UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14C

(Amendment No. 2)

Information Statement Pursuant to Section 14(c) of the Securities Exchange Act
of 1934

Check the appropriate box:

/X/ Preliminary Information Statement

/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14C-5(D)(2))

/ / Definitive Information Statement

APW Ltd.

(Name of Registrant As Specified In Its Charter)
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Payment of Filing Fee (Check the appropriate box):

/ / No fee required

/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11

(1) Title of each class of securities to which transaction applies:

Warrants to Purchase Common Shares for an exercise price of $448.95
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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/X/ Fee paid previously with preliminary materials.

/X/ Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

$51.00
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(2) Form, Schedule or Registration Statement No.:

Schedule 13E-3
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(3) Filing Party:

APW Ltd.
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(4) Date Filed: November 6, 2002
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APW Ltd.
2 Church Street
Hamilton, Bermuda
-and-
N22 W23685 Ridgeview Parkway West
Waukesha, WI 53188
(262) 523-7600

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NOTICE OF ACTION BY
WRITTEN CONSENT OF SHAREHOLDERS
-------------------

To Our Warrant Holders:

On July 31, 2002, APW Ltd. ("APW" or the "Company") emerged from bankruptcy and
issued 60,606 warrants to purchase common shares in APW Ltd. to its
predecessor's shareholders. Based upon the terms of the bankruptcy plan approved
by both U.S. and Bermuda courts, the exercise price of the warrants was set at
approximately five times above the fair market value of the common shares. No
fractional interests were issued and, instead, holders will receive an amount
equal to $4.20 per warrant for each fractional warrant. On November 28, 2002,
the Company will be effecting a four-for-one reverse share split and, as a
result, the warrant(s) you hold pursuant to the warrant agreement will be
adjusted so that:

. the number of shares for which the warrant is exercisable and the
exercise price will be adjusted to provide the equivalent benefit
after the reverse share split (i.e., the exercise price will be
increased by a multiplier of four and the number of shares that the
warrant gives you the right to purchase will be decreased to
one-fourth of the number of pre-split warrants); and

. any additional fractional warrants resulting from the reverse share
split will be redeemed for cash as permitted by the terms of the
warrant agreement.

The Company intends to pay cash for any fractional warrants based upon the U.S.
Bankruptcy Court's approval of a plan specifying a $4.20 per share fair market
value on July 23, 2002 of the existing warrants (or $16.80 per warrant on a
post-reverse share split basis). The Company has not sought an independent
determination of the fair market value of the warrants in connection with the
reverse share split. The shareholders and board have unanimously approved the
reverse share split. You need not vote on this matter and do not have dissenters
rights. The enclosed Information Statement describes in detail the effect of and
contains important information regarding the reverse share split. Additionally,
the Company will be redeeming all warrants held by its 401(k) plan at a price of
$4.20 per warrant prior to the reverse share split.

The Company has fixed November 5, 2002 as the record date for determining the
holders of warrants entitled to notice and receipt of this Information
Statement. We urge you to read this Information Statement carefully.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE TRANSACTION, PASSED UPON THE
MERITS OR FAIRNESS OF THE TRANSACTION OR PASSED UPON THE ADEQUACY OR ACCURACY OF
THE DISCLOSURE IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

APW IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND APW A PROXY.

By Order of the Board of Directors:

Richard G. Sim
Chairman, President and Chief Executive Officer
November 7, 2002

APW LTD.

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PRELIMINARY INFORMATION STATEMENT

---------------

INTRODUCTORY STATEMENT

APW is a Bermuda company with its principal executive offices located at 2
Church Street, Hamilton, Bermuda and N22 W23685 Ridgeview Parkway West,
Waukesha, Wisconsin. Our U.S. telephone number is (262) 523-7600.

This Information Statement is being sent to all warrant holders by the Board of
Directors of APW to inform you about the actions the board and shareholders have
unanimously taken. The shareholder consent action was effective on September 11,
2002, and the four-for-one reverse share split will be effective November 28,
2002. As a result of the reverse share split and pursuant to the warrant
agreement, the number of common shares issuable upon exercise of each warrant
will be reduced, and the exercise price per share of each warrant will increase,
proportionately, and any fractional warrants resulting from the reverse share
split will be redeemed for cash as permitted by the terms of the warrant
agreement. As a result of redeeming the fractional warrants from this reverse
share split and based upon its review of the number of holders who own 3 or less
warrants, APW will have fewer than 300 registered holders of its warrants. After
this reverse share split and a related filing with the Securities and Exchange
Commission ("SEC"), APW will no longer be subject to the registration and
reporting requirements of the Securities Exchange Act of 1934, as amended
("Exchange Act"). As of the date of this Information Statement, we are still
awaiting information on holders who hold in "street name" at Cede & Co.
Therefore, we do not know how many fractional warrants will be redeemed as a
result of the reverse share split. The redemption, prior to the reverse share
split, of the fractional interests and warrants held by our 401(k) plan and
described in more detail later is expected to cost less than $25,000.

Warrant certificates reflecting the reverse share split will be distributed
based on a record date of November 5, 2002. After the reverse share split, each
such holder will receive one warrant for every four warrants previously held and
the exercise price will increase to $1,795.80 per share. Distribution of the
warrant certificates and payment of fractional interests is scheduled to occur
promptly after November 28, 2002. There is no current trading market for the
warrants nor is any trading market expected to develop. This Information
Statement does not constitute an offer to sell or a solicitation of an offer to
buy any securities. The date of this Information Statement is November __, 2002.

Your approval is not required or being sought. We are not asking you for a proxy
and you are requested not to send us a proxy.

Copies of this Information Statement are being mailed on or before November 7,
2002 to the holders of record on November 5, 2002 of the outstanding warrants.

SUMMARY TERM SHEET

This summary is qualified in its entirety by the more detailed
information set forth elsewhere in this Information Statement and should be read
in its entirety.

Purpose of the reverse share split ....................... The sole reason for the reverse share split is
to bring the number of holders of our warrants
below 300 so that we will no longer have the
obligation, and the expenses associated with the
obligation, to file reports with the SEC or have
a class of securities registered under the Exchange
Act. See "Reasons for the Reverse Share Split and
Consequences to Warrant Holders--Fairness of the
Reverse Share Split-Reasons."

No market for warrants ................................... The warrants are not traded on any public market.
After effecting this transaction, the Company does
not intend to make information about its financial
condition publicly available. See "Reasons for the
Reverse Share Split and Consequences to Warrant
Holders--Fairness of the Reverse Share Split--Effects
on the warrant holders."

The reverse share split .................................. Section 5.2 of the warrant agreement provides for an
adjustment to the number of warrants and the exercise
price of the warrants upon the occurrence of a reverse
share split. After the four-for-one reverse share split,
the warrant exercise price will be increased by a
multiplier of four and the number of warrant shares
obtainable upon exercise will be decreased to one-fourth
of the number of pre-split warrants. Therefore, for example,
if prior to the reverse share split you held 100 warrants
at the $448.95 exercise price per warrant, after the reverse
share split you will hold 25 warrants with a $1,795.80
exercise price per warrant. If, for example, you held two
warrants prior to the reverse share split, you would have
had a right to one-half of a warrant at an exercise price of
$1,795.80 per share after the reverse share split, but the
warrant agreement provides that the Company may redeem
fractional warrants and the Company has elected to do so.
Therefore, your fractional warrant will be redeemed and you
will receive $8.40, which is equal to $4.20 for each of the
two pre-split warrants you held (or one-half of the $16.80
post-split value). As a result of the reverse share split,
the par value of our common stock will increase from US$0.02
to US$0.08 per share. See "Reasons for the Reverse Share
Split and the Consequences to Warrant Holders--Fairness of
the Reverse Share Split--Effects on the warrant holders."

What you will receive .................................... On November 28, 2002, every four warrants you hold will convert
into one warrant to purchase common shares. We will mail the
warrant certificates to you promptly after the effectiveness

of the reverse share split. See "Reasons for the
Reverse Share Split and the Consequences to Warrant
Holders--Issuance of Certificates and Payment for
Fractional Warrants."

Treatment of Fractional Shares ........................... We will not distribute any fractional warrants in
connection with the reverse share split. Rather,
warrants that would otherwise be converted by the
reverse share split into a fractional replacement
warrant will be redeemed for cash in an amount equal
to $4.20 per pre-split warrant, or $16.80 per share
post-reverse share split. See "Reasons for the
Reverse Share Split and the Consequences to Warrant
Holders--Issuance of Certificates and Payment for
Fractional Warrants."

Fairness of the Reverse Share Split ...................... We believe that the reverse share split is fair to,
and in the best interests of, our unaffiliated shareholders
and warrant holders. Our opinion is based on, among
others, the following factors: (i) the reverse share
split is being effected pursuant to the requirements
of the laws of Bermuda and our charter documents;
(ii) the shareholders have unanimously approved the
reverse share split; (iii) the warrant anti-dilution
adjustments contemplate the occurrence of a share
split; and (iv) the price paid to fractional
warrant holders is approximately the fair market
value and was approved in our bankruptcy proceedings.
In making our determination regarding the fairness of
the reverse share split, we did not obtain a fairness
opinion or appraisal or hire an unaffiliated
representative to negotiate the terms of the
transaction to the unaffiliated shareholders or
warrant holders. See "Fairness of the Reverse Share
Split."

Treatment of Retirement Plan Beneficiaries ............... We have been informed by our counsel and the
401(k) Plan Trustee that the APW Ltd. 401(k)
Plan cannot hold the warrants. Therefore, we
are proposing, and the 401(k) Plan Committee has
agreed, to redeem all of the warrants held by
the 401(k) Plan at a price per warrant prior to
the reverse share split of $4.20. Based upon
the information available to us, the 401(k) Plan
holds 5,640 warrants and the redemption will
require less than $25,000 to effect. See
"Redemption of 401(k) Warrants."

Record Date for Reverse Share Split ...................... November 5, 2002. See "Introductory Statement."

Effective Date of Reverse Share Split .................... November 28, 2002. See "Change to APW's
Capital Structure--The Reverse Share Split."

Tax Consequences ......................................... Cash you receive in lieu of fractional warrants
will be taxable to you. You will be treated as
receiving cash as payment in exchange for your
fractional warrants and you will recognize a
capital gain or loss in an amount equal to the
difference between the amount of cash you get
and the adjusted basis of your fractional
warrants.

To the extent that you obtain warrants as a result
of the reverse share split, you will not recognize
any gain or loss upon the receipt of your new warrants.
However, if you also receive money in lieu of fractional
warrants you will have to adjust the basis of the new
warrants you receive. For a more complete description,
see "Reasons for the Reverse Share Split and the
Consequences to Warrant Holders--Material Federal Income
Tax Consequences of the Reverse Share Split."

Source of financing for the payment of the fractional Because we do not have information on "street
warrants and the redemption of the warrants held by the name" holders of warrants at Cede & Co., we do
APW Ltd. 401(k) Plan ..................................... not know the exact amount of cash that will be
required to redeem fractional warrants. Based upon
information we do have, we anticipate that

Recent Events............................................. We have recently restated our financial statements for fiscal
years 1999-2001. Please see "Recent Events."

less than $250,000 will be needed to redeem all
of the outstanding fractional warrants and
those warrants held by the APW Ltd. 401(k) Plan.
We will also pay approximately $30,000 for expenses
associated with the reverse share split. We intend
to pay the purchase price and related expenses from
our existing working capital. See "Reasons for the
Reverse Share Split and the Consequences to Warrant
Holders--Financing of the Reverse Share Split."

Vote Required to Approve the Transaction ................. Under our Bye-Laws, the action requires the
affirmative vote of 66-2/3% of the votes cast by
all holders of our common shares. As of
September 1, 2002 there were a total of
1,303,030 common shares outstanding. Each share
entitles the holder to one vote.

THE BOARD AND SHAREHOLDERS HAVE UNANIMOUSLY
CONSENTED TO THE REVERSE SHARE SPLIT. See
"Change to APW's Capital Structure -The Reverse
Share Split."

Dissenters' Rights ....................................... Bermuda law does not provide shareholders or
warrant holders with dissenters' rights as the
result of a reverse share split. Warrant
holders do not have a right to vote with respect
to this matter and are bound by the decision of
the board and shareholders to approve the
reverse share split on the proposed terms.

Distribution Agent and Transfer Agent .................... American Stock Transfer & Trust Company. For
additional information, please contact American
Stock Transfer & Trust Company, our warrant
agent. See "Warrant Agent." The Company's
contact is Susan Silber, American Stock Transfer
& Trust Company, 59 Maiden Lane, Plaza Level,
New York, NY 10038. Her phone number is (718)
921-8217. Ms. Silber's e-mail address is
ssilber@amstock.com.

Possible Exercise of Warrants ............................ Under the terms of the warrant agreement, a
warrant holder could exercise and purchase
common shares prior to the reverse share split.
However, based upon a recent value used for the
issuance of options to its officers, the Company
believes the fair market value of a share prior
to the reverse share split is approximately
$82.50 per share, considerably less than the
exercise price of $448.95 per warrant prior to
the reverse share split.

Exercise Price for Warrants .............................. The pre-reverse share split exercise price of
$448.95 for each warrant was established under
the bankruptcy plan and approved by U.S. and
Bermuda courts. Under the bankruptcy plan, the
exercise price was purposely set significantly
above the estimated fair market price of a share.

AVAILABLE INFORMATION

We are currently required to file reports, proxy statements and other
information with the SEC under the Exchange Act. You can get copies of these
reports, proxy statements and other information at the SEC's public reference
facilities at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549; and Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. You can also view these filings at the SEC's website at
http://www.sec.gov. This Information Statement includes information required to
be disclosed by the SEC pursuant to Rule 13e-3 under the Exchange Act which
governs, among other things, transactions by certain issuers that have a
reasonable likelihood or purpose of, among other things, causing any class of
equity securities of an issuer which is subject to Section 12(g) or Section
15(a) of the Exchange Act to be held of record by fewer than 300 holders. We
have also filed a Rule 13e-3 Transaction Statement on Schedule 13E-3 with the
SEC relating to the reverse share split described in this Information Statement.

SPECIAL NOTE ON FORWARD LOOKING STATEMENTS

Some of the matters in this Information Statement are forward-looking statements
that involve certain risks and uncertainties. All of these risks and
uncertainties could cause actual results to materially differ from those in the
forward-looking statements. For a description of additional factors affecting
our business, see our periodic reports filed with the SEC.

THE COMPANY

We are a leading global provider of Technically Enabled Manufacturing Services
("TEMS"), focused on designing and integrating large electronic products. We
have the capabilities to design and manufacture various subsystems for
electronic products, including enclosures, thermal management systems,
backplanes, power supplies, printed circuit board assemblies (PCBAs), and
cabling, either as integrated custom systems or as individual subsystems. In
addition, we provide a wide range of integration services to our customers,
including product design, supply chain management, manufacturing, assembly,
testing and drop-ship services.

We are organized as one reportable segment operating in approximately 30
locations throughout North America, South America, Europe and Asia. We provide
our solutions and services to original equipment manufacturers ("OEMs"),
primarily in the communications (datacom and telecom), computing (enterprise
hardware--large servers, large data storage, networking) and Internet
(application service providers and Internet service providers) markets. We
believe that our size, global reach, product breadth, depth of engineering
experience, scope of services, and demonstrated expertise uniquely position us
to win large manufacturing contracts from leading global OEMs in our target
markets. Our customers include industry leaders such as Applied Materials,
Cymer, EMC, Ericsson, Fujitsu, Hewlett-Packard, IBM, Lucent, Motorola, NCR,
Nortel Networks and Sun Microsystems. We believe that these customers will
provide us with substantial growth opportunities due to their desire to migrate
from a fragmented regional supply base to an integrated global supply
capability, such as we offer.

Our Recent Bankruptcy Filing

On May 16, 2002, APW Ltd., our predecessor, (then in provisional liquidation),
filed a voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code ("Bankruptcy Code") in the United States Bankruptcy Court for
the Southern District of New York ("Bankruptcy Court") (Case No. 02-12335). The
proceeding involved only APW Ltd. and Vero Electronics, Inc. ("Vero"), a
non-operating entity and subsidiary of APW Ltd. (Case No. 02-12334). All of our
other subsidiaries were excluded from the proceeding and continue to conduct
business with customers and suppliers in the ordinary course.

On May 30, 2002, a proceeding (the "Bermuda Proceeding") was commenced pursuant
to the Companies Act 1981 with respect to APW in the Bermuda Supreme Court in
connection with a winding-up petition. One of the purposes of the filing was the
imposition of a statutory stay preventing third parties from continuing or
taking actions against APW in Bermuda. On May 30, 2002, the Bermuda court
appointed Malcolm L. Butterfield of KPMG Bermuda and Philip W. Wallace of KPMG,
London, England as joint provisional liquidators of APW (or, as referred to
herein, the "JPLs") with limited supervisory powers. The appointment of the JPLs
and statutory stay enabled the JPLs to perform supervisory and oversight of the
management of APW while reviewing the plan of reorganization with a view to its
treatment of creditors. On July 22, 2002, the JPLs were granted various powers,
including the power to authorize the sale of any business, operation,
subsidiary, division or other significant asset of APW.

Confirmation of Plan of Reorganization and Emergence

On July 24, 2002 the Bankruptcy Court, following a hearing on July 23, 2002,
entered an order confirming APW's and Vero's Amended and Restated Plan of
Reorganization dated June 19, 2002 (as modified, amended or supplemented, the
"Plan"). APW emerged from bankruptcy on July 31, 2002.

Pursuant to the terms of the Plan approved by the Bermuda Supreme Court, all of
the assets and liabilities which were to be retained by APW under the original
Plan were transferred to AWP Ltd. ("AWP"), a newly formed Bermuda company. One
of the assets transferred was the right to use the name "APW Ltd.," and the
newly formed entity became the successor-in-interest to APW. After consummation
of the Plan, APW changed its name to BQX Ltd. and AWP Ltd. changed its name to
APW Ltd. These changes became effective on July 31, 2002.

In addition, as of July 31, 2002, the effective date of the Plan, we (the
successor-in-interest to our predecessor) issued under the Plan the following:

. New secured notes in the aggregate principal amount of $100 million to
our senior secured lenders,

. 1,000,000 common shares to our senior secured lenders, which initially
represent 100% of our outstanding common shares after the consummation
of the Plan,

. Warrants to purchase up to 303,030 common shares at an exercise price
of $0.02 per share to lenders under the Post-Petition Multicurrency
Superpriority Credit Facility, all of which were exercised on August
31, 2002; and

. Warrants to purchase up to 60,606 common shares at an exercise price
of $448.95 per share to the predecessor equity holders of APW.

. Options under the APW Ltd. 2002 Stock Incentive Plan permitting the
issuance of 151,515 options (124,915 were issued on August 20, 2002).

At the time of the issuance of the warrants, we requested that DTC conduct a
broker search so that we could complete the original issuance of the warrants
and warrant certificates as well as the redemption of any fractional shares at
$4.20 as contemplated by the Plan. As of the date of this Information Statement,
we have issued the original warrant certificates or paid cash in lieu of issuing
fractional warrant certificates, as the case may be.

OUR SERVICES AND PRODUCTS

We offer a broad range of value-added services to provide our OEM customers with
a vertically integrated solution for the development, manufacture and
distribution of our products.

New Product Design. New Product Introduction Centers ("NPICs") provide services
to help the customer achieve production designs that are cost effective and that
enable customers to produce commercial volumes within a short period of time.
The New Product Introduction ("NPI") process is most effective when a customer
uses it at the concept phase of the product's development cycle. NPI can include
technology selection; design, test and material strategies; best practices
design and development engineering services; and rapid circuit board and system
prototype build services. NPICs in the United Kingdom and on the East and West
coasts of the United States provide customers with comprehensive and rapid
turnaround prototype design for integrated solutions. We have also established
NPICs at several other facilities for specific product applications. We work
closely with our OEM customers' development teams from the early stages of
product development. Our development teams design all the electro-mechanical
aspects of our customers' products with a focus on reducing costs and increasing
ease of manufacturing. We can design everything that goes into large electronic
products. In addition to fast prototype capability, our NPICs provide complete
in-house testing, airflow analysis, safety agency approvals, Electro-Magnetic
Interference/Radio Frequency Interference emission compliance, and testing for
shock, vibration, FCC and environmental compliance.

Manufacturing. Our manufacturing operations include hard and soft metal tooling,
plastic injection molded and structural foam parts, tool and die design and
manufacturing, thermal management componentry, backplane boards, power supplies,
cable assembly and printed circuit board population in Europe and North America.
We manufacture components, subassemblies and systems both for sale as standard
products and for incorporation into our custom integrated electronics enclosure
systems. We employ just-in-time, single piece flow manufacturing and continuous
improvement processes to reduce costs and shorten lead times. We are committed
to maintaining World Class manufacturing operations and employ numerous
techniques, including Kaizen events and global standardization, to continuously
identify areas of improvement in our processes. We believe that our ability to
achieve high levels of quality and delivery for highly customized products that
have low, uneven demand is a competitive advantage.

Supply Chain Management. APW has developed a qualified supplier base that is
integrated using a private trading network called the APW Supply Alliance
("Alliance"). The Alliance provides for easy communication and helps assure that
products are designed using approved components. Increasingly, our suppliers
stock their products in APW administered hubs from which the product is
delivered to APW's integration sites using a kanban system on

a just-in-time basis. This supply base is an important part of APW's
capabilities that provides high quality and reliable delivery for products that
are highly customized and suffer from low, uneven demand.

Integration and Testing. We provide a wide range of services, from component
assembly (Level 0 Services) to full system integration services (Level 5
Services) for enclosures with backplanes, power supplies, thermal management
assemblies and active boards completely assembled, wired and fully functionally
tested. Our assembly services allow our customers to rapidly bring their
products to market at reduced costs, utilizing advanced manufacturing and
testing technology. Our engineers continuously evaluate our ongoing
manufacturing and assembly processes and recommend improvements to reduce costs,
improve quality and shorten lead times. We offer comprehensive in-house testing,
airflow analysis, safety agency approvals, and EMI/RFI compliance, as well as
shock, vibration, FCC and environmental compliance. Each product is subjected to
a battery of tests that verify the performance of every component.

Our Electro-Mechanical Products

We manufacture a wide range of electro-mechanical subsystems, which are either
combined to produce large electronic products or sold separately. Our products
include enclosures, racks, thermal management systems, backplanes, power
supplies, PCBAs and cabling. We believe that the combination of our extensive
manufacturing services capabilities, coupled with our ability to provide a wide
range of high quality electro-mechanical subsystems provides us a competitive
advantage in the EMS industry.

Enclosures. We are a leading global manufacturer of enclosures and racks for the
electronics industry. We have an integrated global network of approximately 35
enclosure manufacturing and integration facilities with operations in the
Americas, Europe and Asia. We believe this manufacturing infrastructure for
integrated enclosure solutions is unequaled in the industry and allows us to
better serve the international needs of our global electronics OEM customers.

Electronic enclosures are steel, aluminum or plastic cabinets that organize and
configure individual electronic components and house, protect and insulate the
entire electronics system. We manufacture a complete range of standard and
custom enclosure products including subracks, racks, indoor and outdoor cabinets
and cases. Our custom enclosure products are developed in coordination with our
customers and typically are incorporated into an integrated manufacturing
solution that includes our and third party components and a range of value-added
design, manufacturing, assembly and test services. Products are marketed, when
appropriate, under the APW brand name.

Thermal Management. We manufacture and market thermal management products under
the APW and McLean brand names. Thermal management products cool and protect
vital electronic components housed within an electronic system. These products
are of particular importance in highly complex communications and networking
systems, which generate a high level of heat, require exacting heat dissipation
capabilities, and are located in a wide range of physical environments. Products
include air conditioners, heat exchangers, filter fan packages, AC and DC
motorized impellers, fan assemblies, centrifugal blowers and packaged blowers.

Backplanes. We manufacture a wide range of standard and custom backplanes for
integration into our electronics enclosure systems. Backplanes are complex,
multi-layered printed circuit boards (a circuit for an electronic apparatus made
by depositing conductive material in continuous paths from terminal to terminal
on an insulating surface) that are used in an electronic system to interconnect
various components. Our ability to offer custom manufactured backplanes to our
OEM customers provides us with a competitive advantage in securing full system
assembly contracts. We manufacture boards for backplanes in the United Kingdom,
including boards to Versa Module Eurocard ("VME") standards and compact
Peripheral Component Interconnect ("PCI") standards. VME refers to a bus
standard developed by Motorola and others that is widely used in industrial,
commercial and military applications. PCI refers to a local bus standard
developed by Intel Corporation that is used on most PCs and newer versions of
the Macintosh Computer.

Power Supplies. We manufacture a complete range of fault-tolerant power supplies
for electronics systems. Our power supply products range from 20 to 1200 watts
with either AC or DC input and single or multiple output. The majority of our
power supplies are developed in cooperation with our customers to meet their
power supply requirements.

Printed Circuit Board Assemblies. As a complement to our vertically integrated
manufacturing strategy, we manufacture complete PCBAs. Generally, we do not
produce PCBAs separately, but rather integrate them with other components to
provide finished products or subsystems.

CHANGE TO APW'S CAPITAL STRUCTURE--THE REVERSE SHARE SPLIT

On August 20, 2002, our Board of Directors adopted a resolution to amend our
capital structure to effect a four-for-one reverse share split of our common
shares. By unanimous written consent dated September 11, 2002, our shareholders
approved the reverse share split. The amendment will become effective on
November 28, 2002 (the "Effective Date"). Prior to the reverse share split, we
had 1,303,030 shares outstanding and 1,515,151 authorized common shares. We have
an option plan that may issue up to 151,515 options (up to 37,878 options after
the reverse share split). We have reserved 60,606 common shares for any exercise
of the warrants issued to shareholders of our predecessor and we also have the
ability to issue up to 325,758 shares and designate the terms. After the reverse
share split, the number of shares reserved for exercise of the warrants and
available for issuance and designation will be 15,151 shares and 81,439.5
shares, respectively.

Upon the Effective Date, approximately 357 of the 440 registered warrant holders
who own warrants to acquire three or fewer common shares will cease to be
holders of APW warrants, thus permitting us to deregister the warrants under the
Exchange Act because we will have fewer than 300 registered holders of the
warrants.

The text of the shareholder resolution effecting the reverse share split is as
follows:

"that the Company shall effect the four-for-one reverse share split such that
each four Common Shares of the Company shall become one Common Share and the
Company will issue fractional shares (but not fractional warrants) in accordance
with such formula and the authorised share capital of the Company comprising
1,515,151 Common Shares of par value US$0.02 each and 325,758 Undesignated
Shares of par value US$0.02 each be and is hereby consolidated into 378,787.75
Common Shares of par value US$0.08 each and 81,439.5 Undesignated Shares of par
value US$0.08 each."

Payment of dividends

We have never paid dividends. We cannot give any assurance that we will become
profitable enough to allow for the payment of any dividends. Our current or
future debt or that of any of our subsidiaries may make payment of dividends or
redemption of the warrants less probable. We have no present intention to pay
any dividends.

Repurchase of 401(k) Plan Warrants

We are also purchasing 5,640 warrants from the APW Ltd. 401(k) Plan on or about
November 15, 2002. See "Redemption of 401(k) Warrants." The percentages of
ownership of officers, directors and affiliates will not change in any material
way from the ownership shown under "Beneficial Ownership of the Warrants."

Interests of Officers and Directors

Other than fractional warrants and the 401(k) plan redemption, we will not
purchase any post reverse share split shares or warrants from any of our
officers, directors or affiliates.

Warrant Ownership

The following table shows information about the beneficial ownership of our
warrants by each of our directors, principal executive officers, and all
executive officers and directors as a group following (a) the reverse share
split and (b) the redemption of warrants from the 401(k) plan. There are no
known 5% or more warrant holders. The Business Address and Telephone for each
Executive Officer and Director is 2 Church Street, Hamilton, Bermuda and N22
W23685 Ridgeview Parkway West, Waukesha, WI 53188-1013, (262) 523-7600.

BENEFICIAL OWNERSHIP OF THE WARRANTS

No. of Warrants Percentage of Beneficial
Named Executive Officers and Directors Beneficially Owned Ownership of Warrants
-------------------------------------- ------------------ ---------------------

Richard G. Sim, Chairman, President and
Chief Executive Officer, Director 251 1.7%
Christopher S. Brothers, Deputy Chairman
and Director 0 *
Richard D. Carroll, Vice President and
Chief Financial Officer 1 *
Susan M. Hrobar, Vice President, North
American Operations 0 *
Thomas F. Giordano, Vice President, Global
Supply Chain 0 *
Kash Pandya, Vice President, Europe and
Asia and South America Operations 0 *
Todd A. Adams, Controller 0 *
Michael F. Gasick, Treasurer 0 *
Anthony W. Asmuth III, Assistant Secretary 0 *
W. Peter A. Douglas, Director 0 *
Michael P. Harmon, Director 0 *
Stephen A. Kaplan, Director 0 *
J. Richard Budd, Director 0 *
Toni J. Smith, Director 0 *
- -
All directors and executive
officers, 14 persons 252 1.7%
=== ====

*less than 1% of the outstanding based upon 15,151 warrants assumed to be
outstanding after the reverse share split.

REASONS FOR THE REVERSE SHARE SPLIT AND CONSEQUENCES TO WARRANT HOLDERS

Purpose of the reverse share split

Purpose

The sole purpose of the transaction is to reduce our ongoing costs of furnishing
information to warrant holders and complying with the requirements of the
Exchange Act by permitting the Company to terminate its registration under the
Exchange Act. The warrants are currently registered under the Exchange Act.
Registration of the warrants under the Exchange Act may be terminated upon our
application to the SEC if the warrants are held by fewer than 300 holders. If
the Exchange Act registration for the warrants is terminated as a result of the
reverse share split, the amount of information publicly available to the
remaining warrant holders of APW would be significantly reduced, and this could
adversely affect any potential trading markets in the warrants and the market
value for any remaining warrants. Generally, securities firms are likely to give
less attention to companies that do not file reports with the SEC. As a result,
the market price for the warrants may be lower than it would otherwise be. The
reduced flow of information may also cause the market prices of the warrants
that remain outstanding to be more volatile.

Background

We have not sought, and have not received, any proposals from any unaffiliated
persons since emergence from Chapter 11 for the merger or consolidation of the
Company, for the sale or other transfer of all or any substantial portion of the
Company's assets, or for the purchase of securities of the Company that would
enable the holder thereof to exercise control of the Company. In the past two
years, the Board of Directors of the COmpany and the Executive Officers have not
received any formal offer for the Company. In October 2001, we retained Credit
Suisse First Boston Corporation ("CSFB") to act as our financial adviser. CSFB
was retained to advise and assist our Board of Directors with the following: (i)
analyzing and evaluating the business, operations and financial position of the
Company; (ii) performing valuation analysis and structuring and planning a sale
or other disposition of all or a substantial amount of our assets; (iii)
negotiating the terms and conditions of the possible sale or other disposition
of our assets; and (iv) evaluating alternatives to a sale or other disposition
of our assets and the financial implications thereto. Our main objective in
retaining CSFB was to explore opportunities to sell all or a substantial amount
of our assets. At that time, CSFB informally indicated to us that third parties
believed the amount of our debt exceeded the fair market value of any proposal.
The CSFB engagement was before the bankruptcy filing, and since the July 31,
2002 emergence no offers have been received or solicited.

Reasons

We incur significant costs in being a public company. We spend at least $250,000
annually to:

. prepare, print and file with the SEC periodic reports under the
Exchange Act,

. prepare, print, file and mail to shareholders a proxy statement in
connection with the annual shareholders meeting, and

. complete the annual audit of our financial statements for inclusion in
our public filings.

Most of these expenses will be eliminated if we are no longer subject to the
reporting requirements of the Exchange Act.

The Board of Directors has decided that this is the appropriate time to
eliminate the ongoing costs of SEC reporting. Since our emergence from Chapter
11 bankruptcy proceedings, no public market for our common shares or warrants
exists. For these reasons, the Board of Directors decided to eliminate our
recurring costs of complying with the SEC reporting requirements. Management
also believes that continuing operations as a non-reporting company is currently
the Company's best option available for the reasons delineated above.

Effects on the warrant holders

Section 5.2 of the Warrant Agreement provides for an adjustment to the number of
warrants and the exercise price of the warrants upon the occurrence of a reverse
share split. After the four-for-one reverse share split, the warrant exercise
price will be increased by a multiplier of four and the number of shares
obtainable upon exercise of the warrants will be decreased to one-quarter of the
number of pre-split warrants. Warrant holders who are required to

accept a cash payment in lieu of a fractional warrant in the reverse share split
will receive $4.20 per share pre-reverse split or $16.80 per share post-reverse
split. The calculation of the redemption value of the warrants for repurchase of
fractional interests is the same price as that assigned to the warrants in
connection with the Chapter 11 proceedings and approved by the U.S. Bankruptcy
Court. Warrant holders would otherwise most likely find that they are unable to
sell their fractional warrants as there is no established trading market for the
warrants. No warrant holder will receive more than $16.79 in cash in lieu of
receipt of a fractional warrant in connection with the reverse share split.

Shareholders have access to our public filings on the SEC's web site at
http://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001111938.

This reverse share split is advantageous in that it provides for a payment for
any fractional interests which provides an immediate means of liquidity for an
illiquid security. It is disadvantageous in that fractional interests will not
have the right to exercise during the remaining term, but will receive $4.20 per
share pre-reverse split. If you hold a number of warrants that adjusted for the
reverse split continues as a whole number, you are not economically advantaged
or disadvantaged.

Fairness of the Reverse Share Split

Our Board of Directors has concluded that the reverse share split is the most
expeditious and economical way of changing our status from that of a reporting
company to that of a more closely held, non-reporting company. Additionally, our
Board of Directors believes that the reverse share split is fair to and in the
best interests of the Company and its unaffiliated shareholders.

The Board of Directors considered the reverse share split at a meeting held on
August 20, 2002 at which all Directors were present. The Board is comprised of
seven members, only one of whom is an officer. The Board did not create a
committee to evaluate this or select an independent director to specially
consider the reverse share split. At that meeting, the Board of Directors
unanimously determined that it was in our best interests to terminate our SEC
reporting obligations. The Board of Directors considered alternatives to the
proposed reverse share split, including an issuer tender offer. The Board of
Directors considered an issuer tender offer as a means of "going private," but
rejected that alternative because there could be no assurance that it would
reduce the number of our warrant holders to fewer than 300. As a result, the
Board of Directors concluded that the best solution for us would be to effect a
reverse share split. By consent dated September 11, 2002, our shareholders also
unanimously approved the reverse share split. However, as a warrant holder, you
are not entitled to vote on the reverse share split pursuant to the provisions
of the Company's Bye-Laws and the laws of Bermuda, under which the Company is
organized.

The Board of Directors believes in its business judgment that the reverse share
split is substantively and procedurally fair to all warrant holders because:

. the reverse share split gives warrant holders holding fewer than four
warrants the opportunity to liquidate their holdings at a premium
without incurring brokerage costs, particularly given the relatively
illiquid market for the warrants;

. we will pay to the resulting fractional warrant holders an amount
equal to the fair market value of their pre-split warrants as of the
time the warrants were issued, which amount was approved as part of
our bankruptcy proceedings;

. between the date hereof and the Effective Date of the reverse share
split, the holders of fewer than four warrants, who do not wish to
give up their ownership interest in us, will have an opportunity to
exercise the warrants owned by them so that the warrant holder will
not otherwise be cashed out as a result of the reverse share split;

. between the date hereof and the Effective Date of the reverse share
split, warrant holders holding four or more warrants may divide or
otherwise adjust their existing holdings so as to be cashed out with
respect to some or all of their warrants as a result of the reverse
share split;

. the reverse share split is being effected in accordance with all of
the requirements under Bermuda law and the Company's charter
documents; and

. the reverse share split has been unanimously approved by our outside
Directors and all shareholders.

The Warrant Agreement contemplates the possibility of a share split and provides
the required adjustment, which is being made via the transaction. We did not
obtain a fairness opinion or appraisal from an independent committee or an
unaffiliated representative to negotiate the terms of the transaction on behalf
of the shareholders or warrant holders. The Board of Directors chose not to do
so because the cost of obtaining a fairness opinion or appraisal or of hiring an
unaffiliated representative would be prohibitively high given the small number
of warrants that will be cashed out in the reverse share split. The total
expected payment to be made for fractional warrants cashed out is less than
$250,000. In light of the small size of this payment, the Board of Directors did
not seek a fairness opinion or appoint an unaffiliated representative in
conjunction with the reverse share split. A fairness opinion would have cost
several times the value of the transaction. The Board of Directors also decided
that requiring approval of the transaction by a majority of warrant holders
would be administratively burdensome, especially because warrant holders with
small holdings would not likely make an effort to vote. The Board of Directors
believes that the added cost of soliciting such warrant holders would be
prohibitively high and, warrant holder approval is not required by law or by the
terms of any governing documents on the warrants. The shareholders unanimously
approved the reverse share split. Notwithstanding the lack of these procedural
safeguards, the Board of Directors believes that it has acted in the best
interests of our shareholders and that the Board of Directors' fairness
determination and approval of the transaction has been procedurally fair.

Because of the wide variety of factors the Board of Directors considered in
determining the substantive and procedural fairness of the reverse share split,
taken as a whole, the Board of Directors did not find it practical to assign
relative weights to any factors that it considered in deciding that the
transaction is fair and in the best interests of the unaffiliated warrant
holders. Because there is no market for the warrants, the Board did not consider
the current market price or the historic market price as a factor. Also, net
book value was not considered a factor because the exercise price of the
warrant is significantly above the current fair market value. In addition, the
Board did not attempt to calculate going concern value or liquidation value. The
Board is not aware of any other purchase price paid for a warrant and,
therefore, was unable to consider that as a factor. If any factor assisted the
Board of Directors in its determination of the fairness of the transaction, the
Board of Directors did not assign a relative weight to that factor and did not
make a determination as to why a particular factor should be assigned any
weight.

Except for Mr. Sim, none of the directors is expected to receive cash for
warrant holdings as a result of the reverse share split.

Conduct of APW's Business After the Reverse Share Split

After the reverse share split, we intend to terminate the registration of the
warrants under the Exchange Act by filing a Form 15 with the SEC. Effective
immediately upon filing the Form 15, our duty to file periodic and current
reports with the SEC will terminate. Ninety days after filing the Form 15, we
will no longer have to comply with the proxy and information statement rules
under the Exchange Act and our officers, directors and shareholders owning more
than 10% of the common shares will no longer have to file reports of their
purchases and sales pursuant to the provisions of the Exchange Act. Similarly,
90 days after filing the Form 15, our directors, executive officers and
shareholders owning more than 10% of our common shares will no longer be
prohibited from making short sales of APW's common shares and they will no
longer have to return to us any profits they might make on a purchase and sale
or sale and purchase of common shares within six months. This change will save
us money.

After the reverse share split, the number of issued common shares will decrease
from 1,303,030 to 325,757.5. Because we do not have information on Cede & Co.
nominee holders (or "street name"), we are unable to determine the number of
warrants that will remain outstanding after the reverse share split. The terms
and relative rights of our outstanding equity will remain the same after the
reverse share split.

Par Value

As a result of the reverse share split, the par value of our common shares will
increase from US$0.02 to US$0.08 per share.

Issuance of Certificates and Payment for Fractional Warrants

Promptly, but generally within a week, after the Effective Date of the reverse
share split, record warrant holders will receive a certificate representing an
outstanding warrant to evidence ownership of the reduced whole number of new
warrants, if applicable, and cash for any fractional warrant interest either
originally issued on July 31, 2002 or from the reverse share split will be paid.
Nominee warrant holders will receive replacement certificates and cash for their
fractional warrants within two weeks of when the record warrant holders receive
the same. If

you hold warrants to acquire fewer than four common shares immediately before
the reverse share split you will have the right only to receive cash in lieu of
the fractional warrants to which you would otherwise be entitled. If you hold
more than four existing warrants, but which number of warrants is not evenly
divisible by four, you will have the right to receive one new warrant for each
four warrants for shares you hold and the right to receive cash in lieu of the
fractional warrant to which you would otherwise be entitled. We, or our transfer
agent, will send to you, in lieu of such fractional warrant, a cash payment
equal to $4.20 per warrant for each pre-split warrant that you held immediately
prior to the reverse share split (or $16.80 per warrant on a post reverse share
split basis).

Financing of the Reverse Share Split

The Board of Directors estimates that the total cost for payment of the
fractional warrant interests resulting from the reverse share split and the
redemption of 401(k) shares will be less than $250,000 and, in addition, we will
incur approximately $30,000 in transaction fees and expenses as follows:

Independent Auditors $ 1,000
Legal Counsel $ 25,000
Printing and Mailing $ 1,000
Transfer Agent $ 2,000
Other Expenses $ 1,000
--------
$ 30,000

We will pay these expenses from our existing working capital.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE SHARE SPLIT

The following is a summary of the material federal income tax consequences of
the reverse share split to holders of warrants. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), regulations, rulings and
judicial decisions currently in effect, all of which are subject to change. The
summary does not address all aspects of federal income taxation that may apply
to a warrant holder because of his particular circumstances, and it does not
discuss any special rules that may be applicable to some types of investors (for
example, estates, trusts, individuals who are not citizens or residents of the
United States, foreign corporations, insurance companies, regulated investment
companies, tax-exempt organizations and dealers in securities). The discussion
assumes throughout that warrant holders have held the warrants subject to the
reverse share split as capital assets at all relevant times. The summary does
not cover the applicability and effect of any state, local or foreign tax laws
on the reverse share split, and warrant holders should accordingly consult their
own tax advisors for information about the state, local and foreign tax
consequences of the transaction.

THE FOLLOWING DISCUSSION SUMMARIZING CERTAIN FEDERAL TAX CONSEQUENCES IS BASED
ON CURRENT LAW. WARRANT HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX EFFECTS OF THE REVERSE SHARE SPLIT IN
LIGHT OF THEIR INDIVIDUAL CIRCUMSTANCES.

If you receive cash in lieu of fractional warrants and do not receive any
warrants as a result of the reverse share split (because you have warrants to
acquire fewer than four pre-split common shares), you will be treated as
receiving cash as payment in exchange for your fractional warrants, and you will
recognize a capital gain or loss in an amount equal to the difference between
the amount of cash you received and the adjusted basis of your fractional
warrants surrendered for cash.

If you receive only warrants in exchange for your existing warrants as a result
of the reverse share split and do not receive payment for any fractional
warrants, you will not recognize any gain or loss. The adjusted tax basis of
your new warrants will be the same as the adjusted tax basis of your existing
warrants. The holding period of the new warrants received as a result of the
reverse share split will be the same as the holding period of your existing
warrants.

If you receive both new warrants and a cash payment in lieu of fractional
warrants, your new warrants will have an aggregate basis for computing gain or
loss equal to the aggregate basis of your old warrants immediately prior to the
reverse share split reduced by the amount of proceeds you receive in lieu of
your fractional warrants and increased by any gain you recognized on those
fractional warrants.

The reverse share split will be tax free to APW under the Code. APW will not
recognize any gain or loss as a result of the reverse share split. There will
not be any other material tax consequences to APW from the transaction. The tax
consequences of the reverse share split to affiliates of APW who are warrant
holders will be the same to those affiliates as they are to other warrant
holders. There will be no material tax consequences from the reverse share split
to affiliates who are not warrant holders of APW.

REDEMPTION OF 401(K) WARRANTS

Under the Plan, we are obligated to issue approximately 5,640 warrants to our
401(k) Plan. The APW 401(k) Plan is a tax-qualified retirement plan subject to
the Employee Retirement Income Security Act of 1974 ("ERISA"). ERISA prohibits
the acquisition and holding of "employer securities" unless the securities are
deemed to constitute "qualifying employer securities." The warrants would
constitute an "employer security" within the meaning of 407(d)(1) of the ERISA,
but might not satisfy the definition of a "qualifying employer security" under
section 407(d)(5) of the ERISA because of the lack of a trading market. To avoid
a possible ERISA violation, the Company would make a cash payment to the 401(k)
Plan in lieu of the warrants that the 401(k) Plan would otherwise receive. The
amount of the payment is based upon the $4.20 per warrant value approved by the
Bankruptcy Court and the total cash payment to the 401(k) Plan is less than
$25,000. The redemption is expected to occur on October 31, 2002. The Board
considered the fairness of the repurchase and the reverse split for warrants as
separate issues. See "Fairness of the Reverse Share Split." For a discussion on
factors, please see "Fairness of the Reverse Share Split."

However, the 401(k) Plan's trustee is concerned that, because these
warrants are not exchange-listed securities, the 401(k) Plan may not be able to
legally hold them. If we issue the warrants to the 401(k) Plan, the trustee may
seek to distribute them to its individual members. Such a distribution would be
adverse to our interests as it would substantially increase the number of record
holders of warrants and possibly subject us to the SEC reporting obligations
described above.

The following table shows information about warrants beneficially owned as of
August 31, 2002 in the 401(k) Plan by each of our directors, and principal
executive officers, and all executive officers and directors as a group.

The warrants of officers beneficially owned through our 401(k) Plan will be
redeemed for cash, regardless of whether the officer owns more than four
warrants. These redemptions will be at the same $4.20 pre-split price used to
cash out fractional interests in connection with the reverse share split. The
Business Address and Telephone for each Executive Officer and Director is 2
Church Street, Hamilton, Bermuda and N22 W23685 Ridgeview Parkway West,
Waukesha, WI 53188-1013, (262) 523-7600.

No. Warrants
Beneficially Owned No. of
in 401(k) Plan Warrants
Name and Address (Pre Reverse Share Split) (Post Split)*
---------------- ------------------------- -------------
Named Executive Officers
and Directors
Richard G. Sim 69 0
Christopher S. Brothers 0 0
Richard D. Carroll 6 0
Susan M. Hrobar 6 0
Thomas F. Giordano 6 0
Kash Pandya 0 0
Todd A. Adams 6 0
Michael F. Gasick 0 0
Anthony W. Asmuth III 0 0
W. Peter A. Douglas 0 0
Michael P. Harmon 0 0
Stephen A. Kaplan 0 0
J. Richard Budd 0 0
Toni J. Smith 0 0
-- -
All Executive Officers and
Directors 93 0
== =

- -------------
* All warrants will be redeemed in order to avoid ERISA law issues.

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth all of our current directors and executive
officers, their ages, and the offices they hold as of September 1, 2002.
Executive officers and employees serve at the discretion of the Board of
Directors. All directors hold office until our next annual meeting of
shareholders and until their successors have been duly elected and qualified.
The Business Address and Telephone for each Executive Officer and Director is 2
Church Street, Hamilton, Bermuda and N22 W23685 Ridgeview Parkway West,
Waukesha, WI 53188-1013, (262) 523-7600.

Country of
Name Age Position Citizenship
---- --- -------- -----------

Richard G. Sim 58 Chairman, President and Chief UK
Executive Officer and Director

Christopher S. Brothers 36 Deputy Chairman and Director US
Richard D. Carroll 39 Vice President and Chief Financial US
Officer

Susan M. Hrobar 47 Vice President, North American US
Operations
Thomas F. Giordano 51 Vice President, Global Supply Chain US
Kash Pandya 39 Vice President, Europe and Asia and UK
South America Operations
Todd A. Adams 31 Controller US
Michael F. Gasick 37 Treasurer US
Anthony W. Asmuth III 60 Assistant Secretary US
W. Peter A. Douglas 46 Director Barbados
Michael P. Harmon 33 Director US
Stephen A. Kaplan 43 Director US
J. Richard Budd 50 Director US
Toni J. Smith 43 Director UK

Richard G. Sim-Chairman, President and Chief Executive Officer; Director. Mr.
Sim was elected President and Chief Operating Officer of APW Ltd.'s predecessor,
Applied Power Inc., in 1985, Chief Executive Officer in 1986 and Chairman of the
Board in 1988. From 1982 through 1985, Mr. Sim was a General Manager in the
General Electric Medical Systems Business Group. He is also a director of IPSCO
Inc. and Oshkosh Truck Corporation.

Christopher Brothers-Deputy Chairman, Director. Mr. Brothers is currently a
Managing Director of Oaktree Capital Management, LLC and has been a senior
member of its principal investments group since joining the organization in
1996. Prior to joining Oaktree, Mr. Brothers worked at the New York headquarters
of Salmon Brothers Inc., where he served as a Vice President in the Mergers and
Acquisitions group. Prior to 1992, Mr. Brothers was a Manager in the Valuation
Services group of Price Waterhouse. Mr. Brothers received his MBA in Finance and
a BA in Accounting from Michigan State University. Mr. Brothers currently serves
on the board of directors of National Mobile Television, Inc.; Caminus
Corporation; Power Measurement, Inc.; Cherokee International, LLC; and Xantrex
Technology, Inc.

Richard D. Carroll-Vice President and Chief Financial Officer. Mr. Carroll was
named VP and Chief Financial Officer in April 2001. Most recently, he served as
President of the Company's thermal management product line from November 2000 to
April 2001. Mr. Carroll was appointed Vice President--Finance of Applied Power
in January 2000. Previously, he served as Financial Leader--Electronics during
all of 1999. During 1998, Mr. Carroll was appointed Treasurer and Controller of
Applied Power Inc. From 1996 to 1997 he was the Corporate Controller of Applied
Power Inc. Mr. Carroll is a Certified Public Accountant.

Susan M. Hrobar-Vice President, North American Operations. Ms. Hrobar has been
the Vice President, North American Operations since August 2002. Prior to that,
Ms. Hrobar was VP, Human Resources. Previously she was named Vice
President--Communications of Applied Power Inc. in January 2000 and had
continued in that capacity with APW Ltd. Ms. Hrobar joined Applied Power in 1994
and was the finance leader for the APITECH division until 1996 and from 1996 to
1998 the finance leader for the Enerpac

division. From 1998 to 2000, Ms. Hrobar was the finance leader for the
Industrial business segment. Ms. Hrobar is a Certified Public Accountant.

Thomas F. Giordano-Vice President, Global Supply Chain. Mr. Giordano was named
VP, Global Supply Chain in August 2001. Prior to that, from 1999 to 2001 he was
the APW Global Supply Chain Leader. From 1996 to 1999 he was the leader for
Global Sourcing--Tools and Supplies of Applied Power.

Kash Pandya-Vice President, Europe and Asia and South America Operations. Mr.
Pandya was named VP, Europe & Asia Operations in August 2001. Prior to that, he
was the Operations Leader, Europe & Asia since joining Applied Power in 1998.
From 1996 to 1998 he was at Caradon Plc in various operational roles, most
recently as the Director of European Operations.

Todd A. Adams-Corporate Controller. Mr. Adams was named Corporate Controller of
Applied Power Inc. in May 2000 and has continued as Corporate Controller with
APW Ltd. Mr. Adams joined Applied Power Inc. in 1998 as Manager of Financial
Planning & Analysis. Mr. Adams was previously employed with IDEX Corporation,
from 1996 to 1998 in accounting and financial roles. Mr. Adams is a Certified
Public Accountant.

Michael F. Gasick-Treasurer. Mr. Gasick joined APW Ltd. in July 2001 as
Treasurer. Mr. Gasick was previously employed with Rockwell International as
Director of International Finance from 1999 to July 2001 and with Ralston Purina
Company as Director of Corporate Finance from 1994 to 1999. Mr. Gasick is a
Chartered Financial Analyst.

Anthony W. Asmuth III-Assistant Secretary. Mr. Asmuth is a partner in the law
firm of Quarles & Brady LLP, Milwaukee, Wisconsin, having joined that firm in
1989. Quarles & Brady LLP performs legal services for the Company and certain of
its subsidiaries.

W. Peter A. Douglas--Director. Mr. Douglas is General Manager of ATI
International SRL (Barbados subsidiary of supplier of 3D graphics and multimedia
technology for personal computers and consumer electronics). Mr. Douglas is a
director of Bico, Limited.

Stephen A. Kaplan-Director. Mr. Kaplan is the leader of Oaktree Capital
Management, LLC's principal investments group and the co-portfolio manager of
the Principal Opportunities Fund II. Mr. Kaplan joined Oaktree in 1995, having
previously served as Managing Director of TCW and portfolio manager of The
Principal Fund. Prior to joining TCW in 1993, Mr. Kaplan was a partner with the
law firm of Gibson, Dunn & Crutcher and responsible for that firm's East Coast
bankruptcy and workout practice. During his career as an attorney, Mr. Kaplan
specialized in transactions involving the purchase and sale of companies
undergoing financial restructurings. Mr. Kaplan holds a B.S. in Political
Science from the State University of New York at Stony Brook and a J.D. from the
New York University School of Law, where he was a member of the Annual Survey of
American Law. Mr. Kaplan currently serves on the board of directors of Cherokee
Investor Partners, LLC; CollaGenex Pharmaceuticals; Forest Oil Corporation;
General Maritime Corporation; Millennium Rail Holdings, LLC; National Mobile
Television; New Bristol Farms, Inc; Regal Entertainment Group; and Stratagene
Holding Corporation.

Toni J. Smith-Director. Mr. Smith has been a Corporate Director, Corporate
Restructuring Unit, Specialised Lending Services of The Royal Bank of Scotland
since April 1991 and Head of Asset Purchasing, Specialised Lending Services,
since October 1997.

Michael P. Harmon-Director. Mr. Harmon is currently a Senior Vice President of
Oaktree Capital Management, LLC and has been a member of its principal
investments group since joining Oaktree in 1997 following graduation from
Harvard Business School. From 1992 through 1995, Mr. Harmon served as a senior
consultant in the Corporate Recovery Consulting Group of Price Waterhouse. Prior
to that, he was an analyst in the distressed credits group at Society
Corporation. Mr. Harmon holds a B.A. in Economics from McGill University and an
M.B.A. from Harvard Business School. Mr. Harmon currently serves on the board of
directors of Cherokee Investor Partners, LLC; Millenium Rail Holdings, LLC; and
Universal Preservation Technologies.

J. Richard Budd, III--Director. Mr. Budd joined the Board of Directors in
July 2002. Since January 2001, Mr. Budd has been a partner in the
consulting firm Marotta Gund Budd & Dzera, LLC. From October 1998 to

January 2001, Mr. Budd served as a consultant to troubled companies and to
creditors of troubled companies. Mr. Budd served as Senior Vice President of
Metallurg, Inc., an international specialty metals producer, from January 1996
to October 1998.

See "Certain Relationships and Related Transactions."

During the last five years, to the best of our knowledge, none of the persons
listed above, and neither APW nor any of APW's affiliates, has been convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.

COMMON SHARE OWNERSHIP

As of September 1, 2002, the following hold our common shares.

Number of Common Number of Common
Shares Shares Percentage
Name (Pre-Split) (Post-Split) ----------
---- ----------- ------------
Investor
--------

O'Connor Distressed Trading Master Limited 21,581 5,395.25 1.7%
JPMorgan Chase Bank 105,323 26,330.75 8.1%(5)
BNP Paribas 28,185 7,046.25 2.2%
Societe Generale 28,185 7,046.25 2.2%
West Register (Investments) Limited 301,287 75,321.75 23.1%(6)
Bank of America NA 84,555 21,138.75 6.5%(7)
US Bank National Association 23,205 5,801.25 1.8%
GSC Partners and Affiliates 104,529 26,132.25 8.0%(8)
William E. Simon & Sons Special Situation Partners 16,773 4,193.25 1.2%
Perry Principals LLC 26,145 6,536.25 2.0%
Oaktree Funds and Affiliates 563,262 140,815.50 43.2%(9)
--------- ---------- -----
Subtotal 1,303,030 325,757.50 100.0%

Officers and Directors
----------------------
Richard G. Sim (1) 1,006 251 *
Christopher S. Brothers (2) 0 0 *
Richard D. Carroll (1) 6 1 *
Susan M. Hrobar 0 0 *
Thomas F. Giordano 0 0 *
Kash Pandya 0 0 *
Todd A. Adams 0 0 *
Michael F. Gasick 0 0 *
Anthony W. Asmuth III 0 0 *
W. Peter A. Douglas 0 0 *
Michael P. Harmon (2) 0 0 *
Stephen A. Kaplan (2) 0 0 *
J. Richard Budd 0 0 *
Toni J. Smith (3) 0 0 *
All directors and executive --------- ---------- -----
officers as a group (14 persons) 1,304,042(4) 326,009.50 100.0%

*Less than 1%
(1) Assumes exercise of warrants held by such officer. All warrants are
exercisable.
(2) Director nominated by Oaktree Funds and Affiliates. The shares held by
Oaktree Funds and Affiliates are listed above and not repeated herein.
(3) Director nominated by West Register (Investments) Limited. The shares held
by West Register (Investments) Limited are listed above and not repeated herein.
(4) Assumes exercise of warrants.
(5) 380 Madison Avenue, 9th floor, New York, NY 10017
(6) 42 St. Andrew Square, Edinburgh, DH2 2YE Scotland, UK
(7) 555 S. Flower St., 11th floor, Los Angeles, CA 90071
(8) 500 Campus Drive, Suite 220, Florham Park, NJ 07932
(9) 333 S. Grand Avenue, 28th Floor, Los Angeles, CA 90071

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH SHAREHOLDERS AND
OFFICERS AND DIRECTORS

Investor Rights Agreement

We and our shareholders have entered into an Investor Rights Agreement, dated
July 31, 2002. We have filed that document as an exhibit in our filings with the
SEC. The agreement among other things:

. restricts the transfer of shares and provides certain rights of first
offer to purchase shares, co-sale rights and drag along rights,

. provides limited pre-emptive rights for shareholders,

. specifies votes for an initial public offering and parameters for
selling shares in the offering,

. provides demand and piggyback registration rights to certain
shareholders and specifies terms applicable to holdbacks, registration
procedures, expenses and participation,

. provides that certain actions or steps require supermajority
shareholders and/or Board of Director approval, and

. specifies certain provisions for shareholders to vote and nominate all
directors.

With regard to director nominees, Oaktree currently has the right to nominate or
remove three directors (out of the seven directors serving on the Board of
Directors). West Register, an affiliate of The Royal Bank of Scotland, has the
right to nominate one director and, if its holdings increase to between 30% to
35%, it would have the right to nominate two directors, and if its holdings
increase to over 35% it could nominate three directors. In addition, the other
shareholders, exclusive of Oaktree and West Register, currently have the right
to nominate one director. Mr. Sim, the Company's Chairman, CEO and President,
and Mr. Peter Douglas, a Barbadian director, also continue as directors absent
removal by a supermajority shareholder vote. The shareholders have agreed to
vote their shares to effect these nominee rights. The Company and the
shareholders listed above are parties to the Investor Rights Agreement.

Holders of warrants are not subject to the terms or conditions of the Investor
Rights Agreement.

Other Transactions

There have been no transactions that have occurred within the past two years
between the Company, its executive officers or directors or any person
controlling the Company on one hand and the affiliates of the Company on the
other hand. Except for a loan to Richard G. Sim to partially finance a residence
in London, United Kingdom, and interest paid on debt owned by certain
shareholders and the bankruptcy and effecting the bankruptcy plan upon the
shareholders and creditors, there have been no transactions within the past two
years between APW, its executive officers or directors or any person controlling
APW. The balance on the loan from the Company to Mr. Sim is currently $500,000
and bears interest at 6.81%. It is due the earlier of July 15, 2031 or upon the
sale, transfer or conveyance of the property.

WARRANT AGENT

Our transfer and distribution agent is American Stock Transfer & Trust Company.
For additional information, please contact Joseph Wolf, American Stock Transfer
& Trust Company, 59 Maiden Lane, Plaza Level, New York, NY 10038. Her phone
number is (718) 921-8143.

HISTORICAL FINANCIAL AND RELATED INFORMATION

The financial and related information is set forth elsewhere
in this Information Statement.

. The audited financial statements for the fiscal years ended August 31,
2000 and 2001 set forth on pages 36 through 64 of APW's Form 10-K for
the fiscal year ended August 31, 2001.

. Management's Discussion and Analysis of Financial Condition and
Results of Operations for the fiscal year ended August 31, 2001 set
forth on pages 15 through 32 of APW's Form 10-K for the fiscal year
ended August 31, 2001.

. Management's Discussion and Analysis of Financial Condition and
Results of Operations for the three and nine months ended May 31, 2002
set forth on pages 22 through 24 of APW's Form 10-Q for the quarter
ended May 31, 2002.

. The unaudited financial statements in APW's Form 10-Q for the fiscal
quarter ended May 31, 2002.

. Ratio of earnings to fixed charges.

. Calculation of book value per share as of August 31, 2002.

. Quantitative and qualitative disclosures about market risk are set
forth on pages 32 through 33 of APW's Form 10-K for the fiscal year
ended August 31, 2001.

Recent Events

As the Company emerged from Chapter 11 bankruptcy proceedings in July 2002,
the Company began preparing its financial statements for its year ended August
31, 2002. In connection with the fiscal 2002 audit, in September 2002 the
Company and its auditors noted that the cash account of one of the Company's
indirect U.S. subsidiaries located in California was not fully reconciled. The
inability of the plant controller to reconcile the cash account was initially
thought to be the result of a recent change in the cash lock-box arrangements as
well as a change recently made to the subsidiary's bank account reconciliation
procedures. The California plant controller asked for additional time to
research the imbalance and provide the reconciliation to the Company and its
auditors. Subsequently, members of the Company's Corporate financial department
reviewed several attempts by the plant controller to reconcile the cash account.
Throughout this process, members of the Company's Corporate financial department
grew increasingly skeptical of the local plant controller's ability to reconcile
the account and to provide an adequate explanation.

After repeated inquiries by the Company's Corporate Controller of the local
plant controller, in early October 2002, the local plant controller contacted
the U.S. subsidiary's senior operating officer and admitted that he had
misstated the financial statements of the subsidiary. The operating manager
promptly called the Company's headquarters. The Company immediately began an
internal investigation overseen by the Company's Chief Financial Officer. The
local controller admitted to intentionally misstating the expenses over a period
of four years, beginning in 1999 and continuing through the fiscal year ended
August 31, 2002. The local controller admitted that he was able to hide the
misstatements from the California general manager by creating false source
documents and other records and hide the adjustments from the Company's internal
reviews and the Company's independent auditors. In October 2002, the controller
was terminated. The Company's investigation continued to determine the amount of
the misstatements as well as determine the periods in which the misstatements
occurred. The Company also began a review to determine whether money or other
assets had been stolen or misappropriated.

This review began in early October and ended in late October 2002.

In effecting these misstatements, the controller, in general, increased the
assets and decreased the liabilities of the U.S. subsidiary over the last four
years. The former controller has acknowledged that he alone manipulated the
financial statements and stated that he did not intend to reap any personal
financial gains from the manipulation. The Company, as a result of the internal
investigation, concluded that the controller had acted alone in manipulating the
financial statements and that no money or other assets had been misappropriated.
The Company's independent auditors also tested the Company's determinations as
to the amounts and timing of the misstatements and agreed with the Company's
internal investigation results.

The Company has informed its Board of Directors and Audit Committee of this
situation through separate calls and through meetings of the Audit Committee and
the Board of Directors.

In addition to the adjustments arising from the U.S. subsidiary, the
Company has determined that other adjustments to its financial statements should
be made as a result of actions of the plant controller at a foreign subsidiary
located in Scotland.

Early in fiscal 2002, the Company became concerned about the financial
controls at one of its subsidiaries in Scotland after the implementation of a
new ERP system. The new ERP computer system was installed and operating in May
2001. The Company became concerned during a monthly financial close that was
completed while the then controller was out on medical leave in August 2001. The
concern surrounded inadequate account reconciliations of balance sheet accounts
in prior months. After a preliminary analysis the Company determined that
certain balance sheet accounts had not been correctly reconciled with
appropriate supporting documentation. The Scotland controller was then
terminated for poor performance in September 2001 prior to the Company's
knowledge of any misstatements. The Company performed detailed reviews of the
balance sheet accounts throughout fiscal 2002, with the review complicated by
the fact that the relevant financial data required to assess the timing and
amount of the errors was contained in two different ERP computer systems. In
August 2002, the Company completed its internal investigation of the
misstatements and concluded that the previous controller at the subsidiary had
overstated the profits through a combination of unintentional but improper
accounting procedures (i.e., not properly implementing the appropriate period
cut-off procedures and not accruing for all liabilities) and apparent willful
misstatements. After completing the internal review, the Company engaged Ernst &
Young in early October 2002 to conduct a review of the Scotland site as well as
the findings of the Company's internal review. Ernst & Young validated the
Company's findings as to the amounts of the misstatements and the periods in
which the misstatements occurred. No assets appear to have been misappropriated
by the former Scotland employee.

The results of the Scotland investigation were communicated to the
Company's independent auditors, PricewaterhouseCoopers LLP, as well as the
Company's Audit Committee and Board of Directors in October 2002. The aggregate
financial misstatement by the plant controller in Scotland overstated pre-tax
profits by $4.3 million in the fiscal year ended August 31, 2001.

The required adjustments for both of the misstatements had been reflected
in the Company's financial statements for the eleven months ended July 31, 2002.
The Company has decided to restate its annual financial statements for fiscal
1999 through fiscal 2001 as well as each of the quarters for the nine months
ending May 31, 2002. Through the nine months of fiscal 2002 (May 31, 2002), the
Company had reported a pre-tax loss of $571.2 million.

The Company expects to amend its Form 10-K for the fiscal year ended 2001
and Forms 10-Q for the first three quarters of 2002 to reflect these
adjustments. The Company is also performing a comprehensive review of its
internal controls. The Audit Committee is currently requesting information on
the alternatives for expanding the Company's outsourced internal audit services.
As a result, the Company determined that the pre tax loss of $571.2 million
for the nine months ended May 31, 2002 was understated by $2.3 million, the pre
tax loss of $257.9 million for the twelve months ended August 31, 2001 was
understated by $6.5 million, the pre tax profit of $32.3 million for the twelve
months ended August 31, 2000 was overstated by $1.3 million, and the pre tax
profit of $30.5 million for the twelve months ended August 31, 1999 were
overstated by $1.3 million, respectively. The Company is restating its
financials and including a copy of the restated financial statements for warrant
holders to review.

The Company has undertaken a thorough review of its internal controls and has
performed a detailed review of all issues related to these accounting events.
After consideration of these matters, the Company and its Board have determined
to retain the offer to warrant holders on the terms presented and as originally
approved by the Board.

Copies of our revised financial information is set forth below.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

AND FINANCIAL STATEMENT SCHEDULE

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS (1) Page
---------------------------------------------- -----

Report of Independent Accountants................................ 18

Consolidated Statements of Operations
For the years ended August 31, 2001, 2000 and 1999............ 19

Consolidated Balance Sheets
As of August 31, 2001 and 2000................................ 20

Consolidated Statements of Shareholders' Equity
and Comprehensive Income (Loss)
For the years ended August 31, 2001, 2000 and 1999............ 21

Consolidated Statements of Cash Flows
For the years ended August 31, 2001, 2000 and 1999............ 22

Notes to Consolidated Financial Statements....................... 23-54

INDEX TO FINANCIAL STATEMENT SCHEDULE (2)
-----------------------------------------

Report of Independent Accountants on Financial Statement Schedule
Schedule II--Valuation and Qualifying Accounts...................

(1) The consolidated financial statements referred to above have been restated
as described in Notes 1 and 18.

(2) All other schedules are omitted because they are not applicable, not
required or because the required information is included in the
Consolidated Financial Statements or notes thereto.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of APW Ltd.:

In our opinion, the consolidated financial statements listed in the index
incorporated by reference under Item 14(a)(1) on page 32 present fairly, in all
material respects, the financial position of APW Ltd. and its subsidiaries at
August 31, 2001 and 2000, and the results of their operations and their cash
flows for each of the three years in the period ended August 31, 2001 in
conformity with accounting principles generally accepted in the United States
of America. 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 of these statements in
accordance with auditing standards generally accepted in the United States of
America, which 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, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Notes 1 and 18 to the consolidated financial statements, the
Company restated its August 31, 2001, 2000 and 1999 consolidated financial
statements.

PricewaterhouseCoopers LLP

Milwaukee, Wisconsin

October 1, 2001, except for Notes 1 and 18 which are as of

November 4, 2002 and except for information in Note 3 as it

relates to the goodwill impairment and for information

in Note 17 which are as of December 13, 2001

APW LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Years Ended August 31,
----------------------------------
As Restated
----------------------------------
2001 2000 1999
---------- ---------- ----------
Net sales............................................... $1,267,684 $1,239,542 $1,055,338
Cost of products sold................................... 1,043,036 917,321 764,852
---------- ---------- ----------
Gross profit......................................... 224,648 322,221 290,486
Engineering, selling and administrative expenses........ 226,709 201,829 187,991
Amortization of intangible assets....................... 194,342 23,918 20,876
Corporate reorganization expenses....................... -- 6,541 --
Restructuring charges................................... 16,981 -- --
Loss on sale of subsidiary.............................. 2,667 -- --
---------- ---------- ----------
Operating earnings (loss)............................ (216,051) 89,933 81,619
Other expense (income)
Net financing costs.................................. 43,762 52,657 52,857
Other expense (income), net.......................... 2,418 4,967 (1,786)
---------- ---------- ----------
Earnings (loss) before income tax expense............... (262,231) 32,309 30,548
Income tax expense (benefit)............................ (25,704) 53,595 10,883
---------- ---------- ----------
Net earnings (loss) before extraordinary item........... (236,527) (21,286) 19,665
Extraordinary loss on early retirement of debt,
net of income tax benefit of $1,250................... -- (2,083) --
---------- ---------- ----------
Net earnings (loss)..................................... $ (236,527) $ (23,369) $ 19,665
========== ========== ==========
Basic and diluted earnings (loss) per share:
Earnings (loss) per share--before extraordinary item. $ (5.96) $ (0.55) $ 0.51
Extraordinary loss, net of tax benefit............... -- (0.05) --
---------- ---------- ----------
Earnings (loss) per share............................ $ (5.96) $ (0.60) $ 0.51
========== ========== ==========
Weighted average common shares outstanding........... 39,664 39,077 38,825
========== ========== ==========

The accompanying notes are an integral part of these financial statements

APW LTD.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

August 31,
----------------------
As Restated
----------------------
2001 2000
---------- ----------

ASSETS
Current assets
Cash and cash equivalents................................................ $ 6,190 $ 712
Accounts receivable, net................................................. 112,948 118,456
Inventories.............................................................. 130,937 155,381
Prepaid expenses......................................................... 14,213 11,066
Deferred income taxes.................................................... 16,650 12,035
---------- ----------
Total current assets................................................. 280,938 297,650
Property, plant and equipment............................................... 477,915 359,007
Less: Accumulated depreciation........................................... (222,886) (181,975)
---------- ----------
Net property, plant and equipment.................................... 255,029 177,032
Goodwill, net............................................................... 679,225 673,060
Other intangibles, net...................................................... 27,616 9,262
Other assets................................................................ 58,524 57,035
---------- ----------
Total assets......................................................... $1,301,332 $1,214,039
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings.................................................... $ 603,353 $ --
Trade accounts payable................................................... 119,904 151,675
Accrued compensation and benefits........................................ 30,126 31,696
Income taxes payable..................................................... 33,859 70,068
Other current liabilities................................................ 40,701 40,274
---------- ----------
Total current liabilities............................................ 827,943 293,713
Long-term debt.............................................................. 18,096 236,370
Deferred income taxes....................................................... -- 9,580
Other long-term liabilities................................................. 45,375 49,504
Contingencies (Note 16)..................................................... -- --
Shareholders' equity
Class A common stock--$0.01 par value per share; authorized 250,000,000
shares; issued and outstanding, less contingent shares, 40,042,207 and
39,204,150 shares, respectively........................................ 400 392
Share premium............................................................ 669,772 638,409
Retained earnings (accumulated deficit).................................. (233,765) 2,806
Accumulated other comprehensive loss..................................... (26,489) (16,735)
---------- ----------
Total shareholders' equity........................................... 409,918 624,872
---------- ----------
Total liabilities and shareholders' equity........................... $1,301,332 $1,214,039
========== ==========

The accompanying notes are an integral part of these financial statements

APW LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)

(In thousands)

Years Ended August 31, 2001, 2000 and 1999 (As Restated)
-------------------------------------------------------------------------
Class A Retained Accumulated
Common Stock Earnings Other Total
------------- Share (Accumulated Comprehensive Combined Shareholders'
Shares Amount Premium Deficit) Loss Equity Equity
------ ------ -------- ------------ ------------- --------- -------------

Balances at September 1, 1998..................... -- $ -- $ -- $ -- $ (2,102) $ 174,884 $ 172,782
Net earnings for the year....................... -- -- -- -- -- 19,665 19,665
Currency translation adjustments................ -- -- -- -- (8,390) -- (8,390)
------ ---- -------- --------- -------- --------- ---------
Total comprehensive income.................... 11,275
---------
Investments by (distributions to) Applied Power
Inc., net...................................... -- -- -- -- -- (11,981) (11,981)
------ ---- -------- --------- -------- --------- ---------
Balances at August 31, 1999....................... -- -- -- -- (10,492) 182,568 172,076
Net loss for the year........................... 2,806 (26,175) (23,369)
Currency translation adjustments................ -- -- -- -- (6,243) -- (6,243)
---------
Total comprehensive loss...................... (29,612)
---------
Reclassification of Applied
Power Inc.'s net investment.................... 39,197 392 156,001 -- -- (156,393) --
Retention of APW Ltd. allocated debt by
Applied Power Inc.............................. -- -- 482,350 -- -- -- 482,350
Exercise of stock options....................... 7 -- 58 -- -- -- 58
------ ---- -------- --------- -------- --------- ---------
Balances at August 31, 2000....................... 39,204 392 638,409 2,806 (16,735) -- 624,872
Net loss for the year........................... -- -- -- (236,527) -- -- (236,527)
Currency translation adjustments................ -- -- -- -- (8,031) -- (8,031)
Derivative instrument fair market value
adjustment..................................... -- -- -- -- (1,935) -- (1,935)
Reclassification of derivative losses to
earnings....................................... -- -- -- -- 44 -- 44
Cumulative effect of change in accounting
principle for derivatives and hedging
activities, net of tax......................... -- -- -- -- 168 -- 168
---------
Total comprehensive loss...................... (246,281)
---------
Issuance of shares for acquisition.............. 755 7 24,993 -- -- -- 25,000
Issuance of warrants............................ -- -- 4,800 -- -- -- 4,800
Dividends on preferred stock of a subsidiary.... -- -- -- (44) -- -- (44)
Exercise of stock options....................... 83 1 1,570 -- -- -- 1,571
------ ---- -------- --------- -------- --------- ---------
Balances at August 31, 2001....................... 40,042 $400 $669,772 $(233,765) $(26,489) $ -- $ 409,918
====== ==== ======== ========= ======== ========= =========

The accompanying notes are an integral part of these financial statements

APW LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Years Ended August 31,
------------------------------
As Restated
------------------------------
2001 2000 1999
--------- -------- ---------

Operating activities
Net earnings (loss)......................................... $(236,527) $(23,369) $ 19,665
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization.............................. 247,975 58,866 50,942
Amortization of financing fees............................. 2,294 620 620
(Gain) loss from sale of assets............................ (161) 708 (805)
Loss on sale of subsidiary................................. 2,667 -- --
(Benefit) provision for deferred income taxes.............. (22,599) (3,083) 4,649
Restructuring charges...................................... 16,981 -- --
Investment write-off....................................... 9,800 -- --
Extraordinary loss on early retirement of debt............. -- 3,333 --
Changes in operating assets and liabilities, excluding the
effects of business acquisitions and disposals:
Accounts receivable.................................. 44,824 (21,156) 741
Inventories.......................................... 39,893 (49,442) (7,176)
Prepaid expenses and other assets.................... (5,496) (4,116) (2,168)
Trade accounts payable............................... (40,946) 49,266 8,079
Income taxes......................................... (42,886) 40,308 (4,026)
Other liabilities.................................... (35,478) (15,874) 5,004
--------- -------- ---------
Net cash provided by (used in) operating activities........... (19,659) 36,061 75,525
Investing activities
Proceeds on sale of property, plant and equipment.......... 3,287 2,579 9,571
Proceeds on the sale of subsidiary, net of cash sold....... 1,782 -- --
Additions to property, plant and equipment................. (88,521) (45,924) (43,017)
Investments and acquisitions of businesses, net of cash
acquired................................................. (241,546) (13,304) (401,891)
Other investing activities................................. (4,231) (3,411) --
--------- -------- ---------
Net cash used in investing activities......................... (329,229) (60,060) (435,337)
Financing activities
Investments by (distributions to) Applied Power Inc., net,
including debt allocations............................... -- 32,988 359,764
Net short term borrowings.................................. 4,620 -- --
Principal repayments on long-term debt..................... (148,245) (53,387) (24,004)
Principal borrowings on long-term debt..................... 582,647 -- --
Net repayments of commercial paper......................... (51,152) -- --
Net receivables financed................................... (20,908) 3,459 37,079
Debt financing costs....................................... (7,700) -- --
Proceeds from sale leaseback financing..................... -- 26,144 --
Other financing activities................................. 801 57 900
--------- -------- ---------
Net cash provided by financing activities..................... 360,063 9,261 373,739
Effect of exchange rate changes on cash....................... (5,697) 849 (606)
--------- -------- ---------
Net increase (decrease) in cash and cash equivalents.......... 5,478 (13,889) 13,321
Cash and cash equivalents--beginning of year.................. 712 14,601 1,280
--------- -------- ---------
Cash and cash equivalents--end of year........................ $ 6,190 $ 712 $ 14,601
========= ======== =========

The accompanying notes are an integral part of these financial statements

APW LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1--Restatement

APW Ltd. (the "Company") has determined that accounting improprieties
occurred in fiscal 2002, 2001, 2000 and 1999 at one U.S. subsidiary and in
fiscal 2001 at one UK subsidiary. These accounting improprieties resulted in
the overstatement of assets (primarily cash and inventory) and income and the
understatement of liabilities (primarily trade accounts payable and accrued
compensation and benefits) and expense. As a result, the consolidated financial
statements as of August 31, 2001 and 2000 and for the years ended August 31,
2001, 2000 and 1999 as well as the interim results for the years ended August
31, 2001 and 2000 have been restated. The restated consolidated financial
statements as of August 31, 2001 and 2000 and for the years ended August 31,
2001, 2000 and 1999 are included herein. Restated condensed financial statement
information for the interim periods in the years ended August 31, 2001 and 2000
have been included in Item 8 of the Form 10-K/A. Restated condensed financial
statement information for the interim periods ended November 30, 2001,
February 28, 2002 and May 31, 2002 have been included in Form 10-Q/As.

The impact of the restatements on net income (loss) for fiscal 2001, 2000
and 1999 is as follows (dollars in millions):

2001 2000 1999
------- ------ -----

Net income (loss), as previously reported.... $(232.1) $(22.6) $20.4
Impact of restatement........................ (4.4) (0.7) (0.8)
------- ------ -----
Net income (loss), as restated............... $(236.5) $(23.3) $19.6
======= ====== =====

A summary of the effects of the restatements are set forth in Note 18.

As a result of the restatement for the year ended August 31, 2001, the
Company believes that it would have been in default of certain debt covenants
as of August 31, 2001, unless the Company had obtained waivers or further
amendments to its debt covenants in connection with the September 27, 2001 or
December 13, 2001 amendments (see Note 17--"Subsequent Events, Liquidity and
Management's Plans"). Accordingly, the Company has classified borrowings under
the Revolving Multi-Currency Credit Agreement and the U.K. Facility Agreement
as a current liability as of August 31, 2001 in the restated consolidated
financial statements.

Note 2--Summary of Significant Accounting Policies

Description of Business and Distribution Transaction: APW Ltd. is a leading
global provider of Technically Enabled Manufacturing Services ("TEMS"), focused
on designing and integrating large electronic products. APW Ltd. has the
capabilities to design and manufacture various subsystems for electronic
products, including enclosures, thermal management systems, backplanes, power
supplies, printed circuit board assemblies (PCBAs), and cabling, either as
integrated custom systems or as individual subsystems. In addition, we provide
a wide range of integration services to our customers, including product
design, supply chain management, manufacturing, assembly, testing and drop-ship
services. Our focus is large infrastructure solutions, such as wireless base
stations and switches, enterprise hardware and internet server enclosures.

On January 26, 2000, Applied Power Inc.'s ("Applied Power", APW Ltd.'s
predecessor company and now named Actuant Corporation, "Actuant"), board of
directors authorized management to pursue a spin-off of the Electronics
business (the "Distribution") to more effectively capitalize on the
opportunities in the electronics market. On July 7, 2000, Applied Power's board
of directors approved the Distribution, which became effective on July 31,
2000, with shareholders of Applied Power common stock as of the July 21, 2000
record date receiving one share of APW Ltd. common stock for every Applied
Power share owned. Prior to the Distribution, APW Ltd. was reorganized as a
Bermuda company.

Basis of Presentation: The consolidated financial statements have been
prepared in United States ("U.S.") Dollars in accordance with accounting
principles generally accepted in the United States of America. The presentation
of fiscal 2000 and 1999 assumes that the Electronics businesses of Applied
Power that were contributed to APW Ltd. in connection with the Distribution
were organized as a separate legal entity. Generally, only assets and
liabilities of the ongoing Applied Power Electronics business segment that were
transferred to APW Ltd. prior to the Distribution are included in the
Consolidated Balance Sheets. In addition, the fiscal 2000 and 1999 consolidated
financial statements of APW Ltd. include allocations of certain Applied Power
corporate assets, liabilities and expenses as discussed below.

The fiscal 2000 and 1999 financial statements assume that Applied Power had
provided certain general and administrative services to APW Ltd. including
administration, finance, legal, tax, treasury, information systems, corporate
communications and human resources prior to the Distribution. The cost for
these services has been allocated to APW Ltd. by Applied Power based upon a
formula that includes sales, operating profit, assets and headcount. Management
of APW Ltd. believes that the allocation of cost for these services is
reasonable. These allocations were $9.0 million and $7.4 million in 2000 and
1999, respectively. Since the Distribution, APW Ltd. has performed these
general and administrative services using its own resources or purchased
services and is responsible for the costs and associated expenses. Prior to the
Distribution, certain assets and liabilities related to the above general and
administrative services have been allocated by Applied Power to APW Ltd. on a
basis consistent with the related expenses.

Applied Power's historical practice had been to incur indebtedness for its
consolidated businesses at the parent company level or at a limited number of
subsidiaries, rather than at the operating company level, and then to centrally
manage various cash functions. Accordingly, through July 31, 2000, historical
amounts include debt and related interest expense allocated to APW Ltd. from
Applied Power based on the portion of Applied Power's investment in APW Ltd.,
which is deemed to be debt. This allocation has generally been based upon a
cash flow model which details the historical uses of debt proceeds by APW Ltd.
and the deemed debt repayments by APW Ltd. based on free cash flow. Management
believes that the allocation of corporate debt and related interest expense for
the historical periods is reasonable. In conjunction with the Distribution, the
consolidated debt of Applied Power was realigned between APW Ltd. and Applied
Power. Through an additional investment by Applied Power on July 31, 2000, a
certain portion of APW Ltd.'s outstanding debt was assumed by Applied Power.

The allocation methodologies followed in preparing the fiscal 2000 and 1999
consolidated financial statements may not necessarily reflect the results of
operations, cash flows, or financial position of APW Ltd. in the future, or
what the results would have been had APW Ltd. been a separate, independent
public entity for all periods presented.

Principles of Consolidation: The fiscal 2001 consolidated financial
statements include the accounts of APW Ltd. and its subsidiaries.The
consolidated fiscal 2000 and 1999 financial statements of APW Ltd. include the
accounts of the related Electronics businesses of Applied Power prior to the
Distribution and of APW Ltd. and its subsidiaries subsequent to the
Distribution. APW Ltd. consolidates companies in which it owns or controls more
than fifty percent of the voting shares. Investments in partially owned
affiliates are accounted for by the equity method when APW Ltd.'s interest
exceeds twenty percent. The results of companies acquired or disposed of during
the fiscal year are included in the consolidated statements from the effective
date of acquisition or until the date of disposal. All significant
interdivisional balances, transactions and profits have been eliminated in
consolidation.

Cash Equivalents: APW Ltd. considers all highly liquid investments with
original maturities of 90 days or less to be cash equivalents.

Inventories: Inventories are comprised of material, direct labor and
manufacturing overhead, and are stated at the lower of cost or market. Cost is
determined using the first-in, first-out method for inventories.

Property, Plant and Equipment: Property, plant and equipment are stated at
cost. Plant and equipment are depreciated over the estimated useful lives of
the assets, ranging from two to thirty years, under the straight-line method
for financial reporting purposes and either the straight-line or regulatory
methods for income tax

purposes. Capital leases and leasehold improvements are amortized over the life
of the related asset or the life of the lease, whichever is shorter.
Expenditures for maintenance and repairs not expected to extend the useful life
of an asset beyond its normal useful life are expensed as incurred.

Goodwill and Other Intangible Assets: Goodwill is amortized on a
straight-line basis over periods of fifteen to forty years. Other intangible
assets, consisting primarily of purchased patents, trademarks, non-compete
agreements and customer lists, are amortized over periods from two to forty
years.

Long-Lived Assets: APW Ltd. assesses the impairment of long-lived assets
periodically in accordance with the provisions of Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed of". APW Ltd. also
assesses the impairment of enterprise level goodwill periodically in accordance
with the provisions of Accounting Principles Board (APB) Opinion No. 17,
"Intangible Assets". An impairment review is performed whenever events or
changes in circumstances indicate that the carrying value may not be
recoverable. Factors APW Ltd. considers important which could trigger an
impairment review include, but are not limited to, significant underperformance
relative to expected historical or projected future operating results,
significant changes in the manner of use of the acquired assets or the strategy
for APW Ltd.'s overall business, or significant negative industry or economic
trends. In determining whether an impairment of long-lived assets or goodwill
has occurred, APW Ltd. compares estimated undiscounted cash flows to the
related asset book value. When APW Ltd. determines that the carrying value of
long-lived assets exceeds estimated undiscounted cash flows, APW Ltd. measures
any impairment based on a projected discounted cash flow method using a
discount rate commensurate with the risk inherent in APW Ltd.'s current
business model.

Revenue Recognition: Revenue is recognized by the Company when all of the
following criteria are met: persuasive evidence of an arrangement exists;
delivery has occurred and ownership has transferred to the customer; the price
to the customer is fixed or determinable; and collectability is reasonably
assured. In December 1999, the Securities and Exchange Commission released
Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial
Statements". SAB 101 was effective for the Company in the fourth quarter of
fiscal 2001 and did not have a material effect on the Company's consolidated
financial statements.

Research and Development Costs: Research and development costs are expensed
as incurred. Such costs incurred in the development of new products or
significant improvements to existing products totaled approximately $5.1
million, $6.1 million and $5.7 million in fiscal 2001, 2000 and 1999,
respectively.

Financing Costs: Prior to the Distribution, net financing costs represent
APW Ltd.'s allocated portion of amounts incurred by Applied Power for interest
expense, financing fees, amortization of debt financing costs and accounts
receivable facility costs, net of interest and investment income earned. See
"Basis of Presentation" above for discussion of debt and interest allocation.
Subsequent to the Distribution, net financing costs represent APW Ltd.'s actual
amounts for interest expense, financing fees, amortization of debt financing
costs and accounts receivable facility costs, net of interest and investment
income earned.

Income Taxes: APW Ltd. uses the asset and liability method to record
deferred income tax assets and liabilities relating to the expected future
income tax consequences of transactions that have been recognized in APW Ltd.'s
financial statements. Under this method, deferred tax assets and liabilities
are determined based on the temporary differences between financial statement
carrying amounts and income tax bases of assets and liabilities using enacted
tax rates in effect in the years in which temporary differences are expected to
reverse. For further information, including discussion of the Tax Sharing and
Indemnification Agreement between APW Ltd. and Applied Power, see Note
11--"Income Taxes."

APW Ltd. is included in the consolidated U.S. income tax return of Applied
Power prior to the Distribution. Therefore, the provision for income taxes of
APW Ltd., through July 31, 2000, has been calculated as if APW Ltd. was a
stand-alone corporation filing a separate tax return.

Foreign Currency Translation: A significant portion of APW Ltd.'s sales,
income and cash flow is derived from its international operations. The
financial position and the results of operations of APW Ltd.'s foreign
operations are measured using the local or regional currency of the countries
in which they operate and are translated into U.S. dollars. Revenues and
expenses of foreign subsidiaries are translated into U.S. dollars at the
average exchange rate effective during the fiscal year. Although the effects of
foreign currency fluctuations are mitigated by the fact that expenses of
foreign subsidiaries are generally incurred in the same currencies in which the
sales are generated, the reported results of operations of APW Ltd.'s foreign
subsidiaries are affected by changes in foreign currency exchange rates and, as
compared to prior periods, will be higher or lower depending on the weakening
or strengthening of the U.S. dollar. In addition, a portion of APW Ltd.'s net
assets are based in its foreign subsidiaries and are translated into U.S.
dollars at the foreign currency rate in effect at the end of each period.
Accordingly, APW Ltd.'s equity and comprehensive income (loss) will fluctuate
depending upon the strengthening or weakening of the U.S. dollar versus other
currencies. Such currency translation amounts are included as part of the
balance of accumulated other comprehensive income (loss) in the accompanying
Consolidated Balance Sheets. Net gains (losses) resulting from foreign currency
transactions, included in "Other expense (income), net" in the Consolidated
Statements of Operations, amounted to ($2.1) million, ($3.4) million and $2.9
million for the years ended August 31, 2001, 2000 and 1999, respectively.

Foreign Currency Hedging and Derivative Financial Instruments: In June 1998,
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities,"
was issued which requires that an entity recognize derivative instruments,
including certain derivative instruments embedded in other contracts, as either
assets or liabilities and measure those instruments at fair value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. APW Ltd. adopted SFAS No. 133, as amended, on September
1, 2000. The adoption of SFAS No. 133 resulted in recording the cumulative
effect of the change in accounting principle for derivative and hedging
activity in other comprehensive income of $0.2 million.

The Company enters into derivative contracts, primarily interest rate swap
contracts, to protect the Company from the effect of an increase in interest
rates. The Company designates its derivatives based upon the criteria
established by SFAS No. 133. For a derivative designated as a fair value hedge,
the derivative gain or loss is recognized in earnings in the period of change
together with the offsetting loss or gain on the hedged item. For a derivative
designated as a cash flow hedge, the effective portion of the derivative's gain
or loss due to a change in fair value is initially recorded as a component of
other comprehensive income (loss) and subsequently reclassified into earnings
when the hedged exposure affects earnings. For a derivative designated as a
hedge of a net investment in a foreign operation, the gain or loss is recorded
as a component of other comprehensive income (loss) as part of the cumulative
translation adjustment. For a derivative not designated as a hedging
instrument, the derivative gain or loss is recognized in earnings in the period
of change.

Fair Value of Financial Instruments: The fair value of APW Ltd.'s cash and
cash equivalents, accounts receivable, accounts payable, short-term borrowings
and long-term debt approximated book value as of August 31, 2001 and 2000 due
to their short-term nature or, in the instance of long-term debt, the fact that
the interest rates approximated year-end market rates of interest. The fair
value of debt instruments is calculated by discounting the cash flow of such
obligations using the market interest rates for similar instruments.

Earnings (Loss) Per Share: Subsequent to the Distribution, basic earnings
per share is calculated by dividing the net loss by the weighted average common
shares outstanding. Fiscal 2001 and 2000 diluted earnings per share exclude the
effect of options to purchase approximately 1.3 million and 1.7 million shares
of common stock, respectively, because they would be anti-dilutive due to the
net loss in the respective fiscal years.

Warrants to purchase approximately 2.1 million shares of common stock were
outstanding as of August 31, 2001, but were not included in the computation of
diluted earnings (loss) per share because they would be anti-dilutive due to
the net loss for the year ended August 31, 2001.

Basic and diluted shares used to calculate earnings per share are the same
as the historical Applied Power basic shares outstanding for the period prior
to the Distribution. APW Ltd. used Applied Power basic shares outstanding for
the following reasons: i) upon the Distribution, each shareholder of Applied
Power common stock received an equivalent number of APW shares and; ii) there
was no potentially issuable common stock of APW Ltd. for the periods presented
prior to the Distribution.

The following table sets forth the computation of basic and diluted earnings
(loss) per share (fiscal 2001 and 2000 results include goodwill impairment,
restructuring and other charges, see Note 3--"Goodwill Impairment,
Restructuring and Other Charges");

(Dollars in thousands, except per share amounts):

As Restated
----------------------------
2001 2000 1999
Numerator: --------- -------- -------

Net earnings (loss) before extraordinary item................... $(236,527) $(21,286) $19,665
Extraordinary loss, net of tax.................................. -- (2,083) --
--------- -------- -------
Net earnings (loss) for basic and diluted earnings per share.... $(236,527) $(23,369) $19,665
========= ======== =======
Denominator:
Weighted average common shares outstanding for basic and diluted
earnings per share............................................ 39,664 39,077 38,825
--------- -------- -------
Basic and Diluted Earnings (Loss) Per Share:
Earnings (loss) per share before extraordinary item............. $ (5.96) $ (0.55) $ 0.51
Extraordinary loss, net of tax.................................. -- (0.05) --
--------- -------- -------
Earnings (loss) per share....................................... $ (5.96) $ (0.60) $ 0.51
========= ======== =======

Use of Estimates: The financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America,
which require management to make estimates and assumptions that affect the
reported amounts of assets, liabilities, revenues and expenses for the years
presented. They also affect the disclosure of contingencies. Actual results
could differ from those estimates and assumptions.

New Accounting Pronouncements: In June 2001, SFAS No. 141, "Business
Combinations" and SFAS No. 142, "Goodwill and Other Intangible Assets" were
issued. The statements eliminate the pooling-of-interests method of accounting
for business combinations and require that goodwill and certain intangible
assets not be amortized. Instead, these assets will be reviewed for impairment
annually with any related losses recognized in earnings when incurred. SFAS No.
141 is effective for APW Ltd. as of July 31, 2001. SFAS No. 142 will be
effective for the Company on September 1, 2002 for existing goodwill and
intangible assets. The Company is currently evaluating the impact of SFAS No.
142.

In June 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations"
was issued. SFAS No. 143 sets forth the financial accounting and reporting to
be followed for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs. SFAS No. 143
requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset retirement costs are
to be capitalized as part of the carrying amount of the long-lived asset.
Subsequently, the recorded liability will be accreted to its present value and
the capitalized costs will be depreciated. The Company is required to adopt
SFAS No. 143 on September 1, 2002. The Company is currently evaluating the
impact of SFAS No. 143.

its carrying value is not recoverable from its undiscounted cash flows, with
the recognized impairment being the difference between the carrying amount and
fair value of the asset. With respect to long-lived assets to be disposed of
other than by sale, SFAS No. 144 requires that the asset be considered held and
used until it is actually disposed of but requires that its depreciable life be
revised in accordance with APB Opinion No. 20, "Accounting Changes." SFAS No.
144 also requires that an impairment loss be recognized at the date a
long-lived asset is exchanged for a similar productive asset. The Company will
be required to adopt SFAS No. 144 on September 1, 2002. The Company is
currently evaluating the impact of SFAS No. 144.

Reclassifications: Certain prior year amounts have been reclassified to
conform with the fiscal 2001 presentation. Such reclassifications had no impact
on previously reported net earnings (loss).

Note 3--Goodwill Impairment, Restructuring and Other Charges

Fiscal 2001-

During fiscal 2001, APW Ltd. recognized pre-tax goodwill impairment,
restructuring and other charges totaling $225.0 million. The components of the
charges recorded during fiscal 2001 are as follows (dollars in millions):

Charges
-------

Facility closure costs:
Severance........................................................ $ 10.2
Lease exit costs................................................. 6.8
Equipment impairment............................................. 12.6
Other costs...................................................... 1.7
------
Total facility closure costs................................... 31.3
Goodwill impairment............................................... 166.9
Inventory and accounts receivable write-downs..................... 15.5
Investment write-off.............................................. 9.8
Credit facility amendment fees.................................... 1.5
------
Total pre-tax goodwill impairment, restructuring and other charges $225.0
======

Facility closure costs are recorded in the fiscal 2001 Consolidated
Statement of Operations as follows: 1) severance and lease exit costs totaling
$17.0 million are recorded as restructuring charges; 2) equipment impairment
charges of $12.6 million and other facility closure costs totaling $1.2 million
are recorded as cost of products sold; and 3) $0.5 million of other facility
closure costs are recorded as engineering, selling, and administrative costs.

Restructuring

In connection with the facility closure costs, management developed formal
plans to exit certain facilities and involuntarily terminate employees.
Management's plans to exit certain facilities included the identification of
duplicate manufacturing and sales facilities for closure and the transfer of
the related operations to other facilities. Management currently anticipates
that the facility closures and all related activities will be substantially
complete within one year of the commitment dates of the respective exit plans.

The following table summarizes the activity with respect to fiscal 2001
restructuring charges during fiscal 2001 (in millions, except employee data):

Severance Facilities Total
---------------- ---------- -------
Number
of
Employees Reserve Reserve Reserve
--------- ------- ---------- -------

Total reserve balance at August 31, 2000 -- $ -- $ -- $ --
Add: fiscal 2001charges................. 2,602 10.2 6.8 17.0
Less: fiscal 2001 utilization........... (2,315) (8.1) (1.6) (9.7)
------ ----- ----- -----
Ending balance at August 31, 2001....... 287 $ 2.1 $ 5.2 $ 7.3
====== ===== ===== =====

Goodwill and Equipment Impairment

In fiscal 2001, APW Ltd. performed an impairment assessment of long-lived
assets, which include property, plant and equipment, goodwill and other
intangible assets. The assessment was performed primarily due to a
deterioration of APW Ltd.'s operating results during fiscal 2001 and the
decision during fiscal 2001 to close certain facilities. As a result of the
assessment, APW Ltd. recorded a $166.9 million impairment charge to reduce the
carrying value of the goodwill and a $12.6 million impairment charge to reduce
the carrying value of equipment associated with closed facilities. The goodwill
impairment charge is recorded as a component of amortization of intangible
assets in the fiscal 2001 Consolidated Statement of Operations. The equipment
impairment charge is recorded as cost of products sold in the fiscal 2001
Consolidated Statement of Operations. Each charge was measured, in accordance
with the provisions of SFAS No. 121, based upon APW Ltd.'s estimated discounted
cash flows. The assumptions supporting these cash flows were determined using
APW Ltd.'s best estimates. The remaining long-lived assets will continue to be
depreciated and amortized over their remaining useful lives, which management
considers appropriate.

Other charges

During fiscal 2001, APW Ltd. recorded write-downs of inventory and accounts
receivable totaling $15.5 million, primarily as a result of the broad based
slow down in the technology sector during 2001. Inventory write-downs of $13
million are recorded as cost of products sold in the fiscal 2001 Consolidated
Statement of Operations and primarily relate to customer program modifications
resulting in excess components. Accounts receivable write-downs of $2.5 million
are recorded as an engineering, selling and administrative expense in the
fiscal 2001 Consolidated Statement of Operations and relate to accounts
receivables that were deemed uncollectable.

During fiscal 2001, APW Ltd. wrote-off a $9.8 million investment assumed
through a prior acquisition that became impaired. The write-off is recorded as
a component of engineering, selling and administrative expense in the fiscal
2001 Consolidated Statement of Operations.

In connection with the amendment of the Company's credit facilities, the
Company incurred $1.5 million of fees, of which $0.7 million was recorded as an
operating expense and $0.8 million was recorded as a financing cost.

Fiscal 2000-

Other charges

During fiscal 2000, Applied Power allocated to APW Ltd. a total of $6.5
million of fees and expenses associated with the Distribution transaction and
organizing APW Ltd. into a Bermuda company. Those fees and expenses were for
legal, accounting, tax and investment banking services incurred and are
classified under the caption "Corporate Reorganization Expenses" in the fiscal
2000 Consolidated Statement of Operations. In fiscal 2000, APW Ltd. incurred a
foreign currency loss of $3.3 million associated with Euro forward contracts.
This loss is recorded in the fiscal 2000 Consolidated Statement of Operations,
under the caption "Other expense (income) - net". Also, in fiscal 2000, a $40.0
million income tax provision was recorded as a result of APW Ltd. reorganizing
as a Bermuda company. This charge is recorded in the fiscal 2000 Consolidated
Statement of Operations, under the caption "Income tax expense". In fiscal
2000, a subsidiary of APW Ltd. paid a $3.3 million make-whole premium for the
early retirement of debt in anticipation of the Distribution transaction. This
charge is recorded in the fiscal 2000 Consolidated Statement of Operations as
an extraordinary loss, net of the $1.2 million tax benefit.

Note 4--Acquisitions and Divestiture

Fiscal 2001-

Acquisitions

On December 15, 2000, APW Ltd., through a wholly owned subsidiary, acquired
certain assets and assumed certain liabilities of Industria Metalurgica
Bagarolli Ltda. ("IMB") located in Campinas, Brazil. IMB specializes in the
design and manufacture of large indoor and outdoor enclosure systems, as well
as sub-assemblies and integration services, to the telecom and financial
services industries in South America. The purchase price totaled

$19.0 million, including fees and expenses, with future consideration becoming
payable during fiscal 2002 of $2.5 million to $5.5 million, depending on the
attainment of targeted revenue and earnings before interest, taxes,
depreciation and amortization levels. This acquisition was funded by borrowings
under APW Ltd.'s revolving credit facility. This acquisition was accounted for
using the purchase method and the results of operations of the acquired company
are included in the Consolidated Statement of Operations from the acquisition
date. Due to the immaterial impact of the transaction, pro forma financial
information has not been presented. Allocations of the purchase price resulted
in approximately $12.1 million of goodwill, to be amortized over 20 years
(consistent with APW Ltd. acquisitions of this size and nature), and is subject
to adjustment for any future consideration in excess of the minimum $2.5
million earn-out. As a result of the long-lived asset impairment assessment APW
Ltd. performed (see Note 3 - "Goodwill Impairment, Restructuring and Other
Charges"), the goodwill associated with the acquisition of IMB was fully
amortized during fiscal 2001.

On February 16, 2001, APW Ltd., through a wholly owned subsidiary, acquired
the majority of the assets and assumed certain liabilities of the Mayville
Metal Products Division ("Mayville") of Connell Limited Partnership. Mayville
specializes in the design, manufacture and integration of large outdoor
enclosures, primarily for the telecom industry. The purchase price consisted
of: 1) $225.0 million in cash (funded by borrowings under APW Ltd.'s revolving
credit facility); 2) 754,717 shares of APW Ltd. common stock, valued at
approximately $25.0 million, subject to adjustment depending on Mayville's 2001
calendar year net sales; and 3) assumed liabilities of $17.1 million. With this
acquisition, APW issued an aggregate of 1,509,434 shares of common stock of
which 754,717 are contingently returnable in the event Mayville's 2001 calendar
year net sales do not attain targeted sales. The contingently returnable shares
are not included in the aforementioned purchase price as of August 31, 2001 nor
are those shares used to calculate loss per share for fiscal 2001. This
acquisition was accounted for using the purchase method of accounting and the
results of operations of the acquired company are included in the Consolidated
Statement of Operations from the acquisition date. Allocations of the purchase
price resulted in approximately $208.6 million of goodwill and other
intangibles, to be amortized over periods not to exceed 40 years (consistent
with APW Ltd. acquisitions of this size and nature), and are subject to
adjustment for any earn-out.

The following unaudited pro forma data summarizes the results of operations
for the periods indicated as if the acquisition of Mayville had been completed
on September 1, 2000 and 1999, respectively. The pro forma data gives effect to
actual operating results prior to the acquisition and adjustments to cost of
products sold, engineering, selling and administrative expenses, interest
expense, depreciation, amortization, and income taxes. These unaudited pro
forma amounts do not purport to be indicative of the results that would have
actually been obtained if the acquisition had occurred on September 1, 2000 and
1999 or that may be obtained in the future (in millions, except per share data):

(Unaudited)
Year ended August 31,
--------------------
As Restated
--------------------
2001 2000
-------- --------

Net sales......................... $1,347.0 $1,393.0
Net loss before extraordinary item (243.6) (26.4)
Net loss.......................... (243.6) (28.5)
Basic and diluted loss per share.. $ (6.13) $ (0.66)

Divestiture

On November 20, 2000, APW Ltd. completed the sale of a subsidiary for a net
$1.7 million, which resulted in a net loss of $2.7 million.

Fiscal 2000-

Acquisitions

On January 28, 2000, the Company, through a wholly owned subsidiary,
acquired all of the outstanding stock of Metalade of Pennsylvania Inc.
("Metalade"). Metalade specializes in metal fabrication relating to electronics
enclosures. The initial purchase price totaled $8.7 million, including fees and
expenses. APW Ltd. paid the seller $1.4 million during fiscal 2001 based on the
attainment of targeted sales levels. Future consideration, not to exceed $3.6
million, is payable based on the attainment of targeted sales levels. The
acquisition was funded by borrowings under Applied Power credit facilities. The
acquisition has been accounted for using the purchase method and the results of
operations of the acquired company are included in the Consolidated Statements
of Operations from the acquisition date. Due to the immaterial impact of the
transaction, pro forma financial information has not been presented.
Allocations of the purchase price resulted in approximately $8.1 million in
goodwill, which is being amortized over 20 years (consistent with APW Ltd.
acquisitions of this size and nature). As a result of the long-lived asset
impairment assessment APW Ltd. performed (see Note 3 - "Goodwill Impairment,
Restructuring and Other Charges"), the goodwill associated with the acquisition
of Metalade was fully amortized during fiscal 2001.

On April 1, 2000, the Company, through a wholly owned subsidiary, acquired
all of the outstanding stock of Malcoe Enclosures Limited ("Malcoe"). Malcoe
specializes in the design and manufacture of shelters, large walk-in enclosures
generally used to house telecom equipment. The purchase price totaled $1.6
million, including fees and expenses. The acquisition was funded by borrowings
under Applied Power credit facilities. The acquisition has been accounted for
using the purchase method and the results of operations of the acquired company
are included in the Consolidated Statements of Operations from the acquisition
date. Due to the immaterial impact of the transaction, pro forma financial
information has not been presented. Allocations of the purchase price resulted
in approximately $1.4 million in goodwill, which is being amortized over 20
years (consistent with APW Ltd. acquisitions of this size and nature). As a
result of the long-lived asset impairment assessment APW Ltd. performed (see
Note 3--"Goodwill Impairment, Restructuring and Other Changes"), the goodwill
associated with the acquisition of Malcoe was fully amortized during fiscal
2001.

Fiscal 1999-

Acquisitions

On September 29, 1998, APW Ltd., through its wholly owned subsidiary, APW
Enclosure Systems Limited, accepted for payment all shares of Rubicon Group plc
("Rubicon") common stock which had been tendered pursuant to the APW Enclosure
Systems Limited tender offer (with a guaranteed loan note alternative) for all
outstanding shares of common stock at 2.35 pounds sterling per share and all
outstanding cumulative preferred shares at 0.50 pounds sterling per share. The
tendered common shares accepted for payment exceeded 90% of the outstanding
common shares on October 8, 1998, and APW Enclosure Systems Limited invoked
Section 429 of the UK Companies Act of 1985, as amended, to acquire the
remaining outstanding common shares of Rubicon. APW Enclosure Systems Limited
now owns all of the common shares of Rubicon. Rubicon is a leading provider of
electronic manufacturing services and engineered magnetic solutions to major
OEMs in the information technology and telecommunication industries. Cash paid
for Rubicon totaled $371.5 million, with the purchase price allocation
resulting in $340.6 million of goodwill, which is being amortized over 40 years
(consistent with APW Ltd. acquisitions of this size and nature). Funds for the
acquisition were provided through Applied Power's revolving credit facility.
The acquisition was recorded using the purchase method of accounting. The
operating results of Rubicon subsequent to September 29, 1998 are included in
the Consolidated Statements of Operations. As a result of the long-lived asset
impairment assessment APW Ltd. performed (see Note 3--"Goodwill Impairment,
Restructuring and Other Charges"), $17.5 million of goodwill associated with an
acquired facility was fully amortized during fiscal 2001.

The following 1999 unaudited pro forma data summarizes the results of
operations as if the acquisition of Rubicon had been completed on September 1,
1998, the beginning of APW Ltd.'s 1999 fiscal year. The pro forma data give
effect to actual operating results prior to the acquisition date and
appropriate adjustments to interest expense, goodwill amortization and income
tax expense. These unaudited pro forma amounts do not purport to be indicative
of the results that would have actually been obtained if the acquisition had
occurred on the date indicated above or that may be obtained in the future (in
millions, except per share data):

(Unaudited)
Year Ended
August 31,
1999
-----------
As Restated
-----------

Net sales............................. $1,080.0
Net earnings before extraordinary item 18.7
Net earnings.......................... 18.7
Basic and diluted earnings per share.. $ 0.48

In June 1999, APW Ltd., through a wholly owned subsidiary, acquired all of
the outstanding stock of Innovative Metal Fabrication, Inc. ("Innovative").
Innovative designs and manufactures technical environments used in electronic
assembly operations, as well as electronic gaming enclosures, in Grass Valley,
CA and Austin, TX. In May 1999, APW Ltd. also acquired certain assets of
Connector Technology, Inc. ("CTI") of Anaheim, CA. CTI manufactures custom
backplanes. The purchase price of the combined Innovative and CTI acquisitions
totaled approximately $13.0 million, including fees and expenses, and was
funded by borrowings under existing Applied Power credit facilities. Both
acquisitions have been accounted for using the purchase method and the results
of operations of the acquired companies are included in the Consolidated
Statements of Operations from their respective acquisition dates. Allocations
of the purchase price resulted in approximately $8.9 million of goodwill, which
is being amortized over lives ranging from 20 to 40 years (consistent with APW
Ltd. acquisitions of these sizes and nature). As a result of the long-lived
asset impairment assessment APW Ltd. performed (see Note 3--"Goodwill
Impairment, Restructuring and Other Charges"), $8.3 million of goodwill
associated with the Innovative acquisiton was fully amortized during fiscal
2001.

Note 5--Inventories

Inventories consisted of (dollars in thousands):

August 31,
------------------
As Restated
------------------
2001 2000
-------- --------

Raw material............ $ 73,427 $ 98,109
Work-in-progress........ 31,945 38,185
Finished goods.......... 39,591 30,437
-------- --------
Total inventories, gross 144,963 166,731
Less: inventory reserves (14,026) (11,350)
-------- --------
Total inventories.... $130,937 $155,381
======== ========

Note 6--Accounts Receivable Facility

As part of the Distribution (See Note 2--"Summary of Significant Accounting
Policies"), APW Ltd. assumed Applied Power's $150.0 million off-balance sheet
accounts receivable facility program. On April 4, 2001, the accounts receivable
facility (the "receivables facility") was amended to decrease the amount
available from $150.0 million to $80.0 million. The receivables facility was
further amended on May 15, 2001 to extend the agreement to May 14, 2002. At
August 31, 2001, $58.0 million of receivable interests were sold under this
facility.

Under the terms of the receivables facility, APW Ltd. and certain
subsidiaries (collectively, "Originators") sell trade accounts receivable to
Applied Power Credit Corporation ("APCC"), a wholly-owned, limited purpose
subsidiary of the Company. APCC is a separate corporate entity that sells
participating interests in its pool of accounts receivable to financial
institutions ("Purchasers"). The Purchasers, in turn, receive an ownership and
security interest in the pool of receivables. Participation interests in new
receivables generated by the Originators are purchased by APCC and resold to
the Purchasers as collections reduce previously sold participation interests.
The accounts receivable sold to Purchasers are reflected as a reduction of
receivables in the Consolidated Balance Sheets. APCC has no risk of credit loss
on such receivables as they are sold without recourse. The Company retains
collection and administrative responsibilities on the participation interests
sold as servicer for APCC and the Purchasers.

At August 31, 2001 and 2000, APW Ltd. accounts receivable were reduced by
$58.0 million and $78.9 million, respectively, representing receivable
interests sold under this program. Sales of trade receivables are reflected as
a reduction of accounts receivable in the accompanying Consolidated Balance
Sheets and the proceeds received, which are used to reduce debt, are included
in cash flows from financing activities in the accompanying Consolidated
Statements of Cash Flows.

APW Ltd. recorded discounts on the accounts receivable sold totaling $5.6
million, $7.6 million and $4.6 million for the fiscal years ended August 31,
2001, 2000 and 1999, respectively, which are included in net financing costs in
the accompanying Consolidated Statements of Operations.

Note 7--Leases

APW Ltd. leases certain facilities, computers, equipment and vehicles under
various lease agreements generally over periods of one to twenty years. Under
most arrangements, APW Ltd. pays the property taxes, insurance, maintenance and
expenses related to the leased property. Many of the leases include provisions
which enable APW Ltd. to renew the lease based upon the fair values on the date
of expiration of the initial lease.

Future obligations on non-cancelable operating leases in effect at August
31, 2001 are: $36.9 million in fiscal 2002; $26.3 million in fiscal 2003; $21.5
million in fiscal 2004; $18.3 million in fiscal 2005; $14.1 million in fiscal
2006 and $122.7 million thereafter.

Total rental expense under operating leases was $27.3 million, $17.4 million
and $17.1 million in fiscal 2001, 2000 and 1999, respectively.

Note 8--Debt Financing

(Dollars in thousands):

August 31,
-----------------
As Restated (2001)
-----------------
2001 2000
-------- --------

Borrowings under:
Revolving Multi-Currency Credit Agreement.. $535,467 $135,000
Commercial paper........................... -- 51,152
Floating rate unsecured loan notes......... 21,196 23,534
U.K. revolving credit agreement............ 57,986 24,970
Other...................................... 6,800 1,714
-------- --------
621,449 236,370
Less short-term borrowings................. 603,353 --
-------- --------
Long-term borrowings..................... $ 18,096 $236,370
======== ========

As a result of the restatement for the year ended August 31, 2001, the
Company believes that it would have been in default of certain debt covenants
as of August 31, 2001, unless the Company had obtained waivers or further
amendments to its debt covenants in connection with the September 27, 2001 or
December 13, 2001 amendments (see Note 17-"Subsequent Events, Liquidity and
Management's Plans"). Accordingly, the Company has classified borrowings under
the Revolving Multi-Currency Credit Agreement and the U.K. Facility Agreement
as a current liability as of August 31, 2001 in the restated consolidated
financial statements.

Prior to the Distribution, general borrowings allocated from Applied Power
were determined based on a model that allocated Applied Power's debt proceeds
on a where incurred basis and allocated Applied Power's net debt paydowns based
on APW Ltd's free cash flow. The debt allocated to APW Ltd. from Applied Power
includes portions of balances outstanding under Applied Power's Multi-Currency
Revolving Credit Agreement, Applied Power's $200 million senior subordinated
notes due 2009, Applied Power's commercial paper program and other general
debt. Under Applied Power, these debt instruments were held centrally, and as
such, debt from these specific instruments was not historically allocated. See
Note 2--"Summary of Significant Accounting Policies--Basis of Presentation" for
further discussion of Applied Power debt allocation.

In conjunction with the Distribution, the consolidated debt of Applied Power
was realigned between APW Ltd. and Applied Power. Through an additional
investment by Applied Power on July 31, 2000, a certain portion of allocated
APW Ltd. debt was assumed by Applied Power.

On August 1, 2000, as part of the Distribution, APW Ltd. entered into a
3-year, $600.0 million revolving credit facility that matures on July 31, 2003.
On May 15, 2001, APW Ltd. amended its credit facilities, including its
Multi-Currency Credit Agreement and U.K. Facility Agreement. The amended
Multi-Currency Credit Agreement continues with its original expiration date of
July 31, 2003. The amendment resulted in increased interest spreads, new
financial covenant tests, the pledging of substantially all the Company's and
its subsidiaries' assets as collateral under the credit facilities and the
issuance of common stock warrants of 5% of the common stock (see further
discussion below). The amended Multi-Currency Credit Agreement has a facility
limit of $570.0 million, of which $34.5 million was available as of August 31,
2001. This facility is used to finance working capital, capital expenditures
and other general corporate requirements. Under the amended Multi-Currency
Credit Agreement, the Company can borrow at a fixed rate of LIBOR plus 3.500%
annually. As of August 31, 2001, based upon APW Ltd.'s current total
borrowings, the weighted average interest rate was 7.206%. A non-use fee
computed at the rate of 0.500% is payable quarterly on the average unused
portion under the amended Multi-Currency Credit Agreement. This amended
Multi-Currency Credit Agreement contains restrictions concerning permitted
investments, permitted liens on assets and the sale of assets.

On May 15, 2001, the Company issued warrants to purchase a total of 2.1
million shares of the Company's common stock to various lenders in connection
with the signing of the amended Multi-Currency Credit Agreement. The warrants
are exercisable at any time during the period from September 1, 2002 through
May 15, 2006, at an exercise price of $8.40 per share, although under certain
limited circumstances the exercise date may be accelerated. The issuance of
warrants did not generate any proceeds and no underwriter was involved in the
issuance of warrants. The warrants were valued at $4.8 million, are recorded as
a deferred financing cost at August 31, 2001, and are being amortized using the
effective interest method through July 31, 2003.

During the fiscal 2001 third quarter, the Company ceased issuing commercial
paper and commenced the redemption of all outstanding commercial paper on the
original maturity dates. As of August 31, 2001, the Company has redeemed all
outstanding commercial paper. Commercial paper outstanding at August 31, 2000
totaled $51.2 million, net of discount, and carried an average interest rate of
6.9%.

The floating rate unsecured loan notes were entered into by APW Ltd. as a
result of its acquisitions of VERO and Rubicon. The notes were exchanged with
individual shareholders of VERO and Rubicon, at their option, in lieu of
receiving cash payment for their tendered shares. The notes carry an interest
rate of LIBOR minus 0.50% (5.0% at August 31, 2001) and can be redeemed at the
option of the note holder on various dates through 2008.

The U.K. Revolving Credit Agreement was entered into by VERO in April 1998,
prior to the acquisition of VERO by APW Ltd. and was amended on May 15, 2001 in
conjunction with amending the Multi-Currency Credit Agreement. The amended U.K.
Revolving Credit Agreement, providing for 52.2 million British Pounds Sterling
in borrowings, is also used by the Company to finance working capital, capital
expenditures and other general corporate purposes. As of August 31, 2001, based
upon APW Ltd.'s current total borrowings, the weighted average interest rate
was 8.230%. This agreement expires on July 31, 2003. As of August 31, 2001,
$17.9 million was available for borrowing. Similar to the amended
Multi-Currency Credit Agreement, the amended U.K. Revolving Credit Agreement
includes restrictions concerning investments, liens on assets and sale of
assets.

Subsequent to August 31, 2001, the Multi-Currency Credit Agreement, U.K.
Revolving Credit Agreement and the Accounts Receivable Facility were amended.
See Note 17--"Subsequent Events, Liquidity and Management's Plans."

Cash paid for interest was $42.3 million during fiscal 2001. Cash paid for
interest from the date of the Distribution through August 31, 2001 was not
material. Prior to the Distribution, all interest payments were made by Applied
Power.

As of August 31, 2000, the Company also had other borrowings outstanding of
approximately $6.8 million, principally through certain international
subsidiaries.

Aggregate Maturities: Long-term debt principal outstanding at August 31,
2001 is payable as follows: $603.4 million in fiscal 2002; $4.6 million in
fiscal 2003; none in fiscal 2004; none in fiscal 2005; none in fiscal 2006 and
$13.4 million thereafter.

Derivative Financial Instruments: As part of its interest rate management
program, the Company periodically enters into interest rate swap agreements
with respect to portions of its outstanding debt. The purpose of these swaps is
to protect the Company from the effect of an increase in interest rates. The
interest rate swap agreements in place at August 31, 2001 effectively convert
$66.5 million of the Company's variable rate debt to a weighted average fixed
rate of 8.8%. The swap agreements expire on varying dates through 2006. The
fair value of the Company's interest rate swap agreements was a liability of
$2.4 million at August 31, 2001 and an asset of $0.2 million at August 31, 2000.

Note 9--Stock Option Plans

Certain employees of APW Ltd. participated in stock option plans sponsored
by Applied Power and had stock options outstanding under Applied Power's 1990
Stock Plan and 1996 Stock Plan, and ZERO's 1994 Stock Plan. No further options
may be granted under Applied Power's 1990 Stock Plan, 1996 Stock Plan and
ZERO's 1994 Stock Plan, although the liability associated with the options
previously issued and outstanding was assumed by APW Ltd. as part of the
Distribution. The outstanding options were converted to options to purchase APW
Ltd. common stock at comparable aggregate intrinsic values based on the closing
share price of APW Ltd. common stock on the Distribution date. These options
remain exercisable pursuant to the provisions of the original plans. Options
granted under Applied Power's plans generally have a maximum term of ten years
and an exercise price equal to 100% of the fair market value of a share of
Applied Power's common stock at the date of grant. Options generally vest 50%
after two years and 100% after five years. Options granted under ZERO's plans
have an exercise price not less than the fair market value of ZERO common stock
on the date of grant. In addition, ZERO's options were granted with terms of
five to eight years and become exercisable in annual installments (generally
one-third of the total grant) commencing one year from the date of grant, on a
cumulative basis.

On July 19, 2000, as part of the Distribution, APW Ltd. adopted the APW Ltd.
2000 Stock Option Plan (the "2000 Plan") which provides for the issuance of
non-qualified stock options to officers and key employees of the Company. Under
the terms of the 2000 Plan, options to purchase 2.2 million shares of common
stock were reserved, are granted at not less than the fair market value (fiscal
2000 grant price was closing price of APW Ltd. Class A common stock on the
Distribution date) and will vest in seven years following the date of grant if
the individual is still employed by APW Ltd.

On January 16, 2001, APW Ltd. adopted the APW Ltd. 2001 Stock Option Plan
(the "2001 Plan") which provides for the issuance of non-qualified stock
options to officers and key employees of the Company. Under the terms of the
2001 Plan, options to purchase 2.0 million shares of common stock were reserved
for issuance, are granted at not less than the fair market value, become 50%
exercisable after two years and 100% exercisable after 5 years, and expire
after 10 years.

Under the terms of the APW Ltd. 2000 Outside Directors Stock Plan (the "2000
Directors Plan"), each non-employee director receives an option grant each year
to purchase shares of common stock. There is no discretion as to the amount or
timing of options to be granted, which are fixed by the terms of the 2000
Directors Plan. The exercise price at which shares may be purchased under each
option is equal to the fair market value of the shares on the date of the
grant. Under the terms of the 2000 Directors Plan, options to purchase 0.2
million shares of common stock were reserved for issuance. Options are not
exercisable until eleven months after the date of grant and then become fully
exercisable, in whole or in part, at any time prior to their expiration or
termination. Unless earlier exercised or terminated, the expiration date of
each option granted under the 2000 Directors Plan is ten years and one day
after the date of grant.

The following table summarizes the APW Ltd. stock option activity for fiscal
2000 and 2001:

Weighted
average
Number of exercise
shares price
---------- --------

Outstanding, August 31, 1999............ -- --
Options issued with the Distribution (a) 2,707,499 $17.9079
Options granted during the period....... 2,248,000 36.3750
Options exercised....................... (455,746) 8.8276
Options cancelled....................... (5,778) 28.6313
---------- --------
Outstanding, August 31, 2000............ 4,493,975 28.0527
Options granted during the period....... 1,590,400 17.0220
Options exercised....................... (188,591) 9.5324
Options cancelled....................... (1,906,879) 31.6283
---------- --------
Outstanding, August 31, 2001............ 3,988,905 22.8130
---------- --------
Exercisable, August 31, 2001............ 1,023,861 $15.5728
========== ========

- --------

(a) Reflects options issued in connection with the Distribution as a result of
converting certain options to purchase Applied Power Inc. common stock into
options to purchase APW Ltd. common stock at comparable aggregate intrinsic
values based on the closing share price of APW Ltd. common stock on the
Distribution date.

The following table summarizes the range of exercise prices for stock
options outstanding and exercisable at August 31, 2001:

Weighted Number of
average Weighted stock Weighted
Outstanding remaining average options average
Range of exercise prices stock options life exercise price exercisable exercise price
- ------------------------ ------------- --------- -------------- ----------- --------------

$ 7.2115--$ 8.9650... 1,126,729 7.73 $ 8.2862 266,229 $ 7.2528
$ 9.1250--$26.1346... 1,057,384 5.86 18.3153 635,472 16.2372
$27.1443--$34.7598... 543,442 7.50 28.4559 122,160 30.2480
$36.3750--$45.9688... 1,261,350 8.97 37.1286 -- --
--------------------- --------- ---- -------- --------- --------
$ 7.2115--$45.9688... 3,988,905 7.59 $22.8130 1,023,861 $15.5728
--------------------- --------- ---- -------- --------- --------

APW Ltd. applies Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related interpretations in accounting for its
employee and Director stock option plans. Accordingly, no compensation expense
has been recognized by APW Ltd. for its stock-based compensation plans. If APW
Ltd. had accounted for these stock options issued to APW Ltd. employees and
Directors in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation," APW Ltd.'s net earnings and basic and diluted earnings per share
would have been as follows (in thousands, except per share data):

As Restated
-------------------
2001 2000
--------- --------

Net loss
As reported.............................. $(236,527) $(23,369)
SFAS No. 123 pro forma................... (241,813) (26,286)
Loss per share
Basic and diluted as reported............ $ (5.96) $ (0.60)
Basic and diluted SFAS No. 123 pro forma. (6.10) (0.66)

The pro forma effects of applying SFAS No. 123 may not be representative of
the effects on reported net income for future years since options vest over
several years and additional awards are made each year.

The fair value of APW Ltd. employee and Director stock options used to
compute pro forma net earnings disclosures is the estimated present value at
grant date using the Black-Scholes option-pricing model. The weighted average
fair values per share of APW Ltd. options granted in fiscal 2001 and 2000 were
$15.49 and $22.02, respectively. The following weighted average assumptions
were used in completing the model:

2001 2000
---------- ----------

Dividend yield.......... 0.00% 0.00%
Expected volatility..... 104.55% 55.39%
Risk-free rate of return 6.65% 5.99%
Expected life........... 8.81 years 7.46 years

Note 10--Employee Benefit Plans

Defined Benefit Pension Plan: APW Ltd. provides defined benefit pension
benefits to certain United Kingdom employees. The following tables provide a
reconciliation of benefit obligations, plan assets, funded status and net
periodic benefit cost for those plans (dollars in thousands):

Pension Benefits
------------------
2001 2000
-------- --------

Change in benefit obligation--
Benefit obligation at beginning of year........ $ 59,359 $ 63,675
Service cost................................... 1,937 2,818
Interest cost.................................. 4,092 3,756
Translation difference......................... 236 (6,440)
Employee contributions......................... 1,140 1,101
Actuarial (gain) loss.......................... 3,145 (4,016)
Benefits paid.................................. (1,931) (1,535)
-------- --------
Benefit obligation at end of year................. $ 67,978 $ 59,359
======== ========
Change in plan assets--
Fair value of plan assets at beginning of year. $ 49,214 $ 46,759
Actual return on plan assets................... (7,450) 5,793
APW Ltd. contributions......................... 2,358 2,291
Employee contributions......................... 1,140 1,101
Translation difference......................... 90 (5,195)
Benefits paid from plan assets................. (1,931) (1,535)
-------- --------
Fair value of plan assets at end of year.......... $ 43,421 $ 49,214
======== ========

Funded status of the plans........................ $(24,557) $(10,145)
Unrecognized net (gain) loss...................... 14,736 (135)
-------- --------
Accrued benefit cost.............................. $ (9,821) $(10,280)
======== ========
Weighted-average assumptions as of August 31--
Discount rate..................................... 6.00% 6.70%
Expected return on plan assets.................... 7.50% 8.25%
Rate of compensation increase..................... 4.00% 4.00%

2001 2000 1999
------- ------- -------

Components of net periodic benefit cost--
Service cost............................. $ 3,008 $ 3,962 $ 3,569
Employee contributions................... (1,070) (1,144) (1,071)
Interest cost............................ 4,092 3,756 3,315
Expected return on assets................ (4,112) (3,814) (3,189)
Other.................................... (44) -- --
------- ------- -------
Benefit cost............................. $ 1,874 $ 2,760 $ 2,624
======= ======= =======

The above pension benefits consist of two plans. The assets of the plans are
held in a separately administered trust and contributions are determined based
on triennial actuarial valuations using the projected unit credit funding
method.

Defined Contribution Benefit Plans: Substantially all of APW Ltd.'s
full-time U.S. employees have been eligible to participate in a qualified
401(k) plan under the APW Ltd. 401(k) Plan. Under the provisions of the 401(k)
Plan to fund employer contributions, the plan administrator acquires shares of
APW Ltd. common stock

on the open market and allocates such shares to accounts set aside for APW Ltd.
employees' retirements. APW Ltd.'s core contributions generally equal 3% of
each employee's annual cash compensation, subject to IRS limitations.
Additionally, employees generally may contribute up to 19% of their pre-tax
base compensation. APW Ltd. also matches approximately 25% of each employee's
contribution up to the participant's first 6% of earnings.

During the years ended August 31, 2001, 2000 and 1999, expenses related to
the above defined contribution plan were approximately $6.6 million, $7.9
million and $5.3 million, respectively.

Non-U.S. Benefit Plans: APW Ltd. contributes to a number of retirement
programs for employees outside the U.S. Pension expense under these programs
amounted to approximately $1.3 million, $1.8 million and $1.9 million in fiscal
2001, 2000 and 1999, respectively. As these plans are not significant, APW Ltd.
does not determine the actuarial value of accumulated plan benefits or net
assets available for benefits.

Note 11--Income Taxes

Income tax expense (benefit) consists of the following (dollars in
thousands):

As Restated
--------------------------
2001 2000 1999
-------- ------- -------

Current:
Federal.... $ (3,618) $47,582 $(3,441)
Foreign.... 769 4,969 9,281
State...... (256) 4,127 394
-------- ------- -------
Subtotals...... (3,105) 56,678 6,234
-------- ------- -------
Deferred:
Federal.... (13,502) (2,475) 5,276
Foreign.... (8,321) (215) (1,328)
State...... (776) (393) 701
-------- ------- -------
Subtotals...... (22,599) (3,083) 4,649
-------- ------- -------
Totals......... $(25,704) $53,595 $10,883
======== ======= =======

Income tax expense differs from the amounts computed by applying the U.S.
federal income tax rate to earnings before income tax expense. A reconciliation
of income taxes at the U.S. statutory rate to the effective tax rate follows:

As Restated
-------------------
% of Pre-tax Earnings
-------------------
2001 2000 1999
----- ----- -----

United States federal statutory rate................... 35.0% 35.0% 35.0%
State income taxes, net of United States federal effect 0.3 2.7 2.5
Non-deductible amortization and other expenses......... (20.4) 16.8 14.8
Cost of reorganization as a Bermuda company............ -- 123.7 --
Net effects of foreign tax rates and credits........... (3.9) (9.0) (16.8)
Other items............................................ (1.2) (3.3) 0.1
----- ----- -----
Effective tax rate..................................... 9.8% 165.9% 35.6%
===== ===== =====

As reflected in the above table, the effective tax rate for fiscal 2001 was
significantly impacted by the goodwill impairment charge recorded in the fourth
fiscal quarter. Most of the goodwill which was written-down was not deductible
for tax purposes.

Temporary differences and carryforwards which gave rise to the deferred tax
assets and liabilities included the following items (dollars in thousands):

August 31,
----------------
2001 2000
------- -------

Deferred income tax assets:
Operating loss and state tax credit carryforwards. $33,021 $ 2,861
Compensation and other employee benefits.......... 8,980 8,294
Inventory items................................... 2,333 2,609
Restructuring expenses............................ 4,506 2,351
Deferred income................................... 2,828 2,499
Book reserves and other items..................... 6,384 4,568
------- -------
Total deferred assets......................... 58,052 23,182
Valuation allowance............................... (9,784) (2,861)
------- -------
Net deferred income tax assets................ 48,268 20,321
------- -------
Depreciation and amortization..................... 20,177 17,117
Inventory items................................... 168 413
Other items....................................... -- 336
------- -------
Net deferred income tax liabilities........... 20,345 17,866
------- -------
Net deferred income taxes............................ $27,923 $ 2,455
======= =======

The valuation allowance represents a reserve for certain non-U.S. and U.S.
federal and state operating loss carryforwards for which utilization is
uncertain. The increase in the valuation allowance represents the current year
increase in such loss carryforwards. The majority of the non-U.S. losses may be
carried forward indefinitely. The U.S. federal and state loss carryforwards
expire in various years through 2021.

Realization of the net deferred tax assets of $27.9 million, reflecting the
net benefit of $23.2 million in loss carryforwards, is dependent on generating
sufficient taxable income prior to the expiration of the loss carryforwards.
Although realization is not assured, management believes it is more likely than
not that the net deferred tax assets will be realized. The amount of the net
deferred tax assets considered realizable, however, could be reduced in future
periods if estimates of future taxable income during the carryforward period
are reduced.

APW Ltd. has agreed to indemnify Applied Power against certain tax
liabilities arising from the reorganization leading up to the Distribution. The
reorganization, including the merger and APW Ltd.'s continuation as a Bermuda
company, involves taxable transactions. APW Ltd. recorded a $40.0 million
income tax provision in fiscal 2000 as a result of the reorganizing as a
Bermuda company. Under a tax sharing agreement the Company entered into with
Applied Power, the Company will be responsible for federal and state income
taxes resulting from the reorganization transactions. As a result, the Company
will bear the risk of any audit adjustments by the IRS or other taxing
authorities challenging the reporting of the reorganization transactions.

Earnings (losses) from continuing operations before income taxes from
non-U.S. operations were ($176.8) million, $8.1 million and $25.9 million for
2001, 2000 and 1999, respectively. Income taxes paid during fiscal 2001 were
$44.5 million, which includes a $30.0 million payment to Actuant under the Tax
Sharing Agreement. APW Ltd. did not pay any income taxes from the Distribution
date through August 31, 2000. Prior to the Distribution, Applied Power paid all
income taxes on behalf of the businesses that comprise APW Ltd. and its
subsidiaries.

Note 12--Equity

On July 7, 2000, Applied Power's board of directors approved the
Distribution of its Electronics businesses. The distribution occurred on July
31, 2000, with shareholders of Applied Power Inc. common stock receiving one
share of APW Ltd. common stock for every Applied Power Inc. share owned as of
the July 21, 2000 record date.

APW Ltd. was formed as an indirect wholly owned subsidiary of Applied Power
through a continuation of an existing corporation (previously named Wright
Line, Inc. and now named APW Ltd.) in Bermuda. As a result, APW Ltd. became a
Bermuda corporation and at such time issued 1.2 million shares of common stock
owned indirectly by Applied Power Inc. In connection with the Distribution, APW
Ltd. issued additional shares of common stock totaling 37,997,135 which were
held indirectly by Applied Power Inc. and on July 31, 2000, Applied Power Inc.
distributed all 39,197,135 shares to the shareholders of Applied Power Inc.

The "Combined equity" caption in the accompanying Consolidated Statements of
Shareholders' Equity and Comprehensive Income (Loss) represents Applied Power's
cumulative net investment in the combined businesses of APW Ltd. prior to the
Distribution. Changes in the "Combined equity" caption represent the net income
(loss) of APW Ltd., net cash and noncash contributions from (distributions to)
Applied Power, changes in allocated corporate debt and allocated corporate
interest, net of tax. See the accompanying Consolidated Statements of
Shareholders' Equity and Comprehensive Income (Loss) for an analysis of the
activity in the "Combined equity" caption.

Under APW Ltd.'s memorandum of association, the Company's authorized share
capital is divided into: 250.0 million shares of common stock, par value $0.01
per share, of which 40,042,207 shares were issued and outstanding, less
contingent shares, at August 31, 2001; and 50.0 million shares of preferred
stock, par value $0.01 per share, of which only the shareholder rights (and the
Series A Junior Participating Preferred Stock) associated with the common stock
were outstanding at August 31, 2001. See discussion of shareholder rights plan
below.

At its July 17, 2000 meeting, the board of directors of APW Ltd. adopted a
shareholder rights plan and declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of APW Ltd. common stock. Each
Right entitles the registered holder to purchase from APW Ltd. one one-ten
thousandth of a share of Series A Junior Participating Preferred Stock, par
value $0.01 per share, of APW Ltd. at a price to be determined, subject to
adjustment. On July 18, 2000, the sole shareholder of APW Ltd. authorized the
adoption of the shareholder rights plan.

Note 13--Transactions and Agreements with Applied Power

In order to effect the Distribution, Applied Power and APW Ltd. have entered
into the following agreements:

. Contribution Agreement, Plan and Agreement of Reorganization and
Distribution

. General Assignment, Assumption and Agreement regarding Litigation,
Claims, and other Liabilities

. Transitional Trademark Use and License Agreement

. Insurance Matters Agreement

. Bill of Sale and Assumption of Liabilities

. Employee Benefits and Compensation Agreement

. Tax Sharing and Indemnification Agreement

. Interim Administrative Services Agreement

. Confidentiality and Non Disclosure Agreement

. Assumption of Applied Power Inc. Debt Obligation

These agreements define the ongoing relationship between the parties after
the Distribution. See Note 11-- "Income Taxes" and Note 16--"Contingencies and
Litigation" for additional discussion of indemnification agreements between APW
Ltd. and Applied Power.

Note 14--Supplemental Balance Sheet Information

August 31,
(Dollars in thousands) --------------------
2001 2000
--------- ---------

Accounts receivable--
Accounts receivable (as restated)........ $ 116,795 $ 122,380
Less allowances.......................... (3,847) (3,924)
--------- ---------
Accounts receivable, net (as restated)... $ 112,948 $ 118,456
========= =========
Property, plant and equipment--
Property................................. $ 11,113 $ 5,690
Plant.................................... 46,783 25,679
Machinery and equipment.................. 420,019 327,638
--------- ---------
Total.................................. 477,915 359,007
Less accumulated depreciation............ (222,886) (181,975)
--------- ---------
Property, plant and equipment, net..... $ 255,029 $ 177,032
========= =========
Goodwill--
Goodwill................................. $ 925,152 $ 730,570
Less accumulated amortization............ (245,927) (57,510)
--------- ---------
Goodwill, net............................ $ 679,225 $ 673,060
========= =========
Other intangibles--
Other intangibles........................ $ 40,527 $ 20,163
Less accumulated amortization............ (12,911) (10,901)
--------- ---------
Other intangibles, net................... $ 27,616 $ 9,262
========= =========

Note 15--Business Segment, Geographic and Customer Information

APW Ltd. operates as one reportable segment. APW Ltd. supplies electronic
enclosures, thermal management systems, backplanes, power supplies, and cabling
either as individual products, or as an integrated system incorporating certain
of APW Ltd.'s product design, supply chain management, assembly and test
capabilities. Sales between geographic areas are insignificant and are
accounted for at prices intended to yield a reasonable return to the selling
affiliate.

Enterprise-wide information is provided in accordance with SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information".
Geographical net sales is based on the origin of the sales. Asset information
is based on physical location of the assets at the end of the fiscal year. The
following table summarizes financial information by geographic region (dollars
in thousands):

Years Ended August 31,
--------------------------------
2001 2000 1999
---------- ---------- ----------

Net sales:
Americas.................... $ 780,248 $ 734,315 $ 576,034
Europe and Asia............. 487,436 505,227 479,304
---------- ---------- ----------
Totals.................. $1,267,684 $1,239,542 $1,055,338
========== ========== ==========

Long-lived assets:
Americas.................... $ 149,723 $ 98,955
Europe and Asia............. 99,015 73,142
General corporate and other. 6,291 4,935
---------- ----------
Totals.................. $ 255,029 $ 177,032
========== ==========

No single customer accounted for more than 10% of total net sales in fiscal
2001, 2000 or 1999. Export sales from United States operations were less than
3% of total net sales in each of the periods presented.

Note 16--Contingencies and Litigation

APW Ltd. is a party to various legal proceedings which have arisen in the
normal course of its business. These legal proceedings typically include
product liability, environmental, labor, patent and contract claims, and
commission disputes. APW Ltd. will assume and indemnify Actuant with respect to
those proceedings involving the Electronics businesses, while Actuant will
indemnify APW Ltd. with respect to the Actuant Industrial businesses.

APW Ltd. has recorded reserves for loss contingencies based on the specific
circumstances of each case. Such reserves are recorded when it is probable that
a loss has been incurred as of the balance sheet date and such loss can be
reasonably estimated. In the opinion of management, the resolution of these
contingencies will not have a material adverse effect on APW Ltd.'s financial
condition, results of operations or cash flows.

APW Ltd. has facilities at numerous geographic locations, which are subject
to a range of environmental laws and regulations. Compliance with these laws
has and will require expenditures on a continuing basis. Predecessors to APW
Ltd. have been identified by the United States Environmental Protection Agency
("EPA") as "Potentially Responsible Parties" regarding various multi-party
Superfund sites. Potentially Responsible Parties are jointly and severally
liable with respect to Superfund remediation liabilities. Any liability in
connection with these sites has been assumed by APW Ltd. Based on the Company's
investigations, management believes that the Company is a de minimis
participant in certain of these sites. As to one other site, the Company is a
minor participant, and the Company's share of estimated cleanup costs is not
likely to exceed $1.1 million. As to another EPA site where the Company is not
a de minimis participant, the state has required additional ground water
testing at a former APW Ltd. manufacturing facility, and the Company cannot
reasonably estimate the amount of the Company's liability, if any. In addition,
the Company is also involved in other state cleanup actions for which
management believes the aggregate costs of remediation are adequately reserved
for.

APW Ltd. anticipates that environmental costs will be expensed or
capitalized depending on their future economic benefits. Expenditures that have
no future economic value are expensed. Liabilities will be recorded when
environmental remediation is probable and the costs can be reasonably
estimated. Environmental expenditures over the last three years for APW Ltd.
have not been material. Although the level of future expenditures for
environmental remediation is impossible to determine with any degree of
certainty, management does not believe these costs are likely to have a
material adverse effect on APW Ltd.'s financial position, results of operations
or cash flows. Environmental remediation accruals of $4.4 million and $3.2
million were included in the Consolidated Balance Sheets at August 31, 2001 and
2000, respectively.

Note 17--Subsequent Events, Liquidity and Management's Plans

On September 27, 2001, the Company's lenders amended certain debt covenants
associated with APW Ltd.'s Multi-Currency Credit Agreement, UK Revolving Credit
Agreement and the Accounts Receivable Facility ("credit facilities"). These
revised covenants were established based upon APW Ltd. management's financial
forecasts prior to the events of September 11, 2001. Throughout the first
fiscal quarter of 2002, APW Ltd. experienced a significant decline in net sales
compared to prior periods and compared to management's financial forecasts that
were the basis for the financial covenants set forth in the September 27, 2001
amendment. Such declines are related to a number of factors, certain of which
were impacted by the terrorist attacks that took place in the United States on
September 11, 2001. Those terrorist attacks were unprecedented events which
have created many economic and political uncertainties. On December 13, 2001,
the Company's lenders again amended certain debt covenants associated with the
Company's credit facilities to reflect the Company's revised financial
forecasts as of that point in time. The revisions in the covenants were
considered necessary due to the magnitude of the decline in the first fiscal
2002 quarter actual results compared to prior periods and management's
forecasts. In addition, the amendment repriced the outstanding warrants issued
in conjunction

with the May 15, 2001 amendment to the closing price of APW Ltd.'s common stock
on December 10, 2001 of $1.98 and eliminates the previous reduction provision
if the Company met repayment targets by August 31, 2002. The Company also
issued warrants for 9.9% of the common stock outstanding on December 13, 2001
(approximately 4.1 million shares) at a price of $0.01. These $0.01 warrants
are cancelled if the credit facilities are repaid by July 31, 2002 (entirely
cancelled) or September 30, 2002 (49.5% cancelled).

If the magnitude of the decline in net sales continues or APW Ltd.
experiences a significant change in its cost structure, APW Ltd. may not be
able to comply with the covenants which were agreed to with the Company's
lenders as of December 13, 2001. Further, such covenants contemplate the sale
of one of the Company's divisions during the second fiscal 2002 quarter. Should
this transaction not be completed during the second fiscal 2002 quarter for any
reason, the Company would likely violate a financial covenant during its second
fiscal 2002 quarter ending February 28, 2002.

APW Ltd.'s management plans to continue to aggressively pursue additional
revenue opportunities within its core customer markets. APW Ltd. has adopted
several restructuring plans during fiscal 2001 in an effort to reduce costs in
the wake of declining net sales experienced during fiscal 2001. These programs
resulted in restructuring charges during fiscal 2001 and have provided cost
savings which are expected to continue into the future. Management plans to
consider additional cost-reduction programs, as necessary, to further align the
Company's cost base with net sales.

While the Company's revised financial forecasts reflect management's best
estimates, there can be no assurances that the Company's fiscal 2002 financial
forecasts, which are the basis of the current financial covenants, will be
achieved. If the Company's actual operating performance does not substantially
meet the fiscal 2002 financial forecasts associated with the amended covenants,
the Company may have difficulty achieving compliance with certain debt
covenants in APW Ltd.'s amended credit facilities. If APW Ltd. fails to comply
with debt covenants for any reason, the Company may have to consider a number
of the following measures: (a) obtain a waiver of default for the violated
covenant(s); (b) obtain an amendment of the covenants in the existing credit
facilities; (c) seek additional sources of debt financing, which likely would
be subject to obtaining necessary lender consents; (d) seek additional equity
financing or other strategic alternatives; (e) restructure its obligations
and/or the business; or (f) consider a combination of the foregoing. Given the
circumstances, the Company is evaluating its alternatives. There can be no
assurances that the aforementioned alternatives would be available to the
Company in the future. If this were the case, a future violation of debt
covenants would cause a material adverse effect on the Company's ability to
continue in its present form and to achieve its intended business objectives.

At August 31, 2001 and November 30, 2001, APW Ltd. had $52.4 million and
$24.0 million, respectively, of borrowings available under the Company's two
credit facilities. In addition, at August 31, 2001 and November 30, 2001,
although APW Ltd. sold all eligible accounts receivable under the Company's
accounts receivable facility, APW Ltd. had the availability to sell an
incremental $22 million and $35.4 million, respectively.

The Company understands that it, and two of its senior executives have been
sued in connection with alleged violations of Federal securities laws which
preceded a drop in the price of its common stock ending on March 20, 2001. The
complaint, which is captioned Stewart Norman Hicks v. APW Ltd., et al., was
filed on December 10, 2001. The complaint alleges violations of the Federal
securities laws and seeks certification of a plaintiff class consisting of all
purchasers of the Company's common stock between September 26, 2000 and March
20, 2001, inclusive. The complaint does not quantify the damages. The Company
has not yet been served with the complaint and, therefore, cannot evaluate the
merits of the claim.

Note 18--Restated Financials

As described in Note 1, the consolidated financial statements as of August 31,
2001 and 2000 and for the years ended August 31, 2001, 2000 and 1999 have been
restated. A summary of the effects of the restatement follows:

APW Ltd.
Consolidated Statement of Operations
(Dollars in millions, except per share data)

For the Year Ended August 31, 2001
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

Net sales....................................... $1,267.7 $ -- $1,267.7
Costs of products sold.......................... 1,036.3 6.7 1,043.0
-------- ----- --------
Gross profit.................................... 231.4 6.7 224.7
Engineering, selling and administrative expenses 226.7 -- 226.7
Amortization of intangible assets............... 194.3 -- 194.3
Restructuring charges........................... 17.0 -- 17.0
Loss on sale of subsidiary...................... 2.7 -- 2.7
-------- ----- --------
Operating loss.................................. (209.3) (6.7) (216.0)
Net financing costs............................. 43.8 -- 43.8
Other expense, net.............................. 2.4 -- 2.4
-------- ----- --------
Loss before income tax benefit.................. (255.5) (6.7) (262.2)
Income tax benefit.............................. (23.4) (2.3) (25.7)
-------- ----- --------
Net loss........................................ $ (232.1) $(4.4) $ (236.5)
======== ===== ========
Basic and diluted loss per share:
Loss per share.................................. $ (5.85) $(.11) $ (5.96)
Weighted average common shares outstanding...... 39,664 -- 39,664

APW Ltd.

Consolidated Balance Sheet

(Dollars in millions)

August 31, 2001
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

ASSETS
Current assets
Cash and cash equivalents.......................... $ 8.5 $ (2.3) $ 6.2
Accounts receivable, net........................... 113.0 (.1) 112.9
Inventories........................................ 135.0 (4.1) 130.9
Prepaid expenses................................... 14.3 (.1) 14.2
Deferred income taxes.............................. 16.7 -- 16.7
-------- ------- --------
Total current assets........................... 287.5 (6.6) 280.9
Property, plant and equipment......................... 477.9 -- 477.9
Less: Accumulated depreciation..................... (222.9) -- (222.9)
-------- ------- --------
Net property, plant and equipment.............. 255.0 -- 255.0
Goodwill, net......................................... 679.2 -- 679.2
Other intangibles, net................................ 27.6 -- 27.6
Other assets.......................................... 58.6 (.1) 58.5
-------- ------- --------
Total assets................................... $1,307.9 $ (6.7) $1,301.2
======== ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term borrowings.............................. $ 5.7 $ 597.6 $ 603.3
Trade accounts payable............................. 118.5 1.4 119.9
Accrued compensation and benefits.................. 29.6 .5 30.1
Income taxes payable............................... 37.2 (3.3) 33.9
Other current liabilities.......................... 40.1 .6 40.7
-------- ------- --------
Total current liabilities...................... 231.1 596.8 827.9
Long-term debt........................................ 615.6 (597.6) 18.0
Other long-term liabilities........................... 45.4 -- 45.4
Shareholders' equity
Common stock.......................................... .4 -- .4
Share premium......................................... 669.8 -- 669.8
Retained earnings (accumulated deficit)............... (227.9) (5.9) (233.8)
Accumulated other comprehensive loss.................. (26.5) -- (26.5)
-------- ------- --------
Total shareholders' equity..................... 415.8 (5.9) 409.9
-------- ------- --------
Total liabilities and shareholders' equity..... $1,307.9 $ (6.7) $1,301.2
======== ======= ========

APW Ltd.

Consolidated Condensed Statement of Cash Flows

(Dollars in millions)

For the Year Ended August 31, 2001
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

Net loss................................... $(232.1) $(4.4) $(236.5)
Net cash used in operating activities...... (17.3) (2.4) (19.7)
Net cash used in investing activities...... (329.2) -- (329.2)
Net cash provided by financing activities.. 360.1 -- 360.1
Effect of exchange rate changes on cash.... (5.7) -- (5.7)
Net increase in cash and cash equivalents.. 7.9 (2.4) 5.5
Cash and cash equivalents-beginning of year .6 .1 .7
Cash and cash equivalents-end of year...... $ 8.5 (2.3) $ 6.2

APW Ltd.

Consolidated Statement of Operations

(Dollars in millions, except per share data)

For the Year Ended August 31, 2000
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

Net sales....................................... $1,239.5 $ -- $1,239.5
Costs of products sold.......................... 916.3 1.0 917.3
-------- ----- --------
Gross profit.................................... 323.2 (1.0) 322.2
Engineering, selling and administrative expenses 201.6 .2 201.8
Amortization of intangible assets............... 23.9 -- 23.9
Restructuring charges........................... 6.5 -- 6.5
-------- ----- --------
Operating earnings.............................. 91.2 (1.2) 90.0
Net financing costs............................. 52.6 -- 52.6
Other expense, net.............................. 5.0 -- 5.0
-------- ----- --------
Earnings before income tax expense.............. 33.6 (1.2) 32.4
Income tax expense.............................. 54.1 (.5) 53.6
-------- ----- --------
Net loss before extraordinary item.............. (20.5) (.7) (21.2)
Extraordinary loss on early retirement of debt,
net of income tax benefit of $1.3............. (2.1) -- (2.1)
-------- ----- --------
Net loss........................................ $ (22.6) $ (.7) $ (23.3)
======== ===== ========
Basic and diluted loss per share:
Loss per share-before extraordinary item........ $ (.53) $(.02) $ (.55)
Extraordinary loss, net of tax benefit.......... (.05) -- (.05)
-------- ----- --------
Loss per share.................................. $ (.58) $(.02) $ (.60)
======== ===== ========
Weighted average common shares outstanding...... 39,077 -- 39,077

APW Ltd.

Consolidated Balance Sheet

(Dollars in millions)

August 31, 2000
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

ASSETS
Current assets
Cash and cash equivalents.......................... $ .6 $ .1 $ .7
Accounts receivable, net........................... 118.5 118.5
Inventories........................................ 155.4 155.4
Prepaid expenses................................... 11.1 11.1
Deferred income taxes.............................. 12.0 12.0
-------- ----- --------
Total current assets........................... 297.6 .1 297.7
Property, plant and equipment......................... 359.0 359.0
Less: Accumulated depreciation..................... (182.0) (182.0)
-------- ----- --------
Net property, plant and equipment.............. 177.0 177.0
Goodwill, net......................................... 673.0 673.0
Other intangibles, net................................ 9.3 9.3
Other assets.......................................... 57.1 (.1) 57.0
-------- ----- --------
Total assets................................... $1,214.0 $ -- $1,214.0
======== ===== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable............................. $ 149.9 $ 1.8 $ 151.7
Accrued compensation and benefits.................. 31.1 .6 31.7
Income taxes payable............................... 71.0 (1.0) 70.0
Other current liabilities.......................... 40.1 .1 40.2
-------- ----- --------
Total current liabilities...................... 292.1 1.5 293.6
Long-term debt........................................ 236.4 -- 236.4
Deferred income taxes................................. 9.6 -- 9.6
Other long-term liabilities........................... 49.5 -- 49.5
Shareholders' equity
Common stock.......................................... .4 -- .4
Share premium......................................... 638.4 -- 638.4
Retained earnings..................................... 4.3 (1.5) 2.8
Accumulated other comprehensive loss.................. (16.7) -- (16.7)
-------- ----- --------
Total shareholders' equity..................... 626.4 (1.5) 624.9
-------- ----- --------
Total liabilities and shareholders' equity..... $1,214.0 $ -- $1,214.0
======== ===== ========

APW Ltd.

Consolidated Condensed Statement of Cash Flows

(Dollars in millions)

For the Year Ended August 31, 2000
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

Net loss................................... $(22.6) $(.7) $(23.3)
Net cash provided by operating activities.. 35.6 .5 36.1
Net cash used in investing activities...... (60.1) -- (60.1)
Net cash provided by financing activities.. 9.3 -- 9.3
Effect of exchange rate changes on cash.... .8 -- .8
Net decrease in cash and cash equivalents.. (14.4) .5 (13.9)
Cash and cash equivalents-beginning of year 15.0 (.4) 14.6
Cash and cash equivalents-end of year...... $ .6 .1 $ .7

APW Ltd.

Consolidated Statement of Operations

(Dollars in millions, except per share data)

For the Year Ended August 31, 1999
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

Net sales....................................... $1,055.3 $ -- $1,055.3
Costs of products sold.......................... 763.5 1.3 764.8
-------- ----- --------
Gross profit.................................... 291.8 (1.3) 290.5
Engineering, selling and administrative expenses 188.0 -- 188.0
Amortization of intangible assets............... 20.9 -- 20.9
-------- ----- --------
Operating earnings.............................. 82.9 (1.3) 81.6
Net financing costs............................. 52.9 -- 52.9
Other income, net............................... (1.8) -- (1.8)
-------- ----- --------
Earnings before income tax expense.............. 31.8 (1.3) 30.5
Income tax expense.............................. 11.4 (.5) 10.9
-------- ----- --------
Net income...................................... $ 20.4 $ (.8) $ 19.6
======== ===== ========
Basic and diluted loss per share:
Earnings per share.............................. $ .53 $(.02) $ .51
Weighted average common shares outstanding...... 38,825 -- 38,825

APW Ltd.

Consolidated Condensed Statement of Cash Flows

(Dollars in millions)

For the Year Ended August 31, 1999
---------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

Net income................................. $ 20.4 $(.8) $ 19.6
Net cash provided by operating activities.. 75.9 (.4) 75.5
Net cash used in investing activities...... (435.3) -- (435.3)
Net cash provided by financing activities.. 373.7 -- 373.7
Effect of exchange rate changes on cash.... (.6) -- (.6)
Net increase in cash and cash equivalents.. 13.7 (.4) 13.3
Cash and cash equivalents-beginning of year 1.3 -- 1.3
Cash and cash equivalents-end of year...... $ 15.0 $(.4) $ 14.6

Note 19--Bankruptcy and Reorganization Under Chapter 11 (Unaudited)

On May 16, 2002, APW Ltd. (in provisional liquidation) (herinafter referred
to as "APW Ltd.", "APW" or "the Company"), a Bermuda company, filed a voluntary
petition for relief under Chapter 11 of the United States Bankruptcy Code
("Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York ("Bankruptcy Court") (Case No. 02-12335). The proceeding
involved only APW Ltd., the Bermuda company, and Vero Electronics, Inc., a
non-operating entity and subsidiary of APW Ltd. (Case No. 02-12334). All other
subsidiaries of the Company were excluded from the proceeding and continue to
conduct business with customers and suppliers in the ordinary course. The
Company continued to operate its business as a debtor-in-possession under the
jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code. The bankruptcy proceedings are being jointly
administered under Case No. 02-12334 (PCB).

On May 30, 2002, a proceeding (the "Bermuda Proceeding") was commenced
pursuant to the Companies Act 1981 with respect to APW Ltd. in the Bermuda
Supreme Court in connection with a winding-up petition. One of the purposes of
the filing was the imposition of a statutory stay preventing third parties from
continuing or taking actions against APW in Bermuda. On May 30, 2002, the
Bermuda court appointed Malcolm L. Butterfield of KPMG Bermuda and Philip W.
Wallace of KPMG London, England as joint provisional liquidators of APW Ltd.
(or, as referred to herein, the JPLs) with limited supervisory powers. The
appointment of the JPL's and statutory stay enabled the JPL's to perform
supervisory and oversight of the management of APW while reviewing the Plan of
reorganization with a view to its treatment of creditors. On July 22, 2002, the
JPLs were granted various powers, including the power to authorize the sale of
any business, operation, subsidiary, division or other significant asset of APW
Ltd.

We decided to pursue reorganization under Chapter 11 of the Bankruptcy Code
based upon the certainty of the elimination of pre-petition indebtedness and as
a consequence the ability of the Company to emerge from bankruptcy
significantly deleveraged. As a debtor-in-possession, APW Ltd. is authorized to
continue to operate as an ongoing business, but may not engage in transactions
outside the ordinary course of business without the approval of the Bankruptcy
Court, after notice and an opportunity for a hearing.

Confirmation of Plan of Reorganization

On July 24, 2002 the Bankruptcy Court entered an order confirming APW Ltd.'s
and Vero's Amended and Restated Plan of Reorganization dated June 19, 2002 (as
modified, amended or supplemented, the "Plan"). APW Ltd. emerged on July 31,
2002.

Pursuant to the terms of the Plan, certain assets and liabilities were
transferred to AWP Ltd. ("AWP"), a newly formed Bermuda company, including the
right to use the name "APW Ltd.," which became the successor-in-interest to APW
Ltd. After the consummation of the Plan, APW Ltd. changed its name to BQX Ltd.
and AWP Ltd. changed its name to APW Ltd. The above name changes became
effective on July 31, 2002.

In addition, as of July 31, 2002 the effective date of the Plan, AWP (the
successor in interest to APW Ltd.) issued under the Plan the following:

. New Secured Notes in the aggregate principal amount of $100 million
issued to its senior secured lenders,

. 1,000,000 common shares of AWP (the successor in interest to APW Ltd.)
(the "APW Common Shares") issued to its senior secured lenders which
represents 100% of the outstanding common shares of AWP after the
consummation of the Plan,

. Warrants to purchase up to 60,606 APW Common Shares at an exercise price
of $448.95 per share issued to the current equity holders of APW Ltd., and

. Warrants to purchase up to 303,030 APW Common Shares at an exercise price
of $0.02 per share issued to lenders under the Credit Facility (defined
below).

As of July 31, 2002, there were approximately 40.8 million common shares of
APW Ltd. outstanding. Under the Plan, holders of APW Ltd. common shares will
receive (a) warrants representing the right to purchase 60,606 APW Common
Shares as stated above and (b) retain existing common shares in APW Ltd. (which
as a practical matter will be liquidated and no distribution is expected to
shareholders). Subsequent to the effective date of the Plan, APW Ltd. will be
dissolved, liquidated or wound-up by joint provisional liquidators in
connection with a proceeding in Bermuda or otherwise pursuant to applicable
Bermuda law, and no assets are expected to be distributed to current
shareholders.

After the consummation of the Plan, AWP Ltd. (as successor to APW Ltd.) is
expected to have approximately 1.8 million authorized common shares, par value
$0.02 per share, of which 1,000,000 common shares will be outstanding. All such
1,000,000 shares will be issued as of the consummation of the Plan.

The Credit Facility

Concurrent with the Chapter 11 filing, the Company entered into a new $110
million debtor-in-possession credit facility ("Credit Facility") to provide for
the payment of permitted pre-petition claims, working capital needs, letters of
credit and other general corporate purposes. The Credit Facility requires that
we maintain certain financial covenants and restrict liens, indebtedness,
capital expenditures, dividend payments and sale of assets. Upon emergence from
the Chapter 11 proceeding, the Credit Facility was extended until November 15,
2003 with respect to $90.0 million of the Credit Facility and May 15, 2004 with
respect to $20.0 million of the Credit Facility.

Fresh Start Accounting

As a result of the bankruptcy, the Company will adopt fresh start accounting
pursuant to guidance provided by the American Institute of Certified Public
Accountant's Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization under the Bankruptcy Code", as of July 31, 2002. In accordance
with the principles of fresh start accounting, the Company will adjust the
carrying values of its assets and liabilities to their fair values as of July
31, 2002. The application of fresh start accounting will result in material
changes to the carrying values of the Company's assets and liabilities.

Going Concern

Following its emergence from the Chapter 11 proceeding, the ability of APW
Ltd., the successor company, to continue as a going concern is predicated upon,
among other things, compliance with the provisions of the Credit Facility and
the term loan agreement related to the $100 million in new secured notes issued
under the Plan and the ability to generate cash flows from operations and
obtain financing sources sufficient to satisfy future obligations.

Management's Discussion and Analysis of Financial Condition and Results of
Operations

APW Ltd. (the "Company") has determined that accounting improprieties
occurred in fiscal 2002, 2001, 2000 and 1999 at one US subsidiary and in fiscal
2001 at one UK subsidiary. These accounting improprieties resulted in the
overstatement of assets (primarily cash and inventory) and income and the
understatement of liabilities (primarily trade accounts payable and accrued
compensation and benefits) and expense. As a result, the

consolidated financial statements as of August 31, 2001 and 2000 and for the
years ended August 31, 2001, 2000 and 1999 as well as the interim results for
the years ended August 31, 2001 and 2000 have been restated. The restated
consolidated financial statements as of August 31, 2001 and 2000 and for the
years ended August 31, 2001, 2000 and 1999 are included herein. The impact of
the restatement was to increase the net loss by $4.4 million and $0.7 million
in fiscal years 2001 and 2000, respectively, and to decrease net income by $0.8
million in fiscal year 1999. Management has taken appropriate remedial actions
with respect to the matters described above.

The following discussion of our financial condition and our results of
operations should be read in conjunction with our accompanying Consolidated
Financial Statements and related notes thereto. Consolidated Financial
Statements for fiscal 2000 and 1999 generally reflect the financial position,
results of operations and cash flows of the Electronic business operations
transferred to us from Applied Power in connection with the Distribution.
Accordingly, for all periods presented prior to July 31, 2000, our Consolidated
Financial Statements have been established from the consolidated financial
statements of Applied Power using the historical results of our operations and
historical basis of our assets and liabilities and the allocation methodology
described under "Historical Allocations from Applied Power" below. We believe
the assumptions underlying our financial statements are reasonable.

Overview

We are a leading global technically enabled manufacturing services provider,
focused on designing and integrating large electronic enclosure products. We
have the capabilities to design and manufacture various subsystems for
electronic products, including enclosures, power supplies, thermal management
systems, printed circuit board assemblies, and cabling, either as individual
subsystems or as integrated custom systems. We provide a wide range of
integrated design, manufacturing and logistics services to customers, including
product design, supply chain management, manufacturing, assembly, testing and
drop-ship services. Operating in approximately 40 locations throughout North
America, South America, Europe and Asia, we provide our solutions and services
to original equipment manufacturers, primarily in the communications (datacom
and telecom), computing (enterprise hardware - large servers, large data
storage, networking) and Internet (application service providers, Internet
service providers and web hosting) markets. Our customers include industry
leaders such as Applied Materials, Cisco, Compaq, Cymer, EMC, Ericsson,
Fujitsu, Hewlett-Packard, IBM, Lucent, Marconi, Motorola, NCR, Nokia, Nortel
Networks and Sun Microsystems. Our ten largest customers comprised 42% of our
net sales for fiscal 2001.

The Distribution

During 1999, Applied Power's management began to consider the separation of
the Electronics business from the Industrial business as a way to more
effectively pursue strategic opportunities in the electronics market. On
January 26, 2000, Applied Power's board of directors authorized various actions
intended to position Applied Power to distribute the Electronics business to
its shareholders (the "Distribution") in the form of a special dividend.

On July 7, 2000, Applied Power's board of directors approved the
Distribution. The Distribution occurred on July 31, 2000 with shareholders of
Applied Power common stock as of the July 21, 2000 record date receiving one
share of APW Ltd. common stock for every Applied Power share owned. APW Ltd.
now trades separately on The New York Stock Exchange ("NYSE") under the ticker
symbol "APW." Applied Power continues to trade on The NYSE, but has changed its
ticker symbol to "ATU" and has subsequently changed its name to Actuant
Corporation ("Actuant"). Prior to the Distribution, APW was reorganized as a
Bermuda company.

Historical Allocations from Applied Power

Through July 31, 2000, Applied Power provided certain general and
administrative services to us including administration, finance, legal, tax,
treasury, information systems, corporate communications and human

resources. The cost for these services was allocated to us by Applied Power
based upon a formula that considered sales, operating profit, assets and
headcount. Management believes that the allocation of cost for these services
was reasonable. Since August 1, 2000, we have performed these general and
administrative services using internal resources or purchased services.

Applied Power's historical practice was to incur indebtedness for its
consolidated businesses at the parent company level or at a limited number of
subsidiaries, rather than at the operating company level, and to centrally
manage various cash functions. Accordingly, through July 31, 2000, our
historical amounts include debt and related interest expense allocated from
Applied Power based on the portion of Applied Power's investment in us which
was deemed to be debt. This allocation was based on a cash flow model which
details the historical uses of debt proceeds by us and the deemed debt
repayments by us based on free cash flow. Management believes that the
allocation of corporate debt and related interest expense for all periods prior
to July 31, 2000 was reasonable. In conjunction with the Distribution, the
consolidated debt of Applied Power was realigned between us and Applied Power.
Through an additional investment by Applied Power on July 31, 2000, a certain
portion of our allocated outstanding debt was retained by Applied Power.

The above allocation methodologies followed in preparing the accompanying
Consolidated Financial Statements prior to July 31, 2000 may not necessarily
reflect our results of operations, cash flows, or financial position in the
future, or what the results would have been had we been a separate, independent
entity for all periods presented.

Recent Developments

In September 2001, we amended certain debt covenants associated with our
existing Multi-Currency Credit Facility, U.K. Facility Agreement and Accounts
Receivable Facility (collectively, "credit facilities"). The amendment provides
us with the ability to implement additional restructuring plans and to benefit
from potential future equity capital raising initiatives. In addition, the
amendment changes certain financial covenants. In December 2001, we further
amended certain debt covenants associated with our credit facilities. The
amendment provides us with the ability to implement additional restructuring
plans and the ability to benefit from the potential sale of assets. In
addition, the amendment changes certain financial covenants and eliminates
certain mandatory reductions in the credit facilities in fiscal 2002. See
further discussion at "Liquidity".

Acquisitions

On December 15, 2000, we acquired certain assets and assumed certain
liabilities of Industrial Metalurgica Bagarolli Ltda. ("IMB") located in
Campinas, Brazil. IMB specializes in the design and manufacture of large indoor
and outdoor enclosure systems, as well as sub-assemblies and integration
services, to the telecom and financial services industries in South America.
The purchase price totaled $19.0 million, including fees and expenses, with
future consideration becoming payable during fiscal 2002 of $2.5 million to
$5.5 million, depending on the attainment of targeted revenue and earnings
before interest, taxes, depreciation and amortization levels. This acquisition
was funded by borrowings under our revolving credit facility. This acquisition
was accounted for using the purchase method, and the results of operations of
the acquired company are included in the Consolidated Statement of Operations
from the acquisition date. Allocations of the purchase price resulted in
approximately $12.1 million of goodwill, to be amortized over 20 years
(consistent with our acquisitions of this size and nature), and is subject to
adjustment for any future consideration in excess of $2.5 million. As a result
of our long-lived asset impairment assessment (see Note 3--"Goodwill
Impairment, Restructuring and Other Charges" in the accompanying notes to
consolidated financial statements), the goodwill associated with the
acquisition of IMB was fully amortized during fiscal 2001.

On February 16, 2001, we acquired the majority of the assets and assumed
certain liabilities of the Mayville Metal Products Division ("Mayville") of
Connell Limited Partnership. Mayville specializes in the design, manufacture
and integration of large outdoor enclosures, primarily for the telecom
industry. The purchase price

consisted of: 1) $225.0 million in cash (funded by borrowings under our
revolving credit facility); 2) 754,717 shares of our common stock, valued at
approximately $25.0 million, subject to adjustment depending on Mayville's 2001
calendar year net sales; and (3) assumed liabilities of $17.1 million. With
this acquisition, we issued an aggregate of 1,509,434 shares of common stock of
which 754,717 are contingently returnable in the event Mayville's 2001 calendar
year net sales do not attain targeted levels. The contingently returnable
shares are not included in the aforementioned purchase price as of August 31,
2001 nor are those shares used to calculate the loss per share for fiscal 2001.
This acquisition was accounted for using the purchase method of accounting and
the results of operations of the acquired company are included in the
Consolidated Statement of Operations from the acquisition date. Allocations of
the purchase price resulted in approximately $208.6 million of goodwill and
other intangibles, to be amortized over periods not to exceed 40 years
(consistent with our acquisitions of this size and nature), and are subject to
adjustment for any earn-out.

Fiscal 2001 Compared to Fiscal 2000

Net Sales

Net sales for fiscal 2001 increased to $1.27 billion from $1.24 billion in
fiscal 2000, an increase of 2.3% (6.1% excluding the negative impact of foreign
currency translation). Fiscal 2001 net sales were negatively impacted by the
broad based slow down in the technology sector which has resulted in reduced
demand for some of our customers products and in turn has negatively impacted
the demand those customers have for our products and services. This negative
impact on sales is partially offset by: 1) the Company's diverse customer base
as evidenced by the fact that net sales to the Company's top 10 customers only
account for 42% of the Company's total net sales for fiscal 2001; and 2) the
inclusion of net sales generated by the second quarter fiscal 2001 acquisitions
of IMB and Mayville.

Geographic Sales

Years Ended August 31,
(Dollars in millions) ----------------------
2001 2000 Change
-------- -------- ------

Americas.......... $ 780.3 $ 734.3 6.3%
Europe and Asia... 487.4 505.2 (3.5%)
-------- -------- ------
Total.......... $1,267.7 $1,239.5 2.3%
======== ======== ======

Net sales in the Americas for fiscal 2001 increased to $780.3 million from
$734.3 million in fiscal 2000, an increase of 6.3%. The increase was due to the
inclusion of the acquisitions of IMB (completed in early second quarter of
fiscal 2001) and Mayville (completed late in the second quarter of fiscal 2001)
as well as a complete year of net sales related to the acquisition of Metalade
in the second quarter of fiscal 2000. The increase in fiscal 2001 net sales
resulting from the aforementioned acquisitions was offset by the broad based
slow down in the technology sector.

Net sales in Europe and Asia for fiscal 2001 decreased to $487.4 million
from $505.2 million in fiscal 2000, a decrease of 3.5%. Foreign currency
translation and our exit of the high-volume personal computer business
adversely impacted fiscal 2001 Europe and Asia net sales compared to fiscal
2000. The appreciation of the U.S. dollar against the British Pound Sterling,
Euro, and Danish Krone currencies adversely impacted translation of these
currencies into U.S. dollars by $48 million. Our decision to exit the
high-volume personal computer related business adversely impacted Europe and
Asia net sales by approximately $38.6 million in fiscal 2001. Excluding both
the adverse impact of foreign currency translation and the exit of the
high-volume personal computer business, Europe and Asia net sales grew 16.3% in
fiscal 2001.

Gross Profit

Fiscal 2001 gross profit decreased to $224.6 million from $322.2 million in
fiscal 2000, a decrease of 30.3%. As a percentage of net sales, fiscal 2001
gross profit was 17.7% compared to 26.0% in fiscal 2000. The

decrease in gross profit as a percentage of net sales is primarily a result of
a combination of factors: 1) $13.0 million of inventory write-offs primarily
related to customer program modifications resulting in excess components; 2)
$13.8 million of costs related to the restructuring (primarily equipment
write-offs); 3) under-absorption of costs resulting from the broad based slow
down in the technology sector which significantly reduced sales volumes; 4)
start-up costs associated with new programs; and 5) a shift in sales mix to
programs with increased levels of systems integration, which typically have
lower margins.

Operating Expenses

Fiscal 2001 operating expenses were $226.7 million compared to $201.8
million in fiscal 2000, an increase of 12.3%. As a percentage of net sales,
fiscal 2001 operating expenses were 17.9% compared to 16.3% for fiscal 2000.
Our operating expenses consist primarily of engineering, selling, marketing,
finance, information technology and general administrative expenses. The
increase in operating expenses as a percentage of net sales is primarily a
result of a combination of factors: 1) $2.5 million of accounts receivable
write-offs deemed uncollectable in the fiscal 2001 third quarter; 2) $9.8
million write-off of an investment assumed through a prior acquisition; 3) $0.7
million of charges related to the amendment of the credit facilities completed
on May 15, 2001; 4) $0.5 million of costs associated with the restructuring
plans; and 5) under-absorption of costs resulting from the broad based slow
down in the technology sector which significantly reduced sales volumes.

Fiscal 2000 operating expenses include an allocation of Applied Power's
corporate general and administrative expenses based on estimated levels of
effort devoted to APW and APW's relative size compared to Applied Power's total
revenues, operating profit, assets and employee headcount. Management believes
that the allocation of Applied Power's corporate general and administrative
expense for the historical periods is reasonable. See "Historical Allocations
from Applied Power" above for further discussion of operating expenses
allocated to APW from Applied Power.

Amortization of Intangible Assets

Fiscal 2001 amortization of intangible assets (amortization) was $194.3
million compared to $23.9 million in fiscal 2000. Fiscal 2001 amortization as a
percentage of net sales increased to 15.3% compared to 1.9% in fiscal 2000. The
increase in amortization was primarily due to the $166.9 million write-down of
goodwill in fiscal 2001 resulting from the closing of certain facilities and
the long-lived asset impairment assessment we performed due to a deterioration
of our operating results during fiscal 2001.

Divestiture

On November 20, 2000, we completed the sale of a subsidiary for a net $1.7
million, which resulted in a net loss of $2.7 million.

Goodwill Impairment, Restructuring and Other Charges

During fiscal 2001 we recognized pre-tax goodwill impairment, restructuring
and other charges totaling $225.0 million. The components of the charges
recorded during fiscal 2001 are as follows (dollars in millions):

Nature of
Charges Charges
------- ---------

Facility closure costs:
Severance........................................................ $ 10.2 Cash
Lease exit costs................................................. 6.8 Cash
Equipment impairment............................................. 12.6 Non-cash
Other costs...................................................... 1.7 Cash
------
Total facility closure costs................................... 31.3
Goodwill impairment............................................... 166.9 Non-cash
Inventory and accounts receivable write-downs..................... 15.5 Non-cash
Investment write-off.............................................. 9.8 Non-cash
Credit facility amendment fees.................................... 1.5 Cash
------
Total pre-tax goodwill impairment, restructuring and other charges $225.0
======

Restructuring

In connection with the facility closure costs, our management developed
formal plans to exit certain facilities and involuntarily terminate employees.
Management's plans to exit certain facilities included the identification of
duplicate manufacturing and sales facilities for closure and the transfer of
the related operations to other facilities. Management currently anticipates
that the facility closures and all related activities will be substantially
complete within one year of the commitment dates of the respective exit plans.

Of the $31.3 million in facility closure costs, $18.7 million are cash costs
and $12.6 million are non-cash costs. Of the $18.7 million in cash costs, only
$2.0 million are incremental cash costs that would not have been incurred in
the next 12 months without undertaking these restructuring actions.

The following table summarizes the activity with respect to fiscal 2001
restructuring charges (in millions, except employee data):

Severance Facilities Total
---------------- ---------- -------
Number of
Employees Reserve Reserve Reserve
--------- ------- ---------- -------

Total reserve balance at August 31, 2000 -- $ -- $ -- $ --
Add: fiscal 2001 charges................ 2,602 10.2 6.8 17.0
Less: fiscal 2001 utilization........... (2,315) (8.1) (1.6) (9.7)
------ ----- ----- -----
Ending balance at August 31, 2001....... 287 $ 2.1 $ 5.2 $ 7.3
====== ===== ===== =====

Goodwill and Equipment Impairment

In fiscal 2001, we performed an impairment assessment of our long-lived
assets, which include property, plant and equipment, goodwill and other
intangible assets. The assessment was performed primarily due to a

deterioration of our operating results during fiscal 2001 and the decision
during fiscal 2001 to close certain facilities. As a result of the assessment,
we recorded a $166.9 million impairment charge to reduce the carrying value of
goodwill and a $12.6 million impairment charge to reduce the carrying value of
equipment associated with closed facilities. The goodwill impairment charge is
recorded as a component of amortization of intangible assets in the fiscal 2001
Consolidated Statement of Operations. The equipment impairment charge is
recorded as cost of products sold in the fiscal 2001 Consolidated Statement of
Operations. Each charge was measured, in accordance with the provisions of SFAS
No. 121, based upon our estimated discounted cash flows. The assumptions
supporting these cash flows were determined using our best estimates. The
remaining long-lived assets will continue to be depreciated and amortized over
their remaining useful lives, which management considers appropriate.

Other Charges

During fiscal 2001, we recorded write-downs of inventory and accounts
receivable totaling $15.5 million primarily as a result of the broad based
slowdown in the technology sector that began to occur during fiscal 2001.
Inventory write-downs of $13.0 million are recorded as cost of products sold in
the fiscal 2001 Consolidated Statement of Operations and primarily relate to
customer program modifications resulting in excess components. Accounts
receivable write-downs of $2.5 million are recorded as a engineering, selling
and administrative expense in the fiscal 2001 Consolidated Statement of
Operations and relate to certain accounts receivables that were deemed
uncollectable during fiscal 2001.

During fiscal 2001, we wrote-off a $9.8 million investment we assumed
through a prior acquisition that became impaired. The write-off is recorded as
a component of engineering, selling and administrative expense in the fiscal
2001 Consolidated Statement of Operations.

On May 15, 2001, we amended our credit facilities, including our
Multi-Currency Credit Agreement and U.K Facility Agreement. We incurred $1.5
million in fees associated with the amendment of which $0.7 million is recorded
as engineering, selling and administrative expense and $0.8 million is recorded
as net financing costs in the fiscal 2001 Consolidated Statement of Operations.

Operating Earnings (Loss)

We incurred an operating loss of $216.1 million in fiscal 2001 compared to
operating earnings of $89.9 million in fiscal 2000. The fiscal 2001 operating
loss was due to $224.2 million of goodwill impairment, restructuring and other
costs incurred during fiscal 2001 as well as reduced sales volumes, driven by
the broad based slow down in the technology sector, which resulted in the
under-absorption of costs during fiscal 2001.

Net Financing Costs

Fiscal 2001 net financing costs were $43.8 million compared to $52.7 million
in fiscal 2000, a decrease of 16.9%. Included in fiscal 2001 net financing
costs is $1.5 million of amortization related to capitalized fees associated
with amending the financing facilities and $0.8 million in fees associated with
amending the financing facilities. Fiscal 2000 net financing costs are net of
an allocated $5.5 million pre-tax gain related to the unwinding of interest
rate swap agreements in conjunction with obtaining a new credit facility in the
fourth quarter of fiscal 2000. The decrease in net financing costs is due to
lower levels of debt in fiscal 2001 as compared to the debt allocated to us in
fiscal 2000 by Applied Power as described above in "Historical Allocations from
Applied Power" as well as lower interest rates during fiscal 2001.

Other Expense, net

Other expense, net was $2.4 million and $5.0 million in fiscal 2001 and
2000, respectively. Other expense, net includes foreign currency exchange gains
and losses, as well as other miscellaneous, non-operating income

and expenses. Fiscal 2000 other expense, net includes a pre-tax loss of $3.3
million associated with the termination of Euro forward contracts.

Income Tax Expense (Benefit)

We recorded an income tax benefit of $25.7 million in fiscal 2001 compared
to income tax expense of $53.6 million in fiscal 2000. Our effective income tax
rate was 9.8% for fiscal 2001, compared to 165.8% for fiscal 2000. The fiscal
2000 effective tax rate was significantly greater due to the $40 million income
tax provision we recorded when we reorganized as a Bermuda company. Excluding
this item, the fiscal 2000 effective income tax rate would have been 42.1%. The
decrease in the fiscal 2001 effective tax rate is primarily a result of the
impact of the goodwill impairment charge and the Company's reorganization as a
Bermuda company. See "Goodwill Impairment, Restructuring and Other Charges"
above for further discussion of the goodwill impairment charge. See "The
Distribution" above for further discussion of the reorganization as a Bermuda
based company.

Fiscal 2000 Compared to Fiscal 1999

Net Sales

Fiscal 2000 net sales grew to $1.24 billion from $1.06 billion in fiscal
1999, an increase of 17% (21% excluding the adverse effect of foreign currency
translation, caused by the U.S. dollar's appreciation against the British Pound
Sterling, the Euro, and Danish Krone). Our net sales growth in fiscal 2000
accelerated in the second half of the fiscal year as growth in the last six
months of fiscal 2000 over the comparable prior year period was 24% (26%
excluding the adverse effect of foreign currency translation). In late fiscal
1999, we put a strategy in place to focus on targeted customers in the
communications, computing, and Internet markets by dedicating sales,
engineering, and program management resources to work with these accounts. We
believe the successful implementation of our strategy from late fiscal 1999
throughout fiscal 2000, coupled with our ability to execute and deliver an
integrated technical solution to our customers on a global basis, is the
primary reason for our net sales growth in fiscal 2000, particularly in the
second half. Our fiscal 2000 net sales growth was also influenced by the
inclusion of acquisitions completed in fiscal 2000 and an additional month of
sales from the Rubicon acquisition, which was completed in October 1998.
Excluding acquisitions, net sales increased 12% in fiscal 2000 (16% excluding
the adverse effect of foreign currency translation).

Geographic Sales

Years Ended August 31,
(Dollars in millions) ----------------------
2000 1999 Change
-------- -------- ------

Americas.......... $ 734.3 $ 576.0 27.5%
Europe and Asia... 505.2 479.3 5.4%
-------- -------- ----
Total............. $1,239.5 $1,055.3 17.5%
======== ======== ====

Fiscal 2000 Americas sales grew to $734.3 million from $576.0 million in
fiscal 1999, an increase of 27.5%. Internal sales growth accounted for $124.2
million of the increase over fiscal 1999. The balance of the net sales
increase, $33.1 million, was a result of acquisitions completed in the second
half of fiscal 1999 and throughout fiscal 2000. The fiscal 2000 internal growth
in Americas was primarily driven by growth in our custom integrated systems,
thermal management and Internet business solutions product lines.

Fiscal 2000 European and Asia sales grew to $505.2 million from $479.3
million in fiscal 1999, an increase of 5.4%. Our fiscal 2000 European and Asia
net sales were adversely impacted by our decision to exit some high-volume
personal-computer related business we inherited via acquisition. We are exiting
this business in order to create capacity for our custom integrated systems
product lines. The exit of this business adversely impacted European and Asia
net sales by approximately $18.0 million in fiscal 2000. Foreign currency
translation

adversely impacted fiscal 2000 European and Asia net sales compared to fiscal
1999. The appreciation of the U.S. dollar against the British Pound Sterling,
the Euro and Danish Krone currencies adversely impacted translation of these
currencies into U.S. dollars by $42.1 million. Excluding both the adverse
impact of foreign currency translation and the exit of the high-volume personal
computer business, European and Asia net sales grew 18% in fiscal 2000 (13% as
result of internal growth and 5% as a result of our acquisitions).

Gross Profit

Fiscal 2000 gross profit increased to $322.2 million from $290.5 million in
fiscal 1999, an increase of 10.9%. As a percentage of net sales, fiscal 2000
gross profit decreased to 26.0% from 27.5% in fiscal 1999. The decrease in
gross profit as a percent of net sales is a result of the change in composition
of our total net sales. A greater percentage of our total net sales in fiscal
2000 were derived from custom integrated systems versus standard products than
in fiscal 1999. Historically, our standard product lines have had a higher
gross profit margin than our custom integrated systems product lines. In the
future, our gross profit margins could fluctuate from quarter to quarter based
on the amount of net sales that include integration-related content relative to
total net sales. As part of our strategy to expand our customer relationships
by providing a total solution, we expect the percentage of our net sales
represented by custom integrated systems to further increase. Our strategy is
also to increase the proportion of custom integrated systems business that
involves the integration of products manufactured by us.

Operating Expenses

Fiscal 2000 operating expenses grew to $208.4 million from $188.0 million in
fiscal 1999, an increase of 10.9%. As a percentage of net sales, operating
expenses were 16.8% for fiscal 2000, compared to 17.8% for fiscal 1999. Our
operating expenses consist primarily of engineering, selling, marketing,
finance, information technology and general administrative expenses. Fiscal
2000 operating expenses also include a $6.5 million allocated charge for
corporate reorganization expenses incurred by Applied Power related to the
Distribution. The decrease in our fiscal 2000 operating expenses as a
percentage of net sales is primarily the result of leverage on our existing
organization infrastructure. In future periods, we will continue to focus on
our business strategy to be customer focused and technically innovative on a
global basis, which will require us to add engineers, program management,
supply chain, and sales personnel as well as other functional support
positions. We expect that our operating expenses expressed in dollars will
continue to grow from year to year. Our goal is to continually identify ways to
be more cost efficient, by either consolidating common functions between our
facilities or by investing in technologies and information tools that will
ultimately allow us to reduce operating expenses in both dollars and as a
percentage of net sales.

Through July 31, 2000, historical operating expenses include an allocation
of Applied Power's corporate general and administrative expenses based on our
relative size compared to Applied Power's total revenues, operating profit,
assets and employee headcount. We believe that the allocation of Applied
Power's corporate general and administrative expense for the historical periods
is reasonable. See ''Historical Allocations from Applied Power'' above for
further discussion of operating expenses allocated to us from Applied Power. We
expect that costs for these corporate functions will differ following the
Distribution, and therefore, adjusted historical results reflect an adjustment
for estimated incremental general corporate expenses to be incurred by us as an
independent company. Although these adjustments are based upon available
information and assumptions that we believe are reasonable, we may incur
greater than expected selling, administrative and other expenses in connection
with operating as an independent company.

Amortization of Intangible Assets

Fiscal 2000 amortization of intangible assets grew to $23.9 million from
$20.9 million in fiscal 1999, an increase of 14%. This increase was primarily
the result of the amortization of goodwill recorded for acquisitions made in
fiscal 2000 and fiscal 1999, which included Innovative Metal Fabrication,
Metalade, and Malcoe. Also

contributing to the increased amortization of intangible assets in fiscal 2000
is the inclusion of an additional month of amortization expense related to the
Rubicon acquisition.

Operating Earnings

Fiscal 2000 operating earnings grew to $89.9 million from $81.6 million in
fiscal 1999, an increase of 10.2%. As a percentage of net sales, operating
earnings decreased to 7.2% from 7.7% in fiscal 1999. The primary reason for the
increase in operating earnings in fiscal 2000 is the increased sales volume and
the leverage of increased net sales volume on relatively small increases in
operating expenses and amortization of intangible assets. The decrease in
operating earnings as a percentage of net sales in fiscal 2000 versus fiscal
1999 is a result of the corporate reorganization expenses allocated to us from
Applied Power of $6.5 million. Excluding those allocated corporate
reorganization expenses, operating earnings as a percentage of net sales would
have been 7.8%.

Net Financing Costs

See "Historical Allocations" from Applied Power" above for further
discussion of net financing costs allocated to us from Applied Power.

Fiscal 2000 net financing costs decreased to $52.6 million from $52.9
million in fiscal 1999, a decrease of less than 1%. Our fiscal 2000 net
financing costs are net of an allocated $5.5 million pre-tax gain related to
the unwinding of interest rate swap agreements in conjunction with obtaining
new credit facilities. The interest rate swap agreements were canceled by
Applied Power in anticipation of the Distribution and a portion of the
associated gain was allocated to us. Excluding the interest rate swap gains,
our fiscal 2000 net financing costs increase was primarily the result of a
general increase in interest rates throughout fiscal 2000. Our fiscal 2000 net
financing costs increase was also influenced by additional borrowings incurred
to finance acquisitions completed during and subsequent to fiscal 1999 offset
by cash flow from operations which was used to repay principal on debt.

Other (Income) Expense, net

Fiscal 2000 Other (Income) Expense, net was $5.0 million of expense. Other
(Income) Expense, net includes foreign currency exchange gains and losses,
gains and losses on the sale of fixed assets as well as other miscellaneous,
non-operating income and expenses. In fiscal 2000, we incurred a pre-tax loss
of $3.3 million associated with the termination of Euro forward contracts.

Income Tax Expense

Fiscal 2000 income tax expense grew to $53.6 million from $10.8 million in
fiscal 1999. Our effective income tax rate was 165.8% in fiscal 2000, compared
to 35.6% in fiscal 1999. Our fiscal 2000 effective income tax rate was
significantly greater than our fiscal 1999 rate primarily as a result of the
$40.0 million income tax provision we recorded when we reorganized as a Bermuda
company. Excluding this one-time item, our fiscal 2000 effective income tax
rate was 42.1%. Our fiscal 2000 effective income tax rate also increased over
the fiscal 1999 effective income tax rate because a higher percentage of our
total pre-tax income in fiscal 2000 was derived domestically. Our domestic
income is taxed at a higher rate than our foreign income.

The goodwill and subsequent amortization expense recorded as a result of
most of our acquisitions is non-deductible for tax purposes. Effective income
tax rates were higher than the statutory rate for all periods presented
primarily as a result of state income taxes and non-deductible amortization of
goodwill, partially offset by net effects of foreign tax rates and credits. We
believe that our effective tax rate should decrease as a result of reorganizing
as a Bermuda company. As such, adjusted income tax expense represents the
anticipated lower effective income tax rate of 30% on the higher adjusted
pre-tax earnings that we expect to be subject to after the Distribution, debt
realignment and reorganization in Bermuda.

We have agreed to indemnify Applied Power against certain tax liabilities
arising from the reorganization leading up to the Distribution. The
reorganization, including the merger and our continuation as a Bermuda company,
involves taxable transactions. Under a tax sharing agreement we entered into
with Applied Power, we will be responsible for federal and state income taxes
resulting from the reorganization transactions. As a result, we will bear the
risk of any audit adjustments by the IRS or other taxing authorities
challenging the reporting of the reorganization transactions.

Extraordinary Loss

In fiscal 2000, we recorded an extraordinary loss of $2.1 million, ($3.3
million pre-tax, net of a $1.2 million tax benefit) that relates to a
make-whole premium paid in connection with the early retirement of $50.0
million of senior promissory notes of a ZERO subsidiary due March 8, 2011.

Liquidity and Capital Resources

Cash Flows

Fiscal Fiscal Fiscal
2001 2000 1999
(in millions) ------- ------ -------

Cash provided by (used in):
Operating activities.... $ (19.7) $ 36.1 $ 75.5
Investing activities.... (329.2) (60.1) (435.3)
Financing activities.... 360.1 9.3 373.7

Cash and cash equivalents totaled $6.2 million at August 31, 2001 and $0.7
million at August 31, 2000.

Net cash used in operating activities was $19.7 million in fiscal 2001
compared to $36.1 million provided by operations in fiscal 2000. The decrease
in cash flow from operations was primarily due to the negative impact of the
broad based slow down in the technology sector on fiscal 2001 earnings, a $30.0
million payment to Actuant under the tax sharing agreement we entered into as
part of the Distribution, other tax payments totaling $14.5 million and
restructuring related payments totaling $11.1 million. These uses of cash were
mainly offset by improvements in working capital.

The decrease in fiscal 2000 cash flow from operations when compared to
fiscal 1999 is primarily due to additional expenditures related to the
corporate reorganization and the subsequent Distribution. Another factor
contributing to the decrease was an increase in accounts receivable at August
31, 2000, mainly due to the increase in sales in the second half of fiscal 2000
versus the second half of fiscal 1999.

Net cash used in investing activities was $329.2 million in fiscal 2001
compared to $60.1 million in fiscal 2000 and $435.3 million in fiscal 1999. The
use of cash in fiscal 2001 primarily consisted of $241.5 million used for
business acquisitions and capital expenditures of $88.5 million. Net cash used
in investing activities in 2000 and 1999 primarily consisted of investments in,
and acquisitions of businesses totaling $13.3 million and $401.9 million,
respectively, and capital expenditures of $45.9 million and $43.0 million,
respectively.

Capital expenditures significantly decreased in the second half of 2001 to
approximately $30.7 million from $57.8 million in the first half of fiscal
2001. APW Ltd. anticipates that capital expenditures will be less than $30.0
million during fiscal 2002.

Net cash provided by financing activities was $360.1 million, $9.3 million
and $373.7 million in fiscal 2001, 2000 and 1999, respectively. Fiscal 2001
financing activities consisted of net revolver borrowings of $434.4 million,
commercial paper repayments of $51.2 million, a reduction in the accounts
receivable facility of $20.9 million and the payment of $7.7 million in debt
financing costs. Fiscal 2000 financing activities include $33.0

million of net cash investments by and advances from Applied Power, net
proceeds of $26.1 million from a sale-leaseback transaction related to five
properties located in the United States and $53.4 million of net principal
payments on long-term debt. Fiscal 1999 financing activities include $359.8
million of net cash investments by and advances from Applied Power, $37.1
million of proceeds from the accounts receivable facility and $24.0 million of
principal payments on long-term debt.

Capitalization

Debt at August 31, 2001 totaled $621.4 million, an increase of $385.0
million since the beginning of fiscal 2001. The increase in debt was primarily
due to the funding of business acquisitions totaling $241.5 million and $88.5
million in capital expenditures as well as the need to fund operations due to
the broad based slow down in the technology sector during fiscal 2001. In
addition, a decrease in the accounts receivable facility required borrowings of
$20.9 million during fiscal 2001.

Debt at August 31, 2000 totaled $236.4 million, a decrease of approximately
$492.4 million since the beginning of the fiscal year. The significant decrease
in debt was a result of the debt realignment between APW and Applied Power in
connection with the Distribution, net principal payments on debt through cash
flow from operations and sale-leaseback financing activities, offset by
additional debt incurred to fund fiscal 2000 acquisitions. See "Historical
Allocations from Applied Power" above for discussion of Applied Power debt
allocated to APW before July 31, 2000.

APW was formed as an indirect wholly owned subsidiary of Applied Power
through a continuation of an existing company (previously named Wright Line,
Inc. and now named APW Ltd.) in Bermuda. As a result, APW became a Bermuda
company and at such time issued 1.2 million shares owned indirectly by Applied
Power. In connection with the Distribution, APW issued additional shares
totaling 37,997,135, which were held indirectly by Applied Power and on July
31, 2000, Applied Power distributed all 39,197,135 shares to the shareholders
of Applied Power. In addition, as a result of the above discussed debt
realignment between APW and Applied Power, our total equity was increased
significantly due to the additional investment by Applied Power to retain a
certain portion of our allocated debt.

Prior to the Distribution, "Combined equity" in our Consolidated Financial
Statements represents Applied Power's cumulative net investment in APW's
combined businesses. Changes in "Combined equity" represent our net income
(loss), net cash and non-cash contributions from distributions to Applied
Power, changes in allocated corporate debt and allocated corporate interest,
net of tax.

Liquidity

On May 15, 2001, we amended our credit facilities. The amended credit
facilities continue with their original expiration date of July 31, 2003. The
amendment resulted in increased interest spreads, new financial covenant tests,
the pledging of substantially all the Company's and its subsidiaries' assets as
collateral under the credit facilities and the issuance of common stock
warrants of 5% of the common stock outstanding on May 15, 2001 (approximately
2.1 million shares). In addition, the amendment reduced the facility limit on
the Multi-Currency Credit Agreement from $600.0 million to $570.0 million.

On September 27, 2001, the Company's lenders amended certain debt covenants
associated with our credit facilities. These revised covenants were established
based upon APW management's financial forecasts prior to the events of
September 11, 2001. Throughout the first fiscal quarter of 2002, our Company,
like others in our industry, experienced a significant decline in net sales
compared to prior periods and compared to management's financial forecasts that
were the basis for the financial covenants set forth in the September 27, 2001
amendment. Such declines are related to a number of factors, certain of which
were impacted by the terrorist attacks that took place in the United States on
September 11, 2001. Those terrorist attacks were unprecedented events which
have created many economic and political uncertainties. On December 13, 2001,
the Company's lenders again

amended certain debt covenants associated with the Company's credit facilities
to reflect the Company's revised financial forecasts as of that point in time.
The revisions in the covenants were considered necessary due to the magnitude
of the decline in the first fiscal 2002 quarter actual results compared to
prior periods and management's forecasts. In addition, the amendment repriced
the outstanding warrants issued in conjunction with the May 15, 2001 amendment
to the closing price of our common stock on December 10, 2001 of $1.98 and
eliminated the previous reduction provision if the Company met repayment
targets by August 31, 2002. The Company also issued warrants for 9.9% of the
common stock outstanding on December 13, 2001 (approximately 4.1 million
shares) at a price of $0.01. These $0.01 warrants are cancelled if the credit
facilities are repaid by July 31, 2002 (entirely cancelled) or September 30,
2002 (49.5% cancelled).

If the magnitude of the decline in net sales continues or we experience a
significant change in our cost structure, we may not be able to comply with the
covenants which were agreed to with the Company's lenders as of December 13,
2001. Further, such covenants contemplate the sale of one of the Company's
divisions during the second fiscal 2002 quarter. Should this transaction not be
completed during the second fiscal 2002 quarter for any reason, we would likely
violate a financial covenant during our second fiscal 2002 quarter ending
February 28, 2002.

APW's management plans to continue to aggressively pursue additional revenue
opportunities within its core customer markets. We have adopted several
restructuring plans during fiscal 2001 in an effort to reduce costs in the wake
of declining net sales experienced during fiscal 2001. These programs resulted
in restructuring charges during fiscal 2001 and have provided cost savings
which are expected to continue into the future. Management plans to consider
additional cost-reduction programs, as necessary, to further align the
Company's cost base with net sales.

While the Company's revised financial forecasts reflect management's best
estimates, there can be no assurances that our fiscal 2002 financial forecasts,
which are the basis of the current financial covenants, will be achieved. If
our actual operating performance does not substantially meet the fiscal 2002
financial forecasts associated with the amended covenants, we may have
difficulty achieving compliance with certain debt covenants in our amended
credit facilities. If we fail to comply with debt covenants for any reason, we
may have to consider a number of the following measures: (a) obtain a waiver of
default for the violated covenant(s); (b) obtain an amendment of the covenants
in the existing credit facilities; (c) seek additional sources of debt
financing, which likely would be subject to obtaining necessary lender
consents; (d) seek additional equity financing or other strategic alternatives;
(e) restructure our obligations and/or the business; or (f) consider a
combination of the foregoing. Given these circumstances, the Company is
evaluating its alternatives. There can be no assurances that the aforementioned
alternatives would be available to the Company in the future. If this were the
case, a future violation of debt covenants would cause a material adverse
effect on our ability to continue in our present form and to achieve our
intended business objectives.

As a result of the restatement for the year ended August 31, 2001, the
Company believes that it would have been in default of certain debt covenants
as of August 31, 2001, unless the Company had obtained waivers or further
amendments to its debt covenants in connection with the September 27, 2001 or
December 13, 2001 amendments previously discussed. Accordingly, the Company has
classified borrowings under the Revolving Multi-Currency Credit Agreement and
the U.K. Facility Agreement as a current liability as of August 31, 2001 in the
restated consolidated financial statements.

The amended Multi-Currency Credit Agreement is used to finance working
capital, capital expenditures and other general corporate requirements. Under
the amended Multi-Currency Credit Agreement, the Company can borrow at a fixed
rate of LIBOR plus 3.500% annually. As of August 31, 2001, based upon our
current total borrowings, the weighted average interest rate was 7.206%. A
non-use fee computed at the rate of 0.500% is payable quarterly on the average
unused portion under the amended Multi-Currency Credit Agreement. This amended
Multi-Currency Credit Agreement contains restrictions concerning permitted
investments, permitted liens on assets and the sale of assets.

The amended U.K. Facility Agreement, providing 52.2 million British Pounds
Sterling (approximately $75.9 million) in borrowings, is used to finance
working capital, capital expenditures and other general corporate purposes.
This amended agreement expires on July 31, 2003. Similar to the amended
Multi-Currency Credit Agreement, the amended U.K. Facility Agreement includes
restrictions concerning investments, liens on assets and sale of assets. As of
August 31, 2001, based upon our current total borrowings, the weighted average
interest rate was 8.230%.

During the fiscal 2001 third quarter, we ceased issuing commercial paper and
commenced the redemption of all outstanding commercial paper on the original
maturity dates. As of August 31, 2001, we have no outstanding commercial paper.

On July 31, 2000, as part of the Distribution, we assumed Applied Power's
$150.0 million off-balance sheet accounts receivable facility. The Accounts
Receivable Facility (facility) was amended to decrease the amount available
from $150.0 million to $80.0 million on April 4, 2001. The facility was further
amended on May 15, 2001 to extend the agreement to May 14, 2002. At August 31,
2001, $58.0 million of receivable interests were sold under this facility.

At August 31, 2001 and November 30, 2001, we had $52.4 million and $24.0
million, respectively, of borrowings available under our two credit facilities.
In addition, at August 31, 2001 and November 30, 2001, although we sold all
eligible accounts receivable under our accounts receivable facility, we had the
availability to sell an incremental $22 million and $35.4 million, respectively.

On September 29, 2000, APW filed a registration statement on Form S-3 with
the Securities and Exchange Commission utilizing a "shelf" registration
process. We may from time to time offer any combination of securities described
in the registration statement in one or more offerings with a total initial
offering price of up to $500.0 million. We continuously evaluate certain
possible issuances and any net proceeds will be used to repay, in part,
existing indebtedness, to finance capital expenditures and for general
corporate purposes.

We have not paid any cash dividends on the Company's common stock. We are
prohibited under the bank credit facilities arrangements from paying any cash
dividends, with the exception of dividends payable on the preferred stock of a
subsidiary of the Company. We currently intend to retain any earnings for use
in the business and do not anticipate paying cash dividends on common stock for
the foreseeable future.

European Economic Monetary Union

On January 1, 1999, eleven of the European Union countries (including eight
countries in which we have operations) adopted the Euro as their single
currency, resulting in fixed conversion rates between their existing currencies
("legacy currencies") and the Euro. The Euro trades on currency exchanges and
is available for non-cash transactions. Following the introduction of the Euro,
the legacy currencies remain legal tender in the participating countries during
the transition through January 1, 2002. Beginning on January 1, 2002, the
European Central Bank will issue Euro-denominated bills and coins for use in
cash transactions. On or before July 1, 2002, the participating countries will
withdraw all legacy bills and coins and use the Euro as their legal currency.

Our various operating units located in Europe that are affected by the Euro
conversion intend to maintain their books in their respective legacy currency
through a portion of the three-year introductory period. At this time, we do
not expect the reasonably foreseeable consequences of the ongoing Euro
conversion to have material adverse effects on our business, operations or
financial condition.

Environmental Compliance

The Company has facilities in a number of geographic locations that are
subject to a range of environmental laws and regulations. Compliance with these
laws has and will require expenditures on a continuing basis.

Predecessors to APW Ltd. have been identified by the United States
Environmental Protection Agency ("EPA") as "Potentially Responsible Parties"
regarding various multi-party Superfund sites. Potentially Responsible Parties
are jointly and severally liable with respect to Superfund site remediation
liabilities. Any liability in connection with these sites has been assumed by
APW Ltd. Based on our investigations, we believe that we are a de minimis
participant in certain of these sites. As to one site, we are a minor
participant, and our share of estimated cleanup costs is not likely to exceed
$1.1 million. As to another EPA site where we are not a de minimis participant,
the state has required us to conduct additional ground water testing at our
former manufacturing facility, and we cannot reasonably estimate the amount of
our liability, if any. In addition, we are also involved in other state clean
up actions for which we believe the aggregate costs of remediation are
adequately reserved for.

We anticipate that environmental costs will be expensed or capitalized
depending on their future economic benefits. Expenditures that have no future
economic value will be expensed. Liabilities will be recorded when
environmental remediation is probable and the costs can be reasonably
estimated. Environmental expenditures over the last three years for us have not
been significant. Although the level of future expenditures for environmental
remediation is impossible to determine with any degree of certainty, in our
opinion these costs are not likely to have a material adverse effect on our
financial position, results of operations or cash flows. Environmental
remediation accruals of $4.4 million and $3.2 million were included in our
Consolidated Balance Sheets at August 31, 2001 and 2000, respectively.

Seasonality

Due to the shortened number of business days in the second quarter of our
fiscal year (from December 1 to February 28), we typically experience lower
sales volumes in the second quarter of each fiscal year as compared to the
other quarters in the fiscal year.

Inflation

No meaningful measures of inflation are available because we have a
significant number of operations in countries with diverse rates of inflation
and currency rate movements.

New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations" and No. 142, "Goodwill and Other Intangible Assets." The
statements eliminate the pooling-of-interests method of accounting for business
combinations and require that goodwill and certain intangible assets not be
amortized. Instead, these assets will be reviewed for impairment annually with
any related losses recognized in earnings when incurred. SFAS No. 141 is
effective for us as of July 31, 2001. SFAS No. 142 will be effective for the
Company on September 1, 2002 for existing goodwill and intangible assets. The
Company is currently evaluating the impact of SFAS No. 142.

Management's Discussion and Analysis of Financial Condition and Results
of Operations

The following discussion of our financial condition and our results of
operations should be read in conjunction with our accompanying unaudited
condensed consolidated financial statements and related notes thereto.

Overview

APW Ltd. is a leading global technically enabled manufacturing services
provider, focused on designing and integrating large electronic enclosure
products. We have the capabilities to design and manufacture various subsystems
for electronic products, including enclosures, power supplies, thermal
management systems, printed circuit board assemblies, and cabling, either as
individual subsystems or as integrated custom systems. We provide a wide range
of integrated design, manufacturing and logistics services to customers,
including product design, supply chain management, manufacturing, assembly,
testing and drop-ship services. Operating in over 30 locations throughout North
America, South America, Europe and Asia, we provide our solutions and services
to original equipment manufacturers, primarily in the communications (datacom
and telecom), computing (enterprise hardware - large servers, large data
storage, networking) and Internet (application service providers, Internet
service providers and web hosting) markets. Our customers include industry
leaders such as Applied Materials, Cisco, Compaq, Cymer, EMC, Ericsson, Fujitsu,
Hewlett-Packard, IBM, Lucent, Marconi, Motorola, NCR, Nortel Networks and Sun
Microsystems.

Reorganization Under Chapter 11

On May 16, 2002, APW Ltd., (in provisional liquidation) (herinafter
referred to as "APW Ltd.", "APW" or "the Company"), a Bermuda company, filed a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy
Code ("Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York ("Bankruptcy Court") (Case No. 02-12335). The proceeding
involved only APW Ltd., the Bermuda company, and Vero Electronics, Inc., a
non-operating entity and subsidiary of APW Ltd. (Case No. 02-12334). All other
subsidiaries of the Company were excluded from the proceeding and continue to
conduct business with customers and suppliers in the ordinary course. The
Company will continue to operate its business as a debtor-in-possession under
the jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code. The bankruptcy proceedings are being jointly
administered under Case No. 02-12334 (PCB).

On May 30, 2002, a proceeding (the "Bermuda Proceeding") was commenced
pursuant to the Companies Act 1981 with respect to APW Ltd. in the Bermuda
Supreme Court in connection with a winding-up petition. One of the purposes of
the filing was the imposition of a statutory stay preventing third parties from
continuing or taking actions against APW in Bermuda. On May 30, 2002, the
Bermuda court appointed Malcolm L. Butterfield of KPMG Bermuda and Philip W.
Wallace of KPMG, London, England as joint provisional liquidators of APW Ltd.
(or, as referred to herein, the JPLs) with limited supervisory powers. The
appointment of the JPL's and statutory stay enabled the JPL's to perform
supervisory and oversight of the management of APW while reviewing the Plan of
reorganization with a view to its treatment of creditors. On July 22, 2002, the
JPLs were granted various powers, including the power to authorize the sale of
any business, operation, subsidiary, division or other significant asset of APW
Ltd.

We decided to pursue reorganization under Chapter 11 of the Bankruptcy
Code based upon the certainty of the elimination of pre-petition indebtedness
and as a consequence the ability of the Company to emerge from bankruptcy
significantly deleveraged. As a debtor-in-possession, APW Ltd. is authorized to
continue to operate as an ongoing business, but may not engage in transactions
outside the ordinary course of business without the approval of the Bankruptcy
Court, after notice and an opportunity for a hearing.

Confirmation of Plan of Reorganization

On July 24, 2002 the Bankruptcy Court entered an order confirming APW
Ltd.'s and Vero's Amended and Restated Plan of Reorganization dated June 19,
2002 (as modified, amended or supplemented, the "Plan"). APW Ltd. emerged on
July 31, 2002.

Pursuant to the terms of the Plan, subject to the approval of the joint
provisional liquidators (the "JPLs") appointed in the Bermuda Proceeding and, if
required, the approval of the Bermuda Supreme Court, all of the assets and
liabilities which were to be retained by APW Ltd. under the original Plan will
be transferred to AWP Ltd. ("AWP"), a newly formed Bermuda company, including
the right to use the name "APW Ltd.," which will be become the
successor-in-interest to APW Ltd. After the consummation of the Plan, APW Ltd.
will change its name to BQX Ltd. and AWP Ltd. will change its name to APW Ltd.
The above name changes became effective on July 31, 2002.

In addition, as of July 31, 2002 the effective date of the Plan, AWP (the
successor in interest to APW Ltd.) will issue under the Plan the following:

. New Secured Notes in the aggregate principal amount of $100 million
issued to its senior secured lenders,

. Warrants to purchase up to 60,606 APW Common Shares at an exercise
price of $448.95 per share issued to the current equity holders of APW
Ltd., and

. Warrants to purchase up to 303,030 APW Common Shares at an exercise
price of $0.02 per share issued to lenders under the Credit Facility
(defined below).

As of July 31, 2002, there were approximately 40.8 million common shares
of APW Ltd. outstanding. Under the Plan, holders of APW Ltd. common shares will
receive (a) warrants representing the right to purchase 60,606 APW Common Shares
as stated above and (b) retain existing common shares in APW Ltd. (which as a
practical matter will be liquidated and no distribution is expected to
shareholders). Subsequent to the effective date of the Plan, APW Ltd. will be
dissolved, liquidated or wound-up by joint provisional liquidators in connection
with a proceeding in Bermuda or otherwise pursuant to applicable Bermuda law,
and no assets are expected to be distributed to current shareholders.

After the consummation of the Plan, AWP Ltd. (as successor to APW Ltd.)
is expected to have approximately 1.8 million authorized common shares, par
value $0.02 per share, of which 1,000,000 common shares will be outstanding. All
such 1,000,000 shares will be issued as of the consummation of the Plan.

The board of directors of AWP Ltd. (as successor to APW Ltd.) after
consummation of the Plan are to consist of: Richard G. Sim, W. Peter Douglas,
Christopher S. Brothers, Stephen A. Kaplan, Michael P. Harmon, J. Richard Budd
and Toni J. Smith.

In addition, the Plan provides for a new management incentive plan for
issuance of options to purchase to key employees or the opportunity for such key
employees to purchase 10% of the APW Common Shares on a fully diluted basis (or
151,515 shares).

As of May 31, 2002, APW Ltd., the Bermuda company, and Vero Electronics,
Inc., a non-operating entity and subsidiary of APW Ltd., had assets and
liabilities of $1.5 billion and $0.8 billion, respectively.

The Credit Facility

Concurrent with the Chapter 11 filing, the Company entered into a new $110
million debtor-in-possession credit facility ("Credit Facility") to provide for
the payment of permitted pre-petition claims, working capital needs, letters of
credit and other general corporate purposes. The Credit Facility requires that
we maintain certain financial covenants and restrict liens, indebtedness,
capital expenditures, dividend payments and sale of assets. We are currently in
compliance with all Credit Facility financial covenants. Upon emergence from the
Chapter 11 proceeding, the Credit Facility will be extended until November 15,
2003 with respect to $90.0 million of the Credit Facility and May 15, 2004 with
respect to $20.0 million of the Credit Facility.

Going Concern

The ability of APW Ltd., the successor company, to continue as a going
concern is predicated upon, among other things, compliance with the provisions
of the Credit Facility and the term loan agreement related to the $100 million
in new secured notes issued under the Plan and the ability to generate cash
flows from operations and obtain

financing sources sufficient to satisfy our future obligations. In addition, the
Plan could materially change the amounts reported in the financial statements,
which do not give effect to all adjustments of the carrying value of assets or
liabilities that might be necessary as a consequence of the Plan.

Significant Accounting Policies

Financial Reporting Release No. 60, which was recently released by the
Securities and Exchange Commission, requires all companies to include a
discussion of critical accounting policies or methods used in the preparation of
financial statements. These policies and methods are the most important to the
portrayal of the Company's financial condition and results, and require
management's most difficult, subjective and complex judgments. The following is
a brief discussion of the more significant accounting policies and methods used
by APW Ltd.

General

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. The most significant estimates and assumptions relate to the
recoverability of long-lived assets including goodwill and other intangibles,
the realization of deferred income taxes and the adequacy of restructuring
reserves. Actual amounts could differ significantly from these estimates.

Recoverability of long-lived assets, goodwill and other intangible assets

We periodically assess the impairment of long-lived assets, goodwill and
other identifiable intangible assets under SFAS No. 121 and Accounting
Principles Board Opinion No. 17 whenever events or changes in circumstances
indicate that the carrying value may not be recoverable. Factors we consider
important which could trigger an impairment review include the following:

.. significant underperformance relative to expected historical or forecasted
future operating results;
.. significant changes in the manner of our use of the acquired assets or the
strategy for our overall business;
.. commitments by management to close certain facilities that are made as part of
a company-wide restructuring initiative;
.. significant negative industry or economic trends;
.. significant decline in our stock price for a sustained period; and
.. our market capitalization relative to net book value.

Upon the existence of one or more of the above indicators of impairment,
we estimate the future undiscounted cash flows and compare such estimates to the
related asset book value. If it is determined that these estimated future
undiscounted cash flows will not be sufficient to enable the recovery of the
related asset book value, we measure any impairment based on a projected
discounted cash flow method using a discount rate determined by our management
to be commensurate with the risk inherent in our current business model.

Prospectively, we must continue to assess the recoverability of the
Company's long-lived assets, goodwill and other intangibles. In so doing, we
will be required to make assumptions regarding estimated future cash flows and
other factors to determine the fair value of the respective assets. While we
believe our estimates are reasonable, if our estimates or their related
assumptions change in the future, we may be required to record additional
impairment charges. Assumptions we make regarding estimated future cash flow
include: (i) future revenue growth (and mix); (ii) future composition of cost of
products sold and operating expenses; and (iii) future capital expenditure
requirements.

Accounting for income taxes

As part of the process of preparing our consolidated financial statements,
we are required to estimate our income taxes in each of the tax jurisdictions in
which we operate. This process involves us estimating our current tax liability
together with assessing temporary differences resulting from differing treatment
of items for tax and book purposes. These differences result in deferred tax
assets and liabilities, which are included within our consolidated balance
sheet.

Significant management judgment is required in determining our provision
for income taxes, deferred tax assets and liabilities and any related valuation
allowance recorded against our net deferred tax assets. Generally accepted
accounting principles require that we record a valuation allowance against our
deferred tax assets if it is "more likely than not" that we will not be able to
utilize them to offset future taxes.

Restructuring Reserves

Restructuring charges as presented in our Condensed Consolidated Statement
of Operations are comprised of severance and lease exit costs. These charges are
recognized in accordance with Emerging Issues Task Force ("EITF") 94-3 and Staff
Accounting Bulleting ("SAB") 100. Our accruals for lease exit obligations
stemming from closed facilities are based on management's best estimate of the
total future cash flows required to exit such facilities. Actual costs could
differ materially due to factors such as our ability to secure subleases, the
creditworthiness of sub-lessees and our success at negotiating early termination
agreements with our lessors. These factors are significantly dependent on the
general health of the economy and the resultant demand for commercial property.

Unaudited Results of Operations (As Restated)

As a Percentage As a Percentage
of Net Sales of Net Sales
Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended
May 31, May 31, May 31, May 31,
-------------------------------------- -------------------------------------
2002 2001 2002 2001 2002 2001 2002 2001
-------------------------------------- -------------------------------------
(in millions) (in millions)

Net sales $221.9 $300.2 100.0% 100.0% $ 642.6 $ 977.5 100.0% 100.0%

Gross profit 11.6 30.1 5.2% 10.0% 47.1 180.9 7.3% 18.5%

Engineering, selling and
administrative expenses 43.7 67.2 19.7% 22.4% 134.7 180.4 21.0% 18.5%
Amortization of intangibles 3.8 7.6 1.7% 2.5% 407.5 20.0 63.4% 2.0%
Restructuring charges 4.7 12.5 2.1% 4.2% 22.2 12.5 3.5% 1.3%
(Gain) loss on sale of
subsidiary - - - - (8.2) 2.6 (1.3%) 0.3%

Operating (loss) earnings (40.7) (57.1) (18.3%) (19.0%) (509.2) (34.7) (78.2%) (3.5%)

Reorganization items 21.7 - 9.8% - 21.7 - 3.4% -
Net financing costs 14.0 15.4 6.3% 5.1% 44.9 29.1 7.0% 3.0%
Other (income) expense, net (1.9) 1.0 (0.9%) 0.4% (2.3) 2.0 (0.4%) 0.2%

Earnings (loss) before
income taxes (74.5) (73.5) (33.6%) (24.5%) (573.4) (65.9) (89.2%) (6.7%)

Three Months Ended May 31, 2002 Compared to Three Months Ended May 31, 2001

Net Sales

Net sales for the fiscal 2002 third quarter were $221.9 million compared to
$300.2 million in the fiscal 2001 third quarter, a decrease of 26.1%.
Sequentially from the second quarter and excluding the effect of the divesture
completed in the second quarter, net sales increased 13.6% in the fiscal 2002
third quarter. Net sales in the fiscal 2002 third quarter versus the prior year
period were negatively impacted by the continued broad based slow down in the
technology sector which has resulted in reduced demand for some of our customers
products and in turn has negatively impacted the demand those customers have for
our products and services.

Our fiscal 2002 third quarter sales were influenced by the exclusion of a
divestiture completed in the second quarter of fiscal 2002. Excluding the effect
of this disposition, net sales decreased 23.7% in the fiscal 2002 third quarter
when compared to sales in the fiscal 2001 third quarter.

Geographic Sales

Three Months Ended
May 31,
--------------------------
2002 2001 Change
-----------------------------------
(In millions)

Americas $ 113.5 $ 180.5 (37.1%)
Europe and Asia 108.4 119.7 ( 9.4%)
-----------------------------------
Total $ 221.9 $ 300.2 (26.1%)
===================================

Net sales in the Americas for the fiscal 2002 third quarter were $113.5
million compared to $180.5 million in the fiscal 2001 third quarter, a decrease
of 37.1%. Our fiscal 2002 third quarter sales were influenced by the disposition
of a subsidiary that was completed in the second quarter of fiscal 2002.
Excluding this disposition, net sales decreased 33.6% in the fiscal 2002 third
quarter when compared to net sales in the fiscal 2001 third quarter. Net sales
in Europe and Asia for the fiscal 2002 third quarter were $108.4 million
compared to $119.7 million in the fiscal 2001 third quarter, a decrease of 9.4%.

Gross Profit

Gross profit for the fiscal 2002 third quarter was $11.6 million compared
to $30.1 million in the fiscal 2001 third quarter, a decrease of 61.5% As a
percentage of net sales, the fiscal 2002 third quarter gross profit was 5.2%
compared to 10.0% in the fiscal 2001 third quarter. The decrease in gross profit
as a percentage of net sales is primarily a result of a combination of factors:
(i) under-absorption of costs resulting from the broad based slow down in the
technology sector which significantly reduced sales volumes; (ii) a shift in
sales mix to programs with increased levels of systems integration, which
typically have lower margins; and (iii) a charge of $4.6 million in the fiscal
2002 third quarter to increase our inventory reserves due to continued weakness
in the computing, telecommunication and semi-conductor markets.

Operating Expenses

Operating expenses in the fiscal 2002 third quarter were $43.7 million
compared to $67.2 million in the fiscal 2001 third quarter. As a percentage of
net sales, operating expenses were 19.7% for the fiscal 2002 third quarter,
compared to 22.4% for the fiscal 2001 third quarter. Our operating expenses
consist primarily of engineering, selling, marketing, finance, information
technology and general administrative expenses. Operating expenses have been
reduced by $23.5 million from the fiscal 2001 third quarter. The reduction in
operating expenses is primarily due to the restructuring and cost reduction
efforts we have made. In addition, fewer charges associated with the
restructuring have been recorded in the fiscal 2002 third quarter as compared to
the fiscal 2001 third quarter.

Amortization of Intangible Assets

In the fiscal 2002 third quarter, we performed an impairment assessment of
our long-lived assets due to continuing deterioration of our operating results
as compared with previously developed forecasts. As a result of the assessment,
no additional impairment charge to reduce the carrying value of goodwill and
other intangible assets was recorded in the third quarter. Total amortization
expense in the fiscal 2002 third quarter was $3.8 million compared to $7.6
million in the fiscal 2001 third quarter.

Restructuring and Other Charges

Beginning in fiscal 2001 and continuing through the fiscal 2002 third
quarter, management has developed formal plans to exit certain facilities and
involuntarily terminate employees. Management's plans to exit certain facilities
included the identification of manufacturing and sales facilities for closure
and the transfer of the related operations to other facilities. Management
currently anticipates that the facility closures and all related activities will
be substantially complete within one year of the commitment dates of the
respective exit plans.

A restructuring charge totaling $4.7 million was recorded during the fiscal
2002 third quarter. The restructuring charge primarily relates to the
rationalization of two facilities and the involuntary termination of both
salaried and hourly employees. Severance costs associated with the involuntary
termination of employees totaled $1.8 million. Lease exit costs resulting from
facility closures totaled $2.9 million. In addition to the restructuring charge
totaling $4.7 million, we incurred $9.3 million of other costs related to
facility closures (primarily equipment impairment charges). Of the $14.0 million
in rationalization charges, $6.5 million are cash costs and $7.5 million are
non-cash costs. Of the $6.5 million in cash costs, only $1.7 million are
incremental cash costs that would not have been incurred in the next 12 months
without undertaking these restructuring actions.

Since commencing our restructuring plans in the third quarter of fiscal
2001, we have recorded restructuring and restructuring related charges totaling
$107.0 million. Our restructuring program was implemented to reduce our
aggregate fixed cost structure to mitigate the revenue decline we began to
experience as a result of a weak economic environment in the computing,
telecommunication, and semi-conductor markets we serve. We have rationalized 20
facilities through consolidating the operations of closed locations into
existing larger locations, thus eliminating fixed facility costs and redundant
headcount and better leveraging our existing infrastructure. Through May 31,
2002, we have spent approximately $30.2 million on cash restructuring, with only
approximately $5.7 million of the total being incremental cash costs that would
not have been incurred in the next 12 months without undertaking these
restructuring actions.

Operating Loss

We incurred an operating loss of $40.7 million in the fiscal 2002 third
quarter compared to an operating loss of $57.1 million in the fiscal 2001 third
quarter. The operating loss was primarily due to: (i) a $4.7 million
restructuring charge; (ii) $9.3 million of costs related to facility closures
(primarily equipment impairment charges); and (iii) reduced sales volumes,
driven by the broad based slow down in the technology sector, which resulted in
the under-absorption of costs during the fiscal 2002 third quarter.

Financing Costs

Financing costs in the fiscal 2002 third quarter were $14.0 million
compared to $15.4 million in the fiscal 2001 third quarter. Included in the
fiscal 2002 and fiscal 2001 third quarter financing costs is $4.5 million and
$0.5 million, respectively, of non-cash amortization of capitalized costs and
the value of warrants issued as a result of amending our credit facilities
during fiscal 2001 and through the first nine months of fiscal 2002. Also
included in the fiscal 2001 third quarter financing costs is $0.9 million to
write-off deferred financing costs. As a result of the Chapter 11 filing, we
have not accrued any interest expense on pre-petition debt since the filing
date.

Income Tax Expense

We did not record additional net tax benefit in the fiscal 2002 third
quarter compared to a $17.6 million income tax benefit in the fiscal 2001 third
quarter. Included in our fiscal 2002 third quarter tax expense is a charge of
$39.9 million to increase our valuation allowance to $178.4 million at May 31,
2002. As a result of this charge, our net deferred tax asset balance was reduced
to $0.4 million at May 31, 2002. We will continue to record a valuation
allowance to offset any future income tax benefits until it is more likely than
not that we will be able to realize such benefits.

Nine Months Ended May 31, 2002 Compared to Nine Months Ended May 31, 2001

Net Sales

Net sales for the fiscal 2002 nine months were $642.6 million compared to
$977.5 million in the fiscal 2001 nine months, a decrease of 34.3%. Net sales in
the fiscal 2002 nine months were negatively impacted by the broad based slow
down in the technology sector which has resulted in reduced demand for some of
our customers products and in turn has negatively impacted the demand those
customers have for our products and services. In addition to the broad based
slow down in the technology sector, the terrorist attacks that took place on
September 11, 2001 have had an adverse impact on our business.

Our fiscal 2002 nine month sales were influenced by the inclusion of
acquisitions completed in the second quarter of fiscal 2001 and the exclusion of
a disposition completed in the second quarter of fiscal 2002. Excluding these
acquisitions and the disposition, net sales decreased 37.2% in the fiscal 2002
nine months when compared to sales in the fiscal 2001 nine months.

Geographic Sales

Nine Months Ended
May 31,
-----------------------
2002 2001 Change
----------------------------------
(In millions)

Americas $ 360.6 $ 599.6 (39.9%)
Europe and Asia 282.0 377.9 (25.4%)
--------------------------------
Total $ 642.6 $ 977.5 (34.3%)
==================================

Net sales in the Americas for the fiscal 2002 nine months were $360.6
million compared to $599.6 million in the fiscal 2001 nine months, a decrease of
39.9%. Our fiscal 2002 ninth month sales were influenced by the inclusion of
acquisitions completed in the second quarter of fiscal 2001 and the exclusion of
a disposition completed in the second quarter of fiscal 2002. Excluding these
acquisitions and the disposition, net sales decreased 45.1% in the fiscal 2002
nine months when compared to net sales in the fiscal 2001 nine months. Net sales
in Europe and Asia for the fiscal 2002 nine months were $282.0 million compared
to $377.9 million in the fiscal 2001 nine months, a decrease of 25.4%.

Gross Profit

Gross profit for the fiscal 2002 nine months was $47.1 million compared to
$180.9 million in the fiscal 2001 nine months, a decrease of 74.0%. As a
percentage of net sales, the fiscal 2002 nine months gross profit was 7.3%
compared to 18.5% in the fiscal 2001 nine months. The decrease in gross profit
as a percentage of net sales is primarily a result of a combination of factors:
(i) $24.8 million of costs related to facility closures (primarily equipment
write-offs) incurred in the fiscal 2002 nine months versus $19.1 million of
similar costs incurred in the fiscal 2001 nine months; (ii) under-absorption of
costs resulting from the broad based slow down in the technology sector which
significantly reduced sales volumes; and (iii) a shift in sales mix to programs
with increased levels of systems integration, which typically have lower
margins.

Operating Expenses

Operating expenses in the fiscal 2002 nine months were $134.7 million
compared to $180.4 million in the fiscal 2001 nine months. As a percentage of
net sales, operating expenses were 21.0% for the fiscal 2002 nine months,
compared to 18.5% for the fiscal 2001 nine months. Our operating expenses
consist primarily of engineering, selling, marketing, finance, information
technology and general administrative expenses. Operating expenses have been
reduced by $45.7 million from the fiscal 2001 nine months. The reduction in
operating expenses is primarily due to the restructuring and cost reduction
efforts we have made. Although operating expenses have been reduced from the
fiscal 2001 nine months, operating expenses as a percentage of net sales
increased due to the under-absorption of costs resulting from the broad based
slow down in the technology sector which significantly reduced sales volumes.

Amortization of Intangible Assets

During the third quarter of fiscal 2002, we performed an impairment
assessment of long-lived assets, which include property, plant and equipment,
goodwill and other intangible assets. The assessment was performed primarily due
to the reduced financial performance of the Company's operating results during
the third quarter of fiscal 2002 as compared with previously developed
estimates. As a result of the most recent assessment, we did not record any
additional impairment during the third quarter. During the second quarter, we
recorded a $391.6 million impairment charge to further reduce the carrying value
of goodwill and other intangible assets based on the impairment assessment
performed at that time. Total amortization expense, including the impairment
charge, in the fiscal 2002 nine months was $407.5 million compared to $20.0
million in the fiscal 2001 nine months. Excluding the impairment charge,
amortization for the fiscal 2002 nine months was $14.9 million compared to $20.0
million in the fiscal 2001 nine months.

Restructuring and Other Charges

Beginning in fiscal 2001 and continuing through the fiscal 2002 third
quarter, management has developed formal plans to exit certain facilities and
involuntarily terminate employees. Management's plans to exit certain facilities
included the identification of duplicate manufacturing and sales facilities for
closure and the transfer of the related operations to other facilities.
Management currently anticipates that the facility closures and all related
activities will be substantially complete within one year of the commitment
dates of the respective exit plans.

A restructuring charge totaling $22.2 million was recorded during the
fiscal 2002 nine months. The restructuring charge relates to the rationalization
of twelve facilities and the involuntary termination of both salaried and hourly
employees. Severance costs associated with the involuntary termination of
employees totaled $9.3 million. Lease exit costs resulting from facility
closures totaled $12.9 million. In addition to the restructuring charge totaling
$22.2 million, we incurred $28.3 million of other costs related to facility
closures (primarily equipment impairment charges). Of the $50.5 million in
rationalization charges, $26.3 million are cash costs and $24.2 million are
non-cash costs. Of the $26.3 million in cash costs, only $4.1 million are
incremental cash costs that would not have been incurred in the next 12 months
without undertaking these restructuring actions.

Since commencing our restructuring plans in the third quarter of fiscal
2001, we have recorded restructuring and restructuring related charges totaling
$107.0 million. Our restructuring program was implemented to reduce our
aggregate fixed cost structure to mitigate the revenue decline we began to
experience as a result of a weak economic environment in the computing,
telecommunication, and semi-conductor markets we serve. We have rationalized 20
facilities through consolidating the operations of closed locations into
existing larger locations, thus eliminating fixed facility costs and redundant
headcount and better leveraging our existing infrastructure. Through May 31,
2002 we have spent approximately $30.2 million on cash restructuring, with only
approximately $5.7 million of the total being incremental cash costs that would
not have been incurred in the next 12 months without undertaking these
restructuring actions.

Divestiture

On February 13, 2002, APW Ltd. completed the sale of its Zero Cases
division. Total consideration from the transaction was a net $19.2 million,
which resulted in a net book gain of $8.2 million.

Operating Loss

We incurred an operating loss of $509.2 million in the fiscal 2002 nine
months compared to an operating loss of $34.7 million in the fiscal 2001 nine
months. The operating loss was primarily due to: (i) a $391.6 million impairment
of goodwill and other intangible assets; (ii) a $22.2 million restructuring
charge; (iii) $28.3 million of costs related to facility closures (primarily
equipment impairment charges); and (iv) reduced sales volumes, driven by the
broad based slow down in the technology sector, which resulted in the
under-absorption of costs during the fiscal 2002 nine months.

Financing Costs

Financing costs in the fiscal 2002 nine months were $44.9 million compared
to $29.1 million in the fiscal 2001 nine months. Included in the fiscal 2002
nine months financing costs is $9.2 million of non-cash amortization of
capitalized fees and warrants issued as a result of amending our credit
facilities during fiscal 2001 and through the first nine months of fiscal 2002.
The increase in our net financing costs, excluding the $9.2 million of non-cash
amortization, is a result of the increase in our outstanding indebtedness to
fund acquisitions made in the second quarter of fiscal 2001, capital
expenditures, restructuring activities and operations.

Income Tax Expense

We recorded income tax expense in the fiscal 2002 nine months of $31.8
million compared to $14.8 million income tax benefit in the fiscal 2001 nine
months. Included in our fiscal 2002 nine months tax expense is a charge of
$168.6 million to increase our valuation allowance to $178.4 million at May 31,
2002. As a result of this charge, our net deferred tax asset balance was reduced
to $0.4 million at May 31, 2002. We will continue to record a valuation
allowance to offset any future income tax benefits until it is more likely than
not that we will be able to realize such benefits.

Liquidity and Capital Resources

Cash Flows

Cash and cash equivalents totaled $22.2 million at May 31, 2002 and $6.2
million at August 31, 2001.

Net cash used in operating activities in the fiscal 2002 nine months was
$32.5 million compared to $36.6 million used in the fiscal 2001 nine months. The
net use of cash in the fiscal 2002 nine months was primarily due to
restructuring and related payments totaling $19.2 million. Other net uses of
cash included the funding of operating losses and payments to professional
advisors offset by a source of cash from primary working capital (receivables,
inventory, and payables).

Net cash provided by investing activities for the fiscal 2002 nine months
was $11.1 million compared to net cash used in investing activities of $322.3
million for the fiscal 2001 nine months. The net source of cash for the fiscal
2002 nine months was primarily due to $19.2 million of proceeds on the sale of a
subsidiary offset by capital expenditures of $16.1 million.

Net cash provided by financing activities for the fiscal 2002 nine months
was $37.3 million compared to $364.4 million provided in the fiscal 2001 nine
months. The net cash provided by financing activities for the fiscal 2002 nine
months primarily came from net borrowings on our long-term debt facility of
$46.8 million and borrowings on the DIP financing facility of $60.0 million,
which was offset by $5.6 million in payments on short-term borrowings, $5.8
million in debt financing costs and a reduction in sold receivables of $58.0
million.

Off-Balance Sheet Arrangements, Contractual Obligations and Commercial
Commitments

On January 22, 2002, the SEC issued FR-61, "Commission Statement about
Management's Discussion and Analysis of Financial Condition and Results of
Operations." FR-61 indicates that registrants should consider the need to
provide disclosures concerning transactions, arrangements and other
relationships with unconsolidated entities or other persons that are reasonably
likely to affect materially liquidity or the availability of, or requirements
for capital resources as well as disclosures concerning a registrant's
obligations and commitments to make future payments under contracts, such as
debt, leases, and contingent commitments. In response to this release, we have
outlined our off-balance sheet arrangement as well as our contractual
obligations and commercial commitments as they relate to the Company.

Accounts Receivable Facility

APW North America Inc., a wholly owned subsidiary of APW Ltd., and certain
domestic subsidiaries (collectively, "Originators") previously sold trade
accounts receivable to Applied Power Credit Corporation ("APCC"), a
wholly-owned, limited purpose, consolidated subsidiary of the Company. APCC is a
separate corporate entity that would sell participating interests in its pool of
accounts receivable to financial institutions ("Purchasers"). The Purchasers, in
turn, received an ownership and security interest in the pool of receivables.
Participation interests in new receivables generated by the Originators were
purchased by APCC and resold to the Purchasers on a revolving basis as
collections reduced previously sold participation interests. The accounts
receivable sold to Purchasers were reflected as a reduction of receivables in
the Condensed Consolidated Balance Sheets. APCC had no risk of credit loss on
such receivables as they were sold without recourse. APW North America Inc.
retained collection and administrative responsibilities on the participation
interests sold as servicer for APCC and the Purchasers. Further, APCC is a
bankruptcy remote corporation, and as such, the assets held by APCC were not
available to satisfy the claims of APW Ltd.'s creditors until all of the amounts
owed to the Purchasers had been paid in full.

The Accounts Receivable Facility described above represented "off-balance
sheet financing." This resulted in assets being removed from our balance sheet,
rather than incurring a liability similar to that of traditional financing. The
receivables were sold on a revolving basis where new eligible receivables
replaced collected receivables on a daily basis. On May 17, 2002, this facility
was terminated in conjunction with the Chapter 11 filing. On that date, $34.5
million of accounts receivable previously sold under the Facility were
repurchased by the Company and to the extent they were still outstanding at May
31, 2002, are included in the balance sheet at that date. At August 31, 2001,
$58.0 million of this facility was utilized and those receivables were excluded
from the balance sheet at that date.

Contractual Obligations and Commercial Commitments

We lease, through various subsidiaries, certain facilities and equipment
under various lease agreements generally over periods of one to twenty years.
Under most arrangements, we also pay the property taxes, insurance, maintenance
and expenses related to the leased properties. None of the leases have been
impaired as a result of the Chapter 11 filing. Future obligations on
non-cancelable operating leases in effect at May 31, 2002 are: $9.6 million for
the remainder of fiscal 2002, $25.5 million in fiscal 2003 and $164.2 million
thereafter. These amounts represent amounts that have previously been disclosed
in our Form 10-K for the twelve months ended August 31, 2001 as adjusted for the
current year's activity, primarily related to the rationalization of facilities
as part of the on-going restructuring program. Included in the May 31, 2002
Condensed Consolidated Balance Sheet are $12.1 million of lease exit reserves
that would

reduce the expense of our future obligations listed above. Total rental expense
under operating leases for the fiscal 2002 nine months was approximately $20.1
million.

Capitalization

Debt at May 31, 2002 totaled $726.3 million, of which $664.9 million is
included in Liabilities subject to compromise on the Condensed Consolidated
Balance Sheets, an increase of approximately $104.8 million from August 31,
2001. The increase in debt was primarily due to restructuring costs, capital
expenditures, the $58.0 million decrease in receivables sold under the accounts
receivable facility and the $60.0 million obtained from the DIP financing
facility, offset by $19.2 million of proceeds from the sale of a division.

Liquidity

On May 16, 2002, the Court approved and, the Company entered into a $110
million debtor-in-possession financing ("DIP financing facility") agreement with
certain members of its lender group. The DIP financing facility is comprised of
the following three tranches: (i) tranche A ($70 million) is collateralized by
US receivables and inventory at an interest rate of LIBOR plus 3.50%; (ii)
tranche B ($20 million) is collateralized by UK and Ireland property, plant and
equipment, receivables and inventory at an interest rate of LIBOR plus 4.25%;
and (iii) tranche C ($20 million) is collateralized by all other Company assets
at an interest rate of LIBOR plus 5.00%. The DIP financing facility has a stated
termination date of 180 days from May 16, 2002. Under the terms of the DIP
financing facility, upon emergence from bankruptcy, the termination date for
tranches A and B will be automatically extended to November 15, 2003, and the
termination date for tranche C will be automatically extended to May 15, 2004,
if the Company is unable to obtain and close refinancing in an amount that is
sufficient to refinance and pay in full all of the obligations. Initial proceeds
from the DIP financing facility were used to repurchase accounts receivable that
had been sold under a previous facility. The DIP financing facility converts
into an exit facility upon APW Ltd.'s emergence from Chapter 11. At May 31,
2002, all outstanding borrowings under the DIP financing facility were from
tranche A. The LIBOR rate at May 31, 2002 was 1.84%.

At May 31, 2002, we had $50.0 million of borrowings available under the DIP
financing facility and $22.2 million in cash.

In December 2001, a subsidiary of the Company received notification from
the lessor of two of its aircraft that the lease contracts ("contracts") for the
two aircraft would be terminated effective March 4, 2002. In conjunction with
the termination, the terms of the contracts would require the Company to pay the
lessor approximately $12.3 million for the two aircraft and, in exchange, the
lessor would convey all of its rights, title and interest in the two aircraft to
the Company. The Company is actively working with the lessor to identify a third
party which would purchase and/or lease the two aircraft, thereby eliminating
the Company's $12.3 million payment obligation. The lessor has informed the
Company that it is willing to continue to work with the Company to find third
party alternatives to eliminate the cost of terminating this contract, provided
the Company continues to make scheduled lease payments. As such, the Company has
recorded a charge of $2.0 million during the second quarter related to its
decision to discontinue use of the related aircraft. This charge reflects
management's current estimates of the cost of the ultimate disposition of the
two aircraft.

New Accounting Pronouncements

In June 2001, SFAS No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangible Assets" were issued. The statements eliminate the
pooling-of-interests method of accounting for business combinations and require
that goodwill and certain intangible assets not be amortized. Instead, these
assets will be reviewed for impairment annually with any related losses
recognized in earnings when incurred. SFAS No. 141 was effective for us as of
July 31, 2001. SFAS No. 142 will be effective for us for existing goodwill and
intangible assets on September 1, 2002 or upon emergence from the Chapter 11
reorganization, expected on or around August 1, 2002, whichever is earlier. We
are currently evaluating the impact of SFAS No. 142.

long-lived assets and the associated asset retirement costs. SFAS No. 143
requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred if a reasonable
estimate of fair value can be made. The associated asset retirement costs are to
be capitalized as part of the carrying amount of the long-lived asset.
Subsequently, the recorded liability will be accreted to its present value and
the capitalized costs will be depreciated. We are required to adopt SFAS No. 143
on September 1, 2002 or upon emergence from the Chapter 11 reorganization,
expected on or around August 1, 2002, whichever is earlier. We are currently
evaluating the impact of SFAS No. 143.

In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" was issued. SFAS No. 144 modifies and expands the financial
accounting and reporting for the impairment or disposal of long-lived assets
other than goodwill, which is specifically addressed by SFAS No. 142. SFAS No.
144 maintains the requirement that an impairment loss be recognized for a
long-lived asset to be held and used if its carrying value is not recoverable
from its undiscounted cash flows, with the recognized impairment being the
difference between the carrying amount and fair value of the asset. With respect
to long-lived assets to be disposed of other than by sale, SFAS No. 144 requires
that the asset be considered held and used until it is actually disposed of but
requires that its depreciable life be revised in accordance with APB Opinion No.
20, "Accounting Changes". SFAS No. 144 also requires that an impairment loss be
recognized at the date a long-lived asset is exchanged for a similar productive
asset. We will be required to adopt SFAS No. 144 on September 1, 2002 or upon
emergence from the Chapter 11 reorganization, expected on or around August 1,
2002, whichever is earlier. We are currently evaluating the impact of SFAS No.
144.

In April 2002, SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and
64, Amendment of FASB Statement No. 13, and Technical Corrections," was issued.
SFAS No. 145 rescinds the indicated statements and amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions. The Company
will be required to adopt SFAS No. 145 on September 1, 2002 or upon emergence
from the Chapter 11 reorganization, expected on or around August 1, 2002,
whichever is earlier. The Company is currently evaluating the impact of SFAS No.
145.

In June 2002, the FASB voted in favor of issuing SFAS No. 146, "Accounting
for Exit or Disposal Activities". SFAS No. 146 addresses significant issues
regarding the recognition, measurement, and reporting of costs that are
associated with exit and disposal activities, including restructuring activities
that are currently accounted for pursuant to the guidance that the Emerging
Issues Task Force ("EITF") has set forth in EITF Issue No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)". The scope of
SFAS No. 146 also includes (1) costs related to terminating a contract that is
not a capital lease and (2) termination benefits that employees who are
involuntarily terminated receive under the terms of a one-time benefit
arrangement that is not an ongoing benefit arrangement or an individual
deferred-compensation contract. The Company will be required to adopt SFAS No,
146 for exit or disposal activities initiated after December 31, 2002, or for
exit or disposal activities initiated after emergence from the Chapter 11
reorganization, expected on or around August 1, 2002, whichever is earlier. The
Company is currently evaluating the impact of SFAS No. 146.

Forward-looking Statements and Cautionary Factors

Certain statements contained in this document, as well as statements in
other Company communications, which are not historical facts, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. The terms
"anticipate", "believe", "estimate", "expect", "objective", "plan", "project"
and similar expressions are intended to identify forward-looking statements.
Such forward-looking statements are subject to inherent risks and uncertainties
that may cause actual results or events to differ materially from those
contemplated by such forward-looking statements. In addition to the assumptions
and other factors referred to specifically in connection with such statements,
factors that may cause actual results or events to differ materially from those
contemplated by such forward-looking statements include, without limitation,
general economic conditions, market conditions in the computer, semiconductor,
telecommunication, and electronic industries in North America, South America,
Europe and Asia, market acceptance of existing and new products, successful
integration of acquisitions, competitive product and pricing pressures, foreign
currency risk, interest rate risk, the Company's ability to emerge from the
Chapter 11 proceedings, the Company's ability to access capital markets,
extension of forbearance of interest obligations and other factors that may be
referred to in APW Ltd.'s

reports filed with the Securities and Exchange Commission from time to time.

FINANCIAL INFORMATION

Financial Statements

APW Ltd. (in provisional liquidation)
Debtor-in-Possession
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months Ended Nine Months Ended
May 31, May 31,
------------------------------- -------------------------------
As Restated As Restated
------------------------------- -------------------------------
2002 2001 2002 2001
--------------- --------------- -------------- ---------------

Net sales $ 221,940 $ 300,208 $ 642,624 $ 977,494
Cost of products sold 210,354 270,080 595,518 796,590
-------------- --------------- -------------- ---------------

Gross profit 11,586 30,128 47,106 180,904

Engineering, selling and administrative expenses 43,693 67,181 134,747 180,434
Amortization and impairment of intangible assets 3,841 7,581 407,515 20,022
Restructuring charges 4,741 12,484 22,217 12,484
(Gain) loss on sale of subsidiary - - (8,210) 2,667
-------------- --------------- -------------- ---------------

Operating loss (40,689) (57,118) (509,163) (34,703)

Reorganization items 21,675 - 21,675 -
Financing costs 13,996 15,368 44,935 29,141
Other expense (income), net (1,830) 980 (2,324) 2,038
-------------- --------------- -------------- ---------------

Loss before income tax expense (benefit) (74,530) (73,466) (573,449) (65,882)

Income tax expense (benefit) - (17,642) 31,792 (14,774)
-------------- --------------- -------------- ---------------

Net loss $ (74,530) $ (55,824) $ (605,241) $ (51,108)
============== =============== ============== ===============

Basic and diluted loss per share:

Loss per share $ (1.86) $ (1.39) $ (15.11) $ (1.29)
============== =============== ============== ===============

Weighted average common and potential dilutive
common shares outstanding 40,056 40,038 40,052 39,551
============== =============== ============== ===============

See accompanying Notes to Condensed Consolidated Financial Statements

APW Ltd. (in provisional liquidation)
Debtor-in-Possession
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)

As Restated
-------------------------------------
May 31, August 31,
2002 2001
----------------- ----------------
(Unaudited)

ASSETS
------
Current assets

Cash and cash equivalents $ 22,201 $ 6,190
Accounts receivable, net 132,430 112,948
Inventories 90,534 130,937
Prepaid expenses 16,435 14,213
Deferred income taxes 546 16,650
----------------- ----------------
Total current assets 262,146 280,938

Property, plant and equipment 390,774 477,915
Less: Accumulated depreciation (185,990) (222,886)
----------------- ----------------
Net property, plant and equipment 204,784 255,029

Goodwill, net 299,167 679,225
Other intangible assets, net 3,637 27,616
Other assets 52,599 58,524
----------------- ----------------

Total assets $ 822,333 $ 1,301,332
================= ================

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
Current liabilities

Short-term borrowings $ - $ 603,353
Trade accounts payable 83,018 119,904
Debtor-in-possession financing 60,000 -
Accrued compensation and benefits 26,598 30,126
Income taxes payable 41,142 33,859
Other current liabilities 47,204 40,701
----------------- ----------------
Total current liabilities 257,962 827,943

Long-term debt 1,339 18,096
Other long-term liabilities 33,995 45,375

Liabilities subject to compromise 689,685 -

Debtor-in-possession warrants 25,451 -

Shareholders' equity (deficit)
Common Stock--$0.01 par value per share; authorized 250,000,000 shares;
issued and outstanding, less contingent shares, 40,056,507
and 40,042,207 shares, respectively 400 400
Share premium 679,429 669,772
Accumulated deficit (839,050) (233,765)
Accumulated other comprehensive loss (26,878) (26,489)
----------------- ----------------
Total shareholders' equity (deficit) (186,099) 409,918
----------------- ----------------

Total liabilities and shareholders' equity (deficit) $ 822,333 $ 1,301,332
================= ================

See accompanying Notes to Condensed Consolidated Financial Statements

APW Ltd. (in provisional liquidation)
Debtor-in-Possession
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Nine Months Ended
May 31,
-----------------------------
As Restated
-----------------------------
2002 2001
----------- -----------

Operating activities
- --------------------
Net loss $ (605,241) $ (51,108)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 460,817 65,814
Amortization of financing fees 9,206 782
Gain from sale of assets (1,747) (311)
(Gain) loss on sale of subsidiary (8,210) 2,667
Deferred income taxes 27,565 (10,478)
Restructuring charges 22,217 12,484
Reorganization items 21,675 -
Changes in operating assets and liabilities:
Accounts receivable 38,886 30,684
Inventories 37,129 15,277
Prepaid expenses and other assets (3,448) (2,500)
Trade accounts payable (37,307) (27,381)
Income taxes 7,891 (42,252)
Other liabilities (1,621) (30,284)
----------- -----------
Net cash used in operating activities before reorganization items (32,188) (36,606)

Reorganization items (296) -
----------- -----------
Net cash used in operating activities (32,484) (36,606)

Investing activities
- --------------------
Proceeds on the sale of property, plant and equipment 8,481 2,466
Additions to property, plant and equipment (16,137) (80,926)
Net proceeds on sale of subsidiary, net of cash sold 19,241 1,782
Business acquisitions, net of cash acquired - (241,546)
Other investing activities (448) (4,028)
----------- -----------
Net cash provided by (used in) investing activities 11,137 (322,252)

Financing activities
- --------------------
Net short term borrowings (repayments) (5,632) 4,644
Principal repayments on pre-petition debt (183,224) (96,650)
Principal borrowings on pre-petition debt 230,065 516,305
Borrowings on DIP facility 60,000 -
DIP facility financing costs (3,734) -
Net repayments of commercial paper - (33,896)
Net receivables financed (repayments) (58,019) (18,912)
Debt financing costs (2,100) (7,700)
Stock option exercises - 1,405
Other financing activities (42) (748)
----------- -----------
Net cash provided by financing activities 37,314 364,448

Effect of exchange rate changes on cash 44 543
----------- -----------

Net increase in cash and cash equivalents 16,011 6,133

Cash and cash equivalents - beginning of period 6,190 712
----------- -----------

Cash and cash equivalents - end of period $ 22,201 $ 6,845
=========== ===========

See accompanying Notes to Condensed Consolidated Financial Statements

APW Ltd. (in provisional liquidation)
Debtor-in-Possession
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - Restatements:

APW Ltd. (hereinafter referred to as "APW Ltd.", "APW" or "the Company")
has determined that accounting improprieties occurred in fiscal 2002, 2001, 2000
and 1999 at one U.S. subsidiary and in fiscal 2001 at one U.K. subsidiary. These
accounting improprieties resulted in the overstatement of assets (primarily cash
and inventory) and income and the understatement of liabilities (primarily trade
accounts payable and accrued compensation and benefits) and expense. As a
result, the consolidated financial statements as of August 31, 2001 and 2000 and
for the years ended August 31, 2001, 2000 and 1999 as well as the interim
results for these periods and the results for the interim periods ended November
30, 2001, February 28, 2002 and May 31, 2002 have been restated. The restated
consolidated financial statements as of August 31, 2001 and 2000 and for the
years ended August 31, 2001, 2000 and 1999 have been included in a Form 10-K/A.
Restated condensed financial statement information for the interim periods in
the years ended August 31, 2001 and 2000 have been included in Item 8 of the
Form 10-K/A. Restated condensed financial statement information for the interim
periods ended May 31, 2002 and 2001 are included herein.

A summary of the effects of the restatements are set forth in Note 17.

As a result of the restatement for the year ended August 31, 2001, the Company
believes that it would have been in default of certain debt covenants as of
August 31, 2001, unless the Company had obtained waivers or the Company's
lenders had amended the debt covenants. Accordingly, the Company has classified
borrowings under the Revolving Multi-Currency Credit Agreement and the U.K.
Facility Agreement as a current liability as of August 31, 2001 in the
restated consolidated financial statements.

Note 2 - Reorganization Under Chapter 11

On May 16, 2002, APW Ltd. (in provisional liquidation), a Bermuda company,
filed a voluntary petition for relief under Chapter 11 of the United States
Bankruptcy Code ("Bankruptcy Code") in the United States Bankruptcy Court for
the Southern District of New York ("Bankruptcy Court") (Case No. 02-12335). The
proceeding involved only APW Ltd., the Bermuda company, and Vero Electronics,
Inc., a non-operating entity and subsidiary of APW Ltd. (Case No. 02-12334). All
other subsidiaries of the Company were excluded from the proceeding and continue
to conduct business with customers and suppliers in the ordinary course. The
Company will continue to operate its business as a debtor-in-possession under
the jurisdiction of the Bankruptcy Court and in accordance with the applicable
provisions of the Bankruptcy Code. The bankruptcy proceedings are being jointly
administered under Case No. 02-12334 (PCB).

APW Ltd. decided to pursue reorganization under Chapter 11 of the
Bankruptcy Code based upon the certainty of the elimination of pre-petition
indebtedness and as a consequence the ability of the Company to emerge from
bankruptcy significantly deleveraged. As a debtor-in-possession, APW Ltd. is
authorized to continue to operate as an ongoing business, but may not engage in
transactions outside the ordinary course of business without the approval of the
Bankruptcy Court, after notice and an opportunity for a hearing.

Confirmation of Plan of Reorganization

On July 24, 2002, the Bankruptcy Court entered an order confirming APW
Ltd.'s and Vero's Amended and Restated Plan of Reorganization dated June 19,
2002 (as modified, amended or supplemented, the "Plan"). APW Ltd. emerged on
July 31, 2002.

In addition, as of July 31, 2002, the effective date of the Plan, AWP (the
successor in interest to APW Ltd.) issued under the Plan the following:

. New Secured Notes in the aggregate principal amount of $100 million
issued to its senior secured lenders,

. Warrants to purchase up to 60,606 APW Common Shares at an exercise price
of $448.95 per share issued to the current equity holders of APW Ltd.,
and

. Warrants to purchase up to 303,030 APW Common Shares at an exercise
price of $0.02 per share issued to lenders under the Credit Facility
(defined below).

As of July 31, 2002, there were approximately 40.8 million common shares of
APW Ltd. outstanding. Under the Plan, holders of APW Ltd. common shares as of
the July 31, 2002 record date received (a) warrants representing the right
to purchase 60,606 APW Common Shares as stated above and (b) retain existing
common shares in APW Ltd. (which as a practical matter will be liquidated and no
distribution is expected to shareholders). Subsequent to the effective date of
the Plan, APW Ltd. will be dissolved, liquidated or wound-up by joint
provisional liquidators in connection with a proceeding in Bermuda or otherwise
pursuant to applicable Bermuda law, and no assets are expected to be distributed
to current shareholders.

The Credit Facility

Concurrent with the Chapter 11 filing, the Company entered into a new
$110.0 million debtor-in-possession credit facility ("Credit Facility") to
provide for the payment of permitted pre-petition claims, working capital needs,
letters of credit and other general corporate purposes. The Credit Facility
requires that we maintain certain financial covenants and restrict liens,
indebtedness, capital expenditures, dividend payments and sale of assets. Upon
emergence from the Chapter 11 proceeding, the Credit Facility was extended
until November 15, 2003 with respect to $90.0 million of the Credit Facility and
May 15, 2004 with respect to $20.0 million of the Credit Facility.

Fresh Start Accounting

As a result of the bankruptcy, the Company will adopt fresh start
accounting pursuant to guidance provided by the American Institute of Certified
Public Accountant's Statement of Position 90-7, "Financial Reporting by Entities
in Reorganization under the Bankruptcy Code", as of July 31, 2002. In accordance
with the principles of fresh start accounting, the Company will adjust the
carrying values of its assets and liabilities to their fair values as of July
31, 2002. The application of fresh start accounting will result in material
changes to the carrying values of the Company's assets and liabilities.

Going Concern

Following its emergence from the Chapter 11 proceeding, the ability of APW
Ltd., the successor company, to continue as a going concern is predicated upon,
among other things, compliance with the provisions of the Credit Facility and
the term loan agreement related to the $100 million in new secured notes issued
under the Plan and the ability to generate cash flows from operations and obtain
financing sources sufficient to satisfy future obligations.

Note 3 - Description of Business

APW Ltd. is a leading global provider of Technically Enabled Manufacturing
Services ("TEMS"), focused on designing and integrating large electronic
products. APW has the capabilities to design and manufacture various subsystems
for electronic products, including enclosures, thermal management systems,
backplanes, power supplies, printed circuit board assemblies, and cabling,
either as integrated custom systems or as individual subsystems. In addition,
APW provides a wide range of integration services to its customers, including
product design, supply chain management, manufacturing, assembly, testing and
drop-ship services. APW's focus is on large infrastructure solutions, such as
wireless base stations and switches, enterprise hardware and Internet server
enclosures. APW is not targeting high volume markets, such as personal computers
or cell phone handsets. These products provide APW's customers with accelerated
time-to-market scheduling and decreased time-to-volume production, while
reducing their production costs and allowing them to focus on the design and
marketing of their products. APW

believes the Company's emphasis on technical innovation and vertically
integrated engineering and manufacturing expertise, coupled with its total
solution approach, which can be delivered on a worldwide basis, differentiates
the Company in the marketplace.

Note 4 - Holding Company Structure

APW Ltd. operates as a holding company that has no significant assets other
than investments in the stock of its wholly owned subsidiaries, intellectual
property and intercompany receivables. APW Ltd. has significant indebtedness,
primarily incurred through its Multi-Currency Credit facilities, which is
collateralized by substantially all of the assets, including the stock, of its
subsidiaries. APW Ltd. relies on dividends and distributions from its
subsidiaries as its primary source of cash, primarily to service its
indebtedness.

Note 5 - Summary of Significant Accounting Policies

Basis of Presentation: The accompanying unaudited condensed consolidated
financial statements of APW Ltd. and its subsidiaries have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial reporting and with the instructions of Form 10-Q
and Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. In the
opinion of management, the financial statements include all adjustments which
are normal and recurring in nature necessary to present fairly the financial
position of the Company at May 31, 2002, the results of operations for the three
and nine months ended May 31, 2002 and 2001 and cash flows for the nine months
ended May 31, 2002 and 2001. These financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
in the Company's fiscal 2001 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated financial statements of
APW Ltd. have also been prepared in accordance with the AICPA's Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOP 90-7"). SOP 90-7 provides for segregating pre-petition
liabilities that are subject to compromise, identifying all transactions and
events that are directly associated with the reorganization of the Company and
discontinuing the accrual of interest on unsecured debt.

Loss Per Share: Basic earnings per share is calculated by dividing net
earnings (loss) by the weighted average common shares outstanding during the
period. Diluted earnings per share is calculated by using the weighted average
common shares outstanding adjusted to include the potentially dilutive effect of
outstanding stock options and warrants.

Earnings (loss) per share for the three and nine months ended May 31, 2002
and 2001 is based on the following (in thousands, except earnings per share
amounts):

Three Months Ended Nine Months Ended
May 31, May 31,
------------------------- -------------------------
As Restated As Restated
------------------------- -------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------

Numerator:

Net loss for basic and diluted earnings per share $ (74,530) $ (55,824) $ (605,241) $ (51,108)
=========== =========== =========== ===========

Denominator:

Weighted average common and potential common shares
outstanding for basic and diluted earnings (loss) per
share 40,056 40,038 40,052 39,551
=========== ============ =========== ===========

Basic and diluted earnings (loss) per share $ (1.86) $ (1.39) $ (15.11) $ (1.29)
=========== =========== =========== ===========

When the Company reports positive net earnings, the diluted earnings per
share calculation will include the impact of dilutive securities issued under
the existing stock option plans and any warrants then outstanding. Due to the
net losses in all periods presented, the effect of options and warrants to
purchase shares have been excluded because they would be anti-dilutive.

New Accounting Pronouncements: In June 2001, Statement of Financial
Accounting Standards ("SFAS") No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangible Assets" were issued. The statements eliminate the
pooling-of-interests method of accounting for business combinations and require
that goodwill and certain intangible assets not be amortized. Instead, these
assets will be reviewed for impairment annually with any related losses
recognized in earnings when incurred. SFAS No. 141 was effective for APW Ltd. as
of July 31, 2001. SFAS No. 142 will be effective for the Company for existing
goodwill and intangible assets on September 1, 2002 or upon emergence from the
Chapter 11 reorganization, expected on or around August 1, 2002, whichever is
earlier. The Company is currently evaluating the impact of SFAS No. 142.

In June 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations"
was issued. SFAS No. 143 sets forth the financial accounting and reporting to be
followed for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. SFAS No. 143 requires entities
to record the fair value of a liability for an asset retirement obligation in
the period in which it is incurred if a reasonable estimate of fair value can be
made. The associated asset retirement costs are to be capitalized as part of the
carrying amount of the long-lived asset. Subsequently, the recorded liability
will be accreted to its present value and the capitalized costs will be
depreciated. The Company is required to adopt SFAS No. 143 on September 1, 2002
or upon emergence from the Chapter 11 reorganization, expected on or around
August 1, 2002, whichever is earlier. The Company is currently evaluating the
impact of SFAS No. 143.

In August 2001, SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" was issued. SFAS No. 144 modifies and expands the financial
accounting and reporting for the impairment or disposal of long-lived assets
other than goodwill, which is specifically addressed by SFAS No. 142. SFAS No.
144 maintains the requirement that an impairment loss be recognized for a
long-lived asset to be held and used if its carrying value is not recoverable
from its undiscounted cash flows, with the recognized impairment being the
difference between the carrying amount and fair value of the asset. With respect
to long-lived assets to be disposed of other than by sale, SFAS No. 144 requires
that the asset be considered held and used until it is actually disposed of but
requires that its depreciable life be revised in accordance with APB Opinion No.
20, "Accounting Changes". SFAS No. 144 also requires that an impairment loss be
recognized at the date a long-lived asset is exchanged for a similar productive
asset. The Company will be required to adopt SFAS No. 144 on September 1, 2002
or upon emergence from the Chapter 11 reorganization, expected on or around
August 1, 2002, whichever is earlier. The Company is currently evaluating the
impact of SFAS No. 144.

Reclassifications: Certain prior period amounts have been reclassified to
conform with the fiscal 2002 presentation. Such reclassifications had no impact
on previously reported net earnings (loss).

Note 6 - Intangible Asset Impairment, Restructuring and Other Charges

Goodwill and other intangible asset impairment charge

During the second quarter of fiscal 2002, the Company performed an
impairment assessment of long-lived assets, which include property, plant and
equipment, goodwill and other intangible assets. The assessment was performed
primarily due to the reduced financial performance of the Company's operating
results during the first six months of fiscal 2002 as compared with previously
developed estimates. As a result of the assessment, the Company recorded a
$391.6 million impairment charge to further reduce the carrying value of
goodwill and other intangible assets. The impairment charge is recorded as a
component of amortization and impairment of intangible assets in the Condensed
Consolidated Statement of Operations for the nine months ended May 31, 2002. The
Company updated the impairment assessment at May 31, 2002 and as a result no
further impairment charge was recorded for the three months ended May 31, 2002.
In determining whether an impairment of long-lived assets has occurred, the
Company compares estimated undiscounted cash flows to the related asset book
value. The charge was measured in accordance with the provisions of SFAS No.
121, based upon the Company's estimated future discounted cash flows using a
discount rate determined by management to be commensurate with the risk inherent
in the Company's current business model.

The remaining long-lived assets are supported by management's current best
estimates of future undiscounted cash flows and will continue to be depreciated
and amortized over their remaining useful lives, which management considers
appropriate. However, there can be no assurances that the Company's (including
its successor) revised forecast will be achieved and accordingly future
impairment charges may be necessary. Additionally, the carrying value of
remaining long-lived assets is supported by estimates of future undiscounted
cash flows as of May 31, 2002, and such amounts could be stated at amounts in
excess of their fair values.

Restructuring

Beginning in fiscal 2001 and continuing in fiscal 2002, management
developed formal plans to exit certain facilities and involuntarily terminate
employees. Management's plans to exit certain facilities included the
identification of manufacturing and sales facilities for closure and the
transfer of the related operations to other facilities. Management currently
anticipates that the facility closures and all related activities will be
substantially complete within one year of the commitment dates of the respective
exit plans.

During the three and nine months ended May 31, 2002, the Company
recognized pre-tax restructuring and other charges of $14.0 million and $50.5
million, respectively. The components of the charges recorded are as follows (in
millions):

Three Months Nine months
Ended May 31, Ended May 31,
2002 2002
------------------------------

Facility closure costs:
Severance $ 1.8 $ 9.3
Lease exit costs 2.9 12.9
Equipment impairment 5.0 20.5
Other costs 4.3 7.8
------------------------------
Total facility closure costs $ 14.0 $ 50.5
==============================

Facility closure costs relate to the rationalization of seven facilities
in the first quarter of fiscal 2002, three facilities in the second quarter of
fiscal 2002 and two facilities in the third quarter of fiscal 2002. The
severance charges impact both salaried and hourly employees. The costs are
recorded in the Condensed Consolidated Statement of Operations for the three and
nine months ended May 31, 2002, respectively, as follows: (i) severance and
lease exit costs totaling $4.7 million and $22.2 million are recorded as
restructuring charges; (ii) equipment impairment charges, resulting from
facility closures, of $5.0 million (recorded as cost of products) and $20.5
million ($18.4 million recorded as cost of products sold and $2.1 million
recorded as engineering, selling and administrative expenses); and (iii) other
facility closure costs totaling $4.3 million ($3.2 million recorded as cost of
products sold, $0.1 million recorded as engineering, selling and administrative
expenses and $1.0 million recorded as amortization and impairment of intangible
assets) and $7.8 million ($6.4 million recorded as cost of products sold, $0.4
million recorded as engineering, selling and administrative expenses and $1.0
million recorded as amortization and impairment of intangible assets).

The following table summarizes the activity with respect to fiscal 2002
restructuring charges (in millions, except employee data):

Number
of Severance Facilities
Employees Reserve Reserve Total Reserve
--------------- ------------- ------------- ---------------

Total reserve balance at August 31, 2001 287 $ 2.1 $ 5.2 $ 7.3
Add: Fiscal 2002 nine month charges 933 9.3 12.9 22.2
Less: Fiscal 2002 nine month utilization (982) (9.2) (6.0) (15.2)
--------------- ------------- ------------- ---------------
Total reserve balance at May 31, 2002 238 $ 2.2 $ 12.1 $ 14.3
=============== ============= ============= ===============

Note 7 - Reorganization Items

Net costs resulting from reorganization of the business have been reported
in the Condensed Consolidated Statements of Operations separately as
reorganization items. For the three and nine months ended May 31, 2002, the
following have been recorded (in thousands):

Three and Nine
Months Ended
May 31, 2002
------------------

Loss on deferred financing costs related to liabilities subject to $ 17,818
compromise (non-cash)
Professional and other fees directly related to Chapter 11 filing 1,547
Loss on discontinuance of derivative instruments (non-cash) (see Note 7) 2,310
------------------
Total $ 21,675
==================

Note 8 - Comprehensive Income (Loss)

The components of comprehensive loss are as follows (in thousands):

Three Months Ended Nine Months Ended
May 31, May 31,
--------------------------- -----------------------------
As Restated As Restated
--------------------------- -----------------------------
2002 2001 2002 2001
------------- ------------ -------------- ------------

Net loss $ (74,530) $ (55,824) $ (605,241) $ (51,108)

Cumulative effect of change in accounting
principle for derivatives and hedging
activities, net of tax - - - 168

Derivative instrument fair market value adjustment (124) 49 (1,503) (1,023)

Reclassification of loss on discontinuance of
derivative instruments to earnings as a
reorganization item 2,310 - 2,310 -

Reclassification of derivative losses to earnings 377 26 916 107

Foreign currency translation adjustments (416) (4,622) (2,112) (4,783)
------------- ------------ -------------- ------------

Comprehensive (loss) income $ (72,383) $ (60,371) $ (605,530) $ (56,639)
============= ============ ============== ============

Note 9 - Inventories

Inventories consisted of (in thousands):

As Restated
-------------------------------------
May 31, August 31,
2002 2001
---------------- ----------------

Raw material $ 60,629 $ 73,427
Work-in-progress 26,322 31,945
Finished goods 21,394 39,591
---------------- ----------------
Total inventories, gross 108,345 144,963
Less: inventory reserves (17,811) (14,026)
---------------- ----------------
Total inventories, net $ 90,534 $ 130,937
================ ================

Due to continued weakness in the computing, telecommunication, and
semi-conductor markets served by APW Ltd., the Company recorded a charge of $4.6
million in the fiscal 2002 third quarter to increase inventory reserves.

Note 10 - Divestitures

On February 13, 2002, APW Ltd. completed the sale of its Zero Cases
division. Total consideration from the transaction was a net $19.2 million,
which resulted in a net book gain of $8.2 million.

Note 11 - Accounts Receivable Facility

On May 17, 2002, the Company's Accounts Receivable Facility terminated. On
that date, $34.5 million of accounts receivable previously sold under the
Accounts Receivable Facility were repurchased by the Company using proceeds from
the debtor-in-possession financing facility (see Note 12 below). At August 31,
2001, accounts receivable were reduced by $58.0 million, representing receivable
interests sold under the Accounts Receivable Facility.

Note 12 - Contingencies and Litigation

APW Ltd. has recorded reserves for loss contingencies based on the
specific circumstances of each case. Such reserves are recorded when it is
probable that a loss has been incurred as of the balance sheet date and such
loss can be reasonably estimated. In the opinion of management, the resolution
of these contingencies will not have a material adverse effect on APW Ltd.'s
financial condition, results of operations or cash flows.

APW Ltd. has facilities at numerous geographic locations, which are
subject to a range of environmental laws and regulations. Compliance with these
laws has and will require expenditures on a continuing basis. Predecessors to
APW Ltd. have been identified by the United States Environmental Protection
Agency ("EPA") as "Potentially Responsible Parties" regarding various
multi-party Superfund sites. Potentially Responsible Parties are jointly and
severally liable with respect to Superfund remediation liabilities. Any
liability in connection with these sites has been assumed by APW Ltd. Based on
the Company's investigations, management believes that the Company is a de
minimis participant in certain of these sites. As to one other site, the Company
is a minor participant, and the Company's share of estimated cleanup costs is
not likely to exceed $1.1 million. As to another EPA site where the Company is
not a de minimis participant, the state has required additional ground water
testing at a former APW Ltd. manufacturing facility, and the Company cannot
reasonably estimate the amount of the Company's liability, if any. In addition,
the Company is also involved in other state cleanup actions for which management
believes the aggregate costs of remediation are adequately reserved for.

APW Ltd. anticipates that environmental costs will be expensed or
capitalized depending on their future economic benefits. Expenditures that have
no future economic value are expensed. Liabilities will be recorded when
environmental remediation is probable and the costs can be reasonably estimated.
Although the level of future expenditures for environmental remediation is
impossible to determine with any degree of certainty, management does not
believe these costs are likely to have a material adverse effect on APW Ltd.'s
financial position, results of operations or cash flows.

with the termination, the terms of the contracts would require the Company to
pay the lessor approximately $12.3 million for the two aircraft and, in
exchange, the lessor would convey all of its rights, title and interest in the
two aircraft to the Company. The Company is actively working with the lessor to
identify a third party which would purchase and/or lease the two aircraft,
thereby eliminating the Company's $12.3 million payment obligation. The lessor
has informed the Company that it is willing to continue to work with the Company
to find third party alternatives to eliminate the cost of terminating this
contract, provided the Company continues to make scheduled lease payments. As
such, the Company recorded a charge of $2.0 million during the second quarter
related to its decision to discontinue use of the related aircraft. This charge
reflects management's current estimates relating to the cost of the ultimate
disposition of the two aircraft.

The Company, as well as one current and one former executive, have been
sued in three actions which are pending in the United States District Court for
the Eastern District of Wisconsin in connection with alleged violations of
Federal securities laws which preceded a drop in the price of its common stock
ending on March 20, 2001. The first of these suits which is captioned Stewart
Norman Hicks v. APW Ltd., et al., was filed on December 10, 2001. The
subsequently filed suits are captioned Robert Betz v. APW Ltd, et al., and
Market Street Securities v. APW Ltd., et al. The complaints for all three suits
allege violations of the Federal securities laws and seek certification of a
plaintiff class consisting of all purchasers of the Company's common stock
between September 26, 2000 and March 20, 2001, inclusive. The complaint does not
quantify the damages. The Company has not yet been served with the complaints
but understands that the respective plaintiffs intend to seek consolidation of
the suits. At this time, the Company is evaluating the merits of these claims.

As a result of the Company's Chapter 11 filing, the above shareholder
lawsuits against APW Ltd., the Bermuda holding company, have been stayed
automatically by the Bankruptcy Code and, absent further order of the Bankruptcy
Court, no party may take any action in the United States to recover on
pre-petition claims against APW Ltd.

Note 13 - Debtor-In-Possession Facility

On May 16, 2002, the Bankruptcy Court approved and the Company entered
into a $110 million debtor-in-possession financing ("DIP financing facility")
agreement with certain members of its lender group. The DIP financing facility
is comprised of the following three tranches: (i) tranche A ($70 million) is
collateralized by US receivables and inventory at an interest rate of LIBOR plus
3.50%; (ii) tranche B ($20 million) is collateralized by UK and Ireland
property, plant and equipment, receivables and inventory at an interest rate of
LIBOR plus 4.25%; and (iii) tranche C ($20 million) is collateralized by all
other Company assets at an interest rate of LIBOR plus 5.00%. The DIP financing
facility has a stated termination date of 180 days from May 16, 2002. Under the
terms of the DIP financing facility, upon emergence from bankruptcy, the
termination date for tranches A and B will be automatically extended to November
15, 2003, and the termination date for tranche C will be automatically extended
to May 15, 2004, if the Company is unable to obtain and close refinancing in an
amount that is sufficient to refinance and pay in full all of the obligations.
Initial proceeds from the DIP financing facility were used to repurchase
accounts receivable that had been sold under a previous facility. The DIP
financing facility will convert into an exit facility upon APW Ltd.'s emergence
from Chapter 11. At May 31, 2002, all outstanding borrowings under the DIP
financing facility were from tranche A. The LIBOR rate at May 31, 2002 was
1.84%.

The DIP financing facility also grants warrants to the lenders for 20% of
the common stock outstanding of the newly reorganized Company upon its emergence
from Chapter 11 bankruptcy. The exercise price of the warrants is $0.02 per
share. The warrants were valued at $25.5 million and are recorded as a liability
at May 31, 2002, which will be adjusted for changes in fair value over the
period the warrants are outstanding. The same amount was recorded as a deferred
financing cost asset, which is being amortized over the term of the DIP
financing facility of 180 days.

Note 14 - Liabilities Subject to Compromise

Liabilities subject to compromise consisted of the following:

May 31,
2002
--------------
Unsecured debt $ 664,935
Accrued interest 22,440
Interest rate swap liabilities 2,310
--------------
Total liabilities subject to compromise $ 689,685
==============

Note 15 - Income Taxes

Due to the size of APW Ltd.'s net operating loss carry-forwards in relation
to the Company's recent history of unprofitable operations and to the continuing
uncertainties surrounding recoverability of these losses and other net deferred
tax assets, in the second quarter of fiscal 2002 a valuation allowance of $178.4
million was established to reduce the Company's net deferred tax assets to $0.4
million. APW Ltd. currently provides for income taxes only to the extent that
the Company expects to pay taxes for current income, as well as for deferred
taxes for those tax jurisdictions in which the Company continues to be
profitable.

Note 16 - Condensed Combined Financial Statements

The following condensed combined financial statements are presented in
accordance with SOP 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code", as restated:

Condensed Combined Consolidating Statement of Operations
(In millions)

Nine Months Ended May 31, 2002 (Unaudited)
---------------------------------------------------------------
As Restated
---------------------------------------------------------------
Entities in Entities not in
Reorganization Reorganization Combined
Proceedings Proceedings Eliminations Consolidated
--------------- --------------- -------------- --------------

Net sales $ - $ 642.6 $ - $ 642.6
Cost of products sold - 595.5 - 595.5
--------------- --------------- -------------- --------------

Gross profit - 47.1 - 47.1

Engineering, selling and administrative expenses 7.7 127.0 - 134.7
Amortization and impairment of intangible assets - 407.5 - 407.5
Restructuring charges - 22.2 - 22.2
(Gain) loss on sale of subsidiary - (8.2) - (8.2)
--------------- --------------- ------------- --------------

Operating earnings (loss) (7.7) (501.4) - (509.1)

Reorganization items 21.7 - - 21.7
Financing costs 43.0 1.9 - 44.9
Other expense (income), net - (2.3) - (2.3)
--------------- --------------- ------------- --------------

Earnings (loss) before income tax expense (benefit) (72.4) (501.0) - (573.4)

Income tax expense (benefit) - 31.8 - 31.8
--------------- --------------- ------------- --------------

Net earnings (loss) $ (72.4) $ (532.8) $ - $ (605.2)
=============== =============== ============= ==============

Condensed Combined Consolidating Balance Sheet
(In millions)

As of May 31, 2002 (Unaudited)
---------------------------------------------------------------
As Restated
---------------------------------------------------------------
Entities in Entities not in
Reorganization Reorganization Combined
Proceedings Proceedings Eliminations Consolidated
--------------- --------------- -------------- --------------

ASSETS
------
Current assets

Cash and cash equivalents $ 0.1 $ 22.1 $ - $ 22.2
Accounts receivable, net 45.4 87.0 - 132.4
Intercompany accounts receivable 240.2 - (240.2) -
Inventories - 90.6 - 90.6
Prepaid expenses 4.2 12.2 - 16.4
Deferred income taxes - .5 - .5
--------------- -------------- -------------- --------------
Total current assets 289.9 212.4 (240.2) 262.1

Net property, plant and equipment - 204.8 - 204.8
Goodwill, net - 299.2 - 299.2
Other intangible assets, net - 3.6 - 3.6
Investments in subsidiaries 749.2 868.9 (1,618.1) -
Intercompany loans receivable 384.2 - (384.2) -
Other assets 26.8 25.8 - 52.6
--------------- -------------- -------------- --------------
Total assets $ 1,450.1 $ 1,614.7 $ (2,242.5) $ 822.3
=============== ============== ============== ==============

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
---------------------------------------------
Current liabilities
Trade accounts payable $ 1.3 $ 81.7 $ - $ 83.0
Debtor-in-possession financing 60.0 - - 60.0
Intercompany accounts payable 8.8 231.4 (240.2) -
Accrued compensation and benefits - 26.6 - 26.6
Income taxes payable 10.0 31.1 - 41.1
Other current liabilities 2.0 45.3 - 47.3
--------------- -------------- -------------- --------------
Total current liabilities 82.1 416.1 (240.2) 258.0

Long-term debt - 1.3 - 1.3
Intercompany loans payable 23.6 360.6 (384.2) -
Other long-term liabilities - 34.0 - 34.0

Liabilities subject to compromise 689.7 - - 689.7

Debtor-in-possession warrants 25.5 - - 25.5

Shareholders'equity (deficit)
Common stock 1.8 23.5 (24.9) 0.4
Share premium 679.4 1,592.1 (1,592.1) 679.4
Accumulated deficit (51.0) (787.0) (1.1) (839.1)
Accumulated other comprehensive loss (1.0) (25.9) - (26.9)
--------------- -------------- --------------- --------------
Total shareholders' equity (deficit) 629.2 802.7 (1,618.1) (186.2)

Total liabilities and shareholders' equity
(deficit) $ 1,450.1 $ 1,614.7 $ (2,242.5) $ 822.3
=============== ============== =============== ==============

Condensed Combined Consolidating Statement of Cash Flow
(In millions)

As Restated Nine months ended May 31, 2002 (Unaudited)
------------------------------------------------------------------
Entities in Entities not in
Reorganization Reorganization Combined
Proceedings Proceedings Eliminations Consolidated
--------------- ---------------- --------------- ---------------

Net cash used in operating activities $ (66.0) $ 33.5 $ - $ (32.5)

Investing Activities:
Proceeds on sale of property, plant and equipment - 8.5 - 8.5
Additions to property, plant and equipment - (16.1) - (16.1)
Net proceeds on sale of subsidiary, net of cash -
acquired 19.2 - 19.2
Other investing activities (0.5) - - (0.5)
--------------- --------------- --------------- ---------------
Net cash provided by investing activities (0.5) 11.6 - 11.1

Financing Activities:
Net short term repayments - (5.6) - (5.6)
Principal repayments on pre-petition debt (183.3) - - (183.3)
Principal borrowings on pre-petition debt 230.0 - - 230.0
Borrowings on DIP facility 60.0 - - 60.0
DIP facility financing costs (3.7) - - (3.7)
Net receivables financed (repayments) (34.3) (23.7) - (58.0)
Debt financing costs (2.1) - - (2.1)
--------------- --------------- --------------- ---------------
Net cash provided by financing activities 66.6 (29.3) 37.3

Effect of exchange rate changes on cash - 0.1 - 0.1
--------------- --------------- --------------- ---------------

Net increase in cash and cash equivalents 0.1 15.9 - 16.0

Cash and cash equivalents - beginning of period - 6.2 - 6.2
--------------- --------------- --------------- ---------------

Cash and cash equivalents - end of period $ 0.1 $ 22.1 $ - $ 22.2
=============== =============== =============== ===============

Note 17--Restated Financials
- ----------------------------

As described in Note 1, the consolidated financial statements as of May 31,
2002 and 2001 and for the three months and nine months ended May 31, 2002 and
2001 have been restated. These statements are unaudited. A review of the
consolidated financial statements for the three and nine month periods ended
May 31, 2001 has not been performed by the Company's independent accountants.
A summary of the effects of the restatements follows:

APW Ltd.
Consolidated Statement of Operations
(Dollars in millions, except per share data)

For the 3 Months Ended May 31, 2002 (Unaudited)
-----------------------------------------------
Previously
Reported Adjustments As Restated
---------- ----------- -----------

Net sales $ 221.9 $ -- $ 221.9
Costs of products sold 209.3 1.0 210.3
------- ------- -------

Gross profit 12.6 (1.0) 11.6

Engineering, selling and administrative expenses 44.0 (.3) 43.7
Amortization of intangible assets 3.8 -- 3.8
Restructuring charges 4.7 -- 4.7
------- ------- -------

Operating loss (39.9) (.7) (40.6)

Reorganization expenses 21.7 -- 21.7
Net financing costs 14.0 -- 14.0

Other income, net (1.8) -- (1.8)
------- ------- -------
Loss before income tax expense (73.8) (.7) (74.5)
Income tax expense -- -- --
------- ------- -------

Net loss $ (73.8) $ (.7) $ (74.5)
======= ======= =======

Basic and diluted loss per share:
Loss per share $ (1.84) $ (.02) $ (1.86)
Weighted average common shares outstanding 40,056 40,056

APW Ltd.
Consolidated Statement of Operations
(Dollars in millions, except per share data)

For the 9 Months Ended May 31, 2002 (Unaudited)
-----------------------------------------------
Previously
Reported Adjustments As Restated
-------- ----------- -----------

Net sales $ 642.6 $ -- $ 642.6
Costs of products sold 592.5 3.0 595.5
------- ------ -------
Gross profit 50.1 (3.0) 47.1

Engineering, selling and administrative expenses 135.5 (.8) 134.7
Amortization of intangible assets 407.5 -- 407.5
Restructuring charges 22.2 -- 22.2
Gain on sale of subsidiary (8.2) -- (8.2)
------- ------ -------
Operating loss (506.9) (2.2) (509.1)

Reorganization expenses 21.7 -- 21.7
Net financing costs 44.9 -- 44.9
Other income, net (2.3) -- (2.3)
------- ------ -------
Loss before income tax expense (571.2) (2.2) (573.4)
Income tax expense 28.1 (3.7) 31.8
------- ------ -------
Net loss $(599.3) $ (5.9) $(605.2)
======= ====== =======
Basic and diluted loss per share:
Loss per share $(14.96) $ (.15) $(15.11)
Weighted average common shares outstanding 40,052 40,052

APW Ltd.
Consolidated Balance Sheet
(Dollars in millions)

May 31, 2002 (Unaudited)
------------------------------------
Previously
Reported Adjustments As Restated
-------- ----------- -----------

ASSETS
- ------
Current assets
Cash and cash equivalents $ 24.2 $ (2.0) $ 22.2
Accounts receivable, net 132.5 (.1) 132.4
Inventories 97.9 (7.3) 90.6
Prepaid expenses 16.7 (.3) 16.4
Deferred income taxes .5 -- .5
------ ------ -------
Total current assets 271.8 (9.7) 262.1

Property, plant and equipment 390.8 -- 390.8
Less: Accumulated depreciation (186.0) -- (186.0)
------- ------ -------
Net property, plant and equipment 204.8 -- 204.8

Goodwill, net 299.2 -- 299.2
Other intangibles, net 3.6 -- 3.6
Other assets 52.4 .2 52.6
------- ------ -------
Total assets $ 831.8 $ (9.5) $ 822.3
======= ====== =======

LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities
Short-term borrowings $ -- -- $ --
Trade accounts payable 81.8 1.2 83.0
Debtor-in-possession financing 60.0 -- 60.0
Accrued compensation and benefits 25.9 .7 26.6
Income taxes payable 41.1 -- 41.1
Other current liabilities 46.8 .5 47.3
------- ------ -------
Total current liabilities 255.6 2.4 258.0

Long-term debt 1.3 -- 1.3
Other long-term liabilities 34.0 -- 34.0
Liabilities subject to compromise 689.7 -- 689.7
Debtor-in-possession warrants 25.5 -- 25.5

Shareholders' equity
Common stock .4 -- .4
Share premium 679.4 -- 679.4
Accumulated deficit (827.2) (11.9) (839.1)
Accumulated other comprehensive loss (26.9) -- (26.9)
------- ------ -------
Total shareholders' equity (174.3) (11.9) (186.2)
------- ------ -------
Total liabilities and shareholders' equity $ 831.8 $ (9.5) $ 822.3
======= ====== =======

100

APW Ltd.
Consolidated Condensed Statement of Cash Flows
(Dollars in millions)

For the 9 Months Ended May 31, 2002 (Unaudited)
-----------------------------------------------
Previously
Reported Adjustments As Restated

Net loss $ (599.3) $(5.9) $ (605.2)

Net cash used in operating activities (32.8) .3 (32.5)

Net cash provided by investing activities 11.1 -- 11.1

Net cash provided by financing activities 37.3 -- 37.3

Effect of exchange rate changes on cash .1 -- .1

Net increase in cash and cash equivalents 15.7 .3 16.0

Cash and cash equivalents-beginning of year 8.5 (2.3) 6.2

Cash and cash equivalents-end of year $ 24.2 $(2.0) $ 22.2

101

APW Ltd.
Consolidated Statement of Operations
(Dollars in millions, except per share data)

For the 3 Months Ended May 31, 2001 (Unaudited)
Previously
Reported Adjustments As Restated

Net sales $300.2 $ -- $300.2
Costs of products sold 268.4 1.7 270.1
------ ------ ------

Gross profit 31.8 (1.7) 30.1
Engineering, selling and administrative expenses 67.2 -- 67.2
Amortization of intangible assets 7.6 -- 7.6
Restructuring charges 12.5 -- 12.5
------ ------ ------

Operating loss (55.5) (1.7) (57.2)
Net financing costs 15.3 -- 15.3

Other expense, net 1.0 -- 1.0
------ ------ ------
Loss before income tax benefit (71.8) (1.7) (73.5)
Income tax benefit (17.1) (.6) (17.7)
------ ------ ------

Net loss $(54.7) $(1.1) $(55.8)
====== ====== ======
Basic and diluted loss per share:
Loss per share $(1.37) $(.02) $(1.39)
Weighted average common shares outstanding 40,038 40,038 40,038

102

APW Ltd.
Consolidated Statement of Operations
(Dollars in millions, except per share data)

For the 9 Months Ended May 31, 2001 (Unaudited)
Previously
Reported Adjustments As Restated

Net sales $ 977.5 $ -- $ 977.5
Costs of products sold 791.6 5.0 796.6
------- ------- -------

Gross profit 185.9 (5.0) 180.9
Engineering, selling and administrative expenses 180.4 -- 180.4
Amortization of intangible assets 20.0 -- 20.0
Restructuring charges 12.5 -- 12.5
Loss on sale of subsidiary 2.7 -- 2.7
------- ------- -------

Operating loss (29.7) (5.0) (34.7)
Net financing costs 29.2 -- 29.2

Other expense, net 2.0 -- 2.0
------- ------- -------
Loss before income tax benefit (60.9) (5.0) (65.9)
Income tax benefit (13.0) (1.8) (14.8)
------- ------- -------

Net loss $ (47.9) $ (3.2) $ (51.1)
======= ======= =======

Basic and diluted loss per share:
Loss per share $ (1.21) $ (.08) $ (1.29)
Weighted average common shares outstanding 39,551 39,551

103

APW Ltd.
Consolidated Condensed Statement of Cash Flows
(Dollars in millions)

For the 9 Months Ended May 31, 2001 (Unaudited)
-----------------------------------------------
Previously Adjustments As Restated
Reported

Net loss $ (47.9) $(3.2) $(51.1)

Net cash used in operating activities (34.7) (1.9) (36.6)

Net cash used in investing activities (322.2) -- (322.2)

Net cash provided by financing activities 364.4 -- 364.4

Effect of exchange rate changes on cash .5 -- .5

Net increase in cash and cash equivalents 8.0 (1.9) 6.1

Cash and cash equivalents-beginning of year .6 .1 .7

Cash and cash equivalents-end of year $ 8.6 $(1.8) $ 6.8

104

We have calculated the ratio of earnings to fixed charges for the years
ended August 31, 2001 and 2000 and the three months ended November 30, 2001, six
months ended February 28, 2002, and nine months ended May 31, 2002 as follows:
The sum of earnings before interest, taxes, depreciation and amortization,
divided by the fixed charges for the respective period, which we have defined as
interest expense on our indebtedness.

Ratio of earnings to fixed charges (Unaudited):

Twelve months ended August 31, 2001 0.67
Twelve months ended August 31, 2000 2.73
Three Months ended November 30, 2001 (1.38)
Six Months ended February 28, 2002 (0.87)
Nine Months ended May 31, 2002 (1.51)

Calculation of book value per share as of August 31, 2002:

(Unaudited)

Book value: $87,721,000

Shares outstanding: 1,000,000

Book value per share: $87.72

105

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in foreign exchange and interest
rates and, to a lesser extent, commodities. To reduce such risks, we
selectively use financial instruments.

As discussed in Note 2--"Summary of Significant Accounting Policies" in the
accompanying notes to consolidated financial statements, we adopted Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 requires that an entity
recognize derivative instruments, including certain derivative instruments
embedded in other contracts, as either assets or liabilities and measure those
instruments at fair value. Gains or losses resulting from changes in the values
of those derivatives would be accounted for depending on the use of the
derivative and whether it qualifies for hedge accounting. We adopted SFAS No.
133, as amended by SFAS No. 137 and SFAS No. 138, on September 1, 2000.

Currency Risk--APW has international operations. In most instances, APW
products are produced at manufacturing facilities located near the customer. As
a result, significant volumes of finished goods are manufactured in countries
for sale into those markets. For goods purchased from APW affiliates, APW
denominates the transaction in the functional currency of the producing
operation.

APW adopted the following guidelines to manage our foreign exchange
exposures:

(i) increase the predictability of costs associated with goods whose
purchase price is not denominated in the functional currency of the
buyer;

(ii) minimize the cost of hedging through the use of naturally offsetting
positions (borrowing in local currency), netting, pooling; and

(iii) where possible, sell product in the functional currency of the producing
operation.

APW's identifiable foreign exchange exposures result primarily from the
anticipated purchase of product from affiliates and third-party suppliers along
with the repayment of intercompany loans with foreign subsidiaries denominated
in foreign currencies. APW periodically identifies naturally occurring
offsetting positions and then purchases hedging instruments to protect against
anticipated exposures. Based on APW's overall currency rate exposure, including
derivative financial instruments and nonfunctional currency denominated
receivables and payables, we do not believe a near-term 10% appreciation or
depreciation of the U.S. dollar would have a significant effect on APW's
financial position, results of operations and cash flows over the next fiscal
year.

Interest Rate Risk--APW periodically enters into interest rate swaps to
stabilize financing costs by minimizing the effect of potential interest rate
increases on floating-rate debt in a rising interest rate environment. Under
these agreements, APW contracts with a counter-party to exchange the difference
between a fixed rate of interest and a floating rate of interest applied to the
notional amount of the swap. The effective portion of the

106

derivative gain or loss due to a change in fair value is initially recorded as
a component of other comprehensive income (loss) and subsequently reclassified
into earnings when the hedged exposure affects earnings. The fair value of the
Company's interest rate swap agreements was a liability of $2.4 million at
August 31, 2001 and an asset of $0.2 million at August 31, 2000. A seventy-two
(10% of our weighted average interest rate) basis-point change in interest
rates on average long-term borrowings would have impacted net interest expense
by approximately $4.3 million for the twelve months ended August 31, 2001.

Commodity Prices--APW is exposed to fluctuation in market prices for steel.
Therefore, APW has established a program for centralized negotiation of steel
prices. This program allows APW to take advantage of economies of scale as well
as to cap pricing. All business units are able to purchase steel under this
arrangement. In general, the contracts lock steel pricing for 18 months and
enable APW to pay less if market prices fall.

Financial Statements and Supplementary Data

The Company has restated its unaudited quarterly financial data for fiscal
2001 and fiscal 2000 as follows (in millions, except per share amounts):

2001 (Unaudited)
-------------------------------------
FIRST (1) SECOND THIRD (2) FOURTH (3)
--------- ------ --------- ----------

Net sales......................................... $359.7 $317.6 $300.2 $ 290.2
Gross profit...................................... $ 90.8 $ 63.4 $ 31.8 $ 45.4
Adjustments...................................... (1.7) (1.7) (1.7) (1.7)
------ ------ ------ -------
Gross profit--as restated......................... $ 89.1 $ 61.7 $ 30.1 $ 43.7
====== ====== ====== =======

Net earnings (loss)............................... $ 12.8 $ (5.9) $(54.7) $(184.3)
Adjustments...................................... (1.1) (1.1) (1.1) (1.1)
------ ------ ------ -------
Net earnings (loss)--as restated.................. $ 11.7 $ (7.0) $(55.8) $(185.4)
====== ====== ====== =======

Basic earnings (loss) per share................ $ 0.33 $(0.15) $(1.37) $ (4.61)
Adjustments................................ (.03) (.03) (.02) (.03)
------ ------ ------ -------
Basic earnings (loss) per share--as restated... $ 0.30 $(0.18) $(1.39) $ (4.64)
====== ====== ====== =======
Diluted earnings (loss) per share.............. $ 0.31 $(0.15) $(1.37) $ (4.61)
Adjustments................................ (.03) (.03) (.02) (.03)
------ ------ ------ -------
Diluted earnings (loss) per share--as restated. $ 0.28 $(0.18) $(1.39) $ (4.64)
====== ====== ====== =======

2000 (Unaudited)
--------------------------------------
FIRST SECOND (4) THIRD (5) FOURTH (6)
------ ---------- --------- ----------

Net sales........................................ $289.1 $277.1 $319.8 $353.5
Gross profit..................................... $ 77.4 $ 72.3 $ 82.7 $ 90.8
Adjustments..................................... (.2) (.2) (.3) (.3)
------ ------ ------ ------
Gross profit--as restated........................ $ 77.2 $ 72.1 $ 82.4 $ 90.5
====== ====== ====== ======

Net earnings (loss).............................. $ 6.5 $ 2.4 $ 6.3 $(37.8)
Adjustments..................................... (.1) (.2) (.2) (.2)
------ ------ ------ ------
Net earnings (loss)--as restated................. $ 6.4 $ 2.2 $ 6.1 $(38.0)
====== ====== ====== ======

Basic and diluted earnings (loss) per share--
Before extraordinary item..................... $ 0.17 $ 0.11 $ 0.16 $(0.97)
Adjustments............................... (.01) -- -- (.01)
------ ------ ------ ------
Before extraordinary item--as restated........ $ 0.16 $ 0.11 $ 0.16 $(0.98)
Extraordinary loss net of tax................. -- (.05) -- --
------ ------ ------ ------
Basic and diluted earnings (loss) per share--
as restated............................... $ 0.16 $ 0.06 $ 0.16 $(0.98)
====== ====== ====== ======

107

The Company's audit for its fiscal year ended 2002 is not yet completed and no
information is available.

108

LEGAL PROCEEDINGS

APW Ltd. and its subsidiaries are parties to various legal proceedings that have
arisen in the normal course of business. These legal proceedings typically
include product liability, warranty, environmental, labor, patent and contract
claims, and commission disputes. The Company has recorded reserves for estimated
losses based on the specific circumstances of each matter. Such reserves are
recorded when it is probable that a loss has been incurred as of the balance
sheet date and the amount of such loss can be reasonably estimated. In our
opinion, the resolution of these legal proceedings is not expected to have a
material adverse effect on our financial condition, results of operations or
cash flows. For further information, refer to Note 16 "Contingencies and
Litigation" in the Notes to the Consolidated Financial Statements contained in
APW's Form 10-K for the fiscal year ended August 31, 2001, which is incorporated
by reference into this Information Statement.

109