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<SEC-DOCUMENT>0000914122-08-000021.txt : 20080609
<SEC-HEADER>0000914122-08-000021.hdr.sgml : 20080609
<ACCEPTANCE-DATETIME>20080609162838
ACCESSION NUMBER:		0000914122-08-000021
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20080430
FILED AS OF DATE:		20080609
DATE AS OF CHANGE:		20080609

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MFRI INC
		CENTRAL INDEX KEY:			0000914122
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564]
		IRS NUMBER:				363922969
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0131

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32530
		FILM NUMBER:		08888418

	BUSINESS ADDRESS:	
		STREET 1:		7720 LEHIGH AVE
		CITY:			NILES
		STATE:			IL
		ZIP:			60714
		BUSINESS PHONE:		8479661000

	MAIL ADDRESS:	
		STREET 1:		7720 LEHIGH AVE
		CITY:			NILES
		STATE:			IL
		ZIP:			60714

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MIDWESCO FILTER RESOURCES INC
		DATE OF NAME CHANGE:	19970402
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>mfriq108.htm
<TEXT>
<HTML>
<HEAD>
<TITLE> </TITLE>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>UNITED STATES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>WASHINGTON, D.C. 20549</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>FORM 10-Q</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="675" style='border-collapse:collapse;   '>
    <tr style='page-break-inside:avoid; height:13.9pt'>

        <td width="40" valign=top style='border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt; height:13.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>X</font></p>  </td>

        <td  colspan="17" rowspan=2 style=' padding:0in 2.15pt 0in 2.15pt;height:13.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:13.85pt'>

        <td width="40" valign=top style='padding:0in 2.15pt 0in 2.15pt;height:13.85pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>


        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="5" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=2>For the quarterly period ended</font></p> </td>

        <td  colspan="13" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>April 30, 2008</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>OR</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:13.9pt'>

        <td width="40" valign=top style='border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt; height:13.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="17" rowspan=2 valign=top style=' padding:0in 2.15pt 0in 2.15pt;height:13.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=2>TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934</font></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:13.85pt'>

        <td width="40" valign=top style='padding:0in 2.15pt 0in 2.15pt;height:13.85pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="5" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=2>For the transition period from</font></p> </td>

        <td  colspan="4" valign=top style='border-bottom: solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="47" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>to</font></p> </td>

        <td  colspan="5" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="10" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Commission file number</font></p> </td>

        <td  colspan="3" valign=top style='border-bottom: solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>0-18370</font></p> </td>

        <td  colspan="5" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font SIZE=2>MFRI, INC.</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Exact name of registrant as specified in its charter)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="8" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>Delaware</font></p> </td>

        <td  colspan="10" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>36-3922969</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="8" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(State or other jurisdiction of</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>incorporation or organization)</font></p> </td>

        <td  colspan="10" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(I.R.S. Employer</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>Identification No.)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="4" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>7720 Lehigh Avenue</font></p> </td>

        <td  colspan="7" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>Niles, Illinois</font></p> </td>

        <td  colspan="7" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>60714</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="11" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>(Address of principal executive offices)</font></p> </td>

        <td  colspan="7" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(Zip Code)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(847) 966-1000</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Registrant&#146;s telephone number, including area code)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' border-top:solid black 1.0pt; padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Former name, former address and former fiscal year, if changed since last report)</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:27.75pt'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt;height:27.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>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.   Yes   </font><font face=Wingdings>x</font><font size=2>      No  </font><font face=Wingdings><font size=2>o</font></font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company.  See definitions of &#147;large accelerated filer&#148;, &#147;accelerated filer&#148; and &#147;smaller reporting company&#148; in Rule 12b-2 of the Exchange Act. (Check one):  </font></p> </td> </tr>
    <tr style='page-break-inside:avoid;height:13.05pt'>

        <td  colspan="2" valign=top style=' padding:0in 2.15pt 0in 2.15pt;height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Large accelerated filer</font></p> </td>

        <td width="18" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>[]</font></p> </td>

        <td  colspan="3" valign=top style=' padding:0in 2.15pt 0in 2.15pt;height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accelerated filer</font></p> </td>

        <td width="30" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font face=Wingdings>x</font></p> </td>

        <td  colspan="5" valign=top style='padding: 0in 2.15pt 0in 2.15pt;height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Non-accelerated filer</font></p> </td>

        <td  colspan="2" valign=top style='padding: 0in 2.15pt 0in 2.15pt;height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>[]</font></p> </td>

        <td  colspan="3" valign=top style=' padding:0in 2.15pt 0in 2.15pt;height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Smaller reporting company </font></p> </td>

        <td width="43" valign=top style='padding:0in 2.15pt 0in 2.15pt; height:13.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>[]</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of </font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>the Exchange Act)   Yes   </font><font face=Wingdings><font size=2>o</font></font><font size=2>     No  </font><font face=Wingdings>x</font></p> </td> </tr>
    <tr style='page-break-inside:avoid'>

        <td  colspan="18" valign=top style=' padding:0in 2.15pt 0in 2.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>On May 31, 2008, there were 6,793,570 shares of the registrant&#146;s common stock outstanding.</font></p> </td> </tr>
    <tr>

        <td width="40" ></td>

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        <td width="30" ></td>

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        <td width="12" ></td>

        <td width="47" ></td>

        <td width="4" ></td>

        <td width="62" ></td>

        <td width="14" ></td>

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        <td width="15" ></td>

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        <td width="135" ></td>

        <td width="43" ></td> </tr> </table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>PART I &#150; FINANCIAL INFORMATION</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="232" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="16" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 1.</font></b></p> </td>

        <td width="155" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Financial Statements</font></b></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The accompanying interim condensed consolidated financial statements of MFRI, Inc. and subsidiaries (the &#147;Company&#148;) are unaudited, but include all adjustments which the Company&#146;s management considers necessary to present fairly the financial position and results of operations for the periods presented.  These adjustments consist of normal recurring adjustments.  Certain information and footnote disclosures have been condensed or omitted pursuant to Securities and Exchange Commission rules and regulations.  These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company&#146;s annual report on Form 10-K for the year ended January 31, 2008.  Reclassifications have been made in prior year financial statements to conform to the current year presentation.  The results of operations for the quarter
ended April 30, 2008 are not necessarily indicative of the results to be expected for the full year ending January 31, 2009.  One of the reasons for this is that, </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>due to the seasonality of the Company's domestic Piping Systems business, sales and earnings are typically lower during the late fall, winter and early spring (fourth and first quarters), due to unfavorable weather for construction over much of North America and are correspondingly higher during the late spring, summer and early fall months (second and third quarters).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>MFRI, INC. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>(In thousands, except per share information)</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="647" style='border-collapse:collapse'>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="6" valign=top style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p
style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style='border-bottom: solid black 1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style=' border-top:solid black 1.0pt; '>
<p style='margin-left:0in;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0in'><b><font size=2>2007</font></b></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net sales</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>65,981</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>56,954</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Cost of sales</font></p> </td>

        <td width="17" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>54,838</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46,343</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Gross profit</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,143</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,611</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Operating expenses:</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Selling expenses</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,726</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,535</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>General and administrative expenses</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,282</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,196</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:34.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total operating expenses</font></p> </td>

        <td width="17" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,008</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8,731</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income from operations</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,135</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,880</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income from joint venture</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>99</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Interest expense &#150; net</font></p> </td>

        <td width="17" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>623</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>476</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income before income taxes</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>611</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,424</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Income taxes </font></p> </td>

        <td width="17" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>188</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>386</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Net income </font></p> </td>

        <td width="17" valign=top style='border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=top style='border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>423</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=top style='border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,038</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average number of common shares outstanding &#150; basic</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,787</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,537</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted average number of common shares outstanding - diluted</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,888</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,821</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Basic earnings per share </font></p>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net income </font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.06</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.16</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="420" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Diluted earnings per share </font></p>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net income </font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.06</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-9.05pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align: center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="57" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.15</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-4.5pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>See notes to condensed consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>1</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<B><font SIZE=2>MFRI, INC. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)</font></B></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="685" style='border-collapse:collapse'>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Assets</font><i></i></p> </td>

        <td  colspan="2" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p
style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>January 31,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="17" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current assets:</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash and cash equivalents</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,963</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,665</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Restricted cash</font>                                      </p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>596</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>565</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade accounts receivable, less allowance for doubtful accounts of </font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:.5in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>$387 in 2008 and $384 in 2007</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46,743</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>39,587</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Inventories, net</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>48,154</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>43,013</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Prepaid expenses and other current assets</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,246</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,240</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Costs and estimated earnings in excess of billings on </font></p>
<p style='margin-left:.25in;text-indent:16.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>uncompleted contracts</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,557</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,449</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred income taxes</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,557</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,488</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income taxes receivable</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>912</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>690</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Accounts receivable &#150; related company</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>144</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>250</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:34.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total current assets</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>110,872</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>95,947</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Property, plant and equipment, net</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>41,891</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35,401</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other Assets:</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Goodwill</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,912</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,826</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Cash surrender value of officers&#146; life insurance policies</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,319</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,977</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred tax asset</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,216</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,421</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deposits</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,472</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,153</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Patents, net of accumulated amortization</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>333</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>349</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other assets</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>510</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>338</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:34.5pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total other assets</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,762</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,064</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total assets</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="70" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,525</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>140,412</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:1.0pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:1.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Liabilities and Stockholders&#146; Equity</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current liabilities:</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Trade accounts payable</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30,449</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,758</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Current maturities of long-term debt</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22,458</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>14,532</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Customer deposits</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7,187</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,972</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Commissions payable</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,958</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,294</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Other accrued liabilities</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,318</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,276</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accrued compensation and payroll taxes</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,954</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,970</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Billings in excess of costs and estimated earnings on uncompleted </font></p>
<p style='margin-left:.25in;text-indent:16.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Contracts</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,089</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,552</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:.25in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=2>Accounts payable &#150; related company</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>53</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>49</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:34.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total current liabilities</font></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>73,466</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>56,403</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-term liabilities:</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Long-term debt, less current maturities</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>23,328</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>19,708</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Deferred compensation liability</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,581</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,243</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Other</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,224</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,278</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:34.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Total long-term liabilities</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>28,133</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>24,229</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:2.9pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:2.9pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stockholders&#146;equity:</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:.5in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Common stock, $.01 par value, authorized &#150; 50,000 shares in April 2008 and January 2008; 6,788 issued and outstanding in April 2008 and 6,787 issued and outstanding in January 2008</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>68</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>68</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Additional paid-in capital</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46,719</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46,551</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Retained earnings</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,657</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>12,234</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Accumulated other comprehensive income</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,482</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>927</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:34.5pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Total stockholders&#146; equity</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="70" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>60,926</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: solid black 1.0pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>59,780</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:5.4pt'>

        <td width="461" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Total liabilities and stockholders&#146; equity</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="70" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>162,525</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="74" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt;height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>140,412</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>See notes to condensed consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>2</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<B><font SIZE=2>MFRI, INC. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)</font></B></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='border-collapse:collapse'>
    <tr style='height:.1in'>

        <td valign=top style='background:white; height:.1in'>
<p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td width="15" valign=bottom style='background:white;height:.1in'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td colspan="7" valign=bottom style=' border-bottom:solid black 1.0pt; background:white;height:.1in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b><br> <b><font size=2>April 30,</font></b></p> </td>

        <td width="7" valign=bottom style='background:white; height:.1in'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font
size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style='background:white; height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align: left;margin-top:1.0pt;margin-bottom:0pt'><i>&nbsp;</i></p> </td>

        <td width="15" valign=bottom style='background:white;height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  background:white;height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="10" valign=bottom style='border-top:solid black 1.0pt; background:white; height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style='border-top:solid black 1.0pt; background:white; height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style='border-top:solid black 1.0pt; background:white; height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  background:white;height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:2pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>

        <td width="7" valign=bottom style='background:white; height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Operating activities:</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-top:solid black 1.0pt; height:12.95pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-top:solid black 1.0pt; height:12.95pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Net income</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>423</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,038</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:31.5pt;text-indent:-13.5pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Adjustments, to reconcile net income to net cash flows from operating activities:</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:17.3pt;text-indent:14.2pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Depreciation and amortization</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,211</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,067</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:17.3pt;text-indent:14.2pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Change in cash surrender value of deferred comp plan</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(342</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(35</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:17.3pt;text-indent:14.2pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Deferred income taxes</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(213</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(61</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:17.3pt;text-indent:14.2pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Stock-based compensation expense</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>167</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>47</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:17.3pt;text-indent:14.2pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Income from joint venture</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(99</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:27.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:27.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(20</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:17.3pt;text-indent:14.2pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Provision for uncollectible accounts</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:32.5pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:32.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:32.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>3</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:17.3pt;text-indent:14.2pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Loss on sales of assets</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:32.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:32.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>4</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.5pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Changes in operating assets and liabilities:</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:45.0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Accounts payable</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>9,627</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:15.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:15.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>26</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:12.0pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:45.0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Accounts receivable</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(6,882</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(949</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:45.0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Inventories</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(6,434</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(1,0655</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:45.0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Customer deposits</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>3,142</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(1,364</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:45.0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Prepaid expenses and other current assets</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(2,934</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(1,072</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:45.0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Accrued compensation and payroll taxes</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(700</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:19.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:19.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(2,127</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:45.0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Income taxes receivable</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>608</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>394</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:45.0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Other assets and liabilities</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='border-bottom:solid black 1.0pt;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(408)</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='border-bottom:solid black 1.0pt;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(1,266</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Net cash used in operating activities</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='border-bottom:solid black 1.0pt;   height:12.95pt'>
<p style='margin-left:0pt;text-indent:26.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-bottom: solid black 1.0pt;height:12.95pt'>
<p style='margin-left:0pt;text-indent:26.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(2,833</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='border-bottom:solid black 1.0pt;   height:12.95pt'>
<p style='margin-left:0pt;text-indent:15.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-bottom: solid black 1.0pt;height:12.95pt'>
<p style='margin-left:0pt;text-indent:15.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(5,380</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Investing activities:</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Purchases of property and equipment</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(7,334</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(1,156</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Distributions from joint venture</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>286</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Proceeds from sales of property and equipment</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Net cash used in investing activities</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(7,334</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(869</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Financing activities:</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Borrowings under revolving, term and mortgage loans</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:16.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:16.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>21,633</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:19.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:19.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>4,702</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Repayment of debt</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:13.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:13.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(10,435</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:15.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:15.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(13,061</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>(Decrease) in cash overdrafts</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(1,830</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(3,343</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Issuance of stock</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>18,332</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Stock options exercised</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>18</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Tax benefit of stock options </font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>167</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>24</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Payments on capitalized lease obligations</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='border-bottom:solid black 1.0pt;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(43</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='border-bottom:solid black 1.0pt;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(41</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Net cash provided by financing activities</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='border-bottom:solid black 1.0pt;   height:12.95pt'>
<p style='margin-left:0pt;text-indent:21.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-bottom: solid black 1.0pt;height:12.95pt'>
<p style='margin-left:0pt;text-indent:21.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>9,493</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='border-bottom:solid black 1.0pt;   height:12.95pt'>
<p style='margin-left:0pt;text-indent:19.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-bottom: solid black 1.0pt;height:12.95pt'>
<p style='margin-left:0pt;text-indent:19.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>6,631</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Effect of exchange rate changes on cash and cash equivalents</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:31.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(28</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:28.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>178</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Net increase in cash and cash equivalents</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:26.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:26.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>(702</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:27.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:27.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>560</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>cash and cash equivalents &#150; beginning of period</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='border-bottom:solid black 1.0pt;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:29.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>2,665</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='border-bottom:solid black 1.0pt;  height:12.95pt'>
<p style='margin-left:0pt;text-indent:27.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='border-bottom: solid black 1.0pt; height:12.95pt'>
<p style='margin-left:0pt;text-indent:27.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>565</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0.5pt'><font size=2>cash and cash equivalents &#150; end of period</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='border-bottom:double black 2.25pt; height:12.95pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="84" valign=bottom style='border-bottom: double black 2.25pt;height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,963</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='border-bottom:double black 2.25pt; height:12.95pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="69" valign=bottom style='border-bottom: double black 2.25pt;height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1,125</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style='height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Supplemental cash flow information:</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:17.0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Cash paid for:</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Interest, net of capitalized amounts</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>590</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:3.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>547</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.95pt'>

        <td valign=top style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:.5in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Income taxes paid</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="84" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:34.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>1</font></p> </td>

        <td width="10" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="15" valign=bottom style=' height:12.95pt'>
<p style='margin-left:-0.7pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="8" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="69" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0pt;text-indent:23.0pt;text-align:right;margin-top:2pt;margin-bottom:0pt'><font size=2>28</font></p> </td>

        <td width="7" valign=bottom style=' height:12.95pt'>
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>See notes to condensed consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>3</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>MFRI, INC. AND SUBSIDIARIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>APRIL 30, 2008</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>1.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Basis of presentation: </font><font size=2> The unaudited financial statements herein have been prepared by the Company in accordance with generally accepted accounting principles and pursuant to the rules and regulations of the Securities and Exchange Commission.  Accordingly, footnote disclosures which would substantially duplicate the disclosures contained in the January 31, 2008 audited financial statements have been omitted from these interim financial statements.  Interim financial statements should be read in conjunction with the financial statements and the notes thereto included in
the Company&#146;s latest Annual Report on Form 10-K.</font></b></i></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>2.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Equity-based</font></b></i><font size=2> </font><i><b><font size=2>compensation:  </font></b></i><font size=2>At April 30, 2008 the Company has equity-based compensation plans from which stock-based compensation awards can be granted to eligible employees, officers or directors.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>Effective February 1, 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standards (&#147;SFAS&#148;) No.&nbsp;123 (revised 2004), &#147;Share-Based Payment&#148; (&#147;SFAS 123R&#148;) using the modified-prospective-transition method.  Under this transition method, compensation cost recognized includes compensation costs for all share-based payments granted prior to, but not vested as of February&nbsp;1, 2006 based on the fair value at grant date estimated in accordance with SFAS 123.  The Company has awarded 1,200 stock options under such plans to employees, officers or directors during the three-month period ended April&nbsp;30, 2008.  The stock-based compensation expense for the three months ended April 30, 2008 and 2007 was $166,700 and $47,300, respectively.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>The fair values of the option awards granted prior to but not vested as of April 2008 and 2007 respectively, were estimated on the grant date using the Black-Scholes option pricing model and the assumptions shown in the following table:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="470" style='margin-left:23.4pt;border-collapse:collapse; '>
    <tr >

        <td width="204" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i>&nbsp;</i></p> </td>

        <td  colspan="2" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30, 2008</font></b></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30, 2007</font></b></p> </td> </tr>
    <tr >

        <td width="204" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected volatility</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="104" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46.81%-62.43%</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="112" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>46.81%-52.23%</font></p> </td> </tr>
    <tr >

        <td width="204" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Risk-free interest rate</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.80%-5.16%</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="112" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.93%-5.16%</font></p> </td> </tr>
    <tr >

        <td width="204" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected dividend yield</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="112" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0%</font></p> </td> </tr>
    <tr >

        <td width="204" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected life in years</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="104" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5 - 7</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="112" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>Stock option activity for MFRI&#146;s Incentive Plan for the three months ended April 30, 2008 was as follows: </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="626" style='margin-left:23.4pt;border-collapse:collapse; '>
    <tr style='height:59.05pt'>

        <td width="240" valign=bottom style='padding:0in 0in 0in 1.45pt; height:59.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="81" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 0in 0in 1.45pt;height:59.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Number of Options</font></b></p> </td>

        <td width="16" valign=bottom style='padding:0in 0in 0in 1.45pt; height:59.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="77" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 0in 0in 1.45pt;height:59.05pt'>
<p
style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Weighted-Average Exercise Price</font></b></p> </td>

        <td width="16" valign=bottom style='padding:0in 0in 0in 1.45pt; height:59.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 0in 0in 1.45pt;height:59.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Weighted-Average Remaining Contractual Term</font></b></p> </td>

        <td width="21" valign=bottom style='padding:0in 0in 0in 1.45pt; height:59.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 0in 0in 1.45pt;height:59.05pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Aggregate Intrinsic Value</font></b></p> </td> </tr>
    <tr style='height:7.75pt'>

        <td width="240" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Outstanding on January 31, 2008</font></p> </td>

        <td width="81" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>436,592</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>13.59</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.0pt'>

        <td width="240" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Granted</font></p> </td>

        <td width="81" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,200</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>16.12</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.0pt'>

        <td width="240" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exercised</font></p> </td>

        <td width="81" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(250</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2.16</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="86" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,400</font></p> </td> </tr>
    <tr style='height:15.0pt'>

        <td width="240" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Expired or forfeited</font></p> </td>

        <td width="81" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(7,775</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=2>26.62</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=2>5,543</font></p> </td> </tr>
    <tr style='height:15.75pt'>

        <td width="240" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Outstanding on April 30, 2008</font></p> </td>

        <td width="81" nowrap valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:double black 2.25pt;border-right:none;  padding:0in 0in 0in 1.45pt;height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>429,767</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>13.37</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>7.0 years</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="86" nowrap valign=bottom style='border-bottom: double black 2.25pt;padding:0in 0in 0in 1.45pt;height:15.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,830,181</font></p> </td> </tr>
    <tr style='height:5.75pt'>

        <td width="240" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="81" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt;height:5.75pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:15.0pt'>

        <td width="240" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Exercisable on April 30, 2008</font></p> </td>

        <td width="81" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>219,317</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4.80</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5.2 years</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="86" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:15.0pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,422,055</font></p> </td> </tr>
    <tr style='height:20.2pt'>

        <td width="240" valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Weighted-average fair value of options granted during first three months of 2008</font></p> </td>

        <td width="81" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="77" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>8.84</font></p> </td>

        <td width="16" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="89" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="21" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:20.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>4</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.26in;text-align:left;'>
<font size=2>The weighted-average exercise price per nonvested stock award at grant date was $16.12 per share for the nonvested stock awards granted in 2008. Nonvested stock award activity for the three months ended April 30, 2008 was as follows:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="331" style='margin-left:23.4pt;border-collapse:collapse; '>
    <tr style='height:22.4pt'>

        <td width="220" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:22.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="102" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 0in 0in 1.45pt;height:22.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Nonvested Stock Outstanding</font></b></p> </td>

        <td width="9" valign=top style='padding:0in 0in 0in 1.45pt; height:22.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:7.1pt'>

        <td width="220" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.1pt'>
<p
style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Outstanding on January 31, 2008</font></p> </td>

        <td width="102" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.1pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>212,025</font></p> </td>

        <td width="9" valign=top style='padding:0in 0in 0in 1.45pt; height:7.1pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:10.4pt'>

        <td width="220" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:10.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Granted</font></p> </td>

        <td width="102" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:10.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,200</font></p> </td>

        <td width="9" valign=top style='padding:0in 0in 0in 1.45pt; height:10.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:4.6pt'>

        <td width="220" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:4.6pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Released</font></p> </td>

        <td width="102" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:4.6pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="9" valign=top style='padding:0in 0in 0in 1.45pt; height:4.6pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:7.4pt'>

        <td width="220" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Expired or forfeited</font></p> </td>

        <td width="102" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:7.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,775</font></p> </td>

        <td width="9" valign=top style='padding:0in 0in 0in 1.45pt; height:7.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:10.15pt'>

        <td width="220" nowrap valign=bottom style='padding:0in 0in 0in 1.45pt; height:10.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Outstanding on April 30, 2008</font></p> </td>

        <td width="102" nowrap valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:double black 2.25pt;border-right:none;  padding:0in 0in 0in 1.45pt;height:10.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>210,450</font></p> </td>

        <td width="9" valign=top style='padding:0in 0in 0in 1.45pt; height:10.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>As of April 30, 2008, there was $2,013,000 of total unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under the equity-based compensation plans. That cost is expected to be recognized over a period of 4 years.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>3.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Inventories consisted of the following:</font></b></i></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="483" style='margin-left:23.4pt;border-collapse:collapse; '>
    <tr >

        <td width="220" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td  colspan="2" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30, 2008</font></b></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2"
valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>January 31, 2008</font></b></p> </td>

        <td width="17" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="220" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Raw materials</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="86" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>36,713</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="96" valign=top style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p  align=right style='text-align:right'><font size=2>34,044</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="220" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Work in progress</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,621</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p  align=right style='text-align:right'><font size=2>4,569</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="220" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Finished goods</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,804</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="96" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p  align=right style='text-align:right'><font size=2>5,756</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="220" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:4.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Sub total</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>49,138</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="96" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p  align=right style='text-align:right'><font size=2>44,369</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="220" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Less: Inventory allowance</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="86" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>984</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="96" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p  align=right style='text-align:right'><font size=2>1,356</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="220" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Inventory, net</font></p> </td>

        <td width="16" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="86" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>48,154</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="96" valign=top style='border-bottom:double black 2.25pt; padding:0in 5.4pt 0in 5.4pt'>
<p  align=right style='text-align:right'><font size=2>43,013</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>4.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Goodwill: </font></b></i><font size=2> The Company reviews the carrying value of goodwill in accordance with Statement of Financial Accounting Standards (&#147;SFAS&#148;) No. 142, &#147;Goodwill and Other Intangible Assets&#148;, which requires that goodwill and other intangible assets with indefinite lives be analyzed for impairment on an annual basis or when there is reason to suspect that their values have been impaired.  For the 2008 and 2007 evaluations, the fair value was determined using discounted cash flows and other market-related valuation models. Certain estimates and judgments
are required in the application of the fair value models.  Based upon the Company&#146;s evaluations for 2008 and 2007, no impairment of goodwill was required.  As of April 30, 2008 and January 31, 2008, $1,100,000 of goodwill was allocated to the Industrial Process Cooling Equipment business.  As of April 30, 2008 and January 31, 2008, $1,812,000 and $1,726,000, respectively, was allocated to the Filtration Products business.  The change in goodwill was due to foreign currency translation.  The changes in the carrying amount of goodwill were as follows:</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="393" style='margin-left:.25in;border-collapse:collapse; '>
    <tr >

        <td width="206" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><i><font size=2>(In thousands)</font></i></p> </td>

        <td width="15" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="9" valign=top style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="55" valign=top style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p>
</td>

        <td width="14" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="56" valign=top style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>

        <td width="12" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="206" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Balance at beginning of year</font></p> </td>

        <td width="15" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="9" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="55" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,826</font></p> </td>

        <td width="14" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="56" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,613</font></p> </td>

        <td width="12" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="206" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=2>Foreign currency translation effect</font></p> </td>

        <td width="15" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="9" valign=bottom style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="55" valign=top style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>86</font></p> </td>

        <td width="14" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="56" valign=top style='border-bottom:solid black 1.0pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>213</font></p> </td>

        <td width="12" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="206" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=2>Balance at end of year</font></p> </td>

        <td width="15" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="9" valign=bottom style='border-bottom:double black 2.25pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="55" valign=top style='border-bottom:double black 2.25pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,912</font></p> </td>

        <td width="14" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="10" valign=bottom style='border-bottom:double black 2.25pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="56" valign=top style='border-bottom:double black 2.25pt; padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,826</font></p> </td>

        <td width="12" valign=bottom style='padding:0in 1.45pt 0in 0in'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>5.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Other intangible assets with definite lives: </font></b></i><font size=2> Patents are capitalized and amortized on a straight-line basis over a period not to exceed the legal lives of the patents.  Patents were $2,447,000 at April 30, 2008 and January 31, 2008.  Accumulated amortization was $2,114,000 and $2,098,000 at April 30, 2008 and January 31, 2008, respectively.  Future amortization over the next five years ending January 31 will be $83,000 in the balance of 2009, $94,000 in 2010, $70,000 in 2011, $18,000 in 2012, $16,000 in 2013 and $52,000 thereafter.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>6.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Pension plan for hourly rated employees of Midwesco Filter Resources, Inc., Winchester, Virginia</font></b></i><font size=2>:  The market-related value of plan assets at April 30, 2008 and January 31, 2008 were $3,949,800 and $3,912,100, respectively.  Net cost recognized was as follows:</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>5</font></p>
<!-- EEDocs PBStart-->
<p style='page-break-before:always'></p>
<!-- EEDocs PBEnd-->

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="564" style='margin-left:.25in;border-collapse:collapse; '>
    <tr >

        <td width="348" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="6" valign=top style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p> </td>

        <td width="12" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td
width="2">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr >

        <td width="348" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Components of net periodic benefit cost:</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>

        <td  colspan="2" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Service cost</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="62" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>31</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>28</font></p> </td>

        <td  colspan="2" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest cost</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="62" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>59</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>56</font></p> </td>

        <td  colspan="2" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Expected return on plan assets</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="62" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(77</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(76</font></p> </td>

        <td  colspan="2" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Amortization of prior service cost</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="62" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>27</font></p> </td>

        <td  colspan="2" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Recognized actuarial loss</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="62" valign=bottom style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>7</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td  colspan="2" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Net periodic benefit cost</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="62" valign=bottom style='border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>47</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>35</font></p> </td>

        <td  colspan="2" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>Employer contributions remaining for fiscal year ending January 31, 2009 are expected to be $123,100.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>7.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>The basic weighted average shares reconcile to diluted weighted average shares as follows:</font></b></i></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="562" style='margin-left:27.9pt;border-collapse:collapse; '>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands, except per share information)</font></i><i></i></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="6" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p> </td>

        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>

        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net income </font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="61" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>423</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="60" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,038</font></p> </td>

        <td width="18" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Basic weighted average number of common shares outstanding</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,787</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="60" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,537</font></p> </td>

        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Dilutive effect of stock options</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>101</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="60" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>284</font></p> </td>

        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=2>Weighted average number of common shares outstanding assuming full dilution</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,888</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="60" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>6,821</font></p> </td>

        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:12.45pt'>

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Basic earnings per share net income</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.06</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="60" valign=bottom style='padding:0in 5.4pt 0in 5.4pt;height:12.45pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.16</font></p> </td>

        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:12.45pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:13.5pt'>

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Diluted earnings per share net income</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.06</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="60" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0.15</font></p> </td>

        <td width="18" valign=bottom style='padding:0in 5.4pt 0in 5.4pt; height:13.5pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="545" style='margin-left:27.9pt;border-collapse:collapse; '>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'>                        <font size=2>&nbsp;</font><i></i></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="6" valign=top style=' border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p> </td> </tr>
    <tr >

        <td width="343" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt;  padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock options not included in the computation of diluted earnings per share of common stock because the option exercise prices exceeded the average market prices of the common shares</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='border-top:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>142,300</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Stock options with an exercise price below the average stock price</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>287,467</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>542,308</font></p> </td> </tr>
    <tr >

        <td width="343" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" valign=bottom style='padding:0in 5.4pt 0in 5.4pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>As of May 31, 2008 a total of 6,250 stock options were exercised since February 1, 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>8.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>The components of comprehensive income, net of tax, were as follows:</font></b></i></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="558" style='margin-left:.25in;border-collapse:collapse; '>
    <tr >

        <td width="348" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="6" valign=top style=' border-bottom:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p> </td>

        <td width="8" valign=top style='padding:0in .7pt 0in 0in'>
<p
style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style='border-bottom: solid black 1.0pt;padding: 0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=top style='border-top:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top style='border-top:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>

        <td width="8" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Net income</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="64" valign=top style='border-top:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>423</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="60" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,038</font></p> </td>

        <td width="8" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Interest rate swap</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="60" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2</font></p> </td>

        <td width="8" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Foreign currency translation adjustment</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>555</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="60" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>554</font></p> </td>

        <td width="8" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Unrealized gain on marketable securities</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='border-bottom:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="60" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(117</font></p> </td>

        <td width="8" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr >

        <td width="348" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Comprehensive income</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='border-bottom:double black 2.25pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="64" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>978</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="60" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,477</font></p> </td>

        <td width="8" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>6</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'>
<font size=2>Accumulated other comprehensive income presented on the accompanying condensed consolidated balance sheets consist of the following:</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="557" style='margin-left:.25in;border-collapse:collapse; '>
    <tr >

        <td width="364" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td  colspan="2" valign=top style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="13" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>January 31,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td  colspan="2" valign=top >
<p style='margin-left:-.6pt;text-indent:.6pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="364" valign=bottom >
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Accumulated translation adjustment</font></p> </td>

        <td width="12" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="66" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,269</font></p> </td>

        <td width="13" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td  colspan="2" valign=top style=' border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,714</font></p> </td>

        <td width="9" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="364" valign=bottom >
<p style='margin-left:.25in;text-indent:-.25in;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=2>Minimum pension liability adjustment (net of cumulative </font><br> <font size=2>tax benefit of  $483)</font></p> </td>

        <td width="12" valign=top style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="66" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(787</font></p> </td>

        <td width="13" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(787</font></p> </td>

        <td width="9" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr >

        <td width="364" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Accumulated other comprehensive income </font></p> </td>

        <td width="12" valign=bottom style='border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="66" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,482</font></p> </td>

        <td width="13" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="18" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td  colspan="2" valign=bottom style=' border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>927</font></p> </td>

        <td width="9" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr>

        <td width="364" ></td>

        <td width="12" ></td>

        <td width="66" ></td>

        <td width="13" ></td>

        <td width="16" ></td>

        <td width="18" ></td>

        <td width="57" ></td>

        <td width="2" ></td>

        <td width="9" ></td> </tr> </table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>9.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Business segment reporting:</font></b></i><font size=2>  The Company has three reportable segments under the criteria of SFAS No. 131, &#147;Disclosures about Segments of an Enterprise and Related Information.&#148;  The Piping Systems business engineers, designs, manufactures and sells specialty piping systems and leak detection and location systems.  The Filtration Products business manufactures and sells a wide variety of filter elements for air filtration and particulate collection systems.  The Industrial Process Cooling Equipment business engineers, designs, manufactures and sells
chillers, cooling towers, plant circulating systems and accessories for industrial process applications.  Included in Corporate and Other activity is the subsidiary which engages in the installation of heating, ventilation and air conditioning (&#147;HVAC&#148;) systems, which is not sufficiently large to constitute a reportable segment. </font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="556" style='margin-left:.25in;border-collapse:collapse; '>
    <tr >

        <td width="368" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td  colspan="6" valign=top style=' border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p> </td>

        <td width="7" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="368" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>


        <td  colspan="2" style='border-bottom:solid black 1.0pt;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style='border-top:solid black 1.0pt; border-left:none;border-bottom:solid black 1.0pt;border-right:none;  '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2007</font></b></p> </td>

        <td width="7" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Net sales:</font></p> </td>

        <td width="15" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=top style='border-top:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Piping Systems</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>30,677</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>20,740</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Filtration Products</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>25,817</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>26,437</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Industrial Process Cooling Equipment</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,067</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>9,442</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Corporate and Other</font></p> </td>

        <td width="15" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>420</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>335</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0.5pt'><font size=2>Total net sales</font></p> </td>

        <td width="15" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>65,981</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>56,954</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Gross profit (loss):</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Piping Systems</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>5,460</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>4,468</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Filtration Products</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,269</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,962</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Industrial Process Cooling Equipment</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,392</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,207</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Corporate and Other</font></p> </td>

        <td width="15" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>22</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(26</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0.5pt'><font size=2>Total gross profit</font></p> </td>

        <td width="15" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>11,143</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>10,611</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Income (loss) from operations:</font></p> </td>

        <td width="15" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Piping Systems</font></p> </td>

        <td width="15" >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,932</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,534</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Filtration Products</font></p> </td>

        <td width="15" >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>253</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,307</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Industrial Process Cooling Equipment</font></p> </td>

        <td width="15" >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(40</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=2>))</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(405</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr >

        <td valign=top >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Corporate and Other</font></p> </td>

        <td width="15" style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,010</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0in;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom: 0in'><font size=2>)</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(1,556</font></p> </td>

        <td width="7" valign=bottom >
<p style='margin-left:0in;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0in'><font size=2>)</font></p> </td> </tr>
    <tr style='height:7.15pt'>

        <td valign=top style=' height:7.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0.5pt'><font size=2>Income from operations</font></p> </td>

        <td width="15" style='border-bottom:double black 2.25pt; height:7.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: double black 2.25pt;height:7.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,135</font></p> </td>

        <td width="16" valign=bottom style=' height:7.15pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:justify;margin-top:1.5pt;margin-bottom: 0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style=' height:7.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: double black 2.25pt;height:7.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: double black 2.25pt;height:7.15pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,880</font></p> </td>

        <td width="7" valign=bottom style=' height:7.15pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:10.2pt'>

        <td width="368" valign=bottom style=' height:10.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Income (loss) before income taxes:</font></p> </td>

        <td width="15" style=' height:10.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=top style='height:10.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style=' height:10.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style=' height:10.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='height:10.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=top style='height:10.2pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="7" valign=top style=' height:10.2pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="368" valign=bottom >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Piping Systems</font></p> </td>

        <td width="15" >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>3,031</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,554</font></p> </td>

        <td width="7" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="368" valign=bottom >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Filtration Products</font></p> </td>

        <td width="15" >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>253</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,307</font></p> </td>

        <td width="7" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="368" valign=bottom >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Industrial Process Cooling Equipment</font></p> </td>

        <td width="15" >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(40</font></p> </td>

        <td width="16" valign=bottom >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>))</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(405</font></p> </td>

        <td width="7" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr >

        <td width="368" valign=bottom >
<p style='margin-left:0pt;text-indent:.25in;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Corporate and Other</font></p> </td>

        <td width="15" style='border-bottom:solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,633</font></p> </td>

        <td width="16" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: solid black 1.0pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,032</font></p> </td>

        <td width="7" >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr >

        <td width="368" valign=bottom >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=2>Income before income taxes</font></p> </td>

        <td width="15" style='border-bottom:double black 2.25pt; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="59" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>611</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: double black 2.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,424</font></p> </td>

        <td width="7" valign=top >
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>10.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Related party transactions:</font></b></i><font size=2>  The Company recorded revenue of $5,000 during the first quarter of 2008 and $229,000 during the first quarter of 2007 pursuant to a contract wholly-subcontracted to a company primarily owned by two principal stockholders who are also members of management of the Company.  Related company balances were as </font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>7</font></p>
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<p style='page-break-before:always'></p>
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<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'>
<font size=2>follows:</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="560" style='margin-left:.25in;border-collapse:collapse; '>
    <tr >

        <td width="350" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style='border-bottom: solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p
style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=top style=' border-bottom:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>January 31,</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>2008</font></b></p> </td>

        <td width="11" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="350" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Related company accounts receivable:</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" valign=top style='border-top:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="11" valign=top style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="350" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Affiliate</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="64" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>144</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>147</font></p> </td>

        <td width="11" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="350" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Joint Venture</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='border-bottom:solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>0</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:justify;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: solid black 1.0pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>103</font></p> </td>

        <td width="11" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="350" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='border-bottom:double black 2.25pt; padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="64" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>144</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='border-bottom: double black 2.25pt;padding: 0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>250</font></p> </td>

        <td width="11" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="350" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="58" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="11" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr >

        <td width="350" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Related company accounts payable</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="12" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="64" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>53</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="58" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>49</font></p> </td>

        <td width="11" valign=bottom style='padding:0in .7pt 0in 0in'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>11.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Contingencies:  </font></b></i><font size=2>The Company is subject to various unresolved legal actions, which arise in the normal course of its business.  None of these matters is expected to have a material adverse effect on the Company&#146;s financial position or results of operations. However, the ultimate resolution of these matters could result in a change in the Company&#146;s estimate of its liability for these matters.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.29in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>The Company issues a standard warranty with the sale of its products and sells extended warranty contracts to customers.  The Company&#146;s recognition of warranty liability is based, generally, on analyses of warranty claims experiences in the operating units in the preceding years.  The warranty liability was included in other accrued liabilities on the balance sheet.  Changes in the warranty liability are summarized below:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="612" style='margin-left:22.5pt;border-collapse:collapse; '>
    <tr style='height:47.65pt'>

        <td width="390" valign=bottom style=' height:47.65pt'>
<p style='margin-left:0pt;text-indent:146.25pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:146.25pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=2>&nbsp;</font></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><i><font size=2>(In thousands)</font></i><i></i></p> </td>

        <td width="13" valign=bottom style=' height:47.65pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="2" valign=bottom style=' border-bottom:solid black 1.0pt; height:47.65pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font
size=2>Three Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>April 30, 2008</font></b></p> </td>

        <td width="12" valign=bottom style=' height:47.65pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  colspan="3" valign=bottom style=' border-bottom:solid black 1.0pt; height:47.65pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Twelve Months Ended</font></b></p>
<p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><b><font size=2>January 31, 2008</font></b></p> </td>

        <td width="1" valign=top style=' height:47.65pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td  width="8">
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></td> </tr>
    <tr style='height:13.5pt'>

        <td valign=top style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Aggregate product warranty liability at beginning of period</font></p> </td>

        <td width="13" valign=top style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="72" valign=bottom style='border-top:solid black 1.0pt; height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,387</font></p> </td>

        <td width="12" valign=bottom style=' height:13.5pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="14" valign=bottom style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="67" valign=bottom style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,259</font></p> </td>

        <td  colspan="2" valign=bottom style=' height:13.5pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.25pt'>

        <td valign=top style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Aggregate accruals related to product warranties</font></p> </td>

        <td width="13" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="72" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>392</font></p> </td>

        <td width="12" valign=bottom style=' height:14.25pt'>
<p style='margin-left:-3.65pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="14" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="67" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>2,964</font></p> </td>

        <td  colspan="2" valign=bottom style=' height:14.25pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:14.25pt'>

        <td valign=top style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:2pt;margin-bottom:0.5pt'><font size=2>Aggregate reductions for payments</font></p> </td>

        <td width="13" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="72" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(318</font></p> </td>

        <td width="12" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="14" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="67" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(2,669</font></p> </td>

        <td  colspan="2" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:14.25pt'>

        <td valign=top style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0.5pt'><font size=2>Aggregate changes for pre-existing warranties</font></p> </td>

        <td width="13" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: solid black 1.0pt; height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="72" valign=bottom style='border-bottom: solid black 1.0pt; height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(30</font></p> </td>

        <td width="12" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td>

        <td width="14" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: solid black 1.0pt; height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="67" valign=bottom style='border-bottom: solid black 1.0pt; height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>(167</font></p> </td>

        <td  colspan="2" valign=bottom style=' height:14.25pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>)</font></p> </td> </tr>
    <tr style='height:13.5pt'>

        <td valign=top style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0.5pt'><font size=2>Aggregate product warranty liability at end of period</font></p> </td>

        <td width="13" valign=bottom style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="16" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="72" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,431</font></p> </td>

        <td width="12" valign=bottom style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="14" valign=bottom style=' height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="17" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>$</font></p> </td>

        <td width="67" valign=bottom style='border-bottom: double black 2.25pt;height:13.5pt'>
<p style='margin-left:0pt;text-indent:0pt;text-align:right;margin-top:0pt;margin-bottom:0pt'><font size=2>1,387</font></p> </td>

        <td  colspan="2" valign=bottom style=' height:13.5pt'>
<p style='margin-left:-3.85pt;text-indent:0pt;text-align:left;margin-top:1.5pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>12.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Recently adopted pronouncements:</font></b></i><font size=2>  The Company adopted SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities on February 1, 2008.  SFAS 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are recorded on different bases.  The adoption of SFAS 159 did not have a material impact on the Company&#146;s consolidated financial statements.  </font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><i><b><font size=2>New accounting pronouncements:</font></b></i><b><font size=2> </font></b><font size=2>In February 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 157-2.  &#147;Effective Date of FASB Statement No. 157,&#148; which delayed the effective date of SFAS 157 &#147;Fair Value Measurements&#148; (SFAS 157) for all non financial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on at least an annual basis, until January 1, 2009 for calendar year-end entities.  Also, in February 2008, the FASB issued FSP No. FAS 157-1, &#147;Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13,&#148; which states that SFAS No. 13, &#147;Accounting for Leases,&#148;
(&#147;SFAS 13&#148;) and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under SFAS 13 are excluded from the provisions of SFAS 157, except for assets and liabilities related to leases assumed in a business combination that are required to be measures at fair value under SFAS No. 141, &#147;Business Combinations,&#148; or SFAS No. 141R.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in SFAS 13.  SFAS 157 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data oriented from independent sources (observable inputs) and (2) an entity&#146;s own assumptions about market participants assumptions developed based on the best information available in the circumstances (unobservable inputs).  The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the
lowest priority to unobservable inputs (Level 3).  The three levels of the fair value hierarchy under SFAS 157 are described below:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in; text-indent:-0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>8</font></p>
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<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 1 &#150; Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.</font></p> </td> </tr></table>
</div>



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<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 2 &#150; Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market data by correlation or other means.</font></p> </td> </tr></table>
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<table border="0" cellspacing=0 cellpadding=0 width="100%" style='margin-left:0pt;border-collapse:collapse; '>
    <tr >

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 3 - Inputs that are both significant to the fair value measurement and unobservable.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>The Company does not expect this to have a material impact on the financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>13.</font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><i><b><font size=2>Debt:</font></b></i><font size=2>  The Company was in compliance with the covenants under the Loan Agreement described below.  However, pursuant to a waiver and amendment obtained in April 2008, there is no earnings covenant (the &#147;Covenant&#148;) for periods prior to July 2008.  While the Company expects to comply with the Covenant for periods after July 2008, in recognition of the uncertainty of compliance, $16,504,000 of the Company&#146;s line of credit (of which $6,096,500 was available as of April 30, 2008) and $2,679,000 of term debt have been classified as current in the
accompanying consolidated financial statements.&nbsp; In management&#146;s opinion adequate financing sources are available to refinance the amounts outstanding under the line of credit during 2008 should this become necessary.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>On July 11, 2002, the Company entered into a secured loan and security agreement with a financial institution ("Loan Agreement").  The Loan Agreement was amended and restated on December 15, 2006.  Under the terms of the Loan Agreement, which matures on November 13, 2010, the Company can borrow up to $38,000,000, subject to borrowing base and other requirements, under a revolving line of credit. The Loan Agreement covenants restrict debt, liens, and investments, do not permit payment of dividends, and require attainment of certain levels of profitability and cash flows. Interest rates generally are based on options selected by the Company as follows:  (a) a margin in effect plus a prime rate; or (b) a margin in effect plus the LIBOR rate for the corresponding interest period.  At April 30, 2008, the prime rate was 5.00%, and the margins added to the prime rate and the LIBOR rate, which are
determined each quarter based on the applicable financial statement ratio, were 0.25 and 2.25 percentage points, respectively.  Monthly interest payments were made.  As of April 30, 2008, the Company had borrowed $16,504,000 and had $6,096,500 available to it under the revolving line of credit.  In addition, $6,712,000 of availability was used under the Loan Agreement primarily to support letters of credit to guarantee amounts committed for inventory purchases.  The Loan Agreement requires that all payments by the Company's customers are deposited in a bank account from which all funds may only be used to pay the debt under the Loan Agreement.  At April 30, 2008, the amount of restricted cash was $596,000.  Cash required for operations is provided by draw-downs on the line of credit.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>On March 4, 2008, the Company borrowed $5,440,000 under a mortgage note secured by the Filtration Product&#146;s new manufacturing facility located in Bolingbrook, Illinois.  The 25 year mortgage resets its interest rate every five years based on a published index.  The initial interest rate is 6.54% during the first five years with monthly payments of $36,867 for principal and interest combined.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="16" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 2.</font></b></p> </td>

        <td width="525" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations</font></b></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The statements contained under the caption &#147;Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations&#148; and certain other information contained elsewhere in this report, which can be identified by the use of forward-looking terminology such as &#147;may,&#148; &#147;will,&#148; &#147;expect,&#148; &#147;continue,&#148; &#147;remains,&#148; &#147;intend,&#148; &#147;aim,&#148; &#147;should,&#148; &#147;prospects,&#148; &#147;could,&#148; &#147;future,&#148; &#147;potential,&#148; &#147;believes,&#148; &#147;plans,&#148; &#147;likely,&#148;  and &#147;probable,&#148; or the negative thereof or other variations thereon or comparable terminology, constitute &#147;forward-looking statements&#148; within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors
created thereby.  These statements should be considered as subject to the many risks and uncertainties that exist in the Company&#146;s operations and business environment.  Such risks and uncertainties could cause actual results to differ materially from those projected.  These uncertainties include, but are not limited to, economic conditions, market demand and pricing, competitive and cost factors, raw material availability and prices, global interest rates, currency exchange rates, labor relations and other risk factors.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>9</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
<U><B><font SIZE=2>RESULTS OF OPERATIONS</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>MFRI, Inc.</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>MFRI, Inc. ("MFRI", the "Company" or the "Registrant") is engaged in the manufacture and sale of products in three distinct business segments:  Piping Systems, Filtration Products, and Industrial Process Cooling Equipment.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Due to the seasonality of the Company's domestic Piping Systems business, sales and earnings are typically lower during the late fall, winter and early spring (fourth and first quarters), due to unfavorable weather for construction over much of North America and are correspondingly higher during the late spring, summer and early fall months (second and third quarters).  The Company&#146;s other businesses do not demonstrate seasonality.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Our analysis presented below is organized to provide instructive information for understanding the business going forward.  However, this discussion should be read in conjunction with the consolidated financial statements, including the notes thereto.  An overview of the segment results is provided in Note 9 of the Notes to Condensed Consolidated Financial Statements (Unaudited) contained in Item 1 of this report.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Three months ended April 30, 2008 vs. Three months ended April 30, 2007</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net sales of $65,981,000 for the quarter increased 15.8% from $56,954,000 in the prior-year quarter mainly in the Piping Systems business. (See discussion of each business segment below.)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Gross profit for the quarter of $11,143,000 increased 5.0% from $10,611,000 in the prior-year quarter, and gross margin decreased to 16.9% of net sales in the quarter from 18.6 % of net sales in the prior-year quarter. (See discussion of each business segment below.)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Selling expenses increased 5.4% to $3,726,000 for the quarter from $3,535,000 in the prior-year quarter due primarily to additional selling personnel and increased commission expense related to increased sales.  (See discussion of each business segment below.)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>General and administrative expenses increased 20.9% to $6,282,000 for the quarter from $5,196,000 in the prior-year quarter.  The increase was mainly due to additional stock compensation expense of $119,400 compared to the prior year quarter, additional staffing, professional fees related to employment-related hiring expenses and incremental expenses incurred to comply with SOX 404 (including consulting fees) that were not incurred in the first quarter of 2007.  (See discussion of each business segment below.)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net income of $423,000 in the quarter decreased from $1,038,000 in the prior-year quarter primarily for reasons summarized above and discussed in more detail below.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Piping Systems Business</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Due to the seasonality of the Company's domestic Piping Systems business, sales and earnings are typically lower during the late fall, winter and early spring (fourth and first quarters), due to unfavorable weather for construction over much of North America and are correspondingly higher during the late spring, summer and early fall months (second and third quarters).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Three months ended April 30, 2008 vs. Three months ended April 30, 2007</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net sales increased 47.9% to $30,677,000 in the quarter from $20,740,000 in the prior-year quarter. This increase was primarily due to a large domestic District Heating and Cooling (&#147;DHC&#148;) job that was produced in a slower time of the year and a sales increase in our operation in the United Arab Emirates (&#147;U.A.E.&#148;).</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Gross margin decreased to 17.8% in the quarter from 21.5% in the prior-year quarter primarily due to the increased domestic DHC sales which tend to have a lower margin than the oil and gas sale .  The increased U.A.E. sales also had a lower mark-up than the prior year&#146;s work.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Selling expenses increased to $602,000 or 2.0% of net sales in the quarter from $471,000 or 2.3% of net sales for the prior-year quarter.  The dollar increase was mainly due to additional staffing in the U.A.E. hired later in 2007 and the related expenses of additional staff.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>10</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>General and administrative expenses increased to $1,926,000 or 6.3% of net sales in the quarter from $1,464,000 or 7.1% of net sales for the prior-year quarter.  The dollar increase was primarily due to additional staffing and administrative related expenses for the U.A.E. as well as higher bank fees and unfavorable foreign currency losses.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Filtration Products Business</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Three months ended April 30, 2008 vs. Three months ended April 30, 2007</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net sales for the quarter decreased 2.3% to $25,817,000 from $26,437,000 in the prior-year quarter.  This decrease was primarily the result of decreased sales of filter bags and related services, which were somewhat offset by increased sales of pleated filter elements.  </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Gross profit as a percent of net sales declined to 12.7% in the quarter from 15.0% in the prior-year quarter primarily as a result of product mix, a highly competitive market place and reduced factory efficiencies at our Danish facility.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Selling expenses increased to $1,966,000 in the quarter from $1,606,000 in the prior-year quarter and increased as a percentage of sales to 7.6% in the quarter from 6.1% of net sales in the prior-year quarter.  The increase was primarily due to increased commissions on sales and salaries from domestic operations.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>General and administrative expenses remained level at $1,050,000 in the quarter compared to $1,049,000 in the prior-year quarter and as a percentage of sales to 4.1% in the quarter from 4.0% of net sales in the prior-year quarter.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Industrial Process Cooling Equipment Business</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Three months ended April 30, 2008 vs. Three months ended April 30, 2007</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net sales of $9,067,000 for the quarter decreased 4.0% from $9,442,000 in the prior-year quarter. The decrease was due primarily to </font><font color="#000080"><font size=2>lower sales at the </font></font><font size=2>international subsidiary and, lower sales in the printing product line reflecting the change in sales and service responsibility to a new channel partner.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Gross profit increased to 26.4% of net sales in the quarter from 23.4% of net sales in the prior-year quarter, primarily due to lower post-sale customer support costs, a more favorable product mix and reduced indirect manufacturing expenses.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Selling expenses decreased to $1,157,000 or 12.8% of net sales in the quarter from $1,459,000 or 15.5% of net sales in the prior-year quarter. The dollar decrease was due to a reduction in staffing and reduced commissions on lower sales. </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>General and administrative expenses increased to $1,275,000 or 14.1% of net sales in the quarter from $1,154,000 or 12.2% of net sales in the prior-year quarter.  This increase was primarily due to increased engineering consulting fees related to new product development partially offset by reduced staffing.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>General Corporate and Other</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><font size=2>Three months ended April 30, 2008 vs. Three months ended April 30, 2007</font></i></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net sales of $420,000 for the quarter increased from $335,000 in the prior-year quarter.  The sales were related to the start-up stage of the heating, ventilation and air conditioning (&#147;HVAC&#148;) systems business, which had a backlog (uncompleted firm orders) of $33,179,000 as of January 31, 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>General corporate expense included interest expense and general and administrative expenses that were not allocated to the business segments.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>General and administrative expenses increased to $2,033,000 in the quarter from $1,530,000 in the prior-year quarter, and increased as a percentage of total company net sales to 3.1% in the quarter from 2.7% in the prior-year quarter.  The increase was mainly due to additional stock compensation expense of $119,400 compared to the prior year quarter, additional staffing, professional fees related to employment-related hiring expenses and incremental expenses incurred to comply with SOX 404 (including consulting fees) that were not incurred in the first quarter of 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Interest expense increased to $623,000 for the quarter from $476,000 in the prior-year quarter.  The increase was due to increased borrowings.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>11</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><b><font size=2>Taxes</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Taxes on earnings reflect the estimated annual effective rates.  The 30.8% effective tax rate for the first quarter 2008 is less than the statutory U.S. federal income tax rate due mainly to the anticipated utilization of the research and development tax credit carried over from prior years.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><U><B><font SIZE=2>LIQUIDITY AND CAPITAL RESOURCES</font></B></U></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Cash and cash equivalents as of April 30, 2008 were $1,963,000 as compared to $2,665,000 at January 31, 2008.  The Company used $2,833,000 from operations during the first three months of fiscal 2008.  Operating cash flows increased by $2,547,000 from the corresponding period in the prior year.  Net borrowings of $11,198,000 from the Company&#146;s credit facility were made.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net sales in the first quarter of 2008 increased $9,027,000 or 15.8% compared to the prior year quarter net sales.  The higher sales contributed to the increased balances in trade accounts receivable, inventories, and trade accounts payable.  Compared to January 31, 2008, trade receivables increased by $6,882,000 mainly in the Piping Systems business, inventories increased by $6,434,000 mainly in the Filtration Products business for orders expected to ship in later months.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Net cash used for investing activities for the three months ended April 30, 2008 was $7,334,000.  Capital expenditures increased $6,178,000 from the prior year to $7,334,000.  The Filtration Products business&#146; Cicero, Illinois operations are relocating in the summer of 2008 to a building purchased in March 2008 for $6,400,000 in Bolingbrook, Illinois.  Improvements and modifications are underway which are expected to cost an additional $1,600,000.  The Company has or may finance such expenditures through real estate mortgages, equipment financing loans, internally generated funds and its revolving line of credit.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Debt totaled $45,786,000, an increase of $11,546,000 since the beginning of fiscal 2008.  Net cash inflows from financing activities in the quarter were $9,493,000, primarily to support higher working capital investments.  Stock option activity in the quarter resulted in $168,000 of total cash inflow, which included $167,000 tax benefit of stock options in addition to stock option proceeds of $1,000.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.01in; text-indent:-0.01in;text-align:left;'><font size=2>The Company&#146;s working capital was approximately $37,406,000 at April 30, 2008 compared to approximately $39,544,000 at January 31, 2008.  The change was primarily due to increases in accounts payable and current maturities offset by increased accounts receivable trade and increased inventory.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The Company&#146;s current ratio was 1.5 to 1 for April 30, 2008 and 1.7 to 1 for January 31, 2008, respectively.  Debt to total capitalization at April 30, 2008 increased to 42.9% from 36.4% at January 31, 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The Company is in compliance with the covenants under its Loan Agreement described below.  However, pursuant to a waiver and amendment obtained in April 2008, there is no earnings covenant (the &#147;Covenant&#148;) for periods prior to July 2008.  While the Company expects to comply with the Covenant for periods after July 2008, in recognition of the uncertainty of compliance, $16,504,000 of the Company&#146;s line of credit (of which $6,096,500 was available as of April 30, 2008) and $2,679,000 of term debt have been classified as current in the accompanying consolidated financial statements.&nbsp; In management&#146;s opinion adequate financing sources are available to refinance the amounts outstanding under the line of credit during 2008 should this become necessary.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>On July 11, 2002, the Company entered into a secured loan and security agreement with a financial institution ("Loan Agreement").  The Loan Agreement was amended and restated on December 15, 2006.  Under the terms of the Loan Agreement, which matures on November 13, 2010, the Company can borrow up to $38,000,000, subject to borrowing base and other requirements, under a revolving line of credit. The Loan Agreement covenants restrict debt, liens, and investments, do not permit payment of dividends, and require attainment of certain levels of profitability and cash flows. Interest rates generally are based on options selected by the Company as follows:  (a) a margin in effect plus a prime rate; or (b) a margin in effect plus the LIBOR rate for the corresponding interest period.  At April 30, 2008, the prime rate was 5.00%, and the margins added to the prime rate and the LIBOR rate, which are determined each
quarter based on the applicable financial statement ratio, were 0.25 and 2.25 percentage points, respectively.  Monthly interest payments were made.  As of April 30, 2008, the Company had borrowed $16,504,000 and had $6,096,000 available to it under the revolving line of credit.  In addition, $6,712,000 of availability was used under the Loan Agreement primarily to support letters of credit to guarantee amounts committed for inventory purchases.  The Loan Agreement provides that all payments by the Company's customers are deposited in a bank account from which all funds may only be used to pay the debt under </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>12</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>the Loan Agreement.  At April 30, 2008, the amount of restricted cash was $596,000.  Cash required for operations is provided by draw-downs on the line of credit.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>On March 4, 2008, the Company borrowed $5,440,000 under a mortgage note secured by the Filtration Product&#146;s new manufacturing facility located in Bolingbrook, Illinois.  The 25 year mortgage resets its interest rate every five years based on a published index.  The initial interest rate is 6.54% during the first five years with monthly payments of $36,867 for principal and interest combined.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><B><font SIZE=2>CRITICAL ACCOUNTING ESTIMATES AND POLICIES</font></B></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Revenue recognition:</font></b></i><font size=2>  The Company recognizes revenues including shipping and handling charges billed to customers, when all the following criteria are met:  (i) persuasive evidence of an arrangement exists, (ii) the seller&#146;s price to the buyer is fixed or determinable, and (iii) collectability is reasonably assured.  All subsidiaries of the Company, except as noted below, recognize revenues upon shipment or delivery of goods or services when title and risk of loss pass to customers.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Percentage of completion revenue recognition:</font></b></i><font size=2>  The Piping System business and Corporate and Other recognize revenues under the above stated revenue recognition policy except for sizable complex contracts that require periodic recognition of income based on the status of the uncompleted contracts and the current estimates of costs to complete and of progress toward completion.   For these contracts, the Company uses "percentage of completion" method.  The choice of accounting method is made at the time the contract is received based on the nature of the contract.  The percentage of completion is determined by the relationship of costs incurred to the total estimated costs of the contract.  Provisions are made for estimated losses on uncompleted contracts in the period in which such losses are determined.  Changes in job performance, job conditions, and estimated profitability,
including those arising from contract penalty provisions and final contract settlements may result in revisions to costs and income.  Such revisions are recognized in the period in which they are determined.  Claims for additional compensation due the Company are recognized in contract revenues when realization is probable and the amount can be reliably estimated.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Inventories:</font></b></i><font size=2>  Inventories are stated at the lower of cost or market.  Cost is determined using the first-in, first-out method for substantially all inventories.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Goodwill and other intangible assets with indefinite lives:  </font></b></i><font size=2>The Company reviews the carrying value of goodwill in accordance with SFAS No. 142, &#147;Goodwill and Other Intangible Assets&#148;, which requires that goodwill and other intangible assets with indefinite lives be analyzed for impairment on an annual basis or when there is reason to suspect that their values have been impaired.  For the evaluations, the fair value was determined using discounted cash flows and other market-related valuation models.  Certain estimates and judgments are required in the application of the fair value models.  Refer to Note 4 Goodwill in Notes to Condensed Consolidated Financial Statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Stock options: </font></b></i><font size=2>Effective February 1, 2006, the Company adopted the fair value recognition provision of SFAS No.&nbsp;123 (revised 2004), &#147;Share-Based Payment&#148; (&#147;SFAS 123R&#148;) using the modified-prospective-transition method. Under this transition method, compensation cost recognized includes compensation costs for all share-based payments granted prior to, but not vested as of February&nbsp;1, 2006 based on the fair value at grant date estimated in accordance with SFAS 123.  In accordance with SFAS 123R, results for prior periods have not been restated.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.03in;text-align:left;'><i><b><font size=2>Income tax provision:  </font></b></i><font size=2>Deferred income taxes have been provided for temporary differences arising from differences in basis of assets and liabilities for tax and financial reporting purposes.  Deferred income taxes on temporary differences have been recorded at the current tax rate.  The Company assesses its deferred tax assets for realizability at each reporting period.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Recently adopted pronouncements:</font></b></i><b><font size=2> </font></b><font size=2>The Company adopted SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities on February 1, 2008.  SFAS 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are recorded on different bases.  The adoption of SFAS 159 did not have a material impact on the Company&#146;s consolidated financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>New accounting pronouncements:</font></b></i><b><font size=2> </font></b><font size=2>In February 2008, the FASB issued SFAS No. 157-2.  &#147;Effective Date of FASB Statement No. 157,&#148; which delayed the effective date of SFAS 157 &#147;Fair Value Measurements&#148; for all non financial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on at least an annual basis, until January 1, 2009 for calendar year-end entities.  Also, in February 2008, the FASB issued FSP No. FAS 157-1, &#147;Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13,&#148; which </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>13</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>states that SFAS No. 13, &#147;Accounting for Leases,&#148;  and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under SFAS 13 are excluded from the provisions of SFAS 157, except for assets and liabilities related to leases assumed in a business combination that are required to be measures at fair value under SFAS No. 141, &#147;Business Combinations,&#148; or SFAS No. 141R.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>SFAS 157 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  This standard is now the single source in GAAP for the definition of fair value, except for the fair value of leased property as defined in SFAS 13.  SFAS 157 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data oriented from independent sources (observable inputs) and (2) an entity&#146;s own assumptions about market participants assumptions developed based on the best information available in the circumstances (unobservable inputs).  The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to
unobservable inputs (Level 3).  The three levels of the fair value hierarchy under SFAS 157 are described below:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 1 &#150; Unadjusted quoted prices in active markets that are accessible at the measurement date for identical unrestricted assets or liabilities.</font></p> </td> </tr></table>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 2 &#150; Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs
that are derived principally from or corroborated by observable market data by correlation or other means.</font></p> </td> </tr></table>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=4><b>&#149;</b></font></p> </td>

        <td  valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Level 3 - Inputs that are both significant to the fair value measurement and unobservable.</font></p> </td> </tr></table>
</div>


<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The Company does not expect this to have a material impact on the financial statements.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="16" nowrap valign=top >
<p style='margin:0in;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 3.</font></b></p> </td>

        <td width="364" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Quantitative and Qualitative Disclosures About Market Risk</font></b></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>The Company is subject to market risk associated with changes in foreign currency exchange rates, interest rates and commodity prices. Foreign currency exchange rate risk is mitigated through maintenance of local production facilities in the markets served, often though not always invoicing customers in the same currency as the source of the products and use of foreign currency denominated debt in Denmark, U.A.E., India and South Africa.  At times the Company has attempted to mitigate its interest rate risk by maintaining a balance of fixed-rate long-term debt and floating-rate debt.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>A hypothetical ten percent change in market interest rates over the next year would increase or decrease interest expense on the Company's floating rate debt instruments by approximately $102,700.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>Commodity price risk is the possibility of higher or lower costs due to changes in the prices of commodities, such as ferrous alloys which are used in the production of the piping systems.  The Company attempted to mitigate such risks by obtaining price commitments from its commodity suppliers and, when it appeared appropriate, purchasing quantities in advance of likely price increases.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="61" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 4.</font></b></p> </td>

        <td width="161" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Controls and Procedures</font></b></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:-0.01in;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the company&#146;s disclosure controls and procedures (as defined in Rule&nbsp;13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of April&nbsp;30, 2008.  Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, the Company&#146;s disclosure controls and procedures were effective as of April 30, 2008 to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission&#146;s rules and forms and is accumulated and communicated to the issuer&#146;s management, including our principal executive and financial officers, to allow timely decisions regarding required disclosure.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Change in Internal Controls:</font></b></i><font size=2>  There was a material weakness in internal control described in Item 9A of the Company&#146;s January 31, 2008 10-K filed on April 30, 2008.</font><font size=2>  </font><font size=2>The Company&#146;s processes, procedures and controls related to the preparation and review of the quarterly and annual income tax provision were not effective at October 31, 2007 and January 31, 2008 to ensure that amounts related to the income tax provision were accurate.  This material weakness resulted in an accounting error.  The error did not affect the Registrant's sales, operating expenses, or cash flow.  However, the error did </font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>14</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>result in the understatement of income taxes, and overstatement of current assets, total assets, and net income for the interim fiscal period reported at October 31, 2007.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Other than the material weakness noted above, there has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting except as discussed below.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><i><b><font size=2>Remediation Plan for the Material Weaknesses in Internal Control over Financial Reporting:</font></b></i><b><font size=2>  </font></b><font size=2>There was a material weakness in internal control described in Item 9A of the Company&#146;s January 31, 2008 10-K filed on April 30, 2008.  The Company&#146;s processes, procedures and controls related to the preparation and review of the quarterly and annual income tax provision were not effective at October 31, 2007 and January 31, 2008 to ensure that amounts related to the income tax provision were accurate.  This material weakness resulted in an accounting error.  The error did not effect the Registrant&#146;s sales, operating expenses, or cash flow.  However, the error did result in the understatement of income taxes, and overstatement of current assets, total assets, and net income for the interim fiscal period reported at October 31, 2007.  Beginning
in 2005, the Company engaged a national public accounting, tax and business consulting firm with affiliates worldwide (the &#147;Tax Advisor&#148;) to assist the Company with calculation and  review of its quarterly and annual income tax provisions and with its income tax compliance.  To avoid recurrence of an error such as the one described above, the Company and Tax Advisor are currently assessing the appropriateness of technical resources assigned to the engagement, improving income tax accounting documentation, and adjusting the timing of quarterly and annual income tax accounting work.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>We anticipate the actions described above and resulting improvements in controls will strengthen our internal control over financial reporting relating to accounting for income taxes and will address the related material weakness that were identified as of January 31, 2008.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>PART II &#150; OTHER INFORMATION</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="64" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Item 6.</font></b></p> </td>

        <td width="67" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><b><font size=2>Exhibits</font></b></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="45" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(31)</font></p> </td>

        <td width="251" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Rule 13a &#150; 14(a)/15d &#150; 14(a) Certifications</font></p> </td> </tr></table>
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        <td width="99" nowrap valign=top style='padding:5.0pt 0in 0in 0in; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="45" nowrap valign=top style='padding:5.0pt 0in 0in 0in; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(1)</font></p> </td>

        <td width="436" nowrap valign=top style='padding:5.0pt 0in 0in 0in; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Executive Officer certification pursuant to Section 302 of the Sarbanes-</font></p> </td> </tr></table>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="120" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Oxley Act of 2002</font></p> </td> </tr></table>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="45" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(2)</font></p> </td>

        <td width="432" nowrap valign=top >
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Financial Officer certification pursuant to Section 302 of the Sarbanes-</font></p> </td> </tr></table>
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        <td width="192" nowrap valign=top style='padding:0in 0in 5.0pt 0in; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="120" nowrap valign=top style='padding:0in 0in 5.0pt 0in; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Oxley Act of 2002</font></p> </td> </tr></table>
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        <td width="51" nowrap valign=top style='padding:5.0pt 0in 5.0pt 0in; '> <p><font size=1>&nbsp;</font></p> </td>

        <td width="45" nowrap valign=top style='padding:5.0pt 0in 5.0pt 0in; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(32)</font></p> </td>

        <td width="165" nowrap valign=top style='padding:5.0pt 0in 5.0pt 0in; '>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Section 1350 Certifications</font></p> </td> </tr></table>
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        <td width="96" nowrap valign=top style='padding:5.0pt 0in 0in 0in; '> <p><font size=1>&nbsp;</font></p> </td>

        <td width="587" nowrap valign=top style='padding:5.0pt 0in 0in 0in; '> <p><font size=2>Chief Executive Officer and Chief Financial Officer certification pursuant to Section 906 of the Sarbanes-</font></p> </td> </tr></table>
</div>



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    <tr >

        <td width="144" nowrap valign=top > <p><font size=1>&nbsp;</font></p> </td>

        <td width="120" nowrap valign=top > <p><font size=2>Oxley Act of 2002</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>
</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>15</font></p>
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<p style=' margin-bottom:5pt; margin-top:5pt;text-align:left;'><font SIZE=2>SIGNATURES</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>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>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt; text-indent:2.97in;text-align:left;'><font SIZE=2>MFRI, INC.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>June 9, 2008</font></p> </td>

        <td width="381" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ David Unger</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font
size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>David Unger</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chairman of the Board of Directors, and</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Chief Executive Officer</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Principal Executive Officer)</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr>
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<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>Date:</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>June 9, 2008</font></p> </td>

        <td width="381" valign=top style='border-bottom:solid black 1.0pt; padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr>
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        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt;height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Michael D. Bennett</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Vice President, Secretary and Treasurer</font></p> </td> </tr>
    <tr style='height:.2in'>

        <td width="57" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="239" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>

        <td width="381" valign=top style='padding:0in 5.4pt 0in 5.4pt; height:.2in'>
<p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>(Principal Financial and Accounting Officer)</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>16</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>Exhibit 31.1</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>I,
David Unger, certify that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>1.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>I have reviewed this
quarterly report on Form 10-Q of MFRI, Inc.</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>2.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>3.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>4.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>The registrant&#146;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 we have:</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(a)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'>&nbsp;</p>


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<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(b)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size="2">Designed such
internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles;</font></p> </td> </tr></table>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(c)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>Evaluated the effectiveness of the registrant&#146;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></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(d)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>5.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(a)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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&#146;s ability to record, process, summarize and report financial information; and</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.25in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(b)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="210" style='border-collapse:collapse'>
    <tr >

        <td width="16" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>

        <td width="48" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=2>Date:</font></p> </td>

        <td width="147" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size="2">
June 9, 2008</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


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<table border="0" cellspacing=0 cellpadding=0 width="181" style='margin-left:3.15pt;border-collapse:collapse; '>
    <tr >

        <td width="181" valign=top style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>/s/ David Unger</font></p> </td> </tr></table>
</div>

<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">David Unger</font></p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">Director and Chairman of the Board of Directors</font></p>
<p style="text-align: justify; margin-top: 0pt; margin-bottom: 0pt">
<font size="2">(Principal Executive Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2></font></p>



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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:right;'><b><font size=2>Exhibit 31.2</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>I, Michael D. Bennett, certify that:</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>1.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>I have reviewed this quarterly report on Form 10-Q of MFRI, Inc.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>2.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>3.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>4.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>The registrant&#146;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 we have:</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(a)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(b)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size="2">Designed such
internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles;</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(c)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>Evaluated the effectiveness of the registrant&#146;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></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(d)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>Disclosed in this report any change in the registrant&#146;s internal control over financial reporting that occurred during the registrant&#146;s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant&#146;s internal control over financial reporting; and</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>5.</font></p> </td>

        <td width="600" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>The registrant&#146;s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant&#146;s auditors and the audit committee of the registrant&#146;s board of directors (or persons performing the equivalent functions):</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(a)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>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&#146;s ability to record, process, summarize and report financial information; and</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td>

        <td width="24" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(b)</font></p> </td>

        <td width="576" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&#146;s internal control over financial reporting.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="210" style='border-collapse:collapse'>
    <tr >

        <td width="16" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>

        <td width="48" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=2>Date:</font></p> </td>

        <td width="147" nowrap valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size="2">
June 9, 2008</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="181" style='margin-left:3.15pt;border-collapse:collapse; '>
    <tr >

        <td width="181" valign=top style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Michael D. Bennett</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Vice President, Secretary and Treasurer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>(Principal Financial and Accounting Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
<!-- EEDocs PBStart-->
<!-- EEDocs PBEnd-->

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



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<p style=' margin-bottom:3pt; margin-top:12pt;text-align:right;'><b><font size=2>Exhibit 32</font></b></p>

<p style=' margin-bottom:0pt; margin-top:12pt;text-align:right;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Certification of Principal Executive Officer</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Pursuant to 18 U.S.C. 1350</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>(Section 906 of the Sarbanes-Oxley Act of 2002)</font></b></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<font size="2">The undersigned in their capacities as Chief Executive Officer
and Chief Financial Officer of MFRI,
Inc. (the "Registrant"), certify that, to the best of their knowledge, based upon a
review of the Quarterly Report on Form 10-Q for the period ended April 30, 2008 of the Registrant (the &#147;Report&#148;):</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>

        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(1)</font></p> </td>

        <td width="528" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=2>The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934, as amended; and</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt; margin-left:1in; text-indent:-0.5in;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="624" style='border-collapse:collapse'>
    <tr >

        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=1>&nbsp;</font></p> </td>

        <td width="48" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>(2)</font></p> </td>

        <td width="528" valign=top style='padding:0pt 0pt 0pt 0pt'>
<p style='margin:0pt;margin-bottom:.0001pt;text-align:justify'><font size=2>The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="181" style='margin-left:3.15pt;border-collapse:collapse; '>
    <tr >

        <td width="181" valign=top style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>/s/ David Unger</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>David Unger</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Director and Chairman of the Board of Directors</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>and Chief Executive Officer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>(Principal Executive Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<font size="2">June 9, 2008</font></p>
<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
&nbsp;</p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>&nbsp;</p>


<div align=left>

<table border="0" cellspacing=0 cellpadding=0 width="181" style='margin-left:3.15pt;border-collapse:collapse; '>
    <tr >

        <td width="181" valign=top style='border-bottom: solid black 1.0pt;padding:0pt 5.4pt 0pt 5.4pt'>
<p style='margin:0pt;margin-bottom:.0001pt'><font size=2>/s/ Michael D. Bennett</font></p> </td> </tr></table>
</div>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>Michael D. Bennett</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>Vice President, Secretary and Treasurer</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>(Principal Financial and Accounting Officer)</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
<font size="2">June 9, 2008</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>A signed original of this written statement required by Section 906 has been provided to MFRI, Inc. and will be retained by MFRI, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
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<p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>



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