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<SEC-DOCUMENT>0000100378-08-000002.txt : 20080122
<SEC-HEADER>0000100378-08-000002.hdr.sgml : 20080121
<ACCEPTANCE-DATETIME>20080122142535
ACCESSION NUMBER:		0000100378-08-000002
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080122
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20080122
DATE AS OF CHANGE:		20080122

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TWIN DISC INC
		CENTRAL INDEX KEY:			0000100378
		STANDARD INDUSTRIAL CLASSIFICATION:	GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560]
		IRS NUMBER:				390667110
		STATE OF INCORPORATION:			WI
		FISCAL YEAR END:			0608

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-07635
		FILM NUMBER:		08541441

	BUSINESS ADDRESS:	
		STREET 1:		1328 RACINE ST
		CITY:			RACINE
		STATE:			WI
		ZIP:			53403
		BUSINESS PHONE:		2626384000

	MAIL ADDRESS:	
		STREET 1:		1328 RACINE STREET
		CITY:			RACINE
		STATE:			WI
		ZIP:			53403

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	TWIN DISC CLUTCH CO
		DATE OF NAME CHANGE:	19770217
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>r8k108.htm
<TEXT>

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<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>======================================================================
</FONT></P>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>SECURITIES AND EXCHANGE COMMISSION</FONT></P>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Washington, D.C. 20549</FONT></P>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>FORM 8-K</FONT><BR></P>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange
Act of 1934</FONT></P>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Date of Report (Date of Earliest Event Reported) January 22, 2008
<BR>------------------</FONT></P>
<P align=center>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Twin Disc,
Incorporated <BR>--------------------------------------</FONT></P>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>(exact name of registrant as specified in its charter)</FONT></P>
<DIV align=center>
<TABLE cellSpacing=1 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="39%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp;<FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>WISCONSIN</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="25%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>001-7635</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="31%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>39-0667110</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="39%">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp;<FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>---------</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="25%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>--------</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="31%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>-----------</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="39%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>(State or other jurisdiction</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="25%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>(Commission</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="31%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>(IRS
      Employer</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="39%">&nbsp;<FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>of
      incorporation)</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="25%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>File
      Number)</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=center width="31%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Identification No.)</FONT>&nbsp;
</TD></TR></TABLE></DIV><BR>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>1328 Racine Street Racine, Wisconsin 53403
<BR>--------------------------------------------------------<BR>(Address of
principal executive offices)</FONT></P>
<DIV align=center>
<TABLE cellSpacing=1 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="75%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Registrant's telephone number, including area
      code:</FONT>&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="22%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>(262)638-4000</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="75%">&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="22%"><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>-------------</FONT>&nbsp; </TD></TR></TABLE></DIV><BR>
<P align=left><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>=========================================================================================================================================================</FONT></P>
<P align=left><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):</FONT></P>
<TABLE cellSpacing=1 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">[ ]</FONT>&nbsp;
    </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Written
      communications pursuant to Rule 425 under the Securities Act (17CFR
      230.425)</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">[ ]</FONT>&nbsp;
    </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">[ ]</FONT>&nbsp;
    </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act
      (17</FONT>&nbsp;<FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">CFR
      24014d-2(b))</FONT> </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="94%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">[ ]</FONT>&nbsp;
    </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="94%"><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act
      (17</FONT>&nbsp; <FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif">CFR
      240.13e-4(c))</FONT></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="2%">&nbsp; </TD>
    <TD noWrap align=left width="94%">&nbsp;
</TD></TR></TABLE><BR>
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<P align="left">
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">Item 2.02 Results of Operations and Financial Condition</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">The Company has reported its 2</FONT><SUP><FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">nd </FONT></SUP><FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">quarter 2008 financial results. The Company's press release dated January 22, 2008 announcing the results is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by
reference.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">The information set forth in this Item 2.02 of Form 8-K, including Exhibit 99.1, is furnished pursuant to Item 2.02 and shall not be deemed "filed" for
the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under
the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.</FONT></P>
<P align="left">
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">Item 7.01</FONT><BR>
</P>
<P align="left">
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">Regulation FD Disclosure</FONT><BR>
</P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">The information set forth under Item 2.02 of this report is incorporated herein by reference solely for the purposes of this Item 7.01.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">The information set forth in this Item 7.01 of Form 8-K is furnished pursuant to Item 7.01 and shall not be deemed "filed" for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933
or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.</FONT></P>
<P align="left">
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">FORWARD LOOKING STATEMENTS</FONT><BR>
</P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">The disclosures in this report on Form 8-K and in the documents incorporated herein by reference contain or may contain &#147;forward-looking
statements&#148; within the meaning of the Private Securities Litigation Reform Act of 1995. The words &#147;believes,&#148; &#147;expects,&#148; &#147;intends,&#148; &#147;plans,&#148; </FONT></P>
<P align="left">
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">&#147;anticipates,&#148; &#147;hopes,&#148; &#147;likely,&#148; &#147;will,&#148; and similar expressions identify such forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company (or entities in which the Company has interests), or industry results, to differ materially
from future results, performance or achievements expressed or implied by such forward-looking statements. Certain factors that could cause the Company&#146;s actual future results to differ materially from those discussed are noted in connection
with such statements, but other unanticipated factors could arise. Readers are cautioned not to place undue reliance on these forward-looking statements which reflect management&#146;s view only as of the date of this Form 8-K. The Company
undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, conditions or circumstances.</FONT></P>
<TABLE border=0 cellspacing=1 cellpadding=0>
<TR valign="bottom">
	<TD width=9% nowrap align=left>
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">Item</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD width=12% nowrap align=left>
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">9.01</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD width=73% nowrap align=left>
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">Financial Statements and Exhibits</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD width=9% nowrap align=left>
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">(c)</FONT>&nbsp;
	</TD>
	<TD width=2%>
&nbsp;	</TD>
	<TD width=87% nowrap colspan=3 align=left>
<FONT size=2 face="CourierNewPSMT,Courier New,Courier,monospace">Exhibits.</FONT>&nbsp;
	</TD>
</TR>
</TABLE><BR>

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<A name=page_3></A>
<P align=left><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>EXHIBIT NUMBER DESCRIPTION</FONT></P>
<P align=left><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>99.1 Press Release announcing 2</FONT><SUP><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>nd</FONT></SUP> <FONT face="CourierNewPSMT,Courier &#13;&#10;New,Courier,monospace" size=2>quarter
2008 financial results.</FONT></P>
<P align=left><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>==========================================================================================================================================================</FONT></P>
<P align=center><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>SIGNATURE</FONT><BR></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Pursuant to the
requirements of section 13 or 15(d) 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 align=left><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Date: January 22,
2008&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>Twin Disc,
Inc.</FONT><BR><BR><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>/s/
THOMAS E. VALENTYN</U></FONT><BR><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Thomas E. Valentyn</FONT><BR><FONT face="CourierNewPSMT,Courier New,Courier,monospace" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
General Counsel &amp; Secretary</FONT><BR></P>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>r8k108exh1.htm
<DESCRIPTION>PRESS RELEASE DATED JANUARY 22, 2008
<TEXT>

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<P align=left><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=4>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FOR IMMEDIATE RELEASE</FONT></B><BR><BR><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Contact: Christopher J. Eperjesy</FONT><BR><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nb
sp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(262) 638-4343</FONT><BR></P>
<P align=center><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif>TWIN DISC,
INC., ANNOUNCES FISCAL 2008 SECOND-QUARTER FINANCIAL RESULTS</FONT></B></P>
<P align=center><FONT face="SymbolMT,Times New Roman,Times,serif" size=2>&#183;
</FONT><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Quarterly
Sales Were A Second Quarter Record</FONT></B></P>
<P align=center><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Second Best Second-Quarter Earnings in Company&#146;s History </FONT></B></P>
<P align=center><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Six-Month Backlog Up 7.9 Percent Over Last Year</FONT></B> </P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>RACINE,
WISCONSIN&#151;January 22, 2008&#151;</FONT><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Twin Disc, Inc. (NASDAQ:
TWIN)</FONT></B><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>, today
reported financial results for the fiscal 2008 second quarter. </FONT></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Sales for the quarter ended
December 28, 2007 improved 10.3 percent to $81,894,000 from $74,239,000 in the
same period a year ago. Year-to-date, sales increased 11.1 percent to
$155,507,000 from $140,013,000 in the fiscal 2007 first half. For the fiscal
2008 second quarter, favorable foreign currency translation represented
$5,137,000 of the $7,655,000 increase in sales. For the fiscal 2008 first half,
favorable foreign currency translation represented $7,494,000 of the $15,494,000
increase in sales. The remainder of the increase for both the fiscal 2008 second
quarter and first half was mainly the result of strong sales of marine and
propulsion products to the commercial marine and mega yacht markets, as well as
continued demand for land based transmission products for the Airport Rescue and
Fire Fighting (ARFF) and military markets.</FONT></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Gross profit, as a percentage of
fiscal 2008 second-quarter sales, decreased 2.0 percentage points to 30.9
percent from 32.9 percent in the fiscal 2007 second quarter. Year-to-date, gross
profit, as a percentage of sales, decreased modestly, 0.3 percentage points to
31.6 percent from 31.9 percent for the fiscal 2007 first half. Profitability for
the fiscal 2008 second quarter was negatively impacted by reduced sales of
higher margin products, higher sales of lower margin products and higher
material costs, partially offset by higher pricing, expanded outsourcing and
lower pension expense. The fiscal 2007 second quarter and first six months
included the impact of an unfavorable purchase accounting adjustment to
inventory related to the BCS acquisition in the amount of $489,000 and
$1,223,000 before tax, respectively. These adjustments were non-cash and no
further adjustments were made.</FONT></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>For the 2008 second quarter,
marketing, engineering and administrative (ME&amp;A) expenses, as a percentage
of sales, were 21.2 percent, compared to 19.6 percent in the fiscal 2007 second
quarter. The higher ME&amp;A expenses were due to an approximate $1,000,000
increase in stock-based compensation primarily due to the increase in the
Company&#146;s stock price as of the end of the</FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&n
bsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;more&#133;</FONT><BR></P>
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<A name="page_2"></A>

<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Page 2, Twin Disc, Inc.</FONT><BR>
</P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">second fiscal quarter, the impact of foreign currency translation from overseas operations and expenditures related to a new global ERP system.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Year-to-date, ME&amp;A expenses, as a percentage of sales, were 20.6 percent, compared to 20.1 percent in the fiscal 2007 first half. Year-to-date, the impact of
foreign currency translation on foreign operations increased ME&amp;A by roughly &#36;1,100,000.  In addition, the increase in ME&amp;A expenses related to the global ERP implementation approximated &#36;1,000,000, compared to the fiscal 2007 first
half. </FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Net earnings for the fiscal 2008 second quarter declined to &#36;4,209,000, or &#36;0.37 per diluted share, compared with &#36;5,670,000, or &#36;0.48 per diluted
share, for the fiscal 2007 second quarter. (All earnings per share figures have been adjusted for the December, 2007 two-for-one stock split). Year-to-date, earnings of &#36;9,314,000 were relatively equal to the same period last year, although
earnings per diluted share improved to &#36;0.81, compared to &#36;0.79 primarily due to the repurchase of shares in the 2008 fiscal first quarter.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Earnings before interest, taxes, depreciation and amortization (EBITDA)* decreased to &#36;9,568,000 for the fiscal 2008 second quarter from &#36;11,991,000 for the
fiscal 2007 second quarter. For the fiscal 2008 first half, EBITDA increased to &#36;20,409,000, compared to &#36;20,127,000 for the fiscal 2007 comparable period.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Commenting on the results, Michael E. Batten, Chairman, President and Chief Executive Officer, said, &#147;Demand for our products across most of our product lines
continues to be historically high; however, we have begun to experience a shift in our sales mix.  Most noticeably, we have begun to experience a slow down in demand for our oil and gas transmissions, which has affected profitability. In addition,
our industrial markets continue to experience a cyclical softening. However, despite a slowdown in these sectors, our commercial and mega yacht segments of the marine market and our Airport Rescue and Fire Fighting and military markets continue to
grow.  We continue to focus our efforts on expanding into new geographic markets, lowering our manufacturing costs through productivity improvements and global outsourcing initiatives in order to offset some of the margin pressures caused by an
unfavorable change in sales mix and higher materials costs.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">&#147;Looking ahead, we continue to expect that fiscal 2008 will be another good year for Twin Disc.  Our backlog of orders to be shipped over the next six months,
which reflects this changing business mix, was &#36;121,281,000, an increase of 7.9 percent from &#36;112,426,000 in the same period a year ago and up 9.9 percent from &#36;110,357,000 at fiscal 2007 year end.&#148;</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Christopher J. Eperjesy, Vice President &#150; Finance, Chief Financial Officer and Treasurer, stated, &#147;During the quarter, our capital investments included
&#36;4,318,000 for upgrading our manufacturing processes and the implementation of a global ERP system.  We expect capital expenditures to be between &#36;15,000,000 and &#36;17,000,000 in fiscal 2008. These expenditures reflect the Company&#146;s
plans to continue investing in modern equipment and facilities, our global ERP system, and new products.</FONT></P>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">&#147;At December 28, 2007, total debt was &#36;55,546,000, compared to &#36;43,920,000 at June 30, 2007 and &#36;55,156,000 at the end of the 2008 first quarter.
The increase from the prior fiscal year end can be primarily attributed to the stock repurchases made in fiscal 2008&#146;s first quarter. Our total </FONT></P>

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<!--$$/page=--><A name=page_3></A>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Page 3, Twin
Disc, Inc.</FONT><BR></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>debt to total
capitalization now stands at 32.0 percent compared to 27.6 percent at June 30,
2007. We continue to be comfortable with our capital structure and have the
financial flexibility to continue to look at ways to further expand our
businesses, including acquisitions. Working capital at December 28, 2007
increased 9.0 percent to $101,721,000, compared to $93,322,000 at June 30,
2007.&#148;</FONT></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Twin Disc will be hosting a
conference call today (January 22, 2008) to discuss these results and to answer
questions at 2:00 p.m. EST. To participate in the conference call, please dial
800-762-9441 five to 10 minutes before the call is scheduled to begin. A replay
will be available from 5:00 p.m. EST January 22, 2008 until midnight on January
29, 2008. The number to hear the teleconference replay is 800-406-7325. The
access code for the replay is 3829987.</FONT></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>The conference call will also be
broadcast live over the Internet. To listen to the call via the Internet, access
Twin Disc's website at </FONT><U><FONT face=ArialMT,Arial,Helvetica,sans-serif color=#0000ff size=2>http://www.twindisc.com/companyinvestor.aspx</FONT></U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2> and follow the instructions at
the web cast link. The archived web cast will be available shortly after the
call on the Company's website.</FONT></P>
<P align=left><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>About Twin
Disc, Inc.</FONT></U><BR></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Twin Disc, Inc. designs,
manufactures and sells marine and heavy-duty off-highway power transmission
equipment. Products offered include: marine transmissions, surface drives,
propellers and boat management systems, as well as power-shift transmissions,
hydraulic torque converters, power take-offs, industrial clutches and control
systems. The Company sells its products to customers primarily in the pleasure
craft, commercial and military marine markets, as well as in the energy and
natural resources, government and industrial markets. The Company&#146;s worldwide
sales to both domestic and foreign customers are transacted through a direct
sales force and a distributor network.</FONT></P>
<P align=left><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Forward-Looking Statements</FONT></U></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>This press release may contain
statements that are forward looking as defined by the Securities and Exchange
Commission in its rules, regulations and releases. The Company intends that such
forward-looking statements be subject to the safe harbors created thereby. All
forward-looking statements are based on current expectations regarding important
risk factors including those identified in the Company&#146;s most recent periodic
report and other filings with the Securities and Exchange Commission.
Accordingly, actual results may differ materially from those expressed in the
forward-looking statements, and the making of such statements should not be
regarded as a representation by the Company or any other person that the results
expressed therein will be achieved.</FONT></P>
<P align=left><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>*Non-GAAP
Financial Disclosures (EBITDA)</FONT></U></P>
<P align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>EBITDA represents net earnings
before interest expense, income taxes, depreciation and amortization. EBITDA is
not a calculation based upon generally accepted accounting principles (GAAP).
The amounts included in the EBITDA calculation, however, are derived from
amounts included in the Consolidated Statements of Operations and Consolidated
Statements of Cash Flows data. EBITDA should not be considered as an alternative
to net earnings or operating profit as an indicator of the Company's operating
performance, or as an alternative to operating cash flows as a measure of
liquidity. Twin Disc has presented EBITDA because it regularly reviews this as a
measure of the Company's ability to incur and service debt. In addition, EBITDA
is used by many of our investors and lenders, and is presented as a convenience
to them. However, the EBITDA measure presented may not always be comparable to
similarly titled measures reported by other companies due to differences in the
components of the calculation.</FONT></P>
<P align=center><I><FONT face=Arial-ItalicMT,Arial,Helvetica,sans-serif size=2>--Financial Results Follow--</FONT></I></P>
<HR align=center width="100%" noShade SIZE=2>
<A name=page_4></A>
<TABLE cellSpacing=1 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="35%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Page 4, Twin
      Disc, Inc.</FONT>&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp;</TD>
    <TD noWrap align=left width="17%">&nbsp;</TD>
    <TD noWrap align=left width="22%">&nbsp;</TD>
    <TD noWrap align=left width="13%">&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" colSpan=4>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>CONDENSED CONSOLIDATED STATEMENTS OF
    OPERATIONS</FONT></B>&nbsp;</TD>
    <TD noWrap align=left width="13%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="86%" colSpan=4>&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(In thousands,
      except per-share data; unaudited)</FONT>&nbsp;</TD>
    <TD noWrap align=left width="13%">&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;</TD>
    <TD noWrap align=center width="29%" colSpan=2><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Three Months Ended</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="35%" colSpan=2><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Six Months Ended</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;</TD>
    <TD noWrap align=center width="29%" colSpan=2><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December 28, December 31,</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="35%" colSpan=2><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December 28, December 31,</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;</TD>
    <TD noWrap align=right width="12%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2007</FONT></U></B>&nbsp;</TD>
    <TD noWrap align=right width="17%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2006</FONT></U></B>&nbsp;</TD>
    <TD noWrap align=right width="22%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2007</FONT></U></B>&nbsp;</TD>
    <TD noWrap align=right width="13%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2006</FONT></U></B>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Net
      sales</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$81,894</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$74,239</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$155,507</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$140,013</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Cost of goods
      sold</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>56,548</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>49,850</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="22%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>106,311</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>95,311</FONT></U>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Gross
      profit</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>25,346</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>24,389</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>49,196</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>44,702</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Marketing,
      engineering and</FONT>&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp;</TD>
    <TD noWrap align=left width="17%">&nbsp;</TD>
    <TD noWrap align=left width="22%">&nbsp;</TD>
    <TD noWrap align=left width="13%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>administrative
      expenses</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>17,378</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>14,528</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>32,072</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>28,180</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Interest
      expense</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>825</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>824</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,568</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,467</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Other expense
      (income), net</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>179</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(248)</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="22%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>174</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(328)</FONT></U>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Earnings before
      income</FONT>&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp;</TD>
    <TD noWrap align=left width="17%">&nbsp;</TD>
    <TD noWrap align=left width="22%">&nbsp;</TD>
    <TD noWrap align=left width="13%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>taxes and
      minority interest</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>6,964</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>9,285</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>15,382</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>15,383</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Income
      taxes</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>2,729</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,573</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>5,967</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>5,950</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Minority
      interest</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(26)</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(42)</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="22%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(101)</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(91)</FONT></U>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Net
      earnings</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><B><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$&nbsp;4,209</FONT></U>&nbsp;</B></TD>
    <TD noWrap align=right width="17%"><B><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$&nbsp;5,670</FONT></U>&nbsp;</B></TD>
    <TD noWrap align=right width="22%"><B><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$</FONT> <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>9,314</FONT>&nbsp;</U></B></TD>
    <TD noWrap align=right width="13%"><B><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$</FONT> <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>9,342</FONT>&nbsp;</U></B></TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Earnings per
      share:</FONT>&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp;</TD>
    <TD noWrap align=left width="17%">&nbsp;</TD>
    <TD noWrap align=left width="22%">&nbsp;</TD>
    <TD noWrap align=left width="13%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Basic</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$&nbsp;0.37</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$&nbsp;0.49</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$
    0.82</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$
    0.80</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Diluted</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$&nbsp;0.37</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$&nbsp;0.48</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$
    0.81</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$
    0.79</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Average shares
      outstanding:</FONT>&nbsp;</TD>
    <TD noWrap align=left width="12%">&nbsp;</TD>
    <TD noWrap align=left width="17%">&nbsp;</TD>
    <TD noWrap align=left width="22%">&nbsp;</TD>
    <TD noWrap align=left width="13%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Basic</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,261</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,618</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,378</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,610</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Diluted</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,399</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,812</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,515</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,802</FONT>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="35%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Dividends per
      share</FONT>&nbsp;</TD>
    <TD noWrap align=right width="12%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$0.0700</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$0.0475</FONT>&nbsp;</TD>
    <TD noWrap align=right width="22%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$0.1250</FONT>&nbsp;</TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$0.0950</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=center><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>RECONCILIATION OF CONSOLIDATED NET EARNINGS TO EBITDA</FONT></B></P>
<P align=center><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(In
thousands; unaudited)</FONT></P>
<TABLE style="WIDTH: 684px; HEIGHT: 223px" cellSpacing=1 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="32%">&nbsp;</TD>
    <TD noWrap align=center width="35%" colSpan=2><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Three Months Ended</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="32%" colSpan=2><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Six Months Ended</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%">&nbsp;</TD>
    <TD noWrap align=center width="16%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December 28,&nbsp;</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="19%" background="">&nbsp;<B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December 31,</FONT></B></TD>
    <TD noWrap align=center width="17%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December 28,</FONT></B>&nbsp;</TD>
    <TD noWrap align=center width="15%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December 31,</FONT></B>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%">&nbsp;</TD>
    <TD noWrap align=right width="16%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2007</FONT></U></B>&nbsp;</TD>
    <TD noWrap align=right width="19%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2006</FONT></U></B>&nbsp;</TD>
    <TD noWrap align=right width="17%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2007</FONT></U></B>&nbsp;</TD>
    <TD noWrap align=right width="15%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2006</FONT></U></B>&nbsp;</TD></TR>
  <TR>
    <TD width="99%" colSpan=5>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Net
      earnings</FONT>&nbsp;</TD>
    <TD noWrap align=right width="16%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$4,209</FONT>&nbsp;</TD>
    <TD noWrap align=right width="19%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$5,670</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$9,314</FONT>&nbsp;</TD>
    <TD noWrap align=right width="15%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$9,342</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Income
      taxes</FONT>&nbsp;</TD>
    <TD noWrap align=right width="16%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>2,729</FONT>&nbsp;</TD>
    <TD noWrap align=right width="19%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,573</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>5,967</FONT>&nbsp;</TD>
    <TD noWrap align=right width="15%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>5,950</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Interest
      expense</FONT>&nbsp;</TD>
    <TD noWrap align=right width="16%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>825</FONT>&nbsp;</TD>
    <TD noWrap align=right width="19%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>824</FONT>&nbsp;</TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,568</FONT>&nbsp;</TD>
    <TD noWrap align=right width="15%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,467</FONT>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Depreciation
      and amortization</FONT>&nbsp;</TD>
    <TD noWrap align=right width="16%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,805</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="19%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,924</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,560</FONT></U>&nbsp;</TD>
    <TD noWrap align=right width="15%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,368</FONT></U>&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Earnings before
      interest, taxes,</FONT>&nbsp;</TD>
    <TD noWrap align=left width="16%">&nbsp;</TD>
    <TD noWrap align=left width="19%">&nbsp;</TD>
    <TD noWrap align=left width="17%">&nbsp;</TD>
    <TD noWrap align=left width="15%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="32%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>depreciation
      and amortization</FONT>&nbsp;</TD>
    <TD noWrap align=right width="16%"><B><FONT><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$9,568</FONT></U>&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="19%"><B><FONT><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$11,991</FONT></U>&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="17%"><B><FONT><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$20,409</FONT></U>&nbsp;</FONT></B></TD>
    <TD noWrap align=right width="15%"><B><FONT><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$20,127</FONT></U>&nbsp;</FONT></B></TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>

<P><!--$$/page=--><A name=page_5></A></P>
<P><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Page 5, Twin Disc,
Inc.</FONT></P>
<TABLE cellSpacing=1 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=center width="99%" colSpan=3><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>CONDENSED CONSOLIDATED BALANCE SHEETS</FONT></B>&nbsp; &nbsp;
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=center width="99%" colSpan=3><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(In thousands,
      unaudited)</FONT>&nbsp; &nbsp; &nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December 28,</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="13%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>June 30,</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2007</FONT></U></B>&nbsp; </TD>
    <TD noWrap align=right width="13%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2007</FONT></U></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>ASSETS</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="17%">&nbsp; </TD>
    <TD noWrap align=left width="13%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Current
      assets:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="17%">&nbsp; </TD>
    <TD noWrap align=left width="13%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Cash and cash
      equivalents</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$22,117</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$19,508</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Trade accounts
      receivable, net</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>59,797</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>63,277</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Inventories,
      net</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>87,615</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>76,253</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Deferred income
      taxes</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>6,360</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>6,046</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Other</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>10,245</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>8,156</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Total current
      assets</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>186,134</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>173,240</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Property, plant
      and equipment, net</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>61,858</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>56,810</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Goodwill</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>17,889</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>17,171</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Deferred income
      taxes</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>2,322</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,956</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Intangible
      assets, net</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>9,567</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>9,352</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Other
      assets</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>6,928</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>6,655</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><FONT size=+0><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$284,698</FONT></U>&nbsp; </FONT></B></TD>
    <TD noWrap align=right width="13%"><B><FONT size=+0><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$267,184</FONT></U>&nbsp; </FONT></B></TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>LIABILITIES AND SHAREHOLDERS' EQUITY</FONT></B>&nbsp; </TD>
    <TD noWrap align=left width="17%">&nbsp; </TD>
    <TD noWrap align=left width="13%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Current
      liabilities:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="17%">&nbsp; </TD>
    <TD noWrap align=left width="13%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Current
      maturities on long-term debt</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$1,933</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$1,768</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Accounts
      payable</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>35,133</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>28,896</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Accrued
      liabilities</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>47,347</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>49,254</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Total current
      liabilities</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>84,413</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>79,918</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Long-term
      debt</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>53,613</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>42,152</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Accrued
      retirement benefits</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>23,861</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>26,392</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Other long-term
      liabilities</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,890</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>2,640</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>165,777</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>151,102</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Minority
      interest</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>655</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>645</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Shareholders'
      equity:</FONT>&nbsp; </TD>
    <TD noWrap align=left width="17%">&nbsp; </TD>
    <TD noWrap align=left width="13%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Common
      stock</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>14,204</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>13,304</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Retained
      earnings</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>128,986</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>121,109</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Accumulated
      other comprehensive income (loss)</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,055</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>( 4,493)</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>146,245</FONT>&nbsp; </TD>
    <TD noWrap align=right width="13%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>129,920</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp;
      &nbsp; &nbsp; &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Less
      treasury stock, at cost</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>27,979</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="13%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>14,483</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="69%">&nbsp; &nbsp; &nbsp;
      &nbsp; &nbsp; &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Total
      shareholders' equity</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>118,266</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="13%">
      <P><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>115,437</FONT></U>&nbsp; </P></TD></TR>
  <TR>
    <TD noWrap align=left width="69%" background=""></TD>
    <TD noWrap align=right width="17%" background=""><B>
      <P><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2><B>$284,698</P></B></FONT></U></B></TD>
    <TD noWrap align=right width="13%" background=""><B>
      <P><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2><B>$267,184</B></FONT></U></P></B></TD></TR></TABLE><BR>
<P align=left>&nbsp;</P>
<P align=left>&nbsp;</P>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_6></A>
<TABLE style="WIDTH: 721px; HEIGHT: 949px" cellSpacing=1 cellPadding=0 border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="65%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Page 6, Twin Disc,
      Inc.</FONT>&nbsp; </TD>
    <TD noWrap align=left width="17%">&nbsp; </TD>
    <TD noWrap align=left width="17%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD align=center width="99%" colSpan=3><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS</FONT></B> </TD></TR>
  <TR vAlign=bottom>
    <TD align=center width="99%" colSpan=3><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(In thousands,
      unaudited)</FONT> </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp; </TD>
    <TD noWrap align=center width="34%" colSpan=2><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Six Months
      Ended</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December
      28,</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>December
      31,</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2007</FONT></U></B>&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><U><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>2006</FONT></U></B>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>CASH FLOWS
      FROM OPERATING ACTIVITIES:</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Net
      earnings</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$ 9,314</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$ 9,342</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Adjustments to
      reconcile net earnings to cash</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>provided (used)
      by operating activities:</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Depreciation
      and amortization</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,560</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>3,368</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Other non-cash
      changes</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,967</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>869</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;
      &nbsp; &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Net change in
      working capital</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(3,813)</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(19,987)</FONT></U>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,028</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(6,408)</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>CASH FLOWS
      FROM INVESTING ACTIVITIES:</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp;</TD>
    <TD noWrap align=right width="17%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;
      &nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Acquisitions of fixed
      assets</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(6,820)</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(8,011)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;
      &nbsp; <FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Proceeds from sale of fixed
      assets</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>200</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>101</FONT></U>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(6,620)</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(7,910)</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%"><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>CASH FLOWS
      FROM FINANCING ACTIVITIES:</FONT></B>&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Bank
      overdraft</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>-</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(3,194)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Increase
      (decrease) in notes payable, net</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>12</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(396)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Proceeds from
      long-term debt</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,393</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>16,255</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Proceeds from
      exercise of stock options</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>100</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>56</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Purchase of
      treasury stock</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(13,367)</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(51)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Dividends
      paid</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(1,437)</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(1,109)</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Other</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>18</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(47)</FONT></U>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(3,281)</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>11,514</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Effect of exchange rate
      changes on cash</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,482</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1,118</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Net change in
      cash and cash equivalents</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>2,609</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>(1,686)</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%"><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Cash and cash
      equivalents:</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD>
    <TD noWrap align=right width="17%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Beginning of
      period</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>19,508</FONT></U>&nbsp; </TD>
    <TD noWrap align=right width="17%"><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>16,427</FONT></U>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="65%">&nbsp;<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>End of
      period</FONT>&nbsp; </TD>
    <TD noWrap align=right width="17%"><B><FONT><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$22,117</FONT></U>&nbsp; </FONT></B></TD>
    <TD noWrap align=right width="17%"><B><FONT><U><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>$14,741</FONT></U>&nbsp; </FONT></B></TD></TR></TABLE>
<P>&nbsp;</P>
<P align=center><FONT face="TimesNewRomanPSMT,Times New Roman,Times,serif" size=2>####</FONT><BR>
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