================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                    FORM 10-Q

[Mark one]

[X]   Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act
      of 1934

             For quarter ended        March 31, 2002
                               ------------------------------

                                       OR

[ ]   Transition Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934

            For the transition period from __________ to ___________

                          Commission file number 1-9334
                                                 ------

                        BALDWIN TECHNOLOGY COMPANY, INC.
             -----------------------------------------------------
             (Exact name of registrant as specified in its charter)

             Delaware                                   12-3258160
-----------------------------------         ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

         Twelve Commerce Drive, Shelton, Connecticut             06484
         -------------------------------------------           ----------
          (Address of principal executive offices)             (Zip Code)

        Registrant's telephone number, including area code: 203-402-1000
                                                            ------------

              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days:

          YES   X                                   NO
               ---                                     ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.

                   Class                       Outstanding at April 30, 2002
          --------------------                 -----------------------------
          Class A Common Stock
             $0.01 par value                           12,828,647

          Class B Common Stock
             $0.01 par value                            2,185,883

================================================================================


                        BALDWIN TECHNOLOGY COMPANY, INC.

                                      INDEX


                                                                                 Page
                                                                                 -----
                                                                              
Part I   Financial Information

         Item 1   Financial Statements

                  Consolidated Balance Sheets at March 31, 2002 (unaudited)
                  and June 30, 2001                                               1-2

                  Consolidated Statements of Income for the three
                  and nine months ended March 31, 2002 (unaudited)
                  and 2001 (unaudited)                                             3

                  Consolidated Statements of Changes in Shareholders'
                  Equity for the nine months ended March 31, 2002 (unaudited)
                  and 2001 (unaudited)                                             4

                  Consolidated Statements of Cash Flows for the nine
                  months ended March 31, 2002 (unaudited) and 2001
                  (unaudited)                                                     5-6

                  Notes to Consolidated Financial Statements (unaudited)          7-16

         Item 2   Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                      17-27

         Item 3   Quantitative and Qualitative Disclosures About
                  Market Risk                                                      27


Part II  Other Information

         Item 6   Exhibits and Reports on Form 8-K                                 28


Signatures                                                                         29










                        BALDWIN TECHNOLOGY COMPANY, INC.

                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

                                     ASSETS



                                                                     March 31,      June 30,
                                                                          2002          2001
                                                                   -----------      --------
                                                                   (Unaudited)
                                                                              
CURRENT ASSETS:
  Cash and cash equivalents                                         $  5,646        $  6,590
  Accounts receivable trade, net of allowance for doubtful
    accounts of $1,839 ($1,943 at June 30, 2001)                      28,107          30,587
  Notes receivable, trade                                             11,137          11,416
  Inventories, net                                                    25,613          33,051
  Deferred taxes                                                       5,484           5,196
  Prepaid expenses and other                                           8,356           7,486
                                                                    --------        --------
                  Total Current Assets                                84,343          94,326
                                                                    --------        --------
MARKETABLE SECURITIES:
  Cost $549 ($564 at June 30, 2001)                                      498             558
                                                                    --------        --------
PROPERTY, PLANT AND EQUIPMENT, at cost:
  Land and buildings                                                   2,567           2,532
  Machinery and equipment                                              4,188           3,449
  Furniture and fixtures                                               4,435           3,827
  Leasehold improvements                                                 413             218
  Capital leases                                                         337             651
                                                                    --------        --------
                                                                      11,940          10,677
  Less:  Accumulated depreciation and amortization                    (5,928)         (5,152)
                                                                    --------        --------
Net Property, Plant and Equipment                                      6,012           5,525
                                                                    --------        --------

PATENTS, TRADEMARKS AND ENGINEERING DRAWINGS at cost,
  less accumulated amortization of $3,271 ($3,010 at
  June 30, 2001)                                                       1,977           1,888

GOODWILL, less accumulated amortization of $5,118
   ($5,284 at June 30, 2001)                                          14,139          14,295

DEFERRED TAXES                                                         7,365          10,550

OTHER ASSETS                                                           6,154           6,748
                                                                    --------        --------

TOTAL ASSETS                                                        $120,488        $133,890
                                                                    ========        ========



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


                                       1

                        BALDWIN TECHNOLOGY COMPANY, INC.

                           CONSOLIDATED BALANCE SHEETS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                      LIABILITIES AND SHAREHOLDERS' EQUITY




                                                                       March 31,      June 30,
                                                                            2002          2001
                                                                     -----------      --------
                                                                     (Unaudited)
                                                                                
CURRENT LIABILITIES:
   Loans payable                                                      $  4,768        $  3,529
   Current portion of long-term debt                                    16,754          10,531
   Accounts payable, trade                                               9,398          12,761
   Notes payable, trade                                                  9,995           9,112
   Accrued salaries, commissions, bonus and
    profit-sharing                                                       3,033           5,096
   Customer deposits                                                     4,997           6,861
   Accrued and withheld taxes                                            1,255           1,625
   Income taxes payable                                                  2,427           5,345
   Other accounts payable and accrued liabilities                       14,650          17,057
                                                                      --------        --------
                  Total current liabilities                             67,277          71,917
                                                                      --------        --------

LONG TERM LIABILITIES:
   Long-term debt                                                          487           8,428
   Other long-term liabilities                                           7,293           8,085
                                                                      --------        --------
                  Total long-term liabilities                            7,780          16,513
                                                                      --------        --------
                  Total liabilities                                     75,057          88,430
                                                                      --------        --------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
   Class A Common Stock, $.01 par, 45,000,000 shares authorized,
     16,458,849 shares issued                                              165             165
   Class B Common Stock, $.01 par, 4,500,000 shares authorized,
     2,185,883 shares issued (2,000,000 at June 30, 2001)                   21              20
   Capital contributed in excess of par value                           56,986          57,496
   Retained Earnings                                                     7,538           7,457
   Accumulated other comprehensive loss                                 (6,405)         (6,334)
   Less: Treasury stock, at cost:
     Class A - 3,630,202 shares
       (3,583,702 at June 30, 2001)

     Class B - zero shares (189,117 at June 30, 2001)                  (12,199)        (13,344)
   Note receivable from key executive for common stock issuance           (675)              0
                                                                      --------        --------
                  Total shareholders' equity                            45,431          45,460
                                                                      --------        --------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                            $120,488        $133,890
                                                                      ========        ========


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


                                       2

                        BALDWIN TECHNOLOGY COMPANY, INC.

                        CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)



                                                 For the three months       For the nine months
                                                   ended March 31,            ended March 31,
                                                 --------------------      ----------------------
                                                   2002         2001         2002          2001
                                                 -------      -------      --------      --------
                                                                             
Net Sales                                        $38,921      $47,575      $113,635      $138,293
Cost of goods sold                                26,620       33,510        78,730        96,385
                                                 -------      -------      --------      --------

Gross Profit                                      12,301       14,065        34,905        41,908
                                                 -------      -------      --------      --------

Operating Expenses:
  General and administrative                       4,550        6,048        13,811        16,193
  Selling                                          3,016        3,733        10,212        12,037
  Engineering                                      2,131        2,909         6,835         8,660
  Research and Development                         1,612        1,367         4,707         4,064
  Provision for loss on the disposition of
    pre-press operations                               0         (472)          (86)         (472)
  Restructuring charges                              289           95           795            95
                                                 -------      -------      --------      --------
                                                  11,598       13,680        36,274        40,577
                                                 -------      -------      --------      --------
 Operating income (loss)                             703          385        (1,369)        1,331
                                                 -------      -------      --------      --------

Other (income) expense:
  Interest expense                                   419          627         1,279         1,663
  Interest income                                    (67)         (74)         (216)         (231)
  Royalty income, net                             (1,106)        (680)       (3,122)       (3,011)
  Other (income) expense, net                        (94)         (59)          292          (778)
                                                 --------     -------      --------      --------
                                                    (848)        (186)       (1,767)       (2,357)
                                                 --------     -------      --------      --------

Income before income taxes                         1,551          571           398         3,688

Provision for income taxes                           513          239           317         1,549
                                                 -------      -------      --------      --------

Net income                                       $ 1,038      $   332      $     81      $  2,139
                                                 =======      =======      ========      ========

Net income per share - basic and diluted         $  0.07      $  0.02      $   0.01      $   0.14
                                                 =======      =======      ========      ========

Weighted average shares outstanding:
Basic and diluted                                 15,016       14,709        14,882        14,818
                                                 =======      =======      ========      ========





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


                                       3

                        BALDWIN TECHNOLOGY COMPANY, INC.

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                    (IN THOUSANDS, EXCEPT SHARES) (UNAUDITED)



                              Class A            Class B         Capital               Accumulated
                            Common Stock      Common Stock     Contributed                Other          Treasury Stock
                        ------------------  -----------------   in Excess   Retained  Comprehensive  ----------------------
                          Shares    Amount   Shares    Amount     of Par    Earnings      Loss         Shares      Amount
                        ----------  ------  ---------  ------  -----------  --------  -------------  -----------  ---------
                                                                                       
Balance at
 June 30, 2001          16,458,849   $165   2,000,000   $20      $57,496     $7,457     $(6,334)     (3,772,819)  $(13,344)

Net income for the
  nine months ended
  March 31, 2002                                                                 81

Translation adjustment                                                                     (183)

Unrealized loss on
  available-for-sale
  securities,
  net of tax                                                                                (30)

Unrealized gain on
  forward contracts                                                                         142

Comprehensive
  Income

Issuance of Class B
  Common Stock to key
  executive                                   185,883     1       (510)                                 189,117      1,184

Purchase of
 treasury stock                                                                                         (46,500)       (39)
                        ----------   ----   ---------   ---    -------       ------     -------      ----------   --------
Balance at
 March 31, 2002         16,458,849   $165   2,185,883   $21    $56,986       $7,538     $(6,405)     (3,630,202)  $(12,199)
                        ==========   ====   =========   ===    =======       ======     =======      ==========   ========





                            Note
                         Receivable
                          from Key
                        Executive for
                        Common Stock    Comprehensive
                          Issuance         Income
                        -------------   -------------
                                     
Balance at
 June 30, 2001             $   0

Net income for the
  nine months ended
  March 31, 2002                           $  81

Translation adjustment                      (183)

Unrealized loss on
  available-for-sale
  securities,
  net of tax                                 (30)

Unrealized gain on
  forward contracts                          142
                                           -----
Comprehensive
  Income                                   $  10
                                           =====

Issuance of Class B
  Common Stock to key
  executive                 (675)

Purchase of
 treasury stock
                           -----
Balance at
 March 31, 2002            $(675)
                           =====


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


                                       4

                        BALDWIN TECHNOLOGY COMPANY, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)



                                                                             For the nine months
                                                                               ended March 31,
                                                                           -----------------------
                                                                             2002           2001
                                                                           -------        --------
                                                                                    
Cash flows from operating activities:
 Net income                                                                $    81        $  2,139
 Adjustments to reconcile net income to net cash
  provided (used) by operating activities:
   Depreciation and amortization                                             1,471           2,542
   Accrued retirement pay                                                      545             (28)
   Provision for losses on accounts receivable                                 955               0
   Loss from disposition of businesses                                           8             650
   Restructuring charges                                                       795              95
   Deferred income taxes                                                     1,940               0
   Write-off of deferred debt financing costs                                  255               0
   Changes in assets and liabilities, net of
    businesses sold:
      Accounts and notes receivable                                         (3,357)         (7,706)
      Inventories                                                              150          (1,981)
      Prepaid expenses and other                                            (2,442)         (1,169)
      Other assets                                                             153             330
      Customer deposits                                                        417           2,008
      Accrued compensation                                                  (1,670)            189
      Payments against restructuring charges                                (2,695)           (901)
      Accounts and notes payable, trade                                       (718)          1,210
      Income taxes payable                                                  (3,011)            (83)
      Accrued and withheld taxes                                               (58)           (450)
      Other accounts payable and accrued liabilities                         1,323             930
      Interest payable                                                        (231)           (269)
                                                                           -------        --------
         Net cash used by operating activities                              (6,089)         (2,494)
                                                                           -------        --------

Cash flows from investing activities:
   Proceeds from disposition of businesses, net                              6,828           3,985
   Additions of property, net                                               (1,397)         (1,945)
   Additions of patents, trademarks and drawings, net                         (346)           (278)
                                                                           -------        --------
         Net cash provided by investing activities                           5,085           1,762
                                                                           -------        --------

Cash flows from financing activities:
   Long-term and short-term debt borrowings                                  9,466          41,329
   Long-term and short-term debt repayments                                 (9,694)        (40,078)
   Principal payments under capital lease obligations                          (17)             (3)
   Payment of debt financing costs                                            (222)              0
   Other long-term liabilities                                                 493             629
   Purchases of treasury stock                                                 (39)           (129)
                                                                           -------        --------
         Net cash (used) provided by financing activities                      (13)          1,748
                                                                           -------        --------

Effects of exchange rate changes                                                73            (776)
                                                                           -------        --------
Net (decrease) increase in cash and cash equivalents                          (944)            240
Cash and cash equivalents at beginning of period                             6,590           7,914
                                                                           -------        --------
Cash and cash equivalents at end of period                                 $ 5,646        $  8,154
                                                                           =======        ========



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


                                       5

                        BALDWIN TECHNOLOGY COMPANY, INC.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:




                                                           For the nine months
                                                             Ended March 31,
                                                          ---------------------
                                                           2002           2001
                                                          ------         ------
                                                                   
Cash paid during the period for:
   Interest                                               $1,510         $1,394
   Income Taxes                                           $3,064         $1,249


         The Company did not enter into any capital lease agreements for either
of the nine months ended March 31, 2002 or 2001.


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


                                       6

                        BALDWIN TECHNOLOGY COMPANY, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION:

         Baldwin Technology Company, Inc. ("Baldwin", or the "Company") is
engaged primarily in the development, manufacture and sale of controls and
accessories equipment for the printing industry.

         The accompanying unaudited consolidated financial statements include
the accounts of Baldwin and its subsidiaries and have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim financial information and in compliance with the
instructions to Form 10-Q. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally accepted
in the United States of America for complete financial statements. These
financial statements reflect all adjustments which are, in the opinion of
management, necessary to present a fair statement of the results for the interim
periods. These financial statements should be read in conjunction with the
consolidated financial statements and related notes included in the Company's
latest Annual Report on Form 10-K for the year ended June 30, 2001. Operating
results for the three and nine months ended March 31, 2002 are not necessarily
indicative of the results that may be expected for the year ending June 30,
2002. All significant intercompany transactions have been eliminated in
consolidation. Certain prior period amounts have been reclassified to conform to
the current period's presentation.

         As more fully described in Note 3, the Company did not satisfy the
minimum operating income covenant required by its credit agreement for the
quarter ended March 31, 2002; accordingly, amounts outstanding under the credit
agreement have become payable on demand. Management believes that alternative
sources of financing are available to refinance the existing facilities on a
long-term basis, which the Company is currently pursuing. However, if
alternative financing sources are not available, management will be required to
take additional actions to reduce operating expenses or sell assets to meet
liquidity needs.

NOTE 2 - ACCOUNTING CHANGES:

         Effective July 1, 2001, the Company adopted the provisions of Financial
Accounting Standards Board ("FASB") Statement of Financial Accounting Standards
No. 141, "Business Combinations" ("FAS 141"). FAS 141 requires that the purchase
method of accounting be used for all business combinations initiated after June
30, 2001. The adoption of FAS 141 did not have an impact on the consolidated
results of operations, the consolidated financial position or the liquidity of
the Company.

         Effective July 1, 2001, the Company adopted the provisions of FASB
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("FAS 142"). As a result, the Company no longer amortizes
goodwill, and has not recorded any goodwill amortization for either of the three
or nine months ended March 31, 2002. Changes in the recorded balances of
goodwill and the associated accumulated amortization from June 30, 2001 to March
31, 2002 are the result of the effects of foreign currency fluctuations. Net
income and net income per share (basic and diluted) would have been
approximately $237,000 and $734,000 or $0.02 and $0.05 higher, respectively, had
the provisions of FAS 142 been applied to the results of operations for the
three and nine months ended March 31, 2001. FAS 142, requires goodwill and
intangible assets with indefinite useful lives to no longer be amortized, but
instead to be tested for impairment at the reporting unit level at least
annually and whenever events or circumstances occur indicating that goodwill
might be impaired. FAS 142,


                                       7

provides a six-month transitional period from the effective date of adoption to
perform an assessment of whether there is an indication that goodwill is
impaired. To the extent that an indication of impairment exists, a second test
must be performed to measure the amount of the impairment. The Company
determined the fair value of each of its reporting units using a discounted cash
flow analysis and compared such values to the respective reporting units'
carrying amounts. The initial impairment analysis performed within the six month
transitional period from the effective date of adoption indicated that goodwill
was not impaired and therefore, no charge to earnings was recorded. Goodwill
will be required to be reviewed for impairment at least on an annual basis,
which the Company will perform at the beginning of each fiscal year.

NOTE 3 - REVOLVING CREDIT FACILITY:

         On October 31, 2000, the Company entered into a $35,000,000 Revolving
Credit Facility (the "Credit Facility") with Fleet National Bank and First Union
National Bank (collectively the "Banks"), which had an original scheduled
maturity date of October 31, 2003. The Credit Facility consisted of a
$25,000,000 Revolving credit line (the "Revolver") and a $10,000,000 credit line
to be utilized for acquisitions, (the "Acquisition Line"). On January 28, 2002,
the Credit Facility was amended (the "Amended Credit Facility"), which included
the removal of the Acquisition Line, a reduction in the Revolver to $21,000,000
(subject to a borrowing base described below), and a change in the maturity date
to October 1, 2002. In addition, $4,000,000 of the existing Revolver was
converted into a term loan (the "Term Loan"), which matures on June 28, 2002,
resulting in available borrowings under the Revolver from July 1, 2002 to
October 1, 2002 of $17,000,000. At March 31, 2002, the Company had outstanding
borrowings of $16,650,000 under the Revolver and Term Loan, plus outstanding
letters of credit of $2,867,000. Accordingly, all amounts outstanding under the
Revolver, and the Term Loan have been classified as current. The Revolver has
associated commitment fees, which are calculated quarterly, at a rate of
one-half of one percent per annum of the unused portion of the Revolver.

         The Amended Credit Facility provides for a new borrowing structure
which enables the Company to borrow certain specified percentages of eligible
domestic accounts receivable, domestic inventory, the appraised value of the
Company's Emporia, Kansas facility, the net book value of domestic machinery and
equipment and certain royalty streams, as defined (collectively the "Borrowing
Base") up to a maximum of $21,000,000. The Amended Credit Facility also provides
that $5,000,000 (less outstanding letters of Credit) may be borrowed in addition
to the amounts available under the Borrowing Base. Interest on the Revolver is
charged at LIBOR plus 3.25% per annum or at an alternative base rate, as
defined, plus 1% per annum. Interest on the Term Loan is charged at LIBOR plus
4.75% per annum.

         The Amended Credit Facility is collateralized by a pledge of the
capital stock and certain domestic assets of the Company's subsidiaries,
includes certain restrictions which limit the incurrence of debt and prohibit
dividend payments among other things, and requires the Company to maintain
certain financial covenants. These covenants include a minimum tangible net
worth covenant, beginning with the quarter ended December 31, 2001, and also
require minimum operating income covenants of $250,000 for the quarter ended
December 31, 2001, $1,250,000 for the quarter ended March 31, 2002 and
$1,750,000 for the quarter ending June 30, 2002.

         The Company did not satisfy the above minimum operating income covenant
for the quarter ended March 31, 2002; accordingly, amounts outstanding under the
Amended Credit Facility have become payable on demand. Management believes that
alternative sources of financing are available to refinance the existing
facilities on a long-term basis, which the Company is currently pursuing.
However, if alternative financing sources are not available,


                                       8

management will be required to take additional actions to reduce operating
expenses or sell assets to meet liquidity needs.

         As a result of the reduction in available borrowings under the Amended
Credit Facility, and the revised maturity date, the Company was required to
write-down a portion of the related unamortized deferred financing costs
initially recorded in connection with obtaining the Credit Facility.
Accordingly, the Company took a charge against earnings of $255,000 during the
quarter ended December 31, 2001, which is included in "Other income and
expense." The Company incurred additional costs of approximately $222,000
associated with entering into the Amended Credit Facility. The Company will
amortize the remaining deferred financing costs through October 1, 2002, the
maturity date of the Amended Credit Facility.

         The Company maintains relationships with both foreign and domestic
banks, which combined have extended credit facilities to the Company totaling
$24,979,000, including amounts available under the Revolver. As of March 31,
2002, the Company had $21,418,000 outstanding under these lines of credit
including $16,650,000 under the Revolver and Term Loan. Total debt levels as
reported on the balance sheet at March 31, 2002 are $40,000 higher than they
would have been if June 30, 2001 exchange rates had been used.

NOTE 4 - EARNINGS PER SHARE:

         Basic earnings per share includes no dilution and is computed by
dividing net income (loss) available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted earnings per
share reflects the potential dilution of securities that could share in the
earnings of an entity. The weighted average shares outstanding used to compute
diluted income (loss) per share include zero additional shares for each of the
three and nine months ended March 31, 2002 and 2001, which represent potentially
dilutive securities. Outstanding options to purchase 1,516,000 and 1,655,000
shares of the Company's common stock for the three and nine months ended March
31, 2002 and 2001, respectively, are not included in the above calculation to
compute diluted income per share as they have an anti-dilutive effect.

NOTE 5 - OTHER COMPREHENSIVE INCOME/(LOSS):

         Accumulated Other Comprehensive Income/(Loss) ("OCI") is comprised of
various items, which affect equity that result from recognized transactions and
other economic events other than transactions with owners in their capacity as
owners. OCI is included in stockholders' equity in the consolidated balance
sheets and consists of cumulative translation adjustments, unrealized gains and
losses on available-for-sale securities and unrealized gains and losses on
derivative instruments.

         OCI consists of the following:




                                                March 31, 2002    June 30, 2001
                                                --------------    -------------
                                                   (Unaudited)
                                                             
Cumulative translation adjustments                $(6,215,000)     $(6,032,000)
Unrealized loss on investments,
   net of deferred taxes of $21,000
   ($3,000 at June 30, 2001)                          (33,000)          (3,000)
Unrealized loss on derivatives,
   net of deferred taxes of $23,000
   ($0 at June 30, 2001)                             (157,000)        (299,000)
                                                  -----------      -----------
                                                  $(6,405,000)     $(6,334,000)
                                                  ===========      ===========




                                       9

NOTE 6 - INVENTORIES:

         Inventories consist of the following:




                                         March 31, 2002          June 30, 2001
                                         --------------          -------------
                                            (Unaudited)
                                                            
Raw materials                               $17,107,000           $18,801,000
In process                                    4,726,000             7,197,000
Finished Goods                                3,780,000             7,053,000
                                            -----------           -----------
                                            $25,613,000           $33,051,000
                                            ===========           ===========


         Translation effects of foreign currency increased inventories by
$23,000 from June 30, 2001 to March 31, 2002.

NOTE 7 - DERIVATIVES:

         The Company adopted the provisions of FASB Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("FAS 133") effective July 1, 2000. During the three and nine months
ended March 31, 2002, the Company had currency futures contracts and an interest
rate swap agreement that qualified as cash flow hedges; accordingly, the gain or
loss was recorded in OCI and will be recognized when the hedged items affect
earnings. On April 27, 2001, the Company entered into an interest rate swap
agreement (the "Swap") with Fleet National Bank to fix the LIBOR portion of its
interest rate at 4.98% for a principal amount of $15,000,000 with the maturity
the same as the Credit Facility. The effect of this Swap added $113,000 and
$263,000, respectively to interest expense for the three and nine months ended
March 31, 2002 and a $186,000 pre-tax ($97,000 after-tax) loss to OCI at March
31, 2002.

         The fair value of the Swap at March 31, 2002 was a loss of $319,000. Of
this amount, $186,000 has been recorded in OCI and the remaining $133,000 has
been charged against earnings. The company recognized a charge of $170,000 in
the quarter ended December 31, 2001 and a credit of $37,000 in the quarter ended
March 31, 2002, which was recorded in "Other income and expense" in the
accompanying consolidated statements of income. As a result of entering into the
Amended Credit Facility and changing various provisions of the original
agreement including the maturity date, the Swap no longer qualified as a hedge
pursuant to FAS 133. The remaining loss of approximately $186,000 recorded in
OCI as of March 31, 2002, will be amortized to earnings through October 1, 2002,
the maturity date of the Amended Credit Facility. Future changes in the fair
value of the Swap, will be recorded in earnings.

         Hedge ineffectiveness, determined in accordance with FAS 133, had no
material impact on earnings for the three and nine months ended March 31, 2002
and 2001. At July 1, 2000, the Company had a derivative that did not qualify as
a hedge pursuant to FAS 133. A $345,000 pre-tax gain related to this derivative
instrument, was recorded in other income in the first quarter of the fiscal year
ended June 30, 2001.


                                       10

         Unrealized net gains (losses) included in OCI are as follows:




                                             March 31, 2002      March 31, 2001
                                             --------------      --------------
                                                             
Balance at beginning of period                 $(299,000)          $       0
Additional gains (losses), net                  (201,000)           (266,000)
Amounts reclassified to earnings, net            343,000              15,000
                                               ---------           ---------
Balance at end of period                       $(157,000)          $(251,000)
                                               =========           =========


         The unrealized net loss of $157,000 at March 31, 2002 is primarily
comprised of a loss on an interest rate swap of $162,000 and a gain on futures
contracts of $5,000. The net unrealized loss associated with the currency
futures contracts, which expire at various times through July 31, 2002, is
expected to be reclassified to earnings during the next twelve months. Other
income and expense, net for the nine months ended March 31, 2002, includes a
$206,000 loss on certain derivative financial instruments, which became
speculative and no longer qualified as hedges pursuant to FAS 133 as a result of
the divestiture of the Roll Handling Group ("RHG").

NOTE 8 - ADJUSTMENT OF PROVISION FOR THE DISPOSITION OF PRE-PRESS OPERATIONS:

         In June 1997, the Company sold all of the outstanding shares of its
former Pre-Press Operations ("PPO") to Kaber Imaging, Inc. ("Kaber" or "Buyer").
The Company recorded a loss on this disposition in the amount of $42,407,000 in
the fiscal year ended June 30, 1997. When the Company acquired the PPO, in July
1991, the Company assumed two existing guarantees that were being provided by
the previous owner. These guarantees consisted of: 1.) a guarantee to Forsakring
Pensiongaranti ("FPG"), a Swedish pension obligation surety bond firm, in the
form of a guarantee bond covering the quasi Swedish government retirement plan,
and 2.) a guarantee directly to a group of individual employees who were members
of a separate plan. The assumption by Kaber of the pension obligations was
unconditional.

         The Company's purchase of the PPO in July 1991 included a liability for
an unfunded pension obligation of approximately $4,309,000. This obligation was
adjusted annually in accordance with Statement of Financial Accounting Standards
No. 87, "Employer's Accounting for Pensions", until the PPO was sold in June
1997.

         The purchase and sale agreement for the sale of the PPO to Kaber in
June 1997 included provisions for the Buyer to assume all pension liabilities
related to the PPO, to use its best efforts to gain the release of the Company
from the guarantees and to reimburse the Company for any and all costs incurred
by the Company associated with the guarantees. The provisions and liabilities
for both the plan covered by the FPG surety bond and a group plan for the
individual retirees were assumed by the Buyer and resulted in no curtailment of
either plan. At the time that the PPO was sold to Kaber, management conducted
due diligence of Kaber and its financial backers and believed that Kaber had the
financial ability to satisfy these guarantees.

         Subsequent to the sale of the PPO, Kaber and related domestic
subsidiaries filed for protection in the United States under Chapter 11 of the
bankruptcy code in February 1999, which caused similar filings by Kaber's
foreign subsidiaries. During the period July 1997 through February 1999, Kaber
failed to gain the release of the Company from the guarantees, which remained in
place. In March 1999, the Company was contacted by FPG, the surety bond holder,
to fulfill the Company's guarantee of the pension obligation. Neither Kaber, nor
its Swedish subsidiaries, which were in liquidation, possessed the financial
capability to fulfill its obligation. Based on the demands from FPG, and
representatives of the members of the separate plan and Kaber's bankruptcy, the
Company recognized a liability for the estimated amount of these obligations in
its financial results by establishing a reserve in the amount of


                                       11

$2,400,000 in the third quarter of the fiscal year ended June 30, 1999. The
Company made payments to FPG of $1,567,000 and reduced the reserve by $472,000
to the estimated liability at June 30, 2001 of $361,000. During the quarter
ended December 31, 2001, the Company further reduced the reserve by $86,000 to
$275,000. The Company paid the remaining balance of $275,000 during March 2002
in full settlement of this obligation.

NOTE 9 - RESTRUCTURING CHARGE AND RELATED RESERVE:

         During March 2000, the Company entered into a restructuring plan that
included the consolidation of production into certain facilities, and a
reduction in total employment. Accordingly, the Company recorded a restructuring
charge in the amount of $5,664,000 in the third quarter of the fiscal year ended
June 30, 2000. In June 2001, the Company expanded its restructuring efforts
under this restructuring plan and closed additional facilities. As a result of
expanding this restructuring plan, the Company recorded an additional
restructuring charge of $2,277,000 in the fourth quarter of the fiscal year
ended June 30, 2001. The restructuring charges in the current year period are
primarily additional exit costs associated with this restructuring plan, which
are expensed as incurred. These changes are expected to reduce the Company's
worldwide cost base and strengthen its competitive position as a leading global
supplier of auxiliary equipment to the printing and publishing industries. Prior
to the restructuring plan, the Company was managed in a decentralized manner
through geographically dispersed autonomous business units. Given that many of
the Company's significant customers have been reorganizing on a global basis,
management decided to restructure the Company along functional lines on a global
basis. Rather than have administration, sales, product development and
production activities at each decentralized business unit, the restructuring
plan included the centralization of these activities. Products that were
previously being produced at multiple facilities are being consolidated with
similar product lines at existing facilities. The following table details the
components of the restructuring charges and the remaining reserve balances as of
June 30, 2001 and March 31, 2002.



                                Remaining        Additional      Charges       Remaining
                                 Reserve       Restructuring     Against        Reserve
                              June 30, 2001       Charges        Reserve    March 31, 2002
                              -------------    -------------    ---------   --------------
                                                     (in thousands)
                                                                     
Severance                       $3,489              $  0         $(1,618)        $1,871
Facility lease
  termination costs              2,178                 0            (282)         1,896
Other costs                          0               795            (795)             0
                                ------              ----         -------         ------
Total Plan                      $5,667              $795         $(2,695)        $3,767
                                ======              ====         =======         ======


         Severance costs will be paid through August 31, 2002. Facility lease
termination costs will be paid through April 30, 2006. As of March 31, 2002,
$2,205,000 of the remaining reserve is included in "Other accounts payable and
accrued liabilities" and the remaining $1,562,000 is included in "Other
long-term liabilities".


                                       12


NOTE 10 - SALE OF BUSINESSES:

         During the fourth quarter of fiscal 2001, the Company committed to a
plan to dispose of the RHG. On September 26, 2001, the Company sold
substantially all of the assets of the RHG. The consideration received for the
transaction, subject to certain post-closing adjustments, amounted to
approximately $6,800,000. The Company received $1,808,000 at closing and
$4,992,000 in October 2001. During the fourth quarter of fiscal 2001, the
Company recorded an impairment charge of approximately $14,831,000 relating
primarily to the write-off of goodwill and certain assets of the RHG, including
$961,000 of cumulative translation adjustments related to the foreign operations
of the RHG, which were reclassified and reflected as part of the impairment
charge. The RHG was included in the Material Handling Group segment.

         Net assets held for disposal related to the RHG were included in the
following categories as of June 30, 2001:


                                                                 
Cash.............................................................   $    74,000
Accounts receivable, net of allowance of $12,000.................     7,124,000
Inventory, net...................................................     5,992,000
Prepaid expenses and other current assets........................       690,000
Accounts payable.................................................    (2,832,000)
Accrued salaries, commissions, bonus and profit-sharing..........      (812,000)
Customer deposits................................................    (1,691,000)
Accrued and withheld taxes.......................................      (386,000)
Income taxes payable.............................................       (64,000)
Other accounts payable and accrued liabilities...................    (1,361,000)
                                                                    -----------
Net assets held for disposal as of June 30, 2001.................   $ 6,734,000
                                                                    ===========


         Not included in the above net assets were $11,192,000 of goodwill,
$989,000 of patents and $1,549,000 of property, plant and equipment, which were
written-off as of June 30, 2001. These assets were considered impaired, as the
carrying value of these assets would not be recovered as a result of the sale of
the RHG.

         Also during the fourth quarter of fiscal 2001, the Company decided to
exit the Print On-Demand ("POD") business, which resulted in a write-off of
$687,000 of goodwill, which was included as part of the impairment charge. The
Company completed the sale of this business in November 2001, and recorded an
additional loss on the sale of $8,000 during the quarter ended December 31,
2001.

         On September 27, 2000, the Company sold substantially all of the assets
of its Baldwin Stobb Division ("BSD") to Systems Technology, Inc., a new company
formed by the former management of BSD. The consideration received for the
transaction, subject to certain post-closing adjustments, was the sum of (i)
$6,750,000; minus (ii) all payments received (net of disbursements paid) on
behalf of BSD for the period July 1, 2000 through September 27, 2000 amounting
to $2,155,000; plus (iii) $175,000 in consideration for income tax obligations
to be received at a later date. The total consideration received by the Company
included 307,000 shares of the Company's Class A Common Stock valued at the
average fair market price of the Company's Class A Common Stock for the ten days
immediately prior to closing ($1.9875 per share). The Company recorded a pre-tax
loss of $650,000 during the three months ended September 30, 2000, which was
later adjusted to $831,000 as the associated disposition costs were greater than
initially estimated.

         Net sales and operating income (loss) of BSD, the RHG, and the POD
businesses combined, were as follows for the three and nine months ended March
31:


                                       13




                                         Three months ended              Nine months ended
                                              March 31,                       March 31,
                                      ------------------------       ---------------------------
                                        2002           2001             2002            2001
                                      --------      ----------       ----------      -----------
                                                                         

Net Sales                             $      0      $8,037,000       $4,791,000      $30,092,000
Operating (loss) income               $(24,000)     $ (137,000)      $ (778,000)     $ 1,797,000


         In January 2002, the Company received a proposed Final Statement from
the purchaser of the RHG setting forth certain potential purchase price
adjustments. The Company has reviewed the proposed Final Statement and the
potential adjustments to the purchase price, and has responded to the purchaser
as required under the contract. The Company is currently negotiating certain
disputed items with the purchaser and expects to resolve these disputes by the
end of June 2002. The Company does not expect that the resolutions to these
disputed items will have a material adverse effect on the Company's consolidated
financial statements.

NOTE 11 - BUSINESS SEGMENT INFORMATION:

         On September 27, 2000, the Company sold substantially all of the assets
of BSD and on September 26, 2001 the Company sold substantially all of the
assets of the RHG. Together BSD and the RHG accounted for approximately 91% of
net sales and 113% of operating loss of the Material Handling Group ("MHG") for
the fiscal year ended June 30, 2001. Additionally, certain production facilities
which were previously used to manufacture material handling equipment, primarily
inserters, have been consolidated, and are now producing both inserters and
other accessories and controls equipment. Therefore, the production of
inserters, which had previously been reported in the MHG, is now reported in the
Accessories and Controls segment. The Company also completed the sale of the POD
business in November 2001. As a result of the divestitures of these businesses
and the consolidation of certain production facilities, the Company has
realigned its segment structure into one segment, the Accessories and Controls
segment.

         The accounting policies of the segments are the same as those described
in the summary of significant accounting policies in the Company's Annual Report
on Form 10-K for the fiscal year ended June 30, 2001. A segment's financial
performance is primarily evaluated based on the operating profit of the segment.

         The Accessories and Controls segment is presented below for the three
and nine months ended March 31, 2002, and 2001 (in thousands): All prior periods
have been restated to conform to the current period's presentation.





                                       Three months ended           Nine months ended
                                            March 31                     March 31
                                     ----------------------      -----------------------
                                          (Unaudited)                  (Unaudited)
                                     ----------------------      -----------------------
                                       2002           2001         2002           2001
                                     -------        -------      --------       --------
                                                                    

Net Sales:
  Accessories and Controls           $38,921        $39,538      $108,844       $108,201
  Divested operations                      0          8,037         4,791         30,092
                                     -------        -------      --------       --------
       Total Net Sales               $38,921        $47,575      $113,635       $138,293
                                     =======        =======      ========       ========


         The effects of foreign currency translation reduced net sales by
$2,720,000 ($0 related to the divested operations) and $7,567,000 ($260,000
related to the divested operations) for the three and nine months ended March
31, 2002, respectively.


                                       14





                                                 Three months ended           Nine months ended
                                                       March 31,                  March 31,
                                                ---------------------       ---------------------
                                                     (Unaudited)                 (Unaudited)
                                                ---------------------       ---------------------
                                                  2002          2001          2002          2001
                                                -------       -------       -------       -------
                                                                              

Operating (loss) income:
  Accessories and Controls                      $ 2,504       $ 2,494       $ 5,501       $ 5,055
  Corporate                                      (1,777)       (1,972)       (6,092)       (5,521)
  Divested operations                               (24)         (137)         (778)        1,797
                                                -------       -------       -------       -------
       Total operating (loss) income                703           385        (1,369)        1,331
Interest expense, net                              (352)         (553)       (1,063)       (1,432)
Royalty income, net                               1,106           680         3,122         3,011
Other income (expense), net                          94            59          (292)          778
                                                -------       -------       -------       -------
       Income before income taxes               $ 1,551       $   571       $   398       $ 3,688
                                                =======       =======       =======       =======






                                              March 31,       June 30,
                                                2002            2001
                                              ---------       --------
                                                    (Unaudited)
                                                        


Identifiable assets:
  Accessories and Controls                     $100,305       $ 98,084
  Corporate                                      20,183         21,926
  Divested operations                                           13,880
                                               --------       --------
        Total identifiable assets              $120,488       $133,890
                                               ========       ========




NOTE 12 - PROFIT SHARING PLAN

       The Company previously had three domestic profit sharing plans; The Enkel
Corporation Retirement Plan (the "Enkel Plan"), the Kansa Corporation
Profit-Sharing/401K Plan and Trust (the "Kansa Plan") and the Baldwin Technology
Profit-Sharing and Savings Plan (the "Baldwin Plan"). The Enkel Plan, which
covered the domestic employees of the divested RHG, was terminated in accordance
with the provisions of the Enkel Plan. The Company has amended the Baldwin Plan
to allow for the combining of the remaining two plans, the Baldwin Plan and the
Kansa Plan into one plan, the Baldwin Plan, effective January 1, 2002. The
amendments also include a change in both the vesting terms and timing of the
Company's contribution to the Baldwin Plan. Previously, the Company's
contribution was discretionary and made on an annual basis, based on the
profitability of the Company and the participants vested in the Company's
contribution according to a 7-year vesting schedule. The changes will enable the
Company to match up to 5% of eligible compensation and the participants'
interest in the Company's contribution to vest immediately. Participant
contributions are made on a weekly basis, while the Company's matching
contributions are made on a quarterly basis. The Company made its initial
quarterly matching contribution in April 2002 for the three months ended March
31, 2002. During the quarter ended December 31, 2001, the Company's management
decided not to make a discretionary contribution to the Baldwin Plan for the
plan year ended December 31, 2001, which was previously reserved for. As a
result, during the quarter ended December 31, 2001, the Company reversed to
earnings approximately $300,000, which had been previously accrued and was
unfunded in connection with the Baldwin Plan.


                                       15



NOTE 13 - RELATED PARTIES

         In accordance with the employment agreement of John T. Heald, Jr.,
President and Chief Executive Officer of the Company, in October 2001, the
Company sold to Mr. Heald 375,000 shares of the Company's Class B Common Stock
at $1.80 per share in exchange for a demand promissory note in the amount of
$675,000. The promissory note bears interest, payable annually, at a rate of 5%
per annum. Of the 375,000 shares issued, 189,117 shares were from treasury
shares, and the balance of 185,883 shares, were newly issued shares. The
promissory note is collateralized by the shares, and is due on the earlier of
six months following termination or twelve months following termination, if
termination is caused by the death of Mr. Heald. In the event that Mr. Heald
sells any of these shares, a respective portion of the note is due five days
following the sale of any of these shares.

       On November 30, 1993, the Company entered into a loan and pledge
agreement and promissory note with Gerald A. Nathe, Director and then President
of the Company, which was amended and restated on November 25, 1997. The loan
was made to enable Mr. Nathe to purchase shares of the Company's Class B Common
Stock from a non-employee shareholder. Mr. Nathe was loaned $1,817,000 to
purchase 315,144 shares of the Company's Class B Common Stock. All of the shares
purchased were pledged as collateral for the demand promissory note and the note
bears interest, payable on the anniversary dates at LIBOR rates plus 1.25% reset
on the first day of each succeeding January, April, July and October.

       At June 30, 2001, the balance of the note receivable from Mr. Nathe,
including interest, was $1,556,000. In November 2001, the Board of Directors of
the Company forgave an interest payment due from Mr. Nathe in the amount of
$112,000 on the above loan, and such amount was recorded as compensation expense
to Mr. Nathe, and included in "General and administrative expenses". The Company
amended Mr. Nathe's employment agreement and loan and pledge agreement on
February 26, 2002 with an effective date of November 14, 2001. The promissory
note was cancelled and a new promissory note was issued for $1,500,000 the
outstanding principal balance on the date thereof, with interest payable
annually at an annual rate of 5%.

NOTE 14 - CUSTOMER BANKRUPTCY

         On September 10, 2001, one large OEM customer, Goss Graphic Systems,
Inc. ("Goss") filed for bankruptcy protection under a prearranged Chapter 11
proceeding in the U.S. Bankruptcy Court. Goss' European and Asian subsidiaries
are not included in this proceeding. The Company has continued to receive timely
payments, on a post petition basis, from the foreign subsidiaries of Goss, and
continues to monitor the status of all Goss payments. At March 31, 2002, the
Company's consolidated balance sheet included approximately $1,520,000 of trade
receivables from Goss, of which approximately $570,000 relates to Goss' European
and Asian subsidiaries, which are not included in the bankruptcy proceeding. The
balance of $950,000 is fully reserved. As a result of this bankruptcy filing,
the Company increased its bad debt reserve related to Goss by $536,000 and
$634,000 during the quarters ended June 30, 2001 and September 30, 2001,
respectively. Further, the Company received $195,000 of these previously
reserved amounts during the quarter ended December 31, 2001. As a result, the
Company reversed $195,000 of the previously recorded reserve to earnings as a
recovery of a previously recorded bad debt charge in that same period.


                                       16



                        BALDWIN TECHNOLOGY COMPANY, INC.

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

         The following is management's discussion and analysis of certain
factors, which have affected the financial position and consolidated financial
statements of Baldwin Technology Company, Inc. ("Baldwin" or the "Company"). On
September 27, 2000, the Company sold substantially all the assets of its Baldwin
Stobb Division ("BSD"). As a result, the revenues and corresponding expenses
attributable to BSD are included in these consolidated financial statements only
for the period BSD was owned by the Company. The effects of this transaction on
consolidated financial statement amounts are discussed below where significant.

         On September 26, 2001, the Company sold substantially all of the assets
of its Roll Handling Group ("RHG"). All periods presented include the revenues
and corresponding expenses attributable to the RHG for such periods. The Company
recorded an impairment charge during the fiscal year ended June 30, 2001 of
approximately $14,831,000 as a result of the write-off of assets, primarily
patents and goodwill, associated with this business. The Company recorded a
similar write-off of goodwill of approximately $687,000 in the fourth quarter of
the fiscal year ended June 30, 2001, associated with the Company's Print on
Demand Group ("POD") as the Company decided to exit this business and sell the
assets of this business. The Company completed the sale of the POD business in
November 2001.

         Net sales and operating income (loss) of BSD, the RHG and the POD
businesses combined were as follows for the three and nine months ended March
31:



                                      Three months ended               Nine months ended
                                          March 31,                        March 31,
                                   ------------------------       ---------------------------
                                     2002           2001             2002            2001
                                   --------      ----------       ----------      -----------
                                                                      

Net Sales                          $      0      $8,037,000       $4,791,000      $30,092,000
Operating (loss) income            $(24,000)     $ (137,000)      $ (778,000)     $ 1,797,000



FORWARD-LOOKING STATEMENTS

         Except for the historical information contained herein, the following
statements and certain other statements contained herein are based on current
expectations. Such statements are forward-looking statements that involve a
number of risks and uncertainties. The Company cautions investors that any such
forward-looking statements made by the Company are not guarantees of future
performance and that actual results may differ materially from those in the
forward-looking statements. Some of the factors that could cause actual results
to differ materially include, but are not limited to the following: (i) the
ability to obtain, maintain and defend challenges against valid patent
protection on certain technology, primarily as it relates to the Company's
cleaning systems, (ii) material changes in foreign currency exchange rates
versus the U.S. Dollar, (iii) changes in the mix of products and services
comprising revenues, (iv) a decline in the rate of growth of the installed base
of printing press units and the timing of new press orders, (v) general economic
conditions, either domestically or in foreign locations, (vi) the ultimate
realization of certain trade receivables and the status of ongoing business
levels with the Company's large OEM customers, and (vii) competitive market
influences. Additional factors are set forth in Exhibit 99 to the Company's
Annual Report on Form 10-K for the year ended June 30, 2001 which should be read
in conjunction herewith.


                                       17



CRITICAL ACCOUNTING POLICIES AND ESTIMATES

         Baldwin's discussion and analysis of its financial condition and
results of operations are based on the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these
financial statements requires Baldwin to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. On an on-going basis,
Baldwin evaluates its estimates, including those related to product returns, bad
debts, inventories, investments, intangible assets, income taxes, financing
operations, warranty obligations, restructuring, pensions and other
post-retirement benefits, and contingencies and litigation. Baldwin bases its
estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

         Baldwin believes the following critical accounting policies affect its
more significant judgments and estimates used in the preparation of its
consolidated financial statements. Baldwin maintains allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to
make required payments. If the financial condition of Baldwin's customers were
to deteriorate, resulting in an impairment of their ability to make payments,
additional allowances could be required. Baldwin provides for the estimated cost
of product warranties at the time revenue is recognized. While Baldwin engages
in extensive product quality programs and processes, including actively
monitoring and evaluating the quality of its component suppliers, Baldwin's
warranty obligation is affected by product failure rates, material usage and
service delivery costs incurred in correcting a product failure. Should actual
product failure rates, material usage or service delivery costs differ from
Baldwin's estimates, revisions to the estimated warranty liability would be
required. Baldwin writes down its inventory for estimated obsolescence or
unmarketable inventory equal to the difference between the cost of inventory and
the estimated market value based upon assumptions about future demand and market
conditions. If actual market conditions are less favorable than those projected
by management, additional inventory write-downs may be required. Baldwin records
a valuation allowance to reduce its deferred tax assets to the amount that is
more likely than not to be realized. While Baldwin has considered future taxable
income and ongoing prudent and feasible tax planning strategies in assessing the
need for the valuation allowance, in the event Baldwin were to determine that it
would be able to realize its deferred tax assets in the future in excess of its
net recorded amount, an adjustment to the deferred tax asset would increase
income in the period such determination is made. Likewise, should Baldwin
determine that it would not be able to realize all or part of its net deferred
tax asset in the future, an adjustment to the deferred tax asset would be
charged to income in the period such determination is made. Baldwin's financial
covenants are based, in part on management's estimates of future revenues and
expenses. If actual results are negatively impacted, the Company may not meet
its financial covenants. Should the Company not meet its financial covenants,
amounts outstanding associated with these covenants would become payable on
demand.

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" ("FAS 142"), which the Company adopted effective July 1,
2001. FAS 142 changes the accounting for goodwill from an amortization method
to an impairment only approach. Going forward, goodwill will be tested at the
reporting unit level annually and whenever events or circumstances occur
indicating that goodwill might be impaired. The assessment of possible
impairment is based upon a comparison of fair value at the reporting unit level
to its carrying



                                       18

value. Impairment occurs if the carrying value of goodwill at the reporting
unit level exceeds its fair value. Fair value may be determined using
traditional valuation techniques including discounted cash flow analysis, market
value comparables or other appropriate methods. Events or changes in
circumstances, such as market conditions, could significantly impact fair values
and require adjustments to recorded asset balances in the future. In addition,
pursuant to FAS 142, amortization of goodwill, including goodwill recorded in
past business combinations, will cease. While the Company, adopted FAS 142 as of
July 1, 2001 with no impact to its consolidated financial position, future
consolidated results of operations will be impacted to the extent amortization
is no longer recorded by the Company, and if events and circumstances occur
which may reduce the fair values of assets recorded. For the three and nine
months ended March 31, 2001, the Company's reported results of operations
reflected goodwill amortization charges of $237,000 and $734,000, respectively.

NINE MONTHS ENDED MARCH 31, 2002 VS. NINE MONTHS ENDED MARCH 31, 2001

CONSOLIDATED RESULTS

         Net sales for the nine months ended March 31, 2002 decreased by
$24,658,000, or 17.8%, to $113,635,000 from $138,293,000 for the nine months
ended March 31, 2001. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales by $7,567,000 in the current period.
Excluding the effects of currency rate fluctuations and the previously noted
divested businesses of BSD, the RHG and POD, net sales would have increased by
$8,210,000, which is primarily the result of increased sales levels of spray
dampening equipment, fluid management products and consumables, offset by
decreased sales levels of inserters and dryers.

         Gross profit for the nine months ended March 31, 2002 was $34,905,000
(30.7% of net sales), as compared to $41,908,000 (30.3% of net sales) for the
nine months ended March 31, 2001, a decrease of $7,003,000 or 16.7%. Currency
rate fluctuations decreased gross profit by $2,330,000 in the current period.
Otherwise, gross profit would have decreased by $4,673,000. Gross profit as a
percentage of net sales increased slightly, primarily due to lower margins
associated with the divested RHG products, the operations of which were divested
during the first quarter of the current fiscal year period. Additionally, gross
profit was impacted by increased volumes of spray dampening equipment, cleaning
products, and consumables, offset by decreased sales of inserters and dryers.
During the quarter ended March 31, 2002, the Company recorded an additional
net expense of $352,000 for inventory write-offs, primarily associated with the
consolidation of the Company's manufacturing facilities. Excluding the effects
of currency rate fluctuations, the previously noted divested businesses of BSD,
the RHG and POD and the additional inventory charge, gross profit would have
increased by $2,936,000 in the current period.

         Selling, general and administrative expenses amounted to $24,023,000
(21.1% of net sales) for the nine months ended March 31, 2002, as compared to
$28,230,000 (20.4% of net sales) for the same period in the prior fiscal year, a
decrease of $4,207,000 or 14.9%. Currency rate fluctuations decreased these
expenses by $936,000 in the current period. Otherwise, selling, general and
administrative expenses would have decreased by $3,271,000. Selling expenses
decreased by $1,365,000, which primarily relates to the exclusion of costs
associated with the divested RHG, and to decreased travel costs, offset by
increased marketing and trade show costs. General and administrative expenses
decreased by $1,906,000 primarily due to the exclusion of costs associated with
the divested RHG, decreased compensation and commission costs, the reversal of
approximately $300,000 of prior accruals of the Company's contribution to the
Company's profit-sharing plan and to decreased goodwill amortization expense of
$734,000 due to the adoption of Financial Accounting Standards Board ("FASB")
Statement of


                                       19


Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
("FAS 142"). These decreases were primarily offset by an additional $439,000 bad
debt charge related to accounts receivable from a major OEM customer, interest
forgiveness of $112,000 related to a loan to an officer of the Company, and
increased consulting costs in the current period. Excluding the effects of
currency rate fluctuations and the previously noted divestitures of BSD, the RHG
and the POD businesses, selling, general and administrative expenses would have
decreased by $326,000 in the current period.

         Engineering and research and development expenses, decreased by
$1,182,000, compared to the same period in the prior year. Currency rate
fluctuations decreased these expenses by $584,000 in the current period.
Otherwise, these expenses would have decreased by $598,000. The decrease in
these expenses relates primarily to the exclusion of costs associated with the
divested RHG, and to reduced engineering consulting costs offset by increased
research and development labor and project costs. As a percentage of net sales,
engineering and research and development expenses increased by 1.0% to 10.2% for
the nine months ended March 31, 2002 compared to 9.2% for the same period in the
prior fiscal year. Excluding the effects of currency rate fluctuations and the
previously noted divested businesses of BSD, the RHG and POD, engineering and
research and development expenses would have increased by $819,000 in the
current period.

         The Company recorded a restructuring charge of $795,000 for the nine
months ended March 31, 2002. This restructuring charge represents additional
exit costs, which were directly related to the restructuring plan announced in
March 2000.

         Interest expense for the nine months ended March 31, 2002 was
$1,279,000 as compared to $1,663,000 for the nine months ended March 31, 2001.
Currency rate fluctuations decreased interest expense by $22,000 in the current
period. Otherwise, interest expense would have decreased by $362,000. This
decrease was primarily due to both lower interest rates and lower long-term debt
levels during the current period, primarily as a result of the use of proceeds
from the divestiture of the RHG to reduce outstanding debt. Interest income
amounted to $216,000 and $231,000 for the nine months ended March 31, 2002 and
March 31, 2001, respectively. Currency rate fluctuations decreased interest
income by $38,000 in the current period.

         Other expense, net amounted to $292,000 for the nine months ended March
31, 2002 compared to other income, net of $778,000 for the nine months ended
March 31, 2001. Other income and expense, net includes net foreign currency
transaction gains of $32,000 and $389,000 for the nine months ended March 31,
2002 and 2001, respectively. Currency rate fluctuations negatively impacted
other income and expense by $11,000 in the current period. The ineffective
portions of derivative financial instruments, which qualify as hedges pursuant
to FASB Statement of Financial Accounting Standards No. 133 "Accounting for
Derivative Instruments and Hedging Activities" ("FAS 133") amounted to a gain of
$35,000 and a loss of $34,000 for the nine months ended March 31, 2002 and 2001,
respectively, while derivative financial instruments which do not qualify as
hedges pursuant to FAS 133 amounted to a loss of $339,000 and a gain of $345,000
respectively. Other income and expense also includes a $255,000 write-down of
deferred financing costs in the current period, recorded as a result of the
renegotiation of the Amended Credit Facility (as defined below under "Liquidity
and Capital Resources at March 31, 2001") and a pre-tax gain of $1,213,000
related to a favorable settlement of the patent litigation suit and a $650,000
pre-tax loss on the sale of BSD in the prior year period.

         The Company's effective tax rate on income before taxes was 79.6% for
the nine months ended March 31, 2002, compared to 42.0% for the nine months
ended March 31, 2001. Currency rate fluctuations decreased the provision for
income taxes by $197,000 in the current



                                       20

period. The current period's effective tax rate reflects a $507,000 valuation
allowance recorded in the quarter ended March 31, 2002. In March 2002, President
Bush signed a new law, which temporarily extended the Net Operating Loss ("NOL")
carryback period from two to five years. Therefore, the Company filed for a
refund of $1,420,000, which is expected to be received in the fourth quarter of
the current fiscal year. As part of this refund claim, the Company carried back
approximately $1,927,000 of previously recorded NOL's in exchange for the
$1,420,000 of cash and approximately $507,000 of previously benefited foreign
tax credits. As it is more likely than not that theses foreign tax credits will
expire unutilized, the Company recorded a valuation allowance charge of $507,000
in the quarter ended March 31, 2002. Absent this charge, the Company has a net
income tax benefit of $190,000 for the nine months ended March 31, 2002,
primarily representing income earned in countries with NOL's, the benefits of
which were not previously recognized.

         The Company's net income amounted to $81,000 for the nine months ended
March 31, 2002, compared to $2,139,000 for the nine months ended March 31, 2001.
Currency rate fluctuations decreased net income by $639,000 in the current
period. Net income per share amounted to $0.01 basic and diluted for the nine
months ended March 31, 2002, as compared to $0.14 basic and diluted for the nine
months ended March 31, 2001. Excluding the effects of currency translation, the
one-time items noted above, and the previously noted divested businesses of BSD,
the RHG and POD, pro forma net income would have increased by $714,000 to
$1,733,000 ($0.12 per diluted share) for the nine months ended March 31, 2002
from $1,019,000 ($0.07 per diluted share) for the nine months ended March 31,
2001.

SEGMENT RESULTS

ACCESSORIES AND CONTROLS GROUP

         Net sales for the nine months ended March 31, 2002 increased by
$643,000, or 0.6%, to $108,844,000 from $108,201,000 for the nine months ended
March 31, 2001. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales for the current period by $7,307,000;
otherwise, net sales would have increased by $7,950,000 in the current period.
This increase is primarily the result of increased sales of spray dampening
equipment, fluid management products, consumables and cleaning products,
particularly by the Company's Japanese and Swedish entities, offset by reduced
sales levels of inserters and dryers.

         Operating income amounted to $5,501,000 (5.1% of net sales) for the
nine months ended March 31, 2002, as compared to $5,055,000 (4.7% of net sales)
for the same period in the prior fiscal year, an increase of $446,000. Currency
rate fluctuations decreased the current fiscal year's operating income by
$836,000, otherwise operating income would have increased by $1,282,000 in the
current period. This increase is primarily the result of the overall increase in
sales discussed above, and decreased compensation and commission costs and
goodwill amortization in the current period. The increase in operating income
was offset by increased marketing and trade show costs and higher research and
development labor and project costs, and a $251,000 bad debt charge related to a
large OEM customer in the current period.


                                       21


THREE MONTHS ENDED MARCH 31, 2002 VS. THREE MONTHS ENDED MARCH 31, 2001

CONSOLIDATED RESULTS

         Net sales for the three months ended March 31, 2002 decreased by
$8,654,000, or 18.2%, to $38,921,000 from $47,575,000 for the three months ended
March 31, 2001. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales by $2,720,000 in the current period.
Excluding the effects of currency rate fluctuations and the previously noted
divested businesses of BSD, the RHG and POD, net sales would have increased by
$2,103,000, which is primarily the result of increased sales of spray dampening
equipment, fluid management products and consumables, offset by decreased sales
of inserters and dryers.

         Gross profit for the three months ended March 31, 2002 was $12,301,000
(31.6% of net sales) as compared to $14,065,000 (29.6% of net sales) for the
three months ended March 31, 2001, a decrease of $1,764,000 or 12.5%. Currency
rate fluctuations decreased gross profit by $902,000 in the current period,
otherwise gross profit would have decreased by $862,000. Gross profit as a
percentage of net sales increased primarily due to the decreased margins
associated with the RHG products not included in the current period and to
increased sales of spray dampening equipment, cleaning products and consumables
offset by decreased sales of inserters and dryers in the current period. During
the quarter ended March 31, 2002, the Company recorded an additional net expense
of $352,000 for inventory write-offs, primarily associated with the
consolidation of the Company's manufacturing facilities. Excluding the effects
of currency rate fluctuations and the previously noted divested businesses of
BSD, the RHG and POD and the additional inventory charge, gross profit would
have increased by $1,013,000 in the current period.

         Selling, general and administrative expenses amounted to $7,566,000
(19.4% of net sales) for the three months ended March 31, 2002 as compared to
$9,781,000 (20.6% of net sales) for the same period in the prior fiscal year, a
decrease of $2,215,000 or 22.6%. Currency rate fluctuations decreased these
expenses by $365,000 in the current period. Otherwise, selling, general and
administrative expenses would have decreased by $1,850,000. Selling expenses
decreased by $553,000 which primarily relates to the exclusion of these expenses
associated with the divested RHG business, to decreased travel costs, and to
decreased compensation and commission expenses associated with reduced sales,
offset by increased marketing and trade show costs. General and administrative
expenses decreased by $1,297,000 primarily due to the exclusion of these costs
associated with the previously noted divested RHG business, and to decreased
goodwill amortization of $237,000 due to the adoption of FAS 142. These
decreases were primarily offset by increased consulting costs and interest
forgiveness of $112,000 related to a loan to an officer of the Company.
Excluding the effects of currency rate fluctuations and the previously noted
divested businesses of BSD, the RHG and POD, selling, general and administrative
expenses would have decreased by $634,000 in the current period.

         Engineering, and research and development expenses decreased by
$533,000 over the same period in the prior year. Currency rate fluctuations
decreased these expenses by $189,000 in the current period. Otherwise, these
expenses would have decreased by $344,000. This decrease relates primarily to
the exclusion of these expenses associated with the divested RHG business,
offset by increased research and development labor and project costs. As a
percentage of net sales, engineering and research and development expenses
increased by 0.6% to 9.6% for the three months ended March 31, 2002 compared to
9.0% for the same period in the prior fiscal year. Excluding the effects of
currency rate fluctuations and the previously noted divested businesses of BSD,
the RHG and POD, engineering and research and development expenses would have
increased by $167,000 in the current period.


                                       22

         The Company recorded a restructuring charge of $289,000 for the three
months ended March 31, 2002. This restructuring charge represents additional
exit costs, which were directly related to the restructuring plan announced in
March 2000.

         Interest expense for the three months ended March 31, 2002 was $419,000
as compared to $627,000 for the three months ended March 31, 2001. Currency rate
fluctuations decreased interest expense by $13,000 in the current period.
Otherwise, interest expense would have decreased by $195,000. This decrease was
primarily due to both lower interest rates and lower long-term debt levels
during the period. Interest income amounted to $67,000 and $74,000 for the three
months ended March 31, 2002 and 2001, respectively. This decrease in interest
income is primarily due to decreased funds available for investment, and to
lower interest rates in the current period. Currency rate fluctuations decreased
interest income by $12,000 in the current period.

         Other income, net amounted to $94,000 and $59,000, respectively for the
three months ended March 31, 2002 and 2001. Other income, net includes net
foreign currency transaction gains of $88,000 and $138,000 for the three months
ended March 31, 2002 and 2001, respectively. Currency rate fluctuations
increased other expenses by $1,000 in the current fiscal year period. The net
foreign currency transaction gains include $3,000 and $17,000 on the ineffective
portions of derivative financial instruments, which qualify as cash flow hedges
for the three months ended March 31, 2002 and 2001, respectively. Other income,
net in the current fiscal year period also includes a $37,000 credit for an
interest rate swap which no longer qualifies as a hedge in accordance with FAS
133 as more fully described in Notes 3 and 7 of this Quarterly Report on Form
10-Q for the nine months ended March 31, 2002, which resulted from the Company
entering into the Amended Credit Facility.

         The Company's effective tax rate on income before taxes was 33.1% for
the three months ended March 31, 2002, compared to 41.9% for the three months
ended March 31, 2001. Currency rate fluctuations decreased the provision for
income taxes by $113,000 in the current period. The current period's effective
tax rate reflects a $507,000 valuation allowance recorded in the current period
associated with foreign tax credits. In March 2002, President Bush signed a new
law, which temporarily extended the Net Operating Loss ("NOL") carryback period
from two to five years. Therefore, the Company filed for a refund of $1,420,000,
which is expected to be received in the fourth quarter of the current fiscal
year. As part of this refund claim, the Company carried back approximately
$1,927,000 of previously recorded NOL's in exchange for the $1,420,000 of cash
and approximately $507,000 of previously benefited foreign tax credits. As it is
more likely than not that theses foreign tax credits will expire unutilized, the
Company recorded a valuation allowance of $507,000 in the quarter ended March
31, 2002. The tax provision and the effective tax rate, without the valuation
allowance charge, is $6,000 and 0.4%, respectively for the quarter ended March
31, 2002, which reflects income earned in countries with NOL's, the benefits of
which were not previously recognized.

         The Company's net income amounted to $1,038,000 for the three months
ended March 31, 2002, compared to $332,000 for the three months ended March 31,
2001. Currency rate fluctuations decreased net income by $230,000 in the current
period. Net income per share amounted to $0.07 basic and diluted for the three
months ended March 31, 2002, as compared to $0.02 basic and diluted for the
three months ended March 31, 2001. Excluding the effects of currency translation
and the previously noted divested businesses of BSD, the RHG and POD, pro forma
net income would have increased by $890,000 to $1,295,000 ($0.09 per diluted
share) for the three months ended March 31, 2002, compared to $405,000 ($0.03
per diluted share) for the three months ended March 31, 2001.


                                       23


SEGMENT RESULTS

ACCESSORIES AND CONTROLS GROUP

         Net sales for the three months ended March 31, 2002 decreased by
$617,000, or 1.6%, to $38,921,000 from $39,538,000 for the three months ended
March 31, 2001. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales for the current period by $2,720,000;
otherwise, net sales would have increased by $2,103,000 in the current period.
This increase is primarily the result of increased sales of spray dampening
equipment, fluid management products, consumables and cleaning products, offset
by decreased sales of inserters and dryers.

         Operating income amounted to $2,504,000 (6.4% of net sales) for the
three months ended March 31, 2002, as compared to $2,494,000 (6.3% of net sales)
for the same period in the prior fiscal year, an increase of $10,000. Currency
rate fluctuations decreased the current fiscal year's operating income by
$422,000. Otherwise operating income would have increased by $432,000 in the
current period. This increase is primarily the result of the overall increase in
sales discussed above, and to the decreased consulting costs and goodwill
amortization, offset by increased research and development labor and project
costs in the current fiscal year period.

                LIQUIDITY AND CAPITAL RESOURCES AT MARCH 31, 2002
                          LIQUIDITY AND WORKING CAPITAL

         On October 31, 2000, the Company entered into a $35,000,000 Revolving
Credit Facility (the "Credit Facility") with Fleet National Bank and First Union
National Bank (collectively the "Banks"), which had an original scheduled
maturity date of October 31, 2003. The Credit Facility consisted of a
$25,000,000 Revolving credit line (the "Revolver") and a $10,000,000 credit line
to be utilized for acquisitions, (the "Acquisition Line"). On January 28, 2002,
the Credit Facility was amended (the "Amended Credit Facility"), which included
the removal of the Acquisition Line, a reduction in the Revolver to $21,000,000
(subject to a borrowing base described below), and a change in the maturity date
to October 1, 2002. In addition, $4,000,000 of the existing Revolver was
converted into a term loan (the "Term Loan"), which matures on June 30, 2002,
resulting in available borrowings under the Revolver from July 1, 2002 to
October 1, 2002 of $17,000,000. At March 31, 2002, the Company had outstanding
borrowings of $16,650,000 under the Revolver and Term Loan, plus outstanding
letters of credit of $2,867,000. Accordingly, all amounts outstanding under the
Revolver, the Term Loan have been classified as current. The Revolver has
associated commitment fees, which are calculated quarterly, at a rate of
one-half of one percent per annum of the unused portion of the Revolver.

         The Amended Credit Facility provides for a new borrowing structure
which enables the Company to borrow certain specified percentages of eligible
domestic accounts receivable, domestic inventory, the appraised value of the
Company's Emporia, Kansas facility, the net book value of domestic machinery and
equipment and certain royalty streams, as defined (collectively the "Borrowing
Base") up to a maximum of $21,000,000. The Amended Credit Facility also provides
that $5,000,000 (less outstanding letters of Credit) may be borrowed in addition
to the amounts available under the Borrowing Base. Interest on the Revolver is
charged at LIBOR plus 3.25% per annum or at an alternative base rate, as
defined, plus 1% per annum. Interest on the Term Loan is charged at LIBOR plus
4.75% per annum.

         The Amended Credit Facility is collateralized by a pledge of the
capital stock and certain domestic assets of the Company's subsidiaries,
includes certain restrictions which limit the incurrence of debt and prohibit
dividend payments among other things, and requires the Company to satisfy
certain financial covenants. These covenants include a minimum tangible net



                                       24


worth covenant, beginning with the quarter ended December 31, 2001, and also
require minimum operating income of $250,000 for the quarter ended December 31,
2001, $1,250,000 for the quarter ended March 31, 2002 and $1,750,000 for the
quarter ending June 30, 2002.

         The Company did not satisfy the above minimum operating income covenant
for the quarter ended March 31, 2002; accordingly, amounts outstanding under the
Amended Credit Facility have become payable on demand. Management believes that
alternative sources of financing are available to refinance the existing
facilities on a long-term basis, which the Company is currently pursuing.
However, if alternative financing sources are not available, management will be
required to take additional actions to reduce operating expenses or sell assets
to meet liquidity needs.

         As a result of the reduction in available borrowings under the Amended
Credit Facility, and the revised maturity date, the Company was required to
write-down a portion of the related unamortized deferred financing costs
initially recorded in connection with obtaining the Credit Facility.
Accordingly, the Company took a charge against earnings of $255,000 during the
quarter ended December 31, 2001, which is included in "Other income and
expense." The Company incurred additional costs of approximately $222,000
associated with entering into the Amended Credit Facility. The Company will
amortize the remaining deferred financing costs through October 1, 2002, the
maturity date of the Amended Credit Facility.

         The Company maintains relationships with both foreign and domestic
banks, which combined have extended credit facilities to the Company totaling
$24,979,000, including amounts available under the Revolver. As of March 31,
2002, the Company had $21,418,000 outstanding under these lines of credit
including $16,650,000 under the Revolver and Term Loan. Total debt levels as
reported on the balance sheet at March 31, 2002 are $40,000 higher than they
would have been if June 30, 2001 exchange rates had been used.

         The Company's working capital decreased by $5,343,000 or 23.8% from
$22,409,000 at June 30, 2001, to $17,066,000 at March 31, 2002. Foreign currency
rate fluctuations accounted for a decrease of $97,000, and the effect of the RHG
divesture increased working capital by $1,096,000. Excluding the effects of the
sale of the RHG and the impact of foreign currency, working capital would have
decreased by $6,342,000. Working capital decreased primarily due to a portion of
long-term debt being reclassified on a short-term basis. Working capital also
decreased due to decreases in cash, accounts and notes receivable and
inventories. Offsetting these items were decreases in accounts payable, accrued
compensation, income taxes payable and customer deposits. On September 26, 2001,
the Company divested the RHG. The proceeds of $6,800,000 were utilized to reduce
outstanding bank debt by $4,500,000 in October 2001, for estimated transaction
and other associated costs of approximately $1,600,000 and for general working
capital purposes.

         The Company generated $5,085,000 and $1,762,000 from investing
activities for the nine months ended March 31, 2002 and 2001, respectively. The
increase in cash provided by investing activities is primarily the result of
higher proceeds from the sale of the RHG and the POD businesses in the current
year period than from the sale of BSD in the prior fiscal year period. Net
capital expenditures made to meet the normal business needs of the Company for
the nine months ended March 31, 2002 and 2001, were $1,743,000 and $2,223,000,
respectively.

         Net cash used by financing activities was $13,000 for the nine months
ended March 31, 2002 as compared to net cash provided by financing activities of
$1,748,000 for the nine months ended March 31, 2001. The difference was
primarily caused by net debt repayments and reduced treasury stock purchases in
the current period while the prior year period included net debt borrowing.


                                       25


         On September 10, 2001, one large OEM customer, Goss Graphic Systems,
Inc. ("Goss") filed for bankruptcy protection under a prearranged Chapter 11
proceeding in the U.S. Bankruptcy Court. Goss' European and Asian subsidiaries
are not included in this proceeding. The Company has continued to receive timely
payments, on a post petition basis, from the foreign subsidiaries of Goss, and
continues to monitor the status of all Goss payments. At March 31, 2002, the
Company's consolidated balance sheet included approximately $1,520,000 of trade
receivables from Goss, of which approximately $570,000 relates to Goss' European
and Asian subsidiaries, which are not included in the bankruptcy proceeding. The
balance of $950,000 is fully reserved. As a result of this bankruptcy filing,
the Company increased its bad debt reserve related to Goss by $536,000 and
$634,000 during the quarters ended June 30, 2001 and September 30, 2001,
respectively. Further, the Company received $195,000 of these previously
reserved amounts during the quarter ended December 31, 2001. As a result, the
Company reversed $195,000 of the previously recorded reserve to earnings as a
recovery of a previously recorded bad debt charge in that same period.

         The Company believes its cash flow from operations, available bank
lines of credit and alternative sources of borrowing are sufficient to finance
its working capital and other capital requirements for the near and long-term
future.

EURO CONVERSION

         Effective January 1, 1999, the "Euro" became the new common currency
for 11 countries of the European Community ("EC") (including Germany and France
where the Company has operations). Other member states (including the United
Kingdom and Sweden where the Company also has operations) may join in future
years. Beginning January 1, 1999, transactions in the Euro became possible, with
the national currencies continuing to circulate until January 1, 2002, when the
Euro became the official functional currency for these 11 countries. During the
transition period from January 1, 1999 to January 1, 2002, payments could be
made using either the Euro or the national currencies at fixed exchange rates.

         Beginning January 1, 1999, the Company began conducting business with
customers in both the Euro and the respective national currency. Systems and
processes that were initially impacted by this dual currency requirement were
customer billing and receivables, payroll and cash management activities,
including cash collections and disbursements. To accomplish compliance, the
Company made the necessary systems and process changes and worked with its
financial institutions on various cash management issues. The Company's German
and French operations began recording all business transactions in the Euro
effective July 1, 2000 and July 1, 2001, respectively.

         The costs associated with implementing and completing the Euro
conversion, as well as business and market implications, if any, associated with
the Euro conversion, were not material to the Company's consolidated results of
operations or consolidated financial condition in any fiscal year or in the
aggregate. The competitive impact of increased cross-border price transparency,
however, is uncertain, both with respect to products sold by the Company, as
well as with products and services purchased by the Company.

         The Company's ongoing efforts with regard to the Euro conversion, and
those of its significant customers and suppliers, including financial
institutions may, at some time in the future, reveal as yet unidentified or not
fully understood issues that may not be addressable in a timely fashion, or that
may cause unexpected competitive or market effects, all contrary to the
foregoing statements. Any issue that may arise, if not resolved favorably, could
have a material adverse effect on the Company's consolidated results of
operations or consolidated financial condition in a future period.


                                       26


IMPACT OF INFLATION

         The Company's results are affected by the impact of inflation on
manufacturing and operating costs. Historically, the Company has used selling
price adjustments, cost containment programs and improved operating efficiencies
to offset the otherwise negative impact of inflation on its operations.

RECENTLY ISSUED ACCOUNTING STANDARDS:

         In June 2001, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" ("FAS 143"), which will be effective for the Company beginning July
1, 2002. FAS 143, addresses the financial accounting and reporting obligations
associated with the retirement of tangible long-lived assets and the associated
asset retirement costs. The adoption of FAS 143 is not expected to have a
material impact on the Company's consolidated financial statements.

         In August 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" ("FAS 144"). FAS 144 provides new
guidance on the recognition of impairment losses on long-lived assets to be held
and used or to be disposed of and also broadens the definition of what
constitutes a discontinued operation and how the results of a discontinued
operation are to be measured and presented. FAS 144 is effective for the Company
beginning July 1, 2002 and is not expected to materially change the methods used
by the Company to measure impairment losses on long-lived assets, but may result
in more dispositions being reported as discontinued operations than permitted
under current accounting principles.

         In April 2002, the FASB issued Statement of Financial Accounting
Standards No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("FAS 145"). FAS 145
rescinds FASB Statement No. 4, which required all gains and losses from
extinguishment of debt to be aggregated and, if material, classified as an
extraordinary item, net of the related income tax effect. As a result, the
criteria in Accounting Principles Board Opinion 30 will now be used to classify
those gains and losses. FAS 145 amends FASB Statement No. 13 to require that
certain lease modifications that have economic effects similar to sale-leaseback
transactions are accounted for in the same manner as sale-leaseback
transactions. This amendment is consistent with the FASB's goal of requiring
similar accounting treatment for transactions that have similar economic
effects. In addition, FAS 145 makes technical corrections to existing
pronouncements. While those corrections are not substantive in nature, in some
instances, they may change accounting practice. The Company is currently
evaluating the impact of this statement to determine the effect, if any, it may
have on its consolidated results of operations and consolidated financial
condition.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK:

         A discussion of market risk exposures is included in Part II Item 7A,
"Quantitative and Qualitative Disclosures About Market Risk" of the Company's
Annual Report on Form 10-K for the year ended June 30, 2001. There have been no
material changes during the nine months ended March 31, 2002.


                                       27


                           PART II: OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         10.50   Amendment to Employment Agreement dated February 26, 2002 and
                 effective November 14, 2001 between Baldwin Technology Company,
                 Inc. and Gerald A. Nathe (filed herewith).

         10.51   Amendment to Employment Agreement dated February 26, 2002 and
                 effective November 14, 2001 between Baldwin Technology Company,
                 Inc. and John T. Heald, Jr. (filed herewith).

         10.52   Amendment to Employment Agreement dated April 12, 2002 and
                 effective May 1, 2001 between Baldwin Technology Company, Inc.
                 and Peter E. Anselmo (filed herewith).

(b)      Reports on Form 8-K. There were no reports on Form 8-K filed for the
         three months ended March 31, 2002.



                                       28


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                       BALDWIN TECHNOLOGY COMPANY, INC.


                                       BY  /s/  Vijay C. Tharani
                                           -------------------------------
                                           Vice President, Chief Financial
                                           Officer and Treasurer

Dated: May 14, 2002


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