ALTRA HOLDINGS, INC.
Notes to Unaudited Condensed Consolidated Interim Financial Statements
Amounts in thousands, unless otherwise noted

Unaudited Condensed Consolidating ~~Statement~~Statements of Comprehensive Income

Year to Date Ended October 1, 2011
Guarantor Non-Guarantor
Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Net sales $ — $ 344,731 $ 191,944 $ (33,580 ) $ 503,095
Cost of sales — 249,795 137,606 (33,580 ) 353,821

Gross profit — 94,936 54,338 — 149,274
Selling, general and administrative expenses — 51,639 32,366 84,005
Research and development expenses — 3,962 3,582 7,544

Income from operations — 39,335 18,390 — 57,725
Interest expense, net 17,265 659 90 18,014
Other non-operating income, net — (432 ) (236 ) (668 )
Equity in earnings of subsidiaries 39,581 — — (39,581 ) —

Income before income taxes 22,316 39,108 18,536 (39,581 ) 40,379
Provision (benefit) for income taxes (9,463 ) 12,515 5,548 8,600

Net income $ 31,779 $ 26,593 $ 12,988 $ (39,581 ) $ 31,779

   Quarter Ended March 31, 2012
   Issuer Guarantor
Subsidiaries Non-Guarantor
Subsidiaries    Eliminations Consolidated
Net sales
   $ —      $ 128,393    $ 75,185       $ (11,193 ) $ 192,385
Cost of sales
   —      94,507    52,398       (11,193 ) 135,712




Gross profit
   —      33,886    22,787       —      56,673
Selling, general and administrative expenses
   —      18,245    13,752       —      31,997
Research and development expenses
   —      1,415    1,612       —      3,027




Income from operations
   —      14,226    7,423       —      21,649
Interest (income) expense, net
   (180 ) 5,953    1       —      5,774
Other non-operating expense (income), net
   —      (58 ) 283       —      225
Equity in earnings of subsidiaries
   11,092       (11,092 ) —




Income before income taxes
   11,272    8,331    7,139       (11,092 ) 15,650
Provision for income taxes
   756    2,358    2,020       —      5,134




Net income
   10,516    5,973    5,119       (11,092 ) 10,516




Other comprehensive income

Foreign currency translation adjustment
   —      —      5,277       —      5,277




Total comprehensive income
   $ 10,516    $ 5,973    $ 10,396       $ (11,092 ) $ 15,793




Unaudited Condensed Consolidating ~~Statement~~Statements of Comprehensive Income

Year to Date Ended October 2, 2010
Guarantor Non-Guarantor
Issuer Subsidiaries Subsidiaries Eliminations Consolidated
Net sales $ — $ 293,134 $ 125,836 $ (29,346 ) $ 389,624
Cost of sales — 215,547 87,252 (29,346 ) 273,453

Gross profit — 77,587 38,584 — 116,171
Selling, general and administrative expenses 46 44,916 21,029 — 65,991
Research and development expenses — 3,091 2,065 — 5,156
Restructuring costs — 1,207 991 — 2,198

Income (loss) from operations (46 ) 28,373 14,499 — 42,826
Interest expense, net 13,526 1,083 125 — 14,734
Other non-operating expense, net — 764 (14 ) — 750
Equity in earnings of subsidiaries 26,594 — — (26,594 ) —

Income before income taxes 13,022 26,526 14,388 (26,594 ) 27,342
Provision (benefit) for income taxes (6,130 ) 9,284 5,036 — 8,190

Net income $ 19,152 $ 17,242 $ 9,352 $ (26,594 ) $ 19,152

   Quarter Ended April 2, 2011
   Issuer Guarantor
Subsidiaries Non-Guarantor
Subsidiaries Eliminations Consolidated
Net sales
   $ —      $ 119,561    $ 50,885    $ (10,599 ) $ 159,847
Cost of sales
   —      87,663    34,948    (10,599 ) 112,012


Gross profit
   —      31,898    15,937    —      47,835
Selling, general and administrative expenses
   —      17,672    7,844    —      25,516
Research and development expenses
   —      1,424    893    —      2,317


Income from operations
   —      12,802    7,200    —      20,002
Interest expense, net
   4,957    184    22    —      5,163
Other non-operating income, net
   —      (142 ) (144 ) —      (286 )
Equity in earnings of subsidiaries
   14,225    —      —      (14,225 ) —


Income before income taxes
   9,268    12,760    7,322    (14,225 ) 15,125
Provision (benefit) for income taxes
   (1,454 ) 4,466    1,391    —      4,403


Net income
   10,722    8,294    5,931    (14,225 ) 10,722


Other comprehensive income

Foreign currency translation adjustment
   —      —      5,420    —      5,420


Total comprehensive income
   $ 10,722    $ 8,294    $ 11,351    $ (14,225 ) $ 16,142


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

the effects of changes to critical accounting estimates; changes in volatility of the Company’s stock price and the risk of litigation following a decline in the price of the Company’s stock;

the cyclical nature of the markets in which we operate;

the risks associated with the global recession and volatility and disruption in the global financial markets;

political and economic conditions nationally, regionally, and in the markets in which we operate;

natural disasters, war, civil unrest, terrorism, fire, floods, tornadoes, earthquakes, hurricanes, or other matters beyond the Company’s control;

the risks associated with international operations, including currency risks;

the risks associated with the Company’s planned investment in a new manufacturing facility in China; and

other factors, risks, and uncertainties referenced in the Company’s filings with the Securities and Exchange Commission, including the “Risk Factors” set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011.

ALL FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS REPORT. EXCEPT AS REQUIRED BY LAW, WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR RELEASE ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT ANY EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS REPORT OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO US OR ANY PERSON ACTING ON THE COMPANY’S BEHALF ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS CONTAINED OR REFERRED TO IN THIS SECTION AND IN OUR RISK FACTORS SET FORTH IN PART I, ITEM 1A OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, ~~2010,~~2011, AND IN OTHER REPORTS FILED WITH THE SEC BY THE COMPANY.

The following discussion of the financial condition and results of operations of Altra Holdings, Inc. and its subsidiaries should be read together with the audited financial statements of Altra Holdings, Inc. and its subsidiaries and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2011. Unless the context requires otherwise, the terms “Altra Holdings,” “ the Company,” “we,” “us,” and “our” refer to Altra Holdings, Inc. and its subsidiaries.

General
~~General~~
Altra Holdings, Inc. is the parent company of Altra Industrial Motion, Inc. (“Altra Industrial”), and owns 100% of Altra Industrial’s outstanding capital stock. Altra Industrial, directly or indirectly, owns 100% of the capital stock of its 56 subsidiaries. The following chart illustrates a summary of our corporate structure:
Although we were incorporated in Delaware in 2004, much of our current business has its roots with the prior acquisition by Colfax Corporation, or Colfax, of a series of power transmission businesses. In December 1996, Colfax acquired the MPT group of Zurn Technologies, Inc. Colfax subsequently acquired Industrial Clutch Corp. in May 1997, Nuttall Gear Corp. in July 1997 and the Boston Gear and Delroyd Worm Gear brands in August 1997 as part of Colfax’s acquisition of Imo Industries, Inc. In February 2000, Colfax acquired Warner Electric, Inc., which sold products under the Warner Electric, Formsprag Clutch, Stieber, and Wichita Clutch brands. Colfax formed Power Transmission Holding LLC, or “PTH”, in June 2004 to serve as a holding company for all of these power transmission businesses. Boston Gear was established in 1877, Warner Electric, Inc. in 1927, and Wichita Clutch in 1949.
On November 30, 2004, we acquired our original core business through the acquisition of PTH from Colfax. We refer to this transaction as the PTH Acquisition.
On October 22, 2004, The Kilian Company, or Kilian, a company formed at the direction of Genstar Capital, then the largest stockholder of Altra Holdings, acquired Kilian Manufacturing Corporation from Timken U.S. Corporation. At the completion of the PTH Acquisition, (i) all of the outstanding shares of Kilian capital stock were exchanged for shares of our capital stock and (ii) Kilian and its subsidiaries were transferred to Altra Industrial.
On February 10, 2006, we purchased all of the outstanding share capital of Hay Hall Holdings Limited, or Hay Hall. Hay Hall was a UK-based holding company established in 1996 that was focused primarily on the manufacture of couplings and clutch brakes.
On May 18, 2006, we acquired substantially all of the assets of Bear Linear Inc., or Warner Linear. Warner Linear manufactures high value-added linear actuators which are electromechanical power transmission devices designed to move and position loads linearly for mobile off-highway and industrial applications.
On April 5, 2007, the Company acquired all of the outstanding shares of TB Wood’s Corporation, or TB Wood’s. TB Wood’s is an established designer, manufacturer and marketer of mechanical and electronic industrial power transmission ~~products with a history dating back to 1857.~~
products. In December 2007, the Company divested the TB Wood’s electronic division.
On October 5, 2007, we acquired substantially all of the assets of All Power Transmission Manufacturing, Inc., or All Power, a manufacturer of universal ~~joints.~~
joints .
28
On December 31, 2007, we sold the TB Wood’s adjustable speed drives business, or Electronics Division. We sold the Electronics Division in order to continue our strategic focus on our core electro-mechanical power transmission business.
On May 29, 2011, the Company acquired substantially all of the assets and liabilities of Danfoss Bauer GmbH relating to its gear motor business (“Bauer”). Bauer is a European manufacturer of high-quality ~~gearmotors,~~gear motors, offering engineered solutions to a variety of industries, including material handling, metals, food processing and energy. We refer to this transaction as the Bauer Acquisition.
We are a leading global designer, producer and marketer of a wide range of MPT and motion control products with a presence in over 70 countries. Our global sales and marketing network includes over 1,000 direct OEM customers and over 3,000 distributor outlets. Our product portfolio includes industrial clutches and brakes, enclosed gear drives, open gearing, couplings, engineered bearing assemblies, linear components and other related products. Our products serve a wide variety of end markets including energy, general industrial, material handling, mining, transportation and turf and garden. We primarily sell our products to a wide range of OEMs and through long-standing relationships with industrial distributors such as Motion Industries, Applied Industrial Technologies, Kaman Industrial Technologies and W.W. Grainger.
While the power transmission industry has undergone some consolidation, we estimate that in ~~2010~~2011 the top five broad-based MPT companies represented approximately 20% of the U.S. power transmission market. The remainder of the power transmission industry remains fragmented with many small and family-owned companies that cater to a specific market niche often due to their narrow product offerings. We believe that consolidation in our industry will continue because of the increasing demand for global distribution channels, broader product mixes and better brand recognition to compete in this industry.
Our products, principal brands and markets and sample applications are set forth below:
Products

Principal Brands

Principal Markets

Sample Applications
~~Products~~ ~~Principal Brands~~ ~~Principal Markets~~ ~~Sample Applications~~
Clutches and Brakes
Warner Electric, Wichita Clutch, Formsprag Clutch, Stieber Clutch, Matrix, Inertia Dynamics, Twiflex, Industrial Clutch,
Marland Clutch Aerospace, energy, material handling, metals, turf and garden, mining Elevators, forklifts, lawn mowers, oil well draw works, punch presses, conveyors
Gearing
Boston Gear, Nuttall Gear, Delroyd, Bauer Gear Motor Food processing, material handling, metals, transportation Conveyors, ethanol mixers, packaging machinery, metal processing equipment
Engineered Couplings
Ameridrives, Bibby Transmissions, TB Wood’s Energy, metals, plastics, chemical Extruders, turbines, steel strip mills, pumps
Engineered Bearing Assemblies
Kilian Aerospace, material handling, transportation Cargo rollers, seat storage systems, conveyors
Power
Transmission
Components
Warner Electric, Boston Gear, Huco Dynatork, Warner Linear, Matrix, TB Wood’s Material handling, metals, turf and garden Conveyors, lawn mowers, machine tools
Engineered Belted
Drives
TB Wood’s Aggregate, HVAC, material handling Pumps, sand and gravel conveyors, industrial fans
Our Internet address is www.altramotion.com. By following the link “Investor Relations” and then “SEC filings” on our Internet website, we make available, free of charge, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our 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 Exchange Act of 1934, as amended (the “Exchange Act”) as soon as reasonably practicable after such forms are filed with or furnished to the SEC. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this Form 10-Q.
29
Business Outlook
Our future financial performance depends, in large part, on conditions in the markets that we serve and on the U.S. and global economies in general. In ~~both the remainder of 2011 and the first portion of~~ 2012, we expect to continue to focus on the execution of our long-term growth strategy, and ~~the integration of Bauer.~~will also continue to focus on maintaining a reduced cost base. Among other items, we expect our growth initiatives in 2012 will continue to include investing in organic growth, ~~pursuing~~seeking strategic acquisitions, targeting key underpenetrated geographic regions, entering new high-growth markets, enhancing our efficiency and productivity through the Altra Business System and focusing on the development of our people and processes.
During ~~the remainder of 2011,~~2012, as a result of the positive demand environment for our products, we expect that early-cycle and late-cycle markets will continue to be ~~strong although growth rates for early-cycle business are moderating as a result~~consistent with the first quarter of ~~a difficult year-over-year comparison.~~2012. The Bauer Acquisition has created business opportunities for us in certain previously underpenetrated geographic regions and we believe the Bauer Acquisition will provide us with a platform from which we can further execute our acquisition strategy.

Critical Accounting Policies
The preparation of our condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make judgments, assumptions and estimates that affect our reported amounts of assets, revenues and expenses, as well as related disclosure of contingent assets and liabilities. We base our estimates on past experiences and other assumptions we believe to be appropriate, and we evaluate these estimates on an on-going basis. ~~With the exception of business combinations noted below, management~~Management believes there have been no significant changes in our critical accounting policies since December 31, ~~2010.~~2011. See the discussion of critical accounting policies in our Annual Report on Form 10-K for the year ended December 31, ~~2010.~~
~~Business Combinations~~
Business combinations are accounted for at fair value. Acquisition costs are generally expensed as incurred and recorded in selling, general and administrative expenses; and changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally affect income tax expense. The accounting for business combinations requires estimates and judgment as to expectations for future cash flows of the acquired business, and the allocation of those cash flows to identifiable intangible assets, in determining the estimated fair value for assets and liabilities acquired. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements could result in a possible impairment of the intangible assets and goodwill, or require acceleration of the amortization expense of finite-lived intangible assets.
2011.
30
Results of Operations

Quarter Ended Year to Date Ended
October 1, October 2, October 1, October 2,
(In thousands) 2011 2010 2011 2010
Net sales $ 177,853 $ 128,930 $ 503,095 $ 389,624
Cost of sales 124,824 90,289 353,821 273,453

Gross profit 53,029 38,641 149,274 116,171
Gross profit percentage
29.82 % 29.97 % 29.67 % 29.82 %
Selling, general and administrative expenses 31,577 22,804 84,005 65,991
Research and development expenses 2,801 1,746 7,544 5,156
Restructuring costs — 510 — 2,198

Income from operations 18,651 13,581 57,725 42,826
Interest expense, net 6,698 4,838 18,014 14,734
Other non-operating (income) expense, net 216 (272 ) (668 ) 750

Income before income taxes 11,737 9,015 40,379 27,342
Provision for income taxes (403 ) 2,441 8,600 8,190

Net income $ 12,140 $ 6,574 $ 31,779 $ 19,152

   Quarter Ended
   March 31, April 2,
(In thousands)    2012 2011
Net sales
   $ 192,385    $ 159,847
Cost of sales
   135,712    112,012


Gross profit
   56,673    47,835
Gross profit percentage
   29.46 % 29.93 %
Selling, general and administrative expenses
   31,997    25,516
Research and development expenses
   3,027    2,317


Income from operations
   21,649    20,002
Interest expense, net
   5,774    5,163
Other non-operating expense (income)
   225    (286 )


Income before income taxes
   15,650    15,125
Provision for income taxes
   5,134    4,403


Net income
   $ 10,516    $ 10,722


Quarter Ended ~~October 1, 2011~~March 31, 2012 compared with Quarter Ended ~~October~~April 2, ~~2010~~2011
(Amounts in thousands unless otherwise noted)

Quarter Ended
October 1, October 2,
2011 2010 Change %

Net sales
$ 177,853 $ 128,930 $ 48,923 37.9 %
Amounts in thousands, except percentage data    Quarter Ended
   March 31,
2012    April 2,
2011    Change    %
Net sales
   $ 192,385       $ 159,847       $ 32,538       20.4 %
The majority of the increase in sales during the ~~third~~first quarter of ~~2011 is primarily~~2012 was due to improvements in the end markets we serve and the acquisition of Bauer. Of the increase in sales, approximately ~~$30.7~~$26.8 million ofare additional sales related to the acquisition of Bauer ~~improvements in~~and $2.5 million relates to the ~~end markets we serve compared to 2010, and $1.7~~impact of price increases, offset by $1.1 million is related to the impact of foreign exchange rate ~~increases~~changes attributed primarily to ~~the increase in~~ the Euro and British Pound Sterling rates compared to ~~2010.~~2011. Early-cycle markets sales were flat to moderately increased while late-cycle markets such as mining and energy increased markedly. We expect that demand ofat our early-cycle markets will remain flat and growth in our late-cycle markets will remain ~~strong and that we will see further improvement from many of our late-cycle markets, such as mining, power generation, and oil production, as~~consistent with the ~~year progresses.~~first quarter. We expect to see continued increases in sales in ~~2011~~2012 compared to ~~2010.~~
2011.

Amounts in thousands, except percentage data    Quarter Ended
   March 31,
2012 April 2,
2011 Change    %
Gross Profit
   $ 56,673    $ 47,835    $ 8,838       18.5 %
Gross Profit as a percent of sales
   29.5 % 29.9 %
31

Quarter Ended
October 1, October 2,
2011 2010 Change %

Gross Profit
$ 53,029 $ 38,641 $ 14,388 37.2 %
Gross Profit as a percent of sales
29.8 % 30.0 %
The decrease in gross profit as a percentage of sales was primarily due to wage increases and higher material costs in the ~~third~~first quarter of ~~2011,~~2012, primarily relating to copper and steel and ~~the inclusion of Bauer results. This has been offset~~was unfavorably impacted by the effect of foreign exchange of $0.4 million, primarily related to the Euro and British Pound Sterling. These factors were offset by productivity improvements, price increases implemented during the past twelve months, and low cost country sourcing, as well as better overhead absorption as a result of ~~$2.4 million.~~higher production levels. We expect to be able to offset the majority of material cost increases with price increases ~~and surcharges~~ to our customers during future periods. We expect our full year 2012 gross profit as a percentage of sales to ~~improve in the fourth quarter of 2011 as price increases continue to~~ be ~~implemented.~~

Quarter Ended
October 1, October 2,
2011 2010 Change %

Selling, general and administrative expense (“SG&A”)
$ 31,577 $ 22,804 $ 8,773 38.5 %
SG&A as a percent of sales
17.8 % 17.7 %
higher than 2011.
Amounts in thousands, except percentage data    Quarter Ended
   March 31,
2012 April 2,
2011 Change    %
Selling, general and administrative expense (“SG&A”)
   $ 31,997    $ 25,516    $ 6,481       25.4 %
SG&A as a percent of sales
   16.6 % 16.0 %
SG&A increased ~~compared to the third quarter of 2010 due to additional headcount to meet increased demand, higher wage rates, and higher commissions related to the increase in sales, $0.6~~$6.1 million of costs associated with the acquisition of Bauer, as well as the impact of foreign exchange of $0.2 million. During the remainder of 2011, we expect SG&A as a percentage of sales to remain consistent with the third quarter of 2011.

Quarter Ended
October 1, October 2,
2011 2010 Change %

Restructuring Expense
$ — $ 510 $ (510 ) -100.0 %
In March 2009, we adopted a restructuring plan to continue to improve the utilization of our manufacturing infrastructure and to realign our business with economic conditions by consolidating certain facilities. We substantially concluded our restructuring efforts as of the fourth quarter 2010 and expect no additional expense associated with this restructuring effort going forward.

Quarter Ended
October 1, October 2,
2011 2010 Change %

Interest Expense, net
$ 6,698 $ 4,838 $ 1,860 38.4 %
Net interest expense increased due to the issuance of $85 million of Convertible Notes in March 2011 as well as the repurchase of $8.2 million of Senior Secured Notes in the third quarter of 2011 at a premium of $0.2 million, which was recorded as part of interest expense in the third quarter of 2011. Due to the repurchase of the Senior Secured Notes, the Company also wrote-off a proportional amount of the deferred financing fees and original issue discount associated with the Senior Secured Notes totaling $0.3 million which was also recorded as part of interest expense in the third quarter of 2011.
32

Quarter Ended
October 1, October 2,
2011 2010 Change %

Other non-operating (income) expense, net
$ 216 $ (272 ) $ 488 -179.4 %
~~Other non-operating (income) expense in both the third quarter 2011 and 2010 relates primarily to changes in foreign currency, primarily the British Pound Sterling and Euro.~~

Quarter Ended
October 1, October 2,
2011 2010 Change %

Provision for income taxes
$ (403 ) $ 2,441 $ (2,844 ) -116.5 %
Provision for income taxes as a % of income before income taxes
-3.4 % 27.1 %
The 2011 third quarter provision for income taxes, as a percentage of income before taxes, was lower than that of the third quarter 2010. The income tax rate before discrete items was 31.8% in the third quarter of 2011. The primary reason for the decrease in tax provision is due to discrete items. The Company recognized a tax benefit for the reduction of the Company’s reserve for uncertain tax positions due to a favorable New Jersey Supreme Court ruling in a case that did not involve the Company. The reserve amount consisted of approximately $2.3 million of tax, $1.8 million accrued interest and $0.5 million of penalties. In addition, the Company reversed $1.4 million of deferred tax assets related to the federal benefit of the accrued state reserve. The net benefit to the Company is approximately $3.2 million. In addition, the Company released $0.7 million of a valuation allowance against state income tax attributes. This amount was fully recognized in the Company’s effective rate for the quarter ended October 1, 2011.
33
~~Year to Date Period Ended October 1, 2011 compared with the Year to Date Period Ended October 2, 2010~~
~~(Amounts in thousands unless otherwise noted)~~

Year to Date Period Ended
October 1, October 2,
2011 2010 Change %

Net sales
$ 503,095 $ 389,624 $ 113,471 29.1 %
The majority of the increase in sales during 2011 is due to improvements in nearly all of the end markets we serve compared to 2010 and to a lesser extent, the acquisition of Bauer. Of the increase in sales, approximately $39.5 million relates to the additional sales related to the acquisition of Bauer, $6.5 million relates to the impact of foreign exchange rate increases attributed to the increase in the Euro and British Pound rates compared to 2010, and approximately $5.9 million relates to the impact of price increases. We expect to see continued increases in sales in 2011 compared to 2010.

Year to Date Period Ended
October 1, October 2,
2011 2010 Change %

Gross Profit
$ 149,274 $ 116,171 $ 33,103 28.5 %
Gross Profit as a percent of sales
29.7 % 29.8 %
The decrease in gross profit as a percentage of sales was primarily due to increases in material costs, specifically related to the price of copper and steel. Gross profit was favorably impacted by the effect of foreign exchange of $2.3 million when compared to 2010, primarily related to the increase in the Euro and British Pound exchange rates, off-set by the incorporation of four months of results for Bauer which includes an inventory fair value charge of $0.6 million. We expect our full year 2011 gross profit as a percentage of sales to increase when compared to 2010 as we expect to continue to implement price increases to offset material costs.

Year to Date Period Ended
October 1, October 2,
2011 2010 Change %

Selling, general and administrative expense (“SG&A”)
$ 84,005 $ 65,991 $ 18,014 27.3 %
SG&A as a percent of sales
16.7 % 16.9 %
~~SG&A increased~~ due to the acquisition of Bauer, as well as the reinstatement of certain employee benefits that were temporarily suspended during 2009 and not reinstated until July 2010. The increase in SG&A costs is also attributed to approximately $2.7 million of acquisition costs related to the Bauer acquisition as well as theunfavorable effect of foreign exchange of ~~$1.4~~$0.2 million. ~~However, due to our cost reduction efforts over the past two years that were focused on headcount reductions and the elimination of non-critical expenses,~~ SG&A as a percentage of sales ~~decreased~~increased modestly as a result of investments the Company has made and the acquisition of Bauer. We forecast modest increases to our SG&A costs and plan to leverage them on increased sales as we invest in ~~the year~~resources to ~~date period ended October 1, 2011 when compared~~enable us to ~~the year to date period ended October 2, 2010. During~~grow faster in emerging markets and strategic industries in the remainder of ~~2011, we expect to focus on maintaining our reduced cost base and to develop synergies as we incorporate Bauer into our corporate structure.~~
2012.

34
Amounts in thousands, except percentage data    Quarter Ended
   March 31,
2012    April 2,
2011    Change    %
Interest Expense, net
   $ 5,774       $ 5,163       $ 611       11.8 %

Year to Date Period Ended
October 1, October 2,
2011 2010 Change %

Restructuring expenses
$ — $ 2,198 $ (2,198 ) -100.0 %
In March 2009, we adopted a restructuring plan to continue to improve the utilization of our manufacturing infrastructure and to realign our business with economic conditions by consolidating certain facilities. We substantially concluded our restructuring efforts as of the fourth quarter 2010 and expect no additional expense associated with this restructuring effort going forward.

Year to Date Period Ended
October 1, October 2,
2011 2010 Change %

Interest Expense, net
$ 18,014 $ 14,734 $ 3,280 22.3 %
Net interest expense increased due to the issuance of $85.0 million of Convertible Notes in March 2011, offset by the repurchase of senior secured notes in the third and fourth quarters of 2011.
Amounts in thousands, except percentage data    Quarter Ended
   March 31,
2012    April 2,
2011    Change    %
Research and development expenses (“R&D”)
   $ 3,027       $ 2,317       $ 710       30.6 %
R&D expenses increased on an absolute dollar basis but represented approximately 1% of sales in both periods. $0.6 million of the increase in R&D expense in 2012 is related to the acquisition of Bauer in May 2011. Increased R&D activities as well as the repurchase of $8.2 million of Senior Secured Notes in the third quarter of 2011 at a premium of $0.2 million, which was recorded as part of interest expense in the year to date period ended October 1, 2011. Dueheadcount additions also contributed to the repurchase of the Senior Secured Notes, the Company also wrote-off a proportional amount of the deferred financing fees and original issue discount associated with the Senior Secured Notes totaling $0.3 million which was also recorded as part of interest expenseincrease in ~~the year to date period ended October 1, 2011.~~

Year to Date Period Ended
October 1, October 2,
2011 2010 Change %

Other non-operating (income) expense, net
$ (668 ) $ 750 $ (1,418 ) -189.1 %
R&D expense. We do not forecast significant variances in future periods.
Amounts in thousands, except percentage data    Quarter Ended
   March 31,
2012    April 2,
2011 Change    %
Other non-operating expense (income), net
   $ 225       $ (286 ) $ 511       -178.7 %
Other non-operating ~~(income) expense~~income in ~~both the year to date periods ended October 1, 2011 and October 2, 2010~~each period relates primarily ~~relates~~ to changes in foreign currency, primarily the British Pound Sterling and Euro.

Year to Date Period Ended
October 1, October 2,
2011 2010 Change %

Provision for income taxes
$ 8,600 $ 8,190 $ 410 5.0 %
Provision for income taxes as a % of income before income taxes
21.3 % 30.0 %
Amounts in thousands, except percentage data    Quarter Ended
   March 31,
2012 April 2,
2011 Change    %
Provision for income taxes
   $ 5,134    $ 4,403    $ 731       16.6 %
Provision for income taxes as a % of income before income taxes
   32.8 % 29.1 %
The ~~2011 year to date~~increase in the 2012 first quarter provision for income taxes, as a percentage of income before taxes, was lower than 2010. The income tax rate before discrete items was 32.3%. The decrease in the amount of the provision for income taxes as a percentage of income from operations before income taxes from 2010 to 2011 is primarily due to discrete items. ~~The Company recognized a tax benefit for~~During the ~~reduction~~first quarter of the Company’s reserve for uncertain tax positions due to a favorable New Jersey Supreme Court ruling in a case that did not involve the Company. The reserve amount consisted of approximately $2.3 million of tax, $1.8 million accrued interest and $0.5 million of penalties. In addition,2011, the Company reversed $1.4 million of deferred tax assets related to the federal benefit of the accrued state reserve. The net benefit to the Company is approximately $3.2 million. In addition, the Company released $0.7 million of a valuation allowance against state income tax attributes. This amount was fully recognized in the Company’s effective rate for the quarter ended October 1, 2011. Also, there wasreceived a refund of foreign taxes paid of $0.6 million that was previously determined to be more likely than not ~~to be~~ uncollectible and, as a result, reversed its valuation allowance associated with the receivable. The Company did not incur this benefit during the first quarter of ~~2011.~~
2012.
35
Liquidity and Capital Resources
Overview
We finance our capital and working capital requirements through a combination of cash flows from operating activities and borrowings under our senior secured revolving credit facility (“Revolving Credit Agreement”). We expect that our primary ongoing requirements for cash will be for working capital, debt service, capital expenditures, acquisitions and pension plan funding. In the event additional funds are needed, we could borrow additional funds under our Revolving Credit Agreement, attempt to secure new debt, attempt to refinance our 8 1/8% Senior Notes due December 2016 (the “Senior Secured Notes”), or attempt to raise capital in the equity ~~and debt~~ markets. Presently, we have capacity under our Revolving Credit Agreement to borrow ~~up to $50.0~~$65.0 million, based on monthly asset collateral calculations, including letters of credit of which we currently have ~~$6.6~~$7.0 million outstanding. Of this total capacity, we can currently borrow up to ~~an additional $30.9~~$52.5 million without being required to comply with any financial covenants under the agreement. In order to refinance the existing 8 1/8% Senior Secured Notes, we would incur a pre-payment premium. There can be no assurance however that additional debt financing will be available on commercially acceptable terms, or at all. Similarly, there can be no assurance that equity financing will be available on commercially acceptable terms, or at all.
Borrowings

Amounts in millions
October 1, December 31,
2011 2010

Debt:
Revolving Credit Agreement $ — $ —
Convertible Notes 85.0 —
Senior Secured Notes 201.8 210.0
Variable rate demand revenue bonds 3.0 5.3
Mortgages 1.9 2.4
Capital leases 0.6 1.3

Total Debt $ 292.3 $ 219.0

   Amounts in millions
   March 31,
2012    December 31,
2011
Debt:

Revolving Credit Agreement
   $ —         $ —
Convertible Notes
   85.0       85.0
Senior Secured Notes
   198.0       198.0
Variable rate demand revenue bonds
   —         3.0
Mortgages
   1.7       1.8
Capital leases
   0.3       0.4




Total Debt
   $ 285.0       $ 288.2




Convertible Senior Notes
In March 2011, the Company issued Convertible Senior Notes (the “Convertible Notes”) due on March 1, 2031. The Convertible Notes are guaranteed by the Company’s U.S. domestic subsidiaries and are secured by a second priority lien, subject to first priority liens securing our Revolving Credit Agreement and our Senior Secured Notes, on substantially all of our assets and those of our domestic subsidiaries. Interest on the Convertible Notes is payable semi-annually in arrears, on March 1 and September 1 of each year, commencing on September 1, 2011 at an annual rate of 2.75%. Proceeds from the offering were $81.6 million, net of fees and expenses ~~that~~which were capitalized. The proceeds from the offering were used to fund the Bauer Acquisition, as well as bolster the Company’s cash position.
36
We were in compliance in all material respects with all covenants of the indenture governing the Convertible Notes at March 31, 2012.
Senior Secured Notes
In November 2009, the Company issued $210 million of 8¹/₈% Senior Secured Notes. We used the proceeds of the offering of the Senior Secured Notes ~~(the “Senior~~to repurchase or redeem Altra Industrial’s 9% Old Senior Secured ~~Notes”).~~ Notes.
During ~~the quarter and year to date period ending October 1,~~ 2011, the Company repurchased ~~$8.2~~$12.0 million of Senior Secured Notes. The Company repurchased the Senior Secured Notes at a premium of ~~$0.2~~$0.3 million, which was recorded as part of interest expense in the ~~quarter ended October 1,~~third and fourth quarters of 2011. Due to the repurchase of the Senior Secured Notes, the Company also wrote-off a proportional amount of the deferred financing fees and original issue discount associated with the Senior Secured Notes totaling ~~$0.3~~$0.4 million which was also recorded as part of interest expense in the ~~quarter ended October 1, 2011~~
third and fourth quarters of 2011.
The Senior Secured Notes are guaranteed by the Company’s U.S. domestic subsidiaries and are secured by a second priority lien, subject to first priority liens securing our Revolving Credit Agreement, on substantially all of our assets and those of our domestic subsidiaries. Interest on the Senior Secured Notes is payable in arrears, semi-annually on June 1 and December 1 of each year, commencing on June 1, 2010. The indenture governing the Senior Secured Notes contains covenants which restrict the Company and our subsidiaries. These restrictions limit or prohibit, among other things, the ability to incur additional indebtedness; repay subordinated indebtedness prior to stated maturities; pay dividends on or redeem or repurchase stock or make other distributions; make investments or acquisitions; sell certain assets or merge with or into other companies; sell stock in our subsidiaries; and create liens on their assets. We were in compliance in all material respects with all covenants of the indenture governing the Senior Secured Notes at ~~October 1, 2011.~~
March 31, 2012.
~~Revolving~~Senior Secured Credit ~~Agreement~~Facility
Concurrently with the closing of the offering of the Senior Secured Notes, Altra Industrial entered into the Revolving Credit Agreement. In November 2011, we amended the Revolving Credit Agreement ~~which provides for~~to increase the borrowing capacity ~~in an initial amount of up~~ to ~~$50.0~~$65 million (subject to adjustment pursuant to a borrowing base calculation and subject to increase from time to time in accordance with the terms of the amended credit facility)~~. The Revolving Credit Agreement replaced Altra Industrial’s then existing senior secured credit facility~~ and to extend the ~~TB Wood’s existing credit facility.~~
term to October 31, 2016.
Altra Industrial and all of its domestic subsidiaries are borrowers, or “Borrowers”, under the Revolving Credit Agreement. Certain of our existing and subsequently acquired or organized domestic subsidiaries that are not Borrowers do and will guarantee (on a senior secured basis) the Revolving Credit Agreement. Obligations of the other Borrowers under the Revolving Credit Agreement and the guarantees are secured by substantially all of Borrowers’ assets and the assets of each of our existing and subsequently acquired or organized domestic subsidiaries that is a guarantor of our obligations under the Revolving Credit Agreement (with such subsidiaries being referred to as the “U.S. subsidiary guarantors”), including but not limited to: (a) a first-priority pledge of all the capital stock of subsidiaries held by Borrowers or any U.S. subsidiary guarantor (which pledge, in the case of any foreign subsidiary, will be limited to 100% of any non-voting stock and 65% of the voting stock of such foreign subsidiary) and (b) perfected first-priority security interests in and mortgages on substantially all tangible and intangible assets of each Borrower and U.S. subsidiary guarantor, including accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, certain real property, cash and proceeds of the foregoing (in each case subject to materiality thresholds and other exceptions).
An event of default under the Revolving Credit Agreement would occur in connection with a change of control, among other things, if: (i) Altra Industrial ceases to own or control 100% of each of its Borrower subsidiaries, or (ii) a change of control occurs under the Senior Secured Notes, or any other subordinated indebtedness.
An event of default under the Revolving Credit Agreement would also occur if an event of default occurs under the indentures governing the Senior Secured Notes or if there is a default under any other indebtedness that any Borrower may have involving an aggregate amount of $10 million or more and such default: (i) occurs at final maturity of such debt, (ii) allows the lender there under to accelerate such debt or (iii) causes such debt to be required to be repaid prior to its stated maturity. An event of default would also occur under the Revolving Credit Agreement if any of the indebtedness under the Revolving Credit Agreement ceases with limited exception to be secured by a full lien of the assets of Borrowers and guarantors.
As of ~~October 1, 2011,~~March 31, 2012, we were in compliance in all material respects with all covenant requirements associated with all of our borrowings. As of ~~October 1, 2011,~~March 31, 2012, we had no borrowings and ~~$6.6~~$7.0 million in letters of credit outstanding under the Revolving Credit Agreement.
37
Cash and Cash Equivalents

Year to Date Period Ended
October 1, December 31,
(in thousands) 2011 2010 Change %

Cash and cash equivalents
$ 90,261 $ 72,723 $ 17,538 24.1 %
   Quarter Ended
   March 31,
2012    December 31,
2011    Change %
(in thousands)
Cash and cash equivalents
   $ 79,946       $ 92,515       $ (12,569 ) -13.6 %
Cash Flows for ~~year to date period~~quarter ended ~~October 1, 2011~~March 31, 2012
The primary sources of funds ~~provided by~~used in operating activities of ~~$29.1~~$2.3 million for the ~~year to date period~~quarter ended ~~October 1, 2011~~March 31, 2012 resulted from cash provided from net income of ~~$31.8~~$10.5 million ~~which~~and was offset by the net ~~impact of the add-back~~ of non-cash depreciation, amortization, stock-based compensation, accretion of debt discount, deferred financing costs, non-cash ~~gain~~loss on foreign currency offset ~~by a net increase in~~, and working capital all totaling ~~$2.7~~$12.8 million. While a variety of factors can influence our ability to project future cash flow, we expect to ~~continue to~~ see positive cash flows from operating activities during the remainder of ~~2011.~~
2012.
Net cash used in investing activities was ~~$81.8~~$8.2 million for the ~~year to date period~~quarter ended October 1, 2011. The increase from 2010 primarily relates to the acquisition of Bauer for $69.5 million as well as capital expenditures of $13.8 million offset by proceeds from the sale of our Chattanooga facility of $1.5 million.March 31, 2012. We expect to incur between ~~$4.0~~$22.0 million and ~~$6.0~~$27.0 million of additional capital expenses in ~~2011.~~
2012 related to our construction project in ChangZhou, continued implementation of our ERP system, and expansion in our current manufacturing facilities.
Net cash ~~provided by~~used in financing activities was ~~$69.0~~$3.3 million for the ~~year to date period~~quarter ended ~~October 1, 2011.~~March 31, 2012. This resulted primarily from the ~~proceeds~~redemption of ~~the issuance of $85.0~~$3.0 million in ~~Convertible Notes, offset by~~variable rate demand revenue bonds related to the San Marcos facility, as well as payments of capital lease obligations of ~~$0.6~~$0.1 million, ~~$0.5~~$0.1 million of payments on mortgages, ~~$2.3~~and $0.1 million ~~related to~~for the ~~redemption of bonds in connection with the sale of our Chattanooga facility, $8.2 million related to the purchase of Senior Secured Notes, $0.9 million of~~ shares repurchased ~~to satisfy employee~~in lieu of tax ~~withholdings upon vesting, and $3.4 million of costs associated with the issuance of the Convertible Notes.~~
withholdings.
We intend to use our remaining existing cash and cash equivalents and cash flow from operations to provide for our working capital needs, and to fund potential future acquisitions, debt service, capital expenditures, and pension ~~funding, and to repay our debt.~~funding. We believe our future operating cash flows will be sufficient to meet our future operating and investing cash needs. Furthermore, the existing cash balances and the availability of additional borrowings under our Revolving Credit Agreement provide additional potential sources of liquidity should they be required.
Contractual Obligations
There were no significant changes in our contractual obligations subsequent to December 31, 2010, with the exception of the issuance of $85.0 million of Convertible Notes in March 2011, due on March 1, 2031. Interest on the Convertible Notes is payable semiannually in arrears, on March 1 and September 1 of each year, commencing on September 1, 2011 at an annual rate of 2.75%. Interest payments on these notes will be approximately $1.9 million in 2011 and approximately $2.3 million of interest will be due each year from 2012 through 2031 when the Convertible Notes become due.
2011.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risk factors such as fluctuating interest rates, changes in foreign currency rates, and changes in commodity prices. At present, we do not utilize derivative instruments to manage these risks. During the reporting period, there have been no material changes to the quantitative and qualitative disclosures regarding our market risk set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2010.~~
2011.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of ~~October 1, 2011,~~March 31, 2012, our management, under the supervision and with the participation of our chief executive officer and chief financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or, the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in reports filed under the Exchange Act, such as this Form 10-Q, is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosures. Based upon that evaluation, our chief executive officer and chief financial officer have concluded that, as of ~~October 1, 2011,~~March 31, 2012, our disclosure controls and procedures are effective at a reasonable assurance level.
38
Changes in Internal Control Over Financial Reporting
~~With the exception changes resulting from the Bauer Acquisition that occurred during the quarter ended July 2, 2011, there~~
There has been no change in our internal control over financial reporting (as defined in Rule ~~13a—~~13a–15(f) under the Exchange Act) that occurred during our fiscal quarter ended ~~October 1, 2011,~~March 31, 2012, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
~~Note Regarding Acquisition~~
In making its assessment of disclosure controls and procedures and of changes in internal control over financial reporting as of October 1, 2011, management has excluded the operations of various legal entities which make up the Bauer Acquisition (consolidated by the Company as of May 30, 2011). The Company is currently assessing the control environment of this acquired business.
The Company’s consolidated financial statements reflect Bauer’s results of operations from the beginning of business on May 30, 2011 forward. The acquired business’ total revenue were less than 10% of the Company’s total revenue at October 1, 2011.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings
We are, from time to time, party to various legal proceedings arising out of our business. During the reporting period, there have been no material changes to the description of legal proceedings set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2010.~~
2011.
Item 1A. Risk Factors
The reader should carefully consider the Risk Factors described in our Annual Report on Form 10-K for the year ended December 31, ~~2010 and our Quarterly Reports on Form 10-Q for the quarters ended April 2, 2011 and July 2,~~ 2011 filed with the Securities and Exchange Commission. Those risk factors described below, elsewhere in this report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2010 and our Quarterly Reports on Form 10-Q for the quarters ended April 2, 2011 and July 2,~~ 2011 are not the only ones we face, but are considered to be the most material. These risk factors could cause our actual results to differ materially from those stated in forward looking statements contained in this Form 10-Q and elsewhere. All risk factors stated in our Annual Report on Form 10-K for the year ended December 31, ~~2010 and our Quarterly Reports on Form 10-Q for the quarters ended April 2, 2011 and July 2,~~ 2011 are incorporated herein by reference.
During the reporting period, except ~~as set forth~~for below, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, ~~2010~~2011.
We may be subject to work stoppages at our facilities, or our customers may be subjected to work stoppages, which could seriously impact our operations and the profitability of our ~~Quarterly Reports~~business.
As of December 31, 2011, we had approximately 3,466 full time employees, of whom approximately 51% were employed outside the United States. Approximately 169 of our North American employees, and 503 of our European employees are represented by labor unions. In addition, our employees in Europe are generally represented by local and national social works councils that hold discussions with employer industry associations regarding wage and work issues every two to three years. Our European facilities, particularly those in France and Germany, may participate in such discussions and be subject to any agreements reached with employees. Additionally, approximately 59 employees in the TB Wood’s production facilities in Mexico are unionized under collective bargaining agreements that are subject to annual renewals.
We are a party to four U.S. collective bargaining agreements. The agreements will expire on, ~~Form 10-Q~~July 2013, October 2013, June 2014, and October 2014, respectively. We have entered into a plant closing agreement with labor union employees at our South Beloit manufacturing facility. We expect the facility to close on or before the July 2013 expiry of the relevant collective bargaining agreement. We may be unable to renew these agreements on terms that are satisfactory to us, if at all. In addition, one of our four U.S. collective bargaining agreements contains provisions for additional, potentially significant, lump-sum severance payments to all employees covered by the ~~quarters ended April 2, 2011~~agreements who are terminated as the result of a plant closing and ~~July 2, 2011.~~
one of our collective bargaining agreements contains provisions restricting our ability to terminate or relocate operations.
If our unionized workers or those represented by a works council were to engage in a strike, work stoppage or other slowdown in the future, we could experience a significant disruption of our operations. Such disruption could interfere with our ability to deliver products on a timely basis and could have other negative effects, including decreased productivity and increased labor costs. In addition, if a greater percentage of our work force becomes unionized, our business and financial results could be materially adversely affected. Many of our direct and indirect customers have unionized work forces. Strikes, work stoppages or slowdowns experienced by these customers or their suppliers could result in slowdowns or closures of assembly plants where our products are used and could cause cancellation of purchase orders with us or otherwise result in reduced revenues from these customers.
Recently, employees at our Kilian manufacturing plant in Toronto, Canada voted in favor of the certification of a union at that facility. As a result of this vote, we have commenced the process of negotiating a new collective bargaining agreement which could divert management attention and result in increased operating expenses and lower net income. If we are unable to negotiate an acceptable collective bargaining agreement, our operating expenses could increase significantly as a result of work stoppages, including strikes. Any of these matters could adversely affect our financial condition, results of operations and cash flows.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table summarizes our share repurchase activity by month for the quarter ended ~~October 1, 2011.~~

Total Number of Dollar Value of
Total Number Average Shares Purchased as Shares That May Yet be
of Shares Price Paid per Part of Publicly Purchased Under
Approximate Period Purchased (1) Share Announced Plans or Programs The Plans or Programs
July 3, 2011 to July 30, 2011
— $ — — $ —
July 31, 2011 to August 27, 2011
41,118 $ 17.64 — $ —
August 28, 2011 to October 1, 2011
10,682 $ 15.52 — $ —
March 31, 2012.
Approximate Period
   Total Number
of Shares
Purchased (1)    Weighted Average
Price Paid per
Share    Total Number of
Shares Purchased as
Part of a Publicly
Announced Program    Dollar Value of
Shares that may be
Purchased under
the Program
January 1, 2012 to January 29, 2012
   —         $ —         —         $ —
January 30, 2012 to February 26, 2012
   3,175       $ 20.81       —         $ —
February 27, 2012 to March 31, 2012
   —         $ —         —         $ —
(1) We repurchased these shares of common stock in connection with the vesting of certain stock awards to cover minimum statutory withholding taxes.

39
Item 3. Defaults Upon Senior Securities
None.
Item 4. ~~(Removed and Reserved)~~Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.

40
Item 6. Exhibits
The following exhibits are filed as part of this report:

Exhibit
Number Description

3.1 (1) Second Amended and Restated Certificate of Incorporation of the Registrant.

3.2 (2) Second Amended and Restated Bylaws of the Registrant.

31.1 * Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 * Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 ** Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 ** Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101 *** The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 1, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Earnings, (ii) the Unaudited Condensed Consolidated Balance Sheet, (iii) the Unaudited Condensed Consolidated Statement of Cash Flows, and (iv) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text.
Exhibit
Number

Description
*
3.1(1)
~~Filed herewith.~~Second Amended and Restated Certificate of Incorporation of the Registrant.
**
3.2(2)
~~Furnished herewith.~~Second Amended and Restated Bylaws of the Registrant.
~~***~~ As provided in Rule 406T of Regulation S-T, this information is furnished herewith and not filed for purposes of sections 11 and 12 of the Securities Act of 1933, as amended, or section 18 of the Securities Exchange Act of 1934, as amended.
~~(1)~~ ~~Incorporated by reference to Altra Holdings, Inc.’s Registration Statement on Form S-1/A, as amended, filed with the Securities and Exchange Commission on December 4, 2006.~~
~~(2)~~ ~~Incorporated by reference to Altra Holdings, Inc.’s Current Report on form 8-K filed with the Securities and Exchange Commission on October 27, 2008.~~
31.1*
41
~~SIGNATURES~~
~~Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.~~
~~ALTRA HOLDINGS, INC.~~
~~November 3, 2011~~ ~~By:~~   ~~/s/ Carl R. Christenson~~
~~Name:~~   ~~Carl R. Christenson~~
~~Title President and Chief Executive Officer~~
~~November 3, 2011~~ ~~By:~~   ~~/s/ Christian Storch~~
~~Name:~~   ~~Christian Storch~~
~~Title:~~   ~~Vice President and Chief Financial Officer~~
~~November 3, 2011~~ ~~By:~~   ~~/s/ Todd B. Patriacca~~
~~Name:~~   ~~Todd B. Patriacca~~
~~Title:~~   ~~Vice President of Finance,~~
~~Corporate Controller and Treasurer~~
42
~~EXHIBIT INDEX~~
~~Exhibit~~
~~Number~~ ~~Description~~
~~31.1~~ Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
~~31.2~~
31.2*
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
~~32.1~~
32.1**
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~32.2~~
32.2**
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~101~~
101****
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~October 1, 2011,~~March 31, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Earnings, (ii) the Unaudited Condensed Consolidated Balance Sheet, (iii) the Unaudited Condensed Consolidated Statement of Cash Flows, and (iv) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text.
* Filed herewith.
** Furnished herewith.
*** As provided in Rule 406T of Regulation S-T, this information is furnished herewith and not filed for purposes of sections 11 and 12 of the Securities Act of 1933, as amended, or section 18 of the Securities Exchange Act of 1934, as amended.

(1) Incorporated by reference to Altra Holdings, Inc.’s Registration Statement on Form S-1A, as amended, filed with the securities and Exchange Commission on December 4, 2006.
43
(2) Incorporated by reference to Altra Holdings, Inc.’s Current Report on Form 8-K filed on October 27, 2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ALTRA HOLDINGS, INC.
April 30, 2012 By:     /s/ Carl R. Christenson
Name: Carl R. Christenson
Title   President and Chief Executive Officer
April 30, 2012 By:     /s/ Christian Storch
Name: Christian Storch
Title:   Vice President and Chief Financial Officer
April 30, 2012 By:     /s/ Todd B. Patriacca
Name: Todd B. Patriacca
Title:   Vice President of Finance, Corporate Controller
and Treasurer
EXHIBIT INDEX
Exhibit
Number
Description
31.1*
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101***
The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Statement of Earnings, (ii) the Unaudited Condensed Consolidated Balance Sheet, (iii) the Unaudited Condensed Consolidated Statement of Cash Flows, and (iv) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text.
* Filed herewith.
** Furnished herewith.
*** As provided in Rule 406T of Regulation S-T, this information is furnished herewith and not filed for purposes of sections 11 and 12 of the Securities Act of 1933, as amended, or section 18 of the Securities Exchange Act of 1934, as amended.
36


Delaware
~~Delaware~~		61-1478870
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

300 Granite Street, Suite 201, Braintree, MA		02184
(Address of principal executive offices)		(Zip Code)


Large Accelerated filero	¨	Accelerated filerþ	x

Non-accelerated filero	~~Smaller reporting company~~o¨
		~~(Do~~ (Do not check if a smaller reporting company.)	Smaller reporting company	¨


	October 1,			December 31,
	2011			2010
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	90,261		$	72,723
Trade receivables, less allowance for doubtful accounts of $2,068 and $1,111 at October 1, 2011 and December 31, 2010, respectively		103,718			67,403
Inventories		123,539			88,217
Deferred income taxes		4,434			4,414
Income tax receivable		5,871			4,126
Assets held for sale		—			1,484
Prepaid expenses and other current assets		5,091			4,168

Total current assets		332,914			242,535

Property, plant and equipment, net		122,650			105,298
Intangible assets, net		79,560			69,250
Goodwill		84,862			76,897
Deferred income taxes		89			82
Other non-current assets, net		15,248			14,040

Total assets	$	635,323		$	508,102


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	50,636		$	40,812
Accrued payroll		21,741			18,486
Accruals and other current liabilities		34,632			24,142
Deferred income taxes		61			59
Current portion of long-term debt		824			3,393

Total current liabilities		107,894			86,892

Commitments and contingencies (Note 15)
Long-term debt — less current portion and net of unaccreted discount		266,417			213,109
Deferred income taxes		31,287			20,558
Pension liablities		11,754			11,031
Long-term taxes payable		6,749			10,892
Other long-term liabilities		984			868
Stockholders’ equity:
Common stock ($0.001 par value, 90,000,000 shares authorized, 26,596,145 and 26,466,216 issued and outstanding at October 1, 2011 and December 31, 2010, respectively)		26			26
Additional paid-in capital		149,007			133,861
Retained earnings		77,315			45,536
Accumulated other comprehensive income		(16,110	)		(14,671	)

Total stockholders’ equity		210,238			164,752


Total liabilities and stockholders’ equity	$	635,323		$	508,102


	March 31, 2012			December 31, 2011
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	79,946		$	92,515
Trade receivables, less allowance for doubtful accounts of $1,300 and $1,092 at March 31, 2012 and December 31, 2011, respectively		110,451			91,859
Inventories		127,112			125,970
Deferred income taxes		5,856			5,856
Income tax receivable		4,197			7,299
Prepaid expenses and other current assets		8,893			7,141

Total current assets		336,455			330,640

Property, plant and equipment, net		128,424			123,464
Intangible assets, net		76,251			77,108
Goodwill		84,597			83,799
Deferred income taxes		1,649			1,614
Other non-current assets, net		13,147			13,360

Total assets	$	640,523		$	629,985


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	47,349		$	52,768
Accrued payroll		17,079			19,734
Accruals and other current liabilities		33,533			28,798
Deferred income taxes		123			118
Current portion of long-term debt		1,109			688

Total current liabilities		99,193			102,106

Long-term debt—less current portion and net of unaccreted discount		260,512			263,361
Deferred income taxes		35,916			35,798
Pension liablities		12,673			12,896
Other post retirement benefits		278			296
Long-term taxes payable		6,324			6,227
Other long-term liabilities		705			905
Stockholders’ equity:
Common stock ($0.001 par value, 90,000,000 shares authorized, 26,620,293 and 26,600,056 issued and outstanding at March 31, 2012 and December 31, 2011, respectively)		27			27
Additional paid-in capital		150,967			150,234
Retained earnings		93,727			83,211
Accumulated other comprehensive income		(19,799	)		(25,076	)

Total stockholders’ equity		224,922			208,396

Total liabilities and stockholders’ equity	$	640,523		$	629,985


	Year to Date Ended
	October 1, 2011			October 2, 2010
	(Unaudited)
Cash flows from operating activities
Net income	$	31,779		$	19,152
Adjustments to reconcile net income to net cash flows:
Depreciation		13,258			12,315
Amortization of intangible assets		4,568			3,713
Amortization and write-offs of deferred financing costs		1,372			536
(Gain) loss on foreign currency, net		(324	)		270
Accretion of debt discount, net		1,887			225
Fixed asset impairment/disposal		—			441
Stock-based compensation		1,933			1,670
Changes in assets and liabilities:
Trade receivables		(17,671	)		(18,798	)
Inventories		(13,873	)		(8,687	)
Accounts payable and accrued liabilities		9,552			27,429
Other current assets and liabilities		880			(752	)
Other operating assets and liabilities		(4,254	)		(186	)

Net cash provided by operating activities		29,107			37,328


Cash flows from investing activities
Purchase of property, plant and equipment		(13,840	)		(12,725	)
Additional purchase price paid for acquisition		—			(1,177	)
Proceeds from sale of Chattanooga Facility		1,484			—
Acquisition of Bauer, net of $41 cash received		(69,460	)		—

Net cash used in investing activities		(81,816	)		(13,902	)


Cash flows from financing activities
Payment of issuance costs for Convertible Notes		(3,414	)		—
Payment of issuance costs for 8¹/₈ Senior Secured Notes		—			(265	)
Purchase of 8¹/₈ Senior Secured Notes		(8,230	)		—
Proceeds from issuance of Convertible Notes		85,000			—
Shares surrendered for tax withholdings		(914	)		(854	)
Redemption of variable rate demand revenue bonds related to Chattanooga facility		(2,290	)		—
Payment on mortgages		(516	)		(481	)
Net payments on capital leases		(627	)		(563	)

Net cash provided by (used in) financing activities		69,009			(2,163	)

Effect of exchange rate changes on cash and cash equivalents		1,238			(599	)

Net change in cash and cash equivalents		17,538			20,664
Cash and cash equivalents at beginning of year		72,723			51,497

Cash and cash equivalents at end of period	$	90,261		$	72,161


Cash paid during the period for:
Interest	$	10,462		$	9,676
Income taxes	$	9,685		$	1,210

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

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


~~Item 1.~~ EX -101 Certain materials formatted in XBRL		~~Financial Statements~~


	Quarter Ended						Year to Date Ended
	October 1,			October 2,			October 1,			October 2,
	2011			2010			2011			2010
	(Unaudited)						(Unaudited)
Net sales	$	177,853		$	128,930		$	503,095		$	389,624
Cost of sales		124,824			90,289			353,821			273,453

Gross profit		53,029			38,641			149,274			116,171

Operating expenses:
Selling, general and administrative expenses		31,577			22,804			84,005			65,991
Research and development expenses		2,801			1,746			7,544			5,156
Restructuring expense		—			510			—			2,198

		34,378			25,060			91,549			73,345

Income from operations		18,651			13,581			57,725			42,826

Other non-operating (income) expense:
Interest expense, net		6,698			4,838			18,014			14,734
Other non-operating (income) expense, net		216			(272	)		(668	)		750

		6,914			4,566			17,346			15,484

Income before income taxes		11,737			9,015			40,379			27,342
(Benefit from) Provision for income taxes		(403	)		2,441			8,600			8,190


Net income	$	12,140		$	6,574		$	31,779		$	19,152


Consolidated Statement of Comprehensive (loss) income
Minimum pension liability adjustment	$	—		$	(185	)	$	—		$	(515	)
Foreign currency translation adjustment		(7,008	)		12,066			(1,439	)		3,223

Comprehensive income	$	5,132		$	18,455		$	30,340		$	21,860


Weighted average shares, basic		26,546			26,414			26,508			26,364
Weighted average shares, diluted		26,655			26,495			26,712			26,477

Net income per share:
Basic	$	0.46		$	0.25		$	1.20		$	0.73
Diluted	$	0.46		$	0.25		$	1.19		$	0.72


	Quarter Ended
	March 31,		April 2,
	2012		2011
	(Unaudited)		(Unaudited)
Net sales	$	192,385	$	159,847
Cost of sales		135,712		112,012

Gross profit		56,673		47,835

Operating expenses:
Selling, general and administrative expenses		31,997		25,516
Research and development expenses		3,027		2,317

		35,024		27,833

Income from operations		21,649		20,002

Other non-operating income and expense:
Interest expense, net		5,774		5,163
Other non-operating expense (income), net		225		(286	)

		5,999		4,877

Income before income taxes		15,650		15,125
Provision for income taxes		5,134		4,403

Net income		10,516		10,722

Other Comprehensive Income
Foreign currency translation adjustment		5,277		5,420

Total comprehensive income	$	15,793	$	16,142


Weighted average shares, basic		26,606		26,487
Weighted average shares, diluted		26,660		26,608

Net income per share:
Basic	$	0.40	$	0.40
Diluted	$	0.39	$	0.40


	Quarter Ended
	March 31, 2012			April 2, 2011
	(Unaudited)			(Unaudited)
Cash flows from operating activities
Net income	$	10,516		$	10,722
Adjustments to reconcile net income to net cash flows:
Depreciation		4,983			4,054
Amortization of intangible assets		1,663			1,364
Amortization of deferred financing costs		329			329
Loss on foreign currency, net		34			51
Accretion of debt discount, net		784			300
Stock-based compensation		784			700
Changes in assets and liabilities:
Trade receivables		(20,229	)		(20,402	)
Inventories		440			(3,508	)
Accounts payable and accrued liabilities		652			2,070
Other current assets and liabilities		(1,612	)		(2,643	)
Other operating assets and liabilities		(606	)		(337	)

Net cash used in operating activities		(2,262	)		(7,300	)


Cash flows from investing activities
Purchase of property, plant and equipment		(8,237	)		(2,754	)

Net cash used in investing activities		(8,237	)		(2,754	)


Cash flows from financing activities
Payment of debt issuance costs		—			(3,404	)
Proceeds from issuance of Convertible Notes		—			85,000
Redemption of variable rate demand revenue bonds related to the San Marcos facility		(3,000	)		—
Shares repurchased for tax withholdings		(51	)		(62	)
Payment on mortgages		(127	)		(131	)
Payments on capital leases		(136	)		(186	)

Net cash (used in) provided by financing activities		(3,314	)		81,217

Effect of exchange rate changes on cash and cash equivalents		1,244			1,636

Net change in cash and cash equivalents		(12,569	)		72,799
Cash and cash equivalents at beginning of year		92,515			72,723

Cash and cash equivalents at end of period	$	79,946		$	145,522


Cash paid during the period for:
Interest	$	1,303		$	74
Income taxes	$	1,558		$	3,286


Total purchase price, excluding acquisition costs of approximately $3.5 million	$	69,501
Cash and cash equivalents		41
Trade receivables, net of $0.7 million for allowance for doubtful accounts		18,394
Inventories		21,397
Prepaid expenses and other		2,331
Property, plant and equipment		18,045
Intangible assets		15,458

Total assets acquired	$	75,666
Accounts payable		3,946
Accrued expenses and other current liabilities		7,589
Other liabilities		2,910

Total liabilities assumed	$	14,445
Net assets acquired		61,221
Excess purchase price over fair value of net assets acquired	$	8,280


Customer relationships, subject to amortization	$	12,063
Trade names and trademarks, not subject to amortization		3,395

Total intangible assets	$	15,458


Customer relationships, subject to amortization	$	12,274
Trade names and trademarks, not subject to amortization		3,395

Total intangible assets	$	15,669


	Pro Forma (unaudited)
	Quarter to Date Period Ended
	April 2, 2011
Total revenues	$	189,416
Net income	$	10,759
Basic earnings per share (amounts not in thousands):
Net income	$	0.41
Diluted earnings per share (amounts not in thousands):
Net income	$	0.40


	October 1,		December 31,
	2011		2010
Raw materials	$	46,000	$	32,826
Work in process		25,976		16,223
Finished goods		51,563		39,168

Inventories	$	123,539	$	88,217


				Weighted-average
	Shares			grant date fair value

Restricted shares unvested January 1, 2011		287,586		$	9.66
Shares granted		114,273			21.94
Shares for which restrictions lapsed		(185,121	)		12.66

Restricted shares unvested October 1, 2011		216,738		$	13.57


	Shares			Weighted-average grant date fair value
Restricted shares unvested January 1, 2012		211,031		$	13.52
Shares granted		128,018			21.27
Shares for which restrictions lapsed		(23,414	)		21.13

Restricted shares unvested March 31, 2012		315,635		$	16.09


	2011
Gross goodwill balance as of January 1	$	108,707
Additional goodwill from Bauer acquisition		8,280
Impact of changes in foreign currency		(315	)

Gross goodwill balance as of October 1		116,672


Accumulated impairment as of January 1		(31,810	)
Impairment charge during the period		—

Accumulated impairment as of October 1		(31,810	)

Net goodwill balance October 1, 2011	$	84,862


	2012
Gross goodwill balance as of January 1	$	115,609
Impact of changes in foreign currency		798

Gross goodwill balance as of March 31		116,407


Accumulated impairment as of January 1		(31,810	)
Impairment charge during the period		—

Accumulated impairment as of March 31		(31,810	)

Net goodwill balance March 31, 2012	$	84,597


	October 1, 2011					December 31, 2010
				Accumulated					Accumulated
	Cost			Amortization		Cost			Amortization
Other intangible assets
Intangible assets not subject to amortization:
Tradenames and trademarks	$	34,125		$	—	$	30,730		$	—
Intangible assets subject to amortization:
Customer relationships		74,101			27,607		62,038			23,821
Product technology and patents		5,632			5,701		5,435			4,919
Impact of changes in foreign currency		(990	)		—		(213	)		—

Total intangible assets	$	112,868		$	33,308	$	97,990		$	28,740


	March 31, 2012					December 31, 2011
	Cost			Accumulated Amortization		Cost			Accumulated Amortization
Other intangible assets
Intangible assets not subject to amortization:
Tradenames and trademarks	$	34,125		$	—	$	34,125		$	—
Intangible assets subject to amortization:
Customer relationships		74,312			31,333		74,312			29,704
Product technology and patents		5,603			5,350		5,576			5,316
Impact of changes in foreign currency		(1,106	)				(1,885	)		—

Total intangible assets	$	112,934		$	36,683	$	112,128		$	35,020


	March 31, 2012			April 2, 2011
Balance at beginning of period	$	4,898		$	3,583
Accrued current period warranty expense		762			566
Payments		(619	)		(1,291	)

Balance at end of period	$	5,041		$	2,858


	Quarter Ended
	Pension Benefits						Other Benefits
	March 31, 2012			April 2, 2011			March 31, 2012			April 2, 2011
Service cost	$	25		$	25		$	1		$	1
Interest cost		273			281			4			4
Expected return on plan assets		(268	)		(246	)		—			—
Amortization of prior service income		—			—			(1	)		(1	)
Amortization of net gain		25			18			(13	)		(13	)

Net periodic benefit cost (income)	$	55		$	78		$	(9	)	$	(9	)


	October 1,			December
	2011			31, 2010

Debt:
Revolving Credit Agreement	$	—		$	—
Convertible Notes		85,000			—
Senior Secured Notes		201,770			210,000
Variable rate demand revenue bonds		3,000			5,300
Mortgages		1,918			2,372
Capital leases		605			1,257

Total debt		292,293			218,929
Less: debt discount, net of accretion		(25,052	)		(2,427	)

Total long-term debt, net of unaccreted discount	$	267,241		$	216,502

Less current portion of long-term debt		824			3,393

Total long-term debt	$	266,417		$	213,109


	October 1,
	2011

Principal amount of debt	$	85,000
Unamortized discount		22,931

Carrying value of debt	$	62,069


	October 1,
	2011

Contractual coupon rate of interest	$	1,364
Accretion of convertible notes discount and amortization of deferred financing costs		1,761

Interest expense for the Convertible Notes	$	3,125


	Year to Date Ended
	October 2, 2010
	2009 Altra
	Plan

Expenses
Severance	$	1,159
Moving and relocation		413
Other cash expenses		395


Total cash expenses		1,967


Non-cash asset impairment and loss on sale of fixed asset		231


Total restructuring expenses	$	2,198


	2009 Altra Plan

Balance at December 31, 2010	$	159
Cash restructuring expense incurred		—
Cash payments		(50	)

Balance at October 1, 2011	$	109


			Guarantor		Non Guarantor
	Issuer		Subsidiaries		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	54,063	$	36,198	$	—		$	90,261
Trade receivables, less allowance for doubtful accounts		—		54,008		49,710		—			103,718
Loans receivable from related parties		267,605		—		—		(267,605	)		—
Inventories		—		72,933		50,606		—			123,539
Deferred income taxes		—		3,814		620		—			4,434
Income tax receivable		—		5,871		—		—			5,871
Prepaid expenses and other current assets		—		2,957		2,134		—			5,091

Total current assets		267,605		193,646		139,268		(267,605	)		332,914

Property, plant and equipment, net		—		75,847		46,803		—			122,650
Intangible assets, net		—		51,295		28,265		—			79,560
Goodwill		—		56,446		28,416		—			84,862
Deferred income taxes		—		—		89		—			89
Investment in subsidiaries		202,650		—		—		(202,650	)		—
Other non-current assets		7,382		7,733		133		—			15,248


Total assets	$	477,637	$	384,967	$	242,974	$	(470,255	)	$	635,323


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	27,594	$	23,042	$	—		$	50,636
Accrued payroll		—		10,037		11,704		—			21,741
Accruals and other current liabilities		5,733		15,634		13,265		—			34,632
Deferred income taxes		—		—		61		—			61
Current portion of long-term debt		—		454		370		—			824
Loans payable to related parties		—		195,086		72,519		(267,605	)		—

Total current liabilities		5,733		248,805		120,961		(267,605	)		107,894

Long-term debt — less current portion and net of unacreted discount		261,666		3,110		1,641		—			266,417
Deferred income taxes		—		22,434		8,853		—			31,287
Pension liablities		—		5,763		5,991		—			11,754
Long-term taxes payable		—		6,749		—		—			6,749
Other long-term liabilities		—		778		206		—			984
Total stockholders’ equity		210,238		97,328		105,322		(202,650	)		210,238


Total liabilities and stockholders’ equity	$	477,637	$	384,967	$	242,974	$	(470,255	)	$	635,323


	Issuer		Guarantor Subsidiaries		Non Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	—	$	41,066	$	38,880	$	—		$	79,946
Trade receivables, less allowance for doubtful accounts		—		65,266		45,185		—			110,451
Loans receivable from related parties		269,745		—		—		(269,745	)		—
Inventories		—		74,790		52,322		—			127,112
Deferred income taxes		—		5,325		531		—			5,856
Income tax receivable		—		3,799		398		—			4,197
Prepaid expenses and other current assets		—		4,382		4,511		—			8,893

Total current assets		269,745		194,628		141,827		(269,745	)		336,455

Property, plant and equipment, net		—		82,038		46,386		—			128,424
Intangible assets, net		—		49,321		26,930		—			76,251
Goodwill		—		56,446		28,151		—			84,597
Deferred income taxes		—		—		1,649		—			1,649
Investment in subsidiaries		213,555		—		—		(213,555	)		—
Other non-current assets		6,800		5,616		731		—			13,147

Total assets	$	490,100	$	388,049	$	245,674	$	(483,300	)	$	640,523

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—	$	28,125	$	19,224	$	—		$	47,349
Accrued payroll		—		6,836		10,243		—			17,079
Accruals and other current liabilities		5,559		15,566		12,408		—			33,533
Deferred income taxes		—		—		123		—			123
Current portion of long-term debt		—		225		884		—			1,109
Loans payable to related parties		—		193,769		75,976		(269,745	)		—

Total current liabilities		5,559		244,521		118,858		(269,745	)		99,193

Long-term debt—less current portion and net of unacreted discount		259,619		54		839		—			260,512
Deferred income taxes		—		29,595		6,321		—			35,916
Pension liablities		—		6,996		5,677		—			12,673
Other post retirement benefits		—		278		—		—			278
Long-term taxes payable		—		6,324		—		—			6,324
Other long-term liabilities		—		630		75		—			705
Total stockholders’ equity		224,922		99,651		113,904		(213,555	)		224,922

Total liabilities and stockholders’ equity	$	490,100	$	388,049	$	245,674	$	(483,300	)	$	640,523


	Year to Date Ended October 1, 2011
				Guarantor			Non-Guarantor
	Issuer			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	344,731		$	191,944		$	(33,580	)	$	503,095
Cost of sales		—			249,795			137,606			(33,580	)		353,821

Gross profit		—			94,936			54,338			—			149,274
Selling, general and administrative expenses		—			51,639			32,366						84,005
Research and development expenses		—			3,962			3,582						7,544

Income from operations		—			39,335			18,390			—			57,725
Interest expense, net		17,265			659			90						18,014
Other non-operating income, net		—			(432	)		(236	)					(668	)
Equity in earnings of subsidiaries		39,581			—			—			(39,581	)		—

Income before income taxes		22,316			39,108			18,536			(39,581	)		40,379
Provision (benefit) for income taxes		(9,463	)		12,515			5,548						8,600

Net income	$	31,779		$	26,593		$	12,988		$	(39,581	)	$	31,779


	Quarter Ended March 31, 2012
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	128,393		$	75,185	$	(11,193	)	$	192,385
Cost of sales		—			94,507			52,398		(11,193	)		135,712

Gross profit		—			33,886			22,787		—			56,673
Selling, general and administrative expenses		—			18,245			13,752		—			31,997
Research and development expenses		—			1,415			1,612		—			3,027

Income from operations		—			14,226			7,423		—			21,649
Interest (income) expense, net		(180	)		5,953			1		—			5,774
Other non-operating expense (income), net		—			(58	)		283		—			225
Equity in earnings of subsidiaries		11,092								(11,092	)		—

Income before income taxes		11,272			8,331			7,139		(11,092	)		15,650
Provision for income taxes		756			2,358			2,020		—			5,134

Net income		10,516			5,973			5,119		(11,092	)		10,516

Other comprehensive income
Foreign currency translation adjustment		—			—			5,277		—			5,277

Total comprehensive income	$	10,516		$	5,973		$	10,396	$	(11,092	)	$	15,793


	Year to Date Ended October 2, 2010
				Guarantor		Non-Guarantor
	Issuer			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	293,134	$	125,836		$	(29,346	)	$	389,624
Cost of sales		—			215,547		87,252			(29,346	)		273,453

Gross profit		—			77,587		38,584			—			116,171
Selling, general and administrative expenses		46			44,916		21,029			—			65,991
Research and development expenses		—			3,091		2,065			—			5,156
Restructuring costs		—			1,207		991			—			2,198

Income (loss) from operations		(46	)		28,373		14,499			—			42,826
Interest expense, net		13,526			1,083		125			—			14,734
Other non-operating expense, net		—			764		(14	)		—			750
Equity in earnings of subsidiaries		26,594			—		—			(26,594	)		—

Income before income taxes		13,022			26,526		14,388			(26,594	)		27,342
Provision (benefit) for income taxes		(6,130	)		9,284		5,036			—			8,190

Net income	$	19,152		$	17,242	$	9,352		$	(26,594	)	$	19,152


	Quarter Ended April 2, 2011
	Issuer			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	119,561		$	50,885		$	(10,599	)	$	159,847
Cost of sales		—			87,663			34,948			(10,599	)		112,012

Gross profit		—			31,898			15,937			—			47,835
Selling, general and administrative expenses		—			17,672			7,844			—			25,516
Research and development expenses		—			1,424			893			—			2,317

Income from operations		—			12,802			7,200			—			20,002
Interest expense, net		4,957			184			22			—			5,163
Other non-operating income, net		—			(142	)		(144	)		—			(286	)
Equity in earnings of subsidiaries		14,225			—			—			(14,225	)		—

Income before income taxes		9,268			12,760			7,322			(14,225	)		15,125
Provision (benefit) for income taxes		(1,454	)		4,466			1,391			—			4,403

Net income		10,722			8,294			5,931			(14,225	)		10,722

Other comprehensive income
Foreign currency translation adjustment		—			—			5,420			—			5,420

Total comprehensive income	$	10,722		$	8,294		$	11,351		$	(14,225	)	$	16,142


	Quarter Ended October 1, 2011
				Guarantor		Non-Guarantor
	Issuer			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	110,929	$	79,500	$	(12,576	)	$	177,853
Cost of sales		—			80,066		57,334		(12,576	)		124,824

Gross profit		—			30,863		22,166		—			53,029
Selling, general and administrative expenses		—			16,595		14,982					31,577
Research and development expenses		—			1,306		1,495					2,801

Income from operations		—			12,962		5,689		—			18,651
Interest expense, net		6,395			253		50					6,698
Other non-operating income, net		—			30		186					216
Equity in earnings of subsidiaries		11,806			—		—		(11,806	)		—

Income before income taxes		5,411			12,679		5,453		(11,806	)		11,737
Provision (benefit) for income taxes		(6,729	)		3,264		3,062					(403	)

Net income	$	12,140		$	9,415	$	2,391	$	(11,806	)	$	12,140


	Quarter Ended October 2, 2010
				Guarantor		Non-Guarantor
	Issuer			Subsidiaries		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	96,652	$	42,156		$	(9,878	)	$	128,930
Cost of sales		—			70,207		29,960			(9,878	)		90,289

Gross profit		—			26,445		12,196			—			38,641
Selling, general and administrative expenses		—			15,702		7,102			—			22,804
Research and development expenses		—			1,043		703			—			1,746
Restructuring costs		—			229		281			—			510

Income from operations		—			9,471		4,110			—			13,581
Interest expense, net		4,465			359		14			—			4,838
Other non-operating (income) expense, net		—			638		(910	)		—			(272	)
Equity in earnings of subsidiaries		8,762			—		—			(8,762	)		—

Income before income taxes		4,297			8,474		5,006			(8,762	)		9,015
Provision (benefit) for income taxes		(2,277	)		2,966		1,752			—			2,441

Net income	$	6,574		$	5,508	$	3,254		$	(8,762	)	$	6,574


~~Item 2.~~		~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~