GENERAL:

The following analysis of the results of operations and financial condition of the Company should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this quarterly report on Form 10-Q.

CRITICAL ACCOUNTING POLICIES:

There have been no material changes to our critical accounting policies and estimates from the information provided in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations", included in our 2008 annual report on Form 10-K.

Overview

The following table has been prepared as an aid in understanding the Company's
results of operations on a comparative basis for the three and six months ended
December 31, 2008 and 2007. Amounts presented are percentages of the Company's
net sales.


                                             Three Months Ended       Six Months Ended
                                                December 31,            December 31,
                                              2008         2007       2008        2007
  Net sales                                     100.0 %     100.0 %    100.0 %    100.00 %
  Cost of goods sold                            (80.9 )     (79.2 )    (81.1 )     (79.8 )
  Gross margin                                   19.1        20.8       18.9        20.2
  Selling, general and administrative           (18.3 )     (17.8 )    (18.2 )     (17.6 )
  Facility consolidation and other costs         (0.6 )         -       (1.1 )         -
  Operating income (loss)                         0.2         3.0       (0.4 )       2.6
  Other income (expense), net                     0.3        (0.2 )        -        (0.3 )
  Income (loss) before income taxes               0.5         2.8       (0.4 )       2.3
  Income tax (expense) benefit                   (0.2 )      (1.0 )      0.1        (0.8 )
  Net income (loss)                               0.3 %       1.8 %     (0.3 )%      1.5 %

Results of Operations for the Quarter Ended December 31, 2008 vs. 2007

Net sales for the quarter ended December 31, 2008 were $84.5 million compared to the prior year quarter of $106.0 million, a decrease of 20%. Residential net sales were $58.1 million, a decrease of 14% from the prior year quarter net sales of $67.5 million. Recreational vehicle net sales were $4.9 million, a decrease of 67% from the prior year quarter net sales of $14.9 million. Commercial net sales were $21.5 million compared to $23.6 million in the prior year quarter, a decrease of 9%.

Gross margin for the quarter ended December 31, 2008 was 19.1% compared to 20.8% in the prior year quarter. The decrease in gross margin percentage is primarily due to higher costs for purchased product and materials and to a lesser extent under-utilization of manufacturing capacity on significantly lower sales volume.

Selling, general and administrative expenses for the quarter ended December 31, 2008 were 18.2% compared to 17.8% in the prior year quarter. This percentage increase is due to under-absorption of fixed costs on the lower sales volume and an increase in bad debt expense of approximately $0.2 million.

Results for the quarter ended December 31, 2008 included a pre-tax gain on the sale of securities held for investment of $0.5 million or $0.04 per share after tax. During the current quarter the Company recorded pre-tax charges of approximately $0.5 million, or $0.05 per share after tax related to facility consolidation.

Operating income for the current quarter was $0.2 million compared to $3.3 million in the prior year quarter reflecting the aforementioned factors.

The effective income tax rate was 36.4% and 36.8% in the current and prior year fiscal quarters, respectively. The primary difference between the federal statutory rate and the expected effective rate is the result of state taxes.

All earnings per share amounts are on a diluted basis.

Results of Operations for the Six Months Ended December 31, 2008 vs. 2007

For the six months ended December 31, 2008, the Company reported net sales of $176.0 million compared to the prior year sales of $206.9 million, a decrease of 15%. Residential net sales were $120.1 million, a decrease of 8% from the six months ended December 31, 2007. Recreational vehicle net sales were $10.9 million, a decrease of 65% from the prior year six months. Commercial net sales were $45.0 million, a decrease of 2% from the six months ended December 31, 2007.

Gross margin for the six-month period ended December 31, 2008 was 18.9% compared to 20.2% in the prior year six-month period. The decrease in gross margin percentage is primarily due to higher costs for purchased product and materials and to a lesser extent under-utilization of manufacturing capacity on significantly lower sales volume.

Selling, general and administrative expenses were 18.2% compared to 17.6% in the prior year six-month period. This percentage increase is due to under-absorption of fixed costs on the lower sales volume and an increase in bad debt expense of approximately $0.4 million.

Results for the six-month period ended December 31, 2008 included a pre-tax gain on the sale of securities held for investment of $0.5 million or $0.04 per share after tax. During the current six-month period the Company recorded pre-tax charges of approximately $1.8 million, or $0.18 per share after tax related to facility consolidation.

Operating loss for the six months ended December 31, 2008 was $0.7 million compared to operating income of $5.5 million in the prior year six-month period reflecting the aforementioned factors.

The effective income tax rate was 34.6% and 36.8% in the current and prior year six-month periods, respectively. The primary difference between the federal statutory rate and the expected effective rate is the result of state taxes.

The above factors resulted in net loss of $0.5 million or $0.07 per share, compared to the prior year six-month period net income of $3.0 million or $0.46 per share.

All earnings per share amounts are on a diluted basis.

Liquidity and Capital Resources

Operating Activities:
Working Capital (current assets less current liabilities) at December 31, 2008 was $93.1 million. Net cash provided by operating activities was $9.3 million for the six months ended December 31, 2008 compared to $3.7 million at December 31, 2007. Significant changes in working capital from June 30, 2008 to December 31, 2008 included decreased accounts receivable of $6.0 million, decreased inventory of $1.7 million and increased accounts payable of $3.6 million. The decrease in receivables is related to timing of shipments to customers and the related payment terms. The decrease in inventory is due to lower purchases to support lower sales volume. The increase in accounts payable is due to the timing of inventory purchases from suppliers, the related payment terms and the timing of payments. The Company expects that due to the nature of our operations that there will be continuing fluctuations in accounts receivable, inventory, accounts payable, and cash flows from operations due to the following: (i) we purchase inventory from overseas suppliers with long lead times and depending on the timing of the delivery of those orders inventory levels can be greatly impacted, and (ii) we have various customers that purchase large quantities of inventory periodically and the timing of those purchases can significantly impact inventory levels, accounts receivable, accounts payable and short-term borrowings. As discussed below, the Company believes it has adequate financing arrangements and access to capital to absorb these fluctuations in operating cash flow.

Investing Activities:
Net cash provided by investing activities was $0.9 million during the six-month period ended December 31, 2008. Proceeds from the sale of utility stocks were $0.7 million. Capital expenditures were $0.8 million for the six months ended December

Financing Activities:
Net cash used in financing activities was $12.2 million during the six-month period ended December 31, 2008. Borrowings were lower by $10.5 million primarily due to the increase in accounts payable. The increase in accounts payable was related to delayed timing of payments due to shutdown of operations for the last two weeks of the quarter. The reduction in accounts receivable and inventory also contributed to lower borrowings. Dividends of $1.7 million were paid during the six-month period.

The Company has begun the process of obtaining an extension or refinancing its working capital line of credit that expires June 30, 2009. The Company believes that it will be able to successfully extend or refinance the terms of the current agreement prior to its expiration date; however, there can be no assurance that the Company will be successful in maintaining all of the current terms of the agreement.

Management believes that the Company has adequate cash and credit arrangements to meet its operating and capital requirements for fiscal year 2009. In the opinion of management, the Company's current liquidity and credit resources provide it with the ability to react to opportunities as they arise, to pay quarterly dividends to its shareholders, and to purchase productive capital assets that enhance safety and improve operations. However, should the current economic conditions continue for an extended period of time or deteriorate significantly, we would further evaluate all uses of cash and credit facilities, including the payment of dividends and purchase of capital assets.

Outlook

The consolidation of manufacturing operations that the Company announced on September 10, 2008 has been substantially completed as of December 31, 2008. Significant workforce reductions have taken place at other facilities as we continue to adjust operations to bring production capacity in line with current and expected demand for our products. Company wide employment has been reduced approximately 25% over the past year.

Demand for our products is dependent on factors such as consumer confidence, affordable housing, reasonably attainable financing and an economy with low levels of unemployment and high levels of disposable income. These factors are all currently in poor positions, and indications are that they will remain that way in the near-term. We are not anticipating significant improvements in market conditions at this time, and are managing our business on that basis.

While we expect that current business conditions will persist for the remainder of fiscal year 2009, we remain optimistic that our strategy of a wide range of quality product offerings and price points to the residential, recreational vehicle and commercial markets combined with our conservative approach to business will be rewarded over the longer-term.