EXHIBIT 99.1

                          THE L. S. STARRETT COMPANY
                             Athol, Massachusetts

                                                            February 6, 2004

To the Stockholders:

Presented below are the comparative operating figures for the Company
for the periods ended in December 2003 and 2002.

Sales increased 1% as compared to the second quarter of last year and
reached the highest quarterly level that we have achieved in the last six
quarters.  We recorded a loss of $.28 per share in the quarter compared to a
$.09 loss last year.  All of the loss is attributable to the write-down ($3.2
million) of CMM inventory taken in this quarter.  Since the government
investigation started, we have experienced a significant decline in CMM sales
and it was our determination that we would not realize book value for the
existing inventory. This inventory write-down has a non-cash impact on the
Company.

Without this charge to inventory, we would have made a $.04 per share
profit in the quarter.  This improved performance reflects cost reductions
and a modest increase in factory hours, but was also helped by some LIFO
inventory reduction benefits and the fact that last year's performance was
hurt by exchange losses.  We continue to maintain a strong balance sheet and
our cash position improved during the quarter.

While these results are encouraging, they are nothing to shout about.
A return to a healthy level of profitability will require structural changes
in the business, which are ongoing.  For example, we recently closed one
warehouse operation and will close 50,000 sq. ft. of manufacturing space in
Pennsylvania before the end of the fiscal year and consolidate this with our
Evans Rule operations.

Our international businesses have performed better than our domestic
operations and we continue to expand the development of our Chinese
operations and other low-cost opportunities for manufacturing and outsourcing
throughout the world.

									D. A. Starrett
									President and CEO


                        SUMMARY OF CONSOLIDATED RESULTS

                                  13 Weeks Ended          26 Weeks Ended
                               12/27/03   12/28/02     12/27/03    12/28/02

Net sales                     45,420,132 44,827,725   86,094,673  90,163,099

Loss before income taxes and
  cumulative effect of change
  in accounting principle     (3,108,498)(1,339,028)  (5,058,567) (5,835,060)
Income tax benefit            (1,276,000)  (698,300)  (2,130,900) (2,659,000)
Loss before cumulative effect
  of change in accounting
  principle for goodwill      (1,832,298)  (640,728)  (2,927,667) (3,176,060)
Cumulative effect of change in
  accounting principle                                            (6,085,583)
Net Loss                      (1,832,298)  (640,728)  (2,927,667) (9,261,643)




Basic and diluted loss per
  share before cumulative
  effect of change in
  accounting principle              (.28)      (.09)        (.44)       (.48)
Cumulative effect of change in
  accounting principle for goodwill                                     (.93)
Basic and diluted loss per share    (.28)      (.09)        (.44)      (1.41)


Dividends per share                  .10        .20          .20         .40


The above figures are in part estimates and are subject to audit and year-end
adjustments. Except for historical information contained herein, the matters
discussed may involve forward-looking statements subject to risks and
uncertainties that could cause actual results to differ materially, including
statements concerning future financial performance, economic and political
conditions, write-downs and reserves, reorganization plans, currency
fluctuations and foreign operations.