Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report and the information incorporated by reference in this report contain various "forward-looking statements" as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934, as amended. The forward-looking statements are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. We have based these forward-looking statements on current expectations and projections about future events and trends affecting the financial condition of our business. Additional information concerning these and other risks and uncertainties is included in Item 1A under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2008. Words and phrases such as "expects," "estimates," "will," "intends," "plans," "believes," "should," "anticipates," and the like are intended to identify forward-looking statements. The results referred to in forward-looking statements may differ materially from actual results because they involve estimates, assumptions and uncertainties. Forward-looking statements included herein are as of the date hereof and we undertake no obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. All forward-looking statements should be viewed with caution. These forward-looking statements are subject to risks and uncertainties that may lead to results that differ materially from those expressed in any forward-looking statement made by us or on our behalf, including, among other things:

- Increases in the cost of, or in some cases continuation of, the current price levels of thermoplastic resins, paper board packaging, and other raw materials.

- Our inability to reduce product costs, including manufacturing, sourcing, freight, and other product costs.

- Our inability to reduce administrative costs through consolidation of functions and systems improvements.

- Our inability to protect our intellectual property rights adequately.

- Our inability to reduce our raw materials costs.

- Our inability to expand our customer base and increase corresponding revenues.

- Our inability to achieve product price increases, especially as they relate to potentially higher raw material costs.

- Competition from foreign competitors.

- The potential impact of higher interest rates on our debt outstanding under the Bank of America Credit Agreement.

- Our inability to meet covenants associated with the Bank of America Credit Agreement.

- Our inability to access funds under our current loan agreements given the current instability in the credit markets.

- Our failure to identify, and promptly and effectively remediate, any material weaknesses or significant deficiencies in our internal controls over financial reporting.

- The potential impact of rising costs for insurance for properties and various forms of liabilities.

- The potential impact of changes in foreign currency exchange rates related to our Canadian operations.

- Labor issues, including union activities that require an increase in production costs or lead to a strike, thus impairing production and decreasing sales, and labor relations issues at entities involved in our supply chain, including both suppliers and those involved in transportation and shipping.

- Changes in significant laws and government regulations affecting environmental compliance and income taxes.

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OVERVIEW

We are a manufacturer, importer and distributor of commercial cleaning and storage products. Our commercial cleaning products are sold primarily to janitorial/sanitary and foodservice distributors that supply end users such as restaurants, hotels, healthcare facilities and schools. Our storage products are primarily sold through major home improvement and mass market retail outlets.

RESULTS OF OPERATIONS

Three Months Ended April 3, 2009 versus Three Months Ended March 31, 2008

Net sales decreased from $41.7 million in the first quarter of 2008 to $35.1 million in the first quarter of 2009, a decrease of 15.8%. Overall, this decline resulted from lower volumes across all of our business units driven by market softness, as well as our decision to exit certain unprofitable business lines.

Gross margin was 14.6% for the first quarter of 2009, an increase of 5.4 percentage points from the same period a year ago. Gross margin was impacted by a favorable quarter over quarter variance in our LIFO adjustment of $1.5 million resulting from a decrease in resin costs and lower inventory levels, in addition to improved factory productivity and cost controls. Selling, general and administrative ("SG&A") expenses increased $0.4 million from the first quarter of 2008 to $7.2 million for the first quarter of 2009. This variance related primarily to costs associated with the transition and hiring of executive level personnel, restructuring of our commercial organization and costs related to the Company's plan to deregister its common stock under the Securities and Exchange Act of 1934, as amended, which the Company abandoned on March 12, 2009.

Other

Interest expense decreased by $0.2 million during the three months ended April 3, 2009 as compared to the three months ended March 31, 2008, primarily as a result of lower average borrowings and interest rates.

The income tax benefit for the three months ended March 31, 2008 reflects a benefit of $0.1 million which offsets a tax provision reflected under discontinued operations for domestic income taxes. The benefit from income taxes for the three month period ended March 31, 2008 also reflects FIN No. 48 benefits of $0.3 million.

With the sale of the Metal Truck Box, CML, Woods US, and Woods Canada business units in 2006 and 2007, all activity associated with these units is classified as discontinued operations. Loss from operations, net of tax, for these business units was approximately $0.3 million for the three months ended March 31, 2008. Gain on sale of discontinued businesses for the three months ended March 31, 2008 includes a gain of $0.5 million recorded for the finalization and receipt of the working capital adjustments associated with the CML business unit, as well as recognition of part of the escrow receivable from the sales of the Woods US and Woods Canada business units.

Overall, we reported a net loss of $2.4 million, or $0.30 per share, for the first quarter of 2009, as compared to $3.4 million, or $0.43 per share, for the first quarter of 2008.

LIQUIDITY AND CAPITAL RESOURCES

We require funding for working capital needs and capital expenditures. We believe that our cash flow from operations and the use of available borrowings under the Bank of America Credit Agreement (as defined below) provide sufficient liquidity for our operations going forward. As of April 3, 2009, we had cash of $0.9 million as compared to cash of $0.7 million at December 31, 2008. Also as of April 3, 2009, we had outstanding borrowings of $17.0 million (50% of total capitalization) under the Bank of America Credit Agreement. Our unused borrowing availability at April 3, 2009 on the Revolving Credit Facility (as defined below) was $3.0 million after the $5.0 million minimum availability requirement discussed below. As of December 31, 2008, we had outstanding borrowings of $17.5 million (48% of total capitalization) with unused borrowing availability of $2.9 million after the $5.0 million minimum availability requirement.

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Bank of America Credit Agreement

On November 30, 2007, the Company entered into the Second Amended and Restated Credit Agreement with Bank of America (the "Bank of America Credit Agreement"). The Bank of America Credit Agreement is a $50.6 million credit facility with a $10.6 million term loan ("Term Loan") and a $40.0 million revolving loan ("Revolving Credit Facility"), including a $10.0 million sub-limit for letters of credit. The Bank of America Credit Agreement replaces the previous credit agreement ("Previous Credit Agreement") as originally entered into on April 20, 2004. The Bank of America Credit Agreement is an asset-based lending agreement and only involves one bank compared to a syndicate of four banks under the Previous Credit Agreement.

The annual amortization on the Term Loan, paid quarterly, is $1.5 million with final payment due November 30, 2010. The Term Loan is collateralized by the Company's property, plant and equipment. The Revolving Credit Facility has an expiration date of November 30, 2010 and all extensions of credit are collateralized by a first priority security interest in and lien upon the capital stock of each material domestic subsidiary of the Company (65% of the capital stock of certain foreign subsidiaries of the Company), and all present and future assets and properties of the Company.

The Company's borrowing base under the Bank of America Credit Agreement is determined by eligible inventory and accounts receivable, amounting to $21.0 million at April 3, 2009, and is reduced by the outstanding amount of standby and commercial letters of credit. The Bank of America Credit Agreement requires the Company to maintain a minimum level of availability such that its eligible collateral must exceed the sum of its outstanding borrowings under the Revolving Credit Facility and letters of credit by at least $5.0 million. Currently, the Company's largest letters of credit relate to its casualty insurance programs. At April 3, 2009, total outstanding letters of credit were $4.1 million. In addition, the Bank of America Credit Agreement prohibits the Company from paying dividends on its securities, other than dividends paid solely in securities.

Borrowings under the Bank of America Credit Agreement bear interest, at the Company's option, at either a rate equal to the bank's base rate or LIBOR plus a margin based on levels of borrowing availability. Interest rate margins for the Revolving Credit Facility under the applicable LIBOR option will range from 2.00% to 2.50%, or under the applicable prime option will range from 0.25% to 0.75% on borrowing availability levels of $20.0 million to less than $10.0 million, respectively. For the Term Loan, interest rate margins under the applicable LIBOR option will range from 2.25% to 2.75%, or under the applicable prime option will range from 0.50% to 1.00%. Financial covenants such as minimum fixed charge coverage and leverage ratios are not included in the Bank of America Credit Agreement.

All of the debt under the Bank of America Credit Agreement is re-priced to current rates at frequent intervals. Therefore, its fair value approximates its carrying value at April 3, 2009. For both of the three month periods ended April 3, 2009 and March 31, 2008, the Company had amortization of debt issuance costs, included in interest expense, of $0.1 million.

The Revolving Credit Facility under the Bank of America Credit Agreement requires lockbox agreements which provide for all Company receipts to be swept daily to reduce borrowings outstanding. These agreements, combined with the existence of a material adverse effect ("MAE") clause in the Bank of America Credit Agreement, result in the Revolving Credit Facility being classified as a current liability, per guidance in the EITF No. 95-22, Balance Sheet Classification of Borrowings Outstanding under Revolving Credit Agreements that Include Both a Subjective Acceleration Clause and a Lock-Box Arrangement. The Company does not expect to repay, or be required to repay, within one year, the balance of the Revolving Credit Facility, which has a final expiration date of November 30, 2010. The MAE clause, which is a fairly common requirement in commercial credit agreements, allows the lender to require the loan to become due if it determines there has been a material adverse effect on the Company's operations, business, properties, assets, liabilities, condition, or prospects. The classification of the Revolving Credit Facility as a current liability is a result only of the combination of the lockbox agreements and the MAE clause.

Cash Flow

Cash used in operating activities before changes in operating assets and liabilities and discontinued operations was $0.7 million in the first quarter of 2009 as compared to $1.4 million in the same period of 2008. This decrease was a result of a $1.3 million reduction in net loss from continuing operations quarter over quarter, offset partially by a lower level of non-cash addbacks, such as loss on sale or disposal of assets, in the current quarter. Changes in operating assets and liabilities provided $2.0 million in the first quarter of 2009 compared to a use of $3.5 million in the first quarter of 2008. This variance resulted primarily from a reduction in inventory balances and the receipt in the first quarter of 2009 of certain insurance claims recorded as a receivable at December 31, 2008. During the first quarter of 2009 we were turning our inventory at 4.3 times per year as compared to 4.9 times per year in the same period a year ago.

Capital expenditures from continuing operations totaled $0.2 million and $1.0 million for the three months ended April 3, 2009 and March 31, 2008, respectively. First quarter of 2008 amounts include capital spending to rebuild manufacturing lines at our Bridgeton, Missouri location. Cash provided by discontinued operations in the first quarter of 2008 consisted of proceeds from receivables from the 2007 sales of the Woods US, Woods Canada and CML business units.

Cash flows used in financing activities in the first quarter of 2009 reflect a $0.5 million decrease in our debt levels since December 31, 2008.

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OFF-BALANCE SHEET ARRANGEMENTS

As of April 3, 2009, the Company had no off-balance sheet arrangements.

SEVERANCE, RESTRUCTURING AND RELATED CHARGES

See Note 10 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further discussion of severance, restructuring and related charges.

ENVIRONMENTAL AND OTHER
CONTINGENCIES

See Note 8 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of environmental and other contingencies.

RECENTLY ISSUED ACCOUNTING
PRONOUNCEMENTS

See Note 2 to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for a discussion of recently issued accounting pronouncements.

CRITICAL ACCOUNTING POLICIES

We disclosed details regarding certain of our critical accounting policies in the Management's Discussion and Analysis section of our Annual Report on Form 10-K for the year ended December 31, 2008 (Part II, Item 7). There have been no changes to policies as of April 3, 2009.