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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

OR

 ̈TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 333-43523

Elgin National Industries, Inc.

(Exact name of registrant as specified in its charter)





|                                                                     |  |                                     
|-------------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                             |  | 36-3908410                          
|(State or other jurisdiction of incorporation or organization)       |  | (I.R.S. Employer Identification No.)
|                                                                     | 
|2001 Butterfield Road, Suite 1020 Downers Grove, Illinois 60515-1050 |  | 60515-1050                          
|(Address of principal executive offices)                             |  | (Zip Code)                          

630-434-7243

(Registrants telephone number, including area code)

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    Yes x  No ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large
accelerated filer ̈Accelerated filer ̈Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes ̈No x

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the last practicable date.

|                     |  |                                            
|-------------------- |  | -------------------------------------------
|Class A common stock |  | 6,408.3 shares outstandingas of May 8, 2006



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##### Table of Contents

ELGIN NATIONAL INDUSTRIES, INC.

TABLE OF CONTENTS



|                                                                                                             |  |     
|------------------------------------------------------------------------------------------------------------ |  | ----
|                                                                                                             |  | Page
|PART IFINANCIAL INFORMATION                                                                                 |  |     
|                                                                                                             | 
|ITEM 1Financial Statements                                                                                  |  |     
|                                                                                                             | 
|Consolidated Balance Sheets as of March 31, 2006 and December 31, 2005                                       |  | 3   
|                                                                                                             | 
|Consolidated Statements of Operations for the Three Months Ended March 31, 2006 and March 31, 2005           |  | 4   
|                                                                                                             | 
|Consolidated Statement of Changes in Stockholders Deficit for the Three Months Ended March 31, 2006         |  | 5   
|                                                                                                             | 
|Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2006 and March 31, 2005 |  | 6   
|                                                                                                             | 
|Notes to Condensed Consolidated Financial Statements                                                         |  | 7   
|                                                                                                             | 
|ITEM 2Managements Discussion and Analysis of Financial Condition and Results of Operations                 |  | 12  
|                                                                                                             | 
|ITEM 3Quantitative and Qualitative Disclosures about Market Risk                                            |  | 14  
|                                                                                                             | 
|ITEM 4Controls and Procedures                                                                               |  | 14  
|                                                                                                             | 
|PART IIOTHER INFORMATION                                                                                    |  |     
|                                                                                                             | 
|ITEM 1Legal Proceedings                                                                                     |  | 15  
|                                                                                                             | 
|ITEM 1ARisk Factors                                                                                         |  | 15  
|                                                                                                             | 
|ITEM 6Exhibits and Reports on Form 8-K                                                                      |  | 15  
|                                                                                                             | 
|SIGNATURES                                                                                                   |  | 16  
|                                                                                                             | 
|EXHIBIT INDEX                                                                                                |  | 17  



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PART I



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

ELGIN NATIONAL INDUSTRIES,
INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED BALANCE SHEETS

(in thousands except share data)

(Unaudited)



|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | - | ----------------- | - | ------- | -
|                                                                                                                                                  |  | March 31, 2006 |         |   | December 31, 2005 |  
|ASSETS                                                                                                                                            |  |                |         |   |                   |   |         |  
|Current assets:                                                                                                                                   |  |                |         |   |                   |   |         |  
|Cash and equivalents                                                                                                                              |  | $              | 7,104   |   |                   | $ | 2,621   |  
|Accounts receivable, net                                                                                                                          |  |                | 56,777  |   |                   |   | 46,737  |  
|Inventories, net                                                                                                                                  |  |                | 24,041  |   |                   |   | 23,064  |  
|Prepaid expenses and other assets                                                                                                                 |  |                | 2,954   |   |                   |   | 697     |  
|Deferred income taxes                                                                                                                             |  |                | 2,547   |   |                   |   | 2,547   |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|Total current assets                                                                                                                              |  |                | 93,423  |   |                   |   | 75,666  |  
|Property, plant and equipment, net                                                                                                                |  |                | 18,107  |   |                   |   | 18,272  |  
|Loans receivable from related parties                                                                                                             |  |                | 12,304  |   |                   |   | 12,131  |  
|Prepaid pension cost                                                                                                                              |  |                | 23,998  |   |                   |   | 24,190  |  
|Other assets                                                                                                                                      |  |                | 3,088   |   |                   |   | 3,134   |  
|Goodwill                                                                                                                                          |  |                | 18,995  |   |                   |   | 18,995  |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|Total assets                                                                                                                                      |  | $              | 169,915 |   |                   | $ | 152,388 |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|LIABILITIES AND COMMON STOCKHOLDERS DEFICIT                                                                                                      |  |                |         |   |                   |   |         |  
|Current liabilities:                                                                                                                              |  |                |         |   |                   |   |         |  
|Current portion of long-term debt                                                                                                                 |  | $              | 1,233   |   |                   | $ | 1,237   |  
|Accounts payable                                                                                                                                  |  |                | 58,855  |   |                   |   | 46,277  |  
|Accrued expenses                                                                                                                                  |  |                | 16,668  |   |                   |   | 16,694  |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|Total current liabilities                                                                                                                         |  |                | 76,756  |   |                   |   | 64,208  |  
|Long-term debt less current portion                                                                                                               |  |                | 99,609  |   |                   |   | 96,622  |  
|Mandatorily redeemable preferred stock units                                                                                                      |  |                | 16,380  |   |                   |   | 16,198  |  
|Mandatorily redeemable preferred stock                                                                                                            |  |                | 4,493   |   |                   |   | 4,443   |  
|Other liabilities                                                                                                                                 |  |                | 1,529   |   |                   |   | 1,542   |  
|Deferred income taxes                                                                                                                             |  |                | 2,441   |   |                   |   | 1,736   |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|Total liabilities                                                                                                                                 |  |                | 201,208 |   |                   |   | 184,749 |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|Common stockholders deficit:                                                                                                                     |  |                |         |   |                   |   |         |  
|Common stock, Class A par value $.01 per share; authorized 23,678 shares; 6,408 issued and outstanding as of March 31, 2006 and
December 31, 2005 |  |                |        |   |                   |   |        |  
|Retained deficit                                                                                                                                  |  |                | (31,666 | ) |                   |   | (32,741 | )
|Accumulated other comprehensive income                                                                                                            |  |                | 373     |   |                   |   | 380     |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|Total common stockholders deficit                                                                                                                |  |                | (31,293 | ) |                   |   | (32,361 | )
|                                                                                                                                                  |  |                |         |   |                   |   |         |  
|Total liabilities and stockholders deficit                                                                                                       |  | $              | 169,915 |   |                   | $ | 152,388 |  
|                                                                                                                                                  |  |                |         |   |                   |   |         |  

The accompanying notes are an integral part of the condensed consolidated financial statements



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ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended March 31, 2006 and 2005

(in thousands)

(Unaudited)



|                                             |  |      |        |   |      |   |        |  
|-------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | -
|                                             |  | 2006 |        |   | 2005 |  
|Net sales                                    |  | $    | 66,156 |   |      | $ | 46,434 |  
|Cost of sales                                |  |      | 53,500 |   |      |   | 37,420 |  
|                                             |  |      |        |   |      |   |        |  
|Gross profit                                 |  |      | 12,656 |   |      |   | 9,014  |  
|Selling, general and administrative expenses |  |      | 7,922  |   |      |   | 7,504  |  
|                                             |  |      |        |   |      |   |        |  
|Operating income                             |  |      | 4,734  |   |      |   | 1,510  |  
|Other expenses (income)                      |  |      |        |   |      |   |        |  
|Interest income                              |  |      | (194   | ) |      |   | (170   | )
|Interest expense                             |  |      | 2,963  |   |      |   | 3,089  |  
|                                             |  |      |        |   |      |   |        |  
|Income (loss) before income taxes            |  |      | 1,965  |   |      |   | (1,409 | )
|Provision (benefit) for income taxes         |  |      | 890    |   |      |   | (429   | )
|                                             |  |      |        |   |      |   |        |  
|Net income (loss)                            |  | $    | 1,075  |   |      | $ | (980   | )
|                                             |  |      |        |   |      |   |        |  

The accompanying notes are an integral part of the condensed consolidated financial statements



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ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

CONSOLIDATED STATEMENT OF CHANGES IN COMMON
STOCKHOLDERS DEFICIT

For the Three Months Ended March 31, 2006

(in thousands except share data)

(Unaudited)



|                                                            |  |              |   |                    |   |         |                                        |  |   |                             |   |  |   |         |  
|----------------------------------------------------------- |  | ------------ | - | ------------------ | - | ------- | -------------------------------------- |  | - | --------------------------- | - |  | - | ------- | -
|                                                            |  | Common Stock |   | Retained (Deficit) |   |         | Accumulated Other Comprehensive Income |  |   | Total Stockholders Deficit |  
|Balance as of December 31, 2005                             |  | $            |  |                    | $ | (32,741 | )                                      |  | $ | 380                         |   |  | $ | (32,361 | )
|Net income for the three months ended March 31, 2006        |  |              |  |                    |   | 1,075   |                                        |  |   |                            |   |  |   | 1,075   |  
|Foreign currency translation adjustments net of tax of $(5) |  |              |  |                    |   |        |                                        |  |   | (7                          | ) |  |   | (7      | )
|                                                            |  |              |   |                    |   |         |                                        |  |   |                             |   |  |   |         |  
|Balance as of March 31, 2006                                |  | $            |  |                    | $ | (31,666 | )                                      |  | $ | 373                         |   |  | $ | (31,293 | )
|                                                            |  |              |   |                    |   |         |                                        |  |   |                             |   |  |   |         |  

The accompanying notes are an integral part of the condensed consolidated financial statements



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ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended March 31, 2006 and 2005

(in thousands)

(Unaudited)



|                                                 |  |      |       |   |      |   |      |  
|------------------------------------------------ |  | ---- | ----- | - | ---- | - | ---- | -
|                                                 |  | 2006 |       |   | 2005 |  
|Net cash provided by operating activities        |  | $    | 2,110 |   |      | $ | 485  |  
|                                                 |  |      |       |   |      |   |      |  
|Cash flows from investing activities:            |  |      |       |   |      |   |      |  
|Purchase of property, plant and equipment        |  |      | (441  | ) |      |   | (206 | )
|                                                 |  |      |       |   |      |   |      |  
|Net cash used by investing activities            |  |      | (441  | ) |      |   | (206 | )
|                                                 |  |      |       |   |      |   |      |  
|Cash flows from financing activities:            |  |      |       |   |      |   |      |  
|Finance costs                                    |  |      | (162  | ) |      |   |     |  
|Borrowings on long-term debt                     |  |      | 3,293 |   |      |   | 870  |  
|Repayments of long-term debt                     |  |      | (310  | ) |      |   | (309 | )
|                                                 |  |      |       |   |      |   |      |  
|Net cash provided by financing activities        |  |      | 2,821 |   |      |   | 561  |  
|                                                 |  |      |       |   |      |   |      |  
|Effect of exchange rates on cash                 |  |      | (7    | ) |      |   | (45  | )
|                                                 |  |      |       |   |      |   |      |  
|Net increase in cash                             |  |      | 4,483 |   |      |   | 795  |  
|                                                 |  |      |       |   |      |   |      |  
|Cash and cash equivalents at beginning of period |  |      | 2,621 |   |      |   | 0    |  
|                                                 |  |      |       |   |      |   |      |  
|Cash and cash equivalents at end of period       |  | $    | 7,104 |   |      | $ | 795  |  
|                                                 |  |      |       |   |      |   |      |  

The accompanying notes are an integral part of the condensed consolidated financial statements



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ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



|1. | Report Preparation
|-- | ------------------

The accompanying consolidated
financial statements, which have not been audited by independent certified public accountants, were prepared in conformity with accounting principles generally accepted in the United States and such principles were applied on a basis consistent with
the preparation of the audited consolidated financial statements included in the Companys December 31, 2005 Form 10-K filed with the Securities and Exchange Commission. The financial information furnished includes all normal recurring
accrual adjustments which are, in the opinion of management, necessary for a fair statement of results for the interim period. Results for the first three months of 2006 are not necessarily indicative of the results to be expected for the full year.
For further information refer to the Companys consolidated financial statements included in the annual report on Form 10-K.



|2. | Accounts receivable
|-- | -------------------

Accounts receivable consist
of:



|                                                                |  |                |        |                   |   |       
|--------------------------------------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                                                |  | March 31, 2006 |        | December 31, 2005
|                                                                |  | (in thousands)
|Trade accounts                                                  |  | $              | 19,101 |                   | $ | 16,370
|                                                                |  |                |        |                   |   |       
|Construction contracts:                                         |  |                |        |                   |   |       
|Billed                                                          |  |                | 26,482 |                   |   | 21,753
|Costs and estimated earnings in excess of billings on Contracts |  |                | 1,748  |                   |   | 991   
|Retainage due upon completion of contracts                      |  |                | 9,758  |                   |   | 7,978 
|                                                                |  |                |        |                   |   |       
|                                                                |  |                | 37,988 |                   |   | 30,722
|                                                                |  |                |        |                   |   |       
|Trade accounts and construction contracts                       |  |                | 57,089 |                   |   | 47,092
|                                                                |  |                |        |                   |   |       
|Other receivables                                               |  |                | 296    |                   |   | 266   
|                                                                |  |                |        |                   |   |       
|                                                                |  |                | 57,385 |                   |   | 47,358
|Less allowance for doubtful accounts                            |  |                | 608    |                   |   | 621   
|                                                                |  |                |        |                   |   |       
|                                                                |  | $              | 56,777 |                   | $ | 46,737
|                                                                |  |                |        |                   |   |       



|3. | Inventories
|-- | -----------

Inventories consist of:



|                                 |  |                |        |                   |   |       
|-------------------------------- |  | -------------- | ------ | ----------------- | - | ------
|                                 |  | March 31, 2006 |        | December 31, 2005
|                                 |  | (in thousands)
|Finished goods                   |  | $              | 13,285 |                   | $ | 12,695
|Work-in-process                  |  |                | 3,806  |                   |   | 3,424 
|Raw materials                    |  |                | 8,848  |                   |   | 8,761 
|                                 |  |                |        |                   |   |       
|                                 |  |                | 25,939 |                   |   | 24,880
|Less excess and obsolete reserve |  |                | 1,898  |                   |   | 1,816 
|                                 |  |                |        |                   |   |       
|                                 |  | $              | 24,041 |                   | $ | 23,064
|                                 |  |                |        |                   |   |       



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ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



|4. | Comprehensive income (loss)
|-- | ---------------------------

Total comprehensive
income (loss) and its components, net of related tax are as follows for the three months ended:



|                             |  |                |       |   |                |   |        |  
|---------------------------- |  | -------------- | ----- | - | -------------- | - | ------ | -
|                             |  | March 31, 2006 |       |   | March 31, 2005 |  
|                             |  | (in thousands) |      
|Net income (loss)            |  | $              | 1,075 |   |                | $ | (980   | )
|Foreign currency translation |  |                | (7    | ) |                |   | (45    | )
|                             |  |                |       |   |                |   |        |  
|                             |  | $              | 1,068 |   |                | $ | (1,025 | )
|                             |  |                |       |   |                |   |        |  

The components of accumulated other comprehensive income, net of related tax consists of foreign
currency translation of $373,000 and $380,000 as of March 31, 2006 and December 31, 2005, respectively.



|5. | Components of Net Periodic Pension Cost
|-- | ---------------------------------------



|                                        |  |                |      |   |                |   |      |  
|--------------------------------------- |  | -------------- | ---- | - | -------------- | - | ---- | -
|                                        |  | March 31, 2006 |      |   | March 31, 2005 |  
|                                        |  | (in thousands) |     
|Service cost                            |  | $              | 178  |   |                | $ | 217  |  
|Interest cost                           |  |                | 307  |   |                |   | 358  |  
|Expected return on assets               |  |                | (573 | ) |                |   | (719 | )
|Net amortization of prior service costs |  |                | 44   |   |                |   | 38   |  
|Net amortization of prior loss          |  |                | 236  |   |                |   | 8    |  
|                                        |  |                |      |   |                |   |      |  
|Net periodic pension cost               |  | $              | 192  |   |                | $ | (98  | )
|                                        |  |                |      |   |                |   |      |  



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ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



|6. | Segment Information
|-- | -------------------

The Company operates primarily
in two industries, Manufactured Products and Engineering Services. In accordance with the Companys method of internal reporting, corporate headquarters costs are not allocated to the individual segments. Information about the Company by
segment is presented below for the three months ended March 31:



|                                                                       |  |                |        |   |      |   |        |  
|---------------------------------------------------------------------- |  | -------------- | ------ | - | ---- | - | ------ | -
|                                                                       |  | 2006           |        |   | 2005 |  
|                                                                       |  | (In thousands) |       
|Net sales to external customers:                                       |  |                |        |   |      |   |        |  
|Manufactured Products                                                  |  | $              | 34,723 |   |      | $ | 28,524 |  
|Engineering Services                                                   |  |                | 31,433 |   |      |   | 17,910 |  
|                                                                       |  |                |        |   |      |   |        |  
|Total net sales to external customers                                  |  | $              | 66,156 |   |      | $ | 46,434 |  
|                                                                       |  |                |        |   |      |   |        |  
|Net sales to internal customers:                                       |  |                |        |   |      |   |        |  
|Manufactured Products                                                  |  | $              | 2,834  |   |      | $ | 1,479  |  
|Engineering Services                                                   |  |                | 552    |   |      |   | 639    |  
|                                                                       |  |                |        |   |      |   |        |  
|Total net sales to internal customers                                  |  | $              | 3,386  |   |      | $ | 2,118  |  
|                                                                       |  |                |        |   |      |   |        |  
|Net sales:                                                             |  |                |        |   |      |   |        |  
|Manufactured Products                                                  |  | $              | 37,557 |   |      | $ | 30,003 |  
|Engineering Services                                                   |  |                | 31,985 |   |      |   | 18,549 |  
|                                                                       |  |                |        |   |      |   |        |  
|Total net sales                                                        |  |                | 69,542 |   |      |   | 48,552 |  
|Elimination of net sales to internal customers                         |  |                | 3,386  |   |      |   | 2,118  |  
|                                                                       |  |                |        |   |      |   |        |  
|Total consolidated net sales                                           |  | $              | 66,156 |   |      | $ | 46,434 |  
|                                                                       |  |                |        |   |      |   |        |  
|Earnings (loss) before corporate expenses, interest, and income taxes: |  |                |        |   |      |   |        |  
|Manufactured Products                                                  |  | $              | 5,319  |   |      | $ | 3,899  |  
|Engineering Services                                                   |  |                | 1,244  |   |      |   | (736   | )
|                                                                       |  |                |        |   |      |   |        |  
|Total segment earnings                                                 |  |                | 6,563  |   |      |   | 3,163  |  
|Corporate expenses                                                     |  |                | (1,829 | ) |      |   | (1,653 | )
|Interest income                                                        |  |                | 194    |   |      |   | 170    |  
|Interest expense                                                       |  |                | (2,963 | ) |      |   | (3,089 | )
|                                                                       |  |                |        |   |      |   |        |  
|Consolidated income (loss) before income taxes                         |  | $              | 1,965  |   |      | $ | (1,409 | )
|                                                                       |  |                |        |   |      |   |        |  



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ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



|7. | Subsidiary Guarantors
|-- | ---------------------

The Companys payment
obligations under the Senior Notes are fully and unconditionally guaranteed on a joint and several basis (collectively, Subsidiary Guarantees) by Tabor Machine Company, Norris Screen and Manufacturing, Inc., TranService, Inc., Mining
Controls, Inc., Clinch River Corporation, Centrifugal Services, Inc., Roberts & Schaefer Company, Soros Associates, Inc., Vanco International, Inc., Leland Powell Fasteners, Inc. and Best Metal Finishing, Inc. (the Guarantors)
each a direct, wholly-owned subsidiary of the Company. The following summarized combined financial data illustrates the composition of the combined Guarantors.



|                                                |  |                                   |        |   |                     |   |         |                           |  |    |                    |   |  |   |         |  
|----------------------------------------------- |  | --------------------------------- | ------ | - | ------------------- | - | ------- | ------------------------- |  | -- | ------------------ | - |  | - | ------- | -
|                                                |  | March 31, 2006                    |       
|                                                |  | Parent                            |        |   | Combined Guarantors |   |         | Consolidating Adjustments |  |    | Consolidated Total |  
|                                                |  | (in thousands)                    |       
|Current assets                                  |  | $                                 | 12,950 |   |                     | $ | 80,473  |                           |  |    |                   |   |  | $ | 93,423  |  
|Noncurrent assets                               |  |                                   | 34,696 |   |                     |   | 49,212  |                           |  | ($ | 7,416              | ) |  |   | 76,492  |  
|                                                |  |                                   |        |   |                     |   |         |                           |  |    |                    |   |  |   |         |  
|Total assets                                    |  | $                                 | 47,646 |   |                     | $ | 129,685 |                           |  | ($ | 7,416              | ) |  | $ | 169,915 |  
|                                                |  |                                   |        |   |                     |   |         |                           |  |    |                    |   |  |   |         |  
|Current liabilities                             |  | $                                 | 9,367  |   |                     | $ | 67,389  |                           |  |    |                   |   |  | $ | 76,756  |  
|Total liabilities                               |  | $                                 | 76,505 |   |                     | $ | 124,703 |                           |  |    |                   |   |  | $ | 201,208 |  
|                                                | 
|                                                |  | December 31, 2005                 |       
|                                                |  | Parent                            |        |   | CombinedGuarantors  |   |         | ConsolidatingAdjustments  |  |    | ConsolidatedTotal  |  
|                                                |  | (in thousands)                    |       
|Current assets                                  |  | $                                 | 10,067 |   |                     | $ | 65,599  |                           |  |    |                   |   |  | $ | 75,666  |  
|Noncurrent assets                               |  |                                   | 30,801 |   |                     |   | 50,854  |                           |  | ($ | 4,933              | ) |  |   | 76,722  |  
|                                                |  |                                   |        |   |                     |   |         |                           |  |    |                    |   |  |   |         |  
|Total assets                                    |  | $                                 | 40,868 |   |                     | $ | 116,453 |                           |  | ($ | 4,933              | ) |  | $ | 152,388 |  
|                                                |  |                                   |        |   |                     |   |         |                           |  |    |                    |   |  |   |         |  
|Current liabilities                             |  | $                                 | 7,587  |   |                     | $ | 56,621  |                           |  |    |                   |   |  | $ | 64,208  |  
|Total liabilities                               |  | $                                 | 70,795 |   |                     | $ | 113,954 |                           |  |    |                   |   |  | $ | 184,749 |  
|                                                | 
|                                                |  | Three months ended March 31, 2006 |       
|                                                |  | Parent                            |        |   | CombinedGuarantors  |   |         | ConsolidatingAdjustments  |  |    | ConsolidatedTotal  |  
|                                                |  | (in thousands)                    |       
|Sales, net                                      |  | $                                 | 10,038 |   |                     | $ | 57,767  |                           |  | ($ | 1,649              | ) |  | $ | 66,156  |  
|Gross profit                                    |  |                                   | 3,429  |   |                     |   | 9,227   |                           |  |    |                   |   |  |   | 12,656  |  
|Income before income tax                        |  |                                   | 1,965  |   |                     |   | 4,369   |                           |  |    | (4,369             | ) |  |   | 1,965   |  
|Net income                                      |  |                                   | 1,075  |   |                     |   | 1,723   |                           |  |    | (1,723             | ) |  |   | 1,075   |  
|Cash (used in) provided by operating activities |  |                                   | (2,787 | ) |                     |   | 4,897   |                           |  |    |                   |   |  |   | 2,110   |  
|Cash used in investing activities               |  |                                   | (44    | ) |                     |   | (397    | )                         |  |    |                   |   |  |   | (441    | )
|Cash provided by (used in) financing activities |  |                                   | 2,831  |   |                     |   | (10     | )                         |  |    |                   |   |  |   | 2,821   |  
|Effect of exchange rate on cash                 |  |                                   |       |   |                     |   | (7      | )                         |  |    |                   |   |  |   | (7      | )



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##### Table of Contents

ELGIN NATIONAL INDUSTRIES, INC. AND SUBSIDIARY COMPANIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

(Unaudited)



|                                                |  |                                   |        |   |                    |   |        |                          |  |    |                   |   |  |   |        |  
|----------------------------------------------- |  | --------------------------------- | ------ | - | ------------------ | - | ------ | ------------------------ |  | -- | ----------------- | - |  | - | ------ | -
|                                                |  | Three months ended March 31, 2005 |       
|                                                |  | Parent                            |        |   | CombinedGuarantors |   |        | ConsolidatingAdjustments |  |    | ConsolidatedTotal |  
|                                                |  | (in thousands)                    |       
|Sales, net                                      |  | $                                 | 8,892  |   |                    | $ | 38,313 |                          |  | ($ | 771               | ) |  | $ | 46,434 |  
|Gross profit                                    |  |                                   | 2,874  |   |                    |   | 6,140  |                          |  |    |                  |   |  |   | 9,014  |  
|(Loss) income before income tax                 |  |                                   | (1,409 | ) |                    |   | 1,450  |                          |  |    | (1,450            | ) |  |   | (1,409 | )
|Net (loss) income                               |  |                                   | (980   | ) |                    |   | 769    |                          |  |    | (769              | ) |  |   | (980   | )
|Cash provided by operating activities           |  |                                   | 401    |   |                    |   | 84     |                          |  |    |                  |   |  |   | 485    |  
|Cash used in investing activities               |  |                                   | (175   | ) |                    |   | (31    | )                        |  |    |                  |   |  |   | (206   | )
|Cash provided by (used in) financing activities |  |                                   | 569    |   |                    |   | (8     | )                        |  |    |                  |   |  |   | 561    |  
|Effect of exchange rate on cash                 |  |                                   |       |   |                    |   | (45    | )                        |  |    |                  |   |  |   | (45    | )

The direct and non-direct, non-guarantor subsidiaries, in terms of assets, equity, income, and
cash flows, on an individual and combined basis are inconsequential.

Separate financial statements of the Guarantors are not presented
because management has determined that these would not be material to investors.



|8. | Contingencies
|-- | -------------

The Company has claims against
others, and there are claims by others against it, in a variety of matters arising out of the conduct of the Companys business. The ultimate resolution of all such claims would not, in the opinion of management, have a material effect on the
Companys financial position, cash flows or results of operations.



|9. | Reclassification
|-- | ----------------

Certain amounts in the 2005
financial statements have been reclassified to conform to the 2006 presentation.



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##### Table of Contents

ITEM 2.    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Three Months Ended March 31, 2006 Compared to Three Months Ended March 31, 2005

Net SalesEngineering Services Segment: Net sales for the quarter ended March 31, 2006 increased $13.6 million, or
75.5%, to $31.5 million from $17.9 million for the corresponding period in 2005 due to the increase in size of projects in process. For the quarter ended March 31, 2006 the Engineering Services Segment had seven projects with sales over $1.0
million totaling $23.7 million, compared to five such projects totaling $10.7 million in sales for the quarter ended March 31, 2005. The Engineering Services Segment also had higher sales from smaller projects less than $1.0 million. For the
quarter ended March 31, 2006 the Engineering Services Segment had $7.7 million in sales of smaller projects, compared to $7.2 million for the quarter ended March 31, 2005.

Net SalesManufactured Products Segment: Net sales for the quarter ended March 31, 2006 increased $6.2 million, or 21.7%, to $34.7
million from $28.5 million for the corresponding period in 2005 primarily due to increased sales of mining equipment, equipment used in the oil industry, and increased fastener sales.

Gross ProfitEngineering Services Segment: Gross profit for the quarter ended March 31, 2006 increased $1.9 million, or 237.5%, to $2.7
million from $0.8 million in the corresponding period in 2005 primarily due to the increased sales level in 2006 and a reduction of the margin on a larger aggregate project in 2005, partially offset with profit recognized on the close-out of a
project in Poland in 2005. As a percentage of net sales, the gross profit increased to 8.6% for the quarter ended March 31, 2006 from 4.5% for the corresponding period in 2005 due to higher margins earned on larger projects in 2006, partially
offset with lower margins earned on smaller engineering services jobs.

Gross ProfitManufactured Products Segment: Gross
profit for the quarter ended March 31, 2006 increased $1.8 million, or 21.3%, to $10.0 million from $8.2 million in the corresponding period in 2005 due to the higher sales level. As a percentage of net sales, the gross profit decreased
slightly to 28.7% for the quarter ended March 31, 2006 from 28.8% for the corresponding period in 2005.

Selling, General and
Administrative Expenses: Selling, general and administrative expenses of the Company for the quarter ended March 31, 2006 of $7.9 million increased $0.4 million from $7.5 million for the corresponding period in 2005 with increased
commissions and employee related expenses, partially offset with lower banking fees.

Interest Income: Interest income of the
Company for the quarter ended March 31, 2006 of $0.2 million approximated the corresponding period in 2005.

Interest Expense:
Interest expense of the Company for the quarter ended March 31, 2006 of $3.0 million decreased $0.1 million or 4.1% from $3.1 million for the corresponding period in 2005. The decrease was due to a lower debt level.

Provision (Benefit) for Income Taxes: Provision for income taxes of the Company for the quarter ended March 31, 2006 of $0.9 million
increased $1.3 million from the benefit of $0.4 million for the corresponding quarter ended March 31, 2005 due to the higher operating results and lower interest expense.

Net Income (Loss): The Company recorded net income of $1.1 million for the three months ended March 31, 2006 compared to a net loss of $1.0
million for the quarter ended March 31, 2005. The increase was due to the reasons discussed above.



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##### Table of Contents

Liquidity and Capital Resources

Net cash generated by operating activities for the three months ended March 31, 2006 of $2.1 million was generated from net income adjusted for non-cash charges, increased accounts payable, partially offset by
cash used by increased accounts receivable, inventories, prepaid expenses and other assets. Included in non-cash charge for the quarter ended March 31, 2006 was depreciation of $0.6 million, other non-cash charges of $0.2 million, and pension
overfunding expense of $0.2 million. Cash flows from operations for any specific period are often materially affected by the timing and amounts of cash receipts and cash disbursements related to engineering services projects.

Cash used in investing activities for the three months ended March 31, 2006 of $0.4 million consisted of capital expenditures resulting from the
Companys regular practice of upgrading and maintaining its equipment base and facilities.

Cash generated by financing activities for
the three months ended March 31, 2006 of $2.8 million consisted of an increase in the Companys revolver borrowings of $3.3 million, partially offset by the repayment of long-term debt of $0.3 million and additional finance costs of $0.2
million related to the extension of Term Loan C.

The Companys liquidity requirements, both long term (over one year) and short term,
are primarily for working capital, capital expenditures and debt service. The primary source for meeting these needs has been funds provided by operations and funds available under the Loan and Security Agreement. The Company monitors its
liquidity position on a regular basis, and is working with their lenders to insure that our credit availability is maximized. The Company anticipates with improved operating results that funds provided by future operations and available credit will
be sufficient to meet its anticipated debt service requirements, working capital needs and capital expenditures. However, if the Company has lower than expected earnings, or there are material delays in collections within our accounts receivable,
the Company could be required to seek additional financing, and there is no assurance that financing would be available on reasonable terms, or at all.

Backlog

The Companys backlog consists primarily of that portion of engineering services contracts that have been
awarded but not performed and also includes open manufacturing orders. Backlog at March 31, 2006 was $206.3 million. Approximately $26.0 million relates to the Manufactured Products Segment, with the remainder of $180.3 million relating to the
Engineering Services Segment. A substantial majority of current backlog is expected to be realized in the next twelve months.

Safe Harbor

Statements herein regarding the Companys ability to meet its liquidity requirements, the anticipated benefits from the
Companys capital expenditures, and the Companys expected realization of current backlog constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Act of 1934. Such statements are subject to
certain risks and uncertainties that could cause actual results to differ materially from those projected. Further, statements herein regarding the Companys performance in future periods are subject to risks relating to, deterioration of
relationships with, or the loss of material customers or suppliers, possible product liability claims, decreases in demand for the Companys products, adverse changes in general market and industry conditions and any resulting inability to
comply with the financial covenants imposed by the Companys credit agreement. Management believes these forward-looking statements are reasonable; however, undue reliance should not be placed on such forward-looking statements, which are based
on current expectations. Except as otherwise required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of
unanticipated events. New factors may emerge from time to time and it is not possible for us to predict all such factors.



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##### Table of Contents

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

The Company continues to use its United States reputation to generate sales in international markets. In the three months ended March 31, 2006 approximately 24% of the Companys net sales were attributable to services provided or
products sold for use outside the United States, primarily to Australia and Brazil. A portion of these net sales and cost of sales is derived from international operations which are conducted in foreign currencies. Changes in the value of these
foreign currencies relative to the U.S. dollar could adversely affect the Companys business, financial condition, results of operation and debt service capability. Sales from the Australia office of Roberts & Schaefer are usually
denominated in Australian dollars. The majority of the Companys foreign sales and costs originated outside the Australia office of Roberts & Schaefer are denominated in U.S. dollars. With respect to transactions denominated in foreign
currencies, when possible the Company attempts to mitigate foreign exchange risk by contractually shifting the burden of the risk of currency fluctuations to the other party to the transactions. It has been the Companys historic practice to
conduct international sales in accordance with the foregoing. There can be no assurance that the Companys strategies will ensure that the Company will be fully protected from foreign exchange risk. Foreign sales, particularly construction
management projects undertaken at foreign locations, are subject to various risks, including exposure to currency fluctuations, political, religious and economic instability, local labor market conditions, the imposition of foreign tariffs and other
trade barriers, and changes in governmental policies. There can be no assurance that the Companys foreign operations, or expansion thereof, would not have a material adverse effect on the Companys business, financial condition, results
of operations and debt service capability.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Elgin National
Industries Inc. management, including the Chief Executive Officer and the Chief Financial Officer, have conducted an evaluation of the effectiveness of disclosure controls and procedures pursuant to Exchange Act Rule 13a-14 as of the end of the
period covered by this report. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the disclosure controls and procedures are effective in ensuring that all material information required to be filed
in this quarterly report has been made known to them in a timely fashion. There have been no significant changes in internal controls, or in other factors that could significantly affect internal controls, subsequent to the date the Chief Executive
Officer and Chief Financial Officer completed their evaluation.



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##### Table of Contents

PART II



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

The Company and its subsidiaries
are involved in legal proceedings from time to time in the ordinary course of its business. As of the date of this filing, neither the Company nor any of its subsidiaries are a party to any lawsuit or proceeding which, individually or in the
aggregate, is reasonably likely to have a material adverse effect on the financial condition, results of operation or cash flow of the Company.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

As of the end of our first quarter,
there were no additional material risks and no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2005.



|ITEM 2. | CHANGES IN SECURITIES AND USE OF PROCEEDS
|------- | -----------------------------------------

None



|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES
|------- | -------------------------------

None



|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|------- | ---------------------------------------------------

None



|ITEM 5. | OTHER INFORMATION
|------- | -----------------

None



|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K
|------- | --------------------------------

None



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##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



ELGIN NATIONAL INDUSTRIES, INC.By

/s/    WAYNE J. CONNERName:

Wayne J. ConnerTitle:

Vice President, Treasurer, and Chief Financial Officer(Duly Authorized Officer and Principal Financial Officer)


Dated: May 8, 2006



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##### Table of Contents

INDEX TO EXHIBITS



|              |  |                                                                                                                        |  |                   |  
|------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | ----------------- | -
|ExhibitNumber |  | Document Description                                                                                                   |  | FootnoteReference |  
|              |  |                                                                                                                       
|31.1          |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                |  | (1                | )
|              |  |                                                                                                                       
|31.2          |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                |  | (1                | )
|              |  |                                                                                                                       
|32.1          |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  | (1                | )
|              |  |                                                                                                                       
|32.2          |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |  | (1                | )

---

|(1) | Filed within
|--- | ------------



17