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|                                               | Page(s)    |
|----------------------------------------------------|------------|
| Report      of Independent Auditors                | 1          |
| Financial      Statements                          |       |
| Balance      Sheets                                | 2          |
| Statements      of Income and Comprehensive Income | 3          |
| Statements      of Shareholders’ Equity      | 4          |
| Statements      of Cash Flows                      | 5          |
| Notes      to Financial Statements                 | 6–16 |

----

----

| (in      thousands, except share amounts)                              |   | 2007   |    |   | 2006   |   |
|------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                   |   |   |    |   |   |   |
| Assets                                                                 |   |   |    |   |   |   |
| Current      assets                                                    |   |   |    |   |   |   |
| Cash                                                                   |   | $      | 3       |   |   | $      | 264 |   |
| Trade      receivables, net of allowances of $80 and $80               |   |   |    |   |   |   |   |   |
|  in      2007 and 2006, respectively                              |   |   | 9,090   |   |   |   | 12,584 |   |
| Due      from shareholders                                             |   |   | 1,000   |   |   |   | 808 |   |
| Other      receivables                                                 |   |   | 74      |   |   |   | 18 |   |
| Inventories                                                            |   |   | 65,100  |   |   |   | 46,832 |   |
| Deferred      income taxes (Note 6)                                    |   |   | 3,640   |   |   |   | 3,316 |   |
| Prepaid      expenses and tooling                                      |   |   | 1,260   |   |   |   | 944 |   |
| Total      current assets                                              |   |   | 80,167  |   |   |   | 64,766 |   |
| Property,      plant and equipment                                     |   |   |    |   |   |   |   |   |
| Land                                                                   |   |   | 1,191   |   |   |   | 1,191 |   |
| Processing      facilities and equipment                               |   |   | 102,273 |   |   |   | 101,532 |   |
| Construction      in process                                           |   |   | 1,899   |   |   |   | 870 |   |
|                                                                   |   |   | 105,363 |   |   |   | 103,593 |   |
| Less:  Accumulated      depreciation and amortization        |   |   | (72,634 | )      |   |   | (70,732 | ) |
| Property,      plant and equipment, net                                |   |   | 32,729  |   |   |   | 32,861 |   |
| Other      assets (Note 1)                                             |   |   | 7,486   |   |   |   | 1,328 |   |
| Total      assets                                                      |   | $      | 120,382 |   |   | $      | 98,955 |   |
| Liabilities      and Shareholders' Equity                              |   |   |    |   |   |   |   |   |
| Current      liabilities                                               |   |   |    |   |   |   |   |   |
| Borrowings      under line of credit (Note 3)                          |   | $      | 47,400  |   |   | $      | 24,000 |   |
| Trade      payables                                                    |   |   | 11,054  |   |   |   | 13,340 |   |
| Other      accrued liabilities                                         |   |   | 8,693   |   |   |   | 9,094 |   |
| Total      current liabilities                                         |   |   | 67,147  |   |   |   | 46,434 |   |
| Long-term      liabilities                                             |   |   |    |   |   |   |   |   |
| Other      long-term liabilities (Notes 1 and 4)                       |   |   | 4,111   |   |   |   | 4,668 |   |
| Deferred      income taxes (Note 6)                                    |   |   | 4,029   |   |   |   | 3,112 |   |
| Total      long-term liabilities                                       |   |   | 8,140   |   |   |   | 7,780 |   |
| Commitments      and contingencies (Note 7)                            |   |   |    |   |   |   |   |   |
| Shareholders'      equity                                              |   |   |    |   |   |   |   |   |
| Common      stock, $100 par value, authorized, issued and outstanding, |   |   |    |   |   |   |   |   |
|  220,000      and 220,000 shares in 2007 and 2006                 |   |   | 19,482  |   |   |   | 19,482 |   |
| Retained      earnings                                                 |   |   | 27,905  |   |   |   | 27,451 |   |
| Accumulated      other comprehensive loss                              |   |   | (2,292  | )      |   |   | (2,192 | ) |
| Total      shareholders' equity                                        |   |   | 45,095  |   |   |   | 44,741 |   |
| Total      liabilities and shareholders' equity                        |   | $      | 120,382 |   |   | $      | 98,955 |   |

----

| (in      thousands)                                     |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|---------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                    |   |   |    |   |   |   |    |   |   |
| Revenue                                                 |   |   |    |   |   |   |    |   |   |
| Gross      sales                                        |   | $      | 270,336 |   |   | $      | 275,091 |   |   | $ | 254,184 |   |
| Cash      discounts allowed                             |   |   | (2,128  | )      |   |   | (2,055  | )      |   |   | (1,749 | ) |
| Total      revenue                                      |   |   | 268,208 |   |   |   | 273,036 |   |   |   | 252,435 |   |
| Cost      of sales                                      |   |   | 196,392 |   |   |   | 206,180 |   |   |   | 204,542 |   |
| Loading      and freight                                |   |   | 5,322   |   |   |   | 5,520   |   |   |   | 5,705 |   |
| Total      costs of sales                               |   |   | 201,714 |   |   |   | 211,700 |   |   |   | 210,247 |   |
| Gross      profit                                       |   |   | 66,494  |   |   |   | 61,336  |   |   |   | 42,188 |   |
| General      and administrative expenses                |   |   | 9,131   |   |   |   | 8,332   |   |   |   | 7,445 |   |
| Income      from operations                             |   |   | 57,363  |   |   |   | 53,004  |   |   |   | 34,743 |   |
| Other      expenses (income), net                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest                                                |   |   | 1,541   |   |   |   | 1,164   |   |   |   | 396 |   |
| Other                                                   |   |   | (785    | )      |   |   | (255    | )      |   |   | (92 | ) |
| Total      other expenses                               |   |   | 756     |   |   |   | 909     |   |   |   | 304 |   |
| Income      before provision for income taxes           |   |   | 56,607  |   |   |   | 52,095  |   |   |   | 34,439 |   |
| Provision      for income taxes (Note 6)                |   |   | 22,570  |   |   |   | 21,536  |   |   |   | 14,048 |   |
| Net      income                                         |   |   | 34,037  |   |   |   | 30,559  |   |   |   | 20,391 |   |
| Unrealized      loss on gas swap derivative, net of tax |   |   | -       |   |   |   | -       |   |   |   | (248 | ) |
| Minimum      pension liability adjustment, net of tax   |   |   | 958     |   |   |   | 895     |   |   |   | (660 | ) |
| Comprehensive      income                               |   | $      | 34,995  |   |   | $      | 31,454  |   |   | $ | 19,483 |   |

----

| (in      thousands, except shares)          |   |              |    |   |     |   |   |     |   |   | Accumulated      Other   |   |   |                 |   |
|---------------------------------------------|--------|-------------------|---------|--------|----------|--------|--------|----------|--------|--------|--------------------------|--------|--------|----------------------|--------|
|                                        |   |              |    |   |     |   |   |     |   |   | Comprehensive      Loss, |   |   |                 |   |
|                                        |   |              |    |   |     |   |   |     |   |   | Net      of Tax          |   |   |                 |   |
|                                        |   |              |    |   |     |   |   |     |   |   |                     |   |   | Unrealized      Gain |   |   |   |   |
|                                        |   | Common      Stock |    |   | Retained |   |   |     |   |   | (Loss)      on Gas       |   |   |                 |   |
|                                        |   | Shares            |    |   | Amount   |   |   | Earnings |   |   | Pension                  |   |   | Swap      Derivative |   |   | Total |   |
|                                        |   |              |    |   |     |   |   |     |   |   |                     |   |   |                 |   |   |   |   |
| Balances      at November 30, 2004          |   |              | 220,000 |   |     | $      | 19,482 |     |   | $      | 30,412                   |   |   | $                    | (2,427 | ) |   | $ | 248 |   |   | $ | 47,715 |   |
| Net      income                             |   |              | -       |   |     |   | -      |     |   |   | 20,391                   |   |   |                 | -      |   |   |   |   |   |   |   | 20,391 |   |
| Unrealized      gain on gas swap derivative |   |              | -       |   |     |   | -      |     |   |   | -                        |   |   |                 | -      |   |   |   | (248 | ) |   |   | (248 | ) |
| Minimum      pension liability adjustment   |   |              | -       |   |     |   | -      |     |   |   | -                        |   |   |                 | (660   | ) |   |   | - |   |   |   | (660 | ) |
| Dividends      to shareholders              |   |              | -       |   |     |   | -      |     |   |   | (23,903                  | )      |   |                 | -      |   |   |   | - |   |   |   | (23,903 | ) |
| Balances      at November 30, 2005          |   |              | 220,000 |   |     |   | 19,482 |     |   |   | 26,900                   |   |   |                 | (3,087 | ) |   |   | - |   |   |   | 43,295 |   |
| Net      income                             |   |              | -       |   |     |   | -      |     |   |   | 30,559                   |   |   |                 | -      |   |   |   |   |   |   |   | 30,559 |   |
| Minimum      pension liability adjustment   |   |              | -       |   |     |   | -      |     |   |   | -                        |   |   |                 | 895    |   |   |   | - |   |   |   | 895 |   |
| Dividends      to shareholders              |   |              | -       |   |     |   | -      |     |   |   | (30,008                  | )      |   |                 | -      |   |   |   | - |   |   |   | (30,008 | ) |
| Balances      at November 30, 2006          |   |              | 220,000 |   |     |   | 19,482 |     |   |   | 27,451                   |   |   |                 | (2,192 | ) |   |   | - |   |   |   | 44,741 |   |
| Net      income                             |   |              | -       |   |     |   | -      |     |   |   | 34,037                   |   |   |                 | -      |   |   |   |   |   |   |   | 34,037 |   |
| Minimum      pension liability adjustment   |   |              | -       |   |     |   | -      |     |   |   | -                        |   |   |                 | 958    |   |   |   | - |   |   |   | 958 |   |
| Adoption      of SFAS 158                   |   |              | -       |   |     |   | -      |     |   |   | -                        |   |   |                 | (1,058 | ) |   |   | - |   |   |   | (1,058 | ) |
| Dividends      to shareholders              |   |              | -       |   |     |   | -      |     |   |   | (33,583                  | )      |   |                 | -      |   |   |   | - |   |   |   | (33,583 | ) |
| Balances      at November 30, 2007          |   |              | 220,000 |   |     | $      | 19,482 |     |   | $      | 27,905                   |   |   | $                    | (2,292 | ) |   | $ | - |   |   | $ | 45,095 |   |
|                                        |   |              |    |   |     |   |   |     |   |   |                     |   |   |                 |   |   |   |   |   |   |   |   |   |   |

----

| (in      thousands)                                              |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                             |   |   |    |   |   |   |    |   |   |
| Cash      flows from operating activities                        |   |   |    |   |   |   |    |   |   |
| Net      income                                                  |   | $      | 34,037  |   |   | $      | 30,559  |   |   | $ | 20,391 |   |
| Adjustments      to reconcile net income to net cash provided by |   |   |    |   |   |   |    |   |   |   |   |   |
|  operating      activities                                  |   |   |    |   |   |   |    |   |   |   |   |   |
| Depreciation                                                     |   |   | 4,378   |   |   |   | 4,426   |   |   |   | 5,005 |   |
| Deferred      income tax (benefit) expense                       |   |   | 397     |   |   |   | 10      |   |   |   | (207 | ) |
| Loss      (profit) on sale/abandonment of property, plant and    |   |   |    |   |   |   |    |   |   |   |   |   |
|  equipment                                                  |   |   | (1      | )      |   |   | 187     |   |   |   | (14 | ) |
| Net      noncash gas swap derivative gain                        |   |   | -       |   |   |   | -       |   |   |   | (376 | ) |
| Changes      in operating assets and liabilities                 |   |   |    |   |   |   |    |   |   |   |   |   |
| Receivables                                                      |   |   | 3,246   |   |   |   | (2,741  | )      |   |   | (2,006 | ) |
| Inventories                                                      |   |   | (18,268 | )      |   |   | 4,359   |   |   |   | 3,673 |   |
| Other      current assets                                        |   |   | (316    | )      |   |   | 147     |   |   |   | (448 | ) |
| Other      assets                                                |   |   | (6,158  | )      |   |   | (1,312  | )      |   |   | 59 |   |
| Trade      payables                                              |   |   | (2,286  | )      |   |   | (4,584  | )      |   |   | 4,940 |   |
| Other      accrued liabilities                                   |   |   | (401    | )      |   |   | 4,613   |   |   |   | (1,054 | ) |
| Other      liabilities                                           |   |   | (461    | )      |   |   | (745    | )      |   |   | (435 | ) |
| Total      adjustments                                           |   |   | (19,870 | )      |   |   | 4,360   |   |   |   | 9,137 |   |
| Net      cash provided by operating activities                   |   |   | 14,167  |   |   |   | 34,919  |   |   |   | 29,528 |   |
| Cash      flows from investing activities                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Acquisition      of property, plant and equipment                |   |   | (4,246  | )      |   |   | (9,500  | )      |   |   | (5,258 | ) |
| Sale      of property, plant and equipment                       |   |   | 1       |   |   |   | 50      |   |   |   | 33 |   |
| Net      cash used in investing activities                       |   |   | (4,245  | )      |   |   | (9,450  | )      |   |   | (5,225 | ) |
| Cash      flows from financing activities                        |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      borrowings on line of credit                            |   |   | 23,400  |   |   |   | 4,800   |   |   |   | (400 | ) |
| Dividends      paid to shareholders                              |   |   | (33,583 | )      |   |   | (30,008 | )      |   |   | (23,903 | ) |
| Net      cash used in financing activities                       |   |   | (10,183 | )      |   |   | (25,208 | )      |   |   | (24,303 | ) |
| Net      (decrease) increase in cash                             |   |   | (261    | )      |   |   | 261     |   |   |   | - |   |
| Cash                                                             |   |   |    |   |   |   |    |   |   |   |   |   |
| Beginning      of year                                           |   |   | 264     |   |   |   | 3       |   |   |   | 3 |   |
| End      of year                                                 |   | $      | 3       |   |   | $      | 264     |   |   | $ | 3 |   |
| Supplemental      disclosures of cash flow                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Cash      paid during the year for                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Interest                                                         |   | $      | 1,568   |   |   | $      | 1,114   |   |   | $ | 382 |   |
| Income      taxes, net of refunds                                |   | $      | 23,125  |   |   | $      | 21,400  |   |   | $ | 13,823 |   |
|                                                             |   |   |    |   |   |   |    |   |   |   |   |   |

----

| 1.   | Summary      of Significant Accounting Policies |
|----------------|-------------------------------------------------|

|                          |   | 2007   |   |   | 2006   |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|
|                          |   |   |   |   |   |   |
| Rebar                         |   | $      | 37,082 |   |   | $      | 26,356 |   |
| Billets                       |   |   | 10,736 |   |   |   | 9,432 |   |
| Scrap      metal              |   |   | 7,924  |   |   |   | 1,990 |   |
| Supplies      and spare parts |   |   | 9,358  |   |   |   | 9,054 |   |
| Total                         |   | $      | 65,100 |   |   | $      | 46,832 |   |
|                          |   |   |   |   |   |   |   |   |

----

| Processing      facilities | 20      to 25 years |
|----------------------------|---------------------|
| Equipment                  | 3      to 25 years  |

|                   |   | (per      share) |   |
|------------------------|--------|------------------|--------|
|                   |   |             |   |
| February      23, 2007 |   | $                | 32.50  |   |
| May      18, 2007      |   | $                | 31.00  |   |
| August      23, 2007   |   | $                | 36.35  |   |
| November      12, 2007 |   | $                | 52.80  |   |
|                   |   |             |   |   |

----

| 2.   | Related      Party Transactions |
|----------------|---------------------------------|

| 3.   | Business      Loan Agreement |
|----------------|------------------------------|

----

| 4.   | Pension      and 401(k) Retirement Plans |
|----------------|------------------------------------------|

|                                      |   | Prior      to Adopting SFAS 158 |   |   | Effect      of Adopting SFAS 158 |   |   | As      Reported at November 30, 2007 |   |
|-------------------------------------------|--------|--------------------------------------|--------|--------|---------------------------------------|--------|--------|---------------------------------------|--------|
|                                      |   |                                 |   |   |                                  |   |   |                                  |   |
| Prepaid      pension cost                 |   | $                                    | 621    |   |                                  | $      | (621   | )                                     |   | $ | - |   |
| Accrued      pension cost                 |   |                                 | (936   | )      |                                  |   | (1,107 | )                                     |   |   | (2,043 | ) |
| Intangible      pension assets            |   |                                 | 32     |   |                                  |   | (32    | )                                     |   |   | - |   |
| Deferred      income tax pension asset    |   |                                 | 818    |   |                                  |   | 702    |                                  |   |   | 1,521 |   |
| Accumulated      other comprehensive loss |   |                                 | 1,234  |   |                                  |   | 1,058  |                                  |   |   | 2,292 |   |

----

|                                         |   | 2007     |   |   | 2006   |   |   | 2005     |   |
|----------------------------------------------|--------|----------|--------|--------|--------|--------|--------|----------|--------|
|                                         |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |
|                                         |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Components      of net periodic pension cost |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Service      cost                            |   | $        | 391    |   |   | $      | 425    |     |   | $ | 436 |   |   | $ | 533 |   |   | $ | 380 |   |   | $ | 567 |   |
| Interest      cost                           |   |     | 860    |   |   |   | 899    |     |   |   | 774 |   |   |   | 827 |   |   |   | 699 |   |   |   | 757 |   |
| Expected      return on market-              |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  related      value of plan assets      |   |     | (974   | )      |   |   | (1,122 | )        |   |   | (893 | ) |   |   | (1,080 | ) |   |   | (763 | ) |   |   | (890 | ) |
| Amortization      of unrecognized            |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  prior      service cost                |   |     | -      |   |   |   | 6      |     |   |   | - |   |   |   | 3 |   |   |   | - |   |   |   | 59 |   |
| Amortization      of accumulated losses      |   |     | 133    |   |   |   | 95     |     |   |   | 232 |   |   |   | 186 |   |   |   | 185 |   |   |   | 193 |   |
| Net      periodic pension cost               |   | $        | 410    |   |   | $      | 303    |     |   | $ | 549 |   |   | $ | 469 |   |   | $ | 501 |   |   | $ | 686 |   |
|                                         |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                             |   | 2007     |   |   | 2006   |   |   | 2005     |   |
|----------------------------------|--------|----------|--------|--------|--------|--------|--------|----------|--------|
|                             |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |
|                             |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Discount      rate               |   |     | 6.125  | %      |   |   | 6.125  | %        |   |   | 5.50 | % |   |   | 5.50 | % |   |   | 5.75 | % |   |   | 5.75 | % |
| Rate      of increase in         |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  compensation      levels   |   |     | 3.75   | %      |   |   | N/A    |     |   |   | 3.75 | % |   |   | N/A |   |   |   | 4.00 | % |   |   | N/A |   |
| Expected      long-term rate of  |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  return      on plan assets |   |     | 8.50   | %      |   |   | 8.50   | %        |   |   | 8.50 | % |   |   | 8.50 | % |   |   | 8.50 | % |   |   | 8.50 | % |

----

|                                         |   | 2007     |   |   | 2006   |   |   | 2005     |   |
|----------------------------------------------|--------|----------|--------|--------|--------|--------|--------|----------|--------|
|                                         |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |
|                                         |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Change      in projected benefit obligation  |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Projected      benefit obligation,           |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
|  beginning      of year                 |   | $        | 14,363 |   |   | $      | 15,018 |     |   | $ | 14,305 |   |   | $ | 15,316 |   |   | $ | 12,358 |   |   | $ | 13,398 |   |
| Service      cost                            |   |     | 391    |   |   |   | 425    |     |   |   | 436 |   |   |   | 533 |   |   |   | 380 |   |   |   | 567 |   |
| Interest      cost                           |   |     | 860    |   |   |   | 898    |     |   |   | 774 |   |   |   | 827 |   |   |   | 699 |   |   |   | 757 |   |
| Plan      amendments                         |   |     | -      |   |   |   | -      |     |   |   | - |   |   |   | 26 |   |   |   | - |   |   |   | - |   |
| Actuarial      (gain) loss                   |   |     | (514   | )      |   |   | 118    |     |   |   | (660 | ) |   |   | (1,037 | ) |   |   | 1,203 |   |   |   | 991 |   |
| Benefits      paid                           |   |     | (473   | )      |   |   | (739   | )        |   |   | (492 | ) |   |   | (647 | ) |   |   | (335 | ) |   |   | (397 | ) |
| Projected      benefit obligation,           |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  end      of year                       |   | $        | 14,627 |   |   | $      | 15,720 |     |   | $ | 14,363 |   |   | $ | 15,018 |   |   | $ | 14,305 |   |   | $ | 15,316 |   |
| Change      in plan assets                   |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      value of plan assets,              |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  beginning      of year                 |   | $        | 11,781 |   |   | $      | 13,533 |     |   | $ | 10,747 |   |   | $ | 12,984 |   |   | $ | 9,186 |   |   | $ | 10,711 |   |
| Actual      return on plan assets            |   |     | 1,515  |   |   |   | 1,726  |     |   |   | 781 |   |   |   | 929 |   |   |   | 1,227 |   |   |   | 1,451 |   |
| Employer      contribution                   |   |     | 806    |   |   |   | 310    |     |   |   | 811 |   |   |   | 355 |   |   |   | 727 |   |   |   | 1,283 |   |
| Administrative      expenses                 |   |     | (72    | )      |   |   | (82    | )        |   |   | (66 | ) |   |   | (88 | ) |   |   | (58 | ) |   |   | (64 | ) |
| Benefits      paid                           |   |     | (473   | )      |   |   | (739   | )        |   |   | (492 | ) |   |   | (647 | ) |   |   | (335 | ) |   |   | (397 | ) |
| Fair      value of plan assets,              |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  end      of year                       |   | $        | 13,557 |   |   | $      | 14,748 |     |   | $ | 11,781 |   |   | $ | 13,533 |   |   | $ | 10,747 |   |   | $ | 12,984 |   |
| Funded      status                           |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deficiency      of plan assets over          |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  projected      benefit obligations     |   | $        | (1,070 | )      |   | $      | (973   | )        |   | $ | (2,583 | ) |   | $ | (1,484 | ) |   | $ | (3,558 | ) |   | $ | (2,331 | ) |
| Unrecognized      actuarial loss             |   |     | -      |   |   |   | -      |     |   |   | 2,808 |   |   |   | 2,589 |   |   |   | 3,521 |   |   |   | 3,572 |   |
| Unrecognized      prior benefit service cost |   |     | -      |   |   |   | -      |     |   |   | - |   |   |   | 38 |   |   |   | - |   |   |   | 16 |   |
| Funded      status, end of year              |   | $        | (1,070 | )      |   | $      | (973   | )        |   | $ | 225 |   |   | $ | 1,143 |   |   | $ | (37 | ) |   | $ | 1,257 |   |
| Amounts      recognized on the               |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  balance      sheet consist of          |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accrued      pension liability               |   | $        | (1,070 | )      |   | $      | (973   | )        |   | $ | (1,149 | ) |   | $ | (1,430 | ) |   | $ | (1,885 | ) |   | $ | (2,331 | ) |
| Pension      intangible asset                |   |     | -      |   |   |   | -      |     |   |   | - |   |   |   | 38 |   |   |   | - |   |   |   | 16 |   |
| Accumulated      other comprehensive loss    |   |     | 1,691  |   |   |   | 2,122  |     |   |   | 1,374 |   |   |   | 2,535 |   |   |   | 1,848 |   |   |   | 3,572 |   |
| Net      amount recognized                   |   | $        | 621    |   |   | $      | 1,149  |     |   | $ | 225 |   |   | $ | 1,143 |   |   | $ | (37 | ) |   | $ | 1,257 |   |
| Accumulated      benefit obligation          |   | $        | 13,225 |   |   | $      | 15,683 |     |   | $ | 12,930 |   |   | $ | 14,964 |   |   | $ | 12,632 |   |   | $ | 15,316 |   |

----

|                           |   | 2007     |   |   | 2006   |   |   | 2005     |   |
|--------------------------------|--------|----------|--------|--------|--------|--------|--------|----------|--------|
|                           |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |
|                           |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Discount      rate             |   |     | 6.25   | %      |   |   | 6.25   | %        |   |   | 6.125 | % |   |   | 6.125 | % |   |   | 5.50 | % |   |   | 5.50 | % |
| Rate      of increase in       |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  compensation      levels |   |     | 3.75   | %      |   |   | N/A    |     |   |   | 3.75 | % |   |   | N/A |   |   |   | 3.75 | % |   |   | N/A |   |

|                          |   | 2007     |   |   | 2006   |   |   | 2005     |   |
|-------------------------------|--------|----------|--------|--------|--------|--------|--------|----------|--------|
|                          |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |   | Salaried |   |   | Hourly |   |
|                          |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |
| Equity      securities        |   |     | 73     | %      |   |   | 73     | %        |   |   | 72 | % |   |   | 72 | % |   |   | 70 | % |   |   | 69 | % |
| Debt      securities          |   |     | 25     | %      |   |   | 25     | %        |   |   | 24 | % |   |   | 24 | % |   |   | 24 | % |   |   | 25 | % |
| Real      estate              |   |     | 2      | %      |   |   | 2      | %        |   |   | 4 | % |   |   | 4 | % |   |   | 6 | % |   |   | 6 | % |
| Other      (cash equivalents) |   |     | 0      | %      |   |   | 0      | %        |   |   | 0 | % |   |   | 0 | % |   |   | 0 | % |   |   | 0 | % |
| Total                         |   |     | 100    | %      |   |   | 100    | %        |   |   | 100 | % |   |   | 100 | % |   |   | 100 | % |   |   | 100 | % |
|                          |   |     |   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|             |   | Salaried |   |   | Hourly |   |
|------------------|--------|----------|--------|--------|--------|--------|
|             |   |     |   |   |   |   |
| Year      ending |   |     |   |   |   |   |
| 2008             |   | $        | 772    |   |   | $      | 858 |   |
| 2009             |   |     | 829    |   |   |   | 918 |   |
| 2010             |   |     | 881    |   |   |   | 952 |   |
| 2011             |   |     | 958    |   |   |   | 982 |   |
| 2012             |   |     | 1,031  |   |   |   | 1,032 |   |
| 2013-2017        |   |     | 5,613  |   |   |   | 5,464 |   |

| 5.   | Derivative      Activity |
|----------------|--------------------------|

| 6.   | Income      Taxes |
|----------------|-------------------|

----

|                |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                |   |   |   |   |   |   |   |   |   |
| Current             |   |   |   |   |   |   |   |   |   |
| Federal             |   | $      | 17,253 |   |   | $      | 16,879 |   |   | $ | 11,160 |   |
|  State         |   |   | 4,920  |   |   |   | 4,647  |   |   |   | 3,095 |   |
| Total      current  |   |   | 22,173 |   |   |   | 21,526 |   |   |   | 14,255 |   |
| Deferred            |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal             |   |   | 297    |   |   |   | (499   | )      |   |   | (167 | ) |
|  State         |   |   | 100    |   |   |   | 509    |   |   |   | (40 | ) |
| Total      deferred |   |   | 397    |   |   |   | 10     |   |   |   | (207 | ) |
| Total               |   | $      | 22,570 |   |   | $      | 21,536 |   |   | $ | 14,048 |   |

|                                            |   | 2007   |   |    | 2006   |   |
|-------------------------------------------------|--------|--------|--------|---------|--------|--------|
|                                            |   |   |   |    |   |   |
| Provision      at the federal statutory rate    |   |   | 35.00  |  % |   |   | 35.00 |  % |
| State      income taxes, net of federal benefit |   |   | 5.76   |  % |   |   | 6.43 |  % |
| Meals      and entertainment                    |   |   | 0.07   |  % |   |   | 0.15 |  % |
| Fuel      tax credit                            |   |   | (0.06  | )%      |   |   | (0.11 | )% |
| Lobbyist      expense                           |   |   | 0.03   |  % |   |   | 0.07 |  % |
| Section      199 credits                        |   |   | (0.95  | )%      |   |   | 0.00 |  % |
| Other                                           |   |   | 0.02   |  % |   |   | (0.20 | )% |
|                                            |   |   | 39.87  |  % |   |   | 41.34 |  % |

----

|                              |   | 2007   |   |   | 2006   |   |
|-----------------------------------|--------|--------|--------|--------|--------|--------|
|                              |   |   |   |   |   |   |
| Deferred      tax asset           |   |   |   |   |   |   |
| Reserve      for contingencies    |   | $      | 663    |   |   | $      | 619 |   |
| Accrued      liabilities          |   |   | 1,371  |   |   |   | 1,355 |   |
| Reserve      for inventories      |   |   | 650    |   |   |   | 360 |   |
| State      taxes                  |   |   | 1,874  |   |   |   | 1,741 |   |
| Additional      pension liability |   |   | 1,635  |   |   |   | 1,713 |   |
| Other                             |   |   | 28     |   |   |   | 35 |   |
| Deferred      tax asset           |   |   | 6,221  |   |   |   | 5,823 |   |
| Deferred      tax liability       |   |   |   |   |   |   |   |   |
| Depreciation                      |   |   | (5,714 | )      |   |   | (5,020 | ) |
| Pension      reserve              |   |   | (896   | )      |   |   | (599 | ) |
| Other                             |   |   | -      |   |   |   | - |   |
| Deferred      tax liability       |   |   | (6,610 | )      |   |   | (5,619 | ) |
|                              |   | $      | (389   | )      |   | $      | 204 |   |

| 7.   | Commitments      and Contingences |
|----------------|-----------------------------------|

| Years      ending November 30, |   |   |   |
|--------------------------------|--------|--------|--------|
|                           |   |   |   |
| 2008                           |   | $      | 516    |   |
| 2009                           |   |   | 516    |   |
| 2010                           |   |   | 516    |   |
| 2011                           |   |   | 516    |   |
| 2012                           |   |   | 473    |   |
|                           |   | $      | 2,537  |   |

----