Asahi America Inc – IPO: ‘424B1’ on 5/16/96

As of:  Thursday, 5/16/96   ·   Accession #:  950146-96-810   ·   File #:  333-02314

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Initial Public Offering (IPO):  Prospectus   —   Rule 424(b)(1)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B1       Asahi/America, Inc.                                   66    380K 

Document Table of Contents

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PROSPECTUS                                                                      

[logo]                        ASAHI/AMERICA((R))                                

1,160,000 Shares  
ASAHI/AMERICA, INC.   
Common Stock  

  Of the 1,160,000 shares of Common Stock offered hereby, 1,000,000 shares are
being sold by Asahi/America, Inc. (the "Company") and 160,000 shares are being  
sold by the Selling Stockholders. The Company will not receive any of the       
proceeds from the sale of shares by the Selling Stockholders. See "Principal and
Selling Stockholders." Prior to this offering, there has been no public market  
for the Company's Common Stock. The Company's Common Stock has been approved for
listing on the Nasdaq National Market under the symbol "ASAM." The initial      
public offering price is $7.50 per share. See "Underwriting" for a discussion of
the factors considered in determining the initial public offering price.        

 See "Risk Factors" beginning on page 5 for certain information which should
be carefully considered by investors before purchasing shares of the Common     
Stock offered hereby. 

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES 
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
 CONTRARY IS A CRIMINAL OFFENSE.

                                                                [Download Table]


                        Underwriting                   Proceeds to 
           Price to     Discounts and   Proceeds to      Selling   
            Public     Commissions (1)  Company (2)   Stockholders 
                                                                   
Per Share       $7.50         $.525           $6.975         $6.975
Total (3)  $8,700,000      $609,000       $6,975,000     $1,116,000

(1) The Company and the Selling Stockholders have agreed to indemnify the       
 Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."                 

(2) Before deducting expenses payable by the Company estimated at $470,000.     

(3) The Selling Stockholders have granted the Underwriters an option,           
   exercisable within 30 days from the date of this Prospectus, to purchase up
   to 174,000 additional shares of Common Stock, on the terms set forth above,
solely to cover over-allotments, if any. If such option is exercised in 
   full, the total Price to Public, Underwriting Discounts and Commissions and
Proceeds to Selling Stockholders will be $10,005,000, $700,350, and     
$2,329,650, respectively. The Company will receive no proceeds from the 
exercise of such option. See "Principal and Selling Stockholders" and   
"Underwriting."                                                         

The shares of Common Stock offered by this Prospectus are offered by the    
several Underwriters, subject to prior sale, when, as and if delivered to and   
accepted by them, and subject to the right of the Underwriters to reject        
orders in whole or in part. It is expected that certificates for the shares     
of Common Stock will be available for delivery at the offices of Fechtor,       
Detwiler & Co., Inc. in Boston, Massachusetts on or about May 20, 1996.         

  Daiwa Securities America Inc.  Fechtor, Detwiler & Co., Inc.

 The date of this Prospectus is May 15, 1996

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{Inside front cover]                                                            

 Bringing New Materials,
Manufacturing Techniques
and Control Systems 
to the Fluid Flow Industry

Photo of: Value-added valve assembly                                            

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR            
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE         
COMPANY'S COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN   
THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL       
MARKET AND OTHER MARKETS. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED   
AT ANY TIME.                                                                    

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Photo of: Workers assembling actuation products in shop                         

Advanced Materials and Maunfacturing Techniques                                 

Photo of: Worker welding product in "clean" room                                

Photo of: Worker operating automatic lathe and milling center                   

Photo of: PolyFlo extrusion manufacturing equipment                             

Asahi/America began operations in 1974 as a master distributor of thermoplastic 
valves, primarily for the chemical industry.                                    

Today, thermoplastic pipe, valves and actuated valves are being used in a       
variety of enviromentally sensitive and industrial applications. These include  
semiconductor and pharmaceutical manufacturing, waste water treatment and       
mining.                                                                         

Asahi/America is an integrated ISO 9001 quality control certified manufacturer, 
realizing significant sales and profits from proprietary manufacturing and      
value-added products, as well as from a variety of distributed products.        

The Company's proprietary products include DuoPro(R) and PolyFlo(TM)            
double-containment pipe for environmentally sensitive applications.             

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Photo of: Trade show exhibit                                                    

Innovative Products and Systems                                                 

Photo of: PolyFlo piping components                                             

Photo of: Actuator products                                                     

Photo of: Filtration systems                                                    

Asahi/America sales have grown as the demand for its products has increased in  
the traditional chemical processing and waste water markets; as new markets have
opened up in response to concerns and legislation regarding the transport of    
hazardous material and pollution control; and as new applications for           
thermoplastic pipe systems have been developed in industries where fluid purity 
is a concern.                                                                   

Also key to the Company's growth is its ongoing development and introduction of 
new and improved products. Asahi/America valve actuation and control products   
meet the growing demands for plant automation; PolyFlo single-extrusion/double  
containment pipe offers significant price and reliability benefits while        
complying with EPA standards; and a new line of industrial filtration equipment 
alleviates environmental concerns relating to cartridge disposal.               

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed   
information and financial statements, including the notes thereto, appearing    
elsewhere in this Prospectus. Investors should carefully consider the           
information set forth under the heading "Risk Factors." Unless otherwise        
indicated, all Common Stock share and per share data and information in this    
Prospectus (i) have been adjusted to give effect to an approximately 836-for-1  
stock split (the "Stock Split") effective immediately prior to the effectiveness
of the registration statement of which this Prospectus is a part and (ii) assume
no exercise of the Underwriters' over-allotment option. Unless the context      
otherwise requires, references in this Prospectus to the "Company" include      
Asahi/America, Inc., its predecessor, and the Company's wholly-owned subsidiary,
Asahi Engineered Products, Inc.                                                 

The Company   

Asahi/America, Inc. markets and sells thermoplastic valves, piping systems
and components manufactured by the Company and others for use in a variety of   
environmentally sensitive and industrial applications, including                
semiconductor manufacturing, chemical processing, waste treatment processing    
and pharmaceutical manufacturing. The Company, an ISO 9001 quality control      
certified manufacturer, makes electric and pneumatic valve actuators and        
controls, proprietary double containment thermoplastic piping systems, and      
custom fabricated fittings and specialty products. The Company offers a broad   
selection of industrial thermoplastic valves in, and, based on a                
Company-commissioned market study prepared by an unaffiliated firm, believes    
it has one of the largest shares of the United States industrial                
thermoplastic valve market.                                                     

The Company is the exclusive master distributor in the United States,     
Latin America and the Caribbean for Asahi Yukizai Kogyo Co., Ltd. ("AYK"), a    
large Japanese manufacturer of thermoplastic valves. The Company is also the    
exclusive master distributor in the United States for Alois-Gruber GmbH         
(together with its United States subsidiary, "Agru"), an Austrian               
manufacturer of thermoplastic pipe and fittings. The Company distributes its    
products under the brand names Asahi, DuoPro and PolyFlo, among others.         

As a master distributor for AYK since 1974 and for Agru since 1985, the   
Company has developed a network of more than 400 United States and              
approximately 20 foreign distributors. Initially developed as the               
distribution channel for products purchased by the Company from AYK and Agru,   
this extensive distribution network also supports increasing sales of the       
higher margin products manufactured by the Company. From 1993 to 1995, annual   
sales of valve actuators and controls, custom valves and piping systems         
manufactured by the Company have increased by 64% from approximately $7.6       
million to approximately $12.4 million and from 30% to 36% of total sales.      

During the past three years, the Company acquired the rights to three new 
product lines, which broadened the array of products manufactured by the        
Company and sold through its distribution network. The new product lines        
include the patented PolyFlo extruded double containment piping system, a       
line of pressure relief valves and a line of patented industrial filtration     
equipment. The Company intends to use a portion of the proceeds of this         
offering to acquire additional complementary product lines and businesses as    
opportunities are identified.                                                   

Advances in thermoplastic technology have made it practical to substitute 
thermoplastic products for metal products in a variety of industrial valve      
and piping applications, creating an opportunity to increase the market share   
of thermoplastic products. End users of the Company's products often specify    
thermoplastic valves and piping systems instead of metal because                
thermoplastics resist corrosion and do not contaminate the transported fluids   
or gases. The Company's products combine the benefits associated with all       
plastic valve and piping products, such as light weight, ease of                
installation, long life and low installed cost, with the additional benefits    
of thermoplastic products, such as resistance to damage from temperature and    
corrosion. The Company seeks to identify industrial applications where the      
end users' requirements justify the use of industrial thermoplastics.           
Examples include double containment corrosion-resistant piping systems that     
meet Environmental Protection Agency ("EPA") regulations, piping systems for    
compressed air and gases, and high purity pipe and valves to assure             
contaminant free processing of liquids. The Company sells its products to       
distributors who sell to end users. Representative end users during the past    
year include Motorola, WMX Technologies, Micron Technology, the Corps of        
Engineers, Browning Ferris Industries, IBM, Schering-Plough, Estee Lauder,      
Rhone Poulenc and DuPont, none of which individually represents a material      
portion of the Company's sales.                                                 

AYK, Nichimen Corporation and its affiliate, Nichimen America Inc.        
("Nichimen America"), are principal stockholders of the Company. Nichimen       
Corporation, one of the largest Japanese trading companies, and Nichimen        
America, provide credit and import services to the Company in connection with   
its purchases from AYK.                                                         

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The Company's predecessor was established as a division of Conant               
Controls, Inc. in 1974, and the Company was incorporated in The Commonwealth    
of Massachusetts on August 18, 1977. The Company's principal executive          
offices are located at 19 Green Street, Malden, Massachusetts 02148, and its    
telephone number is (617) 321-5409.                                             

The Offering                                                                    

                                                        [Enlarge/Download Table]
                                                                                                      

Common Stock Offered by the Company               1,000,000 shares                                    
Common Stock Offered by the Selling Stockholders    160,000 shares                                    
Common Stock to be outstanding after the                                                              
  offering (1)                                    3,340,000 shares                                    
Use of Proceeds                                   To expand the Company's manufacturing and warehouse 
                                                  capacity, to repay short-term bank debt in full, and
                                                  for general corporate purposes, including           
                                                  acquisitions of complementary businesses and product
                                                  lines as opportunities are identified. See "Use of  
                                                  Proceeds."                                          
Risk Factors                                      The securities offered hereby involve a high degree 
                                                  of risk and immediate substantial dilution. See     
                                                  "Risk Factors" and "Dilution."                      
Nasdaq symbol                                     "ASAM"                                              

(1) Does not include a total of 350,000 shares of Common Stock reserved for     
issuance upon the exercise of stock options granted under the Company's 
Equity Incentive Plan and Independent Directors' Stock Option Plan. See 
"Management" and "Principal and Selling Stockholders."                  

Summary Consolidated Financial Information  
(in thousands, except per share and footnote data)  

                                                        [Enlarge/Download Table]

                                                                                            Three months ended 
                                                   Year ended December 31,                       March 31      
                                      ---------------------------------------------------  --------------------
                                       1991       1992       1993       1994       1995      1995       1996   
                                      -------    -------    -------    -------    -------   -------   ---------
                                                                                                               
Consolidated Statements of                                                                                     
  Operations Data:                                                                                             
 Net sales                           $21,495    $22,670    $25,514    $28,518    $34,998    $7,807     $9,651  
 Cost of goods sold                   16,245     15,449     17,021     18,608     23,409     5,178      6,409  
 Foreign currency (gains) losses        (351)       126         48         47       (391)      108       (105) 
 Gross profit                          5,601      7,095      8,445      9,863     11,980     2,521      3,347  
 Income (loss) from operations        (1,864)       434      1,244      2,250      3,298       447        981  
 Income (loss) before provision                                                                                
   (benefit) for income taxes         (2,811)      (340)       787      1,714      2,585       269        867  
 Net income (loss)                    (2,721)       (26)       619      1,118      1,585       165        508  
 Net income (loss) per common share  $ (2.58)   $  (.02)   $   .30    $   .48    $   .68    $  .07     $  .22  
 Weighted average number of common                                                                             
   shares outstanding                  1,056      1,146      2,048      2,340      2,340     2,340      2,340  

                                March 31, 1996
                               -------------------------------
                              Actual       As Adjusted (1)
                                --------   -------------------
Consolidated Balance Sheet Data:                                                
Working capital                         $ 4,310          $ 8,315              
Total assets                            $22,630          $27,313              
Long-term liabilities                   $ 5,214          $ 5,214              
Total liabilities                       $14,688          $12,866              
Stockholders' equity                    $ 7,942          $14,447              

(1) Adjusted to give effect to the sale by the Company of 1,000,000 shares of   
    Common Stock at the initial public offering price of $7.50 per share and the
   application of the estimated net proceeds therefrom. See "Use of Proceeds."

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RISK FACTORS

The shares of Common Stock offered hereby involve a high degree of risk.  
Prospective investors should carefully consider the following factors, in       
addition to the other information set forth herein, in evaluating the Company   
and its business before purchasing shares of the Common Stock offered hereby.   

Dependence on Two Suppliers. The Company purchases substantially all of   
its requirements for valves from AYK, and a large percentage of the pipe and    
fittings sold by the Company are supplied by Agru. Substantially all of the     
Company's sales are from products supplied by these suppliers and Company       
manufactured products incorporating products supplied by them. The Company      
has exclusive contracts of supply and distribution in defined territories       
with both AYK and Agru that extend through 1999. Under the terms of these       
contracts, the Company is not permitted to sell or distribute any products      
manufactured by others that compete with the products for which the Company     
is the exclusive distributor of AYK or Agru. The Company has agreed to          
purchase at least $140 million of product over the term of its agreement with   
AYK. There are no minimum annual purchase requirements, but there are annual    
guidelines attached to the contract. Through December 31, 1995, the end of      
the sixth year of the current term, the Company had purchased approximately     
$51.4 million of product from AYK, which was approximately $16.3 million        
behind the annual guidelines on a cumulative basis. The Company's contract      
with AYK may be terminated only for cause, including breach of the contract     
or the bankruptcy of a party. The Company's contract with Agru renews           
automatically for an additional five year period unless either party gives      
notice of termination no less than 12 months prior to the end of the term.      
Although there are alternative sources of supply to both AYK and Agru, the      
Company's rights to use them are limited by contract, and several of the        
potential sources of supply have exclusive supply arrangements with others in   
one or more of the Company's markets, which would preclude them from selling    
products to the Company. Suppliers that are not restricted from supplying the   
Company might not be able to supply the quantity, quality and variety of        
inventory that the Company requires in a timely manner or on terms as           
favorable as those afforded the Company by AYK and Agru. Therefore, the loss    
of either AYK or Agru as a source of supply would have a material adverse       
effect on the Company. See "Business--Products" and "--Suppliers."              

Dependence on Foreign Sources of Supply; Exchange Rate Risk. The Company  
is subject to various risks beyond the control of the Company inherent in       
dependence on foreign sources of supply, including adverse fluctuations in      
foreign exchange rates, economic or political instability, shipping delays,     
changes in custom duties and import quotas, increases in transportation costs   
and other trade restrictions, all of which could have a significant impact on   
the Company's ability to maintain profitability, obtain supplies and deliver    
its products to its customers on a timely and competitive basis.                

Due to its dependence on AYK and Agru as its principal sources of supply, 
the Company is subject to the effects of adverse fluctuations in the United     
States dollar/Japanese yen and the United States dollar/Austrian schilling      
exchange rates. There was a significant adverse decline in the exchange rate    
between the United States dollar and the Japanese yen over the three-year       
period ended December 31, 1995. The average exchange rate in the first          
quarter of 1993 was approximately 121 yen/dollar and declined to average        
approximately 84 yen/dollar in the second quarter of 1995 before recovering     
to an average of approximately 102 yen/dollar in the fourth quarter of 1995.    
The average daily exchange rate was approximately 111 yen/dollar in 1993, 102   
yen/dollar in 1994, and 94 yen/dollar in 1995, a decline of approximately 15%   
over the three-year period. Due to this extended adverse trend in the           
yen/dollar exchange rate, the Company has been obligated to pay higher          
prices, in terms of United States dollars, for its inventory. If this trend     
were to continue, there can be no assurance that the Company will be able to    
pass on the higher cost of its inventory to its customers. See                  
"Business--Suppliers" and "Management's Discussion and Analysis of Financial    
Condition and Results of Operations."                                           

Foreign Currency Transactions Risk. Under its payment terms with Nichimen 
America, the Company has 180 days from the date of shipment to pay for          
approximately 95% of the valves purchased from AYK. Prior to April 1995,        
Nichimen Corporation priced the Company's orders in United States dollars       
using a 180 day forward exchange rate for the Japanese yen on the date of       
shipment. In April 1995, the Company began purchasing valves in Japanese yen,   
thereby assuming the currency exchange rate risk. As a result, the Company is   
exposed to fluctuations in the exchange rate during the period from the date    
of shipment to the payment due date. The Company                                

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often purchases foreign currency contracts at some point during such period     
to hedge its yen payment commitments. However, the Company is at risk with      
respect to its unhedged commitments unless and until it purchases foreign       
currency contracts. The Company intends to continue its current practices,      
which means that the Company may have unhedged commitments, which could be      
significant, from time to time. The Company recognized net currency gains of    
$391,000 in 1995. There is no assurance that the Company will be able to        
avoid foreign currency losses in the future. The Company did not hedge the      
currency risk associated with purchases in Austrian schillings, and since       
August 1995, purchases from Agru have been denominated in United States         
dollars. See "Business--Suppliers," "Management's Discussion and Analysis of    
Financial Conditions and Results of Operations," and Note 9 of Notes to         
Consolidated Financial Statements.                                              

Dependence on Principal Distributor. For fiscal years 1993, 1994 and 1995,
one of the Company's distributors, Harrington Industrial Plastics               
("Harrington"), accounted for approximately 17.7%, 18.5% and 25.7%,             
respectively, of the Company's net sales. Harrington's territory (which is      
exclusive as to certain products only) has historically included the greater    
Chicago area and the area from El Paso north to Denver and west through         
California. However, Harrington recently acquired one of the Company's other    
distributors whose territory is comprised of Michigan, Ohio, Kentucky,          
Indiana, Western Pennsylvania and part of Tennesee. For fiscal years 1993,      
1994 and 1995, the acquired distributor accounted for approximately 5.0%,       
2.8% and 3.7%, respectively, of the Company's net sales. The Company does not   
have a contract with Harrington, which also sells products that are             
competitive with the products supplied by the Company. The loss of this         
distributor could have a material adverse effect on the Company. See            
"Business--Distribution and Marketing."                                         

Possible Fluctuations in Operating Results. Over the past three years, the
Company increased its sales of complete piping systems. Although these sales    
are typically high in dollar value, they involve long sales cycles, including   
design and engineering support to the end user. Concurrently, the size of the   
average order for the Company's other products has also increased. The          
Company expects these trends to continue. The Company's gross margins are       
significantly affected by the mix of products that it sells in any period.      
The timing and amount of piping system sales and large orders, as well as the   
mix of products sold, can be expected to cause fluctuations in the Company's    
period-to-period results of operations and will make it more difficult for      
the Company to plan with accuracy its financial requirements from period to     
period. In addition, the timing of a shipment of a single large order could     
have a significant impact on the Company's sales and results of operations      
for a particular financial period. See "Management's Discussion and Analysis    
of Financial Condition and Results of Operations."                              

Many of the end user purchasers of the Company's products are engaged in  
cyclical businesses that can be significantly affected by general economic      
conditions or other factors. As a result, a general downturn in the economy     
or other factors could affect the purchasing decisions of these end users,      
which in turn could adversely affect the Company's net sales. See               
"Business--Customers."                                                          

Under generally accepted accounting principles, the Company may adjust its
LIFO reserve each quarter based on the Company's expectations of its            
inventory position at the end of the year. If the Company incorrectly           
forecasts its year end inventory position, there may be substantial             
adjustments in the inventory reserve for the fourth quarter of a year, which    
could result in significant changes to the Company's operating results for      
that quarter. See Note 3 of Notes to Consolidated Financial Statements.         

Risk of Product Liability Claims. Due to the nature of the products it    
sells and their intended uses, including the transport of toxic and corrosive   
materials, flammable materials, and materials under high pressure, the          
Company may be exposed to potential product liability claims by distributors    
and end users, with the attendant risk of substantial damage awards. The        
Company maintains general liability insurance, which includes product           
liability coverage of $36 million per occurrence and per year in the            
aggregate. In addition, the Company is named as an insured on a product         
liability insurance policy maintained by AYK that includes product liability    
coverage of $3 million per occurrence and in the aggregate. The Company's       
principal supplier of pipe and fittings is not required by its contract with    
the Company to maintain such coverage. Although there have been no              
substantial product liability claims asserted against the Company to date,      
there can be no assurance that such insurance will be sufficient to cover       
potential claims or that the present level of coverage will be available in     
the future at reasonable cost. A successful product liability claim against     
the Company that is not fully insured could have a material adverse effect on   
the Company. See "Business--Suppliers."                                         

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Substantial Investment in Inventory. Due to the long lead times required  
to obtain inventory from its principal suppliers, the Company is required to    
maintain a large level of inventory of valves, pipe and accessories in          
relation to its sales in order to meet demands for prompt delivery to its       
customers. Also, to meet customer requirements for a broad selection of         
products, the Company stocks more than 8,000 SKUs. As a result, a significant   
portion of the Company's financial resources is invested in inventory and       
cannot be used for other corporate purposes. In addition, the large inventory   
level makes the Company vulnerable to possible write downs or write-offs of     
inventory if the Company is unable to sell items in inventory or if items in    
inventory become obsolete. See "Management's Discussion and Analysis of         
Financial Condition and Results of Operations."                                 

Single Facility. The Company's manufacturing operations are conducted     
from, and its entire inventory is maintained in, a single facility in Malden,   
Massachusetts. Any significant casualty loss to, or extended interruption of    
operations at, this facility would have a material adverse effect on the        
Company. See "Business--Property."                                              

Competition; Market Acceptance. The industrial valve and pipe industry in 
which the Company operates is very competitive. The Company must compete with   
suppliers of metal valves and pipe, which have a substantial majority of the    
total market, as well as with other suppliers of plastic valves and pipe.       
Many of the entities with which the Company competes, particularly              
manufacturers of metal valves and pipe, have substantially greater financial    
and other resources than the Company. Achieving greater market acceptance for   
thermoplastic valves and pipe requires substantial educational, marketing and   
sales efforts to create greater awareness of and demand for the Company's       
products. There can be no assurance that the Company's products will be able    
to compete successfully with other products available for the same              
applications or that the Company will achieve further market acceptance of      
its products. See "Business--Competition."                                      

Impact of Changes In Environmental Regulations. Demand for the Company's  
double containment piping systems has been created in part by Government laws   
and regulations mandating the installation of secondary containment and         
corrosion-resistant systems in certain applications. Any relaxation in these    
regulations or in the enforcement of them could adversely affect the demand     
for these products and, therefore, the Company's net sales in the future.       

Significant Foreign Sales. During the past three years, sales by the      
Company to foreign markets have been significant, accounting for                
approximately 14%, 12% and 5%, respectively, of net sales for fiscal years      
1993, 1994 and 1995. The Company believes that foreign sales will continue to   
be significant, and as a result, the Company will be subject to the risks       
associated with foreign sales, including economic or political instability in   
its foreign markets, shipping delays, and fluctuations in foreign currency      
exchange rates that may make its products more expensive in its foreign         
markets, all of which could have a significant impact on the Company's          
ability to sell its products on a timely and competitive basis in foreign       
markets. The imposition of, or significant increases in customs duties,         
import quotas or other trade restrictions could also have a material adverse    
effect on the Company. See "Business--Distribution and Marketing" and           
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations."                                                                    

Intellectual Property. The Company has a number of registered trademarks, 
owns several patents relating to its products, and owns copyright               
registrations for the printed circuit boards incorporated in some of its        
actuators. The Company believes that trademark, patent and copyright            
("intellectual property") protection is important to its business and           
anticipates that it will seek additional protection for newly developed         
intellectual property as deemed appropriate. There can be no assurance as to    
the breadth or degree of protection which existing or future trademarks,        
patents and copyrights may afford the Company, that any trademark or patent     
application will result in issued trademarks or patents, or that the            
Company's intellectual property will not be circumvented or invalidated.        
Foreign intellectual property laws may not protect the Company's intellectual   
property adequately. There can be no assurance that the Company's products do   
not or will not violate the proprietary rights of others, that the Company's    
intellectual property would be upheld if challenged, or that the Company        
would not be prevented from using its intellectual property, any of which       
occurrences could have an adverse effect on the Company. In addition, the       
Company may not have the financial resources necessary to enforce or defend     
its trademarks, patents and copyrights at the time of any apparent              
infringement or of any challenge. The validity of one of the Company's          
patents relating to its DuoPro double containment piping system is the          
subject of pending litigation. See "Business--Distribution and Marketing" and   
"--Patents and Trademarks."                                                     

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Dependence Upon Key Personnel. The success of the Company will be largely 
dependent on the personal efforts of Leslie B. Lewis, President and Chief       
Executive Officer, and Timothy L. Robinson, Executive Vice President and        
Chief Operating Officer. Although the Company has employment agreements with    
each of Messrs. Lewis and Robinson, the loss of the services of either of       
them would have a material adverse effect on the Company's business and         
prospects. The Company is the owner and beneficiary of a "key man" life         
insurance policy on Mr. Lewis in the amount of $5 million. See "Management."    

Control by Existing Stockholders. Upon the consummation of this offering, 
Leslie B. Lewis, President and Chief Executive Officer, AYK, Nichimen           
Corporation and Nichimen America will continue to own beneficially              
approximately 65% (approximately 60% if the Underwriters' over-allotment        
option is exercised in full) of the outstanding shares of Common Stock          
(assuming no exercise of outstanding stock options). Accordingly, these         
stockholders, acting together, will be able to elect all of the Company's       
directors and, generally, to direct the affairs of the Company. Each of Mr.     
Lewis and his spouse and a designee of each of AYK, Nichimen Corporation and    
Nichimen America is currently a Director of the Company and together they       
will constitute a majority of the Board of Directors following the offering.    
In addition, AYK, Nichimen Corporation and Nichimen America, voting together,   
could effectively block, and Mr. Lewis, voting separately, could block any      
major corporate transaction, such as a merger or sale of substantially all of   
the Company's assets, that under Massachusetts law requires the vote of         
two-thirds of the outstanding Common Stock of the Company. See "Management,"    
"Principal and Selling Stockholders" and "Description of Capital Stock."        

Immediate Substantial Dilution. Purchasers of shares of Common Stock in   
this offering will experience immediate and substantial dilution in net         
tangible book value per share from the initial public offering price. Such      
dilution at March 31, 1996, would have been equal to $3.60 per share or 48.0%   
of the initial public offering price of $7.50 per share. See "Dilution."        

Absence of Public Market; Arbitrary Determination of Public Offering      
Price; Possible Volatility of Share Price. Prior to this offering, there has    
been no public market for the Company's Common Stock. The initial public        
offering price has been determined by negotiations between the Company and      
the Underwriters. There can be no assurance that an active trading market       
will develop and continue after completion of this offering or that the         
market price of the Common Stock will not decline below the public offering     
price. Stock prices for many companies fluctuate widely for reasons which can   
be unrelated to operating results. These fluctuations, as well as general       
economic, political and market conditions, such as a recession or military      
conflict, may have a material adverse effect on the market price for the        
Company's Common Stock. See "Underwriting."                                     

Shares Eligible for Future Sale. Sales of substantial amounts of Common   
Stock in the public market following the completion of this offering could      
have an adverse effect on the market price of the Common Stock. There will be   
3,340,000 shares of Common Stock outstanding immediately after the offering,    
including the 1,160,000 shares offered hereby. Upon completion of this          
offering, all of the shares of Common Stock offered hereby will be eligible     
for public sale without restriction, except for shares purchased by             
affiliates of the Company. The 2,180,000 shares of Common Stock that will be    
owned by the Company's current stockholders following this offering are         
"restricted securities," as that term is defined under Rule 144 promulgated     
under the Securities Act of 1933, as amended (the "Securities Act"). Subject    
to the volume limitations of Rule 144, all of such shares will be eligible      
for sale under Rule 144 beginning 90 days after the date of this Prospectus.    
In general, under Rule 144 as currently in effect, subject to the               
satisfaction of certain other conditions, a person, including an affiliate of   
the Company (or persons whose shares are aggregated), who has owned             
restricted shares of Common Stock beneficially for at least two years is        
entitled to sell, within any three-month period, a number of shares that does   
not exceed the greater of one percent (1%) of the total number of outstanding   
shares of the same class or, if the Common Stock is quoted on Nasdaq, the       
average weekly trading volume during the four calendar weeks preceding the      
sale. A person who has not been an affiliate of the Company for at least the    
three months immediately preceding the sale and who has beneficially owned      
shares of Common Stock for at least three years is entitled to sell such        
shares under Rule 144(k) without regard to any of the limitations described     
above. Beginning on the date of this Prospectus, 207,257 shares of Common       
Stock would be eligible for sale under Rule 144(k). The holders of all shares   
of Common Stock outstanding as of the date of this Prospectus have agreed not   
to sell or otherwise dispose of any of their shares of Common Stock for a       
period of 180 days from the date of this Prospectus without the prior written   
consent of the Representative of the Underwriters. The possibility that         
substantial amounts                                                             

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of Common Stock may be sold in the public market may adversely affect the       
prevailing market price for the Common Stock and could impair the Company's     
ability to raise capital through the sale of its equity securities. See         
"Shares Eligible for Future Sale."                                              

Dividends. To date, the Company has not paid any dividends on its Common  
Stock, and the Company will not pay any dividends for a period of at least 12   
months following this offering. In subsequent periods, if the Company has       
funds legally available for the payment of dividends, the Board of Directors    
intends to consider the payment of dividends. The payment of dividends is       
within the discretion of the Board of Directors and will depend upon the        
Company's earnings, its capital requirements and financial condition, and       
other relevant factors. Under the terms of its bank loan agreements, the        
Company may not pay dividends without the consent of the bank. See              
"Description of Capital Stock--Dividends."                                      

Anti-Takeover Provisions; Possible Issuance of Preferred Stock. The       
Company's Articles of Organization and By-laws contain provisions that          
provide for a classified Board of Directors, undesignated Preferred Stock and   
a so-called "fair price provision." These provisions may make it more           
difficult for a third party to acquire, or may discourage acquisition bids      
for, the Company. These provisions also may limit the price that certain        
investors may be willing to pay in the future for shares of the Company's       
Common Stock or make the payment of a premium to stockholders in connection     
with an attempted change in control less likely. In addition, shares of the     
Company's Preferred Stock may be issued in the future without further           
stockholder approval and upon such terms and conditions, and having such        
rights, privileges and preferences, as the Board of Directors may determine.    
Such rights, privileges and preferences could include preferential voting       
rights, dividend rights in excess of those provided to holders of Common        
Stock, and conversion rights, redemption privileges or liquidation              
preferences not available to holders of Common Stock. The rights of the         
holders of Common Stock will be subject to, and may be adversely affected by,   
the rights of holders of any Preferred Stock that may be issued in the          
future. The issuance of Preferred Stock, while providing desirable              
flexibility in connection with possible acquisitions and other corporate        
purposes, could have the effect of making it more difficult for a third party   
to acquire, or discouraging a third party from acquiring, a majority of the     
outstanding voting stock of the Company. The Company has no present plans to    
issue any shares of its Preferred Stock. The "fair price provision" requires    
that, in the event of a merger or consolidation, each Company stockholder, if   
the stockholder so elects, must be paid the same price in the same form of      
consideration as the highest price paid by the acquiror for any shares of the   
same class of the Company's stock. This provision could deter or discourage     
acquisition bids for the Company that are structured in two steps, such as a    
cash tender offer followed by a merger for stock or other securities.           
Finally, the Company's Articles of Organization contain an election by the      
Company not to be governed by the Massachusetts Control Share Acquisition       
statute. In general, this statute provides that any stockholder of a            
corporation subject to the statute who acquires beneficial ownership of 20%     
or more of the outstanding voting stock of a corporation may not vote such      
stock unless the holders of a majority of the capital stock (excluding the      
interested shares) of a corporation so authorize. If the Company's              
stockholders were to amend the Articles of Organization to permit the Company   
to be governed by this statute, the price that certain investors may be         
willing to pay for the Company's Common Stock may be limited. See               
"Description of Capital Stock."                                                 

USE OF PROCEEDS   

The net proceeds to the Company from the sale of the 1,000,000 shares of  
Common Stock offered by it hereunder at the initial public offering price of    
$7.50 per share are estimated to be approximately $6.5 million, after deducting 
underwriting discounts and commissions and estimated offering expenses of       
approximately $470,000 payable by the Company. The Company intends to use the   
net proceeds to expand its manufacturing and warehouse capacity through the     
purchase of the land (approximately 2.3 acres) and building adjacent to the     
Company's facility in Malden, Massachusetts, and related capital improvements   
(aggregating approximately $1.75 million), to purchase additional manufacturing 
equipment (approximately $750,000), to repay short-term bank debt in full, and  
for general corporate purposes, including possible acquisitions of complementary
businesses and product lines. The Company is not currently engaged in any       
negotiations, and has no arrangements or understandings with respect to any     
possible acquisitions. Pending the uses described above, the proceeds of the    
offering will be invested in short and medium term investment grade,            
interest-bearing securities. See "Business--Property."                          

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The Company's short-term bank debt consists of borrowings under a line of 
credit established pursuant to a Loan and Security Agreement dated September    
23, 1993, as amended. Borrowings under the credit line are limited to an        
amount equal to 80% of eligible receivables plus the lesser of $3.5 million     
or 50% of eligible inventory, with a maximum borrowing limit of $7.0 million.   
Borrowings under the line are due on the earlier to occur of June 30, 1996 or   
upon an event of default by the Company. Borrowings under the line currently    
bear interest at the bank lender's prime rate. At April 15, 1996, the balance   
outstanding was approximately $2.6 million. The funds drawn on the credit       
line are used to meet working capital requirements.                             

DILUTION  

The difference between the public offering price per share of Common Stock
and the pro forma net tangible book value per share of the Company after this   
offering constitutes the dilution per share to investors in this offering.      
Net tangible book value per share is determined by dividing the net tangible    
book value of the Company (total tangible assets less total liabilities) by     
the number of outstanding shares of Common Stock.                               

At March 31, 1996, the net tangible book value of the Company was         
approximately $6,535,000 or $2.79 per share of Common Stock. After giving effect
to the sale by the Company of 1,000,000 shares of Common Stock offered hereby at
the initial public offering price of $7.50 per share (less underwriting         
discounts and commissions and estimated expenses of this offering), the pro     
forma net tangible book value of the Company at March 31, 1996, would have been 
approximately $13,040,000, or $3.90 per share, representing an immediate        
increase in net tangible book value of $1.11 per share to existing stockholders 
and an immediate dilution of $3.60 per share to investors in the offering. The  
following table illustrates this per share dilution:                            

                                                        [Enlarge/Download Table]
                                                                                       
Initial public offering price per share                                          $7.50 
Net tangible book value at March 31, 1996                                 2.79         
Increase per share attributable to new investors                          1.11         
Pro forma net tangible book value per share after offering                        3.90 
                                                                                -------
Dilution of pro forma net tangible book value per share to new investors         $3.60 
                                                                                =======

The following table sets forth on a pro forma basis at March 31, 1996, a  
comparison of the number of shares of Common Stock purchased from the           
Company, the total consideration paid, and the average price per share paid     
by existing stockholders and to be paid by new investors purchasing Common      
Stock in this offering at the initial public offering price of $7.50:           

                                                        [Enlarge/Download Table]

                                Shares Purchased           Total Consideration         Average   
                           --------------------------  --------------------------     Price per  
                             Number        Percent       Amount         Percent         Share    
                           -----------   -----------   -----------    -----------   -------------
                                                                                                 
Existing stockholders (1)   2,340,000         70.1%    $ 7,358,446        49.5%         $3.14    
New investors (1)           1,000,000         29.9       7,500,000        50.5          $7.50    
                             ---------      ---------     ---------      ---------               
Total                       3,340,000        100.0%    $14,858,446       100.0%                  
                             =========      =========     =========      =========               

(1) Sales by the Selling Stockholders in this offering will reduce the number   
of shares of Common Stock held by the existing stockholders to 2,180,000
or 65.3% of the total number of shares of Common Stock to be outstanding
after this offering (2,006,000 shares and 60.1% if the Underwriters'    
 over-allotment option is exercised in full), and will increase the number
of shares of Common Stock held by new investors to 1,160,000 or 34.7% of
the total number of shares of Common Stock to be outstanding (1,334,000 
shares and 39.9% if the Underwriters' over-allotment option is exercised
in full). See "Principal and Selling Stockholders."                     

The information set forth in the preceding table assumes no exercise of a       
total of up to 350,000 options to purchase Common Stock that have been          
granted or may be granted in the future under the Company's Equity Incentive    

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Plan and Independent Directors' Stock Option Plan effective as of the date of   
this Prospectus. See "Management--Stock Option Plans."                          

CAPITALIZATION  

   The following table sets forth the capitalization of the Company at March 31,
1996, and as adjusted to give effect to the sale of the 1,000,000 shares of     
Common Stock offered by the Company at the initial public offering price of     
$7.50 per share and the application of the estimated net proceeds therefrom as  
described in "Use of Proceeds." The information set forth below should be read  
in conjunction with the financial statements and notes thereto included         
elsewhere in this Prospectus.                                                   

                                                        [Enlarge/Download Table]

                                                                          March 31, 1996       
                                                                    -------------------------- 
                                                                      Actual      As Adjusted  
                                                                     ----------   ------------ 
                                                                       (In thousands, except   
                                                                            share data)        
                                                                                               
Demand note payable to a bank                                         $ 1,822        $  --     
Long-term debt and capital lease obligations                            4,036          4,036   
Stockholders' equity (1):                                                                      
 Preferred stock, $10.00 par value; 1,000,000 shares authorized;                               
    no shares outstanding                                                --             --     
 Common stock, no par value; 10,000,000 shares authorized;                                     
    2,340,000 shares outstanding; 3,340,000 shares outstanding, as                             
    adjusted                                                            7,358         13,863   
 Retained earnings                                                        934            934   
 Note receivable from stockholder/officer                                (350)          (350)  
                                                                       --------      ----------
 Total stockholders' equity                                             7,942         14,447   
                                                                       --------      ----------
  Total capitalization                                                $13,800        $18,483   
                                                                       ========      ==========

(1) Does not include (i) 330,000 shares of Common Stock reserved for issuance   
upon exercise of options granted under the Company's Equity Incentive   
Plan effective as of the date of this Prospectus and (ii) 20,000 shares 
of Common Stock reserved for issuance upon exercise of options available
for grant under the Company's Independent Directors' Stock Option Plan. 
See "Management--Compensation of Directors" and "--Stock Option Plans." 

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SELECTED CONSOLIDATED FINANCIAL INFORMATION 

The selected consolidated financial data set forth below for each of the  
years ended December 31, 1993, 1994 and 1995 and at December 31, 1994 and       
1995 are derived from the consolidated financial statements of the Company      
audited by Arthur Andersen LLP, independent public accountants, which are       
included elsewhere in this Prospectus. The selected consolidated financial      
data set forth below for the years ended December 31, 1991 and 1992 and at      
December 31, 1991, 1992 and 1993 are derived from the consolidated financial    
statements of the Company audited by Arthur Andersen LLP, independent public    
accountants, which are not included in this Prospectus. The selected            
consolidated financial data set forth below for the quarters ended March 31,    
1995 and 1996 and at March 31, 1996 are derived from the unaudited              
consolidated financial statements of the Company which, in the opinion of the   
Company's management, include all adjustments, consisting only of normal        
recurring adjustments, necessary for a fair presentation of financial           
position and the results of operations. The operating results for the quarter   
ended March 31, 1996, are not necessarily indicative of the operating results   
for the entire year. The selected consolidated financial data set forth below   
should be read in conjunction with the Consolidated Financial Statements and    
Notes thereto and with Management's Discussion and Analysis of Financial        
Condition and Results of Operations appearing elsewhere in this Prospectus.     

                                                        [Enlarge/Download Table]

                                                                                                      Three months ended   
                                                        Year ended December 31,                            March 31        
                                      -----------------------------------------------------------   -----------------------
                                        1991         1992        1993         1994        1995        1995         1996    
                                     ---------    ---------    ---------   ---------    ---------  ---------     ----------
                                          (In thousands, except per share and footnote data)                               
                                                                                                                           
Statements of Operations Data:                                                                                             
Net sales                              $21,495     $22,670      $25,514     $28,518      $34,998     $7,807       $9,651   
Cost of goods sold                      16,245      15,449       17,021      18,608       23,409      5,178        6,409   
Foreign currency (gains) losses           (351)        126           48          47         (391)       108         (105)  
                                        -------      -------     -------      -------     -------     -------     ---------
  Gross profit                           5,601       7,095        8,445       9,863       11,980      2,521        3,347   
Selling, general and administrative                                                                                        
 expenses                                7,465       6,661        7,201       7,613        8,682      2,074        2,366   
                                        -------      -------     -------      -------     -------     -------     ---------
  Income (loss) from operations         (1,864)        434        1,244       2,250        3,298        447          981   
Interest expense, net                      937         764          391         536          713        178          114   
                                        -------      -------     -------      -------     -------     -------     ---------
Income (loss) before minority                                                                                              
 interest and provision (benefit)                                                                                          
 for income taxes                       (2,801)       (330)         853       1,714        2,585        269          867   
Minority interest in income of                                                                                             
 consolidated joint venture                (10)        (10)         (66)       --           --         --           --     
                                        -------      -------     -------      -------     -------     -------     ---------
Income (loss) before provision                                                                                             
 (benefit) for income taxes             (2,811)       (340)         787       1,714        2,585        269          867   
Provision (benefit) for income                                                                                             
 taxes                                     (90)       (314)         168         596        1,000        104          359   
                                        -------      -------     -------      -------     -------     -------     ---------
  Net income (loss) (1)                $(2,721)    $   (26)     $   619     $ 1,118      $ 1,585     $  165       $  508   
                                        =======      =======     =======      =======     =======     =======     =========
    Net income (loss) per                                                                                                  
  common share (1)                     $ (2.58)    $  (.02)     $   .30     $   .48      $   .68     $  .07       $  .22   
                                        =======      =======     =======      =======     =======     =======     =========
Weighted average number of                                                                                                 
 common shares outstanding (1)           1,056       1,146        2,048       2,340        2,340      2,340        2,340   

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                                                        [Enlarge/Download Table]

                                                   December 31,                         March 31 
                              -------------------------------------------------------  ----------
                               1991        1992        1993        1994       1995        1996   
                              --------    --------   --------    --------    --------  ----------
                                                  (In thousands)                                 
                                                                                                 
Balance Sheets Data:                                                                             
Working capital (deficit)    $(1,374)    $(1,742)    $ 2,902     $ 2,116     $ 3,850     $ 4,310 
Total assets                  16,389      13,311      13,023      21,308      22,452      22,630 
Long-term liabilities          1,025         691         490       4,583       5,313       5,214 
Total liabilities             16,193      13,142       8,312      15,479      15,018      14,688 
Retained earnings (deficit)   (2,870)     (2,896)     (2,278)     (1,160)        426         934 
Stockholders' equity             196         169       4,711       5,829       7,434       7,942 

(1) After giving pro forma effect to (i) the sale as of December 31, 1995 and   
    March 31, 1996, of 484,158 and 261,267 shares, respectively, of Common Stock
   offered hereby by the Company at the initial public offering price of $7.50
 per share and the use of the net proceeds therefrom to repay indebtedness
totaling $3,377,000 and $1,822,340 as of December 31, 1995 and March 31,
 1996, respectively, and (ii) the resulting reduction in interest expense,
   net of income tax, the pro forma net income and net income per common share
 for the year ended December 31, 1995 and the three months ended March 31,
1996, would have been approximately $1,785,866 and $.63 and $532,035 and
$.20, respectively. See "Use of Proceeds."                              

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
FINANCIAL CONDITION AND RESULTS OF OPERATIONS   

Overview                                                                        

The Company is a manufacturer and master distributor of thermoplastic     
valves, pipe, piping systems and components for use in a wide variety of        
applications across numerous industries. Manufactured products include valve    
actuators and controls, specialized valve assemblies and double containment     
piping systems. Distributed products consist principally of thermoplastic       
valves, pipe and fittings, which are purchased from two major foreign           
suppliers. The Company also realizes revenue for the rental and sale to         
contractors and end user customers of specialized welding equipment that is     
used in connection with the installation of the Company's piping systems. The   
Company expects sales of both distributed and manufactured products to          
continue to grow, with the sales of manufactured products continuing to         
experience higher rates of growth for the foreseeable future.                   

The Company distributes its products through an extensive network of      
domestic and foreign distributors, which are supported by ten                   
Company-employed sales representatives and two sales managers. The              
distributors and the Company's sales force, assisted by the Company's           
in-house engineering department, jointly pursue opportunities for larger        
piping systems sales. Piping systems, which may incorporate both manufactured   
and distributed products, are designed to meet the process flow                 
specifications of a particular end user.                                        

The Company is party to a long-term master distributor and supply         
agreement for thermoplastic valves with AYK, Nichimen Corporation and           
Nichimen America, which are principal stockholders of the Company. Under this   
agreement, AYK manufactures the thermoplastic valves that are supplied to the   
Company, but the Company purchases the valves through Nichimen Corporation      
and Nichimen America at AYK's list price. Nichimen Corporation and Nichimen     
America are responsible for all export (from Japan) and import (into the        
United States) arrangements, including all documentation, transportation        
arrangements and custom clearance in Japan. Nichimen America sells the valves   
to the Company on open account, eliminating the costly letter of credit         
arrangements previously required in connection with direct purchases from       
AYK, which the Company had financed with bank borrowings. As a result of the    
new arrangement, the Company has been able to reduce substantially its bank     
borrowings. For their services, Nichimen Corporation and Nichimen America are   
paid by AYK a combined mark-up of approximately 8% of the invoiced price of     
the Company's purchases from AYK.                                               

Substantially all of the Company's purchases of valves are transacted in  
yen, and therefore, the Company is exposed to fluctuations in foreign           
currency exchange rates. In addition, the decline in the value of the United    
States dollar against the yen over the past several years has resulted in       
increased inventory costs in terms of United States dollars. The Company may    
enter into foreign currency contracts at any time up to the payment date to     
hedge its foreign currency commitments for shipments from its Japanese          
supplier. However, the Company is at risk with respect to its unhedged          
commitments unless and until it purchases foreign currency contracts. The       
Company also purchases pipe and fittings from an Austrian supplier. Since       
August 1995, purchases from the Company's Austrian supplier have been           
denominated in United States dollars.                                           

Results of Operations                                                           

The following table sets forth, for the periods indicated, the Company's  
net sales as well as certain income and expense items expressed as a            
percentage of net sales:                                                        

                                                                [Download Table]

                                                                      Three months  
                                                                         ended      
                                          Year ended December 31,       March 31    
                                           -----------------------  ----------------
                                           1993     1994     1995    1995     1996  
                                           -----    -----    -----   -----   -------
                                                                                    
Net sales                                 100.0%   100.0%   100.0%  100.0%    100.0%
Cost of goods sold                         66.7     65.3     66.9    66.3      66.4 
Foreign currency (gains) losses             0.2      0.1     (1.1)    1.4      (1.1)
Gross profit                               33.1     34.6     34.2    32.3      34.7 
Selling, general and administrative                                                 
expenses                                   28.2     26.7     24.8    26.6      24.5 
Income from operations                      4.9      7.9      9.4     5.7      10.2 
Interest expense, net                       1.5      1.9      2.0     2.3       1.2 
Income before provision for income taxes    3.1      6.0      7.4     3.4       9.0 
Provision for income taxes                  0.7      2.1      2.9     1.3       3.7 
Net income                                  2.4      3.9      4.5     2.1       5.3 

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Years Ended December 31, 1993, 1994 and 1995                                    

Sales                                                                           

For the year ended December 31, 1995, the Company's net sales increased by
22.7% to $35.0 million from $28.5 million in 1994, while sales in 1994          
increased by 11.8% over 1993 sales of $25.5 million. Sales of the Company's     
manufactured products increased by 29.5% to $12.4 million in 1995 from $9.6     
million in 1994, and by 26.4% in 1994 from $7.6 million in 1993. During the     
same period, sales of distributed products increased by 15.7% to $21.2          
million in 1995 from $18.3 million in 1994, and by 3.2% in 1994 from $17.8      
million in 1993. The increase in sales was due primarily to continued strong    
demand for the Company's products in the chemical processing industry coupled   
with significant increases in sales to new markets, particularly in the         
semiconductor manufacturing industry. The Company estimates that sales to end   
users in these two industries each accounted for approximately 24% of sales     
in 1995. The sales increase was also partially attributable to price            
increases effected in early 1994 and 1995 and a second price increase           
effected in July 1995, which was intended to offset, in part, the impact of     
the adverse trend in the exchange rate of the United States dollar versus the   
yen and versus the Austrian schilling over the prior few years. Sales in 1995   
were adversely affected by a decline in export sales.                           

Sales to the Company's principal domestic distributor accounted for       
approximately 17.7%, 18.5% and 25.7% of total sales for the three years ended   
December 31, 1995. Export sales, primarily to Latin America, represented        
approximately 14%, 12% and 5% of total sales during the same period.            

Gross Profit                                                                    

The Company's gross profit as a percentage of sales ("gross margin")      
increased from 33.1% in 1993 to 34.6% in 1994 and declined to 34.2% in 1995.    
The primary factor contributing to the lower gross margin in 1995 was an        
increase in inventory costs attributable to the decline in the value of the     
United States dollar versus the yen. On average, the value of the dollar        
declined 7.9% and 8.1% against the yen in 1995 and 1994, respectively,          
causing corresponding increases in the cost of Japanese purchases. Purchases    
from the Company's Japanese supplier were approximately $10.0 million in 1995   
and $10.3 million in 1994. A secondary factor contributing to the lower gross   
margin in 1995 was increased sales of distributed single wall pipe, which is    
a lower margin product for the Company.                                         

Changes in the Company's product mix contributed to the increase in gross 
margin in 1994 and partially offset the decline in gross margin in 1995, as     
sales of the Company's higher margin manufactured products accounted for a      
greater portion of total sales. These products include the PolyFlo line,        
which was acquired in mid 1994 and contributed a full year of sales in 1995.    
In line with expectations, the PolyFlo product line had a nominally negative    
impact on income from operations for the year ended December 31, 1995. Other    
factors which partially offset the decline in gross margin in 1995 were price   
increases effected in January and July.                                         

The Company recognized net foreign currency gains of $391,000 in 1995. The
foreign currency gains occurred following a change in the Company's             
purchasing arrangements with Nichimen America. Prior to April 1995, the         
Company purchased valves through Nichimen America in United States dollars at   
a price based on the 180 day forward exchange rate for the yen on the date of   
shipment. In April 1995, the Company began purchasing valves through Nichimen   
America in yen, which gave the Company flexibility in the timing of its         
purchases of currency contracts. Under this new arrangement, the Company        
benefited from gains in the United States dollar against the yen between the    
dates that valves were shipped and the dates that the Company fixed the         
amount of the obligation through the purchase of foreign currency contracts.    
See "Risk Factors--Dependence on Foreign Sources of Supply; Exchange Rate       
Risk," "--Foreign Currency Transactions Risk" and Note 9 of Notes to            
Consolidated Financial Statements.                                              

Selling, General and Administrative Expenses                                    

Selling, general and administrative expenses increased in dollar amount   
over the three years ended December 31, 1995, but declined to 24.8% of sales    
in 1995 from 28.2% in 1993 and 26.7% in 1994. The dollar increase was due       
mainly to higher selling, marketing and product handling costs associated       
with significantly improved sales volume. Increased spending on systems         
support also contributed to the increase in 1994 over 1993. During the three    
year period,                                                                    

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the Company's distribution network supported significant sales growth with      
only moderate headcount and expense increases for the Company-employed sales    
force and related administrative support. The Company expects moderate          
increases in engineering related expenses to support development of new         
manufactured products, assistance of end users in the design and engineering    
of piping systems, and development of improved manufacturing processes.         
Control of administrative spending also contributed to the improvement in       
selling, general and administrative expenses as a percentage of sales. The      
Company resumed contributions to its profit-sharing plan in 1994, which added   
$100,000 of expense in each of 1994 and 1995. Moderate personnel increases      
are anticipated in line with expected sales growth.                             

Interest Expense                                                                

Interest expense, net is comprised principally of interest expense on the 
Company's revolving bank line of credit and Industrial Revenue Bonds.           
Borrowings under the line of credit are limited to defined availability and     
currently bear interest at the bank lender's prime rate. The Industrial         
Revenue Bonds bear interest at rates ranging from 4.2% to 5.1% and such rates   
are adjustable in 1999, 2004 and 2009. Interest expense, net increased          
$177,000 in 1995 over 1994 due to an increase of approximately $1 million in    
average borrowings and an increase in the average interest rate under the       
bank line of credit. Interest expense, net for 1994 increased $145,000 over     
1993 due mainly to the increase in debt resulting from the $4.2 million         
Industrial Revenue Bond financing in March 1994.                                

Quarters Ended March 31, 1995 and 1996                                          

Sales                                                                           

Net sales of $9.7 million for the first quarter of 1996 were $1.8 million 
or 23.6% greater than sales for the comparable quarter of 1995. The increase    
was due to higher sales volume of distributed and manufactured products as      
well as increased welding equipment revenues. Sales of distributed products     
increased approximately $800,000 (14.8%) while sales of manufactured products   
increased approximately $344,000 (13.9%). First quarter 1996 sales also         
benefited from a July 1995 price increase. Revenues from welding equipment,     
which is sold or rented for use in installing the Company's piping systems,     
totaled approximately $871,000 in the first quarter of 1996 as compared to      
$142,000 for the prior year first quarter. The increase was largely due to a    
significant sale to a single customer.                                          

Gross Profit                                                                    

First quarter 1996 gross profit increased compared to the first quarter of
1995 principally due to improved sales. Foreign currency exchange gains also    
contributed to the increased gross profit.                                      

Cost of sales as a percentage of sales for the first quarter 1996 was 0.1 
percentage point higher than the prior year first quarter as price increases    
partially offset a slightly less favorable product mix. The PolyFlo product     
line continued to have a nominally negative impact on income from operations    
in the first quarter of 1996.                                                   

The strengthening of the dollar versus the yen resulted in a net foreign  
currency exchange gain of approximately $105,000 during the first quarter of    
1996. This compares to a $108,000 foreign currency exchange loss in the first   
quarter of 1995 resulting mainly from unfavorable movement of the Austrian      
schilling. Since August 1995, purchases from the Company's Austrian supplier    
have been denominated in United States dollars.                                 

Selling, General and Administrative Expenses                                    

Selling, general and administrative expenses for the first quarter of 1996
increased $292,000 or 14.1% on a 23.6% increase in sales, as compared to the    
first quarter of 1995. As a result, first quarter selling, general and          
administrative expenses as a percentage of sales decreased from 26.6% in 1995   
to 24.5% in 1996.                                                               

Interest Expense                                                                

Interest expense, net decreased $64,000 as compared to the prior year     
first quarter due to lower average borrowing and a negotiated reduction in      
the interest rate under the Company's bank line of credit.                      

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Quarterly Results of Operations                                                 

The following table presents certain unaudited consolidated quarterly     
results of operation for each of the five quarters during the period ended      
March 31, 1996. In the opinion of the Company's management, this information    
has been prepared on the same basis as the Consolidated Financial Statements    
appearing elsewhere in this Prospectus and includes all adjustments,            
consisting only of normal recurring adjustments, necessary to present fairly    
the financial results set forth therein. Results of operations for any prior    
quarter are not necessarily indicative of results for any future quarter.       

                                                        [Enlarge/Download Table]

                                                                     Quarter ended                                   
                                  -----------------------------------------------------------------------------------
                                                                1995                                       1996      
                                   ----------------------------------------------------------------   ---------------
                                     March 31         June 30        September 30     December 31        March 31    
                                   -------------    -------------    -------------    -------------   ---------------
                                    $        %       $        %       $        %       $        %       $        %   
                                   -----    ----    -----    ----    -----    ----    -----    ----    -----   ------
                                                                   ($ in thousands)                                  
                                                                                                                     
Net sales                        $7,807   100.0   $8,451   100.0   $9,093   100.0   $9,646   100.0   $9,651    100.0 
Cost of goods sold                5,178    66.3    5,713    67.6    6,235    68.6    6,283    65.1    6,409     66.4 
Foreign currency (gains) losses     108     1.4      (22)   (0.3)    (416)   (4.6)     (61)   (0.6)    (105)    (1.1)
                                    ---      --      ---      --      ---      --      ---      --      ---      ----
Gross profit                      2,521    32.3    2,760    32.7    3,274    36.0    3,424    35.5    3,347     34.7 
Selling, general and                                                                                                 
administrative  expenses          2,074    26.6    2,054    24.3    2,164    23.8    2,389    24.8    2,366     24.5 
                                    ---      --      ---      --      ---      --      ---      --      ---      ----
Income from operations              447     5.7      706     8.4    1,110    12.2    1,035    10.7      981     10.2 
Interest expense, net               178     2.3      201     2.4      178     1.9      156     1.6      114      1.2 
                                    ---      --      ---      --      ---      --      ---      --      ---      ----
Income before provision for                                                                                          
 income taxes                       269     3.4      505     6.0      932    10.3      879     9.1      867      9.0 
Provision for income taxes          104     1.3      195     2.3      361     4.0      340     3.5      359      3.7 
                                    ---      --      ---      --      ---      --      ---      --      ---      ----
Net income                       $  165     2.1   $  310     3.7   $  571     6.3   $  539     5.6   $  508      5.3 
                                    ===      ==      ===      ==      ===      ==      ===      ==      ===      ====

The Company's operations may be subject to significant quarterly          
fluctuations due to a number of factors including: the state of end user        
markets; pricing and competitive conditions; the timing of large orders,        
especially those for larger piping systems; variations in the Company's         
product mix; possible adjustments in the Company's LIFO reserve; general        
economic conditions; and fluctuations in foreign currency exchange rates. The   
Company's sales are generally not considered seasonal in nature; however, the   
impact of weather on construction projects in certain geographical areas        
could potentially impact the timing of large piping system sales.               

The Company experienced increased sales during each quarter, from $7.8    
million in the first quarter of 1995 to $9.7 million in the first quarter of    
1996. The growth was due primarily to volume increases. Sales for the third     
and fourth quarter of 1995 and first quarter of 1996 also benefited from an     
additional price increase implemented on July 1, 1995.                          

In the fourth quarter of 1995, cost of goods sold declined to 65.1% of net
sales due to price increases implemented by the Company on July 1, sales of     
higher margin manufactured products, and the strengthening of the dollar        
versus the yen in the second half of the year. Fourth quarter 1995 margin       
benefited from increased shipments of fabricated pipe in connection with a      
large construction project. The Company recognized a foreign currency loss of   
approximately $108,000 in the first quarter of 1995 due to fluctuations in      
the exchange rate of the dollar versus the Austrian schilling. Since August     
1995, purchases from the Company's Austrian supplier have been denominated in   
United States dollars. The foreign currency gain of approximately $416,000 in   
the third quarter of 1995 was due to the strengthening of the dollar versus     
the yen during the time the Company was unhedged on certain significant         
purchases from its Japanese supplier. Favorable movement in the dollar versus   
the yen also resulted in smaller currency gains in the following two            
quarters.                                                                       

   Quarterly operating expenses increased from $2.1 million in the first quarter
of 1995 to $2.4 million in the first quarter of 1996. Operating expenses, as a  
percentage of sales, declined from 26.6% in the 1995 first quarter to 24.5% in  
the 1996 first quarter due to controlled spending and the leverage of the       
Company's distribution network.                                                 

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Liquidity and Capital Resources                                                 

The Company has financed its operations through the sale of equity        
securities, totaling $7.4 million since inception, including the sale of $3.9   
million in Common Stock in March 1993, bank borrowings, an Industrial Revenue   
Bond financing in March 1994, and cash flow from operations. In addition, the   
Company has benefited from more favorable payment terms extended by Nichimen    
America in connection with the Company's purchases of valves from AYK.          
Beginning in September 1993, Nichimen America permitted the Company to make     
purchases on open account up to $1 million, which was increased to $4 million   
in September 1994 and $6 million in September 1995. In addition, since          
September 1995, payments to Nichimen America for ocean shipments, which         
comprise most of the Company's deliveries of valves, are due 180 days from      
ship date.                                                                      

Working capital at March 31, 1996 was $4.3 million as compared to working 
capital of $3.9 million at December 31, 1995 and $2.1 million at December 31,   
1994. At March 31, 1996, cash was $62,000 while borrowing availability under    
the line of credit was $4.8 million.                                            

Profitable operating activities generated an aggregate of $7.6 million of 
cash during the three year period ended December 31, 1995. Cash flow from       
operating activities increased $1.1 million in 1994 as compared to 1993 and     
$681,000 in 1995 as compared to 1994. Operating activities generated an         
additional $1.7 million during the quarter ended March 31, 1996.                

Inventory purchases from the Company's principal suppliers require long   
lead times and substantially all of the Company's purchases from these          
companies are shipped by sea to minimize freight costs. As a result, the        
Company must maintain significant inventory levels to meet anticipated          
customer demand on a timely basis. The Company has been able to mitigate the    
additional cash requirement for increased inventory that accompanied            
significant sales growth over the past 13 quarters through new payment terms    
negotiated with its principal valve supplier, as discussed above, and           
improved management of inventories. Approximately $3.3 million of accounts      
payable at March 31, 1996 were for purchases of valves from the Company's       
principal Japanese supplier through Nichimen America. Inventory turnover        
improved from 2.4 turns in 1993 to 2.6 turns in 1994 and 3.0 turns in 1995.     

Improving cash flow from operations was also due in part to revised       
customer payment terms implemented in 1995 and improved receivables             
collection results. The new payment terms provide for a 2% discount for         
customer payments made within 15 days of sale, with the net balance due         
within 30 days of sale. The Company has historically enjoyed favorable          
collection experience and at March 31, 1996 less than 4.4% of the Company's     
receivables were more than 60 days past due. The Company's receivables          
balance can vary from month to month as a result of the timing of large         
shipments. The Company's receivables balance at December 31, 1994 was           
affected by a major shipment of valves at the end of 1994. The Company          
generally requires that foreign sales be paid by letter of credit until such    
time as a satisfactory credit experience is established with the customer.      

The Company used $8.6 million in investing activities over the three year 
period ended December 31, 1995. Investing activities included capital           
expenditures aggregating $6 million consisting largely of the building          
facility purchased in 1994 and investment in manufacturing equipment.           
Investing activities also included the acquisition of the PolyFlo product       
line for $1.6 million in 1994 and increases to other assets consisting mainly   
of expenditures for software, patents and other intangibles.                    

Financing activities during the three year period ended December 31, 1995 
provided $1.2 million of net cash. The Company raised $8.1 million of cash      
from the issuance of $3.9 million of Common Stock in 1993 and a $4.2 million    
Industrial Revenue Bond financing in 1994. During this three year period, the   
Company used $6.6 million to reduce demand notes payable to a bank under the    
revolving credit agreement. An additional $277,000 of cash was used to make     
scheduled principal repayments under the Industrial Revenue Bond and capital    
lease obligations. Financing activities used $1.6 million of cash in the        
first quarter of 1996 principally due to a reduction of outstanding amounts     
under the bank line of credit.                                                  

The Company has entered into an agreement to purchase the land and        
building adjoining its existing facility, which will provide needed expansion   
of manufacturing and warehouse capacity. The real estate purchase and related   
capital improvements at an estimated cost of $1.75 million and the purchase     
of additional manufacturing equipment at an aggregate approximate cost of       
$750,000 will be funded with a portion of the net proceeds of this              

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offering. The Company does not anticipate any disruption in operations as a     
result of the expansion. The Company is also continually seeking                
opportunities to expand its product base through the acquisition of             
complementary product lines and businesses, which may require additional        
capital investment. Other than the real estate purchase and related capital     
improvements, the Company has no commitments for any significant capital        
expenditures in 1996. The Company has no commitments at this time with          
respect to any acquisitions.                                                    

The Company's bank line of credit which is secured by all assets of the   
Company provides for borrowing of up to $7 million. Availability under the      
line is determined by a formula based on the amount and quality of the          
Company's receivables and inventory. The Company is charged an annual fee       
based on the unused availability under the line. The Company's borrowing        
availability at March 31, 1996, was $4.8 million. The average outstanding       
balance during 1995 was $4.4 million, with a weighted average interest rate     
of 9.73%. Effective February 1996, the interest rate on the line was reduced    
to the bank's prime rate. All amounts outstanding under the line will be        
repaid with a portion of the net proceeds of this offering. The line of         
credit expires on June 30, 1996. The Company intends to negotiate a new         
working capital line of credit.                                                 

In 1994, the Company financed the purchase of its Malden, Massachusetts   
facility, which it had previously leased, with an issue of 20 year tax-exempt   
Industrial Revenue Bonds through the Massachusetts Industrial Finance Agency.   
Obligations under the bonds are secured by a letter of credit issued by a bank. 
The letter of credit is secured by substantially all assets of the Company. The 
total borrowing was $4.15 million, consisting of six separate bond series, each 
with differing interest rates and maturities. Interest rates range from 4.2% to 
5.1%. The weighted average interest rate during 1995 was approximately 5%. The  
interest rates are subject to adjustment in 1999, 2004 and 2009. The required   
principal payment for 1996 is $130,000 and the maximum principal payment in any 
one year is $320,000 payable in 2014. Interest is paid quarterly and principal  
is paid on a semi-annual basis. In order to maintain the tax-exempt status of   
the bonds, the amount of the bonds plus the Company's aggregate capital         
expenditures in Malden, Massachusetts for the period March 16, 1991 through     
March 16, 1997 (other than those capital expenditures, as defined, financed by  
the bonds) may not exceed $10.0 million. If the bonds lose their tax-exempt     
status, the Company must redeem the bonds. Accordingly, the Company would be    
required to refinance the remaining obligations outstanding and a new facility  
would not provide the favorable tax-exempt bond interest rates. Through March   
31, 1996 the aggregate amount of the bond proceeds and the Company's capital    
expenditures equaled approximately $6,796,000. As a result of the anticipated   
real estate acquisition, related improvements and equipment purchases,          
additional capital expenditures will approximate $2.5 million. The Company      
intends to maintain its capital expenditures below the $10.0 million ceiling    
through March 16, 1997.                                                         

The Company leases certain office space, vehicles and equipment under     
operating leases. The obligations under such leases aggregate $200,000 over     
the next three years. The amount outstanding under capital leases was           
approximately $406,000 at December 31, 1995.                                    

The Company believes that the net proceeds from this offering, together   
with cash generated by operations and lease financing, will be sufficient to    
fund the Company's operations and debt service for at least one year            
following the completion of the offering. However, in the event that the        
Company exceeds its sales plan or identifies significant acquisition            
opportunities, it may require additional sources of debt or equity financing,   
which have not yet been secured.                                                

Other                                                                           

At December 31, 1995, the Company had available for income tax purposes   
net operating loss carryforwards of $554,000. The carryforwards expire          
through 2007 and, as a result of an ownership change in 1993, the benefit of    
the carryforwards is limited to $429,000 in any year.                           

The Company has exclusive distributor agreements with its two principal   
foreign suppliers which call for minimum levels of purchases over defined       
periods of time. The Company substantially exceeded the minimum purchase        
requirement in 1995 under the contract with Agru, its Austrian supplier, and    
expects to continue to meet the requirements of that contract. On a             
cumulative basis, the Company is behind the annual purchase guidelines under    
the contract with AYK, its Japanese supplier, but the Company does not          
anticipate that unusually large purchases will be required in order to meet     
the purchase requirements under the agreement. There are no other known         
contingent liabilities or commitments which may impact the Company's future     
liquidity.                                                                      

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BUSINESS

Introduction                                                                    

Asahi/America, Inc. markets and sells thermoplastic valves, piping systems
and components manufactured by the Company and others for use in a variety of   
environmentally sensitive and industrial applications, including                
semiconductor manufacturing, chemical processing, waste treatment processing    
and pharmaceutical manufacturing. The Company, an ISO 9001 quality control      
certified manufacturer, makes electric and pneumatic valve actuators and        
controls, proprietary double containment thermoplastic piping systems, and      
custom fabricated fittings and specialty products. The Company offers a broad   
selection of industrial thermoplastic valves in, and, based on a market study   
prepared by the unaffiliated firm of Sommers Marketing, Inc. ("Sommers"),       
believes it has one of the largest shares of, the United States industrial      
thermoplastic valve market. The Sommers study was commissioned by the Company   
and Sommers was paid $7,500 for its services.                                   

The Company is the exclusive master distributor in the United States,     
Latin America and the Caribbean for AYK, a large Japanese manufacturer of       
thermoplastic valves. The Company is also the exclusive master distributor in   
the United States for Agru, an Austrian manufacturer of thermoplastic pipe      
and fittings. The Company distributes its products under the brand names        
Asahi, DuoPro and PolyFlo, among others.                                        

As a master distributor for AYK since 1974 and for Agru since 1985, the   
Company has developed a network of more than 400 United States and              
approximately 20 foreign distributors. Initially developed as the               
distribution channel for the products purchased by the Company from AYK and     
Agru, this extensive distribution network also supports increasing sales of     
the higher margin products manufactured by the Company. From 1993 to 1995,      
sales of valve actuators and controls, custom valves and piping systems         
manufactured by the Company have increased by 64% from approximately $7.6       
million to approximately $12.4 million and from 30% to 36% of total sales.      

End users of the Company's products often specify thermoplastic valves and
piping systems instead of metal because thermoplastics resist corrosion and     
do not contaminate transported fluids or gases. The Company's products          
combine the benefits associated with all plastic valve and piping products,     
such as light weight, ease of installation, long life and low installed cost,   
with the additional benefits of thermoplastic products, such as resistance to   
damage from temperature and corrosion. The Company seeks to identify            
industrial applications where the end users' requirements justify the use of    
industrial thermoplastics. Examples include double containment                  
corrosion-resistant piping systems that meet EPA regulations, piping systems    
for compressed air and gases, and high purity pipe and valves to assure         
contaminant free processing of liquids. The Company sells its products to       
distributors which sell to end users. Representative end users include          
Motorola, WMX Technologies, Micron Technology, the Corps of Engineers,          
Browning Ferris Industries, IBM, Schering-Plough, Estee Lauder, Rhone Poulenc   
and DuPont, none of which individually represents a material portion of the     
Company's sales.                                                                

The Company was originally founded to be the exclusive master distributor 
in the United States, Latin America and the Caribbean for AYK. Since the        
early 1980s, the Company has pursued a program to broaden its product lines     
and customer base in order to sell higher margin products that are              
complementary to the valves supplied by AYK. Highlights in the implementation   
of this program include the following:                                          

The addition of thermoplastic pipe. In 1985, the Company became the       
exclusive master distributor in the United States of thermoplastic pipe   
manufactured by Agru, which enabled the Company to supply all of the      
components for complete thermoplastic piping systems. With the development
of its own engineering and manufacturing capabilities, the Company is able
to provide custom designed piping systems.                                

The development of new products. The Company has developed a number of new
higher margin products, including the introduction in 1980 of the         
Company's first valve actuator and in 1986 of the Company's patented      
double containment piping system, called DuoPro. The Company now          
manufactures six types of actuators in a variety of sizes, which permit a 
valve to be operated from a remote site or controlled according to a      
programmed set of instructions. The Company's DuoPro piping systems are   
designed to detect and contain an accidental discharge of hazardous or    
toxic material, meet EPA requirements for underground transport of        
hazardous liquids, and address customer concerns for worker safety and    
protection of the environment.                                            

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The acquisition of complementary product lines. The Company has sought to 
expand its product offerings by acquiring product lines that are not      
available from its principal suppliers. In 1994, the Company acquired its 
PolyFlo product line of double containment pipe and fittings that are     
extruded or molded in a proprietary, patented one-step process. The       
PolyFlo product line is available in internal diameters up to 6 inches and
complements the Company's DuoPro line, which is available in larger       
diameters. The Company added a line of pressure relief valves in October  
1995, when it acquired an exclusive perpetual license of the technology to
manufacture the valves in thermoplastic. In February 1996, the Company    
added a line of industrial filters, which alleviate environmental concerns
relating to cartridge disposal. The filters are sold by a number of the   
Company's existing distributors.                                          

The expansion of its distribution network. The expansion of the Company's 
product lines enabled the Company to increase sales to existing           
distributors and to add distributors serving new markets. In addition, the
Company has initiated a number of programs to support its distributors,   
including the addition of an in-house engineering department to provide   
technical support, a variety of advertising and promotional programs, and 
product education seminars. See "Business--Distribution and Marketing."   

The Company was recently awarded ISO 9001 status by the International     
Organization for Standardization based in Geneva, Switzerland, which is the     
principal international body for establishing guidelines for and certifying     
adherence to a stringent set of quality control and assurance standards. The    
award is significant in validating the Company's manufacturing standards and    
the Company believes that this standard, which is recognized in at least 80     
countries, is of increasing importance in the selection of vendors of           
industrial products. The Company's two principal suppliers, AYK and Agru, are   
also ISO 9001 certified.                                                        

Industry Overview                                                               

According to industry sources, the United States market in 1995 for       
industrial valves was approximately $2.75 billion. Thermoplastic valves         
represent approximately 4% of the industrial valve market. Industry sources     
estimate that, in 1995, the market for metal valves grew by less than 1%,       
while the market for thermoplastic industrial valves grew by approximately 5%   
to 7%.                                                                          

Traditionally, industrial companies have used metal pipe and valves for   
the transportation of fluids and gases. As industrial manufacturing processes   
have grown more sophisticated and environmental concerns have increased, the    
disadvantages of metal valves and piping systems, including weight,             
susceptibility to corrosion, and labor intensive fabrication and                
installation, have become more apparent. In many applications, metal pipe and   
valves will interact with the surrounding environment or the transported        
liquid or gas, which may result in corrosion of the piping system, leakage,     
or contamination of the transported liquid or gas.                              

Advances in thermoplastic technology have made possible the manufacture of
thermoplastic valves and piping systems with the strength and temperature       
resistance required for many industrial applications. Thermoplastic piping      
systems can be used in applications involving pressures up to 230 pounds per    
square inch and temperatures up to 300((degree))F and can provide superior      
performance to metal systems in many applications. These applications include:  

Where the environment is corrosive or corrosive materials are being       
transported. The chemical processing industry was an early adopter of     
thermoplastic valves and pipe because chemical companies frequently       
transport corrosive fluids and gases which can degrade metal systems. In  
certain of these applications, thermoplastic systems require less frequent
replacement than metal systems, which can result in a lower lifetime cost 
for a thermoplastic system.                                               

Where the potential for damage to the environment is a                    
consideration. Federal, state and local environmental authorities are     
mandating that companies which handle toxic fluids take steps to prevent  
leakage into the environment. All owners of underground storage tanks are 
required to be in compliance with the EPA's requirements regarding leak   
containment and detection by 1998. Owners may comply with these           
requirements by using piping systems which are either made of corrosion   
resistant material, such as plastic, or are treated                       

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with corrosion resistant coating. Furthermore, the EPA is mandating the   
use of double containment systems, such as a "pipe-within-a-pipe"         
architecture, to reduce the likelihood of leakage and to detect leaks.    

Where the purity of the transported liquid or gas is a concern. In the    
semiconductor industry, manufacturers require thermoplastic piping systems
for the transport of ultrapure water for washing computer chips. Likewise,
pharmaceutical and biotechnology manufacturers employ high purity plastic 
piping systems to reduce the risk of contamination.                       

Where installation costs are a significant factor in the total system     
cost. Because of the lighter weight of the components and the relatively  
easier installation, thermoplastic piping systems often can be installed  
more quickly than metal systems and without the use of heavy equipment    
that is often required to install comparable metal piping systems.        
Eliminating the need for heavy equipment and extensive labor can result in
a lower installed cost for plastic systems than for comparable metal      
systems.                                                                  

Management believes that thermoplastic products will continue to increase 
their share of the total market for industrial valves and piping systems. In    
management's view, a number of factors drive this increase, including           
continued improvement in thermoplastics technology, enforcement of              
environmental regulations, more widespread recognition of the benefits of       
thermoplastic, and increased familiarity with the skills required to install    
thermoplastic piping systems.                                                   

Company Strategy                                                                

Through its alliances with AYK and Agru, the Company believes it has      
established itself as a market leader in thermoplastic industrial valves and    
piping systems, as evidenced by the breadth of its product line, industry       
recognition of its brand names, and the scope of its distribution network.      
The Company's strategy is to:                                                   

Provide a thermoplastic alternative to metal valves and piping            
systems. The Company considers its primary competitors to be the suppliers
of traditional metal products. The Company believes that a substantial    
opportunity exists for suppliers of thermoplastic products to gain a      
larger share of the total industrial market for valves and pipe.          

Develop and market products manufactured by the Company. As a master      
distributor for AYK and Agru, the Company believes it offers a broader    
line of thermoplastic valves and pipe than any of its competitors. The    
Company seeks to leverage its valve and pipe sales by offering            
complementary higher margin products manufactured by the Company. These   
products include valve actuators, controls, double containment piping     
systems and custom fittings manufactured to customer specifications. The  
Company realizes a higher margin on the products it manufactures than on  
the products it distributes. From 1993 to 1995, annual sales of products  
manufactured by the Company increased by approximately $4.8 million, or   
63.7%, versus an increase of 26.0% in all other sales.                    

Identify and serve markets in diverse industries. The Company seeks to    
continue to expand the market for its products and diversify its end user 
base by identifying new applications where the benefits of thermoplastics 
are superior to metal piping systems. In the early 1980s, virtually all of
the Company's products were sold through distributors to end users in the 
chemical processing industry. The Company estimates that in 1995 sales to 
the semiconductor and chemical processing industries each accounted for   
24% of total sales, while sales to federal and local governmental agencies
(in connection with environmental clean up of government-owned sites and  
water treatment facilities, respectively) accounted for 18%, sales to the 
waste management industry accounted for 6%, and sales to pharmaceutical   
and mining companies and to aquariums accounted for 5% each. The Company's
estimates of sales to the respective industries are based on the Company's
survey of its distributors and on the Company's records of shipments made 
directly to end users at the request of distributors. By expanding the    
applications for its products, the Company seeks to increase revenues, to 
reduce its vulnerability to economic downturns specific to the industries 
in which its customers operate, and to benefit from diverse market        
developments, including the continued growth of the semiconductor         
manufacturing industry, the approaching deadline for compliance with the  
EPA's underground storage tank regulations, and continued business concern
for the protection of the environment.                                    

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Acquire complementary product lines. The thermoplastic valve and pipe     
industry is fragmented, and the Company believes there are opportunities  
to expand its product base through acquisitions of complementary          
businesses and product lines. The Company believes that its current       
network of more than 400 United States and approximately 20 foreign       
distributors can serve as a marketing channel for complementary products. 
In the last three years, the Company expanded its product offerings with  
the acquisition of the PolyFlo product line, the acquisition of a line of 
industrial filtration equipment, and a license of the technology for the  
manufacture of pressure relief valves. Management intends to seek         
acquisitions of complementary product lines that would benefit from       
exposure to the Company's broad and established distribution network.     

Products                                                                        

The Company manufactures and sells thermoplastic valve actuators and      
controls, custom fabricated valves, and proprietary double containment piping   
systems. Products marketed and sold by the Company include thermoplastic        
valves and pipe supplied by AYK and Agru, respectively. In addition, the        
Company sells and rents specialized welding equipment for use in the            
installation of its piping systems. With its broad product base, the Company    
is able to offer its end users "one stop shopping" to meet substantially all    
of their requirements for thermoplastic industrial valves, pipe and piping      
systems.                                                                        

The following table sets forth information concerning the contribution to 
total sales from the Company's principal classes of products (excluding sale    
and rental of welding equipment):                                               

                                                        [Enlarge/Download Table]

                                                                 Year ended December 31,               
                                                  -----------------------------------------------------
                                                       1993               1994               1995      
                                                   --------------    ---------------   ----------------
                                                                    ($ in thousands)                   
                                                                                                       
Distributed products, including valves, pipe                                                           
 and fittings                                    $17,755    69.6%   $18,332    64.3%  $21,212     60.6%
Manufactured products, including actuators and                                                         
 controls, fabricated valves and piping systems  $ 7,585    29.7%   $ 9,585    33.6%  $12,414     35.5%

 Valves. The valves supplied by the Company are injection molded from one of
four primary resins: Polyvinyl Chloride (PVC); Chlorinated Polyvinyl Chloride   
(CPVC); Polypropylene (PP); and Polyvinylidene Flouride (PVDF). Product         
selection is based on such criteria as chemical and temperature resistance,     
pressure tolerance levels, purity, abrasion resistance and cost. Valves made    
from PVC are the lowest in cost. They typically have good chemical resistance,  
can withstand temperatures up to 140((degree))F, and are used extensively in    
applications for chlorinated water, salt water, and relatively mild chemicals.  
CPVC and PP valves can withstand more severe chemicals and tolerate temperatures
up to 200((degree))F and 180((degree))F, respectively. PVDF can be used in      
applications with temperatures up to 250((degree))F. It is ideally suited for   
halogens, strong acids, mild caustics and is the most commonly specified        
material for the transport of distilled water and high purity chemicals in the  
semiconductor industry.                                                         

The Company markets seven basic valve designs: ball, butterfly, swing     
check, gate, globe, ball check and diaphragm. Most valves are available in      
all four of the primary resins with a variety of elastomeric sealing            
materials as options. With the size range of each valve style and the various   
seat, seal and stem materials available, there are a tremendous number of       
variations for each valve style. For example, the Company offers over 2,000     
butterfly valve configurations. Each valve style addresses specific fluid       
flow requirements. Criteria for selecting one model over another include time   
to open, the presence of suspended solids in the transported fluid, the         
potential for bacterial growth, and line size.                                  

Manual valves range in price from $4.50 for a sampling valve to over      
$23,000 for a 24 inch PVDF butterfly valve. A typical valve will sell for $50   
to $100. The Company processes approximately 2,500 invoices per month,          
indicating a broad-based demand.                                                

Actuators and controls. To meet the growing demands of industry for plant 
automation, reduced labor costs and increased productivity, the Company has     
developed electric and pneumatic actuators and controls for remote and          

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programmable operation and control of valves. The Company's actuators and       
controls enable the end user to program or remotely adjust valves in response   
to, or in order to achieve, specified temperature, pressure, and flow rate of   
the transported substance, whether a liquid or gas. These products enable the   
end user to actuate and control precisely the valves in a system in response    
to process variables. Additionally, valve modifications are custom designed     
and fabricated by the Company to meet customer requirements, including          
special stems, locking devices, stem extensions, lugs, etc. The Company         
currently manufactures six basic types of actuators and controls in a variety   
of sizes that are adaptable to a broad spectrum of the valves that it           
distributes for AYK. Actuation and special valve modifications can add from     
$150 to $1,000 to the price of a manual valve, with a positive effect on the    
Company's gross margins.                                                        

Pipe and piping systems. As the exclusive United States distributor for   
Agru, the Company supplies a line of thermoplastic pipe and fittings. In        
addition, the Company fabricates two types of double containment piping         
systems, which are sold under the brand names DuoPro and PolyFlo. These         
double containment "pipe within a pipe" systems are designed to contain         
accidental ruptures and leaks and may be equipped with detection systems that   
signal and locate a leak in the system. These systems are designed to meet      
environmental regulatory requirements for the transport of certain toxic and    
corrosive materials.                                                            

The Company supplies thermoplastic piping systems made of PP, PVDF, HDPE  
(high density Polyethylene) and Halar. PP systems are offered in sizes from     
3/8 inch to 24 inches, with PVDF and Halar offered in sizes from 1/2 inch       
through 12 inches. HDPE pipe and fittings are specifically used for             
compressed air lines, and are sold under the Company's trade name "Air-Pro".    
Typically, piping is sold as a system with the end user purchasing all the      
pipe, fittings and valves from one source. Piping system orders average         
$10,000 to $15,000, with several each year exceeding $100,000.                  

In 1986, the Company developed and patented its DuoPro double containment 
piping system to meet requirements set forth by the EPA's Underground Storage   
Tank Regulations. Pipe and fittings primarily supplied by Agru are fabricated   
into systems as large as 18 inch diameter inner pipe by 24 inch diameter        
containment pipe. An average DuoPro system sells for $35,000 to $50,000.        

With the acquisition of PolyFlo product line in 1994, the Company's double
containment pipe line was expanded to include inner pipe sizes from 1 inch to   
6 inches. The PolyFlo line is extruded using a patented manufacturing           
process.                                                                        

Other sources of sales. The Company also rents and sells specialized      
welding equipment for use in the installation of its piping systems. In 1995,   
revenues from the rental and sale of such equipment totaled approximately       
$1.4 million.                                                                   

During the past three years, the Company has invested in additional       
manufacturing equipment and new product development, with the goal of           
increasing its production capability and building a broader base of             
manufactured products. Products that will enhance the sale of existing pipe     
and valve items are targeted for development. Recent new products have          
included two electric actuators, a mini pneumatic actuator, printed circuit     
boards for more precise control of actuators, a fail safe battery pack, and a   
patented stem support assembly for landfill applications. While the Company     
will continue to develop new products and accessories and introduce new         
product lines, the Company has not incurred a material amount of expense for    
research and development during the past two fiscal years.                      

Distribution and Marketing                                                      

Domestic. Substantially all of the Company's sales in the United States   
are made through an established network of more than 400 independent            
distributors, many of whom have been distributors of the Company's products     
for 20 years. Approximately 125 are stocking distributors, which carry an       
inventory of the Company's products. One distributor accounted for 18%, 19%     
and 26% of the Company's sales in 1993, 1994 and 1995, respectively, and 40     
distributors accounted for 79%, 81% and 82%, respectively, of sales during      
the same period. The Company's principal distributor estimates that it sold     
the Company's products to not fewer than 5,000 end users in 1995.               

The Company supports its distributors with ten Company-employed sales     
representatives and two sales managers. The Company sales force works jointly   
with the Company's distributors and independently to develop                    

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sales leads, which are referred to the distributors. Additional marketing       
support is provided by the Company's staff of seven engineers, who are          
available to provide technical information on the Company's products, suggest   
solutions to customers' requirements and assist in the design and               
installation of full piping systems. The Company also promotes its products     
through trade shows, customer product seminars, and the use of promotional      
materials, including full color product brochures, advertising in trade         
journals, and other public relations activities.                                

The Company has developed an extensive educational program for its        
distributors to train them in the use and benefits of its products. This        
program includes a series of in-house and regional multi-day seminars, as       
well as one-on-one presentations by the Company's sales representatives to      
individual distributors and their sales forces. The Company provides its        
distributors with extensive written materials relating to its products and      
their applications.                                                             

The Company does not have contracts with its distributors. None of the    
Company's distributors carries the Company's products exclusively. The          
Company believes that the use of distributors, which generally specialize in    
pipe and valve products and focus on specific industry or geographic markets    
and, accordingly, have specific knowledge of and contacts in particular         
markets, enhances the scope of the Company's marketing efforts and permits      
the Company to penetrate a broader market without the significant costs         
associated with a large direct sales force that would otherwise be required.    

Foreign. The Company has an established network of approximately 20       
independent foreign distributors. For fiscal years 1993, 1994 and 1995, the     
Company had export sales of approximately $3.5 million, $3.3 million and $1.8   
million, respectively, primarily to Latin America. All of the Company's         
export sales are denominated in United States dollars and most are made         
against letters of credit issued or confirmed by United States banks or are     
prepaid.                                                                        

End Users                                                                       

The Company sells substantially all of its products through distributors  
to a diversified end user base. A common characteristic of end users is the     
need for pipe and valves to control, transport and contain corrosive fluids,    
ultrapure liquids, environmentally harmful fluids or flammable gases. No        
single end user is responsible for a material portion of the Company's sales.   
Principal industries, representative applications and representative end        
users for the Company's products include:                                       

                                                        [Enlarge/Download Table]

                                  Representative                                             
         Industry                  Applications                Representative End Users      
                                                                                             
Chemical processing     Transfer of corrosive and          Dow Chemical, DuPont, Rohm & Haas,
                        environmentally hazardous          P.P.G., Clorox, B.F. Goodrich, and
                        chemicals                          Kerr McGee                        

Semiconductor           Transfer of deionized water,       IBM, Motorola, Texas Instruments, 
manufacturing           ultra pure chemicals and chemical  Micron Technology, Advanced Micro 
                        waste                              Devices and Intel                 

Landfill                Collection of methane gas and      WMX Technologies, and Browning    
                        leachate                           Ferris Industries                 

Aquariums               Automated circulation of salt      New Orleans, Monterey Bay, Tampa, 
                        water                              Albuquerque and Omaha             

The Corps of Engineers  Soil remediation and transfer of   Aberdeen Proving Grounds, Tinker  
                        hazardous waste                    Air Force Base, Hill Air Force    
                                                           Base, Tooele Army Base, Fort      
                                                           Belvoir Defense Laboratory, Nevada
                                                           Test Site and China Lake          

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                                  Representative                                             
         Industry                  Applications                Representative End Users      

Mining                  Transfer of sulfuric acid and      Kennecott Utah Copper, Corporacion
                        cyanide                            Nacional de Cobre de Chile        
                                                           (Codelco), Sociedad Contractual   
                                                           Minera El Abra, and Cypress Mines 

Pharmaceutical          Transfer of chemical waste         Schering-Plough, Eli Lilly, Abbott
                                                           Labs, Merck and Bristol-Myers     
                                                           Squibb                            

Suppliers                                                                       

The Company has exclusive distribution agreements in defined territories  
for substantially all of the valves, pipe and fittings sold by the Company.     
The Company has been the exclusive master distributor of a broad line of        
valves and related accessories for AYK in the United States, Latin America      
and the Caribbean since 1977, and is currently in the seventh year of a ten     
year agreement with AYK, Nichimen Corporation and Nichimen America which runs   
through December 31, 1999. While the agreement is in force, the Company may     
not purchase competing products from any other manufacturer. Under the          
agreement, the Company must use its best efforts to market AYK's valves in      
its territory and has agreed to purchase at least $140 million of products      
from AYK over the term of the agreement. There are no minimum annual purchase   
requirements, but there are annual guidelines attached to the contract.         
Through December 31, 1995, the end of the sixth year of the current term, the   
Company had purchased approximately $51.4 million of product from AYK, with     
the purchases in the years ended December 31, 1993, 1994 and 1995 totaling      
approximately $9.2 million, $10.3 million and $10.0 million respectively.       
Total purchases through December 31, 1995, were approximately $16.3 million     
behind the annual guidelines on a cumulative basis. The Company's prior         
contracts with AYK included similar cumulative and annual purchase              
provisions, and AYK has always agreed to extend or enter into a new contract    
with the Company regardless of its compliance with such terms. However, no      
assurances can be given that AYK will agree to renew its contract with the      
Company at the end of the current term. AYK is a principal stockholder of the   
Company. See "Principal and Selling Stockholders."                              

AYK, which manufactures the valves it supplies to the Company at its plant
in Japan, warrants that its products are merchantable and free from defects     
in material and workmanship, and indemnifies the Company against losses or      
claims arising from the sale of the products. In the case of defective          
products, AYK agrees to repair or replace the products. In addition, AYK must   
maintain a minimum of $3.0 million of product liability insurance that          
includes the Company as a named insured. The Company may not distribute         
products produced by third parties that compete with the products it            
purchases from AYK. Purchases by the Company are made under written purchase    
orders. Once an order is accepted, it may not be canceled except by agreement   
of the parties; AYK may not reject an order unreasonably or in bad faith.       
Either party may terminate the agreement if the other party defaults and the    
default continues for 30 days after notice or if the other party becomes        
subject to a bankruptcy or insolvency proceeding. The parties have agreed to    
negotiate in good faith during the last six months of the term of the           
agreement with a view to extending the agreement.                               

A large percentage of the pipe and fittings sold by the Company is        
supplied by Agru under a five-year distribution agreement, which was amended    
and restated effective as of January 1, 1995. Under the agreement, the          
Company has exclusive distribution rights in the United States for certain      
products (PP, PVDF, and Halar fittings and pipe, and PVDF welding equipment)    
and non-exclusive rights for other products. The Company may not purchase       
products that compete with the exclusive products unless Agru is unable to      
deliver products within four weeks of order. Agru is obligated to repair or     
replace any defective product it supplies. The Company is obligated to make     
minimum purchases from Agru each year, using 1994 total purchases of $3.1       
million as a base. If purchases in any year decline by 20% or more from the     
base, Agru may terminate the contract at the end of the following year unless   
purchases in that year equal or exceed $3.1 million in which case the           
contract continues in force. During the year ended December 31, 1995, the       
Company's purchases from Agru totaled approximately $5.9 million. The           
agreement is terminable in the event of serious breach which is not cured       
within three months                                                             

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of notice, and in the event of the bankruptcy or insolvency of either party.    
Unless either party gives notice of termination not less than 12 months prior   
to the end of the terms, the contract automatically extends for five years.     

While there are other sources of supply for the products which the Company
purchases from AYK and Agru, the Company is not aware of other single sources   
of supply that offer the variety and quality of products they produce. In       
addition, several sources of supply have existing exclusive arrangements with   
other companies that would preclude dealing with the Company. The Company's     
supply arrangements with AYK and Agru are also subject to all of the usual      
risks of foreign trade. The loss of either AYK or Agru as a supplier or the     
imposition of restrictions on foreign trade could have a material adverse       
effect on the Company. The Company believes its relationships with these two    
suppliers are excellent.                                                        

Manufacturing and Distribution                                                  

The Company has an engineering department of seven professionals, who     
support the Company's marketing activities and provide solutions to special     
end user customer requirements, such as modifications of valves and special     
pipe designs. The department has designed a number of actuators and             
accessories that are sold in conjunction with the Company's valves. In          
addition, the department assists end user customers in the design,              
engineering and installation of complete piping systems.                        

At its Malden, Massachusetts facility, the Company manufactures and       
assembles a variety of valve actuators, valve/actuator assemblies and           
accessories. The Company also operates a "clean room" for the fabrication of    
ultrapure water piping systems for the semiconductor industry. In addition,     
the Company fabricates double containment piping systems and assists the end    
user customer (or its mechanical contractor) with on-site installation and      
testing. The Company rents and sells specialized welding equipment to           
customers and contractors for this purpose. A portion of the proceeds of this   
offering will be used to expand the Company's manufacturing capacity. See       
"Use of Proceeds."                                                              

On February 24, 1996, the Company was awarded ISO 9001 certification      
following a fourteen month review process. The certification indicates that     
the Company's operations meet the stringent standards for quality control and   
assurance established by the International Organization for Standardization.    
ISO 9001 has been adopted to date in more than 80 countries. It is              
anticipated that ISO certification will increasingly become a prerequisite      
for doing business with many customers and in many markets.                     

The Company purchases and maintains an inventory of valves, pipe and      
fittings in anticipation of customer orders. The Company has warehouse          
facilities at its principal offices in Malden, Massachusetts. Because lead      
times for delivery from its principal suppliers are long, the Company carries   
significant inventory in relation to sales in order to be able to meet          
delivery requirements of its distributors and end user customers.               
Approximately 125 of the Company's distributors also stock inventory,           
principally valves and valve accessories.                                       

Competition                                                                     

The industrial valve, pipe and fittings market is very fragmented, with   
many manufacturers and suppliers. The Company estimates that there are more     
than 100 suppliers of metal valves and at least a dozen suppliers of            
thermoplastic valves. There are also many suppliers of both metal and plastic   
pipe and fittings. There is no single company that dominates the market for     
either thermoplastic industrial valves or pipe. The Company believes that       
there are two companies which have significant shares of both markets, and      
one additional significant competitor in the valve market and three             
additional significant competitors in the pipe market. Of its competitors,      
the Company is aware of only one competitor that offers a comparable variety    
of thermoplastic valve and pipe products as the Company. Many of the            
Company's competitors, especially manufacturers of metal valves and pipe,       
have substantially greater financial, marketing, personnel and other            
resources than the Company. Based on a study of the market in 1995              
commissioned by the Company, the Company believes that it has one of the        
largest shares of the United States market for industrial thermoplastic         
valves.                                                                         

Suppliers of industrial valves, pipe and piping systems, whether metal or 
plastic, compete primarily on the basis of price, performance and service to    
the customer or end user. In applications requiring high performance of the     
valves and pipe in terms of temperature, pressure and durability, the Company   
believes that its products                                                      

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compete favorably in terms of performance, price and lifetime cost with metal   
products available for the same applications. In certain applications,          
alternative plastic products may be available at lower prices than the          
Company's products. The Company believes, however, that many end users are      
willing to pay higher prices for the Company's products in exchange for the     
higher quality and service that the Company offers. The Company believes that   
its competitive advantages include the breadth of its valve, actuator and       
pipe product lines and its ability to supply complete piping systems,           
including custom fabricated components. The Company believes that it has an     
advantage over other manufacturers of valve actuation and piping products       
because of its ability to offer "one stop shopping" to the end user.            

Joint Venture                                                                   

In February 1990, the Company established a joint venture with Watts      
Industries, Inc. ("Watts"), a United States manufacturer of metal valves, for   
the development of an electric actuator to supply the partners' respective      
needs. The two companies co-funded the tooling of the product, and the          
Company manufactures the product for sale by the Company through its regular    
distribution network and for sale to Watts at a discounted price. The           
employees of both companies executed confidentiality agreements to protect      
the confidential and proprietary information possessed by each company and      
utilized in the development of the actuator. All technology, information,       
material and data developed pursuant to the joint venture as well as any        
trademarks, patents, copyrights or other property interest that may result      
from the joint venture, is the joint and several property of the Company and    
Watts. Development of the product was completed in August 1992, and all         
manufacturing of the product line is done in the Company's plant.               

Patents and Trademarks                                                          

The Company exclusively owns six United States patents relating to its    
DuoPro double containment pipe assemblies and seven United States patents       
relating to actuators and accessories used in conjunction with plastic          
valves, as well as four corresponding Canadian patent applications. All of      
the United States patents have issued since December 1985, and extend at        
least until 2002. In addition, the Company owns 26 United States trademark      
registrations and several pending trademark registrations. The trademark        
registrations, which are renewable by their terms in the ordinary course of     
business, cover various products offered for sale by the Company. The Company   
also owns copyright registration for its catalogs and design guides, as well    
as for the printed circuit boards it has developed for use in its valve         
actuators.                                                                      

All of the Company's intellectual property is owned or is held under a    
perpetual license, is free and clear of restrictions of any nature and is not   
subject to any license, sublicense, agreement or commitment with any third      
party, other than a security interest to the Company's bank lender. The         
Company's intellectual property rights are important to its business, and the   
Company intends to enforce its intellectual property rights. However, the       
Company believes that product quality and service are more important to the     
success of the Company. Except as discussed below, the Company has not been     
engaged in any litigation during the last five years in regard to its           
intellectual property rights.                                                   

On April 30, 1991, the Company voluntarily filed a Request for            
Reexamination by the United States Patent and Trademark Office of a patent      
the Company owns (the "ZIU '544 Patent"). The reexamination resulted in the     
rejection of certain claims of the ZIU '544 Patent. It is believed that a       
competitor which employs a former employee of the Company is currently          
manufacturing and selling a piping system that incorporates the subject         
matter defined by at least one of the claims in the ZIU '544 Patent rejected    
by the examiner. Upon appeal, the Board of Patent Appeals and Interferences     
(the "Board") upheld the decision of the examiner. The Company appealed to      
the United States Court of Appeals for the Federal Circuit, which decided on    
February 24, 1995, to reverse the decision of the Board and to remand the       
case to the United States Patent and Trademark Office for further proceedings   
in accordance with its decision. The case is pending before the United States   
Patent and Trademark Office.                                                    

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Employees                                                                       

As of March 31, 1996, the Company had a work force of 112 people, of which
19 are executive and administrative personnel, 26 are engaged in sales and      
marketing, nine are engineering staff, and 58 are engaged in manufacturing,     
fabricating and warehouse operations. None of the Company's employees is        
covered by a collective bargaining agreement. The Company believes its labor    
relations to be good.                                                           

Properties                                                                      

The Company's executive offices and manufacturing/warehouse facility is   
located in a modern facility in Malden, Massachusetts, of approximately         
60,000 square feet, which the Company purchased in March 1994 with the          
proceeds of an Industrial Revenue Bond issue. The Company considers its         
facility to be in good operating condition and suitable for the purposes for    
which it is used.                                                               

The Company requires additional manufacturing and warehouse capacity to   
accommodate future growth and expansion, and on February 2, 1996, the Company   
entered into an agreement to purchase the land (approximately 2.3 acres) and    
building (approximately 18,000 square feet) adjacent to its Malden facility     
for $1.25 million. The transaction is scheduled to close on or about May 23,    
1996, and a portion of the net proceeds from this offering will be used for     
the purchase. If the purchase is completed, the Company plans to move its       
executive offices to the new building and to expand its manufacturing and       
warehouse operations into the remainder of its current facility. Total cost     
for these capital improvements and additional manufacturing equipment is        
currently estimated to be approximately $1.25 million. See "Use of Proceeds."   

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MANAGEMENT

Directors and Executive Officers                                                

The current directors and executive officers of the Company are as        
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                                              Director
              Name                Age                Position                  since  
--------------------------------    --   ----------------------------------  -------- 
                                                                                      
Leslie B. Lewis (1)                 55  President, Chief Executive Officer      1977  
                                        and Director                                  

Tadashi Kitamura (2)                60  Director                                1993  

Kazuyuki Sato (2)                   49  Director                                1996  

Kazumitsu Yamaguchi (2) (3) (4)     58  Director                                1996  

Nannette S. Lewis (1)               46  Director                                1989  

Kozo Terada                         50  Vice President, Treasurer and                 
                                        Chief Financial Officer                       

Timothy L. Robinson                 46  Executive Vice President and Chief            
                                        Operating Officer                             

The persons named below have been elected, and have consented to serve as 
directors of the Company effective as of the date of this Prospectus:           

Jeffrey C. Bloomberg (3) (4)        49   Director elect                         

Samuel J. Gerson (3) (4)            54   Director elect                         

(1) Leslie B. Lewis and Nannette S. Lewis are husband and wife.                 

(2) Messrs. Kitamura, Sato and Yamaguchi were elected to the Board of           
Directors as the designees of AYK, Nichimen Corporation and Nichimen    
America, respectively, pursuant to the terms of a Stockholders Agreement
 among the Company and its stockholders. The agreement terminates upon the
closing of this offering, but Messrs. Kitamura, Sato and Yamaguchi will 
 continue in office. See "Certain Transactions" and "Principal and Selling
Stockholders."                                                          

(3) Member of the Audit Committee effective as of the date of this              
Prospectus.                                                             

(4) Member of the Compensation Committee effective as of the date of this       
Prospectus.                                                             

Leslie B. Lewis has served as President and Chief Executive Officer since 
November 1989. Prior thereto, for more than 19 years, he served in various      
executive management positions with the Company.                                

Tadashi Kitamura has served as a Director of AYK since June 1992 and as   
the General Manager of the Sales Department of AYK since February 1992. Prior   
thereto, for more than 30 years, he was employed by Asahi Chemical Industry,    
the largest shareholder of AYK, in a number of managerial capacities, last as   
Deputy General Manager of the Plastics Department.                              

Kazuyuki Sato has since October 1993 been the General Manager of the      
Plastics Department (polyolefin, PVC and rubber) of Nichimen Corporation,       
where he has been continuously employed since 1969.                             

Kazumitsu Yamaguchi has been the Executive Vice President of Nichimen     
America, since July 1995 and prior thereto since 1961 was continuously          
employed by Nichimen Corporation in a number of managerial capacities, last     
as Senior General Manager of the Lumber Division. He has been a Director of     
Nichimen Corporation since June 1992.                                           

Nannette S. Lewis has been the President and principal of Nannette Lewis  
Interiors, Inc., which is engaged in providing commercial and residential       
interior design services, for more than ten years.                              

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Kozo Terada has served in his current positions since May 1993, and served
as a Director from May 1993 until March 1996, as the designee of Nichimen       
America. Mr. Terada is seconded to the Company by Nichimen America, and prior   
to assuming his positions with the Company, he held various management          
positions with Nichimen Corporation for more than 24 years, last as a manager   
in the Plastics Division.                                                       

Timothy L. Robinson has served as Executive Vice President and Chief      
Operating Officer of the Company since October 1989. Prior thereto, for more    
than eleven years, he held various management positions with the Company.       

Jeffrey C. Bloomberg has agreed to become a Director of the Company       
effective as of the closing of this offering. Mr. Bloomberg is the President    
and principal of Bloomberg Associates, Inc., a private investment banking       
firm that he founded in January 1994. For 14 years prior thereto, Mr.           
Bloomberg was associated with the investment banking firm of Bear, Stearns &    
Co., Inc., including as a Senior Managing Director from 1985 through November   
1993, and as a General Partner of its predecessor.                              

Samuel J. Gerson has also agreed to become a Director of the Company      
effective as of the closing of this offering. Mr. Gerson has been Chairman of   
the Board and Chief Executive Officer of Filene's Basement, Inc. since          
January 1984. He is a director of BayBanks, Inc.                                

Classes of Directors                                                            

Pursuant to the Company's Articles of Organization, as amended immediately
prior to the effectiveness of the registration statement of which this          
Prospectus is a part, the Company's Board of Directors is composed of three     
classes serving staggered three year terms. Messrs. Lewis and Bloomberg are     
designated Class I directors with their term expiring in 1997; Mrs. Lewis and   
Messrs. Yamaguchi and Gerson are designated Class II directors with their       
term expiring in 1998; and Messrs. Kitamura and Sato are designated Class III   
directors with their term expiring in 1999. See "Description of Capital         
Stock."                                                                         

Committees of the Board of Directors                                            

The Board has appointed Compensation and Audit Committees effective as of 
the date of this Prospectus. Messrs. Yamaguchi, Bloomberg and Gerson will       
serve as the members of both committees. The Board has no nominating            
committee. The Audit Committee will review the results of operations of the     
Company with officers of the Company who are responsible for accounting         
matters and, from time to time, with the Company's independent public           
accountants. The Compensation Committee will review and evaluate the            
compensation and benefits of all officers of the Company, review general        
policy matters relating to compensation and benefits of employees of the        
Company, and make recommendations concerning these matters to the Board of      
Directors. The Compensation Committee will also administer the Company's        
Equity Incentive Plan.                                                          

Compensation of Directors                                                       

Following the closing of this offering, Directors who are not employees of
the Company or affiliated with or related to a principal stockholder of the     
Company ("outside Directors") will be paid an annual retainer of $7,500,        
payable quarterly, and a fee of $500 for each Board or committee meeting        
attended. In addition, the outside Directors have been granted options          
effective as of the closing of this offering. See "Management--Stock Option     
Plans--Independent Directors' Stock Option Plan." All Directors are             
reimbursed by the Company for their out-of-pocket expenses incurred in          
connection with attendance at Board and committee meetings or otherwise in      
the performance of their services as a Director.                                

Bloomberg Associates, Inc., of which Mr. Bloomberg is the principal, has a
consulting contract with the Company pursuant to which it provides financial    
advisory services to the Company in connection with this offering and other     
matters. For services to the Company, Bloomberg Associates bills the Company    
at hourly rates. In addition, the Company reimburses Bloomberg Associates,      
Inc. for its out of pocket expenses incurred in connection with the             
performance of services for the Company. Under the contract, Bloomberg          
Associates, Inc. is entitled to receive a fee equal to 0.75% of the gross       
proceeds of this offering, reduced by the amount of any fees for services       
that have been previously paid.                                                 

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Executive Compensation                                                          

The following table sets forth certain information concerning the         
compensation of the Company's Chief Executive Officer and the one other         
executive officer of the Company whose annual compensation exceeded $100,000    
in 1995:                                                                        

Summary Compensation Table  

                                                        [Enlarge/Download Table]

                                                 Annual Compensation                          
                                        -------------------------------------                 
                                                                  Other                       
                                         Salary     Bonus         annual          All other   
Name and principal position               ($)        ($)     compensation($)   compensation($)
--------------------------------------   -------    ------   ----------------  -------------- 
                                                                                              
Leslie B. Lewis, President and Chief                                                          
   Executive Officer                    300,000   100,000        63,328 (1)        15,026 (2) 
Timothy L. Robinson, Executive Vice                                                           
   President and Chief Operating                                                              
   Officer                              160,000    25,000        23,837 (1)        15,026 (2) 

(1) Includes $40,384 for Mr. Lewis and $6,153 for Mr. Robinson for Company      
buyout of accrued but unused vacation time as a result of a change in   
 Company policy to limit the amount of unused vacation time that employees
may carry forward from year to year. Also includes nonaccountable travel
allowance, car allowance, automobile insurance, personal travel expenses
(Mr. Lewis only) and payment of health care expenses not covered by the 
Company's employee health plan.                                         

(2) Includes $9,240 contributed by the Company to the Company's 401(k) plan     
and $5,786 to the Company's Profit Sharing Plan for the account of each 
individual. Does not include any amount related to a ten-year variable  
premium life insurance policy on the life of Mr. Lewis of which the     
Company is the owner and beneficiary. If Mr. Lewis remains in the employ
of the Company for ten years, the cash surrender value of the policy, if
any, in excess of total premiums paid (which will be reimbursed to the  
Company) will be used to fund a retirement benefit for Mr. Lewis, and he
has the right thereafter, at the time he leaves the employ of the       
Company, to designate the beneficiary under the policy.                 

During 1995, although he worked full-time for the Company, Kozo Terada,   
the Company's Vice President, Treasurer and Chief Financial Officer, was an     
employee of Nichimen America, one of the Company's principal stockholders.      
The Company paid a total of $160,000 to Nichimen America in 1995 for            
management fees, which included Mr. Terada's services. Nichimen America paid    
Mr. Terada his salary and provided any employee benefits to which he was        
entitled under its plans.                                                       

Stock Option Plans                                                              

Equity Incentive Plan. The Company's Equity Incentive Plan ("Equity Plan")
was adopted by the Board of Directors and stockholders of the Company on        
March 11, 1996, and is effective as of the closing of this offering. A total    
of 330,000 shares of Common Stock have been reserved for awards under the       
Equity Plan. The Equity Plan is intended to be an incentive to the key          
employees of, and persons who provide services to, the Company by enabling      
them to acquire or increase their proprietary interest in the Company. The      
Equity Plan is administered by the Compensation Committee of the Company's      
Board of Directors ("Committee"). The Committee may make awards under the       
Equity Plan in the form of stock options (both qualified and non-qualified),    
stock appreciation rights, performance shares, restricted stock or stock        
units. The Committee has complete authority to designate persons to receive     
awards, to grant the awards, to determine the form of the award and to fix      
all terms of any awards granted. Qualified stock options (which are intended    
to qualify as incentive stock options under section 422 of the Internal         
Revenue Code) may be granted only to employees of the Company and must have     
an exercise price of not less than 100% of the fair market value of the         
Company's Common Stock on the date of grant (110% for qualified options         
granted to any 10% stockholder of the Company). The aggregate exercise price    
of the shares as to which a qualified stock option becomes exercisable in any   
year may not exceed $100,000. The term of qualified stock options may not       
exceed ten years (five years in the case of options granted to any 10%          
stockholder of the Company). Non-qualified stock options and other stock        
awards may be granted on such terms (as to date                                 

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of grant, vesting, number of shares, exercise price in the case of options,     
purchase price, restrictions on transfer, forfeiture and other provisions) as   
the Committee may determine. The Equity Plan may be suspended or discontinued   
by the Board and may be amended by the Board, except that the stockholders of   
the Company must approve any amendment if such approval is required to comply   
with any applicable tax or regulatory requirement.                              

Effective as of the closing of this offering, the Company has granted ten 
year non-qualified options under the Equity Plan to Timothy Robinson and Kozo   
Terada for 50,000 and 25,000 shares, respectively, of Common Stock              
exercisable at the initial public offering price. The options vest in three     
equal annual installments beginning on the anniversary of the date of grant.    

Independent Directors' Stock Option Plan. The Board of Directors adopted  
an Independent Directors' Stock Option Plan which was approved by the           
Company's stockholders on March 11, 1996, effective as of the closing of this   
offering. An aggregate of 20,000 shares of Common Stock are reserved under      
the plan. This plan authorized the issuance of an option to each director who   
is neither an employee of the Company nor the holder of, or affiliated with a   
holder of, five percent or more of the Company's Common Stock, to purchase up   
to 10,000 shares of the Company's Common Stock at a purchase price equal to     
the fair market value of the Common Stock on the date of election to the        
Board of Directors. The plan and the options granted to Jeffrey C. Bloomberg    
and Samuel J. Gerson are effective as of the closing of this offering.          
Pursuant to the plan, each of Messrs. Bloomberg and Gerson will receive a       
five-year fully vested option to purchase 10,000 shares of Common Stock at      
the initial public offering price.                                              

Employment Agreements                                                           

The Company has entered into employment agreements with Leslie B. Lewis,  
Timothy L. Robinson and Kozo Terada. The employment agreement with Mr. Lewis    
is for a term of three years commencing on January 1, 1996, which may be        
extended at Mr. Lewis' option, for an additional period of up to three years,   
two years or one year if the Company achieves or exceeds on a cumulative        
basis 80%, 70% or 60%, respectively, of target net operating income ("Target    
NOI") specified in the agreement for the three year period ended December 31,   
1998. Mr. Lewis' agreement provides for an annual salary of $300,000            
($330,000 during any extension period). Mr. Lewis is also eligible to receive   
an annual bonus equal to the sum of (i) $100,000 multiplied by a fraction       
(not greater than one), the numerator of which is the Company's net operating   
income ("NOI") and the denominator of which is Target NOI for the year plus     
(ii) an amount equal to 10% of the amount by which NOI for the year exceeds     
Target NOI for the year. For purposes of the agreement, NOI is the Company's    
net income before taxes, depreciation, amortization and certain other defined   
expenses. To the extent that NOI exceeds Target NOI for any year, the excess    
is carried forward and added to NOI in the following year. For 1996, there is   
a carryforward amount of NOI of $195,550, representing the amount by which      
NOI exceeded Target NOI during the three year period ended December 31, 1995.   
Pursuant to the agreement, the Company is obligated to maintain life            
insurance on Mr. Lewis in the amount of $5 million, and if Mr. Lewis is still   
employed with the Company on December 31, 2005, to use the accumulated cash     
surrender value of the policy, if any, in excess of total premiums paid         
(which will be refunded to the Company) to fund a retirement benefit for Mr.    
Lewis, and he has the right thereafter, at the time he leaves the employ of     
the Company, to designate the beneficiary under the policy.                     

The Company's employment agreement with Mr. Robinson commenced as of      
November 1, 1995, and terminates on December 31, 1998. Under the agreement,     
Mr. Robinson is entitled to base compensation of $165,000 in 1996, with         
annual increases of $5,000 thereafter. Mr. Robinson will be entitled to         
receive bonuses at such times and in such amounts as the Board of Directors     
may determine in its discretion.                                                

The Company's employment agreement with Mr. Terada commences on May 1,    
1996 and terminates on December 31, 1998. Under the agreement, Mr. Terada is    
entitled to base compensation of $140,000 with annual increases of $5,000       
thereafter. Mr. Terada will be entitled to receive bonuses at such times and    
in such amounts as the Board of Directors may determine in its discretion.      

Each of the agreements with Messrs. Lewis and Robinson contains provisions
regarding confidentiality of the Company's proprietary information and          
nonsolicitation of customers and employees. In addition, the agreements         
require each of them to transfer to the Company any inventions or other         
intellectual property rights developed by them during the period of             
employment.                                                                     

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PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial       
ownership of the Company's Common Stock, as of March 31, 1996, and as           
adjusted for the sale of the shares of Common Stock offered hereby, by each     
of the Company's directors, directors elect, named executive officers, all      
executive officers and directors as a group, and each person or group known     
to the Company to be the beneficial owner of more than five percent of the      
Company's Common Stock. Percentage ownership is based on 2,340,000 and          
3,340,000 shares of Common Stock outstanding prior to and after the offering,   
respectively.                                                                   

                                                        [Enlarge/Download Table]


                                                  Shares Owned Prior                           Shares to be Owned        
                                                     to Offering            Shares to be         After Offering          
                                             ----------------------------    Sold in the   ----------------------------- 
                                                 Number       Percentage     Offering (8)      Number         Percentage 
                                             ---------------    ---------  --------------  ---------------    -----------
                                                                                                                         
Leslie B. Lewis (1)                            1,193,400 (2)      51.0          81,600       1,111,800 (2)       33.3    
 President, Chief Executive Officer and                                                                                  
   Director                                                                                                              
 c/o Asahi/America, Inc.                                                                                                 
 19 Green Street                                                                                                         
 Malden, MA 02148                                                                                                        
Tadashi Kitamura, Director (3)                      --             --             --              --              --     
Kazuyuki Sato, Director (4)                         --             --             --              --              --     
Kazumitsu Yamaguchi, Director (5)                   --             --             --              --              --     
Nannette S. Lewis, Director (1)                1,193,400 (6)      51.0            --         1,111,800 (6)       33.3    
Jeffrey C. Bloomberg, Director elect                --             --             --            10,000 (7)         *     
Samuel J. Gerson, Director elect                    --             --             --            10,000 (7)         *     
Timothy L. Robinson, Executive Vice                 --             --             --              --              --     
 President and Chief Operating Officer                                                                                   
Kozo Terada, Vice President, Treasurer              --             --             --              --              --     
 and Chief Financial Officer                                                                                             
Asahi Yukizai Kogyo Co., Ltd. (3)                573,300          24.5          39,200         534,100           16.0    
 15-9, Uchikanda 2 Chome                                                                                                 
   Chiyodaku, Tokyo                                                                                                      
   Japan                                                                                                                 
Nichimen Corporation (4) (9)                     573,300          24.5          39,200         534,100           16.0    
 1-23, Shiba 4-Chome                                                                                                     
   Minato-Ku, Tokyo 108                                                                                                  
   Japan                                                                                                                 
Nichimen America Inc. (5) (9)                    172,157           7.4          11,771         160,386            4.8    
 1185 Avenue of the Americas                                                                                             
   New York, NY 10036                                                                                                    
Wells Fargo Bank, N.A., as executor of the                                                                               
   estate of Alan Baker                          207,257 (2)       8.9            --           207,257 (2)        6.2    
 Northern California Estate Division                                                                                     
   420 Montgomery Street                                                                                                 
   San Francisco, CA 94104                                                                                               
All directors, directors elect and                                                                                       
  executive officers as a group (9 persons)    1,193,400          51.0          81,600       1,131,800           33.7    

* Less than one percent.                                                        

(1) Leslie B. Lewis and Nannette S. Lewis are husband and wife.                 

(2) The shares beneficially owned by Mr. Lewis include 207,257 shares owned     
by Wells Fargo Bank, N.A., as executor of the estate of Alan Baker.     
 Pursuant to a voting trust, Mr. Lewis has voting control over the shares,
and he also holds a currently exercisable option and right of first     
refusal to purchase the shares.                                         

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(3) Mr. Kitamura is the designee of AYK on the Company's Board of Directors.    

(4) Mr. Sato is the designee of Nichimen on the Company's Board of Directors.   

(5) Mr. Yamaguchi is the designee of Nichimen America on the Company's Board    
of Directors.                                                           

(6) Represents shares beneficially owned by Mrs. Lewis' spouse, Leslie B.       
Lewis.                                                                  

(7) Represents shares subject to options that will be granted and exercisable   
upon the closing of this offering. See "Management--Stock Option        
Plans--Independent Directors' Stock Option Plan."                       

(8) The Selling Stockholders have granted the Underwriters a 30-day option to   
purchase up to 174,000 additional shares to cover over-allotments. See  
"Underwriting." The following table sets forth the number of shares of  
Common Stock that each Selling Stockholder is obligated to sell to the  
 Underwriters if the over-allotment is exercised in full. If the option is
exercised as to a lesser amount, the obligation of each Selling         
Stockholder will be proportionately reduced.                            

(9) All Nichimen amounts and percentages include shares owned by Nichimen       
America as Nichimen may be deemed to be the beneficial owner of such    
shares.                                                                 

                                                        [Enlarge/Download Table]

                                                                  Shares to be owned after the 
                                                                        offering if the        
                                                                   over-allotment option is    
                                   Number of shares to be sold         exercised in full       
                                     if over-allotment option    ------------------------------
   Name of Selling Stockholder         is exercised in full           Number        Percentage 
--------------------------------  -----------------------------  ---------------    -----------
                                                                                               
Leslie B. Lewis                               88,740                1,023,060 (1)      30.6    
Asahi Yukizai Kogyo Co., Ltd.                 42,630                  491,470          14.7    
Nichimen Corporation (2)                      42,630                  491,470          14.7    
Nichimen America Inc. (2)                     12,801                  147,585           4.4    

(1) Includes 207,257 shares owned by Wells Fargo Bank, N.A., as executor of     
the estate of Alan Baker.                                               

(2) All Nichimen amounts and percentages include shares owned by Nichimen       
America as Nichimen may be deemed to be the beneficial owner of such    
shares.                                                                 

CERTAIN TRANSACTIONS  

On March 31, 1993, the Company issued and sold an aggregate of 1,287,000  
shares of its Common Stock to AYK (643,500 shares), Nichimen Corporation        
(450,450 shares) and Nichimen America (193,050 shares) for total cash           
consideration of $4 million or approximately $3.11 per share. The purchase      
price was determined by negotiation between the Company and the investors. In   
connection with the investment, the investors and Mr. Leslie B. Lewis entered   
into a Stockholders Agreement which provided, among other things, that the      
parties would vote to elect as Directors of the Company two designees named     
by Mr. Lewis and a trust that was a stockholder at the time and a designee      
named by each of the three investors. Pursuant to this agreement, Messrs.       
Kitamura, Sato and Yamaguchi have been elected to the Company's Board of        
Directors as designees of the investors. The Stockholders Agreement             
terminates by its terms effective as of the closing of this offering.           

In connection with the transaction described in the preceding paragraph,  
AYK, Nichimen Corporation and Nichimen America granted to Leslie B. Lewis an    
option to purchase up to an aggregate of 140,400 shares of Common Stock from    
them (in proportion to their ownership interests) for a total of $530,712 or    
approximately $3.78 per share which was exercisable only if the Company         
achieved a target level of cumulative net income, as defined, for the three     
year period ended December 31, 1995. The Company achieved that target, and on   
March 11, 1996, Mr. Lewis exercised his option in full.                         

AYK has been the principal supplier of valves to the Company for more than
20 years. The Company purchased a total of approximately $9.2 million, $10.3    
million and $10.0 million of valves from AYK in the years ended December 31,    
1993, 1994 and 1995, respectively, and $2.6 million in the three months ended   
March 31, 1996. The Company purchases products from AYK at AYK's list price.    
Under its contract with the Company, AYK has the right to revise the price      
list "in good faith." The Company has a long-term Distributorship Agreement     
with AYK. See "Business--Suppliers."                                            

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Since August 1992, the Company has purchased valves from AYK through      
Nichimen Corporation and Nichimen America. The two companies are responsible    
for all export (from Japan) and import (into the United States) arrangements,   
including all documentation, transportation arrangements and custom clearance   
in Japan, and Nichimen America sells the valves to the Company on open          
account, eliminating the costly letter of credit arrangements previously        
required in connection with direct purchases from AYK. Prior to this            
arrangement with Nichimen Corporation and Nichimen America, the Company had     
been required to pay for substantially all shipments from AYK with              
irrevocable letters of credit, which the Company financed with bank             
borrowing. As a result of the new arrangement, the Company has been able to     
reduce substantially its bank borrowing. For their services, Nichimen           
Corporation and Nichimen America are paid by AYK a combined mark-up of          
approximately 8% of the invoiced price of the Company's purchases from AYK.     
For the years ended December 31, 1993, 1994 and 1995, the total mark-up was     
approximately $733,440, $824,320 and $797,680, respectively, and for the        
three months ended March 31, 1996, was approximately $209,000. Nichimen         
Corporation and Nichimen America are parties to the Company's Distributorship   
Agreement with AYK. See "Business--Suppliers."                                  

On March 31, 1993, in connection with the investment by AYK, Nichimen     
Corporation and Nichimen America in the Company, the Company redeemed 92,764    
shares of Common Stock owned by Timothy L. Robinson, the Company's Executive    
Vice President and Chief Operating Officer. The consideration for the           
redemption was the cancellation of a personal note in the amount of $250,000    
from Mr. Robinson to the Company, which Mr. Robinson had issued to the          
Company in March 1990 in full payment for the stock. The note would have been   
due on February 28, 1995, and bore interest at the rate of 9% per annum,        
which accrued and was payable at maturity.                                      

Mr. Leslie B. Lewis, President and Chief Executive Officer of the Company,
is indebted to the Company in the amount of $350,000. The loan to Mr. Lewis,    
which was made to him in October 1991, is evidenced by a loan agreement, as     
amended, dated March 31, 1993. Under the amended loan agreement, interest       
began to accrue on January 1, 1996, at prime plus one percentage point. The     
principal, plus accrued interest, is payable in equal quarterly installments    
over five years commencing on April 1, 1996.                                    

DESCRIPTION OF CAPITAL STOCK  

General                                                                         

The Company is authorized to issue 1,000,000 shares of Preferred Stock,   
$10.00 par value, and 10,000,000 shares of Common Stock, no par value. As of    
the date of this Prospectus, no shares of Preferred Stock are outstanding,      
and 2,340,000 shares of Common Stock are outstanding.                           

Preferred Stock                                                                 

The Board of Directors has the authority to issue the Preferred Stock in  
one or more series and to fix the rights, preferences, privileges and           
restrictions thereof, including dividend rights, dividend rates, conversion     
rights, voting rights, terms of redemption, redemption prices, liquidation      
preferences and the number of shares constituting any series or the             
designation of such series, without further vote or action of the               
stockholders. The rights of the holders of Common Stock will be subject to,     
and may be adversely affected by, the rights of holders of any Preferred        
Stock that may be issued in the future. The issuance of Preferred Stock,        
while providing desirable flexibility in connection with possible               
acquisitions and other corporate purposes, could have the effect of making it   
more difficult for a third party to acquire, or discourage a third party from   
acquiring, a majority of the outstanding Common Stock of the Company. The       
Company has no present plans to issue any shares of its Preferred Stock.        

Common Stock                                                                    

The holders of Common Stock are entitled to one vote for each share held  
of record on all matters to be voted on by stockholders. There is no            
cumulative voting with respect to the election of directors, with the result    
that the holders of more than 50% of the shares voted for the election of       
directors can elect all of the directors. The holders of Common Stock are       
entitled to receive dividends when, as and if declared by the Board of          
Directors out of funds legally available therefor. In the event of              
liquidation, dissolution or winding up of the Company, the                      

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holders of Common Stock are entitled to share ratably in all assets remaining   
available for distribution to them after payment of liabilities. Holders of     
shares of Common Stock, as such, have no conversion, preemptive or other        
subscription rights, and there are no redemption provisions applicable to the   
Common Stock. All of the outstanding shares of Common Stock are, and the        
shares of Common Stock offered hereby, when issued against the consideration    
set forth in this Prospectus, will be, fully paid and nonassessable.            

Massachusetts Law and Certain Provisions of the Company's Articles of           
Organization and By-Laws; Anti-Takeover Effects                                 

The Company is subject to Chapter 110F of the Massachusetts General Laws, 
an anti-takeover law. Under Chapter 110F, a Massachusetts corporation with      
200 or more shareholders may not engage in a "business combination" with an     
"interested shareholder" for a period of three years after the date of the      
transaction in which the person becomes an interested shareholder, unless (i)   
prior to such date, the Board of Directors approves either the business         
combination or the transaction which results in the shareholder becoming an     
interested shareholder, (ii) upon consummation of the transaction which         
results in the shareholder becoming an interested shareholder, the interested   
shareholder owns at least 90% of the outstanding voting stock of the            
corporation (excluding shares held by certain affiliates of the corporation),   
or (iii) on or subsequent to such date, the business combination is approved    
by both the Board of Directors and the holders of two-thirds of the             
outstanding voting stock of the corporation (excluding shares held by the       
interested shareholder). An "interested shareholder" is a person who,           
together with affiliates and associates, owns (or at any time within the        
prior three years did own) 5% or more of the outstanding voting stock of the    
corporation. A "business combination" includes a merger, a stock or asset       
sale, and certain other specified transactions resulting in a financial         
benefit to the interested shareholder.                                          

Massachusetts General Laws Chapter 156B, Section 50A requires that        
publicly held Massachusetts corporations have a classified board of directors   
consisting of three classes as nearly equal in size as possible, unless the     
corporation elects not to be covered by Section 50A. The Company's By-Laws,     
as amended, contain provisions which give effect to Section 50A. See            
"Management--Directors and Executive Officers." The Articles of Organization,   
as amended, also include a provision excluding the Company from the             
applicability of Chapter 110D of the Massachusetts General Laws. Under          
Chapter 110D, any shareholder of a corporation subject to this statute who      
acquires 20% or more of the outstanding voting stock of a corporation subject   
to the statute may not vote such stock unless shareholders holding a majority   
of the outstanding voting stock (excluding the interested shares) of the        
corporation so authorize. The stockholders may amend the Company's By-Laws at   
any time to subject the Company to this statute prospectively.                  

The Company's Articles of Organization, as amended, include a provision   
which requires that, in the event of any merger or consolidation of the         
Company with any other corporation, each of the Company's stockholders, if      
the stockholder so elects, shall receive a price for their shares of stock      
that is not less than, and is paid in the same form of consideration as, the    
highest price previously paid by the acquiror for any shares of the Company's   
stock of the same class. The effect of this provision could be to deter or      
discourage acquisition bids for the Company, especially bids that might be      
structured in two steps and include a form of payment in the second step that   
is equal in value to, but in a different medium than was paid in the first      
step, such as a cash tender offer followed by a merger for stock or other       
securities.                                                                     

The Company's By-Laws provide that the directors and officers of the      
Company shall be indemnified by the Company to the fullest extent authorized    
by Massachusetts law, as it now exists or may in the future be amended,         
against all expenses and liabilities reasonably incurred in connection with     
service for or on behalf of the Company. In addition, the Company's Articles    
of Organization provide that the directors of the Company will not be           
personally liable for monetary damages to the Company for breaches of their     
fiduciary duty as directors, unless they violated their duty of loyalty to      
the Company or its shareholders, acted in bad faith, knowingly or               
intentionally violated the law, authorized illegal dividends or redemptions     
or derived an improper personal benefit from their action as directors.         

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Dividends                                                                       

To date, the Company has not paid any dividends on its Common Stock, and  
the Company will not pay any dividends for a period of at least 12 months       
following this offering. In subsequent periods, if the Company has funds        
legally available for the payment of dividends, the Board of Directors          
intends to consider the payment of dividends. The payment of dividends is       
within the discretion of the Board of Directors and will depend upon the        
Company's earnings, its capital requirements and financial condition, and       
other relevant factors. Under the terms of its bank loan agreements, the        
Company may not pay dividends without the consent of the bank.                  

Transfer Agent                                                                  

The transfer agent for the Company's Common Stock is Boston EquiServe     
Limited Partnership, Canton, Massachusetts.                                     

SHARES ELIGIBLE FOR FUTURE SALE   

Upon the consummation of this offering, the Company will have 3,340,000   
shares of Common Stock outstanding. Of these shares, the 1,160,000 shares       
sold in this offering will be freely transferable without restriction or        
further registration under the Securities Act, except for any shares            
purchased by an "affiliate" of the Company (in general, a person who has a      
control relationship with the Company) which will be subject to the             
limitations of Rule 144 adopted under the Securities Act. The remaining         
2,180,000 shares of Common Stock outstanding are deemed to be "restricted       
securities," as that term is defined under Rule 144 promulgated under the       
Securities Act, in that such shares were issued and sold by the Company in      
private transactions not involving a public offering. These shares will be      
eligible for sale under Rule 144 beginning 90 days after the date of this       
Prospectus.                                                                     

In general, under Rule 144 as currently in effect, subject to the         
satisfaction of certain other conditions, a person, including an affiliate of   
the Company (or persons whose shares are aggregated), who has owned             
restricted shares of Common Stock beneficially for at least two years is        
entitled to sell, within any three-month period, a number of shares that does   
not exceed the greater of 1% of the total number of outstanding shares of the   
same class or, if the Common Stock is quoted on Nasdaq, the average weekly      
trading volume during the four calendar weeks preceding the sale. A person      
who has not been an affiliate of the Company for at least the three months      
immediately preceding the sale and who has beneficially owned shares of         
Common Stock for at least three years is entitled to sell such shares under     
Rule 144(k) without regard to any of the limitations described above. Except    
for restrictions imposed by the agreement described in the next paragraph,      
beginning on the date of this Prospectus, 207,257 shares of Common Stock        
owned by Wells Fargo, N.A., as executor of the estate of Alan Baker, after      
this offering would be eligible for sale under Rule 144(k).                     

The holders of all of the shares of the Company's Common Stock have agreed
not to sell or otherwise dispose of their shares of Common Stock, except for    
the shares to be sold in this offering, for a period of 180 days from the       
date of this Prospectus without the prior written consent of the                
Representative of the Underwriters.                                             

Prior to this offering, there has been no market for the Common Stock and 
no prediction can be made as to the effect, if any, that market sales of        
shares of Common Stock or the availability of such shares for sale will have    
on the market prices prevailing from time to time. Nevertheless, the            
possibility that substantial amounts of Common Stock may be sold in the         
public market may adversely affect prevailing market prices for the Common      
Stock and could impair the Company's ability to raise capital through the       
sale of its equity securities.                                                  

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UNDERWRITING

Under the terms and subject to the conditions set forth in the            
Underwriting Agreement (the "Underwriting Agreement"), the Company has agreed   
to sell to each of the Underwriters named below (the "Underwriters"), and       
each of the Underwriters has severally agreed to purchase the respective        
number of shares of Common Stock set forth opposite its name below:             

Number of     
Underwriter                       Shares                                        
-----------------------------    ---------                                      
Fechtor, Detwiler & Co., Inc.      405,000                                      
Daiwa Securities America Inc.      405,000                                      
Advest, Inc.                        25,000                                      
Crowell, Weedon & Co.               25,000                                      
Fahnestock & Co. Inc.               25,000                                      
First Albany Corporation            25,000                                      
Janney Montgomery Scott Inc.        25,000                                      
Josephthal Lyon & Ross                                                          
Incorporated                   25,000                                 
John G. Kinnard & Company,                                                      
Incorporated                   25,000                                 
Ladenburg, Thalmann & Co. Inc.      25,000                                      
McDonald & Company                                                              
Securities, Inc.               25,000                                 
Needham & Company, Inc.             25,000                                      
Pennsylvania Merchant Group Ltd.    25,000                                      
Tucker Anthony Incorporated         25,000                                      
Wedbush Morgan Securities Inc.      25,000                                      
H.C. Wainwright & Co., Inc.         25,000                                      
-------   
Total                          1,160,000                                    
=======   

In the Underwriting Agreement, the Underwriters have agreed, subject to   
the terms and conditions set forth therein, to purchase all the shares of       
Common Stock offered hereby if any such shares are purchased. In the event of   
a default by an Underwriter, the Underwriting Agreement provides that, in       
certain circumstances, such commitments of the non-defaulting Underwriter may   
be increased or the Underwriting Agreement may be terminated.                   

The Underwriters, for whom Fechtor, Detwiler & Co., Inc. is acting as the 
representative (the "Representative"), have advised the Company that they       
propose initially to offer the shares of Common Stock offered hereby to the     
public at the public offering price per share set forth on the cover page of    
this Prospectus. The Underwriters may allow a concession of not more than $0.30 
per share to selected dealers; and the Underwriters may allow, and such         
dealers may reallow, a discount not in excess of $0.10 per share on sales to    
certain other dealers. After the initial public offering, the concession to     
selected dealers and the reallowance to other dealers may be changed by the     
Underwriters. The shares of Common Stock are offered subject to receipt and     
acceptance by the Underwriters and to certain other conditions, including the   
right to reject orders in whole or in part.                                     

The Company has agreed to indemnify the Underwriters against certain civil
liabilities, including liabilities under the Securities Act and the             
Securities Exchange Act of 1934, as amended, or to contribute to payments the   
Underwriters may be required to make in respect thereof.                        

The Selling Stockholders have granted to the Underwriters an option to    
purchase up to 174,000 additional shares of Common Stock, solely to cover       
over-allotments, if any, exercisable within 30 days after the date of this      
Prospectus, at the initial public offering price per share of Common Stock      
offered hereby, less underwriting discounts and commissions.                    

The holders of all of the shares of the Company's Common Stock have agreed
not to sell or otherwise dispose of their shares of Common Stock, except for    
the shares to be sold in this offering, during the 180-day period following     
the date of this Prospectus. The Company has agreed not to offer, sell, grant   
any options to purchase or otherwise dispose of any shares of Common Stock      
during the 180-day period following the date of this Prospectus, without        
prior written consent of the Representative.                                    

The Company has granted the Representatives a right of first refusal to   
manage a second underwritten public offering, if any, of the Common Stock,      
which right will expire one year from the effective date of this offering.      

Prior to this offering, there has been no market for the Common Stock of  
the Company. Accordingly, the initial public offering price has been            
determined by negotiations between the Company and the Underwriters. Among      
the                                                                             

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factors considered in determining the initial public offering price are the     
Company's results of operations, the Company's current financial condition,     
its future prospects, the state of the markets for its products and services,   
the experience of its management, the economics of the industry in general,     
the general condition of the equity securities market and the demand for        
similar securities of companies considered comparable to the Company.           

In addition, Bloomberg Associates, Inc. is entitled to receive a fee equal
to 0.75% of the gross proceeds of this offering in connection with financial    
advisory services rendered to the Company.                                      

The foregoing is a summary of the principal terms of the agreements       
described above and does not purport to be complete. Reference is made to a     
copy of each such agreement which is filed as an exhibit to the Registration    
Statement of which this Prospectus forms a part. See "Additional                
Information."                                                                   

LEGAL MATTERS   

The validity of the Common Stock offered by the Company and the Selling   
Stockholders will be passed upon for the Company by Gadsby & Hannah, Boston,    
Massachusetts, and certain other legal matters will be passed upon for the      
Company by Morse, Barnes-Brown & Pendleton, P.C., Waltham, Massachusetts.       
Certain legal matters will be passed upon for the Underwriters by Choate,       
Hall & Stewart (a partnership including professional corporations), Boston,     
Massachusetts.                                                                  

EXPERTS   

The audited consolidated financial statements and schedule of the Company 
included or incorporated by reference in this Prospectus and elsewhere in the   
Registration Statement have been audited by Arthur Andersen LLP, independent    
public accountants, as indicated in their reports with respect thereto, and     
are included herein in reliance upon the authority of said firm as experts in   
giving said reports.                                                            

The Statement of Income of Poly Kinetics, Inc. included in this Prospectus
has been audited by Warburton, Simonyan & Co., independent public               
accountants, as indicated in their report with respect thereto, and is          
included herein in reliance upon the authority of said firm as experts in       
giving said report.                                                             

ADDITIONAL INFORMATION  

The Company has filed with the Securities and Exchange Commission (the    
"Commission") a registration statement on Form S-1 (the "Registration           
Statement") under the Securities Act with respect to the Common Stock offered   
by this Prospectus. This Prospectus does not contain all of the information     
set forth in the Registration Statement and the exhibits and schedules          
thereto, certain parts of which are omitted in accordance with the rules and    
regulations of the Commission. For further information with respect to the      
Company and its Common Stock, reference is made to the Registration             
Statement, including the exhibits and schedules filed therewith, which may be   
inspected without charge at the Commission's Public Reference Room, Judiciary   
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at Northwestern      
Atrium Center, Suite 1400, 500 West Madison Street, Chicago, Illinois           
60661-2511, and Northeast Regional Office, Seven World Trade Center, 13th       
floor, New York, New York 10048. Copies of the Registration Statement may be    
obtained from the Commission from its Public Reference Section, 450 Fifth       
Street, N.W., Washington, D.C. 20549 upon payment of prescribed fees.           
Statements contained in this Prospectus as to the contents of any contract or   
other document are not necessarily complete and, where the contract or other    
document has been filed as an exhibit to the Registration Statement, each       
such statement is qualified in all respects by reference to the exhibit filed   
with the Commission.                                                            

The Company will furnish to its stockholders annual reports containing    
audited financial statements accompanied by an opinion thereon of an            
independent public accountant, and such other periodic reports as the Company   
may determine to be appropriate or as may be required by law.                   

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ASAHI/AMERICA, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS  

                                                        [Enlarge/Download Table]

                                                                                                  Page  
                                                                                                 -------
                                                                                                        
Report of Independent Public Accountants                                                           F-2  
Consolidated Balance Sheets as of December 31, 1994 and 1995 and March 31, 1996                    F-3  
Consolidated Statements of Operations for the Years Ended December 31, 1993, 1994 and 1995 and          
  for the three months ended March 31, 1995 and 1996                                               F-4  
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1993, 1994 and         
  1995 and for the three months ended March 31, 1996                                               F-5  
Consolidated Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and 1995 and          
  for the three months ended March 31, 1995 and 1996                                               F-6  
Notes to Consolidated Financial Statements                                                         F-7  

POLY KINETICS, INC.   

                                                                [Download Table]

                                                             Page  
                                                            -------
                                                                   
Report of Independent Public Accountants                     F-17  
Statement of Income for the Six Months Ended June 30, 1994   F-18  
Notes to Statement of Income                                 F-19  

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS  

To Asahi/America, Inc.:                                                         

We have audited the accompanying consolidated balance sheets of           
Asahi/America, Inc. (a Massachusetts corporation) and subsidiary as of          
December 31, 1994 and 1995, and the related consolidated statements of          
operations, stockholders' equity and cash flows for each of the three years     
in the period ended December 31, 1995. These consolidated financial             
statements are the responsibility of the Company's management. Our              
responsibility is to express an opinion on these consolidated financial         
statements based on our audits.                                                 

We conducted our audits in accordance with generally accepted auditing    
standards. Those standards require that we plan and perform the audit to        
obtain reasonable assurance about whether the financial statements are free     
of material misstatement. An audit includes examining, on a test basis,         
evidence supporting the amounts and disclosures in the financial statements.    
An audit also includes assessing the accounting principles used and             
significant estimates made by management, as well as evaluating the overall     
financial statement presentation. We believe that our audits provide a          
reasonable basis for our opinion.                                               

In our opinion, the consolidated financial statements referred to above   
present fairly, in all material respects, the financial position of             
Asahi/America, Inc. and subsidiary as of December 31, 1994 and 1995, and the    
results of their operations and their cash flows for each of the three years    
in the period ended December 31, 1995, in conformity with generally accepted    
accounting principles.                                                          

We have also audited, in accordance with generally accepted auditing      
standards, the consolidated balance sheets as of December 31, 1991, 1992 and    
1993 and the related consolidated statements of operations, stockholders'       
equity and cash flows for the two years ended December 31, 1992, (none of       
which are presented herein) and have expressed an unqualified opinion on        
those financial statements. In our opinion, the information set forth in the    
selected consolidated financial data for each of the five years in the period   
ended December 31, 1995, appearing in this Prospectus, is fairly stated, in     
all material respects, in relation to the financial statements from which it    
has been derived.                                                               

                                                         ARTHUR ANDERSEN LLP

Boston, Massachusetts                                                           
February 19, 1996                                                               
(except with respect to                                                         
the matters discussed                                                           
in Notes 1 and 15,                                                              
as to which the date                                                            
is May 13, 1996)                                                                

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ASAHI/AMERICA, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS   

                                                        [Enlarge/Download Table]

                                                                December 31,              March 31,   
                                                       ------------------------------                 
                                                           1994             1995             1996     
                                                       -------------   -------------   ---------------
                       ASSETS                                                            (Unaudited)  
                                                                                                      
Current Assets:                                                                                       
Cash                                                    $   184,522      $   224,189     $    61,613  
Accounts receivable, less reserves of $311,000 at                                                     
  December 31, 1994, $245,000 at December 31, 1995                                                    
  and $225,000 at March 31, 1996                          4,886,155        4,446,034       4,580,560  
Inventories                                               7,636,423        8,206,697       8,255,135  
Prepaid expenses and other current assets                   305,653          678,074         887,240  
                                                         -----------      -----------    -------------
    Total current assets                                 13,012,753       13,554,994      13,784,548  
                                                         -----------      -----------    -------------
Property and Equipment, net                               6,465,976        7,203,138       7,072,125  
                                                         -----------      -----------    -------------
Other Assets:                                                                                         
Goodwill, net of accumulated amortization of $929,061                                                 
  at December 31, 1994, $1,106,469 at December 31,                                                    
  1995 and $1,150,822 at March 31, 1996                     845,018          667,610         623,258  
Other, net                                                  984,337        1,026,334       1,150,554  
                                                         -----------      -----------    -------------
    Total other assets                                    1,829,355        1,693,944       1,773,812  
                                                         -----------      -----------    -------------
                                                        $21,308,084      $22,452,076     $22,630,485  
                                                         ===========      ===========    =============
        LIABILITIES AND STOCKHOLDERS' EQUITY                                                          
Current Liabilities:                                                                                  
Demand note payable to a bank                           $ 5,274,853      $ 3,377,000     $ 1,822,340  
Current portion of MIFA obligations                         125,000          130,000         135,000  
Current portion of capital lease obligations                 23,847          104,205         103,696  
Accounts payable                                          4,447,646        5,209,277       6,335,188  
Accrued expenses                                          1,024,959          884,945       1,078,310  
                                                         -----------      -----------    -------------
    Total current liabilities                            10,896,305        9,705,427       9,474,534  
                                                         -----------      -----------    -------------
MIFA Obligations, less current portion                    3,920,833        3,833,336       3,760,000  
                                                         -----------      -----------    -------------
Capital Lease Obligations, less current portion               8,197          301,335         275,966  
                                                         -----------      -----------    -------------
Deferred Income Taxes                                       654,000        1,178,000       1,178,000  
                                                         -----------      -----------    -------------
Commitments (Notes 8 and 12)                                                                          
Stockholders' Equity:                                                                                 
Preferred stock, $10.00 par value                                                                     
  Authorized--1,000,000 shares                                                                        
  Issued and outstanding--none                               --               --              --      
Common stock, no par value-                                                                           
 Authorized--10,000,000 shares                                                                        
 Issued and outstanding--2,340,000 shares                 7,338,283        7,358,446       7,358,446  
Retained earnings (deficit)                              (1,159,534)         425,532         933,539  
                                                         -----------      -----------    -------------
                                                          6,178,749        7,783,978       8,291,985  
Less--Notes receivable from stockholder/officer             350,000          350,000         350,000  
                                                         -----------      -----------    -------------
    Total stockholders' equity                            5,828,749        7,433,978       7,941,985  
                                                         -----------      -----------    -------------
                                                        $21,308,084      $22,452,076     $22,630,485  
                                                         ===========      ===========    =============

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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ASAHI/AMERICA, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS   

                                                        [Enlarge/Download Table]

                                                                                                 Three Months          
                                                 Years Ended December 31,                      Ended March 31,         
                                       ----------------------------------------------   -------------------------------
                                          1993             1994             1995            1995             1996      
                                      -------------   -------------    -------------   -------------    ---------------
                                                                                                 (Unaudited)           
                                                                                                                       
Net Sales                              $25,513,782      $28,517,662     $34,997,567      $7,806,923       $9,651,037   
Cost of Goods Sold                      17,068,685       18,655,361      23,018,043       5,286,293        6,303,592   
                                        -----------      -----------      -----------     -----------    ------------- 
  Gross profit                           8,445,097        9,862,301      11,979,524       2,520,630        3,347,445   
Selling, General and Administrative                                                                                    
  Expenses                               7,201,419        7,612,559       8,681,252       2,073,641        2,366,153   
                                        -----------      -----------      -----------     -----------    ------------- 
  Income from operations                 1,243,678        2,249,742       3,298,272         446,989          981,292   
Interest Income                              2,150           22,288           1,140             240            9,362   
Interest Expense                          (393,273)        (558,046)       (714,346)       (178,671)        (123,647)  
                                        -----------      -----------      -----------     -----------    ------------- 
  Income before minority interest                                                                                      
  and provision for income taxes           852,555        1,713,984       2,585,066         268,558          867,007   
Minority Interest in Income of                                                                                         
  Consolidated Joint Venture               (65,422)          --              --              --               --       
                                        -----------      -----------      -----------     -----------    ------------- 
  Income before provision for income                                                                                   
    taxes                                  787,133        1,713,984       2,585,066         268,558          867,007   
Provision for Income Taxes                 168,000          596,000       1,000,000         104,000          359,000   
                                        -----------      -----------      -----------     -----------    ------------- 
  Net income                           $   619,133      $ 1,117,984     $ 1,585,066      $  164,558       $  508,007   
                                        ===========      ===========      ===========     ===========    ============= 
Net Income per Common Share            $       .30      $       .48     $       .68      $      .07       $      .22   
                                        ===========      ===========      ===========     ===========    ============= 
Weighted Average Number of Common                                                                                      
  Shares Outstanding                     2,048,336        2,340,000       2,340,000       2,340,000        2,340,000   
                                        ===========      ===========      ===========     ===========    ============= 

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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ASAHI/AMERICA, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY   

                                                        [Enlarge/Download Table]

                                                                                   Notes                    
                                          Common Stock                           Receivable                 
                                  ----------------------------    Retained          from          Total     
                                     Number            No         Earnings     Stockholders/  Stockholders' 
                                   of Shares       Par Value      (Deficit)       Officers        Equity    
                                  ------------   ------------   ------------    ------------  --------------
                                                                                                            
Balance, December 31, 1992         1,145,764       $3,666,111    $(2,896,651)    $(600,000)     $  169,460  
Repurchase of stock                  (92,764)        (250,000)        --           250,000          --      
Issuance of stock, net of                                                                                   
  issuance costs of $77,828        1,287,000        3,922,172         --             --          3,922,172  
Net income                             --              --            619,133         --            619,133  
                                    ----------      ----------     ----------     ----------   ------------ 
Balance, December 31, 1993         2,340,000        7,338,283     (2,277,518)     (350,000)      4,710,765  
Net income                             --              --          1,117,984         --          1,117,984  
                                    ----------      ----------     ----------     ----------   ------------ 
Balance, December 31, 1994         2,340,000        7,338,283     (1,159,534)     (350,000)      5,828,749  
Compensation expense related to                                                                             
  stockholder's stock repurchase                                                                            
  rights                               --              20,163         --             --             20,163  
Net income                             --              --          1,585,066         --          1,585,066  
                                    ----------      ----------     ----------     ----------   ------------ 
Balance, December 31, 1995         2,340,000        7,358,446        425,532      (350,000)      7,433,978  
                                    ----------      ----------     ----------     ----------   ------------ 
Net income (unaudited)                 --              --            508,007         --            508,007  
                                    ----------      ----------     ----------     ----------   ------------ 
Balance, March 31, 1996                                                                                     
  (unaudited)                      2,340,000       $7,358,446    $   933,539     $(350,000)     $7,941,985  
                                    ==========      ==========     ==========     ==========   ============ 

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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ASAHI/AMERICA, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS   

                                                        [Enlarge/Download Table]

                                                                                                           Three Months       
                                                                  Years Ended December 31,               Ended March 31,      
                                                            --------------------------------------  --------------------------
                                                              1993          1994          1995         1995           1996    
                                                            ----------    ----------    ----------   ----------   ------------
                                                                                                           (Unaudited)        
Cash Flows from Operating Activities:                                                                                         
                                                                                                                              
Net income                                                $   619,133   $ 1,117,984   $ 1,585,066    $ 164,558    $   508,007 
Adjustments to reconcile net income to net cash provided                                                                      
  by operating activities-                                                                                                    
 Depreciation and amortization                                615,397       887,483     1,115,964      264,041        305,944 
 Compensation expense related to stockholder's stock                                                                          
   repurchase rights                                           --            --            20,163        --            --     
 Minority interest                                             65,422        --            --            --            --     
 Deferred income taxes                                         --           164,000       524,000      131,000         --     
 Changes in assets and liabilities-                                                                                           
  Accounts receivable                                        (438,893)   (1,333,299)      440,121      336,825       (134,526)

  Inventories                                                 624,910      (941,899)     (570,274)     (23,051)       (48,438)

  Prepaid expenses and other current assets                  (124,599)       86,517      (372,421)    (227,928)      (209,166)

  Accounts payable                                            637,261     2,199,732       761,631      426,093      1,125,911 
  Accrued expenses                                           (423,025)      502,274      (140,014)    (161,102)       193,365 
                                                             --------      --------      --------     --------      ----------

    Net cash provided by operating activities               1,575,606     2,682,792     3,364,236      910,436      1,741,097 
                                                             --------      --------      --------     --------      ----------

Cash Flows from Investing Activities:                                                                                         
Purchase of property and equipment                           (138,608)   (4,769,029)   (1,058,422)    (118,453)       (94,836)

Acquisition of certain assets of Poly Flowlines                --        (1,621,348)       --            --            --     
Increase in other assets                                     (174,162)     (493,293)     (224,955)     (39,529)      (159,963)

Distribution to minority investor                             (85,921)       --            --            --            --     
                                                             --------      --------      --------     --------      ----------

    Net cash used in investing activities                    (398,691)   (6,883,670)   (1,283,377)    (157,982)      (254,799)

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

Cash Flows from Financing Activities:                                                                                         
Net proceeds (payments) on demand note payable to a bank   (4,998,680)      261,454    (1,897,856)    (691,174)    (1,554,660)

Payments on capital lease obligations, net                    (23,284)       (6,196)      (60,844)     (10,655)       (25,878)

Proceeds from issuance of MIFA obligations                     --         4,150,000        --            --            --     
Payments on MIFA obligations                                   --          (104,167)      (82,492)     (31,250)       (68,336)

Net proceeds from issuance of common stock                  3,922,172        --            --            --            --     
                                                             --------      --------      --------     --------      ----------

  Net cash provided by (used in) financing activities      (1,099,792)    4,301,091    (2,041,192)    (733,079)    (1,648,874)

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

Net Increase in Cash                                           77,123       100,213        39,667       19,375       (162,576)

Cash, Beginning of Period                                       7,186        84,309       184,522      184,522        224,189 
                                                             --------      --------      --------     --------      ----------

Cash, End of Period                                       $    84,309   $   184,522   $   224,189    $ 203,897    $    61,613 
                                                             ========      ========      ========     ========      ==========

Supplemental Disclosure of Cash Flow Information:                                                                             
Cash paid during the period for-                                                                                              
 Interest                                                 $   357,253   $   536,109   $   713,207    $ 178,431    $    88,510 
                                                             ========      ========      ========     ========      ==========

 Income taxes                                             $   273,549   $   111,300   $ 1,032,651    $ 105,000    $    28,500 
                                                             ========      ========      ========     ========      ==========

Supplemental Schedule of Noncash Investing and Financing                                                                      
Activities:                                                                                                                   
Repurchase of common stock and cancellation of note                                                                           
  receivable from officer                                 $   250,000   $     --      $     --       $    --      $     --    
                                                             ========      ========      ========     ========      ==========

Acquisition of equipment under capital lease obligations  $     --      $     --      $  (434,340)   $ (41,019)   $     --    
                                                             ========      ========      ========     ========      ==========


The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

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ASAHI/AMERICA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  
(Including Data Applicable to Unaudited Periods)  

(1) ORGANIZATION                                                                

(a) Historical Background                                                 

Asahi/America, Inc. (the Company) was established on August 18, 1977 as a 
Massachusetts corporation and is engaged in the manufacture and distribution    
of thermoplastic valves and piping systems for the chemical processing and      
other industries in North and South America. The Company has exclusive          
distribution agreements with two international manufacturers.                   

(b) Stock Split                                                           

On March 11, 1996, the Board of Directors approved an approximately       
836-to-1 stock split of the Company's common stock to be effective              
immediately prior to the effective date of the registration statement for the   
Company's initial public offering. All share and per share amounts have been    
retroactively restated to reflect this stock split.                             

(c) Goodwill                                                              

The goodwill was recorded as a result of a change in control in 1989.     
Goodwill is being amortized on a straight-line basis over a 10-year period,     
which is management's estimate of its useful life.                              

(d) Acquisition of Poly Flowlines                                         

In July 1994, the Company acquired certain assets of Poly Kinetics, Inc.  
d/b/a Poly Flowlines Company and Poly Flow Engineering, Inc. (together, Poly    
Flowlines). The total purchase price of approximately $1.62 million was paid    
in cash. The Company accounted for the acquisition as a purchase. The           
allocation of the purchase price was as follows:                                

Molds, dies and equipment    $1,280,000                                         
Patents                          19,000                                         
Goodwill                        322,000                                         
---------         
$1,621,000            
=========         

The results of operations related to Poly Flowlines have been included    
with those of the Company since July 1, 1994. Unaudited pro forma operating     
results for the Company, assuming the acquisition had been made as of January   
1, 1994, are as follows:                                                        

 Pro forma
  Year ended
 December 31, 1994
  --------------------
Revenue                            $28,782,293                                  
  ==================
Net Income                         $ 1,014,530                                  
  ==================
Net Income per Common Share        $       .43                                  
  ==================

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(1) ORGANIZATION (Continued)                                                    

(e) Issuance of Stock                                                     

On March 31, 1993, the Company sold a total of 1,287,000 shares of stock  
to its Japanese valve manufacturer, Asahi Yukizai Kogyo Co., Ltd. (AYK), and    
Nichimen Corporation, a Japanese trading company, and Nichimen America Inc.,    
the Japanese trading company's U.S. affiliate (together, Nichimen).             

In connection with the sale of stock, an officer/stockholder has the right
to repurchase from AYK and Nichimen a certain number of the Company's shares    
(at a formula-based value) if certain performance milestones are met, as        
defined in the stock purchase agreement. The Company is accounting for this     
repurchase right in accordance with Accounting Principles Board Opinion No.     
25. Accordingly, compensation is measured based on the difference between the   
purchase price and the fair market value of the Company's common stock. In      
1993 and 1994, no compensation expense was recorded as the formula-based        
value was higher than the fair market value. For the year ended December 31,    
1995, $20,163 of compensation expense was recorded, as the fair market value    
was in excess of the formula-based value and performance milestones had been    
met.                                                                            

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                  

The accompanying consolidated financial statements reflect the application
of certain accounting policies as described below and elsewhere in the notes    
to consolidated financial statements. The preparation of these consolidated     
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, disclosures of contingent       
assets and liabilities at the date of the financial statements and the          
reported amounts of revenues and expenses during the reporting period. Actual   
results could differ from those estimates.                                      

(a) Principles of Consolidation                                           

The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, Asahi Engineered Products, Inc.    
(AEP). All significant intercompany balances and transactions have been         
eliminated in consolidation.                                                    

(b) Revenue Recognition                                                   

The Company recognizes revenue on product sales at the time the products  
are shipped. Rental revenues, which are less than 10% of total revenues for     
all periods presented, are recognized over the related rental period.           

(c) Inventories                                                           

The Company uses the last-in, first-out (LIFO) method for the costing of  
its inventories.                                                                

The Company currently purchases a significant portion of its inventory    
from two suppliers in Japan and Austria. There are a limited number of          
suppliers of these particular types of thermoplastic valves and piping          
systems, and a change of supplier could adversely affect the Company's          
business due to the time it would take to locate and qualify new vendors.       

(d) Depreciation and Amortization                                         

The Company provides for depreciation and amortization using the          
straight-line and declining-balance methods and charges to operations amounts   
estimated to allocate the cost of the assets over their estimated useful        
lives as follows:                                                               

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ASAHI/AMERICA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)   
(Including Data Applicable to Unaudited Periods)  

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                      

Estimated     
Asset Classification        Useful Life                                 
---------------------------    --------------                                   
Machinery and equipment             5-7 Years                                   
Molds and dies                        7 Years                                   
Furniture and fixtures                7 Years                                   
Building                             40 Years                                   
Building improvements               7.5 Years                                   

(e) Other Assets                                                          

Other assets consist primarily of redemption cost in excess of assets     
acquired, debt refinancing costs and the cost of obtaining patents. The         
Company provides for amortization using the straight-line method and charges    
to operations amounts estimated to allocate the cost of the assets over their   
estimated useful lives as follows:                                              

                                     Estimated
Asset Classification                   Useful Life  
------------------------------------------------    --------------              
Redemption cost in excess of assets acquired              10 Years              
Debt refinancing costs                                    20 Years              
Patents                                                 5-11 Years              

During March 1995, the Financial Accounting Standards Board (FASB) issued 
Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for      
the Impairment of Long-Lived Assets, which is effective for fiscal years        
beginning after December 15, 1995. The Company does not expect the adoption     
of this standard to have a material effect on its financial position or         
results of operations.                                                          

(f) Postretirement Benefits                                               

The Company has no significant obligations for postretirement benefits.   

(g) Concentration of Credit Risk                                          

Financial instruments that potentially subject the Company to             
concentration of credit risk are principally cash and accounts receivable.      
The Company places its cash in federally insured institutions. Concentration    
of credit risk with respect to accounts receivable relates to certain           
domestic and international customers to whom the Company makes substantial      
sales. To reduce risk, the Company routinely assesses the financial strength    
of its customers and obtains letters of credit for most of its international    
sales; as a consequence, the Company believes that its accounts receivable      
credit risk exposure is limited. The Company maintains an allowance for         
potential credit losses, but historically has not experienced any significant   
credit losses related to any individual customer or group of customers in any   
particular industry or geographic area.                                         

(h) Net Income per Common Share                                           

Net income per common share for the years ended December 31, 1993, 1994   
and 1995 and for the three months ended March 31, 1995 and 1996 has been        
determined by dividing net income by the weighted average common shares         
outstanding during the period.                                                  

(i) Interim Financial Statements                                          

The accompanying consolidated balance sheet as of March 31, 1996, the     
consolidated statements of operations and cash flows for the three months       
ended March 31, 1995 and 1996, and the consolidated statement of                
stockholders' equity for the three months ended March 31, 1996, are             
unaudited, but in the opinion of                                                

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                      

management, include all adjustments (consisting only of normal, recurring       
adjustments) necessary for a fair presentation of the results for these         
interim periods. The results of operations for the three months ended March     
31, 1996 are not necessarily indicative of results to be expected for the       
entire year.                                                                    

(3) INVENTORIES                                                                 

Inventories consist of the following:                                     

   December 31,            March 31,
--------------------------                  
1994           1995            1996   
-----------    -----------  ------------- 
                           (Unaudited)
Raw materials     $  449,621     $  742,526      $  751,454                     
Finished goods     7,544,279      7,946,370       7,910,880                     
LIFO reserve        (357,477)      (482,199)       (407,199)                    
 ---------      ---------      -----------
$7,636,423     $8,206,697      $8,255,135   
 =========      =========      ===========
The balance in the Company's allowance for inventory obsolescence was   
$377,079 at December 31, 1993 and $527,079 at December 31, 1994 and 1995 and    
March 31, 1995 and 1996.                                                        

If the first-in, first-out (FIFO) method of inventory costing had been    
used by the Company, inventories and net income would have been reported as     
follows:                                                                        

                                                        [Enlarge/Download Table]

                                                 December 31,                           March 31,          
                                   -----------------------------------------  ---------------------------- 
                                      1993           1994           1995          1995            1996     
                                    -----------    -----------   -----------   -----------   ------------- 
                                                                                       (Unaudited)         
                                                                                                           
Inventories on a FIFO basis        $7,025,498     $7,993,900     $8,688,896    $8,047,951      $8,662,334  
                                     =========      =========      =========     =========      ===========
Net income on a LIFO basis (as                                                                             
  reported in the accompanying                                                                             
  consolidated financial                                                                                   
  statements)                      $  619,133     $1,117,984     $1,585,066    $  164,558      $  508,007  
Current year increase (decrease)                                                                           
  in LIFO reserve, net of current                                                                          
  year related tax effects            155,207         17,288         74,833        18,600         (43,950) 
                                     ---------      ---------      ---------     ---------      -----------
  Net income on a FIFO basis       $  774,340     $1,135,272     $1,659,899    $  183,158      $  464,057  
                                     =========      =========      =========     =========      ===========

(4) PROPERTY AND EQUIPMENT                                                      

Property and equipment are stated at cost and consist of the following:   

                                                                [Download Table]

                                           December 31,            March 31,   
                                    --------------------------                 
                                       1994           1995            1996     
                                     -----------    -----------  ------------- 
                                                                  (Unaudited)  
                                                                               
Machinery and equipment             $3,194,914     $4,224,017      $4,287,289  
Molds and dies                         921,217        962,000         962,000  
Furniture and fixtures                 221,214        299,032         305,446  
Building                             2,847,125      2,847,125       2,847,125  
Building improvements                  762,541        793,581         793,581  
Land                                   780,237        780,237         780,237  
                                      ---------      ---------      -----------
                                     8,727,248      9,905,992       9,975,678  
Less--Accumulated depreciation and                                             
  amortization                       2,261,272      2,702,854       2,903,553  
                                      ---------      ---------      -----------
                                    $6,465,976     $7,203,138      $7,072,125  
                                      =========      =========      ===========

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(5) ACCRUED EXPENSES                                                            

Accrued expenses consist of the following:                                

                                     December 31,            March 31,
                --------------------------
                               1994           1995            1996
                                 -----------    -----------  -------------
                                                             (Unaudited)
Accrued payroll/payroll-related    $  476,728      $609,222       $  404,490    
Other accruals                        548,231       275,723          673,820    
                                   ---------      ---------      -----------
                               $1,024,959      $884,945       $1,078,310
                                   =========      =========      ===========

(6) INCOME TAXES                                                                

The Company accounts for income taxes under the liability method in       
accordance with SFAS No. 109, Accounting for Income Taxes. Under SFAS No.       
109, deferred tax assets or liabilities are computed based on the differences   
between the financial statement and income tax bases of assets and              
liabilities as measured by the enacted tax rates. The deferred tax provision    
is based on changes in the asset or liability from period to period. The        
provision for income taxes consists of the following for the years ended        
December 31, 1993, 1994 and 1995:                                               

1993           1994            1995           
-----------    -----------  -------------         
Current--                                                                       
Federal       $122,000       $308,000       $  364,000                        
State           46,000        124,000          112,000                        
---------      ---------      -----------       
168,000        432,000          476,000         
---------      ---------      -----------       
Deferred--                                                                      
Federal          --           127,000          495,000                        
State            --            37,000           29,000                        
---------      ---------      -----------       
--           164,000          524,000       
---------      ---------      -----------       
$168,000       $596,000       $1,000,000          
=========      =========      ===========       

The components of the net deferred tax liability recognized in the        
accompanying consolidated balance sheets with the approximate income tax        
effect of each type of temporary difference are as follows:                     

                  1994            1995
                     -----------   -------------
Nondeductible reserves              $   378,135     $   497,000                 
Net operating loss carryforwards        395,678         223,000                 
Depreciation                            111,549         (10,000)                
LIFO reserve                         (1,389,632)     (1,734,000)                
Other temporary differences              41,270         (54,000)                
                      ---------      -----------
                       (463,000)     (1,078,000)
Valuation allowance                    (191,000)       (100,000)                
                      ---------      -----------
Net deferred tax liability        $  (654,000)    $(1,178,000)              
                      =========      ===========

The valuation allowance relates to deferred tax assets for which          
realization is not assured. The decrease in the valuation allowance is due to   
the realization of certain deferred tax assets which were previously            
reserved.                                                                       

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(6) INCOME TAXES (Continued)                                                    

The provision for income taxes differs from the amount computed by        
applying the statutory federal income tax rate as follows:                      

                                                                [Download Table]

                                               1993      1994     1995  
                                              -------  -------  --------
                                                                        
Provision at federal statutory rate             34.0%    34.0%    34.0% 
State income tax, net of federal benefit         5.8      6.3      5.5  
Change in valuation allowance                  (25.0)    (6.0)    (3.5) 
Amortization of redemption cost in excess of                            
  assets acquired                                9.0      4.1      2.7  
Other, net                                      (2.5)    (3.6)     --   
                                               -----     -----   -------
  Effective tax rate                            21.3%    34.8%    38.7% 
                                               =====     =====   =======

As of December 31, 1995, the Company had net operating loss carryforwards 
for income tax purposes of approximately $554,000. The net operating loss       
carryforwards expire through 2007 and are subject to review and possible        
adjustment by the Internal Revenue Service.                                     

The Internal Revenue Code contains provisions that limit the net operating
loss carryforwards available to be used in any given year upon the occurrence   
of certain events, including significant changes in ownership interests. The    
Company has determined that such a change in ownership, as defined, occurred    
on March 31, 1993, and consequently, the net operating losses available are     
limited to approximately $429,000 in any given year.                            

(7) INVESTMENT IN JOINT VENTURE                                                 

During 1990, AEP and Prisma International S.A. entered into a general     
partnership agreement (MAC/USA Partners) (the Partnership). The Partnership     
was formed to produce, market, sell and distribute pneumatic actuators.         

Due to the Partnership's dependence on the Company for managerial,        
financial (including funding of operations) and technological expertise, this   
investment was accounted for under the consolidation method. The remaining      
50% was reflected as minority interest in the accompanying consolidated         
financial statements. The results of operations for the Partnership for the     
period ended December 31, 1993 was income of $130,844, of which $65,422 was     
allocated to the minority interest. During 1993, the Partnership terminated,    
and the Company settled all accounts of the Partnership.                        

(8) RELATED PARTY ARRANGEMENTS                                                  

(a) Distributorship Agreement and Inventory Arrangements                  

The Company has a 10-year exclusive distributorship agreement with AYK and
Nichimen (see Note 1(e)). Under the terms of the agreement, the Company is      
expected to purchase a total of $140,000,000 of merchandise over the 10-year    
period beginning on January 2, 1990. The agreement provides for annual          
purchase guidelines but does not assess penalties if either the annual          
purchase guidelines or the cumulative total are not met. The Company has made   
cumulative purchases of approximately $51,432,000 and $54,045,000 under this    
agreement through December 31, 1995 and March 31, 1996, respectively. For       
their services, Nichimen is paid by AYK a combined mark-up of approximately     
8% of the invoiced price of the Company's purchases from AYK.                   

The Company purchased approximately $9,168,000, $10,304,000 and $9,971,000
of valves from AYK during the years ended December 31, 1993, 1994 and 1995,     
respectively and $1,767,697 and $2,613,265 for the three months ended March     
31, 1995 and 1996, respectively. The accompanying consolidated balance sheets   
include                                                                         

F-12

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(8) RELATED PARTY ARRANGEMENTS (Continued)                                      

accounts payable to Nichimen America of approximately $2,753,000, $2,707,000    
and $3,340,000 at December 31, 1994 and 1995 and March 31, 1996,                
respectively.                                                                   

To facilitate its purchases from AYK, the Company has from time to time   
made arrangements with a bank whereby irrevocable letters of credit (see Note   
10(a)) for 180 days are drawn upon shipment. Currently, Nichimen America        
allows the Company to purchase on open account and to maintain a payable        
balance of up to $6 million, above which letters of credit are required.        
During 1995, Nichimen America charged the Company a fee of approximately        
$47,000 for this arrangement. At December 31, 1995, there were no letters of    
credit issued by the bank that have been drawn under these arrangements.        

(b) Related Party Transactions                                            

The Company conducts certain transactions with entities controlled by the 
chief executive officer's father, Stanley M. Lewis. Management believes that    
all transactions were made at terms no less favorable than could have been      
obtained from unrelated parties.                                                

California Office/Warehouse                                               

The Company leased a California facility from a trust of which Stanley M. 
Lewis is the sole beneficiary. The lease expired on December 31, 1995 and was   
not renewed. The Company has paid $64,775, $54,506 and $46,644 in 1993, 1994    
and 1995, respectively, under this arrangement.                                 

Customer                                                                  

The Company sells various products to a company owned by Stanley M. Lewis.
Sales to this customer were $186,227, $296,752 and $260,513 in 1993, 1994 and   
1995, respectively.                                                             

Pipe Supplier                                                             

The Company purchased pipe from a company that was 50% owned by Stanley M.
Lewis through September 1994 (the date the Father sold his interest). The       
Company continues to purchase from this pipe supplier. Total purchases          
amounted to $1,172,000 and $855,000 for the year ended December 31, 1993 and    
the nine months ended September 30, 1994, respectively.                         

(9) FOREIGN CURRENCY TRANSACTIONS                                               

The Company charges foreign currency gains or losses to operations in     
accordance with SFAS No. 52, Foreign Currency Translation. The foreign          
currency gain (loss) recorded in cost of goods sold in the accompanying         
consolidated statements of operations for the years ended December 31, 1993,    
1994 and 1995 and the three months ended March 31, 1995 and 1996 was            
approximately $(48,000), $(47,000), $391,000, $(108,000) and $105,000,          
respectively.                                                                   

In 1993, the Company used foreign exchange forward contracts to minimize  
the effects of exchange rates on foreign currency-denominated purchases. In     
April 1993, the Company ceased using such contracts, as their exposure to the   
effects of changes in foreign exchange rates on payables was reduced by         
arranging to purchase products through Nichimen America in U.S. dollars.        

During 1995, the arrangement with Nichimen America was changed, and the   
Company began to purchase products through Nichimen America in Japanese yen.    
As such, the Company began entering into foreign exchange forward and option    
contracts to reduce the exposure to changes in foreign currencies related to    
the purchase of                                                                 

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(9) FOREIGN CURRENCY TRANSACTIONS (Continued)                                   

inventories. Gains and losses on the contracts that are hedges of firm          
commitments are deferred and recognized in the accompanying consolidated        
statement of operations in the same period as the related transaction.          

The Company had no foreign exchange contracts outstanding as described in 
SFAS No. 119, Disclosure about Derivative Financial Instruments and Fair        
Value of Financial Instruments, as of December 31, 1993, 1994 or 1995. At       
March 31, 1996, the Company had foreign exchange forward contracts, all         
having maturities of less than one year, to buy Japanese yen in the amount of   
$2,680,820.                                                                     

(10) DEBT                                                                       

(a) Demand Revolving Loan Payable to a Bank                               

The Company has a revolving loan with a bank. At December 31, 1995, the   
total amount outstanding under the agreement was $3,377,000. Interest on the    
loan is at the prime rate (8.50% at December 31, 1995) plus 1/2%. The           
revolving loan is secured by substantially all of the assets of the Company.    
The estimated fair value of the revolving loan approximates its carrying        
value at December 31, 1995.                                                     

The amount available under the revolving loan is limited to the lesser of 
$7,000,000 or the sum of 80% of qualified accounts receivable and 50% of        
eligible inventory, as defined. This revolving loan also provides for the       
issuance of irrevocable letters of credit up to a maximum of $4,000,000, as     
defined. Any amounts outstanding under these letters of credit, of which        
approximately $50,000 are outstanding at December 31, 1995, reduce the          
availability under the revolving loan. The Company is required to maintain      
certain financial ratios, including, among others, minimum working capital      
and tangible net worth, as defined in the agreement.                            

(b) MIFA Obligations                                                      

In connection with the purchase of the Malden facility, the Company issued
bonds with the Massachusetts Industrial Finance Agency (MIFA) for a total of    
$4,150,000. The bonds bear interest at rates that range from 4.2% to 5.1%.      
Interest is payable semiannually and is subject to adjustment in 1999, 2004     
and 2009. The bonds are payable in annual installments, commencing on March     
1, 1995, of $125,000; the installments increase $5,000 per year through 1999.   
The bond requires payments of $160,000 (increasing $5,000 to $15,000 each       
year) to $320,000 per year from 2000 to 2014.                                   

The bonds are secured by an irrevocable letter of credit issued by a bank,
which expires in March 1999. This letter of credit does not affect the          
availability under the Company's revolving loan.                                

In accordance with SFAS No. 107, Disclosure about Fair Value of Financial 
Instruments, the Company estimates the fair value of the bonds based on the     
quoted market price for the same or similar issue, or on the current rate       
offered to the Company for debt of the same remaining maturity. The carrying    
amount and estimated fair value for the bonds as of December 31, 1995 are       
$3,963,336 and $4,032,536, respectively.                                        

(11) NOTES RECEIVABLE FROM STOCKHOLDERS/OFFICERS                                

(a) Chief Executive Officer                                               

On October 1, 1991, the Company loaned $350,000 to the chief executive    
officer of the Company. The terms of the loan were amended on March 31, 1993,   
and interest began accruing on January 1, 1996 at prime plus 1%. The            
outstanding principal is due beginning in April 1996 in equal quarterly         
payments, with accrued interest, over a five-year period. The proceeds of the   
loan were used for the purchase of Company stock by the chief executive         
officer from another stockholder.                                               

F-14

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(11) NOTES RECEIVABLE FROM STOCKHOLDERS/OFFICERS (Continued)                    

(b) Executive Vice President                                              

On March 1, 1990, the Company sold 92,764 shares of common stock to the   
executive vice president of the Company in exchange for a $250,000 promissory   
note. On March 31, 1993, the shares were repurchased by the Company, and the    
note was canceled in conjunction with the sale of stock (see Note 1(e)).        

(12) COMMITMENTS                                                                

(a) Operating Leases                                                      

The Company leases certain office space and certain equipment under       
operating leases through December 1998.                                         

The approximate future minimum lease payments under these leases are as   
follows:                                                                        

1996                                                $109,000                    
1997                                                  79,000                    
1998                                                  12,000                    
                                   -------
Total minimum lease payments                      $200,000                  
                                   =======

Rental expense incurred under operating leases and charged to operations  
was approximately $662,000, $316,000 and $165,000 for the years ended           
December 31, 1993, 1994 and 1995, respectively, and approximately $43,000 and   
$31,000 for the three months ended March 31, 1995 and 1996, respectively.       

(b) Capital Leases                                                        

The Company leases certain equipment under capital leases. Future minimum 
lease payments under these leases as of December 31, 1995 are as follows:       

1996                                                  $136,187                  
1997                                                   127,701                  
1998                                                    99,315                  
1999                                                    67,434                  
2000                                                    52,672                  
                                       -------
Total minimum lease payments                          483,309                 
Less--Amount representing interest                     77,769                 
                                       -------
Obligations under capital leases                      405,540                 
Less--Current portion of capital lease                                        
obligations                                          104,205                
                                       -------
                                    $301,335

(c) Building Purchase Commitment                                          

In February 1996, the Company entered into an agreement to purchase the   
land and building adjacent to its Malden facility for $1,250,000.               

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ASAHI/AMERICA, INC. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
(Including Data Applicable to Unaudited Periods)

(13) PROFIT SHARING PLAN                                                        

The Asahi America, Inc. Profit Sharing Plan (the Plan) is a combined      
401(k) and profit sharing plan. Under the terms of the Plan, the profit         
sharing and 401(k) funds are accounted for together.                            

Employer contributions for the profit sharing portion of the Plan are     
discretionary and determined by the Board of Directors. The Company made no     
contributions to the Plan in 1993. The Company made contributions to the Plan   
of $100,000 in 1994 and 1995.                                                   

Under the terms of the 401(k) portion of the Plan, eligible employees may 
contribute limited percentages of their salaries to the Plan, and the Company   
matches one quarter of each eligible employee's contribution. The Company's     
matching contribution is limited to 4% of each eligible employee's              
compensation.                                                                   

(14) SIGNIFICANT CUSTOMER AND EXPORT SALES                                      

During 1993, 1994 and 1995, one customer accounted for 18%, 19% and 26%,  
respectively, of net sales. During 1993, 1994 and 1995, export sales            
accounted for 14%, 12% and 5%, respectively, of net sales.                      

(15) STOCKHOLDERS' EQUITY                                                       

(a) Preferred Stock                                                       

The Board of Directors has the authority to issue up to 1,000,000 shares  
of Preferred Stock, $10.00 par value, in one or more series and to fix the      
rights, preferences, privileges and restrictions thereof, including dividend    
rights, dividend rates, conversion rights, voting rights, terms of              
redemption, redemption prices, liquidation preferences and the number of        
shares constituting any series or the designation of such series, without       
further vote or action of the stockholders.                                     

(b) Equity Incentive Plan                                                 

On March 11, 1996, the Board of Directors and stockholders approved,      
effective upon the closing of the initial public offering of the Company's      
Common Stock described in this Prospectus, the Equity Incentive Plan. The       
aggregate number of shares of Common Stock that may be issued pursuant to       
this Plan is 330,000 shares. The Company may grant incentive stock options      
and other stock compensation arrangements to eligible employees and             
consultants. The exercise price of each incentive stock option may not be       
less than 100% (110% for greater than 10% stockholders) of the fair market      
value of Common Stock at the date of grant. Nonqualified stock options may be   
granted to any employee, officer, director or consultant of the Company. The    
terms of each nonqualified stock option is determined by the Board of           
Directors. The Company granted options for 330,000 shares to certain            
employees effective as of the closing of the Company's initial public           
offering at the initial public offering price. All options vest in three        
equal annual increments beginning on the first anniversary of the date of       
grant.                                                                          

(c) Independent Directors' Stock Option Plan                              

On March 11, 1996, the Board of Directors, and stockholders, approved,    
effective upon the closing of the initial public offering of the Company's      
Common Stock described in this Prospectus, the Independent Directors' Stock     
Option Plan. The Plan authorizes the issuance of an option to each Company      
director who is neither an employee of the Company nor a holder of, or          
affiliated with or related to a holder of, five percent or more of the          
Company's Common Stock, to purchase up to 10,000 shares of the Company's        
Common Stock on the date of election to the Board of Directors. A total of      
20,000 shares of Common Stock is reserved under the Plan, and the Company       
granted options to two directors for 10,000 shares each, effective as of the    
closing of the Company's initial public offering, at the initial public         
offering price.                                                                 

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors                                                       
Poly Kinetics, Inc.                                                             
Sylmar, California                                                              

We have audited the accompanying statement of income of Poly Kinetics,  
Inc. for the six months ended June 30, 1994. This statement of income is the    
responsibility of the Company's management. Our responsibility is to express    
an opinion on this statement of income based on our audit.                      

We conducted our audit in accordance with generally accepted auditing     
standards. Those standards require that we plan and perform the audit to        
obtain reasonable assurance about whether the statement of income is free of    
material misstatement. An audit includes examining, on a test basis, evidence   
supporting the amounts and disclosures in the statement of income. An audit     
also includes assessing the accounting principles used and significant          
estimates made by management, as well as evaluating the overall statement of    
income presentation. We believe that our audit of the statement of income       
provides a reasonable basis for our opinion.                                    

In our opinion, the statement of income referred to above presents fairly,
in all material respects, the financial position of Poly Kinetics, Inc. for     
the six months ended June 30, 1994, in conformity with generally accepted       
accounting principles.                                                          

Warburton, Simonyan & Co.                                                       
Valencia, California                                                            
March 3, 1996                                                                   

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POLY KINETICS, INC. 

STATEMENT OF INCOME   
For the Six Months Ended June 30, 1994  

                                  % Of
                                 Sales
                                 -------
Sales                                   $ 264,631     100.0                     
Cost of Sales (Notes 1 and 2)             208,352      78.7                     
            --------
Gross Profit                               56,279      21.3                     
Selling Expenses                          159,604      60.3                     
Operating Expenses                            129                               
            --------
Total Expenses                           159,733      60.4                    
            --------
Income (Loss) From Operations            (103,454)    (39.1)                    
Gain On Sale Of Assets (Note 3)           440,558     166.5                     
            --------
Income Before Income Taxes                337,104     127.4                     
Income Taxes (Note 4)                      52,938      20.0                     
            --------
Net Income                              $ 284,166     107.4                     
            ========

See accountants' audit report and notes to income statement.                    

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POLY KINETICS, INC. 
 NOTES TO INCOME STATEMENT
For the Six Months Ended June 30, 1994

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                            

Principles of Consolidation                                               

Poly Kinetics, Inc. is a wholly owned subsidiary of Poly-Flow Engineering,
Inc. The companies' financial statements were presented in the consolidated     
financial statements of Poly-Flow Engineering, Inc. and Subsidiaries.           

Inventory                                                                 

Inventories are valued at the lower of cost or market value as determined 
on a first-in first-out basis. The company maintains a perpetual inventory.     
The last physical inventory was taken on December 31, 1993.                     

Property and Equipment                                                    

Property and equipment is presented at cost and is being depreciated using
the straight-line and declining balance methods over the estimated useful       
lives (3 to 10 years) of the assets.                                            

NOTE 2--INVENTORIES                                                             

Inventories as of June 30, 1994 were $192,360                             

NOTE 3--SALE OF INVENTORY AND FIXED ASSETS                                      

On June 30, 1994, the company entered into a sale of inventory and fixed  
assets to Asahi/America, Inc. This statement of income reflects the effects     
of the disposition of these items.                                              

NOTE 4--INCOME TAXES AND DEFERRED INCOME TAXES                                  

The Financial Accounting Standards Board issued Statement of Financial    
Accounting Standards No. 109, Accounting for Income Taxes. FASB 109 mandates    
the liability method for computing deferred income taxes. Under the liability   
method, total tax expense is the amount of income taxes expected to be          
payable for the current year plus or minus the change from the beginning of     
the year in a deferred tax liability or asset established for the expected      
future tax consequences resulting from differences in the financial reporting   
and tax basis of assets and liabilities. One of the principle differences       
from the deferred method used in these financial statements is that changes     
in tax rules and laws will be reflected in income from continuing operations    
in the period such changes were reflected over time, if at all.                 

The company adopted FASB 109; however, since the consolidated returns have
large net operating loss carry forwards, FASB 109 did not result in             
additional deferred income tax.                                                 

The provision for income taxes consists of the following:                 

Current--Federal                   $   --                                     
--State                     $52,938                             

Poly Kinetics, Inc., has a taxable net operating loss carryforward in the 
amount of $30,802. In prior years this subsidiary filed separate income tax     
returns. The total net operating loss carryforward is from the separately       
filed returns. Therefore, separate return limitation year rules apply and the   
carryforward may be used to reduce only the taxable income of Poly Kinetics,    
Inc., and will expire in the years 1997 through 2004.                           

See accountants' audit report.  

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Photo of: AutoCAD operator                                                      

Custom Design and Service for the Fluid Flow Industry                           

Photo of: Worker fabrication of DuoPro system                                   

Photo of: Plant site of DuoPro system                                           

Photo of: Workers in training facility                                          

Asahi/America is one of the largest independent manufacturers and distributors  
of thermoplastic valves, pipe, actuators and controls in the United States. The 
Company's products are but one of its strengths. Just as important are the      
Company's extensive distribution network; the support and education provided to 
customers during the sales and implementation cycles; and an enlightened        
customer service attitude.                                                      

Prospects are generated by an active marketing communications program and       
through the Company's more than 400 distributors. When appropriate,             
Asahi/America regional and district managers and headquarters applications      
engineers advise on product and system specification and design, including      
AutoCAD assistance. Customer service continues through installation and includes
product and system guarantees.                                                  

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No dealer, salesman or other person has been authorized to give any       
information or to make any representations other than those contained in this   
Prospectus, and, if given or made, such information or representations must     
not be relied upon as having been authorized by the Company or the              
Underwriter. This Prospectus does not constitute an offer to sell or a          
solicitation of an offer to buy any security other than the shares of Common    
Stock offered by this Prospectus, or an offer to sell or a solicitation of an   
offer to buy any security by any person in any jurisdiction in which such       
offer or solicitation would be unlawful. Neither the delivery of this           
Prospectus nor any sale made hereunder shall, under any circumstances, imply    
that the information in this Prospectus is correct as of any time subsequent    
to the date of this Prospectus.                                                 

TABLE OF CONTENTS 

                  Page
                   -------
Prospectus Summary                                3                             
Risk Factors                                      5                             
Use of Proceeds                                   9                             
Dilution                                         10                             
Capitalization                                   11                             
Selected Consolidated Financial                                                 
Information                                    12                           
Management's Discussion and Analysis of                                         
Financial Condition and Results of                                          
Operations                                     14                           
Business                                         20                             
Management                                       30                             
Principal and Selling Stockholders               34                             
Certain Transactions                             35                             
Description of Capital Stock                     36                             
Shares Eligible for Future Sale                  38                             
Underwriting                                     39                             
Legal Matters                                    40                             
Experts                                          40                             
Additional Information                           40                             
Index to Consolidated Financial Statements      F-1                             

Until June 9, 1996, all dealers effecting transactions in the registered  
Securities, whether or not participating in this distribution, may be required  
to deliver a Prospectus. This is in addition to the obligation of dealers to    
deliver a Prospectus when acting as underwriters and with respect to their      
unsold allotments or subscriptions.                                             

1,160,000 Shares

[logo]
ASAHI/AMERICA((R))

 ASAHI/AMERICA, INC.

Common Stock

PROSPECTUS

 Daiwa Securities America Inc.

 Fechtor, Detwiler & Co., Inc.

May 15, 1996

Dates Referenced Herein   and   Documents Incorporated by Reference

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