UNAUDITED CROMPTON & KNOWLES CORPORATION AND SUBSIDIARIES Consolidated Statements of Cash Flows Quarters ended March 30, 1996 and April 1, 1995 (In thousands of dollars) March 30, April 1, Increase (decrease) to cash 1996 1995 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $ 9,468 $ 13,196 Adjustments to reconcile net earnings to net cash provided by operations: Depreciation and amortization 4,009 3,726 Deferred compensation 150 473 Changes in assets and liabilities, net 663 (12,979) Net cash provided by operations 14,290 4,416 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions (10,025) (8,633) Capital expenditures (2,967) (5,733) Other investing activities (635) 457 Net cash used by investing activities (13,627) (13,909) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings 10,000 - Change in notes payable (2,510) 19,851 Net treasury stock activity 35 (3,607) Dividends paid (6,483) (5,814) Net cash provided by financing activities 1,042 10,430 CASH Effect of exchange rates on cash (24) 34 Change in cash 1,681 971 Cash at beginning of period 918 1,832 Cash at end of period $ 2,599 $ 2,803 See accompanying notes to consolidated financial statements. -4-