This presentation, and commentary, may contain statements reflecting our views about the Company’s future performance. These statements are “Forward-Looking Statements” under the Private Securities Litigation Reform Act of 1995. Participants should refer to the comments contained in our Annual Report, which explain that various factors may affect our future performance.

This presentation also includes non-GAAP financial measures. A copy of this presentation, and earnings press releases which include reconciliations of the non-GAAP financial measures with the most comparable measures calculated and presented in accordance with GAAP, are available on our website at www.kaydon.com

Summary：
Our market leading businesses serve world class customers by leveraging reputation, expertise, and market position；

We operate in diverse, high value added niche markets that support our long term financial goals；

Our highly engineered products provide critical functionality in significantly larger systems；

We have global operations with considerable opportunity to further expand organically；

Our businesses generate operating margins, financial returns and free cash flow that are among the “elite” in the industrial sector；

Our balance sheet is debt-free with nearly $300 million of available cash to create a range of strategic alternatives to create shareholder value.

Market Leader in High Value Niches:
Leadership products generate the majority of Kaydon’s total sales
Products Market Share Market Position
Custom Thin Section Bearings 50% - 60% #1
North American Wind Power 65% #1
Global CT Scanner Bearings 40% - 50% #1
Linear Deceleration Products 35% - 40% #1
Split Roller Bearings 55% #1
Gas Phase Filtration Products 45% #1

Diverse End Markets:



Global Breadth but with “headroom”:
Global operations but with considerable further opportunity



Segment Overview (2010 base):



Friction Control Products:
Businesses include Kaydon Bearings, Cooper Bearings and ITI Bearings;

Markets served include wind energy, military, heavy equipment, medical technology and industrial automation;

Growth opportunities include energy infrastructure business and further international expansion;

Products include custom thin section bearings, large turntable bearings, split roller bearings and miniature ball bearings.



Velocity Control Products:

Principal business is ACE Controls;

Products include industrial shock absorbers, safety shock absorbers and industrial gas springs;

Markets served include materials handling, robotics, machine tool, medical and general industrial;

Growth opportunities include adjacent product expansion and further international expansion both furthered significantly with pending HAHN gas spring acquisition.



Other Industrial Products:
Includes industrial ring and aerospace seal operations, filtration operations, a metal alloy company, and a machine tool manufacturer;

Opportunity to expand internationally within Filtration business and to reduce fixed cost structure within Ring and Seal operation;

All Other Industrial Products’ businesses, while periodically reviewed for “fit,” are profitable and cash flow accretive.



Strategic Priorities:
Leverage brands, reputation, expertise and customer base to gain greater share of customer and deeper penetration in existing and adjacent markets;

Accelerate and broaden international growth company-wide, but particularly in Friction Control businesses;

Maintain cost discipline throughout all cycles, a philosophy that served us well in the “Great Recession” and at the current point in the recovery;

Opportunistically pursue both complementary “bolt-on” acquisitions and larger, free standing businesses that meet our qualitative criteria within the industrial sector while selectively returning free cash flow to our shareholders.

Financial Performance And Business Update:







Recent Financial Performance:
2009 recessionary troughs were meaningfully higher than those reached in prior downturn due to revenue growth and recent structural cost initiatives;

Margins, at both the recent recessionary trough and current point in recovery, compare favorably to historical precedents on a significantly broader and larger revenue base;

2010 performance reflected meaningful improvement due to improved volume and enhanced operating leverage;

Cost reductions, both cyclical and structural, during past two years should continue to provide operating leverage through next full growth cycle;

2010 reflected all-time record operating cash flow from operations and free cash flow from operations.

General Market Update:
Industrial businesses, particularly industrial machinery, medical and semiconductor equipment, have seen continued improvement in both shipments and orders;

Military business will see year-over-year moderation from “winding down” of key program as the year progresses;

Wind orders and shipments will continue to be impacted by the downturn in electricity demand and ongoing uncertainty over a national Renewable
Electricity Standard or carbon legislation;

HAHN acquisition will be immediately accretive to EBITDA and cash EPS and will be accretive to GAAP EPS within first twelve months of closing date.

Summary:
Our market leading businesses serve world class customers by leveraging reputation, expertise, and market position;

We operate in diverse, high value added niche markets that support our long term financial goals;

Our highly engineered products provide critical functionality in significantly larger systems;

We have global operations with considerable opportunity to further expand organically;

Our businesses generate operating margins, financial returns and free cash flow that are among the “elite” in the industrial sector;

Our balance sheet is debt-free with nearly $300 million of available cash to create a range of strategic alternatives to create shareholder value.

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