The following discussions of the Company's results of operations and financial condition should be read in conjunction with the consoliated financial statements and notes pertaining to them that appear elsewhere in this Form 10-K.

Any forward looking statements made herein are based on current expectations of the Company that involve a number of risks and uncertainties and should not be considered as guarantees of future performance. These statements are made under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements may be identified by the use of words such as "expect," "anticipate," "believe," "intend," "plans," "predict," or "will".

Although the Company believes that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward looking statements. Several of these factors include, in addition to those contained in "Factors that may affect future operating results," without limitation:
· our ability to maintain our current pricing model and/or decrease our cost of sales;

· a stable interest rate market and/or a stable currency rate environment in the world, and specifically the countries we are doing business in or plan to do business in;

· continued availability of supplies or materials used in manufacturing at competitive prices;

· volatility in commodity and energy prices and our ability to offset higher costs with price increases;

· adverse regulatory developments in the United States or any other country we plan to do business in;

· entrance of competitive products in our markets;

· the ability of management to execute plans and motivate personnel in the execution of those plans;

· no adverse publicity related to our products or the Company;

· no adverse claims relating to our intellectual property;

· the adoption of new, or changes in, accounting principles;

· the passage of new, or changes in, regulations; legal proceedings;

· our ability to maintain compliance with the NYSE AMEX requirements for continued listing of our common stock;

· the costs inherent with complying with new statutes and regulations applicable to public reporting companies, such as the Sarbanes-Oxley Act of 2002;

· our ability to efficiently integrate future acquisitions and other new lines of business that the Company may enter in the future, if any; and

· other risks referenced from time to time elsewhere in this report and in our filings with the SEC.

The Company is under no obligation and does not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of any unanticipated events.

The Company's primary source of revenue relates to the manufacturing of components, devices and equipment primarily for the medical and defense industries. The single largest category of revenue relates to Micron's production and sale of silver/silver chloride coated and conductive resin sensors used as component parts in the manufacture of integrated disposable electrophysiological sensors. These disposable medical devices are used worldwide in the monitoring of electrical signals in various medical applications. In an effort to leverage current skills, the Company has expanded into custom thermoplastic injection molded products and product life cycle management. This sector includes revenues from both high volume precision injection molding and custom injection molding. With the addition of a medical machining cell in 2007, the Company began production of patient specific metal medical devices. Management continues to identify complementary and/or synergistic products, technologies and lines of business in an effort to broaden the Company's offerings.

The following table sets forth for the periods indicated, the percentages of the net sales represented by certain items reflected in the Company's statements of operations.

                                                 Years ended December 31,
                                                  2008               2007
         Net sales                                   100.0 %            100.0 %
         Cost of sales                                81.0               75.5
         Gross profit                                 19.0               24.5
         Selling and marketing                         3.5                3.9
         General and administrative                   11.3               10.9
         Research and development                      1.4                0.6
         Other income, net                             0.0                0.0
         Income before income tax provision            2.8                9.1
         Income tax provision                          1.2                2.5
         Net income                                    1.6 %              6.6 %

Net Sales

Net sales for 2008 were $22,482,219, an increase of $2,994,457 or 15%, when compared to the total net sales of $19,487,762 in 2007. The disposable electrode sensor business continues to experience extreme price pressure in an increasingly competitive market. The revenue associated with the sensor business, including silver surcharge, decreased by $112,584 as a result of price erosion and the loss of market share in Canada and Europe. The complementary metal snap business increased by $44,170. The growth of the NEM and MIT divisions increased revenue by $2,928,841. Included in the increase is $3,800,000 of sales related to imported forgings that are being phased out in the first three months of 2009. Due to a change in customer demands, the precision molded products from Micron Products decreased approximately $72,981 when compared to 2007. LTD increased revenues by $118,137 excluding internal work for other divisions when compared to 2007. The remaining increase of $89,525 was related to the snap assembly machine business and other miscellaneous revenues. Included in the revenues detailed above, non-recurring engineering and tooling revenue accounted for over $214,000 of the revenues in 2008 as compared to $380,000 in 2007. Engineering and tooling revenues typically occur at the beginning of a product life cycle or when a customer changes its manufacturing source. After the design and manufacture of the prototype and/or production tooling, the Company should benefit from product sales as it begins to utilize the customer owned tooling. There were no sales of SAECG software in either 2008 or 2007.

Cost of sales was $18,204,526 (81% of net sales) in 2008 compared to $14,709,035 (75.5% of net sales) in 2007 an increase of $3,495,491 or 24%. A significant portion of the increase in cost of sales can be attributed to material costs. Gross margin is negatively affected by the increase in material costs as not all increases can be passed along to the customer in the form of price increases or surcharges. Silver pricing has generally been passed on to our customers in the form of a surcharge, but this does not preclude the Company from being pressured to reduce its margins as the price continues to climb. Silver surcharge collected from our customers is approximately 13% and 14% of total net sales for years ended December 31, 2008 and 2007, respectively. Energy costs for 2008 were $223,000 higher than 2007. The stabilization of manufacturing costs continues to be a major focus of management efforts. The forged products in the MIT division had higher than expected costs as quality problems from a subcontractor required extensive internal time and effort and freight costs exceeded expectations for most of 2008. All current products, services and programs, including those in development, are being evaluated for contribution and value to our overall business strategy and results. Products, services and programs that are underperforming from an overall contribution standpoint and not expected to improve will be phased out or discontinued so that the Company's resources can be put to use in developing those of more strategic value.

Selling and Marketing

Selling and marketing expenses increased to $781,456 (3.5% of net sales) in 2008 from $764,021 (3.9% of net sales) in 2007, an increase of $17,435, or 2%. This increase in selling and marketing expense is mainly attributable to the commissions payable to the sales and business development personnel along with increased travel and trade show costs incurred as business development and marketing efforts were expanded. Management believes this increase to be nominal and expects the expense as a percentage of sales to continue to decrease as the Company begins to see positive results from the increase in business development efforts.

General and Administrative Expenses

General and administrative expenses were $2,536,648 (11.3% of net sales) in 2008 as compared to $2,131,694 (10.9% of net sales) in 2007, an increase of $404,954 or 19%. Included in the increase of expense for the year ended December 31, 2008 is a one time charge of $250,000 for costs associated with a terminated acquisition following due diligence. During this same period, the cost of additional administrative personnel of $32,000, and $71,000 of additional depreciation for the technology upgrades in preparation for Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX") compliance increased the expense when compared to the similar period in 2007. Although the delay by the SEC for outside auditor attestation requirements of SOX Section 404 will limit a previously expected increase in audit fees for 2008, the costs associated with internal control documentation with outside consultants cost $88,258 for the twelve months in 2008, and continues as planned. The new enterprise resource planning solution continues to improve data collection and reporting in all aspects of the business.

Research and Development

Research and development costs increased to $320,040 (1.4% of net sales) in 2008 from $112,472 (0.6% of net sales) in 2007, an increase of $207,567, or 185%. For the fiscal years ended December 31, 2008, and 2007, ART had research and development expenses of approximately $69,779 and $36,501, respectively. Expenses include the technical support of a National Institutes of Health research project utilizing ART's proprietary Signal Averaged ECG products and patented algorithms. In 2008 and 2007, Micron's research and development efforts resulted in $250,261 and $73,500 of expense. The expense is associated with continued work on patentable technologies and process improvements on the Micron sensor and snap product lines. The twelve months ended December 31, 2008 included $52,000 of expense for equipment tested in a process improvement project with the sensor product line as well as the impairment of equipment used for final product testing.

Interest Expense

Interest expense was $46,230 in 2008 compared to $21,188 in 2007, an increase of $25,042, or 118%. This expense is a result of the acquisition note and an equipment loan. The Company does not incur an unused borrowing base fee under our unsecured credit facility.

Other Income

Other income was $29,464 in 2008 compared to $27,711 in 2007, an increase of $1,753, or 6%. The majority of other income was bank interest of $29,861 and $34,299, in 2008 and 2007, respectively. Lower average balances and a decrease in the rate of return account for the decrease in interest income. The remainder of other income was from miscellaneous expense items including a loss in the disposal of assets, and currency losses relating to a foreign government's import taxes and the timing of the reimbursement.

The Company's combined federal and state effective income tax rate was 42% and 28% in 2008 and 2007, respectively. The effective rates in 2007 were lower than the statutory rates primarily due to the reductions in tax from tax credits. In 2007, the Company utilized all remaining federal net operating loss carryforwards. During the third quarter of 2007, the IRS completed its audit of the Company's tax returns for several prior periods, and did not require any changes to be made to those returns.

Goodwill

As of December 31, 2008, the Company's goodwill of $1,564,966 is related to three reporting units, $1,244,000 associated with the acquisition of Micron Products, Inc. in 1992, $235,727 associated with the acquisition of Shrewsbury Molders, Inc. in 2004, and $85,239 associated with the acquisition of Leominster Tool Co. Inc. in December 2006. There was no impairment to the goodwill associated with or expected in any acquisition based on the first quarter annual impairment test in 2008.

Earnings Per Share

The basic earnings per share was $0.13 in 2008 as compared to $0.47 in 2007, a decrease of $0.34, or 72%. The increase in expenses described above had a direct impact to the earnings per share when comparing 2008 to 2007. The decrease in earnings per share for 2008 includes non-recurring charges totaling $302,000, related to an acquisition and research and development activities. This charge, net of tax, decreased basic earnings per share for 2008 by $0.07.

Off-Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements.

Liquidity and Capital Resources

Working capital was $7,440,721 as of December 31, 2008 as compared to $6,454,847 as of December 31, 2007, as restated. Operating results produced positive cash flows of $1,937,379 of which $1,015,702 was spent on capital asset investment. Cash and cash equivalents were $2,320,467 and $1,684,411 at December 31, 2008, and 2007, respectively. Substantially all of these funds are invested in fixed rate bank instruments that are highly liquid.

Inventories increased to $3,727,492 at the end of 2008, an increase of $725,972 from the end of 2007. The increased inventory was the result of raw material requirements, the rising cost of silver and higher unit cost of resins purchased. Several factors contributed to the increase in finished goods inventory. The MIT division had product shipments in the first week of 2009 which were built in 2008. In the NEM division, the ability to produce in longer runs lowers the per unit cost of the product while increasing the finished goods inventory. For one major Micron sensor customer, larger inventories of particular sensors are held in finished goods in an effort to decrease delivery time. The quantity of this sensor inventory maintained has not materially changed, but the cost of silver has increased resulting in higher inventory balances.

Net capital equipment expenditures were $1,015,702 in 2008 as compared to $2,638,000 in 2007. In 2008, the majority of the expenditures were for the acquisition of additional production machinery and equipment, including upgrades in and replacement of existing machinery and tooling. A climate controlled mold manufacturing space built for LTD and the addition of an ultrasonic cleaning production line cost $306,000 and $55,000, respectively. In 2007, the largest expenditure of $1,086,000 included the installation of four (4) machining centers and creation of a medical machining cell. This climate controlled space includes a computer programming office to control the machines and the latest in 5-axis three dimensional computer technology. The second largest expenditure of $450,000 in computer software and equipment related to the installation and upgrade of our enterprise resource planning package. The total budget for this project is over $500,000 and improves all aspects of the information technology at all levels of the organization. The software will ease the Company's transition with SOX Section 404 compliance, and is expected to facilitate integration of future acquisitions. Other administrative improvements included a new phone system, facility security and expansion of the internal network with full replication of data for disaster recovery. The majority of remaining capital expenditures related to manufacturing equipment replacements and additions including computer controlled inspection equipment.

In 2007, another adjoining property for an additional 13,000 square feet and vacant lot was purchased for $205,000.

An unsecured $1,000,000 credit facility was available in 2008 and 2007. The agreement provides for borrowings up to 80% of eligible accounts receivable plus 50% of raw material and finished goods inventories up to a $300,000 maximum. This facility has no borrowing base charge. There were no outstanding borrowings on our line of credit as of December 31, 2008 and 2007. The agreement contains covenants that apply upon drawing on the line. The covenants relate to various matters including notice prior to executing further borrowings and security interests, merger or consolidation, acquisitions, guarantees, sales of assets other than in the normal course of business, leasing, changes in ownership and payment of dividends.

Funding for future research and development is expected to be provided by ongoing operations, and at this time there are no plans for projects that would require outside funding.

In October 2008, the Company's Board of Directors authorized the repurchase in the open market from time to time of up to $650,000 of the Company's outstanding stock. An aggregate of 23,389 shares were purchased in the fourth quarter under the program for an aggregate of $53,975.

Inflation

The Company believes that inflation in the United States or international markets has not had a significant effect on its results of operations except for the impact of the increase in volatility of materials and energy prices particularly the cost of silver.

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 prescribes a single definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company does not believe the adoption of SFAS No. 157 will have a material impact on its financial condition or results of operations. SFAS No. 157 was effective for the Company's interim reporting period beginning January 1, 2008.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115. SFAS No. 159 permits an entity to elect fair value as the initial and subsequent measurement attribute for many financial assets and liabilities. Entities electing the fair value option would be required to recognize changes in fair value in earnings. Entities electing the fair value option would also be required to distinguish, on the face of the statement of financial position, the fair value of assets and liabilities for which the fair value option has been elected and similar assets and liabilities measured using another measurement attribute. The Company does not believe the adoption of SFAS No. 159 will have a material impact on its financial condition or results of operations. SFAS No. 159 was effective for the Company's interim reporting period beginning January 1, 2008.

In December 2007, the SEC issued SAB No. 110. SAB 110 allows for the continued use of a "simplified" method, as discussed in SAB No. 107, in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS 123 (revised 2004). Originally the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31, 2007. Accordingly, the SEC staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company will continue the use of the simplified method for determining the value of options granted as allowed by SAB 110.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations.
SFAS No. 141(R) establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS No. 141(R) also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The provisions of SFAS No. 141(R) are applicable to business combinations consummated on or after December 15, 2008 with early adoption prohibited.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51. SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary for the deconsolidation of a subsidiary. SFAS No. 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim statements within those fiscal years. The Company does not currently have any noncontrolling interests.

The preparation of financial statements and related disclosures in conformity with generally accepted accounting principles requires management to make judgments, assumptions and estimates that affect the amounts reported. Note 2 of Notes to Consolidated Financial Statements describes the significant accounting policies used in the preparation of the consolidated financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

A critical accounting policy is defined as one that is both material to the presentation of the Company's financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on the Company's financial condition and results of operations. Specifically, critical accounting estimates have the following attributes: 1) the Company is required to make assumptions about matters that are highly uncertain at the time of the estimate; and 2) different estimates the Company could reasonably have used, or changes in the estimate that are reasonably likely to occur, would have a material effect on the Company's financial condition or results of operations.

Estimates and assumptions about future events and their effects cannot be determined with certainty. The Company bases its estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as the Company's operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within its control and will not be known for prolonged periods of time. These uncertainties are discussed in the section above entitled "Factors that may affect future operating results." Based on a critical assessment of its accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that the Company's consolidated financial statements are fairly stated in accordance with generally accepted accounting principles, and present a meaningful presentation of the Company's financial condition and results of operations.

Management believes that the following are critical accounting policies:

Revenue Recognition and Accounts Receivable

The Company recognizes revenue upon product shipment, provided that there exists persuasive evidence of an arrangement, the fee is fixed or determinable, and collectability of the related receivable is reasonably assured.

The financing of customer purchased tooling utilizes the direct financing method of revenue recognition. This requires the gain or loss on the sale of the tooling to be recorded at the time the tool is put into service while the customer's stream of payments is reflected as a lease receivable.

Based on management's on-going analysis of accounts receivable balances, and after the initial recognition of the revenue, as to any event that adversely affects the ultimate ability to collect the related receivable, management will record an allowance for bad debts. Bad debts have not had a significant impact on the Company's financial position, results of operations and cash flows.

Inventory and Inventory Reserves

The Company values its inventory at the lower of average cost or market. The Company reviews its inventory for quantities in excess of production requirements, obsolescence and for compliance with internal quality specifications. Any adjustments to inventory would be equal to the difference between the cost of inventory and the estimated net market value based upon assumptions about future demand, market conditions and expected cost to distribute those products to market.

The Company maintains a reserve for excess, slow moving, and obsolete inventory as well as inventory with a carrying value in excess of its net realizable value. A review of inventory on hand is made at least annually and any provision for excess and obsolete inventory is recorded. The review is based on several factors including a current assessment of future product demand, historical experience, and product expiration.

Deferred Tax Assets

The Company assesses its deferred tax assets based upon a more likely than not to be realized criteria. The Company considers future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance. In accordance with FIN 48 we recognize the benefits of a tax position if that position is more likely than not to be sustained on audit, based on the technical merit of the position.

The Company reviews the valuation of goodwill and intangible assets to assess potential impairments. Management reassesses the useful lives of other intangible assets with identifiable useful lives in accordance with the guidelines set forth in the Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets". The value assigned to intangible assets is determined by a valuation based on estimates and judgment regarding expectations for the success and life cycle of products previously acquired or others likely to be acquired in the future. If the actual sale of product and market acceptance differs significantly from the estimates, management may be required to record an impairment charge to write down the asset to its realizable value. To test for impairment, a present value of an estimate of . . .