================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

             FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS
               13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

   [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

                                       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 1-3920



                   NORTH AMERICAN GALVANIZING & COATINGS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

                                    DELAWARE
         --------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   71-0268502
                      ------------------------------------
                      (I.R.S. Employer Identification No.)

                2250 EAST 73RD STREET, TULSA, OKLAHOMA 74136-6832
                -------------------------------------------------
               (Address of principal executive offices)(Zip Code)

                                 (918) 494-0964
               --------------------------------------------------
               Registrant's telephone number, including AREA code

           Securities registered pursuant to Section 12(b) of the Act:

          TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
          -------------------------------------------------------------
              Common Stock, $.10 par value American Stock Exchange

        Securities registered pursuant to Section 12(g) of the Act: NONE



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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K. [X]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [_]   No [X]

The aggregate market value of Common Stock held by non-affiliates on June 30,
2004 was approximately $8.8 million. As of March 31, 2005, there were 6,796,962
shares of North American Galvanizing & Coatings, Inc. Common Stock, $.10 par
value, outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement to be filed not later
than 120 days after the end of the fiscal year covered by this report are
incorporated by reference in Part III.
================================================================================
<PAGE>
                   NORTH AMERICAN GALVANIZING & COATINGS, INC.
                  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004




TABLE OF CONTENTS




                                                                            PAGE
                                                                            ----

FORWARD LOOKING STATEMENTS OR INFORMATION ..................................  2

PART I
   Item 1.    Business .....................................................  3
   Item 2.    Properties ...................................................  6
   Item 3.    Legal Proceedings ............................................  6
   Item 4.    Submission of Matters to a Vote of Security Holders ..........  7
   Item 4A.   Executive Officers of the Registrant .........................  7


PART II
   Item 5.    Market for Registrant's Common Equity, Related Stockholder
                Matters and Issuer Purchases of Equity Securities ..........  8
   Item 6.    Selected Financial Data ......................................  9
   Item 7.    Management's Discussion and Analysis of Financial Condition
                and Results of Operations ..................................  9
   Item 7A.   Quantitative and Qualitative Disclosures About Market Risk ...  9
   Item 8.    Financial Statements and Supplementary Data ..................  9
   Item 9.    Changes in Disagreements with Accountants on Accounting
                and Financial Disclosure ...................................  9
   Item 9A.   Controls and Procedures ......................................  9
   Item 9B.   Other Information ............................................  9


PART III
   Item 10.   Directors and Executive Officers of the Registrant ........... 10
   Item 11.   Executive Compensation ....................................... 10
   Item 12.   Security Ownership of Certain Beneficial Owners and
                Management and Related Stockholder Matters ................. 10
   Item 13.   Certain Relationships and Related Transactions
   Item 14.   Principal Accountant Fees and Services ....................... 10


PART IV
   Item 15.   Exhibits and Financial Statement Schedules ................... 11










                                        1
<PAGE>
FORWARD LOOKING STATEMENTS OR INFORMATION

Certain statements in this Annual Report on Form 10-K, including information set
forth under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations," constitute "Forward-Looking Statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such statements
are typically punctuated by words or phrases such as "anticipates," "estimate,"
"should," "may," "management believes," and words or phrases of similar import.
The Company cautions investors that such forward-looking statements included in
this Form 10-K, or hereafter included in other publicly available documents
filed with the Securities and Exchange Commission, reports to the Company's
stockholders and other publicly available statements issued or released by the
Company involve significant risks, uncertainties, and other factors which could
cause the Company's actual results, performance (financial or operating) or
achievements to differ materially from the future results, performance
(financial or operating) or achievements expressed or implied by such
forward-looking statements. Factors that could cause or contribute to such
differences could include, but are not limited to, changes in demand, prices,
and the raw materials cost of zinc; changes in economic conditions of the
various markets the Company serves, as well as the other risks detailed herein
and in the Company's reports filed with the Securities and Exchange Commission.
The Company believes that the important factors set forth in the Company's
cautionary statements in Exhibit 99 to this Form 10-K could cause such a
material difference to occur and investors are referred to Exhibit 99 for such
cautionary statements.
















                                        2
<PAGE>
PART I

ITEM 1.  BUSINESS

The Company's corporate headquarters are located in Tulsa, Oklahoma. As used in
this report, except where otherwise stated or indicated by the context, North
American Galvanizing (the "Company" and the "Registrant") means North American
Galvanizing & Coatings, Inc. and its consolidated subsidiary. At the Company's
Annual Meeting held May 14, 2003, stockholders approved an amendment of the
Company's certificate of incorporation to change the Company's name from Kinark
Corporation to North American Galvanizing & Coatings, Inc., effective July 1,
2003. The former Kinark Corporation was incorporated under the laws of the State
of Delaware in January 1955.

North American Galvanizing is a manufacturing services holding company currently
conducting business in galvanizing and coatings through its wholly-owned
subsidiary, North American Galvanizing Company and its wholly-owned subsidiaries
("NAG"). Formed in 1996, NAG merged with Rogers Galvanizing Company ("Rogers")
in 1996 and Boyles Galvanizing Company ("Boyles") in 1997, with NAG as the
surviving company. Rogers was acquired by the Company in 1996 and Boyles was
acquired in 1969.

On February 28, 2005, NAGalv-Ohio, Inc., a Delaware corporation and indirect
subsidiary of the Company, purchased the hot-dip galvanizing assets of Gregory
Industries, located in Canton, Ohio. The Company expects to continue operating
the Canton plants' established galvanizing business without interruption.

AVAILABLE INFORMATION

The Company makes available through its Internet website at www.nagalv.com, the
Statements of Beneficial Ownership of Securities on Forms 3, 4 and 5 for
Directors and Officers of the Company that are filed with the Securities and
Exchange Commission. The Company has also posted on the website its (1)
Corporate Governance Guidelines; (2) Code of Business Conduct and Ethics and,
(3) the Company's charters for the Audit Committee, the Compensation Committee,
and the Corporate Governance and Nominating Committee.

GALVANIZING

The Company conducts galvanizing and coating operations through its NAG
subsidiary. NAG is principally engaged in hot dip galvanizing of metal products
and components fabricated by its customers. All of NAG's revenue is generated
from the value-added galvanizing and coating of its customer's products. NAG
galvanizes iron and steel products by immersing them in molten zinc. This
bonding process produces an alloyed metal surface that provides an effective
barrier ("cathodic protection") against oxidation and corrosion from exposure to
the elements, for up to 50 years. Additional coating services provided by NAG
include sandblasting, quenching, metalizing (flame sprayed), centrifuge spinner
galvanizing, Corrocote Classic II painting and INFRASHIELDsm Coating.

PLANTS

NAG operates 11 galvanizing plants in seven states. These strategically located
plants enable NAG to compete effectively by providing galvanizing to
manufacturers representing a broad range of basic industries throughout the mid
and south-central United States, and beyond. Its galvanizing plants are located
in Tulsa, Oklahoma; Kansas City, Missouri; St. Louis, Missouri; Nashville,
Tennessee; Louisville, Kentucky; Denver, Colorado; Canton, Ohio; Hurst, Texas
and Houston, Texas.

                                        3
<PAGE>
Based on the number of its operating plants, NAG is one of the largest merchant
market hot dip galvanizing companies in the United States.

In February 2005, NAG's new indirect subsidiary, NAGalv-Ohio, Inc. purchased the
hot-dip galvanizing assets of the galvanizing facility located in Canton, Ohio,
listed above. The Canton facility operates two hot-dip galvanizing lines
featuring 52-foot and 16-foot kettles to handle a broad range of steel
structures.

In June 2003, NAG wrote-off its investment in the Cunningham galvanizing plant
located in Houston, Texas as a discontinued operation.

In January 2003, NAG expanded services at its Nashville, Tennessee facility with
the installation of a centrifuge spinner line to galvanize small product and
threaded materials.

In the fourth quarter of 2002, NAG began operations at its galvanizing plant in
St. Louis, Missouri. This facility features a 51-foot kettle, providing the
largest galvanizing capacity in the St. Louis region.

In the third quarter of 2002, NAG introduced INFRASHIELDsm coating, a specialty
multi-part polymer coating system designed to be applied over hot dip galvanized
material. The resultant superior corrosion protection offered by combining
cathodic protection with a non-conductive coating is applicable to many
environments that have unique corrosion issues.

In 2001, the Company completed a major expansion of its galvanizing operations
with the construction of a new galvanizing plant in Houston, Texas. This
facility includes a 62-foot galvanizing kettle with capabilities to process
extra large poles for the wireless communication and electric transmission
markets. The facility became operational in the first quarter of 2001.

RAW MATERIAL

Zinc, the primary raw material and largest cost component in the Company's
galvanizing process, is a widely available commodity in the open market. The
London Metal Exchange price of zinc for three month delivery was $.46 per pound
at the beginning of 2003. During 2004 the price of zinc remained fairly stable
until the final quarter when market pressures resulted in a closing price of
$.57 per pound at year end. During the first quarter of 2005, the spot price of
zinc quoted on the London Metal Exchange continued to increase, exceeding $.60
per pound. The Company's zinc procurement strategy to minimize the potential
risk associated with zinc price fluctuations primarily includes entering into
forward purchase commitments of up to one year.

CUSTOMERS

NAG's ten largest customers, on a combined basis, accounted for approximately
39% of the Company's consolidated sales in 2004, compared with 33% in 2003. The
backlog of orders at NAG is generally nominal due to the short turn-around time
requirement demanded in the galvanizing industry.

PRINCIPAL MARKETS

The galvanizing process provides effective corrosion protection of fabricated
steel which is used in numerous markets such as petrochemical, highway and
transportation, energy, utilities, communications, irrigation, pulp and paper,
waste water treatment, food processing, recreation and the manufacture of
original equipment. In a typical year, NAG will galvanize in excess of
300,000,000 pounds of steel products for approximately 1,800 customers
nationwide.

                                        4
<PAGE>
The Company maintains a sales and service network coupled with its galvanizing
plants, supplemented by national account business development at the corporate
level.

All of the Company's sales are generated for domestic customers whose end
markets are principally in the United States. The Company markets its
galvanizing and coating services directly to its customers and does not utilize
agents or distributors. Although hot dip galvanizing is considered a mature
service industry, the Company is actively engaged in developing new markets
through participation in industry trade shows, metals trade associations and
presentation of technical seminars by its national marketing service team.

Hot dip galvanizing is highly competitive. NAG competes with other publicly and
privately owned independent galvanizing companies, captive galvanizing
facilities operated by manufacturers, and alternative forms of corrosion
protection such as paint. The type and number of competitors vary throughout the
geographic areas in which NAG does business. Competition is driven primarily by
price, rapid turn-around service time, and the quality of the finished
galvanized product. Management believes that the broad geographic disbursement
of its galvanizing plants and the reliable quality of its service enables NAG to
compete on a favorable basis. The Company continues to develop and implement
operating and market strategies to maintain its competitive position and to
develop new markets, as demonstrated by the purchase of the hot-dip galvanizing
assets of a galvanizing facility in Canton, Ohio (2005), as well as expanded
service capabilities at its existing plants.

Our management does not generally consider our business to be seasonal due to
the breadth and diversity of markets served, although revenues typically are
lower in the first and fourth quarters due to seasonality in certain
construction markets. In line with its historical pattern, NAG generated 50% of
its revenues during the first six-months of 2004, compared with 50% in the first
six-months of 2003.

ENVIRONMENTAL

The Company's facilities are subject to extensive environmental legislation and
regulation affecting their operations and the discharge of wastes. The cost of
compliance with such regulations was approximately $934,000 and $1,061,000 in
2004 and 2003, respectively, for the disposal and recycling of wastes generated
by the galvanizing operations. In 1997, NAG was named a potentially responsible
party by the Illinois Environmental Protection Agency ("IEPA") in connection
with cleanup of an abandoned site formerly owned by Sandoval Zinc Co. The IEPA
notice included NAG and a number of other organizations which arranged for the
treatment and disposal of hazardous substances at Sandoval. Based on current
information, NAG's share of any probable future costs cannot be estimated at
this time.

EMPLOYEE RELATIONS

NAG's labor agreement with the United Steel Workers Union covering production
workers at its Tulsa galvanizing plants expired March 31, 2003. In October 2003,
the union employees ratified a new three-year labor agreement, effective
November 1, 2003. The new agreement re-defines eligibility for payment of
over-time, requires employee contributions for family coverage under the
Company's group medical insurance program and grandfathers vacation benefits for
certain long-term employees. The United Steel Workers Union represents the labor
force at the galvanizing business purchased in Canton, Ohio in February 2005.
NAGalv-Ohio, Inc. has not assumed the existing labor agreement and has
implemented wage and benefit programs similar to those at the Company's other
galvanizing facilities.

                                        5
<PAGE>
Nationwide, the Company total employment was 296 and 318 persons at December 31,
2004 and 2003, respectively. In February 2005, the Company added 45 persons with
the purchase of a galvanizing facility located in Canton, Ohio. The Company
believes its relationship with its employees is satisfactory.


ITEM 2.  PROPERTIES

NAG operates hot dip galvanizing plants located in Ohio, Oklahoma, Missouri,
Texas, Colorado, Tennessee and Kentucky. Two of the plants located in Kansas
City, Missouri and Tulsa, Oklahoma are leased under terms which gives NAG the
option to extend the lease for up to 15 years. NAG's galvanizing plants average
20,000 square feet in size, with the largest approximately 55,000 square feet,
and it operates zinc kettles ranging in length from 16 to 62 feet. The Company
owns all of its galvanizing plants, except for the two plants noted above.
Certain of the Company's galvanizing plant's are mortgaged to a bank pursuant to
a credit agreement scheduled to expire December 15, 2007, under which the
Company is provided an $8,000,000 revolving credit facility and a $5,001,000
term loan.

The Company's headquarters office is located in Tulsa, Oklahoma, in
approximately 4,100 square feet of office space leased through December, 2005.
The Company expects to renew this lease during 2005.


ITEM 3.  LEGAL PROCEEDINGS

On August 30, 2004, the Company was informed by counsel for the Metropolitan
Water Reclamation District of Greater Chicago (the "Water District") that the
Water District had, on August 25, 2004 filed a Second Amended Complaint in the
United States District Court, Northern District of Illinois, Eastern Division,
naming North American Galvanizing & Coatings, Inc. (formerly known as Kinark
Corporation) as an added defendant. Counsel for the Water District also gave the
Company notice of the Water District's intent to file (or amend the Complaint to
include) a Citizens Suit under the Resource Compensation and Recovery Act
("RCRA") against North American Galvanizing & Coatings, Inc., pursuant to
Section 7002 of RCRA, 42 U.S.C. Section 6972. This Second Amended Complaint
seeks enforcement of an August 12, 2004 default judgment in the amount of
$1,810,463.34 against Lake River Corporation and Lake River Holding Company,
Inc. in connection with the operation of a storage terminal by Lake River
Corporation in violation of environmental laws. Lake River Corporation conducted
business as a subsidiary of the Company until June 30, 2000, at which time Lake
River Corporation was sold to Lake River Holding Company, Inc. and ceased to be
a subsidiary of the Company. The Second Amended Complaint asserts that prior to
the sale of Lake River Corporation, the Company directly operated the Lake River
facility and, accordingly, seeks to have the Court pierce the corporate veil of
Lake River Corporation and enforce the default judgment order of August 12, 2004
against the Company. The Company denies the assertions set forth in the Water
District's Complaint and on November 13, 2004 filed a partial motion for
dismissal of the Second Amended Complaint.

In December 2004, the Water District filed a Third Amended complaint in the
litigation, adding two claims: (1) a common law claim for nuisance; and (2) a
claim under the federal Resource Conservation and Recovery Act, in which the
Water District argues that the Company is responsible for conditions on the
plaintiff's property that present an "imminent and substantial endangerment to
human health and the environment." In January 2005 and March 2005, the Company
filed partial motions to dismiss plaintiff's third amended complaint, in the
United States District Court, Northern District of Illinois, Eastern Division.
The Court has not ruled on the Company's motions for dismissal, at this time. We
have denied any liability with respect to this claim and intend to vigorously
defend ourselves in this case. At this time, we have not determined the amount
of any liability that may result from this matter or whether such liability, if
any, would have a material adverse effect on our financial condition, results of
operations, or liquidity.

                                        6
<PAGE>
NAG was notified in 1997 by the Illinois Environmental Protection Agency
("IEPA") that it was a potentially responsible party ("PRP") under the
Comprehensive Environmental Response, Compensation, and Liability Information
System ("CERCLIS") in connection with cleanup of an abandoned site formerly
owned by Sandoval Zinc Co. Since then approximately 30 additional PRPs have been
identified by the IEPA. A number of the PRPs (approximately 12 to 15) have
agreed to work together and with IEPA on a voluntary basis. The Company has been
and continues to participate in this volunteer group. The group has retained
consultants and legal representatives familiar with IEPA regulations. This
volunteer group, with its consultants, has cooperated with IEPA in attempting to
better define the environmental issues associated with the Sandoval Zinc site.
To that extent, this voluntary group prepared and submitted to IEPA in August
2000 a work plan. The purpose of this work plan is to attempt to define the
extent of environmental remediation that might be required, assess risks, and
review alternatives to addressing potential remediation. The IEPA has yet to
respond to this proposed work plan or suggest any other course of action, and
there has been no activity in regards to this issue during 2004. Therefore, the
Company has no basis for determining potential exposure and estimated
remediation costs at this time.

The lease term of a galvanizing facility occupied by Reinforcing Services, Inc.
("RSI"), a subsidiary of North American Galvanizing Company, expired July 31,
2003 and has not been renewed. RSI has exercised an option to purchase the
facility, and the landlord is contesting the Company's right to exercise this
option. RSI has filed a lawsuit against the landlord seeking enforcement of the
right to exercise the option. This litigation is in the discovery stage and
management expects there will be no disruption to its galvanizing business being
conducted at the facility.

Various other litigation arising in the ordinary course of business is pending
against the Company. Management believes that resolution of this litigation
should not materially affect the Company's consolidated financial position or
liquidity.


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

No matters were submitted to a vote of stockholders during the fourth quarter of
2004.


ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

PAUL R. CHASTAIN (70)    Vice President and Chief Financial Officer since
                         February 1996, and Secretary of the Company since
                         January 2000 to present. From July 1993 through January
                         1996, President and Chief Executive Officer of the
                         Company. From June 1991- July 1993, Chairman and Chief
                         Executive Officer. Co-Chairman and Co-Chief Executive
                         Officer of the Company from June 1990-June 1991. From
                         1976, Executive Vice President and Treasurer. From 1973
                         through 1976, Vice President of Finance and Secretary
                         of the Company. Director of the Company since 1975.

RONALD J. EVANS (55)     President of the Company since February 1996 and
                         appointed Chief Executive Officer November 1999 to
                         present. From May 1995 through January 1996, private
                         investor. From 1989-1995, Vice President and General
                         Manager of Deltech Corporation. Mr. Evans' previous
                         experience includes 13 years with Hoechst Celanese
                         Corporation. Director of the Company since 1995.

Pursuant to the bylaws of the Company, the executive officers are appointed
annually by the Board of Directors, and shall hold office until their successors
are chosen.

                                        7
<PAGE>
PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
         ISSUER PURCHASES OF EQUITY SECURITIES

STOCK INFORMATION

The Company's common stock trades on the American Stock Exchange under the
symbol "NGA". The Company does not expect to pay a dividend on its common stock
and has not done so in the past 30 years. The Company expects to continue that
policy in order to reinvest earnings to support and expand its business
operations. The Company's board of directors may review the dividend policy in
the future, recognizing that dividends may be a desirable form of return on the
investment made by many of its stockholders. Stockholders of record at April 4,
2005 numbered approximately 1806.

QUARTERLY STOCK PRICES

                            FIRST       SECOND        THIRD       FOURTH
                           ------       ------       ------       ------
2003
----
High                       $ 1.64       $ 1.58       $ 1.45       $ 1.83
Low                        $ 1.46       $ 1.20       $ 1.10       $ 1.16

2004
----
High                       $ 1.74       $ 2.28       $ 2.40       $ 2.30
Low                        $ 1.35       $ 1.60       $ 1.95       $ 1.86


ISSUER PURCHASES OF EQUITY SECURITIES

<TABLE><CAPTION>
                                                                   TOTAL      APPROXIMATE
                                                                 NUMBER OF   DOLLAR VALUE
                                                                  SHARES      OF SHARES
                                       TOTAL                     PURCHASED   THAT MAY YET
                                     NUMBER OF      AVERAGE     AS PART OF   BE PURCHASED
PERIOD                                SHARES      PRICE PAID     PUBLICLY        UNDER
(FROM/TO)                            PURCHASED     PER SHARE  ANNOUNCED PLAN   THE PLAN
---------                            ---------     ---------     ---------     ---------
<S>                                  <C>           <C>           <C>           <C>
March 1, 2004 - March 31, 2004              50     $    1.70       105,371     $ 812,053
April 1, 2004 - April 31, 2004             600          1.70       105,971       811,033
May 1, 2004 - May 31, 2004              25,806          1.71       131,777       766,905
July 1, 2004 - July 31, 2004               120          2.06       131,897       766,658
August 1, 2004 - August 31, 2004           100          2.25       131,997       766,433
October 1, 2004 - October 31, 2004         200          2.17       132,197       766,000
                                     ---------     ---------     ---------     ---------
Total                                   26,876     $    1.71       132,197     $ 766,000
                                     =========     =========     =========     =========
</TABLE>

In August 1998, the Board of Directors authorized $1,000,000 for a share
repurchase program for shares to be purchased in private or open market
transactions. Unless terminated earlier by resolution of the Board of Directors,
the program will expire when the Company has purchased shares with an aggregate
purchase price of no more than $1,000,000.


                                        8
<PAGE>
ITEM 6.  SELECTED FINANCIAL DATA

The selected financial data for years 2000 through 2004 are presented on page
FS-35 of this Annual Report on Form 10-K.


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The index to Management's Discussion and Analysis of Financial Condition and
Results of Operations is presented on page 15 of this Annual Report on Form
10-K.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management's discussion of quantitative and qualitative disclosures about market
risk is presented on page FS-13.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The index to Financial Statements and Supplementary Data is presented on page 15
of this Annual Report on Form 10-K.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.


ITEM 9A. CONTROLS AND PROCEDUERS

The certifying officers of the Company are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the Company and have (i) designed such disclosure
controls and procedures to ensure that material information relating to the
Company, including its consolidated subsidiary, is recorded, processed,
summarized and reported within the time frames specified in the SEC's rules and
forms and that such information is made known to them by others within the
Company and such entity to allow for timely decisions regarding required
disclosures; and (ii) along with other members of management, evaluated the
effectiveness of the design and operation of the Company's disclosure controls
and procedures as of the end of the period covered by this report. Based on this
evaluation, the chief executive officer and the chief financial officer of the
Company have concluded that the Company's disclosure controls and procedures
were effective during the period being reported on in this annual report. The
Company intends to conduct an assessment of the disclosure controls and
procedures of the Canton, Ohio galvanizing facility, acquired February 28, 2005,
during the second quarter of 2005.

The Company's certifying officers have indicated that there were no changes in
internal controls over financial reporting that have occurred during the fiscal
quarter ended December 31, 2004 that materially affected, or were reasonably
likely to materially affect, our internal controls over financial reporting.


ITEM 9B. OTHER INFORMATION

None.

                                        9
<PAGE>
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information contained under the headings "Election of Directors," "Board of
Directors and Committees" and "Company Information Available on Website" in the
Company's Proxy Statement (the "2005 Proxy Statement") for its annual meeting of
stockholders to be held on May 24, 2005 herein is incorporated by reference.

Information about our Executive Officers may be found in Part I, Item 4A of this
Form 10-K under the heading "Executive Officers of the Registrant" in accordance
with Instruction 3 of Item 401(b) of Regulation S-K and General Instruction G(3)
of Form 10-K.


ITEM 11. EXECUTIVE COMPENSATION

The information required by this item appears in the 2005 Proxy Statement under
the headings "Executive Compensation," "Stock Option Grants in Fiscal Year
2004," "Options Exercised in Fiscal Year 2004 and Fiscal Year End Values,"
"Director's Compensation," "Compensation Committee Interlocks and Insider
Participation" and "Compensation Committee Report" and is incorporated herein by
reference. Information regarding the Company's stock option plans appears herein
on page FS-31, Footnotes to Consolidated Financial Statements.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

The information required by this item concerning security ownership of certain
beneficial owners and management appears in the 2005 Proxy Statement under the
heading "Security Ownership of Principal Stockholders and Management" and is
incorporated herein by reference.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this item concerning certain relationships and
related party transactions appears in the 2005 Proxy Statement under the heading
"Related Party Transactions" and is incorporated herein by reference.


ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required by this item are incorporated herein by reference from the
2005 Proxy Statement under the captions "Audit Committee Report" and
"Ratification of Appointment of Independent Accountants."




                                       10
<PAGE>
PART IV


ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following documents are filed as part of this report:


(1) FINANCIAL STATEMENTS

    Report of Independent Registered Public Accounting Firm                FS-16

    Consolidated Balance Sheets at December 31, 2004 and 2003              FS-17

    Consolidated Statements of Operations and Comprehensive Income
      for the Years Ended December 31, 2004, 2003 and 2002                 FS-18

    Consolidated Statements of Stockholders' Equity for the Years
      Ended December 31, 2004, 2003 and 2002                               FS-19

    Consolidated Statements of Cash Flows for the Years Ended
      December 31, 2004, 2003 and 2002                                     FS-20

    Notes to Consolidated Financial Statements                    FS-21 to FS-34


(2) FINANCIAL STATEMENT SCHEDULES

    Schedule II - Valuation and Qualifying Accounts                           13

    All schedules omitted are inapplicable or the information required is
    included in either the consolidated financial statements or the related
    notes to the consolidated financial statements.


(3) EXHIBITS

    The Exhibits filed with or incorporated by reference into this report are
    listed in the following Index to Exhibits.









                                       11
<PAGE>
EXHIBIT INDEX

NO.       DESCRIPTION

3.1       Restated Certificate of Incorporation of Kinark Corporation, as
          amended on June 6, 1996 (incorporated by reference to Exhibit 3.1 of
          the Company's Pre-Effective Amendment No. 1 to Registration Statement
          on Form S-3, Registration No. 333-4937, filed with the Commission on
          June 7, 1996).

3.2       Amended and Restated Bylaws of Kinark Corporation (incorporated by
          reference to Exhibit 3.1 to the Company's Quarterly Report on Form
          10-Q dated March 31, 1996)

10.1      Credit Agreement, dated September 24, 1999, between Kinark
          Corporation, a Delaware corporation, and Bank One, Oklahoma, N.A.,
          National Association, a national banking association.

10.1.1    Amendment One to Credit Agreement, March 30, 2001.

10.1.2*   Amendment Two to Amended and Restated Credit Agreement, November 26,
          2001.

10.1.3    Amendment Three to Amended and Restated Credit Agreement, September
          26, 2003 (incorporated by reference to the Company's Form 10-Q filed
          with the Commission on November 7, 2003.

10.1.4*   Amendment Four to Amended and Restated Credit Agreement, December 15,
          2004.

10.1.5    Amendment Five to Amended and Restated Credit Agreement, February 28,
          2005 (incorporated by reference to the Company's Form 8-K filed with
          the Commission on March 4, 2005).

10.2**    2004 Incentive Stock Plan (incorporated by reference to the Company's
          Form 8-K filed with the Commission on March 18, 2005).

10.2.1**  Form of Stock Option Agreement (incorporated by reference to the
          Company's Form 8-K filed with the Commission on March 18, 2005).

10.2.2**  Schedule A to Stock Option Agreement (incorporated by reference to the
          Company's Form 8-Kfiled with the Commission on March 18, 2005).

10.3**    Director Stock Unit Program (incorporated by reference to the
          Company's Form 8-K filed with the Commission on March 18, 2005).

21.*      Subsidiaries of the Registrant.

23.*      Consent of Independent Registered Public Accounting Firm.

24.1*     Power of attorney from Directors: Linwood J. Bundy, Ronald J. Evans,
          Gilbert L. Klemann, II, Patrick J. Lynch, Joseph J. Morrow and John H.
          Sununu.

31.1*     Certification pursuant to Section 302 of the Sarbanes, Oxley Act of
          2002.

31.2*     Certification pursuant to Section 302 of the Sarbanes, Oxley Act of
          2002

32*.      Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002.

99*       Cautionary Statements by the Company Regarding Forward Looking
          Statements.

*   Filed Herewith.
**  Indicates management contract or compensation plan.

                                       12
<PAGE>
SCHEDULE II


VALUATION AND QUALIFYING ACCOUNTS


YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002:


                                            ADDITIONS
                               BALANCE AT   CHARGED TO
                               BEGINNING    COSTS AND                BALANCE AT
DESCRIPTION                     OF YEAR      EXPENSES   DEDUCTIONS   END OF YEAR
================================================================================
Allowance for doubtful
  receivables (deducted from
  accounts receivable)
----------------------------
2004                           $ 339,000    $  50,000   $ 132,000     $ 257,000
2003                             285,000      190,000     136,000       339,000
2002                             293,000      184,000     192,000       285,000






























                                       13
<PAGE>
SIGNATURES

Pursuant to the requirements of Section 13 and 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, as duly authorized.


                                         NORTH AMERICAN GALVANIZING
                                         & COATINGS, INC. (Registrant)

Date: April 14, 2005                     By: /s/ Paul R. Chastain
                                             --------------------
                                         Paul R. Chastain
                                         Vice President and
                                         Chief Financial Officer


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on April 14, 2005, by the following persons on behalf of
the Registrant and in the capacities indicated.


/s/Joseph J. Morrow*                     /s/ Patrick J. Lynch*
--------------------                     -----------------------------
Joseph J. Morrow, Non-Executive          Patrick J. Lynch, Director
Chairman the Board

/s/Ronald J. Evans*                      /s/ John H. Sununu*
--------------------                     -----------------------------
Ronald J. Evans, President and           John H. Sununu, Director
Chief Executive Officer (Principal
Executive Officer), and Director

/s/Paul R. Chastain                      /s/ Gilbert L. Klemann, II*
--------------------                     -----------------------------
Paul R. Chastain, Vice President,        Gilbert L. Klemann, II, Director
Chief Financial Officer, Secretary &
Director (Principal Financial and
Accounting Officer)

/s/Linwood J. Bundy*
--------------------
Linwood J. Bundy, Director


*Paul R. Chastain, by signing his name hereto, does hereby sign this Annual
Report on Form 10-K on behalf of each of the directors and officers of the
Registrant after whose typed names asterisks appear pursuant to powers of
attorney duly executed by such directors and officers and filed with the
Securities and Exchange Commission as exhibits to this report.


                                         By: /s/ Paul R. Chastain
                                         -----------------------------------
                                         Paul R. Chastain, Attorney-in-fact


                                       14
<PAGE>

INDEX TO MANAGEMENT'S DISCUSSION AND ANALYSIS, CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA


                                                                        PAGE

Management's Discussion and Analysis                               FS-1 to FS-14

Management's Responsibility for Financial Statements                       FS-15

Report of Independent Registered Public Accounting Firm                    FS-16

Consolidated Balance Sheets                                                FS-17

Consolidated Statements of Operations and Comprehensive Income             FS-18

Consolidated Statements of Stockholders' Equity                            FS-19

Consolidated Statements of Cash Flows                                      FS-20

Notes to Consolidated Financial Statements                        FS-21 to FS-34

Quarterly Results                                                          FS-35

Selected Financial Data                                                    FS-36


















                                       15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

GENERAL

North American Galvanizing ("NAG") is a leading provider of corrosion protection
for iron and steel components fabricated by its customers. Hot dip galvanizing
is the process of applying a zinc coating to fabricated iron or steel material
by immersing the material in a bath consisting primarily of molten zinc. Based
on the number of its operating plants, the Company is one of the largest
merchant market hot dip galvanizing companies in the United States.


RECENT DEVELOPMENTS

On February 28, 2005, NAGalv-Ohio, Inc., a Delaware corporation and indirect
subsidiary of the Company, purchased the hot-dip galvanizing assets of a
galvanizing facility located in Canton, Ohio. The Canton facility operates two
hot-dip galvanizing lines providing after-fabrication hot-dip galvanizing and
spinning services to an established customer base of approximately 400
customers. The facility features 52-foot and 16-foot kettles. This asset
purchase expands the service area of NAG into the northeast region of the United
States, and increases the total number of galvanizing plants it owns and
operates to 11. The Canton facility will operate under the name of North
American Galvanizing.


OVERVIEW

The Company's galvanizing plants offer a broad line of services including
centrifuge galvanizing for small threaded products, sandblasting, chromate
quenching, polymeric coatings, and proprietary INFRASHIELDsm Coating Application
Systems for polyurethane protective linings and coatings over galvanized
surfaces. The Company's structural and chemical engineers provide customized
assistance with initial fabrication design, project estimates and steel
chemistry selection.

The Company's galvanizing and coating operations are composed of eleven
facilities located in Colorado, Kentucky, Missouri, Ohio, Oklahoma, Tennessee
and Texas. These facilities operate galvanizing kettles ranging in length from
16 feet to 62 feet, and have lifting capacities ranging from 12,000 pounds to
40,000 pounds.

Hot dip galvanizing provides metals corrosion protection for many product
applications used in commercial, construction and industrial markets. The
Company's galvanizing can be found in almost every major application and
industry that requires corrosion protection where iron or steel is used,
including the following end user markets:

     o    highway and transportation

     o    power transmission and distribution

     o    wireless and telecommunications

     o    utilities

     o    petrochemical processing

     o    industrial grating

     o    infrastructure - buildings, airports, bridges and power generation

     o    wastewater treatment

                                      FS-1
<PAGE>

     o    fresh water storage and transportation

     o    pulp and paper

     o    pipe and tube

     o    food processing

     o    agricultural (irrigation systems)

     o    recreation (boat trailers, marine docks, stadium scaffolds)

     o    bridge and pedestrian handrail, and

     o    original equipment manufactured products, including general
          fabrication.

As a value-added service provider, the Company's revenues are directly
influenced by the level of economic activity in the various end markets that it
serves. Economic activity in those markets that results in the expansion and/or
upgrading of physical facilities (i.e., construction) may involve a time-lag
factor of several months before translating into a demand for galvanizing
fabricated components. Despite the inherent seasonality associated with large
project construction work, the Company maintains a relatively stable revenue
stream throughout the year by offering fabricators, large and small, reliable
and rapid turn-around service.

The Company records revenues when the galvanizing and customer billing processes
are completed. The Company generates all of its operating cash from such
revenues, and utilizes a line of credit secured by its underlying accounts
receivable and zinc inventory to facilitate working capital needs.

Each of the Company's galvanizing plants operates in a highly competitive
environment underscored by pricing pressures, primarily from other public and
privately-owned galvanizers and alternative forms of corrosion protection, such
as paint. The Company's long-term response to these challenges has been a
sustained strategy focusing on providing a reliable quality of galvanizing to
standard industry technical specifications and rapid turn-around time on every
project, large and small. Key to the success of this strategy is the Company's
continuing commitment and long-term record of reinvesting earnings to upgrade
its galvanizing facilities and provide technical innovations to improve
production efficiencies; and to construct new facilities when market conditions
present opportunities for growth. The Company is addressing long-term
opportunities to expand its galvanizing and coatings business through programs
designed to increase industry awareness of the proven, unique benefits of
galvanizing for metals corrosion protection. Each of the Company's independently
operated galvanizing plants is linked to a centralized system involving sales
order entry, facility maintenance and operating procedures, quality assurance,
purchasing and credit and accounting that enable the plant to focus on providing
galvanizing and coating services in the most cost-effective manner.

The principal raw materials essential to the Company's galvanizing and coating
operations are zinc and various chemicals which are normally available for
purchase in the open market.


KEY INDICATORS

Key industries which historically have provided the Company some indication of
the potential demand for galvanizing in the near-term, (i.e., primarily within a
year) include highway and transportation, power transmission and distribution,
telecommunications and the level of quoting activity for regional metal
fabricators. In general, growth in the commercial/industrial sectors of the
economy generates new construction and capital spending which ultimately impacts
the demand for galvanizing.

                                      FS-2
<PAGE>

Key operating measures utilized by the Company include new orders, zinc
inventory, tons of steel galvanized, revenue, pounds and labor costs per hour,
zinc usage related to tonnage galvanized, and lost-time safety performance.
These measures are reported and analyzed on various cycles, including daily,
weekly and monthly.

The Company utilizes a number of key financial measures to evaluate the
operations at each of its galvanizing plants, to identify trends and variables
impacting operating productivity and current and future business results, which
include: sales, gross profit, fixed and variable costs, selling and general
administrative expenses, operating cash flows, capital expenditures, interest
expense, and a number of ratios such as profit from operations and accounts
receivable turnover. These measures are reviewed by the Company's operating and
executive management each month, or more frequently, and compared to prior
periods, the current business plan and to standard performance criteria, as
applicable.


KEY DEVELOPMENTS

During the period 2002 through February 2005, the Company reported a number of
developments supporting its strategic program to reposition its galvanizing
business in the national market.

In February 2005, the Company expanded galvanizing operations into the northeast
region of the United States with the purchase of the assets of a galvanizing
facility located in Canton, Ohio. This strategic expansion provides NAG an
important, established customer base of major fabricators serving industrial,
OEM, and highway markets as well as residential and commercial markets for
lighting poles. Canton's 52 foot long dipping kettle is designed to handle large
steel structures, such as bridge beams, utility poles and other steel structural
components that require galvanizing for extended-life corrosion protection. The
Canton plant also processes small parts used in construction, such as nuts and
anchor rods, in a dedicated facility with a smaller 16 foot dipping kettle and a
spinner operation.

In January 2003, the Company's opened its St. Louis galvanizing plant, replacing
a smaller plant at the same location. This larger, facility is providing NAG a
strategic base for extending its geographic area of service. A 51-foot kettle at
this facility provides the largest galvanizing capacity in the St. Louis region.
In 2004, production tonnage at St. Louis more than doubled compared to
production at the plant it replaced.

In January 2003, the Company expanded services at its Nashville galvanizing
plant with the announced installation of a state-of-the-art spinner line to
galvanize small products, including bolts and threaded material.

As reported previously, the Company wrote-off its investment in the formerly
idled Houston-Cunningham galvanizing plant in the second quarter ended June 30,
2003. The write-off resulted in a net loss on the abandoned assets of $754,000,
net of taxes of $443,000 in 2003. The net loss from operations for the
Cunningham plant was $77,000 and $205,000, net of taxes of $45,000 and $133,000,
for the years ended December 31, 2003 and 2002, respectively. The abandoned
Cunningham plant has been classified as a discontinued operation and its
expenses are not included in the results of continuing operations discussed
below.

In the third quarter of 2002, the Company announced the introduction of
INFRASHIELDsm coating, a specialty polymer coating system that is designed to be
applied over hot dip galvanized material slated for harsh operating conditions.
The INFRASHIELDsm coating technology results in superior corrosion protection by
combining cathodic protection with a non-conductive coating.

                                      FS-3
<PAGE>
RESULTS OF OPERATIONS

The following table shows the Company's results of operations:

<TABLE><CAPTION>
                                                                 (DOLLARS IN THOUSANDS)
                                                                 YEAR ENDED DECEMBER 31,
                                    --------------------------------------------------------------------------------
                                              2004                        2003                        2002
                                    ------------------------    ------------------------    ------------------------
                                                     % OF                        % OF                        % OF
                                      AMOUNT         SALES        AMOUNT         SALES        AMOUNT         SALES
                                    ----------    ----------    ----------    ----------    ----------    ----------
<S>                                 <C>           <C>           <C>           <C>           <C>           <C>
Sales                               $   35,822         100.0%   $   33,200         100.0%   $   38,178         100.0%

Cost of sales                           25,814          72.1%       23,833          71.8%       26,208          68.7%
                                    ----------    ----------    ----------    ----------    ----------    ----------
Gross profit                            10,008          27.9%        9,367          28.2%       11,970          31.3%

Selling, general and
  administrative expenses                5,917          16.5%        5,992          18.0%        5,904          15.5%
Depreciation and amortization            2,701           7.5%        2,880           8.7%        3,028           7.9%
                                    ----------    ----------    ----------    ----------    ----------    ----------
Operating income                         1,390           3.9%          495           1.5%        3,038           7.9%

Interest expense--net                      764           2.1%          654           2.0%          872           2.3%
Other income                               (25)           --            --            --            --            --
                                    ----------    ----------    ----------    ----------    ----------    ----------
Income (loss) from continuing
  operations before income taxes           651           1.8%         (159)         (0.5)%       2,166           5.6%

Income tax expense                         248           0.7%           23            --           851           2.2%
                                    ----------    ----------    ----------    ----------    ----------    ----------
Income (loss) from continuing
  operations                               403           1.1%         (182)         (0.5)%       1,315           3.4%

Loss from discontinued operations           --            --          (831)          2.5%         (205)         (0.5)%
                                    ----------    ----------    ----------    ----------    ----------    ----------

Net income (loss)                   $      403           1.1%   $   (1,013)         (3.0)%  $    1,110           2.9%
                                    ==========    ==========    ==========    ==========    ==========    ==========
</TABLE>


In 2004, sales from the Company's galvanizing and coatings operations increased
7.9% compared to 2003. The Company experienced an increase in production tonnage
in 2004 primarily due to a modest upturn in activity from key customers serving
power distribution, communications, highway and recreational markets. The
increase in 2004 production tonnage did not reflect the improvement in the
economy that we had expected, but it compares favorably with the prior two years
when demand for the Company's galvanizing services was impacted by a slow-down
in construction activity and a general weakness in capital spending.


2004 COMPARED TO 2003

SALES--Sales for the year ended December 31, 2004 increased 7.9% to $35,822,000
from sales of $33,200,000 for 2003. NAG experienced a modest upturn in demand
for its galvanizing and coatings services in 2004, led by a number of its
traditional large markets. These markets included power distribution,
communications, highway and recreational. Total billable production volume
increased 6.8% in 2004, as compared to 2003 when an extended period of lower
levels of construction activity and industrial capital spending resulted in a
17% decrease in our galvanizing production volume. In 2004, we


                                      FS-4
<PAGE>
also achieved an important marketing objective with a slight improvement in the
average selling price for galvanizing services. NAG continues to compete
aggressively and successfully with a number of galvanizing companies in each of
its market areas, with particular emphasis on quality and reliable turn-around
delivery. Strategic market development from the corporate level for national
account new business supplements our regional sales teams. As a result of these
efforts, in 2004 we achieved higher production volume, strengthened selling
prices and, for the second consecutive year, added more than 200 new business
accounts.

GROSS PROFIT--Gross profit of $10,008,000 for 2004 increased $641,000 or 6.8%
from $9,367,000 for 2003. Although the market price of zinc increased
significantly during 2004, rising approximately 24%, gross profit as a
percentage of sales remained fairly stable at 27.9% compared to 28.2% for 2003.
The Company continues to implement cost containment and safety measures to lower
its production costs. The Company's practice of selective forward commitments
for the procurement of zinc, which minimizes the risk associated with
fluctuations in the price of zinc, is one aspect of these efforts. Despite the
success of these measures, in 2004 the Company incurred an increase of 9.4% in
the cost of natural gas. As a result, cost of sales as a percentage of sales was
72.1% in 2004 compared to 71.8% in 2003.

DEPRECIATION EXPENSE--Depreciation expense for 2004 decreased $179,000, or 6.2%,
to $2,701,000 compared to $2,880,000 for 2003. The decrease for 2004 primarily
relates to assets becoming fully depreciated.

SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES--SG&A decreased $75,000, or
1.3%, in 2004 to $5,917,000 compared to $5,992,000 in 2003. The Company's
continuing emphasis on controlling costs extends to its administrative support
functions. During 2004, while the Company incurred increases in outside services
for legal ($96,000), audit and tax ($12,000) and stockholder services ($84,000),
all of these increases were offset by reductions in other functions including
administrative labor, liability insurance, travel and telecommunication. SG&A as
a percentage of sales was 16.5% in 2004 and 18.0% in 2003.

INTEREST EXPENSE--Interest expense increased to $764,000 in 2004 from $654,000
in 2003, primarily due to higher interest rates on variable-rate debt and lower
interest rebates on the Company's industrial revenue bonds in 2004, partially
offset by the effect of lower average borrowings during 2004 as compared to
2003. For the two years ended December 31, 2004, the interest rate on the
company's variable rate debt increased from 4.25% to 5.50% as a result of
changes in the prime rate. The Company's average outstanding borrowings for 2004
were $15,199,000 compared to $17,622,000 for 2003. Excess interest in the
industrial revenue bonds Trustee's Interest Account, which is recognized as a
reduction of interest expense, was approximately $152,000 in 2004 compared to
approximately $354,000 in 2003. The Company's interest expense for 2004 was not
impacted by inflation.

INCOME FROM CONTINUING OPERATIONS--In 2004, income from continuing operations
before income taxes was $651,000 compared to a loss of $159,000 in 2003. The
improvement in income for 2004 reflects higher sales resulting from increases in
tonnage shipments and average selling prices, lower depreciation and SG&A,
selling, partially offset by higher interest expense.


                                      FS-5
<PAGE>
INCOME TAXES--The Company's effective income tax rates, including taxes related
to discontinued operations in 2003, for 2004 and 2003 were 38.1% and 31.5%
respectively. The rate for 2004 differed from the federal statutory rate
primarily due to state income taxes. The rate for 2003 differed from the federal
statutory rate primary due to state income taxes and adjustments to estimate the
deferred tax asset accounts.

NET INCOME (LOSS)--For 2004, the Company reported net income of $403,000, or
$.05 per share fully diluted, compared to a net loss of $(1,013,000), or $(.15)
per share fully diluted, for 2003. The net loss for 2003 included a loss from
discontinued operations of $831,000 resulting from the write-off of the assets
of an abandoned galvanizing operation and its related operating loss.


2003 COMPARED TO 2002

SALES--Sales for the year ended December 31, 2003 were $33,200,000, down 13%
from sales of $38,178,000 for 2002. In 2003, the lower demand for galvanizing
due to weaknesses in the economy adversely impacted NAG's operations. Total
production volume decreased 17% from the record tonnage NAG achieved in 2002.
This lower volume resulted in a sales decrease of $6,500,000, which was
partially offset by a $1,500,000 increase in sales attributed to product mix. In
addition to competing with a number of galvanizing companies in each of its
market areas, NAG experienced a continuation of competitive pressure on selling
prices due to weak market conditions. Production volume at the Company's
galvanizing facilities varied significantly by region in 2003, with the weakness
in some industrial markets still impacting small and medium-sized fabricators.
Over the course of 2003, the Company lowered its operating break-even cost
structure.

GROSS PROFIT--Gross profit of $9,367,000 for 2003 declined $2,603,000 or 21.7%
from $11,970,000 for 2002. Gross profit as a percentage of sales declined to
28.2% from 31.3% in 2002. Gross profit margins declined primarily because of
lower sales in 2003 and higher costs for labor, natural gas and insurance for
liability and workers compensation. During 2003, NAG countered declining sales
with a number of cost containment measures, including reductions in personnel.
As a result of these measures, cost of sales as a percent of sales was held to
71.8% in 2003 compared with 68.6% for the previous year. In 2003, significantly
higher market prices resulted in a 39% increase in NAG's cost of natural gas,
compared to 2002. For the second consecutive year, the Company experienced
higher premiums for liability and workers compensation insurance, which
increased approximately 21% in 2003.

DEPRECIATION EXPENSE--Depreciation expense decreased $148,000 for 2003 to
$2,880,000 compared with $3,028,000 in 2002. The decrease for 2003 primarily
relates to lower production volume as the unit of production method for
depreciation is utilized by the Company in its new galvanizing plants.

SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES--SG&A was $5,992,000 in
2003, an increase of $88,000, or 1.5%, from $5,904,000 in 2002. The increase in
SG&A is due primarily to the incremental costs of higher premiums for insurance
of $74,000, increased travel and recruiting of $44,000, and an increase in legal
and professional services of $190,000, which were partially offset by reductions
in administrative salaries and marketing activities of $215,000.

INTEREST EXPENSE--Interest expense decreased to $654,000 in 2003 from $872,000
in 2002, reflecting lower average borrowings outstanding for working capital in
2003 and lower average interest rates on variable rate debt in 2003. During the
two-year period 2002 through 2003, the interest rate on the Company's variable
rate debt decreased from 6.75% to 4.25% as a result of changes in the prime
rate. The Company's average outstanding borrowings for 2003 were $17,622,000
compared to $18,135,000 for 2002. Interest expense also decreased due to
interest rebates of $354,000 in 2003 on the Company's industrial revenue bonds.
In September 2003, the Company amended the bond agreement to more closely


                                      FS-6
<PAGE>
reflect the interest rate earned by the bondholders. The amendment provides that
the bond trustee will evaluate the interest account at the end of each calendar
quarter and refund the excess amount determined, if any, and rebate such excess
to the Company. The Company does not expect to receive future interest rebates
comparable to those received in 2003. The Company's interest expense for 2003
was not impacted by inflation.

INCOME (LOSS) FROM CONTINUING OPERATIONS--In 2003, the Company reported a loss
of $(159,000) from continuing operations before income taxes, reflecting a
decline of approximately $5,000,000, or 13%, in sales from 2002 when the Company
produced a record tonnage volume and reported income of $2,166,000 from
continuing operations before income taxes.

INCOME TAXES--The Company's effective income tax rates, including taxes related
to discontinued operations in 2003, for 2003 and 2002 were 31.5% and 39.3%,
respectively. The rate for 2003 differed from federal statutory rate primarily
due to state income taxes and adjustments to the estimate of the deferred tax
asset accounts. The rate for 2002 differed primarily due to state income taxes.

DISCONTINUED OPERATIONS--In 2002, the Board of Directors authorized the Company
to pursue alternative uses for the Houston-Cunningham plant, which was
temporarily idled in late 2001. Management believed the carrying value of the
plant and the related galvanizing assets would be realized through future
operations of the plant. Accordingly, no write-down was recognized in 2002.
However, in late April 2003, after new events, combined with a further
contraction of the galvanizing business in the Houston market, management
determined that it would likely be unable to maintain the plant as part of the
Company's continuing operations. As a result, the Company wrote-off its
investment in the Houston-Cunningham galvanizing plant in the quarter ended June
30, 2003 as discontinued operations. The write-off resulted in a net loss on the
abandoned assets of $754,000, net of taxes of $443,000. The net loss from
operations for the Cunningham plant was $77,000 and $205,000, net of taxes of
$45,000 and $133,000 for 2003 and 2002, respectively.

NET INCOME (LOSS)--For 2003, the Company reported a net loss of $(1,013,000)
compared to net income of $1,110,000 in 2002. The loss per share for 2003 was
$(.15) per share compared to diluted earnings of $.15 per share in 2002.


LIQUIDITY AND CAPITAL RESOURCES

The Company's cash flow from operations continues to be adequate to fund its
working capital and current facilities' capital spending requirements. During
the three years ended December 31, 2004, operating cash flow has been the
primary source of liquidity, supplemented as necessary by use of the revolving
credit facility and by funds from a term loan to finance a new galvanizing
plant. The Company monitors working capital and planned capital spending to
assess liquidity and minimize cyclical cash flow.

The Company generated operating cash flow from continuing operations of
$2,581,000 in 2004, a decrease of 18% compared to operating cash flow from
continuing operations of $3,131,000 in 2003. Decreased cash flow from continuing
operations in 2004 was due primarily to increases in working capital and lower
depreciation partially offset by increases in deferred taxes and earnings. In
2004, zinc inventory increased $285,000, primarily due to the scheduled timing
of deliveries of floor stock for current galvanizing requirements. In 2004,
trade accounts receivable increased $60,000 as sales for the year increased
$2,622,000. This nominal increase in trade receivables reflects the Company's
continuing focus on reducing the average collection time, which dropped below 49
days for 2004 compared to 51 days in 2003. The Company anticipates that it will
be able to satisfy cash requirements for its ongoing business operations for the
foreseeable future with cash generated by operations and borrowings under its
existing credit facilities.


                                      FS-7
<PAGE>
In 2004, the Company was in compliance with the financial covenants of its
credit agreement with the lender under its credit facility, except for the
second quarter. For the quarter ended June 30, 2004, the Company's capital
expenditures coverage ratio fell slightly below the level permitted under the
credit agreement, due to the timing of major expenditures for material handling
equipment at the end of the second quarter. The Company obtained a waiver from
the bank for this event of non-compliance. Based on the Company's analysis and
projections of operations and capital expenditure requirements, the Company
expects to be in compliance with such covenants during 2005.

Operating cash flows were $3,131,000 and $3,971,000 in 2003 and 2002,
respectively. Decreased cash flow from continuing operations in 2003 was due
primarily to a net loss and increases in deferred taxes, partially offset by a
decrease in working capital. Discontinued operations provided cash flow of
$96,000 and $200,000 in 2003 and 2002, respectively.

Cash of $1,095,000 used in investing activities in 2004 consisted of capital
expenditures of $1,230,000, offset by proceeds from the sale of fixed assets and
investment securities of $43,000 and $92,000, respectively. Capital expenditures
were $901,000 in 2003 and $5,880,000 in 2002. Capital expenditures in 2004
primarily focused on budgeted capital programs to upgrade existing galvanizing
facilities and the Company expects capital expenditures in 2005, excluding the
purchase of assets of a galvanizing facility in Canton, Ohio (see Note 16 to
Consolidated Financial Statements), will be maintained at a comparable level.
NAG completed construction of new galvanizing facilities in St. Louis, Missouri
in 2002.

In 2004, the Company's total debt (current and long-term obligations) decreased
$862,000 to $15,553,000. Financing activities in 2004 included payments of
$656,000 to a bond sinking fund, net payments of $206,000 on bank debt and other
obligations (see Note 3 to Consolidated Financial Statements). In 2004, the
Company issued 40,751 shares of its common stock from treasury in lieu of cash
for payment of board fees to its directors, and added 26,876 shares to treasury
in private transactions.

In December 2004, the Company amended a three-year bank credit agreement that
was scheduled to expire in January 2005 and extended its maturity to December
15, 2007. Subject to borrowing base limitations, the amended agreement provided
(i) a $7,000,000 maximum revolving credit facility for working capital and
general corporate purposes and (ii) a $3,013,000 term loan that combined the
outstanding principal balances of a term loan and a construction term loan.

In February 2005, the Company amended the three-year bank credit agreement that
was scheduled to expire in December 2007 and extended its maturity to February
28, 2008. Subject to borrowing base limitations, the amended agreement provided
(i) an $8,000,000 maximum revolving credit facility for working capital and
general corporate purposes and (ii) a $5,001,000 term loan that combined the
outstanding principal balance of the existing term loan with additional
financing for the purchase of assets of a galvanizing facility (see Note 16 to
Consolidated Financial Statements).

The principal balance of the term loan is payable in 36 monthly installments of
$59,540, plus accrued interest, beginning March 31, 2005, except that the final
installment due on February 28, 2008 shall be in the amount of the then
remaining unpaid principal balance. Monthly principal payments of $59,540 plus
accrued interest on the term loan represent a 7-year amortization schedule on a
three-year term loan. The revolving line of credit may be paid down without
penalty, or additional funds may be borrowed up to the maximum line of credit.


                                      FS-8
<PAGE>
At December 31, 2004, $7,932,000 was outstanding under the bank credit
agreement, and $400,000 was reserved for outstanding irrevocable letters of
credit for workers' compensation insurance coverage. The Company's commitment to
repay $6,626,250 of tax-exempt adjustable rate industrial revenue bonds issued
in 2000 is fully secured by an irrevocable letter of credit issued by Bank One,
Oklahoma, N.A. in favor of Bank One Trust Company (see Note 4 to Consolidated
Financial Statements). At December 31, 2004, the Company had additional
borrowing capacity of $1,281,000 net of outstanding letters of credit, under its
revolving line of credit based on the borrowing base calculated under the
agreement. The Company believes that its ability to continue to generate cash
from operations and its bank credit facilities will provide adequate capital
resources and liquidity to support operations and capital expenditures plans for
2005.

The bank credit agreement requires the Company to maintain compliance with
covenant limits for current ratio, debt to tangible net worth ratio, debt
service coverage ratio and a capital expenditures ratio. At December 31, 2004
the Company was in compliance with all of the covenant limits and the actual
financial ratios compared to the required ratios, were as follows: Current Ratio
- Actual 1.42 versus minimum required of 1.0; Debt to Tangible Net Worth Ratio -
Actual 1.26 versus maximum allowed of 2.50; Debt Service Coverage Ratio - Actual
1.89 versus minimum permitted of 1.25; Capital Expenditures Coverage Ratio - 1.8
versus minimum required of 1.0.

The Company has various commitments primarily related to long-term debt,
industrial revenue bonds, operating lease commitments, zinc purchase commitments
and vehicle operating leases. The Company's off-balance sheet contractual
obligations at December 31, 2004, consist of $1,608,000 for long-term operating
leases for three galvanizing facilities and galvanizing equipment, $763,000 of
vehicle and equipment operating leases and $4,017,000 for zinc purchase
commitments. The various leases for galvanizing facilities, including option
renewals, expire from 2015 to 2017. A lease for galvanizing equipment expires in
2007. The vehicle leases expire annually on various schedules through 2010. NAG
periodically enters into fixed price purchase commitments with domestic and
foreign zinc producers to purchase a portion of its requirements for its hot dip
galvanizing operations; commitments for the future delivery of zinc can be for
up to one year.







                                      FS-9
<PAGE>

The Company expects to fund these commitments with cash generated from
operations and continuation of existing bank credit agreements as they mature.
The Company's contractual obligations and commercial commitments as of December
31, 2004 are as follows (in thousands):


<TABLE><CAPTION>
                                                                                                MORE
                                                      LESS THAN       1-3          3-5          THAN
                                            TOTAL      ONE YEAR      YEARS        YEARS       5 YEARS
                                         ----------   ----------   ----------   ----------   ----------
<S>                                      <C>          <C>          <C>          <C>          <C>
Industrial revenue bonds                 $    6,626   $      692   $    2,305   $    2,689   $      940
Long-term debt                                7,951          604        7,332           15           --
Subordinated notes                            1,000           --        1,000           --           --
Facilities operating leases                   1,608          491          826          108          183
Vehicle and equipment operating leases          763          342          334           87           --
Zinc purchases                                4,017        4,017           --           --           --
                                         ----------   ----------   ----------   ----------   ----------

Total contractual cash obligations       $   21,965   $    6,146   $   11,797   $    2,899   $    1,123
                                         ==========   ==========   ==========   ==========   ==========

Other contingent commitments:
   Letters of credit*                    $    7,026   $    1,092   $    2,305   $    2,689   $      940
   Lines of credit                       $    1,281           --   $    1,281           --           --
</TABLE>


      * Amount includes letter of credit relating to debt outstanding under the
        industrial revenue bond Agreement (see Note 4 to Consolidated Financial
        Statements).


SHARE REPURCHASE PROGRAM

In August 1998, the Board of Directors authorized the Company to repurchase up
to $1,000,000 of its common stock in private or open market transactions. In
2004, the Company repurchased 26,876 shares at an average price per share of
$1.71 totaling $46,000, bringing the total number of shares repurchased through
December 31, 2004 to 132,197 at an average price of $1.77 per share totaling
$234,000. In 2004 and 2003, Directors of the Company could elect to receive
shares of the Company's common stock for up to all of their fee for board
service. Under this program, the Company issued 40,751 and 46,218 shares from
Treasury Stock in 2004 and 2003, respectively, in lieu of cash payments of
$73,000 and $64,000 respectively.


ENVIRONMENTAL MATTERS

The Company's facilities are subject to extensive environmental legislation and
regulations affecting their operations and the discharge of wastes. The cost of
compliance with such regulations was approximately $934,000, $1,061,000, and
$1,168,000 in 2004, 2003 and 2002, respectively, for the disposal and recycling
of wastes generated by the galvanizing operations.

NAG was notified in 1997 by the Illinois Environmental Protection Agency
("IEPA") that it was a potentially responsible party ("PRP") under the
Comprehensive Environmental Response, Compensation, and Liability Information
System ("CERCLIS") in connection with cleanup of an abandoned site formerly
owned by Sandoval Zinc Co. Since then approximately 30 additional PRPs have been
identified by the IEPA.

                                      FS-10
<PAGE>
A number of the PRPs (approximately 12 to 15) have agreed to work together and
with IEPA on a voluntary basis. The Company has been and continues to
participate in this volunteer group. The group has retained consultants and
legal representatives familiar with IEPA regulations. This volunteer group, with
its consultants, has cooperated with IEPA in attempting to better define the
environmental issues associated with the Sandoval Zinc site. To that extent,
this voluntary group prepared and submitted to IEPA in August 2000 a work plan.
The purpose of this work plan is to attempt to define the extent of
environmental remediation that might be required, assess risks, and review
alternatives to addressing potential remediation. The IEPA has yet to respond to
this proposed work plan or suggest any other course of action, and there has
been no activity in regards to this issue during 2004. Therefore, the Company
has no basis for determining potential exposure and estimated remediation costs
at this time.

On August 30, 2004 the Company was informed by counsel for the Metropolitan
Water Reclamation District of Greater Chicago (the "Water District") that the
Water District had recently filed a Second Amended Complaint in the United
States District Court, Northern District of Illinois, Eastern Division, Case No.
03 C 0754, naming North American Galvanizing & Coatings, Inc. (formerly known as
Kinark Corporation) as an added defendant. Counsel for the Water District also
gave the Company notice of the Water District's intent to file (or amend the
Complaint to include) a Citizens Suit under the Resource Compensation and
Recovery Act ("RSRA") against North American Galvanizing & Coatings, Inc.,
pursuant to Section 7002 of RCRA, 42 U.S.C. Section 6972. This Second Amended
Complaint seeks enforcement of the August 12, 2004 default judgment in the
amount of $1,810,463.34 against Lake River Corporation and Lake River Holding
Company, Inc. in connection with the operation of a storage terminal by Lake
River Corporation. Lake River Corporation conducted business as a subsidiary of
the Company until June 30, 2000, at which time Lake River Corporation was sold
to Lake River Holding Company, Inc. and ceased to be a subsidiary of the
Company. The Second Amended Complaint asserts that prior to the sale of Lake
River Corporation, the Company directly operated the Lake River facility and,
accordingly, seeks to have the Court pierce the corporate veil of Lake River
Corporation and enforce the default judgment order of August 12, 2004 against
the Company (North American Galvanizing & Coatings, Inc.). The Company denies
the assertions set forth in the Water District Complaint and on November 13,
2004 filed a partial motion for dismissal of the Second Amended Complaint.

In December 2004, the Water District filed a Third Amended complaint in the
litigation, adding two claims: (1) a common law claim for nuisance; and (2) a
claim under the federal Resource Conservation and Recovery Act, in which the
Water District argues that the Company is responsible for conditions on the
plaintiff's property that present an "imminent and substantial endangerment to
human health and the environment." In January 2005 and March 2005, the Company
filed partial motions to dismiss plaintiff's third amended complaint, in the
United States District Court, Northern District of Illinois, Eastern Division.
The Court has not ruled on the Company's motions for dismissal, at this time. We
have denied any liability with respect to this claim and intend to vigorously
defend ourselves in this case. At this time, we have not determined the amount
of any liability that may result from this matter or whether such liability, if
any, would have a material adverse effect on our financial condition, results of
operations, or liquidity.

The Company is committed to complying with all federal, state and local
environmental laws and regulations and using its best management practices to
anticipate and satisfy future requirements. As is typical in the galvanizing
business, the Company will have additional environmental compliance costs
associated with past, present, and future operations. Management is committed to
discovering and eliminating environmental issues as they arise. Because of the
frequent changes in environmental technology, laws and regulations management
cannot reasonably quantify the Company's potential future costs in this area.

                                      FS-11
<PAGE>
CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires that management
apply accounting policies and make estimates and assumptions that affect results
of operations and the reported amounts of assets and liabilities. The following
areas are those that management believes are important to the financial
statements because they require significant judgment and estimation.

REVENUE RECOGNITION--The Company generates revenue by providing galvanizing and
other coating services to customers' products. Revenue is recognized when the
galvanizing and customer billing processes are completed. Freight billed to
customers is recorded as revenue.

INVENTORIES--Inventories are stated at the lower of cost (LIFO basis) or market.
Since substantially all of the Company's inventory is raw zinc used in the
galvanizing of customers' products, market value is based on an estimate of the
value added to the cost of raw zinc as a result of the galvanizing service.

SELF-INSURANCE RESERVES--The reserves for the self-insured portion of workers
compensation and health insurance coverage is based on historical data and
current trends. Estimates for claims incurred and incurred but not reported
claims are included in the reserves. These estimates may be subject to
adjustment if the Company's actual claims are significantly different than its
historical experience. The Company has obtained insurance coverage for medical
claims exceeding $60,000 and workers' compensation claims exceeding $125,000 per
occurrence, respectively, and has implemented safety training and other programs
to reduce workplace accidents.

IMPAIRMENT OF LONG-LIVED ASSETS--The Company reviews long-lived assets for
impairment using forecasts of future cash flows to be generated by those assets.
These cash flow forecasts are based upon expected tonnage to be galvanized and
the margin to be earned by providing that service to customers. These
assumptions are susceptible to the actions of competitors and changes in
economic conditions in the industries and geographic markets the Company serves.

ENVIRONMENTAL--The Company expenses or capitalizes, where appropriate,
environmental expenditures that relate to current operations as they are
incurred. Such expenditures are expensed when they are attributable to past
operations and are not expected to contribute to current or future revenue
generation. The Company records liabilities when remediation or other
environmental assessment or clean-up efforts are probable and the cost can be
reasonably estimated.

GOODWILL--Pursuant to the provisions of SFAS No. 141, "Business Combinations"
and SFAS No. 142, "Goodwill and Other Intangible Assets," which requires
management to estimate the fair value of the Company's reporting units, the
Company conducts an annual impairment test of goodwill during the second quarter
of each year unless circumstances arise that require more frequent testing. The
determination of fair value is dependent upon many factors including, but not
limited to, management's estimate of future cash flows of the reporting units
and discount rates. Any one of a number of future events could cause management
to conclude that impairment indicators exist and that the carrying value of
these assets will not be recovered. During the second quarter of 2004, the
Company completed the annual impairment test of goodwill for 2004 and concluded
goodwill was not impaired.

NEW ACCOUNTING STANDARDS--In December 2004, the FASB issued SFAS No. 123(R),
which is a revision of SFAS No. 123. This revised statement establishes
accounting standards for all transactions in which an entity exchanges its
equity instruments for goods and services focusing primarily on accounting for
transactions with employees and carrying forward prior guidance for share-based
payments for transactions with non-employees.

                                      FS-12
<PAGE>
SFAS No. 123(R) eliminates the intrinsic value measurement method of accounting
in APB Opinion 25 and generally requires measuring the cost of the employee
services received in exchange for an award of equity instruments based on the
fair value of the award on the date of the grant. The standard requires grant
date fair value to be estimated using either an option-pricing model which is
consistent with the terms of the award or a market observed price, if such a
price exists. Such costs must be recognized over the period during which an
employee is required to provide service in exchange for the award. The standard
also requires estimating the number of instruments that will ultimately be
issued, rather than accounting for forfeitures as they occur.

The effective date of SFAS No. 123(R) is the first reporting period beginning
after June 15, 2005 and the Company expects to adopt SFAS No. 123(R) effective
July 1, 2005. SFAS No. 123(R) permits companies to adopt its requirements using
either a "modified prospective" method, or a "modified retrospective" method.
Under the "modified prospective" method, compensation cost is recognized in the
financial statements beginning with the effective date, based on the
requirements of SFAS No. 123(R) for all share-based payments granted after that
date, and based on the requirements of SFAS No. 123 for all unvested awards
granted prior to the effective date of SFAS No. 123(R). Under the "modified
retrospective" method, the requirements are the same as under the "modified
prospective" method, but also permits entities to restate financial statements
of previous periods based on pro forma disclosures made in accordance with SFAS
No. 123. The Company plans to adopt SFAS No. 123(R) under the modified
prospective method on July 1, 2005 and does not anticipate the adoption to have
a material effect on the consolidated financial statements of the Company.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company's operations include managing market risks related to changes in
interest rates and zinc commodity prices.

INTEREST RATE RISK--The Company is exposed to financial market risk related to
changes in interest rates. Changing interest rates will affect interest paid on
the Company's variable rate debt. Variable rate debt aggregating $7,932,000 and
$8,156,000 and was outstanding under the credit agreement at December 31, 2004
and 2003, respectively, with effective rates of 5.5% and 4.2%, respectively.
Amounts outstanding under the industrial revenue bond agreement were $6,626,250
and $7,282,500 at December 31, 2004 and 2003, respectively, with an effective
rate of 3.5% (see Note 4 to Consolidated Financial Statements). In addition, the
Company's fixed rate debt consisting of $1,000,000 of 10% subordinated
promissory notes was outstanding at December 31, 2004. The borrowings under all
of the Company's debt obligations at December 31, 2004 are due as follows:
$1,296,000 in 2005; $2,335,000 in 2006; $7,495,000 in 2007 and $4,451,000 in
years 2008 through 2013. Each increase of 10 basis points in the effective
interest rate would result in an annual increase in interest charges on variable
rate debt of approximately $14,600 based on December 31, 2004 outstanding
borrowings. The actual effect of changes in interest rates is dependent on
actual amounts outstanding under the various loan agreements. The Company
monitors interest rates and has sufficient flexibility to renegotiate the loan
agreement, without penalty, in the event market conditions and interest rates
change.

ZINC PRICE RISK--NAG periodically enters into fixed price purchase commitments
with domestic and foreign zinc producers to purchase a portion of its zinc
requirements for its hot dip galvanizing operations. Commitments for the future
delivery of zinc, typically up to one year, reflect rates quoted on the London
Metals Exchange. At December 31, 2004 and 2003, the aggregate fixed price
commitments for the procurement of zinc were approximately $4,017,000 and
$1,401,000, respectively. With respect to the zinc fixed price purchase
commitments, a hypothetical decrease of 10% in the market price of zinc from the
December, 2004 and 2003 levels represented potential lost gross margin
opportunities of approximately $402,000 and $140,000, respectively.

                                      FS-13
<PAGE>
The Company's financial strategy includes evaluating the selective use of
derivative financial instruments to manage zinc and interest costs. As part of
its inventory management strategy, the Company expects to continue evaluating
hedging instruments to minimize the impact of zinc price fluctuations. The
Company's current zinc forward purchase commitments (see Note 6) are considered
derivatives, but the Company has elected to account for these purchase
commitments as normal purchases.





































                                      FS-14
<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS

The management of North American Galvanizing & Coatings, Inc. is responsible for
the integrity and accuracy of the accompanying consolidated financial
statements. Management believes that the consolidated financial statements for
the three years ended December 31, 2004 have been prepared in conformity with
accounting principles, appropriate in the circumstances, generally accepted in
the United States. In preparing the consolidated financial statements,
management makes informed judgments and estimates where necessary to reflect the
expected effects of events and transactions that have not been completed. The
Company's disclosure controls, including operating procedures and guidelines,
ensure that material information required to be disclosed is appropriately and
timely recorded and communicated to management.

Management relies on a system of internal operating procedures and accounting
controls that allows it to meet its responsibility for the reliability of the
consolidated financial statements. This system provides reasonable assurance
that the Company's physical and intellectual assets are safeguarded and
transactions are recorded and processed in accordance with management's
authorization that permits the preparation of consolidated financial statements
in accordance with accounting principles generally accepted in the United
States. Management believes that the Company's system of internal operating
procedures and accounting controls provide reasonable assurance that errors that
could be material to the consolidated financial statements are prevented or
would be detected within a timely period.

The Audit Committee of the Board of Directors, composed of three Independent
Directors, is responsible for overseeing the Company's financial reporting
process. The Audit Committee regularly meets with executive and financial
management to review financial reports and monitor matters that could be
material to the consolidated financial statements. The Audit Committee also
meets several times a year with the independent auditors who have free access to
the Audit Committee and the Board of Directors to discuss the quality and
acceptability of the Company's financial reporting, internal controls and
matters related to corporate governance.

The independent auditors are engaged to express an opinion on the Company's
consolidated financial statements in accordance with auditing standards of the
Public Company Accounting Oversight Board (United States). Their report is
included herein on page FS-16.


      /s/ Ronald J. Evans                      /s/ Paul R. Chastain
      Ronald J. Evans                          Paul R. Chastain
      President and                            Vice President and
      Chief Executive Officer                  Chief Financial Officer



                                      FS-15
<PAGE>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
NORTH AMERICAN GALVANIZING & COATINGS, INC.

We have audited the accompanying consolidated balance sheets of North American
Galvanizing & Coatings, Inc. and subsidiary (the "Company") as of December 31,
2004 and 2003, and the related consolidated statements of operations and
comprehensive income, stockholders' equity and cash flows for each of the three
years in the period ended December 31, 2004. Our audits also included the
financial statement schedule listed in the Index at Item 15. These financial
statements and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of North American Galvanizing &
Coatings, Inc. and subsidiary at December 31, 2004 and 2003, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2004 in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.


Deloitte & Touche LLP


Tulsa, Oklahoma
April 12, 2005

                                      FS-16
<PAGE>
NORTH AMERICAN GALVANIZING & COATINGS, INC.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2004 AND 2003
(In thousands, except per share amounts)
================================================================================
<TABLE><CAPTION>
ASSETS                                                                             2004            2003
                                                                               ------------    ------------
<S>                                                                            <C>             <C>
CURRENT ASSETS:
  Cash                                                                         $        634    $         56
  Investments                                                                            --              73
  Trade receivables--less allowances of $257 for 2004 and $339 for 2003               4,654           4,594
  Inventories                                                                         5,693           5,408
  Prepaid expenses and other assets                                                     521              87
  Deferred tax asset--net                                                               723             746
                                                                               ------------    ------------
           Total current assets                                                      12,225          10,964


PROPERTY, PLANT AND EQUIPMENT--AT COSTS:
  Land                                                                                1,967           1,962
  Galvanizing plants and equipment                                                   32,805          34,941
                                                                               ------------    ------------
                                                                                     34,772          36,903
  Less--allowance for depreciation                                                  (13,861)        (14,529)
  Construction in progress                                                              220             286
                                                                               ------------    ------------
           Total property, plant and equipment--net                                  21,131          22,660

GOODWILL--Net                                                                         3,389           3,389

OTHER ASSETS                                                                            369             354
                                                                               ------------    ------------
TOTAL ASSETS                                                                   $     37,114    $     37,367
                                                                               ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Current maturities of long-term obligations                                  $        604    $      1,408
  Current portion of bonds payable                                                      692             656
  Trade accounts payable                                                                582             480
  Accrued payroll and employee benefits                                                 717             623
  Other taxes                                                                           405             316
  Other accrued liabilities                                                             604             874
                                                                               ------------    ------------
           Total current liabilities                                                  3,604           4,357
                                                                               ------------    ------------

DEFERRED TAX LIABILITY--Net                                                             944             774

LONG-TERM OBLIGATIONS                                                                 7,347           6,768

BONDS PAYABLE                                                                         5,934           6,626

SUBORDINATED NOTES PAYABLE                                                              976             957
                                                                               ------------    ------------
           Total liabilities                                                         18,805          19,482
                                                                               ------------    ------------

COMMITMENTS AND CONTINGENCIES (NOTES 6 AND 7)

STOCKHOLDERS' EQUITY:
  Common stock--$.10 par value:
    Issued--8,209,925 shares in 2004 and 2003                                           819             819
    Additional paid-in capital                                                       17,252          17,343
    Retained earnings                                                                 5,899           5,496
    Other comprehensive income                                                           --               6
  Common shares in treasury at cost--1,412,913 in 2004 and 1,426,788 in 2003         (5,661)         (5,779)
                                                                               ------------    ------------
           Total stockholders' equity                                                18,309          17,885
                                                                               ------------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $     37,114    $     37,367
                                                                               ============    ============
</TABLE>

See notes to consolidated financial statements.

                                      FS-17
<PAGE>
NORTH AMERICAN GALVANIZING & COATINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002
(In thousands, except per share amounts)
================================================================================
<TABLE><CAPTION>

                                                                             2004            2003            2002
                                                                         ------------    ------------    ------------
<S>                                                                      <C>             <C>             <C>
SALES                                                                    $     35,822    $     33,200    $     38,178

COSTS AND EXPENSES:
  Cost of sales                                                                25,814          23,833          26,208
  Selling, general and administrative expenses                                  5,917           5,992           5,904
  Depreciation and amortization                                                 2,701           2,880           3,028
                                                                         ------------    ------------    ------------
           Total costs and expenses                                            34,432          32,705          35,140
                                                                         ------------    ------------    ------------

OPERATING INCOME                                                                1,390             495           3,038

INTEREST EXPENSE--Net                                                             764             654             872

OTHER INCOME                                                                      (25)             --              --
                                                                         ------------    ------------    ------------

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                      651            (159)          2,166

INCOME TAX EXPENSE                                                                248              23             851
                                                                         ------------    ------------    ------------

INCOME (LOSS) FROM CONTINUING OPERATIONS                                          403            (182)          1,315

LOSS FROM DISCONTINUED OPERATIONS--Net                                             --             (77)           (205)

LOSS ON WRITE-OFF OF ASSETS OF DISCONTINUED OPERATIONS--Net                        --            (754)             --
                                                                         ------------    ------------    ------------

NET INCOME (LOSS)                                                                 403          (1,013)          1,110

OTHER COMPREHENSIVE INCOME (LOSS):
  Unrealized holding gain on investment                                            12               6              --
  Reclassification adjustment for realized gain included in net income            (18)             --              --
                                                                         ------------    ------------    ------------
           Total other comprehensive income (loss)                                 (6)              6              --
                                                                         ------------    ------------    ------------

COMPREHENSIVE INCOME (LOSS)                                              $        397    $     (1,007)   $      1,110
                                                                         ============    ============    ============


NET INCOME (LOSS) PER COMMON SHARE:
  Continuing operations:
    Basic                                                                $       0.06    $      (0.03)   $       0.20
    Diluted                                                              $       0.05    $      (0.03)   $       0.18
  Discontinued operations:
    Basic                                                                          --    $      (0.12)   $      (0.03)
    Diluted                                                                        --    $      (0.12)   $      (0.03)
  Net income (loss)
    Basic                                                                $       0.06    $      (0.15)   $       0.17
    Diluted                                                              $       0.05    $      (0.15)   $       0.15
</TABLE>

See notes to consolidated financial statements.

                                      FS-18
<PAGE>
NORTH AMERICAN GALVANIZING & COATINGS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 2004
(In thousands, except per share amounts)
================================================================================


<TABLE><CAPTION>
                                               COMMON
                                                STOCK      ADDITIONAL                    OTHER
                                 SHARES       ($.10 PAR     PAID-IN       RETAINED    COMPREHENSIVE   TREASURY
                               OUTSTANDING      VALUE)      CAPITAL       EARNINGS       INCOME         STOCK         TOTAL
                               ----------    ----------    ----------    ----------    ----------    ----------    ----------
<S>                            <C>           <C>           <C>           <C>           <C>           <C>           <C>
BALANCE--January 1, 2002        6,680,825    $      819    $   17,464    $    5,399    $       --    $   (6,029)   $   17,653

  Net income                           --            --            --         1,110            --            --         1,110

  Treasury stock issued            56,094            --            --            --            --            65            65
                               ----------    ----------    ----------    ----------    ----------    ----------    ----------

BALANCE--January 1, 2003        6,736,919           819        17,464         6,509            --        (5,964)       18,828

  Net loss                             --            --            --        (1,013)           --            --        (1,013)

  Other comprehensive income           --            --            --            --             6            --             6

  Treasury stock issued            46,218            --          (121)           --            --           185            64
                               ----------    ----------    ----------    ----------    ----------    ----------    ----------

BALANCE--January 1, 2004        6,783,137           819        17,343         5,496             6        (5,779)       17,885

  Net income                           --            --            --           403            --            --           403

  Other comprehensive income           --            --            --            --            (6)           --            (6)

  Treasury stock purchased        (26,876)           --            --            --            --           (46)          (46)

  Treasury stock issued            40,751            --           (91)           --            --           164            73
                               ----------    ----------    ----------    ----------    ----------    ----------    ----------

BALANCE--December 31, 2004      6,797,012    $      819    $   17,252    $    5,899    $       --    $   (5,661)   $   18,309
                               ==========    ==========    ==========    ==========    ==========    ==========    ==========
</TABLE>

See notes to consolidated financial statements.

                                      FS-19
<PAGE>
NORTH AMERICAN GALVANIZING & COATINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2003
(In thousands, except per share amounts)
================================================================================
<TABLE><CAPTION>
                                                                 2004            2003            2002
                                                             ------------    ------------    ------------
<S>                                                          <C>             <C>             <C>
OPERATING ACTIVITIES:
  Net income (loss)                                          $        403    $     (1,013)   $      1,110
  Loss from discontinued operations                                    --           1,197              --
  Loss on disposal of assets                                           15               7               7
  Depreciation                                                      2,701           2,880           3,027
  Gain on sale of investment securities                               (25)             --              --
  Deferred income taxes                                               193            (715)            507
  Non-cash directors' fees                                             73              64              65
  Changes in assets and liabilities:
     Accounts receivable--net                                         (60)            (65)            292
     Inventories and other assets                                    (734)          1,299            (974)
     Accounts payable, accrued liabilities and other                   15            (523)            (63)
                                                             ------------    ------------    ------------
Net cash provided by continuing operations                          2,581           3,131           3,971

Net cash provided by discontinued operations                           --              96             200
                                                             ------------    ------------    ------------
           Cash provided by operating activities                    2,581           3,227           4,171

INVESTING ACTIVITIES:
  Proceeds from sale of fixed assets                                   43              --              --
  Investment proceeds (purchases)                                      92             (68)             --
  Capital expenditures                                             (1,230)           (901)         (5,880)
                                                             ------------    ------------    ------------
           Cash used in investing activities                       (1,095)           (969)         (5,880)

FINANCING ACTIVITIES:
  Purchase of treasury stock                                          (46)             --              --
  Payment on bonds                                                   (656)           (618)           (587)
  Payments on long-term obligations                               (18,747)        (15,947)        (16,794)
  Proceeds from long-term obligations                              18,541          14,360          18,240
                                                             ------------    ------------    ------------
           Cash provided by (used in) financing activities           (908)         (2,205)            859

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                      578              53            (850)

CASH AND CASH EQUIVALENTS:
  Beginning of year                                                    56               3             853
                                                             ------------    ------------    ------------

  End of year                                                $        634    $         56    $          3
                                                             ============    ============    ============

CASH PAID DURING THE YEAR FOR:
  Interest                                                   $        789    $        556    $        980
                                                             ============    ============    ============

  Income taxes                                               $        250    $         87    $        150
                                                             ============    ============    ============
</TABLE>

See notes to consolidated financial statements.

                                      FS-20
<PAGE>
NORTH AMERICAN GALVANIZING AND COATINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2004, 2003 AND 2002

DESCRIPTION OF BUSINESS

North American Galvanizing & Coatings, Inc. ("North American Galvanizing" or the
"Company") is engaged in hot dip galvanizing and coatings for corrosion
protection of fabricated steel products through its wholly owned subsidiary,
North American Galvanizing Company ("NAG"). NAG provides metals corrosion
protection with 11 regionally located galvanizing plants. The Company grants
unsecured credit to its customers on terms standard for this industry, typically
net 30 to 45 days.

(1)  DISCONTINUED OPERATIONS

The Company wrote-off its investment in the formerly idled Houston-Cunningham
galvanizing plant in the quarter ended June 30, 2003 as a discontinued
operation. In 2002, the Board of Directors authorized the Company to pursue
alternative uses for the Houston-Cunningham plant, which was temporarily idled
in late 2001. Management believed the carrying value of the plant and the
related galvanizing assets would be realized through future operations of the
plant. Accordingly, no write-down was recognized in 2002. However, in late April
2003, new events, combined with a further contraction of the galvanizing
business in the Houston market, resulted in the likely inability to maintain the
plant as part of the Company's continuing operations. The write-off resulted in
a net loss on the abandoned assets of $754,000, net of taxes of $443,000. The
net loss from operations for the Cunningham plant was $77,000 and $205,000, net
of taxes of $45,000 and $133,000 for 2003 and 2002, respectively.

(2)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary. All inter-company
transactions are eliminated in consolidation.

ESTIMATES--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 and disclosure of contingent assets and liabilities at
the balance sheet dates and the reported amounts of revenues and expenses for
each of the years. Actual results will be determined based on the outcome of
future events and could differ significantly from the estimates.

CASH AND CASH EQUIVALENTS--Cash and cash equivalents include interest bearing
deposits with original maturities of three months or less.

INVESTMENTS--The Company classifies its investments as available-for-sale and
records unrealized holding gains (losses) on investments as a separate component
of Stockholders' Equity as other comprehensive income. If the Company believes
that a decline in the fair value of a security is other than temporary, the cost
basis of such security is written down and the loss is reflected as a charge to
income. Investment income is recognized on the accrual method. Cost is
determined on the specific identification basis in computing realized gains and
losses on sales of investments.

                                     FS-21
<PAGE>

The Company held no investments at December 31, 2004. The Company's investments
at December 31, 2003 consisted of equity securities. The amortized cost,
unrealized holding gains and losses, and fair values of the Company's
available-for-sale equity securities at December 31, 2003 were as follows:

                                      GROSS         GROSS
                                   UNREALIZED    UNREALIZED
                                     HOLDING       HOLDING        FAIR
                        COST          GAINS        LOSSES         VALUE
                     ----------    ----------    ----------    ----------
Equity Securities    $   67,841    $    5,575    $       --    $   73,416
                     ==========    ==========    ==========    ==========

In the first quarter of 2004, the Company liquidated its investment in
securities and recorded a gain of $25,000.

INVENTORIES--Inventories consist of raw zinc "pigs," molten zinc in galvanizing
kettles and other chemicals and materials used in the galvanizing process.
Inventories are stated at the lower of cost or market with market value based on
estimated realizable value from the galvanizing process. Zinc cost is determined
on a last-in first-out ("LIFO") basis. Other inventories are valued primarily on
an average cost basis. Inventories consist of the following:

                                                  (DOLLARS IN THOUSANDS)
                                                    2004          2003
                                                 ----------    ----------
Zinc                                             $    5,435    $    5,215
Other                                                   258           193
                                                 ----------    ----------
                                                 $    5,693    $    5,408
                                                 ==========    ==========

Had the Company used first-in-first-out ("FIFO") basis for valuing its zinc
inventories, at December 31, 2004 and 2003 inventories would have been lower by
approximately $513,000 and $1,292,000, respectively. The Company's LIFO
inventories represented approximately 96% of total inventories at December 31,
2004 and 2003. Raw zinc replacement cost based on year-end market prices was
$5,640,000 and $4,263,000 at December 31, 2004 and 2003, respectively. In 2003,
inventory quantities were reduced resulting in liquidation of LIFO inventory
layers which increased the Company's net loss by $71,000.

GOODWILL--Goodwill represents the excess of purchase price over the fair value
of net assets acquired in business combinations. Goodwill and intangible assets
with an indefinite life are no longer amortized but instead are reviewed, at
least annually, for impairment. Management selected May 31 as the date of its
annual goodwill impairment test. Based upon the impairment test performed at May
31, 2004, management determined that goodwill was not impaired.

DEPRECIATION AND AMORTIZATION--Plant and equipment, including assets under
capital leases, are depreciated on the straight-line basis over their estimated
useful lives, generally at rates of 2% to 6% for buildings and 10% to 20% for
equipment, furnishings, and fixtures. In 2001 the Company adopted the units of
production method of depreciation, based on projected total tonnage to be
processed over the estimated life of the respective equipment, for new
galvanizing plants or for significant expansions of existing plants. During 2004
and 2003, the Company removed fully depreciated assets totaling $1,419,000 and
$3,027,000, respectively, from the accounting records.

                                     FS-22
<PAGE>

ENVIRONMENTAL EXPENDITURES--The Company expenses or capitalizes, where
appropriate, environmental expenditures that relate to current operations as
they are incurred. Such expenditures are expensed when they are attributable to
past operations and are not expected to contribute to current or future revenue
generation. The Company records liabilities when remediation or other
environmental assessment or clean-up efforts are probable and the cost can be
reasonably estimated.

LONG-LIVED ASSETS--Long-lived assets and certain intangibles to be held and used
or disposed of are reviewed for impairment on an annual basis or when events or
circumstances indicate that such impairment may have occurred. The Company has
determined that no impairment loss need be recognized for the years ended
December 31, 2004, 2003 or 2002.

SELF-INSURANCE--The Company is self-insured for workers' compensation and
certain health care claims for its active employees. The Company carries excess
insurance providing coverage for medical claims exceeding $60,000 and workers'
compensation claims exceeding $125,000 per occurrence, respectively. The
reserves for workers' compensation benefits and health care claims represent
estimates for reported claims and for claims incurred but not reported using
loss development factors. Such estimates are generally based on historical
trends and risk assessment methodologies; however, the actual results may vary
from these estimates since the evaluation of losses is inherently subjective and
susceptible to significant changing factors.

REVENUE RECOGNITION--The Company generated revenues by providing galvanizing and
other coating services to customers' products. Revenue is recognized when the
galvanizing and coating processes are completed. Freight billed to customers is
recorded as revenue.

DERIVATIVE FINANCIAL INSTRUMENTS--The Company has previously utilized commodity
collar contracts as derivative instruments which are intended to offset the
impact of potential fluctuations in the market price of zinc. The Company had no
derivative instruments that were required to be reported at fair value
outstanding at December 31, 2004 and 2003, and did not utilize derivatives
during the years ended December 31, 2004, 2003 or 2002, except for the zinc
forward purchase commitments, which are accounted for as normal purchases (see
Note 6).















                                     FS-23
<PAGE>

STOCK OPTIONS--The Company accounts for its stock option plans in accordance
with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees", under which no compensation cost has been recognized for stock
option awards. Had compensation cost for the Company's stock option plans been
determined according to the methodology of Statement of Financial Accounting
Standard No.123, ACCOUNTING FOR STOCK BASED COMPENSATION ("SFAS No. 123"), the
Company's pro forma net earnings (loss) and basic and diluted earnings (loss)
per share for 2004, 2003 and 2002, would have been as follows:

                                                  (Dollars in thousands,
                                                 except per share amounts)
                                                  Year Ended December 31
                                           ------------------------------------
                                             2004          2003          2002
                                           --------      --------      --------
Net income (loss)-as reported              $    403      $ (1,013)     $  1,110
Deduct-total stock-based employee
  compensation expense determined under
  fair value based methods-net of tax           (45)          (20)          (11)
Pro forma net income (loss)                     358        (1,033)        1,099
Earnings per share:
  Basic-as reported                        $   0.06      $  (0.15)     $   0.17
  Basic-pro forma                          $   0.05      $  (0.15)     $   0.16
  Diluted-as reported                      $   0.05      $  (0.15)     $   0.15
  Diluted-pro forma                        $   0.05      $  (0.15)     $   0.15

The fair value of options granted under the Company's stock option plans was
estimated using the Black-Scholes option-pricing model with the following
assumptions used:

                                                   Year Ended December 31
                                            -----------------------------------
                                              2004          2003         2002
                                            --------      --------     --------
Volatility                                      66 %          66 %         66 %
Discount rate                                    6.5%          4 %          5 %
Dividend yield                                   0 %           0 %          0 %
Fair value                                  $   1.46      $   0.86     $   0.68


In December 2004, the FASB issued SFAS No. 123(R), which is a revision of SFAS
No. 123. This revised statement establishes accounting standards for all
transactions in which an entity exchanges its equity instruments for goods and
services focusing primarily on accounting for transactions with employees and
carrying forward prior guidance for share-based payments for transactions with
non-employees.

SFAS No. 123(R) eliminates the intrinsic value measurement method of accounting
in APB Opinion 25 and generally requires measuring the cost of the employee
services received in exchange for an award of equity instruments based on the
fair value of the award on the date of the grant. The standard requires grant
date fair value to be estimated using either an option-pricing model which is
consistent with the terms of the award or a market observed price, if such a
price exists. Such costs must be recognized over the period during which an
employee is required to provide service in exchange for the award. The standard
also requires estimating the number of instruments that will ultimately be
issued, rather than accounting for forfeitures as they occur.

                                     FS-24
<PAGE>

The effective date of SFAS No. 123(R) is the first reporting period beginning
after June 15, 2005 and the Company expects to adopt SFAS No. 123(R) effective
July 1, 2005. SFAS No. 123(R) permits companies to adopt its requirements using
either a "modified prospective" method, or a "modified retrospective" method.
Under the "modified prospective" method, compensation cost is recognized in the
financial statements beginning with the effective date, based on the
requirements of SFAS No. 123(R) for all share-based payments granted after that
date, and based on the requirements of SFAS No. 123 for all unvested awards
granted prior to the effective date of SFAS No. 123(R). Under the "modified
retrospective" method, the requirements are the same as under the "modified
prospective" method, but also permits entities to restate financial statements
of previous periods based on pro forma disclosures made in accordance with SFAS
No. 123. The Company plans to adopt SFAS No. 123(R) under the modified
prospective method on July 1, 2005 and does not anticipate the adoption to have
a material effect on the consolidated financial statements of the Company.

INCOME TAXES--Net deferred income tax assets and liabilities on the consolidated
balance sheet reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes and the benefit of net operating loss
and other tax credit carry-forwards. Valuation allowances are established
against deferred tax assets to the extent management believes it is more likely
than not that the assets will not be realized. No valuation allowance was
considered necessary at December 31, 2004 and 2003.

(3)  LONG-TERM OBLIGATIONS

                                                        (Dollars in thousands)
                                                              December 31
                                                        ----------------------
                                                          2004          2003
                                                        --------      --------
         Revolving line of credit                       $  4,919      $  3,867
         Term loan                                         3,013         1,567
         Construction loan                                  --           2,722
         9.5% note due 2015                                   19            20
                                                        --------      --------

                                                           7,951         8,176

         Less current portion                               (604)       (1,408)
                                                        --------      --------

                                                        $  7,347      $  6,768
                                                        ========      ========

LONG TERM DEBT--In December 2004, the Company amended the three-year bank credit
agreement that was scheduled to expire in January 2005 and extended its maturity
to December 2007. Subject to borrowing base limitations, the amended agreement
provided (i) a $7,000,000 maximum revolving credit facility for working capital
and general corporate purposes and (ii) a $3,013,000 term loan that combined the
outstanding principal balances of a term loan and a construction term loan.

At December 31, 2004, the Company had additional borrowing capacity of
$1,281,000, net of outstanding irrevocable letters of credit, under the bank
revolving line of credit based on the borrowing base calculated under the
agreement. At December 31, 2004, the Company had outstanding irrevocable letters
of credit totaling $400,000 for future potential workers' compensation claims.

                                     FS-25
<PAGE>

Substantially all of the Company's accounts receivable, inventories, fixed
assets and the common stock of its subsidiary are pledged as collateral under
the agreement, and the credit agreement is secured by a full and unconditional
guaranty from NAG. Amounts borrowed under the agreement bear interest at the
prime rate of Bank One, Oklahoma or the LIBOR rate, at the option of the
Company, subject to a rate margin adjustment determined by the Company's
consolidated debt service ratio. In the event the Company fails to maintain a
consolidated debt service coverage ratio for any fiscal quarter of at least 1.25
to 1.00, the Applicable LIBOR Rate Margin will be increased to 5.75% and the
Applicable Prime Rate Margin will be increased to 3.00%. Thereafter, the
increased rate margin will remain in effect until such time as the Company has
maintained a consolidated debt service coverage ratio greater than or equal to
1.25 to 1.00 for a subsequent fiscal quarter.

In the event the Company fails to maintain a consolidated Capital Expenditures
Coverage Ratio for any fiscal quarter of at least 1.00 to 1.00, the increase in
the Applicable LIBOR Rate Margin ranges from 3.75% to 5.75%, and the increase in
the Applicable Prime Rate Margin ranges from 1.00% to 3.00%.

Amounts borrowed under the bank credit facilities bore interest ranging from
4.0% to 5.5% during the three years ended December 31, 2004, and an effective
rate of 5.5% at December 31, 2004 and 4.2% at December 31, 2003.

Term loan payments are based on 36 installments with monthly principal payments
of $59,540 plus interest, and the loan may be prepaid without penalty. The
revolving line of credit may be paid down without penalty, or additional funds
may be borrowed up to the revolver limit. Interest is subject to a rate margin
adjustment determined by the Company's consolidated debt service ratio.

The bank credit agreement requires the Company to maintain compliance with
covenant limits for current ratio, debt to tangible net worth ratio, debt
service coverage ratio and a capital expenditures ratio. At December 31, 2004
the Company was in compliance with all of the covenant limits and the actual
financial rations compare to the required rations, were as follows: Current
Ratio - Actual 1.42 versus minimum required of 1.0; Debt to Tangible Net Worth
Ratio - Actual 1.26 versus minimum required of 2.50; Debt Service Coverage Ratio
- Actual 1.89 versus minimum permitted of 1.25; Capital Expenditures Coverage
Ratio - 1.8 versus minimum required of 1.0.

Aggregate maturities of long-term debt of $7,951,000, exclusive of subordinated
notes and bonds are payable as follows: $604,000 (2005), $604,000 (2006),
$6,728,000 (2007), $1,000 (2008), $1,000 (2009) and $13,000 (thereafter).

In February 2005, the Company amended the three-year bank credit agreement that
was scheduled to expire in December 2007 and extended its maturity to February
28, 2008. Subject to borrowing base limitations, the amended agreement provides
(i) an $8,000,000 maximum revolving credit facility for working capital and
general corporate purposes and (ii) a $5,001,000 term loan that combined the
outstanding principal balance of the existing term loan with additional
financing for the purchase of assets of a galvanizing facility (see Note 16 to
Consolidated Financial Statements).

(4)  BONDS PAYABLE

During the first quarter of 2000, the Company issued $9,050,000 of Harris County
Industrial Development Corporation Adjustable Rate Industrial Development Bonds,
Series 2000 (the "Bonds"). The Bonds are senior to other debt of the Company.
All of the bond proceeds, which were held in trust by Bank One Trust Company,
N.A. ("Trustee"), were used by NAG for the purchase of land and construction of
a hot dip galvanizing plant in Harris County, Texas. The galvanizing plant was
completed and began operation in the first quarter of 2001. The principal amount
outstanding on these bonds was $6,626,250 at

                                     FS-26
<PAGE>

December 31, 2004. In accordance with the bond agreement, the Company is
obligated to make principal payments to a sinking fund on the following
schedule: 2005 $692,500; 2006 $731,250; 2007 $767,500; 2008 $806,250, 2009
$851,250 and 2010 to 2012 $2,777,500.

The Bonds bear interest at a variable rate that can be converted to a fixed rate
upon certain conditions outlined in the bond agreement. In September 2003, the
Reimbursement Agreement with the bank trustee was amended (a) to adjust the
variable interest rate on the Company's interest deposits from 5.25% to 3.5% on
the principal amount of Bonds until such time as the trustee determines that a
subsequent adjustment is warranted and (b) to permit the Company to withdraw
excess interest from the trustee's Interest Account on or about March 31, June
30, September 30 and December 31 of each year, commencing September 30, 2003. In
2004 the Company withdrew excess interest of $72,000 from the Interest Account
and applied the proceeds to pay-down the balance due in the bank letter of
credit securing the bonds. At December 31, 2004, the Company determined, in
accordance with the amended Reimbursement Agreement, that the trustee's interest
account held excess interest in the amount of $123,000, which the Company
recorded as a reduction of interest expense.

The Bonds are subject to annual sinking fund redemption payments, which were
$656,250 in 2004 and increases annually thereafter to a maximum redemption of
$960,000 on June 15, 2012. The Company makes monthly payments of principal and
interest of approximately $74,000 into the sinking fund. The final maturity date
of the Bonds is June 15, 2013. The Company has the option of early redemption of
the Bonds at par unless the bonds are converted to a fixed interest rate, in
which case they are redeemable at a premium during a period specified in the
bond agreement. The Company's obligation under the bond agreement is secured
through a letter of credit with a bank which must remain in effect as long as
any Bonds are outstanding. The letter of credit is collateralized by
substantially all the assets of the Company.

(5)  SUBORDINATED DEBT

In February 2001, the Company completed a $1,000,000 private placement of
unsecured subordinated debt. The Company utilized the proceeds to partially fund
construction of a galvanizing facility in St. Louis, Missouri. Participation in
the private placement was offered to accredited investors, which included the
Company's directors and eligible stockholders holding a minimum of 100,000
shares of common stock. The amount outstanding on these notes, net of discount,
was $976,000 and $957,000 at December 31, 2004 and 2003, respectively. The
notes, which mature February 17, 2006 and bear interest at 10% payable annually,
were issued with warrants to purchase 666,666 shares of common stock of the
Company. Terms of the warrants, which expire February 17, 2008, permit the
holder to purchase shares of the Company's common stock at any time prior to the
expiration date. The exercise price of $.856 per share reflects the fair value
of the Company's common stock at the time the warrants were issued, as
determined by an independent financial advisor.

(6)  COMMITMENTS

The Company leases its headquarters office, and certain manufacturing buildings
and equipment under non-cancelable operating leases. The Company also leases
certain facilities to third parties under non-cancelable operating leases. These
operating leases generally provide for renewal options and periodic rate
increases and are typically renewed in the normal course of business. Lease
expense was $686,000 in 2004, $673,000 in 2003 and $629,000 in 2002.

                                     FS-27
<PAGE>

Minimum annual rental commitments at December 31, 2004 are payable as follows:

                                                        (Dollars in thousands)
                                                           Operating Leases
                                                           ----------------

         2005                                                  $    833
         2006                                                       575
         2007                                                       475
         2008                                                       110
         2009                                                        96
         Thereafter                                                 282
                                                               --------
                                                               $  2,371
                                                               ========

The Company has commitments with domestic and foreign zinc producers to purchase
zinc used in its hot dip galvanizing operations. Commitments for the future
delivery of zinc either reflect rates then quoted on the London Metals Exchange
and are not subject to price adjustment. These zinc purchase commitments are
considered to be derivatives and are accounted for as normal purchases. At
December 31, 2004, the aggregate commitments for the procurement of zinc at
fixed prices were $4,017,000. The Company reviews these fixed price contracts
for losses using the same methodology employed to estimate the market value of
its zinc inventory.

(7)  CONTINGENCIES

NAG was notified in 1997 by the Illinois Environmental Protection Agency
("IEPA") that it was one of more than 50 potentially responsible parties
("PRPs") for cleanup of an abandoned site formerly owned by Sandoval Zinc
Company. Since then approximately 30 additional PRPs have been identified by the
IEPA.

A number of the PRP's (approximately 12 to 15) have agreed to work together and
with the IEPA on a voluntary basis. The Company has been and continues to
participate in this volunteer group. The group has retained consultants and
legal representatives familiar with the IEPA regulations. This volunteer group,
with its consultants, has cooperated with the IEPA in attempting to better
define the environmental issues associated with the Sandoval Zinc site. To that
extent, this volunteer group prepared and submitted to IEPA in August 2000 a
work plan. The purpose of this work plan is to attempt to define the extent of
environmental remediation that might be required, assess risks, and review
alternatives to addressing potential remediation. The IEPA has yet to respond to
this proposed work plan or suggest any other course of action, and there has
been no activity in regards to this issue during 2004. Therefore, the Company
has no basis for determining potential exposure and estimated remediation costs
at this time.

On August 30, 2004, the Company was informed by counsel for the Metropolitan
Water Reclamation District of Greater Chicago (the "Water District") that the
Water District had, on August 25, 2004 filed a Second Amended Complaint in the
United States District Court, Northern District of Illinois, Eastern Division,
naming North American Galvanizing & Coatings, Inc. (formerly known as Kinark
Corporation) as an added defendant. Counsel for the Water District also gave the
Company notice of the Water District's intent to file (or amend the Complaint to
include) a Citizens Suit under the Resource Compensation and Recovery Act
("RCRA") against North American Galvanizing & Coatings, Inc., pursuant to
Section 7002 of RCRA, 42 U.S.C. Section 6972. This Second Amended Complaint
seeks enforcement of the August 12, 2004 default judgment in the amount of
$1,810,463.34 against Lake River Corporation and Lake River Holding Company,
Inc. in connection with the operation of a storage terminal by Lake River
Corporation in violation of environmental laws. Lake River Corporation conducted
business as a subsidiary of the Company until June 30, 2000, at which time Lake
River Corporation was sold to Lake River Holding

                                     FS-28
<PAGE>

Company, Inc. and ceased to be a subsidiary of the Company. The Second Amended
Complaint asserts that prior to the sale of Lake River Corporation, the Company
directly operated the Lake River facility and, accordingly, seeks to have the
Court pierce the corporate veil of Lake River Corporation and enforce the
default judgment order of August 12, 2004 against the Company (North American
Galvanizing & Coatings, Inc.). The Company denies the assertions set forth in
the Water District's Complaint and on November 13, 2004 filed a partial motion
for dismissal of the Second Amended Complaint.

In December 2004, the Water District filed a Third Amended complaint in the
litigation, adding two claims: (1) a common law claim for nuisance; and (2) a
claim under the federal Resource Conservation and Recovery Act, in which the
Water District argues that the Company is responsible for conditions on the
plaintiff's property that present an "imminent and substantial endangerment to
human health and the environment." In January 2005 and March 2005, the Company
filed partial motions to dismiss plaintiff's third amended complaint, in the
United States District Court, Northern District of Illinois, Eastern Division.
The Court has not ruled on the Company's motions for dismissal, at this time. We
have denied any liability with respect to this claim and intend to vigorously
defend ourselves in this case. At this time, the Company has not determined the
amount of any liability that may result from this matter or whether such
liability, if any, would have a material adverse effect on our financial
condition, results of operations, or liquidity.

The Company is committed to complying with all federal, state and local
environmental laws and regulations and using its best management practices to
anticipate and satisfy future requirements. As is typical in the galvanizing
business, the Company will have additional environmental compliance costs
associated with past, present and future operations. Management is committed to
discovering and eliminating environmental issues as they arise. Because of
frequent changes in environmental technology, laws and regulations management
cannot reasonably quantify the Company's potential future costs in this area.

Various litigation arising in the ordinary course of business is pending against
the Company. Management believes that resolution of the Company's litigation and
environmental matters should not materially affect the Company's consolidated
financial position or liquidity. Should future developments cause the Company to
record an additional liability for environmental matters, litigation or customer
claims, the recording of such a liability could have a material impact on the
results of operations and cash flows for the period involved.

(8)  INCOME TAXES

The provision for income taxes consists of the following:

                                                (Dollars in thousands)
                                                Year Ended December 31
                                          -----------------------------------
                                            2004         2003          2002
                                          --------     --------      --------
         Current                          $     55     $    250      $    211
         Deferred                              193         (715)          507
                                          --------     --------      --------

         Income tax expense (benefit)     $    248     $   (465)     $    718
                                          ========     ========      ========

The 2003 income tax benefit of $465,000 includes $488,000 related to
discontinued operations net of $23,000 income tax expense in continuing
operations. Income tax expense for 2002 is net of a benefit of $133,000 related
to discontinued operations.

                                     FS-29
<PAGE>

The reconciliation of income taxes at the federal statutory rate to the
Company's effective tax rate is as follows:

                                                  (Dollars in thousands)
                                                  Year Ended December 31
                                            -----------------------------------
                                              2004         2003          2002
                                            --------     --------      --------
         Taxes at statutory rate            $    221     $   (502)     $    622
         State tax net of federal benefit         27          (59)           73
         Adjustment to the estimate of
           the deferred tax asset               --             70          --
         Other                                  --             26            23
                                            --------     --------      --------

         Taxes at effective tax rate        $    248     $   (465)     $    718
                                            ========     ========      ========

At December 31, 2004, alternative minimum tax credit carry-forwards of
approximately $224,000 are available as carry-forwards to future years.

The tax effects of significant items comprising the Company's net deferred tax
asset (liability) consist of the following:

                                                       (Dollars in thousands)
                                                            December 31
                                                       ----------------------
                                                         2004          2003
                                                       --------      --------
         Deferred tax assets:
           Net operating loss carryback                $    325      $    325
           Alternative minimum tax                          224           352
           Reserves not currently deductible                398           421
                                                       --------      --------

                                                            947         1,098
                                                       --------      --------
         Deferred tax liabilities:
           Differences between book and tax
             basis of property                            1,168         1,126
                                                       --------      --------

                                                       $   (221)     $    (28)
                                                       ========      ========
         As reported in the balance sheet:
           Deferred tax assets                         $    723      $    746
           Deferred tax liabilities                         944           774
                                                       --------      --------

                                                       $   (221)     $    (28)
                                                       ========      ========

                                     FS-30
<PAGE>

(9)  STOCK COMPENSATION PLANS

In 2004, stockholders approved the 2004 Incentive Stock Plan. The Plan provides
for the grant of stock options, stock grants, stock units and stock appreciation
rights to certain eligible employees and to outside directors. At December 31,
2004, there were1,250,000 shares of stock reserved for issuance under the 2004
Incentive Stock Plan, which includes 489,667 authorized but unissued shares
under the Company's 1996 Stock Option Plan. At December 31, 2003, 1,042,000
shares of the Company's common stock were reserved for issuance under the terms
of the Company's 1996 and 1988 Stock Option Plans for key employees and
directors. The plans generally provide options to purchase Company stock at fair
value as of the date the option is granted. Options generally become exercisable
in installments specified by the applicable plan and must be exercised within
ten years of the grant date.

                                                                     Weighted-
                                                                      Average
                                                        Number       Exercise
         Under Option                                  of Shares       Price

         Balance at January 1, 2002                     377,333      $   2.44
         Granted                                         75,000          1.26
                                                        -------      --------
         Balance at December 31, 2002                   452,333          2.24
         Granted                                         80,000          1.44
                                                        -------      --------
         Balance at December 31, 2003                   532,333          2.12
         Expired                                         (7,500)        (4.50)
         Granted                                         50,000          1.84
                                                        -------      --------

         Balance at December 31, 2004                   574,833      $   2.06
                                                        =======      ========

At December 31, 2004, 2003 and 2002, options for 464,833, 407,333 and 377,333
shares, respectively, were exercisable.

Information about stock options as of December 31, 2004:

                       Options Outstanding
--------------------------------------------------------------------------------
                                        Weighted-         Remaining   Weighted-
                                        Average          Contractual   Average
Range of                                 Number             Life      Exercise
Exercise Prices                        Outstanding        in Years      Price
---------------                        -----------        --------      -----

         $1.00 to $1.39                   163,333            7.0     $     1.19
         $1.50                             50,000            8.2           1.50
         $1.70 to $2.00                    65,000            8.2           1.88
         $2.50 to $3.00                   234,500            1.0           2.50
         $3.06 to $3.50                    62,000            2.4           3.30
                                         --------

                                          574,833
                                         ========

                                     FS-31
<PAGE>

                    Options Exercisable at December 31, 2004
                    ----------------------------------------

           Weighted-
            Average
            Exercise                                    Number
             Price                                    Exercisable
             -----                                    -----------
            $ 1.00                                        22,500
              1.05                                        30,000
              1.06                                         7,708
              1.25                                           625
              1.31                                        20,000
              1.35                                        30,000
              1.39                                        30,000
              1.50                                        12,500
              2.00                                        15,000
              2.50                                       233,000
              3.00                                         1,500
              3.06                                        15,000
              3.25                                        15,000
              3.38                                        15,000
              3.50                                        17,000
                                                        --------
                                                         464,833
                                                        ========

(10) EARNINGS PER SHARE RECONCILIATION

         For the Year                          Income (Loss)       Shares
         Ended December 31                     (Numerator)      (Denominator)
                                               ------------      ------------
         2002
         Net income                            $  1,110,000              --
         Basic EPS                                     --           6,717,088
         Effect of dilutive stock
             options and warrants                      --             671,996
                                               ------------      ------------
         Diluted EPS                           $  1,110,000         7,389,084
                                               ============      ============

         2003
         Net loss                              $ (1,013,000)             --
         Basic and diluted EPS                         --           6,762,587
                                               ------------      ------------
         Diluted EPS                           $ (1,013,000)        6,762,587
                                               ============      ============

         2004
         Net income                            $    403,000              --
         Basic EPS                                     --           6,790,351
         Effect of dilutive stock
           options and warrants                        --             700,844
                                               ------------      ------------
         Diluted EPS                           $    403,000         7,491,195
                                               ============      ============

                                     FS-32
<PAGE>

The Company had a net loss for the year ended December 31, 2003 and the effect
of including dilutive securities in the earnings per common share would have
been anti-dilutive. Accordingly, all options to purchase common shares were
excluded from the calculation of diluted loss per share for the year ended
December 31, 2003. The number of options excluded from the calculation of
diluted earnings per share due to the option price exceeding the share market
price are 311,500 and 319,000, at December 31, 2004 and 2002, respectively.

(11) EMPLOYEE BENEFIT PLAN

The Company offers a 401(k) defined contribution plan to its eligible employees.
Employees not covered by a bargaining contract become eligible to enroll in this
benefit plan after one year of service with the Company. Company contributions
to this benefit plan were $220,000 in 2004, $204,000 in 2003 and $233,000 in
2002. Assets of the defined contribution plan consisted of short-term
investments, intermediate bonds, long-term bonds and listed stocks.

(12) SHARE REPURCHASE PROGRAM

In August 1998, the Board of Directors authorized the Company to repurchase up
to $1,000,000 of its common stock in private or open market transactions. In
2004, the Company repurchased 26,876 shares at an average price per share of
$1.71 totaling $46,000, bringing the total number of shares repurchased through
December 31, 2004 to 132,197 at an average price of $1.77 per share totaling
$234,000. In 2004 and 2003, Directors of the Company could elect to receive
shares of the Company's common stock for up to all of their fee for board
service. Under this program, the Company issued 40,751 and 46,218 shares from
Treasury Stock in 2004 and 2003, respectively, in lieu of cash payments of
$73,000 and $64,000 respectively.

(13) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of financial instruments included in current assets and
liabilities approximates fair value. The fair value of the Company's long-term
debt is estimated to approximate carrying value based on the borrowing rates
currently available to the Company for loans with similar terms and average
maturities.

(14) UNION CONTRACTS

NAG's labor agreement with the United Steel Workers Union covering production
workers at its Tulsa galvanizing plants expired March 31, 2003. In October 2003,
the union employees ratified a new three-year labor agreement, effective
November 1, 2003. The new agreement re-defines eligibility for payment of
over-time, requires employee contributions for family coverage under the
Company's group medical insurance program and grandfathers vacation benefits for
certain long-term employees. The United Steel Workers Union represents the labor
force at the galvanizing business purchased in Canton, Ohio in February 2005.
NAGalv-Ohio, Inc .has not assumed the existing labor agreement and has
implemented wage and benefit programs similar to those at the Company's other
galvanizing facilities.

(15) SEGMENT DISCLOSURES

The Company's sole business is hot dip galvanizing and coatings, which is
conducted through its wholly owned subsidiary, North American Galvanizing
Company.

                                     FS-33
<PAGE>

(16) SUBSEQUENT EVENT--BUSINESS ACQUISITION

On February 28, 2005, NAGalv-Ohio, Inc., an indirect subsidiary of the Company,
purchased the hot-dip galvanizing assets of a galvanizing facility located in
Canton, Ohio for cash of $3,641,000. The transaction was structured as an asset
purchase, pursuant to an Asset Purchase Agreement dated February 28, 2005 by and
between NAGalv-Ohio, Inc. and the privately owned Gregory Industries, Inc. for
all of the plant, property and equipment of Gregory Industries' galvanizing
operation. Sales for the Canton galvanizing operation for its most recent fiscal
year ended May 28, 2004 were approximately $7.0 million. The results of the
purchased galvanizing business will be included in the Company's financial
statements from the date of acquisition. The allocation of the purchase price
has not yet been completed.
































                                     FS-34
<PAGE>

QUARTERLY RESULTS (UNAUDITED)

Quarterly results of operations for the years ended December 31, 2004 and 2003
were as follows:

<TABLE><CAPTION>
                                                     (Dollars in thousands except per share amounts)
                                                                           2004
                                             ---------------------------------------------------------------
                                              Mar 31        Jun 30        Sep 30       Dec 31        Total
                                             --------      --------      --------     --------      --------
<S>                                          <C>           <C>           <C>          <C>           <C>
Sales                                        $  8,558      $  9,333      $  9,348     $  8,583      $ 35,822

Gross Profit                                    2,553         2,698         2,623        2,134        10,008

Net Income (Loss)                            $    210      $    106      $    229     $   (142)     $    403
                                             ========      ========      ========     ========      ========
Income (Loss) Per Common Share
  Basic                                      $   0.03      $   0.02      $   0.03     $  (0.02)     $   0.06
                                             ========      ========      ========     ========      ========
  Diluted                                    $   0.03      $   0.01      $   0.03     $  (0.02)     $   0.05
                                             ========      ========      ========     ========      ========

                                                     (Dollars in thousands except per share amounts)
                                                                           2003
                                             ---------------------------------------------------------------
                                              Mar 31        Jun 30        Sep 30       Dec 31        Total
                                             --------      --------      --------     --------      --------
Sales                                        $  8,040      $  8,398      $  8,516     $  8,246      $ 33,200

Gross Profit                                    2,038         2,563         2,394        2,372         9,367

Income (loss) from continuing operations         (286)           73            90          (59)         (182)

Loss from discontinued operations                 (41)         (790)         --           --            (831)

Net Income (Loss)                            $   (327)     $   (717)     $     90     $    (59)     $ (1,013)
                                             ========      ========      ========     ========      ========

Income (Loss) Per Common Share
Continuing Operations:
  Basic and Diluted                          $  (0.04)     $   0.01      $   0.01     $  (0.01)     $  (0.03)
Discontinued Operations:
  Basic and Diluted                              --           (0.12)         --           --           (0.12)
                                             --------      --------      --------     --------      --------
Net Income (Loss):
  Basic and Diluted                          $  (0.04)     $  (0.11)     $   0.01     $  (0.01)     $  (0.15)
                                             ========      ========      ========     ========      ========
</TABLE>

The Company typically experiences increased galvanizing activity and sales in
the second and third quarters due to increased construction activity in those
periods. Changes in gross profit and gross profit margin reflect sales volume,
as well as the impact of fixed costs in the Company's cost structure and also
product mix.

                                     FS-35
<PAGE>

SELECTED FINANCIAL HIGHLIGHTS

The following is a summary of selected financial data of the Company:

<TABLE><CAPTION>
                                                     (Dollars in thousands except per share amounts)
For the Years Ended December 31,               2004          2003*         2002**       2001          2000
                                             --------      --------      --------     --------      --------
<S>                                          <C>           <C>           <C>          <C>           <C>
Sales                                        $ 35,822      $ 33,200      $ 38,178     $ 35,039      $ 33,955

Operating Income                             $  1,390      $    495      $  3,038     $  1,990      $  1,605
  Percent of sales                              3.9 %         1.5 %         8.0 %        5.7 %         4.8 %

Net Income (Loss)                            $    403      $ (1,013)     $  1,110     $    289      $ (1,240)

Basic Earnings (Loss) per common share       $   0.06      $  (0.15)     $   0.17     $   0.04      $  (0.19)
Diluted Earnings (Loss) per common share     $   0.05      $  (0.15)     $   0.15     $   0.04      $  (0.19)

Capital Expenditures                         $  1,230      $    901      $  5,880     $  3,297      $  9,463

Depreciation and Amortization                $  2,701      $  2,880      $  3,027     $  3,181      $  2,658

Weighted Average Shares Outstanding ***      7,491,195     7,437,789     7,389,084    7,365,638     6,712,212


At December 31,                                2004          2003          2002         2001          2000
                                             --------      --------      --------     --------      --------
Working Capital                              $  8,621      $  6,607      $  7,032     $  7,606      $  7,639

Total Assets                                 $ 37,114      $ 37,367      $ 41,431     $ 39,092      $ 40,676

Long-Term Obligations                        $ 14,257      $ 14,351      $ 16,700     $ 16,178      $ 17,907

Stockholders' Equity                         $ 18,309      $ 17,885      $ 18,828     $ 17,653      $ 17,313

Book Value Per Share                         $   2.69      $   2.64      $   2.79     $   2.64      $   2.58

Common Shares Outstanding                    6,797,012     6,783,137     6,736,919    6,680,825     6,712,209
</TABLE>

*    All amounts for all years presented prior to 2003 have been restated to
     reflect discontinued operations.

**   On January 1, 2002, the Company adopted SFAS 142 "Goodwill and Other
     Intangible Assets" and ceased amortizing goodwill. In each of the two years
     ended December 31, 2001, the Company recorded goodwill amortization of
     approximately $188,000.

***  Weighted average shares outstanding include the dilutive effect of stock
     options and warrants, if applicable.

                                     FS-36