EXECUTIVE SUMMARY

For the quarter ended June 30, 2004 the Company's net sales increased 15% and gross profit increased 34% compared to the same period in 2003. Net sales increased primarily from volume increases in the America and European markets coupled with the favorable impact of the conversion of local currencies to U.S. dollars as a result of the continued weakness of the U.S. dollar compared to most foreign currencies. The larger increase in the gross profit percentage is primarily due to relatively stable fixed manufacturing costs being spread over increased sales volume. The increase in gross profit and minimal increases in costs and expenses resulted in an increase in net income of 185% when compared to the quarter ended June 30, 2003.

For the six months ended June 30, 2004 the Company's net sales increased 14% and gross profit increased 19% compared to the same period in 2003. Net sales and gross profit increased for the same reasons as indicated for the quarter. The increase in gross profit and minimal increases in costs and expenses resulted in an increase in net income of 95% when compared to the same period in 2003.

THREE MONTHS ENDED JUNE 30, 2004 COMPARED TO THREE MONTHS ENDED JUNE 30, 2003

For the three months ended June 30, 2004 consolidated net sales were $45.9 million, an increase of $5.9 million, or 15%, from the same period in 2003. Domestic net sales increased $3.6 million, or 15%, and foreign sales increased $2.3 million, or 14%. The increase in domestic net sales was due to volume increases in the telecommunications and energy markets. The Company benefited from increased spending by its energy customers who are believed to be undertaking previously deferred projects. The Company also benefited from telecommunication companies activities in expanding fiber to the home. The Company believes that continued stability and strengthening of the U.S. economy should allow spending on new construction and maintenance projects in the energy and communications markets to outpace business levels of 2003. Foreign net sales were favorably impacted by $1.1 million when converting local currencies to U.S. dollars as a result of the continued weakness of the U.S. dollar compared to most foreign currencies. Excluding the foreign currency impact, foreign sales increased $1.2 million compared to the same period in 2003 primarily due to stronger sales in the North American, South American and European markets. The Company expects the improvement in 2004 in most of its foreign markets to continue for the remainder of 2004.

Gross profit of $15.1 million for the three months ended June 30, 2004 was an increase of $3.9 million, or 34%, compared to last year. The increase in gross profit is primarily a result of higher net sales and relatively unchanged manufacturing costs. Domestic gross profit increased $3.2 million compared to the second quarter 2003 primarily as a result of higher net sales and relatively stable manufacturing expenses compared to the same period in 2003 partially offset by increased material cost for steel and aluminum. Foreign gross profit increased $.7 million primarily due to the increase in net sales and a $.4 million favorable impact of converting foreign currencies to U.S. dollars. The Company expects its raw material costs to continue to increase primarily for steel wire and aluminum. However, the Company believes its future pricing will enable it to recover most of the future increases in raw material costs.

Consolidated costs and expenses of $11.5 million for the three months ended June 30, 2004 increased $1.1 million, or 10%, compared to the previous year as summarized in the following table:

<CAPTION>
                                                                 Three month periods ended June 30,
                                                    ----------------------------------------------------------
thousands of dollars                                                                  Increase        Increase
                                                       2004             2003         (decrease)      (decrease)
                                                    ----------      ----------       ----------      ---------
<S>                                                 <C>             <C>              <C>                   <C>
Cost and expenses
Domestic:
       Selling                                      $    2,944      $    2,923       $      21               1%
       General and administrative                        3,274           3,237              37               1
       Research and engineering                          1,035             885             150              17
       Other operating (income) expense- net               201            (305)            506              NM*
                                                    ----------      ----------       ---------       ---------
                                                         7,454           6,740             714              11
                                                    ----------      ----------       ---------       ---------

Foreign:
       Selling                                           1,606           1,492             114               8
       General and administrative                        1,998           1,956              42               2
       Research and engineering                            422             403              19               5
       Other operating (income) expense- net                55            (142)            197              NM*
                                                    ----------      ----------       ---------       ---------
                                                         4,081           3,709             372              10
                                                    ----------      ----------       ---------       ---------

Total                                               $   11,535      $   10,449       $   1,086              10%
                                                    ==========      ==========       =========       =========
<FN>
*NM - Not meaningful
</FN>

Domestic costs and expenses of $7.5 million for the three-month period ended June 30, 2004 increased $.7 million, or 11%, compared to the same period in 2003. Selling expenses of $2.9 million and general and administrative of $3.3 million remained relatively unchanged compared to the same period in 2003. Research and engineering costs of $1 million increased $.2 million primarily as a result of an increase in employees and development resources. Other

operating expense increased $.5 million due to a $.4 million increase in the costs related to officers' split dollar life insurance policies and a $.1 million increase in foreign currency transaction expense.

Foreign costs and expenses of $4.1 million for the three months ended June 30, 2004 increased $.4 million, or 10%, compared to the same period in 2003. The weaker dollar unfavorably impacted costs and expenses by $.2 million when foreign costs in local currency were translated to U.S. dollars. Foreign selling, general and administrative and research and engineering costs net of currency translation remained relatively unchanged compared to 2003. Other operating income net of currency translation decreased $.2 million primarily due to foreign currency transaction expense.

Royalty income for the quarter ended June 30, 2004 of $.3 million remained relatively unchanged compared to 2003.

Operating income of $3.9 million for the quarter ended June 30, 2004 increased $2.7 million, or 240%, compared to $1.1 million in the previous year. This increase was a result of the $3.9 million increase in gross profit partially offset by the $1.1 million increase in costs and expenses. Domestic operating income increased $2.6 million, compared to the same period in 2003, primarily as a result of the $3.2 million increase in gross profit on higher net sales partially offset by the $.7 million increase in costs and expenses. Foreign operating income of $2 million increased $.1 million compared to the same period in 2003, primarily due to the $.7 million increase in gross profit partially offset by the increase in cost and expenses of $.4 million and the $.2 million increase in intercompany royalty expense.

Other expense for the three months ended June 30, 2004 remained relatively unchanged from the same period in 2003.

Income taxes for the three months ended June 30, 2004 of $1.4 million increased $1.2 million compared to the same period in 2003. The effective tax rate in 2004 was 37.8% compared to 24.1% in 2003 primarily as a result of a domestic pretax loss in 2003. In accordance with the applicable tax laws in China, the Company is entitled to a preferential tax rate of a 50% reduction for the three years beginning in 2003. The favorable aggregate tax and per share effect was thirteen thousand dollars, or less than $.01 per share, for the three-month period ended June 30, 2004, while the favorable aggregate tax was twenty thousand dollars, or less than $.01 per share, for the three-month period ended June 30, 2003.

As a result of the preceding, net income for the three month period ended June 30, 2004 was $2.4 million, which represents an increase of $1.5 million, or 185%, compared to 2003.

SIX MONTHS ENDED JUNE 30, 2004 COMPARED TO SIX MONTHS ENDED JUNE 30, 2003

For the six months ended June 30, 2004 consolidated net sales were $85.4 million, an increase of $10.2 million, or 14%, from the same period in 2003. Domestic net sales increased $5.6 million, or 13%, and foreign sales increased $4.6 million, or 15%. The increase in domestic net sales was primarily due to volume increases in the telecommunications and energy markets. Foreign net sales were favorably impacted by $3.7 million when converting local currencies to U.S. dollars as a result of the continued weakness of the U.S. dollar compared to most foreign currencies. Excluding the foreign currency impact, foreign net sales increased $.9 million when compared to the same period in 2003 as stronger sales in the America and European markets were partially offset by lower sales in the Asia Pacific market.

Gross profit of $27.2 million for the six months ended June 30, 2004 was an increase of $4.3 million, or 19%, compared to the prior year. The increase in gross profit is primarily a result of higher net sales while manufacturing costs remained at relatively the same level as the previous year. Domestic gross profit increased $2.8 million compared to the same period in 2003 primarily as a result of higher domestic net sales and relatively stable manufacturing costs partially offset by higher material costs for steel and aluminum. Foreign gross profit increased $1.5 million primarily due to the increase in net sales and the $1.2 million favorable impact of converting foreign currencies to U.S. dollars.

During the quarter ended March 31, 2003 the domestic business segment forgave foreign intercompany debt of $4.5 million related to the abandoned European data communications operations. This amount was included as expense for the domestic business segment and as income for the foreign business segment. Consolidated costs and expenses of $21.9 million for the six months ended June 30, 2004 increased $1 million, or 5%, compared to the previous year,

excluding intercompany debt forgiveness, as summarized in the following table:

<CAPTION>
                                                                      Six month periods ended June 30,
                                                    --------------------------------------------------------------------
thousands of dollars                                                                       Increase            Increase
                                                       2004               2003            (decrease)          (decrease)
                                                    ----------         ----------         ----------          ----------
<S>                                                 <C>                <C>                 <C>                      <C>
Cost and expenses
Domestic:
       Selling                                      $    5,919         $    5,599          $    320                   6%
       General and administrative                        5,915              6,537              (622)                (10)
       Research and engineering                          2,065              1,910               155                   8
       Other operating (income) expense- net               122                (82)              204                  NM*
                                                    ----------         ----------          --------            --------
                                                        14,021             13,964                57                   0
                                                    ----------         ----------          --------            --------

Foreign:
       Selling                                           3,118              2,731               387                  14
       General and administrative                        3,874              3,727               147                   4
       Research and engineering                            869                751               118                  16
       Other operating (income) expense- net                 6               (249)              255                  NM*
                                                    ----------         ----------          --------            --------
                                                         7,867              6,960               907                  13
                                                    ----------         ----------          --------            --------

Total                                               $   21,888         $   20,924          $    964                   5%
                                                    ==========         ==========          ========            ========
<FN>
*NM - Not meaningful
</FN>

Domestic costs and expenses of $14 million for the six-month period ended June 30, 2004 increased $.1 million compared to the same period in 2003. Selling expenses of $5.9 million increased $.3 million as a result of a $.2 million increase in commission expense on increased net sales and a $.1 million increase in advertising and sales promotion expense. General and administrative expenses decreased $.6 million primarily due to a $.2 million reduction in bad debt expense, a $.1 million reduction in professional fees and a $.3 million reduction in employee and wage related expenses. Research and engineering costs remained relatively unchanged from 2003. Other operating expense increased $.2 million due primarily to a $.2 million increase in the costs related to officers' split dollar life insurance policies.

Foreign costs and expenses of $7.9 million for the six months ended June 30, 2004 increased $.9 million, or 13%, compared to the same period in 2003. The weaker dollar unfavorably impacted costs and expenses by $.7 million when foreign costs in local currency were translated to U.S. dollars. Foreign selling expense net of currency translation increased $.1 million due to an increase in employment. General and administrative expense net of currency translation decreased $.2 million due to a reduction in administrative expenses incurred in 2003 related to the abandonment of the European data communication operations. Research and engineering costs net of currency translation remained relatively unchanged from the same period in 2003. Other operating income decreased $.3 million primarily due to the increase in foreign currency transaction expense.

Royalty income for the six months ended June 30, 2004 of $.7 million remained relatively unchanged compared to 2003.

Operating income of $6 million for the six months ended June 30, 2004 increased $3.3 million, or 125%, from $2.7 million in the previous year. This increase was a result of the $4.3 million increase in gross profit partially offset by the $1 million increase in costs and expenses. Domestic operating income increased $7.6 million, compared to the same period in 2003, primarily as a result of the forgiveness of intercompany debt of $4.5 million in 2003, the $2.8 million increase in gross profit and the increase in intercompany royalties of $.3 million. Foreign operating income of $3 million decreased $4.3 million, compared to the same period in 2003, primarily due to the $4.5 million forgiveness of intercompany debt in 2003, the increase in cost and expenses of $.9 million, the $.3 million increase in intercompany royalty expense partially offset by the increase in gross profit of $1.5 million.

Other expense for the six months ended June 30, 2004 increased $.2 million from the same period in 2003 as a result of the decrease in equity earnings from foreign joint ventures.

Income taxes for the six months ended June 30, 2004 of $2.3 million increased $1.4 million compared to the same period in 2003. The effective tax rate in 2004 was 37.9% compared to 30.6% in 2003 as a result of tax refunds received in the first quarter of 2003. In accordance with the applicable tax laws in China, the Company is entitled to a preferential tax rate of a 50% reduction for the three years beginning in 2003. The favorable aggregate tax and per share effect was eleven thousand dollars, or less than $.01 per share for the six-month period ended June 30, 2004, while the favorable aggregate tax was fifty-four thousand dollars, or $.01 per share, for the six-month period ended June 30, 2003.

As a result of the preceding, net income for the six months ended June 30, 2004 was $3.7 million which represents an increase of $1.8 million, or 95%, compared to 2003.

WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was $2.9 million for the first six months of 2004, a decrease of $6.8 million when compared to the same period in 2003. An increase in net income of $1.8 million and an increase in non-cash expenses of $.6 million was offset by an increase in working capital of $8.5 million, primarily accounts receivable as a result of higher net sales, when compared to 2003.

Net cash used in investing activities of $2.2 million represents a decrease of $.4 million when compared to 2003. This decrease is primarily a result of lower capital expenditures in 2004 compared to 2003. On April 2, 2004, the Company acquired the assets of Union Electric Manufacturing Co. LTD, located in Bangkok, Thailand for $.5 million. This acquisition did not have a material impact on the financial position or results of operations of the Company. The Company is continually analyzing potential acquisition candidates and business alternatives but has no commitments that would materially impact the Company's operations or results.

Cash used in financing activities was $5.2 million compared to $5.3 million in the previous year. During 2004 approximately $2.6 million in cash was used to repurchase 100,000 common shares, which was offset by the Company receiving $.1 million for the exercise of stock options. Approximately $.4 million of cash was used for debt repayments during 2004 compared to $3.2 million used for debt repayments in 2003. The Company's current portion of debt outstanding was approximately $1.4 million greater at June 30, 2003 when compared to June 30, 2004.

The Company's current ratio was 3.3 to 1 at June 30, 2004 compared to 3.5 to 1 at December 31, 2003. Working capital of $63.8 million remains consistent with December 31, 2003 of $63.6 million. At June 30, 2004, the Company's unused balance under its credit facility was $20 million and its bank debt to equity percentage was 4%. The revolving credit agreement contains, among other provisions, requirements for maintaining levels of working capital, net worth, and profitability. At June 30, 2004 the Company was in compliance with these covenants. The Company believes its future operating cash flows will be more than sufficient to cover debt repayments, other contractual obligations, capital expenditures and dividends. In addition, the Company believes its existing cash position, together with its untapped borrowing capacity, provides substantial financial resources. If the Company were to incur significant additional indebtedness it expects to be able to continue to meet liquidity needs under the credit facilities but at an increased cost for interest and commitment fees. The Company does not believe it would increase its debt to a level that would have a material adverse impact upon results of operations or financial condition.

NEW ACCOUNTING PRONOUNCEMENTS

During January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable Interest Entities an interpretation of ARB No. 51, Consolidated Financial Statements (FIN 46). FIN 46 clarifies the accounting for certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. In December 2003, the FASB released a revised version of FIN 46 (FIN 46R). The revision slightly modified the variable interest model contained in FIN 46. However, FIN 46R adopted certain scope exceptions and clarified definitions and calculations underlying the model. FIN 46R required the application of either

FIN 46 or FIN 46R for Special Purpose Entities ("SPE") in the annual reporting period ending after December 15, 2003. The application of FIN 46R for non-SPEs was deferred until the quarter ending March 31, 2004. The Company has adopted the applicable disclosure provisions of FIN 46 and FIN 46R in the financial statements.

The Company has invested in qualified affordable housing projects as a limited partner. The Company receives affordable housing federal tax credits for these limited partnership investments. The Company's maximum potential exposure to these partnerships is $.3 million, consisting of the limited partnership investments plus unfunded commitments. The Company has determined its investment should not be consolidated in accordance with FIN 46R.

The Company has an equity investment in a Japanese joint venture. The Company has determined that the investment should not be consolidated in accordance with FIN 46R. The maximum exposure of the Company's investment is $3.4 million as of June 30, 2004, which is equal to its recorded investment.