##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



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FORM 10Q



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



FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005



OR



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



FOR THE TRANSITION PERIOD FROM  TO



COMMISSION FILE NUMBER 333124543



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EDGEN CORPORATION

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Nevada                                                         |  | 13-3908690                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|18444 Highland Road                                            |  |                                     
|Baton Rouge, Louisiana                                         |  | 70809                               
|(Address of principal executive offices)                       |  | (Zip Code)                          



225-756-9868

(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 ̈No  x



Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b2).    Yes ̈No  x



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



There were 2,681,564 shares of Class A Common Stock outstanding as of
August 11, 2005.



There were no shares of Class B Common Stock
outstanding as of August 11, 2005.



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##### Table of Contents

|                               |  |                                                                                                                                                                                                                                                    
|------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                              
|PART I  FINANCIAL INFORMATION
|                               | 
|Item 1.                        |  | Financial Statements:                                                                                                                                                                                                                              
|                               |  | Condensed Consolidated Balance Sheets at June 30, 2005 (unaudited) and December 31, 2004                                                                                                                                                           
|                               |  | Condensed Consolidated Statements of Operations for the three months ended June 30, 2005 and 2004, the period February 1, 2005 to June 30, 2005, the period January 1, 2005 to January 31, 2005, and the six months ended June 30,
2004 (unaudited)
|                               |  | Condensed Consolidated Statement of Shareholders Equity (Deficit) as of June 30, 2005 (unaudited) and December 31, 2004                                                                                                                           
|                               |  | Condensed Consolidated Statements of Cash Flows for the period February 1, 2005 to June 30, 2005, the period January 1, 2005 to January 31, 2005, and the six months ended June 30, 2004 (unaudited)                                               
|                               |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                                                                                                                                                   
|                               | 
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                                                              
|                               | 
|Item 3.                        |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                                                                                                                         
|                               | 
|Item 4.                        |  | Disclosure Controls and Procedures                                                                                                                                                                                                                 
|                              
|PART II  OTHER INFORMATION   
|                               | 
|Item 1.                        |  | Legal Proceedings                                                                                                                                                                                                                                  
|                               | 
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                                                                        
|                               | 
|Item 3.                        |  | Defaults Upon Senior Securities                                                                                                                                                                                                                    
|                               | 
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                
|                               | 
|Item 5.                        |  | Other Information                                                                                                                                                                                                                                  
|                               | 
|Item 6.                        |  | Exhibits                                                                                                                                                                                                                                           
|                              
|SIGNATURES                    
|                              
|EXHIBIT INDEX                 



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##### Table of Contents

PART I  FINANCIAL INFORMATION



Item 1. Financial Statements.



EDGEN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | ----------- | - | ---------------- | - | ----------- | -
|                                                                                                                                                                         |  | Successor     |             |   | Predecessor      |  
|                                                                                                                                                                         |  | June 30, 2005 |             |   | December 31,2004 |  
|ASSETS                                                                                                                                                                   |  |               |             |   |                  |   |             |  
|                                                                                                                                                                         |  |              
|CURRENT ASSETS:                                                                                                                                                          |  |               |             |   |                  |   |             |  
|Cash and cash equivalents                                                                                                                                                |  | $             | 310,149     |   |                  | $ | 134,299     |  
|Accounts receivablenet of allowance for doubtful accounts of $67,352 and $658,675                                                                                       |  |               | 40,371,052  |   |                  |   | 31,750,990  |  
|Inventory                                                                                                                                                                |  |               | 80,278,015  |   |                  |   | 57,960,261  |  
|Income tax receivable                                                                                                                                                    |  |               | 429,106     |   |                  |   | 2,601,312   |  
|Prepaid expenses and other current assets                                                                                                                                |  |               | 1,242,208   |   |                  |   | 1,049,274   |  
|Deferred tax asset                                                                                                                                                       |  |               | 8,708,022   |   |                  |   | 9,280,850   |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Total current assets                                                                                                                                                     |  |               | 131,338,552 |   |                  |   | 102,776,986 |  
|PROPERTY, PLANT AND EQUIPMENTnet                                                                                                                                        |  |               | 11,636,067  |   |                  |   | 10,422,777  |  
|GOODWILL AND OTHER INTANGIBLES                                                                                                                                           |  |               | 37,546,297  |   |                  |   | 6,518,093   |  
|DEFERRED FINANCING COSTS                                                                                                                                                 |  |               | 6,772,084   |   |                  |   | 35,272      |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|TOTAL                                                                                                                                                                    |  | $             | 187,293,000 |   |                  | $ | 119,753,128 |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS EQUITY (DEFICIT)                                                                                   |  |               |             |   |                  |   |             |  
|                                                                                                                                                                         |  |              
|CURRENT LIABILITIES:                                                                                                                                                     |  |               |             |   |                  |   |             |  
|Managed cash overdrafts                                                                                                                                                  |  | $             | 561,306     |   |                  | $ | 1,361,404   |  
|Accounts payable                                                                                                                                                         |  |               | 27,328,161  |   |                  |   | 19,017,837  |  
|Accrued expenses and other current liabilities                                                                                                                           |  |               | 10,087,328  |   |                  |   | 6,375,597   |  
|Current portion of long-term debt                                                                                                                                        |  |               |            |   |                  |   | 7,229,553   |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Total current liabilities                                                                                                                                                |  |               | 37,976,795  |   |                  |   | 33,984,391  |  
|DEFERRED TAX LIABILITY                                                                                                                                                   |  |               | 1,404,136   |   |                  |   | 890,980     |  
|LONG-TERM DEBT                                                                                                                                                           |  |               | 118,992,268 |   |                  |   | 40,653,230  |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Total liabilities                                                                                                                                                        |  |               | 158,373,199 |   |                  |   | 75,528,601  |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Mandatorily redeemable preferred stock, $.01 par value, 372,644 shares authorized and designated; 367,644 shares plus accrued dividends issued
and outstanding, Series A |  |               |            |   |                  |   | 51,978,809  |  
|Mandatorily redeemable preferred stock, $.01 par value, 10,000 shares authorized, issued, and outstanding, Series B                                                      |  |               |            |   |                  |   | 4,000,000   |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Total mandatorily redeemable preferred stock                                                                                                                             |  |               |            |   |                  |   | 55,978,809  |  
|                                                                                                                                                                         |  |              
|COMMITMENTS AND CONTINGENCIES                                                                                                                                            |  |               |            |   |                  |   |            |  
|                                                                                                                                                                         |  |              
|SHAREHOLDERS EQUITY (DEFICIT):                                                                                                                                          |  |               |             |   |                  |   |             |  
|Preferred stock  Series A Cumulative Compounding, $.01 par value, 40,000 shares authorized and designated; 21,600 shares issued and
outstanding as of June 30, 2005     |  |               | 765,216     |   |                  |   |            |  
|Common stockClass A, $.01 par value, 6,000,000 shares authorized; 2,681,564 and 4,307,880 shares issued and outstanding as of June 30,
2005 and December 31, 2004       |  |               | 26,816      |   |                  |   | 43,079      |  
|Common stockClass B, $.01 par value, 505,512 shares authorized, issued, and outstanding at December 31, 2004                                                            |  |               |            |   |                  |   | 5,055       |  
|Unearned stock-based compensation                                                                                                                                        |  |               | (269,833    | ) |                  |   |            |  
|Paid-in capital                                                                                                                                                          |  |               | 24,254,533  |   |                  |   | 22,578,191  |  
|Retained earnings (deficit)                                                                                                                                              |  |               | 4,143,069   |   |                  |   | (31,742,997 | )
|Less treasury stock 570,300 sharesat cost at December 31, 2004                                                                                                          |  |               |            |   |                  |   | (2,637,610  | )
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|Total shareholders equity (deficit)                                                                                                                                     |  |               | 28,919,801  |   |                  |   | (11,754,282 | )
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  
|TOTAL                                                                                                                                                                    |  | $             | 187,293,000 |   |                  | $ | 119,753,128 |  
|                                                                                                                                                                         |  |               |             |   |                  |   |             |  



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



1



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##### Table of Contents

EDGEN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                                   |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|------------------------------------------------------------------ |  | ------------------------------- | ---------- | - | ------------------------------- | - | ---------- | -------------------------------------- |  | - | ----------------------------------------- | - |  | ----------------------------- | ----------- | - |  | - | ---------- | -
|                                                                   |  | Successor                       |            |   | Predecessor                     |   |            | Successor                              |  |   | Predecessor                               |   |  | Predecessor                   |            
|                                                                   |  | Three MonthsEnded June 30, 2005 |            |   | Three MonthsEnded June 30, 2004 |   |            | PeriodFebruary 1, 2005 toJune 30, 2005 |  |   | Period January 1, 2005 toJanuary 31, 2005 |   |  | Six MonthsEnded June 30, 2004 |            
|SALES                                                              |  | $                               | 74,393,557 |   |                                 | $ | 54,041,006 |                                        |  | $ | 120,288,283                               |   |  | $                             | 18,944,787  |   |  | $ | 96,872,469 |  
|                                                                   |  |                                 |            |   |                                
|COST OF SALES                                                      |  |                                 | 57,828,189 |   |                                 |   | 40,294,398 |                                        |  |   | 93,626,875                                |   |  |                               | 14,153,065  |   |  |   | 73,836,974 |  
|                                                                   |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Gross profit                                                       |  |                                 | 16,565,368 |   |                                 |   | 13,746,608 |                                        |  |   | 26,661,408                                |   |  |                               | 4,791,722   |   |  |   | 23,035,495 |  
|                                                                   |  |                                 |            |   |                                
|OPERATING EXPENSES:                                                |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|                                                                   |  |                                 |            |   |                                
|Yard and shop expense                                              |  |                                 | 1,234,242  |   |                                 |   | 1,205,324  |                                        |  |   | 2,002,757                                 |   |  |                               | 389,928     |   |  |   | 2,175,481  |  
|                                                                   |  |                                 |            |   |                                
|Selling, general, and administrative expense                       |  |                                 | 6,840,948  |   |                                 |   | 6,162,610  |                                        |  |   | 11,032,158                                |   |  |                               | 13,974,331  |   |  |   | 11,213,510 |  
|Depreciation and amortization expense                              |  |                                 | 608,711    |   |                                 |   | 606,870    |                                        |  |   | 1,086,650                                 |   |  |                               | 200,644     |   |  |   | 1,203,976  |  
|                                                                   |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Total operating expenses                                           |  |                                 | 8,683,901  |   |                                 |   | 7,974,804  |                                        |  |   | 14,121,565                                |   |  |                               | 14,564,903  |   |  |   | 14,592,967 |  
|                                                                   |  |                                 |            |   |                                
|INCOME (LOSS) FROM OPERATIONS                                      |  |                                 | 7,881,467  |   |                                 |   | 5,771,804  |                                        |  |   | 12,539,843                                |   |  |                               | (9,773,181  | ) |  |   | 8,442,528  |  
|                                                                   |  |                                 |            |   |                                
|OTHER INCOME (EXPENSE):                                            |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|                                                                   |  |                                 |            |   |                                
|Other income (expense)                                             |  |                                 | 67,808     |   |                                 |   | 14,668     |                                        |  |   | 74,520                                    |   |  |                               | (49,886     | ) |  |   | 35,151     |  
|                                                                   |  |                                 |            |   |                                
|Interest expense                                                   |  |                                 | (3,022,985 | ) |                                 |   | (904,945   | )                                      |  |   | (4,958,409                                | ) |  |                               | (333,288    | ) |  |   | (1,628,025 | )
|                                                                   |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE |  |                                 | 4,926,290  |   |                                 |   | 4,881,527  |                                        |  |   | 7,655,954                                 |   |  |                               | (10,156,355 | ) |  |   | 6,849,654  |  
|                                                                   |  |                                 |            |   |                                
|INCOME TAX EXPENSE (BENEFIT)                                       |  |                                 | 1,737,909  |   |                                 |   | 1,951,232  |                                        |  |   | 2,747,885                                 |   |  |                               | (1,916,508  | ) |  |   | 2,739,862  |  
|                                                                   |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS                           |  |                                 | 3,188,381  |   |                                 |   | 2,930,295  |                                        |  |   | 4,908,069                                 |   |  |                               | (8,239,847  | ) |  |   | 4,109,792  |  
|                                                                   |  |                                 |            |   |                                
|PREFERRED DIVIDEND REQUIREMENT                                     |  |                                 | 464,100    |   |                                 |   | 551,466    |                                        |  |   | 765,000                                   |   |  |                               | 189,949     |   |  |   | 1,102,932  |  
|                                                                   |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS                |  | $                               | 2,724,281  |   |                                 | $ | 2,378,829  |                                        |  | $ | 4,143,069                                 |   |  | $                             | (8,429,796  | ) |  | $ | 3,006,860  |  
|                                                                   |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  



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



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##### Table of Contents

EDGEN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (DEFICIT)

(Unaudited)



|                                         |  |                        |         |                    |   |                    |  |                |       |                                 |   |            |                           |   |          |               |  |   |             |   |  |   |            |   |  |   |             |  
|---------------------------------------- |  | ---------------------- | ------- | ------------------ | - | ------------------ |  | -------------- | ----- | ------------------------------- | - | ---------- | ------------------------- | - | -------- | ------------- |  | - | ----------- | - |  | - | ---------- | - |  | - | ----------- | -
|                                         |  | Series APreferredStock |         | Class ACommonStock |   | Class BCommonStock |  | Paid-InCapital |       | UnearnedStock-basedCompensation |   |            | RetainedEarnings(Deficit) |   |          | TreasuryStock |  |   | Total       |  
|PREDECESSOR                              |  |                        |         |                    |   |                    |  |                |       |                                 |   |            |                           |   |          |               |  |   |             |   |  |   |            |   |  |   |             |  
|                                         |  |                        |         |                    |   |                    |  |               
|Balance - December 31, 2004              |  | $                      |        |                    | $ | 43,079             |  | $              | 5,055 |                                 | $ | 22,578,191 |                           | $ |         |               |  | $ | (31,742,997 | ) |  | $ | (2,637,610 | ) |  | $ | (11,754,282 | )
|                                         |  |                        |         |                    |   |                    |  |               
|Preferred dividend requirement           |  |                        |        |                    |   |                   |  |                |      |                                 |   |           |                           |   |         |               |  |   | (189,949    | ) |  |   |           |   |  |   | (189,949    | )
|                                         |  |                        |         |                    |   |                    |  |               
|Net loss                                 |  |                        |        |                    |   |                   |  |                |      |                                 |   |           |                           |   |         |               |  |   | (8,239,847  | ) |  |   |           |   |  |   | (8,239,847  | )
|                                         |  |                        |         |                    |   |                    |  |                |       |                                 |   |            |                           |   |          |               |  |   |             |   |  |   |            |   |  |   |             |  
|Balance - January 1, 2005                |  | $                      |        |                    | $ | 43,079             |  | $              | 5,055 |                                 | $ | 22,578,191 |                           | $ |         |               |  | $ | (40,172,793 | ) |  | $ | (2,637,610 | ) |  | $ | (20,184,078 | )
|                                         |  |                        |         |                    |   |                    |  |                |       |                                 |   |            |                           |   |          |               |  |   |             |   |  |   |            |   |  |   |             |  
|SUCCESSOR                                |  |                        |         |                    |   |                    |  |                |       |                                 |   |            |                           |   |          |               |  |   |             |   |  |   |            |   |  |   |             |  
|                                         |  |                        |         |                    |   |                    |  |               
|Balance - February 1, 2005               |  | $                      |        |                    | $ |                   |  | $              |      |                                 | $ |           |                           | $ |         |               |  | $ |            |   |  | $ |           |   |  | $ |            |  
|                                         |  |                        |         |                    |   |                    |  |               
|Issuance of Class A common stock         |  |                        |        |                    |   | 24,000             |  |                |      |                                 |   | 2,376,000  |                           |   |         |               |  |   |            |   |  |   |           |   |  |   | 2,400,000   |  
|                                         |  |                        |         |                    |   |                    |  |               
|Issuance of Series A preferred stock     |  |                        | 216     |                    |   |                   |  |                |      |                                 |   | 21,599,784 |                           |   |         |               |  |   |            |   |  |   |           |   |  |   | 21,600,000  |  
|                                         |  |                        |         |                    |   |                    |  |               
|Net income                               |  |                        |        |                    |   |                   |  |                |      |                                 |   |           |                           |   |         |               |  |   | 4,908,069   |   |  |   |           |   |  |   | 4,908,069   |  
|                                         |  |                        |         |                    |   |                    |  |               
|Issuance of stock based compensation     |  |                        |        |                    |   | 2,816              |  |                |      |                                 |   | 278,749    |                           |   | (281,565 | )             |  |   |            |   |  |   |           |   |  |   |            |  
|                                         |  |                        |         |                    |   |                    |  |               
|Amortization of stock-based compensation |  |                        |        |                    |   |                   |  |                |      |                                 |   |           |                           |   | 11,732   |               |  |   |            |   |  |   |           |   |  |   | 11,732      |  
|                                         |  |                        |         |                    |   |                    |  |               
|Preferred dividend requirement           |  |                        | 765,000 |                    |   |                   |  |                |      |                                 |   |           |                           |   |         |               |  |   | (765,000    | ) |  |   |           |   |  |   |            |  
|                                         |  |                        |         |                    |   |                    |  |                |       |                                 |   |            |                           |   |          |               |  |   |             |   |  |   |            |   |  |   |             |  
|Balance - June 30, 2005                  |  | $                      | 765,216 |                    | $ | 26,816             |  | $              |      |                                 | $ | 24,254,533 |                           | $ | (269,833 | )             |  | $ | 4,143,069   |   |  | $ |           |   |  | $ | 28,919,801  |  
|                                         |  |                        |         |                    |   |                    |  |                |       |                                 |   |            |                           |   |          |               |  |   |             |   |  |   |            |   |  |   |             |  



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



3



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##### Table of Contents

EDGEN CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|---------------------------------------------------------------------------------------- |  | ---------------------------------------- | ------------ | - | ------------------------------------------ | - | ---------- | ------------------------------ |  | - | ----------- | -
|                                                                                         |  | Successor                                |              |   | Predecessor                                |   |            | Predecessor                    | 
|                                                                                         |  | Period February 1, 2005 to June 30, 2005 |              |   | Period January 1, 2005 to January 31, 2005 |   |            | Six Months Ended June 30, 2004 | 
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|Net income (loss)                                                                        |  | $                                        | 4,908,069    |   |                                            | $ | (8,239,847 | )                              |  | $ | 4,109,792   |  
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|Depreciation and amortization                                                            |  |                                          | 1,086,650    |   |                                            |   | 200,644    |                                |  |   | 1,203,976   |  
|Amortization of deferred financing costs                                                 |  |                                          | 515,813      |   |                                            |   | 35,272     |                                |  |   | 139,485     |  
|Provision for doubtful accounts                                                          |  |                                          | 160,950      |   |                                            |   | 26,700     |                                |  |   | 160,216     |  
|Stock-based compensation expense                                                         |  |                                          | 11,732       |   |                                            |   |           |                                |  |   |            |  
|Inventory fair value purchase price adjustment                                           |  |                                          | 1,240,855    |   |                                            |   |           |                                |  |   |            |  
|Deferred income tax expense                                                              |  |                                          | 368,458      |   |                                            |   |           |                                |  |   |            |  
|Gain on sale of property, plant and equipment                                            |  |                                          | (1,508       | ) |                                            |   |           |                                |  |   |            |  
|Changes in operating assets and liabilities, net                                         |  |                                          | (22,689,414  | ) |                                            |   | 12,226,056 |                                |  |   | (11,444,881 | )
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|Net cash (used in) provided by operating activities                                      |  |                                          | (14,398,395  | ) |                                            |   | 4,248,825  |                                |  |   | (5,831,412  | )
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|Purchase of Edgen Corporation, net of cash acquired                                      |  |                                          | (120,952,320 | ) |                                            |   |           |                                |  |   |            |  
|Purchase of property, plant and equipment                                                |  |                                          | (581,986     | ) |                                            |   | (4,079     | )                              |  |   | (384,486    | )
|Proceeds from the sale of capital assets                                                 |  |                                          |             |   |                                            |   | 3,000      |                                |  |   |            |  
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|Net cash used in investing activities                                                    |  |                                          | (121,534,306 | ) |                                            |   | (1,079     | )                              |  |   | (384,486    | )
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                    |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|Principal payments on notes payable and long-term debt                                   |  |                                          | (22,837      | ) |                                            |   | (232,072   | )                              |  |   | (716,678    | )
|Proceeds from issuance of long-term debt                                                 |  |                                          | 105,000,000  |   |                                            |   |           |                                |  |   | 1,500,000   |  
|Proceeds from debt issuancenet of payments under revolving credit agreement             |  |                                          | 13,992,278   |   |                                            |   | 116,438    |                                |  |   | 4,280,579   |  
|Deferred financing costs                                                                 |  |                                          | (7,287,897   | ) |                                            |   |           |                                |  |   | (1,287,275  | )
|Issuance of common stock                                                                 |  |                                          | 2,400,000    |   |                                            |   |           |                                |  |   |            |  
|Issuance of preferred stock                                                              |  |                                          | 21,600,000   |   |                                            |   |           |                                |  |   |            |  
|Increase (decrease) in managed cash overdraft                                            |  |                                          | 561,306      |   |                                            |   | (1,361,404 | )                              |  |   | (523,671    | )
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|Net cash provided by (used in) financing activities                                      |  |                                          | 136,242,850  |   |                                            |   | (1,477,038 | )                              |  |   | 3,252,955   |  
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                     |  |                                          | 310,149      |   |                                            |   | 2,770,708  |                                |  |   | (2,962,943  | )
|CASH AND CASH EQUIVALENTS (Beginning of period)                                          |  |                                          |             |   |                                            |   | 134,299    |                                |  |   | 3,124,606   |  
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  
|CASH AND CASH EQUIVALENTS (End of period)                                                |  | $                                        | 310,149      |   |                                            | $ | 2,905,007  |                                |  | $ | 161,663     |  
|                                                                                         |  |                                          |              |   |                                            |   |            |                                |  |   |             |  



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



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EDGEN CORPORATION AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)



1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Description of BusinessEdgen Corporation
(Edgen or the Company), formerly TPS Holdings, Inc. a Nevada corporation, was formed on November 30, 2000. Through its wholly owned subsidiaries, Edgen Alloy Products Group, L.L.C. (Edgen
Alloy), Edgen Carbon Products Group, L.L.C. (Edgen Carbon), and Edgen Canada Inc. (Edgen Canada), Edgen distributes and sells prime carbon steel pipe, alloy grade pipe, fittings and flanges, and
provides services for the applications of such pipe and steel products. The Company has no assets or operations independent of its wholly owned subsidiaries.



On February 1, 2005, Edgen Acquisition Corporation, a corporation newly formed by Jefferies Capital Partners and certain members of Edgen management,
purchased all of the outstanding capital stock of Edgen from its existing stockholders for an aggregate purchase price of approximately $124.0 million, which included the assumption or repayment of indebtedness of Edgen but excluded the payment of
fees and expenses. The acquisition was funded with proceeds to Edgen Acquisition Corporation from the issuance and sale of $105 million aggregate principal amount of 97/8% senior secured notes due 2011 and from an equity investment from funds managed by Jefferies Capital Partners and certain members of Edgen management. Concurrently with the
purchase, Edgen entered into a new $20 million senior secured revolving credit facility.



Simultaneously with the acquisition and the related financing transactions, Edgen Acquisition Corporation was merged with and into Edgen Corporation,
which survived the merger and became liable for all obligations under the old notes and borrowings under the new revolving credit facility. We refer to the acquisition of Edgen Corporation, the offering and issuance of the old notes, the equity
investment, the related financing transactions and the merger collectively as the Transactions. Edgen Corporation following the merger is referred to as the Successor. Edgen Corporation prior to the merger is
referred to as the Predecessor.



Basis
of PresentationThe condensed consolidated financial statements and notes are presented in accordance with accounting principles generally accepted in the United States of America (GAAP). The condensed consolidated
financial statements include the accounts of Edgen and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.



In accordance with GAAP, we have separated our historical financial results for the Predecessor and the Successor. The
separate presentation is required under GAAP in situations when there is a change in accounting basis, which occurred when purchase accounting was applied to the acquisition of the Predecessor. Purchase accounting requires that the historical
carrying value of assets acquired and liabilities assumed be adjusted to fair value, which may yield results that are not comparable on a period-to-period basis due to the different, and sometimes higher, cost basis associated with the allocation of
the purchase price. In addition, at the time of the acquisition of the Predecessor, we experienced changes in our business as a result of the other Transactions, which were consummated simultaneously with the acquisition of the Predecessor. There
were no material changes to the operations or customer relationships of the business as a result of the acquisition of the Predecessor.



Interim Financial InformationCertain information and footnote disclosures normally included in financial statements prepared in
accordance with GAAP have been condensed or omitted pursuant to the rules and regulations promulgated by the United States Securities and Exchange Commission. However, management believes that the disclosures contained herein are adequate to make
the information presented not misleading. Certain reclassifications of prior period amounts have been made to conform to the current period presentation. The unaudited financial statements should be read in conjunction with the audited financial
statements and accompanying notes as of and for the year ended December 31, 2004 included in Amendment No. 1 to the Companys Registration Statement on Form S-4 (File No. 333-124543) as filed with the Securities and Exchange Commission on June
14, 2005.



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Use of Estimates and AssumptionsThe preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.



New Accounting Standards From time to time, new accounting pronouncements are issued by the Financial
Accounting Standards Board (FASB) which are adopted by us as of the specified effective date. Unless otherwise discussed, our management believes the impact of recently issued standards which are not yet effective will not have a material impact on
our consolidated financial statements upon adoption.



2. ACQUISITION OF
EDGEN CORPORATION



As described in Note 1, on February 1,
2005, Edgen Acquisition Corporation purchased all of the outstanding capital stock of Edgen from its existing stockholders for an aggregate purchase price of approximately $124.0 million, which included the assumption or repayment of indebtedness of
Edgen but excluded the payment of certain fees and expenses. The acquisition was funded with (i) proceeds to Edgen Acquisition Corporation from the issuance and sale of $105.0 million aggregate principal amount of 97/8% Senior Secured Notes due 2011 ( the Notes), (ii) from an equity investment from funds managed by Jefferies Capital Partners and certain members of Edgen management and (iii) a payable to the sellers of $2,317,921 upon
receipt of certain income tax refunds for the remainder of the purchase price.



As of June 30, 2005, the purchase price allocation is preliminary as we have not completed our review and valuation procedures of the assets acquired and the liabilities assumed on February 1, 2005. The preliminary
purchase price allocation as of June 30, 2005 includes the following:



|                                                    |  |   |             |  
|--------------------------------------------------- |  | - | ----------- | -
|Accounts receivable                                 |  | $ | 29,733,590  |  
|Inventory                                           |  |   | 63,097,410  |  
|Other current assets                                |  |   | 18,300,773  |  
|Property, plant and equipment                       |  |   | 12,110,055  |  
|Goodwill                                            |  |   | 37,527,549  |  
|Other assets                                        |  |   | 109,416     |  
|Accounts payable                                    |  |   | (25,335,643 | )
|Accrued expenses and other current liabilities      |  |   | (12,959,496 | )
|Deferred tax liability                              |  |   | (1,608,507  | )
|Long-term debt                                      |  |   | (22,828     | )
|                                                    |  |   |             |  
|Purchase price (net of cash received of $3,582,737) |  | $ | 120,952,319 |  
|                                                    |  |   |             |  



If the acquisition and
related transactions would have taken place at the beginning of each period, net income would have been reduced by approximately $374,000, $1,819,000 and $3,261,000 for the period January 1, 2005 to January 31, 2005 and the three and six months
ended June 30, 2004, respectively, as a result of interest expense associated with the $105.0 million in Notes issued in connection with the acquisition. There would have been no impact to revenue for the period January 1, 2005 to January 31, 2005
and the three and six months ended June 30, 2004.



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3. LONG-TERM DEBT AND CREDIT ARRANGEMENTS



Long-term debt and credit arrangements consisted of the following at June 30, 2005 and December 31, 2004:



|                                 |  |               |             |   |                  |   |            |  
|-------------------------------- |  | ------------- | ----------- | - | ---------------- | - | ---------- | -
|                                 |  | Successor     |             |   | Predecessor      |  
|                                 |  | June 30, 2005 |             |   | December 31,2004 |  
|97/8%
Senior Secured Notes       |  | $             | 105,000,000 |   |                  | $ |           |  
|New revolving credit facility    |  |               | 13,992,268  |   |                  |   |           |  
|Old revolving credit loans       |  |               |            |   |                  |   | 39,608,998 |  
|Various notes and capital leases |  |               |            |   |                  |   | 8,273,785  |  
|                                 |  |               |             |   |                  |   |            |  
|Total                            |  |               | 118,992,268 |   |                  |   | 47,882,783 |  
|Less current portion             |  |               | (          | ) |                  |   | (7,229,553 | )
|                                 |  |               |             |   |                  |   |            |  
|Long-term debt                   |  | $             | 118,992,268 |   |                  | $ | 40,653,230 |  
|                                 |  |               |             |   |                  |   |            |  



Senior Secured Notes



On February 1, 2005, the Company issued $105.0 million
aggregate principal amount of 97/8% Senior Secured Notes due 2011. The proceeds from the issuance of the Notes were used to retire substantially all of the Companys long-term debt under its existing
revolving credit facility and certain other notes and loans on February 1, 2005. Interest accrues on the Notes at the stated rate semi-annually and is payable in arrears on each February 1 and August 1, beginning on August 1, 2005.



The Company may redeem some or all of the Notes at any
time prior to February 1, 2008 at a make-whole redemption price set forth in the terms of the Notes. On or after February 1, 2008, the Company may at its option, redeem some or all of the Notes at the following redemption prices, plus accrued and
unpaid interest to the date of redemption:



|                 |  |         |  
|---------------- |  | ------- | -
|On or after:     |  |         |  
|February 1, 2008 |  | 104.938 | %
|February 1, 2009 |  | 102.469 | %
|February 1, 2010 |  | 100.000 | %



In addition, at any
time prior to February 1, 2007, the Company may redeem up to 35% of the aggregate principal amounts of the Notes issued under the indenture at a price equal to 109.875% of their principal amount, plus accrued and unpaid interest, to the date of
redemption with the net cash proceeds of certain equity offerings. The terms of the Notes also contain certain change in control and sale of asset provisions where the holders of the Notes have the right to require the Company to repurchase all or
any part of the Notes at an offer price in cash equal to 101% and 100%, respectively, of their principal amount, plus accrued and unpaid interest, to the date of the repurchase.



All of the Companys domestic subsidiaries fully and unconditionally guarantee the Notes on a joint and several basis.
The Notes and the related guarantees are secured by a lien on substantially all of the Companys assets and the assets of our existing and future domestic restricted subsidiaries in including inventory, accounts receivable, lockboxes, deposit
accounts, securities accounts and financial assets and certain related assets. The Notes are subordinate to our new revolving credit facility to the extent of the value of such assets.



There are no significant restrictions on the Companys ability and the ability of the subsidiary guarantors to obtain
funds from the Companys and the subsidiary guarantors respective subsidiaries by



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dividend or loan. Consequently, separate financial statements have not been presented for the Companys subsidiaries because management has determined
that they would not be material to investors. The Companys management has determined that Edgen Canada, the only subsidiary that is not a guarantor of the Notes, is a minor subsidiary as that term is used in Rule 3-10 of Regulation
S-X promulgated by the Securities and Exchange Commission.



Revolving Credit
Facility



In connection with the Transactions, Edgen
entered into a new $20 million senior secured revolving credit facility (the New Credit Agreement) with GMAC Commercial Finance LLC (GMAC CF), replacing its $55.5 million revolving credit agreement. The New Credit Agreement is subject to
certain borrowing limitations and matures on February 1, 2010. Under the New Credit Agreement, interest accrues on borrowings (at the option of the Company) at either (i) the prime rate of interest announced by GMAC CF less 0.50% per annum (5.50% as
of June 30, 2005), or (ii) a Eurodollar rate based on LIBOR plus 1.50% per annum (4.80% as of June 30, 2005). The Company must also pay a monthly facility fee of 0.05% per annum on the unused portion of the maximum revolving amount.



The New Credit Agreement is guaranteed by all of our domestic subsidiaries
and is secured by a first priority security interest in all of the Companys domestic subsidiaries working capital assets and a second priority security interest in all of the Companys domestic subsidiaries other assets (other
than certain excluded assets such as our leasehold interests and the capital stock of our subsidiaries).



In addition, the New Credit Agreement contains various affirmative and negative covenants, including limitations on additional indebtedness, the making of
distributions, loans and advances, transactions with affiliates, dispositions or mergers, and the sale of assets.



4. MANDATORILY REDEEMABLE PREFERRED STOCK



In connection with the Transactions on February 1, 2005, all mandatorily redeemable preferred stock was redeemed (See Note 1).



5. SHAREHOLDERS EQUITY



Common StockThe Class B Common Stock is identical to
Class A Common Stock, except that the Class B Common Stock is non-voting. The Class B Common Stock is exchangeable at any time at the option of the holder thereof, pursuant to terms of a certain agreement between such holder and Edgen, into shares
of Class A Common Stock on a one-for-one basis.



Preferred StockThe holders of Series A Preferred Stock, $.01 par value, are entitled to receive annual dividends when, as and if, declared. The dividends are cumulative, whether or not earned or declared, and accrue at a
rate of 8.5%, compounding annually, and are payable in cash or shares of Series A Preferred Stock, at the discretion of the board of directors. Upon the occurrence of certain events including a public offering, the sale of substantially all the
assets of the Company or a change in control, the Series A Preferred Stock can be redeemed by the Company at a price of $1,000 per share, plus accrued and unpaid dividends.



Stock OptionsIn December 1998, the shareholders of the Company approved a stock option plan to provide
stock options as incentives and rewards for employees of the Company. Under the stock option plan, a maximum of 500,000 shares of the Companys Class A Common Stock could be granted. In connection with the Transactions, the Companys stock
option plan and all outstanding stock options were cancelled on February 1, 2005.



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On February 1, 2005, 281,565 shares of restricted stock were granted to certain employees of the Company,
including the Chief Executive Officer, the Chief Financial Officer and the two Operating Segment Presidents under a new incentive compensation plan (the Plan). Vesting of the restricted stock is based on either time or a
combination of performance and time. The time-based vesting schedule is generally 20% per year over a five year period subject to the holders continued employment with the Company. Restricted stock grants that use a vesting schedule that
combines performance and time will generally vest 10% per year over five years subject to continued employment with the Company plus an additional 10% or more per year for each year that the Company achieves certain performance goals as determined
by the board of directors. Performance based restricted stock is cumulative so if the performance goals are achieved in any year of the five year period, all restricted stock subject to the performance criteria for that year and prior years will
vest. If the performance goals are not achieved within five years of the grant date, the restricted stock subject to the performance goals is forfeited. Upon a change in control, all restricted stock subject to time based vesting will fully and
immediately vest. For the three months ended June 30, 2005 and the period February 1, 2005 to June 30, 2005, the statement of operations includes $7,039 and $11,732 of stock-based compensation expense, respectively. As of June 30, 2005, $269,833 of
unearned compensation is reflected as a contra-equity account on the statement of shareholders equity (deficit).



6. SEGMENT INFORMATION



Edgen markets and distributes specialty pipe, fittings and flanges made of highly engineered prime carbon and alloy steel. Edgen distributes its products
primarily to companies operating within the oil and gas production and transmission, the process/petrochemical and the power generation industries. Edgen aggregates its operations into two reportable segments: alloy products and carbon products.



The alloy products segment distributes specialty steel pipe
and components for use in environments that are highly corrosive, extremely high or low temperature and/or involve high pressures. These products are sold primarily to the process/petrochemical and power generation industries.



The carbon products segment distributes specialty carbon steel pipe and
components primarily for use in high pressure and/or abrasive environments. The primary industries served are natural gas transmission and distribution, offshore fabrication and mining.



The accounting policies of the segments are the same as those described in the summary of significant accounting policies.
Edgen evaluates performance based on profit or losses from operations before income taxes not including nonrecurring gains or losses and discontinued operations.

The following table presents the financial information for each reportable segment:



|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|------------------------------ |  | ------------------------------- | ---------- | - | ------------------------------- | - | ---------- | -------------------------------------- |  | - | ----------------------------------------- | - |  | ----------------------------- | ----------- | - |  | - | ---------- | -
|                               |  | Successor                       |            |   | Predecessor                     |   |            | Successor                              |  |   | Predecessor                               |   |  | Predecessor                   |            
|                               |  | Three MonthsEnded June 30, 2005 |            |   | Three MonthsEnded June 30, 2004 |   |            | PeriodFebruary 1, 2005 toJune 30, 2005 |  |   | Period January 1, 2005 toJanuary 31, 2005 |   |  | Six MonthsEnded June 30, 2004 |            
|Sales:                         |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Alloy Products                 |  | $                               | 18,951,766 |   |                                 | $ | 13,242,002 |                                        |  | $ | 32,960,417                                |   |  | $                             | 4,214,009   |   |  | $ | 25,594,750 |  
|Carbon Products                |  |                                 | 55,441,791 |   |                                 |   | 40,799,004 |                                        |  |   | 87,327,866                                |   |  |                               | 14,730,778  |   |  |   | 71,277,719 |  
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|                               |  | $                               | 74,393,557 |   |                                 | $ | 54,041,006 |                                        |  | $ | 120,288,283                               |   |  | $                             | 18,944,787  |   |  | $ | 96,872,469 |  
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Operating Income (Loss):       |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Alloy Products                 |  | $                               | 3,477,244  |   |                                 | $ | 1,262,911  |                                        |  | $ | 5,708,856                                 |   |  | $                             | 959,632     |   |  | $ | 2,924,447  |  
|Carbon Products                |  |                                 | 6,800,148  |   |                                 |   | 6,402,843  |                                        |  |   | 10,495,695                                |   |  |                               | 1,980,553   |   |  |   | 9,288,608  |  
|General Corporate              |  |                                 | (2,395,925 | ) |                                 |   | (1,893,950 | )                                      |  |   | (3,664,708                                | ) |  |                               | (12,713,366 | ) |  |   | (3,770,527 | )
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|                               |  | $                               | 7,881,467  |   |                                 | $ | 5,771,804  |                                        |  | $ | 12,539,843                                |   |  | $                             | (9,773,181  | ) |  | $ | 8,442,528  |  
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Capital Expenditures:          |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Alloy Products                 |  | $                               | 52,090     |   |                                 | $ | 122,658    |                                        |  | $ | 104,923                                   |   |  | $                             |            |   |  | $ | 161,733    |  
|Carbon Products                |  |                                 | 144,171    |   |                                 |   | 34,436     |                                        |  |   | 158,135                                   |   |  |                               | 4,079       |   |  |   | 65,857     |  
|General Corporate              |  |                                 | 292,339    |   |                                 |   | 125,242    |                                        |  |   | 318,928                                   |   |  |                               |            |   |  |   | 156,896    |  
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|                               |  | $                               | 488,600    |   |                                 | $ | 282,336    |                                        |  | $ | 581,986                                   |   |  | $                             | 4,079       |   |  | $ | 384,486    |  
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Depreciation and Amortization: |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|Alloy Products                 |  | $                               | 49,552     |   |                                 | $ | 42,826     |                                        |  | $ | 215,726                                   |   |  | $                             | 14,935      |   |  | $ | 86,494     |  
|Carbon Products                |  |                                 | 245,002    |   |                                 |   | 241,429    |                                        |  |   | 411,030                                   |   |  |                               | 80,338      |   |  |   | 473,972    |  
|General Corporate              |  |                                 | 314,157    |   |                                 |   | 322,615    |                                        |  |   | 459,894                                   |   |  |                               | 105,371     |   |  |   | 643,510    |  
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  
|                               |  | $                               | 608,711    |   |                                 | $ | 606,870    |                                        |  | $ | 1,086,650                                 |   |  | $                             | 200,644     |   |  | $ | 1,203,976  |  
|                               |  |                                 |            |   |                                 |   |            |                                        |  |   |                                           |   |  |                               |             |   |  |   |            |  





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|                  |  |               |             |                  |   |               |  |   |            
|----------------- |  | ------------- | ----------- | ---------------- | - | ------------- |  | - | -----------
|                  |  | Successor     |             | Predecessor      |   | Predecessor  
|                  |  | As of        
|                  |  | June 30, 2005 |             | December 31,2004 |   | June 30, 2004
|Total Assets:     |  |               |             |                  |   |               |  |   |            
|Alloy Products    |  | $             | 31,087,969  |                  | $ | 26,324,510    |  | $ | 29,146,445 
|Carbon Products   |  |               | 99,773,964  |                  |   | 79,177,069    |  |   | 79,837,734 
|General Corporate |  |               | 56,431,067  |                  |   | 14,251,549    |  |   | 5,933,986  
|                  |  |               |             |                  |   |               |  |   |            
|                  |  | $             | 187,293,000 |                  | $ | 119,753,128   |  | $ | 114,918,165
|                  |  |               |             |                  |   |               |  |   |            



7. INCOME TAXES



For the period February 1, 2005 to June 30, 2005 and the period January 1, 2005 to January
31, 2005, the Companys effective tax rate was approximately 32% and (19%), respectively, as compared to approximately 40% for the six months ended June 30, 2004. The income tax payable and effective tax rate for the period February 1, 2005 to
June 30, 2005 was impacted by a deferred tax liability related to a purchase price allocation adjustment to inventory which is being reduced in the period the inventory is sold. The income tax benefit and effective tax rate for the period January 1,
2005 to January 31, 2005 reflects the net loss incurred in that period as a result of Transaction-related expenses, which may not be fully deductible for income tax purposes.



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



You should read the following discussion together with our consolidated financial statements and related notes thereto included elsewhere in this report. The following
discussion and analysis of our financial condition and results of operations contains forward looking statements within the meaning of the federal securities laws. See Forward-Looking Statements below.



Overview



Background



We are a leading global distributor of specialty steel pipe, fittings and flanges for use in niche applications, primarily
in the oil and gas, processing and power generation industries. The products we distribute are highly specialized and are used in environments that require high performance characteristics, such as the ability to withstand highly corrosive or
abrasive materials, extremely high or low temperatures, or high-pressure. These products are principally used in maintenance and repair projects as well as expansions of infrastructure and development projects. We offer our customers significant
breadth in our product offering and consistently provide products that may not otherwise be available on a quick-response basis in quantities that are usable by customers. The depth and breadth of our inventory positions us as a leading distributor
of difficult-to-find, specialty products.



The Company has two
operating segmentsour alloy products group and our carbon products group. Our alloy products group primarily distributes alloy based specialty pipes, fittings and flanges that are principally used in high-pressure, extreme temperature and
high-corrosion applications in the process and power generation industries. Our carbon products group primarily distributes prime carbon specialty pipes, fittings and flanges that are principally used in high-yield, high-tensile applications in the
oil and gas, offshore construction and mining industries.



We
were founded in 1983 as Thomas Pipe and Steel, Inc. and since 1996, we have grown significantly from one location to our current 16 locations through six add-on acquisitions and three greenfield start-up locations. As of June 30, 2005, we operate in
16 locations, including 15 in the United States, and one in Canada. We also conduct European operations through an exclusive full-time sales agent in Scotland.



Predecessor and Successor



On December 31, 2004, Edgen Acquisition Corporation, a corporation newly formed by Jefferies Capital Partners, entered into a stock purchase agreement
with Edgen Corporation and the stockholders of Edgen Corporation to purchase all of the outstanding capital stock of Edgen Corporation from its then existing stockholders for an aggregate purchase price of approximately $124.0 million, which
included the assumption or repayment of indebtedness of Edgen Corporation but excluded payment of fees and expenses. The acquisition closed on February 1, 2005 and was funded with proceeds to Edgen Acquisition Corporation from the issuance and sale
of 9 7/8% Senior Secured Notes due 2011, which we refer to as the senior secured notes as well as an equity investment from funds managed by Jefferies Capital Partners and certain members of management of Edgen Corporation.



Concurrently with the acquisition and the issuance of the Senior Secured
Notes, Edgen Corporation also entered into a new $20.0 million senior secured revolving credit facility, which we refer to as the new revolving credit facility, and borrowed $2.7 million in loans thereunder.



Simultaneously with the acquisition and the related financing transactions,
Edgen Acquisition Corporation was merged with and into Edgen Corporation, which survived the merger and became liable for all obligations under the Senior Secured Notes and borrowings under the new revolving credit facility.



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We refer to the acquisition of Edgen Corporation, the offering and issuance of the Senior Secured Notes, the equity investment, the related financing
transactions and the merger collectively as the Transactions. Edgen Corporation following the merger is referred to as the Successor. Edgen Corporation prior to the merger is referred to as the Predecessor.



In accordance with GAAP, we have separated our historical
financial results for the Predecessor and the Successor. The separate presentation is required under GAAP in situations when there is a change in accounting basis, which occurred when purchase accounting was applied to the acquisition of the
Predecessor. Purchase accounting requires that the historical carrying value of assets acquired and liabilities assumed be adjusted to fair value, which may yield results that are not comparable on a period-to-period basis due to the different, and
sometimes higher, cost basis associated with the allocation of the purchase price. In addition, at the time of the acquisition of the Predecessor, we experienced changes in our business as a result of the other Transactions, which were consummated
simultaneously with the acquisition of the Predecessor. There have been no material changes to the operations or customer relationships of our business as a result of the acquisition of the Predecessor.



In evaluating our results of operations and financial performance, our
management has used combined results for the six months ended June 30, 2005 as a single measurement period. Due to the Transactions, we believe that comparisons between the six months ended June 30, 2004 and either the Predecessors results for
the period from January 1, 2005 to January 31, 2005 or the Successors results for the period from February 1, 2005 to June 30, 2005 may impede the ability of users of our financial information to understand our operating and cash flow
performance.



Consequently, to enhance an analysis of our
operating results and cash flows, we have presented our operating results and cash flows on a combined basis for the six month period ended June 30, 2005. This combined presentation for the six month period ended June 30, 2005 simply represents the
mathematical addition of the pre-merger results of operations of the Predecessor for the period from January 1, 2005 to January 31, 2005 and the results of operations of the Successor for the period from February 1, 2005 to June 30, 2005. The
Successor conducted no operations from the date of formation of Edgen Acquisition Corporation until the merger on February 1, 2005. We believe the combined presentation provides relevant information for investors. These combined results, however,
are not intended to represent what our operating results would have been had the Transactions occurred at the beginning of the period. A reconciliation showing the mathematical combination of our operating results for such periods is included below
under Results of Operations.



Critical Accounting Policies



The preparation of our financial statements requires us
to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to
accounts receivable, inventory, impairment of goodwill and other intangible assets, and income taxes. We base our estimates on historical experience and on various other assumptions and factors that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Based on our ongoing review, we plan to make adjustments to our judgments
and estimates where facts and circumstances dictate. Actual results could differ from our estimates. Refer to Amendment No. 1 to our Registration Statement on Form S-4 (File No. 333-124543) as filed with the Securities and Exchange Commission (the
SEC) on June 14, 2005 for a discussion of our accounting policies and estimates.



In addition, we believe the following critical accounting policies are important to the portrayal of our financial condition and results and require our managements most difficult, subjective or complex
judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.



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Accounts Receivable



We maintain an allowance for doubtful accounts to reflect our estimate of the uncollectibility of accounts receivable.
Concentration of credit risk with respect to trade accounts is within several industries and is limited because of our broad customer base. We perform ongoing credit evaluations of customers and set credit limits based upon reviews of
customers current credit information and payment histories. We monitor customer payments and maintain a provision for estimated uncollectible accounts based on historical experience and specific customer collection issues that we have
identified. Estimation of such losses requires adjusting historical loss experience for current economic conditions and judgments about the probable effects of economic conditions on certain customers. The rate of future credit losses may not be
similar to past experience.



We record the effect of any
necessary adjustments prior to the publication of our consolidated financial statements. We consider all available information when assessing the adequacy of the provision for allowances, claims and doubtful accounts. Adjustments made with respect
to the allowance for doubtful accounts often relate to improved information not previously available. Uncertainties with respect to the allowance for doubtful accounts are inherent in the preparation of financial statements.



Inventories



We state our inventories at the lower of cost or market. We account for our
inventories using the weighted average cost method of accounting. We maintain allowances for damaged, slow-moving and unmarketable inventory to reflect the difference between the cost of the inventory and the estimated market value. We regularly
review our inventory on hand and update our allowances based on historical and current sales trends. Changes in product demand and our customer base may affect the value of inventory on hand and may require higher inventory allowances. Uncertainties
with respect to the inventory valuation are inherent in the preparation of financial statements.



Goodwill and Other Intangible Assets



In assessing the recoverability of our goodwill and other intangibles, we must make assumptions regarding estimated future
cash flows and other factors to determine the fair value of the respective assets. In accordance with the FASBs, Statement of Financial Accounting Standards (SFAS) No. 142, we perform annual impairment testing or more frequently if changes in
events or circumstances trigger an impairment test. We estimate future cash flows at the reporting unit level. A key assumption that we make is that our business will grow at approximately 10% per year, adjusted for the current economic outlook. If
these estimates or their related assumptions change in the future, we may be required to record impairment charges not previously recorded for these assets.



Income Tax Expense Estimates and Policies



As part of the income tax provision process of preparing our consolidated financial statements, we are required to estimate
our income taxes. This process involves estimating our current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets
and liabilities. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income and to the extent we believe the recovery is not likely, we must establish a valuation allowance. Further, to the extent
that we establish a valuation allowance or increase this allowance in a financial accounting period, we must include a tax provision, or reduce our tax benefit in our consolidated statement of operations. We use our judgment to determine our
provision or benefit for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.



There are various factors that may cause our tax assumptions to change in the near term, and we may have to record a valuation allowance against our
deferred tax assets. We cannot predict whether future U.S. federal and state income tax laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant changes to the U.S.
federal and state income tax laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when new legislation and regulations are enacted.





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Results of Operations



The following tables provide our statements of operations, selected segment information including our sales, operating profits and gross margins as a
percentage of sales and international sales. The segment information is presented as it is reported to management, and is consistent with the segment reporting in Note 6 to our notes to the consolidated financial statements included elsewhere in
this document. The period-to-period comparisons of financial results are not necessarily indicative of future results, or results for a full year.



|                                                                   |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|------------------------------------------------------------------ |  | ------------------------------- | ------ | - | ------------------------------- | - | ------ | -------------------------------------- |  | - | ---------------------------------------- | - |  | ---------------------------- | ------- | - | ----------------------------- | - | ------- | - |  | - | ------ | -
|                                                                   |  | Successor                       |        |   | Predecessor                     |   |        | Successor                              |  |   | Predecessor                              |   |  | Non-GAAPCombined             |         |   | Predecessor                   |  
|                                                                   |  | Three MonthsEnded June 30, 2005 |        |   | Three MonthsEnded June 30, 2004 |   |        | PeriodFebruary 1, 2005 toJune 30, 2005 |  |   | PeriodJanuary 1, 2005 toJanuary 31, 2005 |   |  | Six MonthsEndedJune 30, 2005 |         |   | Six MonthsEnded June 30, 2004 |  
|SALES                                                              |  | $                               | 74,394 |   |                                 | $ | 54,041 |                                        |  | $ | 120,288                                  |   |  | $                            | 18,945  |   |                               | $ | 139,233 |   |  | $ | 96,872 |  
|COST OF SALES                                                      |  |                                 | 57,828 |   |                                 |   | 40,294 |                                        |  |   | 93,627                                   |   |  |                              | 14,153  |   |                               |   | 107,780 |   |  |   | 73,837 |  
|                                                                   |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|Gross profit                                                       |  |                                 | 16,566 |   |                                 |   | 13,747 |                                        |  |   | 26,661                                   |   |  |                              | 4,792   |   |                               |   | 31,453  |   |  |   | 23,035 |  
|OPERATING EXPENSES:                                                |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|Yard and shop expense                                              |  |                                 | 1,234  |   |                                 |   | 1,205  |                                        |  |   | 2,003                                    |   |  |                              | 390     |   |                               |   | 2,393   |   |  |   | 2,175  |  
|Selling, general, and administrative expense                       |  |                                 | 6,841  |   |                                 |   | 6,163  |                                        |  |   | 11,032                                   |   |  |                              | 13,974  |   |                               |   | 25,006  |   |  |   | 11,214 |  
|Depreciation and amortization expense                              |  |                                 | 609    |   |                                 |   | 607    |                                        |  |   | 1,086                                    |   |  |                              | 201     |   |                               |   | 1,287   |   |  |   | 1,204  |  
|                                                                   |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|Total operating expenses                                           |  |                                 | 8,684  |   |                                 |   | 7,975  |                                        |  |   | 14,121                                   |   |  |                              | 14,565  |   |                               |   | 28,686  |   |  |   | 14,593 |  
|INCOME (LOSS) FROM OPERATIONS                                      |  |                                 | 7,882  |   |                                 |   | 5,772  |                                        |  |   | 12,540                                   |   |  |                              | (9,773  | ) |                               |   | 2,767   |   |  |   | 8,442  |  
|OTHER INCOME (EXPENSE):                                            |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|Other income (expense)                                             |  |                                 | 68     |   |                                 |   | 15     |                                        |  |   | 75                                       |   |  |                              | (50     | ) |                               |   | 25      |   |  |   | 36     |  
|Interest expense                                                   |  |                                 | (3,023 | ) |                                 |   | (905   | )                                      |  |   | (4,959                                   | ) |  |                              | (333    | ) |                               |   | (5,292  | ) |  |   | (1,628 | )
|                                                                   |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE |  |                                 | 4,927  |   |                                 |   | 4,882  |                                        |  |   | 7,656                                    |   |  |                              | (10,156 | ) |                               |   | (2,500  | ) |  |   | 6,850  |  
|INCOME TAX EXPENSE (BENEFIT)                                       |  |                                 | 1,738  |   |                                 |   | 1,952  |                                        |  |   | 2,748                                    |   |  |                              | (1,916  | ) |                               |   | 832     |   |  |   | 2,740  |  
|                                                                   |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|INCOME (LOSS) FROM CONTINUING OPERATIONS                           |  |                                 | 3,189  |   |                                 |   | 2,930  |                                        |  |   | 4,908                                    |   |  |                              | (8,240  | ) |                               |   | (3,332  | ) |  |   | 4,110  |  
|PREFERRED DIVIDEND REQUIREMENT                                     |  |                                 | 464    |   |                                 |   | 551    |                                        |  |   | 765                                      |   |  |                              | 190     |   |                               |   | 955     |   |  |   | 1,103  |  
|                                                                   |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  
|NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS                |  | $                               | 2,725  |   |                                 | $ | 2,379  |                                        |  | $ | 4,143                                    |   |  | $                            | (8,430  | ) |                               | $ | (4,287  | ) |  | $ | 3,007  |  
|                                                                   |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |   |                               |   |         |   |  |   |        |  



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|                                                                    |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|------------------------------------------------------------------- |  | ------------------------------- | ------ | - | ------------------------------- | - | ------ | -------------------------------------- |  | - | ---------------------------------------- | - |  | ---------------------------- | ------- | -- | ----------------------------- | - | ------- | - |  | - | ------ | -
|                                                                    |  | Successor                       |        |   | Predecessor                     |   |        | Successor                              |  |   | Predecessor                              |   |  | Non-GAAPCombined             |         |    | Predecessor                   |  
|                                                                    |  | Three MonthsEnded June 30, 2005 |        |   | Three MonthsEnded June 30, 2004 |   |        | PeriodFebruary 1, 2005 toJune 30, 2005 |  |   | PeriodJanuary 1, 2005 toJanuary 31, 2005 |   |  | Six MonthsEndedJune 30, 2005 |         |    | Six MonthsEnded June 30, 2004 |  
|Segment Sales                                                       |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Alloy Products                                                      |  | $                               | 18,952 |   |                                 | $ | 13,242 |                                        |  | $ | 32,960                                   |   |  | $                            | 4,214   |    |                               | $ | 37,174  |   |  | $ | 25,595 |  
|Carbon Products                                                     |  |                                 | 55,442 |   |                                 |   | 40,799 |                                        |  |   | 87,328                                   |   |  |                              | 14,731  |    |                               |   | 102,059 |   |  |   | 71,277 |  
|                                                                    |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Total                                                               |  | $                               | 74,394 |   |                                 | $ | 54,041 |                                        |  | $ | 120,288                                  |   |  | $                            | 18,945  |    |                               | $ | 139,233 |   |  | $ | 96,872 |  
|                                                                    |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Segment Operating Profits (Losses)                                  |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Alloy Products                                                      |  | $                               | 3,477  |   |                                 | $ | 1,263  |                                        |  | $ | 5,709                                    |   |  | $                            | 960     |    |                               | $ | 6,668   |   |  | $ | 2,924  |  
|Carbon Products                                                     |  |                                 | 6,801  |   |                                 |   | 6,403  |                                        |  |   | 10,545                                   |   |  |                              | 1,981   |    |                               |   | 12,526  |   |  |   | 9,289  |  
|General Corporate                                                   |  |                                 | (2,396 | ) |                                 |   | (1,894 | )                                      |  |   | (3,714                                   | ) |  |                              | (12,714 | )  |                               |   | (16,427 | ) |  |   | (3,771 | )
|                                                                    |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Total                                                               |  | $                               | 7,882  |   |                                 | $ | 5,772  |                                        |  | $ | 12,540                                   |   |  | $                            | (9,773  | )  |                               | $ | 2,767   |   |  | $ | 8,442  |  
|                                                                    |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Segment Gross Margins as a Percentage of Segment Sales              |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Alloy Products                                                      |  |                                 | 32.9   | % |                                 |   | 28.9   | %                                      |  |   | 31.2                                     | % |  |                              | 41.3    | %  |                               |   | 32.3    | % |  |   | 28.8   | %
|Carbon Products                                                     |  |                                 | 18.6   | % |                                 |   | 24.3   | %                                      |  |   | 18.8                                     | % |  |                              | 20.7    | %  |                               |   | 19.0    | % |  |   | 22.0   | %
|Total                                                               |  |                                 | 22.3   | % |                                 |   | 25.4   | %                                      |  |   | 22.2                                     | % |  |                              | 25.3    | %  |                               |   | 22.6    | % |  |   | 23.8   | %
|                                                                    |  |                                 |        |   |                                 |  
|Segment Operating Profits (Losses) as a Percentage of Segment Sales |  |                                 |        |   |                                 |   |        |                                        |  |   |                                          |   |  |                              |         |    |                               |   |         |   |  |   |        |  
|Alloy Products                                                      |  |                                 | 18.3   | % |                                 |   | 9.5    | %                                      |  |   | 17.3                                     | % |  |                              | 22.8    | %  |                               |   | 17.9    | % |  |   | 11.4   | %
|Carbon Products                                                     |  |                                 | 12.3   | % |                                 |   | 15.7   | %                                      |  |   | 12.1                                     | % |  |                              | 13.4    | %  |                               |   | 12.3    | % |  |   | 13.0   | %
|Total                                                               |  |                                 | 10.6   | % |                                 |   | 10.7   | %                                      |  |   | 10.4                                     | % |  |                              | (51.6   | )% |                               |   | 2.0     | % |  |   | 8.7    | %
|                                                                    |  |                                 |        |   |                                 |  
|International Sales                                                 |  | $                               | 5,237  |   |                                 | $ | 3,252  |                                        |  | $ | 11,814                                   |   |  | $                            | 1,897   |    |                               | $ | 13,711  |   |  | $ | 6,055  |  
|                                                                    |  |                                 |        |   |                                 |  
|International Sales as a Percentage of Total Sales                  |  |                                 | 7.0    | % |                                 |   | 6.0    | %                                      |  |   | 9.8                                      | % |  |                              | 10.0    | %  |                               |   | 9.8     | % |  |   | 6.3    | %





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|                                  |  |                                          |          |   |                                            |   |        |                                |  |   |                                |   |  |   |        |  
|--------------------------------- |  | ---------------------------------------- | -------- | - | ------------------------------------------ | - | ------ | ------------------------------ |  | - | ------------------------------ | - |  | - | ------ | -
|                                  |  | Successor                                |          |   | Predecessor                                |   |        | Non-GAAP Combined              |  |   | Predecessor                    |  
|                                  |  |                                          |         
|                                  |  | Period February 1, 2005 to June 30, 2005 |          |   | Period January 1, 2005 to January 31, 2005 |   |        | Six Months Ended June 30, 2005 |  |   | Six Months Ended June 30, 2004 |  
|                                  |  |                                          |         
|                                  |  |                                          |         
|Net cash (used in) provided by:   |  |                                          |          |   |                                            |   |        |                                |  |   |                                |   |  |   |        |  
|Cash flows - operating activities |  | $                                        | (14,398  | ) |                                            | $ | 4,249  |                                |  | $ | (10,149                        | ) |  | $ | (5,831 | )
|Cash flows - investing activities |  |                                          | (121,534 | ) |                                            |   | (1     | )                              |  |   | (121,533                       | ) |  |   | (384   | )
|Cash flows - financing activities |  |                                          | 136,243  |   |                                            |   | (1,477 | )                              |  |   | 134,766                        |   |  |   | 3,253  |  



As used under this
Results of Operations section the terms listed below have the following meanings:



Sales. Our sales represent revenues from product sales to third parties net of returns and allowances.



Segment Operating Profits. Our segment operating profits are our revenues minus cost of sales and operating expenses (such as yard and shop
expenses) and depreciation and amortization, excluding general corporate expenses and interest expense.



Selling, General and Administrative Expenses. Our selling, general and administrative expenses include sales and administrative employee
compensation and benefit costs, as well as travel expenses for sales representatives, information technology infrastructure and communication costs, office rent and supplies, professional services, management fees and other general corporate
expenses.



Yard and Shop Expenses. Our yard and shop
expenses include costs for warehouse personnel and benefits, supplies, equipment maintenance and rental and contract storage.



Gross Margin. Our gross margin is equal to our sales minus cost of goods sold expressed as a percentage of sales. The primary components of our
cost of goods sold are product costs, freight in and freight out and outsourced services to prepare the product for sale.



Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004



Sales. For the three months ended June 30, 2005, our consolidated sales increased $20.4 million, or 37.7%, to $74.4
million as compared to the three months ended June 30, 2004. This increase in sales was primarily the result of commodity price increases for alloy and carbon steel products, particularly chrome pipe, an increase in carbon pipe sales volume
primarily due to the shipment of a large project order, and an increase in international sales of our carbon products, net of a slight decrease in alloy pipe sales volume. The strong worldwide demand for iron ore, nickel, chrome and copper has
positively impacted pipe and component pricing and positively impacted our sales for the three months ended June 30, 2005.



Sales order backlog decreased from $48.8 million at March 31, 2005 to $41.4 million at June 30, 2005. This decrease was primarily the result of the
shipment of a large project order to a major customer during the three months ended June 30, 2005. This decrease in backlog reflects the impact project orders can have on our backlog, and ultimately our sales from period to period. Project orders
are driven by scheduled



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shipment dates and planned major capital expenditures, as opposed to quick-ship inventory orders used primarily for daily customer repair and maintenance
activity. Alloy products sales order backlog decreased slightly from $15.5 million at March 31, 2005 to $14.2 million at June 30, 2005 and carbon products sales order backlog decreased from $33.3 million at March 31, 2005 to $27.2 million at June
30, 2005. The decrease in carbon product sales backlog is due primarily to the large shipment to a major customer, as previously discussed, partially offset by new project orders for a new international customer and for a domestic customer.



Gross Profit. Our consolidated gross profit for the
three months ended June 30, 2005 was $16.6 million, an increase of approximately $2.9 million, or 20.5%, from the three months ended June 30, 2004. Our gross profit margin (gross profit as a percentage of sales) for the three months ended June 30,
2005 decreased to 22.3% as compared to 25.4% for the three months ended June 30, 2004. The decrease in gross profit margin for the three months ended June 30, 2005 is due primarily to a large, lower margin carbon product sale under contractual
pricing terms and to an increase in inventory costs for carbon products as a result of the current market price of steel for the three months ended June 30, 2005 as compared to the same period in 2004.



In addition, gross profit and gross profit margin for the three months ended
June 30, 2005 was negatively impacted by $0.6 million related to a purchase price allocation adjustment that increased the value of our alloy inventory as of February 1, 2005. This purchase price allocation adjustment will continue to impact gross
profit margins until all of the acquired alloy inventory is sold. As of June 30, 2005, $0.7 million of the purchase price adjustment remained on our Companys balance sheet. We cannot predict the exact timing of these inventory sales, which we
expect will fluctuate from period to period.



The decrease in
total gross profit margin was partially offset by an increase in sales prices for our alloy products and by a change in our product mix for the three months ended June 30, 2005.



Operating Income. Our consolidated operating income for the three months ended June 30, 2005 increased $2.1 million
from operating income of $5.8 million for the three months ended June 30, 2004. The consolidated operating income for the three months ended June 30, 2005 is primarily attributable to increased gross profit margins for our alloy products, as
described above, which was partially offset by increases in our bonus pool accrual, related payroll taxes and an increase in legal, accounting and compliance costs associated with an exchange offer for our Senior Secured Notes which was completed on
July 21, 2005 (the Exchange Offer) and related filings with the SEC.



Yard and Shop Expenses. Yard and shop expenses were 1.7% and 2.2% of sales for the three months ended June 30, 2005 and the three months ended June 30, 2004, respectively. Yard and shop expenses remained
consistent for the three months ended June 30, 2004 compared to the three months ended June 30, 2005.



Selling, General and Administrative Expenses. Selling, general and administrative expenses increased approximately $0.7 million, or 11.0% for the
three months ended June 30, 2005 compared to the three months ended June 30, 2004. The majority of the increase is attributable to an increase in the employee bonus pool accrual and related payroll taxes based on the Companys expected
operating results for 2005 as compared to the same period in 2004 and an increase in legal and accounting costs associated with the Exchange Offer and related filings with the SEC.



Interest Expense. Interest expense, net, increased $2.1 million, 234.0%, to $3.0 million for the three months ended
June 30, 2005 from $0.9 million for the three months ended June 30, 2004. The increase in interest expense was the result of the issuance of $105 million of Senior Notes on February 1, 2005 and borrowings under the Companys new revolving line
of credit during the three months ended June 30, 2005, partially offset by the retirement of $47.7 million of revolving line of credit and term loan debt on February 1, 2005. Interest expense for the three months ended June 30, 2005 included $0.3
million of deferred financing costs amortization compared to less than $0.1 million for the three months ended June 30, 2004.



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Income Tax Expense. Income tax expense was $1.7 million for the three months ended June 30, 2005
as compared to income tax expense of $2.0 million for the three months ended June 30, 2004. The effective tax rate of approximately 35% for the three months ended June 30, 2005 as compared to approximately 40% for the three months ended June 30,
2004 is primarily due to the reduction of a deferred tax liability related to the fair value purchase price allocation adjustment to inventory in the period the inventory is sold.



Preferred Stock Dividends and Related Charges.Preferred stock dividends and related charges were $0.5 million for
the three months ended June 30, 2005 as compared to $0.6 million for the three months ended June 30, 2004. The decrease resulted from our repurchase of all outstanding shares of our mandatorily redeemable preferred stock partially offset by the
issuance of our Series A cumulative compounding preferred stock.



Combined Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004



Sales. For the combined six months ended June 30, 2005, our consolidated sales increased $42.4 million, or 43.7%, to $139.2 million as compared to
the six months ended June 30, 2004. This increase in sales was primarily the result of commodity price increases for alloy and carbon products, particularly chrome pipe, an increase in carbon pipe sales volume primarily due to the shipment of a
large project order in the second quarter of 2005, and an increase in international sales of our carbon products, net of a slight decrease in alloy pipe sales volume. The strong worldwide demand for iron ore, nickel, chrome and copper has positively
impacted pipe and component pricing and has positively impacted our sales for the combined six months ended June 30, 2005.



Company sales order backlog grew from $36.7 million at December 31, 2004 to $41.4 million at June 30, 2005. The change in backlog reflects an increase in
alloy product pricing, and an increase in project orders from both new and existing customers offset by the completion of project orders since December 31, 2004. Alloy products sales order backlog decreased from $18.5 million at December 31, 2004 to
$14.2 million at June 30, 2005, while carbon products sales order backlog increased from $18.2 million at December 31, 2004 to $27.2 million at June 30, 2005. The increase in carbon products sales order backlog is due primarily to new project orders
for a new international customer and for a domestic customer, offset by project orders completed since December 31, 2004.



Gross Profit. Our consolidated gross profit for the combined six months ended June 30, 2005 was $31.5 million, an increase of $8.4 million, or
36.5%, from the six months ended June 30, 2004. Our gross profit margin (gross profit as a percentage of sales) for the combined six months ended June 30, 2005 decreased to 22.6% as compared to 23.8% for the six months ended June 30, 2004. The
decrease in gross profit margin is due primarily to the increase in inventory costs associated with carbon products for the six months ended June 30, 2005 as a result of the current market price of steel when compared to the same period in 2004. The
decrease in gross profit margin was partially offset by an increase in sales prices for our alloy products, which increased overall gross profit, and a change in our product mix with increased carbon product sales, both domestically and
internationally, for the combined six months ended June 30, 2005.



The gross profit and gross profit margin for the combined six months ended June 30, 2005 were also negatively impacted by additional cost of sales of $1.2 million related to a purchase price allocation adjustment that increased the value of
our alloy inventory as of February 1, 2005. This purchase price allocation adjustment will continue to impact gross profit margins until all of the acquired alloy inventory is sold. As of June 30, 2005, $0.7 million of the purchase price adjustment
remained on our Companys balance sheet. We cannot predict the exact timing of these inventory sales, which we expect will fluctuate from period to period.



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Operating Income. Our consolidated operating income of $2.8 million for the combined six months
ended June 30, 2005 decreased $5.6 million from operating income of $8.4 million for the six months ended June 30, 2004. The consolidated operating income for the combined six months ended June 30, 2005 includes Transaction-related expenses of
approximately $12.0 million. Excluding the Transaction-related expenses, consolidated operating income as a percentage of consolidated sales for the combined six months ended June 30, 2005 actually increased when compared to the operating income as
a percentage of consolidated sales of 8.7% for the six months ended June 30, 2004. The increase in operating income excluding Transaction-related expense is primarily attributable to increased gross profit for alloy products as described above which
was partially offset by an increase in our bonus pool accrual, related payroll taxes and legal, accounting and compliance costs associated with the completion of our Exchange Offer and related filings with the SEC.



Yard and Shop Expenses.Yard and shop expenses were 1.7% and 2.2% of
sales for the combined six months ended June 30, 2005 and the six months ended June 30, 2004, respectively. Yard and shop expenses did not materially change from $2.2 million for the six months ended June 30, 2004 compared to $2.4 million for the
combined six months ended June 30, 2005.



Selling,
General and Administrative Expenses. Selling, general and administrative expenses increased approximately $13.8 million, or 123.0% for the combined six months ended June 30, 2005 compared to the six months ended June 30, 2004. The majority of
the increase is related to the approximately $12.0 million in Transaction-related expenses previously discussed above, with the remaining increase attributable to an increase in the employee bonus pool accrual and related payroll taxes based on the
Companys expected operating results for 2005 as compared to the same period in 2004 and an increase in legal and accounting costs associated with the Exchange Offer and related filings with the SEC.



Interest Expense.Interest expense, net, increased $3.7 million, or
225.0%, to $5.3 million for the combined six months ended June 30, 2005 from $1.6 million for the six months ended June 30, 2004. The increase in interest expense was the result of the issuance of the Senior Secured Notes on February 1, 2005 and
borrowings under the Companys new revolving line of credit, partially offset by the retirement of $47.7 million of revolving line of credit and term loan debt as of February 1, 2005. Interest expense for the combined six months ended June 30,
2005 included $0.5 million of deferred financing costs amortization compared to $0.1 million for the six months ended June 30, 2004.



Income Tax Expense. Income tax expense was $2.7 million for the period February 1, 2005 to June 30, 2005 as compared to an income tax benefit of
$1.9 million for the period January 1, 2005 to January 31, 2005 and income tax expense of $2.7 million for the six months ended June 30, 2004. The effective tax rate was approximately 36% for the period February 1, 2005 to June 30, 2005,
approximately (19%) for the period January 1, 2005 to January 31, 2005 and approximately 40% for the six months ended June 30, 2004. The effective tax rate for the period February 1, 2005 to June 30, 2005 is primarily due to the reduction of the
deferred tax liability related to the fair value purchase price allocation adjustment to inventory in the period the inventory is sold. The income tax benefit and effective tax rate for the period January 1, 2005 to January 31, 2005 is due to the
net loss incurred in the first quarter 2005 as a result of Transaction-related expenses, which may not be fully deductible for income tax purposes.



Preferred Stock Dividends and Related Charges. Preferred stock dividends and related charges were $1.0 million for the combined six months ended
June 30, 2005 as compared to $1.1 million for the six months ended June 30, 2004. The decrease resulted from our repurchase of all outstanding shares of our mandatorily redeemable preferred stock, partially offset by the issuance of our Series A
cumulative compounding preferred stock in connection with the Transactions.



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Liquidity and Capital Resources



Combined Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004



Operating Activities. Net cash outflows from operating activities
were $10.1 million for the combined six months ended June 30, 2005 compared with net cash outflows from operating activities of $5.8 million for the six months ended June 30, 2004. The increase in cash outflows from operating activities of $4.3
million was primarily attributable to Transaction-related expenses of $12.0 million partially offset by increased operating income.



Investing Activities. Net cash outflows from investing activities were $121.5 million for the combined six months ended June 30, 2005, compared
with net cash outflows from investing activities of $0.4 million for the six months ended June 30, 2004. The increase in cash outflows is due primarily to the acquisition of Edgen Corporation with $121.0 million in cash paid for the combined six
months ended June 30, 2005. Capital expenditures were relatively consistent for the combined six months ended June 30, 2005 and the six months ended June 30, 2004 as capital expenditures were limited to general maintenance expenditures.



Financing Activities. Net cash inflows from financing activities
were $134.8 million for the combined six months ended June 30, 2005 compared with net cash inflows of $3.3 million from financing activities in the six months ended June 30, 2004. The increase in cash flows from financing activities of $131.5
million for the combined six months ended June 30, 2005 as compared to the six months ended June 30, 2004 is due primarily to the issuance of the Notes, additional borrowings under our new revolving credit facility and the issuance of common and
preferred stock in connection with the Transactions.



Indebtedness



New Senior Secured
Notes. We have outstanding $105.0 million principal amount of senior secured notes due 2011. Total cash interest payments required under the Senior Secured Notes are in excess of $10.3 million on an annual basis. The indenture governing our
notes and our new revolving credit facility contain various covenants that limit our discretion in the operation of our business. The indenture governing the notes also contains various restrictive covenants. It, among other things: (i) limits our
ability and the ability of our subsidiaries to incur additional indebtedness, issue shares of preferred stock, incur liens and enter into certain transactions with affiliates; (ii) places restrictions on our ability to pay dividends or make certain
other restricted payments; and (iii) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our
assets.



Senior Credit Facility. Concurrently with the
private offering of the Senior Secured Notes, we entered into a $20.0 million senior secured revolving credit facility, with a $5.0 million sublimit for letters of credit. Interest is determined based on several alternative rates as stipulated in
the revolving credit facility, including the base lending rate per annum plus an applicable margin, or LIBOR plus an applicable margin. The revolving credit facility is secured by a first priority security interest in the collateral consisting of
working capital assets and by a security interest in substantially all of our and our domestic subsidiaries other assets (other than certain excluded assets such as our leasehold interests and the capital stock of our existing and future
subsidiaries). Pursuant to an intercreditor agreement, the security interest on the collateral, that consists of working capital assets that secure the Senior Secured Notes and related guarantees, is contractually subordinated to the liens thereon
which secure the revolving credit facility; and the security interest on substantially all of our and our domestic subsidiaries other assets (other than certain excluded assets such as our leasehold interests and the capital stock of our
existing and future subsidiaries) that secures the revolving credit facility is contractually subordinated to the liens thereon securing the Senior Secured Notes and related guarantees. The revolving credit facility contains covenants that restrict,
among other things, our ability to incur additional indebtedness, pay dividends and create certain liens. We borrowed approximately $2.7 million under the revolving credit facility in connection with the consummation of the Transactions. As of June
30, 2005, we had $14.0 million outstanding under the revolving credit facility.



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Future Capital Needs



Our principal source of liquidity is cash flow generated from operations and borrowings under our new revolving credit
facility. Our principal liquidity requirements are to meet debt service requirements, finance our capital expenditures and provide working capital. Our indebtedness at June 30, 2005 was $119.0 million. Subsequent to our interest payment of $5.2
million on the Senior Secured Notes on August 1, 2005, our indebtedness increased $0.7 million to $119.7 million at August 1, 2005. Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures will
depend on our ability to generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.



Based on our current level of operations, we believe our cash flow from
operations, available cash and available borrowings under our revolving credit facility will be adequate to meet our liquidity needs for at least the next twelve months. Additionally, we continue to evaluate appropriate growth strategies for the
Company including possible acquisition opportunities. These growth strategies may require us to use cash on hand, make additional borrowings under our revolving credit facility, or enter into other financing arrangements in order to support these
growth strategies. We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our new revolving credit facility in an amount sufficient to enable us to
service our indebtedness or to fund our other liquidity needs.



Commitments
and Contractual Obligations



Our contractual obligations
and commitments principally include obligations associated with our outstanding indebtedness and future minimum operating lease obligations Other than in connection with the Transactions, there have been no material changes outside the ordinary
course of our business in the specified contractual obligations during the six months ended June 30, 2005.



Off-balance Sheet Arrangements



As of June 30, 2005, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.



Recently Issued Accounting Pronouncements



From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) which are adopted by us as of the specified
effective date. Unless otherwise discussed, our management believes the impact of recently issued standards which are not yet effective will not have a material impact on our consolidated financial statements upon adoption.



Seasonality



Some of our customers may be in seasonal businesses, especially those customers who purchase our products for use in new
capital expenditure projects at refineries, oil and gas rigs and processing and power generation plants. As a consequence, our results of operations and working capital, including our accounts receivable, inventory and accounts payable, fluctuate
during the year. However, because of our geographic, product and customer diversity, our operations have not shown any material seasonal trends. We believe that our significant operations in more mild southern climates moderate our seasonality. In
addition, our sales to MRO distributors, who tend not to be seasonal purchasers, mitigate the overall effects of seasonality on our business. Sales in the months of November and December traditionally have been lower than in other months because of
a reduced number of working days for shipments of our products and holiday closures for some of our customers. We cannot assure you that period-to-period fluctuations will not occur in the future. Results of any one or more quarters are, therefore,
not necessarily indicative of annual results.



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Forward Looking Statements



This report includes forward looking statements. Statements that are not historical facts, including statements
about our beliefs and expectations, are forward looking statements. Forward-looking statements include statements preceded by, followed by or that include the words, may, could, would, believe,
expect, estimate, anticipate, plan, estimate, target, project, and intend and similar expressions. These statement include, among others, statement
regarding our expected business outlook, anticipated financial and operating results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in
expanding out business, financing plans, budgets, working capital need and sources of liquidity.



These forward looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and
uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause actual results to differ materially from trends, plans or expectations set forth in the forward
looking statements. These risks and uncertainties may include these risks and uncertainties and this described in Amendment No. 1 to our Registration Statement on Form S-4 (File No. 333-124543) as filed with the Securities and Exchange Commission on
June 14, 2005. Given these risks and uncertainties, we urge you to read this report completely and with the understanding that actual future results may be materially different from what we plan or expect. Also, these forward looking statements
present our estimates and assumptions only as of the date of this report. Except for our ongoing obligation to disclose material information as required by federal securities laws, we do not intend to update you concerning any future revisions to
any forward looking statements to reflect events or circumstances occurring after the date of this report.



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



In the normal course of operations, we are exposed to market risks arising from adverse changes in interest rates and foreign exchange rates. Market risk
is defined for these purposes as the potential change in the fair value of financial assets or liabilities resulting from an adverse movement in interest rates or foreign exchange rates.



Interest Rate Risk. As of June 30, 2005, our variable rate borrowings are $14.0 million under our new revolving
credit facility. A 100 basis point increase in interest rates, applied to our borrowings at June 30, 2005, would have resulted in an increase in interest expense and a corresponding reduction in cash-flow of approximately $0.1 million per annum.



Foreign Currency Risk. Substantially all of our net
sales and expenses are denominated in U.S. dollars. Therefore, foreign currency fluctuations did not materially impact our financial statements for the three months ended June 30, 2005.



ITEM 4. CONTROLS AND PROCEDURES



As of the end of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of our disclosure
controls and procedures (as defined by Rules 13a - 15(e) and 15d-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these
disclosure controls and procedures were effective. There has been no change in the Companys internal control over financial reporting that occurred during the Companys most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the Companys internal control over financial reporting.



PART II - OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



We are
from time to time a party to various claims and legal proceedings related to our business. We do not believe that the resolution of any such threatened or pending legal proceedings will have a material adverse affect on our financial position,
results of operations or liquidity.



ITEM 2. UNREGISTERED SALES OF EQUITY 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.



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ITEM 6. Exhibits



|         |  |                                                                                                                                                                                                                   
|-------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  |                                                                                                                                                                                                                   
|31.1     |  | Certification of Chief Executive Officer pursuant to Rule 13a14(a) or 15d14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
SarbanesOxley Act of 2002.                    
|         | 
|31.2     |  | Certification of Chief Financial Officer pursuant to Rule 13a14(a) or 15d14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
SarbanesOxley Act of 2002.                    
|         | 
|32.1     |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, executed by Daniel J. OLeary, President and Chief Executive
Officer of Edgen Corporation.
|         | 
|32.2     |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002, executed by David L. Laxton, III, Chief Financial Officer of Edgen
Corporation.           



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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.



|                      |  |                   |  |                                      
|--------------------- |  | ----------------- |  | -------------------------------------
|                      |  | EDGEN CORPORATION
|                      |  |                  
|Date: August 11, 2005 |  | By:               |  | /s/ DANIEL J. OLEARY                
|                      |  |                   |  | Daniel J. OLeary                    
|                      |  |                   |  | President and Chief Executive Officer
|                      |  |                  
|Date: August 11, 2005 |  | By:               |  | /s/ DAVID L. LAXTON, III             
|                      |  |                   |  | David L. Laxton, III                 
|                      |  |                   |  | Chief Financial Officer              



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INDEX TO EXHIBITS



|            |  |                                                                       
|----------- |  | ----------------------------------------------------------------------
|Exhibit No. |  | Description                                                           
|31.1       |  | Rule 15d-14(a) Certification of President and Chief Executive Officer.
|            | 
|31.2       |  | Rule 15d-14(a) Certification of Chief Financial Officer.              
|            | 
|32.1       |  | Rule 1350 Certification of President and Chief Executive Officer.     
|            | 
|32.2       |  | Rule 1350 Certification of Chief Financial Officer.                   

---

| | Filed herewith.
|- | ---------------



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