2003 and 2002, respectively. In 2004, the Company reclassified certain amounts in its 2003 and 2002 Consolidated Statements of Cash Flow from financing activities to operating activities as a result of a determination that they had not been reported in accordance with Statement of Financial Accounting Standard No. 95 “Statement of Cash Flows”. The amounts reclassified of $10.6 and ($11.0) million in 2003 and 2002, respectively, reflect a change in classification of the net change in the accounts receivables sold under the Company’s accounts receivable securitization agreement. As a result of these reclassifications, there was no impact on the Company’s net change in cash and short-term cash investments in 2003 and 2002. The net change during 2004 in accounts receivables sold under the Company’s accounts receivable securitization agreement which is included in operating activities is $6.2 million. The increase in cash from operating activities in 2004 compared to 2003 is primarily attributable to an increase in net income in addition to a larger reduction in the non-cash components of working capital compared to 2003, partially offset by a larger decrease in long-term liabilities resulting from a $20 million contribution to the Company’s pension plan in 2004 (compared to a $10 million contribution in 2003). The increase in cash from operating activities in 2003 compared to 2002 is primarily attributable to an increase in net income and a larger reduction in the 2003 period in non-cash components of working capital. 

The non - cash components of working capital decreased $14.1 million in 2004 due primarily to a $3.2 million increase in accounts payable, an increase of $15.7 million in accrued liabilities, an increase of $6.2 million in receivables sold and an increase of $28.5 million related to accrued income taxes, partially offset by a $26.0 million increase in accounts receivable due to higher sales levels and an operating addition of $14.5 million in inventory. 

The non - cash components of working capital decreased $11.6 million in 2003 due primarily to a $20.8 million increase in accounts payable, an 

operating reduction of $4.6 million in inventory, an increase of $10.6 million in receivables sold, and an increase in accrued income taxes of $18.0 million, partially offset by a $28.8 million increase in accounts receivable due to higher sales levels and a decrease of $7.7 million in accrued liabilities. 

The non-cash components of working capital decreased $4.8 million in 2002 due primarily to a $12.9 million decrease in inventory as inventory levels were reduced in response to lower sales levels, a $6.2 million increase in accrued income taxes and a $3.7 million increase in accounts payable, partially offset by an $11 million decrease in receivables sold and a $6.5 million reduction in accrued liabilities. 

In 2004, accounts receivable increased $41.7 million to $214.2 million, due to an increase in sales levels, $12.6 million from an acquired company, and a $9.3 million increase due to translation resulting from the comparatively weaker U.S. dollar at December 31, 2004 compared to December 31, 2003, partially offset by a $6.2 million increase in sales of receivables (further discussed below). Days sales outstanding, computed before sales of receivables, decreased to approximately 64 days from 66 days in 2003. Inventory increased $25.9 million to $247.3 million, primarily due to an increase of $6.7 million due to translation resulting from the comparatively weaker U.S. dollar at December 31, 2004 compared to December 31, 2003, and $4.7 million in inventory from an acquired company coupled with an operating addition of $14.5 million. Inventory turnover increased to 4.2x at December 31, 2004 from 3.9x at December 31, 2003. Deferred taxes and other assets decreased $0.3 million to $28.1 million reflecting the decrease in deferred taxes, the details of which are included in Note 3 to the Company's Consolidated Financial Statements. Goodwill increased $29.1 million to $545.4 million primarily as a result of an acquisition completed in the third quarter of 2004 as well as additional contingent consideration paid in 2004 relating to a prior year acquisition. Land and 

depreciable assets, net, increased $19.5 million to $197.8 million reflecting capital expenditures of $44.3 million, assets from acquisitions of approximately $6.8 million, an increase of $7.8 million due to translation resulting from the comparatively weaker U.S. dollar at December 31, 2004 compared to December 31, 2003, depreciation of $38.2 million and disposals of $1.2 million. Accounts payable and accrued salaries, wages and employee benefits increased $18.0 million and $7.4 million to $134.9 million and $38.5 million, respectively, due primarily to an increase in sales levels, liabilities assumed from acquired companies and a $0.8 million and $0.3 million increase, respectively, due to translation resulting from the comparatively weaker U.S. dollar at December 31, 2004 compared to December 31, 2003. Accrued income taxes increased $23.7 million due primarily to increased profits. Other accrued liabilities increased $5.3 million to $37.1 million relating primarily to an increase in liabilities for the purchase of acquired companies and accruals relating to higher sales volume. 

In 2004, cash from operating activities of $208.3 million (including additional sales of receivables of $6.2 million) and proceeds from exercise of stock options and related tax benefits of $30.3 million were used primarily to fund capital expenditures of $44.3 million, acquisitions of $41.8 million, the purchase of treasury stock of $45.6 million, an increase in cash on hand of $6.6 million and for a net debt reduction of $100.3 million. For 2003, cash from operating activities of $170.0 million (including additional sales of receivables of $10.6 million), proceeds from the refinancing of $27.0 million and proceeds from exercise of stock options and related tax benefits of $35.9 million were used primarily to fund capital expenditures of $30.2 million, acquisitions of $51.1 million, an increase in cash on hand of $2.9 million and for a net debt reduction of $148.8 million. 

During the second quarter 2003, the Company completed a refinancing of its senior credit facilities. During 2003 borrowings of $625.0 million under a 

