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                  Transcript of                                                                601 Moorefield Park Dr.
                                                                                               Richmond, VA 23236
              P&F Industries (PFIN)                                                            Phone: 888-301-5399
          Second Quarter 2008 Earnings                                                         Fax: 804-327-7554

                Conference Call                                                                info@vcall.com
                          August 12, 2008                                                      www.vcall.com
                                                                                               www.investorcalendar.com


Participants
    Richard Goodman, P&F Industries, General Counsel
    Richard Horowitz, P&F Industries, Chairman, President and CEO
    Joseph Molino, P&F Industries, Chief Operating Officer and Chief Financial Officer



Presentation
    Operator
    Greetings, and welcome to the P&F Industries Second Quarter 2008 Earnings
    Conference Call.

    At this time, all participants are in a listen-only mode. A question and answer session
    will follow the formal presentation. If anyone should require operator assistance
    during the conference, please press star-zero on your telephone keypad.

    As a reminder, this conference is being recorded.

    It is now my pleasure to introduce your host, Mr. Richard Goodman, General Counsel
    for P&F Industries. Thank you. You may begin.

    Richard Goodman – P&F Industries – General Counsel
    Thank you, Operator.

    Good morning, and welcome to P&F Industries' Second Quarter 2008 Earnings
    Conference Call. With us today from management are Richard Horowitz, Chairman,
    President and CEO; and Joseph Molino, Chief Operating Officer and CFO.

    Before we get started, I'd like to remind you that any forward-looking statements
    expressed in this call, including those related to the Company's future performance
    and those contained in the comments of management are based upon the Company's
    historical performance and current plans, estimates and expectations, which are
    subject to various risks and uncertainties, including but not limited to economic
    conditions, the impact of competition, product demand and pricing, and those
    described in the reports and statements filed by the company with the Securities &
    Exchange Commission including, among others, as described in the Company's most
    recent Annual Report on Form 10-K. These risks could cause the Company's actual
    results for the 2008 fiscal year and beyond to differ materially from those expressed in


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                                                                                           Transcript:
                                                                                 P&F Industries (PFIN)
                                                                     Q2 2008 Earnings Conference Call
                                                                                      August 12, 2008
                                                                                                Vcall
any forward-looking statement made by or on behalf of the Company. Forward-
                                                                                                601 Moorefield Park Dr.
looking statements speak only as of the date on which they are made, and the                    Richmond, VA 23236
Company undertakes no obligation to update publicly or revise any forward-looking
statements whether as a result of new information, future developments or otherwise.            Phone: 888-301-5399
                                                                                                Fax: 804-327-7554
With that, I would now like to turn the call over to Richard Horowitz. Good morning,
Richard.                                                                                        info@vcall.com
                                                                                                www.vcall.com
                                                                                                www.investorcalendar.com
Richard Horowitz – P&F Industries – Chairman, President and CEO
Good morning, Rich, and thank you so much. And thank you all for joining us this
morning on our Second Quarter 2008 Conference Call--excuse me, our first quarter
2008--oh, Second Quarter 2008 Conference Call.

I would like to start off with a brief overview of our financial results for this quarter. We
are reporting earnings from continuing operations for the second quarter of $453,000,
a 97 percent increase compared to the 233--$230,000 for the second quarter of 2007.
Additionally, diluted earnings per share from continuing operations for the three month
ended June 30, 2008 doubled to 12 cents per share compared to six cents per share
for the comparable three-month period in 2007.

This improvement was achieved despite a decrease in net revenue to $25,554,000
from $30,608,000 for the three months ended June 30, 2007.

Our earnings from continuing operations were approximately $42,000 and $54,000
respectively net of taxes for the three and six-month periods ended June 30, 2008,
with diluted earnings per share of one cent for both the three and six-month periods
ended June 30, 2008.

Earnings for the three and six-month periods ended June 30, 2007 were $3,029,000
and $3,008,000 respectively. It should be noted that, during the three-month period
ended June 30, 2007, we recognized a gain on the sale of real estate assets from
continuing operations of $3,027,000. That was the Embassy Building, as you may
recall. As a result, diluted earnings per share from discontinued operations for the
three and six-month periods ended June 30, 2007 were 80 cents and 79 cents
respectively.

As a result, the Company is reporting net earnings of $495,000 for the three-month
period ended June 30 of this year compared to $3,260,000 reported in the three-
month period last year. Overall, our net diluted EPS for the three-month periods
ended June 30, 2008 and 2007 were 13 cents and 86 cents respectively.

Since there are a few new people on the phone call this morning, I'm going to take
you through a little commentary on what our operations do.

Firstly, our Continental Tool Group consists of our Hy-Tech and Florida Pneumatic
wholly owned subsidiaries. Hy-Tech manufactures and distributes pneumatic tools
and parts generally for industrial applications. Hy-Tech manufactures approximately
60 types of industrial pneumatic tools, most of which are sold at prices ranging from


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                                                                                        Transcript:
                                                                              P&F Industries (PFIN)
                                                                  Q2 2008 Earnings Conference Call
                                                                                   August 12, 2008
                                                                                           Vcall
$300 to $7,000 under various names, such as ATT, Taxton [sp], Thor and Eureka, as
                                                                                           601 Moorefield Park Dr.
well as the trade names and trademarks of other private label customers.                   Richmond, VA 23236

This line of products includes grinders, drills, saws, impact wrenches and pavement        Phone: 888-301-5399
breakers. Hy-Tech's products are sold to distributors and private label customers          Fax: 804-327-7554
through in-house sales personnel and manufacturer's representatives. Users of Hy-
Tech's tools include refineries, chemical plants, power generation facilities, the heavy   info@vcall.com
construction industry, oil and mining companies, and heavy industry. Hy-Tech's             www.vcall.com
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products are sold off-the-shelf and are also produced to customers' orders.

Florida Pneumatic is primarily engaged in importing and manufacturing of
approximately 75 types of pneumatic hand tools. Florida Pneumatic also markets,
through its Berkley Tool division, a line of pipe-cutting and threading tools, wrenches
and replacement electrical components for a widely-used brand of pipe-cutting and
threading machines. In addition, through its Franklin Manufacturing division, Franklin-
-Florida Pneumatic imports a line of door and window hardware.

Countrywide, our other division, which is comprised of Nationwide Industries,
Woodmark International and Pacific Stairs, Nationwide and Woodmark both import
and manufacture hardware products for items such as doors, windows and fences,
staircase components, kitchen and bath hardware and accessories, as well as other
general hardware products. And Pacific Stair is a manufacturer and distributor of
premium handrail--excuse me--premium stair rail products and staircase components
from Woodmark to the building industry, primarily selling in Southern California and
the Southwestern United States.

And now, for the second quarter performance. Net revenue reported by our Tool
segment decreased $1,299,000. Significant factors representing and contributing to
this decrease include, (1) a net reduction in retail revenue in Florida Pneumatic of
$1,624,000, of which $471,000 is due to the wind-down of the Home Depot business,
$651,000 due to the reduced volume of promotional sales and lower sales of basic
retail products aggregating $502,000 to a major customer.

Additionally, our Franklin Hardware line revenue decreased $520,000, primarily the
result of the loss of its business with Home Depot. The above declines in product line
revenues were somewhat offset by a net increase of $116,000 reported by our
Berkley Filters and Automotive lines.

The acquisition of Hy-Tech continues to provide a positive impact to P&F. Hy-Tech
focuses on the industrial sector of pneumatic tools market, an area which has not
been affected by the sluggish economy. When comparing the three-month periods
ended June 30, 2008 and 2007, Hy-Tech contributed an increase of $729,000 to the
Tool segment. This increase is primarily attributable to organic growth.

As a result of the continuing reduction in the number of new homes being constructed,
which is the principal driver for the Hardware segment, revenue for the quarter ended
June 30, 2008 decrease an aggregate of $3,755,000 when compared to the three-
month period ended June 30, 2007.


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                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                             Vcall
Our Woodmark subsidiary, which primarily services the southern tier of the United
                                                                                             601 Moorefield Park Dr.
States, continues to be hard hit, reporting a net revenue decrease to $5,968,000 for         Richmond, VA 23236
the three-month period ended 2000--June 30, 2008 compared to $8,509,000 for the
same period last year. Within Woodmark, revenue from the sale of its stair parts and         Phone: 888-301-5399
accessories decreased $2,321,000.                                                            Fax: 804-327-7554

Additionally, Woodmark's Kitchen-Bath product lines witnessed a decrease in revenue          info@vcall.com
of $220,000 due to a lagging recreational vehicle market, the loss of a large customer,      www.vcall.com
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as well as the weak economic conditions we are all experiencing. Until the downward
trend in the number of new housing starts levels and begins to increase, we do not
expect to see any real improvements in Woodmark's net revenue.

Pacific Stair's revenue decreased to $557,000 for the three-month period ended June
30, 2008 from $1,031,000 for the second quarter of last year. This was primarily
attributable to the continuing decline in the new home construction market in Southern
California and Arizona.

And Nationwide, which primarily markets fencing and gate hardware, has until this
quarter not been materially affected by the sluggish homebuilding sector, but now has
experienced a decrease in net revenue to $4,542,000 for the three months ended
June 30 of this year from $5,282,000 for the same period last year. Nationwide's net
revenue for fencing decreased $237,000. And furthermore, its OEM products and
product--and patio product lines decreased as well by 281,000 and 222,000
respectively.

Gross margins on a consolidated basis increased to 31.5 percent for the three months
ended June 30, 2008 compared to 29.7 percent for the same period last year. Gross
margins in the Tool segment increased six percentage points to 32.9 percent reported
for the three-month period June 30, 2008 from 26.9 percent last year when comparing
the three-month periods ended June 30, 2008 and 2007.

Specifically, gross margins at Florida Pneumatic increased to 30.4 percent for the
three-month period ended June 30, 2008 from 25.3 percent reported for the same
three-month period in the prior year, primarily the result of a reduction in the fees paid
to an overseas trading partner, various cost reductions implemented during the
quarter, and product mix.

Gross margins increased at Hy-Tech to 36.9 percent for the three-month period ended
June 30, 2008 from 31.6 percent for the three-month period ended June 30, 2007.
This increase is due to changes in product mix, as well as improved manufacturing
efficiencies.

Gross margin, excuse me, for the Hardware segment decreased 2.8 percent to 29.8
percent for the three-month period ended June 30, 2008 from 32.6 percent for the
same period a year ago. Specifically, gross margins for our Stair parts business, as
well as our Kitchen and Bath business Woodmark, decreased 2.7 percent and 1.1
percent respectively when comparing the three-month periods June 30, 2008 over
2007.


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                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                              Vcall
The gross margin decrease in the Stair Parts business was primarily the result of
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lower absorption and fixed expenses as a result of lower revenue. Our gross margin            Richmond, VA 23236
at Pacific Stair was severely impacted by the continued weak housing market,
decreasing from 13.5 percent reported for the three-month period ended 2000--June             Phone: 888-301-5399
30 to a deficit of 11.9 percent reported for the same period this year, essentially due to    Fax: 804-327-7554
the inability to reduce fixed overhead costs as sales levels decreased.
                                                                                              info@vcall.com
Gross margins at Nationwide for the three-month period ended June 30, 2008                    www.vcall.com
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decreased to 38 percent from 40.6 percent for the three-month period ended June 30,
2007. Further, the gross margin decrease was primarily due to price increases from
overseas suppliers, as well as current competitive conditions which, for certain items,
necessitated price reductions.

During the three-month period ended June 30, 2008, our SG&A decreased 13.4
percent to $6,763,000 from $7,814,000 for the three-month period ended last year.
The primary factors driving this decrease are our continued cost-cutting measures, as
well as lower variable costs. Significant components of the reduction of our selling
and G&A expenses include a reduction in salaries, benefits and bonuses aggregating
approximately $779,000.

This reduction is due primarily to a one-time compensation charge incurred during the
three-month period last year of approximately $400,000 related to the sale of
Embassy's real estate assets. Also, advertising decreased $136,000, our stock-based
compensation decreased $194,000, and warranty and freight expenses in the
aggregate were lower by approximately $96,000.

Additionally, certain intangible assets related to our acquisition of Nationwide were
fully amortized during 2007, resulting in a reduction of amortization expense of
133,000 when comparing the three-month periods June 30, 2008 and 2007.
Offsetting the above reductions in our operating expenses was an increase in
professional services of $122,000 primarily attributable to funds received during the
three-month period ended June 30, 2007 resulting from a favorable legal settlement
with a former employee.

Additionally, as part of the previously disclosed loss of the Home Depot business, we
incurred a one-time aggregate charge of 219,000 consisting of severance and other
employee-related expenses of 101,000 as a result of reducing our warehouse and
manufacturing staff, as well as $118,000 due to a write-down in the value of certain
machinery and equipment used solely for the Home Depot account.

In conclusion, I would like to state that, while our results from continuing operations for
the second quarter of this year reflected an improvement over the prior year, we
remain guarded for the balance of this year due to the questionable nature of the
housing market which we are tightly tied to.

The key to our growth will be the eventual timing of this housing recovery. Until such
time that that occurs, everyone at P&F remains dedicated to optimizing our efforts and
profitability in order to enhance shareholder value.


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                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                            Vcall
At this time, I'd like to return--turn the call over to Joe. Joe?
                                                                                            601 Moorefield Park Dr.
                                                                                            Richmond, VA 23236
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer                                                                                     Phone: 888-301-5399
Thank you, Richard.                                                                         Fax: 804-327-7554

Turning to our results for the six months ended June 30, 2008, revenue was                  info@vcall.com
$49,879,000 compared to $55,567,000 for the six months ended June 30, 2007. Net             www.vcall.com
                                                                                            www.investorcalendar.com
revenue for our Tool segment for the six-month period ended June 30, 2008 of 27.8
million reflects a slight improvement of 400,000 from the 27.4 million reported during
the same period in '07. Key factors for this increase are reporting six months of
revenue for Hy-Tech compared to approximately four and a half months in 2007, as
well as revenue growth at Hy-Tech during the second quarter, which together
generated $2,929,000 of increase over the six-month period ended June 30, 2007.

The increase was, however, offset by a decrease on the year-to-date revenue
reported by Florida Pneumatic of 2,554,000 due essentially to lower-than-expected
retail and promotional sales. I'd like to point out that we expect retail revenue at
Florida Pneumatic to be weak for some period, going forward, as we have been
advised by a significant retail customer that they reduced their expenditures are at--
have reduced their expenditures on advertising for the foreseeable future.

In addition, the Home Depot business is finally concluded. This should be somewhat
mitigated by strong industrial revenue, however.

Net revenue for the Hardware segment continues to be severely impacted by the
ongoing downward trend of new home construction. Revenue at Woodmark and
Pacific Stair products, whose primary sales driver is new home construction, were
down 27.1 percent and 47.8 percent respectively for the six-month periods ended
June 30, 2008 compared to 2007.

Specifically, Woodmark's revenue decreased to 12.4 million from 17 million, and
Pacific Stair Products' revenues decreased to one million from 1,970,000. It is difficult
to predict when the new home starts will begin to improve. Until such time, we'll
continue our ongoing efforts to reduce costs and overhead where possible.

When comparing the six-month periods ended June 30, 2008 and 2007, net revenue
at Nationwide decreased to 8,672,000 from 9,174,000 primarily due to competitive
pressures and cost increases from overseas. The overall gross margins for the Tool
segment for the six-month period ended June 30, 2008 was higher, 3.9 percentage
points, than the prior year. Specifically, Hy-Tech's improved gross margins are due
primarily to an improved product mix as well as lower variable costs. Gross margins
at Florida Pneumatic improved as well primarily due to reduced costs from overseas
suppliers and product mix.

Gross margins for the six-month period ended June 30, 2008 for the Hardware
segment are down 1.8 percentage points when compared to the same time period in
the prior year. Woodmark's gross margin is down 1.4 percent due in part to less
efficient absorption of warehouse costs due to lower revenue. At Pacific Stair

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                                                                                            Transcript:
                                                                                  P&F Industries (PFIN)
                                                                      Q2 2008 Earnings Conference Call
                                                                                       August 12, 2008
                                                                                          Vcall
Products, gross margins for the six-month period ended June 30, 2008 are running at
                                                                                          601 Moorefield Park Dr.
a deficit, principally the result of under-utilization of the facilities.                 Richmond, VA 23236

Gross margins for the six-month period at Nationwide were 2.3 percentage points           Phone: 888-301-5399
lower than the same period in '07, primarily the result of higher material costs          Fax: 804-327-7554
combined with current competitive market conditions. Our SG&A for the six-month
period ended June 30, 2008 aggregated 13,274,000, reflecting a reduction of               info@vcall.com
1,394,000 from the six-month period ended June 30, 2007 total of 14,668,000.              www.vcall.com
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Key elements contributing to this reduction include total salaries, payroll taxes and
other employee costs aggregating 484,000, most of which is due to the approximately
400,000 compensation charge in connection with the sale of Embassy's real property,
which occurred in the six-month period ended June 30, 2007.

Additionally, advertising and promotions decreased 258,000, commission expense
decreased 120,000, freight costs decreased 122,000, depreciation and amortization
were lower by 220,000, warranty expense decreased 149,000, product liability
decreased 211,000, and stock-based compensation decreased 154,000.

The above items were offset by a one-time severance and equipment write-down of
219,000 incurred as a result of the loss of the Home Depot business. Additionally, we
received a payment of $165,000 as reimbursement of fees and expenses incurred
related to a legal matter, which was settled in our favor.

Our net interest for the six-month period ended June 30, 2008 was lower than the
same period in the prior year by $473,000. Key components of this change include
interest expense incurred in association with the Hy-Tech term loan, which decreased
$216,000, interest expense associated with the Woodmark acquisition, which
decreased $196,000, and interest on long-term debt, which was lower by $95,000.

The proceeding reductions of interest expense were partially offset by an increase in
interest expense incurred on our short-term borrowings, which rose approximately
$65,000 incurred--excuse me--primarily as we paid down long-term debt in January
2008 with short-term borrowings. Total borrowings of approximately 31.3 million
reflect a decrease of approximately 2.8 million from the 34.1 million outstanding at
December 31, 2007, due primarily to a decrease in working capital needs consistent
with lower revenue.

Capital expenditures for the six-month period ended June 30, 2008 were 562,000
compared to 959,000 for the same period a year ago. We reported depreciation and
amortization of 856,000 and 729,000 for the six-month periods ended June 30, 2008
and 2007 respectively.

With that, I'd like to turn the call back over to Richard. Richard?

Richard Horowitz – P&F Industries – Chairman, President and CEO
Thank you, Joe, and that's the end of our report for the second quarter of 2008. And
of course, now we'll be happy to answer any questions any of you may have. Thank
you for calling in.

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                                                                             P&F Industries (PFIN)
                                                                 Q2 2008 Earnings Conference Call
                                                                                  August 12, 2008
                                                                                           Vcall
                                                                                           601 Moorefield Park Dr.
Operator                                                                                   Richmond, VA 23236
Thank you.
                                                                                           Phone: 888-301-5399
We will now be conducting a question and answer session. If you would like to ask a        Fax: 804-327-7554
question, please press star-one on your telephone keypad. A confirmation tone will
indicate your line is in the question queue. You may press star-two if you would like to   info@vcall.com
remove your question from the queue. For participants using speaker equipment, it          www.vcall.com
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may be necessary to pick up your handset before pressing the star keys. One
moment, please, while we poll for questions.

Our first question comes from Andrew Shapiro with Lawndale Capital Management.
Please state your question.

Andrew Shapiro – Lawndale Capital Management
Hi. I have several questions I'll ask of you, and then back out into the queue for
others to step in here.

Could you clarify these items as non-recurring and, again, which quarter they were?
There was this--and if they came through SG&A or cost of goods sold. There was the
severance of 219, the inventory machinery write-down of 118, and then this litigation
of 122. That sounded like that was from prior year.

Richard Horowitz – P&F Industries – Chairman, President and CEO
That was from prior year. That--the 122,000 was for the prior year.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Correct.

Andrew Shapiro – Lawndale Capital Management
Okay, and that was reduction of SG&A, I'm assuming, in--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--Yes--.

Andrew Shapiro – Lawndale Capital Management
--In a prior year?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yes.

Andrew Shapiro – Lawndale Capital Management
And then, the inventory and machinery of 118, cost of goods sold or SG&A, and that
was this quarter?




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                                                                                       Transcript:
                                                                             P&F Industries (PFIN)
                                                                 Q2 2008 Earnings Conference Call
                                                                                  August 12, 2008
                                                                                           Vcall
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
                                                                                           601 Moorefield Park Dr.
Officer                                                                                    Richmond, VA 23236
Well, there's no inventory in that number, Andy.
                                                                                           Phone: 888-301-5399
Andrew Shapiro – Lawndale Capital Management                                               Fax: 804-327-7554
Okay.
                                                                                           info@vcall.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial              www.vcall.com
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Officer
It's a write-down of some equipment and severance, and that was all put through
SG&A.

Andrew Shapiro – Lawndale Capital Management
Okay, so the full 337 or so?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
No, no, 219, I believe.

Andrew Shapiro – Lawndale Capital Management
Yeah, and then there was 118 as well.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
A hundred and 18--.

Andrew Shapiro – Lawndale Capital Management
Part of the 219? That's what I needed clarified, then.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
There was 101 of severance and 118 of equipment write-down.

Andrew Shapiro – Lawndale Capital Management
Okay. All right. So, I got that. All right.

Last quarter, you mentioned you believe the year would be better than last year, and
you've done a lot of blocking and tackling, and the benefits should flow through. I just
want to get a feel about where you are in the process of recognizing the benefits of
the blocking and tackling, as obviously the margins appear better than this quarter.
Are there some additional improvements to be seen in the current quarter we're in,
ended September?

Richard Horowitz – P&F Industries – Chairman, President and CEO
Andrew, it's really--we really don't give guidance like that anymore. And I--and the
reason is is exactly for these reasons, because there is so much tumultuousness in
the world right now, in the economy, that we really don't have that crystal ball.

Andrew Shapiro – Lawndale Capital Management

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                                                                                        Transcript:
                                                                              P&F Industries (PFIN)
                                                                  Q2 2008 Earnings Conference Call
                                                                                   August 12, 2008
                                                                                           Vcall
Well, I'm trying to get at, I guess, the costs and the blocking and tackling part. I
                                                                                           601 Moorefield Park Dr.
understand you can't predict the revenue side or then the net cash flow. But, are          Richmond, VA 23236
there some additional blocking and tackling in net benefits that had not yet been seen
in the quarter ended June that we might see in the quarter ended September?                Phone: 888-301-5399
                                                                                           Fax: 804-327-7554
Richard Horowitz – P&F Industries – Chairman, President and CEO
Yeah. There are absolutely a lot of that ongoing in all of our divisions, you know?        info@vcall.com
Price increases, getting vendor concessions, freight savings. I mean, employee--you        www.vcall.com
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know, employee issues. It's all going on, and it's not--we haven't had--if you're asking
us if it's all in the second quarter, the answer is no.

Andrew Shapiro – Lawndale Capital Management
Yeah. Basically, did the June quarter reflect a full quarter of savings yet?

Richard Horowitz – P&F Industries – Chairman, President and CEO
I would say no.

Andrew Shapiro – Lawndale Capital Management
Okay.

Richard Horowitz – P&F Industries – Chairman, President and CEO
I would say no. But, of--you know, maybe half of it I'd be guessing, maybe, maybe
something like that, you know? But, no. It'll be going forward, obviously, and there'll
be others, but we don't know what they are, and we don't know if they'll be offset by
other things going the other way.

Andrew Shapiro – Lawndale Capital Management
Right.

The sequential build-up in inventory, was that planned for future growth? Was that
involuntary? What's behind that inventory build?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
There--the--there was nothing planned about the inventory build. I think part of it
relates to a slowdown in some revenue that we didn't anticipate. It may also be--I
know in one instance we had to buy ahead of a price increase.

Andrew Shapiro – Lawndale Capital Management
Um-hmm.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
And then, kind of going the other direction, you've got, you know, revenue dropping,
so that would tend to drive inventory down in the longer run.

Andrew Shapiro – Lawndale Capital Management
Yeah. Well, it was down year-over-year, but it just--we noticed it ticked up from last
quarter.

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                                                                                           Transcript:
                                                                                 P&F Industries (PFIN)
                                                                     Q2 2008 Earnings Conference Call
                                                                                      August 12, 2008
                                                                                          Vcall
                                                                                          601 Moorefield Park Dr.
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial             Richmond, VA 23236
Officer
Revenue--excuse me, Andy. Inventory between the end of the year in '08 actually           Phone: 888-301-5399
went down by a couple hundred thousand dollars. Are you talking about Q2--?               Fax: 804-327-7554

Andrew Shapiro – Lawndale Capital Management                                              info@vcall.com
--[Unintelligible] sequentially. I'm talking from March to June [unintelligible]--.       www.vcall.com
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Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Oh, excuse me. I don't have that in front of me, but it could be, what, a couple of
hundred thousand dollars?

Andrew Shapiro – Lawndale Capital Management
No. Actually, your inventories at the end of March were 30.1 million, and they went up
to 31.4 for a jump of about 1.3 million.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah. I mean, that's just timing there, really. I wouldn't draw any conclusions from
that increase.

Andrew Shapiro – Lawndale Capital Management
Okay.

So, do you guys feel you've right-sized for the current environment, or are you having
to contemplate, we'll call it, a plan B or a plan C here of additional cuts?

Richard Horowitz – P&F Industries – Chairman, President and CEO
I would say each of our companies are different in that regard. I think we have--Joe,
you may not agree, but I think we've right-sized, for the most part. But, it's a moving
target, and things change. And if it changes, we'll have to right-size up or down
accordingly.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah. I would agree, actually. I think we are right-sized. However, I think there's
probably some more opportunity in the--on the hardware side. We're going to take a
little harder look at it, even though I think we are right-sized. That doesn't mean we
can't get a little skinnier.

Andrew Shapiro – Lawndale Capital Management
Okay.

Now, in Pacific Stair, you had sequential gain, meaning, you know, it was up from last
quarter. Your revenue level's certainly down sizably year-over-year.




                                                                                                             11
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                              Vcall
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
                                                                                              601 Moorefield Park Dr.
Officer                                                                                       Richmond, VA 23236
Yeah.
                                                                                              Phone: 888-301-5399
Andrew Shapiro – Lawndale Capital Management                                                  Fax: 804-327-7554
Is this sequential gain a sign of seasonality, a sign of some stabilization in the market?
                                                                                              info@vcall.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial                 www.vcall.com
                                                                                              www.investorcalendar.com
Officer
I would say both. Well, first of all, there is a little bit of seasonality. Q1 is generally
not their best quarter. I don't think the market has really stabilized, but I think we have
been successful in picking up a couple of decent sized new accounts.

Andrew Shapiro – Lawndale Capital Management
Okay. And so, you think you may be gaining some share, then?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah, we--absolutely.

Andrew Shapiro – Lawndale Capital Management
Okay.

And if I recall Pacific Stair, while we're on that particular segment, I think you had at
one point maybe two facilities. It was a carry-over migrating from one to another.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Right. We're now in one facility.

Andrew Shapiro – Lawndale Capital Management
I was going to say, are--facilities consolidation available, when did you implement the
facilities consolidation?

Richard Horowitz – P&F Industries – Chairman, President and CEO
Very, very recently.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah, really right at the end of June, really beginning of July.

Andrew Shapiro – Lawndale Capital Management
So, then where Pacific Stair had negative gross margins reflected in the June quarter
as a result of not being able to, you know, offset fixed facility costs, amongst others,
there should be some improvement, at least in that line item, in quarter ended
September?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yes.

                                                                                                                 12
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                            Vcall
                                                                                            601 Moorefield Park Dr.
Andrew Shapiro – Lawndale Capital Management                                                Richmond, VA 23236
Great.
                                                                                            Phone: 888-301-5399
Richard Horowitz – P&F Industries – Chairman, President and CEO                             Fax: 804-327-7554
Yeah. But, again, it's not significant, Andrew, to speak of.
                                                                                            info@vcall.com
Andrew Shapiro – Lawndale Capital Management                                                www.vcall.com
                                                                                            www.investorcalendar.com
All right. And--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--And maybe it will only be one month or one and a half months out of the three
months.

Andrew Shapiro – Lawndale Capital Management
Okay.

And Nationwide had also sequential gains June quarter versus the March quarter.
Again, is that a sign of seasonality or a sign of stabilization in that business as well?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Extreme seasonality. If you go back--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--Yeah, we [unintelligible] stabilization there yet at all.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
If you will go back to your previous Q2s, you'll find that pattern where that market is
very weak. Very weak.

Andrew Shapiro – Lawndale Capital Management
All right.

I have more questions. I'll back out in case others have some, but please come back
to me.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Okay.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Okay.

Operator
Thank you.


                                                                                                               13
                                                                                            Transcript:
                                                                                  P&F Industries (PFIN)
                                                                      Q2 2008 Earnings Conference Call
                                                                                       August 12, 2008
                                                                                                  Vcall
Just a reminder, to ask a question, please press star-one.
                                                                                                  601 Moorefield Park Dr.
                                                                                                  Richmond, VA 23236
Our next question comes from Bruce Winter. Please state your question.
                                                                                                  Phone: 888-301-5399
Bruce Winter                                                                                      Fax: 804-327-7554
Yes, thank you.
                                                                                                  info@vcall.com
I understand your geographical footprint from a historical perspective. I'm wondering             www.vcall.com
                                                                                                  www.investorcalendar.com
if there's any more opportunities to rationalize your footprint for the current business
that you have.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Are you suggesting that--well, let me just make sure you're clear. We've got six
facilities, four major facilities, two relatively minor facilities in different businesses. Are
you asking whether we would go to fewer facilities than that?

Bruce Winter
Yes. You import from the Far East all the way over to Florida. You have two
distribution facilities for tools.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Actually, the two--just to be clear, the two tool businesses are--while there is a fair
amount of overlap in those businesses in terms of how they go to market, there is next
to no overlap in where they're getting product. Pittsburgh--the product sold by Hy-
Tech is all made in Pittsburgh. The product sold by Florida Pneumatic is imported
from Asia to Jupiter, Florida. So, there really isn't any opportunity to do anything
there.

Nationwide's business in Tampa has nothing to do with the stair parts business, so
there's really no consolidation available there to us. And the Woodmark business is
three operations, and, frankly, you--one might argue that we need six. We've got
three operations along the southern tier of the U.S. It's a very local business in a lot of
ways. Once you get out three or 400 miles from the warehouse, you start to be at a
severe disadvantage to more local competition.

So, ironically, despite the market conditions, we're considering more facilities in
hardware, not less. So--and so, I would say the rationalization doesn't really make
sense for us.

Bruce Winter
I like the idea of six or more and growth in that business. That sounds good to me.

How about Long Island?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Which--I'm sorry, what--?

                                                                                                                     14
                                                                                            Transcript:
                                                                                  P&F Industries (PFIN)
                                                                      Q2 2008 Earnings Conference Call
                                                                                       August 12, 2008
                                                                                          Vcall
                                                                                          601 Moorefield Park Dr.
Richard Horowitz – P&F Industries – Chairman, President and CEO                           Richmond, VA 23236
--Long Island for a facility?
                                                                                          Phone: 888-301-5399
Bruce Winter                                                                              Fax: 804-327-7554
Aren't you done doing things in Long Island?
                                                                                          info@vcall.com
Richard Horowitz – P&F Industries – Chairman, President and CEO                           www.vcall.com
                                                                                          www.investorcalendar.com
Yes, but you're talking about in terms of having another facility, like a warehouse or
something?

Bruce Winter
No, shifting your Long Island business to--your Long Island operations somewhere
else.

Richard Horowitz – P&F Industries – Chairman, President and CEO
We don't have any Long Island operation. Just--we just have corporate offices here.

Bruce Winter
Right, shifts your corporate offices to--closer to your operations.

Richard Horowitz – P&F Industries – Chairman, President and CEO
There's no--these corporate offices could be anywhere. But, that's--you know, we're
accounting and banking and all that stuff, this is where our relationships are.

Bruce Winter
Yeah, but that's the most expensive place in--to do stuff.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Well, we have a very--I mean, we have 5,000 square feet of space. So, as far as real
estate goes across a $100 million company, that's noise. We would have the salaries
pretty much wherever we were in the--you know, in the country. I mean, it's nine
people. I just don't see how there'd be a big savings. The public company costs
would be identical regardless of where we were. We don't really see a big opportunity
there.

Bruce Winter
Okay. Well, I'm looking forward to some expansion with the hardware stuff, though.
That sounds good to me. Thank you.

Richard Horowitz – P&F Industries – Chairman, President and CEO
You're welcome.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Thank you.

Operator

                                                                                                             15
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                               Vcall
Our next question comes from David Bouvay [sp] with Elk Partners. Please state your
                                                                                               601 Moorefield Park Dr.
question.                                                                                      Richmond, VA 23236

David Bouvay - Elk Partners                                                                    Phone: 888-301-5399
Hi. I just wanted to ask about your inventories. I think, you know, before the Hy-Tech         Fax: 804-327-7554
acquisition, they were running--inventory turns were about three times a year, and,
you know, since then they've been a little less than that. And I'm wondering if, at            info@vcall.com
some point, you think that you can get back to the inventory turns at three times.             www.vcall.com
                                                                                               www.investorcalendar.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Sure. Two things going on there. I think the slowdown in the economy is probably
hurting our turns. Until that gets to, you know, a stable point, that would hurt us vis-à-
vis prior years.

Second, Hy-Tech's business model is one of keeping a great deal of parts on the
shelf. They sell--and the business really started as a replacement part--parts
business for name-brand air tools. And while they now make entire tools and product
lines, that's still a very significant part of their business. If those tools--excuse me--if
those parts are not on the shelf, the sale is lost. So, there is a very significant sort of
distributor aspect to their business, even though they're actually making this stuff. So,
their turns are just not going to be that great. And we're okay with that. The return on
assets in general is very high, given the margins available to us. So, that would be
the two reasons that the turns are down from prior to the acquisition.

David Bouvay - Elk Partners
Okay. Thanks.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
You're welcome.

Operator
Our next question comes from Andrew Shapiro with Lawndale Capital Management.
Please state your question.

Andrew Shapiro – Lawndale Capital Management
Okay. A few follow-ups, if I could.

You recently re-negotiated your credit agreement. And in the publicly filed agreement
that we have just--you know, we read through, there was mention of property of
something like 9.8 million. Was that 9.8 million number related to an appraisal value,
a percentage of appraisal value, and what's the cost basis of the property it's related
to?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer




                                                                                                                  16
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                             Vcall
That figure actually was derived--the banks came up with that number, our current
                                                                                             601 Moorefield Park Dr.
credit facility banks. It is an estimate, a conservative estimate on their part, of what     Richmond, VA 23236
the value of our three owned facilities is worth.
                                                                                             Phone: 888-301-5399
Andrew Shapiro – Lawndale Capital Management                                                 Fax: 804-327-7554
Oh, a percent of appraisal value, in a sense?
                                                                                             info@vcall.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial                www.vcall.com
                                                                                             www.investorcalendar.com
Officer
I--you know, honestly, they didn't tell me how they got to that number. They didn't tell
me how that number--what it represents as a percentage of anything. It's just a
number they're using as part of our new borrowing base formula. But, you know, it
does bear relation to what the actual value of the businesses is, but they didn't share
with me how they got to that figure other than looking at the recent transactions.

We bought the Hy-Tech facility a year ago, so, you know, the purchase price
allocation would be a good proxy for the value now. The Tampa facility was bought
about five years--six years ago, and the market there hasn't changed a whole lot. And
we did have a recent--not appraisal, but something just short of an appraisal done by
a market expert on the Jupiter facility to get us a sense of what that market is worth.

The book values of those three buildings, and this is really off the top of my head, I'd
say Hy-Tech's probably over two million bucks. Tampa facility, which is Nationwide, is
probably, I don't--million and three-quarters. And Florida Pneumatic is probably under
a million dollars. Those are rough estimates.

Andrew Shapiro – Lawndale Capital Management
So, roughly $10 million they put on it [unintelligible] conservative on about five million
or so of book value, roughly on both sides of the coin there?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah, uh-huh.

Andrew Shapiro – Lawndale Capital Management
Okay.

And the new agreement, does it have share buyback restrictions that prevent you
from being in the market now?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Not officially.

Andrew Shapiro – Lawndale Capital Management
Okay. So, just emotionally?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer

                                                                                                                17
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                               Vcall
Yeah. We have been in the market supporting the stock. I don't think the bank would
                                                                                               601 Moorefield Park Dr.
entertain us buying large blocks of shares, obviously to the extent that that hurts our        Richmond, VA 23236
ability to pay down the debt at these levels. So, officially, there's no prohibition
against it.                                                                                    Phone: 888-301-5399
                                                                                               Fax: 804-327-7554
Andrew Shapiro – Lawndale Capital Management
Okay. And the duration of the loan through November, that seemed a little odd. Can             info@vcall.com
you comment on that?                                                                           www.vcall.com
                                                                                               www.investorcalendar.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Well, frankly, as you know, we have two banks. One of the two banks was not
comfortable going out another 12 months. They still like the facility. They would like
to take a little bit of time and take a look at our real estate values, which has really not
historically been part of the loan collateral, so to speak, and perform some internal
audits. And they're going to review it again in November.

Richard Horowitz – P&F Industries – Chairman, President and CEO
What--I might add that they told us--one of the banks was totally fine with the--our new
arrangement. The other bank said that their policy within their bank is short-term four-
month loans. And it's not just P&F. It's pretty much what they're doing now. That's
their own appetite. So, it's--one bank was--had no issue with 12 months, and the
other one said it's not just P&F. It's their policy, going forward, with the climate of the
world right now.

Andrew Shapiro – Lawndale Capital Management
But, your--four-month loans? You're $100 million public company. It sounds like you
need to upgrade to, you know, a little bit bigger bank.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
It's a very big bank.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
It's a huge--it's a--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--It's a huge bank. It's--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--It's one of the largest banks in the world.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Yeah. It's got nothing to do with--.

Andrew Shapiro – Lawndale Capital Management
And they're doing four-month loans?

                                                                                                                  18
                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                            Vcall
                                                                                            601 Moorefield Park Dr.
Richard Horowitz – P&F Industries – Chairman, President and CEO                             Richmond, VA 23236
That's what the--.
                                                                                            Phone: 888-301-5399
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial               Fax: 804-327-7554
Officer
--Well, again--.                                                                            info@vcall.com
                                                                                            www.vcall.com
                                                                                            www.investorcalendar.com
Richard Horowitz – P&F Industries – Chairman, President and CEO
--Not everybody in the world is too--maybe people in our category are--in our market
cap or our volume, whatever their--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--Yeah, I think--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Or whatever their internal decisions are--.

Andrew Shapiro – Lawndale Capital Management
--Right, yeah--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--That's their internal decisions. But, it's an extremely large bank. It's got nothing to
do with the size.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah. I mean, Richard's absolutely right. I think the fact that we're exposed to
housing is just in their sort of internal review, is something they want to be careful
about, and we understand that. But, they have assured us that they have no problem
entertaining renewing the loan. It's just that they're more comfortable with a shorter
term for now.

Andrew Shapiro – Lawndale Capital Management
Okay.

Richard Horowitz – P&F Industries – Chairman, President and CEO
And I might mention, Andrew, in our 8-K, it mentions our two banks, Citibank and
HSBC. And HSBC is the one--that's the second bank, and they're the one that had
the issue. And they're a pretty large bank, as you know.

Andrew Shapiro – Lawndale Capital Management
No, they're a large bank, but you're in some kind of small business division where
their credit department's a little--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
No--.


                                                                                                               19
                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                             Vcall
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
                                                                                             601 Moorefield Park Dr.
Officer                                                                                      Richmond, VA 23236
--No, we're not absolutely in a small business division. In fact, we're dealing with a
very senior level person there. So, it has nothing--there is no small business division.     Phone: 888-301-5399
The people that we talk to loan out billions.                                                Fax: 804-327-7554

Andrew Shapiro – Lawndale Capital Management                                                 info@vcall.com
On four-month terms? Okay.                                                                   www.vcall.com
                                                                                             www.investorcalendar.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
I didn't say that. I said that, in our specific case, given our financials and the markets
we serve, that's what they were comfortable with doing.

Andrew Shapiro – Lawndale Capital Management
Okay.

The two segments, Tools and Hardware, they have certain operating expenses and
operating expenses as a percent of revenue. Do you have--I'm trying to compare to
prior quarters if we've seen some improvement there, where these cuts came into
which division. The SG&A expense percentages that you provide for the segments,
do you have that handy for both Tools and Hardware for the quarter?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
No, I do not have it handy. We don't break it out that way for the Qs. But, I can tell
you that the--.

Andrew Shapiro – Lawndale Capital Management
--Well, that's actually where we get it, is out of the 10-Q.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
I--okay. Well, I don't have--let me just say this. The cuts in SG&A came out of
Hardware.

Andrew Shapiro – Lawndale Capital Management
Okay. All right.

And then, we'll--your 10-Q is going to be filed when?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Thursday, I believe.

Andrew Shapiro – Lawndale Capital Management
All right. Well, you have--your segment breakout will have what we're looking for for
the--.


                                                                                                                20
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                               Vcall
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
                                                                                               601 Moorefield Park Dr.
Officer                                                                                        Richmond, VA 23236
--Yeah--.
                                                                                               Phone: 888-301-5399
Andrew Shapiro – Lawndale Capital Management                                                   Fax: 804-327-7554
--Comparison.
                                                                                               info@vcall.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial                  www.vcall.com
                                                                                               www.investorcalendar.com
Officer
Yeah. Yeah.

Andrew Shapiro – Lawndale Capital Management
I have more questions. I'll back out in the queue because we've got some people
here who are asking questions, and--but, come back to me, please.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Okay.

Operator
Our next question comes from Timothy Staboz [sp]. Please state your question.

Timothy Staboz
Good morning, gentlemen.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Morning.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Morning.

Timothy Staboz
Boy. I've been involved in this company, I was surprised to see, for 12 years. I first
bought stock 12 years ago and have been in and out of the stock. Had been out of it
for a while, but bought 25,000 shares all in the last month, and I had no position part
of that. So, I'm back in. I can't believe the sell-off in the stock, frankly.

Let me praise you and then take you to task, okay, and then I'll ask you to comment
on this, if you'll allow it.

You've got a great franchise here in P&F Industries. It's a great company. You make
money. You made money for 15 years straight. If you strip out the goodwill write-off
in '07, you made money even in '07, if you'll strip out the goodwill write-off. It's a great
franchise. And, you know, with the housing--you're a housing-related company, and
you should be losing money in a housing crisis, and you're still making money. And I
think that's great. So, that's the praise.




                                                                                                                  21
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                              Vcall
Now, the concern is your stock's at 2.50. And I think part of the reason your stock is
                                                                                              601 Moorefield Park Dr.
at 2.50 is because, despite the earnings and the quality of the business that                 Richmond, VA 23236
sophisticated people can understand, you're not getting the credit on the street that
you might deserve. And part of the reason for that is--I'm going to be as nice as             Phone: 888-301-5399
possible about this, okay--but you're taking out a lot in salaries.                           Fax: 804-327-7554

And it's a great business, but--and I'm going to give you credit for the best years of        info@vcall.com
your life, which is 2002 through 2006, okay, five years. Your average blended return          www.vcall.com
                                                                                              www.investorcalendar.com
on equity post-tax, you know, return on equity is 10 percent, almost exactly 10
percent.

So, guys, you've got a great business, and you're excellent managers, but I think your
pay is too high for a 10 percent return on equity company, and it's hurting your
credibility on Wall Street. Sure, part of it's that you're thinly traded, and you're not to
blame for that.

But, you know, can we restructure our salary arrangements so that we get more, you
know, related to increase in value of the stock or something? Because the fact that
you're selling at $2, which is a 13-year low, when you've created all this internal value
is, frankly, absurd. Can you comment?

Richard Horowitz – P&F Industries – Chairman, President and CEO
I think the only reason we're trading where we are is because we're getting
[unintelligible], and we're in the midst of--throes of a housing market collapse, which
we are a very big part of. And when things were better in that regard, the stock was
doing better, and the salaries and all that stuff were the same.

So, it's not about that, in our opinion. It's about the market and how we're--our
revenues and our profits and our margins are being crushed with the economy the
way it is. And any more than that, I--I mean, I appreciate what you're saying, but, any
more than that I can't comment.

Timothy Staboz
Can I make a--I want to make a suggestion, then I'll let it go back in the queue or
whatever.

But, you know, the Board should consider buying out the company and taking it
private at $7. I mean, you could borrow against your future salaries to buy this
company at seven bucks. And I don't know if the 10 percent shareholders, the three
of them, are going to be interested in that. But, you almost have a moral obligation to
take this thing private, quite honestly, with the salaries as they are. And please
consider that, okay? Please consider that.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Okay. We appreciate it. Thank you.

Operator
Our next question comes from David Bouvay with Elk Partners. Please state your
question.

                                                                                                                 22
                                                                                        Transcript:
                                                                              P&F Industries (PFIN)
                                                                  Q2 2008 Earnings Conference Call
                                                                                   August 12, 2008
                                                                                             Vcall
                                                                                             601 Moorefield Park Dr.
David Bouvay - Elk Partners                                                                  Richmond, VA 23236
I just wanted to ask about SOX-404 compliance, you know, the--.
                                                                                             Phone: 888-301-5399
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial                Fax: 804-327-7554
Officer
--Sure--.                                                                                    info@vcall.com
                                                                                             www.vcall.com
                                                                                             www.investorcalendar.com
David Bouvay - Elk Partners
--Review of internal controls.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yes.

David Bouvay - Elk Partners
Have you guys complied with that yet, or are you in the process? And I'm not sure
what the deadlines are for that.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah. The--as you know, we're--well, the term used to be "small issuer." It--the
requirements for us to be 404 compliant, which basically means to have our internal
controls audited, that has been pushed out, once again, till 2010. So, that would be
the first year that we would have to have an external firm audit our internal controls.

Having said that, we continue to self-certify. We've got a full internal control aspect to
our business. In fact, we recently hired a major accounting firm to perform that work
for us. We had, for some period of time, done that internally and have moved to some
outside expertise there.

So, we're as compliant, I guess, as we can be, given the rules that we're required to
follow at the moment.

David Bouvay - Elk Partners
Okay.

And you said the rule actually was pushed out to 2010?

Richard Horowitz – P&F Industries – Chairman, President and CEO
For our size--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
For our size company.

David Bouvay - Elk Partners
Oh, okay. Oh, that's good news.


                                                                                                                23
                                                                                    Transcript:
                                                                          P&F Industries (PFIN)
                                                              Q2 2008 Earnings Conference Call
                                                                               August 12, 2008
                                                                                       Vcall
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
                                                                                       601 Moorefield Park Dr.
Officer                                                                                Richmond, VA 23236
Larger companies have to be compliant now, and have been.
                                                                                       Phone: 888-301-5399
David Bouvay - Elk Partners                                                            Fax: 804-327-7554
Okay. Okay, excellent.
                                                                                       info@vcall.com
And I think you should stay a public company, by the way.                              www.vcall.com
                                                                                       www.investorcalendar.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Okay. Thank you.

David Bouvay - Elk Partners
Things are going to turn around. So, thank you.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Thank you.

Operator
Our next question comes from Andrew Shapiro with Lawndale Capital Management.
Please state your question.

Andrew Shapiro – Lawndale Capital Management
Okay. Some follow-ups, if I could.

Given the severance and equipment expenses that you've taken now in the Florida
Pneumatic area, are we completely out of Home Depot in terms of inventory and
associated overhead?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
We will be out of Home Depot by the end of July, first part of August.

Andrew Shapiro – Lawndale Capital Management
Does that mean, in the September quarter, there's some additional minor charges, or-
-?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--No more--there shouldn't be any more--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Not charges--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--Charges.

                                                                                                          24
                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                            Vcall
                                                                                            601 Moorefield Park Dr.
Richard Horowitz – P&F Industries – Chairman, President and CEO                             Richmond, VA 23236
Minor, minor revenue.
                                                                                            Phone: 888-301-5399
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial               Fax: 804-327-7554
Officer
Revenue--some revenue with some associated expenses, but profitable revenue.                info@vcall.com
                                                                                            www.vcall.com
                                                                                            www.investorcalendar.com
Richard Horowitz – P&F Industries – Chairman, President and CEO
And I might remind you, Andrew, and I'll remind anybody else on the call, for us at
P&F, it's--we're better off, under these circumstances, without Home Depot in the--as
our customer.

Andrew Shapiro – Lawndale Capital Management
Oh, it was low. It was a really low-margin business. Is--was that [unintelligible]--?

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Very, very low margin business, and--.

Andrew Shapiro – Lawndale Capital Management
--Is that part of the reason for the margin improvement?

Richard Horowitz – P&F Industries – Chairman, President and CEO
It is--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--Yes--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--In some part of it, yes--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--As a matter of fact. And we were able to, knowing that the business was going to be
lost, reduce some expenses where we might have kept them around if the business
had been ongoing. So, we kind of have a little bit of a benefit here the last few
months of having that business generating a little more margin that it might have
historically.

Andrew Shapiro - Lawndale Capital Management
Um-hmm, okay.

Sears is obviously--as an overall firm is having some poor comps. But, they unveiled
a new strategy we've talked about on prior calls, and still they hadn't gotten visibility
from it, if it would be beneficial, which was to have different brand managers. Since
you provide a variety of products for their Craftsman segment, which is considered
one of their, you know, good brands and good segments, have you gotten any better
visibility or clarity as to what they're doing with the brand management and the

                                                                                                               25
                                                                                      Transcript:
                                                                            P&F Industries (PFIN)
                                                                Q2 2008 Earnings Conference Call
                                                                                 August 12, 2008
                                                                                        Vcall
opportunities that might present for you with the Craftsman brand and the Craftsman
                                                                                        601 Moorefield Park Dr.
products you provide?                                                                   Richmond, VA 23236

Richard Horowitz – P&F Industries – Chairman, President and CEO                         Phone: 888-301-5399
No, we have not, Andrew. And I don't think they know. So--.                             Fax: 804-327-7554

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial           info@vcall.com
Officer                                                                                 www.vcall.com
                                                                                        www.investorcalendar.com
--Yeah, we--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--We don't know either--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--I would agree. It seems even more confusing than it was before that strategy was
announced, frankly.

Andrew Shapiro - Lawndale Capital Management
Um-hmm.

But, they also--they said--they were--you had said you were ramping up a new volume
price arrangement with them. How is that going?

Richard Horowitz – P&F Industries – Chairman, President and CEO
A new volume price--I don't know--I don't think any of us know what you're talking
about.

Andrew Shapiro - Lawndale Capital Management
I thought in the prior calls you had talked about some type of volume price
arrangement that you would be doing some higher volume with them, but it would be
in return for price concessions.

Richard Horowitz – P&F Industries – Chairman, President and CEO
No, no, no--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Hmm, no.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Maybe that was a couple of quarters ago, but things have changed, I believe, if I'm
talking about the same thing you're talking about.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
And I would--well, I would just say, in general, when we get a higher volume at Sears
through some sort of promotion, that is the case. We would get a promotional item


                                                                                                           26
                                                                                             Transcript:
                                                                                   P&F Industries (PFIN)
                                                                       Q2 2008 Earnings Conference Call
                                                                                        August 12, 2008
                                                                                                  Vcall
with some very high volume, but at lower margin. But, there's no particular agreement
                                                                                                  601 Moorefield Park Dr.
or strategy or--?                                                                                 Richmond, VA 23236

Richard Horowitz – P&F Industries – Chairman, President and CEO                                   Phone: 888-301-5399
--If I recall, there was something going on like that in '07, but, you know, their world          Fax: 804-327-7554
changed a lot in '08. And you know, it's not--nothing of any import to us unfortunately.
                                                                                                  info@vcall.com
Andrew Shapiro - Lawndale Capital Management                                                      www.vcall.com
                                                                                                  www.investorcalendar.com
Okay.

And are you looking at other retailers, prospectively, to reduce reliance on Sears, or is
retail not part of the future and it's more a move to diversify away?

Richard Horowitz – P&F Industries – Chairman, President and CEO
I would say it's the latter.

Andrew Shapiro - Lawndale Capital Management
Okay.

But--however, saying that, Sears is definitely a part of our, you know, plan and our
future. But, you know, we have a very good arrangement with them, a very good--
they--.

Andrew Shapiro - Lawndale Capital Management
--But, you're not looking to go add Lowe's or someone?

Richard Horowitz – P&F Industries – Chairman, President and CEO
Absolutely not, because we'll be back in the same pot that we were with Home Depot,
etc.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah. I mean, Sears is a little bit of a different customer than a Home Depot or a
Lowe's. We have a different arrangement with them. It's a much more engineering-
focused sale. We have some leverage there in that we really promote our knowledge
of the product. And it's really not quite--it is retail, but it's really at a higher level than
would be Lowe's or--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Their customer, Andrew, as I'm sure you know, is more--I'm going to call them more
professional in--you know, in a lot of ways, and more handy, where Home Depot and
Lowe's and those places, they're all selling, you know, price--you know, low price
points just, you know, to compete against each other. The Craftsman label is a
higher-end product, better warranties, better quality, so they demand a better price,
and they get a better product from us.

Andrew Shapiro - Lawndale Capital Management
Um-hmm.


                                                                                                                     27
                                                                                            Transcript:
                                                                                  P&F Industries (PFIN)
                                                                      Q2 2008 Earnings Conference Call
                                                                                       August 12, 2008
                                                                                               Vcall
Richard Horowitz – P&F Industries – Chairman, President and CEO
                                                                                               601 Moorefield Park Dr.
So, it's a--you know, that's a different--a little--a slightly different segment to us.        Richmond, VA 23236

Andrew Shapiro - Lawndale Capital Management                                                   Phone: 888-301-5399
Now, you've been sourcing from Asia, and you moved some stuff from Japan to                    Fax: 804-327-7554
Taiwan more and more into China. How much better is the cost advantage, and do
you see yourself moving more there?                                                            info@vcall.com
                                                                                               www.vcall.com
                                                                                               www.investorcalendar.com
And also, in light of their production cutbacks during the Olympic period, is there any
Olympic-related impact on your sourcing from there?

Richard Horowitz – P&F Industries – Chairman, President and CEO
There's no Olympic-related sourcing at all, in that regard.

We're--you know, we're doing more and more with China, we're doing--well, I should
say we're doing less and less with Japan.

Andrew Shapiro - Lawndale Capital Management
Um-hmm.

Richard Horowitz – P&F Industries – Chairman, President and CEO
And sometimes we go to--we still are in Taiwan and we still are in China, and we are
looking into other areas of the world, as well, not necessarily even China.

Andrew Shapiro - Lawndale Capital Management
Okay. Hy-Tech--on the oil and gas markets that you're serving, is this--primarily,
would you say, the end market mix is maintenance of construction of new facilities?
And if the--you get a fall back on the oil and gas pricing, does that have an impact in
the Hy-Tech business?

Richard Horowitz – P&F Industries – Chairman, President and CEO
The short form of the answer is no it does not have an impact, and--because there's
going to be plenty of drilling going forward at whatever prices the oil is. It's still very,
very inflated, as we all know, every day when we go to get--fill up our cars. And it's
both--it's also--it's both for payors and new exploration, new bumping--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--And construction--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--And construction. Right.

Andrew Shapiro - Lawndale Capital Management
Okay.

And then, you mentioned on a prior call the potential marketing and distribution and
product opportunities from high-tech products going in through Florida Pneumatic,
primarily, rather than the other way around. And they were--but, they were immaterial

                                                                                                                  28
                                                                                             Transcript:
                                                                                   P&F Industries (PFIN)
                                                                       Q2 2008 Earnings Conference Call
                                                                                        August 12, 2008
                                                                                                  Vcall
last quarter. But, you mentioned that Florida took in 15 to 20 tools or so, and that in
                                                                                                  601 Moorefield Park Dr.
'08 they thought the benefits might grow to be in the 100,000 range. Is that still a              Richmond, VA 23236
thought, and what's the timing of that?
                                                                                                  Phone: 888-301-5399
Richard Horowitz – P&F Industries – Chairman, President and CEO                                   Fax: 804-327-7554
It's not a thought, it's an implementation, and that's what they're doing.
                                                                                                  info@vcall.com
Andrew Shapiro - Lawndale Capital Management                                                      www.vcall.com
                                                                                                  www.investorcalendar.com
Okay.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Yeah, we are presently--Florida Pneumatic is having great success with the Hy-Tech
products, and the business is growing in--you know, in the hundreds of thousands of
dollars annualized, as of now.

Andrew Shapiro - Lawndale Capital Management
Okay.

And was that the case already in the quarter ended June, or that's a run rate you've
got going here in the September quarter that--?

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Yeah, I mean, I would say it was the run rate in the June quarter, but it's increasing,
you know--every--you know, it seems to be increase every month. But, again, that's
lost in the noise, if not--it's not earth shattering, but it's definitely rising every quarter-
every month.

Andrew Shapiro - Lawndale Capital Management
And you--in hardware, you rolled out a pretty extensive product line, overhaul, at
Nationwide over the last several quarters, you had mentioned. What's your new
product status at Woodmark or Pacific Stairs? Are they due for a product line
overhaul, or are new products not part of the mix?

Richard Horowitz – P&F Industries – Chairman, President and CEO
It's an ongoing thing at Woodmark. It's an ongoing thing at all of our businesses,
actually. And we didn't really have a total overhaul at Nationwide, but we added many
products and eliminated others, and I think we're in the midst of that at Woodmark, as
well.

But, again, at Woodmark, we could be doing--we could be selling anything right now.
Once you go into the housing market, it really doesn't matter what we're selling--.

Andrew Shapiro - Lawndale Capital Management
--Um-hmm--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--You know? It's just doesn't seem--you know, there's just no customers.

Andrew Shapiro - Lawndale Capital Management

                                                                                                                     29
                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                              Vcall
How quickly would a decline in raw material prices feed back to you?
                                                                                              601 Moorefield Park Dr.
                                                                                              Richmond, VA 23236
Richard Horowitz – P&F Industries – Chairman, President and CEO
Six months.                                                                                   Phone: 888-301-5399
                                                                                              Fax: 804-327-7554
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer                                                                                       info@vcall.com
Yeah.                                                                                         www.vcall.com
                                                                                              www.investorcalendar.com
Richard Horowitz – P&F Industries – Chairman, President and CEO
Three to six months I would say.

Andrew Shapiro - Lawndale Capital Management
Okay.

And we mentioned that you've been in the market buying stock, and you mentioned
the phrase supporting the price. I would hope, actually, it's not a price support, but it's
more that this is cheap accretive deployment use of your cash or capital.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
It's all of the above.

Andrew Shapiro - Lawndale Capital Management
Okay

Richard Horowitz – P&F Industries – Chairman, President and CEO
It's all of the above, yeah.

Andrew Shapiro - Lawndale Capital Management
But, how many shares did you buyback, either during the quarter, or what's the
outstanding share count now here in August?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
We bought back starting--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Roughly 9,000 shares, I believe--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--In the last two months, and we'll call it around 9,000 shares.

Richard Horowitz – P&F Industries – Chairman, President and CEO
There are limitations to what we can buy, Andrew.

Andrew Shapiro - Lawndale Capital Management
Well, you were in the quiet period, I'm sure, so--.

                                                                                                                 30
                                                                                       Transcript:
                                                                             P&F Industries (PFIN)
                                                                 Q2 2008 Earnings Conference Call
                                                                                  August 12, 2008
                                                                                          Vcall
                                                                                          601 Moorefield Park Dr.
Richard Horowitz – P&F Industries – Chairman, President and CEO                           Richmond, VA 23236
--Now, to gain that, it's a function--and I'm not an expert on it. But, our lawyers and
our brokers are telling us that we have limitations based upon the average daily          Phone: 888-301-5399
volume, and there are things--and there're many, many times that we could only sell,      Fax: 804-327-7554
like, 200 share--or buy 200 shares when available--.
                                                                                          info@vcall.com
Andrew Shapiro - Lawndale Capital Management                                              www.vcall.com
                                                                                          www.investorcalendar.com
--Yeah--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Which is really not--.

Andrew Shapiro - Lawndale Capital Management
--Well, you know--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Supporting the stock is only doing it, actually--.

Andrew Shapiro - Lawndale Capital Management
--Two hundred shares a day adds up if--you know, and your daily volume's rising
because some semi-institutional holder blew out of your shares and took it from the
threes into the twos, and there was actually a few days of a ton of volume.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
There was.

Richard Horowitz – P&F Industries – Chairman, President and CEO
That--and that gave us the opportunity to buy a larger amount of shares at the end of
last week.

In the second quarter of this year, we bought 1,000 shares, and in the third quarter
we're--we bought so far 8,900 shares. So--.

Andrew Shapiro - Lawndale Capital Management
--Eighty-nine hundred--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--That was only because the buy-in last week, as you mentioned, went up, so it gave
the opportunity to do that. We're not--you know, we're limited by the SEC, so--.

Andrew Shapiro - Lawndale Capital Management
--I know. I know that--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--We can only buy what we can buy, as you know.

Andrew Shapiro - Lawndale Capital Management

                                                                                                             31
                                                                                            Transcript:
                                                                                  P&F Industries (PFIN)
                                                                      Q2 2008 Earnings Conference Call
                                                                                       August 12, 2008
                                                                                               Vcall
Yeah, I understand that. But, obviously--.
                                                                                               601 Moorefield Park Dr.
                                                                                               Richmond, VA 23236
Richard Horowitz – P&F Industries – Chairman, President and CEO
--Yeah--.                                                                                      Phone: 888-301-5399
                                                                                               Fax: 804-327-7554
Andrew Shapiro - Lawndale Capital Management
--As long as there's sellers in there, that's actually--and you have up-tick rules and         info@vcall.com
things like that, which means, frankly, not to be--at these prices, whether it's two, three    www.vcall.com
                                                                                               www.investorcalendar.com
or four, it would be not to be picky on the price because you're only given down-ticks
so often that you got to take advantage of the down-ticks when you get them.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Yeah, we're not--at least--at--with the kind of stock that we're buying, we're really not
supporting the stock. It's more about, as you mentioned, just buying a [inaudible]--.

Andrew Shapiro - Lawndale Capital Management
--Buy them and retire them--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Of value--.

Andrew Shapiro - Lawndale Capital Management
--Yeah, buy and retire. These are--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Right--.

Andrew Shapiro - Lawndale Capital Management
--It's reallocation of capital--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Right--.

Andrew Shapiro - Lawndale Capital Management
--And--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--But, of course, it's a balancing act with our bank and with our own cash needs in
these very difficult times.

Andrew Shapiro - Lawndale Capital Management
Um-hmm, um-hmm. Okay, let's see here.

You had Pacific Stair. You know, obviously the markets you sell into are in duress.
Do you feel that there are some developers that you're selling into that, for their own
reasons, they got to complete projects that they keep building to complete, but then
will be stopping after they've hit the wall, that we--that there's still risk of incremental
drops from some of the customer base at Pacific Stair?


                                                                                                                  32
                                                                                           Transcript:
                                                                                 P&F Industries (PFIN)
                                                                     Q2 2008 Earnings Conference Call
                                                                                      August 12, 2008
                                                                                               Vcall
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
                                                                                               601 Moorefield Park Dr.
Officer                                                                                        Richmond, VA 23236
I--you know, I think that we've seen the other shoe fall at Pacific Stair in terms of the
larger accounts. I mean, we are--the customers that we have now, for whatever                  Phone: 888-301-5399
they're doing, this seems to be their level of activity. And that's not to say that activity   Fax: 804-327-7554
levels couldn't drop again, but I feel reasonably confident that we are at the bottom
there.                                                                                         info@vcall.com
                                                                                               www.vcall.com
                                                                                               www.investorcalendar.com
Andrew Shapiro - Lawndale Capital Management
Okay. One last question, and I'll drop back into the queue.

The litigation to obtain permanent possession of the escrowed moneys on the deposit-
-on the sale of the Embassy property, where does that stand in terms of the timing of
trial, discovery, settlement and arbitration--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--[Inaudible]. I'll let you have that one.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
There have been some re-judgment motions filed by both sides. I don't know that the
judge has even ruled on those. I don't know that we even have a trial date yet. So, it
just goes on and on.

Andrew Shapiro - Lawndale Capital Management
Okay.

And remind me again, and remind us again, of the quantity that's in escrow that would
be cash to come on to the balance sheet, and income to be recognized if you are
successful in your endeavors?

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Well, I mean, we would--there's $650,000 in escrow.

Andrew Shapiro - Lawndale Capital Management
Okay.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
And remember, any gain would be in discontinued operations, although the cash is
cash.

Andrew Shapiro - Lawndale Capital Management
Right.

Richard Horowitz – P&F Industries – Chairman, President and CEO
And also, there's a expense--you know, legal expense going with it, and they've had--.


                                                                                                                  33
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                        Vcall
Andrew Shapiro - Lawndale Capital Management
                                                                                        601 Moorefield Park Dr.
--You're not capitalizing that legal expense. You're--.                                 Richmond, VA 23236

Richard Horowitz – P&F Industries – Chairman, President and CEO                         Phone: 888-301-5399
--No--.                                                                                 Fax: 804-327-7554

Andrew Shapiro - Lawndale Capital Management                                            info@vcall.com
Expensing it, is that correct?                                                          www.vcall.com
                                                                                        www.investorcalendar.com
Richard Horowitz – P&F Industries – Chairman, President and CEO
Right.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
That's correct.

Andrew Shapiro - Lawndale Capital Management
Okay.

So, you bring in 650 in cash, you'd have a gain below the line--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Sure--.

Andrew Shapiro - Lawndale Capital Management
--In discontinued ops if you prevail, and obviously a settlement would results in
smaller amounts--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Yeah--.

Andrew Shapiro - Lawndale Capital Management
--Than that. And a loss would not necessarily result in incremental legal because
you've been expensing that.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Correct.

Richard Horowitz – P&F Industries – Chairman, President and CEO
That's correct.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah, we really don't have anything to lose.

Andrew Shapiro - Lawndale Capital Management
Right.


                                                                                                           34
                                                                                          Transcript:
                                                                                P&F Industries (PFIN)
                                                                    Q2 2008 Earnings Conference Call
                                                                                     August 12, 2008
                                                                                             Vcall
Richard Horowitz – P&F Industries – Chairman, President and CEO
                                                                                             601 Moorefield Park Dr.
But, having said that, we feel we are--and our lawyers feel we are 100 percent in the        Richmond, VA 23236
right of the case, and we're--you know, and we're proceeding all the way down to the
end with the trial.                                                                          Phone: 888-301-5399
                                                                                             Fax: 804-327-7554
Andrew Shapiro - Lawndale Capital Management
When was the summary judgment motions submitted, and when do you feel the court              info@vcall.com
might rule on that?                                                                          www.vcall.com
                                                                                             www.investorcalendar.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
I would say they were submitted in the last--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--Hmm--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--Thirty to 60 days. We don't have any idea when they're going to rule.

Richard Horowitz – P&F Industries – Chairman, President and CEO
You know, they're probably on summer schedule now, and who knows? But, I'm
certainly hoping--.

Andrew Shapiro - Lawndale Capital Management
--Right--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--By the end of the year, we can get there, but who knows?

Andrew Shapiro - Lawndale Capital Management
And in this type of--and in this particular type of litigation, if you were awarded by the
court, rather than a settled decision, would interest--?

Richard Horowitz – P&F Industries – Chairman, President and CEO
--No--.

Andrew Shapiro - Lawndale Capital Management
--On this--on the money's be awarded?

Richard Horowitz – P&F Industries – Chairman, President and CEO
No, there's no interest on real estate law in the State of New York, as I understand it,
and we're not settling. We--you know, we feel we're right, and we're going to--.

Andrew Shapiro - Lawndale Capital Management
--No, no, I understand. But, then, the monies in escrow, do they get invested and
grow and accrue some interest income at all, or no?

Richard Horowitz – P&F Industries – Chairman, President and CEO

                                                                                                                35
                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                         Vcall
Oh, that interest is--.
                                                                                         601 Moorefield Park Dr.
                                                                                         Richmond, VA 23236
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer                                                                                  Phone: 888-301-5399
--Small amount--.                                                                        Fax: 804-327-7554

Richard Horowitz – P&F Industries – Chairman, President and CEO                          info@vcall.com
--Minimal. It's very minimal.                                                            www.vcall.com
                                                                                         www.investorcalendar.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Yeah, no [inaudible]--.

Andrew Shapiro - Lawndale Capital Management
--But, I'm sure it's in a money market account, and you know what those are earning
right now--.

Richard Horowitz – P&F Industries – Chairman, President and CEO
--It is in a money market account. They're very, very--you know, at these rates today,
it's very, very--again, it's--the 650 is the bigger number--.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
--Well--.


Richard Horowitz – P&F Industries – Chairman, President and CEO
--Not the interest--.

Andrew Shapiro - Lawndale Capital Management
--Presently, that's a higher rate of return than our stock price at P&F, so that's not
necessarily bad.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
For now.

Andrew Shapiro - Lawndale Capital Management
Yeah.

Very good. I'll back out into the queue in case there's more questions.

Operator
Our next question comes from Timothy Staboz. Please state your question.

Timothy Staboz
Gentlemen, what is your estimate of the annual public company costs?




                                                                                                            36
                                                                                         Transcript:
                                                                               P&F Industries (PFIN)
                                                                   Q2 2008 Earnings Conference Call
                                                                                    August 12, 2008
                                                                                         Vcall
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
                                                                                         601 Moorefield Park Dr.
Officer                                                                                  Richmond, VA 23236
A million dollars.
                                                                                         Phone: 888-301-5399
Timothy Staboz                                                                           Fax: 804-327-7554
A million dollars to be public, that much?
                                                                                         info@vcall.com
Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial            www.vcall.com
                                                                                         www.investorcalendar.com
Officer
One million dollars.

Timothy Staboz
Wow.

Okay, thanks.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Okay.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
You're welcome.

Operator
I'm not receiving any further questions at this time. I will turn the conference back
over to management for closing comments.

Richard Horowitz – P&F Industries – Chairman, President and CEO
I though that Andrew said he had another question, so let's just make double sure that
that's not the case.

Operator
Mr. Shapiro, if you have a question, please press star-one.

Andrew Shapiro, go ahead with your question.

Andrew Shapiro - Lawndale Capital Management
Oh, I was just going to say we're good. Thank you for the thorough answers, and go
in there and buy back more shares.

Joseph Molino – P&F Industries – Chief Operations Officer and Chief Financial
Officer
Thank you.

Richard Horowitz – P&F Industries – Chairman, President and CEO
Okay, thank you, Andrew, and thank you, everybody else.

And we are dealing with very difficult times, but--it's no consolation, but we're not
alone in the battles, but we continue to do what we can to maximize shareholder

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                                                                                       Transcript:
                                                                             P&F Industries (PFIN)
                                                                 Q2 2008 Earnings Conference Call
                                                                                  August 12, 2008
                                                                                           Vcall
value. So, thank you all for calling, and thank you all for your patience and indulgence
                                                                                           601 Moorefield Park Dr.
with us at P&F.                                                                            Richmond, VA 23236

Operator                                                                                   Phone: 888-301-5399
Thank you. This concludes today's teleconference. You may disconnect your lines at         Fax: 804-327-7554
this time. Thank you all for your participation.
                                                                                           info@vcall.com
                                                                                           www.vcall.com
                                                                                           www.investorcalendar.com




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