UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED OCTOBER 21, ~~2004~~2005

Commission file number 0-5971

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

WOODHEAD INDUSTRIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		36-1982580
(State of other jurisdiction of		(I.R.S. Employer Identification Number)
(State of other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
incorporation or organization)
Three Parkway North, Suite 550, Deerfield, IL		60015
(Address of principal executive offices)		(Zip Code)

(847) 236-9300

Registrants Telephone Number, including area code

SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT


Common Stock, Par Value $1.00		NASDAQ
Preferred Stock Purchase Rights		NASDAQ
(Title of Class)		(Exchange on which registered)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x. 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. ¨

Indicate by a check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the act). Yes x. No ¨.

The aggregate market value of the voting stock held by non-affiliates of the Registrant as of ~~March 27~~April 2, ~~2004~~2005 was $~~185~~162,~~915~~720,~~317~~393. The number of common shares outstanding as of ~~December 1~~November 16, ~~2004~~2005 was 12,~~207~~258,~~274~~957.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information contained in the Proxy Statement for the Annual Meeting of Stockholders of

registrant to be held February 3 2, ~~2005~~2006 is incorporated by reference into Part III hereof.

TABLE OF CONTENTS

PART I
ITEM 1.	BUSINESS	2
ITEM 2.	PROPERTIES	5
ITEM 3.	LEGAL PROCEEDINGS	5
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	6
PART II
ITEM 5.	MARKET FOR THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	7
ITEM 6.	SELECTED FINANCIAL DATA	8
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	9
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	1516
ITEM 8.	CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	1617
ITEM 9.	CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	45
ITEM 9	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	50
ITEM 9A.	CONTROLS AND PROCEDURES	45
ITEM 9A	CONTROLS AND PROCEDURES	50
PART III
ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	4651
ITEM 11.	EXECUTIVE COMPENSATION	4651
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT	4651
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	4752
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	4752
PART IV
ITEM 15.	EXHIBITS, AND FINANCIAL STATEMENT SCHEDULES ~~AND REPORTS ON FORM 8-K~~	4853

PART I

ITEM 1.

BUSINESS

GENERAL

Woodhead Industries, Inc. (the Company, which may be referred to as “we”, “us”, or “our”) is engaged in two business segments serving a diverse group of customers and industries worldwide. We develop, manufacture and market network and electrical infrastructure products engineered ~~for~~to ~~performance~~perform in harsh, demanding and hazardous industrial environments.

Where reference is made in any Item of this Annual Report on Form 10-K to information in the Proxy Statement for the Annual Meeting of Stockholders of the Company to be held on February 3 2, ~~2005~~2006, such information ~~shall~~ shall be deemed to be incorporated therein by such reference.

BUSINESS SEGMENTS

Our operating segments are based on the organization of business groups comprised of similar products and services. Revenues in our Industrial Communications and Connectivity Products Segment (Connectivity Segment) are primarily derived from sales of system components for devices in open networks for automated manufacturing and distribution applications. Revenues in our Electrical Safety & Industrial Products Segment (Electrical Segment) are primarily derived from sales of specialized products to support enhanced safety and productivity on the factory floor.

Selected financial information by business segment for each of the last three fiscal years is contained in Note 13 of the Notes to Consolidated Financial Statements.

PRODUCTS

Woodhead Industries develops, manufactures and markets network and electrical infrastructure products engineered ~~for~~to ~~performance~~perform in harsh, demanding and hazardous industrial environments. We are known in the global industrial market by our recognized brands that include Brad Harrison®, BradPower™, BradControl™, SST™, Daniel Woodhead®, mPm®, applicom®, Aero-Motive® and RJ-Lnxx®. Our expertise ranges from mechanical, electrical and electronics to communication software products and technologies.

Woodhead operates from 21 locations in 10 countries spanning North America, Europe and Asia/Pacific.

DISTRIBUTION

We sell our products to stocking distributors, original equipment manufacturers (OEM) and system integrators. Our direct sales force, as well as manufacturers’ agencies, service our customers and promote our products to end-customers.

RAW MATERIALS

Parts and materials for our products are readily available from a variety of suppliers. It has been our practice to develop more than one source of supply for critical items.

PATENTS AND INTELLECTUAL PROPERTY RIGHTS

We hold patents, trademarks and licensing agreements on certain of our products. We believe these trademarks and patents are valuable but not essential to the future growth of our businesses.

CUSTOMERS

We sell our products to a broad customer base. No single customer accounts for ten percent or more of our sales revenue.

CUSTOMERS

We sell our products to a broad customer base. No single customer accounts for ten percent or more of our sales revenue.

BACKLOG

The backlog of unfilled orders was $1516.53 million, $1615.05 million and $1416.30 million at the end of fiscal years ~~2004~~2005, ~~2003~~2004 and ~~2002~~2003, respectively. The ~~2004~~2005 Connectivity segment backlog ~~as compared to the prior year~~ was up 58.74%. ~~The~~compared ~~Electrical~~to ~~segment~~prior ~~recorded a 29~~year.4% ~~decrease~~This increase in the backlog ~~when~~of ~~compared~~our toConnectivity ~~fiscal~~segment ~~2003. This decrease~~ was ~~mainly~~ due mainly to ~~the~~increases ~~divestiture~~in ofour anNorth ~~Aero-Motive~~American ~~product~~operations. ~~line~~The in2005 ~~the~~Electrical ~~first~~backlog ~~quarter~~was down 8.7% ofcompared ~~fiscal~~to 2004.

COMPETITION

Similar products of the type sold by us are also available from competitors. We believe delivery time, as well as quality and customer service are important to our success. Our ability to manufacture high-quality products that serve specialized needs, as well as our multiple channels of distribution, differentiate us from the competition.

INTERNATIONAL OPERATIONS

A significant portion of our business is from outside the United States and fluctuations in foreign currency exchange rates can impact our results of operations and financial condition. Since most of our international manufacturing costs and operating expenses are incurred in local currencies, the impact of changes in exchange rates on reported net income is partially mitigated. Selected financial information by major geographical region for each of the last three fiscal years is contained in Note 13 of the Notes to Consolidated Financial Statements.

RESEARCH & DEVELOPMENT

Selected financial information related to research and development is contained in Note 12 of the Notes to Consolidated Financial Statements.

ENVIRONMENTAL MATTERS

Our operations are subject to international, federal, state and local environmental laws and regulations. We are party to an environmental matter, which obligates us to investigate, remediate, or mitigate the effects on the environment of the release of certain substances at one of our ~~manufacturing~~former manufacturing facilities. It is possible that this matter could affect cash flows and results of operations. Additional details on the environmental exposure can be found in Note 16 of the Notes to Consolidated Financial Statements.

EMPLOYEES

At the end of fiscal year ~~2004~~2005 we had 1,~~558~~541 full-time employees.

AVAILABILITY OF REPORTS

Our Internet Web site address is www.woodhead.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 are available free of charge through our Web site as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.

FORWARD-LOOKING STATEMENTS

The Securities and Exchange Commission encourages companies to disclose forward-looking information, so that investors can better understand a company’s future prospects, and make informed investment decisions. This report, and other written and oral statements that we make from time to time, contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements set out anticipated results based on management’s plans and assumptions. We have tried, wherever possible, to identify such statements by using words such as “anticipate”, “estimate”, “expect”, “plan”, “believe”, and words and terms of similar substance, in connection with any discussion of future operating or financial performance.

FORWARD-LOOKING STATEMENTS

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties, and inaccurate assumptions.

In particular, such risks include statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, general economic and business conditions, currency fluctuations, and competition.

International-based revenues and substantial international assets ~~result~~expose inthe ~~our~~company ~~exposure~~ to currency exchange rate fluctuations. We continue to evaluate the economic and operational impact of all foreign currencies, including its impact on competition, pricing, and foreign currency exchange risks. There is no guarantee, however, that all problems have been foreseen and corrected, or that no material disruption will occur in our businesses.

Growth in costs and expenses, changes in product mix, and the impact of acquisitions, restructuring, divestitures and other unusual items that could result from evolving business strategies could affect future results. Changes in the U.S. tax code and the tax laws in other countries can affect our net earnings. Claims have been brought against us and our subsidiaries for various legal, environmental, and tax matters, and additional claims arise from time to time. It is possible that our cash flows and results of operations could be affected by the resolution of these matters.

Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements.

This discussion of potential risks and uncertainties is by no means complete but is designed to highlight important factors that may impact our outlook. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise.

ITEM 2.

PROPERTIES

We own facilities in the following locations:

Location	Land owned	Floor Area	Business Segment
Juarez, Mexico	16.5 acres	229,000 sq. ft.	Connectivity and Electrical
Northbrook, Illinois	4.7 acres	125,000 sq. ft.	Connectivity and Electrical
Kalamazoo, Michigan	39.1 acres	116,000 sq. ft.	Electrical
Franklin, Massachusetts	6.6 acres	60,000 sq. ft.	Connectivity
El Paso, Texas	5.0 acres	50,000 sq. ft.	Connectivity and Electrical
Ebbw Vale, UK	4.5 acres	43,000 sq. ft.	Connectivity
Belvidere, Illinois	3.5 acres	36,000 sq. ft.	Electrical
Bretten, Germany	1.4 acres	32,000 sq. ft.	Connectivity
Cusano Milanino, Italy	0.1 acres	16,000 sq. ft.	Connectivity
Caudebec-lès-Elbeuf, France	0.2 acres	6,000 sq. ft.	Connectivity

We own all of the above properties in fee, except the land in Ebbw Vale, UK, which is held under a lease expiring in 2105, and the land in Bretten, Germany, which is held under a lease expiring in 2046.

We lease the following properties for use in our operations. In addition to rent, the leases require us to pay directly for taxes, insurance, maintenance and other operating expenses or to pay higher rent when operating expenses increase.

Location	Floor Area	Business Segment
Waterloo, Canada	60,000 sq. ft.	Connectivity
Paderno, Italy	23,000 sq. ft.	Connectivity
Mississauga, Canada	20,000 sq. ft.	Connectivity
Deerfield, Illinois	11,600 sq. ft.	Corporate Headquarters
Lagny-Sur-Marne, France	6,500 sq. ft.	Connectivity
Cusano Milanino, Italy	6,500 sq. ft.	Connectivity
Genoa, Italy	3,300 sq. ft.	Connectivity
Toh Tuck, Singapore	3,000 sq. ft.	Connectivity
Caudebec-lès-Elbeuf, France	2,000 sq. ft.	Connectivity
Leinfelden, Germany	4,500 sq. ft.	Connectivity
Tokyo, Japan	1,~~500~~700 sq. ft.	Connectivity
Shanghai, China	1,~~500~~550 sq. ft.	Connectivity
Kalamazoo, Michigan	1,200 sq. ft.	Electrical
Nagoya, Japan	1,200 sq. ft.	Connectivity
Nagoya, Japan	1,100 sq. ft.	Connectivity
Livonia, Michigan	1,000 sq. ft.	Electrical

We believe we have sufficient capacity available to meet our needs in fiscal year ~~2005~~2006.

ITEM 3.

LEGAL PROCEEDINGS

Selected financial information related to current legal proceedings is contained in Note 16 of the Notes to Consolidated Financial Statements.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter of fiscal year ~~2004~~2005, which ended on October 2 1, ~~2004~~2005, there were no matters submitted to a vote of security holders either through ~~solicitation~~ solicitation of proxies or otherwise.

Executive Officers of the Registrant

All officers are elected each year at the Annual Meeting of the Board of Directors, which is held immediately following the Annual Meeting of Stockholders. The next Annual Meeting of Stockholders will be held on February 3 2, ~~2005~~2006. The name, age, executive office, position held since and principal occupation and employment during at least the past five years for each of our executive officers as of October 2 1, ~~2004~~2005, are as follows:

Name	Age	Position	Position held since
Philippe Lemaitre	5556	Chairman, President and Chief Executive Officer	August 2003
Robert H. Fisher	5657	Vice President of Finance, Chief Financial Officer	December 2000
Michael H. Gies	4546	Vice President, ~~Corporate~~E.V.P. ~~Development~~Woodhead ~~and Strategy~~Europe	~~August~~December ~~2003~~2004
Robert A. Moulton	5556	Vice President, Human Resources	May 1987
Joseph P. Nogal	4950	Vice President, Treasurer/Controller and Assistant Secretary	January 1999
Robert J. Tortorello	5556	Vice President, General Counsel and Secretary	January 1991
Duane E. Wiedor	4647	Vice President, E.V.P. Woodhead North America	January 2003

Mr. Philippe Lemaitre joined the Company in October 1999 as its President and Chief Operating Officer. On January 1, 2001, Mr. Lemaitre became the Company’s President and Chief Executive Officer and on August 1, 2003 he was appointed Chairman of the Board. Prior to joining the Company, he had served as Corporate Vice President, Chief Technology Officer at Amp, Inc. since 1997.

Mr. Robert H. Fisher joined Woodhead in December 2000 as Vice President, Finance and Chief Financial Officer. He previously served as Executive Vice President of Finance for Rockwell International’s Electronic Commerce group from 1998 to 2000. ~~Before that he was Vice President of Finance for US Robotics/3 Com’s Personal Communication business, and Vice President/Controller for Zenith Electronics Corporation.~~

Mr. Michael H. Gies joined Woodhead in January 2000 as Vice President, Marketing and Product Development, Daniel Woodhead Company. He was appointed President, Aero-Motive Company in February 2002. In January 2003 he was elected a Corporate Vice President and Executive Vice President, Global Marketing, Connectivity. In August 2003 he was appointed Vice President, Corporate Development and Strategy. HeIn ~~previously~~December ~~served~~2004 ashe ~~Manager,~~became ~~Transportation~~Executive ~~Industry~~Vice ~~Cinch~~President, Woodhead ~~North American Group, Labinal Inc~~Europe. ~~from 1995 to 2000.~~

Mr. Robert A. Moulton joined Woodhead in October 1986 as Manager, Human Resources and was elected Vice President in May 1987. ~~He previously served as Director, Personnel at G.D. Searle and Company from 1981 to 1986.~~

Mr. Joseph P. Nogal became Woodhead’s Treasurer/Controller in January 1991. He was elected Assistant Secretary in July 1993, and was elected Vice President, Treasurer/Controller in January 1999. ~~He previously served as Controller at Woodhead Canada Limited.~~

Mr. Robert J. Tortorello became our General Counsel and Secretary in June 1987. He was elected Corporate Vice President in January 1991. ~~He previously served as Assistant Vice President and Assistant to the Chairman at Beatrice Companies, Inc. from 1986 to 1987.~~

Mr. Duane E. Wiedor joined Woodhead in April 2001 as President, Aero-Motive Company. In February 2002 he was ~~appointed~~ appointed President, Woodhead Connectivity, N. A. and North American Operations. In January 2003 he was elected a Corporate Vice President and Executive Vice President, Woodhead Connectivity, N. A. In October 2004 he became Executive Vice President, ~~Woodhead~~ Woodhead North America. He previously served as Business Development Manager/Production Manager at Tessy Plastics Incorporated from 1998 to 2001.

PART II

ITEM 5.

MARKET FOR THE COMPANY’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Selected information regarding the company’s common equity and related stockholder matters is contained in Note 19 of the Notes to Consolidated Financial Statements.

ITEM 6.

SELECTED FINANCIAL DATA

The following Financial Profile sets forth selected consolidated financial data for our operations. The data should be read in conjunction with the Management Discussion and Analysis of Financial Condition and Results of Operations and the Financial Statements. The consolidated statement of operations data for each of the last five fiscal years, the related consolidated balance sheet data and other data have been derived from our audited consolidated financial statements.

Financial Profile

(Amounts in thousands; except per share data, employees and stockholders)

	Fiscal Years Ended
	20041			20031			20021			2001			2000
	2005			2004			2003			20021			20011
OPERATIONS
Net sales	$	~~201~~215,~~735~~036		$	~~179~~201,~~038~~735		$	~~170,~~179,038		$	~~190~~170,~~186~~179		$	~~196~~190,~~932~~186
Cost of sales		~~125~~135,~~665~~400			~~112~~125,~~991~~665			~~107~~112,~~770~~991			~~114~~107,~~493~~770			~~115~~114,~~195~~493
Gross profit		7679,~~070~~636			6676,~~047~~070			6266,~~409~~047			7562,~~693~~409			8175,~~737~~693
% of net sales		37.70	%		3637.97	%		36.79	%		3936.87	%		4139.58	%
Operating expenses		6668,~~181~~036			5666,~~855~~181			5456,~~466~~855			5654,~~978~~466			5756,~~322~~978
% of net sales		3231.86	%		3132.8	%		3231.08	%		3032.0	%		2930.10	%
Interest and other expenses		33223			~~(39~~33	)		~~2,820~~(39	)		52,~~159~~820			35,~~567~~159
Income before income taxes		911,~~856~~377			9,~~231~~856			59,~~123~~231			135,~~556~~123			2013,~~848~~556
% of net sales		45.93	%		54.29	%		35.02	%		73.10	%		107.61	%
Provision for income taxes		12,~~818~~991			31,~~392~~818			23,~~578~~392			52,~~722~~578			75,~~716~~722
Income from continuing operations		8,~~038~~386			58,~~839~~038			25,~~545~~839			72,~~834~~545			137,~~132~~834
% of net sales		43.09	%		34.30	%		13.53	%		4.1.5	%		64.71	%
Income from discontinued operations		—			~~730~~—			—730			—			—
% of net sales		~~0.0~~—	%		~~0.4~~—	%		0.04	%		~~0.0~~—	%		~~0.0~~—	%
Net income	$	8,~~038~~386		$	68,~~569~~038		$	26,~~545~~569		$	72,~~834~~545		$	137,~~132~~834
% of net sales		43.09	%		34.70	%		13.57	%		4.1.5	%		64.71	%
Earnings per share, basic:
Earnings per share, basic
From continuing operations	$	0.6769		$	0.5067		$	0.2250		$	0.6822		$	10.1668
From discontinued operations		—			~~0.06~~—			—0.06			—			—
Net income	$	0.6769		$	0.5667		$	0.2256		$	0.6822		$	10.1668
Earnings per share, diluted:
Earnings per share, diluted
From continuing operations	$	0.6668		$	0.4966		$	0.2249		$	0.6622		$	10.1266
From discontinued operations		—			~~0.06~~—			—0.06			—			—
Net income	$	0.6668		$	0.5566		$	0.2255		$	0.6622		$	10.1266
Dividends per share	$	0.40		$	0.3640		$	0.36		$	0.36		$	0.36
Weighted average common shares outstanding, diluted		12,~~202~~266			1112,~~930~~202			11,~~829~~930			11,~~810~~829			11,~~680~~810
OTHER DATA
Net cash flows provided by operating activities		1215,~~350~~798			1712,~~479~~350			2417,~~524~~479			2324,~~435~~524			2123,~~917~~435
Net cash (used for) provided by investing activities		(67,~~991~~629	)		21(6,991	)		~~(7,011~~21	)		(247,~~601~~011	)		(924,~~313~~601	)
Net cash used for financing activities		(8,524	)		(6,827	)		(6,370	)		(3,519	)		(6,035	)
Net cash (used for) financing activities		(8,965	)		(8,524	)		(6,827	)		(6,370	)		(3,519	)
Interest expense, net		21,~~337~~644			2,~~862~~337			2,~~895~~862			32,~~125~~895			23,~~932~~125
Depreciation and amortization		11,~~048~~799			11,~~115~~048			1011,~~366~~115			1110,~~221~~366			1011,~~285~~221
Engineering and product development		11,~~430~~905			811,~~918~~430			8,~~261~~918			78,~~822~~261			7,~~000~~822
YEAR-END POSITIONS
Total assets	$	~~181~~178,~~064~~380		$	~~173~~181,~~856~~064		$	~~166~~173,~~651~~856		$	166,~~868~~651		$	~~162~~166,~~459~~868
Total liabilities		6357,~~630~~701			6563,~~406~~630			6965,~~306~~406			7469,~~149~~306			74,~~499~~149
Working capital (Current assets less current liabilities)		5254,~~788~~782			4852,~~247~~788			3848,~~963~~247			4138,~~438~~963			4641,~~310~~438
Current ratio		2.89 to 1			2.78 to 1			2.47 to 1			2.74 ~~to1~~to 1			2.87 ~~to1~~to 1
Stockholders’ investment		~~117~~120,~~434~~679			~~108~~117,~~450~~434			97108,~~345~~450			9297,~~719~~345			8792,~~960~~719
Long-term debt		2519,~~200~~500			3025,~~900~~200			3630,~~600~~900			4536,~~400~~600			45,~~000~~400
Book value per share	$	9.6784		$	9.0367		$	89.2403		$	8.0224		$	78.7002
Number of employees		1,~~558~~541			1,~~506~~558			1,~~490~~506			1,~~534~~490			1,~~679~~534
Number of stockholders		~~386~~374			~~395~~386			~~402~~395			~~407~~402			~~434~~407

^1.	The company adopted SFAS No. 142 in 2002. Goodwill amortization was $1.5 million in fiscal years 2001 and 2002.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations ~~2004~~2005, ~~2003~~2004 and ~~2002~~2003

Woodhead Industries develops, manufactures and markets network and electrical infrastructure products engineered ~~for~~to ~~performance~~perform in demanding, harsh or hazardous environments. We are known in the global industrial market by our recognized brands which include Brad Harrison®, BradPower™, BradControl™ SST™, Daniel Woodhead®, mPm®, applicom®, Aero-Motive® and RJ-Lnxx®. Our expertise extends from mechanical, electrical and electronics products to communication software products and technologies.

Woodhead operates from twenty-one locations in ten countries spanning North America, Europe and Asia/Pacific.

Sales

Our sales increased 126.76% in fiscal ~~2004~~2005 when compared to ~~2003~~2004. Sales increased ~~year-over-year~~12.7% and 5.2% in fiscal ~~year~~years ~~2003~~2004 ~~but~~and ~~declined~~2003, 10respectively.5% inIt is important to note that as a result of being on a statistical fiscal calendar, the fiscal 2004 fourth quarter and full year ~~2002~~had one more week of operations than the same periods in 2003 and 2005. This impacts all full year revenue year-over-year comparisons shown below by 2.0 points.

Total revenue for fiscal year ~~2004~~2005 was $~~201~~215.70 million compared to $~~179~~201.07 million in fiscal ~~2003~~2004, a 126.76% increase. ~~Sales~~This ~~increased~~increase ~~mainly~~was ~~due~~wholly attributable to the ~~implementation~~increased ofsales ~~several~~in ~~sales,~~our ~~marketing~~Connectivity segment and ~~engineering~~the ~~initiatives~~positive ~~that~~impact weresulting ~~initiated~~from changes in ~~early~~exchange ~~2004~~rates. ~~and~~The ~~the~~growth ~~strengthening~~in ~~business~~our ~~climate~~Connectivity insegment ~~both~~was due mainly to the ~~U.S.~~success of our growth initiatives in North America and ~~international~~improved ~~manufacturing~~operating ~~markets~~results in North America and Asia. Also contributing to this ~~the~~ increase were the positive effects from changes in exchange rates, which accounted for $84.91 million or 52.0 points of the increase~~, and an additional week of operations this fiscal year due to our statistical calendar~~. Partially offsetting these increases were ~~$4.4~~the ~~million~~decreases ofin ~~lost~~our ~~revenue~~Electrical ~~from~~segment ~~the~~due ~~divestiture~~mainly ofto ~~two~~several ~~Aero-Motive~~large ~~product~~non-recurring ~~lines~~government ~~and~~orders ~~$8.5~~that ~~million~~were ofshipped ~~lost revenue from a North American OEM account~~ in the ~~data~~second ~~communication~~and ~~industry.~~third Wequarters ~~recorded sales improvements in all regions~~ of ~~the world~~2004. In constant dollars, we recorded sales ~~increased~~increases in North America, ~~Europe~~ and Asia by ~~3.8%,~~of 127.62% and 4614.35%, respectively. In Europe we recorded a 1.9% decrease in sales.

Connectivity segment sales were $~~147~~162.0 3 million in fiscal ~~2004~~2005 compared to $~~126~~147.30 million in fiscal ~~2003~~2004, a 1610.4% increase. Favorable exchange rates accounted for $84.91 million of the increase and we experienced solid growth in ~~Germany~~North America and Asia. In constant dollars sales increased in North America by 15.3% due mainly to increases in our U.S. physical media and U.S. copper and fiber assemblies of 13.8% and 33.5%, ~~Italy~~respectively. In constant dollars sales increased in Canada, Japan and ~~France~~Asia by 6.7%, ~~This~~13.5% ~~growth~~and ~~was~~16.8%, ~~partially~~respectively. Although constant dollar sales ~~offset~~declined in Europe by ~~the~~1.9% ~~lost~~we ~~revenue~~recorded ofincreases ain ~~North~~both ~~American~~Germany ~~OEM~~and ~~account~~France of 5.3% and 4.7%, respectively. Connectivity sales represented 7275.95% of ~~our~~ total sales in fiscal ~~2004~~2005 compared to 7072.69% in fiscal ~~2003~~2004.

Electrical segment sales were $5452.7 million in fiscal ~~2004~~2005 compared to $5254.7 million in fiscal ~~2003~~2004, a 3.76% ~~increase~~decrease. This ~~increase~~decrease ~~was mainly~~is due to the ~~strong~~non-recurrence ~~performance~~ of ~~our~~several ~~U.S.~~large ~~Electrical~~government ~~business~~orders in 2004, which ~~was~~totaled ~~partially offset by the~~ $43.41 million ~~of lost revenue from the divestiture of two Aero-Motive product lines~~. Electrical segment sales represented 2724.15% of ~~our~~ total sales in fiscal ~~2004~~2005 compared to 2927.41% in fiscal ~~2003~~ 2004.

Sales volume in ~~2004~~2005 compared to ~~2003~~ 2004 was also ~~negatively~~positively impacted by slightly ~~lower~~higher selling prices (less than 1%), which resulted from ~~reduced~~increased prices in the United States.

~~Sales activity in 2003 started to show improvement from the economic conditions that affected the U.S. and international manufacturing environments beginning in 2001.~~ Total ~~revenues~~revenue for fiscal ~~2003~~year ~~were~~2004 was $~~179~~201.07 million compared to $~~170~~179.20 million in fiscal ~~2002.~~2003, ~~This~~a 12.7% increase. ~~was~~Sales ~~all~~increased inmainly ~~our~~due ~~Connectivity~~to ~~segment,~~the ~~which~~implementation ~~had~~of several sales, ofmarketing ~~$126.3~~and ~~million~~engineering initiatives in ~~2003,~~early a2004 ~~12.6%~~and ~~increase~~the ~~from~~strengthening ~~fiscal~~business ~~2002.~~climate ~~The~~in ~~increase~~both ~~was~~the ~~mainly due~~U.S. toand ~~favorable~~international ~~exchange~~manufacturing ~~rates~~markets. (aAlso ~~$9.0~~contributing ~~million~~to ~~gain~~the ~~when~~increase ~~compared~~were tothe ~~2002)~~positive ~~and~~effects ~~improved~~from ~~performance~~changes in ~~our~~exchange ~~European operations~~rates, ~~primarily~~which inaccounted ~~the~~for ~~Physical~~$8.9 ~~Media~~million or ~~and~~5.0 ~~DIN~~points ~~product~~of ~~lines.~~the ~~Connectivity~~increase, ~~sales~~and ~~accounted~~an ~~for~~additional ~~70.6%~~week of ~~total~~operations ~~revenue~~during infiscal ~~2003 and~~2004 ~~65.9%~~due into ~~2002.~~our

Electrical segment sales were $52.7 million in 2003, a 9.1% decrease from fiscal 2002. This decrease was mainly due to the sale of our AKAPP operation, which accounted for $5.7 million of revenue in 2002. Electrical sales accounted for 29.4% of total sales in 2003 and 34.1% in 2002.

~~Sales~~ statistical ~~volume~~calendar. inPartially ~~2003~~offsetting ~~compared~~these toincreases ~~2002~~were ~~was~~$4.4 ~~also~~million ~~negatively~~of ~~impacted~~lost byrevenue ~~slightly~~from ~~lower~~the ~~selling~~divestiture ~~prices~~of ~~(less~~two ~~than~~Aero-Motive ~~1%),~~product ~~which~~lines and $8.5 ~~resulted~~million of lost revenue from ~~competitive~~a ~~market~~North ~~pressures~~American OEM account in the data communication industry. We recorded sales improvements in all regions of the world. In constant dollars, sales increased in North America, Europe and Asia by 3.8%, 12.6% and 46.3%, respectively.

Connectivity segment sales were $147.0 million in fiscal 2004 compared to $126.3 million in fiscal 2003, a 16.4% increase. Favorable exchange rates accounted for $8.9 million of the increase and we experienced solid growth in Germany, Italy, Japan and France. This growth was partially offset by the lost revenue of a North American OEM mentioned above. Connectivity sales represented 72.9% of our total sales in fiscal 2004 compared to 70.6% in fiscal 2003.

Electrical segment sales were $54.7 million in fiscal 2004 compared to $52.7 million in fiscal 2003, a 3.7% increase. This increase was mainly due to the strong performance of our U.S. Electrical business, which was partially offset by the $4.4 million of lost revenue from the divestiture of two Aero-Motive product lines. Electrical sales represented 27.1% of our total sales in fiscal 2004 compared to 29.4% in fiscal 2003.

Sales volume in 2004 compared to 2003 was also negatively impacted by slightly lower selling prices (less than 1%), which resulted from reduced prices in the United States.

Sales by Region

Sales to customers in the United States were $~~111~~119.~~4 million, $107.~~3 ~~million~~ ~~and $106.4~~ million ~~in 2004~~, ~~2003 and 2002, respectively. Sales to customers outside the U.S. were~~ $90111.4 million ~~in 2004, $71.7 million in 2003~~ and $63107.83 million in ~~2002. European sales increased 26.1% in fiscal 2004 mainly due to the positive effects from changes in exchange rates and strong performance in Germany~~2005, ~~Italy and France. Sales in~~ 2004 ~~to customers in Canada~~ and the Far East increased by 14.0% and 56.9%, respectively. The increase in Canada was mainly due to the positive effects from changes in the Canadian dollar and the increase in our SST product line sales. In 2003 ~~European sales increased 11% mainly due to the changes in the Euro exchange rate. In 2003 sales in Canada and the Far East also increased by 8% and 60%~~, respectively ~~when compared to 2002~~.

WeSales ~~collected~~to ~~45%~~customers outside the U.S. were $95.8 million in 2005, 40$90.4 million in 2004 and $71.7 million in 2003. Canadian sales increased 19.4% due to the positive effects from change in the exchange rate and 38the strong Connectivity business. Sales in the Far East increased 16.5% of ~~our~~while ~~revenue~~sales in ~~foreign~~France ~~currencies~~and ~~during~~Germany ~~2004,~~increased ~~2003~~9.1% and ~~2002~~9.6%, respectively. These increases in Europe were partially offset by decreased sales levels in the U.K. and Italy due to weak economic conditions.

European sales increased 26.1% in fiscal 2004 mainly due to the positive effect from changes in exchange rates and strong performance in Germany, Italy and France. Sales in 2004 to customers in Canada and Asia increased by 14.0% and 56.9%, respectively. The increase in Canada was mainly due to the positive effect from changes in the Canadian dollar and the increase in our SST product line sales.

We collected 45% of our revenue in foreign currencies in both fiscal 2005 and 2004 and 40% in fiscal 2003.

Backlog

The backlog of unfilled orders was $1516.5 3 million, $1615.05 million and $1416.30 million at the end of ~~2004~~2005, ~~2003~~2004 and ~~2002~~2003, respectively. The 2004 Connectivity segment backlog as compared to the prior year was up 5.7% from $12.0 million in fiscal 2003 to $12.7 million in fiscal 2004. The Electrical segment backlog decreased from $4.0 million in fiscal 2003 to $2.8 million in fiscal 2004, a 29.4% decrease. This decrease was due to the divestiture of the Aero-Motive product line during 2004.

The fiscal 2005 Connectivity segment backlog was up 8.4% when compared to fiscal 2004. This increase in the backlog of our Connectivity segment was due mainly to increases in our North American operations. The Electrical segment recorded an 8.7% decrease in backlog when compared to fiscal 2004.

The 2004 Connectivity segment backlog was $12.7 million, up 5.7% from $12.0 million in fiscal 2003. The Electrical segment backlog decreased from $4.0 million in fiscal 2003 to $2.8 million in fiscal 2004, a 29.4% decrease. This decrease was due to the divestiture of the Aero-Motive product line during 2004.

Gross Profit

In ~~2004~~2005 gross profit as a percent of sales ~~increased~~decreased to 37.70% from 3637.97% in ~~2003~~fiscal 2004. This Wedecrease ~~are starting to show improvements~~ in ~~our~~ gross ~~margins as~~profit ~~our~~was ~~operating efficiencies improve~~ due tomainly ~~the increase in sales volume. Margin rates will continue~~ to ~~increase~~issues asthat ~~our~~occurred ~~sourcing programs progress and our product mix improves. Partially offsetting these favorable improvements to gross margins were increases~~ in ~~commodity prices, reductions in selling prices (mainly in~~ our ~~North~~Electrical ~~American~~segment ~~operations),~~during ~~start-up costs associated with~~ the ~~Aero-Motive~~first ~~production move to Mexico~~ and ~~lower~~fourth ~~margins~~quarters inof ~~the telecommunications market.~~

In 2003 gross profit as a percent of sales increased to 36.9% from 36.7% in 2002. This increase was mainly due to improved efficiencies and productivity improvements, particularly from the migration of production to our Juarez, Mexico facility. Also contributing to this increase in the gross profit level was a $0.7 million decrease in obsolescence expense. Partially offsetting these improvements were lower pricing, the shift in sales mix by location and lower margins in the telecommunications market.

Operating Expenses

Operating expenses as a percent of sales were 32.8% in 2004, 31.8% in 2003 and 32.0% in 2002. Operating expenses increased to $66.2 million in fiscal 2004 from $56.9 million in fiscal 2003, a 16.4% increase. Operating expenses, excluding the Aero-Motive restructuring charge, were $65.1 million in fiscal 2004 compared to $54.8 million in fiscal 2003, an 18.8% increase. The increase in operating expenses was driven by the planned growth initiatives in sales, marketing and engineering. Included in these growth initiatives was the hiring of additional experienced sales professionals in North America, a branding study to maximize the value of our brand names, the development of a new E-Catalog, the improvement of our marketing tools and programs to increase our customer awareness. Changes in exchange rates had a negative impact of $2.7 million on fiscal 2004 operating expenses and an additional week of operations due to our statistical calendar also contributed to the increase. Also contributing to the year-over-year increase was the modification of our retiree medical program. In fiscal 2004 this change resulted in a credit of $0.8 million compared to the credit of $1.5 million in fiscal 2003. The Aero-Motive restructuring program is now complete with charges in fiscal 2004 of $1.1 million compared to $2.1 million in fiscal 2003. Included in the 2004 restructuring charge was $0.4 million of pension settlement expense triggered by reduced employment levels that required us to recognize past gains and losses in our pension plan accounts.

~~While~~ 2005. ~~operating~~There ~~expenses~~were asseveral small issues that occurred during the first quarter when combined had a ~~percent~~significant ofimpact ~~sales~~on ~~decreased~~our ingross ~~2003~~profit. First, costs associated with the ~~actual~~launch ~~expenses~~of ~~increased~~our tonew ~~$56.9~~Electrical ~~million~~consumer inproduct, ~~2003 from~~including ~~$54.5~~the ~~million~~freight inand ~~2002.~~logistics ~~The~~costs ~~dollar~~of ~~increase~~getting ~~was~~the ~~mainly~~product ~~due~~from China to the ~~$2.1~~individual ~~million~~stores, ~~restructuring~~were ~~charge~~much ~~for~~higher ~~the~~than ~~migration~~planned. ofSecond, ~~our~~freight ~~operations~~costs ~~from~~associated ~~our~~with ~~Aero-Motive~~the ~~subsidiary~~final migration of production to Juarez, Mexico. ~~Also~~were ~~contributing~~higher tothan ~~the~~planned ~~increase~~due into ~~operating~~not ~~expenses~~changing ~~in 2003~~our ~~was~~supplier base from the $2Midwest.6 ~~million~~Finally, ~~negative~~we ~~impact~~had ~~from~~a ~~foreign~~temporary ~~exchange~~shift ~~rate~~towards ~~changes~~certain ~~and~~lower ~~the~~margin ~~upgrading~~lighting inproducts ~~the~~due ~~sales,~~to ~~marketing~~several ~~and~~large ~~engineering~~one-time ~~areas~~orders. ~~Partially~~While substantial ~~offsetting~~progress was made on these ~~increases~~issues ~~were~~during the ~~$1.5~~year, ~~million~~their ~~credit~~impact tomaterially ~~operating~~affected ~~expense~~full ~~due~~year toresults. In the ~~modification~~ offourth ~~our~~quarter ~~retiree~~the ~~medical~~Electrical ~~program,~~margin ~~the~~was ~~non-recurrence~~adversely ofimpacted aby ~~restructuring~~higher ~~charge~~LIFO ~~for~~and $1freight costs.0 ~~million~~Connectivity product margins improved year-over-year primarily due to ~~account~~better ~~for~~plant ~~severance~~utilization, increases in our copper and ~~related~~fiber ~~costs~~product tolines ~~eliminate~~and ~~approximately~~improved ~~10%~~operations ofin Asia. On a consolidated level our ~~salaried~~gross ~~positions~~profit ~~worldwide~~increased infrom ~~2002~~34.4% ~~and~~in the ~~elimination~~first quarter of 2005 to 38.0% ~~AKAPP~~in ~~operating~~the ~~expenses,~~fourth ~~which~~quarter ~~were~~of $12005.8 ~~million.~~

In 2004 gross profit as a percent of sales increased to 37.7% from 36.9% in fiscal 2003. During the year we started to show improvements in our gross margins as our operating efficiencies improved due to the increase in sales volume. Partially offsetting these favorable improvements to gross margins were increases in commodity prices, reductions in selling prices (mainly in our North American operations), start-up costs associated with the Aero-Motive production move to Mexico and lower margins in the telecommunications market.

Operating Expenses

Operating expenses as a percent of sales were 31.6% in 2005, 32.8% in 2004 and 31.8% in 2003.

Operating expenses increased to $68.0 million in fiscal 2005 up from $66.2 million in fiscal 2004, a 2.8% increase. The major increases in 2005 operating expenses were $2.4 million of incremental expense associated with Sarbanes-Oxley compliance, $1.5 million from changes in foreign exchange rates when compared to fiscal 2004 and the non-recurrence of a $0.8 million credit from the reduction in our liability for retiree medical benefits that occurred in fiscal 2004. Partially offsetting these increases were $1.6 million of reduced costs associated with our Management Incentive Plan, the elimination of the $1.1 million of restructuring charges related to the migration of our operations from our Aero-Motive subsidiary to Juarez, Mexico and the extra fiscal week, which was worth approximately $1.0 million.

Operating expenses increased to $66.2 million in fiscal 2004 from $56.9 million in fiscal 2003, a 16.4% increase. Operating expenses, excluding the Aero-Motive restructuring charge, were $65.1 million in fiscal 2004 compared to $54.8 million in fiscal 2003, an 18.8% increase. The increase in operating expenses was driven by the planned growth initiatives in sales, marketing and engineering. Included in these growth initiatives were the hiring of additional experienced sales professionals in North America, a branding study to maximize the value of our brand names, the development of a new E-Catalog, the improvement of our marketing tools and programs to increase our customer awareness. Changes in exchange rates had a negative impact of $2.7 million on fiscal 2004 operating expenses and an additional week of operations due to our statistical calendar contributed approximately $1.0 million to the increase. Also contributing to the year-over-year increase was the modification of our retiree medical program. In fiscal 2004 this change resulted in a credit of $0.8 million compared to the credit of $1.5 million in fiscal 2003. The Aero-Motive restructuring program was completed with charges in fiscal 2004 of $1.1 million compared to $2.1 million in fiscal 2003. Included in the 2004 restructuring charge was $0.4 million of pension settlement expense triggered by reduced employment levels that required us to recognize past gains and losses in our pension plan accounts.

Segment Operating Income

Income from operations in our Connectivity segment increased to $9.7 million or 6.0% of sales in fiscal 2005 compared to $4.6 million or 3.1% of sales in 2004. The combined effect of increased revenue, better plant utilization and improved gross margins were the main factors in improved income from operations. Gross margins in our Connectivity segment increased to 37.0% in fiscal 2005 from 35.8% in fiscal 2004. These factors

were partially offset by increased operating expenses for the segment. Income from operations in our Electrical segment decreased to $4.8 million or 9.1% of sales from $6.6 million or 12.0% of sales in 2004. This decrease in income from operations was due to reduced revenue, a shift in product mix and the gross profit issues mentioned earlier. These factors were partially offset by lower operating expenses in fiscal 2005 caused primarily by the decrease in incentive paid under the 2005 Management Incentive Plan and no restructuring expense in 2005.

Income from operations in our Connectivity segment decreased to $4.6 million, or 3.1% of sales, in fiscal 2004 from $5.1 million, or 4.0% of sales, in fiscal 2003. This decrease was mainly due to a shift in product mix and the increase in operating costs from our growth initiatives. Income from operations in our Electrical segment increased to $6.6 million, or 12.0% of sales, in fiscal 2004 from $4.8 million, or 9.1% of sales, in fiscal 2003. The increase in the Electrical segment operating income was the result of our efforts to improve cost efficiencies and the decrease in the Aero-Motive restructuring charge to $1.1 million in fiscal 2004 from $2.1 million in fiscal 2003. Partially offsetting this increase was the $4.4 million of lost revenue from the divestiture of two Aero-Motive product lines.

Income from operations in our Connectivity segment increased to $5.1 million, or 4.0% of sales, in 2003 from $2.9 million, or 2.6% of sales, in 2002. This increase was mainly due to higher sales and lower obsolescence expense. A shift in sales mix and the weak telecommunications market partially offset these improvements. Income from operations in our Electrical segment declined to $4.8 million, or 9.1% of sales, from $5.8 million, or 9.9% of sales, in 2002. The decrease in our Electrical segment was mainly due to the $2.1 million restructuring charge for the Aero-Motive actions in 2003 and the $0.4 million from the AKAPP divestiture.

Interest (Income) / Expense

Interest expense was $21.5 9 million in ~~2004~~2005, $32.15 million in ~~2003~~2004 and $3.01 million in ~~2002~~2003 primarily for interest paid on our long-term debt incurred in connection with the mPm and SST acquisitions in 1998. ~~The~~When ~~decrease~~comparing infiscal ~~interest~~2005 ~~expense~~to ~~during~~ fiscal 2004 the decrease in interest was due to apaying off $45.2 7 million ~~reduction~~of in our senior guaranteed notes, ~~which~~at ~~occurred~~the onend ~~September~~of ~~30,~~fiscal ~~2003~~2004. ~~The~~Also ~~increase~~reducing inour fiscal 2005 interest expense inwas ~~2003~~a credit ~~compared~~for tothe ~~2002~~capitalization ~~was~~of ~~due~~interest related to ~~$0.3~~the ~~million~~implementation of ~~interest paid on~~ a ~~value~~global ~~added~~ERP ~~tax~~and ~~ruling~~financial inreporting ~~Mexico~~system.

The decrease in interest expense during fiscal 2004 was due to a $4.2 million reduction in our senior guaranteed notes, which occurred on September 30, 2003.

Other (Income) / Expense

Other (income)/expense in ~~2004~~2005 was ($21.34) million compared to ($2.93) million in ~~2003~~2004. The ~~2004~~2005 income consisted mainly of a $10.28 million ~~gain~~gains realized from exchange rate changes on ~~the~~a ~~sale~~U.S. Dollar ofdenominated ~~the~~loan ~~Aero-Motive~~in ~~government~~Canada. ~~hose~~Also ~~reel~~included ~~product~~in ~~line~~fiscal ~~and~~2005 awere earn-out fees of $1.0.3 million ~~gain~~received ~~realized~~for ~~from~~the ~~exchange~~sale ~~rate~~of ~~changes,~~the ~~due~~Aero-Motive ~~primarily~~product line toin athe ~~U.S.~~first ~~Dollar~~quarter ~~denominated~~of ~~loan~~2004 ~~that~~and ~~our~~the ~~Canadian subsidiary~~gain ~~used~~of to$0.2 ~~acquire~~million from the ~~assets~~divestiture of ~~SST~~a insmall ~~early~~product ~~1998~~line in Germany.

Other (income)/expense in ~~2003~~2004 was ($2.93) million compared to ($02.19) million in ~~2002~~2003. The ~~2003~~2004 income consisted mainly of a $21.42 million gain ~~realized from exchange rate changes~~ on the ~~U.S.~~divestiture ~~Dollar denominated loan, a $0.8 million gain from the sale~~ of the Aero-Motive ~~workstation~~government hose reel product line and a $01.20 million ofgain ~~expense~~realized ~~related~~from toexchange anrate ~~adverse~~changes ~~value~~on ~~added~~the ~~tax~~U.S. Dollar ~~ruling~~denominated ~~in Mexico~~loan.

Income from Continuing Operations

Income from continuing operations was $8.04 million, or 43.09% of net sales, in ~~2004~~2005, $5.8.0 million, or 34.30% of net sales, in ~~2003~~2004 and $2.5.8 million, or 13.53% of net sales, in 2002. The 2004 increase in income from continuing operations was mainly due to increased revenue and improved margins, which was the result of improved operating efficiencies in both our Connectivity and Electrical segments and a lower Aero-Motive restructuring charge. Also contributing to the increase was the lower effective tax rate in fiscal 2004, which was 18.4%, compared to 34.1% in fiscal 2003.

11The increase in income from continuing operations in fiscal 2005 was mainly due to increased revenue and the increased margins in our Connectivity segment. These two factors were partially offset by increased operating expenses and a higher effective tax rate in fiscal 2005. The fiscal 2005 effective tax rate was 26.3% compared to 18.4% in fiscal 2004.

The 2004 increase in income from continuing operations was mainly due to increased revenue and improved margins, which was the result of improved operating efficiencies in both our Connectivity and Electrical segments and a lower Aero-Motive restructuring charge. Also contributing to the increase was the lower effective tax rate in fiscal 2004, which was 18.4%, compared to 34.1% in fiscal 2003.

The 2003 increase in income from continuing operations when compared to 2002 was mainly due to the gain from exchange rate changes on the U.S. dollar loan that our Canadian subsidiary has outstanding, improved operating efficiencies, and the sale of the Aero-Motive workstation product line. Also contributing to the increase was the lower effective tax rate in fiscal 2003, which was 34.1%, compared to 50.3% in fiscal 2003. The increases were partially offset by the Aero-Motive restructuring charges.

Discontinued Operations

In the first fiscal quarter of 2003 we sold our AKAPP operations for $4.9 million in cash. This sale resulted in a gain of $0.7 million and was recorded as Income from Discontinued Operations. The results of operations related to AKAPP for fiscal 2003 were also recorded as Income from Discontinued Operations.

Net Income

Net income was $8.04 million, or 43.09% of net sales, in ~~2004~~2005, $68.60 million, or 34.70% of net sales, in ~~2003~~2004 and $26.56 million, or 13.57% of net sales, in ~~2002~~2003. ~~The 2004 increase in net income was due to the increase in income from continuing operations, the reduced interest expense and the lower effective tax rate.~~

The ~~2003~~2005 increase in net income ~~when compared to 2002~~ was due to the increase in income from continuing operations, and ~~specifically~~ the ~~positive~~reduced ~~exchange~~interest ~~rate changes~~expense, ~~improved~~which ~~efficiencies,~~was ~~the~~partially ~~Aero-Motive~~offset ~~product~~by ~~line sale~~lower ~~and~~other income ~~generated~~and ~~from~~ the ~~AKAPP~~higher ~~sale~~effective tax rate.

~~Our~~The ~~effective tax rate was 18.4% in~~ 2004, ~~34.1%~~increase in ~~2003~~net ~~and~~income ~~50.3% in 2002. In 2004 the low tax rate~~ was due to ~~improved~~the ~~international~~increase ~~operations, a change~~ in ~~the~~income ~~valuation~~from ~~allowance~~continuing ~~related to our French~~ operations, ~~higher tax credits and~~ the ~~utilization~~reduced ofinterest ~~capital~~expense, ~~loss carryforwards~~lower ~~created~~other ~~in 2001. The 2003~~ income ~~tax~~and ~~rate was close to~~ the ~~U.S.~~lower ~~federal statutory rate. In 2002 the low level of profitability combined with certain items not deductible in Europe resulted in the high~~ effective tax rate.

Our effective tax rate was 26.3% in 2005, 18.4% in 2004 and 34.1% in 2003.

In 2005 the tax rate was impacted by a tax benefit related to the reversal of a $0.5 million income tax contingency accrual following the completion of an Internal Revenue Service audit of our fiscal 2002 income tax return. In 2004 the low tax rate was due to improved international operations, a change in the valuation allowance related to our French operations, higher tax credits and the utilization of capital loss carryforwards created in 2001.

Financial Condition, Liquidity and Capital Resources

Assets

At fiscal year-end ~~2004~~2005 we had $1613.79 million in cash and short-term investments, down from $2216.57 million at the end of ~~2003~~2004. ~~The~~Although ~~decrease in~~ our 2005 cash ~~balance~~flow ~~was~~from ~~mainly~~operations increased ~~due~~year-over-year toby ~~operating~~$3.4 ~~cash~~million ~~flow~~to of $1215.48 million, ~~which~~our ~~was~~cash ~~more~~decreased ~~than~~due ~~offset~~to byspending $79.41 million ~~for~~on ~~the purchase of~~ property, plant and equipment, the ~~long-term debt~~ payment of $5.7 million of long-term debt and dividend payments of $4.89 million. ~~Operating~~ ~~cash~~Cash flow from operations was negatively impacted by increases in our accounts receivable and inventory levels during fiscal ~~2004.~~2005, ~~Both accounts increased~~ due to higher revenue ~~increases~~ and inventories ~~were also up due~~ to ~~the~~meet ~~temporary~~customer ~~build up in inventory to facilitate the migration of Aero-Motive products to Juarez, Mexico~~demands. ~~The change in exchange rates also increased our asset values.~~

Working capital in ~~2004~~2005 increased to $5254.8 million from $4852.28 million in ~~2003~~2004. This increase in working capital was mainly due to ~~increased~~ higher inventory and accounts receivable levels. ~~and~~These ~~the~~increases ~~exchange~~were ~~rate~~partially ~~effects~~offset onby ~~our~~a ~~foreign~~decrease ~~assets~~in accrued liabilities due to lower incentive pay under the 2005 Management Incentive Plan.

We continued to invest in property, plant and equipment, including new machinery, computer systems and facility improvements. Purchases of property, plant and equipment were ~~a more normal~~ $79.41 million in ~~2004~~2005 compared to $47.54 million in ~~2003~~2004. In 2004 we started the process of upgrading and standardizing our ERP and financial reporting systems, which increased spending in fiscal 2005. The project will be completed worldwide in ~~2006~~2007.

Our cash and short-term investments are available for strategic investments, acquisitions and other potential cash needs that may arise. We believe that existing cash and short-term investments, together with funds generated from operations, will be sufficient to meet our operating requirements in ~~2005~~2006.

Liabilities

At fiscal year-end ~~2004~~2005 we had $3025.92 million of long-term debt outstanding ($5.7 million shown as current debt) and we had unused credit facilities that provide for additional borrowings of ~~up to~~ $25.0 million. On April 28, 2004 we entered into a new three-year revolving credit agreement with our existing bank that will continue to provide for ~~borrowings up to $25.0 million at the bank’s prime or offered~~ rate. This agreement will expire on April 28, 2007. This new revolving credit agreement states that the maximum ratio of debt to EBITDA, as defined, shall be no greater than 2.5 to 1.0 and the minimum interest coverage ratio, as defined, shall be no less than 2.5 to 1.0. Additional information on debt covenants can be found in Note 2 A of the Notes to Consolidated Financial Statements.

borrowings up to $25.0 million at the bank’s prime or offered rate. This agreement will expire on April 28, 2007. This new revolving credit agreement states that the maximum ratio of debt to EBITDA, as defined, shall be no greater than 2.5 to 1.0 and the minimum interest coverage ratio, as defined, shall be no less than 2.5 to 1.0. Additional information on debt covenants can be found in Note 2 A of the Notes to Consolidated Financial Statements.

Contractual Obligations

A summary of our contractual obligations as of October 2 1, ~~2004~~2005 is as follows:

	Payments due by period
	Total		2005		2006- 2007		2008- 2009		After 2009
Contractual obligation	Total		2006		2007-2008		2009-2010		After2010
Contractual obligation
Long-term debt	$	25,200	$	5,700	$	12,000	$	3,000	$	4,500
Long-term debt	$	30,900	$	5,700	$	11,400	$	7,800	$	6,000
Operating leases		4,057		1,332		1,867		536		322
Operating leases		5,471		1,465		2,473		892		641
Unconditional purchase obligations		8,851		8,782		69		—		—
Unconditional purchase obligations		11,306		11,306		—		—		—
Other long-term liabilities		799		364		432		3		—
Other long-term liabilities		677		406		271		—		—
Total contractual obligations	$	38,907	$	16,178	$	14,368	$	3,539	$	4,822
Total contractual obligations	$	48,354	$	18,877	$	14,144	$	8,692	$	6,641

Unconditional purchase obligations include amounts committed under legally enforceable contracts or purchase orders for goods and services with defined terms as to price, quantity and delivery. Other long-term liabilities ~~represent~~included the cost to terminate the agreement on the fair ~~value~~ value of our cross-currency swap. The fair value of the swap is valued at the balance sheet date, October 2 1, ~~2004~~2005.

Cash Flows

Net cash flow provided by operating activities was $1215.48 million in ~~2004~~2005, ~~down from~~ $1712.54 million in ~~2003~~2004 and $2417.5 million in ~~2002~~2003. The ~~decrease~~increase in ~~2004~~2005 operating cash flow ~~was primarily due to the increase in accounts receivable and inventory levels~~ compared to ~~reductions~~2004 ~~in fiscal 2003. The increase in accounts receivable~~ was due mainly to the ~~sales~~reduced ~~results in the fourth quarter~~ rate of ~~2004~~spending ~~and~~on ~~the higher percentage of sales coming from Europe. The increase in~~ inventory ~~was due to the temporary build up in inventory to facilitate the migration of Aero-Motive products to Mexico~~ and ~~the~~higher ~~impact~~accounts ~~of exchange rates on our foreign balances~~payable. Partially offsetting these ~~increases~~reductions ~~was an increase to both accounts payable and other liabilities. The decrease~~ in ~~2003 operating~~ cash ~~flows~~spending was ~~due~~the tolower aaccrued ~~smaller~~liability ~~reduction~~for inincentive ~~inventory and an increase in prepaid expenses when compared to fiscal 2002~~pay. ~~The increase in prepaid expense was due to a $2.0 million contribution to the pension plan.~~

InThe ~~fiscal~~decrease in 2004 operating cash ~~flows~~flow ~~from~~was ~~investing activities~~primarily ~~included~~due ~~$7.4~~to ~~million~~the ofincrease ~~capital~~in ~~additions.~~accounts Inreceivable and inventory levels compared to reductions in fiscal 2003. ~~cash~~The increase ~~flows~~in ~~from~~accounts ~~investing~~receivable ~~activities~~was ~~included~~due ~~$4.5~~mainly ~~million~~to ofthe ~~capital~~sales ~~additions~~results in the fourth quarter of 2004 and ~~cash~~the ~~received~~higher percentage of ~~$4.2~~sales ~~million~~coming from Europe. The increase in inventory was due to the ~~sale~~temporary build up in inventory to facilitate the migration of ~~AKAPP~~Aero-Motive ~~operations~~products to Mexico and the impact of exchange rates on our foreign balances. Partially offsetting these increases was an increase to both accounts payable and other liabilities.

~~Net~~In fiscal 2005 cash ~~used~~flows ~~for~~from ~~financing~~investing activities inincluded ~~2004,~~$9.1 ~~2003~~million ~~and 2002 includes the repayment~~ of ~~debt~~capital ~~in the amounts of $5~~additions.7 ~~million,~~In ~~$4.2~~fiscal ~~million~~2004 and ~~$4.9~~2003 ~~million,~~cash ~~respectively,~~flows ~~and~~from ~~dividend~~investing ~~payments~~activities toincluded ~~our shareholders of~~ $47.~~8 million, $~~4.3 million and $4.25 million, ~~respectively.~~of Incapital ~~fiscal 2004 we increased our dividend per share to $0.40 from $0.36~~additions, ~~which explains the increase in dividend payments during the fiscal year~~respectively.

Net cash used for financing activities includes the repayment of debt in the amounts of $5.7 million in years 2005 and 2004 and $4.2 million in 2003. Dividend payments to our shareholders were $4.9 million, $4.8 million and $4.3 million in years 2005, 2004 and 2003, respectively. In fiscal 2004 we increased our annual dividend per share to $0.40 from $0.36, which accounts for the increase in dividend payments during fiscal years 2005 and 2004.

Financial Instruments

In our global operating activities, and in the normal course of our business, we are exposed to changes in foreign currency exchange rates that may adversely affect our results of operations and financial condition. We seek to ~~minimize those risks through our regular~~ ~~operating activities and, when deemed appropriate, through the use of~~

1314

minimize those risks through our regular operating activities and, when deemed appropriate, through the use of financial instruments. We use financial instruments to selectively hedge our foreign currency risk and do not use financial instruments for speculative purposes. Additional details on our foreign exchange exposures can be found in Note 2 B and C of the Notes to Consolidated Financial Statements.

Contingent Liabilities and Environmental Matters

Our operations are subject to international, federal, state and local environmental laws and regulations. We are party to an environmental matter, which obligates us to investigate, remediate or mitigate the effects on the environment of the release of certain substances at one of our manufacturing facilities. It is possible that this matter could affect cash flows and results of operations. Additional details on the environmental exposure can be found in Note 16 of the Notes to Consolidated Financial Statements.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Critical accounting policies for the business include revenue recognition, valuation of long-lived assets, accounting for contingent liabilities and environmental matters and accounting for income taxes. There were no material changes made to critical accounting estimates compared to prior years.

REVENUE RECOGNITION—We recognize revenue upon transfer of title at the time of shipment or services provided, when all significant contractual obligations have been satisfied, the price is fixed or determinable and collection is reasonably assured. At the end of ~~2004~~2005 we had $12.50 million accrued for warranty costs, sales returns, sales incentives, price adjustments and other allowances based on prior claims experience and other quantitative and qualitative factors. No single customer accounted for more than 10% of revenue.

VALUATION OF LONG-LIVED ASSETS—Our long–lived assets include land, buildings, equipment, molds and dies, purchased software, goodwill and other intangible assets. Long-lived assets, other than goodwill, are depreciated over their estimated useful lives. We review long-lived assets other than goodwill for impairment to assess recoverability from future operations using undiscounted cash flows. Goodwill and indefinite-lived intangible assets are reviewed annually for impairment under the provisions of Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets.” Fair values are estimated based upon forecasted cash flows discounted to present value. The fair value of our long-lived assets is dependent on the future performance of individual operations as well as volatility inherent in their external markets. If estimated forecasts are not met and actual cash flows or discount rate estimates change, we may have to record an impairment charge not previously recognized. We currently have $3635.87 million of goodwill on our consolidated balance sheet. No impairment charges were recorded in 2005, 2004, ~~2003~~ or ~~2002~~2003.

ACCOUNTING FOR CONTINGENT LIABILITIES AND ENVIRONMENTAL MATTERS—We have incurred and expect to incur assessment, remediation and related costs at one of our facilities for the costs of cleaning up contamination resulting from past spills, disposal or other releases of hazardous substances. We have been conducting an investigation of soil and groundwater at the site with oversight by the Michigan Department of Environmental Quality (“DEQ”). We estimate that $1.75 million of investigation and remediation expense remain to be incurred over the next 1413 years. We have a reserve for such purpose. Our cost estimates are subject to uncertainty because of the extent of the contamination area, changes in remediation technology and ongoing DEQ feedback. We may incur significant additional assessment, remediation and related costs at the site and such costs could materially and adversely affect our consolidated net income for the period in which such costs are incurred.

~~ACCOUNTING~~15 FOR INCOME TAXES—SFAS No. 109, “Accounting for Income Taxes”, establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for future tax consequences of events that have been recognized in our financial statements or tax returns.

ACCOUNTING FOR INCOME TAXES—SFAS No. 109, “Accounting for Income Taxes”, establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for future tax consequences of events that have been recognized in our financial statements or tax returns. We have on our balance sheet net deferred tax assets of $1.0.2 million. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Fluctuations in the actual outcome of these tax consequences could impact our financial position or the results of operations.

FORWARD-LOOKING STATEMENTS

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Selected financial information related to quantitative and qualitative market risk is contained in Note 2 of the Notes to Consolidated Financial Statements.

1516

ITEM 8.

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Management’s Report ofon ~~Management~~Internal Control Over Financial Reporting

Woodhead Industries, Inc. management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the ~~integrity~~Securities and Exchange Act of ~~the~~1934. ~~information~~Internal ~~presented~~control inover ~~this~~financial ~~Annual~~reporting ~~Report~~is ona ~~Form~~process ~~10-K,~~designed ~~including~~to provide reasonable assurance regarding the ~~Company’s~~reliability of financial ~~statements.~~reporting ~~These~~and the preparation of financial statements ~~have~~for ~~been~~external ~~prepared~~purposes in ~~conformity~~accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes policies and ~~include~~procedures that: (1) pertain to the maintenance of records that, ~~where~~in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, ~~estimates~~and that receipts and ~~judgments~~expenditures byare being made only in accordance with authorization of management and our directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have material effect on the financial statements.

WeOur ~~maintain~~management ~~systems~~conducted an assessment of ~~accounting~~the ~~and~~effectiveness of our internal ~~controls~~control ~~designed~~over tofinancial ~~provide~~reporting ~~assurance~~as ~~that~~of ~~assets~~October 1, ~~are~~2005, ~~properly~~based ~~accounted~~on ~~for~~the asframework ~~well~~set asforth in toInternal ~~insure~~Control ~~that~~– Integrated Framework issued by the ~~financial records~~Committee ~~are~~of ~~reliable~~Sponsoring ~~for~~Organizations ~~preparing~~of ~~financial~~the ~~statements~~Treadway Commission. ~~The~~Based ~~systems~~on ~~are~~this ~~augmented~~assessment, bymanagement ~~qualified~~has ~~personnel~~concluded ~~and~~that ~~are~~our ~~reviewed~~internal oncontrol aover ~~periodic~~financial ~~basis~~reporting was not effective as of October 1, 2005 because of the material weakness we identified, as outlined below.

~~Our~~A ~~independent~~material ~~registered~~weakness ~~public~~in ~~accounting~~internal ~~firm,~~controls ~~Ernst~~is &a ~~Young~~significant ~~LLP~~deficiency, ~~conducts~~or ~~annual~~combination ~~audits~~ of ~~our~~significant ~~financial~~deficiencies, ~~statements~~that result in ~~accordance~~more ~~with~~than ~~auditing~~a ~~standards generally~~remote ~~accepted~~likelihood inthat ~~the~~a ~~United~~material ~~States,~~misstatement ~~which include the review~~ of ~~internal controls for~~ the ~~purpose~~financial ofstatements would ~~establishing~~not ~~audit~~be ~~scope,~~prevented ~~and~~or ~~issue~~detected ~~an opinion~~ on ~~the~~a ~~fairness~~timely ~~of such financial statements~~basis.

~~The~~We ~~Audit~~did ~~Committee,~~not ~~which is composed solely of independent directors, meets periodically~~maintain ~~with~~effective ~~management~~controls ~~and~~over the ~~independent~~accounting ~~registered~~for ~~public~~inventory. ~~accounting~~We ~~firm~~have todetermined ~~review~~that ~~the~~certain ~~manner~~inventory inreconciliations ~~which~~were ~~they~~not ~~are~~operating ~~performing~~effectively ~~their~~during ~~responsibilities~~fiscal ~~and~~2005. An adjustment to ~~discuss~~correct ~~auditing,~~the ~~internal~~overstatement ~~accounting~~of ~~controls,~~inventory and ~~financial~~understatement ~~reporting~~of ~~matters.~~cost ~~The independent~~of ~~public~~sales ~~accountants~~was ~~periodically~~recorded ~~meet~~by ~~alone with~~ the ~~Audit~~company ~~Committee~~during ~~and~~2005 ~~have~~subsequent ~~free access~~ to the ~~Audit~~identification ~~Committee~~of atthe ~~any~~material ~~time~~weakness.

Our assessment of the effectiveness of our internal control over financial reporting as of October 1, 2005 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included elsewhere herein.

/S/ PHILIPPE LEMAITRE

Philippe Lemaitre

Chairman, President and Chief Executive Officer

/S/ ROBERT H. FISHER

Robert H. Fisher

Vice President, Finance and Chief Financial Officer

1617

Report of Independent Registered Public Accounting Firm

To The Board of Directors and Shareholders of ~~Woodhead Industries, Inc.:~~

~~We have audited the accompanying consolidated balance sheets of~~ Woodhead Industries, Inc. (a Delaware corporation) and subsidiaries as of October 2, 2004 and September 27, 2003, and the related consolidated statements of income, stockholders’ investment, comprehensive income and cash flows for each of the three years in the period ended October 2, 2004. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We have audited the accompanying consolidated balance sheets of Woodhead Industries, Inc. (a Delaware Corporation) and subsidiaries as of October 1, 2005 and October 2, 2004, and the related consolidated statements of income, stockholders’ investment, comprehensive income and cash flows for each of the three years in the period ended October 1, 2005. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, the ~~consolidated~~ financial statements referred to above present fairly, in all material respects, the consolidated financial position of Woodhead Industries, Inc. and subsidiaries at October 2 1, ~~2004~~2005 and ~~September 27~~October 2, ~~2003~~2004, and the consolidated results of their operations and their cash flows for each of the three years in the period ended October 2 1, ~~2004~~2005, in conformity with U.S. generally accepted accounting principles.

/We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Woodhead Industries, Inc.’s/ ~~Ernst~~internal &control ~~Young~~over ~~LLP~~financial ~~Chicago~~reporting as of October 1, ~~Illinois~~2005, ~~November~~based 12on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated December 9, ~~2004~~2005 expressed an unqualified opinion on management’s assessment of the effectiveness of internal control over financial reporting and an adverse opinion on the effectiveness of internal control over financial reporting.

17/S/ ERNST & YOUNG LLP Ernst & Young LLP Chicago, Illinois December 9, 2005

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Woodhead Industries, Inc.

We have audited management’s assessment, included in the accompanying Management’s Report on Internal Control over Financial Reporting, that Woodhead Industries, Inc. did not maintain effective internal control over financial reporting as of October 1, 2005, because of the effect of a material weakness due to inadequate controls and procedures relating to effective and timely completion of inventory reconciliations, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Woodhead Industries, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weakness has been identified and included in management’s assessment. Management concluded that internal controls over the accounting for inventory were not operating effectively during the year ended October 1, 2005 as a result of certain inventory reconciliations not operating effectively. An adjustment to correct the overstatement of inventory and understatement of cost of sales was recorded by the Company during 2005 subsequent to the identification of the material weakness. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2005 financial statements, and this report does not affect our report dated December 9, 2005 on those financial statements.

In our opinion, management’s assessment that Woodhead Industries, Inc. did not maintain effective internal control over financial reporting as of October 1, 2005, is fairly stated, in all material respects, based on the COSO control criteria. Also, in our opinion, because of the effect of the material weakness described above on

the achievement of the objectives of the control criteria, Woodhead Industries, Inc. has not maintained effective internal control over financial reporting as of October 1, 2005, based on the COSO control criteria.

/S/ ERNST & YOUNG LLP

Ernst & Young LLP

Chicago, Illinois

December 9, 2005

Woodhead Industries, Inc.

Consolidated Balance Sheets

As of October 2 1, ~~2004~~2005 and ~~September 27~~October 2, ~~2003~~ 2004

(Amounts in thousands)

	2004			2003
	2005			2004
ASSETS
Current assets:
Cash and short-term investments	$	1613,~~709~~887		$	2216,~~547~~709
Accounts receivable		3539,~~759~~040			3135,~~017~~759
Inventories		1921,~~106~~173			1319,~~020~~106
Prepaid expenses		45,~~948~~785			4,~~816~~948
Refundable income taxes		2,~~863~~097			2,~~479~~863
Deferred income taxes		32,~~043~~164			3,~~390~~043
TOTAL CURRENT ASSETS		8284,~~428~~146			7782,~~269~~428
Property, plant and equipment, net		5854,~~289~~758			6058,~~391~~289
Other intangible assets, net		~~643~~568			~~706~~643
Goodwill		3635,~~769~~730			3236,~~290~~769
Deferred income taxes		2,~~427~~746			2,~~584~~427
Other assets		~~508~~432			~~616~~508
TOTAL ASSETS	$	~~181~~178,~~064~~380		$	~~173~~181,~~856~~064
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
Accounts payable	$	911,~~423~~080		$	89,~~343~~423
Accrued expenses		1311,~~245~~531			13,~~586~~245
Income taxes payable		1,~~272~~053			1,~~393~~272
Current portion of long-term debt		5,700			5,700
TOTAL CURRENT LIABILITIES		29,~~640~~364			29,~~022~~640
Long-term debt		2519,~~200~~500			3025,~~900~~200
Deferred income taxes		4,~~451~~698			34,~~049~~451
Other liabilities		4,~~339~~139			24,~~435~~339
TOTAL LIABILITIES		6357,~~630~~701			6563,~~406~~630
STOCKHOLDERS’ INVESTMENT
Common stock at par (shares issued: 12,147 in 2004 and 12,011 in 2003)		12,147			12,011
Common stock at par (shares issued: 12,260 in 2005 and 12,147 in 2004)		12,260			12,147
Additional paid-in capital		2021,~~236~~596			1820,~~578~~236
Deferred stock compensation		(~~552~~397	)		(~~773~~552	)
Accumulated other comprehensive income		64,~~602~~726			26,~~832~~602
Retained earnings		7982,~~001~~494			7579,~~802~~001
TOTAL STOCKHOLDERS’ INVESTMENT		~~117~~120,~~434~~679			~~108~~117,~~450~~434
TOTAL LIABILITIES AND STOCKHOLDERS’ INVESTMENT	$	~~181~~178,~~064~~380		$	~~173~~181,~~856~~064

The accompanying notes are an integral part of these statements.

1821

Woodhead Industries, Inc.

Consolidated Statements of Income

For the years ended October 1, 2005, October 2, 2004, ~~September~~and September 27, 2003, ~~and September 28, 2002~~

(Amounts in thousands, except per share data)

	2004			2003			2002
	2005			2004			2003
Net sales	$	~~201~~215,~~735~~036		$	~~179~~201,~~038~~735		$	~~170,~~179,038
Cost of sales		~~125~~135,~~665~~400			~~112~~125,~~991~~665			~~107~~112,~~770~~991
Gross profit		7679,~~070~~636			6676,~~047~~070			6266,~~409~~047
Operating expenses:
Engineering and product development		11,~~430~~905			811,~~918~~430			8,~~261~~918
Marketing and sales		3031,~~003~~295			2530,~~528~~003			25,~~695~~528
General and administrative		2324,~~655~~836			2023,~~344~~655			1920,~~495~~344
Restructuring and other charges		~~1,093~~—			21,~~065~~093			12,~~015~~065
Income from operations		911,~~889~~600			9,~~192~~889			79,~~943~~192
Interest expense		21,~~519~~935			32,~~084~~519			3,~~036~~084
Interest income		(~~182~~291	)		(~~222~~182	)		(~~141~~222	)
Other (income) expense, net		(21,~~304~~421	)		(2,~~901~~304	)		(752,901	)
Income before income taxes		911,~~856~~377			9,~~231~~856			59,~~123~~231
Provision for income taxes		12,~~818~~991			31,~~392~~818			23,~~578~~392
Income from continuing operations	$	8,~~038~~386		$	58,~~839~~038		$	25,~~545~~839
Discontinued Operations
Income from discontinued AKAPP operations (Including gain on disposal $725)		—			~~733~~—			—733
Income tax expense		—			3—			—3
Income from discontinued operations		—			~~730~~—			—730
Net Income	$	8,~~038~~386		$	68,~~569~~038		$	26,~~545~~569
Earnings per share, basic
From continuing operations	$	0.6769		$	0.5067		$	0.2250
From discontinued operations	$	—		$	~~0.06~~—		$	—0.06
Net income	$	0.6769		$	0.5667		$	0.2256
Earnings per share, diluted
From continuing operations	$	0.6668		$	0.4966		$	0.2249
From discontinued operations	$	—		$	~~0.06~~—		$	—0.06
Net income	$	0.6668		$	0.5566		$	0.2255
Weighted average number of shares outstanding
Basic		1112,~~989~~119			11,~~812~~989			11,~~668~~812
Diluted		12,~~202~~266			1112,~~930~~202			11,~~829~~930

The accompanying notes are an integral part of these statements.

1922

Woodhead Industries, Inc.

Consolidated Statements of Cash Flows

For the years ended October 1, 2005, October 2, 2004, ~~September~~and September 27, 2003, ~~and September 28, 2002~~

(Amounts in thousands)

2004

2003

2002

2005

2004

2003

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income for the year

8,~~038~~386

68,~~569~~038

26,~~545~~569

Adjustments to reconcile net income to net cash flows from operating activities:

Depreciation and amortization

11,~~048~~799

11,~~115~~048

1011,~~366~~115

Pension adjustment to other comprehensive income

(~~230~~191

)

—(230

)

—

Income from discontinued operations

—

~~(730~~—

)

—(730

)

Tax benefit from employee stock options

~~239~~75

~~200~~239

~~218~~200

Deferred tax expense

~~589~~1,206

~~1,432~~589

1,~~631~~432

(Increase) Decrease in:

Accounts receivable

(3,~~392~~404

)

~~583~~(3,392

)

~~1,230~~583

Inventories

(52,~~623~~283

)

2(5,~~347~~623

)

92,~~394~~347

Prepaid expenses

74(1,053

)

~~(1,970~~74

)

(871,970

)

Other assets

241,129

~~(200~~24

)

~~586~~(200

)

(Decrease) Increase in:

Accounts payable

~~847~~1,863

~~(1,043~~847

)

(~~738~~1,043

)

Accrued expenses

(~~746~~2,867

)

~~488~~(746

)

~~(1,105~~488

)

Income taxes payable

(~~277~~318

)

(~~511~~277

)

(~~255~~511

)

Other liabilities

1,~~759~~456

~~(801~~1,759

)

~~739~~(801

)

Net cash flows provided by operating activities

1215,~~350~~798

1712,~~479~~350

2417,~~524~~479

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

(79,~~423~~060

)

(47,~~506~~423

)

(74,~~167~~506

)

Dispositions of property, plant and equipment

~~432~~1,431

~~340~~432

~~156~~340

Cash from sale of AKAPP operations (less cash sold)

—

~~4,187~~—

—4,187

Net cash (used) provided for investing activities

(67,~~991~~629

)

21(6,991

)

~~(7,011~~21

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Decrease in long-term debt

(5,700

)

(45,~~200~~700

)

(4,~~879~~200

)

Sales of stock

21,~~015~~628

12,~~652~~015

21,~~711~~652

Dividend payments

(4,~~839~~893

)

(4,~~279~~839

)

(4,~~202~~279

)

Net cash used for financing activities

(8,~~524~~965

)

(68,~~827~~524

)

(6,~~370~~827

)

EFFECT OF EXCHANGE RATES

(2,~~673~~026

)

(12,~~278~~673

)

(21,~~147~~278

)

NET (DECREASE) INCREASE IN CASH AND SHORT-TERM INVESTMENTS

(52,~~838~~822

)

9(5,~~395~~838

)

89,~~996~~395

Cash and short-term investments at beginning of year

2216,~~547~~709

1322,~~152~~547

413,~~156~~152

Cash and short-term investments at end of year

1613,~~709~~887

2216,~~547~~709

1322,~~152~~547

SUPPLEMENTAL CASH FLOW DATA

Cash paid during the year for:

Interest

2,~~456~~075

2,~~735~~456

32,~~117~~735

Income taxes

1,~~849~~179

21,~~415~~849

12,~~434~~415

The accompanying notes are an integral part of these statements.

2023

Woodhead Industries, Inc.

Consolidated Statements of Comprehensive Income

For the years ended October 1, 2005, October 2, 2004, ~~September~~and September 27, 2003, ~~and September 28, 2002~~

(Amounts in thousands)

	2004			2003			2002
	2005			2004			2003
Net Income	$	8,~~038~~386		$	68,~~569~~038		$	26,~~545~~569
Other comprehensive income:
Accumulated foreign currency translation adjustment		4(1,~~058~~669	)		74,~~069~~058			37,~~937~~069
Unrealized (loss) gain on cash flow hedging instrument		(5883	)		(~~687~~58	)		68(687	)
Minimum pension liability adjustment		(~~354~~191	)		~~1,178~~(354	)		(1,~~088~~178	)
Income tax benefit related to other comprehensive income		~~124~~67			~~(436~~124	)		(436	)
Comprehensive income, net of tax	$	116,~~808~~510		$	1311,~~693~~808		$	513,~~898~~693

The accompanying notes are an integral part of these statements.

2124

Woodhead Industries, Inc.

Consolidated Statements of Stockholders’ Investment

For the years ended October 1, 2005, October 2, 2004, ~~September~~and September 27, 2003, ~~and September 28, 2002~~

(Amounts in thousands, except per share data)

	CommonStock		AdditionalPaid-inCapital		DeferredStockCompensation			AccumulatedOtherComprehensiveIncome (Loss)			RetainedEarnings			TotalStockholders’Investment
Balance September 29, 2001		11,568		13,979		(352	)		(7,645	)		75,169			92,719
Net income for the year		—		—		—			—			2,545			2,545
Translation adjustment		—		—		—			3,937			—			3,937
Unrealized gain on cash flow hedging instrument		—		—		—			68			—			68
Minimum pension liability adjustment, net of tax		—		—		—			(652	)		—			(652	)
Cash dividends, $0.36 per share		—		—		—			—			(4,202	)		(4,202	)
Stock option plans		249		2,547		134			—			—			2,930
Balance September 28, 2002	$	11,817	$	16,526	$	(218	)	$	(4,292	)	$	73,512		$	97,345
Net income for the year		—		—		—			—			6,569			6,569
Translation adjustment		—		—		—			7,069			—			7,069
Unrealized loss on cash flow hedging instrument		—		—		—			(687	)		—			(687	)
Minimum pension liability adjustment, net of tax		—		—		—			742			—			742
Cash dividends, $0.36 per share		—		—		—			—			(4,279	)		(4,279	)
Stock option plans		194		2,052		(555	)		—			—			1,691
Balance September 27, 2003	$	12,011	$	18,578	$	(773	)	$	2,832		$	75,802		$	108,450
Net income for the year		—		—		—			—			8,038			8,038
Translation adjustment		—		—		—			4,058			—			4,058
Unrealized loss on cash flow hedging instrument		—		—		—			(58	)		—			(58	)
Minimum pension liability adjustment, net of tax		—		—		—			(230	)		—			(230	)
Cash dividends, $0.40 per share		—		—		—			—			(4,839	)		(4,839	)
Stock option plans		136		1,658		221			—			—			2,015
Balance October 2, 2004	$	12,147	$	20,236	$	(552	)	$	6,602		$	79,001		$	117,434
Net income for the year		—		—		—			—			8,386			8,386
Translation adjustment		—		—		—			(1,669	)		—			(1,669	)
Unrealized loss on cash flow hedging instrument		—		—		—			(83	)		—			(83	)
Minimum pension liability adjustment, net of tax		—		—		—			(124	)		—			(124	)
Cash dividends, $0.40 per share		—		—		—			—			(4,893	)		(4,893	)
Stock option plans		113		1,360		155			—			—			1,628
Balance October 1, 2005	$	12,260	$	21,596	$	(397	)	$	4,726		$	82,494		$	120,679

The accompanying notes are an integral part of these statements.

2225

Woodhead Industries, Inc.

Notes to Consolidated Financial Statements

(Currency amounts in tables are in thousands, except per share data)

1.	SUMMARY OF ACCOUNTING POLICIES

A.	CONSOLIDATION AND BASIS PRESENTATION

Our consolidated financial statements include the accounts of all our subsidiaries, including those operating outside the United States, each of which is wholly owned. All material intercompany transactions have been eliminated in consolidation. We prepare our financial statements in conformity with United States Generally Accepted Accounting Principles. In preparing the financial statements, we must use some estimates and assumptions that may affect reported amounts and disclosures. Among others, we use estimates when accounting for depreciation, amortization, employee benefits, asset valuation allowances and loss contingencies. We are also subject to risks and uncertainties that may cause actual results to differ from those estimates.

We follow the practice of ending our fiscal year on the Saturday closest to September 30, which resulted in ~~a 53~~52-week ~~period~~periods in ~~the~~years ~~year~~2005 ~~2004~~and 2003 and 52a 53-week ~~periods~~period in ~~years~~year ~~2003 and 2002~~2004.

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation.

B.	CASH AND SHORT-TERM INVESTMENTS

Cash and short-term investments include cash and items almost as liquid as cash, such as certificates of deposit and time deposits, with maturity periods of three months or less when purchased.

C.	ACCOUNTS RECEIVABLE

We make judgments as to collectibility of accounts receivable based on historical trends and future expectations. Management estimates an allowance for sales returns and doubtful accounts, which represents the collectibility of trade accounts receivable. These allowances adjust gross trade accounts receivable down to net realizable value. To determine the allowance for sales returns, management uses historical trends to estimate future period product returns. To determine the allowance for doubtful accounts, management reviews specific customers and our accounts receivable aging report. Accounts receivable balances are determined to be delinquent when the amount is past due based on payment terms with the customer.

D.	INVENTORIES

We value our inventories at the lower of cost or market value, and adjust their values for reserves. Cost is determined using the first-in first-out (FIFO) method, or the last-in first-out (LIFO) method. The LIFO method of inventory valuation is used by two of our three U.S. subsidiaries and this method was chosen to better match current cost and revenue.

E.	LONG-LIVED ASSETS

Long-lived assets include:

Property, plant and equipment – These assets are recorded at original cost and increased by the cost of significant improvements after purchase. We depreciate the cost evenly over the assets’ estimated useful lives, using the straight-line method. Maintenance and repairs are charged to expense as incurred. We remove the cost of property retired or otherwise disposed of from the property accounts, accumulated depreciation from the related reserves, and reflect the net gain or loss in income.

~~Maintenance~~26 and repairs are charged to expense as incurred. We remove the cost of property retired or otherwise disposed of from the property accounts, accumulated depreciation from the related reserves, and reflect the net gain or loss in income.

Other intangible assets – When accounting for acquisitions under the purchase method of accounting, we allocate the purchase price to the fair values of tangible and intangible assets. Intangible assets include trade names and non-compete agreements. Intangible assets are amortized over periods ranging from 3 to 15 years.

Goodwill – Goodwill represents the difference between the purchase price of an acquired business and the fair value of the assets, when accounted for under the purchase method of accounting. Goodwill is not amortized as part of operating expense, but instead is reviewed for impairment. If impairment exists the goodwill is written down and charged to operating expenses only in any period in which the recorded value of goodwill and certain intangibles exceeds this fair value.

We have completed comprehensive studies of the fair value of goodwill. We found that the fair values of our reporting units’ net assets exceed their carrying values. Consequently, we concluded that there was no impairment of goodwill. We will continue to assess the fair values of our reporting units. If in the future the carrying values of our reporting unit net assets exceed their fair values, we will charge goodwill impairment to operating expense in the period in which the goodwill impairment becomes evident.

We review long-lived assets, other than goodwill, to assess the recoverability from future operations using undiscounted cash flows. If necessary, we record the charges for impairment of long-lived assets for the amount by which the carrying value of these assets exceeds the present value of future cash flows. We continually evaluate the periods of amortization and depreciation assigned to our assets to determine whether events or circumstances warrant revised estimates of useful lives.

F.	FOREIGN CURRENCY TRANSLATION

Most of our international operations maintain their records in their local currencies, which are also their functional currencies. We translate assets and liabilities to their U.S. Dollar equivalents at rates in effect at the balance sheet date and record translation adjustments in Other Comprehensive Income included in Stockholders’ Investment. We translate Statement of Income accounts at average rates for the period. We translate the financial statements of our Mexican operation, whose functional currency is the U.S. Dollar, using both the current and historic exchange rates and record translation adjustments in Other Expenses.

G.	STOCK-BASED COMPENSATION

We grant options to our directors, officers and key employees. The exercise price of the stock options granted equals the market price on the date of grant. In accordance with SFAS No. 123, “Accounting for Stock-Based Compensation”, we elected to account for our stock-based compensation under Accounting Principles Board Opinion (APB) No. 25: Accounting for Stock Issued to Employees. We do not record expenses related to stock option grants.

We adopted the disclosure-only provisions of SFAS No. 123:, Accounting ~~for~~ for Stock-Based Compensation. The following table summarizes results as if we had recorded compensation expense for the ~~2004~~2005, ~~2003~~2004 and ~~2002~~2003 option grants:

	2004		2003		2002
	2005		2004		2003
Net Income:
As reported	$	8,~~038~~386	$	68,~~569~~038	$	26,~~545~~569
Pro forma		67,~~157~~300		56,~~430~~157		15,~~943~~430
Basic earnings per share
As reported	$	0.6769	$	0.5667	$	0.2256
Pro forma		0.5160		0.4651		0.1746
Diluted earnings per share
As reported	$	0.6668	$	0.5566	$	0.2255
Pro forma		0.5159		0.4551		0.1745

2427

The pro forma effect of stock option grants on results of operations may not be representative of the pro forma effect on results of operations for future years.

We are required to adopt SFAS No. 123(R) in the first quarter of 2006, which will require us to record compensation costs related to share based payment transactions on the appropriate financial statements.

H.	REVENUE RECOGNITION

We recognize revenue upon transfer of title at the time of shipment (F.O.B. shipping point), when all significant contractual obligations have been satisfied, the price is fixed or determinable, and collectibility is reasonably assured. We sell our products to stocking distributors, system integrators, as well as directly to OEM customers. We provide for warranty costs, sales returns, sales incentives, price adjustments and other allowances at the time of shipment, based on prior claims experience and other quantitative and qualitative factors.

We have no post shipment obligations such as installation, training or customer acceptance. Most products are shipped F.O.B. shipping point; the risks and rewards of ownership pass to the buyer at that time. Our return policies allow only for catalog items to be returned based on factory approval and our financial statements include a return reserve (estimates are based on historic performance), which reduces period net sales.

We require receipt of a firm purchase order including quantities, shipping date and price. Any pricing discounts are reflected on the invoice. For certain customers, we offer volume rebates and these rebates are accrued monthly based on our estimates of the customer earning the amount of the rebate.

I.	SHIPPING AND HANDLING COSTS

All shipping and handling costs charged to customers are recorded as Net Sales and all related expenses are included in Cost of Sales.

J.	ADVERTISING

We expense advertising and promotional costs in the period incurred. Advertising expenses were $2.20 million in ~~2004~~2005, $12.82 million in ~~2003~~2004 and $1.98 million in ~~2002~~2003.

K.	RESEARCH AND DEVELOPMENT

We expense research and development costs in the period incurred.

L.	RECENTLY ISSUED ACCOUNTING STANDARDS

OnIn ~~September~~November ~~29,~~ 2002 wethe ~~adopted~~Financial ~~SFAS~~Accounting Standards Board (FASB) issued FASB Interpretation No. ~~144~~(FIN) 45, Guarantor’s Accounting ~~for~~and ~~the~~Disclosure ~~Impairment~~Requirements orfor Guarantees, ~~Disposal~~Including Indirect Guarantees of ~~Long-Lived~~Indebtedness ~~Assets~~of Others. ~~SFAS~~FIN ~~No.~~45 ~~144~~provides ~~states~~guidance ~~that~~on the ~~results~~disclosures ofto ~~operations of~~be made by a ~~component~~guarantor ofin anits ~~entity~~interim ~~that~~and ~~has~~annual ~~either~~financial ~~been~~statements ~~disposed~~about ofits orobligations isunder ~~classified~~certain asguarantees ~~held~~that ~~for~~it ~~sale~~has issued ~~shall~~and bealso ~~reported~~clarifies inthat ~~discontinued~~the ~~operations~~guarantor ifis ~~both~~required to recognize, at the ~~following~~inception ~~conditions~~of ~~are~~a ~~met:~~guarantee, (a) ~~the~~liability ~~operations~~for ~~and~~the ~~cash~~fair ~~flows~~value of the ~~component~~obligation ~~have~~undertaken ~~been~~in ~~(or will~~issuing ~~be)~~the ~~eliminated~~guarantee. ~~from~~We ~~the~~have ~~ongoing~~adopted ~~operations~~the requirements of ~~the~~FIN ~~entity~~45 asand amade ~~result~~the appropriate ofdisclosures in the ~~disposal~~Financial ~~transaction~~Statements and ~~(b)~~Notes included in this Form 10-K. We believe that the ~~entity~~amount ~~will~~of ~~not~~our ~~have~~warranty ~~any~~settlements ~~significant~~and ~~continuing~~reserve ~~involvement~~are innot ~~the~~material ~~operations~~and ofare ~~the~~not ~~component~~therefore ~~after~~included ~~the~~as ~~disposal~~a ~~transaction.~~disclosure to these financial statements.

In ~~November~~December 2002 the FASB issued ~~FASB~~SFAS ~~Interpretation~~ No. ~~(FIN) 45~~ 148, ~~Guarantor’s~~ Accounting ~~and Disclosure Requirements~~ for ~~Guarantees,~~Stock-Based ~~Including~~Compensation ~~Indirect~~– ~~Guarantees~~Transition ~~of Indebtedness of Others. FIN 45 provides guidance on the disclosures to be made by a guarantor in its interim~~ and ~~annual financial statements about its obligations under certain guarantees that it has issued and also clarifies that the guarantor is required to recognize~~Disclosure, atwhich ~~the~~amends ~~inception~~SFAS ~~of a guarantee~~No. 123, aAccounting ~~liability~~ for ~~the~~Stock-Based ~~fair~~Compensation. ~~value~~SFAS ~~of the obligation undertaken in issuing the guarantee~~No. 148 Weprovides ~~have~~alternative ~~adopted~~methods ~~the requirements~~ of ~~FIN~~transition 45for ~~and~~companies ~~made~~that ~~the~~voluntarily ~~appropriate~~change ~~disclosures in~~ to the ~~Financial~~fair ~~Statements and Notes included in this Form 10~~value-K.based Wemethod ~~believe that the amount~~ of ~~our warranty settlements and reserve are not material and are~~ ~~not therefore included as a disclosure to these financial statements.~~

~~In December~~28 2002 the FASB issued SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure, which amends SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 148 provides alternative methods of transition for companies that voluntarily change to the fair value-based method of accounting for stock-based employee compensation, and also requires expanded disclosures in both interim and annual financial statements. We have adopted the expanded disclosure requirements of SFAS No. 148.

accounting for stock-based employee compensation, and also requires expanded disclosures in both interim and annual financial statements. We have adopted the expanded disclosure requirements of SFAS No. 148.

In January 2003 we adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, which generally requires that a liability for costs associated with an exit or disposal activity be expensed as incurred. Exit costs primarily consist of future minimum lease payments on vacated facilities, facility closure costs and facility consolidation costs. Employee separation costs consist primarily of severance costs. At each reporting date, we evaluate our accruals for exit costs and employee separation costs to ensure that the accruals are still appropriate. In certain circumstances, accruals are no longer required because of efficiencies in carrying out the plans or because employees previously identified for separation resigned unexpectedly and did not receive severance or were redeployed due to circumstances not foreseen when the original plans were initiated.

In January 2003 the FASB issued FIN 46, Consolidation of Variable Interest Entities, which requires certain variable interest entities to be consolidated by the primary beneficiary of the entity if the equity investors in the entity do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. FIN 46 was effective immediately for all new variable interest entities created or acquired after January 31, 2003. We do not have any variable interest entities that require consolidation under FIN 46.

In December 2003 the FASB issued ~~revised~~ SFAS No. 132(R). This statement revises employers’ disclosures about pension plans and other post retirement benefit plans. ~~Revised~~ SFAS No. 132(R) generally does not change the measurement or recognition standards for how employers account for pension and other post retirement benefits under SFAS No. 87, Employers’ Accounting for Pensions and SFAS No. 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions. ~~Revised~~ SFAS No. 132(R) retains the disclosure requirements contained in original SFAS No. 132, Employers’ Disclosures about Pensions and Other Postretirement Benefits, which it replaces. ~~Revised~~ SFAS No. 132(R) now requires additional disclosures to those in the original SFAS No. 132 about assets, obligations, cash flows, and net periodic benefit cost of defined benefit pension plans and other defined benefit postretirement plans. Our additional disclosure is included in Note 15 of the Notes to Consolidated Financial Statements.

In November 2004 the FASB issued SFAS No. 151 Inventory Costs, an amendment to ARB No. 43, Chapter 4. FAS No. 151 clarifies the accounting for abnormal amounts of idle facilities, freight, handling costs and spoilage and requires these items to be recognized as current period expenses. Also, FAS No. 151 requires fixed overhead costs be allocated to inventories based on normal production capacity. FAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We believe that implementing FAS No. 151 should not have a material impact on our financial position and results of operations.

In December 2004 FASB issued the revised SFAS No. 123, Share-Based Payment (SFAS No. 123(R)). SFAS No. 123(R) requires compensation costs related to share-based payment transactions to be recognized in the financial statements. Generally, compensation cost will be measured based on the grant-date fair value of the equity or liability instrument issued. In addition, liability awards will be remeasured each reporting period. Compensation cost will be recognized over the requisite service period, generally as the award vests. We are required to adopt SFAS No. 123(R) in the first quarter of fiscal 2006. SFAS No. 123(R) applies to all awards granted after June 30, 2005 and to previously granted awards unvested as of the adoption date.

In May 2005 the FASB issued SFAS No. 154 Accounting Changes and Error Corrections – a replacement of APB No. 20 and FAS No. 3. FAS No. 154 changes the requirements for the accounting for and reporting of a change in accounting principle and applies to all voluntary changes in accounting principle. FAS No. 154 also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. FAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. We believe that implementing FAS No. 154 should not have a material impact on our financial position and results of operations.

2.	FINANCIAL INSTRUMENTS

A.	LONG-TERM DEBT

In September 1998 we issued $45.0 million of Senior Guaranteed Notes to refinance bank borrowings related to the acquisitions of SST and mPm. Long-term debt at the balance sheet dates consisted of the following:

	2004		2003
	2005		2004
6.64% Notes, Due September 30th, annually, 2002 – 2008	$	139,~~200~~000	$	1713,~~400~~200
6.81% Notes, Due September 30th, annually, 2004 – 2013		1210,~~000~~500		1312,~~500~~000
Total long-term debt	$	2519,~~200~~500	$	3025,~~900~~200
Current portion not included above	$	5,700	$	5,700

Long-term debt outstanding, including the current portion, at October 2 1, ~~2004~~2005 matures as follows:

Fiscal Year	Amounts Maturing
2005	$	5,700
2006	$	5,700
2006		5,700
2007		5,700
2008		6,300
2009		1,500
After 2009	$	6,000

On April 28, 2004 we entered into a ~~new~~a three-year revolving credit agreement with our existing bank that will continue to provide for borrowings up to $25.0 million at the bank’s prime or offered rate. This agreement will expire on April 28, 2007. This ~~new~~ revolving credit agreement states that the maximum ratio of debt to EBITDA, as defined, shall be no greater than 2.5 to 1.0 and the minimum interest coverage ratio, as defined, shall be no less than 2.5 to 1.0.

26Included in our financial statements is a 6.64% senior guaranteed note, which is held by a subsidiary and has a parental guarantee. In addition, there is a 6.81% senior guaranteed note held by the parent company, which is guaranteed by our U.S. subsidiaries. We are in compliance with all provisions of our credit agreement. At October 1, 2005 and October 2, 2004 we had no short-term borrowings.

~~Table~~B. ofHEDGING ~~Contents~~ACTIVITIES AND DERIVATIVE FINANCIAL INSTRUMENTS

Included in our financial statements is a 6.64% senior guaranteed note, which is held by a subsidiary and has a parental guarantee. In addition, there is a 6.81% senior guaranteed note held by the parent company, which is guaranteed by our U.S. subsidiaries. We are in compliance with all provisions of our credit agreement. At October 2, 2004 and September 27, 2003 we had no short-term borrowings.

B. DERIVATIVE FINANCIAL INSTRUMENTS

In our global operating activities and in the normal course of our business, we are exposed to changes in foreign currency exchange rates, which may adversely affect our results of operations and financial condition. We seek to minimize those risks through our regular operating activities and, when deemed appropriate, through the use of derivatives.

In ~~1998~~the wefiscal ~~entered~~year ~~into~~2005 aour ~~foreign~~Canadian ~~currency~~subsidiary ~~swap~~entered ~~agreement~~into ~~with~~three anforeign ~~AA-~~currency ~~rated~~forward ~~counterparty~~contracts to ~~hedge~~cover aits ~~portion~~debt ofobligations ~~our~~under ~~cash flows from our~~a ~~Italian subsidiary~~U.S. Dollar ~~Under~~denominated ~~the~~loan. ~~terms~~These offorward ~~the~~contracts ~~agreement,~~will wereduce ~~agreed~~the exposure to ~~swap~~fluctuations ~~35.52~~in ~~billion~~foreign ~~Lire~~currency ~~for~~exchange ~~20.0~~rates, ~~million~~since ~~U.S.~~gains ~~Dollars~~and ~~over~~losses aon ~~period~~these ofcontracts 8offset ~~years.~~losses Inand ~~addition,~~gains on the ~~contract~~underlying ~~provides~~positions. ~~for~~We ushave elected not to ~~make~~treat ~~annual~~these ~~interest~~instruments ~~payments~~as ofhedges ~~6.50%~~for onaccounting ~~the~~purposes ~~outstanding Lire~~and, ~~balance~~accordingly, ~~and~~both torealized ~~receive~~and ~~7.43%~~unrealized ~~annual~~gains ~~interest~~and losses on ~~the~~these ~~outstanding~~instruments ~~U.S.~~have ~~Dollar~~been ~~balance.~~recorded ~~While the hedge was denominated~~ in ~~Italian~~miscellaneous ~~Lire~~income weand ~~re-denominated~~expense ~~the~~on ~~transaction~~our inCanadian ~~Euros~~subsidiary’s ~~in 2002~~general ledger. The ~~re-denomination~~table ~~was~~below ~~done~~details atour anposition ~~exchange~~on ~~rate~~these of instruments at October 1,~~936.27~~ ~~Italian~~2005: ~~Lire to the Euro.~~

The following table describes the values to be exchanged over the next two years relating to the Euro swap:


Maturity	Forward Rate	Inverse		Payment U.S. Dollar Amount	Payment Cnd Forward Rate
September 27, 2006	1.1757	$	0.8506	4,200	4,938
September 26, 2007	1.1674	$	0.8566	4,200	4,903
September 24, 2008	1.1597	$	0.8523	4,800	5,567

Total				13,200	15,408

	U.S. Dollars
Maturity	AmortizingAmount		OutstandingNotional Amount
09/30/05	$	3,000	$	5,000
09/30/06	$	2,000	$	0
	Euros
Maturity	AmortizingAmount		OutstandingNotional Amount
09/30/05	€	2,752	€	4,586
09/30/06	€	1,834	€	0

WeTable base the fair value for our cross-currency swap on the cost estimate to terminate the agreement. The fair value of the swap at October 2, 2004 and September 27, 2003 was recorded as a $0.7 million and $0.3 million liability, respectively. Contents

In 1998 we entered into a foreign currency swap agreement with an AA- rated counterparty to hedge a portion of our cash flows from our Italian subsidiary. Under the terms of the agreement, we agreed to swap 35.52 billion Lire for 20.0 million U.S. Dollars over a period of 8 years. In addition, the contract provides for us to make annual interest payments of 6.50% on the outstanding Lire balance, and to receive 7.43% annual interest on the outstanding U.S. Dollar balance. While the hedge was originally denominated in Italian Lire we re-denominated the transaction in Euros in 2002. The re-denomination was done at an exchange rate of 1,936.27 Italian Lire to the Euro.

The following table describes the values to be exchanged during the next year relating to the Euro swap:


	U.S. Dollars
Maturity	Amortizing Amount		Outstanding Notional Amount
09/30/06	$	2,000	$	0


	Euros
Maturity	Amortizing Amount		Outstanding Notional Amount
09/30/06	€	1,834	€	0

We base the fair value for our cross-currency swap on the cost estimate to terminate the agreement. The fair value of the swap at October 1, 2005 and October 2, 2004 was recorded as a $0.2 million and $0.7 million liability, respectively.

C.	FAIR VALUE

Our long-term debt is denominated in U.S. Dollars and carries fixed interest. We base the fair value of our long-term debt on market or dealer quotes. The difference between fair and carrying values of our financial instruments, other than the swap, were not material at the balance sheet dates.

3.	ACCOUNTS RECEIVABLE

We reduce our accounts receivable balance to account for reserves for doubtful accounts, sales returns, warranties and allowances. The table below shows the activity in our accounts receivable reserves during the fiscal years:

	2004			2003			2002
	2005			2004			2003
Beginning balance	$	1,~~287~~531		$	1,~~250~~287		$	1,~~844~~250
Charged to costs and expenses		~~382~~37			~~189~~382			20189
Write-offs		(~~191~~174	)		(~~240~~191	)		(~~180~~240	)
Price adjustments charged to net sales		5372			8853			~~(434~~88	)
Ending balance	$	1,~~531~~466		$	1,~~287~~531		$	1,~~250~~287

2731

4.	INVENTORIES

Inventories at the balance sheet dates were comprised of the following:

	2004			2003
	2005			2004
Inventories valued using FIFO	$	1012,~~969~~435		$	810,~~463~~969
Inventories valued using LIFO:
At FIFO cost		1011,~~678~~057			710,~~636~~678
Less: Reserve to reduce to LIFO		(2,~~541~~319	)		(32,~~079~~541	)
LIFO Inventories		8,~~137~~738			48,~~557~~137
Total Inventories	$	1921,~~106~~173		$	1319,~~020~~106
Inventory composition using FIFO
Raw Materials	$	12,~~066~~894		$	812,~~978~~066
Work-in-process and finished goods		910,~~581~~598			79,~~121~~581
Total Inventories at FIFO	$	2123,~~647~~492		$	1621,~~099~~647

The use of LIFO for inventory valuation was chosen in 1979 to better match current cost and revenue. The LIFO method of inventory valuation is used by two of our three U.S. subsidiaries. The one U.S. subsidiary not utilizing LIFO was acquired in 1990 and is a higher technology business in which the inventory (approximately 69% of total inventory) declines in value over time. LIFO is not utilized in our foreign operations as ~~this method is not accepted by~~ foreign countries for tax purposes do not accept this method and the cost of maintaining two inventory systems is cost prohibitive to us.

In ~~2004~~2005 inventory levels increased compared to fiscal ~~2003~~2004. This increase was mainly due to ~~high~~higher sales volumes and the ~~temporary~~ build up of inventory to ~~facilitate~~meet the ~~integration~~increased ofdemand ~~the~~especially ~~Aero-Motive~~at ~~production~~our inNorthbrook, ~~our~~IL ~~Juarez~~and Franklin, ~~Mexico~~MA ~~facility~~locations.

In ~~2003~~2004 inventory levels ~~continued~~increased compared to ~~reduce~~2003. This ~~reduction~~increase ~~resulted~~was inmainly adue ~~liquidation~~to ofhigher ~~LIFO~~sales ~~inventory~~volumes ~~quantities~~and ~~carried~~the attemporary ~~lower~~build ~~costs~~up ~~prevailing~~of ininventory ~~prior~~to ~~years~~facilitate ~~as compared with~~ the ~~cost~~integration of ~~2003~~the ~~purchases.~~Aero-Motive ~~The~~production ~~effect~~in ofour ~~this~~Juarez, ~~liquidation~~Mexico ~~was to increase net income by $0~~facility.4 ~~million.~~

Had we used the FIFO method for all inventories, net income would have been $0.41 million lower in ~~fiscal~~2005 ~~years 2004~~ and ~~2003 and~~ $0.64 million lower in ~~2002.~~both fiscal years 2004 and 2003.

5.	PROPERTY, PLANT AND EQUIPMENT

Net property (PP&E) at the balance sheet dates was as follows:

Asset Description	~~2004~~2005			~~2003~~2004
Land	$	4,~~228~~012		$	4,228
Buildings and improvements		2724,~~901~~416			27,~~102~~901
Machinery and equipment		3942,~~929~~046			3839,~~289~~929
Dies and molds		2425,~~691~~423			2324,~~901~~691
Software technology		3840,~~084~~771			3538,~~756~~084
Furniture and office equipment		1822,~~595~~781			18,~~175~~595
Total PP&E, at cost		~~153~~159,~~428~~449			~~147~~153,~~451~~428
Less: Accumulated depreciation		(95104,~~139~~691	)		(8795,~~060~~139	)
PP&E, net	$	5854,~~289~~758		$	6058,~~391~~289

~~Depreciation~~32 ~~expense was $10.9 million, $11.1 million and $10.2 million for fiscal years 2004, 2003 and 2002, respectively.~~

Depreciation expense was $11.5 million, $10.9 million and $11.1 million for fiscal years 2005, 2004 and 2003, respectively.

The carrying values of fixed assets are impacted by fluctuations in foreign exchange rates. We depreciate fixed assets using the straight-line method over the following periods:


Asset Description		Asset Life
Buildings and improvements		20 to 40 years
Machinery and equipment		3 to 12 years
Dies and molds		4 to 5 years
Software technology		9 years
Furniture and office equipment		3 to 10 years

In the fourth quarter of fiscal year 1998 we acquired the business and certain assets of SST, including software technology, and in the second quarter of fiscal year 2001 we acquired the business ~~and certain assets~~ of applicom International, including software technology. We depreciate the capitalized software over a period of nine years, which we believe is appropriate for these types of industrial software. Net software at the balance sheet dates was as follows:

	2004			2003
	2005			2004
Software technology	$	3840,~~084~~771		$	3538,~~756~~084
Accumulated depreciation		(2430,~~355~~736	)		(1824,~~719~~355	)
Net software technology	$	1310,~~729~~035		$	1713,~~037~~729

6.	GOODWILL AND OTHER INTANGIBLE ASSETS

Our goodwill relates to our Connectivity Segment. Goodwill at the balance sheet dates was:

	2004			2003
	2005			2004
Goodwill	$	4342,~~901~~737		$	3843,~~490~~901
Accumulated amortization		(7,~~132~~007	)		(67,~~200~~132	)
Goodwill, net	$	3635,~~769~~730		$	3236,~~290~~769

The following is a summary of changes in the carrying value of goodwill at the balance sheet dates:

	2004			2003
	2005				2004
Beginning balance	$	3236,~~290~~769		$	~~28,757~~$	32,290
Sale of AKAPP operations		—			(890	)
Effect of changes in exchange rates		(1,039	)			2,465
Effect of changes in exchange rates		2,465			4,423
Purchase accounting adjustment		—				2,014
Purchase accounting adjustment		2,014			—
Ending balance	$	35,730			$	36,769
Ending balance	$	36,769		$	32,290

Other intangible assets at the balance sheet dates were:

	2004			2003
	2005			2004
Other intangible assets	$	1,~~419~~374		$	1,~~313~~419
Accumulated amortization		(~~776~~806	)		(~~607~~776	)
Other intangible assets, net	$	~~643~~568		$	~~706~~643

~~The~~33 ~~following table shows the future amortization expense for intangible assets as of October 2, 2004:~~

Fiscal Year	EstimatedAmortization
2005	$	57
2006		57
2007		57
2008		57
2009		57
after 2009	$	358

The following table shows the future amortization expense for intangible assets as of October 1, 2005:


Fiscal Year	Estimated Amortization
2006	$	55
2007		55
2008		55
2009		55
2010		55
after 2010	$	293

7.	ACCRUED EXPENSES

Accrued expenses at the balance sheet dates were as follows:

	2004		2003
	2005		2004
Payroll	$	3,~~971~~862	$	45,~~341~~401
Commissions		1,~~412~~366		~~875~~1,412
Taxes		1,~~290~~248		~~837~~1,290
Pension and profit sharing		~~971~~1,134		~~2,633~~971
Environmental		~~452~~493		452
Insurance		~~814~~335		~~402~~814
All other		43,~~335~~093		42,~~046~~905
Total accrued expenses	$	1311,~~245~~531	$	13,~~586~~245

8.	LEASE COMMITMENTS

We lease properties for use in our operations. In addition to rent, the leases require us to pay directly for taxes, insurance, maintenance and other operating expenses, or to pay higher rent when operating expenses increase. Total lease expenses were $1.2 million in fiscal 2005, $1.4 million for fiscal 2004 and $1.0 million for ~~both fiscal~~ 2003 ~~and fiscal 2002~~. The following table shows future minimum lease commitments under non-cancelable lease-terms in excess of one year as of ~~October~~ 2October 1, ~~2004~~2005:

Fiscal Year	LeaseCommitments
2005	$	1,465
2006	$	1,122
2006		1,304
2007		1,032
2007		1,169
2008		521
2008		584
2009		257
2009		308
2010		261
after 2009		641
after 2010		332

9.	CAPITAL STOCK

A.	COMMON AND PREFERRED STOCK

Our total authorized stock is 40.0 million shares, consisting of 10.0 million shares of preferred stock, par value $0.01 per share, and 30.0 million shares of common stock, par value $1.00 per share. No shares of preferred stock have been issued to date. Common stock issued was 12.1 3 million and 12.0 1 million on October 2 1, ~~2004~~2005 and ~~September 27~~October 2, ~~2003~~2004, respectively.

In34 May 1996 we adopted a new shareholder rights plan, effective upon termination of the previous rights plan, and declared a dividend distribution of one preferred stock purchase right (“Right”) for each share of common stock outstanding. Each Right represents the right to purchase, if and when the Rights are exercisable, a unit consisting of one one-thousandth of a share (“Unit”) of Series A Junior Participating Preferred Stock at a purchase price of $65 per unit, subject to adjustment. The exercise price and the number of shares issuable upon the exercise of the Rights are subject to adjustment in certain cases to prevent dilution. The Rights are evidenced by the common stock certificates and are not exercisable or transferable apart from the common stock, until ten days after a person (i) acquires 15% or more of the common stock, or (ii) commences a tender offer, which would result in the ownership of 15% or more of the common stock, or the Board of Directors determines that any person has become an Adverse Person, as that term is defined in the plan. In the event any person becomes the beneficial owner of 15% or more of common stock or the Board of Directors declares a person an Adverse Person, each of the Rights (other than Rights held by the party triggering the Rights and certain transferees which are voided) becomes a discount right, entitling the holder to acquire common stock having a value equal to twice

In May 1996 we adopted a new shareholder rights plan, effective upon termination of the previous rights plan, and declared a dividend distribution of one preferred stock purchase right (“Right”) for each share of common stock outstanding. Each Right represents the right to purchase, if and when the Rights are exercisable, a unit consisting of one one-thousandth of a share (“Unit”) of Series A Junior Participating Preferred Stock at a purchase price of $65 per unit, subject to adjustment. The exercise price and the number of shares issuable upon the exercise of the Rights are subject to adjustment in certain cases to prevent dilution. The Rights are evidenced by the common stock certificates and are not exercisable or transferable apart from the common stock, until ten days after a person (i) acquires 15% or more of the common stock, or (ii) commences a tender offer, which would result in the ownership of 15% or more of the common stock, or the Board of Directors determines that any person has become an Adverse Person, as that term is defined in the plan. In the event any person becomes the beneficial owner of 15% or more of common stock or the Board of Directors declares a person an Adverse Person, each of the Rights (other than Rights held by the party triggering the Rights and certain transferees which are voided) becomes a discount right, entitling the holder to acquire common stock having a value equal to twice the Right’s exercise price. In the event the Company is acquired in a merger or other business combination transaction (including one in which the Company is the surviving corporation), each Right will entitle its holder to purchase, at the then current exercise price of the Right, that number of shares of common stock of the surviving company which at the time of such transaction would have a market value of two times the exercise price of the Right. The Rights do not have any voting rights and are redeemable, at the option of the Company, at a price of $0.01 per Right at any time until ten days after a person acquires beneficial ownership of at least 15% of the common stock. The Rights expire on May 29, 2006. So long as the Rights are not separately transferable, the Company will issue one Right with each new share of common stock issued.

B.	STOCK OPTION PLANS

We may grant stock options to directors, officers and key employees, under our stock option plans, at a price not less than the market value at the date of grant. Options issued to directors are exercisable 6 months after the grant date, and expire 10 years (5 years for pre-2002 grants) after the grant date.

Options granted to employees in October 2003 were originally to vest in equal increments over the first three anniversary dates of the grant and expire 10 years after the grant date. In September 2004 we accelerated the vesting of the 2003 option awards. As these option awards were out of the money, no compensation expense was recorded. As a result of the acceleration, all of these options vested on the first anniversary date of the grant. Additionally, in September 2004 we granted options to employees that normally would have been granted six weeks later during fiscal 2005. These options ~~are~~were exercisable one year after the grant date and expire 10 years after the grant date. Consequently, there ~~will~~was be no regular grant of stock options for employees in fiscal 2005. All of these actions were taken to reduce, or eliminate to the extent permitted, the transition expenses related to outstanding stock option awards under SFAS No. 123R, as then proposed. Portions of options issued to employees in fiscal years 2003 and 2002 are exercisable one, two, three and ~~three~~five years after the grant date and expire 10 years after the grant date. Options issued to employees before fiscal year 2001 were exercisable one year after the grant date and expire 10 years after the grant date. All granted options are subject to continuous employment and certain other conditions.

Options Outstanding
Range of Exercise Prices	NumberOutstandingat 10/2/2004	WeightedAverageRemainingContractualLife, in years	WeightedAverageExercisePrice
$5 – $10	5	0.1	$	9.33
10 – 15	1,185	7.2		12.45
15 – 20	615	7.4		16.28
over $20	265	4.3		20.50
	2,070	6.9	$	14.61
Options Exercisable
Range of Exercise Prices	NumberOutstandingat 10/2/04	WeightedAverageRemainingContractualLife, in years	AccumulatedWeightedAverageExercisePrice
$5 – $10	5	0.1	$	9.33
10 – 15	500	7.2		12.77
15 – 20	249	7.4		16.07
Over $20	265	4.3		20.50
	1,019	6.9	$	15.57


Options Outstanding

Range of Exercise Prices	Number Outstanding at 10/1/2005	Weighted Average Remaining Contractual Life, in years	Weighted Average Exercise Price
10 – 15	1,015	6.5		12.42
15 – 20	520	6.3		16.27
over $20	240	3.3		20.50

	1,775	6.0	$	14.64


Options Exercisable

Range of Exercise Prices	Number Outstanding at 10/1/05	Weighted Average Remaining Contractual Life, in years	Accumulated Weighted Average Exercise Price
10 – 15	788	6.5		12.84
15 – 20	519	6.3		16.27
Over $20	240	3.3		20.50

	1,547	6.0	$	15.18

The following table summarizes the activity for the plans:

	SharesAvailablefor Grant		Under Option
			Under Option
			Numberof Shares		WeightedAverageExercisePrice
	SharesAvailablefor Grant		Numberof Shares		WeightedAverageExercisePrice
Balance September 29, 2001	260		1,268		$	14.23
Authorized	1,500		—			—
Grant	(394	)	394			15.18
Exercised	—		(276	)		9.37
Forfeited	119		(119	)		17.52
Balance September 28, 2002	1,485		1,267			15.29
Grant	(572	)	572			10.74
Exercised	130		(130	)		10.53
Expired	14		(14	)		20.38
Forfeited	37		(37	)		13.17
Balance September 27, 2003	1,094		1,658			14.07
Grant	(689	)	689			15.25
Exercised	139		(139	)		11.11
Forfeited	138		(138	)		14.77
Balance October 2, 2004	682		2,070		$	14.61
Exercised	107		(107	)		12.36
Expired	180		(180	)		15.73
Forfeited	8		(8	)		14.97
Balance October 1, 2005	977		1,775		$	14.64

We estimated the fair values using the Black-Scholes option-pricing model, modified for dividends, and used the following assumptions:

	2004				2003				2002
	2005			2004				2003
Expected dividend yield	2.7	~~2.6~~%	%		2.6	~~3.5~~%	%		3.5	~~2.4~~%	%
Risk-free interest rate	4.9	~~4.1~~%	%		4.1	~~4.0~~%	%		4.0	~~3.7~~%	%
Expected stock price volatility	48.2	~~50.2~~%	%		50.2	~~47.7~~%	%		47.7	~~40.7~~%	%
Expected term until exercise, in years	7.8	~~8.0~~			8.0	~~8.0~~			8.0	~~7.9~~
Weighted fair value per share	$—	~~6.79~~		$	$6.79	~~4.13~~		$	$4.13	~~5.73~~
Total value of options granted	$—	~~4,675~~		$	$4,675	~~2,360~~		$	$2,360	~~1,916~~

On December 2, 2005, the Human Resources Committee of the Board granted, pursuant to our Stock Awards Plans, certain restricted stock awards totaling 110,500 shares to our six non-employee directors and thirty-four key employees.

10.

COMPREHENSIVE INCOME

Accumulated other comprehensive income (loss) consists of the following components:

	ForeignCurrencyTranslationAdjustment			UnrealizedGains onCash FlowHedgingInstrument		MinimumPensionLiability,Net ofTaxes		Comprehensive(Income) Loss
Balance September 29, 2001	$	(8,099	)	544		(90	)	$	(7,645	)
Other Comprehensive Income		3,937		68		(652	)		3,353
Balance September 28, 2002		(4,162	)	612		(742	)		(4,292	)
Other Comprehensive Income		7,069		(687	)	742			7,124
Balance September 27, 2003		2,907		(75	)	—			2,832
Other Comprehensive Income		4,058		(58	)	(230	)		3,770
Balance October 2, 2004	$	6,965		(133	)	(230	)	$	6,602
Other Comprehensive Income		(1,669	)	(83	)	(124	)		(1,876	)
Balance October 1, 2005	$	5,296		(216	)	(354	)	$	4,726

11.

EARNINGS PER SHARE

The reconciliation between basic and diluted earnings per share is as follows:

	2004		2003		2002
	2005		2004		2003
Income from continuing operations	$	8,~~038~~386	$	58,~~839~~038	$	25,~~545~~839
Income from discontinued operations		—		~~730~~—		—730
Net income	$	8,~~038~~386	$	68,~~569~~038	$	26,~~545~~569
Earnings per share, basic
From continuing operations	$	0.6769	$	0.5067	$	0.2250
From discontinued operations		—		~~0.06~~—		—0.06
As reported	$	0.6769	$	0.5667	$	0.2256
Earnings per share, diluted
From continuing operations	$	0.6668	$	0.4966	$	0.2249
From discontinued operations		—		~~0.06~~—		—0.06
As reported	$	0.6668	$	0.5566	$	0.2255
Weighted-average number of shares outstanding		1112,~~989~~119		11,~~812~~989		11,~~668~~812
Dilutive common stock options		~~213~~147		~~118~~213		~~161~~118
Weighted-average number of shares outstanding plus dilutive common stock options		12,~~202~~266		1112,~~930~~202		11,~~829~~930
Outstanding common stock options having no dilutive effect		~~773~~1,005		~~937~~773		~~336~~937

12.

RESEARCH AND DEVELOPMENT

Innovation by our research and development operations is very important to the growth of our businesses. Our goal is to discover, develop and bring to market innovative products that address new needs. In addition to Research and Development, our Statement of Income caption Engineering and Product Development includes expenses for engineers, designers and drafters to enhance existing products.

Research and development expenses were $65.39 million in ~~2004~~2005, $56.53 million in ~~2003~~2004 and $45.25 million in ~~2002~~2003.

13.

SEGMENT INFORMATION AND GEOGRAPHIC DATA

Our operating segments are based on the organization of business groups comprised of similar products and services. Revenues in our Industrial Communications and Connectivity Products Segment (Connectivity Segment) are primarily derived from sales of system components tofor devices in open networks for automated manufacturing and distribution applications. Revenues in our Electrical Safety & Industrial Segment (Electrical Segment) are primarily derived from sales of specialized products to support enhanced safety and productivity on the factory floor.

Sales between segments were not significant. Sales in geographic areas were determined by customer location. No single customer accounted for 10 percent or more of our total revenue. Sales in foreign countries did not meet minimum disclosure requirements. We did not allocate certain corporate expenses, primarily those related to the overall management of the corporation, to the segments or geographic areas. Both segments share certain production facilities and equipment (PP&E). These assets, and related additions and depreciation, were allocated based on unit production. Geographic data on assets is based on the physical location of those assets. Corporate assets were primarily investments in subsidiaries and cash.

A.	SEGMENT INFORMATION

	Net Sales
	2004			2003			2002
	2005				2004				2003
Connectivity	$	~~147~~162,~~036~~291		$	~~126,315~~$	147,036	$	~~112,171~~	$	126,315
Electrical		5452,~~699~~745			~~52,723~~	54,699		~~58,008~~		52,723
Consolidated	$	~~201~~215,~~735~~036		$	~~179,038~~$	201,735	$	~~170,179~~	$	179,038
	Income from Operations
	2005				2004				2003
Connectivity	$	9,696			$	4,575			$	5,098
Electrical		4,812				6,551				4,772
Corporate & other		(2,908	)			(1,237	)			(678	)
Consolidated	$	11,600			$	9,889			$	9,192

3338

	Income from Operations
	2004			2003			2002
Connectivity	$	4,575		$	5,098		$	2,901
Electrical		6,551			4,772			5,769
Corporate & other		(1,237	)		(678	)		(727	)
Consolidated	$	9,889		$	9,192		$	7,943

Reconciliation of Income from Operations to Net Income

	2004			2003			2002
	2005			2004			2003
Income from operations	$	911,~~889~~600		$	9,~~192~~889		$	79,~~943~~192
Interest expense, net		(21,~~337~~644	)		(2,~~862~~337	)		(2,~~895~~862	)
Other income, net		21,~~304~~421			2,~~901~~304			752,901
Income taxes		(12,~~818~~991	)		(31,~~392~~818	)		(23,~~578~~392	)
Income from continuing operations		8,~~038~~386			58,~~839~~038			25,~~545~~839
Discontinued operations
Income from discontinued operations (including gain on disposal of $725)		—			~~733~~—			—733
Income tax expense		—			(3—	)		—(3	)
Income from discontinued operations		—			~~730~~—			—730
Consolidated net income	$	8,~~038~~386		$	68,~~569~~038		$	26,~~545~~569

	Total Assets
	2004		2003
	2005		2004
Connectivity	$	~~138~~136,~~571~~926	$	~~125~~138,~~167~~571
Electrical		2931,~~967~~917		2429,~~590~~967
Corporate & other		129,~~526~~537		2412,~~099~~526
Consolidated	$	~~181~~178,~~064~~380	$	~~173~~181,~~856~~064

	Depreciation and Amortization
	2004		2003		2002
	2005		2004		2003
Connectivity	$	9,~~431~~906	$	89,~~163~~431	$	78,~~671~~163
Electrical		1,~~476~~792		21,~~782~~476		2,~~465~~782
Corporate & other		~~141~~101		~~170~~141		~~230~~170
Consolidated	$	11,~~048~~799	$	11,~~115~~048	$	1011,~~366~~115

	Additions to Long-livedAssets
	2004		2003
	2005		2004
Connectivity	$	4,~~322~~725	$	34,~~029~~322
Electrical		24,~~905~~014		12,~~425~~905
Corporate & other		~~196~~321		52196
Consolidated	$	79,~~423~~060	$	47,~~506~~423

B.	GEOGRAPHIC DATA

	Net Sales
	2004		2003		2002
	2005		2004		2003
United States	$	~~111~~119,~~354~~280	$	~~107~~111,~~309~~354	$	~~106~~107,~~355~~309
All other countries		9095,~~381~~756		7190,~~729~~381		6371,~~824~~729
Consolidated	$	~~201~~215,~~735~~036	$	~~179~~201,~~038~~735	$	~~170,~~179,038

	Total Assets
	2004		2003
United States	$	48,312	$	56,693
Italy		35,703		32,739
France		24,112		20,633
Mexico		22,444		19,275
Canada		22,203		24,182
All other countries		28,290		20,334
Consolidated	$	181,064	$	173,856


	Total Assets
	2005		2004
United States	$	50,083	$	48,312
Italy		33,390		35,703
Canada		25,188		22,203
Mexico		23,120		22,444
France		21,369		24,112
All other countries		25,230		28,290

Consolidated	$	178,380	$	181,064

14.

TAXES

Income before income taxes consisted of the following:

	2004		2003		2002
	2005		2004		2003
United States	$	2,~~324~~474	$	62,~~434~~324	$	46,~~712~~434
International		78,~~532~~903		37,~~530~~532		~~411~~3,530
Total income before taxes	$	911,~~856~~377	$	9,~~964~~856	$	59,~~123~~964

The provision for income taxes consisted of the following:

	2004			2003			2002
	2005				2004			2003
U.S. federal income tax	$	~~456~~244		$	~~1,471~~$	456	$	~~732~~$	1,471
State income taxes		~~108~~103			75	108		~~198~~	75
International income taxes		12,~~254~~644			~~1,849~~	1,254		~~1,648~~	1,849
Total provision for taxes on income		12,~~818~~991			~~3,395~~	1,818	$	~~2,578~~$	3,395
Current provision		~~1,229~~			~~1,963~~			~~947~~
Deferred provision		589			1,432			1,631
U.S. federal income tax		(53	)			409			926
Total provision for taxes on income	$	1,818		$	3,395		$	2,578
State income tax		39				68			9
International		1,799				752			1,028
Total current provision		1,785				1,229			1,963
Deferred provision
U.S. federal income tax		297				47			545
State income tax		64				40			66
International		845				502			821
Total deferred provision		1,206				589			1,432
Total provision for taxes on income		2,991				1,818			3,395

3540

Deferred taxes arise because of different treatment within financial statement accounting and tax accounting, known as temporary differences. We record the tax effect of these temporary differences as deferred tax assets (generally items that can be used as a tax deduction or credit in future periods), and deferred tax liabilities (generally items for which we received a tax deduction, but have not yet recorded in the Statement of Income). The tax effects of the major items recorded as deferred tax assets and liabilities are:

	2004			2003
	2005			2004
Deferred tax assets:
Accounts receivable reserves	$	~~382~~361		$	~~306~~382
Inventory reserves		1,~~129~~021			~~879~~1,129
Employee benefit reserves		1,~~291~~250			1,~~360~~291
Environmental reserves		~~428~~380			~~459~~428
Other reserves		~~1,082~~843			1,~~319~~082
Write-off of purchased research and development		1,~~700~~340			1,~~395~~700
Software amortization		~~1,229~~393			1,~~008~~229
Write-off of impaired long-lived assets		510			635
Depreciation and amortization		476			—
Investment impairment loss		30			439
Write-off of impaired long-lived assets		390			510
Loss carryforwards		4,571			3,658
Investment impairment loss		—			30
Other, net		418			316
Loss carryforwards		4,565			4,571
Less: Valuation allowance		(929	)		(1,389	)
Other, net		407			418
Total deferred tax assets		11,841			10,385
Less: Valuation allowance		(1,291	)		(929	)
Total deferred tax assets		10,135			11,841
Less: Deferred tax liabilities
Accelerated depreciation and amortization		98,~~486~~565			69,~~590~~486
Prepaid pension		~~631~~694			~~659~~631
Other, net		~~705~~664			~~211~~705
Total deferred tax liabilities		109,~~822~~923			710,~~460~~822
Net deferred tax assets	$	~~1,019~~212		$	21,~~925~~019

At October 2 1, ~~2004~~2005 we have federal, state and foreign net operating loss carryforwards of $22.02 million for income tax purposes that expire in fiscal years 2006 through ~~2009~~2010. In addition, we have foreign net operating loss carryforwards of $1.82 million with an indefinite ~~carryforward~~ carryforward period. For financial reporting purposes, we recorded a valuation allowance of $01.80 million to offset some of the deferred tax assets related to those net operating loss carryforwards that may expire unused.

In performing our updated analysis of the ~~reasonability~~reasonableness of our deferred tax assets, we considered current and forecasted operating results and available tax planning strategies. During the year ended October 2, 2004, legislation was enacted in France, which extended the net operating loss carryforward period from five years to an indefinite period. In light of this new information, and after considering all available evidence, both positive and negative, we concluded a valuation allowance was no longer required for our net operating loss carryforward deferred tax asset in France, resulting in $0.5 million of tax benefit being recognized during the year ended October 4 2, 2004.

3641

A reconciliation of the federal statutory rate to the effective tax rate is as follows:

	2004		2003		2002
	2005		2004		2003
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income tax, net of federal benefit	0.76	%	0.57	%	20.65	%
Effect of international operations	(23.8	)%	3(2.78	)%	03.57	%
Tax effect of capital gain not recorded	~~(4.1~~—	)%	(2.4.1	)%	—(2.4	)%
Benefit of partial exclusion of capital gain income	(21.89	)%	(52.08	)%	—(5.0	)%
Research credits	(21.43	)%	(2.64	)%	(12.6	)%
Effect of tax rate changes on existing deferred balances	(10.94	)%	(01.69	)%	—(0.6	)%
Change in valuation allowance	(3.23	)%	2(3.82	)%	92.8	%
Other, net	(0.1	)%	2.7	%	4.0	%
Reversal of tax contingency accrual	(4.5	)%	—		—
Effective tax rate	18.4	%	34.1	%	50.3	%
Other, net	(0.7	)%	(0.1	)%	2.7	%
Effective tax rate	26.3	%	18.4	%	34.1	%

~~Undistributed~~In ~~earnings~~2005 ofwe ~~our~~recorded ~~foreign subsidiaries~~a ~~amounted~~tax tobenefit ~~approximately~~ of $190.25 million atby ~~October~~reversing 2,an ~~2004. Those earnings are considered to be indefinitely reinvested and, accordingly, no provision for U.S. federal and state~~ income tax ~~has~~contingency ~~been~~accrual ~~provided~~following ~~thereon. Upon distribution of those earnings in~~ the ~~form~~completion of ~~dividends or otherwise, we would be subject to both U.S. income tax (subject to~~ an ~~adjustment~~audit ~~for foreign tax credits) and withholding taxes payable to various foreign countries. Determination~~ of ~~the~~our ~~amount~~fiscal ~~of unrecognized~~2002 ~~deferred U.S.~~ income tax ~~liability~~return isby ~~not practicable because of~~ the ~~complexities~~Internal ~~associated~~Revenue ~~with its hypothetical calculation~~Service. ~~Withholding taxes of approximately $1.0 million would be payable upon remittance of all previously unremitted earnings at October 2, 2004.~~

Undistributed earnings of our foreign subsidiaries amounted to approximately $29.3 million at October 1, 2005. Those earnings are considered to be indefinitely reinvested and, accordingly, no provision for U.S. federal and state income tax has been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, we would be subject to both U.S. income tax (subject to an adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable because of the complexities associated with its hypothetical calculation. Withholding taxes of approximately $1.5 million would be payable upon remittance of all previously unremitted earnings at October 1, 2005.

During the first fiscal quarter of 2005, the American Jobs Creation Act and the Working Families Tax Relief Act of 2004 were enacted. This legislation contains numerous corporate tax changes, including eliminating a tax benefit relating to U.S. product exports, a new deduction relating to U.S. manufacturing, a special one-time provision allowing earnings of certain foreign corporations to be repatriated at a lower U.S. tax rate and an extension of the research and experimentation credit. We are studying this legislation, including the impact of repatriation provisions (as provided by FASB Staff Position 109-2) to determine if there is any impact to our future tax liability.

15.

BENEFIT PLANS

We have defined contribution, defined benefit and government mandated plans covering eligible non-bargaining unit employees.

The annual profit-sharing contributions, which are the lesser of (i) a percentage of income defined in the plans, or (ii) 15% of the aggregate compensation paid to to participants during the year, were $0.67 million, $0.6 million and $0.76 million in ~~2004~~2005, ~~2003~~2004 and ~~2002~~2003, respectively.

We make matching contributions of 50% of employees’ contributions, up to 4% of compensation, to a 401(k) plan. Matching contributions were $0.3 million in ~~2004~~2005, ~~2003~~2004 and ~~2002~~2003.

Pension benefits are fully vested after five years and are based upon years of service and highest five-year average compensation. It has been our policy to fund our pension costs by making annual contributions based upon minimum funding provisions of the Employee Retirement Income Security Act of 1974. We contributed an additional $~~0.9 million and $2.0 million in 2004 and 2003, respectively, to improve the funded status of our plan. Our total pension expense for company-sponsored qualified plans was $~~1.05 million, $0.49 million, and $02.40 million in ~~2004~~ 2005, ~~2003~~2004 and ~~2002~~2003, respectively., ~~The 2004 pension expense of $1.0 million included $0.4 million of pension settlement expense triggered by reduced employment levels that required us~~ to ~~recognize~~improve ~~past gains and losses in our pension accounts. This $0.4 million settlement expense is included in~~ the ~~Aero-Motive restructuring charge.~~

In42 1990 we adopted a supplemental retirement benefit plan for certain key executive officers which will provide supplemental payments upon retirement, disability or death. The obligations are not funded apart from our general assets. We charged $0.2 million in 2004, 2003 and 2002 to expense under the plan.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the plans with accumulated benefit obligations in excess of plan assets were $1.8 million, $1.6 million and $0, respectively in 2004; $1.1 million, $1.0 million and $0, respectively in 2003; and $8.0 million, $6.5 million and $4.8, respectively, in 2002.

funded status of our plan. Our total pension expense for company-sponsored qualified plans was $0.7 million, $1.0 million, and $0.4 million in 2005, 2004 and 2003, respectively. The 2004 pension expense of $1.0 million included $0.4 million of pension settlement expense triggered by reduced employment levels that required us to recognize past gains and losses in our pension accounts. This $0.4 million settlement expense was included in the Aero-Motive restructuring charge.

In 1990 we adopted a supplemental retirement benefit plan for certain key executive officers which will provide supplemental payments upon retirement, disability or death. The obligations are not funded apart from our general assets. We charged $0.4 million in 2005 and $0.2 million in both 2004 and 2003 to expense under the plan.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the plans with accumulated benefit obligations in excess of plan assets were $2.0 million, $1.8 million and $0, respectively in 2005; $1.8 million, $1.6 million and $0, respectively in 2004; and $1.1 million, $1.0 million and $0, respectively, in 2003.

The components of net periodic pension cost for the non-union plans were:

	2004			2003			2002
	2005			2004			2003
Service cost-benefits earned during the year	$	~~600~~664		$	~~496~~600		$	~~486~~496
Interest cost on projected benefit obligation		~~595~~608			~~508~~595			~~572~~508
Expected return on plan assets		(~~610~~616	)		(~~486~~610	)		(~~551~~486	)
Amortization of prior service cost		27			27			3127
Amortization of transitional asset		12			1			1
Recognized actuarial loss		~~196~~331			50196			350
Additional loss recognized due to settlement		~~430~~99			—430			—
Periodic pension cost, net	$	1,~~239~~115		$	~~596~~1,239		$	~~542~~596

The measurement date used to determine pension ~~and other postretirement~~ benefits was September 30, ~~2004~~2005. We used the following assumptions in accounting for the pension plans:

	2004		2003		2002
	2005		2004		2003
Discount rate	5.85	%	65.38	%	6.83	%
Rate of increase in compensation levels	4.5	%	4.5	%	4.5	%
Expected long-term rate of return on plan assets	8.0	%	8.0	%	8.0	%

~~The~~43 ~~following table reconciles the plans’ funded status and the amount recorded on our consolidated balance sheets for our non-union plans:~~

	2004			2003
Change in benefit obligation:
Benefit obligation at beginning of year	$	9,048		$	7,962
Service cost		600			496
Interest cost		595			508
Benefits paid		(1,559	)		(684	)
Settlement payments		1,304			—
Actuarial loss		425			766
Benefit obligation at end of year		10,413			9,048
Change in plan assets:
Fair value of plan assets at beginning of year		7,059			4,841
Actual return on plan assets		(493	)		703
Employer contributions		945			2,199
Benefits paid		(1,559	)		(684	)
Settlement payments		1,304			—
Fair value of plan assets at end of year		7,256			7,059
Reconciliation of funded status:
Underfunded status		3,157			1,989
Unrecognized actuarial loss		(3,590	)		(2,689	)
Unrecognized transition obligation		(3	)		(4	)
Unrecognized prior service cost		(165	)		(191	)
Prepaid pension cost included in the consolidated balance sheets	$	(601	)	$	(895	)

The following table reconciles the plans’ funded status and the amount recorded on our consolidated balance sheets for our non-union plans:


	2005			2004
Change in benefit obligation:
Benefit obligation at beginning of year	$	10,413		$	9,048
Service cost		664			600
Interest cost		608			595
Benefits paid		(917	)		(255	)
Settlement payments		(375	)		(1,304	)
Actuarial loss		1,148			1,729

Benefit obligation at end of year		11,541			10,413

Change in plan assets:
Fair value of plan assets at beginning of year		7,256			7,059
Actual return on plan assets		755			811
Employer contributions		1,920			945
Benefits paid		(917	)		(255	)
Settlement payments		(375	)		(1,304	)

Fair value of plan assets at end of year		8,639			7,256

Reconciliation of funded status:
Underfunded status		2,902			3,157
Unrecognized actuarial loss		(4,168	)		(3,590	)
Unrecognized transition obligation		(2	)		(3	)
Unrecognized prior service cost		(138	)		(165	)

Prepaid pension cost included in the consolidated balance sheets	$	(1,406	)	$	(601	)

Amounts recorded on the consolidated balance sheets were:

	2004			2003
	2005			2004
Prepaid benefit cost	$	(12,~~783~~582	)	$	(~~895~~1,783	)
Accrued benefit liability		1,~~646~~816			—1,646
Intangible asset		(~~110~~95	)		—(110	)
Accumulated other comprehensive income		(~~354~~545	)		—(354	)
Prepaid pension cost included in the consolidated balance sheets	$	(~~601~~1,406	)	$	(~~895~~601	)

Our investment policies employ an approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The investment portfolio contains a diversified blend of equity and fixed income investments. Equity investments are diversified across domestic and international stocks, as well as growth, value and small to large capitalizations. Fixed income investments have an average duration of three to seven years. Investment and market risks are measured and monitored on an ongoing basis through regular portfolio reviews, annual liability measurements and periodic asset/liability studies. We rebalance asset allocations as appropriate in order to stay within a targeted range of allocation for each asset category. Investment in certain derivatives is permitted.

The plan asset targeted and actual allocations by category were:

	Targeted 2004	2004		2003
	Targeted2005	2005		2004
Domestic equities	30% – 75%	4154	%	2741	%
International equities	5% – 25%	1715	%	1817	%
Fixed income	10% – 65%	3020	%	4430	%
Cash		1211	%	1112	%
Total		100	%	100	%

The expected return on plan assets is based on our expectation of the long-term average rate of return of the capital markets in which the plan invests. The expected return reflects the investment policy target asset mix and considers the historical returns earned for each asset category.

We do not expect to contribute ~~$0.4 million~~ to the non-union ~~plans~~qualified inplan ~~2005.~~in 2006.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

Fiscal Year	Payment
2005	$	670
2006	$	304
2006		329
2007		312
2007		346
2008		359
2008		392
2009		402
2009		428
2010		420
2010 – 2014	$	2,659
2011 – 2015	$	2,968

Although we have the right to improve, change or terminate the plans, they are intended to be permanent.

~~Most~~Our ~~of our~~ union employees are covered by union-sponsored, collectively- bargained, multi-employer pension plans. For such plans, we contributed and charged to expense $0.1 million in 2005 and $0.2 million in both 2004, ~~2003~~ and ~~2002~~2003. These contributions are determined in accordance with the provisions of negotiated labor contracts and generally are based on the number of man-hours worked. Information from the union plans’ administrators is not available to permit us to determine our share of unfunded vested benefits.

We provide an optional retiree medical program to a majority of our U.S. salaried and non-union retirees. Beginning in April 2003, the plan was modified to require participants to fund the total cost of the retiree medical program. At September 28, 2002 we had an accrued postretirement benefit cost, which was included in our consolidated balance sheet in the amount of $2.3 million. At December 27, 2003 we had no liability for any of these postretirement benefit costs and the reduction of the $2.3 million liability was amortized over the period from April 1, 2003 to December 27, 2003.

program. At September 28, 2002 we had an accrued postretirement benefit cost, which was included in our consolidated balance sheet in the amount of $2.3 million. At December 27, 2003 we had no liability for any of these postretirement benefit costs and the reduction of the $2.3 million liability was amortized over the period from April 1, 2003 to December 27, 2003.

These postretirement benefits are unfunded. Cost components of these postretirement benefits, principally health care, were:

	2004				2003				2002
	2005		2004				2003
Service cost	$—	~~(1,497~~	)$	(1,497	$)	67	$	67	$	~~121~~
Interest cost	—	—		—		~~166~~		166		~~256~~
Amortization of transition obligation	—	—		—		~~(2,895~~	)	(2,895	)	38
Recognized actuarial loss	—	~~719~~		719		~~1,493~~		1,493		77
Total Cost	$—	~~(778~~	)$	(778	$)	~~(1,169~~	)$	(1,169	$)	~~492~~

~~The~~45 ~~funded status of these benefits on the balance sheet dates was as follows:~~

	2004		2003
Actuarial present value of benefit obligation:
Retirees	$	—	$	40
Eligible active employees		—		—
Other active employees		—		—
Accumulated postretirement benefit obligation		—		40
Fair value of plan assets at end of year		—		—
Underfunded status		—		40
Unrecognized transition obligation		—		—
Unrecognized prior service cost		—		1,457
Unrecognized actuarial loss		—		(719	)
Accrued postretirement benefit cost included in the consolidated balance sheets	$	—	$	778

We used the following assumptions in accounting for these plans:

Participants aged under 65:

	2004	2003		2002
Discount rate	N/A	6.3	%	6.8	%
Health care trend rate in first year	N/A	N/A		10.0	%
Gradually declining to a trend rate of	N/A	N/A		6.0	%
in the year	N/A	N/A		2006

Participants aged 65 and over:

	2004	2003		2002
Discount rate	N/A	6.3	%	6.8	%
Health care trend rate in first year	N/A	N/A		10.0	%
Gradually declining to a trend rate of	N/A	N/A		6.0	%
in the year	N/A	N/A		2006

A one-percentage point increase in the assumed health care trend would have the following effects on:

	2004	2003		2002
Aggregate of service and interest cost	—	$	38	$	90
Accumulated postretirement obligation	—		—	$	1,016

We used an assumed discount rate of 6.3% in 2003 for these plans.

We provide certain post-employment benefits to former or inactive employees before retirement. The costs associated with those benefits are immaterial.

16.

CONTINGENT LIABILITIES

We are subject to federal and state hazardous substance cleanup laws that impose liability for the costs of cleaning up contamination resulting from past spills, disposal or other releases of hazardous substances. In this regard, we have incurred, and expect to incur, assessment, remediation and related costs at one of our former facilities. In 1991, we reported to state regulators a release at that site from an ~~underground~~ underground storage tank (“UST”). The UST and certain contaminated soil subsequently were removed and disposed of at an off-site disposal facility.

We have been conducting an investigation of soil and groundwater at the site with oversight by the state Department of Environmental Quality (“DEQ”). The investigation indicates that, unrelated to the UST release, additional soil and groundwater at the site have been impaired by chlorinated solvents, including tetrachloroethane and trichloroethylene, and other compounds. Also, our investigation revealed that the previous owners of the site had used a portion of the site as a disposal area. We have remediated the soils in this area but we believe that it is a source of contamination of groundwater, both on-site and off-site. Our investigation indicates that there were releases by the previous owners in areas over which additions were subsequently built. These releases have impacted groundwater that has migrated off-site. We have implemented a groundwater remediation system for the on-site contamination. We continue to monitor and analyze conditions to determine the continued efficacy of the system. We also have implemented a groundwater remediation system for the off-site contamination. We continue to analyze other remedial alternatives for the off-site groundwater contamination and are reviewing these alternatives with the DEQ.

We previously filed a complaint in federal district court seeking contribution from the previous owners of the site for the cost of the investigation and remediation of the site. We settled that litigation through a consent judgment against the former owners. Also, we asserted claims against insurers of the former owners for the amounts specified in the consent judgment. The insurers denied coverage and three of them filed a declaratory judgment action to that effect against us in federal district court. In July 2004 the federal district court entered an Order and Judgment on cross motions for summary ~~disposition~~judgment resolving the claims in favor of the insurers. We have filed an appeal to the U.S. Court of Appeals for the Sixth Circuit, and following the Court’s per curium affirmance in November 2005 we have filed a petition for rehearing en banc.

We have a reserve for the $1.75 million of investigation and remediation expenses we have estimated to be incurred over the next 1413 years to address the environmental issue at our site in Michigan. We based our estimate on the future costs expected to be incurred to investigate, monitor and remediate the site. Our cost estimate continues to be subject to substantial uncertainty because of the extent of the contamination area, the variety and nature of geological conditions throughout the contamination area, changes in remediation technology and the state’s Department of Environmental Quality feedback. Funding this activity will come from operating cash flows and only changes to the reserve estimate will affect the results of operations.

We indemnify certain customers with regard to product liability. We have insurance policies to cover this exposure, which includes a minimal deductible to be paid by us.

17.

RESTRUCTURING CHARGES

~~During~~In ~~the~~January ~~second~~2003 ~~quarter of 2002~~ we ~~recorded~~adopted aSFAS ~~restructuring charge in the amount of $1~~No.0 146, ~~million~~Accounting ~~to primarily account~~ for ~~severance~~Costs ~~and~~Associated ~~related~~with ~~costs~~Exit ofor ~~eliminating about~~Disposal ~~10% of our salaried positions worldwide. Additionally we identified 31 positions in our manufacturing plant in Northbrook~~Activities, ~~Illinois,~~ which ~~were~~generally ~~eliminated~~requires ~~with~~that ~~the~~a ~~continued~~liability ~~migration~~for ~~of product to our new manufacturing plant in Juarez,~~costs ~~Mexico.~~associated ~~This~~with ~~workforce reduction represented~~ an ~~acceleration~~exit ofor ~~initiatives~~disposal ~~that~~activity webe ~~started~~expensed ~~over~~as ~~the~~incurred. ~~previous~~Exit ~~six~~costs ~~months~~primarily toconsist ~~improve~~of ~~our~~future ~~efficiencies~~minimum ~~and~~lease ~~reduce~~payments ~~expenses.~~on ~~The~~vacated ~~restructuring resulted in the layoffs of 93 people~~facilities, offacility ~~which~~closure ~~70 people were~~

4146

~~severed~~costs asand offacility ~~March~~consolidation ~~30, 2002~~costs. ~~The~~Employee ~~restructuring~~separation ~~was~~costs ~~completed~~consist ~~during~~primarily ~~fiscal~~of ~~2002~~severance ~~and~~costs. ~~there~~At iseach ~~currently~~reporting nodate, ~~reserve~~we ~~left~~will ~~for~~evaluate ~~any~~our ~~of these restructuring~~accruals ~~charges.~~for ~~The~~exit ~~restructuring~~costs ~~accrual~~and ~~account~~employee ~~had~~separation ~~the~~to ~~following~~ensure ~~balances~~that atthe ~~September~~accruals ~~28,~~are ~~2002~~still ~~and~~appropriate. ~~September 27, 2003:~~

	Restructuring Reserve
Balance at 9/29/2001		—
Charged to expense in Q2 2002	$	1,015
Cash paid in 2002		984
Remaining balance at 9/28/02		31
Cash paid in 2003		31
Balance 9/27/2003		—

In the quarter ending June 28, 2003 we announced the closing of our Aero-Motive facility in Kalamazoo, Michigan. In addition to selling two small product lines (workstations in the fourth quarter of fiscal 2003 and government hose reels in the first quarter of 2004) that did not align strategically with our current operations, we consolidated and integrated the remaining manufacturing operations into our facility in Juarez, Mexico. The office operations have been integrated with our Northbrook, Illinois facility. The closing of this facility terminated the employment of 111 total employees, which included 64 plant employees and 47 office employees. At the end of fiscal year 2004 the facility was closed and all employees terminated.

InWe ~~January~~completed ~~2003~~the werestructuring ~~adopted~~in ~~SFAS No.~~fiscal ~~146,~~year ~~Accounting~~2004 ~~for~~and ~~Costs~~recorded ~~Associated~~restructuring ~~with~~and ~~Exit~~other orrelated ~~Disposal~~charges ~~Activities,~~of ~~which~~$1.1 ~~generally~~million ~~requires~~in that ayear. ~~liability~~We ~~for~~recorded ~~costs~~$3.2 ~~associated~~million ~~with~~of antotal ~~exit~~restructuring orcharges ~~disposal~~for ~~activity~~this beaction. ~~expensed~~Included asin ~~incurred.~~the ~~Exit~~restructuring ~~costs~~charges ~~primarily~~were ~~consist~~pension settlement costs of ~~future~~$0.4 ~~minimum~~million ~~lease~~in ~~payments~~fiscal on2004. ~~vacated~~The ~~facilities,~~pension ~~facility~~settlement ~~closure~~charges ~~costs~~were ~~and~~triggered ~~facility~~by ~~consolidation~~the ~~costs.~~reduction ~~Employee~~in ~~separation~~employment ~~costs~~levels ~~consist~~that ~~primarily~~required ofus ~~severance~~to ~~costs.~~recognize Atpast ~~each~~gains ~~reporting~~and ~~date,~~losses wein ~~will evaluate~~ our ~~accruals~~pension ~~for~~plan ~~exit~~accounts. ~~costs~~This ~~and~~restructuring ~~employee separation~~charge, toincluding ~~ensure~~the ~~that~~pension ~~the~~settlement ~~accruals~~charge, is ~~are~~comprised ~~still~~of ~~appropriate.~~the following:

In the quarter ending June 28, 2003 we announced the closing of our Aero-Motive facility in Kalamazoo, Michigan. In addition to selling two small product lines (workstations in the fourth quarter of fiscal 2003 and the hose reels in the first quarter of 2004) that did not align strategically with our current operations, we consolidated and integrated the remaining manufacturing operations into our facility in Juarez, Mexico, which will improve our overall operating efficiencies. The office operations have been integrated with our Northbrook, Illinois facility. The closing of this facility terminated the employment of 111 total employees, which included 64 plant employees and 47 office employees. At the end of fiscal year 2004 the facility was closed and all employees terminated.

In fiscal year 2004 we recorded restructuring and other related charges of $1.1 million, which related to the closing of our Aero-Motive facility. The Aero-Motive restructuring program is now complete and we recorded $3.2 million of total restructuring charges. Included in the restructuring charges were pension settlement costs of $0.4 million in fiscal 2004. The pension settlement charges were triggered by the reduction in employment levels that required us to recognize past gains and losses in our pension plan accounts. This restructuring charge, including the pension settlement charge, is composed of the following:


	Costs expensed Fiscal Year 10/02/04		Cumulative costs through 10/02/04		Total anticipated costs
One-Time Termination Benefit	$	269	$	1,203	$	1,203
Other Associated Costs		824		1,955		1,955

Total Restructuring and Other Charges	$	1,093	$	3,158	$	3,158

The costs included as a one-time termination benefit are the payment of severance benefits that have been expensed. Included in other associated costs are the pension settlement charges of $0.4 million. Accelerated depreciation, legal fees, system conversion costs, incidental salaries and travel expense represent the balance of other associated costs.

42For the twelve months ended October 2, 2004 we recorded restructuring charges of $1.1 million.

~~Table~~The ofAero-Motive ~~Contents~~restructuring accrual accounts had the following balances at September 27, 2003 and October 2, 2004:

The Aero-Motive restructuring accrual accounts had the following balance at September 27, 2003 and October 2, 2004:


	Restructuring Reserve
Balance at 9/27/2003	$	859

Charged to expense in fiscal 2004		1,093
Less: depreciation non-cash expense		(15	)
Cash paid in 2004		1,967

Balance at 10/2/2004		—

	Restructuring Reserve
Balance at 9/27/2003	$	859
Charged to expense in fiscal 2004		1,093
Less: depreciation non-cash expense		(15	)
Cash paid in 2004		1,967
Remaining balance at 10/2/2004		—

There was no activity for the twelve months ending October 1, 2005 and the accrual balance remained zero.

18.

SALE OF AKAPP OPERATIONS

On September 29, 2002 we adopted SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. SFAS No. 144 states that the results of operations of a component of an entity that has either been ~~disposed of or is classified as held for sale shall be reported in discontinued operations if both the following conditions are met: (a) the operations and cash flows of the component have been (or~~ will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction and (b) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.

disposed of or is classified as held for sale shall be reported in discontinued operations if both the following conditions are met: (a) the operations and cash flows of the component have been (or will be) eliminated from the ongoing operations of the entity as a result of the disposal transaction and (b) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction.

In November 2002 we sold our Dutch subsidiary, AKAPP, to a third party. We sold the AKAPP operation for $4.9 million in cash, which included the payment of a $2.6 million inter-company loan and the receipt of $2.3 million in cash. As a result of this transaction we recorded a $0.7 million gain on disposal, which in accordance with SFAS No. 144 has been reported as Income from Discontinued Operations. The results of operations related to AKAPP for fiscal 2003 were also recorded as Income from Discontinued Operations. The results of operations for AKAPP in fiscal 2002 were not reclassified to discontinued operations because (as shown below) they are not material.

	Twelve Months Ended 9/28/02
	Twelve MonthsEnded 9/28/02
Sales	$	5,732
Income Before Taxes		26
Net Income	$	17

4319. SUBSEQUENT EVENT

On November 11, 2005, one of our subsidiaries (the “Subsidiary”) entered into an agreement to settle litigation with another party (the “Defendant”) relating to allegations of breach of contract filed by the Subsidiary and to counterclaims alleged by the Defendant against the Subsidiary relating to allegations of breach of a related contract. Under the terms of the settlement, the Subsidiary will receive approximately $1.5 million (after payment of amounts owed to the former owner of certain assets purchased by the Subsidiary) and is expected to be credited to operations in 2006. The confidential settlement, in which neither party admits liability, provides for mutual releases, dismissal of all actions between the parties and termination of the parties’ obligations under certain agreements between the parties.

1920. SUMMARY OF QUARTERLY DATA (UNAUDITED)

Our common stock trades on the NASDAQ Stock Market under the symbol WDHD. The daily quotations are published in the Wall Street Journal and other leading publications. At October 2 1, ~~2004~~2005 we had ~~386~~374 shareholders of record.

The following table sets forth selected financial data along with the high and low sales price of our common stock on the NASDAQ Stock Market during the last three fiscal years.

	Quarter
2005	First		Second		Third		Fourth		Full year
Net sales	$	48,676	$	56,393	$	56,958	$	53,009	$	215,036
Gross profit		16,722		20,845		21,947		20,122		79,636
Income from operations		226		3,097		4,901		3,376		11,600
Net income		1,216		1,327		3,173		2,670		8,386
Earnings per share - basic		0.10		0.11		0.26		0.22		0.69
Earnings per share - diluted		0.10		0.11		0.26		0.22		0.68
Dividends per common share	$	0.10	$	0.10	$	0.10	$	0.10	$	0.40
Stock Prices:
High	$	17.09	$	16.06	$	13.42	$	14.98	$	17.09
Low	$	14.75	$	13.31	$	11.51	$	13.00	$	11.51
2004	First		Second		Third		Fourth		Full year
Net sales	$	45,144	$	50,841	$	52,653	$	53,097	$	201,735
Gross profit		16,521		19,328		20,201		20,020		76,070
Income from operations		959		2,481		3,592		2,857		9,889
Net income		2,059		955		1,610		3,414		8,038
Earnings per share - basic		0.17		0.08		0.13		0.28		0.67
Earnings per share - diluted		0.17		0.08		0.13		0.28		0.66
Dividends per common share	$	0.10	$	0.10	$	0.10	$	0.10	$	0.40
Stock Prices:
High	$	17.36	$	18.88	$	16.22	$	15.50	$	18.88
Low	$	14.81	$	14.58	$	13.50	$	13.21	$	13.21
2003	First		Second		Third		Fourth		Full year
Net sales	$	42,232	$	45,810	$	46,694	$	44,302	$	179,038
Gross profit		15,728		16,910		16,629		16,780		66,047
Income from operations		1,960		2,576		2,322		2,334		9,192
Net income		2,156		1,531		2,044		838		6,569
Earnings per share - basic		0.18		0.13		0.17		0.08		0.56
Earnings per share - diluted		0.18		0.13		0.17		0.07		0.55
Dividends per common share	$	0.09	$	0.09	$	0.09	$	0.09	$	0.36
Stock Prices:
High	$	12.74	$	13.90	$	12.85	$	17.37	$	17.37
Low	$	8.81	$	10.93	$	11.10	$	11.83	$	8.81
2002
Net sales	$	38,621	$	42,579	$	45,603	$	43,376	$	170,179
Gross profit		14,485		15,593		17,429		14,902		62,409
Income from operations		1,295		1,230		3,277		2,141		7,943
Net income		136		164		1,526		719		2,545
Earnings per share - basic		0.01		0.01		0.13		0.06		0.22
Earnings per share - diluted		0.01		0.01		0.13		0.06		0.22
Dividends per common share	$	0.09	$	0.09	$	0.09	$	0.09	$	0.36
Stock Prices:
High	$	18.15	$	17.80	$	19.23	$	17.30	$	19.23
Low	$	13.80	$	14.73	$	15.90	$	11.38	$	11.38

4449

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~Information~~None required by this item is incorporated by reference to our current report on Form 8-K, which we filed on May 8, 2002, confirming the dismissal of Arthur Andersen LLP as our independent auditor and confirming the engagement of Ernst & Young LLP as our independent auditor.

ITEM 9A.

CONTROLS AND PROCEDURES

WeDisclosure ~~maintain~~Controls ~~disclosure controls~~ and ~~procedures~~Procedures that are designed to ensure that information required to be disclosed in our filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. This information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Our management, including our principal executive officer and our principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

~~Under~~We have carried out an evaluation, under the supervision and with the participation of our ~~management,~~Chief ~~including~~Executive ~~our~~Officer ~~principal~~(CEO) ~~executive~~and ~~officer~~Chief ~~and~~Financial ~~principal~~Officer ~~financial~~(CFO) ~~officer,~~of wethe effectiveness ~~conducted~~of anthe ~~evaluation~~ design and operation of our disclosure controls and procedures ~~within~~as 90of ~~days~~October 1, of2005. Disclosure controls and procedures are to be designed to reasonably assure that material information we must disclose in our reports filed or submitted under the ~~filing~~Securities ~~date~~Exchange Act of ~~this~~1934 ~~report.~~is ~~Based~~(i) recorded, processed, summarized and reported on ~~this~~a ~~evaluation,~~timely basis and (ii) accumulated and communicated to our ~~principal~~management, ~~executive~~including ~~officer~~the CEO and ~~principal~~the ~~financial~~CFO, ~~officer~~as appropriate to allow timely decisions regarding disclosure. As a result of this evaluation, our CEO and CFO have concluded that our disclosure controls and procedures ~~are~~were not effective in ~~alerting~~at ~~them~~October 1, on2005 due to a ~~timely~~material ~~basis~~weakness tooutlined ~~material~~in ~~information~~our management’s ~~required~~report toon beinternal ~~disclosed~~control over financial reporting included in ~~our~~Item 8 ~~periodic~~of ~~filings~~this Annual Report on Form 10-K.

~~There~~Management ~~were~~Report noon ~~significant~~Internal ~~changes~~Control inOver ~~our~~Financial ~~internal~~Reporting ~~controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced in the foregoing paragraph.~~

45Our management’s report on internal control over financial reporting is included with the financial statements set forth in Item 8 of this Annual Report on Form 10-K and is incorporated by reference.

Attestation Report of the Independent Registered Public Accounting Firm

Ernst & Young LLP has audited management’s assessment of the effectiveness of internal controls over financial reporting as stated in their report included in Item 8 of this Annual Report on Form 10-K and is incorporated by reference.

Change in Internal Controls over Financial Reporting

We made changes to our internal controls over financial reporting relating to inventory accounting due to a material weakness that has been identified. These changes are reported in this Annual Report on Form 10-K.

As a result of the material weakness identified, management has instituted procedures to verify that inventory reconciliations are completed on a timely basis and operating effectively. We have made the appropriate changes to our internal controls and all accounts were reconciled at year-end.

PART III

Information for Items 10 through 12 of this report is incorporated by reference to our definitive proxy statement for the Annual Meeting of Stockholders to be held on February 3 2, ~~2005~~2006, which will be filed with the Securities and Exchange Commission (SEC) pursuant to Regulation 14A on or about December 22 21, ~~2004~~2005.

ITEM 10. DIRECTORS

AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information required by this Item related to our directors is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed on or about December 22 21, ~~2004~~2005. The information required by this Item related to our executive officers has been furnished in this report in Part I, after Item 4, under the caption “Executive Officers of the Registrant”.

Information required by this Item as to compliance with Section 16(a) of the Securities Exchange Act of 1934 is incorporated by reference to our proxy statement under the caption “Section 16(a) Beneficial Ownership Reporting Compliance”, which will be filed on or about December 22 21, ~~2004~~2005.

Information required by this Item related to the Audit Committee and Financial Experts is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed on or about December 22 21, ~~2004~~2005.

We have ~~adopted~~ a Code of Ethics for Senior Officers that applies to all of our officers including the Chief Executive Officer, Chief Financial Officer and Chief ~~Accounting~~ Accounting Officer. The Code of Ethics for Senior Officers is included as Exhibit 14 to this Annual Report on Form 10-K. WeThe ~~have made the~~ Code of Ethics is available on our Web Site at www.woodhead.com, which is updated as any amendments or waivers are made.

The information required by this Item regarding material changes to the procedures by which our stockholders may recommend nominees to our Board of Directors is incorporated herein by reference to our proxy statement under the caption “Committees of the Board”, which will be filed on or about ~~December~~ 22December 21, ~~2004~~ 2005.

ITEM 11. EXECUTIVE

COMPENSATION

Information required by this Item is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed with the SEC on or about ~~December~~ 22December 21, ~~2004~~2005.

ITEM 12. SECURITY

OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information required by this Item is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed with the SEC on or about December 22 21, ~~2004~~2005.

We may grant stock options to directors, officers and key employees, under our stock option plans at a price not less than the market value at the date of grant. Detailed information regarding stock option plans can be found in Note 9 of the Notes to Consolidated Financial Statements. The following table summarizes the availability of options in total and available options to be exercised:

	(a)	(b)		(c)
	Number of securitiesto be issued uponexercise ofoutstanding options,warrants and rights	Weighted-averageexercise price ofoutstandingoptions, warrantsand rights		Number of securitiesremaining availablefor futureissuance underequity compensationplans (excludingsecurities reflectedin column (a))
Equity compensation plans approved by security holders	21,~~070~~774,~~025~~575	$	14.6164	~~681~~976,~~542~~992
Equity compensation plans not approved by security holders	—		—	—
Total	21,~~070~~774,~~025~~575	$	14.6164	~~681~~976,~~542~~992

4651

ITEM 13. CERTAIN

RELATIONSHIPS AND RELATED TRANSACTIONS

The registrant does not have any information relating to certain relationships or related transactions that is required to be reported by Item 404 of Regulation S-K.

ITEM 14. PRINCIPAL

ACCOUNTING FEES AND SERVICES

The aggregate fees for professional services provided by our independent registered public accounting firm for the fiscal years ended October 2 1, ~~2004~~2005 and ~~September 27,~~ ~~2003~~October 2, 2004 are as follows:

	2004		2003
	2005		2004
	Ernst & Young LLP		Ernst & Young LLP
Audit Fees	$	~~411~~1,4021	$	~~372~~4201
Audit Related Fees		~~421~~642		~~242~~33
Tax Fees		~~1373~~1263		~~3114~~1374
All Other Fees		—		—
Total	$	~~590~~1,592	$	~~707~~590

1. ~~Amounts~~Fiscal ~~are~~years ~~for~~2005 ~~Sarbanes~~and -2004 ~~Oxley~~include ~~Section~~$917 ~~404~~and ~~consultation~~$42, ~~SFAS~~respectively, ~~No.~~in ~~132~~fees ~~review~~ for ~~Italy~~assurance ~~and~~services ~~review~~in connection with Section 404 of the ~~Aero~~Sarbanes-~~Motive~~Oxley ~~restructuring~~Act ~~charge~~of 2002.

2. ~~Amounts~~Amount ~~are~~includes ~~for~~due ~~benefit~~diligence ~~plan audits and accounting and internal control consultation~~work.

3. Includes $~~125~~90 for tax compliance and $1236 for ~~other~~ tax ~~work programs~~consulting.

4. Includes $~~267~~125 for tax compliance and $4412 for tax ~~planning and tax advice~~consulting.

The Audit Committee of our Board of Directors pre-approves on an annual basis the audit, audit related, tax and other non-audit services to be rendered by our accountants based on historical information and anticipated requirements for the following fiscal year. The Audit Committee pre-approves specific types or categories of engagements constituting audit, audit related, tax and other non-audit services as well as the range of fee amounts corresponding to each such engagement. To the extent that our management believes that a new service or the expansion of a current service provided by our accountants is necessary or desirable, such new or expanded services are presented to the Audit Committee for its review and approval prior to the engagement of our accountants to render such services. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee, who must present such member’s decisions to the full Audit Committee at its next scheduled meeting. No audit related, tax or other non-audit services were approved by the Audit Committee pursuant to Rule 2-01, paragraph (c)(7)(i)(C) of SEC Regulation S-X during the fiscal year ended October 2 1, ~~2004~~2005.

4752

PART IV

ITEM 15. EXHIBITS,

FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

15 (a) (1) FINANCIAL STATEMENTS

All financial statements listed below are those of the company and its consolidated subsidiaries:

		Page(s) in our2004 Form 10-K
		Page(s) in our2005 Form 10-K
Reports of Independent Registered Public Accounting Firm		1718-20
Segment Information		3338-3439
Geographic Data		3539-40
Consolidated Balance Sheets		1821
Consolidated Statements of Income		1922
Consolidated Statements of Cash Flows		2023
Consolidated Statements of Comprehensive Income		2124
Consolidated Statements of Stockholders’ Investment		2225
Notes to Financial Statements		2326-4449

15 (a) (2) FINANCIAL STATEMENT SCHEDULES

Schedules are omitted because they are not required or the information is given elsewhere in the financial statements or related notes.

15 (a) (3) EXHIBITS

These exhibits are available upon request. Requests should be directed to Mr. Robert J. Tortorello, Secretary, Woodhead Industries, Inc., Three Parkway North, Suite 550, Deerfield, Illinois, 60015.

3 (i)

Articles of Incorporation

Our Certificate of Incorporation including amendments through January 22, 1993 is incorporated by reference to Exhibit (4) a of our Form S-8 report filed on April 22, 1994, as Registration #33-77968.

3 (ii)

By-laws

Our By-laws, as amended, are incorporated by reference to Exhibit (3) b of our Form 10-K report for the year ended September 27, 1997.

Instruments defining the rights of security holders, including indentures.

Our Preferred Stock Purchase Rights Plan adopted April 24, 1996, is incorporated by reference to Exhibit 4 of our Form 10-Q report for the period ended March 30, 1996.

A Credit Agreement between the Registrant and Harris Trust and Savings Bank dated April 28, 2004 is incorporated by reference to Exhibit 4(A) of our Quarterly Report on Form 10-Q for the quarter ended June 26, 2004.

Form of the 6.64% Note Purchase Agreement between the Registrant’s consolidated subsidiary, Woodhead Finance Company, and private investors dated September 28, 1998 is incorporated by reference to Exhibit 4(c) of our Annual Report on Form 10-K for the fiscal year ended September 28, 2002.

The 6.81% Note Purchase Agreement between the Registrant and private investors dated September 28, 1998 in the amount of $15,000,000, maturing in 2013.

The document described in paragraph 4(d) above is not filed herewith by Registrant, but Registrant undertakes to furnish copies thereof to the Securities and Exchange Commission upon request.

4853

10.	Material Contracts

The 1990 Stock Awards Plan, as amended, is incorporated by reference to Exhibit (10) (c) of our Form 10-K report for the year ended October 2, 1999.

The 1993 Stock Awards Plan, as amended, is incorporated by reference to Exhibit (10) (d) of our Form 10-K report for the year ended October 2, 1999.

The 1996 Stock Awards Plan, as amended, is incorporated by reference to Exhibit (10) (e) of our Form 10-K report for the year ended October 2, 1999.

The 1999 Stock Awards Plan is incorporated by reference to Exhibit A of our Proxy Statement for the 2000 Annual Meeting of Stockholders.

The 2001 Stock Awards Plan is incorporated by reference to Exhibit A of our Proxy Statement for the 2002 Annual Meeting of Stockholders.

f The ~~Management~~Woodhead ~~Incentive~~Industries, ~~Plan~~Inc. ~~effective~~2006 ~~for~~Management ~~fiscal~~Incentive ~~2005~~Plan, is incorporated by reference to Exhibit 10.2 of our Form 8-K filed on ~~November~~December 178, ~~2004.~~2005

The Plan of Compensation for Outside Directors, is incorporated by reference to Exhibit (10) of our Form 10-K report for the year ended September 28, 1985.

h The 1990 Supplemental Executive Retirement Plan is incorporated by reference to our proxy statement for the Annual Meeting of Stockholders, which will be filed with the SEC on or about December 2221, ~~2004~~2005.

i The Severance Agreement between Mr. Philippe Lemaitre and Woodhead is incorporated by reference to Exhibit 10(i) of our 10-K report for the year ended September 29, 2001. Messrs. Fisher, Gies, Moulton, Nogal, Tortorello, ~~Wiedor~~ and ~~two~~Wiedor ~~other key employees~~ have substantially identical contracts.

j The key employee non-compete agreement with Robert H. Fisher in connection with the grant to Mr. Fisher of a long-term incentive award is incorporated by reference to our Form 8-K filed on November 24, 2004. Messrs. Lemaitre, Gies, ~~Wiedor~~ and ~~one~~Wiedor ~~other key employee~~ have substantially identical non-compete agreements.

The Woodhead Industries, Inc. Board Compensation Summary for non-employee directors effective January 3, 2006, is incorporated by reference to Exhibit 10.1 of our Form 8-K filed on December 8, 2005.

A copy of the Company’s form of Long Term Incentive Award Agreement is incorporated by reference to Exhibit 10.3 of our form 8-K filed on December 8, 2005.

Exhibit 14 Code of Ethics for Senior Officers

Exhibit 21 Subsidiaries of the Company

Exhibit 23.1 Consent of Ernst & Young LLP

Exhibit 31.1 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by Philippe Lemaitre – President and C.E.O.

Exhibit 31.2 Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 signed by Robert H. Fisher – Vice President, Finance and Chief Financial Officer.

Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

1554 ~~(b) REPORTS ON FORM 8-K~~

During the quarter ended October 2, 2004 we filed an 8-K on July 23, 2004 releasing our third quarter 2004 earnings.

SIGNATURES

Under the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, this report was signed on behalf of the Registrant by the authorized persons below.


WOODHEAD INDUSTRIES, INC.

By:		/s/ ROBERT H. FISHER
		Robert H. Fisher Vice President, Finance and C.F.O.

Date: December 15, ~~2004~~ 2005

Under the requirements of the Securities and Exchange Act of 1934, this report was signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Signature	Title	Date
/S/ PHILIPPE LEMAITRE Philippe Lemaitre	Chairman, President and C.E.O. (Principal Executive Officer)	12-15-0405
/S/ ROBERT H. FISHER Robert H. Fisher	Vice President, Finance and C.F.O. (Principal Financial Officer)	12-15-0405
/S/ JOSEPH P. NOGAL Joseph P. Nogal	Vice President, Treasurer/Controller (Principal Accounting Officer)	12-15-0405
/S/ CHARLES W. DENNY Charles W. Denny	Director	12-15-0405
/S/ WILLIAM K. HALL William K. Hall	Director	12-15-04
/S/ THOMAS MCKANE Thomas McKane	Director	12-15-05
/S/ THOMAS MCKANE Thomas McKane	Director	12-15-04
/S/ EUGENE P. NESBEDA Eugene P. Nesbeda	Director	12-15-05
/S/ EUGENE P. NESBEDA Eugene P. Nesbeda	Director	12-15-04
/S/ SARILEE K. NORTON Sarilee K. Norton	Director	12-15-05
/S/ SARILEE K. NORTON Sarilee K. Norton	Director	12-15-04

5055

Table of Contents

WeTable base the fair value for our cross-currency swap on the cost estimate to terminate the agreement. The fair value of the swap at October 2, 2004 and September 27, 2003 was recorded as a $0.7 million and $0.3 million liability, respectively. Contents

Table of Contents

Table of Contents

Table of Contents

Filing Compare · WOODHEAD INDUSTRIES INC