ROLLER BEARING CO OF AMERICA INC, 10-K405, 2000-06-29

ROLLER BEARING CO OF AMERICA INC
10-K405, 2000-06-29
BALL & ROLLER BEARINGS

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FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

(Mark One)

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the fiscal year ended April 1, 2000 or

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

Commission File Number: 333-33085

ROLLER BEARING COMPANY OF AMERICA, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 13-3426227
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)

60 Round Hill Road, Fairfield, CT 06430
(Address of principal executive offices) (Zip code)

Registrant's telephone number, including area code: (203) 255-1511

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

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. /X/

As of June 27, 2000, there were 100 shares of the registrant's Common
Stock outstanding, all of which were held by Roller Bearing Holding Company,
Inc., a Delaware corporation. There is no public market for the registrant's
Common Stock.

Documents Incorporated by Reference: None

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THIS ANNUAL REPORT OF ROLLER BEARING COMPANY OF AMERICA, INC. (THE
"COMPANY") ON FORM 10-K CONTAINS VARIOUS FORWARD-LOOKING STATEMENTS, AS
CONTEMPLATED BY THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY SUCH AS "MAY," "WILL," "SHOULD," "EXPECT," "INTEND," "ESTIMATE" OR
"CONTINUE" OR THE NEGATIVE THEREOF OR COMPARABLE TERMINOLOGY AND MAY INCLUDE,
AMONG OTHER THINGS, EXPECTED GROWTH, BUSINESS STRATEGIES, FUTURE REVENUES,
FUTURE SALES, FUTURE OPERATING PERFORMANCE, PLANS, OBJECTIVES, GOALS AND
STRATEGIES OF THE COMPANY. SUCH FORWARD-LOOKING STATEMENTS ARE BASED UPON
INFORMATION CURRENTLY AVAILABLE IN WHICH THE COMPANY'S MANAGEMENT SHARES ITS
KNOWLEDGE AND JUDGMENT ABOUT FACTORS THAT IT BELIEVES MAY MATERIALLY AFFECT THE
COMPANY'S PERFORMANCE. THE FORWARD-LOOKING STATEMENTS ARE MADE IN GOOD FAITH BY
THE COMPANY AND ARE BELIEVED BY THE COMPANY TO HAVE A REASONABLE BASIS. HOWEVER,
SUCH STATEMENTS ARE SPECULATIVE, SPEAK ONLY AS OF THE DATE MADE AND ARE SUBJECT
TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS. SHOULD ONE OR MORE OF THESE
RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE
INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE ANTICIPATED, ESTIMATED
OR EXPECTED. FACTORS THAT MIGHT CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE IN SUCH FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, THE
EFFECT OF ECONOMIC AND MARKET CONDITIONS AND COMPETITION, THE CYCLICAL NATURE OF
THE COMPANY'S TARGET MARKETS, PARTICULARLY, THE AEROSPACE INDUSTRY, THE COST OF
RAW MATERIALS AND THE COMPANY'S ABILITY TO PASS COST INCREASES TO ITS CUSTOMERS,
THE ABILITY OF THE COMPANY TO EXPAND INTO NEW MARKETS, THE ABILITY OF THE
COMPANY TO INTEGRATE ACQUISITIONS, AND OTHER FACTORS DISCUSSED IN "ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS", AS WELL AS OTHER FACTORS DISCUSSED FROM TIME TO TIME IN THE REPORTS
FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.

READERS ARE URGED TO REVIEW CAREFULLY AND CONSIDER DISCLOSURES MADE BY
THE COMPANY IN THIS AND OTHER REPORTS THAT DISCUSS FACTORS GERMANE TO THE
COMPANY'S BUSINESS.

PART I

ITEM 1. BUSINESS

OVERVIEW

The Company is an international manufacturer and distributor of highly
engineered precision roller, ball and plain bearings in the United States.
Bearings, which are integral to the manufacture and operation of most machines
and mechanical systems, reduce wear to moving parts, facilitate proper power
transmission and reduce damage and energy loss caused by friction. While the
Company manufactures products in all major bearing categories, the Company
focuses primarily on highly technical or regulated bearing products for niche
markets. The Company targets the higher end of the domestic bearing market where
it believes its value added manufacturing and engineering capabilities enable it
to differentiate itself from its competitors and to enhance profitability. The
Company believes that it is the leading supplier to many of its targeted markets
and maintains secondary positions in other product niches where it believes
market share gains can be achieved.

The Company conducts and operates its business through three divisions:
the RBC division; the Heim Bearings ("Heim") division; the Transport Dynamics
Corporation ("TDC") division, and seven wholly-owned subsidiaries: RBC Nice
Bearings, Inc. ("Nice"); RBC Linear Precision Products, Inc. ("LPP"); Bremen
Bearings, Inc. ("Bremen"); Industrial Tectonics Bearings Corporation ("ITB");
Miller Bearing Company, Inc. ("Miller"), Tyson Bearing Company, Inc. ("Tyson")
and RBC Schaublin S.A. ("Schaublin"). The Company also has a wholly owned
foreign sales subsidiary, Roller Bearing Company FSC, Inc. ("FSC").

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FORMATION; CORPORATE STRUCTURE; ACQUISITIONS

The Company was incorporated in Delaware in 1987. In July 1991, the
Company's Chairman, President and Chief Executive Officer, Dr. Michael J.
Hartnett, teamed up with affiliates of Aurora Capital Partners, L.P. ("Aurora")
to implement a plan to acquire a series of small to medium size domestic
companies in the roller and ball bearing industry. In March 1992, the Company's
capital stock was acquired for $52 million by RBC Acquisition Company (which was
incorporated in March, 1992 as a Delaware corporation), which was subsequently
merged into the Company and the Company became a wholly-owned subsidiary of
Roller Bearing Holding Company, Inc. ("Holdings"). From 1992 to 1999, the
Company has acquired TDC, a manufacturer of plain bearings, for $5.8 million,
Heim, a leading producer of rod end and ball bearings, for $6.8 million, LPP, a
pioneer in grinding techniques for precision ball bearing screws, for $5.5
million, Nice, the oldest active brand name in the domestic bearing industry,
for $7.5 million, and Bremen and Miller, manufacturers of rollers and needle
bearings, for approximately $5.3 million and $11.1 million, respectively. In
Fiscal 2000, the Company acquired Tyson, a manufacturer of tapered roller
bearings, and Schaublin, a manufacturer of collets and bearings, for $10.2
million and $8.8 million, respectively.

The Company has historically acquired complementary bearing companies
and integrated them effectively into its existing operations. Following an
acquisition, management typically rationalizes operations, reduces overhead
costs, develops additional cross-selling opportunities and establishes new
customer relationships.

The Company believes that there will continue to be consolidation
opportunities within the bearing industry. The Company is currently in
discussion with several companies that meet its strategic goals. Priority will
be given to acquiring bearing companies with sales of between $15 million and
$50 million. Additionally, the Company will seek smaller "fold-in" acquisitions,
businesses whose products can be manufactured at the Company's existing
facilities.

While the Company believes that it has greatly benefited from the
consolidation opportunities in the bearing industry and the acquisitions that
the Company has pursued, there can be no assurance that such opportunities will
continue to materialize or that the Company will be able to successfully
capitalize on any such opportunities in the future.

HISTORY AND RECENT DEVELOPMENTS

RECAPITALIZATION

On June 23, 1997, pursuant to a Redemption and Warrant Purchase
Agreement (the "Recapitalization Agreement") dated May 20, 1997, Holdings
effected a recapitalization of its outstanding capital stock, including the
financing and other transactions consummated by Holdings, the Company and its
subsidiaries in connection therewith (the "Recapitalization"). In connection
with the Recapitalization, all of the outstanding preferred stock of Holdings
("Preferred Stock") was redeemed by Holdings and substantially all of the
outstanding common stock of Holdings ("Holdings Common Stock") and warrants to
purchase Holdings Common Stock ("Holdings Warrants") held by non-management
stockholders of Holdings were redeemed or purchased by Holdings, or certain
current stockholders or warrantholders of Holdings, including certain affiliates
of Credit Suisse First Boston ("CSFB") and one of the purchasers of the Discount
Debentures (as defined herein).

The Recapitalization was financed with the proceeds from the issuance
by the Company of $110 million of 9 5/8% Senior Subordinated Notes Due 2007 (the
"Notes"), the incurrence by the Company of $16 million of term loans (the "Term
Loans"), the issuance by Holdings of approximately $74.8 million in

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Senior Secured Discount Debentures (the "Discount Debentures") and warrants
(the "Discount Warrants") to purchase 6,731 shares of Class A Common Stock, par
value $.01 per share, of Holdings ("Class A Common Stock") for an aggregate
gross consideration of $40 million. The Term Loans are a part of the senior
credit facilities (the "Senior Credit Facilities") of the Company with a group
of lenders, which also include a $54 million revolving credit facility (the
"Revolving Credit Facility").

On January 22, 1998, the Company consummated an exchange of all of the
outstanding Notes for substantially identical Notes that were registered under
the Securities Act of 1933, as amended. Such exchange was undertaken pursuant to
obligations of the Company under the indenture governing the Notes (the
"Indenture") and certain other agreements entered into by the Company in
connection with the Recapitalization.

Additionally, in connection with the Recapitalization, (i) the Company
paid a dividend to Holdings in the amount of approximately $56.9 million (the
"Dividend") to finance the Recapitalization, (ii) Holdings used the proceeds of
the Dividend and the proceeds from the sale of the Discount Debentures and the
Discount Warrants, to redeem Holdings Common Stock and Preferred Stock and to
purchase Holdings Warrants for aggregate consideration of approximately $92.2
million, (iii) Holdings assigned its rights to purchase certain shares of
Holdings Common Stock and Holdings Warrants under the Recapitalization Agreement
to Dr. Michael J. Hartnett, certain affiliates of CSFB, OCM Principal
Opportunities Fund, L.P. (the "Oaktree Fund"), Kirk Morrison, The Sommers Family
Trust and Mitchell Quain, (iv) Holdings repurchased (the "Hartnett Repurchase")
1,250 Holdings Warrants from Dr. Hartnett for an amount per share of Holdings
Common Stock underlying such Holdings Warrants equal to $514 less the
approximately $77 exercise price of such warrants (an aggregate of approximately
$550,000), (v) Holdings issued warrants exercisable for 1,250 shares of Class B
Supervoting Common Stock, par value $.01 per share, of Holdings ("Class B Common
Stock") at an exercise price of $514 per share to Dr. Hartnett, (vi) Holdings
loaned $500,000 to Dr. Hartnett (the "Hartnett Loan") to finance a portion of
his purchase of Holdings Common Stock and Holdings Warrants referred to in
clause (iii) above, (vii) Holdings paid to Dr. Hartnett a fee of $1 million (the
"Hartnett Fee"), (viii) Holdings converted all of Dr. Hartnett's shares of
Holdings Common Stock into shares of Class B Common Stock, and amended all
Holdings Warrants held by Dr. Hartnett to provide that they be exercisable for
shares of Class B Common Stock, (ix) the Company repaid outstanding indebtedness
of approximately $52.1 million on its revolving credit facility (the "Existing
Revolving Credit Facility") and its term loan (the "Existing Term Loan") both
with Heller Financial, Inc., ("Heller") and (x) the Company and Holdings paid
certain other fees and expenses, in the approximate aggregate amount of $10.4
million, payable in connection with the foregoing.

Dr. Hartnett, the Chairman, President and Chief Executive Officer of
the Company, currently owns approximately 40% (approximately 39% on a fully
diluted basis) of the outstanding capital stock of Holdings, and, through the
operation of provisions of Holdings' certificate of incorporation, he has the
power to control a majority of the voting rights of all capital stock of
Holdings. See "Item 12. Security Ownership of Certain Beneficial Owners and
Management" and "Item 13. Certain Relationships and Related Transactions."

As discussed herein, the Company incurred indebtedness in connection
with the Recapitalization and is leveraged. The degree to which the Company is
leveraged could have important consequences for the Company, including but not
limited to, (i) impairing the ability of the Company to obtain additional
financing for working capital, capital expenditures, acquisitions, debt service
requirements or other purposes, (ii) impacting the portion of cash flow from
operations available for general corporate needs (the "obligations"), (iii)
impacting the Company's ability to compete against its less leveraged
competitors and (iv) increasing the Company's vulnerability in the event of a
downturn in any industry to which the Company markets its products or a downturn
in the economy in general. Although the Company believes it will be able to pay
its obligations as they come due, there can be no assurance that it will
generate earnings in any future period sufficient to cover its fixed charges.

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BREMEN ACQUISITION

On August 8, 1997, Bremen, a wholly owned subsidiary of the Company,
completed the acquisition of Bremen Bearings Division of SKF USA, Inc., a
manufacturer of needle bearings with facilities in Bremen, Indiana. The purchase
was effective as of July 1, 1997. The Company paid approximately $5.6 million,
of which approximately $3.6 million was paid at the closing. The purchase price
for Bremen was financed by borrowings under the Term Loans.

MILLER ACQUISITION

On June 3, 1998, Miller, a wholly owned subsidiary of the Company,
completed the acquisition of Miller Bearing Company, Inc. ("MBC"), a
manufacturer of pins, rollers and screw machine products with facilities in
Bremen, Indiana. The aggregate purchase price for the acquisition, which was
effective as of March 1, 1998, was approximately $11.1 million which included
the assumption of certain liabilities of MBC. Miller discharged an aggregate of
approximately $1.7 million of such assumed liabilities at closing, representing
all notes payable assumed in the transaction. The acquisition was financed from
proceeds from the sale of the Notes. Operations of Miller for March, 1998 were
not material to the consolidated financial results of the Company.

TYSON ACQUISITION

On June 11, 1999, Tyson, a wholly-owned subsidiary of the Company,
completed the acquisition of certain assets of SKF USA, Inc.'s taper roller
bearing operations whose principal operations are located in Glasgow, Kentucky.
The aggregate purchase price for the acquisition, which was effective as of
April 1, 1999, was $10.2 million plus the assumption of certain liabilities. The
acquisition was accounted for under the purchase method of accounting.

SCHAUBLIN ACQUISITION

On December 17, 1999, Schaublin, a wholly owned subsidiary of the
Company, completed an asset purchase of Schaublin SA, a manufacturer of collets
and bearings whose principal operations are located in Delemont, Switzerland,
and a related stock purchase of Schaublin France SA, a manufacturer of bearings
located in Bovagnet, France. The acquisition was economically effective as of
January 1, 1999. The earnings of Schaublin for the period from January 1, 1999
through September 30, 1999 effectively reduced the aggregate purchase price for
the acquisition to 14.0 million Swiss Francs, or approximately $8.8 million. The
results of operations of Schaublin for the period commencing October 1, 1999 are
included in the results of operations of the Company.

GENERAL

The Company is a manufacturer and distributor of highly engineered
precision roller, ball and plain bearings in the United States. Bearings, which
are integral to the manufacture and operation of most machines and mechanical
systems, reduce wear to moving parts, facilitate proper power transmission and
reduce damage and energy loss caused by friction. Many of the Company's products
are custom designed or highly engineered for specific applications to meet
demanding specifications. While the Company manufactures products in all major
bearing categories, the Company focuses primarily on highly technical or
regulated bearing products for niche markets.

<PAGE>

The Company targets the higher end of the domestic bearing market where
it believes its value added manufacturing and engineering capabilities enable it
to differentiate itself from its competitors and to enhance profitability. The
Company believes that it is the leading supplier to many of its targeted markets
and maintains secondary positions in other product niches where it believes
market share gains can be achieved. In fiscal 2000 (which commenced on April 4,
1999 and ended on April 1, 2000), the Company had sales to more than 3,000
customers with no single customer amounting to more than 8% of net sales. The
Company believes its rapid turnaround on orders, custom designed engineering and
strict adherence to quality and reliability provide it with significant
competitive advantages. The Company's key customers include Caterpillar, John
Deere, Boeing, Pratt & Whitney, Dana Corporation, Honeywell Inc., General
Electric, Bell Helicopter and Motion Industries.

The Company sells primarily to domestic Original Equipment
Manufacturers ("OEMs") and distributors in three markets: industrial, aerospace
and government. Many of the Company's product offerings are in markets which
require high service levels, extensive technical engineering support, short lead
times and small production runs, with market sizes between $30 million and $150
million. In combination with the Company's efficient production processes,
targeting such markets has allowed the Company to achieve its plan.
Additionally, in an effort to generate more stable revenues, the Company has
increased sales to the replacement market. Management estimates that currently
over 60% of the Company's products are sold directly or indirectly for use in
the replacement market.

Although the Company operates as one manufacturing and operational
segment, it sells products to various customer markets. As it relates to
geographical data; during fiscal year 2000, the Company acquired Schaublin,
based in Delemont, Switzerland, which produced $8.7 million in foreign sales,
and additionally exported $12.3 million from its domestic operations to foreign
customers. This combined $21.0 million represents 11.8% of the Company's total
sales. During fiscal year 1999, the Company maintained no overseas manufacturing
facilities but had foreign sales of $9.5 million or 6.4%, of the Company's total
sales.

Approximately 72% of the Company's fiscal 2000 net sales were to the
industrial market. The Company believes opportunities exist to increase sales in
this market as a result of (i) increasing demand for industrial machinery in
both the domestic and international markets, which is expected to expand
existing OEM selling opportunities, (ii) growth in aftermarket demand as the
installed base continues to expand and (iii) the increased emphasis being placed
on maintenance and repair of capital goods given the increasing cost of such
items.

Approximately 19% of the Company's fiscal 2000 net sales were to the
aerospace market for applications in commercial and military aviation. According
to Boeing, worldwide air travel is expected to grow 75% between 1996 and 2006
and the world commercial aircraft fleet is expected to double by 2016. The
Company provides bearings for virtually every model of commercial aircraft in
production, as well as many military applications, and its customers include all
major aerospace manufacturers. Sales to the aerospace market have been
increasing as a percentage of total sales, a trend which the Company expects
will continue.

Approximately 9% of the Company's fiscal 2000 net sales were to the
government. The Company expects sales to this market to remain stable in the
foreseeable future due to (i) increased emphasis on repair and maintenance of
existing military platforms, (ii) sole source supplier relationships and
replacement part sales for existing programs and (iii) long product lives of
existing programs, which should ensure steady sales relating to such programs
for several years.

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BUSINESS STRATEGY

The Company has developed a business strategy that focuses on
profitability while growing, both internally and through acquisitions.

Management believes that the Company's business strategy makes it well
positioned to achieve continued growth and market share gains through (i)
increasing sales to the aftermarket, (ii) continuing its focus on high margin
niche markets where the Company believes it has a sustainable competitive
advantage, (iii) penetrating new markets with innovative products, (iv)
expanding international OEM and distributor sales and (v) acquiring other
manufacturers which have complementary products, similar distribution channels
or provide significant potential for margin enhancement.

COMPETITIVE STRENGTHS

The Company believes that it has significant competitive strengths,
including a strong management team with extensive managerial experience in the
bearing industry, excellent design and manufacturing capabilities, long-term
customer relationships, the Company's focus on niches of the bearing market, the
Company's proprietary manufacturing processes, its low cost operations and the
Company's commitment to service.

BEARING INDUSTRY

Bearings are integral to the manufacture and operation of machines and
mechanical systems. Bearings serve to reduce the wear to moving parts, ensure
proper power transmission and reduce damage and energy loss caused by friction.
Demand for bearings generally follows the market for products in which bearings
are incorporated and the general economy as a whole. Purchasers of bearings
include (i) automotive manufacturers, (ii) industrial equipment and machinery
manufacturers, (iii) producers of commercial and military aerospace equipment,
(iv) agricultural machinery manufacturers and (v) construction and specialized
equipment manufacturers. The Company estimates that approximately one-third of
all bearings manufactured are for use in the automobile industry, a market in
which the Company has recently begun to participate in strategic areas.

The domestic bearing market is comprised of three primary product
categories: ball bearings, roller bearings and plain bearings. Ball bearings are
used for high-speed applications; roller bearings for lower speed, heavily
loaded applications; and plain bearings for sliding action and misalignment
applications.

The domestic market for standard bearings is dominated by three major
international competitors: The Timken Company ("Timken"), Torrington Company
("Torrington") and SKF USA, Inc. ("SKF"). The balance of the domestic market,
consisting primarily of specialty and custom engineered bearings, is more
fragmented. Due to the shorter production runs and significant post-sale
technical support associated with these products, the Company believes they are
not the primary focus of the larger bearing manufacturers. A group of smaller
companies (including the Company) frequently establish leading positions, in
market share and reputation, in certain of these niche product lines.
Furthermore, competition in these niche markets is based on lead times and
reliability of product and service, and these markets are generally not as price
sensitive as the markets for standard bearings.

CUSTOMERS AND MARKETS

The Company supplies bearings to OEMs and distributors in the
industrial, aerospace and government markets. The industrial OEM market
continues to be the largest market for the Company, accounting for 49% of the
Company's fiscal 2000 net sales. While the Company's sales in its target markets
have historically been concentrated on OEMs, the Company has recently shifted
its focus in the

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aerospace and industrial markets towards replacement part sales. The Company
believes this generates more stable revenues. The Company's top ten customers
were responsible for generating 31% of the Company's fiscal 2000 net sales and
no single customer was responsible for generating more than 8% of fiscal 2000
net sales. Five of the Company's top ten customers are distributors and the
remaining five are OEMs.

The Company does not believe that it is dependent upon a single
customer or a few customers. However, the loss of the Company's major customers
or a substantial decrease in such customers' purchases from the Company could
have a material adverse effect on the financial condition and results of
operations of the Company.

The aerospace, heavy equipment and other industries to which the
Company sells its products are, to varying degrees, cyclical and have
experienced periodic downturns, which have often had a negative effect on demand
for the Company's products. Although the Company believes that by concentrating
on products with a strong aftermarket demand it has reduced its exposure to such
business downturns, any future material weakness in demand in any of these
industries could have a material adverse effect on the financial condition and
results of operations of the Company.

INDUSTRIAL

Industrial bearings are used in a wide range of industries such as
heavy equipment, machine tools, agricultural equipment, pumps and packaging.
Nearly all mechanical devices and machinery require bearings to relieve friction
where one part moves relative to another. The Company's products target existing
market applications in which the Company's engineering and manufacturing
capabilities provide it with a competitive advantage in the marketplace.

The Company manufactures a wide range of roller, ball and plain
bearings for industrial uses by customers including Caterpillar, John Deere,
Euclid Hitachi, Motion Industries, Applied Industrial Technologies, and Kaman.
See "Products." Sales to the industrial market accounted for 72% of the
Company's fiscal 2000 net sales. Approximately 67% of such sales were to OEMs
while 33% were to distributors. Within the industrial market, the Company sells
to the construction and mining equipment, material handling, machine tools,
semiconductor manufacturing equipment and energy and natural resources markets.
The Company believes that the diversification of its sales among the various
markets of the industrial bearings market reduces its exposure to downturns in
any individual market.

AEROSPACE

Bearings are used in numerous applications within airplanes,
helicopters and aircraft engines. The aerospace market utilizes spherical plain
bearings, rod ends, journal bearings and thin section ball bearings. Bearings
are regularly replaced on aircraft in conjunction with routine maintenance
procedures and include such items as high precision ball and roller bearings and
metal-to-metal and self-lubricating plain bearings. Commercial aerospace
customers generally require precision products, often of special materials, made
to unique designs and specifications.

The Company's penetration of the commercial aerospace market expanded
through the acquisitions of TDC and Heim. Sales to the aerospace market
accounted for 19% of the Company's fiscal 2000 net sales. Of this total, 70%
reflected sales to OEMs and the remaining 30% were to distributors. Management
estimates that over 75% of commercial aerospace net sales are actually used as
replacement parts since a portion of OEM sales also are ultimately intended for
replacement market use. Sales of products for use in the aftermarket helped the
Company's sales over the past five years. The Company supplies bearings for
commercial aircraft, commercial aircraft engines and private aircraft
manufacturers, as well as to various military contractors for airplanes,
helicopters and missile systems. Aerospace

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customers include Boeing, Lockheed-Martin, Bell Helicopter, General Electric,
Pratt & Whitney, Honeywell, Aviation Sales and WS Wilson.

Essential to servicing the aerospace market is the ability to obtain
product approvals. The Company has in excess of 20,000 product approvals, which
enable it to provide products used in virtually all domestic aircraft platforms
presently in production or operation. Product approvals are typically issued by
the Federal Aviation Administration ("FAA") designated OEMs who are Production
Approval Holders ("PAHs") of FAA approved aircraft. These PAHs provide quality
control oversight and generally limit the number of suppliers directly servicing
the commercial aerospace aftermarket. Recent regulatory changes enacted by the
FAA provide for an independent process (the PMA process), which enables
suppliers who currently sell their products to the PAH, to sell products to the
aftermarket. The Company has submitted over 6,100 PMA applications and has
received over 1,000 approvals to date. There can be no assurance that the
Company will receive approvals on all or any of its remaining submissions. To
the extent that such approvals do not materialize, the Company's ability to
service the aerospace market could be adversely affected.

GOVERNMENT

The Company manufactures high precision ball and roller bearings,
commercial ball bearings and metal-to-metal and self-lubricating plain bearings
for all branches of the United States military, and certain foreign military
forces. In addition to products that meet military specifications, these
customers often require precision products made of specialized materials to
custom designs and specifications. The Company manufactures an extensive line of
standard products that conform to many domestic military application
requirements, as well as customized products designed for unique applications.
Product approval for use on military equipment is often a lengthy process
ranging from six months to three years, and represents a significant barrier to
new entrants.

Government sales accounted for 9% of the Company's fiscal 2000 net
sales, consisting primarily of replacement bearings on programs for which the
Company is the sole source supplier. Despite cutbacks in the overall defense
budget during the 1990s, appropriations for maintenance and repairs for product
platforms serviced by the Company have remained stable. Military programs for
which the Company supplies component products include airplanes, helicopters,
turbine engines and armored vehicles.

While a significant portion of the Company's sales are directly or
indirectly to the government, related military or other government projects, no
significant portion of such sales are subject to renegotiation of profits or
termination of contracts at the election of the government. However, compliance
with various government regulations may be required. Violations of such
regulations could result in termination of the Company's contracts, which may
have material adverse effects on the Company's operations. In addition, the
consolidation and combination of defense manufacturers may eliminate customers
from the industry and/or put downward pricing pressures on sales of component
parts sold by the Company. Such factors could result in a material adverse
effect on the Company.

PRODUCTS

The Company's products and services include six broad categories: plain
bearings, roller bearings, ball bearings, linear precision products, machine
tool collets and refurbishment, each of which includes both standard and highly
specialized and customized products. Within the six major categories that
encompass the Company's product offerings, its major bearing products include
heavy duty needle roller bearings, cam follower bearings, metal-to-metal, ball
bearing and self-lubricating rod ends and spherical bearings, high precision
ball and roller bearings, precision ball screws and semi-precision unground ball
bearings. Bearings are employed to fulfill several functions including reduction
of friction, transfer of motion and carriage of loads.

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PLAIN BEARINGS

Plain bearings accounted for approximately 30% of the Company's fiscal
2000 net sales. In general, plain bearings are produced with either
self-lubricating or metal-to-metal designs and consist of several sub-classes,
including rod end bearings, spherical plain bearings and journal bearings.
Unlike ball bearings, which are used in high-speed rotational applications,
plain bearings are primarily used to rectify inevitable misalignments in various
mechanical components. Such misalignments are either due to machining
inaccuracies or result when components change position relative to each other.
Spherical plain bearings are designed for heavy equipment applications.
Spherical plain bearings and rod end bearings are used in the aerospace market
in the same applications as airframe control ball bearings. Heim and TDC produce
Teflon(R) fabric lined sleeves for the aerospace market.

ROLLER BEARINGS

Roller bearings are anti-friction bearings that use rollers instead of
balls. The Company manufactures four basic types of roller bearings: heavy duty
needle roller bearings with inner rings, tapered roller bearings, track rollers
and aircraft roller bearings. The sale of roller bearings accounted for 48% of
the Company's fiscal 2000 net sales. Track rollers have widespread use in heavy
industrial machinery applications. The Company is a leading producer of roller
bearings for use in helicopters. The Company produces medium sized tapered
roller bearings used primarily in heavy truck axle applications. A significant
portion of the sales of this product is to the aftermarket through Chicago
Rawhide, a division of SKF. The Company offers several needle roller bearing
designs produced at the Bremen and Miller facilities. Needle bearings are used
in various industrial applications and in certain U.S. military aircraft
platform bearing applications that require high load carrying capability in a
confined space. The product is also used as a shaft for another type of bearing
or to support rotating components in mechanical or electromechanical devices.
The Company produces this product in bearing quality steel but also has the
capability to produce this product from various grades of low carbon, stainless
or tool steel.

BALL BEARINGS

The Company manufactures four basic types of ball bearings: high
precision aerospace, airframe control, thin section and commercial ball
bearings. Ball bearings accounted for 17% of the Company's fiscal 2000 net
sales. High precision aerospace bearings are primarily sold to customers in
government or the defense industry that require more technically sophisticated
bearing products providing higher degrees of fault tolerance given the
criticality of the applications in which they are used. Airframe control ball
bearings are precision ball bearings that are plated to resist corrosion and are
qualified under a military specification. Thin section ball bearings are
specialized bearings which use extremely thin cross sections and give
specialized machinery manufacturers many advantages. The Company is also
involved in two niche markets: unground ball bearings and specialty inch and
metric ball bearings.

LINEAR PRECISION PRODUCTS

LPP produces precision ground ball bearing screws that offer repeatable
positioning accuracy in machine tools, transfer lines, robotic handling and
semiconductor equipment. Linear precision products accounted for approximately
2% of the Company's fiscal 2000 net sales. LPP's products are primarily used in
the machine tool industry where the Company believes significant opportunities
to cross-sell the Company's other products exist. LPP also serves many new,
replacement and repair markets through an agreement with Warner Electric, a
division of Dana Corporation.

<PAGE>

MACHINE TOOL COLLETS

Schaublin produces precision machine tool collets that provide
effective part holding and accurate part location during machining operations.
The machine tool collets accounted for approximately 2% of the Company's fiscal
2000 net sales. The Company believes that significant opportunities to expand
sales of this product outside of Europe exist.

BEARING REFURBISHMENT PROGRAM

ITB has developed a bearing refurbishment center. Management estimates
this to be a $60 million market which historically has not been well served.
Bearing refurbishment accounts for approximately 1% of the Company's fiscal 2000
net sales. The Company believes that, as an OEM manufacturer of bearing
components, it is well positioned to serve this industry. Refurbished bearings
offer the end user a significant savings and provide the equivalent service
level. As material costs are minimal and most primary machining and grinding
operations are not required to operate in this market, the opportunity exists
for higher margins. The Company believes bearing refurbishment will continue to
be a growing market, but does not currently expect this program to have a
material impact upon its results of operations or liquidity for at least the
next three to five years.

The RBC Linear Precision Products facility has upgraded their precision
ball screw repair facility to allow them to focus on this growing market.
Management estimates this to be a $60 million market which has been fragmented
in the past among many small companies. The Company believes that LPP, as an OEM
manufacturer of precision ball screws, it is well positioned to service this
industry. As this is a service-oriented business, the opportunity exists for
higher margins. The Company does not currently expect this program to have a
material impact upon its results of operations or liquidity for at least the
next three to five years.

NEW PRODUCTS

The Company develops and acquires new products and determines new
applications for existing products. Some of the Company's new product
introductions over the last several years in the industrial market include: the
RBC self-lubricated, fibrinoid lined spherical plain bearing, designed to meet
an increasing demand for products that are not lubricated and totally
maintenance free; the NBC heavy duty needle roller bearing series; a commercial
thin section ball bearing, which the Company developed by capitalizing on ITB's
expertise in the aerospace industry and adapted for industrial use; and the
Spherco self-lubricated fiberglide rod end, a maintenance-free rod end with
reduced radial play.

In the aerospace and defense markets, the Company's products also
include the ITB swashplate thin section ball bearings and Heim ball bearing rod
ends. The Company is also concurrently working with Boeing to develop weight
saving products. The Company has submitted samples and test data to the
Department of the Navy for military approval, which is required for the sale of
the Company's aircraft cam follower product line to the aerospace industry. In
addition, the company continues to pursue product approval and qualification for
many different series of airframe control bearings through the FAA and Boeing.

MANUFACTURING AND OPERATIONS

The Company's production processes are designed to reduce costs and
improve overall profitability. Using its operating strategy, the Company
endeavors to design its manufacturing process so that machine and labor
utilization are optimized and total costs are reduced. Cost savings are
generated through management of monthly product line profit and loss. On a
monthly basis, gross margins of every

<PAGE>

product line within each product group are reviewed. The Company monitors the
progress of its efficiency efforts on an ongoing basis, both monthly and
quarterly, and reacts quickly to resolve problems or capitalize on unanticipated
opportunities.

Custom products are sold at a premium based on factors such as lot size
and availability. Management believes it has a thorough understanding of the
products and customers in the markets it serves, allowing the Company to utilize
aggressive and competitive pricing practices.

CAPACITY

The Company's plants currently run on a single shift and a light second
shift at selected locations to meet the demands of its customers. Management
believes that current capacity levels, with future annual capital expenditures
equal to approximately 5% of sales in turning and grinding equipment, will
permit the Company to effectively meet demand levels through at least 2002.
Management also believes that as it continues to invest in bearing
professionals, the ability to increase capacity and move to full second shifts,
if required, could be accomplished without compromising product quality or
involving significant additional capital expenditure.

INVENTORY MANAGEMENT

The Company's increasing emphasis on the distributor/aftermarket has
required it to maintain greater inventories of a broader range of products than
the OEM market historically demanded. As a result, the Company has implemented
an inventory management program designed to balance customer delivery
requirements with economically optimal inventory levels. In this program, each
product is categorized based on characteristics including order frequency,
number of customers and sales volume. Using this classification system,
management's primary goal is to maintain a sufficient supply of standard items
while minimizing warehousing costs. In addition, production cost savings are
achieved by optimizing plant scheduling around inventory levels and customer
delivery requirements. This leads to more efficient utilization of manufacturing
facilities and minimized plant production changes while maintaining sufficient
inventories to service customer needs.

INTEGRATION OF ACQUISITIONS

The Company has demonstrated an ability to institute programs which
improve the performance of acquired companies. The process involves applying the
Company's operating strategy, rationalizing the product offerings and
appropriately capitalizing the acquisition.

MARKETING

The Company's marketing strategy is aimed at increasing sales within
its three primary market sectors and targeting specific profitable niche
products. To effect this strategy, the Company seeks to expand into geographic
areas not previously served by it and continues to capitalize on new markets and
industries for existing and new products. The Company employs a technically
proficient sales force and also utilizes marketing managers, product managers,
customer service representatives and product application engineers in its
selling efforts.

Despite the difficulties inherent in the development of a quality,
technically astute, sales force in the bearing industry, the Company has been
able to accelerate the growth of its sales force through the

hiring of sales personnel with prior bearing industry experience, complemented
by an in-house training program, implemented in 1995, which has graduated 20
professionals. The Company will continue to hire and develop expert sales
professionals and strategically locate them to implement its expansion strategy.

<PAGE>

Today, the Company employs strategically located sales professionals nationwide
in its sales and marketing effort.

The Company has placed an emphasis on increasing sales to distributors
serving the spare parts aftermarket in the Company's key industry markets. Sales
to this market tend to be less cyclical as they arise out of end users' needs
for replacement bearings on existing equipment. See "Customers and Markets."
Management estimates that sales to the replacement market exceeded 60% of the
Company's fiscal 2000 net sales. Management intends to continue to focus on
building distributor sales volume.

With regard to its OEM customers, the Company has and continues to
focus on establishing and maintaining relationships with OEMs that produce
products with strong aftermarket demand characteristics for the Company's
products. The Company's OEM relationships also provide it with extensive
cross-selling opportunities, as many OEM products utilize several types of
bearings manufactured by the Company.

COMPETITION

Competition in the bearing industry is based on a number of factors,
including price, product line offering, technical service and timeliness of
supply. The Company believes that it is well positioned to compete with regard
to each of these factors in each of the markets in which it operates.

For large run bearing products, price is a very important factor.
Larger manufacturers generally are relative low cost producers in the more
standard bearing product lines and are thus able to attain extensive market
shares. However, with niche product lines, when the production runs are smaller,
larger manufacturers are often unable to achieve the economies of scale needed
to maintain their low-cost producer status. As a result, while the Company
competes with the larger bearing manufacturers in some of the more standard
bearing product markets, its primary competition includes smaller niche
companies such as Kaydon Corporation, New Hampshire Ball Bearings and McGill
Manufacturing Company, Inc. Competitors to the Company's ballscrew product line
are 20th Century and Thompson.

Bearings manufacturers operating in the more specialized market compete
by maintaining a broad product line and adequate inventories to service the
aftermarket. This enables such manufacturers to exploit the trend of OEMs
towards sourcing a broader range of products from a small number of suppliers.
Additionally, in certain industries and groups, purchasers require product
approval on an industry or company specific level for their component parts.

Other factors in the more specialized bearing market include strong
distribution channels, quality product, strong technical product service,
customer support and long-term customer relationships.

While the Company believes that it has significant strengths over
several of its competitors, many of its competitors are more diversified than
the Company, have greater resources than the Company and possess greater market
share in certain markets of the bearing industry. In addition, the Company
relies on certain of its competitors for its own raw materials and in certain
circumstances, produces products for and sells products to its competitors for
resale under such competitors' names. See "Suppliers and Raw Materials."

BACKLOG

<PAGE>

As of April 1, 2000, the Company had a backlog of $77.7 million as
compared to a backlog of $69.1 million as of April 3, 1999. The primary reasons
for the increase in the backlog are the acquisitions of Tyson and Schaublin. The
backlog not including Tyson and Schaublin was $68.1 million. The Company has
historically maintained a strong backlog of orders. The Company sells many of
its products pursuant to contractual agreements, single source relationships or
long-term purchase orders, each of which may permit early termination by the
customer. However, due to the nature of many of the products supplied by the
Company and the lack of availability of alternative suppliers to meet the
demands of such customers' orders in a timely manner, the Company believes that
it is not practical or prudent for most customers, including many of the
Company's largest customers, to shift their bearing business to other suppliers.

EMPLOYEES

The Company had approximately 1,520 employees at April 1, 2000.

Currently, collective bargaining agreements with the United Auto
Workers (UAW) cover substantially all of the hourly employees at the Company's
West Trenton, New Jersey; Fairfield, Connecticut; and Bremen, Indiana plants,
and collective bargaining agreements with the United Steelworkers (USWA) covers
substantially all the hourly employees at the Company's Kulpsville, Pennsylvania
and Glasgow, Kentucky plants. A collective bargaining agreement with the
Association of Swiss Engineering Employers (ASM) covers substantially all of the
hourly employees at the Company's Delemont, Switzerland plant. The West Trenton
agreement expires on July 1, 2001; the Fairfield agreement expires on January
31, 2002; the Bremen agreement expires on June 30, 2002; the Kulpsville
agreement expires on October 25, 2002; the Glasgow agreement expires on March
29, 2002; and the Delemont agreement expires on June 30, 2003. All other hourly
employees are non-unionized.

The Company considers its relations with its employees to be
satisfactory and has not experienced a significant work stoppage in over
thirteen years. However, there can be no assurance that additional employees who
are not represented by unions will not elect to be so represented in the future
or that any of the collective bargaining agreements will be renewed when they
expire or that the Company will not experience strikes, work stoppages or other
situations.

In addition, the Company business is managed by a small number of key
executive officers. Accordingly, the loss of services of certain of these
executives, including Dr. Hartnett, could have a material adverse impact on the
financial condition and results of operations of the Company. There can be no
assurance that the services of such personnel will continue to be made
available.

SUPPLIERS AND RAW MATERIALS

The Company obtains raw materials, component parts and supplies from a
variety of sources and generally from more than one supplier. The Company's
principal raw material is steel. The Company's suppliers and sources of raw
materials are based in the United States. The Company believes that its sources
are adequate for its needs in the foreseeable future, that there exist
alternative suppliers for its raw materials and that in most cases readily
available alternative materials can be used for most of its raw materials. The
Company does not believe that the loss of any one supplier would have a material
adverse effect on the financial condition or results of operations of the
Company.

Notwithstanding the foregoing, the Company relies on certain of its
competitors for its own raw materials. There is no assurance that such
competitors will continue to supply raw materials to the Company in the future.

INTELLECTUAL PROPERTY

<PAGE>

The Company's policy is to file patent applications to protect its
technology, inventions and improvements that are important to the development of
its business, and to seek trademark protection with respect to its product
titles that have achieved brand name recognition. The Company also relies upon
trade secrets, know-how and continuing technological innovation to develop and
maintain its competitive position. The Company holds six United States patents
(including those covering the RBC Roller-TM- cam follower and Quadlube-TM-
spherical plain bearing) and has three additional United States patent
applications pending. The Company has registered twelve trademarks in the United
States. There can be no assurance that such rights will not be infringed upon,
that additional patents will be issued as a result of the Company's applications
and that the Company's trade secrets will not otherwise become known to or
independently developed by competitors. The Company believes that it would have
adequate remedies for any such infringement or use or that claims allowed under
such patents or any existing patents will not be challenged or invalidated or
would be of adequate scope to protect the Company's technology. The Company does
not believe that any individual item of intellectual property is material to its
business.

ENVIRONMENTAL COMPLIANCE

The Company is subject to various federal, state and local
environmental laws, ordinances and regulations, including those governing
discharges of pollutants into the air and water, the storage, handling and
disposal of solid wastes, hazardous wastes and hazardous substances and the
health and safety of employees ("Environmental Laws"). Agencies responsible for
enforcing Environmental Laws have authority to impose significant civil or
criminal penalties for non-compliance. The Company believes it is currently in
material compliance with all applicable requirements of Environmental Laws, but
there can be no assurance that some future non-compliance will not result in the
imposition of significant liabilities.

The Company also may be liable under Environmental Laws, including the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), state analogs to CERCLA and certain state property transfer laws,
for the costs of investigation and remediation of contamination at facilities
owned or operated by the Company, or at other facilities at which the Company
has disposed of hazardous substances. In connection with such contamination, the
Company may also be liable for natural resource damages, government penalties
and claims by third parties for personal injury and property damage.

State agencies are currently overseeing investigation, remediation
and/or monitoring activities at the Company's facilities in Fairfield,
Connecticut, West Trenton, New Jersey, Santa Ana, California, Rancho Dominguez,
California and Hartsville, South Carolina and the prior property owners have
conducted limited remediation at the Company's Kulpsville, Pennsylvania and
Bremen, Indiana facilities. The former owners of these facilities have agreed to
indemnify the Company for liabilities arising from environmental conditions that
existed prior to the date of purchase of such facilities by the Company, which
has covered most of the costs of ongoing activities to date, although the
Company has relinquished the indemnity for the Fairfield, Connecticut facility.
Moreover, there can be no assurance that the indemnities relating to the other
facilities, all of which contain negotiated dollar limits, will be adequate to
resolve any remaining cleanup liabilities or that the indemnifying parties will
continue to perform their indemnification obligations.

At the Company's two facilities located in California and its facility
in New Jersey, the previous owners of the assets purchased by the Company
indemnified the Company for liabilities arising from environmental conditions
that existed prior to the date of the Company's purchase of such assets, subject
to certain thresholds, limitations and caps, and are undertaking cleanup in
fulfillment of those indemnification obligations. With respect to the Rancho
Dominguez, California facility, the Company has contributed a total of
approximately $100,000 toward the cost of the on-going cleanup. Under the
acquisition agreement, the previous facility owner is responsible for all
further costs to cleanup conditions existing at the time of

<PAGE>

the transfer of the facility, up to a maximum of the full purchase price. The
previous owner is continuing to undertake cleanup activities at this facility.
To the Company's knowledge, cleanup costs are not expected to approach the
indemnification cap limit.

Cleanup has been completed at the Company's Santa Ana, California
facility, although standard monitoring continues as required by the regional
regulatory authority. Currently, the previous owner is working with this
regulatory authority to obtain final approval and closure of the now-concluded
cleanup activities at this facility. The Company did not contribute toward the
costs of cleanup, and has not contributed toward the ongoing monitoring costs.
To the Company's knowledge, cleanup and monitoring costs have not approached the
$4.5 million limit on the previous owner's liability under the acquisition
agreement for this facility.

At the West Trenton, New Jersey facility, the previous facility owner
has been investigating and remediating the land where the facility is located
since the mid-1980s. The previous owner both indemnified the Company with
respect to its cleanup obligations and is performing the cleanup pursuant to a
consent order with the New Jersey Department of Environmental Protection. The
Company has not contributed to the costs of remediation at this facility, and
does not expect to do so with respect to conditions existing at the time the
Company acquired the facility.

Each of the Company's Bremen, Indiana facilities formerly had on-site
lagoons used for settling process wastewater. In each case, the former owner of
the facility discontinued use of the lagoon and removed residual sludge for
disposal off-site years before RBC began operations at the facility. With regard
to the former SKF facility located at 1342 West Plymouth Street in Bremen, some
material from the lagoon was disposed of on-site. Testing of this material
revealed that it was not hazardous under the United States Environmental
Protection Agency's EP toxicity protocol and some of this material remains
on-site. The former owner of this facility has indemnified RBC for pre-existing
environmental liabilities at this site. At the former Miller Bearings facility
located at 225 Industrial Boulevard in Bremen, the former owner removed residual
sludge for off-site disposal and a Phase II environmental sampling investigation
at this facility did not reveal the existence of regulated substances in excess
of applicable regulatory standards at this facility. The former owner of this
facility has indemnified RBC for pre-existing environmental liabilities at this
site. Neither of the Bremen facilities has been the subject of any regulatory
interest in connection with the cleanup of the former lagoons. Although there
can be no assurance, the Company does not expect to incur material costs with
respect to these former lagoons.

Finally, limited environmental activities have been conducted at the
Company's Kulpsville, Pennsylvania and Hartsville, South Carolina facilities.
The prior owner of the Kulpsville facility is undertaking limited remediation at
that facility in fulfillment of its indemnification obligations. Also, at the
request of the state regulatory agency, the Company is monitoring trace level
contamination at its Hartsville, South Carolina facility. This contamination
resulted from operations prior to the Company's acquisition of the facility.
Because the contamination has been detected at very low levels, which are
decreasing, the state has not required cleanup activities beyond monitoring.
Monitoring costs have remained minimal and are being paid by the Company.
However, if the state regulatory agency were to require cleanup activities in
the future, the cost of that cleanup would be covered by an indemnity with the
prior facility owner. There can be no assurance that the cost of such a cleanup,
if required, would not exceed the limits of the prior owner's indemnification
obligation to the Company.

<PAGE>

for completing cleanup efforts previously initiated by that owner. In 1996,
the Company submitted and obtained regulatory approval for its investigation
and remediation plan as required by the CTA. The results of this investigation
revealed the continued presence of certain low level soil and groundwater
contamination, the remediation of which had been commenced by the previous owner
of the facility. In March 1998, the Company submitted these findings to
Connecticut Department of Environmental Protection ("CTDEP"). In April 1999,
CTDEP responded to this submission and requested that the Company develop a
workplan for additional investigation, analysis and possible remediation to
address the isolated, low level residual contamination at this facility. While
the Company believes that its total investigation and cleanup costs will not
exceed $200,000, Connecticut regulators may require additional cleanup or
monitoring of the residual contamination at this facility. If such activities
are required, there can be no assurance that the Company's total investigation
and remediation costs will not exceed its $200,000 estimate.

The Company's Recapitalization in 1997 also triggered ISRA obligations
at its West Trenton facility, obligating the Company to investigate all possible
past hazardous substances releases, and to cleanup any resulting contamination,
at that facility. Under ISRA, investigation requirements for facilities that are
currently being remediated pursuant to an earlier ISRA-triggering transaction
may be merged into that ongoing ISRA investigation. In this case, the West
Trenton facility has been the subject of an ongoing ISRA (and its predecessor
statute) groundwater investigation and remediation by the facility's prior owner
since the Company's acquisition of the facility in 1987. Accordingly, the New
Jersey regulatory authorities have informed the Company that its ISRA
obligations triggered by the 1997 Recapitalization are being satisfied by the
prior owner's ongoing ISRA investigation and remediation. That investigation has
not found any additional contamination that would require remediation beyond
that which continues to be performed by the facility's prior owner.

Prior to, and in connection with, the acquisition of a facility or
business, the Company endeavors to obtain indemnification from parties whom the
Company believes to be able to support such indemnities. Further, the Company
takes such actions as it deems warranted to establish the scope of any
environmental issues that exist as of such purchase, as well as to assess what
potential environmental liabilities exist. Such actions include investigations
by members of management of the Company of the records and facilities relating
to the plant or business to be acquired, analysis of existing investigations,
analyses and compliance work done by the sellers and commissioning its own
studies, investigations or analyses.

The Company monitors its various facilities and operations for
compliance with Environmental Laws and exposure to environmental claims,
including, where deemed necessary, the hiring of outside consultants to conduct
surveys and tests. When presented with a potential violation or claim, the
manager of the facility in question will, in coordination and consultation with
management of the Company, endeavor to establish the scope and nature of the
issue, and, if possible, resolve the issue without resort to litigation or
formal proceedings. The Company also undertakes an analysis of the various
indemnification obligations owed to it to ascertain which, if any, would apply,
and the procedures to be followed to perfect its rights with respect to
potential recoveries. Several members of management of the Company have
experience in dealing with such issues and take a leading role in resolving
issues that arise.

Future events, such as new releases of hazardous substances, new
information concerning past releases of hazardous substances, changes in
existing Environmental Laws or their interpretation, and more rigorous
enforcement by regulatory authorities, may give rise to additional expenditures,
compliance requirements or liabilities that could have a material adverse effect
on the financial condition and results of the operations of the Company. See
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations."

ITEM 2. PROPERTIES

<PAGE>

The principal executive offices of the Company are comprised of 13,728
square feet of owned office space located at the Heim division in Fairfield,
Connecticut which it owns. The Company conducts manufacturing in approximately
80,000 square feet at such facility where it manufactures plain bearing product,
both Teflon(R) lined and metal to metal and commercial ball bearings. The
Company also owns: (i) a facility in Hartsville, South Carolina, consisting of
approximately 104,000 square feet of manufacturing space, occupied by the RBC
division, at which facility the Company manufacturers the smaller end of all of
the RBC division's product lines, and performs the initial machining operations
for a large percentage of the product manufactured in the West Trenton, New
Jersey facility; (ii) a facility in Kulpsville, Pennsylvania, consisting of
approximately 130,000 square feet of manufacturing space, occupied by Nice, at
which facility the Company manufactures commercial ground and unground ball
bearings; (iii) a facility in Rancho Dominguez, California, consisting of
approximately 69,100 square feet of manufacturing space, occupied by ITB, at
which facility the Company manufactures high precision ball and roller bearings
for the aerospace industry, thin section ball bearings and large diameter cam
followers; (iv) a facility in Santa Ana, California consisting of approximately
80,000 square feet of manufacturing space, occupied by the TDC division, at
which facility the Company manufactures journal bearings and spherical plain
bearings; (v) a facility in Walterboro, South Carolina, consisting of
approximately 40,000 square feet of manufacturing space, occupied by LPP, at
which facility the Company manufactures ball screws, ball spline and ball screw
actuator product lines and (vi) 48,000 square feet of manufacturing space in
Bremen, Indiana, occupied by Miller, at which facility the Company produces
needle bearings. Additionally the Company leases: (i) 55,000 square feet of
manufacturing space in West Trenton, New Jersey, occupied by the RBC division,
at which facility the Company manufactures heavy duty needle roller bearings for
the aerospace industry as well as the RBC division's larger diameter heavy duty
needle roller bearings and single fracture spherical plain bearings; (ii) 22,000
square feet of space in Waterbury, Connecticut (iii) a facility in Bremen,
Indiana consisting of approximately 64,000 square feet of manufacturing space,
occupied by Bremen, at which facility the Company manufacturers needle roller
bearings (iv) approximately 240,000 square feet of manufacturing space in
Glasgow, Kentucky, at which facility the Company manufacturers tapered roller
bearings and (vi) a facility in Delemont, Switzerland, occupied by Schaublin
consisting of approximately 131,000 square feet, at which facility the Company
manufactures spherical bearings, rod ends, collets and tool holders.

The lease for the West Trenton, New Jersey facility expires on February
28, 2009, the lease for the Waterbury, Connecticut facility expires on February
28, 2003, a portion of the lease for the Bremen, Indiana facility expires on
July 16, 2002, the lease for the Glasgow, Kentucky facility expires on June 30,
2005 and the lease for the Delemont, Switzerland facility expires on December
31, 2009.

At the Company's facility in Waterbury, Connecticut, its Engineered
Components Division ("ECD") has come on line as a Computer Numerically
Controlled Turning center. The mission of ECD is to be a manufacturer of turned
rings for the other operating units of the Company. The operation currently has
22 employees and approximately $2.4 million in equipment.

<PAGE>

ITEM 3. LEGAL PROCEEDINGS

There are various claims and legal proceedings against the Company
relating to its operations in the normal course of business, none of which the
Company believes to be material. The Company currently maintains insurance
coverage for product liability claims. There can be no assurance that
indemnification from its customers and coverage under insurance policies will be
adequate to cover any future product liability claims against the Company.

<PAGE>

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

<PAGE>

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

As of April 1, 2000, there were 100 shares of common stock, par
value $.01 per share, of the Company ("Company Common Stock") outstanding,
all of which were held by Holdings. There is no established public trading
market for the Company Common Stock.

As of April 1, 2000, there were 6,075 shares of Holdings Class A
Common Stock outstanding held by 19 holders and 3,748 shares of Holdings
Class B Common Stock outstanding held by Michael J. Hartnett. In addition, as
of April 1, 2000, there were outstanding warrants and options to purchase up
to an additional 16,401 shares of Holdings Class A Common Stock and 10,077
shares of Holdings Class B Common Stock.

DIVIDENDS

The Company, as a wholly owned subsidiary of Holdings, from time to
time will pay dividends (and has paid the Dividend in connection with the
Recapitalization) to Holdings from funds legally available therefore to fund
Holdings' operations. No cash dividends have been declared by Holdings on the
Common Stock in the last three years. Holdings intends to retain earnings to
finance the development and growth of its business. Accordingly, Holdings
does not anticipate that any dividends will be declared on the Holdings
Common Stock for the foreseeable future. Future payments of cash dividends,
if any, will depend on the financial condition, results of operations,
business conditions, capital requirements, restrictions contained in
agreements, future prospects and other factors deemed relevant by the Board
of Directors of the Company and Holdings. Further, the Company's ability to
declare and pay dividends on the Company Common Stock is restricted by
certain covenants in the credit agreement relating to the Senior Credit
Facilities (the "Credit Agreement") and the Indenture. Holdings' ability to
pay and declare dividends is restricted by certain covenants in the indenture
related to the Discount Debentures (the "Discount Indenture").

UNREGISTERED SALES OF STOCK

In connection with the Recapitalization, Holdings assigned its right
under the Recapitalization Agreement to purchase certain shares of Holding's
Common Stock and Holdings Warrants to Dr. Hartnett, certain affiliates of
CSFB, the Oaktree Fund, Kirk Morrison, The Sommers Family Trust and Mitchell
Quain. In addition, in connection with the Recapitalization, Holdings issued
warrants to purchase 1,250 shares of Class B Common Stock to Dr. Hartnett and
issued the Discount Warrants to the Oaktree Fund and Northstar (as defined
herein). See "Item 1. Business--Recent Developments--Recapitalization."

Pursuant to the Stock Option Plan (as defined herein), Holdings has
issued options to purchase 1,728 shares of Holdings Class A Common Stock in
fiscal year 1998 and 409.5 shares (options with respect to 100 of which were
subsequently cancelled and returned to the plan for future grant) of Holdings
Class A Common Stock in fiscal year 1999, and 167.5 shares of Holdings Class
A Common Stock in fiscal year 2000, and as a result thereof was obligated to
issue additional warrants to purchase 436 shares of Holdings Class A Common
Stock to the Oaktree Fund and Northstar pursuant to certain anti-dilution
provisions of the Discount Warrants.

<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

The selected financial data presented below for the fiscal years in the
three-year period ended April 1, 2000 has been derived from the Consolidated
Financial Statements of the Company which have been audited by Arthur
Andersen LLP, and the selected financial data presented below for each of the
fiscal years in the two-year period ended March 29, 1997 has been derived
from the Consolidated Financial Statements of the Company, which have been
audited by Ernst & Young, LLP. The information presented below should be read
in conjunction with "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements and Notes to Consolidated Financial Statements contained elsewhere
in this Form 10-K.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------------------------------
March 30 March 29 March 28 April 3 April 1
1996 1997(a) 1998( b) 1999(c) 2000(d)
---------------------------------------------------------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Statement of Operations Data:

Net Sales $ 82,233 $ 93,427 $136,009 $147,932 $177,148
Operating Income $ 9,687 $ 13,202 $ 10,600 $ 21,073 $ 31,432
Extraordinary Charge, Net $ 995 $ -- $ 625 $ -- $ --
Net Income (Loss) $ 827 $ 4,640 $ (1,917) $ 3,895 $ 10,018

Balance Sheet Data:

Total Assets $110,182 $124,513 $156,405 $164,819 $192,093
Total Debt $ 56,079 $ 62,815 $136,200 $145,075 $157,582
Cash Dividends $ -- $ -- $ 56,977 $ -- $ --
Stockholder's Equity (Deficit) $ 35,785 $ 37,372 $(14,922) $(11,027) $ (1,159)

--------------------------------------------------------------------------------------------------
</TABLE>

(a) Includes the results of operations for LPP and Nice following their
respective effective dates of acquisition in October 1996 and February
1997.
(b) Includes the results of operations for Bremen following the effective
date of its acquisition in July 1997.
(c) Includes the results of operations for Miller for the full fiscal year
(d) Includes the results of operations for Tyson for the full fiscal year,
and the results of Schaublin following the effective date of acquisition
of October 1, 1999.

<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

FISCAL 2000 COMPARED TO FISCAL 1999

NET SALES

The Company's net sales increased by approximately 19.7%, or $29.2
million, to $177.1 million in fiscal 2000 from $147.9 million in fiscal 1999.
Net sales growth in fiscal 2000 was primarily due to acquisitions. Net sales
for fiscal 2000 included $37.9 million related to the Tyson acquisition,
which was effective April 1, 1999, and the Schaublin acquisition, which was
effective October 1, 1999. Net sales for the Company excluding the Tyson and
Schaublin acquisitions decreased $8.7 million or 5.9% from fiscal 1999,
primarily due to cyclical factors in the aerospace business and an agreement
with a major customer to delay receipt of contractually committed orders.

GROSS MARGIN

Gross margin increased by approximately 27.9% or $12.5 million, to
$57.3 million for fiscal 2000 from $44.8 million for fiscal 1999. Gross
margin as a percentage of net sales increased from 30.3% to 32.3%. These
increases are primarily the result of strategic pricing increases, better
operational performance through Kaizen management techniques and machine tool
capital enhancements.

OPERATING EXPENSES

Selling, general and administrative ("SG&A") expenses increased by
approximately 9.1%, or $2.1 million, to $25.1 million in fiscal 2000 from
$23.0 million in fiscal 1999 primarily due to expenses relating to the
acquired companies. Other operating expenses remained constant in fiscal 2000
at $0.7 million.

OPERATING INCOME

Operating income increased by approximately 49.2%, or $10.3 million,
to $31.4 million for the current year versus $21.1 million for fiscal 1999
primarily due to the higher gross margin and was partially offset by higher
SG&A expenses.

INTEREST EXPENSE

Interest expense for fiscal 2000 was $15.0 million as compared to
$14.5 million for fiscal 1999.

INCOME BEFORE TAXES AND EXTRAORDINARY CHARGE

Income before taxes and extraordinary items increased by $9.8
million to $16.4 million in fiscal 2000 from $6.6 million in fiscal 1999,
primarily due to the increased operating income.

NET INCOME

Net income for fiscal 2000 reflects a tax provision of $6.4 million
compared to a tax provision of $2.7 million for fiscal 1999. Net income
increased by $6.1 million to $10.0 million in the current year compared to
$3.9 million last year.

<PAGE>

FISCAL 1999 COMPARED TO FISCAL 1998

NET SALES

The Company's net sales increased by approximately 8.8%, or $11.9
million, to $147.9 million for fiscal 1999 from $136.0 million for fiscal
1998. Net sales growth in fiscal 1999 occurred both through internal growth
in the Company's existing businesses and through acquisitions. Net sales for
fiscal 1999 included $8.5 million related to the Miller acquisition which was
effective March 1998. Net sales for the Company excluding the Miller
acquisition increased by $3.4 million or 2.5% from fiscal 1998.

GROSS MARGIN

Gross margin increased by approximately 15.4%, or $6.0 million, to
$44.8 million for fiscal 1999 from $38.8 million for fiscal 1998. Gross
margin as a percentage of sales increased from 28.5% to 30.3%. These
increases are primarily the result of strategic pricing increases, better
operational performance through Kaizen management techniques, the elimination
of certain unprofitable product lines and machine tool capital enhancements.

OPERATING EXPENSES

SG&A expenses increased by approximately 18.0%, or $3.5 million, to
$23.0 million for fiscal 1999 from $19.5 million in fiscal 1998. SG&A
expenses as a percentage of net sales increased from approximately 14.3% in
fiscal 1998 to approximately 15.6% in fiscal 1999. The increase was primarily
attributable to increased fixed infrastructure costs necessary to support the
expanded business. Key additions to operating management were directly
related to the margin improvement experienced in fiscal 1999. A full year of
expenses by the newly acquired Miller also contributed to the higher level of
expenses. Other operating expenses decreased to $0.7 million in fiscal 1999
from a total of $8.7 million in the prior year primarily due to one time
charges of $7.8 million in fiscal 1998 for expenses related to the extension
of warrants and the Recapitalization.

OPERATING INCOME

Operating income increased by approximately 98.8%, or $10.5 million,
to $21.1 million for fiscal 1999 from $10.6 million for fiscal 1998.
Excluding the $7.8 million in fiscal 1998 one time other expenses, operating
income increased by $2.7 million, or approximately 14.7% for the current year
primarily due to higher gross margin partially offset by higher SG&A expenses.

INTEREST EXPENSE

Interest expense for the fiscal year was $14.5 million compared to
$11.8 million for the prior year. The increase of $2.7 million is primarily
related to higher debt incurred in connection with the Recapitalization and
the Miller acquisition.

INCOME BEFORE TAXES AND EXTRAORDINARY CHARGE

Income before taxes and extraordinary items increased by $7.8
million to $6.6 million for fiscal 1999 compared to a loss of $1.2 million in
fiscal 1998. The increase is primarily due to higher operating income of
$10.5 million partially offset by higher interest expense of $2.7 million.

<PAGE>

NET INCOME

Net income for fiscal 1999 reflects a tax provision of $2.7 million
compared to $0.1 million for fiscal 1998. Net income increased by $5.8
million to $3.9 million in the current year compared to a loss of $1.9
million for fiscal 1998. Fiscal 1998 results include an extraordinary charge
related to the write-off of unamortized deferred financing costs in
connection with the Company's early extinguishment of debt. The extraordinary
charge was $1.0 million and is reflected net of the related income tax
benefit of $0.4 million.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating activities was approximately $14.5
million for fiscal 2000, versus $3.7 million in fiscal 1999. The increase of
$10.8 million is primarily the result of the net income increase of $6.1
million combined with working capital changes of $2.5 million and a change in
the deferred income tax asset of $2.2 million.

Cash used in investing activities increased by $3.4 million to $25.0
million in fiscal 2000 from $21.6 million in fiscal 1999. Acquisition costs
were $7.9 million higher in fiscal 2000, due to the acquisition of Tyson and
Schaublin of $10.2 million and $8.8 million, respectively, versus the fiscal
1999 acquisition of Miller for $11.1 million. This utilization was somewhat
offset by lower capital expenditure costs in fiscal 2000 of $6.6 million
compared to $9.4 million in fiscal 1999, a decrease of $2.8 million and an
increase in cash flow due to restricted marketable securities of $1.7 million.

The Company had net cash inflows from financing activities of $11.4
million primarily due to proceeds from the issuance of long term debt, mainly
in connection with the Schaublin acquisition, of $7.7 million, proceeds from
Industrial Revenue Bonds of $4.8 million, draw downs on our revolving credit
facility of $3.0 million, less principal payments on bank loans and capital
lease obligations of $4.1 million.

Principal and interest payments under the Senior Credit Facilities,
interest payments on the Notes, and the funding of acquisitions, represent
significant liquidity requirements for the Company. With respect to the Term
Loans, the Company began to make its required quarterly scheduled principal
payments in September 1997. The Term Loans bear interest at a floating rate
based upon the interest rate option elected by the Company. As a result of
the indebtedness incurred in connection with the Recapitalization, the
Company's post-Recapitalization interest expense was higher and will continue
to have a greater proportionate impact on net income in comparison to
pre-Recapitalization periods.

The Company believes that borrowings available under the Revolving
Credit Facility, cash flow from operations and cash on hand will provide
adequate funds for ongoing operations, planned capital expenditures and debt
service payments for the foreseeable future. The Company's ability to incur
indebtedness is limited by the terms of the Credit Agreement, the Indenture
and the Discount Debentures.

YEAR 2000

The Company experienced no material problems with its information
systems, or those of its vendors, customers or financial institutions, as a
result of the date change to the Year 2000. The Company developed a detailed
Year 2000 compliance plan, which was completed by November 1999, utilizing
both internal and external resources to ensure Year 2000 compliance. Costs
related to this conversion were approximately $0.3 million. The Company does
not anticipate expending any additional funds on Y2K related activities.

ENVIRONMENTAL COMPLIANCE

<PAGE>

The Company is subject to various federal, state and local
environmental laws, ordinances and regulations, including those governing
discharges of pollutants into the air and water, the storage, handling and
disposal of solid wastes, hazardous wastes and hazardous substances and the
health and safety of employees. Agencies responsible for enforcing
Environmental Laws have authority to impose significant civil or criminal
penalties for non-compliance. The Company believes it is currently in
material compliance with all applicable requirements of Environmental Laws,
but there can be no assurance that some future non-compliance will not result
in the imposition of significant liabilities.

Additionally, capital expenditures and operating costs associated
with the Company's compliance with Environmental Laws may increase in the
future if environmental laws become more stringent, are enforced more
rigorously, or if the Company's operations were to change.

Prior to, and in connection with, the acquisition of a facility or
business, the Company endeavors to obtain indemnification from parties whom
the Company believes to be able to support such indemnities. Further, the
Company takes such actions as it deems warranted to establish the scope of
any environmental issues that exist as of such purchase, as well as to
project what potential environmental liabilities exist. Such actions include
investigations by members of management of the Company of the records and
facilities relating to the facility or business to be acquired, analysis of
existing investigations, analyses and compliance work done by the sellers and
commissioning its own studies, investigations or analyses.

The Company monitors its various facilities and operations for
compliance with Environmental Laws and exposure to environmental claims,
including, where deemed necessary, the hiring of outside consultants to
conduct surveys and tests. When presented with a potential violation or
claim, the manager of the facility in question will, in coordination and
consultation with management of the Company, endeavor to establish the scope
and nature of the issue, and, if possible, resolve the issue without resort
to litigation or formal proceedings. The Company also undertakes an analysis
of the various indemnification obligations owed to it to ascertain which, if
any, would apply, and the procedures to be followed to perfect its rights
with respect to potential recoveries. Several members of management of the
Company have experience in dealing with such issues and take a leading role
in resolving issues that arise.

<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ROLLER BEARING COMPANY OF AMERICA, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS AS OF APRIL 1, 2000
AND APRIL 3, 1999 AND FOR EACH OF
THE THREE FISCAL YEARS IN THE PERIOD ENDED APRIL 1, 2000

<TABLE>
<CAPTION>
<S> <C>
Report of Independent Public Accountants - Arthur Andersen LLP F - 2

Consolidated Statements of Operations F - 3

Consolidated Balance Sheets F - 4

Consolidated Statements of Cash Flows F - 5

Consolidated Statements of Stockholder's Equity (Deficit) F - 6

Notes to Consolidated Financial Statements F - 7 to F - 22
</TABLE>

F-1

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Stockholder
of Roller Bearing Company of America, Inc.:

We have audited the accompanying consolidated balance sheets of Roller
Bearing Company of America, Inc. (a wholly owned subsidiary of Roller Bearing
Holding Company, Inc.) as of April 1, 2000 and April 3, 1999, and the related
consolidated statements of operations, stockholder's equity (deficit) and cash
flows for the years then ended. These 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 auditing standards generally
accepted in the 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 financial statements referred to above present fairly, in
all material respects, the financial position of Roller Bearing Company of
America, Inc. as of April 1, 2000 and April 3, 1999, and the results of its
operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.

/s/ ARTHUR ANDERSEN LLP

Stamford, Connecticut
June 15, 2000

F-2

<PAGE>

ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
---------------------------------------
APRIL 1, APRIL 3, MARCH 28,
2000 1999 1998
---------------------------------------
<S> <C> <C> <C>
Net sales $ 177,148 $ 147,932 $ 136,009

Cost of sales 119,888 103,165 97,223
---------------------------------------
Gross margin 57,260 44,767 38,786

Operating expenses:
Selling, general and administrative 25,112 23,008 19,492
Other expense, net of other income 716 686 1,547
Compensation related to warrants - - 7,147
---------------------------------------
25,828 23,694 28,186

Operating income 31,432 21,073 10,600

Interest expense, net 15,037 14,465 11,761
---------------------------------------
Income (loss) before taxes and extraordinary charge 16,395 6,608 (1,161)

Income tax expense 6,377 2,713 131
---------------------------------------
Income (loss) before extraordinary charge 10,018 3,895 (1,292)

Extraordinary charge, net - - 625
---------------------------------------
Net income (loss) $ 10,018 $ 3,895 $ (1,917)
=======================================
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE>

ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
APRIL 1, APRIL 3,
2000 1999
---------- ----------
<S> <C> <C>
ASSETS

Current assets:
Cash $ 1,051 $ 291
Accounts receivable, net 31,775 26,693
Inventories 58,166 44,939
Prepaid expenses and other current assets 1,778 2,098
---------- ----------
Total current assets 92,770 74,021
---------- ----------
Property, plant and equipment, net of accumulated depreciation of
$40,431 at April 1, 2000 and $33,718 at April 3, 1999 60,987 49,309
Restricted marketable securities 4,501 5,118
Excess of cost over net assets acquired, net of accumulated amortization
of $5,022 at April 1, 2000 and $4,221 at April 3, 1999 26,752 27,553
Deferred financing costs, net of accumulated amortization of $2,720 at
April 1, 2000 and $1,735 at April 3, 1999 5,561 6,344
Other assets 1,522 2,474
---------- ----------
Total assets $ 192,093 $ 164,819
========== ==========
LIABILITIES AND STOCKHOLDER'S DEFICIT

Current liabilities:
Accounts payable $ 10,413 $ 11,214
Accrued expenses and other current liabilities 13,484 10,073
Current portion of long-term debt 15,331 10,500
Obligations under capital leases, current portion 808 1,208
---------- ----------
Total current liabilities 40,036 32,995
---------- ----------
Long-term debt 142,251 134,575

Capital lease obligations, less current portion 1,316 1,635

Other noncurrent liabilities 9,649 6,641
---------- ----------
Total liabilities 193,252 175,846
---------- ----------
Stockholder's deficit:
Common stock - $.01 par value; 1,000 shares
authorized; 100 shares issued and outstanding
at April 1, 2000 and at April 3, 1999 - -
Stock warrants 6,600 6,600
Currency translation adjustment (150) -
Retained (deficit) earnings (7,609) (17,627)
---------- ----------
Total stockholder's deficit (1,159) (11,027)
---------- ----------
Total liabilities and stockholder's deficit $ 192,093 $ 164,819
========== ==========
</TABLE>

See notes to consolidated financial statements.

F - 4
<PAGE>

ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
----------------------------------
APRIL 1, APRIL 3, MARCH 28,
2000 1999 1998
--------- --------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 10,018 $ 3,895 $ (1,917)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 8,098 8,175 7,137
Deferred income taxes 2,715 562 (1,987)
Amortization of excess of cost over net assets acquired 801 801 577
Amortization of deferred financing costs 985 969 766
Compensation related to warrants - - 6,600
Extraordinary charge, net - - 625
Changes in working capital, net of acquisition:
(Increase) decrease in accounts receivable (1,089) 1,107 (6,622)
(Increase) decrease in inventories (3,401) (5,112) (46)
(Increase) decrease in prepaid expenses & other current assets 454 (70) (433)
(Increase) decrease in other non-current assets (952) (777) (38)
Increase (decrease) in accounts payable (2,517) (2,336) 1,163
Increase (decrease) in accrued expenses & other current liabilities (3,372) (6,421) 4,296
Increase (decrease) in other non-current liabilities 2,716 2,912 2,741
-------- --------- ---------
Net cash provided by operating activities 14,456 3,705 12,862

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiaries (19,030) (11,088) (3,937)
Purchase of property, plant & equipment, net (6,582) (9,434) (6,510)
(Purchase) sale of restricted marketable securities, net 617 (1,113) (104)
-------- --------- ---------
Net cash used in investing activities (24,995) (21,635) (10,551)

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase (decrease) in revolving credit facility 3,000 7,500 (24,627)
Issuance of Industrial Revenue Bond 4,800 3,000 -
Proceeds from long-term debt 7,707 - 126,000
Payments of long-term debt - - (27,488)
Payments of bank term loan (3,000) (1,625) (500)
Principal payments on capital lease obligations (1,058) (1,279) (1,348)
Dividend paid to parent company - - (56,977)
Financing fees paid in connection with the Recapitalization - - (7,605)
--------- --------- ---------

Net cash provided by financing activities 11,449 7,596 7,455

CASH AND CASH EQUIVALENTS:
Effect of exchange rate changes (150) - -
---------------------------------
Increase (decrease) during the year 760 (10,334) 9,766
Cash, at beginning of year 291 10,625 859
--------- --------- ---------
Cash, at end of year $ 1,051 $ 291 $ 10,625
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:

Interest $ 14,489 $ 13,213 $ 7,826
========= ========= =========
Income taxes $ 1,916 $ 587 $ 1,107
========= ========= =========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE>

ROLLER BEARING COMPANY OF AMERICA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (DEFICIT)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
RETAINED ACCUMULATED
ADDITIONAL EARNINGS/ OTHER
COMMON PAID-IN ACCUMULATED COMPREHENSIVE
STOCK CAPITAL (DEFICIT) INCOME TOTAL
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at March 29, 1997 $ - $ 35,831 $ 1,541 $ - $ 37,372
Dividend paid to Parent - (35,831) (21,146) - (56,977)
Warrant grant - 6,600 - - 6,600
Net loss - (1,917) - (1,917)
----------------------------------------------------------------
Balance at March 28, 1998 - 6,600 (21,522) - (14,922)
Net income - - 3,895 - 3,895
----------------------------------------------------------------
Balance at April 3, 1999 - 6,600 (17,627) - (11,027)
Net income - - 10,018 - 10,018
Currency translation adjustment - - - (150) (150)
----------------------------------------------------------------
Balance at April 1, 2000 $ - $ 6,600 $ (7,609) $ (150) $ (1,159)
================================================================
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE>

ROLLER BEARING COMPANY OF AMERICA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(ALL CURRENCIES IN THOUSANDS)

1. ORGANIZATION AND BUSINESS

Roller Bearing Company of America, Inc., ("RBC" or the "Company") is a wholly
owned subsidiary of Roller Bearing Holding Company, Inc. ("Holdings"). On March
31, 1992, Holdings acquired all of the outstanding shares of RBC pursuant to an
Agreement and Plan of Reorganization. The acquisition was accounted for under
the purchase method of accounting. The excess of the purchase price ($20,100)
over the fair market value of the tangible net assets acquired by Holdings has
been pushed down and recorded as excess of cost over net assets acquired by the
Company.

The Company operates in one business segment in which it manufactures roller
bearing components and assembled parts and designs and manufactures
high-precision roller and ball bearings. The Company sells to a wide variety of
original equipment manufacturers ("OEMs") and distributors who are primarily
domestic but widely dispersed geographically.

On June 23, 1997, pursuant to a Redemption and Warrant Purchase dated May 20,
1997, Holdings effected a recapitalization of its outstanding capital stock
(including the financing and other transactions consummated by Holdings, the
Company and its subsidiaries in connection therewith, the "Recapitalization").
In connection with the Recapitalization, the Company issued the Senior
Subordinated Notes and incurred the Term Loans described in Note 5. The proceeds
therefrom were utilized to pay a dividend to Holdings to finance the redemption
of a substantial portion of its common stock, all of its preferred stock and
certain outstanding warrants to purchase common stock, and to pay certain
Recapitalization fees and expenses. This transaction was further financed from
the proceeds of certain debt issued directly by Holdings. In addition, a new
group of investors (who were not previously stockholders of Holdings) purchased
shares of common stock and warrants to purchase common stock of Holdings,
directly from certain stockholders of Holdings. The redemption of shares and
warrants was treated by Holdings as a recapitalization transaction.

Stockholders of Holdings owning approximately 7% of the outstanding voting
shares prior to the effective date of the Recapitalization, owned approximately
71% of the outstanding voting shares immediately following the Recapitalization.
The new group of investors referred to above owned the remaining 29% of the
voting shares at such time and thus are not controlling stockholders of either
Holdings or the Company. As a result, the transaction did not result in the
establishment of new bases in Holdings' or the Company's assets and liabilities.
Funds disbursed by Holdings and the Company were charged against their capital
accounts to the extent permitted by law.

2. ACQUISITION OF WHOLLY OWNED SUBSIDIARIES

In August 1997, Bremen Bearings, Inc. ("Bremen"), a wholly owned subsidiary of
the Company, completed the acquisition of the Bremen Bearings Division of SKF
USA, Inc., a manufacturer of needle bearings with facilities in Bremen, Indiana.
The purchase was effective as of July 1, 1997. The acquisition was accounted for
under the purchase method of accounting. The total cost through April 1, 2000 of
$5,632 was subject to certain adjustments and subsequent conditions. The
purchase price has been allocated to the assets acquired and liabilities assumed
based upon their respective estimated fair values.

On June 3, 1998, Miller Bearings, Inc. ("Miller"), a wholly owned subsidiary of
the Company, completed the acquisition of the assets of Miller Bearing Company,
Inc., a manufacturer of pins, rollers and screw machine products with facilities
in Bremen, Indiana. The aggregate purchase price for the acquisition, which was
effective as of March 1, 1998, was approximately $11,088. The acquisition was
accounted for under the purchase method of accounting, resulting in
approximately $2,139 allocable to tangible assets and $8,949 of excess of
purchase price over net assets acquired allocable to goodwill.

F-7

<PAGE>

On June 11, 1999, Tyson, a wholly owned subsidiary of the Company, completed the
acquisition of certain assets of SKF USA, Inc.'s taper roller bearing operations
whose principal operations are located in Glasgow, Kentucky. The aggregate
purchase price for the acquisition, which was effective as of April 1, 1999, was
$10,200 plus the assumption of certain liabilities. The acquisition was
accounted for under the purchase method of accounting.

On December 17, 1999, Schaublin, a wholly owned subsidiary of the Company,
completed an asset and stock purchase of Schaublin SA, a manufacturer of collets
and bearings whose principal operations are located in Delemont, Switzerland.
The acquisition was economically effective as of January 1, 1999. The earnings
of Schaublin for the period from January 1, 1999 through September 30, 1999
effectively reduced the aggregate purchase price for the acquisition to 14.0
million Swiss Francs, or approximately $8,830. The results of operations of
Schaublin for the period commencing October 1, 1999 are included in the results
of operations of the Company. The acquisition was accounted for under the
purchase method of accounting.

The results of operations subsequent to the effective dates of acquisition are
included in the results of operations of the Company. Pro forma consolidated
results of operations of the Company, based upon pre-acquisition unaudited
historical information provided by the former owners for the years ended April
1, 2000, April 3, 1999 and March 28, 1998, as if the acquisitions took place on
March 28, 1997 are as follows (unaudited):

APRIL 1, 2000 APRIL 3, 1999 MARCH 28, 1998
-----------------------------------------------------
<S> <C> <C> <C>
Net sales $185,835 $196,945 $194,041

Income before extraordinary charge $ 17,951 $ 10,127 $ 1,383

Net income $ 10,961 $ 6,184 $ 460

</TABLE>

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

The consolidated financial statements include the accounts of RBC, and its
wholly owned subsidiaries, Industrial Tectonics Bearings Corporation ("ITB"),
RBC Linear Precision Products, Inc. ("LPP"), RBC Nice Bearings, Inc. ("Nice"),
Bremen, Miller, Tyson, Schaublin and Roller Bearing Company FSC, Inc. ("FSC"),
as well as its Transport Dynamics ("TDC") and Heim ("Heim") divisions. All
material intercompany balances and transactions have been eliminated in
consolidation.

The Company has a fiscal year consisting of 52 or 53 weeks, ending on the
Saturday closest to March 31. Based on this policy, the fiscal 1999 reporting
year contained 53 weeks, while fiscal years 2000 and 1998 contained 52 weeks.

INVENTORY

Inventories are stated at the lower of cost or market, using the first-in,
first-out method, and are summarized as follows:

APRIL 1, 2000 APRIL 3, 1999
------------- -------------
<S> <C> <C>
Raw material $ 3,029 $ 2,521

Work in process 16,345 14,287

Finished goods 38,792 28,131
------- -------

Total inventories $58,166 $44,939
======= =======

</TABLE>

F-8

<PAGE>

PROPERTY, PLANT, AND EQUIPMENT AND DEPRECIATION

Property, plant, and equipment are recorded at cost. Depreciation of plant and
equipment, including equipment under capital leases, is provided for by the
straight-line method over the estimated useful lives (3 to 31 years) of the
respective assets or the lease term, if shorter. Amortization of assets under
capital leases is reported with depreciation. The cost of equipment under
capital leases is equal to the lower of the net present value of the minimum
lease payments or the fair market value of the leased equipment at the inception
of the lease.

Property, plant and equipment are summarized as follows:

APRIL 1, 2000 APRIL 3, 1999
------------- -------------
<S> <C> <C>
Land $ 7,633 $ 7,579

Buildings 12,239 11,697

Machinery & equipment 81,546 63,751
-------- --------

Total property, plant & equipment 101,418 83,027

Less: accumulated depreciation (40,431) (33,718)
-------- --------

Property, plant and equipment, net $ 60,987 $ 49,309
======== ========

</TABLE>

REVENUE RECOGNITION AND CONCENTRATION OF CREDIT RISK

Revenue is recognized upon shipment of products and percentage of completion in
certain aerospace long-term projects at ITB. The Company sells to a large number
of OEMs and distributors who service the aftermarket. The Company's credit risk
associated with accounts receivable is minimized due to its customer base and
wide geographic dispersion. The Company performs ongoing credit evaluations of
its customers' financial condition, and bad debt losses have historically been
within the Company's expectations.

INTANGIBLE ASSETS

The excess of purchase price over the fair market value of tangible net assets
acquired is being amortized by the straight-line method over a 40-year period.

Deferred financing costs and related expenses are amortized by the effective
interest method over the lives of the related credit agreements (5 to 23 years).

INCOME TAXES

The Company is included in the consolidated tax return of Holdings and
calculates its provision for income taxes on a separate entity basis.

Income taxes are recognized during the year in which transactions occur and
enter into the determination of financial statement income, with deferred taxes
being provided for temporary differences between amounts of assets and
liabilities for financial reporting purposes and such amounts for tax purposes.
The differences relate primarily to the timing of deductions for depreciation,
goodwill amortization relating to the acquisition of operating divisions, basis
differences arising from acquisition accounting, pension and retirement
benefits, and various accrued and prepaid expenses. Deferred tax assets and
liabilities are recorded at the rates expected to be in effect when the
temporary differences reverse.

USE OF ESTIMATES

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

IMPAIRMENT

The Company follows Statement of Financial Accounting Standard ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of". The Company periodically assesses the net

F-9

<PAGE>

realizable value of its long-lived assets and evaluates such assets for
impairment whenever events or changes in circumstances indicate the carrying
amount of an asset may not be recoverable. For assets to be held, impairment is
determined to exist if estimated undiscounted future cash flows are less than
the carrying amount. For assets to be disposed of, impairment is determined to
exist if the estimated net realizable value is less than the carrying amount.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued. This Statement, which was amended by SFAS No. 137,
becomes effective for the Company for the fiscal year beginning April 1, 2001,
and establishes accounting and reporting standards for derivative instruments
and for hedging activities. It requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial position and
measure those instruments at fair value. The Company does not anticipate the
adoption of this standard will have a material effect on the financial
statements.

FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS

Assets and liabilities of the Company's foreign operations (Schaublin) are
translated into U.S. dollars using the exchange rate in effect at the balance
sheet date. Results of operations are translated using the average exchange rate
prevailing throughout the period. The effects of exchange rate fluctuations on
translating foreign currency assets and liabilities into U.S. dollars are
included in the foreign currency translation adjustment component of
Stockholder's equity, while gains and losses resulting from foreign currency
transactions are included in net income (loss).

4. RESTRICTED MARKETABLE SECURITIES

Restricted marketable securities, which are classified as available for sale,
consist of short-term investments of $4,501 and $5,118 at April 1, 2000 and
April 3, 1999, respectively, which were purchased with proceeds from industrial
development revenue bonds issued by the Company during fiscal 2000, 1999 and
1995. The use of these investments is restricted primarily for capital
expenditure requirements in accordance with the applicable loan agreement and,
accordingly, are classified as long-term. These investments consist of highly
liquid investments with insignificant interest rate risk and original maturities
of three months or less, and are carried at market value, which approximates
cost. Fixed maturities consist of U.S. Treasury Notes and are stated at
amortized cost, which approximates market.

5. DEBT

In connection with the financing of the Recapitalization disclosed in Note 1,
the Company issued $110,000 aggregate principal amount of 9 5/8% Senior
Subordinated Notes Due 2007 (the "Notes"). The Notes pay interest semi-annually
and mature on June 15, 2007, but may be redeemed at the Company's option
beginning on June 15, 2002, as well as, earlier under certain conditions
specified in the indenture (the "Indenture") pursuant to which the Notes were
issued. The Notes are unsecured and subordinate to all existing and future
Senior Indebtedness (as defined in the Indenture) of the Company. The Notes are
fully, unconditionally and irrevocably guaranteed jointly and severally, on a
senior subordinated basis by each of the wholly owned subsidiaries of the
Company.

The separate financial statements of the subsidiary guarantors have not been
presented because management has determined that they would not be material to
investors. However, the summarized combined financial information of the
subsidiary guarantors are as follows:

APRIL 1, 2000 APRIL 3, 1999
------------- -------------
<S> <C> <C>
Balance Sheet Data
Total current assets $35,156 $27,475
Noncurrent assets 42,740 34,825
------- -------
Total assets 77,896 62,300

Total current liabilities 48,280 42,129
Noncurrent liabilities 4,974 4,207
------- -------
Total liabilities 53,254 46,336
Stockholder's equity $24,642 $15,964
======= =======

</TABLE>

F-10

<PAGE>

APRIL 1, 2000 APRIL 3, 1999 MARCH 28, 1998
------------- ------------- --------------
<S> <C> <C> <C>
Operating Results
Net sales $86,159 $63,851 $54,935
Gross margin $20,432 $15,255 $13,142
Net income $ 8,537 $ 6,007 $ 5,582

</TABLE>

Total current liabilities shown above of the subsidiary guarantors includes
intercompany liabilities of $22,266 and $26,717 as of April 1, 2000 and April 3,
1999, respectively. Income before extraordinary charge includes a provision for
income taxes of $5,932, $4,174 and $3,879 in fiscal years 2000, 1999 and 1998,
respectively. Intercompany allocations have been eliminated in each fiscal year.

In connection with the Recapitalization, the Company entered into bank credit
facilities (the "Senior Credit Facilities") with a group of lenders providing
for $16,000 of term loans (the "Term Loans") and up to $54,000 of revolving
credit loans and letters of credit (the "Revolving Credit Facility"). The
interest rate on the Term Loan is based on LIBOR plus 2.5%. The applicable
interest rate margin is determined on the first day of each fiscal period based
on the Company's leverage ratio, as defined. The rate in effect at April 1, 2000
was 8.78%.

In connection with the purchase of Schaublin, the Company entered into a bank
credit facility (the "Swiss Credit Facility) with Credit Suisse providing for
10,000 Swiss Francs, or approximately $6,031 of term loans (the "Swiss Term
Loans") and up to 1,000 Swiss Francs, or approximately $603, of revolving credit
loans and letters of credit (the "Swiss Revolving Credit Facility"). Also in
connection with the purchase of Schaublin, the Company entered into a two-year
term loan (the "Schaublin Loan") with the Seller for 1,222 Swiss Francs, or
approximately $737.

In connection with the purchase of Tyson, the company entered into a loan with
the former owner of Tyson for the purchase of certain leasehold improvements,
which are included in the Property, Plant and Equipment assets. This loan bears
interest at 9.0% and is paid monthly. The term of the loan is for 75 months, and
will end in June 2005.

At April 1, 2000, $19,204 of the Revolving Credit Facility was being utilized to
provide letters of credit to secure the Company's obligations relating to
certain Industrial Development Revenue Bonds ($18,778), described below, and
trade import letters of credit ($426). A letter of credit fee of 2.5% per annum
payable quarterly in arrears is required on the outstanding amount of the letter
of credit. As of April 1, 2000 the Company had the ability to borrow up to an
additional $24,296 under the Revolving Credit Facility. Borrowings outstanding
under this facility as of April 1, 2000 were $10,500. A commitment fee of 0.5%
per annum payable quarterly in arrears is required on the unused portion of the
Revolving Credit Facility.

The Senior Credit Facilities are secured by substantially all of the Company's
assets. Under the terms of the Senior Credit Facility, the Company is required
to comply with various operational and financial covenants, including minimum
EBITDA, minimum fixed charge coverage, total interest coverage and maximum
leverage ratio.

In addition, the Senior Credit Facility places limitations on the Company's
capital expenditures in any fiscal year, restricts its ability to pay dividends,
requires the Company to obtain the lenders' consent to certain acquisitions and
contains mandatory prepayment provisions which include prepayments from the sale
of the Company's stock and 50% of excess cash flow, as defined. The Company
incurred approximately $7,605 of fees primarily related to costs associated with
the issuance of the Notes as well as the Senior Credit Facilities. These costs
have been capitalized as deferred financing costs and are being amortized over
the terms of the Notes and Term Loans.

Proceeds from these borrowings were used to repay certain existing indebtedness
as well as to pay a dividend to Holdings in order to consummate the
Recapitalization described in Note 1.

During fiscal 1995, the Company entered into a loan agreement with the South
Carolina Jobs Economic Development Authority ("SC JEDA") which provides for
borrowings up to $10,700 under two industrial development revenue bonds and
during fiscal 1999 the Company entered into an additional loan agreement with
the SC JEDA which provides for borrowings up to $3,000 under an industrial
development revenue bond (the "Bonds" or "IRBs"). Additionally, during fiscal
2000, the Company entered into a loan agreement with the California
Infrastructure and Economic Development Bank which provides for borrowings up to
$4,800 under an industrial development revenue bond. The proceeds from the

F-11

<PAGE>

Bonds are restricted for working capital requirements and capital expenditure
purposes. As of April 1, 2000, $15,241 of the proceeds have been expended, and
the remaining $4,501 (including accumulated interest of $1,242) is invested by
the trustee in marketable securities. The SC JEDA Bonds are secured by an
irrevocable direct-pay letter of credit issued by one of the Company's lenders.
The letter of credit is equal to the aggregate principal amounts of the Bonds
plus not less than forty-five days' interest thereon, calculated at 12% per
annum ($13,899). The California Infrastructure and Economic Development Bank
bond is likewise secured by an irrevocable direct-pay letter of credit issued by
one of the Company's lenders. The Company's obligation to its lenders is secured
pursuant to the provisions of the Credit Facility and is equal to the aggregate
principal amounts of the Bond plus not less than fifty days' interest thereon,
calculated at 12% per annum ($4,879).

F-12

<PAGE>

The balances payable under all borrowing facilities are as follows:

<TABLE>
<CAPTION>
APRIL 1, 2000 APRIL 3, 1999
------------- -------------
<S> <C> <C>
SENIOR SUBORDINATED NOTES PAYABLE $110,000 $110,000
CREDIT FACILITY

Term Loan, payable in quarterly installments of $250, commencing September 30,
1997, increasing annually thereafter to $1,375 from September 20, 2001 with
final payment due June 30, 2002; bears interest at variable rates, payable monthly 10,875 13,875
and quarterly for prime and LIBOR-based elections, respectively
Revolving Credit Facility borrowings outstanding 10,500 7,500

SWISS CREDIT FACILITY

Term Loan, payable in quarterly installments of approximately $301, commencing
March 2001, increasing thereafter to approximately $452 from March 2004; bears
interest at variable rates, payable quarterly 6,031 --

SCHAUBLIN NOTE

Term Loan, payable in two annual installments; approximately
$134 due December, 2000 and approximately $603 due December, 2001, 737 --
bears interest at 5%

OTHER LOANS 939 --

INDUSTRIAL DEVELOPMENT REVENUE BONDS

Series 1994 A due in annual installments of $180 beginning September 1, 2006,
graduating to $815 on September 1, 2014 with final payment due on
September 1, 2017; bears interest at a variable rate, payable monthly 7,700 7,700
through December 2017

Series 1994 B bears interest at a variable rate, payable monthly
through December 2017 3,000 3,000

Series 1998 tax-exempt industrial development bonds; bears interest at
variable rates, payable monthly through December 2021 3,000 3,000

Series 1999 tax-exempt industrial development bonds; bearing
interest at variable rates, payable monthly through April 2024 4,800 --
-------- --------

TOTAL DEBT 157,582 145,075

LESS: CURRENT PORTION 15,331 10,500
-------- --------

LONG-TERM DEBT $142,251 $134,575
======== ========
</TABLE>

The current portion of long-term debt for the year ended April 1, 2000 includes
$10,500 borrowing on the Revolving Credit Facility, which is borrowed on and
paid down periodically throughout the year.

F-13

<PAGE>

Maturities of long-term debt during each of the following five fiscal years and
thereafter are as follows:

<TABLE>
<S> <C>
2001 $ 15,331
2002 7,217
2003 2,754
2004 1,547
2005 2,018
Thereafter 128,715
-------
Total $ 157,582
=========
</TABLE>

The estimated fair value of the Company's debt approximates the book value as of
April 1, 2000 and April 3, 1999.

6. OBLIGATIONS UNDER CAPITAL LEASES
Machinery and equipment additions under capital leases amounted to $750, $422
and $582 in fiscal 2000, 1999 and 1998, respectively. The average imputed rate
of interest on these leases is 7.2%, 7.2% and 8.4% in fiscal year 2000, 1999 and
1998, respectively. The aggregate present value of future minimum lease payments
under these leases at April 1, 2000 are as follows:

<TABLE>
<S> <C>
2001 $ 808
2002 616
2003 556
2004 141
2005 3
----------
Total $ 2,124
==========
</TABLE>

7. PENSION PLANS
At April 1, 2000, the Company has noncontributory defined benefit pension plans
covering union employees in its Heim division plant in Fairfield, Connecticut,
its Nice subsidiary plant in Kulpsville, Pennsylvania, its Bremen subsidiary
plant in Bremen, Indiana and its Tyson subsidiary plant in Glasgow, Kentucky.
Additionally, during 1998, the Company terminated a noncontributory defined
benefit pension plan covering union employees in its RBC plant in West Trenton,
New Jersey, effective May 31, 1997. The anticipated distribution of plan assets
was $5.0 million, of which $4.8 million had been distributed through April 1,
2000. The remaining $0.2 million is currently considered sufficient to fund any
final expenses.

Plan assets are comprised primarily of U.S. government securities, corporate
bonds, and stocks. The plans provide benefits of stated amounts based on a
combination of an employee's age and years of service.

The following tables set forth net periodic benefit cost of the Company's plans,
and total pension benefit expense for the three fiscal years in the period ended
April 1, 2000:

<TABLE>
<CAPTION>
Components of net periodic benefit cost: 2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Service cost $ 367 $ 361 $ 277
Interest cost 718 621 507
Actual return on plan assets (979) (869) (638)
Amortization of prior service cost and deferrals (59) (75) (45)
Amortization of (gains) losses -- -- (6)
----- ----- -----
Net periodic benefit cost of the Company's plans $ 47 $ 38 $ 95
===== ===== =====
</TABLE>

F-14

<PAGE>

The following tables set forth the funded status of the Company's pension
benefit plans, the amount recognized in the balance sheets of the Company at
April 1, 2000 and April 3, 1999 and the principal weighted-average assumptions
inherent in their determination:

<TABLE>
<CAPTION>
Change in benefit obligation: 2000 1999
---- ----
<S> <C> <C>
Benefit obligation at beginning of year $ 9,585 $ 9,042
Service cost 288 286
Interest cost 718 621
Plan amendments 179
Actuarial (gain) (208) --
Benefits paid (433) (364)
------ -----
Benefit obligation at end of year 10,129 9,585
------ -----

Change in plan assets:
Fair value of plan assets at beginning of year 11,087 9,866
Actual return on plan assets 1,343 1,394
Employer contributions -- 264
Benefits paid (433) (363)
Administrative expense (143) (74)
------ --------
Fair value of plan assets at end of year 11,854 11,087
------ --------

Reconciliation of funded status at end of year:
Funded status 1,725 1,502
Unrecognized prior service cost (584) (823)
Unrecognized actuarial net (gain) (1,443) (935)
-------- ------
Accrued benefit cost $ (302) $ (256)
======= ======
</TABLE>

Benefits under the union plans are not a function of employees' salaries; thus,
the accumulated benefit obligation equals the projected benefit obligation.

The assumptions used in determining the funded status information were as
follows:

<TABLE>
<CAPTION>
2000 1999 1998
----------------------------------------------------------
<S> <C> <C> <C>
Discount rate 7.75% 7.0% 7.0%
Expected long-term rate of return on plan assets 8.5% 9.0% 8.5%
</TABLE>

In addition, the Company has a defined contribution plan under Section 401(k) of
the Internal Revenue Code for all of its employees not covered by a collective
bargaining agreement. The plan is funded by participants through employee
contributions and by Company contributions equal to a percentage of eligible
employee compensation. Employer contributions under this plan amounted to
$1,026, $1,439 and $627 in fiscal 2000, 1999 and 1998, respectively.

Effective September 1, 1996 the Company adopted a non-qualified supplemental
retirement plan ("SERP") for a select group of highly compensated management
employees designated by the Board of Directors of the Company. The SERP allows
eligible employees to elect to defer until termination of their employment the
receipt of up to 25% of their current salary. The Company makes contributions
equal to the lesser of 50% of the deferrals or 3.5% of the employees' annual
salary, which vest in full after three years of service following the effective
date of the SERP. Employer contributions under this plan amounted to $87, $64
and $25 in fiscal 2000, 1999 and 1998, respectively.

F-15
<PAGE>

8. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS

The Company, for the benefit of employees at its Heim, West Trenton, Nice and
Bremen facilities, sponsors contributory defined benefit health care plans that
provide postretirement medical benefits to union employees who have attained
certain age and/or service requirements while employed by the Company. The plans
are unfunded and costs are paid as incurred. Postretirement benefit obligations
are included in "Other noncurrent liabilities" within the Consolidated Balance
Sheets.

<TABLE>
<CAPTION>
---------------------------------
FISCAL YEAR FISCAL YEAR
2000 1999
---------------------------------
<S> <C> <C>
Accrued Benefit Cost at Beginning of Year $2,557 $2,576
Net Periodic Benefit Cost 270 114
Actual Benefit Payments (133) (133)
------- -------
Accrued Benefit Cost at Year End $2,694 $2,557
====== ======
</TABLE>

The net periodic postretirement benefit costs are as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
--------------------------------------------------
APRIL 1, APRIL 3, MARCH 28,
2000 1999 1998
--------------------------------------------------
<S> <C> <C> <C>
Service cost $ 59 $ 70 $ 60
Interest cost 233 179 165
Prior service cost amortization (22) (135) (155)
---------------------------------------------------
$ 270 $ 114 $ 70
===================================================
</TABLE>

The Company has contractually capped its liability for certain groups of future
retirees. As a result, there is no health care trend associated with these
groups. The effect of a 1% annual increase in the assumed cost trend rate would
increase the accumulated postretirement benefit obligation by approximately 1.2%
for these plans; the annual service and interest cost components in the
aggregate would not be materially affected. The discount rate used in
determining the accumulated postretirement benefit obligation for the plans was
7.75% for fiscal year 2000 and 7% for fiscal years 1999 and 1998.

9. INCOME TAXES

The Company is included in the consolidated tax return of Holdings and
calculates its provision for income taxes on a separate entity basis.

The Company's effective income tax rate is reconciled to the U.S. Federal
statutory tax rate as follows:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------------------------
APRIL 1, APRIL 3, MARCH 28, 1998
2000 1999
-----------------------------------------------------
<S> <C> <C> <C>
Federal statutory tax rate 34.0% 34.0% (34.0%)
State income taxes - net of federal tax benefit 1.1% 5.5% 23.7%
Amortization of goodwill 3.5% 3.0% 16.0%
Other non-deductible items 0.8% (1.5%) 5.6%
-----------------------------------------------------
Effective tax rate 39.4% 41.0% 11.3%
=====================================================
</TABLE>

F-16
<PAGE>

The income tax provision, excluding the tax benefit on extraordinary charges
consisted of:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------------------------
APRIL 1, APRIL 3, MARCH 28,
2000 1999 1998
-----------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $ 2,878 $ 1,654 $2,429
State 724 540 579
Foreign 80 -- --
-----------------------------------------------------
Total Current 3,682 2,194 3,008
Deferred 2,695 519 (2,877)
-----------------------------------------------------
Total $ 6,377 $ 2,713 $ 131
=====================================================
</TABLE>

The net deferred tax asset consists of the following:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------
APRIL 1, APRIL 3,
2000 1999
-----------------------------------

<S> <C> <C>
Alternative minimum tax carryforward $ -- $1,852
Postretirement benefits 1,228 1,250
Employee compensation accruals 717 3,047
Property, plant and equipment (2,400) (2,651)
Unremitted foreign earnings (503) --
Amortizable excess purchase price (241) (336)
Other, net 2,195 549
-----------------------------------
Net deferred tax asset $ 996 $3,711
===================================
</TABLE>

In both 2000 and 1999, a component of deferred tax assets was related to the
recording of certain liabilities in connection with purchase accounting.

10. STOCKHOLDER'S EQUITY

The Company has 100 shares of Common Stock par value $.01 per share outstanding,
all of which is owned by Holdings.

All issuances and redemptions of equity by Holdings are shown on the financial
statements of the Company as dividends paid to and capital contributions from
Holdings.

A summary of the status of the Company's warrants and stock options outstanding
as of April 1, 2000, April 3, 1999 and March 28, 1998, (including activity other
than related to compensation) and changes during the years ending on those dates
is presented below:

F-17
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF CLASS A COMMON SHARE
WARRANTS/OPTIONS
--------------------------------

<S> <C>
Outstanding, March 29, 1997 19,452

Awarded Warrants fiscal 1998 200

Awarded Options fiscal 1998 1,728

Issued in connection with the Recapitalization 7,076.5

Redeemed fiscal 1998 (2,088)

Repurchased by Holdings in fiscal 1998 (1,713)

Exchanged for Class B Warrants in fiscal 1998 (8,827)
-------

Outstanding, March 28, 1998 15,828.5

Awarded fiscal 1999 471.5

Warrants cancelled (100)
-------

Outstanding, April 3, 1999 16,200

Awarded fiscal 2000 201
-------

Outstanding, April 1, 2000 16,401
=======

<CAPTION>
NUMBER OF SUPERVOTING CLASS B
COMMON SHARE WARRANTS
--------------------------------

<S> <C>
Outstanding, March 29, 1997 --

Awarded in exchange for Class A Warrants 8,827

Awarded in fiscal 1998 1,250
------

Outstanding, March 28, 1998 10,077

Awarded in fiscal 1999 --
------

Outstanding April 3, 1999 10,077

Awarded in fiscal 2000 --
------

Outstanding, April 1, 2000 10,077
======
</TABLE>

In connection with the Recapitalization, as described in Note 1, Holdings issued
warrants to purchase 1,250 shares of Class B Common Stock, par value $.01 per
share, of Holdings at an exercise price of $514 per share to the Company's
Chairman. In addition, a new group of investors (who were not previously
stockholders of Holdings) were issued 6,731 warrants to purchase Class A Common
Stock of Holdings. In fiscal 1998, fiscal 1999 and fiscal 2000, an additional
340.5, 62 and 33.5 warrants were issued, respectively, to this new group of
investors in respect of an anti-dilution protection pursuant to issuance of
options under the stock option plan.

STOCK BASED COMPENSATION

Management participates in Holdings' stock compensation plan. Holdings has
issued warrants to purchase shares of Class B Supervoting Common Stock to Dr.
Hartnett. All other warrants and options are to purchase Class A common stock.
Warrants and options issued to the Company's management as compensation become
vested and are exercisable in one-third annual increments commencing on the date
of award.

In June 1997, the terms of certain warrants held by the Company's management
were altered. A total of 7,024 options to purchase Class A Common Stock, which
would otherwise have expired in 2002, were extended to expire on June 23, 2007.
Additionally, 8,827 warrants to purchase Class A Common Stock held by Dr.
Hartnett were converted into 8,827 warrants to purchase Class B Common Stock.
These Class B Common Stock Warrants were extended to expire on June 23, 2007. In
connection with these transactions, compensation cost of $6.6 million arose
which has been recorded as operating expense.

F-18
<PAGE>

On February 9, 1998, the Company issued 1,728 options to acquire Class A
Common Stock to management and Board members. The term of the options are 10
years and they are exercisable at $514 per share, the estimated fair market
value at the time of grant. Additionally, a member of management departed
without exercising the vested portion of his 100 options.

In fiscal 1999, the Company issued 409.5 options to management (100 of which
were subsequently cancelled) to acquire Class A Common Stock. The term of the
options are 10 years and they are exercisable at $514 per share, the estimated
fair market value at the time of grant.

In fiscal 2000, the Company issued 167.5 options to acquire Class A Common Stock
to management. The term of the options are 10 years and they are exercisable at
$514 per share, the estimated fair market value at the time of grant.

The following table summarizes information about compensation related stock
option and warrants outstanding at April 1, 2000:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------------------------------------------- ----------------------------------------------

EXERCISE PRICE OPTIONS OUTSTANDING WEIGHTED AVERAGE OPTIONS EXERCISABLE WEIGHTED AVERAGE

CONTRACTUAL LIFE EXERCISE PRICE
------------------------- ----------------------- ----------------------- ---------------------- -----------------------

<S> <C> <C> <C> <C>
CLASS A

$100 7,024 10 years 7,024 $100

$514 2,205 10 years 1,484 $514

CLASS B

$77 - $100 8,827 10 years 8,827 $ 77

$514 1,250 10 years 1,250 $514
</TABLE>

In addition to the compensation based warrants described above, there are 7,172
penny warrants and all such warrants are fully exercisable at April 1, 2000. The
fair value for the Holdings warrants was estimated at the date of grant using a
Black-Scholes warrant pricing model with the following weighted-average
assumptions: risk free interest rate used was 5.7% for fiscal 2000 and 6.2% for
fiscal 1999 and 1998; dividend yields of 0%, volatility factors of expected
market price of Holdings common stock of .44% and a weighted-average expected
life of the warrants of three years.

The Black-Scholes warrant valuation model was developed for use in estimating
the fair value of traded warrants which have no vesting restrictions and are
fully transferable. In addition, warrant valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Holdings warrants have characteristics significantly different from
those of traded warrants, and because changes in the subjective input
assumptions can materially affect the fair value, estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its warrants.

The pro forma effect on the Company's fiscal 2000, 1999 and 1998 operations is
as follows:

<TABLE>
<CAPTION>
NET INCOME
----------------------------------------------------------------------------------------
2000 1999 1998
----------------------------- ---------------------------- -----------------------------

<S> <C> <C> <C>
As Reported $10,018 $3,895 ($1,917)
Pro Forma
$ 9,975 $3,834 ($2,147)
</TABLE>

11. COMMITMENTS AND CONTINGENCIES

The Company leases factory facilities under non-cancelable operating leases,
which expire on various dates through February 2009 with rental expense
aggregating $779, $508 and $561 in fiscal 2000, 1999 and 1998, respectively

The Company also has non-cancelable operating leases for transportation,
computer and office equipment, which expire at various dates. Rental expense for
2000, 1999 and 1998 aggregated $517, $481 and $395, respectively.

F-19
<PAGE>

The aggregate future minimum lease payments under leases are as follows:

<TABLE>
<S> <C>
2001 $1,721
2002 1,582
2003 1,354
2004 1,305
2005 1,084
Thereafter 4,308
-------
Total $11,354
-------
-------
</TABLE>

The Company enters into government contracts and subcontracts that are subject
to audit by the government. In the opinion of the Company's management, the
results of such audits, if any, are not expected to have a material impact on
the financial statements of the Company.

Certain types of property transactions in Connecticut and New Jersey may trigger
investigation and cleanup obligations under the Connecticut Transfer Act (the
"CTA") or the New Jersey Industrial Site Recovery Act (the "ISRA"),
respectively. In connection with the purchase of its Fairfield, Connecticut
facility in 1996, the company was required by the CTA to submit an investigation
and rededication plan for known environmental contamination at that facility.
Although this known contamination had been the result of operations conducted by
the facility's prior owner, the Company agreed to assume responsibility for
completing cleanup efforts previously initiated by that owner. In 1996, the
Company submitted and obtained regulatory approval for its investigation and
remediation plan as required by the CTA The results of this investigation
revealed the continued presence of certain low level soil and groundwater
contamination, the remediation of which had been commenced by the previous owner
of the facility. In March 1998, the Company submitted these findings to
Connecticut Department of Environmental Protection ("CTDEP"). In April 1999,
CTDEP responded to this submission and requested that the Company develop a
workplan for additional investigation, analysis and possible remediation to
address the isolated, low level residual contamination at this facility. While
the Company believes that its total investigation and cleanup costs will not
exceed $200, Connecticut regulators may require additional cleanup or monitoring
of the residual contamination at this facility. If such activities are required,
there can be no assurance that the Company's total investigation and remediation
costs will not exceed its $200 estimate.

The Company's Recapitalization in 1997 also triggered ISRA obligations at its
West Trenton facility, obligating the Company to investigate all possible past
hazardous substances releases, and to cleanup any resulting contamination, at
that facility. Under ISRA, investigation requirements for facilities that are
currently being remediated pursuant to an earlier ISRA-triggering transaction
may be merged into that ongoing ISRA investigation. In this case, the West
Trenton facility has been the subject of an ongoing ISRA (and its predecessor
statute) groundwater investigation and remediation by the facility's prior owner
since the Company's acquisition of the facility in 1987. Accordingly, the New
Jersey regulatory authorities have informed the Company that its ISRA
obligations triggered by the 1997 Recapitalization are being satisfied by the
prior owner's ongoing ISRA investigation and remediation. That investigation has
not found any additional contamination that would require remediation beyond
that which continues to be performed by the facility's prior owner.

There are various claims and legal proceedings against the Company relating to
its operations in the normal course of business, none of which the Company
believes is material. The Company currently maintains insurance coverage for
product liability claims. The Company is subject to various federal, state and
local environmental laws, ordinances and

regulations. State agencies are currently overseeing investigation and/or
remediation activities at various Company facilities. In addition, the previous
owners of certain facilities are undertaking cleanup and limited remediation in
each case in fulfillment of certain indemnification obligations. The Company
believes it is currently in substantial compliance with all applicable
requirements of environmental laws.

F-20
<PAGE>

12. OTHER EXPENSE, NET OF OTHER INCOME

Other expense, net of other income, is comprised of the following:

<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-------------------------------------------------
APRIL 1, APRIL 3, MARCH 28,
2000 1999 1998
-------------------------------------------------
<S> <C> <C> <C>
Additional compensation expense
related to the Recapitalization $ -- $ -- $ 652
Amortization of goodwill and
certain intangible assets 801 801 577
Management consulting fees -- -- 108
Royalty income (76) (99) (85)
Minority interest 7 -- --
Legal settlements -- -- 295
Other income (16) (16) --
================ ================ =================
$ 716 $ 686 $ 1,547
================ ================ =================
</TABLE>

13. SEGMENT INFORMATION

The Company operates in a single reportable segment; the manufacture and
distribution of various types of bearing products. No detailed segment data is
required to be disclosed under this pronouncement. As it relates to geographical
data, during fiscal year 2000, the Company acquired Schaublin, based in
Delemont, Switzerland, which produced $8.7 million in foreign sales, and had
long-lived assets of $3.9 million at April 1, 2000. The Company additionally
exported $12.3 million from its domestic operations to foreign customers. This
combined $21.0 million represents 11.8% of the Company's total sales. During
fiscal year 1999, the Company maintained no overseas manufacturing facilities
but had foreign sales of $9.5 million or 6.4% of the Company's total sales.

F. EXTRAORDINARY CHARGE

The extraordinary charge for the year ended March 28, 1998 resulted from the
write off of unamortized deferred financing costs due to the Company's early
extinguishment of debt in connection with the Recapitalization. The
extraordinary charge was $1,059 and is reflected net of the related tax benefit
of $434.

F-21

<PAGE>

ROLLER BEARING COMPANY OF AMERICA, INC.
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>

Year Ended April 1, 2000:
--------------------------------------------------------------------------------------------------
Q1 Q2 Q3 Q4 FISCAL 2000
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $42,971 $41,228 $41,326 $51,623 $177,148
--------------------------------------------------------------------------------------------------
Operating income $ 5,747 $ 7,491 $ 6,509 $11,685 $ 31,432
--------------------------------------------------------------------------------------------------
Net income $ 1,459 $ 2,137 $ 1,576 $ 4,846 $ 10,018
--------------------------------------------------------------------------------------------------

Year Ended April 3, 1999:
--------------------------------------------------------------------------------------------------
Q1 Q2 Q3 Q4 FISCAL 1999
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
Net Sales $37,480 $36,001 $34,063 $40,388 $147,932
--------------------------------------------------------------------------------------------------
Operating income $ 5,379 $ 4,912 $ 4,368 $ 6,414 $ 21,073
--------------------------------------------------------------------------------------------------
Net income $ 1,143 $ 686 $ 416 $ 1,650 $ 3,895
--------------------------------------------------------------------------------------------------

Year Ended March 28, 1998:
--------------------------------------------------------------------------------------------------
Q1 Q2 Q3 Q4 FISCAL 1998
--------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------
Net Sales $28,662 $32,309 $34,282 $40,756 $136,009
--------------------------------------------------------------------------------------------------
Operating income $ 3,458 $ 4,689 $ 4,437 $(1,984) $ 10,600
--------------------------------------------------------------------------------------------------
Income before
extraordinary charge $ 1,106 $ 813 $ 584 $(3,795) $ (1,292)
--------------------------------------------------------------------------------------------------
Net income (loss) $ 481 $ 813 $ 584 $(3,795) $ (1,917)
--------------------------------------------------------------------------------------------------
</TABLE>

F-22
<PAGE>

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

None
<PAGE>

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information concerning the
directors and executive officers of Holdings, the Company and the Company's
subsidiaries. Each director is elected for a one year term or until such
person's successor is duly elected and qualified.

<TABLE>

<S> <C> <C>
Dr. Michael Hartnett 54 Chairman, President and Chief Executive
Officer of Holdings and the Company,
Chairman and President of ITB, President of
Nice and LLP, Director of the Company, ITB,
Nice, LLP, Bremen, Miller, Tyson and
Schaublin

Anthony S. Cavalieri 53 Vice President and Chief Financial Officer
of Holdings and the Company, Chief Financial
Officer of ITB, Nice, LLP, Bremen, Miller,
Tyson and Schaublin

Michael S. Gostomski 49 Executive Vice President, Mergers and
Acquisitions of Holdings, the Company, ITB,
Nice and LLP, Executive Vice President of
Bremen, Miller, Tyson and Schaublin,
Secretary of Nice and LPP

Frederick L. Morlok 59 Executive Vice President, Marketing of
Holdings and the Company

Richard J. Edwards 44 Vice President of Holdings and the Company,
General Manager of the RBC division

Christopher Thomas 45 Vice President, Business Development of
Holdings and the Company

Edward J. Trainer 58 Secretary of Holdings, the Company and ITB

Kurt B. Larsen 36 Director of Holdings and the Company

Robert Anderson 80 Director of Holdings and the Company

William E. Myers, Jr. 40 Director of Holdings and the Company

Stephen A. Kaplan 40 Director of Holdings and the Company

Richard R. Crowell 45 Director of Holdings and the Company

Mitchell Quain 48 Director of Holdings and the Company
</TABLE>

<PAGE>

DR. MICHAEL J. HARTNETT has been president and Chief Executive Officer of the
Company since April 1992 and Chairman since June 1993. Prior to that, Dr.
Hartnett served as Vice President and General Manager of ITB from 1990,
following eighteen years at Torrington Company, one of the three largest
bearings manufacturers in the United States. While at Torrington, Dr. Hartnett
held the position of Vice President and General Manager of the Aerospace
Business Unit and was, prior to that, Vice President of the Research and
Development Division. Dr. Hartnett holds an undergraduate degree from University
of New Haven, a Masters degree from Worcester Polytechnic Institute, and a Ph.D.
in Applied Mechanics from the University of Connecticut. Dr. Hartnett has also
developed numerous patents, authored more than two dozen technical papers and is
well known for his contributions to the field of Tribology (the study of
friction). Dr. Hartnett currently serves as a director of Aftermarket Technology
Company, a publicly held company in the business of re-manufacturing aftermarket
components for automobiles.

ANTHONY S. CAVALIERI joined the Company in July 1996 as Vice President and Chief
Financial Officer. From August 1990 to November 1995 he was Vice President and
Chief Financial Officer of Duro-Test Corporation, a medium sized lighting
products manufacturer. From December 1995 through June 1996, Mr. Cavalieri
provided management and financial consulting services to various entities. Prior
to that he was a controller at the Mennen Company and before that on the audit
staff of Price Waterhouse, LLP. Mr. Cavalieri holds a B.S. in Accounting from
St. John's University and a M.B.A. from Fordham University. He is also a
certified public accountant (CPA) as well as a certified management accountant
(CMA), certified internal auditor (CIA), certified in financial management (CFM)
and certified in production and inventory management (CPIM).

MICHAEL S. GOSTOMSKI, the Company's Executive Vice President, Mergers and
Acquisitions joined the Company in September 1993. From January 1991 through
August 1993, he served as President and Chief Executive Officer for
Transnational Industries, a publicly held manufacturer of components for
commercial and military aircraft. Mr. Gostomski holds a B.S. in Accounting and a
M.B.A. in Finance from the University of Connecticut. He is also a certified
public accountant (CPA). Mr. Gostomski currently serves as director of a number
of publicly held companies, including Transnational Industries, Seatek, a
publicly held manufacturer of small tools for the electronics industry, Protopak
Corporation, a packaging equipment manufacturer and New Jersey Steel, a
specialty steel manufacturer.

FREDERICK L. MORLOK, the Company's Executive Vice President, Marketing joined
the Company in 1987. Prior to that he spent twenty-four years at Torrington
where he served in various sales and marketing positions including District
Sales Manager, Product Manager of Machined Race Products and Business Manager,
Strategic Technology Unit. He holds a B.S. in Management Engineering, Mechanical
Engineering Option and a M.B.A. from Rensselaer Polytechnic Institute.

RICHARD J. EDWARDS joined the Company in February 1990 as Manufacturing Manager
in the Hartsville, South Carolina plant. He then became Plant Manager of the
Hartsville facility, Director of Operations of the RBC division, and has been
the Vice President and General Manager of the RBC division since 1998. Prior to
joining the Company, he spent six years with Torrington as Materials Manager and
then Plant Superintendent at their Tyger River plant. Mr. Edwards holds a B.S.
in Production Operations Management from Arizona State University and a CPIM
certification from APICS.

<PAGE>

CHRISTOPHER THOMAS joined the Company in October 1997 as Vice President,
Business Development. From March 1997 through October 1997, he served as
Business Manager of the Needle Bearing Division of Torrington, a manufacturer of
needle bearings. Mr. Thomas served as a Managing Director of NASTECH Europe,
Ltd., located in Coventry, England, a joint venture between Torrington and NSK
Ltd., a Japanese bearing and automotive component manufacturer from April 1995
until March 1997. Prior to that, Mr. Thomas was the Chairman of the Joint Task
Force for the formation of NASTECH Europe Ltd from June 1994 until March 1995.
From May 1990 through June 1994, Mr. Thomas served as the Business Manager of
Precision Components, a division of Torrington. Mr. Thomas received a B.S.
degree in Mechanical Engineering from Worcester Polytechnic Institute and a
M.B.A. from the University of Michigan.

EDWARD J. TRAINER has been employed by the Company since 1967. He served from
1987 to January 1995 as Vice President of Human Resources and has served as
Director of International Sales since January 1995. Mr. Trainer was named
Secretary of the Company in 1993.

KURT B. LARSEN joined the Company in March 1992 and served as Vice President and
Secretary until January 1997. He served as a Director of the Company from March
1992 to January 1997 and from June 1997 to the present. From February 1990 to
January 1997, he served as a principal of Aurora, a leveraged buy-out firm,
where he oversaw and executed investments in several companies. He also serves
as Chairman of Enrich International, Inc., a privately held company which
manufactures and distributes nutritional supplements, and has been a principal
investor and partner in Hunter Capital, an investment bank, since February 1997.

WILLIAM E. MYERS, JR. served as a Director of the Company from March 1992 to May
1997 and from June 1997 to the present. From November 1989 through April 1998 he
was the Chairman and Chief Executive Officer of W.E. Myers & Company, a merchant
bank which specialized in industry consolidations. Mr. Myers has been employed
as the Chairman and Chief Executive Officer of Consolidation Partners, Inc.,
which is engaged in consolidating various manufacturers of components
industries.

MITCHELL I. QUAIN joined the Company as a Director in June 1997. Since May 1997
he has served as an Executive Vice President and member of the Board of
Directors of ING Baring Furman Selz, LLC, an investment banking and brokerage
company. From June 1975 to May 1997 he served as a Managing Director of
Schroeder Wertheim & Company, an investment banking company. He also serves on
the Board of Directors of a number of publicly-held companies, including Allied
Products Corporation, a diversified manufacturing company, Mechanical Dynamics,
Inc., a software company, Strategic Distribution, Inc., a company in the
business of industrial distribution, and Titan International, manufacturer of
off-highway components. He chairs the Board of Overseers of the School of
Engineering at the University of Pennsylvania as well as serving on the Board of
Trustees of Penn.

RICHARD R. CROWELL is President and a Managing General Partner of Aurora Capital
Group, a private equity investment firm. Prior to establishing Aurora in 1991,
Mr. Crowell was a Managing Partner of Acadia Partners, a New York-based
investment fund formed with The Robert M. Bass Group. From 1983 to 1987, he was
a Managing Director, Corporate Finance for Drexel Burnham Lambert. He serves on
the Board of Directors for Aftermarket Technology Corp.; Impaxx, Inc.; Tartan
Textile Services, Inc.; ADCO Global, Inc.; and Quality Distribution Service
Partners, Inc. Mr. Crowell earned a BA in English Literature from the University
of California, Santa Cruz, and an MBA from the Anderson School of the University
of California, Los Angeles.

<PAGE>

ROBERT ANDERSON has served as Chairman Emeritus of Rockwell Corporation since
February 1990. He also serves as a director of a number of publicly held
companies, including Gulfstream Aerospace Corp., Aftermarket Technology Corp.,
and Motor Cargo Industries.

STEPHEN A. KAPLAN joined the Company as a Director in June 1997. He is also a
Principal of Oaktree Capital Management, LLC ("Oaktree"), the general partner of
the Oaktree Fund. Prior to joining Oaktree in June 1995, he was a managing
director of Trust Company of the West ("TCW"). Prior to joining TCW in 1993, he
was a partner in the law firm of Gibson, Dunn & Crutcher. He serves as a
director of a number of publicly-held companies, including KinderCare Learning
Centers, Inc., which provides child care and pre-school educational services,
Acorn Products, Inc., a manufacturer of lawn and garden tools, Collagenix, Inc.,
a specialty pharmaceutical company and Geo Logistics Corporation, one of the
largest non-asset based global logistics providers headquartered in North
America.

The Boards of Directors of Holdings and the Company currently consist
of Dr. Hartnett and Messrs. Kaplan, Larsen, Myers, Quain, Anderson and Crowell.
Dr. Hartnett is the sole director of ITB, Nice and LPP. Pursuant to the
Stockholders Agreement (as defined herein), the Oaktree Fund has the
right to designate one member of the board of directors of Holdings and the
Company. Mr. Kaplan is the designee of the Oaktree Fund. See "Certain
Relationships and Related Transactions."

Members of the Boards of Directors of Holdings and the Company
currently do not receive any compensation for their service as directors but are
reimbursed by the Company for any expenses incurred in attending meetings of the
Boards or otherwise performing their duties for the Company and Holdings.

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

The following table sets forth the cash and other compensation paid by the
Company in fiscal years 2000, 1999 and 1998 to Dr. Hartnett, its Chairman,
President and Chief Executive Officer, and the next four highly paid executive
officers of the Company (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM ALL OTHER
COMPENSATION COMPENSATION

NAMES & PRINCIPAL POSITION FISCAL SALARY BONUS OTHER ANNUAL SECURITIES
YEAR COMPENSATION UNDERLYING OPTIONS
<S> <C> <C> <C> <C> <C> <C>
DR. MICHAEL J. HARTNETT,
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER 2000 $432,186(a)(b) $393,750(c) $ 35,856 (d)
1999 $375,000(a)(b) $736,058(e) $ 686,071 (f) 92.5(bb)
1998 $461,250(a)(b) $ -- $1,545,117 (g) 1,250 0(h) $546,787 (i)

MICHAEL S. GOSTOMSKI,
EXECUTIVE VICE PRESIDENT,
MERGERS & ACQUISITIONS 2000 $159,500 (a) $ 90,000(j) $ 14,377 (k)
1999 $159,500 (a) $ 50,000(l) $ 15,017 (m) $0 (ee)
1998 $159,500 (a) $100,000(n) $ 13,256 (o)

ANTHONY S. CAVALIERI,
VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER 2000 $151,900 (a) (b) $ 40,000(j) $ 17,797 (p)
1999 $147,000 (a) (b) $ 50,000(l) $ 18,185 (q)
1998 $141,750 (a) (b) $ 70,000(n) $ 16,371 (r) 250 (s)

FREDERICK MORLOK,
EXECUTIVE VICE PRESIDENT,
MARKETING 2000 $175,000 (a) (b) $ 40,000(j) $ 16,492 (t)
1999 $168,333 (a) (b) $ 55,000(l) $ 17,687 (u) 100 (cc) $0 (ee)
1998 $165,000 (a) (b) $ 45,000(n) $ 13,820 (v)

RICHARD J. EDWARDS,
VICE PRESIDENT AND GENERAL
MANAGER, RBC DIVISION 2000 $142,000 (a) (b) $ 30,000(j) $ 16,851 (w)
1999 $136,750 (a) (b) $ 50,000(l) $ 19,763 (x) 100 (dd)
1998 $130,378 (a) (b) $ 50,000(o) $ 13,291 (y) 100 (aa)
</TABLE>

(a) Includes amounts deferred by the executive pursuant to the Company's 401(k)
Plan (as defined herein).

(b) Includes amounts deferred by the executive pursuant to the Company's SERP
(as defined herein).

<PAGE>

(d) Consists of (i) $10,104 paid by the Company to lease a car for Dr.
Hartnett's use and (ii) $5,240 contributed by the Company to Dr. Hartnett's
401(k) Plan account and (iii) $20,512 contributed by the Company to Dr.
Hartnett's SERP account.

(e) Includes (i) bonus of $361,058 earned in fiscal 1997 and paid in fiscal
1999, and (ii) bonus of $375,000 earned in fiscal 1998 and paid in fiscal
1999.

(f) Consists of (i) $20,446 paid by the Company to lease a car for Dr.
Hartnett's use and (ii) $5,000 contributed by the Company to Dr. Hartnett's
401(k) Plan account and (iii) $9,626 contributed by the Company to Dr.
Hartnett's SERP account and (iv) includes $651,000 paid to Dr. Hartnett in
reimbursement of tax liabilities resulting from certain payments made to
Dr. Hartnett, and the repurchase by the Company of certain warrants to
purchase Common Stock of the Company from Dr. Hartnett, in each case in
connection with the Recapitalization.

(g) Consists of the $1 million Hartnett Fee and to $500,000 Hartnett Loan, paid
and advanced in connection with the Recapitalization. Also includes (i)
$4,587 contributed by the Company to Dr. Hartnett's 401(k) Plan account,
(ii) $28,542 contributed by the Company to Dr. Hartnett's SERP Account and
(iii) $11,988 paid by the Company to lease a car for Dr. Hartnett's use.

(h) Consists of warrants to purchase Class B Common Stock issued in connection
with the Recapitalization. Does not include the amendment of warrants owned
by Dr. Hartnett to provide that they become exercisable for shares of Class
B Common Stock or the restating of warrants to, among other things, extend
the exercise period thereof to June, 2007.

(i) Amounts paid to Dr. Hartnett in connection with the redemption by Holdings
of warrants to purchase 1,250 shares of Class A Common Stock at an exercise
price of $76.77 per share. Such warrants were purchased for $437.23 (the
fair market value of the Class A Common Stock as of the date of purchase
($514) less the exercise price thereof) per share underlying such warrants.
Holdings subsequently issued to Dr. Hartnett, warrants to purchase 1,250
shares of Class B Common Stock at an exercise price of $514 per share. Does
not include $172,290.03 paid by Holdings to Dr. Hartnett for redemption of
certain shares of Preferred Stock in connection with the Recapitalization.

(j) Bonus earned in fiscal 1999 and paid in fiscal 2000. Bonus for fiscal 2000
will be paid in fiscal 2001.

(k) Consists of (i) $10,390 contributed by the Company to lease a car for Mr.
Gostomski's use and (ii) $3,987 contributed by the Company to Mr.
Gostomski's 401(k) plan.

(l) Bonus earned in fiscal 1998 and paid in fiscal 1999. Bonus for fiscal 1999
is reflected in fiscal 2000.

(m) Consists of (i) $10,970 contributed by the Company to lease a car for Mr.
Gostomski's use and (ii) $4,047 contributed by the Company to Mr.
Gostomski's 401(k) plan.

(n) Bonus earned in fiscal 1997 and paid in fiscal 1998. Bonus for fiscal 1998
is reflected in fiscal 1999.

(o) Consists of (i) $5,016 contributed by the Company to Mr. Gostomski's 401(k)
Plan account and (ii) $8,240 paid by the Company to lease a car for Mr.
Gostomski's use.

(p) Consists of (i) $6,305 paid by the Company to lease a car for Mr.
Cavalieri's use and (ii) $4,798 contributed by the Company to Mr.
Cavalieri's 401(k) plan account and (iii) $6,695 contributed by the Company
to Mr. Cavalieri's SERP account.

(q) Consists of (i) $6,270 paid by the Company to lease a car for Mr.
Cavalieri's use and (ii) $5,000 contributed by the Company to Mr.
Cavalieri's 401(k) plan account and (iii) $6,915 contributed by the Company
to Mr. Cavalieri's SERP account.

(r) Consists of (i) $4,444 contributed by the Company to Mr. Cavalieri's 401(k)
Plan account (ii) $7,391 contributed by the Company to Mr. Cavalieri's SERP
account and (iii) $4,536 paid by the Company to lease a car for Mr.
Cavalieri.

<PAGE>

(s) Options granted under the Stock Option Plan (as defined herein). Options
with respect to 83.33 of such shares are exercisable as of the date hereof.

(t) Consists of (i) $8,867 paid by the Company to lease a car for Mr. Morlok's
use (ii) $5,000 contributed by the Company to Mr. Morlok's 401(k) plan
account (iii) $2,625 contributed by the Company to Mr. Morlok's SERP
account.

(u) Consists of (i) $9,894 paid by the Company to lease a car for Mr. Morlok's
use (ii) $5,062 contributed by the Company to Mr. Morlok's 401(k) plan
account (iii) $2,731 contributed by the Company to Mr. Morlok's SERP
account.

(v) Consists of (i) $4,838 contributed by the Company to Mr. Morlok's 401(k)
Plan account (ii) $4,725 contributed by the Company to Mr. Morlok's SERP
account and (iii) $4,257 paid by the Company to lease a car for Mr.
Morlok's use.

(w) Consists of (i) $9,439 paid by the Company to lease a car for Mr. Edwards's
use, (ii) $4,302 contributed by the Company to Mr. Edwards' (401(k) plan
account, and (iii) $3,110 contributed by the Company to Mr. Edwards' SERP
account.

(x) Consists of (i) $10,411 paid by the Company to lease a car for Mr.
Edwards's use, (ii) $4,727 contributed by the Company to Mr. Edwards'
(401(k) plan account, and (iii) $4,625 contributed by the Company to Mr.
Edwards' SERP account.

(y) Consists of (i) $4,422 contributed by the Company to Mr. Edwards' 401(k)
plan account, (ii) $3,225 contributed by the Company to Mr. Edwards' SERP
account, and (iii) $5,644 paid by the Company to lease a car for Mr.
Edwards' use.

(aa) Options granted under the Stock Option Plan. Options with respect to 66.7
of such shares are exercisable as of the date hereof.

(bb) Options granted as a member of the Board of Directors. Options with respect
to 62.5 of such shares are exercisable as of the date hereof.

(cc) Options granted under the Stock Option Plan. Options with respect to 66.7
of such shares are exercisable as of the date hereof.

(dd) Options granted under the Stock Option Plan. Options with respect to 66.7
of such shares are exercisable as of the date hereof.

<PAGE>

OPTION GRANTS IN FISCAL 2000

No options were granted to any of the Named Executive Officers in
fiscal 2000.

The following information is furnished for the fiscal year ended April
1, 2000 with respect to the Named Executive Officers of the Company for
unexercised stock options and warrants at April 1, 2000.

<TABLE>
<CAPTION>
FISCAL YEAR-END OPTION AND WARRANT VALUES
-----------------------------------------

NUMBER OF SECURITIES
UNDERLYING UNEXERCISED
WARRANTS AT APRIL 1,2000 VALUE OF UNEXERCISED IN-THE-
EXERCISABLE/ MONEY WARRANTS AT APRIL 1,
UNEXERCISABLE 2000 EXERCISABLE/UNEXERCISABLE (a)
------------------------------ -------------------------------------- ---------------------------------------
<S> <C> <C>
Dr. Michael J. Hartnett 10,139/315 $14,056,432/$436,707
Michael S. Gostomski 0/0 $0/$0
Frederick L. Morlok 67/33 $66,062/$32,538
Anthony S. Cavalieri 183/67 $180,438/$66,062
Richard J. Edwards 1,167/33 $1,150,662/$32,538
</TABLE>

(a) Based upon a per share price of $1,500.00.

STOCK OPTION PLAN

Effective, February 18, 1998, Holdings adopted the Roller Bearing
Holding Company, Inc. Stock Option Plan (the "Stock Option Plan"). The terms of
the Stock Option Plan provide for the grant of options to purchase up to
3,569.346 shares of Class A Common Stock to officers and employees of, and
consultants (including members of the board of directors) to, Holdings and its
subsidiaries. Options granted may be either incentive stock options (under
Section 422 of the Internal Revenue Code) or non-qualified stock options. The
Stock Option Plan, which expires on December 31, 2008, is to be governed by the
board of directors of Holdings (the "Holdings Board"), or a committee to which
the Board delegates its responsibilities.

The purpose of the Stock Option Plan is to provide incentives which
will attract and retain highly competent persons as officers, employees and
directors of, and consultants to, Holdings and its subsidiaries, by providing
them opportunities to acquire shares of Class A Common Stock.

The exercise price of options granted under the Stock Option Plan shall
be determined by the Board, but in no event less than 100% of the Fair Market
Value (as defined in the Stock Option Plan) of the Class A Common Stock on the
date of grant.

Options granted under the Stock Option Plan may be exercised during the
period set forth in the agreement pursuant to which the options are granted, but
in no event more than ten (10) years following grant.

Incentive stock options granted under the Stock Option Plan may only be
granted to employees of Holdings and subject to further limitations set forth in
the Stock Option Plan.

The number of shares of Class A Common Stock for which options may be
granted under the Stock Option Plan shall be increased, and the number of shares
for which outstanding options shall be exercisable, and the exercise price
thereof, shall be adjusted upon the happening of stock dividends, stock splits,
recapitalizations and certain other capital events regarding Holdings or the
Class A Common Stock.

<PAGE>

Upon any merger, consolidation or combination of Holdings where shares of
Class A Common Stock are converted into cash securities or other property,
outstanding options shall be converted into the right to receive upon
exercise the consideration as would have been payable in exchange for the
shares of Class A Common Stock underlying such options had such options been
exercised prior to such event.

Options granted under the Stock Option Plan are not transferable by the
holders thereof except by the laws of descent and distribution.

The Holdings Board shall have the right to establish such rules and
regulations concerning the Stock Option Plan, and to make such determinations
and interpretations of the terms thereof as it deems necessary or advisable.

As of June 27, 2000, there were outstanding options to purchase 2,238.5
shares of Class A Common Stock granted under the Stock Option Plan, of which
options to purchase 754.45 shares were exercisable as of such date.

401(k) PLAN

The Company maintains the Roller Bearing Company of America 401(k)
Retirement Plan (the "401(k) Plan"), a plan established pursuant to Section
401(k) of the Internal Revenue Code, for the benefit of its non-union employees.
All non-union employees who have completed six months of service with the
Company are entitled to participate. Subject to various limits, employees are
entitled to defer up to 15% of their annual salary on a pre-tax basis and up to
an additional 10% of their annual salary on an after tax basis. The Company
matches 50% of an employee's pre-tax contribution up to 10% of annual salary.
The Company may also make discretionary contributions that are allocated among
eligible accounts pro rata based upon salary. Employees vest in the Company's
contributions ratably over three years.

SUPPLEMENTAL RETIREMENT PLAN

Effective September 1, 1996, the Company adopted a non-qualified
supplemental retirement plan ("SERP") for a select group of highly compensated
and management employees designated by the Board of Directors of the Company.
The SERP allows eligible employees to elect to defer until termination of their
employment the receipt of up to 25% of their current salary. The Company makes
contributions equal to the lesser of 50% of the deferrals or 3.5% of the
employee's annual salary, which vest in full after three years of service
following the effective date of the SERP. Accounts are paid, either in a lump
sum or installments, upon retirement, death or termination of employment.
Accounts are generally payable from the general assets of the Company although
it is intended that the Company set aside in a "rabbi trust" invested in annuity
contracts amounts necessary to pay benefits. Employees' rights to receive
payments are subject to the rights of the creditors of the Company.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

In fiscal 2000, there was no compensation committee of the Board of
Directors of Holdings (the "Board"). No member of the Board was involved in an
interlocking relationship or insider participation with respect to the
compensation committee of any other entity.

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of April 1, 2000, there were 100 shares of common stock, par value
$.01 per share, of the Company outstanding, all of which were owned by Holdings
and pledged by Holdings to the holders of the Discount Debentures. The following
table lists, as of April 1, 2000, all shares of Class A Common Stock and Class B
Common Stock of Holdings beneficially owned by (i) each director of the Company,
(ii) the Named Executive Officers, (iii) each person known by the Company to
beneficially own more than 5% of the outstanding shares of any class of common
stock of Holdings at such date and (iv) all directors and executive officers of
Holdings and the Company as a group (22 persons). As of April 1, 2000, there
were 6,075.2 shares of Class A Common Stock and 3,748 shares of Class B Common
Stock outstanding. Additionally, as of such date, there were outstanding
warrants and options to purchase up to an additional 16,401 shares of Class A
Common Stock and 10,077 shares of Class B Common Stock.

<TABLE>
<CAPTION>
STOCKHOLDER (a) NUMBER OF SHARES (a) PERCENTAGE OF CLASS
--------------- -------------------- -------------------
<S> <C> <C>
Dr. Michael J. Hartnett 13,918.3(b) 69.61%(c)

Michael S. Gostomski 1 *

Frederick L. Morlok 625(d) 10.12%

Anthony S. Cavalieri 217(e) 3.45%

Christopher J. Sommers 935(f) 15.35%

Richard J. Edwards 1,200(g) 16.49%

William E. Myers
Two North Lake Avenue
Pasadena, California 91101 2,275(h) 27.25%

Kurt Larsen
P.O. Box 692547
Park City, Utah 84068 292.5(I) 4.74%

Stephen Kaplan
333 South Grand Avenue
Los Angeles, California 90071 8,641.81(j) 64.89%

Mitchell Quain
230 Park Avenue
New York, New York 10020 492.5(k) 7.57%

Oaktree Capital Management, LLC
333 South Grand Avenue
Los Angeles, California 90071 8,549.31(l) 64.65%

<PAGE>

OCM Principal Opportunities Fund, L.P.
333 South Grand Avenue
Los Angeles, California 90071 8,549.31(m) 64.65%

Northstar High Total Return Fund
300 First Stamford Place
Stamford, Connecticut 06902 1,344.69(n,o) 18.12%

Northstar Investment Management Corp.
300 First Stamford Place
Stamford, Connecticut 06902 1,344.69(o) 18.12%

Merban Equity (p)(q)
c/o Credit Suisse First Boston
Bleichistrasse 8
P.O. Box 4263
CH-6304 Zug, Switzerland 1,399.8 ( r)(s) 23.04%

Credit Suisse First Boston Corporation (t)
11 Madison Avenue
New York, New York 10010 2,840.8 (u) 46.76%

Credit Suisse Group (p)(v)
Uetlibergstrasse 231
Ch-8045
Zurich, Switzerland 2,840.8 (r)(u) 46.76%

Mark Kennelley(w)
c/o Credit Suisse First Boston
11 Madison Avenue
New York, New York 10010 490(r ) 8.06%

Richard Gallant (w)
c/o Credit Suisse First Boston
11 Madison Avenue
New York, New York 10010 431(r) 7.09%

Brian Sanderson 362 (h) 5.62%

Ronald E. Lemansky 516(x) 7.83%

Phil Beausoleil 416(y) 6.41%

Robert Anderson 92.5(z) 1.49%

Richard Crowell 92.5(z) 1.49%
All directors and officers as a group
(11 persons) 31,551.11(aa) 91.76%
</TABLE>

*Less than 1%

<PAGE>

(a) Except where otherwise indicated, (i) shares of common stock are of Class A
Common Stock (ii) warrants are to purchase shares of Class A Common Stock
and (iii) the address for each stockholder is c/o the Company at 60 Round
Hill Road, P.O. Box 430, Fairfield, Connecticut 06430.
(b) Consists of 3,748.4 shares of Class B Common Stock and warrants to purchase
up to 10,077.4 shares of Class B Common Stock and options granted under the
Stock Option Plan to purchase up to 92.5 shares of Class A Common Stock.
(c) Represents 100% of the outstanding shares of Class B Common Stock and
69.61% of all outstanding shares of common stock of any class. Shares of
Class B Common Stock are convertible into shares of Class A Common Stock
one a one-for-one basis. Through the ownership of Class B Common Stock, Dr.
Hartnett has the power to control a majority of the voting power of all
voting securities of Holdings even if he were to own less than 50% of the
outstanding common stock. See "Item 13. Certain Relationships and Related
Transactions.
(d) Includes options to purchase 100 shares of Class A common Stock granted
under the Stock Option Plan.
(e) Consists of options granted under the Stock Option Plan. Does not include
additional options to purchase 33 shares of Class A Common Stock issued
under the Stock Option Plan not exercisable within 60 days of the date
hereof.
(f) Certain of such shares are held of record by The Sommers Family Trust. Mr.
Sommers beneficially owns such shares.
(g) Consists of warrants to purchase 1,100 shares of Class A Common Stock and
options to purchase 100 shares of Class A Common Stock granted under the
Stock Option Plan.
(h) Consists of warrants to purchase Class A Common Stock.
(i) Includes (1) options to purchase 92.5 shares of Class A Common Stock
granted under the Stock Option Plan, (2) 100 shares of Class A Common Stock
held by Kristen Larsen, the wife of Mr. Larsen, which may be deemed to be
owned by Mr. Larsen and (3) 100 shares of Class A Common Stock held by the
Aurora Capital Partners 401(k) Plan for the benefit of Mr. Larsen.
(j) Consists of warrants to purchase 6,791 shares of Class A Common Stock and
1,400 shares of Class A Common Stock owned by the Oaktree Fund, and
warrants to purchase 358.31 shares of Class A Common Stock issued to the
Oaktree Fund following the issuance of options under the Stock Option Plan
pursuant to certain anti-dilution provisions of the Discount Warrants, as
well as options to purchase 92.5 shares of Class A Common Stock granted
under the Stock Option Plan. To the extent that the stockholder, as a
principal of Oaktree, participates in the process to vote or to dispose of
any shares or warrants held by the Oaktree Fund, he may be deemed under
such circumstances for the purposes of Section 13 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), to be the beneficial
owner of such securities. The stockholder disclaims beneficial ownership of
securities held by the Oaktree Fund.
(k) Includes warrants to purchase 340 shares of Class A Stock and options to
purchase 92.5 shares of Class A Common Stock granted under the Stock Option
Plan.
(l) Consists of warrants to purchase 6,791 shares of Class A Common Stock and
1,400 shares of Class A Common Stock owned by the Oaktree Fund, and
warrants to purchase 358.31 shares of Class A Common Stock issued to the
Oaktree Fund following the issuance of options under the Stock Option Plan
pursuant to certain antidilution provisions of the Discount Warrants. The
stockholder is the general Partner of the Oaktree Fund. Does not include
options to purchase Class A Common owned by Mr. Kaplan.
(m) Consists of warrants to purchase 6,791 shares of Class A Common Stock and
1,400 shares of Class A Common Stock owned by the Oaktree Fund, and
warrants to purchase 358.31 shares of Class A Common Stock issued to the
Oaktree Fund following the issuance of options

<PAGE>

under the Stock Option Plan pursuant to certain antidilution provisions of
the Discount Warrants. Does not include options to purchase Class A Common
Stock owned by Mr. Kaplan.
(n) Consists of warrants to purchase 6,791 shares of Class A Common Stock and
1.400 shares of Class A Common Stock owned by the Oaktree Fund, and
warrants to purchase 358.31 shares of Class A Common Stock issued to the
Oaktree Fund following the issuance of options under the Stock Option Plan
pursuant to certain antidilution provisions of the Discount Warrants. Does
not include options to purchase Class A Common Stock owned by Mr. Kaplan.
To the extent that the stockholder, as a principal of Oaktree, participates
in the process to vote or to dispose of any shares or warrants held by
Oaktree Fund, he may be deemed under such circumstances for the purposes of
Section 13 of the Exchange Act, to be the beneficial owner of such
securities. The stockholder disclaims beneficial ownership of such
securities.
(o) Consists of Discount Warrants to purchase 1,262 shares of Class A Common
Stock owned by Northstar High Total Return Fund (the "Northstar Fund"), and
warrants to purchase 82.69 shares of Class A Common Stock issued to the
Northstar Fund following the issuance of options under the Stock Option
Plan pursuant to certain antidilution provisions of the Discount Warrants.
Northstar Investment Management Corp. (`Northstar") is the investment
advisor of the Northstar Fund and may be deemed to beneficially own such
warrants.
(p) Affiliate of CSFB.
(q) A wholly owned subsidiary of Credit Suisse Group, an entity incorporated
under the laws of Switzerland.
(r) Such shares may be deemed to be beneficially owned by CSFB.
(s) Does not include shares of Class A Common Stock held by certain employees
of CSFB.
(t) An indirect wholly owned subsidiary of Credit Suisse Group, an entity
incorporated under the laws of Switzerland. CSFB is a subsidiary of Credit
Suisse First Boston, Inc., which is a subsidiary of CFSB, a Swiss Bank,
which is a subsidiary of Credit Suisse Group. Each of such entities may be
deemed to beneficially own the shares of Class A Common Stock and warrants
owned by affiliates of CSFB.
(u) Consists of shares of Class A Common Stock owned by affiliates and
employees of CSFB.
(v) The stockholder, an entity incorporated under the laws of Switzerland, is
the ultimate parent entity of CSFB and Merban Equity.
(w) The stockholder is an employee of CSFB.
(x) Consists of warrants to purchase 416 shares of Class A Common Stock and
options to purchase 100 shares of Common Stock granted under the Stock
Option Plan.
(y) Consists of warrants to purchase 316 shares of Class A Common Stock and
options to purchase 100 shares of Class A Common Stock granted under the
Stock Option Plan.
(z) Consists of options granted under the Stock Option Plan.
(aa) Includes (i) (1) 784.99 shares of Class A Common Stock, (2) 3,748.4 shares
of Class B Common Stock, (3) warrants to purchase 4,074.31 shares of Class
A Common Stock, (4) warrants to purchase 10,077.4 shares of Class B Common
Stock, and (5) options to purchase 972 shares of Class A Common Stock
granted under the Stock Option Plan, held by members of management and (ii)
1,400 share of Class A Common Stock and warrants to purchase 4,074 shares
of Class A Common Stock held by the Oaktree Fund. Does not include options
to purchase 75.5 shares of Class A Common Stock granted under the Stock
Option Plan and not exercisable within 60 days of the date hereof.

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Set forth below is a summary of certain agreements and arrangements, as well as
other transactions between the Company and related parties which have taken
place during the Company's most recent fiscal year.

CONSULTING AGREEMENT

Prior to the Recapitalization, the Company and Tribos Management Company, Inc.,
an affiliate of Aurora, were parties to a consulting agreement (the "Consulting
Agreement"), whereby Tribos provided certain consulting services to the Company
in exchange for monthly payments of approximately $36,000. The Consulting
Agreement also provided for annual adjustments to the fee, reimbursement of
Tribos' expenses by the Company and the payment of additional fees in connection
with the acquisition of Nice. The total fees paid in fiscal 2000, 1999 and 1998
pursuant to the consulting agreement were $0, $0 and $108,000, respectively. The
Consulting Agreement was terminated in connection with the Recapitalization.

STOCK OPTION PLAN

Effective February 18, 1998, Holdings adopted the Stock Option Plan and issued
options thereunder to certain of its directors, officers and employees. See
"Item 11. Executive Compensation".

<PAGE>

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT, SCHEDULES AND REPORTS ON FORM 8-K

<TABLE>
<S> <C>
Consolidated Statement of Operations for Each of the Fiscal Years
in the Three-Year Period Ended April 1, 2000 Part II Item 8

Consolidated Balance Sheet at April 1, 2000, April 3, 1999 and
March 28, 1998 Part II Item 8

Consolidated Statement of Cash Flows for Each of the Fiscal Years
in the Three-Year Period Ended April 1, 2000 Part II Item 8

Consolidated Statement of Stockholder's (Deficit) Equity for Each of
the Fiscal Years in the Three-Year Period Ended April 1, 2000 Part II Item 8

Notes to Consolidated Financial Statements Part II Item 8

Independent Public Accountants' Report Part II Item 8

Independent Auditors' Report Part II Item 8
</TABLE>

<PAGE>

ITEM 21. EXHIBITS AND FINANCIAL SCHEDULES

(a) Exhibits.
EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION OF DOCUMENT
NUMBER -----------------------
------

<S> <C>
3.1* Amended and Restated Certificate of Incorporation, dated June 23,
1997, of Roller Bearing Company of America, Inc. ("RBCA").

3.2** Bylaws of RBCA.

3.2(a)*** Amendment to the Bylaws of RBCA.

4.1** Indenture, dated as of June 15, 1997 between RBCA and the United
States Trust Company of New York ("Trustee") with forms of
Outstanding Note and Exchange Note.

4.1(a)** Supplemental Indenture, dated as of August 8, 1997 by and between
Bremen and the Trustee.

4.2** Global Note Issued to Depository Trust Co., duly authenticated by
RBCA and the Trustee.

4.3** Registration Rights Agreement dated June 17, 1997 between RBCA,
the Subsidiary Guarantors named therein and CSFB.

4.4*** Stock Option Plan of Holdings, dated as of February 18, 1998 with
form of agreement.

4.5*** Form of Stock Transfer Restriction Agreement between Holdings and
certain of its stockholders.

4.6*** Form of Amended and Restated Warrant of Holdings.

10.1** Purchase Agreement, dated June 17, 1997 among RBCA, the
Subsidiary Guarantors named therein and the CSFB

10.2** Redemption and Warrant Purchase Agreement by and among Holdings,
Certain Stockholders of Holdings, and Michael J. Hartnett, as
purchaser representative, dated as of May 20, 1997, as amended by
that certain Amendment No. 1, dated as of June 23, 1997.

10.3** Credit Agreement dated as of June 23, 1997, among RBCA, the
Lenders named therein and CSFB, as Administrative Agent.

10.4** Pledge Agreement dated as of June 23, 1997, among RBCA, each
Subsidiary of RBCA named therein and CSFB.

10.5** Security Agreement dated as of June 23, 1997, among RBCA, each
Subsidiary of RBCA named therein and CSFB.

10.6** Guarantee Agreement dated as of June 23, 1997, among each of the
subsidiaries named therein of RBCA and CSFB.

10.7** Asset Purchase Agreement by and among BFM Aerospace Corporation,
Ground Support, Inc., RBC Transport Dynamics Corporation and
Holdings, dated as of October 26, 1992.

<PAGE>

10.8** Asset Purchase Agreement by and among BFM Aerospace Corporation,
BFM Transport Dynamics Corporation, RBC Transport Dynamics
Corporation and Holdings, dated as of October 26, 1992.

10.9** Agreement and Plan of Reorganization among RBCA, Roller Bearing
Acquisition Company, Inc., Holdings and the Stockholders of RBCA,
dated March 31, 1992.

10.10** Agreement of Merger between Roller Bearing Acquisition Company,
Inc. and RBCA, dated March 31, 1992.

10.11** Asset Sale Agreement by and between IMO Industries Inc. and RBCA,
dated as of May 10, 1993.

10.12** Asset Purchase Agreement by and among BPP Acquisition
Corporation, Beaver Precision Products, Inc., RBCA, and Lloyd J.
Baretz, dated as of October 18, 1998.

10.13** Asset Purchase Agreement By and Among SKF USA Inc., Nice and
RBCA, dated as of February 28, 1997.

10.14** Lease between General Sullivan Group, Inc. and RBC Bearings,
dated July 11, 1995, for West Trenton, New Jersey premises.

10.15** Lease between Industrial Development Group and RBCA, dated March
12, 1998 for Waterbury, Connecticut premises.

10.16** Letter of Credit Agreement, dated as of September 1, 1994,
between RBCA and Heller Financial, Inc. ("Heller").

10.17** Termination, Release and Enhancement Letter of Credit Documents
Continuation Agreement dated June 23, 1997, by and between
Heller, RBCA and ITB.

10.18** Executed counterpart of the Pledge and Security Agreement, dated
as of September 1, 1994, between RBCA, Heller and the Trustee.

10.19** Loan Agreement, dated as of September 1, 1994, between the South
Carolina Job - Economic Development Authority, ("the Authority")
and RBCA with respect to the Series 1994A Bonds.

10.20*** Agreement between Bremen, Indiana Plant of SKF USA, Inc and
International Union Automobile, Aerospace and Agricultural
Workers of America, U.A.W., Local 1368, effective July 20, 1998.

10.21** Trust Indenture, dated as of September 1, 1994, between the
Authority and Mark Twain Bank, ("Bond Trustee"), with respect to
the Series 1994A Bonds.

10.22** Loan Agreement, dated as of September 1, 1994, between the
Authority and RBCA, with respect to the Series 1994B Bonds.

10.23** Trust Indenture, dated as of September 1, 1994, between the
Authority and Bond Trustee, with respect to the Series 1994B
Bonds.

<PAGE>

10.24** Collective Bargaining Agreement between Heim, the International
Union, United Automobile, Aerospace and Agricultural Implement
Workers of America, U.A.W., and Amalgamated Local 376, U.A.W.,
effective February 1, 1998.

10.25** Collective Bargaining Agreement between Nice Specialty Bearings
Division, SKF Bearing Industries and United Steelworkers of
America (AFL - CIO) and its Local 6326, effective October 26,
1998.

10.26** Collective Bargaining Agreement between RBCA and the
International Union U.A.W. and its Local 502, effective December
1, 1998.

10.27** Employment Agreement effective as of June 23, 1997 between RBCA
and Michael J. Hartnett, Ph.D.

10.28** Stockholders' Agreement dated as of June 23, 1997 by and among
Holdings, OCM Principal Opportunities Fund, Northstar Investment
Management Corporation, Merban Equity, the CSFB Individuals named
therein and Dr. Michael J. Hartnett.

10.29** Promissory Note dated as of June 23, 1997 for $500,000 made by
Michael J. Hartnett, Ph.D. and payable to RBCA.

10.30** Tax Sharing Agreement effective as of June 23, 1997, by and among
Holdings and RBCA, ITB, LPP and Nice.

10.31** Asset Purchase Agreement by and among SKF USA Inc., Bremen and
RBCA dated as of August 8, 1997.

10.32*** Real Estate Purchase Agreement for the Walterboro , South
Carolina facility, dated March 27, 1998 by and between Linear
Precision Products, Inc., RBCA and Dana Corporation.

10.33*** Amendment to the Letter of Credit Agreement, dated as of June 23,
1998 between RBCA and Heller Financial Inc.

10.34*** Supplement No. 1 to Guarantee Agreement, dated as of August 8,
1997, by and between Bremen and CSFB.

10.35*** Supplement No. 1 to Indemnity, Subrogation and Contribution
Agreement, dated as of August 8, 1997, by and between Bremen and
CSFB.

10.36*** Supplement No. 1 to Security Agreement, dated as of August 8,
1997, by and between Bremen and CSFB.

10.37*** Supplement No. 1 to Pledge Agreement, dated as of August 8, 1997,
by and between Bremen and CSFB.

10.38*** Agreement of Lease, dated as of November 1, 1964, between Bren,
Inc. and SKF Industries, Inc. with Assignment and Agreement of
Lease, dated August 8, 1997, between SKF USA, Inc. and Bremen
Bearings.

10.39*** Asset Purchase Agreement, dated as of June 3, 1998, by and among
Miller Acquisition Corporation, Miller Bearing Company and the
Shareholders of Miller Bearing Corporation.

<PAGE>

10.40*** Supplement No. 2 to Guarantee Agreement dated as of June 3, 1998,
by and between Miller Acquisition Corporation and CSFB, as
Collateral Agent.

10.41*** Supplement No. 2 to Indemnity, Subrogation and Contribution
Agreement, dated as of June 3, 1998, by and between Miller
Acquisition Corporation and CSFB.

10.42*** Supplement No. 2 to Security Agreement, dated as of June 3, 1998,
by and between Miller Acquisition Corporation and CSFB.

10.43*** Supplement No. 2 to Pledge Agreement, dated as of June 3, 1998,
by and between Miller Acquisition Corporation and CSFB.

10.44**** Asset Purchase Agreement By and Among SKF USA Inc., Tyson Bearing
Company, Inc. and Roller Bearing Company of America, Inc. dated
as of June 11, 1999.

10.45++ Loan Agreement, dated as of April 1, 1999, by and between
California Infrastructure and Economic Development Bank and
Roller Bearing Company of America, Inc.

10.46+ Indenture Of Trust, dated as of April 1, 1999, between California
Infrastructure and Economic Development Bank and U.S. Bank Trust
National Association, as Trustee

10.47+ Remarketing Agreement, dated as of April 1, 1999, by and between
The Chapman Company and Roller Bearing Company of America, Inc.

10.48+ Tax Regulatory Agreement, dated as of April 1, 1999, by and among
California Infrastructure and Economic Development Bank, U.S.
Bank Trust National Association, as Trustee, and Roller Bearing
Company of America, Inc.

10.49++ Asset And Stock Purchase Agreement, dated as of December 17,
1999, by and among Schaublin France SA, Schaublin USA Inc.,
Schaublin SA, And RBC Schaublin SA and RBC Schaublin SA.

10.50++ Lease Agreement, dated as of December 17, 1999, between Schaublin
SA and RBC Schaublin SA.

10.51++ Credit Agreement, dated as of December 27, 1999, between RBC
Schaublin S.A. Delemont and Credit Suisse.

16.2** Letter of Ernst & Young LLP regarding Change in Certifying
Accountant.

21.*** Subsidiaries of RBCA.

27.+++ Financial Data Schedule.
</TABLE>

* Incorporated by reference to the Registration Statement on
Form S-4, filed with the Securities and Exchange Commission by
RBCA and its subsidiaries on August 8, 1997.
** Incorporated by reference to Amendment No. 1 to the
Registration Statement on Form S-4, filed with the Securities
and Exchange Commission by RBCA and its subsidiaries on
October 31, 1997.
*** Incorporated by reference to the Company's Annual Report on
Form

<PAGE>

10-K for the year ended April 3, 1999.
**** Incorporated by reference to the Company's Current Report on
Form 8-K, dated June 11, 1999.
+ Incorporated by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended June 26, 1999.

++ Incorporated by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 25, 1999.
+++ Filed herewith.

<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

ROLLER BEARING COMPANY OF AMERICA, INC.

By: /s/ Michael J. Hartnett
-----------------------------------------
Michael J. Hartnett
President and Chief Executive Officer
Chairman of the Board of Directors
(Principal Executive Officer)

By: /s/ Anthony S. Cavalieri
-----------------------------------------
Anthony S. Cavalieri
Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)

Pursuant to the requirement of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

<TABLE>
<S> <C>
June 27, 2000 By: /s/ Michael J. Hartnett
------------------------------------------
Michael J. Hartnett
Chairman of the Board of Directors,
President and Chief Executive Officer

June 27, 2000 By: /s/ Stephen A. Kaplan
-----------------------------------------
Stephen A. Kaplan
Director

June 26, 2000 By: /s/ Kurt B. Larsen
-----------------------------------------
Kurt B. Larsen
Director

June 26, 2000 By: /s/ William E. Myers, Jr.
-----------------------------------------
William E. Myers, Jr.
Director

June 26, 2000 By: /s/ Mitchell I. Quain
-----------------------------------------
Mitchell I. Quain
Director

June 26, 2000 By: /s/ Robert Anderson
-----------------------------------------
Robert Anderson
Director

June 26, 2000 By: /s/ Richard R. Crowell
-----------------------------------------
Richard R. Crowell
Director
</TABLE>

<PAGE>
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
--------------------------------------------------------------------------------------------------------------------------
DESCRIPTION BALANCE AT
BEGINNING OF BALANCE AT END
PERIOD ADDITIONS DEDUCTIONS OF PERIOD
--------------------------------------------------------------------------------------------------------------------------
CHARGED TO COSTS CHARGED TO
AND EXPENSES OTHER ACCOUNTS
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BAD DEBT RESERVE $168 $117 $ -- $ 6 $279
--------------------------------------------------------------------------------------------------------------------------
</TABLE>