Management's Discussion and Analysis Consolidated Balance Sheets Consolidated Statements of Income Consolidated Statements of Cashflows Consolidated Statements of Shareholder's Equity Notes to Consolidated Financial Statements Report of Ernst & Young LLP, Independent Auditors Report of Management Directors

CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY thousands of dollars common stock additional paid-in capital retained earnings treasury stock note receivable from savings & stock ownership plan cumulative translation adjustment total share- holders' equity   Balances, September 1, 1994 $8,577 $12,489 $79,128 $(29,327) $(3.340) $(362) $67,165 Net income 7,217 7,217 Exercise of stock options 14 61 75 Purchase of treasury stock (1,310) (1,310) Savings and Stock   Ownership Plan activity 362 362 Translation loss (131) (131) Dividends declared (1,396) (1,396) Balances, August 31, 1995 8,591 12,550 84,949 (30,637) (2,978) (493) 71,982 Net income 5,052 5,052 Exercise of stock options 86 790 876 Tax benefit of stock   option exercises 293 293 Savings and Stock   Ownership Plan activity 1,236 1,236 Translation gain 60 60 Dividends declared (1,361) (1,361) Balances, August 31, 1996 8,677 13,633 88,640 (30,637) (1,742) (433) 78,138 Net income 6,625 6,625 Exercise of stock options 416 3,255 3,671 Tax benefit of stock   option exercises 1,328 1,328 Stock compensation expense   related to non-employee   director stock options 246 246 Savings and Stock   Ownership Plan activity 4 33 1,103 1,140 Translation loss (636) (636) Dividends declared (1,411) (1,411) Balances, August 31, 1997 $9,093 $18,466 $93,854 $(30,604) $ (639) $(1,069) $89,101