10-K 1 irm290.txt FORM 10-K UNITED STATES -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED JANUARY 31, 2003 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-14812 EDISON CONTROL CORPORATION (Exact name of registrant as specified in its charter) New Jersey 22-2716367 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 777 Maritime Drive 53074-0308 PO Box 308 (Zip Code) Port Washington, Wisconsin (Address of principal executive offices) Registrant's telephone number, including area code: 262-268-6800 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT None SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT Common stock, par value $.01 per share (Title of class) 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. [x] Yes [ ] No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2) [ ]Yes [x] No The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity as of July 31, 2002 (the last business day of the registrant's most recently completed second quarter): $3,688,636. Indicate the number of shares outstanding of each of the issuer's classes of common stock as of March 31, 2003: 1,638,595, shares of common stock, par value $.01 per share. Documents Incorporated by Reference -------------------------------------------------------------------------------- PART I Special Note Regarding Forward-Looking Statements Certain matters discussed in this Annual Report on Form 10-K are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes", "anticipates", "expects", or words of similar import. Similarly, statements that describe the Company's future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties, including, but not limited to, new product advancements by competition, significant changes in industry technology, general economic or political conditions, the continued availability of sources of supply, the availability and consummation of favorable acquisition opportunities, increasing competitive pressures on pricing and other contract terms and economic factors affecting the Company's customer base. These factors could cause actual results to differ materially from those anticipated as of the date of this report. Shareholders, potential investors and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included herein are only made as of the date of this Annual Report on Form 10-K and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Item 1. Business Edison Control Corporation (the "Company") was incorporated under the laws of the State of New Jersey on June 18, 1986 to succeed a limited partnership organized on October 31, 1979. Until June 21, 1996, the principal operating business was the design, development, manufacture and sale of electronic fault indicators. On June 21, 1996, the Company purchased, from unaffiliated persons, all of the issued and outstanding stock of Construction Forms, Inc. ("ConForms"), CF Ultra Tech, Inc. ("Ultra Tech") and CF Gilco, Inc. ("Gilco") and all of the issued and outstanding units of another affiliate, JABCO, LLC. On October 31, 1996, the Company sold certain net assets of the electronic fault indicators business to the manager of that operation. On February 1, 1998, Ultra Tech and Gilco were merged into ConForms. On September 29, 2000, ConForms sold certain assets and the business of Gilco to another party. On November 1, 2001, ConForms acquired the remaining 50% of the outstanding common stock of South Houston Hose Company, Inc. ("South Houston Hose"). The Company conducts its business through its divisions. ConForms, the Company's principal operating unit, designs, manufactures and distributes concrete pumping systems and accessories. Ultra Tech is engaged in the manufacturing and marketing of abrasion resistant piping systems. Abrasion resistant piping systems are used extensively in mining, pulp and paper mills, wastewater treatment plants and coal-fired electric utility plants, as well as in concrete pumping applications. South Houston Hose is engaged in the distribution of industrial hose and fittings. ConForms Most of ConForms' manufacturing operations and all of its administrative functions are located at the Company's headquarters in Port Washington, Wisconsin, which is approximately 25 miles north of Milwaukee. ConForms also operates four branch warehouses for light manufacturing and distribution of its products. The warehouses are located in Gardena, California; Houston, Texas; Newport, Wales, United Kingdom; and Johor Bahru, Malaysia. ConForms produces a standardized line of concrete pumping components and accessories compatible with many different types of concrete pumps. This puts ConForms in a position to provide concrete pumpers and distributors 2 with a complete, high quality line of components and accessories priced lower than if each component were purchased individually. ConForms believes that a pumping system designed as a package helps improve the reliability and output of the pump. In the 1970s, as concrete pumps became more reliable, available and acceptable in the United States as the most efficient method of placing concrete, ConForms worked closely with pump manufacturers and contractors to develop better engineered products for the rapidly changing industry. The Company believes that industry standards were largely established based on ConForms' designs. ConForms' objective was, and continues to be, to provide high quality components and a superior level of service to stay at the forefront of the concrete pumping market. As ConForms continued to grow by utilizing quality engineering, patent protection, tooling and fixtures, manufacturing methods and distribution, it became difficult for smaller manufacturers to match ConForms' total service level. The Company believes this strategy has allowed ConForms to increase its market share to over 50% of the North American market. ConForms manufactures concrete pumping systems and accessories for many applications, including use in residential construction, high-rise construction, airport and parking structures, and bridge and tunnel construction. In addition, ConForms' products are used extensively on mobile, truck-mounted concrete pumps equipped with articulating booms. Because of the inherent abrasiveness of concrete being conveyed under pressure, ConForms' products need to be replaced periodically and the end-user usually contacts ConForms or one of its distributors for high-quality, in-stock replacement components. ConForms is a complete source of piping system components and accessories needed to pump and place concrete. ConForms' products include straight pipe sections in a variety of lengths, diameters, wall thicknesses, degrees of hardness, and fittings. In addition, ConForms' products include couplings, reducers, bends, elbows and valves in various sizes and styles. ConForms' product base also includes specially made rubber hose in a variety of sizes and configurations. ConForms' product line also includes equipment, which is tailor-made for particular applications, such as bridge-deck spreaders, krete-placers, hydraulic diversion discharge valves, and customized equipment used in tunnel construction. Marketing ConForms' products, which account for approximately 78% of the Company's sales, are marketed principally through its own sales personnel and distributors. Besides contact from sales personnel, ConForms also attempts to maintain a prominent level of market visibility through active membership in the American Concrete Pumping Association, exhibits at industry trade shows, direct mail publications to end users and conducting industry safety seminars. A majority of all orders are received over the telephone. Export sales accounted for approximately 20.1% of ConForms' business for the year ended January 31, 2003, compared to 18.3% in the prior year. International markets are expected to be an increasing part of the business in future years. Customers ConForms' customer base consists of pumper/dealers (organizations which run a concrete pumping operation but also act as dealers of concrete pumps and systems) (37.0%), dealers (18.0%), concrete pump manufacturers (14.1%), pumping contractors (21.3%) and various other businesses such as rental yards, general contractors, pool contractors, ready mix operations, mines, fireproofers and precast companies (9.6%). No customer exceeded 10% of the Company's consolidated net sales for the year ended January 31, 2003. Competition ConForms competes with a number of manufacturers in the concrete pumping components and accessories industry. However, the Company believes that this competition is very fragmented, with most competitors offering only a limited selection of concrete pumping components and mainly selling against ConForms on price. ConForms competes by providing a complete line of products, quality, first class service and engineering assistance. 3 Moreover, the Company believes that ConForms' patents, manufacturing methods and inventory stocking strategy provide it with a competitive advantage. Pump manufacturers also compete by actively promoting their internal wear parts and piping systems. Also, some customers develop their own in-house capability to produce some of the products. Miscellaneous Data ConForms' principal manufacturing operations include machining, welding, burning, bending, heat-treating, painting, sawing, hose coupling, assembly and fixture and tool making. Raw materials principally include steel pipe and tubing, rubber hose and castings. ConForms has long-term relationships with a select group of suppliers to control costs and ensure material quality and availability. ConForms does not have any written contractual agreements with any of its suppliers. If necessary, ConForms would be able to find other sources for raw material and supplies without a material delay or adverse effect on its business. The business typically has marginally lower sales volume in the fourth quarter; however, working capital requirements are not significantly impacted. Terms of sale are generally net 30 days. ConForms has several patents and trademarks; however, only one, the method of heat-treating pipe with a wall thickness of under .200 inches, is considered of significant importance to the Company. ConForms order backlogs on March 31, 2003 and 2002 were approximately $1,023,000 and $750,000, respectively; all of which should be completed prior to the end of the current fiscal year. Ultra Tech Ultra Tech was formed in 1989 to help assure ConForms an in-house supply of high quality, induction-hardened pipe for its concrete pumping systems. The Company believes its induction-hardened pipe will typically last 3 to 8 or more times longer than non-hardened pipe. Since its formation, Ultra Tech has attempted to establish its own identity in many other markets, primarily throughout the United States, including the mining industry to carry phosphate and coal slurries, the pulp and paper industry to carry various slurry mixes, the power industry to convey fly ash and coal and the waste treatment industry to convey sludge. Ultra Tech has developed a line of hardened and overlay pipe products that are available in varying diameters, lengths and configurations which prolong the life of a piping system, regardless of particular wear characteristics found in the pumping system. The Company uses low alloy steel pipe, advanced heat-treating technology and metallurgical principles to produce both UT600 and UT500 induction-hardened pipe. Both of these products have a hard, abrasion resistant inner wall and a more ductile outer layer. For pure abrasion applications, UT600 provides outstanding wear resistance. UT600 induction-hardened pipe is made from a raw steel pipe of a proprietary chemistry. The pipe is induction heated, then water quenched on the inner wall. In applications involving impact or shock loading, UT500 offers more ductility while maintaining a hard innerwear surface. For applications where abrasion from shear and erosion are extreme, UltraWeld Overlay is considered for superior wear resistance. The result is a surface possessing an excellent combination of high resistance to erosion, severe abrasion and moderate impact strength. Recently, Ultra Tech has broadened its line of abrasion resistant products to include ceramic, chrome carbide and basalt products. Marketing Ultra Tech products, which account for approximately 14% of the Company's net sales, are marketed through Company sales and marketing personnel and distributors. Ultra Tech advertises regularly in various trade journals. Ultra Tech's export sales for the year ended January 31, 2003 and 2002 accounted for approximately 13.7% and 12.9% of Ultra Tech's net sales, respectively. 4 Customers The market for Ultra Tech's products is primarily resource-based industries such as mining, paper and energy. Ultra Tech's products are also used in processing industries such as dredging, foundries, steel, cement, sludge and grain handling. In addition, any pneumatic or hydraulic pipeline transporting solids is a potential customer for Ultra Tech. No customer exceeded 10% of the Company's consolidated net sales for the year ended January 31, 2003. Competition There are a number of competitors in the piping industry, including producers of mild steel, duplex steel, plastic pipe, rubber lined pipe, basalt lined pipe, ceramic lined pipe and cast alloy pipe. Ultra Tech is one of only two North American competitors that manufactures induction-hardened pipe. Ultra Tech relies on its efficient manufacturing processes, superior value, quality, variety of products and engineering assistance to compete. Miscellaneous Data Ultra Tech's principal manufacturing operations include machining, welding, burning, bending, heat-treating and sawing. Raw materials principally include steel pipe in lengths up to 50 feet and diameters from 2 1/2 to 40 inches. Ultra Tech does not have any written contractual agreements with any of its suppliers. Raw materials are readily available from various sources. Ultra Tech's business is not seasonal. Working capital requirements may be significant depending on the size of the order. Terms of sale are generally net 30 days. Ultra Tech does not depend on patents and trademarks. Ultra Tech's order backlogs on March 31, 2003 and 2002 were approximately $665,000 and $720,000, respectively; all of which should be completed prior to the end of the current fiscal year. South Houston Hose South Houston Hose has been supplying its customers with industrial rubber hose and fittings since 1980. In December of 1985, ConForms acquired 50% ownership of South Houston Hose. This purchase led to South Houston Hose becoming ConForms' stocking distributor for the Texas region. In May of 1987, South Houston Hose purchased the assets of a company, which added hydraulic hose, flexible stainless steel hose and Teflon lined hose to its product line. On November 1, 2001, ConForms purchased the remaining fifty percent of the common stock of South Houston Hose and became its sole owner. On February 1, 2002, South Houston Hose was merged into ConForms and now operates as a division of ConForms. South Houston Hose's mission is to continue to offer its customers the same dedicated service and outstanding commitment to quality that has made it one of the most competitive hose distributors in the Texas region. The strength of South Houston Hose is the ability to supply their customers with hose assemblies ranging from 1/2" PVC suction hose to 18" large bore oil suction and discharge hose and from 150 PSI red air hose to 20,000 PSI water-blast hose. Stainless steel hose assemblies are fabricated in-house and hydraulic hoses are assembled to order. A complete line of fittings, adaptors and hose accessories are stocked or sourced locally. Marketing South Houston Hose products, which account for approximately 8% of the Company's net sales, are principally marketed through Company sales personnel. Export sales are not a significant part of the business. 5 Customers Equipment rental, water pump, construction, chemical, liquid hauling and oil well drilling companies are a sample of South Houston Hose's diverse customer base. No customer exceeded 10% of the Company's consolidated net sales for the year ended January 31, 2003. Competition There are numerous competitors in the industrial hose and fittings marketplace. South Houston Hose relies on service and competitive pricing to remain competitive in the marketplace. Miscellaneous Data South Houston Hose operates from a 16,500 sq. ft. office and warehouse in Houston, Texas. Principal manufacturing operations include assembly, welding and sawing. Raw materials are available from a variety of sources. South Houston Hose does not have any contractual agreements with its suppliers. The business is not seasonal and working capital requirements are not significantly impacted. Terms of sale are generally net 30 days. South Houston Hose does not depend on patents and trademarks. South Houston Hose's order backlog on March 31, 2003 and 2002 were approximately $16,000 and $51,000, respectively; all of which should be completed prior to the end of the current fiscal year. General Matters Research and development expenditures are a part of the engineering department's budget and are expensed as incurred. The estimated total amount spent on research and development during the years ended January 31, 2003, 2002 and 2001 totaled approximately $214,000, $207,000 and $215,000, respectively. The Company believes that compliance with Federal, state and local environmental regulations will not require significant capital expenditures or materially affect future earnings in fiscal 2003. No portion of the business is subject to renegotiation of profits or termination of contracts at the election of the United States government. Industry Segments Information on industry segments is incorporated by reference to footnote 14 of the consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K. Foreign Operations Information on foreign operations is incorporated by reference to footnote 13 of the consolidated financial statements contained in Item 8 of this Annual Report on Form 10-K. Employees As of January 31, 2003, the Company had 113 active full-time employees. 6 Item 2. Properties The following table sets forth certain information with respect to the Company's principal facilities as of January 31, 2003:

_________ (1) The Company owns these facilities, all of which are mortgaged under debt agreements. (2) The Company leases this facility. The lease expires November 30, 2003. (3) The Company leases this facility. The lease expires November 30, 2006. (4) The Company leases this facility. The lease expires July 6, 2010. (5) The Company leases this facility. The lease expires January 31, 2004. The Company believes that all of its facilities are in good condition and are adequate for their intended uses. Item 3. Legal Proceedings The Company is party to routine legal proceedings, involving product liability and environmental matters, incidental to its business. There are currently no material legal proceedings pending to which the Company is a party nor were any material legal proceedings concluded during the fourth quarter of fiscal 2002. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the fourth quarter of fiscal 2002. 7 Part II Item 5. Market for the Company's Stock and Related Stockholder Matters The Company's Common Stock trades on OTC Bulletin Board under the symbol EDCO. The following table sets forth the high and low bid quotation for the fiscal quarter shown. The prices quoted represent prices between dealers in securities without adjustments for mark-ups, markdowns or commissions and do not necessarily reflect actual transactions. Fiscal 2001 Quarter High Low ------- ---- --- 1st $5.38 $3.88 2nd 5.00 3.30 3rd 4.50 3.60 4th 8.85 4.50 Fiscal 2002 Quarter High Low ------- ---- --- 1st $6.50 $6.10 2nd 6.52 6.30 3rd 6.75 6.40 4th 6.50 5.00 The approximate number of shareholders of record and beneficial shareholders of the Company's $.01 par value Common Stock as of January 31, 2003 were 30 and 150, respectively. In November 2001, the Company announced that its Board of Directors had authorized the repurchase of up to 750,000 shares of its outstanding common stock. Repurchases were effected from time to time in the open market, pursuant to privately negotiated transactions or otherwise. The repurchased shares have been held in the Company's treasury pending potential future issuance in connection with employee stock option plans, potential future acquisitions or other general corporate purposes. On December 4, 2002, the Company announced the termination of the Stock Repurchase Plan. As of March 31, 2003, Edison had repurchased 718,295 shares for $4,940,565 under the Stock Repurchase Plan (including the repurchase of 96,000 shares from current or former officers). The Company has not previously paid any dividends on its Common Stock. The Company intends to follow a policy of retaining all of its earnings to finance its business and any future acquisitions. The terms of the Company's master credit agreement require compliance with certain financial covenants, including tangible net worth (10,476,263 at January 31, 2003). 8 Item 6. Summary of Selected Financial Data

Note: (1) In FY2002, The Company incurred stock compensation costs of approximately $960,000 and severance expense of approximately $420,000 related to former officers. (2) On November 1, 2001, the Company purchased the remaining 50% of the outstanding common stock of South Houston Hose Company, Inc. ("South Houston Hose") from the seller for cash and debt totaling $800,000. The acquisition was accounted for as a purchase transaction with the purchase price allocated to the fair value of specific assets acquired and liabilities assumed. Accordingly, the results of operations have been included since the date of acquisition. (3) On September 29, 2000, the Company sold certain assets and the business of its Gilco division. The results of operations of the Gilco division have been presented as discontinued operations. Accordingly, previously reported statements of income information have been restated to reflect this presentation. (4) Tangible book value per share - diluted is calculated as Shareholders' equity less goodwill, divided by weighted average shares outstanding assuming dilution. (5) Net of treasury stock of 751,628 at 1/31/03 and 559,753 at 1/31/02 (there was no treasury stock outstanding prior to fiscal year 2001). 9 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Fiscal 2002 versus Fiscal 2001 Net sales for the year ended January 31, 2003 ("fiscal 2002") decreased $61,734, or .2%, to $27,390,816, compared with $27,452,550 for the year ended January 31, 2002 ("fiscal 2001"). The acquisition of South Houston Hose on November 1, 2001 accounted for increased net sales of $1,895,389 for fiscal 2002, while ConForms non-U.S. operations accounted for increased sales of $157,736. Ultra Tech's net sales for fiscal 2002 decreased by $734,474. ConForms U.S. net sales decreased $1,380,384 for fiscal 2002. The economic slowdown has resulted in a soft concrete pumping accessories market as end users' business levels have decreased and other equipment manufacturers have seen a significant decrease in new equipment sales. As a percentage of net sales, gross profit margin was 35.0% for fiscal 2002 as compared to 37.1% in fiscal 2001. The decrease is due largely to lower margins for Ultra Tech due to a higher mix of lower margin project sales compared to the same period of the prior year, in addition to the inclusion of South Houston Hose sales for a full year, which typically have a lower margin than ConForms or Ultra Tech. Selling, engineering and administrative expenses increased $2,351,694, or 45.8%, to $7,481,837 in fiscal 2002. The sharp increase is largely due to approximately $960,000 of compensation expense relating to fiscal 2002 stock option activity, and approximately $420,000 of severance expense relating to former officers. Approximately $776,000 of additional increase was due to the November 1, 2001 acquisition of South Houston Hose. Net sales for the ConForms' segment for fiscal 2002 decreased 5.4% to $21,225,901 compared with $22,448,550 for fiscal 2001. The decrease is due largely to the economic slowdown, which has resulted in a soft concrete pumping accessories market as end users' business levels have decreased and other equipment manufacturers have seen a significant decrease in new equipment sales. Operating income decreased $832,999, or 17.8%, to $3,854,958 in fiscal 2002 compared to $4,687,957 in fiscal 2001. The decrease was due largely to a reduction in gross margin of approximately $700,000 caused largely by lower sales, partially offset by the absence of goodwill amortization, which was $225,801 for fiscal 2001. Net sales for the Ultra Tech segment for fiscal 2002 decreased $734,474, or 16.5%, to $3,723,332 from $4,457,806 in the prior fiscal year. Ultra Tech's volume will continue to fluctuate based on its ability to attain large project sales in the industries it serves. As a result of the decrease in sales, which were slightly offset by lower Ultra Tech Selling, Engineering and Administrative Costs, operating income decreased $137,365 to $413,041 in fiscal 2001 compared to $550,406 in fiscal 2001. Net sales for the South Houston Hose segment for fiscal 2002 increased $1,895,389, or 347.0%, to $2,441,583 from $546,194 in the prior fiscal year. Operating loss increased by $170,808 to $221,058 from $50,250 in the prior fiscal year. The increases were due to the November 1, 2001 acquisition of South Houston Hose resulting in the inclusion of a full year of income statement activity in fiscal 2002 vs. 3 months in fiscal 2001 (November 2001, December 2001 and January 2002). Net income of $1,141,559, or $.66 and $.52 per share, basic and diluted, respectively, for fiscal 2002 represented a decrease of $1,576,749 (58.0%), from net income of $2,718,308, or $1.20 and $1.01 per share, basic and diluted, respectively, for fiscal 2001. The decrease is due largely to compensation expense of approximately $960,000 and severance expense of $420,000 relating to former officers in FY2002 combined with gross margin reductions of approximately $700,000 for ConForms and approximately $300,000 for Ultra Tech due to lower sales volumes The Company adopted Statement of Financial Accounting Standard No. 142, and ceased the amortization of goodwill, effective February 1, 2002. Under the new standard, pro forma income per diluted share in the year ended January 31, 2002 would have been $1.09, had goodwill not been amortized. The Company completed the transitional impairment test during the quarter ended July 31, 2002 and determined that no impairment of goodwill exists. Interest expense decreased $7,255 or 3.5%, to $200,382 for fiscal 2002 from $207,637 for fiscal 2001. 10 The Company had a trading loss (unrealized) of $25,002 in fiscal 2002 compared to a net trading loss (realized and unrealized) of $123,573 in fiscal 2001. Although the Company has no established formal investment policies or practices for its trading securities portfolio, the Company has from time to time pursued an aggressive trading strategy, focusing primarily on generating near-term capital appreciation from its investments in common equity securities. Securities held in the Company's portfolio at the end of each period are reported at fair value, with unrealized gains and losses included in earnings for that period. The Company does not use or buy derivative securities. The Company recorded tax expense of $740,000 for fiscal 2002, which represented an estimated annual effective tax rate of 39.3% applied to pre-tax book income compared to a tax rate of 40.1% for fiscal 2001 . The difference is due largely to an effective tax rate of 1.7% relating to goodwill for fiscal 2001. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement reporting purposes and the amounts used for income tax purposes. Fiscal 2001 versus Fiscal 2000 Net sales for the year ended January 31, 2002 ("fiscal 2001") increased 5.3% to $27,452,550 compared with $26,070,682 for the year ended January 31, 2001 ("fiscal 2000"). The increase was due largely to an approximate $700,000 increase in Ultra Tech sales to mining customers in fiscal 2001 and the inclusion of $879,194 of South Houston Hose net sales for the three months ended January 31, 2002 due to acquisition of the remaining 50% of the common stock of South Houston Hose on November 1, 2001. These increases were partially offset by a decrease of approximately $194,000 in ConForms Asia's fiscal 2001 sales. As a percentage of net sales, gross profit margin was 37.1% for fiscal 2001 as compared to 37.1% in fiscal 2000. Decreases in material costs of approximately $180,000 were offset by increases in group and workers compensation insurance costs of approximately $160,000. Selling, engineering and administrative expenses increased $406,850, or 8.6%, in fiscal 2001 to $5,130,143. The increase was partially due to the inclusion of $253,811 of selling, engineering and administrative expenses for South Houston Hose for the three months ended January 31, 2002. The remaining increase was due largely to increases in advertising, trade show and promotional of approximately $65,000, bad debt expenses of approximately $60,000 and group insurance costs of approximately $65,000. Net sales for the ConForms' segment for fiscal 2001 decreased 1.3% to $22,448,550 compared with $22,753,684 for fiscal 2000. The decrease is due largely to a decrease of approximately $194,000 in ConForms Asia sales and a decrease of approximately $445,000 in ConForms U.S. sales. Operating income decreased $208,282, or 4.3%, to $4,687,957 in fiscal 2001 compared to $4,896,239 in fiscal 2000. The decrease was due largely to increases in advertising, trade show and promotional expenses of approximately $90,000, bad debt expenses of approximately $60,000 and group and workers compensation insurance costs of approximately $210,000. Net sales for the Ultra Tech segment for fiscal 2001 increased $1,140,808, or 34.4%, to $4,457,806 from $3,316,998 in the prior fiscal year. The increase was due principally to increases in Ultra Tech sales to mining customers of approximately $700,000 in fiscal 2001. As a result of the increase in sales, operating income increased $244,842 to $550,406 in fiscal 2001 compared to $305,564 in fiscal 2000. Interest expense decreased $326,143, or 61.1%, to $207,637 for fiscal 2001 from $533,780 for fiscal 2000. The decrease resulted from a reduction of the Company's average outstanding debt from the previous year combined with lower interest rates. The Company had a net trading loss (realized and unrealized) of $123,573 in fiscal 2001 compared to a net trading loss (realized and unrealized) of $380,900 in fiscal 2000. A major reason for the $257,327 change was the decrease in the average holdings in the Company's portfolio. Securities held in the Company's portfolio at the end of each period are reported at fair value, with unrealized gains and losses included in earnings for that period. The amortization of goodwill and financing costs created a total non-cash charge of $268,299 for fiscal 2001 compared to $235,796 for fiscal 2000. Goodwill from the June 1996 acquisition of ConForms was being amortized over a 40-year period through January 31, 2002. 11 The Company recorded tax expense of $1,820,000 for fiscal 2001, which represented an estimated annual effective tax rate of 40.1% applied to pre-tax book income compared to a tax rate of 39.4% for fiscal 2001. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial statement reporting purposes and the amounts used for income tax purposes. Income from continuing operations of $2,718,308, or $1.20 and $1.01 per share, basic and diluted, respectively, for fiscal 2001 represented an increase of $410,053 or 17.8% from income from continuing operations of $2,308,255, or $.98 and $.80 per share, basic and diluted, respectively, for fiscal 2000. The increase was due largely to the reduction of trading securities losses of $257,327 and the decrease in interest expense of $326,143 from the previous year. New Accounting Standards ------------------------ In June 2002 the Financial Accounting Standards Board ("FASB") issued SFAS No. 146, "Accounting for Exit or Disposal Activities". SFAS No. 146 addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted for pursuant to Emerging Issues Task Force ("EITF") EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". The scope of SFAS No. 146 also includes (i) costs related to terminating a contract that is not a capital lease and (ii) termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002 with early adoption allowed. Adoption of SFAS No. 146 is not expected to have an impact on the Company's consolidated financial statements. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation--Transition and Disclosure, an amendment of FASB Statement No. 123." SFAS No. 148 provides alternative methods of transition to the fair value method of accounting for stock-based employee compensation and also amends the disclosure provisions of SFAS No. 123. The Company will adopt only the disclosure portion of SFAS No. 148. Thus, such statement will not have an impact on the Company's consolidated financial statements. In November 2002, the FASB issued Interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN No. 45 requires that a guarantor must recognize, at the inception of a guarantee, a liability for the fair value of the obligation that it has undertaken in issuing a guarantee. FIN No. 45 also addresses the disclosure requirements that a guarantor must include in its financial statements ending after December 15, 2002. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. FIN No. 45 also requires disclosure regarding the Company's product warranty liability (see Note 11). Adoption of FIN No. 45 is not expected to have an impact on the Company's consolidated financial statements. The FASB issued FIN No. 46, "Consolidation of Variable Interest Entities" (an interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements") in January 2003, which becomes effective for the Company on August 1, 2003. FIN No. 46 provides consolidation guidance for certain variable interest entities ("VIE") in which equity investors of the VIE do not have the characteristics of a controlling interest or do not have sufficient equity at risk for the VIE to finance its activities independently. FIN No. 46 requires each enterprise involved with a VIE to determine whether it provides financial support to the VIE through a variable interest. Variable interests may arise from financial instruments, service contracts, minority ownership interests or other arrangements. If an entity holds a majority of the variable interests, or a significant variable interest that is considerably more than any other party's variable interest, that entity would be the primary beneficiary and would be required to include the assets, liabilities and results of operations of the VIE in its consolidated financial statements. Adoption of FIN No. 46 is not expected to have an impact on the Company's consolidated financial statements. 12 Item7A. Quantitative and Qualitative Disclosures About Market Risk The Company is exposed to interest rate risk, foreign currency risk and equity price risk. These risks include changes in U.S interest rates, changes in foreign currency exchange rates as measured against the U.S. dollar and changes in the prices of stocks traded on the U.S. markets. Interest Rate Risk ------------------ The Company's revolving credit borrowings and variable rate term loans, which totaled $5,200,000 as of January 31, 2003, are subject to interest rate risk. Most of the borrowings float at the prime rate or LIBOR plus a certain number of basis points. Based on the fiscal 2002 year end balance, an increase of one percent in the interest rate on the Company's loans would cause an increase in interest expense of approximately $52,000, or $.02 per diluted share, net of taxes, on an annual basis. The Company currently does not use derivatives to fix variable rate interest obligations. Foreign Currency Risk The Company has foreign operations in the United Kingdom and Malaysia. Sales and purchases are typically denominated in the British pound, Malaysian ringgit, Singapore dollar, U.S. dollar or the Euro, thereby creating exposures to changes in exchange rates. The changes in exchange rates may positively or negatively affect the Company's sales, gross margins and retained earnings. The Company does not enter into foreign exchange contracts but attempts to minimize currency exposure risk through working capital management. There can be no assurance that such an approach will be successful, especially in the event of a significant and sudden decline in the value of a currency. Controls and Procedures ----------------------- The Chief Executive Officer and the Chief Financial Officer of the Company (its principal executive officer and principal financial officer, respectively) have concluded, based on their evaluation as of a date within 90 days prior to the date of the filing of this Report, that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and includes controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company's management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. There were no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of such evaluation. Item7B. Liquidity and Capital Resources Cash flow from operating activities was $2,150,162 for fiscal 2002, compared to $4,630,953 for fiscal 2001. This is due largely to a decrease in net income combined with a decrease in the change in trade accounts payable, accrued compensation and deferred income taxes of $295,758, $226,083 and $175,000, respectively. These decreases were offset by a decrease in the change in accounts receivable of $320,540. Net working capital of $9,938,694 at January 31, 2003 increased $1,017,497, or 11.4%, from the fiscal 2001 year-end level of $8,921,197. Current ratio at January 31, 2003 was 4.8:1 compared to 3.3:1 at January 31, 2002. The improvement in working capital and current ratio is due primarily to deferred compensation of $666,752 relating to stock options being reclassified from a current liability to additional paid-in capital during the quarter ended October 31, 2002. 13 Cash used in investing activities in fiscal 2002 was $569,977 compared to cash received from investing activities of $17,970 in fiscal 2001. Capital expenditures increased to $569,977 in fiscal 2002 from $233,602 in fiscal 2001. The increase is largely due largely to the upgrade of Ultra Tech's heat-treated bender to allow for larger diameter bends. The Company used $1,343,125 to repurchase its common stock during fiscal 2002 compared to $3,918,271 in fiscal 2001. The Company used $259,514 to reduce debt during the year. The Company's debt to capitalization ratio at January 31, 2003 and 2002 was 20.7% and 22.4%, respectively. The Company maintains various debt agreements, which are described in more detail in the footnotes to the consolidated financial statements. Required principal payments in fiscal 2003 are expected to be approximately $160,000. The Company believes that it can fund proposed capital expenditures and operational requirements from operations and currently available cash and cash equivalents and existing bank credit lines. Proposed capital expenditures for the fiscal year ending January 31, 2004 are expected to total approximately $735,000 compared to $569,977 for fiscal 2002. Contractual Obligations The terms under the amended master credit agreement, among other provisions, require the Company to maintain a minimum current ratio, tangible net worth, and debt service ratio, and restricts the Company to a maximum funded debt to EBITDA (as defined) ratio. The tangible net worth requirement at January 31, 2003 was $10,476,253. Substantially all of the Company's assets are collateralized under the above debt agreement. The LIBOR spread may be reduced or increased annually based on the achievement of a certain "funded debt to EBITDA" ratio. The following table of material debt and lease commitments at January 31, 2003, summarizes the effect these obligations are expected to have on the Company's cash flow in future periods set forth below.

Critical Accounting Policies The consolidated financial statements and related notes contain information that is pertinent to management's discussion and analysis. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Edison Control Corporation considers the following policies to be the most critical in understanding the judgments that are involved in the preparation of the Company's consolidated financial statements and the uncertainties that could impact the Company's financial position, results of operations and cash flows. 14 Revenue Recognition - The Company recognizes revenue, net of expected returns, upon shipment of products, which is when title passes to the customer, the price is fixed, the customer is obligated to pay and the Company has no remaining obligations. Allowance for Doubtful Accounts -The Company's accounts receivable are reported net of bad debt reserves, which are regularly evaluated by management for adequacy. The evaluation includes and is not limited to a review of individual customer accounts that have balances beyond the agreed upon terms of the sale. Reserve values are assigned to individual accounts based on the Company's recent payment experience with the customer and knowledge of the customer's creditworthiness. In addition, a general reserve is established to cover the exposure presented by the remainder of account balances. Excess and Obsolete Inventory - The Company's inventories are reported net of excess and obsolete reserves, which are maintained and evaluated on a regular basis by management. A reserve for excess inventory is calculated by an analysis of items with on-hand quantities in excess of historical usage over a reasonable time frame. Management identifies obsolete inventory on a regular basis and disposes of the quantities through sale to scrap dealers or commercial waste haulers. On rare occasions obsolete inventory may remain in the Company's inventory for a period of time and would be reserved for. Warranties - The Company warrants its products sold to customers to be free from defects in material and workmanship. The warranty does not vary based on customer, product sold or any other factor. The company accrues for future warranty costs in the period in which the sale is recorded, and the estimated reserve is adjusted periodically based on recent actual experience. 15 Item 8. Audited Financial Statements and Supplemental Data INDEPENDENT AUDITORS' REPORT To the Board of Directors and Shareholders of Edison Control Corporation: We have audited the accompanying consolidated balance sheets of Edison Control Corporation and subsidiaries (the "Corporation") as of January 31, 2003 and 2002, and the related consolidated statements of income and comprehensive income, shareholders' equity, and cash flows for each of the three years in the period ended January 31, 2003. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Edison Control Corporation and subsidiaries as of January 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended January 31, 2003, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1 to the consolidated financial statements, effective February 1, 2002, the Corporation adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets". Deloitte & Touche LLP Milwaukee, Wisconsin April 1, 2003 16

22 EDISON CONTROL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED JANUARY 31, 2003, 2002 AND 2001 -------------------------------------------------------------------------------- 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation - The consolidated financial statements include the accounts of Edison Control Corporation ("Edison") and subsidiaries, all of which are wholly owned (collectively, the "Company"). All material intercompany accounts and transactions have been eliminated in consolidation. Nature of Operations - The Company is currently comprised of the following operations. Construction Forms ("ConForms") is a leading manufacturer and distributor of systems of pipes, couplings and hoses and other equipment used for the pumping of concrete. ConForms manufactures a wide variety of finished products which are used to create appropriate configurations of systems for various concrete pumps. Ultra Tech manufactures abrasion resistant piping systems for use in industries such as mining, pulp and paper, power and waste treatment. South Houston Hose is a distributor of concrete pumping systems and accessories and industrial hose and fittings. The Company's principal market is in North America with limited sales activity in Europe, South America, the Middle East and Asia. Cash Equivalents - The Company considers all temporary investments with maturities of three months or less when acquired to be cash equivalents. Trading Securities - Debt and equity securities purchased and held principally for the purpose of selling them in the near term are classified as "trading securities" and reported at fair value with unrealized gains and losses included in income. The cost of securities sold is based on the first-in, first-out method. Accounts Receivable - Accounts receivable are stated net of an allowance for doubtful accounts. Inventories - Inventories are stated at the lower of cost (principally last-in, first-out method) or market. Property, Plant and Equipment - Property, plant and equipment are stated at cost. Expenditures for major renewals and improvements are capitalized, while maintenance and repairs, which do not significantly improve the related asset or extend its useful life, are charged to expense as incurred. For financial reporting purposes, plant and equipment are depreciated primarily by the straight-line method over the estimated useful lives of the assets. Estimated useful lives of buildings and improvements range from 7 to 40 years and of machinery and equipment from 2 to 12 years. Depreciation claimed for income tax purposes is computed by accelerated methods. Goodwill - Goodwill represents the excess of the purchase price over the fair value of identifiable net assets of acquired companies and was previously amortized on a straight-line basis over 40 years. The Company assesses the carrying value of goodwill at each balance sheet date. All goodwill is attributed to ConForms. Long-Lived Assets - Consistent with Statement of Financial Accounting Standard ("SFAS") No. 144, "Accounting for the Impairment or Disposals of Long-Lived Assets, and for Long-Lived Assets to be Disposed of". The Company asseses the impairment of long-lived assets based on the comparison of the estimated future nondiscounted cash flows anticipated to be generated during the remaining amortization period of the long-lived assets to the net carrying value of long-lived assets. The Company recognizes diminution in value of long-lived assets, if any, on a current basis based on the excess of carrying amounts over fair value. Estimates - The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 23 Fair Value of Financial Instruments - Management believes the carrying value of investments is a reasonable estimate of their fair value as their carrying value represents market value. The carrying value of the Company's long-term debt approximates fair value due to its variable interest rates. All other financial instruments are considered to approximate fair value due to their short-term nature. Translation of Foreign Currencies - Assets and liabilities of foreign operations are translated into United States dollars at current exchange rates. Income and expense accounts are translated into United States dollars at average exchange rates for the periods and capital accounts have been translated using historical rates. The resulting translation adjustments are recorded as accumulated other comprehensive income (loss). Foreign currency translation gains or losses are the only components of other comprehensive income for all years presented. Revenue Recognition - The Company recognizes revenue, net of expected returns, upon shipment of products, which is when title passes to the customer, the price is fixed, the customer is obligated to pay and the Company has no remaining obligations. Research and Development - Amounts expended for research and development for the years ended January 31, 2003, 2002 and 2001 totaled approximately $214,000, $207,000 and $215,000, respectively, and are expensed as incurred. Advertising Costs - Amounts expended for advertising for the years ended January 31, 2003, 2002 and 2001 totaled approximately $117,000, $93,000, and $63,000, respectively, and are expensed as incurred. Stock Compensation Expense - The Company records stock compensation expense in accordance with Accounting Principals Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees". Treasury Stock - The Company uses the cost method to account for treasury stock. Shipping and Handling Costs - Amounts billed to a customer in a sale transaction related to shipping costs are reported as net sales and the related costs incurred for shipping are reported as costs of goods sold. Derivatives and Financial Instruments - In 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as amended, was adopted on February 1, 2001. The adoption of this statement had no impact on the consolidated financial statements. New Accounting Standards - In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations" and No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 eliminates the use of the pooling-of-interests method of accounting for business combinations and requires that all such transactions be accounted for by the purchase method. In addition SFAS No. 141 requires that intangible assets be recognized as assets apart from goodwill and that they meet specific criteria in the Standard. This standard is applicable to all business combinations initiated after June 30, 2001 and accordingly, the Company adopted this standard with the acquisition of South Houston Hose Company, Inc. ("South Houston Hose") and for all future business combinations. SFAS No. 142 is effective for the Company beginning February 1, 2002, and applies to goodwill and other intangible assets recognized in the Company's consolidated balance sheet as of that date, regardless of when those assets were initially recognized. SFAS No. 142 requires that upon adoption, amortization of goodwill will cease and instead, the carrying value of goodwill will be evaluated for impairment on an annual basis. Accordingly, the Company discontinued amortization of goodwill effective February 1, 2002. All goodwill is attributed to Conforms. The Company completed the transitional impairment test during the quarter ended July 31, 2002 and determined that no impairment of goodwill exists. A reconciliation of previously reported net income and net income per share to the amounts adjusted for the exclusion of goodwill amortization follows: 24 January 31, --------------------------------------------- 2003 2002 2001 Reported net income $ 1,141,559 $ 2,718,308 $ 2,203,178 Add goodwill amortization - 225,801 232,258 ----------- ----------- ----------- Adjusted net income $ 1,141,559 $ 2,944,109 $ 2,435,436 =========== =========== =========== Net income per share-Basic: Reported net income $ 0.66 $ 1.20 $ 0.94 Add goodwill amortization - 0.10 0.10 ----------- ----------- ----------- Adjusted net income $ 0.66 $ 1.30 $ 1.04 =========== =========== =========== Net income per share-Diluted: Reported net income $ 0.52 $ 1.01 $ 0.76 Add goodwill amortization - 0.08 0.08 ----------- ----------- ----------- Adjusted net income $ 0.52 $ 1.09 $ 0.84 =========== =========== =========== In June 2002 the FASB issued SFAS No. 146, "Accounting for Exit or Disposal Activities". SFAS No. 146 addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including restructuring activities that are currently accounted for pursuant to the guidance that the Emerging Issues Task Force ("EITF") set forth in EITF Issue No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)". The scope of SFAS No. 146 also includes (i) costs related to terminating a contract that is not a capital lease and (ii) termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract. SFAS No. 146 is effective for exit or disposal activities that are initiated after December 31, 2002 with early adoption allowed. In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation--Transition and Disclosure, an amendment of FASB Statement No. 123." SFAS No. 148 provides alternative methods of transition to the fair value method of accounting for stock-based employee compensation and also amends the disclosure provisions of SFAS No. 123. The Company will adopt only the disclosure portion of SFAS No. 148. Thus, such statement will not have an impact on the Company's consolidated financial statements. In November 2002, the FASB issued Interpretation ("FIN") No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." FIN No. 45 requires that a guarantor must recognize, at the inception of a guarantee, a liability for the fair value of the obligation that it has undertaken in issuing a guarantee. FIN No. 45 also addresses the disclosure requirements that a guarantor must include in its financial statements ending after December 15, 2002. The initial recognition and measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. FIN No. 45 also requires disclosure regarding the Company's product warranty liability (see Note 11). Adoption of FIN No. 45 is not expected to have an impact on the Company's consolidated financial statements. The FASB issued FIN No. 46, "Consolidation of Variable Interest Entities" (an interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements") in January 2003, which becomes effective for the Company on August 1, 2003. FIN No. 46 provides consolidation guidance for certain variable interest entities ("VIE") in which equity investors of the VIE do not have the characteristics of a controlling interest or do not have sufficient equity at risk for the VIE to finance its activities independently. FIN No. 46 requires each enterprise involved with a VIE to determine whether it provides financial support to the VIE through a variable interest. Variable interests may arise from financial instruments, service contracts, minority ownership interests or other arrangements. If an entity holds a majority of the variable interests, or a significant variable interest that is considerably more than any other party's variable interest, that entity would be the primary beneficiary and would 25 be required to include the assets, liabilities and results of operations of the VIE in its consolidated financial statements. Adoption of FIN No. 46 is not expected to have an impact on the Company's consolidated financial statements. Income From Continuing Operations Per Share - Reconciliation of the numerator and denominator of the basic and diluted per share computations are summarized as follows:

2. ACQUISITIONS AND DISPOSITIONS On November 1, 2001 the Company purchased the remaining 50% of the outstanding common stock of South Houston Hose from the seller for $800,000, which consisted of a cash payment of $300,000 and a note payable in the principal amount of $500,000. Prior to November 1, 2001, the Company owned 50% of the outstanding common stock of South Houston Hose and accounted for the investment by the equity method. South Houston Hose is a distributor of concrete pumping systems and accessories and industrial hose and fittings. The acquisition was accounted for as a purchase transaction with the purchase price allocated to the fair value of specific assets acquired and liabilities assumed. Accordingly, the results of operations have been included since the date of acquisition. The purchase price was allocated as follows: Cash on hand $ 321,714 Receivables 392,187 Inventory 787,021 Other assets 69,915 Property, plant and equipment 149,523 Goodwill 130,000 Liabilities assumed (398,217) Less exisiting investment in South Houston Hose (652,143) --------- $ 800,000 ========= 26 The following unaudited pro-forma results of operations give effect to the acquisition as if it had occurred at the beginning of the fiscal year for each of the periods presented: Year Ended January 31, ----------------------------- 2002 2001 Net sales $ 29,584,049 $ 28,321,683 Net income 2,809,738 2,249,474 Net income per share, diluted $ 1.04 $ 0.78 The unaudited pro-forma information is not necessarily indicative of either results of operations that would have occurred had the purchase been made at the beginning of each fiscal year or of future results of operations of the combined companies. In September 2000, the Company sold the inventory, tooling and intangible assets of its Gilco division to a third party for $400,000 cash and a non-interest bearing note receivable for $164,155, which was paid in the first quarter of fiscal 2001. Gilco had supplied portable concrete and mortar/plaster mixers to various customers. The sale resulted in a loss of $12,379, net of income tax benefit. The results of operations of the Gilco division have been presented as discontinued operations. Accordingly, previously reported statements of income and comprehensive income information have been restated to reflect this presentation. Net sales of the Gilco division for the year ended January 31, 2001 were $1,272,461. 3. INVENTORIES Inventories consisted of the following:

4. INVESTMENT IN AND ADVANCES TO AFFILIATE Prior to its November 1, 2001 acquisition, the Company owned 50% of the outstanding common stock of South Houston Hose, and accounted for the investment by the equity method (see note 2). The Company had sales of approximately $852,000 and $878,000 to the affiliate for the nine months ended October 31, 2001, and the year ended January 31, 2001, respectively. Summary unaudited financial information for this affiliate as of October 31, 2001 and January 31, 2001 and for the nine-month period and year then ended is as follows: 27 October 31, January 31, 2001 2001 Current assets $ 1,570,834 $ 1,477,106 Noncurrent assets 73,732 81,733 Current liabilities 368,217 425,959 Shareholders' equity 1,276,349 1,132,880 Net sales 2,983,107 3,129,211 Net income 143,469 82,139 5. ACCRUED EXPENSES Accrued expenses consisted of the following: January 31, ------------------------------------ 2003 2002 Group insurance benefits $ 140,000 $ 130,000 Warranty (Note 11) 65,000 120,000 Legal and professional 169,985 56,235 Interest 11,359 20,533 Selling commissions and rebates 25,946 34,484 Other 26,532 37,487 --------- --------- Total $ 438,822 $ 398,739 ========= ========= 6. INCOME TAXES Deferred income taxes are provided on temporary differences relating to reporting expenses in different periods for financial statement and income tax purposes and differences in bases of assets and liabilities. Such differences relate primarily to unrealized gain (losses) on investments, depreciation expense, inventory costs, bad debt expense, warranty costs, insurance and compensation. The provision for income taxes from continuing operations is as follows: 28 Year Ended January 31, ----------------------------------------------- 2003 2002 2001 Currently payable: Federal $ 785,000 $1,510,000 $1,360,000 State 130,000 275,000 220,000 --------- ---------- ---------- 915,000 1,785,000 1,580,000 Deferred (credit): Federal (155,000) 35,000 (70,000) State (20,000) (10,000) --------- ---------- ---------- (175,000) 35,000 (80,000) --------- ---------- ---------- Total $ 740,000 $1,820,000 $1,500,000 ========= ========== ========== Temporary differences, which gave rise to the deferred tax assets (liabilities), included the following items at January 31, 2003 and 2002: Deferred tax assets: Compensation and other employee benefits $ 168,000 $ 264,000 Unrealized losses 350,000 339,000 Deferred financing 1,053,000 1,150,000 Other items 27,000 48,000 Bad debt reserve 210,000 192,000 Vacation pay 83,000 72,000 ---------- ---------- 1,891,000 2,065,000 ---------- ---------- Deferred tax liabilities: Inventory items (544,000) (677,000) Other items (165,000) (388,000) Fixed assets (237,000) (230,000) ---------- ---------- (946,000) (1,295,000) ---------- ---------- Net deferred tax asset $ 945,000 $ 770,000 ========== ========== The reconciliation of income tax computed at the U.S. federal statutory rates to income tax expense is: 29

7. LONG-TERM DEBT Long-term debt consisted of the following at January 31, 2003 and 2002: 2003 2002 Industrial revenue bonds $ 2,200,000 $ 2,350,000 Revolving loan fund term loan 60,703 70,217 Bank revolving credit loan 3,000,000 2,600,000 Note payable 500,000 ----------- ----------- Total debt 5,260,703 5,520,217 Less current portion (159,902) (259,514) ----------- ----------- Total long-term debt $ 5,100,801 $ 5,260,703 =========== =========== The Industrial Revenue Bonds ("IRB") were issued to finance construction of a new production facility in Port Washington, Wisconsin. A total of $3,000,000 was issued for the facility and is due in annual principal installments of $150,000 from February 2003 through February 2005, and $175,000 from February 2006 through February 2015. Interest is based on a weekly floating rate determined by the market for IRB loans. The interest rate at January 31, 2003 was 1.45%. The Revolving Loan Fund (RLF) term loan was a loan issued by the City of Port Washington to finance the purchase of real estate for the construction of an addition at the Company's Port Washington facility. A total of $100,000 was issued for the facility and is due in monthly installments of $1,012 through September 4, 2008 with interest at 4.0%. The amended master credit agreement, which expires April 30, 2004, allows for revolving credit borrowings not to exceed $6,000,000. Borrowings, which are based on qualified accounts receivable and inventory, bear interest at either the prime rate or the LIBOR rate plus 1.50% at the Company's election. The interest rate at January 31, 2003 was 2.8525%. The Company had $3,000,000 available under the agreement at January 31, 2003. 30 The terms under the amended master credit agreement, among other provisions, require the Company to maintain a minimum current ratio, tangible net worth, and debt service ratio, and restricts the Company to a maximum funded debt to EBITDA (as defined) ratio. The tangible net worth requirement at January 31, 2003 was $10,476,263. The Company was not in compliance with certain non-financial covenants for fiscal 2002, but has obtained waivers for such non-compliance. The Company was in compliance with all financial covenants at and for the year ended January 31, 2003. Substantially all of the Company's assets are collateralized under the above debt agreement. The LIBOR spread may be reduced or increased annually based on the achievement of a certain "funded debt to EBITDA" ratio. The note payable was issued to finance the purchase of the remaining 50% of South Houston Hose on November 1, 2001. The balance was paid in full during the year ended January 31, 2003. Annual principal payments for the next five years on long-term debt are as follows: Year Ending RLF Revolving January 31, IRB Term Loan Credit Loan Total 2004 $ 150,000 $ 9,902 $ $ 159,902 2005 150,000 10,305 3,000,000 3,160,305 2006 150,000 10,724 160,724 2007 175,000 11,162 186,162 2008 175,000 11,616 186,616 Thereafter 1,400,000 6,994 1,406,994 ---------- -------- ----------- ---------- $2,200,000 $ 60,703 $ 3,000,000 $5,260,703 ========== ======== =========== ========== 8. EMPLOYEE RETIREMENT PLANS The Company has a retirement savings and thrift plan (401(k) plan) covering substantially all of its employees. Under the 401(k) plan, the Company contributes amounts based on employee contributions. Amounts charged to income related to the 401(k) plan for the years ended January 31, 2003, 2002 and 2001 were $151,599, $104,015 and $98,088, respectively. The Company had a noncontributory defined benefit pension plan (the "Plan") covering substantially all full-time employees. The Plan provided for benefits based on years of service and compensation. In December 2000, the Company amended the Plan. The amendment specifically ceased accrual of benefits as of December 31, 2000 and terminated the Plan effective February 28, 2001. In February 2001, the Board of Directors authorized the allocation of excess plan assets to the participants. In December 2001, all plan assets were distributed to the participants. Net periodic pension expense was $25,193, including a curtailment gain of $127,063 for the year ended January 31, 2001. 9. EMPLOYEE STOCK OPTION PLANS In February 1995, the Board of Directors authorized and on October 17, 1995, the shareholders approved a grant to the Company's former President and Chief Executive Officer of a ten-year option to purchase up to 200,000 shares of common stock pursuant to the Company's 1986 Option Plan at an exercise price of $4.00 per share. In May 1997, a five-year non-qualified option for 25,000 shares was granted to a member of the Board of Directors at an exercise price of $3.50 per share. In October 1997, a five-year non-qualified option for 25,000 shares was granted to a member of the Board of Directors at an exercise price of $3.50 per share. All of these options are fully vested. 31 In May 2002, the Company repurchased 25,000 common shares for $7.00 each pursuant to a stock option exercise by a member of the Board of Directors for the options granted in May 1997. As a result, the Company recorded compensation expense of $87,500 during the quarter ended July 31, 2002. In August 2002 the Company paid the equivalent of $7.00 per share (less the exercise price of the options) to the former President in return for the cancellation of options to purchase 200,000 shares. As a result, $600,000 of compensation expense was recorded during the quarter ended October 31, 2003. In October 2002, the Company extended the term of the option agreement granted to a member of the Board of Directors from five years to seven years. As a result of this extension, the Company recorded compensation expense of $77,500 during the quarter ended October 31, 2002. In connection with the issuance of certain subordinated debt in 1996, the principal shareholder of the Company provided collateral to a bank to support a guaranty of repayment by the Company of the principal and interest on the loan. The arrangement was made to reduce the cost of borrowed funds from that which would have been otherwise obtainable by the Company from unaffiliated "mezzanine" lenders. In consideration of his providing such collateral, the Company issued a ten-year warrant to purchase 500,000 shares of Common Stock exercisable at a price of $1.60 per share. At the time the transaction was negotiated, Common Stock was quoted at approximately $4.00 per share. On the date the ConForms acquisition was consummated, which was the grant date, the closing sale price for the Common Stock in the over-the-counter market was $7.50 per share. The difference between the warrant price and the fair market value at the grant date was amortized over the three-year term of the subordinated debt. In connection with the ConForms acquisition on June 21, 1996, the Company granted ten-year nonqualified options to purchase an aggregate of 167,611 shares of Common Stock exercisable at $3.00 per share to key personnel. Such options vested fully on the first anniversary of the closing of the acquisition. On the date of the grant of the options, the closing sale price for the Common Stock was $7.50 per share. The difference between the option price and the fair market value at the time of option grant was amortized over the option's one-year vesting period and was recorded as deferred compensation. These amounts were reclassified to additional paid-in capital at January 31, 2003. On February 15, 2001, 19,444 of these options were exercised. In January 2003 the Company paid the equivalent of $7.00 per share (less the exercise price of the options) to the Company's' former Chief Financial Officer, in return for the cancellation of options to purchase 48,611 shares. As a result, $194,444 of compensation expense was recorded during the quarter ended January 31, 2003. In January 1999, the Board of Directors authorized and on June 8, 1999, the shareholders approved the Edison Control Corporation 1999 Equity Incentive Plan (the "Plan"). The Plan provides that up to a total of 200,000 shares of Common Stock will be available for the granting of stock options, stock appreciation rights, restricted stock or performance shares. No awards were granted under this Plan as of January 31, 2003. The Company has adopted the disclosure-only provisions of SFAS No.123, "Accounting for Stock-Based Compensation," but continues to apply APB Opinion No. 25 and related interpretations in accounting for all of its plans. Expense was $959,444, $0, and $0 for fiscal years ended 2002, 2001 and 2000, respectively. If the Company had elected to recognize costs for the options/warrants issued after December 15, 1994 in accordance with SFAS No. 123, net income and net income per share would have changed to the pro forma amounts as follows: 32

Stock option/warrant activity is summarized as follows:

33 Weighted Year Ended Average January 31, Exercise 2001 Price Options/warrant outstanding, beginning of year 917,611 $ 2.48 Options/warrant exercised - - Options/warrant expired - - ----------- ------ - - Options/warrant outstanding, end of year 917,611 $ 2.48 =========== ====== Options/warrant exercisable, end of year 917,611 $ 2.48 =========== ====== Price range per share $1.60 - $4.00 ============= The weighted average remaining contractual life of stock options and warrants outstanding at January 31, 2003 is 3.4 years. No options or warrants were granted during the years ended January 31, 2003, 2002 and 2001. 10. VALUATION ACCOUNTS Activity related to valuation accounts for the years ended January 31, 2003, 2002 and 2001 is as follows:

The allowance for doubtful accounts is determined by specific analysis of all accounts over sixty days past due and the application of a historical percentage to the remaining receivable balance. The excess and obsolete inventory reserve is determined by specific analysis of all inventory items with quantities in excess of eighteen-months supply and items that become obsolete because of product design changes. 11. COMMITMENTS AND CONTINGENCIES The Company has various warehouse and auto leases expiring at various dates through July 2010. Future minimum lease payments required under these noncancelable operating lease agreements are approximately as follows: 34

Total rent expense for the years ended January 31, 2003, 2002 and 2001 was approximately $235,000, $180,000 and $203,000, respectively. The Company provides warranties for specific product lines and accrues for estimated future warranty cost in the period in which the sale is recorded. The Company calculates its reserve requirements based on historic warranty loss experience that is periodically adjusted for recent actual experience. The following is an analysis of the Company's product warranty reserve for the years ended January 31, 2003, 2002 and 2001:

The Company is involved in various legal proceedings, which have arisen in the normal course of business. Reserves are recorded when the occurrence of loss is probable and can be reasonably estimated. In the opinion of management, the resolution of these contingencies will not have a materially adverse effect on the Company's consolidated financial statements. 12. RELATED PARTY TRANSACTIONS The Company had a note payable to an employee at January 31, 2002, which was used to finance the purchase of the remaining 50% of South Houston Hose on November 1, 2001. The balance was paid in full during the year ended January 31, 2003. The Company recognized interest expense of $14,583 and $8,750 for the years ended January 31, 2003 and 2002 respectively. 13. FOREIGN OPERATIONS Foreign operations are based on the location of the Company's facilities. Foreign operations information for the year ended January 31, 2003 follows: 35

14. SEGMENT INFORMATION The Company's operating segments are organized based on the nature of products and services provided. A description of the nature of the segment's operations and their accounting policies are contained in Note 1. Segment information follows: 36

(1) ConForms segment includes goodwill amortization expense of $0, $225,801 and $232,258 for the years ended January 31, 2003, 2002 and 2001, respectively. (2) On November 1, 2001 the Company purchased the remaining 50% of South Houston Hose, (Note 2). Effective February 1, 2003, the Company segregated the Industrial Hose component of South Houston Hose and began reporting the operating results as a separate reportable segment. Accordingly, the operating results of South Houston Hose for the 3 month period ended January 31, 2002 was reclassified out of the ConForms segment to reflect this change. 15. UNAUDITED QUARTERLY FINANCIAL INFORMATION Quarterly financial information for the year ended January 31, 2003 follows: 37

(1) Fiscal 2001 includes goodwill amortization of $58,064, $58,064, $58,064 and $51,609 in the 1st, 2nd, 3rd and 4th quarters, respectively. All goodwill expense was attributed to the ConForms division. (2) Results include the acquisition of South Houston Hose on November 1, 2001 (see note 2). 16. SUBSEQUENT EVENT On April 1, 2003, the Company filed a Form 8-K disclosing that its Board of Directors approved a proposal from its majority shareholder and Chairman of the Board and its Chief Executive Officer to acquire all shares of the Company not currently owned by them in a going-private transaction. Such transaction is to be structured as a one-for-66,666 reverse stock split in which shareholders owning less than one share as a result of the reverse stock split will receive cash in an amount equal to $7.00 per pre-split share in lieu of receiving fractional shares. The Chairman and Chief Executive Officer together currently beneficially own 71% of the Company's common shares. In conjunction with the reverse stock split, the Company intends to enter into individual option cancellation agreements with each person holding options to acquire the Company's common stock (with the exception of the Chief Executive Officer, whose options will remain outstanding). It is anticipated that as a result of these transactions, the Chairman and Chief Executive Officer will remain as the only two shareholders of the Company. The terms and conditions of the reverse stock split and the cash consideration to be received by the Company's minority shareholders were unanimously approved by the Board of Directors (with the Chairman and Chief Executive Officer abstaining), based on the recommendation of a Special Committee composed entirely of disinterested directors. The estimated total cost to cash-out fractional shares and options to acquire shares is expected to be approximately $3.5 million, excluding transaction costs. To fund the transaction, the Company has received a commitment, subject to customary limitations, for a $5 million five-year term loan secured by assets of the Company. 38 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. Part III Item 10. Directors and Executive Officers of the Registrant At March 31, 2003, the names and ages of all executive officers and directors of the Company and all positions and offices held with the Company are listed below. There are no family relationships between such persons. All officers are elected annually by the Board of Directors at the first Board meeting following each annual meeting of the shareholders. There are no agreements between any of the officers and any other person pursuant to election as an officer.

William B. Finneran is a Managing Director of Wachovia Securities, an investment-banking firm. Prior to joining Wachovia in 1999, Mr. Finneran was a Managing Director at CIBC Oppenheimer Corp., an investment-banking firm, and had been employed with Oppenheimer since 1972. Mr. Finneran is a Director of National Planning Association, a non-profit advisory board. He serves on the Board of Villanova University and is a former Board Member of Covenant House and Operation Smile, non-profit charitable institutions. Mr. Finneran also currently serves on the Executive Committee of the New York Archdiocesan Patrons Program. Alan J. Kastelic was appointed President and Chief Executive Officer of Edison Control Corporation in June 1998 and President and Chief Executive Officer of Construction Forms in June 1996 when the Company acquired Construction Forms, Inc. Mr. Kastelic had previously been Executive Vice President and Chief Operating Officer of Construction Forms, which he joined in 1977. Prior to joining Construction Forms, Mr. Kastelic was Manufacturing Manager at Badger Dynamics and Chief Cost Accountant, Material Control Manager and Manager of Manufacturing at the PCM division of Koehring Corporation. Gregory L. Skaar was appointed Chief Financial Officer on February 20, 2003. Mr. Skaar is the Chief Financial Officer of Construction Forms. He has served as Edison's Corporate Controller since 1997. From 1991 to 1997, Mr. Skaar was with the Cooper Power Systems Division of Cooper Industries where he served as a Product Line Controller. From 1985 to 1991 he was employed by the international accounting firm of Deloitte & Touche LLP. Robert L. Cooney has worked as a business and financial consultant since February 1997. Mr. Cooney was a Managing Director-Equity Capital Markets at Credit Suisse First Boston from 1977 to January 1997. Mr. Cooney also serves as a director of Equity One, Inc., a NYSE-listed real estate investment trust located in Miami, Florida. William C. Scott was the Chairman and Chief Executive Officer of Panavision Inc. from 1988 to 1999, the leading designer and manufacturer of high-precision film camera systems for the motion picture and television industries. From 1972 until 1987, Mr. Scott was President and Chief Operating Officer of Western Pacific Industries Inc., a manufacturer of industrial products. Prior to 1972 Mr. Scott was a Group Vice President of Cordura Corporation (a business information company) for three years and Vice President of Booz, Allen & Hamilton (a management-consulting firm) for five years. He is currently a director of Audio Visual Services Corporation and Vari-Lite, Inc. 39 Item 11. Executive Compensation EXECUTIVE COMPENSATION Summary Compensation Table -------------------------- The following table sets forth the annual and long-term compensation for the Company's Chief Executive Officer and the other named executive officers who earned in excess of $100,000 in fiscal 2002, as well as the total compensation paid to each named executive officer for the Company's two previous fiscal years:

Option Grants in Last Fiscal Year --------------------------------- The Company did not grant options to any of the named executive officers during the year ended January 31, 2003. Option Exercises in Fiscal 2002 and Fiscal Year-End Option Values ----------------------------------------------------------------- The following table presents the value of unexercised options held by the named executive officers at January 31, 2003. No options were exercised in fiscal 2002 by the named executive officers. In connection with Mr. Hanamann's termination, the Company paid Mr. Hanamann $194,444, or the equivalent of $7.00 per share, for the cancellation of options to purchase 48,611 shares. Mr. Hanamann has no options remaining as of January 31, 2003.

(1) Valuewas calculated by subtracting the respective option exercise price from the fair market value of the Common Stock on January 31, 2003, which was the closing sale price of $6.00 per share as reported by the Over the Counter Bulletin Board. 40 Benefit Plans ------------- The Company also has a retirement savings and thrift plan (401(k) plan) covering substantially all of its employees. Effective July 1, 2002, for each employee contribution to the 401(k) plan of up to 4% of the employee's annual compensation, the Company will match all of the employees' 401(k) contribution. Section 16(a) Beneficial Ownership Reporting Compliance ------------------------------------------------------- Section 16(a) of the Securities Exchange Act of 1934 requires the Company's executive officers and directors to file reports concerning the ownership of the Company's Common Stock with the Securities and Exchange Commission and the Company. Based solely upon the information provided to the Company by individual directors and executive officers, the Company believes that during the fiscal year ended January 31, 2003 all of its directors and officers complied with the Section 16(a) filing requirements. Agreements with Named Executive Officers ---------------------------------------- In connection with the Company's acquisition of Construction Forms, Inc. ("ConForms") in June 1996, ConForms entered into an Employment Agreement with Alan J. Kastelic, pursuant to which ConForms agreed to employ Mr. Kastelic as the President and Chief Executive Officer of ConForms until June 30, 1998. Mr. Kastelic is also the President and Chief Executive Officer of the Company. The term of Mr. Kastelic's Employment Agreement is automatically renewed for successive one-year periods thereafter unless notice is given of non-renewal at least 30 days prior to the end of the then current term or unless earlier terminated in accordance with the provisions of the Employment Agreement. Under this Employment Agreement, Mr. Kastelic is entitled to receive a minimum base salary $147,000 per year and certain minimum performance bonuses and other benefits. If Mr. Kastelic's employment is terminated by the Company other than by reason of death, disability or cause or by Mr. Kastelic for good reason, then Mr. Kastelic is entitled to continue to receive his base salary and benefits for a period of twelve months. Mr. Kastelic's Employment Agreement also contains a covenant not to compete that is in effect during the term of his employment and during any period during which he receives severance compensation thereafter. Also in connection with the Company's acquisition of ConForms in June 1996, ConForms entered into an Employment Agreement with Jay R. Hanamann, pursuant to which ConForms agreed to employ Mr. Hanamann as the Chief Financial Officer, Secretary and Treasurer of ConForms until June 30, 1998. Mr. Hanamann was the Chief Financial Officer, Secretary and Treasurer of the Company until December 31, 2002. On December 31, 2003, Mr. Hanamann and the Company mutually agreed to terminate Mr. Hanamann's employment by the Company ( including terminating his membership on the ConForm's Board of Directors. In consideration of the mutual promises contained in the termination agreement, Mr. Hanamann was paid $194,444, or the equivalent of $7.00 per share for the cancellation of his 48,611 unexercised options. Mr. Hannamann was also paid $233,331 on December 30,2002, or $7.00 per share for the 33,333 Company shares he owned directly. Mr. Hanamann received severance payments of $93,666 in January 2003 and will receive an additional $128,334 in equal installments through December 31, 2003 subject to Mr. Hanamann's compliance with this agreement. Compensation of Directors ------------------------- Directors who are not executive officers of the Company each receive an annual retainer of $15,000. Directors of the Company do not receive additional compensation for attendance at Board of Directors meetings or committee meetings. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The following table sets forth, as of March 31, 2003, the number of shares of Common Stock beneficially owned by (i) each director of the Company , (ii) each of the executive officers named in the Summary Compensation Table set forth above (except for Mr. Hanamann, whose shares were repurchased by the Company in connection with his termination agreement and who owns no shares as of March 31, 2003, (iii) all directors and executive officers of the Company as a group, and (iv) each person known to the Company to be the beneficial owner of more than 5% of the Common Stock. The business address of all individuals listed below is 777 Maritime Drive, Port Washington, WI 53074-0308. 41

------------- (1) Includes a currently exercisable warrant to purchase 500,000 shares of Common Stock and excludes 9,740 shares owned by two Uniform Gifts to Minors Act accounts, each for the benefit of one of Mr. Finneran's children. Mr. Finneran disclaims beneficial ownership of the 9,740 shares for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, or otherwise. (2) Based on information set forth in the indicated party's Schedule 13D or 13G as filed with the Securities and Exchange Commission and the Company. (3) Includes a currently exercisable stock option to purchase 97,222 shares of Common Stock. (4) Includes a currently exercisable stock option to purchase 25,000 shares of Common Stock. (5) Includes currently exercisable stock options and warrants, which in the aggregate are exercisable for 622,222 shares of Common Stock. Equity Compensation Plan Information The following table provides information as of January 31, 2003 about the Company's existing equity incentive plans, including individual arrangements.

(1) Consists of a warrant issued to William B. Finneran to purchase shares of Common Stock. (2) Consists of shares available for grant under the 1999 Equity Incentive Plan. All of the available shares under the 1999 Equity Incentive Plan may be issued upon the exercise of stock options or granted as restricted stock or performance shares. (3) Consists of options to purchase 99,556 shares of Common Stock granted to employees of the Company pursuant to individual stock option agreements dated June 21, 1996. All of such options are fully vested and expire on June 21, 2006. If any optionee's employment is terminated by the Company for cause (as defined) the options granted will immediately terminate. If an optionee's employment is terminated by the Company at any time for a reason other than for cause, or voluntarily by the optionee, or as a result of disability, the options will be exercisable for a period of three months from the date of termination. Also consists of options to purchase 25,000 shares of Common Stock granted to William C. Scott pursuant to a stock option agreement dated October 15, 1997 and extended on October 1, 2002. All of the options are fully vested and expire on October 15, 2004. If Mr. Scott's service as a director terminates at any time, the options will be exercisable for a period of three months from the date of such termination. Item 13. Certain Relationships and Related Transactions Committees, Meetings and Attendance ----------------------------------- Certain Transactions -------------------- Mr. Finneran, Chairman of the Board of the Company, is not a full time employee of the Company; however, he has devoted considerable time to the search for acquisitions and consideration of the Company's current business operation. For fiscal 2002, Mr. Finneran received compensation of $112,000 for such services. Part IV Item 14. Controls and Procedures The Company carried out an evaluation, within 90 days prior to the filing date of this report, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures, as defined in Exchange Act Rules 13a-14(c) and 15d-14(c). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer to allow timely decisions regarding required disclosure. There have been no significant changes in the Company's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation. Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K (a)(1) Financial Statements: 43 The following consolidated financial statements of the Company and the report of independent auditors for the fiscal year ended January 31, 2003, are contained in Item 8: Report of Deloitte & Touche LLP, Independent Auditors Consolidated Balance Sheets, January 31, 2003 and 2002 Consolidated Statements of Income and Comprehensive Income, Years Ended January 31, 2003, 2002 and 2001 Consolidated Statements of Shareholders' Equity, Years Ended January 31, 2003, 2002 and 2001 Consolidated Statements of Cash Flows, Years Ended January 31, 2003, 2002 and 2001 Notes to Consolidated Financial Statements, Years Ended January 31, 2003, 2002 and 2001 (a)(2) Financial Statement Schedules: Schedules not included have been omitted because they are either not applicable or the information is presented in the consolidated financial statements or notes thereto. (b) Reports on Form 8-K: The Company filed a Current Report on 8-K on December 4, 2002 announcing under Item 9 of that form the termination of the stock repurchase plan effective Monday, December 9, 2002. Edison's Board of Directors had previously authorized the repurchase of up to 750,000 shares of common stock effective on November 7, 2001. Edison has purchased a total of 718,295 for an aggregate purchase price of $4,940,565 under this plan. (c) Exhibits: The Exhibits filed or incorporated by reference herein are as specified in the Exhibit Index. 44 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. By: /s/ Alan J. Kastelic ------------------------- Alan J. Kastelic President and Chief Executive Officer (Principal Executive Officer) April 22, 2003 By: /s/ Gregory L. Skaar ------------------------- Gregory L. Skaar Chief Financial Officer (Principal Financial and Accounting Officer) April 22, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K has been signed below by the following persons on behalf of Edison Control Corporation and in the capacities and on the dates indicated: /s/ William B. Finneran ----------------------- William B. Finneran Chairman of the Board and Director April 22, 2003 /s/ Alan J. Kastelic -------------------- Alan J. Kastelic Director, President and Chief Executive Officer April 22, 2003 /s/ Robert L. Cooney -------------------- Robert L. Cooney Director April 22, 2003 /s/ William C. Scott -------------------- William C. Scott Director April 22, 2003 45 CERTIFICATIONS I, Alan J. Kastelic, certify that: 1. I have reviewed this annual report on Form 10-K of Edison Control Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of Edison Control Corporation as of, and for, the periods presented in this annual report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Edison Control Corporation and we have: a. designed such disclosure controls and procedures 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 annual report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c. presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. April 22, 2003 /s/ Alan J. Kastelic -------------------- Alan J. Kastelic President and Chief Executive Officer 46 I, Gregory L. Skaar, certify that: 1. I have reviewed this annual report on Form 10-K of Edison Control Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; and 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of Edison Control Corporation as of, and for, the periods presented in this annual report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for Edison Control Corporation and we have: a. designed such disclosure controls and procedures 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 annual report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c. presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. April 22, 2003 /s/ Gregory L. Skaar -------------------- Gregory L. Skaar Chief Financial Officer 47 EXHIBIT INDEX ------------- Exhibit No. Description ----------- ----------- 3.1 Certificate of Incorporation (incorporated by reference to the Company's Form 10-Q for the quarter ended July 31, 1998). 3.2 By-laws of the Company (incorporated by reference to the Company's Registration Statements on Form S-18 (File No. 33-6736-NY) filed on June 24, 1986). 4.1 Master Credit Agreement dated June 21, 1996 between Construction Forms, Inc., CF Ultra Tech, Inc., CF Gilco, Inc., and LaSalle National Bank (incorporated by reference to the Company's Form 8-K dated July 8, 1996). 4.2 Loan Agreement dated June 21, 1996 between Construction Forms, Inc., CF Ultra Tech, Inc., CF Gilco, Inc., and Bank Audi USA (incorporated by reference to the Company's Form 8-K dated July 8, 1996). 10.2 * Stock Warrant issued to William Finneran (incorporated by reference to the Company's 1997 Proxy Statement Exhibit 2). 10.3 * Edison Control Corporation 1999 Equity Incentive Plan (incorporated by reference to the Company's 1999 Proxy Statement Appendix A). 10.4 Stock and Unit Purchase Agreement dated June 21, 1996 by and among Registrant, Construction Forms Acquisition Inc. and the Shareholders of Construction Forms, Inc., CF Gilco, Inc., and JABCO, LLC (incorporated by reference to Form 8-K dated July 8, 1996). 10.5 * Employment Agreement dated June 21, 1996 between the Company and Alan J. Kastelic (incorporated by reference to the Company's Form 10-K dated April 25, 1997). 10.7 * Stock Option Plan dated June 21, 1996 between the Company and Alan J. Kastelic (incorporated by reference to the Company's Form 10-K dated April 25, 1997). 10.10 * Nonqualified Stock Option Agreement dated October 15, 1997, between the Company and William Scott (incorporated by reference to the Company's Registration Statement on Form S-8 (File No. 333-41483) filed December 4, 1997). 10.11 Indemnity Agreement dated March 18, 2003 between the Company and William Scott. 10.12 Indemnity Agreement dated March 18, 2003 between the Company and Robert Cooney. 10.13 * Termination Agreement dated August 20, 2002 between the Company and Mary E. McCormack 10.14 * Termination Agreement dated December 27, 2002 between the Company and Jay R. Hanamann 21 Subsidiaries of Edison Control Corporation. 23 Consent of Independent Auditors. 99.1 Written Statement of the President and Chief Executive Officer, pursuant to 18 U.S.C. ss.1350, dated April 22, 2003 99.2 Written Statement of the Chief Financial Officer, pursuant to 18 U.S.C. ss.1350, dated April 22, 2003 * Represents a management compensation plan. 48

EDISON CONTROLS CORP 10-K