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<SEC-DOCUMENT>0001144204-04-011329.txt : 20040809
<SEC-HEADER>0001144204-04-011329.hdr.sgml : 20040809
<ACCEPTANCE-DATETIME>20040809162119
ACCESSION NUMBER:		0001144204-04-011329
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20040630
FILED AS OF DATE:		20040809

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BEL FUSE INC /NJ
		CENTRAL INDEX KEY:			0000729580
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC COILS, TRANSFORMERS & OTHER INDUCTORS [3677]
		IRS NUMBER:				221463699
		STATE OF INCORPORATION:			NJ
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-11676
		FILM NUMBER:		04961602

	BUSINESS ADDRESS:	
		STREET 1:		206 VAN VORST ST.
		CITY:			JERSEY CITY
		STATE:			NJ
		ZIP:			07032
		BUSINESS PHONE:		2014320463

	MAIL ADDRESS:	
		STREET 1:		206 VAN VORST ST.
		CITY:			JERSEY CITY
		STATE:			NJ
		ZIP:			07032
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>v05349_10q.htm
<DESCRIPTION>FORM 10-Q
<TEXT>
<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">
<A name="page_1"></A>
<P align="center"> <FONT face="Arial, Helvetica, sans-serif">FORM 10-Q<br>
  </FONT><FONT size=2 face="Arial, Helvetica, sans-serif"> </FONT><FONT face="Arial, Helvetica, sans-serif">SECURITIES
  AND EXCHANGE COMMISSION </FONT></P>
<P align="center">
<FONT face="Arial, Helvetica, sans-serif">Washington, D.C. 20549 </FONT></P>
<P align="left">&nbsp;</P>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="5%"><font face="Arial, Helvetica, sans-serif">|X|</font></td>
    <td><font face="Arial, Helvetica, sans-serif">QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></td>
 </TR>
</table>
<P align="left"><FONT face="Arial, Helvetica, sans-serif">For the quarterly period
  ended June 30, 2004</FONT></P>
<P align="center"><FONT face="Arial, Helvetica, sans-serif">OR </FONT></P>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr valign="top">
    <td width="5%"><font face="Arial, Helvetica, sans-serif">|&nbsp;&nbsp;&nbsp;|</font></td>
    <td><FONT face="Arial, Helvetica, sans-serif">TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</FONT></td>
 </TR>
</table>
<P align="left"><FONT face="Arial, Helvetica, sans-serif">For the transition period
  from ________ to __________</FONT></P>
<P align="left"><FONT face="Arial, Helvetica, sans-serif">Commission file number:
  0-11676 </FONT></P>
<P align="left">&nbsp;</P>
<P align="center"><FONT face="Arial, Helvetica, sans-serif">BEL FUSE INC. <br>
  </FONT><FONT face="Arial, Helvetica, sans-serif">(Exact name of registrant as
  specified in its charter) </FONT></P>
<P align="center">
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD width=33% nowrap> <FONT face="Arial, Helvetica, sans-serif">New Jersey</FONT></TD>
	<TD width=33%>&nbsp;</TD>
	<TD width=33% nowrap> <FONT face="Arial, Helvetica, sans-serif">22-1463699</FONT></TD>
</TR>
  <TR align="center" valign="bottom">
    <TD width=33% nowrap> <FONT face="Arial, Helvetica, sans-serif">(State or
      other jurisdiction of</FONT></TD>
	<TD width=33%>&nbsp;</TD>
	<TD width=33% nowrap> <FONT face="Arial, Helvetica, sans-serif">(I.R.S. Employer</FONT></TD>
</TR>
  <TR align="center" valign="bottom">
    <TD width=33% nowrap> <FONT face="Arial, Helvetica, sans-serif">incorporation
      or organization)</FONT></TD>
	<TD width=33%>&nbsp;</TD>
	<TD width=33% nowrap> <FONT face="Arial, Helvetica, sans-serif">Identification
      No.)</FONT></TD>
</TR>
</TABLE><BR></P>
<P align="center"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">206
  Van Vorst Street<br>
  Jersey City, New Jersey 07302<br>
  (Address of principal executive offices) (Zip Code)<br>
  <br>
  (201) 432-0463<br>
  (Registrant's telephone number, including area code)<br>
  <br>
  <br>
  <br>
  </FONT><FONT size=2
face="serif"> </FONT><FONT face="Arial, Helvetica, sans-serif">(Former name, former
  address and former fiscal year, if changed since last report) </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">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. </FONT></P>
<P> <FONT face="Arial, Helvetica, sans-serif">Yes |X| &nbsp;&nbsp;&nbsp;No |_|
  </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Indicate
  by check mark whether the registrant is an accelerated filer (as defined in
  Rule 12b-2 of the Exchange Act) Yes </FONT><FONT face="Arial, Helvetica, sans-serif">|X|</FONT><B><FONT face="Arial, Helvetica, sans-serif">
  </FONT></B><FONT
face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;No |_|</FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">At August 1, 2004, there were 2,701,663 shares of Class A Common Stock, $.10 par value, outstanding and 8,624,492 shares of Class B Common Stock, $.10 par value, outstanding. </FONT></P>

<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<A name="page_2"></A>

<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">BEL FUSE
  INC. </FONT></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">INDEX </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=8% align=center nowrap>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=65% align=left nowrap>&nbsp;</TD>
    <TD width=17%>&nbsp;</TD>
    <TD colspan="2" align=center nowrap><font size="2" face="Arial, Helvetica, sans-serif">Page
      Number</font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=center nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap><hr noshade size=1></TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Part
      I.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Financial
      Information</FONT>&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width=2% align=left nowrap></TD>
    <TD width=6% align=left nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item
      1.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Financial
      Statements</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">1</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Consolidated
      Balance Sheets as of</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">June
      30, 2004 (unaudited) and</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">December
      31, 2003</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2
      - 3</FONT></TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Consolidated
      Statements of</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Operations
      for the Six and Three</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Months
      Ended June 30, 2004</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">and
      2003 (unaudited)</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">4</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Consolidated
      Statements of</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Stockholders'
      Equity for the</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">Year
      Ended December 31, 2003</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">and
      the Six Months Ended</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">June
      30, 2004 (Unaudited)</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">5</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Consolidated
      Statements of</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Cash
      Flows for the Six</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Months
      Ended June 30,</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004
      and 2003 (unaudited)</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">6
      &#150; 8</FONT></TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Notes
      to Consolidated Financial</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Statements
      (unaudited)</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">9
      &#150; 25</FONT></TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item
      2.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Management's
      Discussion and Analysis</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">of
      Financial Condition and Results</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">of
      Operations</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">26</FONT>
      <FONT size="2" face="Arial, Helvetica, sans-serif">&#150; 40</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item
      3.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Quantitative
      and Qualitative</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Disclosures
      About Market Risk</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">41</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item
      4.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Controls
      and Procedures</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">41</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Part
      II.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Other
      Information</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item
      1.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Legal
      Proceedings</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">42</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item
      4.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">Submission
      of Matters to a Vote of Security Holders</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">42</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=8% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item
      6.</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Exhibits
      and Reports on Form 8-K</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">43</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap colspan=3 align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">Signatures</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">44</FONT>
   </TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_3"></A> </font>
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">PART I. Financial
      Information<br>
      <br>
      </FONT><font size="2"><BR>
      <FONT face="Arial, Helvetica, sans-serif"> Item 1. <U>Financial Statements</U></FONT><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">Certain information and
  footnote disclosures required under accounting principles generally accepted
  in the United States of America have been condensed or omitted from the following
  consolidated financial statements pursuant to the rules and regulations of the
  Securities and Exchange Commission. It is suggested that the following consolidated
  financial statements be read in conjunction with the year-end consolidated financial
  statements and notes thereto included in the Company's Annual Report on Form
  10-K for the year ended December 31, 2003. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The results of operations
  for the six and three months ended June 30, 2004 and 2003 are not necessarily
  indicative of the results for the entire fiscal year or for any other period.
  </FONT></P>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-1-</font><font size="2"></font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_4"></A> </font>
<p><A name="page_1"></A></P>
<p align="center"><B><FONT size=2 face="sans-serif">BEL FUSE INC. AND SUBSIDIARIES</FONT></B>
  <br>
  <B><FONT size=2 face="sans-serif">CONSOLIDATED BALANCE SHEETS</FONT></B></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=62% align=left nowrap>&nbsp;</TD>
    <TD colspan="2" align="center"> <FONT size=2 face="sans-serif">June 30,</FONT>&nbsp;
   </TD>
    <TD width=10% align=center nowrap>&nbsp;</TD>
    <TD colspan="2" align="center"> <FONT size=2 face="sans-serif">December 31,</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD colspan="2" align="center"> <FONT size=2 face="sans-serif">2004</FONT>&nbsp;
   </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD colspan="2" align="center"> <FONT size=2 face="sans-serif">2003</FONT>&nbsp;
   </TD>
 </TR>
  <TR>
    <TD></TD>
    <TD width="1%"><hr noshade size=1></TD>
    <TD width="12%"> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD width="1%"><hr noshade size=1></TD>
    <TD width="14%"> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD colspan="2" align="center"> <FONT size=2 face="sans-serif">(Unaudited)</FONT>&nbsp;
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=center colspan=6> <B><FONT size=2 face="sans-serif">ASSETS</FONT></B>
   </TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="sans-serif">Current Assets:</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Cash
      and cash equivalents</FONT>&nbsp;</TD>
    <TD><font size=2 face="sans-serif">$</font></TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">74,830,976</FONT>&nbsp;
   </TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD><font size=2 face="sans-serif">$</font></TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">57,461,152</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Marketable
      securities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">1,492,648</FONT>&nbsp;
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">5,038,749</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Accounts
      receivable - less allowance for doubtful</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">accounts
      of $1,835,000 and $1,976,000 at</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">June
      30, 2004 and December 31, 2003, respectively</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">34,502,238</FONT>&nbsp;
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">30,381,613</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Inventories</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">30,427,438</FONT>&nbsp;
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">26,228,697</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Prepaid
      expenses and other current</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">assets</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">2,349,712</FONT>&nbsp;
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">1,704,475</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Deferred
      income taxes</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">537,000</FONT>&nbsp;
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">650,000</FONT>&nbsp;
   </TD>
 </TR>
  <TR>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Total
      Current Assets</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">144,140,012</FONT>&nbsp;
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">121,464,686</FONT>&nbsp;
   </TD>
 </TR>
  <TR>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="sans-serif">Property, plant and
      equipment - net</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">41,301,214</FONT>&nbsp;
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">44,119,786</FONT>&nbsp;
   </TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="sans-serif">Intangible assets -
      net</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">3,137,175</FONT>&nbsp;
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">3,637,985</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="sans-serif">Goodwill</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">9,881,854</FONT>&nbsp;
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">9,881,854</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="sans-serif">Prepaid pension costs</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">1,355,017</FONT>&nbsp;
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">1,359,414</FONT>&nbsp;
   </TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="sans-serif">Other assets</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">1,457,377</FONT>&nbsp;
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">1,352,836</FONT>&nbsp;
   </TD>
 </TR>
  <TR>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR>
    <TD colspan = 7>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">TOTAL
      ASSETS</FONT>&nbsp;</TD>
    <TD><font size=2 face="sans-serif">$</font></TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">201,272,649</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD><font size=2 face="sans-serif">$</font></TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">181,816,561</FONT>&nbsp;
   </TD>
 </TR>
  <TR>
    <TD></TD>
    <TD><hr noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD><hr noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
 </TR>
</TABLE>
<BR>
<P align="center"> <font size=2 face="sans-serif">See notes to consolidated unaudited
  financial statements.</font>
<P align="center"> <font size=2 face="sans-serif">-2-</font><br>
<p></P>

<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<p><A name="page_2"></A></P>
<p align="center"><b><font size=2 face="sans-serif">BEL FUSE INC. AND SUBSIDIARIES</font></b>
  <b><font size=2 face="sans-serif"><br>
  CONSOLIDATED BALANCE SHEETS</font></b>&nbsp;</P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="sans-serif">June 30,</FONT>&nbsp;
   </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="sans-serif">December
      31,</FONT>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="sans-serif">2004</FONT>&nbsp;
   </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="sans-serif">2003</FONT>&nbsp;
   </TD>
    <TD nowrap align=center>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD>
      <HR noshade size=1></TD>
    <TD>
      <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="sans-serif">(Unaudited)</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap colspan=4 align=left> <div align="center"><B><FONT size=2 face="sans-serif">LIABILITIES
        AND STOCKHOLDERS' EQUITY</FONT></B>&nbsp;</div></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="sans-serif">Current Liabilities:</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Current
      portion of long-term debt</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap><font size=2 face="sans-serif">$</font></TD>
    <TD align=right nowrap><font size=2 face="sans-serif">2,000,000</font>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left nowrap> <FONT size=2 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">2,000,000</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Accounts
      payable</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">11,184,480</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">7,514,860</FONT>&nbsp;
   </TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Accrued
      expenses</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">10,055,060</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">9,442,689</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Income
      taxes payable</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">636,529</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">226,432</FONT>&nbsp;
   </TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Dividends
      payable</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">539,000</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">530,000</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Total
      Current Liabilities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">24,415,069</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">19,713,981</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="sans-serif">Long-term Liabilities:</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Minimum
      pension obligation</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">2,187,627</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">1,983,627</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Long-term
      debt - net of current portion</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">5,500,000</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">6,500,000</FONT>&nbsp;
   </TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Deferred
      income taxes</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">8,412,000</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">6,764,000</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Total
      Long-term Liabilities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">16,099,627</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">15,247,627</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Total
      Liabilities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">40,514,696</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">34,961,608</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=2 face="sans-serif">Commitments and Contingencies</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="sans-serif">Stockholders' Equity:</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Preferred
      stock, no par value,</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">authorized
      1,000,000 shares;</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">none
      issued</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">&#151;</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">&#151;</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Class
      A common stock, par value</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">$.10
      per share - authorized</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">10,000,000
      shares; outstanding</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap colspan=2 align=left> &nbsp;&nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">2,701,663
      and 2,701,663 shares at June 30, 2004</FONT></TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">&nbsp;and
      December 31, 2003, respectively</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;&nbsp;<FONT size=2 face="sans-serif">(net
      of 2,676,225 treasury shares)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">270,167</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">270,167</FONT>&nbsp;
   </TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Class
      B common stock, par value</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">$.10
      per share - authorized</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD colspan=2 align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">30,000,000
      shares; outstanding 8,607,192</FONT></TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD colspan=2 align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">and
      8,460,692 shares, at June 30, 2004 and</FONT></TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">December
      31, 2003, respectively</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">(net
      of 8,405,492 treasury shares)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">860,719</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">846,069</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Additional
      paid-in capital</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">20,735,024</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">17,352,448</FONT>&nbsp;
   </TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Retained
      earnings</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">138,108,727</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">127,406,693</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Accumulated
      other comprehensive</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">income</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">783,316</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="sans-serif">979,576</FONT>&nbsp;
   </TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">Total
      Stockholders' Equity</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap> <FONT size=2 face="sans-serif">160,757,953</FONT>&nbsp;
   </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">146,854,953</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif">TOTAL
      LIABILITIES AND</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align="left" nowrap> <FONT size=2 face="sans-serif">&nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="sans-serif"></FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;STOCKHOLDERS'
      EQUITY</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap><font size=2 face="sans-serif">$</font></TD>
    <TD align=right nowrap><FONT size=2 face="sans-serif">201,272,649</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT size=2 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=2 face="sans-serif">181,816,561</FONT>&nbsp;
   </TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="2"> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
 </TR>
</TABLE>
<p align="center"><font size=2 face="sans-serif">See notes to consolidated unaudited
  financial statements.</font></P>
<p align="center"><FONT size=2 face="sans-serif">-3-</FONT> </p>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<A name="page_3"></A>
<P align="center"><b><font size=1 face="sans-serif">BEL FUSE INC. AND SUBSIDIARIES</font></b><font size="1"><br>
  <b><font face="sans-serif">CONSOLIDATED STATEMENTS OF OPERATIONS</font></b><br>
  <b><font face="sans-serif">(Unaudited)</font></b> </font>
<p></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width="38%" align=left nowrap>&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD colspan="5" align=center nowrap><font size=1 face="sans-serif">Six Months
      Ended</font>&nbsp;</TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD colspan="5" align=center nowrap><font size=1 face="sans-serif">Three Months
      Ended</font></TD>
    <TD width="2%" align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center nowrap><font size=1 face="sans-serif">June 30,</font>&nbsp;
    </TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD colspan="5" align=center nowrap><font size=1 face="sans-serif">June 30,</font></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="2%" align=right nowrap>&nbsp;</TD>
    <TD width="10%" align=center nowrap><font size=1 face="sans-serif">2004</font></TD>
    <TD width="4%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="11%" align=center nowrap><font size=1 face="sans-serif">2003</font></TD>
    <TD width="3%" align=center nowrap>&nbsp;</TD>
    <TD width="2%" align=center nowrap>&nbsp;</TD>
    <TD width="10%" align=center nowrap><font size=1 face="sans-serif">2004</font></TD>
    <TD width="3%" align=center nowrap>&nbsp;</TD>
    <TD width="1%" align=center nowrap>&nbsp;</TD>
    <TD width="10%" align=center nowrap><font size=1 face="sans-serif">2003</font></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right><HR noshade size=1></TD>
    <TD nowrap align=right><HR noshade size=1></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=right><HR noshade size=1></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=right><HR noshade size=1></TD>
    <TD nowrap align=right></TD>
    <TD nowrap align=right><HR noshade size=1></TD>
    <TD nowrap align=right><HR noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Net Sales</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">90,747,265</FONT></TD>
    <TD align=right nowrap>&nbsp;&nbsp;</TD>
    <TD align=left nowrap><font size=1 face="sans-serif">$</font>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">69,768,508</FONT></TD>
    <TD align=right nowrap>&nbsp;&nbsp;</TD>
    <TD align=left nowrap><font size=1 face="sans-serif">$</font></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">48,390,242</FONT></TD>
    <TD align=right nowrap>&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">44,821,149</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Costs and expenses:</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp;<FONT size=1 face="sans-serif">Cost of
      sales</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">62,987,015</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">50,874,944</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">33,196,001</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">32,907,743</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp;<FONT size=1 face="sans-serif"><FONT size=1 face="sans-serif"></FONT>Selling,
      general and administrative</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">15,069,585</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">13,169,395</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">8,118,713</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">8,322,341</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp;<FONT size=1 face="sans-serif">Write down
      of fixed assets</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1,032,786</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">&#151;</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1,032,786</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">&#151;</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD></TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">79,089,386</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">64,044,339</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">42,347,500</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">41,230,084</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Income from operations</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">11,657,879</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">5,724,169</FONT>&nbsp;
    </TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">6,042,742</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">3,591,065</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Other income (expense):</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap>&nbsp; &nbsp;<font size=1 face="sans-serif">Interest
      expense</font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right valign="bottom" nowrap><font size=1 face="sans-serif">(116,474</font>
    </TD>
    <TD align=left valign="bottom" nowrap><font size=1 face="sans-serif">)</font></TD>
    <TD align=left valign="bottom" nowrap>&nbsp;</TD>
    <TD align=right valign="bottom" nowrap><font size=1 face="sans-serif">(83,285</font>
    </TD>
    <TD align=left valign="bottom" nowrap><font size=1 face="sans-serif">)</font></TD>
    <TD align=left valign="bottom" nowrap>&nbsp;</TD>
    <TD align=right valign="bottom" nowrap><font size=1 face="sans-serif">(59,708</font>
    </TD>
    <TD align=left valign="bottom" nowrap><font size=1 face="sans-serif">)</font></TD>
    <TD align=left valign="bottom" nowrap>&nbsp;</TD>
    <TD align=right valign="bottom" nowrap><font size=1 face="sans-serif">(72,868</font></TD>
    <TD align=left nowrap><font size=1 face="sans-serif">)</font>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp;<FONT size=1 face="sans-serif">Interest
      income</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">279,579</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">199,620</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">175,219</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">73,023</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp;<FONT size=1 face="sans-serif">Lawsuit
      proceeds</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">2,935,000</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">&#151;</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">2,935,000</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">&#151;</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">3,098,105</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">116,335</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">3,050,511</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">155</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 15>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Earnings before provision
      for income taxes</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">14,755,984</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">5,840,504</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">9,093,253</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">3,591,220</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Income tax provision</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">2,956,000</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1,303,000</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1,948,000</FONT>&nbsp;
    </TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">834,000</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 15>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Net earnings</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,799,984</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=left nowrap><font size=1 face="sans-serif">$</font></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">4,537,504</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=left nowrap><font size=1 face="sans-serif">$</font></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">7,145,253</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">2,757,220</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp; </TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp; </TD>
  </TR>
  <TR>
    <TD colspan = 15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Earnings per common
      share - basic</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left><font size=1 face="sans-serif">$</font></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1.05</FONT></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=left><font size=1 face="sans-serif">$</font></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">0.41</FONT></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=left><font size=1 face="sans-serif">$</font></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">0.64</FONT></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">0.25</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp; </TD>
  </TR>
  <TR>
    <TD colspan = 15>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Earnings per common
      share - diluted</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap><font size=1 face="sans-serif">$</font>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">1.03</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=left nowrap><font size=1 face="sans-serif">$</font></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">0.41</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=left nowrap><font size=1 face="sans-serif">$</font></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">0.63</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">0.25</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 15>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Weighted average common
      shares</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">outstanding - basic</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">11,225,389</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">10,950,769</FONT>&nbsp;
    </TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">11,247,242</FONT></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">10,956,062</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Weighted average common
      shares</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">outstanding - diluted</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,418,840</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,081,281</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,426,868</FONT></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,090,629</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center"> <font size=1 face="sans-serif">See notes to consolidated unaudited
  financial statements.</font>
<P align="center"> <font size=1 face="sans-serif">-4-</font><br>
<p></P>

<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<p><A name="page_4"></A></P>
<p align="center"><b><font size=1 face="sans-serif">BEL FUSE INC. AND SUBSIDIARIES</font></b>
  <b><font size=1 face="sans-serif"><br>
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY</font></b></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap><font size=1 face="sans-serif">Accumulated</font></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap colspan=2 align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center><font size=1 face="sans-serif">Other</font></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap colspan=2 align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Compre-</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Compre-</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap colspan=2 align=center> <FONT size=1 face="sans-serif">Class A</FONT>&nbsp;
    </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Class
      B</FONT>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Additional</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=center></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">hensive</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Retained</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">hensive</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap colspan=2 align=center> <FONT size=1 face="sans-serif">Common</FONT>&nbsp;
    </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Common</FONT>&nbsp;
    </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Paid-In</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Total</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Income
      (loss)</FONT></TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Earnings</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap colspan=2 align=center> <FONT size=1 face="sans-serif">Income (loss)</FONT>
    </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap colspan=2 align=center> <FONT size=1 face="sans-serif">Stock</FONT>&nbsp;
    </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Stock</FONT>&nbsp;
    </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="sans-serif">Capital</FONT>&nbsp;
    </TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <hr noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan =2> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD colspan =2> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR>
    <TD colspan = 27>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">Balance,
      January 1, 2003</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">$</FONT>
    </TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">130,659,147</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">$</FONT>
    </TD>
    <TD align=right bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">115,632,819</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">$</FONT>
    </TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">(50,132</FONT>
    </TD>
    <TD align=left bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">)</FONT>&nbsp;
    </TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">$</FONT>&nbsp;
    </TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">267,623</FONT>&nbsp;
    </TD>
    <TD bgcolor="#ccffcc">&nbsp;&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">$</FONT>
    </TD>
    <TD align=right bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">826,149</FONT>&nbsp;
    </TD>
    <TD bgcolor="#ccffcc">&nbsp;&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">$</FONT>
    </TD>
    <TD align=right bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">13,982,688</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Exercise of stock</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">options</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">2,580,224</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">2,544</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">19,920</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">2,557,760</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">Tax
      benefits arising</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> &nbsp;<FONT size=1 face="sans-serif">from
      the disposition of</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> &nbsp;<FONT size=1 face="sans-serif">non-qualified</FONT>&nbsp;
    </TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> &nbsp;<FONT size=1 face="sans-serif">stock
      options</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">812,000</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">812,000</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Cash dividends on Class
      A</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">common stock</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">(322,234</FONT></TD>
    <TD nowrap align=left> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">(322,234</FONT></TD>
    <TD align=left> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">Cash
      dividends on Class B</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> &nbsp;<FONT size=1 face="sans-serif">common
      stock</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">(1,667,586</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">)</FONT>&nbsp;
    </TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">(1,667,586</FONT>
    </TD>
    <TD align=left bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">)</FONT>&nbsp;
    </TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Currency translation</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">adjustment - net
      of tax</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1,014,808</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1,014,808</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">1,014,808</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">Increase
      in marketable</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> &nbsp;<FONT size=1 face="sans-serif">securities-net
      of taxes</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">14,900</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">14,900</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">14,900</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Net income</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">13,763,694</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">13,763,694</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">13,763,694</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
      income</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">$</FONT>
    </TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT size=1 face="sans-serif">14,793,402</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"><hr noshade size=2></TD>
    <TD><hr noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">&nbsp; </TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Balance, December 31,
      2003</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">146,854,953</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">127,406,693</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">979,576</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">270,167</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">846,069</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">17,352,448</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Exercise of stock</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp;<FONT size=1 face="sans-serif">options</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">2,927,226</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">14,650</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">2,912,576</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Tax benefits arising</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">from the disposition
      of</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">non-qualified</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">stock options</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">470,000</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">470,000</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Cash dividends on Class
      A</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp;<FONT size=1 face="sans-serif">common stock</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right> <FONT size=1 face="sans-serif">(270,000</FONT></TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">(270,000</FONT></TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Cash dividends on Class
      B</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">common stock</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD align=right> <FONT size=1 face="sans-serif">(827,950</FONT></TD>
    <TD nowrap align=left> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD align=right> <FONT size=1 face="sans-serif">(827,950</FONT></TD>
    <TD nowrap align=left> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Currency translation</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp;<FONT size=1 face="sans-serif">adjustment - net
      of tax</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right> <FONT size=1 face="sans-serif">(203,460</FONT></TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">(203,460</FONT></TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">(203,460</FONT></TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">Increase in marketable</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT size=1 face="sans-serif">securities-net
      of taxes</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">7,200</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">7,200</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">7,200</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Net income</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,799,984</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,799,984</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">11,799,984</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"></TD>
    <TD></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=1 face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
      income</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD nowrap align=right> <FONT size=1 face="sans-serif">11,603,724</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT size=1 face="sans-serif">Balance, June 30, 2004
      (Unaudited)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">160,757,953</FONT>
    </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">138,108,727</FONT>
    </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">783,316</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">270,167</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=1 face="sans-serif">860,719</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT size=1 face="sans-serif">$</FONT></TD>
    <TD align=right> <FONT size=1 face="sans-serif">20,735,024</FONT>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
  </TR>
</TABLE>
<p>&nbsp;</p>
<p align="center"><FONT size=1 face="sans-serif">See notes to consolidated unaudited
  financial statements.</FONT></p>
<p align="center"><FONT size=1 face="sans-serif"> -5-</FONT><BR>
</p>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<p><A name="page_5"></A></P>
<p align="center"><b><font face="sans-serif">BEL FUSE INC. AND SUBSIDIARIES</font></b>
  <b><font face="sans-serif"><br>
  CONSOLIDATED STATEMENTS OF CASH FLOWS</font></b>&nbsp;<b><font face="sans-serif"><br>
  (Unaudited)</font></b></p>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width="55%" align=left nowrap>&nbsp;</TD>
    <TD width="0%">&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT face="sans-serif">Six Months Ended</FONT>
    </TD>
    <TD width="3%" align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT face="sans-serif">June 30,</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT face="sans-serif">2004</FONT></TD>
    <TD width="6%" align=center nowrap>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT face="sans-serif">2003</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD width="3%" align=left nowrap><HR noshade size=1></TD>
    <TD width="14%" align=left nowrap><HR noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD width="3%" align=left nowrap><HR noshade size=1></TD>
    <TD width="16%" align=left nowrap><HR noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT face="sans-serif">Cash flows
      from operating</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT face="sans-serif">&nbsp;&nbsp;activities:</FONT>&nbsp;
    </TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Net income</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">11,799,984</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">4,537,504</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT face="sans-serif">Adjustments
      to reconcile net</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT face="sans-serif">&nbsp;&nbsp;income
      to net cash provided</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> <FONT face="sans-serif">&nbsp;&nbsp;by
      operating activities:</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc"></TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Depreciation
      and amortization</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">4,372,332</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">3,907,889</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<font face="Arial">Fixed asset
    impairment</font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">1,032,786</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">&#151;</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Other</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">674,000</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">57,000</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Deferred
      income taxes</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">1,665,000</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">662,000</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Changes
      in operating assets</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">and
      liabilities (net of acquisitions)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(4,431,561</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(1,847,985</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Net
      Cash Provided by</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Operating
      Activities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">15,112,541</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">7,316,408</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT face="sans-serif">Cash flows from investing activities:</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Purchase
      of property, plant</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">and
      equipment</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(2,010,767</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(1,864,073</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Purchase
      of marketable</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">securities</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(1,392,146</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(1,228,873</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Payment
      for acquisitions - net of</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">cash
      acquired</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(74,539</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(36,104,410</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Proceeds
      from repayment</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">by
      contractors</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">14,500</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">14,500</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Proceeds
      from sale of</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">marketable
      securities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">4,953,449</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">4,904,875</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT face="sans-serif">&nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; Net Cash Provided by (Used in)</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp;<FONT face="sans-serif">Investing Activities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">1,490,497</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(34,277,981</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
</TABLE>
<BR>
<P align="center"> <FONT size=2 face="sans-serif">See notes to consolidated unaudited
  financial statements. </FONT></P>
<P align="center"><FONT size=2 face="sans-serif">-6-</FONT></P>

<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<A name="page_6"></A>
<P align="center"> <B><FONT face="sans-serif">BEL FUSE INC. AND SUBSIDIARIES</FONT></B><br>
  <B><FONT face="sans-serif">CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
  <br>
  (Unaudited)</FONT></B></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT face="sans-serif">Six Months Ended</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT face="sans-serif">June 30,</FONT>&nbsp;
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT face="sans-serif">2004</FONT></TD>
    <TD align=center nowrap>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT face="sans-serif">2003</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT face="sans-serif">Cash flows from financing</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp;<FONT face="sans-serif">activities:</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Proceeds
      from borrowings</FONT>&nbsp;</TD>
    <TD bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT face="sans-serif">&#151;</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=right nowrap bgcolor="#ccffcc"> <FONT face="sans-serif">10,000,000</FONT>
    </TD>
    <TD align=left nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Loan repayments</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(1,000,000</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(500,000</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap bgcolor="#ccffcc"> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Proceeds
      from exercise of</FONT>&nbsp;</TD>
    <TD align="right" bgcolor="#CCFFCC">&nbsp;</TD>
    <TD align=right nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=right nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=right nowrap bgcolor="#ccffcc">&nbsp;</TD>
    <TD align=right nowrap bgcolor="#ccffcc"></TD>
    <TD align=right nowrap bgcolor="#ccffcc">&nbsp;</TD>
  </TR>
  <TR align="right" valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">stock
      options</FONT>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD nowrap> <FONT face="sans-serif">2,927,226</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">271,066</FONT></TD>
    <TD align=right nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Dividends
      paid to common</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">shareholders</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(1,088,950</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(824,411</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT face="sans-serif">&nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif"></FONT>&nbsp;&nbsp;Net
      Cash Provided By</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Financing
      Activities</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">838,276</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">8,946,655</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap colspan=3 align=left> <FONT face="sans-serif">Effect of exchange
      rate changes on cash</FONT>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(71,490</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> <FONT face="sans-serif">Net Increase (decrease) in</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Cash and
      Cash Equivalents</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">17,369,824</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(18,014,918</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT face="sans-serif">Cash and Cash Equivalents</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp;<FONT face="sans-serif">- beginning of period</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">57,461,152</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">59,002,581</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT face="sans-serif">Cash and Cash Equivalents</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp;<FONT face="sans-serif">- end of period</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">74,830,976</FONT></TD>
    <TD align=left nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">40,987,663</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT face="sans-serif">Changes in operating assets</FONT>&nbsp;
    </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap colspan=3 align=left> &nbsp;<FONT face="sans-serif">and liabilities
      (net of acquisitions) consist of:</FONT>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Increase
      in accounts receivable</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(4,165,495</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(11,601</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Increase
      in inventories</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(4,244,931</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">(2,191,871</FONT></TD>
    <TD nowrap align=left> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Increase
      in prepaid</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">expenses
      and other</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">current
      assets</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(645,237</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(1,336,228</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Decrease
      in prepaid taxes</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">752,781</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Increase
      in other assets</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(104,682</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(334,963</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Increase
      in accounts payable</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">3,628,710</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">1,199,354</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD colspan=3 align=left nowrap> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Increase
      in income taxes payable</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">410,097</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">&#151;</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> &nbsp; &nbsp; &nbsp;<FONT face="sans-serif">Increase
      in accrued expenses</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">689,977</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">74,543</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(4,431,561</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">(1,847,985</FONT></TD>
    <TD align=left nowrap> <FONT face="sans-serif">)</FONT>&nbsp;</TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
  </TR>
</TABLE>
<BR>
<P align="center"> <FONT size=2 face="sans-serif">See notes to consolidated unaudited
  financial statements. </FONT></P>
<P align="center"><FONT size=2 face="sans-serif">-7-</FONT></P>

<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<A name="page_7"></A>
<P align="center"> <B><FONT face="sans-serif">BEL FUSE INC. AND SUBSIDIARIES<br>
  </FONT></B><B><FONT face="sans-serif">CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Concluded)<br>
  (Unaudited)</FONT></B></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align=center nowrap> <FONT face="sans-serif">Six Months Ended</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align=center nowrap> <FONT face="sans-serif">June 30,</FONT>&nbsp;
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap><font face="sans-serif">2004</font>&nbsp;
    </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="3" align=center nowrap><font face="sans-serif">2003</font></TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap><HR noshade size=1></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="3" align=center nowrap><HR noshade size=1></TD>
  </TR>
  <TR>
    <TD colspan = 10>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">Supplementary
      information:</FONT> </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;Cash
      paid during the period for:</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
      taxes</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">410,021</FONT>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <font face="sans-serif">32,000</font></TD>
    <TD align=right nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD><HR noshade size=2></TD>
    <TD>&nbsp; </TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">116,474</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD nowrap align=right> <font face="sans-serif">83,285</font></TD>
    <TD nowrap align=right>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="100%" align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=2></TD>
    <TD><HR noshade size=2></TD>
    <TD>&nbsp; </TD>
  </TR>
  <TR>
    <TD colspan = 10 align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">Details of acquisitions:</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fair
      value of assets</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD colspan=4 align=left nowrap> <FONT face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;acquired
      (excluding cash of $2,436,000</FONT>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in
      2003)</FONT></TD>
    <TD align=left nowrap>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">&#151;</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <font face="sans-serif">36,817,627</font></TD>
    <TD align=right nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangibles</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">74,539</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <font face="sans-serif">5,733,904</font></TD>
    <TD nowrap align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">Less: cash on
      deposit previous year</FONT></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">&#151;</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <font face="sans-serif">(6,447,121</font></TD>
    <TD align=left nowrap>)</TD>
  </TR>
  <TR>
    <TD width="100%" align="left"></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD></TD>
    <TD align="left"> <HR noshade size=1></TD>
    <TD><hr noshade size=1></TD>
    <TD>&nbsp; </TD>
  </TR>
  <TR valign="bottom" bgcolor="#ccffcc">
    <TD width="100%" align=left nowrap> <FONT face="sans-serif">Cash paid for
      acquisitions</FONT> </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">74,539</FONT>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <FONT face="sans-serif">$</FONT>&nbsp;</TD>
    <TD align=right nowrap> <font face="sans-serif">36,104,410</font></TD>
    <TD align=right nowrap>&nbsp;</TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD><hr noshade size=2></TD>
    <TD>&nbsp; </TD>
  </TR>
</TABLE>
<BR>
<P align="center"> <FONT size=2 face="sans-serif">See notes to consolidated unaudited
  financial statements. </FONT></P>
<P align="center"><FONT size=2 face="sans-serif">-8-</FONT></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_5"></A> </font>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">BEL FUSE
  INC. AND SUBSIDIARIES<br>
  </FONT><font size="2"><FONT face="Arial, Helvetica, sans-serif">NOTES TO CONSOLIDATED
  FINANCIAL STATEMENTS<br>
  (Unaudited) </FONT></font></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basis
  of Presentation and Accounting Policies </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The consolidated balance
  sheet as of June 30, 2004, and the consolidated statements of operations and
  cash flows for the periods presented herein have been prepared by Bel Fuse Inc.
  (the "Company" or "Bel") and are unaudited. In the opinion of management, all
  adjustments (consisting solely of normal recurring adjustments) necessary to
  present fairly the financial position, results of operations and cash flows
  for all periods presented have been made. The information for the consolidated
  balance sheet as of December 31, 2003 was derived from audited financial statements.
  </FONT></P>
<font size="2"><u><font face="Arial, Helvetica, sans-serif">Accounting Policies</font></u></font>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">DESCRIPTION OF
  BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</FONT></U></font></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Bel Fuse Inc. and subsidiaries
  operate in one industry with three reporting segments and are engaged in the
  design, manufacture and sale of products used in local area networking, telecommunication,
  business equipment and consumer electronic applications. The Company manages
  its operations geographically through its three reporting units: North America,
  Asia and Europe. Sales are predominantly in North America, Europe and Asia.
  </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">PRINCIPLES OF
  CONSOLIDATION - </FONT></U><FONT face="Arial, Helvetica, sans-serif">The consolidated
  financial statements include the accounts of the Company and its wholly owned
  subsidiaries including the businesses acquired since their respective dates
  of acquisition. All intercompany transactions and balances have been eliminated.
  </FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">USE OF ESTIMATES
  - </FONT></U><FONT face="Arial, Helvetica, sans-serif">The preparation of the
  consolidated financial statements in conformity with accounting principles generally
  accepted in the United States of America requires management to make estimates
  and assumptions that affect the reported amounts of assets and liabilities and
  disclosure of contingent assets and liabilities at the date of the financial
  statements and the reported amounts of revenues and expenses during the reporting
  period. Actual results could differ from those estimates. </FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">CASH EQUIVALENTS
  - </FONT></U><FONT face="Arial, Helvetica, sans-serif">Cash equivalents include
  short-term investments in U.S. treasury bills and commercial paper with an original
  maturity of three months or less when purchased. At June 30, 2004 and December
  31, 2003, cash equivalents approximated $43,686,000 and $25,228,000, respectively.
  </FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">MARKETABLE SECURITIES
  &#150; </FONT></U><FONT face="Arial, Helvetica, sans-serif">The Company classifies
  its investments in equity securities as "available for sale", and, accordingly,
  reflects unrealized gains and losses, net of deferred income taxes, as Other
  Comprehensive Income. </FONT></font></P>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-9-</font><font size="2"></font>
 <HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_6"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The fair values of marketable
  securities are estimated based on quoted market prices. Realized gains or losses
  from the sales of marketable securities are based on the specific identification
  method. </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">FOREIGN CURRENCY
  TRANSLATION - </FONT></U><FONT face="Arial, Helvetica, sans-serif">The functional
  currency for some foreign operations is the local currency. Assets and liabilities
  of foreign operations are translated at balance sheet date rates of exchange
  and income, expense and cash flow items are translated at the average exchange
  rate for the period. Translation adjustments are recorded in Other Comprehensive
  Income. The U.S. Dollar is used as the functional currency for certain foreign
  operations that conduct their business in U.S. Dollars. A combination of current
  and historical exchange rates is used in measuring the local currency transactions
  of these subsidiaries and the resulting exchange adjustments are included in
  the statement of operations. Realized foreign currency gains/(losses) were $74,000
  and $(10,000) for the six months ended June 30, 2004 and 2003, and $62,000 and
  $16,000 for the three months ended June 30, 2004 and 2003, respectively, and
  are included in Selling, General and Administrative expenses in the consolidated
  statement of operations. </FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">CONCENTRATION
  OF CREDIT RISK - </FONT></U><FONT face="Arial, Helvetica, sans-serif">Financial
  instruments which potentially subject the Company to concentrations of credit
  risk consist principally of accounts receivable and temporary cash investments.
  The Company grants credit to customers that are primarily original equipment
  manufacturers and to subcontractors of original equipment manufacturers based
  on an evaluation of the customer's financial condition, without requiring collateral.
  Exposure to losses on receivables is principally dependent on each customer's
  financial condition. The Company controls its exposure to credit risk through
  credit approvals, credit limits and monitoring procedures and establishes allowances
  for anticipated losses. </FONT></font></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company places its
  temporary cash investments with quality financial institutions and commercial
  issuers of short-term paper and, by policy, limits the amount of credit exposure
  in any one financial instrument. </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">INVENTORIES -
  </FONT></U><FONT face="Arial, Helvetica, sans-serif">Inventories are stated
  at the lower of weighted average cost or market.</FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">REVENUE RECOGNITION
  &#150;</FONT></U><FONT face="Arial, Helvetica, sans-serif">The Company recognizes
  revenue in accordance with the guidance contained in SEC Staff Accounting Bulletin
  No. 104, "Revenue Recognition in Financial Statements" ("SAB 104"). Revenue
  is recognized when the product has been delivered and title and risk of loss
  has passed to the customer, collection of the resulting receivable is deemed
  probable by management, persuasive evidence of an arrangement exists and the
  sales price is fixed and determinable. Substantially all of the Company's shipments
  are FCA (free carrier) which provides for title to pass upon delivery to the
  customer's freight carrier. Some product is shipped DDP/DDU with title passing
  when the product arrives at the customer's dock.</FONT></font></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">For certain customers,
  the Company provides consigned inventory, either at the customer&#146;s facility
  or at a third party warehouse. Sales of consigned inventory are recorded when
  the customer withdraws inventory from consignment</FONT><font size="2"><B><FONT face="Arial, Helvetica, sans-serif">.
  </FONT></B></font></P>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-10-</font><font size="2"></font>
</P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_7"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company typically has
  a twelve-month warranty policy for workmanship defects. Warranty returns have
  historically averaged at or below 1% of annual net sales. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company is not contractually
  obligated to accept returns except for defective product or in instances where
  the product does not meet the customer's quality specifications. However, the
  Company may permit its customers to return product for other reasons. In these
  instances, the Company would generally require a significant cancellation penalty
  payment by the customer. The Company estimates such returns, where applicable,
  based upon management's evaluation of historical experience, market acceptance
  of products produced and known negotiations with customers. Such estimates are
  deducted from gross sales and provided for at the time revenue is recognized.
  </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">GOODWILL AND OTHER
  INTANGIBLES &#150; </FONT></U><FONT face="Arial, Helvetica, sans-serif">In June
  2001, the Financial Accounting Standards Board (&#147;FASB&#148;) issued SFAS
  No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). SFAS 142 specifies
  the financial accounting and reporting for acquired goodwill and other intangible
  assets. Goodwill and intangible assets that have indefinite useful lives are
  not amortized but rather they are tested at least annually for impairment unless
  certain impairment indicators are identified. This standard was effective for
  fiscal years beginning after December 15, 2001. The Company tests goodwill for
  impairment, at least annually (fourth quarter), using a fair value approach
  at the reporting unit level. A reporting unit is an operating segment or one
  level below an operating segment for which discrete financial information is
  available and reviewed regularly by management. Assets and liabilities of the
  Company have been assigned to the reporting units to the extent that they are
  employed in or are considered a liability related to the operations of the reporting
  unit and were considered in determining the fair value of the reporting unit.
  Upon adoption of this standard, the Company allocated its goodwill and other
  intangibles to two reporting units - North America and Asia.</FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">DEPRECIATION -
  </FONT></U><FONT face="Arial, Helvetica, sans-serif">Property, plant and equipment
  are stated at cost less accumulated depreciation and amortization. Depreciation
  and amortization are calculated primarily using the declining-balance method
  for machinery and equipment and the straight-line method for buildings and improvements
  over their estimated useful lives. </FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">INCOME TAXES -
  </FONT></U><FONT face="Arial, Helvetica, sans-serif">The Company accounts for
  income taxes using an asset and liability approach under which deferred income
  taxes are recognized by applying enacted tax rates applicable to future years
  to the differences between the financial statement carrying amounts and the
  tax bases of reported assets and liabilities. </FONT></font></P>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-11-</font><font size="2"></font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_8"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Except for a portion of
  foreign earnings, an income tax provision has not been recorded for U.S. federal
  income taxes on the undistributed earnings of foreign subsidiaries as such earnings
  are intended to be permanently reinvested in those operations. Such earnings
  would become taxable upon the sale or liquidation of these foreign subsidiaries
  or upon the repatriation of dividends. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">STOCK-OPTION PLAN &#150;
  The Company accounts for equity-based compensation issued to employees in accordance
  with Accounting Principles Board ("APB") Opinion No. 25 "Accounting for Stock
  Issued to Employees". APB No. 25 requires the use of the intrinsic value method,
  which measures compensation cost as the excess, if any, of the quoted market
  price of the stock at the measurement date over the amount an employee must
  pay to acquire the stock. The Company makes disclosures of pro forma net earnings
  and earnings per share as if the fair-value-based method of accounting had been
  applied as required by SFAS No. 123 "Accounting for Stock-Based Compensation-Transition
  and Disclosure".</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In December 2002, the FASB
  issued SFAS No. 148, &#147;Accounting for Stock-Based Compensation-Transition
  and Disclosure, an amendment of FASB Statement No. 123&#148;. SFAS No. 148 provides
  alternative methods of transition for a voluntary change to the fair value based
  method of accounting for stock-based employee compensation. It also requires
  disclosure in both annual and interim financial statements about the method
  of accounting for stock-based employee compensation and the effect of the method
  used on reported results. The Company adopted the disclosure provisions of SFAS
No. 148 beginning with the year ended December 31, 2002. The Company grants
incentive stock options at fair market value at the date of the grant. The
Company will continue to account for stock-based employee compensation under the
recognition and measurement principle of APB Opinion No. 25 and related
interpretations.</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company has adopted
  the disclosure-only provisions of Statement of Financial Accounting Standards
  No. 123, "Accounting for Stock-Based Compensation" (SFAS No. 123). Had compensation
  cost for the Company's stock option plan been determined based on the fair value
  at the grant date for awards in 2003 consistent with the provisions of SFAS
  No. 123, the Company's net earnings and earnings per share would have been reduced
  to the pro forma amounts indicated below: </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap colspan=4 align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap colspan=4 align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">Three
      Months Ended</FONT></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap colspan=4 align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap colspan=3 align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2004</FONT>
   </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2003</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=center></TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2004</FONT>
   </TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2003</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      earnings - as reported</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,799,984</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">4,537,504
      </FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">7,145,253</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,757,220</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap colspan=2 align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">Stock-based
      compensation expense</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;using
      fair value method</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">(619,797</FONT>
   </TD>
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">(959,432</FONT>
   </TD>
    <TD nowrap align=left><font size="2">)</font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">(309,899</FONT>
   </TD>
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">(539,709</FONT>
   </TD>
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      earnings - pro forma</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,180,187</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">3,578,072</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">6,835,354</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,217,511</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Earnings
      per share -</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;basic-as
      reported</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1.05</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">0.41</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">0.64</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">0.25</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Earnings
      per share -</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;basic-pro
      forma</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.99</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.33</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.61</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.20</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Earnings
      per share -</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;diluted-as
      reported</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1.03</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">0.41</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">0.62</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">0.25</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Earnings
      per share -</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;diluted-pro
      forma</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.98</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.32</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.60</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.20</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=right><hr noshade size=2></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-12-</font><font size="2"></font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_9"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The fair value of each
  option grant is estimated on the date of grant using the Black-Scholes option-pricing
  model with the following weighted-average assumptions used for grants in 2003:
  dividends yield of .9%, expected volatility of 76% for Class A, and 54% for
  Class B; risk-free interest rate of 2%, and expected lives of 5 years. No options
  were granted during the six months ended June 30, 2004. </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">RESEARCH AND DEVELOPMENT
  - </FONT></U><FONT face="Arial, Helvetica, sans-serif">Research and development
  costs are expensed as incurred, and are included in cost of sales. Generally
  all research and development is performed internally for the benefit of the
  Company. The Company does not perform such activities for others. Research and
  development costs include salaries, building maintenance and utilities, rents,
  materials, administration costs and miscellaneous other items. Research and
  development expenses for the six months ended June 30, 2004 and 2003 amounted
  to $3.7 million and $3.7 million, respectively, and for the three months ended
  June 30, 2004 and 2003 amounted to $1.9 million and $2.1 million, respectively.
  </FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">EVALUATION OF
  LONG-LIVED ASSETS &#150; </FONT></U><FONT face="Arial, Helvetica, sans-serif">The
  Company reviews property and equipment for impairment whenever events or changes
  in circumstances indicate the carrying value may not be recoverable in accordance
  with guidance in SFAS No. 144 &#147;Accounting for the Impairment or Disposal
  of Long-Lived Assets.&#148; If the carrying value of the long-lived asset exceeds
  the present value of the related estimated future cash flows, the asset would
  be adjusted to its fair value and an impairment loss would be charged to operations
  in the period identified.</FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">EARNINGS PER SHARE
  - </FONT></U><FONT face="Arial, Helvetica, sans-serif">Basic earnings per common
  share are computed by dividing net earnings by the weighted average number of
  common shares outstanding during the period. Diluted earnings per common share
  are computed by dividing net earnings by the weighted average number of common
  shares and potential common shares outstanding during the period. Potential
  common shares used in computing diluted earnings per share relate to stock options
  and warrants which, if exercised, would have a dilutive effect on earnings per
  share.</FONT></font></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The following table includes
  a reconciliation of shares used in the calculation of basic and diluted earnings
  per share: </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan=3 align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan=3 align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">Three
      Months Ended</FONT><font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap colspan=3 align=center><font size="2"><FONT face="Arial, Helvetica, sans-serif">June
      30,</FONT>&nbsp; </font></TD>
    <TD></TD>
    <TD nowrap colspan=3 align=center><font size="2"><FONT face="Arial, Helvetica, sans-serif">June
      30,</FONT>&nbsp; </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"> <hr noshade size=1></TD>
    <TD></TD>
    <TD colspan="3"> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center><font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD></TD>
    <TD nowrap align=center><font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
    <TD></TD>
    <TD nowrap align=center><font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD></TD>
    <TD nowrap align=center><font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Weighted
      average shares outstanding - basic</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,225,389</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">10,950,769</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,247,242</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">10,956,062</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Dilutive
      impact of options and warrants outstanding</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">193,451</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">130,512</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">179,626</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">134,567</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Weighted
      average shares outstanding - diluted</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,418,840</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,081,281</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,426,868</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,090,629</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">During the three months
  ended June 30, 2003, 103,277 of outstanding options were not included in the
  foregoing computations because they were antidilutive. During the six months
  ended June 30, 2003, 104,798 of outstanding options were not included in the
  foregoing computations because they were antidilutive. During the six and three
  months ended June 30, 2004, there were no options that were antidilutive. </FONT></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-13- </FONT></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_10"></A> </font>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">FAIR VALUE OF
  FINANCIAL INSTRUMENTS - </FONT></U><FONT face="Arial, Helvetica, sans-serif">For
  financial instruments, including cash, accounts receivable, accounts payable
  and accrued expenses, it was assumed that the carrying amount approximated fair
  value because of the short maturities of such instruments. Interest rates that
  are currently available to the Company for issuance of debt with similar terms
  and remaining maturities are used to estimate fair value for bank debt. The
  carrying amounts of bank debt is a reasonable estimate of its fair value. </FONT></font></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">RECLASSIFICATIONS
  - </FONT></U><FONT face="Arial, Helvetica, sans-serif">Certain reclassifications
  have been made to prior period amounts to conform to the current year presentation.
  </FONT></font></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Acquisitions
  </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">On March 22, 2003, the
  Company acquired certain assets (including cash acquired of $799,000), subject
  to certain liabilities, and common shares of certain entities comprising the
  Passive Components Group of Insilco Technologies, Inc. ("Insilco") for $37.0
  million in cash, including transaction costs of approximately $1.4 million.
  This acquisition included the Stewart Connector Systems Group (&#147;Stewart&#148;),
  InNet Technologies (&#147;InNet&#148;) and the Signal Transformer Group (&#147;Signal
  Transformer&#148;). The purchase price has been allocated to both tangible and
  intangible assets and liabilities based on estimated fair values after considering
  various independent formal appraisals. Approximately $1.6 million of identifiable
  intangible assets (patents) arose from this transaction; such intangible assets
  are being amortized on a straight line basis over a period of five years. In
  addition, $2.9 million has been attributed to goodwill. Patents having a carrying
  value of $1.6 million and goodwill of $.8 million have been included in the
  Company's Asia reporting unit. Goodwill of $1.5 million and $.6 million has
  been included in the Company's North America and European reporting units, respectively.
  </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Effective January 2, 2003,
  the Company entered into an asset purchase agreement with Advanced Power Components
  plc ("APC") to purchase the communication products division of APC for $5.5
  million in cash plus the assumption of certain liabilities. The agreement also
  required the Company to make contingent payments equal to 5% of sales (as defined)
  in excess of $5.5 million per year for the years 2003 and 2004. No contingent
  purchase price payments were made during 2003 and no contingent purchase price
  payment amounts are due as of June 30, 2004. The purchase price has been allocated
  to both tangible and intangible assets and liabilities based on estimated fair
  values. Goodwill of approximately $2.1 million has been included in the Company's
  Asia reporting segment. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">There was no in-process
  research and development acquired as part of these acquisitions.</FONT></P>
<P align="center"> <font size="2" face="Arial, Helvetica, sans-serif">-14-</font><font size="2">
  </font>
</P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_11"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">These transactions were
  accounted for using the purchase method of accounting and, accordingly, the
  results of operations of Insilco's Passive Components Group have been included
  in the Company's financial statements from March 22, 2003 and the results of
  operations of APC have been included in the Company's financial statements from
  January 2, 2003. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The following unaudited
  pro forma summary results of operations assumes that both Insilco and APC had
  been acquired as of January 1, 2003 (in thousands): </FONT></P>
<TABLE width="40%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT><font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center> <font size="2"><FONT face="Arial, Helvetica, sans-serif">June
      30,</FONT> <FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center> <hr size="1" noshade></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      sales</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">85,482</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      earnings</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">5,229</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Earnings
      per share - diluted</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">0.47</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The information above is
  not necessarily indicative of the results of operations that would have occurred
  if the acquisitions had been consummated as of January 1, 2003. Such information
  should not be construed as being a representation of the future results of operations
  of the Company. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">A condensed balance sheet
  of the major assets and liabilities of the acquired entities at the acquisition
  date is as follows: </FONT></P>
<TABLE width="40%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Cash</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">799,000</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Accounts
      receivable</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">14,764,000</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Inventories</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">15,613,000</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Prepaid
      expenses</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">327,000</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Property,
      plant and</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">equipment</FONT>&nbsp;
      </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,049,000</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Other
      assets</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">244,000</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Goodwill</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">5,062,000</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Patents</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,600,000</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Accounts
      payable</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">(2,748,000</FONT>
   </TD>
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Accrued
      expenses</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">(3,540,000</FONT>
   </TD>
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Income
      taxes payable</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">566,000</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Deferred
      income taxes</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">payable</FONT>&nbsp;
      </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">(421,000</FONT>
   </TD>
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 5>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      assets acquired</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">43,315,000</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill
  and Other Intangibles </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Goodwill represents the
  excess of the purchase price and related acquisition costs over the value assigned
  to the net tangible and other intangible assets with finite lives acquired in
  a business acquisition.</FONT></P>
<P align="center">
<div align="center"><font size="2" face="Arial, Helvetica, sans-serif">-15-</font><font size="2"></font>
  <font size="2"></P> </font> </div>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_12"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Effective January 1, 2002,
  the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142,
  "Goodwill and Other Intangible Assets". Under SFAS No. 142, goodwill and intangible
  assets deemed to have indefinite lives are no longer amortized, but are subject
  to, at a minimum, an annual impairment test. If the carrying value of goodwill
  or intangible assets exceeds its fair market value, an impairment loss would
  be recorded.</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Other intangibles include
  patents, product information, covenants not-to-compete and supply agreements.
  Amounts assigned to these intangibles have been determined by management. Management
  considered a number of factors in determining the allocations, including valuations
  and independent appraisals. Other intangibles are being amortized over 4 to
  10 years. Amortization expense was $575,000 and $567,000 for the six months
  ended June 30, 2004 and 2003, respectively and $290,000 and $375,000 for the
  three months ended June 30, 2004 and 2003, respectively.</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Under the terms of the
  E-Power and Current Concepts, Inc. acquisition agreements, of May 11, 2001,
  the Company is required to make contingent purchase price payments up to an
  aggregate of $7.6 million should the acquired companies attain specified sales
  levels. E-Power will be paid $2.0 million in contingent purchase price payments
  when sales, as defined, reach $15.0 million and an additional $4.0 million when
  sales reach $25.0 million on a cumulative basis through May 2007. No payments
  have been required through June 30, 2004 with respect to E-Power. Current Concepts
  will be paid 16% of sales, as defined, on the first $10.0 million of sales through
  May 2007. During the three months ended June 30, 2004 and 2003, the Company
  paid $-0- and $65,000 respectively, in contingent price payments to Current
  Concepts. During the six months ended June 30, 2004 and 2003, the Company paid
  approximately $75,000 and $94,000, respectively, in contingent purchase price
  payments to Current Concepts. The contingent purchase price payments are accounted
  for as additional purchase price and increase other intangibles when such payment
  obligations are incurred. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The changes in the carrying
  value of goodwill classified by geographic reporting units, net of accumulated
  amortization, for the six months ended June 30, 2004 and the year ended December
  31, 2003 are as follows: </FONT></P>
<P align="center">
<TABLE width="90%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2">&nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">Total</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Asia</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">North
      America</FONT>&nbsp; </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Europe</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Balance,
      January 1, 2003</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <font size="2">&nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">4,819,563</FONT></font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">3,396,181</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left nowrap> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">$</FONT>&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,423,382</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap>&#151;<font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Goodwill
      allocation</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap> <font size="2">&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">related
      to acquisitions</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <font size="2">&nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">5,062,291</FONT></font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,011,254</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,445,710</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">605,327</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD align="right"> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap><font size=2 face="Arial, Helvetica, sans-serif">Balance
      December 31, 2003</font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap> <font size="2">&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">and
      June 30, 2004</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <font size="2">&nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">9,881,854</FONT>&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">6,407,435</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">$</FONT>&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,869,092</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">605,327</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
 </TR>
</TABLE>
<font size="2"><BR></P>
</font>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-16-</font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_13"></A> </font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">The
  components of other intangibles are as follows: </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD colspan="17" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">December 31, 2003</FONT><font size="1">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD nowrap align=left><font size="1">&nbsp;</font></TD>
    <TD nowrap colspan=4 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">Total</FONT><font size="1">&nbsp; </font></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD nowrap align=left><font size="1">&nbsp;</font></TD>
    <TD nowrap colspan=4 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">Asia</FONT><font size="1">&nbsp; </font></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD nowrap align=left><font size="1">&nbsp;</font></TD>
    <TD nowrap colspan=4 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">North America</FONT><font size="1">&nbsp; </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=1></TD>
    <TD colspan =4> <HR noshade size=1></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD> <HR noshade size=1></TD>
    <TD colspan =4> <HR noshade size=1></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD> <HR noshade size=1></TD>
    <TD colspan =4> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD nowrap colspan=2 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">Gross Carrying</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Accumulated</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD nowrap colspan=2 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">Gross Carrying</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Accumulated</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Gross Carrying</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Accumulated</FONT><font size="1">&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amount</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amortization</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amount</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amortization</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amount</FONT><font size="1">&nbsp; </font></TD>
    <TD align="center"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amortization</FONT><font size="1">&nbsp; </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Patents and Product</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Information</FONT>&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,935,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">863,591</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,653,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">741,680</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">282,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">121,911</FONT><font size="2">&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap colspan=2 align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">Covenants not-to-compete</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,169,987</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,603,411</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,169,987</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,603,411</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp; </font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Supply agreement</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,660,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,660,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,409,800</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,409,800</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,250,200</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,250,200</FONT><font size="2">&nbsp; </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">8,764,987</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">5,127,002</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">7,232,787</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,754,891</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,532,200</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,372,111</FONT><font size="2">&nbsp; </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
  </TR>
  <TR>
    <TD colspan = 19>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD colspan="17" align=center nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">June 30, 2004</FONT><font size="1">&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD nowrap align=left><font size="1">&nbsp;</font></TD>
    <TD nowrap colspan=4 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">Total</FONT><font size="1">&nbsp; </font></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD nowrap align=left><font size="1">&nbsp;</font></TD>
    <TD nowrap colspan=4 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">Asia</FONT><font size="1">&nbsp; </font></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD nowrap align=left><font size="1">&nbsp;</font></TD>
    <TD nowrap colspan=4 align=center> <FONT size=1 face="Arial, Helvetica, sans-serif">North America</FONT><font size="1">&nbsp; </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=1></TD>
    <TD colspan =4> <HR noshade size=1></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD> <HR noshade size=1></TD>
    <TD colspan =4> <HR noshade size=1></TD>
    <TD><font size="1">&nbsp;</font></TD>
    <TD> <HR noshade size=1></TD>
    <TD colspan =4> <HR noshade size=1></TD>
  </TR>
  <TR>
    <TD width=100% align=left valign="bottom" nowrap>&nbsp;</TD>
    <TD colspan=2 align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Gross Carrying</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Accumulated</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan=2 align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Gross Carrying</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Accumulated</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Gross Carrying</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Accumulated</FONT><font size="1">&nbsp;
      </font></TD>
  </TR>
  <TR>
    <TD width=100% align=left valign="bottom" nowrap>&nbsp;</TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amount</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amortization</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amount</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amortization</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amount</FONT><font size="1">&nbsp;
      </font></TD>
    <TD align="center" valign="bottom"><font size="1">&nbsp;</font></TD>
    <TD colspan="2" align=center valign="bottom" nowrap> <FONT size=1 face="Arial, Helvetica, sans-serif">Amortization</FONT><font size="1">&nbsp;
      </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Patents and Product</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Information</FONT>&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,935,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,100,647</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,653,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">964,636</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">282,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">136,011</FONT><font size="2">&nbsp; </font></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap colspan=2 align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">Covenants not-to-compete</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,244,526</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,941,704</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,244,526</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,941,704</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> &#151;<font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> &#151;<font size="2">&nbsp; </font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Supply agreement</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,660,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,660,000</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,409,800</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,409,800</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,250,200</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,250,200</FONT><font size="2">&nbsp; </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">8,839,526</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">5,702,351</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">7,307,326</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">4,316,140</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,532,200</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT> </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,386,211</FONT><font size="2">&nbsp; </font></TD>
  </TR>
  <TR>
    <TD width="100%"></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
  </TR>
</TABLE>
<font size="2"><BR>
</font>
<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">Amortization
  expense for other intangible assets for the next five years is as follows:</FONT></P>
<TABLE width="20%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR align="center" valign="bottom">
    <TD width=100% nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Year
      Ending</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap></TD>
    <TD nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Amortization</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR align="center" valign="bottom">
    <TD width=100% nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">December
      31,</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap></TD>
    <TD nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Expense</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD align=right nowrap><HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right><HR noshade size=1></TD>
    <TD nowrap align=right><HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2004</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,117,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2005</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,031,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2006</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">806,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2007</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">417,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2008</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">266,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR>
    <TD colspan = 5>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Total</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <font size="2"><FONT face="Arial, Helvetica, sans-serif">3,637,000</FONT></font></TD>
 </TR>
  <TR valign="bottom">
    <TD align=right nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=right nowrap><HR noshade size=2></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories
  </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  components of inventories are as follows: </FONT></P>
<P align="center">
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT><font size="2">&nbsp; </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">December
      31,</FONT><font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Raw
      materials</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">17,801,214</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left nowrap> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">$</FONT>&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">12,421,655</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Work
      in progress</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,795,719</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">2,094,474</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Finished
      goods</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">10,830,505</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,712,568</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">30,427,438</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">$</FONT>&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">26,228,697</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
 </TR>
</TABLE>
<font size="2"><BR></P>
</font>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-17- </FONT></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_14"></A> </font> <font size="2" face="Arial, Helvetica, sans-serif">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restructuring
Charges</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">During the six months ended
  June 30, 2004 and 2003, the Company incurred approximately $244,000 and $106,000,
  respectively, of severance costs and anticipates additional severance expenses
  for the remainder of 2004 of approximately $50,000 as additional jobs are moved
  to mainland China and Hong Kong operations are restructured. </FONT></P>
<font size="2" face="Arial, Helvetica, sans-serif">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed
Asset Impairment</font><font size="2"><br>
</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif"> During the six month period
  ended June 30, 2004 the Company wrote down fixed assets, principally machinery
  and equipment, with a net book value of $1,033,000 at its Far East manufacturing
  facilities. The Company considered these fixed assets to be surplus equipment
  which was replaced by equipment with more advanced technology. </FONT></P>
<font size="2" face="Arial, Helvetica, sans-serif">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Business
Segment Information</font><font size="2"></font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company operates in
  one industry with three reportable segments. The segments are geographic and
  include North America, Asia and Europe. The primary criteria by which financial
  performance is evaluated and resources are allocated are revenues and operating
  income. The following is a summary of key financial data: </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="7" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Three
      Months Ended</FONT></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="7" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="7" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD colspan =5> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD colspan =5><HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2004</FONT>
   </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="3" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2003</FONT>
   </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="3" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2004</FONT>
   </TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="3" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2003</FONT>
   </TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Total
      Revenues:</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">North
      America</FONT>&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">39,703,801</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">26,921,222</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">20,090,468</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">19,493,248</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <font size="2"> &nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Asia</FONT>&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">64,730,050</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">56,010,918</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">34,244,781</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">32,974,559</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;&nbsp;&nbsp;<font size="2"><FONT face="Arial, Helvetica, sans-serif">Europe</FONT>&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">8,019,194</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">5,090,891</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">4,235,094</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">4,457,924</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD colspan=3 align=left nowrap> <font size="2"> &nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Less
      intergeographic</FONT>&nbsp; </font></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">revenues</FONT>&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">(21,705,780</FONT>
   </TD>
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">(18,254,523</FONT>
   </TD>
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">(10,180,101</FONT>
   </TD>
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">(12,104,582</FONT>
   </TD>
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">90,747,265</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">69,768,508</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">48,390,242</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">44,821,149</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 18>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD colspan=3 align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Income
      from Operations:</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap><font size="2" face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;</font><font size="2"><FONT face="Arial, Helvetica, sans-serif">North
      America</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,740,892</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">617,190</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">355,906</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">465,955</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Asia</FONT>&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">8,829,494</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">4,636,216</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">4,974,342</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,828,986</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <font size="2">&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Europe</FONT>&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,087,493</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">470,763</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">712,494</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">296,124</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,657,879</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">5,724,169</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">6,042,742</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">3,591,065</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P align="center"> <font size="2" face="Arial, Helvetica, sans-serif">-18-</font><font size="2">
  </font>
</P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_15"></A> </font> <font size="2" face="Arial, Helvetica, sans-serif">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt</font><font size="2"><br>
</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">On March 21, 2003, the
  Company entered into a $10 million secured term loan. The loan was used to partially
  finance the Company's acquisition of Insilco's Passive Components Group. The
  loan is payable in 20 equal quarterly installments of principal with a final
  maturity on March 31, 2008 and currently bears interest at LIBOR plus 1.25 percent
  (3.0% percent at June 30, 2004) payable quarterly. The rate may vary based upon
  the Company's performance with respect to certain financial covenants. In addition,
  the note may be prepaid in certain circumstances. The loan is collateralized
  with a first priority security interest in and lien on 65% of all the issued
  and outstanding shares of the capital stock of certain of the foreign subsidiaries
  of Bel and all other personal property and certain real property of Bel. The
  Company is required to maintain certain financial covenants, as defined in the
  agreement. As of June 30, 2004, the Company was in compliance with all financial
  covenants. As of June 30, 2004, the balance due on the term loan was $7.5 million.
  For the six months ended June 30, 2004 and 2003, the Company recorded interest
  expense of approximately $116,000 and $ 83,000, respectively, and for the three
  months ended June 30, 2004 and 2003 recorded interest expense of approximately
  $60,000 and $73,000, respectively.</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued
  Expenses </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Accrued expenses consist
  of the following: </FONT></P>
<P align="center">
<TABLE width="60%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30, 2004</FONT><font size="2">&nbsp; </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">December
      31, 2003</FONT><font size="2">&nbsp; </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Sales
      commissions</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,488,385</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=left nowrap> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">$</FONT>&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,378,925</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Subcontracting
      labor</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">2,150,692</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">1,900,189</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Salaries,
      bonuses and</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;related
      benefits</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">4,168,007</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">3,047,904</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Other</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">2,247,976</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,115,671</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">10,055,060</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">$</FONT>&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">9,442,689</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD><HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RETIREMENT
  FUND AND PROFIT SHARING PLAN</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company maintains a
  domestic profit sharing plan and a contributory stock ownership and savings
  401(K) plan, which combines stock ownership and individual voluntary savings
  provisions to provide retirement benefits for plan participants. The plan provides
  for participants to voluntarily contribute a portion of their compensation,
  subject to certain legal maximums. The Company will match, based on a sliding
  scale, up to $350 for the first $600 contributed by each participant. Matching
  contributions plus additional discretionary contributions will be made with
  Company stock purchased in the open market. The expense for the six months ended
  June 30, 2004 and 2003 amounted to approximately $148,000 and $124,000, respectively,
  and for the three months ended June 30, 2004 and 2003 amounted to approximately
  $39,000 and $68,000, respectively. As of June 30, 2004, the plans owned 20,910
  and 120,501 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.
  </FONT></P>
<P align="center">

<div align="center"><font size="2" face="Arial, Helvetica, sans-serif">-19-</font><font size="2"><br>
  </font> <font size="2"></P> </font> </div>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_16"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company's Far East
  subsidiaries have a retirement fund covering substantially all of their Hong
  Kong based full-time employees. Eligible employees contribute up to 5% of salary
  to the fund. In addition, the Company may contribute an amount up to 7% of eligible
  salary, as determined by Hong Kong government regulations, in cash or Company
  stock. The expense for the six months ended June 30, 2004 and 2003 amounted
  to approximately $218,000 and $174,000, respectively, and for the three months
  ended June 30, 2004 and 2003 amounted to approximately $111,000 and $86,000,
  respectively. As of June 30, 2004, the plan owned 3,323 and 12,256 shares of
  Bel Fuse Inc. Class A and Class B common stock, respectively. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Supplemental Executive
  Retirement Plan (the &#147;Plan&#148;) is designed to provide a limited group
  of key management and highly compensated associates of the Company supplemental
  retirement and death benefits. The Plan was established by the Company in 2002.
  Employees are selected at the sole discretion of the Board of Directors of the
  Company to participate in the Plan. The Plan is unfunded. The Company utilizes
  life insurance to partially cover its obligations under the Plan. The benefits
  available under the Plan vary according to when and how the participant terminates
  employment with the Company. If a participant retires (with the prior written
  consent of the Company) on his normal retirement date (65 years old, 20 years
  of service, and 5 years of Plan participation), his normal retirement benefit
  under the Plan would be annual payments equal to 40% of his average base compensation
  (calculated using compensation from the highest 5 consecutive calendar years
  of Plan participation), payable in monthly installments for the remainder of
  his life. If a participant retires early from the Company (55 years old, 20
  years of service, and 5 years of Plan participation), his early retirement benefit
  under the Plan would be an amount (i) calculated as if his early retirement
  date were in fact his normal retirement date, (ii) multiplied by a fraction,
  with the numerator being the actual years of service the participant has with
  the Company and the denominator being the years of service the participant would
  have had if he had retired at age 65, and (iii) actuarially reduced to reflect
  the early retirement date. If a participant dies prior to receiving 120 monthly
  payments under the Plan, his beneficiary would be entitled to continue receiving
  benefits for the shorter of (i) the time necessary to complete 120 monthly payments
  or (ii) 60 months. If a participant dies while employed by the Company, his
  beneficiary would receive, as a survivor benefit, an annual amount equal to
  (i) 100% of the participant&#146;s annual base salary at date of death for one
  year, and (ii) 50% of the participant&#146;s annual base salary at date of death
  for each of the following 4 years, each payable in monthly installments. The
  Plan also provides for disability benefits, and a forfeiture of benefits if
  a participant terminates employment for reasons other than those contemplated
  under the Plan. The expense for the six months ended June 30, 2004 and 2003
  amounted to approximately $204,000 and $189,000, respectively and for the three
  months ended June 30, 2004 and 2003 amounted to approximately $110,000 and $107,000,
  respectively.</FONT></P>
<P align="center">

<div align="center"><font size="2" face="Arial, Helvetica, sans-serif">-20-</font><font size="2"><br>
  </font> <font size="2"></P> </font> </div>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_17"></A> </font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">The components of SERP
  expense are as follows: </FONT></P>
<TABLE width="60%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT><font size="2">&nbsp; </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Three
      Months Ended</FONT><font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT><font size="2">&nbsp; </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="5" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT><font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Service
      cost</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">71,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">84,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">43,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">52,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Interest
      cost</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">80,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">52,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">40,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">28,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Amortization
      of adjustments</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">53,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">53,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">27,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">27,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Total
      SERP expense</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">204,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">189,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">110,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">107,000</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD width="100%"></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
    <TD> <hr noshade size=2></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
    <TD> <hr noshade size=2></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
    <TD> <hr noshade size=2></TD>
    <TD></TD>
    <TD> <hr noshade size=2></TD>
    <TD> <hr noshade size=2></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
 </TR>
</TABLE>
<p>&nbsp;</p>
<TABLE width="40%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30</FONT><font size="2">&nbsp; </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">December
      31,</FONT><font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left><HR noshade size=1></TD>
    <TD nowrap align=left><HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Balance
      sheet amounts:</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;Accrued
      pension liability </FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=left><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">2,187,627</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=center> <FONT size=2 face="Arial, Helvetica, sans-serif">1,983,627</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;Intangible
      asset</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,356,017</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,359,414</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
</TABLE>
<p>&nbsp;</p>

<P> <FONT size="2" face="Arial, Helvetica, sans-serif">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common
  Stock </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company maintains two
  classes of outstanding common stock, Class A Common Stock (&#147;Class A&#148;)
  and Class B Common Stock (&#147;Class B&#148;). The following is a summary of
  the pertinent rights and privileges of each class outstanding: </FONT></P>
<UL>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Voting - Class A receives
    one vote per share; Class B is non-voting;<br>
    <br>
    </FONT></LI>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Dividends (cash) - Cash
    dividends are payable at the discretion of the Board of Directors and is subject
    to a 5% provision whereby cash dividends paid out to Class B must be at least
    5% higher per share annually than Class A. At the discretion of the Board
    of Directors, Class B may receive a cash dividend without Class A receiving
    a cash dividend.<br>
    <br>
    </FONT></LI>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Dividends (other than
    cash) and distributions in connection with any recapitalization and upon liquidation,
    dissolution or winding up of the Company - Shared equally among Class A and
    Class B;<br>
    <br>
    </FONT></LI>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Mergers and consolidations
    - Equal amount and form of consideration per share among Class A and Class
    B;<br>
    </FONT></LI>
</UL>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-21-</font><font size="2"></font>
</P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_18"></A> </font>
<UL>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Class B Protection -
    Any person or group that purchases 10% or more of the outstanding Class A
    (excluding certain shares, as defined) must make a public cash tender offer
    (within 90 days) to acquire additional shares of Class B to avoid disproportionate
    voting rights. Failure to do so will result in forfeiture of voting rights
    for those shares acquired after the recapitalization. Alternatively, the purchaser
    can sell Class A shares to reduce the purchaser's holdings below 10% (excluding
    shares owned prior to recapitalization). Above 10%, this protection transaction
    is triggered every 5%(e.g., 15%, 20%, 25%, etc.);<br>
    <br>
    </FONT></LI>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Convertibility - Not
    convertible into another class of Common Stock or any other security by the
    Company, unless by resolution by the Board of Directors to convert such shares as
    a result of either class becoming excluded from quotation on NASDAQ, or if
    total outstanding shares of Class A falls below 10% of the aggregate number
    of outstanding shares of both classes (in which case, all Class B shares will
    be automatically converted in Class A shares).<br>
    <br>
    </FONT></LI>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Transferability and
    trading - Both Class A and Class B are freely transferable and publicly traded
    on NASDAQ National Market;<br>
    <br>
    </FONT></LI>
  <LI> <FONT size="2" face="Arial, Helvetica, sans-serif">Subdivision of shares
    - Any split, subdivision or combination of the outstanding shares of Class
    A or Class B must be proportionately split with the other class in the same manner
    and on the same basis.</FONT></LI>
</UL>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Comprehensive
  Income </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Comprehensive income for
  the six and three months ended June 30, 2004 and 2003 consists of:</FONT></P>
<TABLE width="90%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Three
      Months Ended</FONT></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align=center nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="3" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      earnings</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">11,799,984</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">4,537,504</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">7,145,253</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,757,220</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left><font size=2 face="Arial, Helvetica, sans-serif">Currency
      translation adjustment-</font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <font size="2"> &nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">net
      of taxes</FONT>&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">(203,460</FONT>
   </TD>
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">491,754</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">18,978</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">498,269</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap><font size=2 face="Arial, Helvetica, sans-serif">Increase
      (decrease) in marketable</font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <font size="2">&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">securities
      - net of taxes</FONT>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">7,200</FONT>
   </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">4,206</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">(8,500</FONT>
   </TD>
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">4,200</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
 </TR>
  <TR>
    <TD colspan = 16>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">Comprehensive
      income</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT>
   </TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">11,603,724</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">5,033,464</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">7,155,731</FONT>
   </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;
      </font></TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">3,259,689</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD> <HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=5% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">13.</FONT><font size="2">&nbsp;
      </font></TD>
    <TD> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">Legal
      Proceedings</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% align=left valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% align=left valign="top"> <FONT size="2" face="Arial, Helvetica, sans-serif">a)</FONT>
   </TD>
    <TD> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company has been
      a party to an ongoing arbitration proceeding related to the</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">acquisition</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">of its Telecom
      business in 1998. The Company believes that the seller</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">breached the
      terms of a related Global Procurement Agreement dated October 2, 1998</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">and was seeking
      damages related thereto. During February 2004, the Company and the</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">seller agreed
      in principle to settle the matter. The settlement resulted in a payment
      to the</FONT><font size="2">&nbsp; </font> <FONT size="2" face="Arial, Helvetica, sans-serif">Company</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">and an unconditional
      release by the seller of all counterclaims against the</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">Company.</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">The net gain
      of $2,935,000 from the settlement of the lawsuit is included in the</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">Company's</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">consolidated
      statement of operations for the three months ended June 30,</FONT><font size="2">&nbsp;
      </font> <FONT size="2" face="Arial, Helvetica, sans-serif">2004.</FONT></TD>
 </TR>
</TABLE>
<p align="center"><font size="2">&nbsp; </font> <FONT size="2" face="Arial, Helvetica, sans-serif">-22-</FONT><font size="2">&nbsp;
  </font><font size="2"> </font></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_19"></A> </font>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR>
    <TD width="5%" valign=top nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">b)</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD width="95%"> <p><FONT size="2" face="Arial, Helvetica, sans-serif">The
        Company is a party to a lawsuit commenced by a third party which claims
        that its patent covers all of the Company's modular jack products. That
        party had previously advised the Company that it was willing to grant
        a non-exclusive license to the Company under the patent for a 3% royalty
        on all future gross sales of ICM products; payments of a lump sum of 3%
        of past sales including sales of applicable Insilco products; an annual
        minimum royalty of $500,000; payment of all attorney fees and marking
        of all licensed ICM's with the third party's patent number. The Company
        is subject to another lawsuit commenced by a third party which claims
        that its patent covers certain of the Company's modular jack products.
        That partyhad previously advised the Company that it was willing to grant
        a non transferable license to the Company for an up front fee of $500,000
        plus a 6% royalty on future sales. The Company believes that none of its
        products are covered by these patents and intends to vigorously defend
        its position and no accrual has been provided. The Company cannot predict
        the outcome of these matters; however, management believes that the ultimate
        resolution of these matters will not have a material impact on the Company's
        consolidated financial condition or results of operations.</FONT> </p>
      <p><FONT size="2" face="Arial, Helvetica, sans-serif">The Company is not
        a party to any other legal proceeding, the adverse outcome of which is
        expected to have a material adverse effect on the Company's consolidated
        financial condition or results of operations.</FONT> </p></TD>
 </TR>
</TABLE>
<P><FONT size="2" face="Arial, Helvetica, sans-serif">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent
  Accounting Pronouncements </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In June 2002, the FASB
  issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal
  Activities." This Statement requires recording costs associated with exit or
  disposal activities at their fair values when a liability has been incurred.
  Under previous guidance, certain exit costs were accrued upon management's commitment
  to an exit plan. The Company adopted SFAS No. 146 on January 1, 2003. The adoption
  of SFAS No. 146 did not have a material impact on the Company's result of operations
  or financial position. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In April 2003, the FASB
  issued SFAS No. 149, "Amendment of Statement No. 133 on Derivative Instruments
  and Hedging Activities." This statement amends and clarifies financial accounting
  and reporting for derivative instruments, including certain derivative instruments
  embedded in other contracts and for hedging activities under FASB Statement
  No. 133, "Accounting for Derivative Instruments and Hedging Activities." This
  Statement is effective for contracts entered into or modified after June 30,
  2003, and for hedging relationships designated after June 30, 2003. Adoption
  of this statement did not have a material impact on the Company's results of
  operations or financial position. </FONT></P>
<P align="center"> <font size="2" face="Arial, Helvetica, sans-serif">-23-</font><font size="2"><br>
  </font>
</P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<P align="center"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font size="2"><A name="page_20"></A>
  </font></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In November 2002, the FASB
  issued FASB Interpretation No. 45 (FIN 45), Guarantor&#146;s Accounting and
  Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
  of Others, and interpretation of FASB Statements No. 5, 57,and 107 and Rescission
  of FASB Interpretation No. 34. FIN 45 clarifies the requirements of FASB Statement
  No. 5, Accounting for Contingencies, relating to the guarantor&#146;s accounting
  for, and disclosure of, the issuance of certain types of guarantees. This interpretation
  clarifies that a guarantor is required to recognize, at the inception of certain
  types of guarantees, a liability for the fair value of the obligation undertaken
  in issuing the guarantee. The initial recognition and initial measurement provisions
  of this Interpretation are applicable on a prospective basis to guarantees issued
  or modified after December 31, 2002, irrespective of the guarantor&#146;s fiscal
  year-end. The disclosure requirements in this interpretation were effective
  for financial statements of interim or annual periods ending after December
  15, 2002. The Company adopted FIN 45 on January 1, 2003. The adoption of FIN
  45 did not have a material impact on the Company's results of operations or
  financial position. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In January 2003, the FASB
  issued FIN No. 46, Consolidation of Variable Interest Entities. In December
  2003, the FASB issued FIN No. 46 (Revised) (&#147;FIN 46-R&#148;) to address
  certain FIN 46 implementation issues. This interpretation requires that the
  assets, liabilities, and results of activities of a Variable Interest Entity
  (&#147;VIE&#148;) be consolidated into the financial statements of the enterprise
  that has a controlling interest in the VIE. FIN 46R also requires additional
  disclosures by primary beneficiaries and other significant variable interest
  holders. For entities acquired or created before February 1, 2003, this interpretation
  is effective no later than the end of the first interim or reporting period
  ending after March 15, 2004, except for those VIE&#146;s that are considered
  to be special purpose entities, for which the effective date is no later than
  the end of the first interim or annual reporting period ending after December
  15, 2003. For all entities that were acquired subsequent to January 31, 2003,
  this interpretation is effective as of the first interim or annual period ending
  after December 31, 2003. The adoption of FIN 46 did not have a material impact
  on the Company's results of operations or financial position. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In May 2003, the FASB issued
  SFAS No. 150, &#147;Accounting for Certain Financial Instruments with Characteristics
  of Both Liabilities and Equity.&#148; SFAS No. 150 clarifies the accounting
  for certain financial instruments with characteristics of both liabilities and
  equity and requires that those instruments be classified as liabilities in statements
  of financial position. Previously, many of those financial instruments were
  classified as equity. SFAS No. 150 is effective for financial instruments entered
  into or modified after May 31, 2003, and otherwise is effective at the beginning
  of the first interim period beginning after June 15, 2003. The adoption of the
  provisions of SFAS No. 150 did not have a material impact on the Company&#146;s
  financial position. </FONT></P>
<P>&nbsp;</P>
<P align="center"><font size="2" face="Arial, Helvetica, sans-serif">-24-</font><font size="2"><br>
  </font>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_21"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In December 2003, the FASB
  issued SFAS No. 132 (Revised) (&#147;SFAS No. 132-R&#148;), &#147;Employer&#146;s
  Disclosure about Pensions and Other Postretirement Benefits.&#148; SFAS No.
  132-R retains disclosure requirements of the original SFAS No. 132 and requires
  additional disclosures relating to assets, obligations, cash flows, and net
  periodic benefit cost for defined benefit pension plans and defined benefit
  post retirement plans. SFAS No. 132-R is effective for fiscal years ending after
  December 15, 2003, except that certain disclosures are effective for fiscal
  years ending after June 15, 2004. Interim period disclosures are effective for
  interim periods beginning after December 15, 2003.</FONT></P>
<P>&nbsp;</P>
<P align="center"> <font size="2" face="Arial, Helvetica, sans-serif">-25-</font><font size="2"><br>
  </font>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_22"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Item 2. Management&#146;s
  Discussion and Analysis of Financial Condition and Results of Operations </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company&#146;s quarterly
  and annual operating results are affected by a wide variety of factors that
  could materially and adversely affect revenues and profitability, including
  the risk factors described in the Company's Annual Report on Form 10-K for the
  year ended December 31, 2003. As a result of these and other factors, the Company
  may experience material fluctuations in future operating results on a quarterly
  or annual basis, which could materially and adversely affect its business, financial
  condition, operating results, and stock prices. Furthermore, this document and
  other documents filed by the Company with the Securities and Exchange Commission
  (the &#147;SEC&#148;) contain certain forward-looking statements under the Private
  Securities Litigation Reform Act of 1995 (&#147;Forward-Looking Statements&#148;)
  with respect to the business of the Company. These Forward-Looking Statements
  are subject to certain risks and uncertainties, including those detailed in
  Item 1 of the Company&#146;s Annual Report on Form 10-K for the year ended December
  31, 2003, which could cause actual results to differ materially from these Forward-Looking
  Statements. The Company undertakes no obligation to publicly release the results
  of any revisions to these Forward-Looking Statements which may be necessary
  to reflect events or circumstances after the date hereof or to reflect the occurrence
  of unanticipated events. An investment in the Company involves various risks,
  including those which are detailed from time to time in the Company&#146;s SEC
  filings. </FONT></P>
<font size="2"><u><font face="Arial, Helvetica, sans-serif">Overview</font></u><br>
</font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="2"><FONT face="Arial, Helvetica, sans-serif">Bel is a leading
  producer of electronic products that help make global connectivity a reality.
  The Company designs, manufactures and markets a broad array of magnetics, modules,
  circuit protection devices and interconnect products. While these products are
  deployed primarily in the computer, networking and telecommunication industries,
  Bel&#146;s expanding portfolio of products also finds application in the automotive,
  medical and consumer electronics markets. These products are designed to protect,
  regulate, connect, isolate or manage a variety of electronic circuits.</FONT></font></P>
<P> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> <font size="2"><FONT face="Arial, Helvetica, sans-serif"></FONT></font>During
  the first six months of 2004, approximately $14.6 million of the sales increase
  compared to the first six months of 2003 is attributable to the acquisition
  by the Company of Insilco&#146;s Passive Components Group which occurred on
  March 22, 2003. The Company also attributes its increased profitability to better
  manufacturing overhead absorption due to the increase in sales. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">Gross
  profit margins have been favorably impacted due to various cost cutting measures
  implemented by the Company. These cost cutting measures continued during 2003
  and 2004 as many manufacturing and administrative positions were moved from
  Hong Kong to China. The Texas and Indiana research facilities were closed during
  2003 with some positions being relocated to the Company's California research
  facilities. A Mexican facility was closed during 2003 and the business was moved
  to the Dominican Republic. </FONT></P>
<P align="center"> <font size="2" face="Arial, Helvetica, sans-serif">-26-</font><font size="2"><br>
  </font>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_23"></A> </font>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Critical Accounting
  Policies</FONT></U><FONT face="Arial, Helvetica, sans-serif"> </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company&#146;s discussion
  and analysis of its financial condition and results of operations are based
  upon the Company&#146;s consolidated financial statements, which have been prepared
  in accordance with accounting principles generally accepted in the United States
  of America. 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 product returns, bad debts, inventories, intangible
  assets, investments, income taxes, its Supplemental Executive Retirement Plan
  ("SERP") 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. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company believes the
  following critical accounting policies affect its more significant judgments
  and estimates used in the preparation of its consolidated financial statements.</FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Allowance for
  Doubtful Accounts</FONT></U><FONT face="Arial, Helvetica, sans-serif"> </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company maintains
  allowances for doubtful accounts for estimated losses from the inability of
  its customers to make required payments. The Company determines its reserves
  by both specific identification of customer accounts where appropriate and the
  application of historical loss experience to non-specific accounts. If the financial
  condition of the Company's customers were to deteriorate, resulting in an impairment
  of their ability to make payments, additional allowances may be required. </FONT></P>
<font size="2"><u><font face="Arial, Helvetica, sans-serif">Inventory</font></u><br>
</font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company makes purchasing
  decisions principally based upon firm sales orders from customers, the availability
  and pricing of raw materials and projected customer requirements. Future events
  that could adversely affect these decisions and result in significant charges
  to the Company&#146;s operations include miscalculating customer requirements,
  technology changes which render certain raw materials and finished goods obsolete,
  loss of customers and/or cancellation of sales orders, stock rotation with distributors
  and termination of distribution agreements. The Company writes down its inventory
  for estimated obsolescence or unmarketable inventory equal to the difference
  between the cost of inventory and the estimated market value based upon the
  aforementioned assumptions. If actual market conditions are less favorable than
  those projected by management, additional inventory write-downs may be required.</FONT></P>
<P align="center">

<div align="center"><font size="2" face="Arial, Helvetica, sans-serif">-27-</font><font size="2"><br>
  </font> <font size="2"> </font></div>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_24"></A> </font>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">When
  inventory is written-off, it is never written back up; the cost remains at zero
  or the level to which it has been written-down. When inventory that has been
  written-off is subsequently used in the manufacturing process, the lower adjusted
  cost of the material is charged to cost of sales. At December 31, 2003, approximately
  $8.7 million of inventory was on hand, including $3.1 million of raw materials
  received from the outstanding purchase commitments (at original cost before
  the write-down or reserve of $12.0 million in 2001). During the third quarter
  of 2003 approximately $2.5 million of this inventory was scrapped. Management
  intends to retain the balance of this inventory for possible use in future orders.
  Should any of this inventory be used in the manufacturing process for customer
  orders, the improved gross profit will be recognized at the time the completed
  product is shipped and the sale is recorded.</FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The following is a quarterly
  schedule of material reintroduced into production since the initial $12 million
  charge in the fourth fiscal quarter of 2001. </FONT></P>


<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=36% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">4th
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2001</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% align=right nowrap>&nbsp;</TD>
    <TD width=3%><font size="2" face="Arial, Helvetica, sans-serif">$</font></TD>
    <TD width=20% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">164,329</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR>
    <TD colspan = 8 align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=36% nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">1st
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">2002</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% nowrap align=left></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">4,538</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=36% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2nd
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2002</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% align=left nowrap></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">68,098</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD width=36% nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">3rd
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">2002</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% nowrap align=left></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">38,914</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=36% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">4th
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2002</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% align=left nowrap></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">271,163</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR>
    <TD colspan = 8 align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=36% nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">1st
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">2003</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% nowrap align=left></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">77,069</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=36% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2nd
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2003</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% align=left nowrap></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">80,046</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD width=36% nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">3rd
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">2003</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% nowrap align=left></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">28,851</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=36% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">4th
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2003</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% align=left nowrap></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">98,263</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR>
    <TD colspan = 8 align="left">&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD width=36% nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">1st
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">2004</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% nowrap align=left></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">31,051</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=36% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2nd
      Quarter</FONT><font size="2">&nbsp; </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2004</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% align=left nowrap></TD>
    <TD width=3%>&nbsp;</TD>
    <TD width=20% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">78,232</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD><hr noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD width=36% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=17% nowrap align=left>&nbsp;</TD>
    <TD width=6%>&nbsp;</TD>
    <TD width=16% nowrap align=right>&nbsp;</TD>
    <TD width=3%><font size="2" face="Arial, Helvetica, sans-serif">$</font></TD>
    <TD width=20% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">940,554</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD><hr noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
  </TR>
</TABLE>
<font size="2"><BR>
</font>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Acquisitions</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Acquisitions continue
  to be a key element in the Company's growth strategy. If the Company's evaluation
  of a target company misjudges its technology, estimated future sales and profitability
  levels, or ability to keep pace with the latest technology, these factors could
  impair the value of the investment, which could materially adversely affect
  the Company's profitability.</FONT></P>
  <P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Income Taxes</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company files income
  tax returns in every jurisdiction in which it has reason to believe it is subject
  to tax. Historically, the Company has been subject to examination by various
  taxing jurisdictions. To date, none of these examinations has resulted in any
  material additional tax. Nonetheless, any tax jurisdiction may contend that
  a filing position claimed by the Company regarding one or more of its transactions
  is contrary to that jurisdiction's laws or regulations. </FONT></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-28- </FONT></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_25"></A> </font>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Results of Operations</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The following table sets
  forth, for the six and three months ended June 30, 2004 and 2003, the percentage
  relationship to net sales of certain items included in the Company&#146;s unaudited
  consolidated statements of operations. </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0 height="422">
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap colspan=6 align=center height="22"><font size="2">&nbsp;<font face="Arial, Helvetica, sans-serif">Percentage
      of Net Sales</font></font></TD>
    <TD align="center" height="22">&nbsp;</TD>
    <TD nowrap colspan=6 align=center height="22"><font size=2 face="Arial, Helvetica, sans-serif">Percentage
      of Net Sales</font><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap colspan=6 align=center height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT></TD>
    <TD align="center" height="22">&nbsp;</TD>
    <TD nowrap colspan=6 align=center height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Three
      Months Ended</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap colspan=6 align=center height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT></TD>
    <TD align="center" height="22">&nbsp;</TD>
    <TD nowrap colspan=6 align=center height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">June
      30,</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
  <TR>
    <TD width="100%" height="22"></TD>
    <TD height="22"></TD>
    <TD colspan =5 height="22"> <HR noshade size=2></TD>
    <TD height="22"> <HR noshade size=2></TD>
    <TD height="22"><HR noshade size=2></TD>
    <TD colspan =5 height="22"> <HR noshade size=2></TD>
    <TD height="22"><HR noshade size=2></TD>
    <TD height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD colspan="2" align=center nowrap height="22"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD align=center nowrap height="22">&nbsp;</TD>
    <TD align="center" height="22">&nbsp;</TD>
    <TD colspan="2" align=center nowrap height="22"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>
      </font></TD>
    <TD align="center" height="22">&nbsp;</TD>
    <TD colspan="2" align=center nowrap height="22"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2004</FONT>&nbsp;
      </font></TD>
    <TD align=center nowrap height="22">&nbsp;</TD>
    <TD align="center" height="22">&nbsp;</TD>
    <TD colspan="2" align=center nowrap height="22"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">2003</FONT>&nbsp;
      </font></TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
  <TR>
    <TD align=left valign="bottom" nowrap height="22">&nbsp;</TD>
    <TD valign="bottom" height="22">&nbsp;</TD>
    <TD colspan="2" align=center valign="bottom" nowrap height="22"><HR noshade size=2></TD>
    <TD align=center valign="bottom" nowrap height="22">&nbsp;</TD>
    <TD align="center" valign="bottom" height="22">&nbsp;</TD>
    <TD colspan="2" align=center valign="bottom" nowrap height="22"><HR noshade size=2></TD>
    <TD align="center" valign="bottom" height="22">&nbsp;</TD>
    <TD colspan="2" align=center valign="bottom" nowrap height="22"><HR noshade size=2></TD>
    <TD align=center valign="bottom" nowrap height="22">&nbsp;</TD>
    <TD align="center" valign="bottom" height="22">&nbsp;</TD>
    <TD colspan="2" align=center valign="bottom" nowrap height="22"><HR noshade size=2></TD>
    <TD align=left valign="bottom" nowrap height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      sales</FONT><font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">100.0</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align="left" height="22"><FONT size=2 face="Arial, Helvetica, sans-serif">%</FONT>
   </TD>
    <TD align=right nowrap height="22"> <font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">100.0</FONT>
   </TD>
    <TD align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">%</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">100.0</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align="left" height="22"><FONT size=2 face="Arial, Helvetica, sans-serif">%</FONT>
   </TD>
    <TD align=right nowrap height="22"> <font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">100.0</FONT><font size="2">&nbsp;
      </font></TD>
    <TD align="left" height="22"><FONT size=2 face="Arial, Helvetica, sans-serif">%</FONT>
   </TD>
    <TD align=right nowrap height="22"> <font size="2">&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Cost
      of sales</FONT><font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">69.4</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">72.9</FONT>
   </TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">68.6</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">73.4</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Selling,
      general and</FONT><font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22"></TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap height="22"> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;administrative
      expenses</FONT>&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">16.6</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">18.9</FONT>
   </TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">16.8</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">18.6</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="23"> <font size="2" face="Arial">Fixed
      asset impairment</font></TD>
    <TD height="23">&nbsp;</TD>
    <TD nowrap align=right height="23"> <FONT size=2 face="Arial, Helvetica, sans-serif">1.1</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="23">&nbsp;</TD>
    <TD nowrap align=left height="23">&nbsp;</TD>
    <TD height="23">&nbsp;</TD>
    <TD nowrap align=right height="23"> <FONT face="sans-serif">&#151;</FONT></TD>
    <TD nowrap align=left height="23">&nbsp;</TD>
    <TD height="23">&nbsp;</TD>
    <TD nowrap align=right height="23"> <FONT size=2 face="Arial, Helvetica, sans-serif">2.1</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="23">&nbsp;</TD>
    <TD nowrap align=left height="23">&nbsp;</TD>
    <TD height="23">&nbsp;</TD>
    <TD nowrap align=right height="23"> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="23">&nbsp;</TD>
    <TD nowrap align=left height="23">&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap height="23"> <FONT size=2 face="Arial, Helvetica, sans-serif">Interest
      income</FONT><font size="2">&nbsp; </font></TD>
    <TD height="23">&nbsp;</TD>
    <TD align=right nowrap height="23"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.3</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="23">&nbsp;</TD>
    <TD align=left nowrap height="23">&nbsp;</TD>
    <TD height="23">&nbsp;</TD>
    <TD align=right nowrap height="23"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.3</FONT>
   </TD>
    <TD align=left nowrap height="23">&nbsp;</TD>
    <TD height="23">&nbsp;</TD>
    <TD align=right nowrap height="23"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.3</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="23">&nbsp;</TD>
    <TD align=left nowrap height="23">&nbsp;</TD>
    <TD height="23">&nbsp;</TD>
    <TD align=right nowrap height="23"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.2</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="23">&nbsp;</TD>
    <TD align=left nowrap height="23">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Interest
      expense</FONT><font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.1</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.1</FONT>
   </TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.1</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">0.2</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap height="24"> <FONT size=2 face="Arial, Helvetica, sans-serif">Lawsuit
      proceeds</FONT><font size="2">&nbsp; </font></TD>
    <TD height="24">&nbsp;</TD>
    <TD align=right nowrap height="24"> <FONT size=2 face="Arial, Helvetica, sans-serif">3.2</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="24">&nbsp;</TD>
    <TD align=left nowrap height="24">&nbsp;</TD>
    <TD height="24">&nbsp;</TD>
    <TD align=right nowrap height="24"> <FONT face="sans-serif">&#151;</FONT> </TD>
    <TD align=left nowrap height="24">&nbsp;</TD>
    <TD height="24">&nbsp;</TD>
    <TD align=right nowrap height="24"> <FONT size=2 face="Arial, Helvetica, sans-serif">6.1</FONT></TD>
    <TD height="24">&nbsp;</TD>
    <TD align=left nowrap height="24">&nbsp;</TD>
    <TD height="24">&nbsp;</TD>
    <TD align=right nowrap height="24"> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="24">&nbsp;</TD>
    <TD align=left nowrap height="24">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Earnings
      before provision</FONT><font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22"></TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22"> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;for
      income taxes</FONT>&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">16.3</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">8.4</FONT>
   </TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">18.8</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">8.0</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width="100%" align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Income
      tax provision</FONT><font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">3.3</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">1.9</FONT>
   </TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">4.0</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD align=right nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">1.9</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD align=left nowrap height="22">&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width="100%" align=left nowrap height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">Net
      earnings</FONT><font size="2">&nbsp; </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">13.0</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">6.5</FONT>
   </TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">14.8</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=right height="22"> <FONT size=2 face="Arial, Helvetica, sans-serif">6.1</FONT><font size="2">&nbsp;
      </font></TD>
    <TD height="22">&nbsp;</TD>
    <TD nowrap align=left height="22">&nbsp;</TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The following table sets
  forth the period over period percentage increases of certain items included
  in the Company's unaudited consolidated statements of operations. </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=31% align=left nowrap>&nbsp;</TD>
    <TD width=0 align=left nowrap>&nbsp;</TD>
    <TD width=0>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Increase
      from</FONT></TD>
    <TD width=0>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Increase
      (Decrease) from</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Prior
      Period</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Prior
      Period</FONT></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD width="20%"> <HR noshade size=1></TD>
    <TD width="15%"> <HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD width="20%"> <HR noshade size=1></TD>
    <TD width="14%"> <HR noshade size=1></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Six
      Months Ended June</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Three
      Months Ended June</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">30,
      2004 compared with the</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">30,
      2004 compared with the</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Six
      Months Ended</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Three
      Months Ended</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">June
      30, 2003</FONT></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align=center nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">June
      30, 2003</FONT></TD>
  </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
  </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
  </TR>
  <TR>
    <TD colspan = 9>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Net
      sales</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">30.1</FONT>
    </TD>
    <TD align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">%</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">8.0</FONT>
    </TD>
    <TD align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">%</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">Cost
      of sales</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">23.8</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">0.9</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Selling,
      general and</FONT><font size="2">&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD align=left nowrap>&nbsp;</TD>
  </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;administrative
      expenses</FONT>&nbsp; </font></TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">14.4</FONT>
    </TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">(2.4</FONT>
    </TD>
    <TD align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">)</FONT><font size="2">&nbsp;
      </font></TD>
  </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size="2" face="Arial, Helvetica, sans-serif">Net
      earnings</FONT><font size="2">&nbsp; </font></TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">160.1</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">159.1</FONT>
    </TD>
    <TD nowrap align=left>&nbsp;</TD>
  </TR>
</TABLE>
<font size="2"><BR>
</font>
<P align="center"> <font size="2" face="Arial, Helvetica, sans-serif">-2</font><font size="2"><b><u></u></b></font><font size="2" face="Arial, Helvetica, sans-serif">9-</font><font size="2"><br>
  </font>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_26"></A> </font>
<P><font size="2"><B><U><font size="2"><b><u><font face="Arial, Helvetica, sans-serif">Six
  </font></u></b></font><FONT face="Arial, Helvetica, sans-serif">Months Ended
  June 30, 2004 versus</FONT></U></B><BR>
  <B><U><FONT face="Arial, Helvetica, sans-serif"> Six Months Ended June 30, 2003</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></B></font></P>
<P><font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Sales</FONT></U></font>
</P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">Net
  sales increased 30.1% from $69,768,508  during the first six months of
  2003 to $90,747,265 during the first six months of 2004. The Company attributes
  this increase principally to sales of approximately $15.2 million from the Insilco
  Passive Components Group during the first quarter of 2004, compared to $.6 million
  during the first quarter of 2003. The acquisition took place on March 22, 2003.
  The Company also experienced strong demand for Magnetics sales from Bel&#146;s
  existing business, resulting in an increase of $4.2 million in such sales, and
  increased circuit protection sales of $1.9 million. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The significant components
  of the Company's first six months of 2004 sales were from magnetic products
  of $60.0 million (as compared with $46.7 million during the first six months
  of 2003), circuit protection of $10.2 million (as compared with $8.3 million
  during the first six months of 2003), interconnect products of $15.5 million
  (as compared with $10.0 million during the first six months of 2003), and module
  sales of $5.1 million (as compared with $4.6 million during the first six months
  of 2003). </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size="2"><FONT face="Arial, Helvetica, sans-serif">The
  Company is cautiously optimistic that its revenues will continue to grow during
  the second half of 2004 in light of the increases in the Company's backlog although
  the Company cannot provide assurances to investors in this regard. This statement
  represents a Forward Looking Statement, subject to the risks and uncertainties
  described in Item 1 of the Company's Annual Report on Form 10-K for the year
  ended December 31, 2003. The Company continues to have limited visibility as
  to future customer requirements. Actual results could differ materially from
  this Forward Looking Statement. The Company had one customer with sales in excess
  of 10% (10.2%) of total sales during the first six months of 2004. The loss
  of this customer could have a material adverse effect on the Company's results
  of operations, financial position and cash flows. </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company cannot quantify
  the extent of sales growth arising from unit sales mix and/or price changes.
  Given the change in the nature of the products purchased by customers from period
  to period, the Company believes that neither unit changes nor price changes
  are meaningful. The Company does not believe that it experienced a material
  change in unit sales, except for the additional unit sales generated from the
  acquisition of the Insilco Passive Components Group during 2003. Over the past
  year, newer and more sophisticated products with higher unit selling prices
  have been introduced. Through the Company's engineering and research effort,
  the Company has been successful in adding additional value to existing product
  lines, which tends to increase sales prices initially until that generation
  of products becomes mature and sales prices experience price degradation. In
  general, as products become mature, average selling prices decrease.</FONT></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-30-</FONT><font size="2"><BR>
  </font>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_27"></A> </font>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Cost of Sales</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Bel generally enters into
  processing arrangements with four independent third party contractors in the
  Far East. Under the terms of the Company's agreements with these contractors,
  the Company is only responsible for value-added costs when finished goods pass
  the Company's quality control inspections. Therefore, no value-added costs are
  recorded until the Company's Quality Control group approves the finished goods.
  The Company's raw materials are valued as finished goods when they are returned
  from these third-party contractors. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Value-added costs are
  recorded as incurred for all products manufactured at the Company's own manufacturing
  facilities. Such amounts are determined based upon the estimated stage of production
  and include labor cost and fringes and related allocations of factory overhead.
  The Company believes that such costs generally are not significant as a percentage
  of total inventory costs at any point in time. The Company manufactures finished
  goods at its own manufacturing facilities in Glen Rock, Pennsylvania, Inwood,
  New York, the Dominican Republic and Mexico. See "Critical Accounting Policies"
  above for information regarding the use of inventories in the manufacturing
  process that have been written down in prior years. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Cost of sales as a percentage
  of net sales decreased from 72.9 % during the first six months of 2003 to 69.4%
  in 2004. The decrease in the cost of sales percentage is primarily attributable
  to a 2.1% decrease in direct labor as a percentage of sales, and a 1.1% decrease
  in research and development as a percentage of sales. The decrease in direct
  labor as a percentage of sales is primarily attributable to the lower direct
  labor costs associated with the Insilco manufacturing operations and the Company's
  relocating direct labor from Hong Kong to China where labor costs are lower.
  To support the manufacture of certain sophisticated products and to respond
  to increases in customer forecasts in, the Company required additional direct
  laborers and has added 3,300 workers in the Far East manufacturing facilities
  during the six months ended June 30, 2004. The decrease in research and development
  expenses as a percentage of sales is primarily attributable to the increase
  in sales.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The acquisition of the
  Insilco Passive Components Group resulted in additional cost of sales in the
  amount of $10.7 million during the first three months of 2004. The acquisition
  took place on March 22, 2003. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Included in cost of sales
  are research and development expenses of $3.7 million and $3.7 million for the
  first six months of 2004 and 2003, respectively. Although the research and development
  expense remained constant the Company had increased expenditures in connection
  with the purchase of the Passive Components Group of Insilco offset in part
  by the closure of the Indiana research facility and lower research and development
  costs in the Far East as many of these jobs were moved from Hong Kong to China.
  </FONT></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-31-</FONT><font size="2"><BR>
  </font>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_28"></A> </font>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Fixed Asset
Impairment</FONT></U><BR>
  </font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">During the six month period
  ended June 30, 2004 the Company wrote down fixed assets, principally machinery
  and equipment, with a net book value of $1,033,000 at its Far East manufacturing
  facilities. The Company considered these fixed assets to be surplus equipment
  which was replaced by equipment with more advanced technology. </FONT></P>
<P><font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Selling, General
  and Administrative Expenses</FONT></U><BR>
  </font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">The percentage relationship
  of selling, general and administrative expenses to net sales decreased from
  18.9% during the six months ended June 30, 2003 to 16.6% during the six months
  ended June 30, 2004, in part as a result of the Company's ability to leverage
  general and administrative expenses over a larger revenue base. The Company
  attributes the $1.9 million increase in the dollar amount of such expenses primarily
  to costs associated with the Insilco operations of approximately $2.0 million
  and a $.4 million increase in professional fees, principally related to Sarbanes
  Oxley compliance offset in part by reduced severance expense and various overhead
  accounts amounting to approximately $.3 million. </FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Interest
      Income</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">Interest income earned
  on cash and cash equivalents increased by approximately $80,000 during the first
  six months of 2004 compared to 2003. The increase is due primarily to increased
  earnings on higher cash and cash equivalent balances. </FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Interest
      Expense</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">Interest expense increased
  by approximately $33,000 during the first six months of 2004 compared to 2003.
  The increase arose from a $10 million term loan entered into on March 21, 2003
  which was borrowed for the acquisition of Insilco's Passive Components Group.
  The loan bears interest at LIBOR plus 1.25% (3% at June 30, 2004) payable quarterly.
  See Note 7 of Notes to Consolidated Financial Statements. </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Lawsuit Proceeds</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> During the six months
  ended June 30, 2004 the Company settled an arbitration proceeding related to
  a 1998 acquisition. The Company received $2,935,000 (net of $65,000 of related
  legal expenses incurred during the period.) </FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Provision
      for Income Taxes</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">
  The provision for income taxes for the six months ended June 30, 2004 was $3.0
  million as compared to $1.3 million for the six months ended June 30, 2003.
  The increase in the provision is due primarily to the Company's increased earnings
  before income taxes for the six months ended June 30, 2004, as compared with
  2003. The income tax provision is lower than the statutory federal income tax
  rate primarily due to lower foreign tax rates and the reversal of accruals no
  longer required.</FONT></P>
<P>&nbsp;</P>
<P align="center"><FONT size="2" face="Arial, Helvetica, sans-serif">-32-</FONT></P>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_29"></A> </font>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><B><U><FONT face="Arial, Helvetica, sans-serif">Three
      Months Ended June 30, 2004 versus</FONT></U></B><BR>
      <B><FONT face="Arial, Helvetica, sans-serif">Three Months Ended June 30,
      2003 </FONT></B><BR>
      </font></TD>
 </TR>
</TABLE>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Sales</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Net sales increased 8.0%
  from $44,821,149 million during the three months ended June 30, 2003 to $48,390,242
  million during the three months ended June 30, 2004. The Company attributes
  this increase principally to strong demand for Magnetics sales , resulting in
  an increase of $1.9 million in such sales, increased circuit protection sales
  of $.8 million, and increased interconnect sales of $.7 million. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The significant components
  of the Company's three months ended June 30, 2004 sales were from magnetic products
  of $30.4 million (as compared with $28.5 million during the three months ended
  June 30, 2003), circuit protection of $5.2 million (as compared with $4.5 million
  during the three months ended June 30, 2003), interconnect products of $10.2
  million (as compared with $9.4 million during the three months ended June 30,
  2003), and module sales of $2.6 million (as compared with $2.3million during
  the three months ended June 30, 2003). The Company had no customers with sales
  in excess of 10% of total sales during the three months ended June 30, 2004.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> At this time the Company
  cannot quantify the extent of sales growth arising from unit sales mix and/or
  price changes. Given the change in the nature of the products purchased by customers
  from period to period, the Company believes that neither unit changes nor price
  changes are meaningful. The Company does not believe that it experienced a material
  change in unit sales, except for the additional unit sales generated from the
  acquisition of the Insilco Passive Components Group during 2003. Over the past
  year, newer and more sophisticated products with higher unit selling prices
  have been introduced. Through the Company's engineering and research effort,
  the Company has been successful in adding additional value to existing product
  lines, which tends to increase sales prices initially until that generation
  of products becomes mature and sales prices experience price degradation. In
  general, as products become mature, average selling prices decrease.</FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Cost
      of Sales</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Cost of sales as a percentage
  of net sales decreased from 73.4 % during the three months ended June 30, 2003
  to 68.6% for the three months ended June 30, 2004. The decrease in cost of sales
  as a percentage of sales is primarily attributable to decreases of 1.5% in material
  costs, .8% in direct labor, .9% in research and development, .6% in depreciation
  and amortization and 1% in factory overheads. The decrease in material cost
  is primarily attributed to a change in sales mix as the Company moves into "gigabit"
  manufacturing which has a lower material content. The other decreases in the
  percentage of costs of sales to sales is primarily attributable to the increase
  in sales. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The acquisition of the
  Insilco Passive Components Group took place on March 22, 2003. Therefore there
  was no additional cost of sales during the three months ended June 30, 2004
  since the quarters are comparative. The Company expects fluctuations in cost
  of sales to continue in future quarters in relation to increases or decreases
  of sales. </FONT></P>
<P>&nbsp;</P>
<P align="center"><FONT size="2" face="Arial, Helvetica, sans-serif">-33-</FONT></P>
<font size="2"><p></P> <p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_30"></A> </font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Included in cost of sales
  are research and development expenses of $1.9 million and $2.2 million for the
  three months ended June 30, 2004 and 2003, respectively. The decrease is principally
  attributable to the closure of the Indiana research facility and lower research
  and development costs in the Far East as many of these jobs were moved from
  Hong Kong to China. </FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Fixed
      Asset Impairment</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">
  During the three month period ended June 30, 2004, the Company wrote down fixed
  assets, principally machinery and equipment, with a net book value of $1,033,000
  at its Far East manufacturing facilities. The Company considered these fixed
  assets to be surplus equipment which was replaced by equipment with more advanced
  technology. </FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Selling,
      General and Administrative Expenses</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The percentage relationship
  of selling, general and administrative expenses to net sales decreased from
  18.6% during the three months ended June 30, 2003 to 16.8% during the three
  months ended June 30, 2004. The Company attributes this in part to the Company's
  ability to leverage general and administrative expenses over a larger revenue
  base. The Company attributes the $.2 million decrease in the dollar amount of
  such expenses primarily to a general reduction of several selling, general and
  administrative expenditures as the Company continually attempts to control its
  overhead expenditures.</FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Interest Income</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Interest income earned
  on cash and cash equivalents increased by approximately $102,000 during the
  three months ended June 30, 2004 compared with the three months ended June 30,
  2003. The increase is due primarily to the same reasons stated in the six month
  analysis. </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Interest Expense</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif">
  Interest expense decreased by approximately $13,000 during the three months
  ended June 30, 2004 compared to the three months ended June 30, 2003. The decrease
  is principally attributable to lower loan balances during 2004 versus 2003.
  See Note 7 of Notes to Consolidated Financial Statements. </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Lawsuit Proceeds</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> During the three months
  ended June 30, 2004 the Company settled an arbitration proceeding related to
  a 1998 acquisition. The Company received $2,935,000 (net of $65,000 of related
  legal expenses incurred during the period.) </FONT></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-34-</FONT></P>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_31"></A> </font>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Provision
      for Income Taxes</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The provision for income
  taxes for the three months ended June 30, 2004 was $1.9 million as compared
  to $.8 million for the three months ended June 30, 2003. The increase in the
  provision is due primarily to the Company's increased earnings before income
  taxes for the three months ended June 30, 2004, as compared with 2003. The income
  tax provision is lower than the statutory federal income tax rate primarily
  due to lower foreign tax rates. </FONT></P>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">The
  Company conducts manufacturing activities in the Far East. More specifically,
  the Company manufactures the majority of its products in the People&#146;s Republic
  of China (&#147;PRC&#148;), Hong Kong and Macau and has not been subject to
  corporate income tax in the PRC. The Company's activities in Hong Kong have
  generally consisted of administration, quality control and accounting, as well
  as some limited manufacturing activities. Hong Kong imposes corporate income
  tax at a rate of 16 percent solely on income sourced to Hong Kong. That is,
  its tax system is a territorial one which only seeks to tax activities conducted
  in Hong Kong. Since the Bel entity in Hong Kong conducts most of its manufacturing
  and quality control activities in the PRC, most of this entity&#146;s income
  is deemed &#147;offshore&#148; and thus non-taxable in Hong Kong. Although the
  statutory tax rate in Hong Kong is 17.5 percent, the Company generally pays
  an effective Hong Kong rate of less than 4 percent. </FONT></font></P>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">The
  Company also conducts manufacturing operations in Macau. Macau has a statutory
  corporate income tax rate of 16 percent. However, the Company, as a result of
  investing in a certain location in Macau, was able to obtain a 10-year tax holiday
  in Macau, thereby reducing its effective Macau income tax rate from 16 percent
  to 8 percent. Additionally, the Macau subsidiary utilized approximately $.6
  million in net operating loss carryforward to offset its taxable income during
  the six months ended June 30, 2004. The tax holiday in Macau expired in April
  2004. Since most of the Company's operations are conducted in the Far East,
  the majority of its profits are sourced in these three Far East jurisdictions.
  Accordingly, the profits earned in the U.S. are comparatively small in relation
  to its profits reported in the Far East. Therefore, there is generally a significant
  difference between the statutory U.S. tax rate and the Company&#146;s actual
  effective tax rate. There was no material tax benefit during the first six months
  of 2004 and 2003 because of the lower tax rate in Macau. </FONT></font></P>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Cost
      Control Measures</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> In light of the current
  market in the Company&#146;s industry, the Company continues to review its operating
  structures in efforts to control costs. Such measures can be expected to result
  in a restructuring of the Company&#146;s operations and the recognition of related
  restructuring charges in future periods. During the six months ended June 30,
  2004 and 2003, the Company incurred approximately $119,000 and $106,000, respectively,
  of severance costs and anticipates additional severance expenses in the amount
  of approximately $50,000 during 2004 as additional jobs are moved to mainland
  China and Hong Kong operations are restructured. </FONT></P>
<P>&nbsp;</P>
<P align="center"><FONT size="2" face="Arial, Helvetica, sans-serif">-35-</FONT></P>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_32"></A> </font>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Inflation
      and Foreign Currency Exchange</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> During the past two years,
  the effect of inflation on the Company's profitability was not material. Historically,
  fluctuations of the U.S. dollar against other major currencies have not significantly
  affected the Company's foreign operations as most sales have been denominated
  in U.S. dollars or currencies directly or indirectly linked to the U.S. dollar.
  Most significant expenses, including raw materials, labor and manufacturing
  expenses, are either incurred in US dollars or the currencies of the Hong Kong
  dollar, the Macau Pataca or the Chinese Renminbi. Commencing with the acquisition
  of the Passive Components Group, the Company's European entity has sales transactions
  which are denominated principally in Euros and British Pounds. Conversion of
  these transactions into U.S. dollars has resulted in currency exchange gains
  of $74,000 for the six months ended June 30, 2004 which are included in selling,
  general and administrative expense and approximately $203,000 in unrealized
  exchange gains relating to the translation of foreign subsidiary financial statements
  which are included in other comprehensive income. Any change in linkage of the
  U.S. dollar and the Hong Kong dollar, the Chinese Renminbi, the Macau Pataca,
  the Euro or the British Pound could have a material effect on the Company's
  consolidated financial position or results of operations. </FONT></P>

<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Liquidity
      and Capital Resources</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Historically, the Company
  has financed its capital expenditures primarily through cash flows from operating
  activities. Currently, due to the recent acquisition of the Passive Components
  Group of Insilco Technologies, Inc., the Company has borrowed money under a
  secured term loan, and has unused lines of credit, as described below. Management
  believes that the cash flow from operations after payments of dividends and
  scheduled repayments of the term loan, combined with its existing capital base
  and the Company's available lines of credit, will be sufficient to fund its
  operations for the near term. Such statement constitutes a Forward Looking Statement.
  Factors which could cause the Company to require additional capital include,
  among other things, a softening in the demand for the Company&#146;s existing
  products, an inability to respond to customer demand for new products, potential
  acquisitions requiring substantial capital, future expansion of the Company's
  operations and net losses that would result in net cash being used in operating,
  investing and/or financing activities which result in net decreases in cash
  and cash equivalents. Net losses may result in the loss of domestic and foreign
  credit facilities and preclude the Company from raising debt or equity financing
  in the capital markets. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company has two domestic
  lines of credit amounting to $11 million, which were unused at June 30, 2004.
  An unsecured $1 million line of credit is renewable annually. The $10 million
  line of credit expires on March 21, 2006. Borrowings under this $10 million
  line of credit are secured by the same assets which secure the term loan described
  below. </FONT></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-36- </FONT></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_33"></A> </font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> On March 21, 2003, the
  Company entered into a $10 million secured term loan. The loan was used to partially
  finance the Company's acquisition of Insilco's Passive Components Group. The
  loan agreement requires 20 equal quarterly installments of principal with a
  final maturity on March 31, 2008 and bears interest at LIBOR plus 1.25 percent
  (3% percent at June 30, 2004) payable quarterly. The loan is collateralized
  with a first priority security interest in 65% of all the issued and outstanding
  shares of the capital stock of certain of the foreign subsidiaries of Bel Fuse
  Inc. and all other personal property and certain real property of Bel Fuse Inc.
  The Company is required to maintain certain financial covenants, as defined
  in the agreement. For the six months ended June 30, 2004 and 2003, the Company
  recorded interest expense of approximately $116,000 and $83,000, respectively,
  and was in compliance with all of the covenants contained in the loan agreement
  as of June 30, 2004. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company's Hong Kong
  subsidiary has an unsecured line of credit of approximately $2 million, which
  was unused at June 30, 2004. This line of credit expires on April 30, 2005.
  Borrowing on this line of credit is guaranteed by the Company. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> For information regarding
  further commitments under the Company's operating leases, see Note 15 of Notes
  to the Company's Consolidated Financial Statements in the Company's Annual Report
  on Form 10-K for the year ended December 31, 2003. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company is constructing
  a 64,000 square foot manufacturing facility in Zhongshan City, PRC for approximately
  $1.3 million. As of June 30, 2004, the Company has paid approximately $.5 million
  toward the construction. The Company expects to complete the construction during
  2004. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Under the terms of the
  E-Power and Current Concepts, Inc. acquisition agreements, of May 11, 2001,
  the Company will be required to make contingent purchase price payments up to
  an aggregate of $7.6 million should the acquired companies attain specified
  sales levels. E-Power will be paid $2.0 million in contingent purchase price
  payments when sales, as defined, reach $15.0 million and an additional $4.0
  million when sales reach $25.0 million on a cumulative basis through May, 2007.
  No payments have been required to date with respect to E-Power. Current Concepts
  will be paid 16% of sales, as defined, on the first $10.0 million in sales through
  May 2007. During the six months ended June 30, 2004 and 2003, the Company paid
  approximately $79,000 and $94,000, respectively, in contingent purchase price
  payments to Current Concepts. The contingent purchase price payments have been
  accounted for as additional purchase price and increase other intangibles when
  such payment obligations are incurred. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> On May 9, 2000, the Board
  of Directors authorized the repurchase of up to 10% of the Company&#146;s outstanding
  common shares from time to time in market or privately negotiated transactions.
  As of June 30, 2004, the Company had purchased and retired 23,600 Class B shares
  at a cost of approximately $808,000, which reduced the number of Class B common
  shares outstanding. No shares were repurchased during the six months ended June
  30, 2004.</FONT></P>
<P align="center">
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">-37-</FONT><font size="2"><BR>
      </font></TD>
 </TR>
</TABLE>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_34"></A> </font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> During the six months
  ended June 30, 2004, the Company's cash and cash equivalents increased by approximately
  $17.4 million, reflecting approximately $15.1 million provided by operating
  activities, $5.0 million provided from the sale of marketable securities and
  $2.9 million from proceeds from the exercise of stock options offset by $2.0
  million for the purchase of property, plant and equipment, $1.4 million for
  the purchase of marketable securities, $1.0 million for loan repayments and
  $1.1 million for payment of dividends. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Cash, marketable securities
  and cash equivalents and accounts receivable comprised approximately 55.1% and
  51.1% of the Company's total assets at June 30, 2004 and December 31, 2003,
  respectively. The Company's current ratio (i.e., the ratio of current assets
  to current liabilities) was 5.9 to 1 and 6.2 to 1 at June 30, 2004 and December
  31, 2003, respectively. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The following table sets
  forth at June 30, 2004 the amounts of payments due under specific types of contractual
  obligations, aggregated by category of contractual obligation, for the time
  periods described below. </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=34% align=left nowrap>&nbsp;</TD>
    <TD width=0%>&nbsp;</TD>
    <TD width=0% align=left nowrap></TD>
    <TD colspan="2">&nbsp;</TD>
    <TD width=0% align="center">&nbsp;</TD>
    <TD width=2% align=center nowrap></TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Less
      than</FONT>&nbsp; </font></TD>
    <TD width=0% align="center">&nbsp;</TD>
    <TD width=1% align=center nowrap></TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">1-3</FONT>&nbsp;
      </font></TD>
    <TD width=0% align="center">&nbsp;</TD>
    <TD width=1% align=center nowrap>&nbsp;</TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">3-5</FONT>&nbsp;
      </font></TD>
    <TD width=0% align="center">&nbsp;</TD>
    <TD width=1% align=center nowrap>&nbsp;</TD>
    <TD width=0% align="center">&nbsp;</TD>
    <TD width=2% align=center nowrap>&nbsp;</TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">More
      than</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=center> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Contractual
      Obligations</FONT></U>&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Total</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">1
      year</FONT>&nbsp; </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center></TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">years</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">years</FONT>&nbsp;
      </font></TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD align="center">&nbsp;</TD>
    <TD nowrap align=center>&nbsp;</TD>
    <TD colspan="2" align="center"> <font size="2"><FONT face="Arial, Helvetica, sans-serif">5
      years</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD colspan="2"><hr noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD colspan="2"><HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD colspan="2"><HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD colspan="2"><HR noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD colspan="2" align="left"><HR noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Long-term
      debt</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD width="2%"><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD width="12%" align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">7,500,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;&nbsp;</TD>
    <TD width="2%"><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD width="12%" align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">2,000,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;&nbsp;</TD>
    <TD width="2%"><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD width="11%" align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">5,500,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <font size="2">&nbsp; </font></TD>
    <TD width="4%"><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD width="3%" align=right nowrap><FONT face="sans-serif">&#151;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD width="5%" align="left"><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;</font>
   </TD>
    <TD width="6%" align=right nowrap> <FONT face="sans-serif">&#151;</FONT></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">Capital
      expenditure obligations</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">748,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">748,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right><FONT face="sans-serif">&#151;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Operating
      leases</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">1,926,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">993,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">933,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap><FONT face="sans-serif">&#151;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD align=right nowrap> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left> <FONT size=2 face="Arial, Helvetica, sans-serif">Raw
      material purchase obligations</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">12,648,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size=2 face="Arial, Helvetica, sans-serif">12,648,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right><FONT face="sans-serif">&#151;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD nowrap align=right> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=1></TD>
    <TD> <HR noshade size=1></TD>
    <TD></TD>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
    <TD></TD>
    <TD></TD>
    <TD><HR noshade size=1></TD>
    <TD align="right"><HR noshade size=1></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="left"><HR noshade size=1></TD>
    <TD><HR noshade size=1></TD>
 </TR>
  <TR>
    <TD colspan = 24>&nbsp;</TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD align=left nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Total</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">22,822,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">16,389,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap>&nbsp;</TD>
    <TD><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD align=right nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">6,433,000</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <font size="2"><U></U>&nbsp; </font></TD>
    <TD><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT></TD>
    <TD align=right nowrap><FONT face="sans-serif">&#151;</FONT> </TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=left nowrap> <font size="2"><U></U>&nbsp; </font></TD>
    <TD align="left"><FONT size=2 face="Arial, Helvetica, sans-serif">$</FONT><font size="2">&nbsp;</font>
   </TD>
    <TD align=right nowrap> <FONT face="sans-serif">&#151;</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR>
    <TD></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD><HR noshade size=2></TD>
    <TD> <HR noshade size=2></TD>
    <TD></TD>
    <TD></TD>
    <TD><HR noshade size=2></TD>
    <TD><HR noshade size=2></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD><HR noshade size=2></TD>
    <TD><HR noshade size=2></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company is currently
  obligated to fund the Company's Supplemental Executive Retirement Plan ("SERP").
  As of June 30, 2004 the SERP had an unfunded benefit obligation of approximately
  $2.2 million. See Note 10 of the Notes to Consolidated Financial Statements
  for further information. </FONT></P>
<P> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Other Matters</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company believes that
  it has sufficient cash reserves to fund its foreseeable working capital needs.
  It may, however, seek to expand such resources through bank borrowings, at favorable
  lending rates, from time to time. Should the Company pursue additional acquisitions
  during 2004, the Company may be required to pursue public or private equity
  or debt transactions to finance the acquisitions and to provide working capital
  to the acquired companies. </FONT></P>
<P align="center">
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">-38-</FONT><font size="2"><BR>
      </font></TD>
 </TR>
</TABLE>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_35"></A> </font>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">New
      Financial Accounting Standards</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">In
  June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with
  Exit or Disposal Activities." This Statement requires recording costs associated
  with exit or disposal activities at their fair values when a liability has been
  incurred. Under previous guidance, certain exit costs were accrued upon management's
  commitment to an exit plan. The Company adopted SFAS No. 146 on January 1, 2003.
  The adoption of SFAS No. 145 did not have a material impact on the Company's
  result of operations or financial position. </FONT></font></P>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">In
  April 2003, the FASB issued SFAS No. 149, "Amendment of Statement No. 133 on
  Derivative Instruments and Hedging Activities." This statement amends and clarifies
  financial accounting and reporting for derivative instruments, including certain
  derivative instruments embedded in other contracts and for hedging activities
  under FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
  Activities." This Statement is effective for contracts entered into or modified
  after June 30, 2003, and for hedging relationships designated after June 30,
  2003. Adoption of this statement did not have a material impact on the Company's
  results of operations or financial position. </FONT></font></P>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">In
  November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45), Guarantor&#146;s
  Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees
  of Indebtedness of Others, and interpretation of FASB Statements No. 5, 57,and
  107 and Rescission of FASB Interpretation No. 34. FIN 45 clarifies the requirements
  of FASB Statement No. 5, Accounting for Contingencies, relating to the guarantor&#146;s
  accounting for, and disclosure of, the issuance of certain types of guarantees.
  This interpretation clarifies that a guarantor is required to recognize, at
  the inception of certain types of guarantees, a liability for the fair value
  of the obligation undertaken in issuing the guarantee. The initial recognition
  and initial measurement provisions of this Interpretation are applicable on
  a prospective basis to guarantees issued or modified after December 31, 2002,
  irrespective of the guarantor&#146;s fiscal year-end. The disclosure requirements
  in this interpretation are effective for financial statements of interim or
  annual periods ending after December 15, 2002. The Company adopted FIN 45 on
  January 1, 2003. The adoption of FIN 45 did not have a material impact on the
  Company's results of operations or financial position. </FONT></font></P>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">In
  January 2003, the FASB issued FIN No. 46, Consolidation of Variable Interest
  Entities. In December 2003, the FASB issued FIN No. 46 (Revised) (&#147;FIN
  46-R&#148;) to address certain FIN 46 implementation issues. This interpretation
  requires that the assets, liabilities, and results of activities of a Variable
  Interest Entity (&#147;VIE&#148;) be consolidated into the financial statements
  of the enterprise that has a controlling interest in the VIE. FIN 46R also requires
  additional disclosures by primary beneficiaries and other significant variable
  interest holders. For entities acquired or created before February 1, 2003,
  this interpretation is effective no later than the end of the first interim
  or reporting period ending after March 15, 2004, except for those VIE&#146;s
  that are considered to be special purpose entities, for which the effective
  date is no later than the end of the first interim or annual reporting period
  ending after December 15, 2003. For all entities that were acquired subsequent
  to January 31, 2003, this interpretation is effective as of the first interim
  or annual period ending after December 31, 2003. The adoption of FIN 46 did
  not have a material impact on the Company's results of operations or financial
  position</FONT></font><FONT size=2 face="Arial, Helvetica, sans-serif">. </FONT></P>
<P align="center"><FONT size=2 face="Arial, Helvetica, sans-serif">-39- </FONT></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_36"></A> </font>
<P> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">In
  May 2003, the FASB issued SFAS No. 150, &#147;Accounting for Certain Financial
  Instruments with Characteristics of Both Liabilities and Equity.&#148; SFAS
  No. 150 clarifies the accounting for certain financial instruments with characteristics
  of both liabilities and equity and requires that those instruments be classified
  as liabilities in statements of financial position. Previously, many of those
  financial instruments were classified as equity. SFAS No. 150 is effective for
  financial instruments entered into or modified after May 31, 2003, and otherwise
  is effective at the beginning of the first interim period beginning after June
  15, 2003. The adoption of the provisions of SFAS No. 150 did not have a material
  effect on the Company&#146;s financial position. </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> In December 2003, the
  FASB issued SFAS No. 132 (Revised) (&#147;SFAS No. 132-R&#148;), &#147;Employer&#146;s
  Disclosure about Pensions and Other Postretirement Benefits.&#148; SFAS No.
  132-R retains disclosure requirements of the original SFAS No. 132 and requires
  additional disclosures relating to assets, obligations, cash flows, and net
  periodic benefit cost. SFAS No. 132-R is effective for fiscal years ending after
  December 15, 2003, except that certain disclosures are effective for fiscal
  years ending after June 15, 2004. Interim period disclosures are effective for
  interim periods beginning after December 15, 2003.</FONT></P>
<P align="center">
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">-40-</FONT><font size="2"><BR>
      </font></TD>
 </TR>
</TABLE>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_37"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Item 3. </FONT><font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Quantitative
  and Qualitative Disclosures About Market Risk</FONT></U></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Fair Value of Financial
  Instruments &#151; The following disclosure of the estimated fair value of financial
  instruments is made in accordance with the requirements of Statement of Financial
  Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments".
  The estimated fair values of financial instruments have been determined by the
  Company using available market information and appropriate valuation methodologies.
  </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> However, considerable
  judgment is required in interpreting market data to develop the estimates of
  fair value. Accordingly, the estimates presented herein are not necessarily
  indicative of the amounts that the Company could realize in a current market
  exchange. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company has not entered
  into, and does not expect to enter into, financial instruments for trading or
  hedging purposes. The Company does not currently anticipate entering into interest
  rate swaps and/or similar instruments. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> The Company's carrying
  values of cash, marketable securities, accounts receivable, accounts payable
  and accrued expenses are a reasonable approximation of their fair value. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Interest rates that are
  currently available to the Company for issuance of debt with similar terms and
  remaining maturities are used to estimate fair value for bank debt. The carrying
  amounts of bank debt is a reasonable estimate of fair value. </FONT></P>
<TABLE>
  <TR>
    <TD> <FONT size="2" face="Arial, Helvetica, sans-serif">Item 4. </FONT><font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Controls
      and Procedures</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<br>
<TABLE border=0 cellspacing=0 cellpadding=0>
  <TR>
    <TD nowrap valign=top> <FONT size="2" face="Arial, Helvetica, sans-serif">a)</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Disclosure
      controls and procedures</FONT></U><FONT face="Arial, Helvetica, sans-serif">.
      As of the end of the Company&#146;s most recently completed fiscal quarter
      covered by this report, the Company carried out an evaluation, with the
      participation of the Company&#146;s management, including the Company&#146;s
      chief executive officer and chief financial officer, of the effectiveness
      of the Company&#146;s disclosure controls and procedures pursuant to Securities
      Exchange Act Rule 13a-15. </FONT><font size="2" face="Arial, Helvetica, sans-serif">Based
      upon that evaluation, the Company&#146;s chief executive officer and chief
      financial officer concluded that the Company&#146;s disclosure controls
      and procedures are effective in ensuring that information required to be
      disclosed by the Company in the reports that it files or submits under the
      Securities Exchange Act is recorded, processed, summarized and reported,
      within the time periods specified in the SEC&#146;s rules and forms.</font></font></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size="2" face="Arial, Helvetica, sans-serif">b)</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Changes in
      internal controls over financial reporting</FONT></U><FONT face="Arial, Helvetica, sans-serif">.
      There have been no changes in the Company&#146;s internal controls over
      financial reporting that occurred during the Company&#146;s last fiscal
      quarter to which this report relates that have materially affected, or are
      reasonably likely to materially affect, the Company&#146;s internal control
      over financial reporting.</FONT></font></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
</TABLE>
<P align="center"> <font size="2" face="Arial, Helvetica, sans-serif">-41-</font><font size="2">
  </font>
<font size="2">
<p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_38"></A> </font>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">PART II. Other Information
  </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Item 1. </FONT><font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Legal
  Proceedings</FONT></U><FONT face="Arial, Helvetica, sans-serif"> </FONT></font></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
  <TR>
    <TD nowrap valign=top> <FONT size="2" face="Arial, Helvetica, sans-serif">a)</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company has been
      a party to an ongoing arbitration proceeding related to the acquisition
      of its Telecom business in 1998. The Company believes that the seller breached
      the terms of a related Global Procurement Agreement dated October 2, 1998
      and was seeking damages related thereto. During February, 2004, the Company
      and the seller agreed in principle to settle the matter. The settlement
      resulted in a payment to the Company and an unconditional release by the
      seller of all counterclaims against the Company. The net gain of $2,935,000
      from the settlement of the lawsuit is included in the Company's consolidated
      statement of operations for the three months ended June 30, 2004.</FONT>
   </TD>
 </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
 </TR>
  <TR>
    <TD nowrap valign=top> <FONT size="2" face="Arial, Helvetica, sans-serif">b)</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company is a party to a lawsuit commenced by Murata Manufacturing Company Ltd. in United States District Court Northern District of Illinois Eastern Division.  The complaint claims that it's the plaintiff's patent covers all of the Company's modular jack products   The complainant previously advised the Company that it was willing to grant a non-exclusive license to the Company under the patent for a 3% royalty on all future gross sales of ICM products; payments of a lump sum of 3% of past sales including sales of applicable Insilco products; an annual minimum royalty of $500,000; payment of all attorney fees and marking of all licensed ICM's with the third party's patent number.  The Company is also a party to a lawsuit commenced by Regal Electronics, Inc. in United States District Court for the Northern District of California.  The compliant claims that the plaintiff's patent covers certain of the Company's modular jack product.  The complaina

nt previously advised the Company that it was willing to grant a non transferable license to the Company for an up front fee of $500,000 plus a 6% royalty on future sales.  The Company believes that none of its products are covered by these patents and intends to vigorously defend its position and no accrual has been provided.  The Company cannot predict the outcome of these matters; however, management believes that the ultimate resolution of these matters will not have a material impact on the Company's consolidated financial condition or results of operations.  This statement represents a Forward Looking Statement; outcomes of legal proceedings are difficult to predict, due in part to the difficulties associated with the proof of facts in such proceedings. </FONT></TD>
 </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
 </TR>
</TABLE>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company is not a party
  to any other legal proceeding, the adverse outcome of which is expected to have
  a material adverse effect on the Company's consolidated financial condition
  or results of operations.</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Item 4. </FONT><font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Submission
  of Matters to a Vote of Security Holders</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
  <TR>
    <TD nowrap valign=top> <FONT size="2" face="Arial, Helvetica, sans-serif">(1)</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size="2" face="Arial, Helvetica, sans-serif">The Company's annual
      meeting of security holders was held on May 27, 2004. At the meeting, the
      Board's nominees were elected to the Board of Directors for a term of one
      to three years. The votes were cast as follows:</FONT></TD>
 </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
 </TR>
</TABLE>
<P align="center">
<TABLE border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=100% align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center> <font size="2"><FONT face="Arial, Helvetica, sans-serif">For</FONT>&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=center> <font size="2"><FONT face="Arial, Helvetica, sans-serif">Withheld</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right><hr noshade size=1></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Daniel
      Bernstein</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2,639,962</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">9,425</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Peter
      Gilbert</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">2,640,262</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">9,125</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom" bgcolor="#CCFFCC">
    <TD width=100% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">John
      Johnson</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">2,639,912</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">9,475</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=100% align=left nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Avi
      Eden</FONT><font size="2">&nbsp; </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">2,647,712</FONT><font size="2">&nbsp;
      </font></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">1,675</FONT><font size="2">&nbsp;
      </font></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">-42- </FONT></P>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_39"></A> </font>
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Item 6. </FONT><font size="2"><U><FONT face="Arial, Helvetica, sans-serif">Exhibits
      and Reports on Form 8-K<br>
      </FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<TABLE border=0 cellspacing=0 cellpadding=0>
  <TR valign="top">
    <TD width=5% align=right nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">(a)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% align=left nowrap> <font size="2"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Arial, Helvetica, sans-serif">Exhibits:</FONT>&nbsp;
      <br>
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">Exhibit
      31.1 Certification of the Chief Executive Officer pursuant to Section 302
      of</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">the
      Sarbanes-Oxley Act of 2002.</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">Exhibit
      31.2 Certification of the Vice President of Finance pursuant to Section
      302</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">of
      the Sarbanes-Oxley Act of 2002.</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">Exhibit
      32.1 Certification of the Chief Executive Officer pursuant to Section 906
      of</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">the
      Sarbanes-Oxley Act of 2002.</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD nowrap align=left>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align=left>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">Exhibit
      32.2 Certification of the Vice President of Finance pursuant to Section
      906</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">of
      the Sarbanes-Oxley Act of 2002.</FONT>&nbsp; </font></TD>
 </TR>
  <TR>
    <TD colspan = 4>&nbsp;</TD>
 </TR>
  <TR>
    <TD colspan = 4>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=right> <FONT size="2" face="Arial, Helvetica, sans-serif">(b)</FONT><font size="2">&nbsp;
      </font></TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp; <FONT face="Arial, Helvetica, sans-serif">Current
      Report on Form 8-K:</FONT>&nbsp; </font></TD>
 </TR>
  <TR>
    <TD colspan = 4>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">The
      Company filed the following current reports on Form 8-K with the SEC during</FONT>&nbsp;
      </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">the
      second quarter of 2004:</FONT>&nbsp; </font></TD>
 </TR>
  <TR>
    <TD colspan = 4>&nbsp;</TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">No
      current reports on Form 8-K were filed during the quarter ended June 30,
      2004</FONT>&nbsp; </font></TD>
 </TR>
  <TR valign="bottom">
    <TD width=5% nowrap align=left>&nbsp;</TD>
    <TD width=2%>&nbsp;</TD>
    <TD width=90% nowrap align=left> <font size="2">&nbsp; &nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">(excludes
      reports that were submitted to, but not filed with the SEC)</FONT>&nbsp;
      </font></TD>
 </TR>
</TABLE>
<font size="2"><BR>
</font>
<P align="center">
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">-43-</FONT><font size="2"><BR>
      </font></TD>
 </TR>
</TABLE>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_40"></A> </font>
<P align="center"> <font size="2"><U><FONT face="Arial, Helvetica, sans-serif">SIGNATURES</FONT></U><FONT face="Arial, Helvetica, sans-serif">
  </FONT></font></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size="2" face="Arial, Helvetica, sans-serif"> Pursuant to the requirements
  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.
  </FONT></P>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="left">&nbsp;</td>
 </TR>
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="19%">&nbsp;</td>
    <td width="48%" align="left"><font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BEL
      FUSE INC.</FONT>&nbsp; </font></td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif">By: /s/Daniel
      Bernstein</FONT></font></td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><HR noshade size=1></td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif">Daniel Bernstein,
      President and</FONT></font></td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2">&nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">Chief
      Executive Officer</FONT></font></td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Arial, Helvetica, sans-serif">By: /s/ Colin Dunn</FONT><font size="2">&nbsp;</font></td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><HR noshade size=1></td>
 </TR>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2">&nbsp;<FONT face="Arial, Helvetica, sans-serif">Colin Dunn,
      Vice President of Finance</FONT></font></td>
 </TR>
</table>
<P><font size="2" face="Arial, Helvetica, sans-serif"></font></P>
<font size="2"><BR>
</font>
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Dated: August
      6, 2004</FONT><font size="2"><BR>
      </font></TD>
 </TR>
</TABLE>
<P align="center">
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">-44-</FONT><font size="2"><BR>
      </font></TD>
 </TR>
</TABLE>
<font size="2"><p></P> </font>
<HR style="page-break-after: always" noshade align="center" width="100%" size=1>
<font size="2"><A name="page_41"></A> </font>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><U><FONT face="serif">EXHIBIT INDEX</FONT></U><BR>
      </font></TD>
 </TR>
</TABLE>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Exhibit 31.1 - Certification
  of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Exhibit 31.2 - Certification
  of the Vice President of Finance pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Exhibit 32.1 - Certification
  of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002. </FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">Exhibit 32.2 - Certification
  of the Vice President of Finance pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002. </FONT></P>
<font size="2"> </font><font size="2"><BR>
<p></P>
</font>
<HR noshade align="center" width="100%" size=1>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>2
<FILENAME>v05349_ex31-1.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
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<head>
<title>Untitled Document</title>
</head>

<body>
<font size="2"></font>
<TABLE>
  <TR>
    <TD nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Exhibit 31.1<br>
      <br>
      </FONT></TD>
  </TR>
</TABLE>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><I><FONT face="serif">CERTIFICATION<br>
      </FONT></I><BR>
      </font></TD>
  </TR>
</TABLE>
<TABLE>
  <TR>
    <TD nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">I, Daniel Bernstein,
      certify that:</FONT><font size="2"><br>
      <br>
      </font></TD>
  </TR>
</TABLE>
<TABLE border=0 cellspacing=0 cellpadding=0>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">1.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">I have reviewed
      this quarterly report on Form 10-Q of Bel Fuse Inc.;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">2.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">Based on my
      knowledge, this report does not contain any untrue statement of a material
      fact or omit to state a material fact necessary to make the statements made,
      in light of the circumstances under which such statements were made, not
      misleading with respect to the period covered by this report;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">3.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">Based on my
      knowledge, the financial statements, and other financial information included
      in this report, fairly present in all material respects the financial condition,
      results of operations and cash flows of the registrant as of, and for, the
      periods presented in this report;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">4.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">The registrant's
      other certifying officer and I are responsible for establishing and maintaining
      disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
      and 15d-15(e)) for the registrant and have:</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">a.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Designed such disclosure
      controls and procedures, or caused such disclosure controls and procedures
      to be designed under our supervision, to ensure that material information
      relating to the registrant, including its consolidated subsidiaries, is
      made known to us by others within those entities, particularly during the
      period in which this report is being prepared;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">b.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Evaluated the effectiveness
      of the registrant's disclosure controls and procedures and presented in
      this report our conclusions about the effectiveness of the disclosure controls
      and procedures, as of the end of the period covered by this report based
      on such evaluation; and</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">c.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Disclosed in this report
      any change in the registrant's internal control over financial reporting
      that occurred during the registrant's most recent fiscal quarter that has
      materially affected, or is reasonably likely to materially affect, the registrant's
      internal control over financial reporting; and</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">5.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">The registrant's
      other certifying officer and I have disclosed, based on our most recent
      evaluation of internal control over financial reporting, to the registrant's
      auditors and the audit committee of the registrant's board of directors
      (or persons performing the equivalent functions):</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">a.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">All significant deficiencies
      and material weaknesses in the design or operation of internal control over
      financial reporting which are reasonably likely to adversely affect the
      registrant's ability to record, process, summarize and report financial
      information; and</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">b.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Any fraud, whether or
      not material, that involves management or other employees who have a significant
      role in the registrant's internal control over financial reporting.</FONT>
    </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE>
  <TR>
    <TD nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Date: August
      6, 2004</FONT><font size="2"><BR>
      </font></TD>
  </TR>
</TABLE>
<p>&nbsp;</p>
<table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="19%">&nbsp;</td>
    <td width="48%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><font size="2"><FONT face="Arial, Helvetica, sans-serif">By:&nbsp;&nbsp;</FONT></font></td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif"> /s/ Daniel Bernstein</FONT></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><HR noshade size=1></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif">Daniel Bernstein,
      President and</FONT></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2">&nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">Chief
      Executive Officer</FONT></font></td>
  </tr>
</table>
<p>&nbsp; </p>
<HR noshade align="center" width="100%" size=1>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>3
<FILENAME>v05349_ex31-2.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
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<body>
<font size="2"></font>
<TABLE>
  <TR>
    <TD nowrap> <FONT size=2 face="serif">Exhibit 31.2<br>
      </FONT><font size="2"><BR>
      </font></TD>
  </TR>
</TABLE>
<TABLE>
  <TR>
    <TD nowrap> <font size="2"><I><FONT face="serif">CERTIFICATION<br>
      </FONT></I><BR>
      </font></TD>
  </TR>
</TABLE>
<TABLE>
  <TR>
    <TD nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">I, Colin Dunn,
      certify that:</FONT><font size="2"><br>
      <BR>
      </font></TD>
  </TR>
</TABLE>
<TABLE border=0 cellspacing=0 cellpadding=0>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">1.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">I have reviewed
      this quarterly report on Form 10-Q of Bel Fuse Inc.;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">2.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">Based on my
      knowledge, this report does not contain any untrue statement of a material
      fact or omit to state a material fact necessary to make the statements made,
      in light of the circumstances under which such statements were made, not
      misleading with respect to the period covered by this report;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">3.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">Based on my
      knowledge, the financial statements, and other financial information included
      in this report, fairly present in all material respects the financial condition,
      results of operations and cash flows of the registrant as of, and for, the
      periods presented in this report;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">4.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">The registrant's
      other certifying officer and I are responsible for establishing and maintaining
      disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
      and 15d-15(e)) for the registrant and have:</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">a.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Designed such disclosure
      controls and procedures, or caused such disclosure controls and procedures
      to be designed under our supervision, to ensure that material information
      relating to the registrant, including its consolidated subsidiaries, is
      made known to us by others within those entities, particularly during the
      period in which this report is being prepared;</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">b.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Evaluated the effectiveness
      of the registrant's disclosure controls and procedures and presented in
      this report our conclusions about the effectiveness of the disclosure controls
      and procedures, as of the end of the period covered by this report based
      on such evaluation; and</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">c.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Disclosed in this report
      any change in the registrant's internal control over financial reporting
      that occurred during the registrant's most recent fiscal quarter that has
      materially affected, or is reasonably likely to materially affect, the registrant's
      internal control over financial reporting; and</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">5.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD colspan=2> <FONT size=2 face="Arial, Helvetica, sans-serif">The registrant's
      other certifying officer and I have disclosed, based on our most recent
      evaluation of internal control over financial reporting, to the registrant's
      auditors and the audit committee of the registrant's board of directors
      (or persons performing the equivalent functions):</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">a.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">All significant deficiencies
      and material weaknesses in the design or operation of internal control over
      financial reporting which are reasonably likely to adversely affect the
      registrant's ability to record, process, summarize and report financial
      information; and</FONT> </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD nowrap valign=top> <FONT size=2 face="Arial, Helvetica, sans-serif">b.</FONT><font size="2">&nbsp;
      &nbsp; &nbsp; </font></TD>
    <TD> <FONT size=2 face="Arial, Helvetica, sans-serif">Any fraud, whether or
      not material, that involves management or other employees who have a significant
      role in the registrant's internal control over financial reporting.</FONT>
    </TD>
  </TR>
  <TR>
    <TD colspan=3>&nbsp;</TD>
  </TR>
</TABLE>
<TABLE>
  <TR>
    <TD nowrap> <FONT size=2 face="Arial, Helvetica, sans-serif">Date: August
      6, 2004</FONT><font size="2"><BR>
      </font></TD>
  </TR>
</TABLE>
<p>&nbsp;</p><table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="19%">&nbsp;</td>
    <td width="48%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><font size="2"><FONT face="Arial, Helvetica, sans-serif">By:&nbsp;&nbsp;</FONT></font></td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif"> /s/ </FONT><FONT size=2 face="Arial, Helvetica, sans-serif">Colin
      Dunn</FONT></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><HR noshade size=1></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size=2 face="Arial, Helvetica, sans-serif">Colin Dunn, Vice President</FONT><font size="2">&nbsp;</font><font size="2">&nbsp;</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2">&nbsp; &nbsp;<FONT face="Arial, Helvetica, sans-serif">of
      Finance</FONT></font></td>
  </tr>
</table>
<p>&nbsp;</p>
<P align="center">
<HR noshade align="center" width="100%" size=1>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>4
<FILENAME>v05349_ex32-1.htm
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
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<P align="left"><FONT size="2" face="Arial, Helvetica, sans-serif">Exhibit 32.1
  </FONT></P>
<P align="center"> <font size="2"><B><FONT face="Arial, Helvetica, sans-serif">CERTIFICATION
  PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO</FONT></B></font></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">SECTION
  906 OF THE SARBANES-OXLEY ACT OF 2002</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In connection with the
  quarterly report of Bel Fuse Inc (the "Company") on Form 10-Q for the quarter
  ended June 30, 2004 filed with the Securities and Exchange Commission (the "Report"),
  I, Daniel Bernstein, President and Chief Executive Officer of the Company, certify,
  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002, that:</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">(1) The Report fully complies
  with the requirements of Section 13(a) of the Securities Exchange Act of 1934;
  and</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">(2) The information contained
  in the Report fairly presents, in all material respects, the consolidated financial
  condition of the Company as of the dates presented and consolidated result of
  operations of the Company for the periods presented.</FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Dated: August
      6, 2004</FONT><font size="2"><BR>
      </font></TD>
  </TR>
</TABLE>
<p>&nbsp;</p><table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="19%">&nbsp;</td>
    <td width="48%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><font size="2"><FONT face="Arial, Helvetica, sans-serif">By:&nbsp;&nbsp;</FONT></font></td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif"> /s/ Daniel Bernstein</FONT></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><HR noshade size=1></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif">Daniel Bernstein,
      President </FONT></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2"><font size="2"><FONT face="Arial, Helvetica, sans-serif">and</FONT></font>
      <FONT face="Arial, Helvetica, sans-serif">Chief Executive Officer</FONT></font></td>
  </tr>
</table>
<p>&nbsp;</p>
<P align="right">
<font size="2">
<p></P> </font>
<HR noshade align="center" width="100%" size=1>
<font size="2"><A name="page_45"></A> </font>
<P align="center">&nbsp; </P>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>5
<FILENAME>v05349_ex32-2.htm
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
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<title>Untitled Document</title>
</head>

<body>
<P align="center"> <font size="2"><A name="page_45"></A> </font> </P>
<P align="left"> <FONT size="2" face="Arial, Helvetica, sans-serif">Exhibit 32.2
  </FONT></P>
<P align="center"> <font size="2"><B><FONT face="Arial, Helvetica, sans-serif">CERTIFICATION
  PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO</FONT></B></font></P>
<P align="center"> <FONT size="2" face="Arial, Helvetica, sans-serif">SECTION
  906 OF THE SARBANES-OXLEY ACT OF 2002</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">In connection with the
  quarterly report of Bel Fuse Inc (the "Company") on Form 10-Q for the quarter
  ended June 30, 2004 filed with the Securities and Exchange Commission (the "Report"),
  I, Colin Dunn, Vice President of Finance of the Company, certify, pursuant to
  18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
  Act of 2002, that:</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">(1) The Report fully complies
  with the requirements of Section 13(a) of the Securities Exchange Act of 1934;
  and</FONT></P>
<P> <FONT size="2" face="Arial, Helvetica, sans-serif">(2) The information contained
  in the Report fairly presents, in all material respects, the consolidated financial
  condition of the Company as of the dates presented and consolidated result of
  operations of the Company for the periods presented.</FONT></P>
<TABLE>
  <TR>
    <TD nowrap> <FONT size="2" face="Arial, Helvetica, sans-serif">Dated: August
      6, 2004</FONT><font size="2"><BR>
      </font></TD>
  </TR>
</TABLE>
<p>&nbsp;</p><table width="100%" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="33%">&nbsp;</td>
    <td width="19%">&nbsp;</td>
    <td width="48%">&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td align="right"><font size="2"><FONT face="Arial, Helvetica, sans-serif">By:&nbsp;&nbsp;</FONT></font></td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif"> /s/ </FONT><FONT size=2 face="Arial, Helvetica, sans-serif">Colin
      Dunn</FONT></font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><HR noshade size=1></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size=2 face="Arial, Helvetica, sans-serif">Colin Dunn, Vice President</FONT><font size="2">&nbsp;</font><font size="2">&nbsp;</font></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2"><FONT face="Arial, Helvetica, sans-serif">of Finance</FONT></font></td>
  </tr>
</table>
<p>&nbsp;</p>
<p><font size="2"><BR>
  </font></p>
<font size="2">
<p></P>
</font>
<HR noshade align="center" width="100%" size=1>
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</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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