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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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(Mark One)

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



FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004



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



FOR THE TRANSITION PERIOD FROM N/A TO N/A



Commission File Number 000 - 25161



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MODTECH HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 33  0825386                        
|(State or other jurisdiction of Incorporation or organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|2830 Barrett Avenue, Perris, CA                                |  | 92571                               
|(Address of principal executive office)                        |  | (Zip Code)                          



(951) 943-4014

(Registrants telephone number, including area code)



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



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



As of November 5, 2004, there were 14,120,382 of the Registrants Common Stock outstanding.



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MODTECH HOLDINGS, INC.



FORM 10-Q



FOR THE QUARTER ENDED SEPTEMBER 30, 2004



PART I. FINANCIAL INFORMATION



Item 1. Financial Statements



The condensed consolidated financial statements included herein have been prepared by Modtech Holdings, Inc. and subsidiaries, hereafter referred to as
Modtech, we, or our, the Company), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information normally included in consolidated financial
statements prepared in accordance with accounting principles generally accepted in the United States of America has been omitted pursuant to such rules and regulations. However, we believe that the condensed consolidated financial statements,
including the disclosures herein, are adequate to make the information presented not misleading. The results of operations for the three months and nine months ended September 30, 2003 and 2004 are not necessarily indicative of the results to be
expected for the full fiscal years. The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31,
2003 as filed with the Securities and Exchange Commission.



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MODTECH HOLDINGS, INC.



Condensed Consolidated Balance Sheets



(Unaudited)



|                                                                                                                                      |  |                  |             |                   |   |            
|------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------- | ----------- | ----------------- | - | -----------
|                                                                                                                                      |  | December 31,2003 |             | September 30,2004
|Assets                                                                                                                                |  |                  |             |                   |   |            
|Current assets:                                                                                                                       |  |                  |             |                   |   |            
|Cash and cash equivalents                                                                                                             |  | $                | 1,122,000   |                   | $ | 2,353,000  
|Contracts receivable, net, including costs in excess of billings of $9,535,000 and $17,760,000 in 2003 and 2004, respectively         |  |                  | 36,960,000  |                   |   | 58,840,000 
|Inventories                                                                                                                           |  |                  | 6,841,000   |                   |   | 14,665,000 
|Due from affiliates                                                                                                                   |  |                  | 1,867,000   |                   |   |           
|Deferred tax assets                                                                                                                   |  |                  | 2,875,000   |                   |   | 2,875,000  
|Other current assets                                                                                                                  |  |                  | 3,752,000   |                   |   | 1,697,000  
|                                                                                                                                      |  |                  |             |                   |   |            
|Total current assets                                                                                                                  |  |                  | 53,417,000  |                   |   | 80,430,000 
|                                                                                                                                      |  |                  |             |                   |   |            
|Property and equipment, net                                                                                                           |  |                  | 17,397,000  |                   |   | 15,715,000 
|                                                                                                                                      |  |                 
|Other assets                                                                                                                          |  |                  |             |                   |   |            
|Goodwill                                                                                                                              |  |                  | 71,903,000  |                   |   | 71,903,000 
|Covenants not to compete, net                                                                                                         |  |                  | 58,000      |                   |   | 35,000     
|Debt issuance costs, net                                                                                                              |  |                  | 969,000     |                   |   | 724,000    
|Deferred tax asset  non-current                                                                                                      |  |                  | 111,000     |                   |   | 111,000    
|Other assets                                                                                                                          |  |                  | 1,191,000   |                   |   | 1,374,000  
|                                                                                                                                      |  |                  |             |                   |   |            
|Total assets                                                                                                                          |  | $                | 145,046,000 |                   | $ | 170,292,000
|                                                                                                                                      |  |                  |             |                   |   |            
|Liabilities and Shareholders Equity                                                                                                  |  |                  |             |                   |   |            
|Current liabilities:                                                                                                                  |  |                  |             |                   |   |            
|Accounts payable and accrued liabilities                                                                                              |  | $                | 14,720,000  |                   | $ | 35,884,000 
|Billings in excess of costs                                                                                                           |  |                  | 3,817,000   |                   |   | 4,982,000  
|Current revolving credit line                                                                                                         |  |                  | 7,400,000   |                   |   | 22,900,000 
|Current maturities of long-term debt                                                                                                  |  |                  | 6,000,000   |                   |   | 5,750,000  
|                                                                                                                                      |  |                  |             |                   |   |            
|Total current liabilities                                                                                                             |  |                  | 31,937,000  |                   |   | 69,516,000 
|                                                                                                                                      |  |                 
|Long-term debt, excluding current portion                                                                                             |  |                  | 6,000,000   |                   |   |           
|                                                                                                                                      |  |                  |             |                   |   |            
|Total liabilities                                                                                                                     |  |                  | 37,937,000  |                   |   | 69,516,000 
|                                                                                                                                      |  |                  |             |                   |   |            
|Shareholders equity:                                                                                                                 |  |                  |             |                   |   |            
|Common stock, $.01 par. Authorized 25,000,000 shares; issued and outstanding 13,726,664 and 13,850,855 in 2003 and 2004,
respectively |  |                  | 137,000     |                   |   | 139,000    
|Additional paid-in capital                                                                                                            |  |                  | 79,262,000  |                   |   | 79,729,000 
|Retained earnings                                                                                                                     |  |                  | 27,710,000  |                   |   | 20,908,000 
|                                                                                                                                      |  |                  |             |                   |   |            
|Total shareholders equity                                                                                                            |  |                  | 107,109,000 |                   |   | 100,776,000
|                                                                                                                                      |  |                  |             |                   |   |            
|                                                                                                                                      |  | $                | 145,046,000 |                   | $ | 170,292,000
|                                                                                                                                      |  |                  |             |                   |   |            



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



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MODTECH HOLDINGS, INC.



Condensed Consolidated Statements of Operations



(Unaudited)



|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|---------------------------------------------------- |  | ------------------------------- | ---------- | - | ------------------------------- | - | ---------- | ---- |  | - | ----------- | - |  | - | ----------- | -
|                                                     |  | Three Months EndedSeptember 30, |            |   | Nine Months Ended September 30, |  
|                                                     |  | 2003                            |            |   | 2004                            |   |            | 2003 |  |   | 2004        |  
|Net sales                                            |  | $                               | 50,729,000 |   |                                 | $ | 55,950,000 |      |  | $ | 136,727,000 |   |  | $ | 139,987,000 |  
|Cost of goods sold                                   |  |                                 | 44,719,000 |   |                                 |   | 58,973,000 |      |  |   | 121,731,000 |   |  |   | 139,694,000 |  
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Gross profit (loss)                                  |  |                                 | 6,010,000  |   |                                 |   | (3,023,000 | )    |  |   | 14,996,000  |   |  |   | 293,000     |  
|                                                     |  |                                 |            |  
|Selling, general, and administrative expenses        |  |                                 | 1,847,000  |   |                                 |   | 6,383,000  |      |  |   | 5,757,000   |   |  |   | 10,969,000  |  
|Covenant amortization                                |  |                                 | 6,000      |   |                                 |   | 6,000      |      |  |   | 69,000      |   |  |   | 23,000      |  
|Gain on sale of property and equipment               |  |                                 |           |   |                                 |   | (137,000   | )    |  |   |            |   |  |   | (757,000    | )
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Income (loss) from operations                        |  |                                 | 4,157,000  |   |                                 |   | (9,275,000 | )    |  |   | 9,170,000   |   |  |   | (9,942,000  | )
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Other income (expense):                              |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Interest expense, net                                |  |                                 | (387,000   | ) |                                 |   | (464,000   | )    |  |   | (1,090,000  | ) |  |   | (1,448,000  | )
|Other, net                                           |  |                                 | 7,000      |   |                                 |   | 16,000     |      |  |   | 21,000      |   |  |   | 43,000      |  
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|                                                     |  |                                 | (380,000   | ) |                                 |   | (448,000   | )    |  |   | (1,069,000  | ) |  |   | (1,405,000  | )
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Income (loss) before income taxes                    |  |                                 | 3,777,000  |   |                                 |   | (9,723,000 | )    |  |   | 8,102,000   |   |  |   | (11,347,000 | )
|                                                     |  |                                 |            |  
|Income tax expense (benefit)                         |  |                                 | 1,586,000  |   |                                 |   | (4,084,000 | )    |  |   | 3,403,000   |   |  |   | (4,766,000  | )
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Net income (loss)                                    |  |                                 | 2,191,000  |   |                                 |   | (5,639,000 | )    |  |   | 4,699,000   |   |  |   | (6,581,000  | )
|                                                     |  |                                 |            |  
|Series A Preferred stock dividend                    |  |                                 |           |   |                                 |   |           |      |  |   | 7,000       |   |  |   |            |  
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Net income (loss) applicable for common stockholders |  | $                               | 2,191,000  |   |                                 | $ | (5,639,000 | )    |  | $ | 4,692,000   |   |  | $ | (6,581,000  | )
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Basic earnings (loss) per common share               |  | $                               | 0.16       |   |                                 | $ | (0.41      | )    |  | $ | 0.34        |   |  | $ | (0.48       | )
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Basic weighted-average shares outstanding            |  |                                 | 13,727,000 |   |                                 |   | 13,851,000 |      |  |   | 13,674,000  |   |  |   | 13,812,000  |  
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Diluted earnings (loss) per common share             |  | $                               | 0.15       |   |                                 | $ | (0.41      | )    |  | $ | 0.33        |   |  | $ | (0.48       | )
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  
|Diluted weighted-average shares outstanding          |  |                                 | 14,261,000 |   |                                 |   | 13,851,000 |      |  |   | 14,285,000  |   |  |   | 13,812,000  |  
|                                                     |  |                                 |            |   |                                 |   |            |      |  |   |             |   |  |   |             |  



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





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MODTECH HOLDINGS, INC.



Condensed Consolidated Statements of Cash Flows



(Unaudited)



|                                                                                                   |  |                                 |            |   |      |   |             |  
|-------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ---- | - | ----------- | -
|                                                                                                   |  | Nine Months Ended September 30, |           
|                                                                                                   |  | 2003                            |            |   | 2004 |  
|Cash flows from operating activities:                                                              |  |                                 |            |   |      |   |             |  
|Net income (loss)                                                                                  |  | $                               | 4,699,000  |   |      | $ | (6,581,000  | )
|Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |  |                                 |            |   |      |   |             |  
|Depreciation and amortization                                                                      |  |                                 | 1,576,000  |   |      |   | 1,748,000   |  
|Loss (gain) on sale of property and equipment                                                      |  |                                 | 2,000      |   |      |   | (757,000    | )
|(Increase) decrease in assets:                                                                     |  |                                 |            |   |      |   |             |  
|Contracts receivable                                                                               |  |                                 | (911,000   | ) |      |   | (21,880,000 | )
|Inventories                                                                                        |  |                                 | (1,408,000 | ) |      |   | (7,824,000  | )
|Due from affiliates                                                                                |  |                                 | (1,462,000 | ) |      |   | 1,867,000   |  
|Other current and noncurrent assets                                                                |  |                                 | (1,270,000 | ) |      |   | 1,872,000   |  
|Increase in liabilities:                                                                           |  |                                 |            |   |      |   |             |  
|Accounts payable and accrued liabilities                                                           |  |                                 | 8,083,000  |   |      |   | 21,436,000  |  
|Billings in excess of costs                                                                        |  |                                 | 1,497,000  |   |      |   | 1,165,000   |  
|                                                                                                   |  |                                 |            |   |      |   |             |  
|Net cash (used in) provided by operating activities                                                |  |                                 | 10,806,000 |   |      |   | (8,954,000  | )
|                                                                                                   |  |                                 |            |   |      |   |             |  
|Cash flows from investing activities:                                                              |  |                                 |            |   |      |   |             |  
|Proceeds from sale of property and equipment                                                       |  |                                 | 26,000     |   |      |   | 2,405,000   |  
|Purchase of property and equipment                                                                 |  |                                 | (4,122,000 | ) |      |   | (1,211,000  | )
|                                                                                                   |  |                                 |            |   |      |   |             |  
|Net cash (used in) provided by investing activities                                                |  |                                 | (4,096,000 | ) |      |   | 1,194,000   |  
|                                                                                                   |  |                                 |            |   |      |   |             |  
|Cash flows from financing activities:                                                              |  |                                 |            |   |      |   |             |  
|Net principal borrowings under revolving credit line                                               |  |                                 | 200,000    |   |      |   | 15,500,000  |  
|Principal payments on long-term debt                                                               |  |                                 | (5,250,000 | ) |      |   | (6,250,000  | )
|Payment of debt issuance costs                                                                     |  |                                 | (113,000   | ) |      |   | (235,000    | )
|Series A dividend payment                                                                          |  |                                 |           |   |      |   | (221,000    | )
|Proceeds from exercise of stock options                                                            |  |                                 | 202,000    |   |      |   | 197,000     |  
|                                                                                                   |  |                                 |            |   |      |   |             |  
|Net cash (used in) provided by financing activities                                                |  |                                 | (4,961,000 | ) |      |   | 8,991,000   |  
|                                                                                                   |  |                                 |            |   |      |   |             |  
|Net increase in cash and cash equivalents                                                          |  |                                 | 1,749,000  |   |      |   | 1,231,000   |  
|                                                                                                   |  |                                
|Cash and cash equivalents at beginning of period                                                   |  |                                 | 213,000    |   |      |   | 1,122,000   |  
|                                                                                                   |  |                                 |            |   |      |   |             |  
|Cash and cash equivalents at end of period                                                         |  | $                               | 1,962,000  |   |      | $ | 2,353,000   |  
|                                                                                                   |  |                                 |            |   |      |   |             |  



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



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MODTECH HOLDINGS, INC.



Notes to Condensed Consolidated Financial Statements



September 30, 2004

1) Basis of
Presentation



In the opinion of management, the condensed
consolidated financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position and results of operations as of and for the periods presented.



The results of operations for the three and nine months ended September 30,
2003 and 2004 are not necessarily indicative of the results to be expected for the full fiscal years.



2) Inventories



Inventories
consist of the following:



|                |  |                   |           |                    |   |           
|--------------- |  | ----------------- | --------- | ------------------ | - | ----------
|                |  | December 31, 2003 |           | September 30, 2004
|Raw materials   |  | $                 | 5,614,000 |                    | $ | 12,696,000
|Work in process |  |                   | 1,227,000 |                    |   | 1,969,000 
|                |  |                   |           |                    |   |           
|                |  | $                 | 6,841,000 |                    | $ | 14,665,000
|                |  |                   |           |                    |   |           



Raw materials at
September 30, 2004 include approximately $4.2 million purchased in 2004 which will be used over the next 4-6 months.



3) Earnings (Loss) Per Share



The following table illustrates the calculation of basic and diluted earnings (loss) per common share:



|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|-------------------------------------------------- |  | -------------------------------- | ---------- | ---- | ------------------------------- | ---------- | ---- |  | ---- | ---------- |  | - | ---------- | -
|                                                   |  | Three Months Ended September 30, |            |      | Nine Months Ended September 30, |           
|                                                   |  | 2003                             |            | 2004 |                                 |            | 2003 |  | 2004 |           
|Basic                                              |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Net income (loss)                                  |  | $                                | 2,191,000  |      | $                               | (5,639,000 | )    |  | $    | 4,699,000  |  | $ | (6,581,000 | )
|Dividends on preferred stock                       |  |                                  |           |      |                                 |           |      |  |      | 7,000      |  |   |           |  
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Net income (loss) available to common stockholders |  | $                                | 2,191,000  |      | $                               | (5,639,000 | )    |  | $    | 4,692,000  |  | $ | (6,581,000 | )
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Basic weighted-average common shares outstanding   |  |                                  | 13,727,000 |      |                                 | 13,851,000 |      |  |      | 13,674,000 |  |   | 13,812,000 |  
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Basic earnings (loss) per common share             |  | $                                | 0.16       |      | $                               | (0.41      | )    |  | $    | 0.34       |  | $ | (0.48      | )
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Diluted                                            |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Net income (loss)                                  |  | $                                | 2,191,000  |      | $                               | (5,639,000 | )    |  | $    | 4,699,000  |  | $ | (6,581,000 | )
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Weighted-average common shares outstanding         |  |                                  | 13,727,000 |      |                                 | 13,851,000 |      |  |      | 13,674,000 |  |   | 13,812,000 |  
|Add:                                               |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Conversion of preferred stock                      |  |                                  |           |      |                                 |           |      |  |      | 35,000     |  |   |           |  
|Exercise of stock options                          |  |                                  | 534,000    |      |                                 |           |      |  |      | 521,000    |  |   |           |  
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Diluted weighted-average shares outstanding        |  |                                  | 14,261,000 |      |                                 | 13,851,000 |      |  |      | 14,285,000 |  |   | 13,812,000 |  
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  
|Diluted earnings (loss) per common share           |  | $                                | 0.15       |      | $                               | (0.41      | )    |  | $    | 0.33       |  | $ | (0.48      | )
|                                                   |  |                                  |            |      |                                 |            |      |  |      |            |  |   |            |  



---

Options to purchase 1,101,000 and 1,088,000 shares of common stock were outstanding during the three and
nine months ended September 30, 2003, and options to purchase 1,485,000 and 1,483,000 shares of common stock were outstanding during the three and nine months ended September 30, 2004, respectively, but were not included in the computation of
diluted earnings (loss) per share because the option exercise price was greater than the average market price of the common shares and therefore, the effect would be anti-dilutive. In addition, the three and nine months ended September 30, 2004 had
a loss and therefore diluted earnings per share are equal to basic earnings per share.



4) Debt



Modtech has a $42.0 million credit facility,
of which $30.0 million represents a revolving loan commitment. The credit facility is secured by all of our assets, as well as our stock ownership in its subsidiaries. The credit facility expires in December 2006. On September 30, 2004, $22.9
million was outstanding under the revolving loan commitment with an additional $7.0 in stand-by letters-of-credit. The credit facility in place contains various covenants.



Due to the operating loss during the three months ended September 30, 2004 we were not in compliance with certain covenants
as of September 30, 2004. Compliance with certain covenants has been waived until year-end, but certain other covenants including earnings as measured by EBITDA, current ratio and net worth, were violated due to the loss incurred during the three
months ended September 30, 2004 and these covenant violations have not been waived. Due to these covenant violation, Modtech has reclassified $2,750,000 in long-term debt to current debt.



Management is in discussions regarding debt restructuring with several
lenders, including the current bank group. We believe that any restructuring, if required, will be orderly and will not have a negative impact on our continuing operations, but there is no assurance that we will be successful in restructuring our
debt. There can be no assurance that Modtech will be able to improve its cash flow and operating results to improve our financial condition, but we are committed to take all feasible actions directed toward achieving these goals.



Please see footnote 7 for further disclosure regarding liquidity.



5) Goodwill and Intangible Assets



The changes in the carrying amount of goodwill are as follows:



|                                                                |  |   |           
|--------------------------------------------------------------- |  | - | ----------
|Balance as of December 31, 2003                                 |  | $ | 71,903,000
|Goodwill acquired during nine months ended September 30, 2004   |  |   |          
|Impairment loss during the nine months ended September 30, 2004 |  |   |          
|                                                                |  |   |           
|Balance as of September 30, 2004                                |  | $ | 71,903,000
|                                                                |  |   |           



6) Stock Options Plans



Modtech applies the intrinsic-value-based method of accounting prescribed by
Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations to account for its fixed-plan stock options. Under this method, compensation expense is recorded on the date of grant
only if the current market price of the underlying stock exceeded the exercise price. FASB Statement No. 123, Accounting for Stock-Based Compensation  as amended, established accounting and disclosure requirements using a
fair-value-based method of accounting for stock-based employee compensation plans. As permitted by existing accounting standards, Modtech has elected to continue to apply the intrinsic-value-based method of accounting described above, and has
adopted only the disclosure requirements of Statement 123, as amended. The following table illustrates the effect on net income (loss) if the fair-value-based method had been applied to all outstanding and unvested awards in each period.



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|                                                                                             |  |                                  |           |      |                                 |            |      |  |      |           |  |   |            |  
|-------------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | ---- | ------------------------------- | ---------- | ---- |  | ---- | --------- |  | - | ---------- | -
|                                                                                             |  | Three Months Ended September 30, |           |      | Nine Months Ended September 30, |           
|                                                                                             |  | 2003                             |           | 2004 |                                 |            | 2003 |  | 2004 |          
|Net income (loss)                                                                            |  |                                  |           |      |                                 |            |      |  |      |           |  |   |            |  
|As reported                                                                                  |  | $                                | 2,191,000 |      | $                               | (5,639,000 | )    |  | $    | 4,699,000 |  | $ | (6,581,000 | )
|Deduct stock-based compensation expense determined under fair-value based method, net of tax |  | $                                | 202,000   |      | $                               | 96,000     |      |  | $    | 377,000   |  | $ | 314,000    |  
|                                                                                             |  |                                  |           |     
|Pro forma                                                                                    |  | $                                | 1,989,000 |      | $                               | (5,735,000 | )    |  | $    | 4,322,000 |  | $ | (6,895,000 | )
|                                                                                             |  |                                  |           |     
|Basic earnings (loss) per share                                                              |  |                                  |           |      |                                 |            |      |  |      |           |  |   |            |  
|As reported                                                                                  |  | $                                | 0.16      |      | $                               | (0.41      | )    |  | $    | 0.34      |  | $ | (0.48      | )
|Pro forma                                                                                    |  | $                                | 0.14      |      | $                               | (0.41      | )    |  | $    | 0.32      |  | $ | (0.50      | )
|Diluted earnings (loss) per share                                                            |  |                                  |           |      |                                 |            |      |  |      |           |  |   |            |  
|As reported                                                                                  |  | $                                | 0.15      |      | $                               | (0.41      | )    |  | $    | 0.33      |  | $ | (0.48      | )
|Pro forma                                                                                    |  | $                                | 0.14      |      | $                               | (0.41      | )    |  | $    | 0.30      |  | $ | (0.50      | )



There were no stock
options granted during the three months ended September 30, 2003 and 2004. The per share weighted-average fair value of stock options granted during the nine months ended September 30, 2003 and 2004 were $5.00 and $3.84, respectively. The fair value
of stock options on the date of grant were estimated using the Black Scholes option-pricing model with the following weighted-average assumptions:



|                                |  |                                 |  |                                |  |         |   |  |         |  
|------------------------------- |  | ------------------------------- |  | ------------------------------ |  | ------- | - |  | ------- | -
|                                |  | Three Months EndedSeptember 30, |  | Nine Months EndedSeptember 30, | 
|                                |  | 2003                            |  | 2004                           |  | 2003    |   |  | 2004    |  
|Expected dividend yield         |  | n/a                             |  | n/a                            |  | 0       | % |  | 0       | %
|Average risk-free interest rate |  | n/a                             |  | n/a                            |  | 2.6     | % |  | 3.2     | %
|Volatility factor               |  | n/a                             |  | n/a                            |  | 65.54   | % |  | 57.7    | %
|Expected life                   |  | n/a                             |  | n/a                            |  | 4 years |   |  | 4 years |  
|                                |  |                                 |  |                                |  |         |   |  |         |  



7) Liquidity



Modtech has experienced material operating losses and negative operating cash flows during
the three months ended September 30, 2004. Modtechs ability to fund its reasonably foreseeable working capital, capital expenditure and debt service requirements for the next twelve months from cash on hand, funds from operations and its bank
line of credit will require improvements in operating results and operating cashflow and the willingness of our lenders to waive defaults to financial covenants. Modtech is aggressively pursuing improvements in its cash flow and operating results,
including specific steps directed at conserving cash, increasing margins and reducing costs and is committed to take all feasible actions to achieve these goals. Management believes that its efforts will succeed in enabling it to meet its cash
requirements, improve its financial position and satisfy the lenders.



Management is in discussions regarding debt restructuring with several lenders, including the current bank group. We believe that any restructuring, if required, will be orderly and will not have a negative impact on our continuing
operations, but there is no assurance that we will be successful in restructuring our debt. We are committed to take all feasible actions including but not limited to seeking additional equity and very aggressive cost controls. The failure to
successfully restructure our debt could have a material adverse effect on our liquidity position and capital resources which may force us to curtail operations until we are able to secure alternate financing.



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations



Cautionary Statement



You should read the following discussion and analysis with our Unaudited Condensed
Consolidated Financial Statements and related Notes thereto contained elsewhere in this report. We urge you to carefully review and consider the various disclosures made in this report and in our other reports filed with the Securities and Exchange
Commission.



Company Overview



Modtech manufactures and sells modular buildings for both re-locatable and permanent
applications. We serve the educational, commercial, governmental, institutional and retail markets. We distribute our products through the customers preferred channel utilizing dealers and distributors and for major projects and direct sales.
We also arrange third-party financing for those customers who request our help.



---

At September 30, 2004, Modtech had six manufacturing facilities. Three facilities are located in California and we have a
single plant in Texas, Arizona and Florida. All of the locations manufacture and sell products into all the markets we serve.



Forward Looking Statements



This report contains statements which, to the extent that they are not recitations of historical fact, such as our belief that we have sufficient liquidity to meet our
near-term operating needs, constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words believe, estimate, anticipate,
project, intend, expect, plan, outlook, forecast may, will, should, continue, predict and similar expressions are
intended to identify forward-looking statements. Such forward-looking statements are intended to be subject to the safe harbor protection within the meaning of that term in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Statements in this quarterly report, including the Notes to the Condensed
Consolidated Financial Statements and in this Managements Discussion and Analysis of Financial Condition and Results of Operations, describe factors, among others, that could contribute to or cause such differences.



In addition, the accuracy of such forward looking statements may be impacted by a number of
business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including but not limited to: the ability to adequately pass through to customers unanticipated future increases in raw
material costs; an unanticipated change in the types of classrooms required by school districts; and declines in available funding for modular classroom construction and other risks and uncertainties that are described in our other filings with the
Securities and Exchange Commission, including our reports on Form 10-K. Although we believe the expectations reflected in our forward-looking statements are based upon reasonable assumptions, there is no assurance that our expectations will be
attained. We will not update these forward-looking statements, even though our situation may change in the future. We qualify all of our forward-looking statements by these cautionary statements.



Use of Estimates and Critical Accounting Policies



The preparation of financial statements in accordance with accounting principles generally
accepted in the United States requires Modtech to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statement and reported amounts of net revenue and expenses during the reporting
period.



Management continually evaluates its estimates and assumptions
including those related to Modtechs most critical accounting policies. Management bases its estimates and assumptions on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates under different assumptions or conditions. Changes in economic conditions could have an impact on these estimates and our actual results. Management believes that the following critical accounting policies may involve a
higher degree of judgment or complexity:



Allowances for Contract
Adjustments



Modtech maintains allowances for contract adjustments that
result from the inability of its customers to make their required payments. Management bases its allowances on analysis of the aging of accounts receivable, by account, at the date of the financial statements, assessments of historical collection
trends, and an evaluation of the impact of current economic conditions. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.



Revenue Recognition on Construction Contracts



Contracts are recognized using the percentage-of-completion method of accounting and,
therefore, take into account the costs, estimated earnings and revenue to date on contracts not yet complete. Revenue recognized is that percentage of the total contract price that cost expended to date bears to anticipated final total cost, based
on current estimates of costs to complete. The percentage-of-completion methodology generally results in the recognition of reasonably consistent profit margins over the life of a contract. Cumulative revenues recognized may be less or greater than
cumulative costs and profits billed at any point in time during a contracts term. The resulting difference is recognized as unbilled or deferred revenue.



---

Any estimation process, including that used in preparing contract accounting models, involves inherent risk. We reduce
the inherent risk relating to revenue and cost estimates in percentage-of-completion models through corporate policy, approval and monitoring processes. Risks relating to project delivery, productivity and other factors are considered in the
estimation process. Our estimates of revenues and costs on construction contracts change periodically in the normal course of business due to factors such as productivity and modifications of contractual arrangements. Such changes are reflected in
the results of operations as a change in accounting estimate in the period the revisions are determined. Provisions for estimated losses are made in the period in which the loss first becomes apparent.



Overview of Three Months ended September 30, 2004



Net sales of $56.0 million in the third quarter of 2004 were up 10.3% over the prior year on
the strength of business outside of California. Sales outside California increased 62.3% year-over-year while California sales were down 8.3%. California sales were negatively impacted by projected cost overruns on two major projects for which we
recognized a future loss in the third quarter.



These losses resulted in a
reduction of sales revenue of $3.1 million with a corresponding reduction in gross margin. The largest of these projects, accounting for $2.6 million, began production in the third quarter at which time it became clear that we would not be able to
manufacture or install the project for the projected costs. A major contributor to the cost overruns on this project was our inability to enforce contract specifications that allowed modular-friendly modifications to the design. That is,
we could not change certain design requirements to accommodate factory production where such a change had been assumed during the estimating process.



The previously announced management changes also had a significant negative impact on our expenses in the quarter. There was an additional $2.1 million in costs relating
to severance pay for the departing officers and recruiting fees and related costs for hiring our new President/CEO.



Based on the strength of our current backlog, both in California classrooms and our other markets, Modtech believes it is poised for a strong turn-around starting with a
break-even fourth quarter in 2004 followed by the strongest first quarter in 2005 in the last four years. Our backlog of $149.3 million includes $129.8 million of California classroom and $19.5 million of non-California classroom
projects / orders. We include firm purchase orders and notices of award from school districts for work over the next eighteen months in our backlog.



We are expecting significant growth in revenue for 2005 and, in addition, the new leadership team is aggressively attacking Modtechs cost structure with a
commitment to returning to positive earnings beginning in the first quarter and continuing throughout 2005.



The losses in the third-quarter continued to put pressure on our cash position. As a result, we are in discussions regarding debt restructuring with several lenders, including our current bank group. We believe that
any restructuring, will be orderly and will not have a negative impact on our continuing operations. Our discussions regarding future financing also take into account our needs associated with our anticipated growth.



---

Trends, Risks and Uncertainties



The trends, risks, and uncertainties described below are not the only ones we face. Additional trends, risks and uncertainties not presently
known or that are currently deemed immaterial may also affect our business. If any of these known or unknown trends, risks or uncertainties actually occur, they could have a material adverse effect on our business, financial condition and results of
operations.



| |  | We are facing a trend of increasing demand for complex modular structures
| | - | -------------------------------------------------------------------------



Sales of standardized modular classrooms to California school districts as a percentage of total sales has declined both due to an increase in sales outside of California
and as a result of increased demand for more complex, customized structures. In response to this shift in demand, Modtech has had to rely less on its factory production skills and become more involved in the on-site construction and installation of
its products. Our design and contract bidding methods have also had to be adapted to the changing market demand. Because of these changes in our business and large, unanticipated cost increases in steel and lumber which could not be passed through
to the customer under existing contracts, we have experienced cost overruns on certain projects which have resulted in losses despite an increased sales volume.



| |  | We must successfully change our business methods to avoid cost overruns on projects
| | - | -----------------------------------------------------------------------------------



Modtech has made, and continues to make, adjustments in its methods of bidding, contracting, designing, constructing and installing the more
complex structures that are now being ordered by our customers. Management believes that these adjustments will reduce the problem of cost overruns on future projects. If the adjustments prove to be inadequate, we will continue to incur cost
overruns that will effect our profitability.



| |  | We may not be able to adequately pass through to our customers price increases in raw materials
| | - | -----------------------------------------------------------------------------------------------



Although Modtech is attempting to contract with its customers to be able to pass through price increases in steel and lumber, we have not
been successful in all cases. We still have several existing contracts that prevent passing through such increases. If there is another increase in the price of these raw materials, Modtech could experience more cost overruns on its pending
projects.



Due to all of the foregoing factors, and the other risks discussed
in this Report and our other filings with the Securities and Exchange Commission, including our reports on Forms 10-K and 8-K, quarter to quarter comparisons of our operating results is not a reliable indicator of future performance.



---

Results of Operations



The following table sets forth certain items in the Condensed Consolidated Statements of Operations as a percent of net sales.



|                                             |  |                                 |   |  |                                |   |  |       |   |  |       |  
|-------------------------------------------- |  | ------------------------------- | - |  | ------------------------------ | - |  | ----- | - |  | ----- | -
|                                             |  | Percent of Net Sales            |   |  | Percent of Net Sales           |  
|                                             |  | Three Months EndedSeptember 30, |   |  | Nine Months EndedSeptember 30, |  
|                                             |  | 2003                            |   |  | 2004                           |   |  | 2003  |   |  | 2004  |  
|Net sales                                    |  | 100.0                           | % |  | 100.0                          | % |  | 100.0 | % |  | 100.0 | %
|Gross profit (loss)                          |  | 11.8                            |   |  | (5.4                           | ) |  | 11.0  |   |  | 0.2   |  
|Selling, general and administrative expenses |  | 3.6                             |   |  | 11.4                           |   |  | 4.3   |   |  | 7.8   |  
|Gain on sale of property and equipment       |  |                                |   |  | 0.2                            |   |  |      |   |  | 0.5   |  
|Income (loss) from operations                |  | 8.2                             |   |  | (16.6                          | ) |  | 6.7   |   |  | (7.1  | )
|Interest expense, net                        |  | (0.8                            | ) |  | (0.8                           | ) |  | (0.8  | ) |  | (1.0  | )
|Income (loss) before income taxes            |  | 7.4                             |   |  | (17.4                          | ) |  | 5.9   |   |  | (8.1  | )
|Income tax expense (benefit)                 |  | 3.1                             |   |  | (7.3                           | ) |  | 2.5   |   |  | (3.4  | )
|Net income (loss)                            |  | 4.3                             |   |  | (10.1                          | ) |  | 3.4   |   |  | (4.7  | )



Net sales for the three months ended
September 30, 2004, increased by $5.2 million or 10.3% while net sales for the nine months ended September 30, 2004 increased by $3.3 million or 2.4%, when compared to the same periods in 2003. Compared to the same periods in the prior year, sales
of California classrooms decreased by 22.1% for the three months ended September 30, 2004 and by 18.7% for the nine months then ended. California classroom sales have been impacted throughout the year by continuing delays in major projects. The
projects remain in our backlog, but have not started on schedule. Also impacting revenue in the 3rdquarter was the
recognition of future losses on two projects which resulted in a reduction of sales revenue of $3.1 million with a corresponding reduction in gross margin.



Revenue from sources other than California classrooms grew by 75.3% in the 3rdquarter and 42.9% year-to-date with growth in revenue at all of our locations. In 2003, California classroom revenue accounted for 66.8% and 65.8%, respectively, for the three and nine months ended at
September 30, 2003. In 2004, California classroom revenue accounted for 47.2% and 52.3%, respectively, for the three and nine months ended at September 30, 2004. We expect this trend to continue and as we become even more balanced and less dependant
on California classroom sales delays, in specific projects will have a reduced impact.



The 5.4% gross loss as a percentage of net sales for the quarter ended September 30, 2004 compares to a gross profit of 11.8% for the same period the prior year. In addition to the impact of the recognition of future losses referenced
above, the same projects had an additional $1.4 million in direct cost overruns recognized as cost-of-goods sold. Cost increases for steel and lumber across the company accounted for an additional $1.1 million of cost overruns. An additional
$900,000 was incurred as subcontractor cost overruns were incurred in finishing several projects. We believe that changes implemented during 2004 in project management, estimating and engineering, combined with significantly increased involvement by
the senior management at all stages will eliminate these cost overruns in the future. However, if the changes prove to be inadequate, we will continue to incur cost overruns that will effect our profitability.



The physical inventory taken as of September 30, 2004 identified $800,000 of obsolete steel
and elevators which were written off. Due to the age and condition of certain finished goods the value of such goods was also written down by $900,000 to reflect only the value of the raw materials in such goods.



These same factors caused a decline in gross profit for the nine month period ended at
September 30, 2004 from 11.0% in 2003 to 0.2% in 2004.



Selling, general and
administrative expenses (SG&A) increased for the three and nine months ended September 30, 2004 by $4.5 million and $5.2 million, respectively. Costs associated with the management change in the 3rdquarter, including severance for former officers and costs associated with recruiting and relocation, totaled $2.1 million. Professional fees associated with
certain compliance issues, including Sarbanes-Oxley 404, amounted to an incremental $1.0 million in the 3rdquarter.
We also increased our bad debt reserve by $500,000 in recognition of the unlikely collection of specific receivables. The additional SG&A costs incurred in the third quarter and year-to-date are related to costs supporting incremental sales
outside California.



The gain on the sale of property and equipment was from
the sale of a plant in Florida. We had previously combined the operations of this facility into the Plant City, Florida facility.



---

Net interest expense increased for the three and nine months ended September 30, 2004 by $77,000 or 19.5% and $358,000 or
32.8%, respectively, when compared to the same periods in 2003. The increase is due to the increased borrowing required due to losses from operations and certain costs of restructuring the debt facility during 2004.



Based on an effective tax rate of 42%, we recorded a tax benefit of $4.1 million and $4.8
million for the three and nine months ended September 30, 2004. The effective tax rate has not changed from the prior year.



Inflation



We have been adversely affected by steel, lumber and plywood price increases during the three and nine months ended September 30, 2004. Although we aggressively pursued means of offsetting the impact of these price
increases, we estimate that there was a negative impact exceeding $1.0 million and $4.0 million for the three and nine months ended September 30, 2004, respectively. Although we use the most recently available cost information when evaluating
pricing and margin decisions when entering contracts, there can be no assurance that our business will not be affected by unusually volatile inflation in the future.



Liquidity and Capital Resources



Modtech has historically generated cash from operations and bank borrowings to meet its needs. At September 30, 2004, Modtech had $2.4 million in cash and cash
equivalents. During the nine months ended September 30, 2004, Modtech used $9.0 million in cash for operating activities.



Modtech believes that improvements in our cash flow and operating results are crucial to our financial stability and our relationship with our lenders and is aggressively
pursuing these objectives. To improve cash flow, we are directing our efforts toward minimizing inventories and accounts receivable. We are also focusing on improving operating results which will further improve cash flow.



Modtech has a $42.0 million credit facility, of which $30.0 million represents a revolving
loan commitment. The credit facility is secured by all of our assets, as well as the Companys stock ownership in its subsidiaries. The credit facility expires in December 2006. On September 30, 2004, $22.9 million was outstanding under the
revolving loan commitment with an additional $7.0 in stand-by letters-of-credit. The credit facility in place contains various covenants. Due to the operating loss we were not in compliance with certain covenants as of September 30, 2004. Compliance
with certain covenants has been waived until year-end, but certain other covenants including earnings as measured by EBITDA, current ratio and net worth, were violated due to the loss incurred during the three months ended September 30, 2004 and
these covenant violations have not been waived. Due to these covenant violation, Modtech has reclassified $2,750,000 in long-term debt to current debt.



Management is in discussions regarding debt restructuring with several lenders, including the current bank group. We believe that any restructuring, if required, will be
orderly and will not have a negative impact on our continuing operations, but there is no assurance that we will be successful in restructuring our debt. There can be no assurance that Modtech will be able to improve its cash flow and operating
results to improve our financial condition, but we are committed to take all feasible actions directed toward achieving these goals. The failure to successfully restructure our debt could have a material adverse effect on our liquidity position and
capital resources which may force us to curtail operations until we are able to secure alternate financing.



---

Item 3. Quantitative And Qualitative Disclosures About Market Risk



Market risk refers to the risk that a change in the level of one or more market factors such
as interest rates, foreign currency exchange rates, or equity prices will result in losses for a certain financial instrument of group of instruments. We are principally exposed to interest rate and credit risks. We are not exposed to foreign
currency exchange rate risk.



Interest Rate Risk



We are exposed to market risks related to fluctuation in interest rates on our $42 million
credit facility. During the quarter ended September 30, 2004, we did not use interest rate swaps or other types of derivative financial instruments. The carrying value of the credit facility approximates fair value as the interest rate is variable
and resets frequently. Indebtedness under the credit facility bears interest at LIBOR plus additional interest of between 1.25% and 2.75%, or the Federal Funds rate plus additional interest of between 0.25% to 1.25%. The additional interest charge
is based upon certain financial ratios. In addition, Modtechs default on certain financial covenants may lead to higher interest charges by our lender group. We estimate that the average amount of debt outstanding under the credit facility for
the remaining three months of 2004 will be $28.0 million. Therefore, a one-percentage point increase in interest rates would result in an increase in interest expense of $70,000 for the remaining three months of 2004.



Management believes that Modtechs existing product lines and manufacturing capacity
coupled with the management changes in the third quarter along with the renewed focus on cost containment and inventory control will enable us to generate sufficient cash through operations, supplemented by periodic use of our existing bank line of
credit, to finance our business at current levels over the next twelve months. Additional cash resources may be required if Modtech is able to expand its business beyond current levels or if operating losses continue. For example, it will be
necessary for Modtech to construct or acquire additional manufacturing facilities in order for Modtech to compete effectively in new market areas or states which are beyond a 300 mile radius from one of our production facilities. The construction or
acquisition of new facilities would require significant additional capital. For these reasons, among others, Modtech may need additional debt or equity financing in the future. There can be no assurance that Modtech will be successful in obtaining
such additional financing.



Credit Risk



We are currently exposed to credit risk on credit extended to customers. We actively monitor
this risk through a variety of control procedures involving senior management. Historically, credit losses have been small and within our expectations.



Item 4. Controls And Procedures



As of the end of the period covered by this report, we carried out an evaluation, with the participation of our management, including our President/Chief Executive
Officer and our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures. Based upon that evaluation, our President/Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and
procedures are effective in recording, processing, summarizing and reporting, on a timely basis, the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934. No change occurred
during the quarter ended September 30, 2004, in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



The design of any system of controls and procedures is based in part upon certain assumptions
about the likelihood of future events. There can be no assurance that any design will succeed in achieving its state goals under all potential future conditions, regardless of how remote.



14



---

PART II. OTHER INFORMATION



Item 1. Legal Proceedings.



We are party to various claims, complaints and other legal actions that have arisen in the normal course of business from time to time. We believe the
outcome of these pending legal proceedings, in the aggregate, will not have a material adverse effect on our operations or financial position.



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds



None



Item 3. Defaults upon Senior Securities



Due to operating losses, we are not in compliance with, and have not received a waiver for, the covenants not met under our $42 million line of credit
with the Wells Fargo lender group.



Item 4. Submission of Matters to
a Vote of Security Holders



At our annual meeting of
the stockholders held on August 10, 2004, the stockholders elected by the votes indicated below the following persons as directors to hold office until the next annual meeting and until their successors are elected and qualified:



|                      |  |                 |  |                
|--------------------- |  | --------------- |  | ---------------
|Name:                 |  | Votes Cast For: |  | Votes Withheld:
|Evan M. Gruber        |  | 10,710,883      |  | 1,681,232      
|Robert W. Campbell    |  | 12,363,097      |  | 29,018         
|Daniel J. Donahoe III |  | 12,183,790      |  | 208,325        
|Stanley N. Gaines     |  | 12,182,938      |  | 209,177        
|Charles R. Gwirtsman  |  | 12,132,369      |  | 259,746        
|Charles C. McGettigan |  | 12,133,221      |  | 258,894        
|Michael G. Rhodes     |  | 12,186,090      |  | 206,025        
|Myron A. Wick III     |  | 12,133,221      |  | 258,894        



Item 5. Other
Information



None



Item 6. Exhibits



|       |  |                                                               
|------ |  | --------------------------------------------------------------
|Number |  | Name of Exhibit                                               
|3.11   |  | Certificate of Incorporation of Modtech Holdings, Inc.        
|       | 
|3.25   |  | Bylaws of Modtech Holdings, Inc.                              
|       | 
|10.12  |  | Modtech, Incs 1994 Stock Option Plan                         
|       | 
|10.2   |  | Modtech, Incs 1996 Stock Option Plan                         
|       | 
|10.3   |  | Modtech Holdings, Inc. 1999 Stock Option Plan                 
|       | 
|10.4   |  | Modtech Holdings, Inc. 2002 Stock Option Plan                 
|       | 
|10.5   |  | Separation Agreement between the Company and Evan M. Gruber   
|       | 
|10.6   |  | Separation Agreement between the Company and Michael G. Rhodes
|       | 
|10.7   |  | Employment Agreement between the Company and David M. Buckley 



---

|       |  |                                                                                                                                                  
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|       | 
|10.83  |  | Lease between the Company and Pacific Continental Modular Enterprises, relating to the Barrett property in Perris, California                    
|       | 
|10.93  |  | Lease between the Company and BMG, relating to the property in Lathrop, California                                                               
|       | 
|10.103 |  | Form of Indemnity Agreement between the Company and its executive officers and directors                                                         
|       | 
|10.114 |  | Credit Agreement, dated December 26, 2001                                                                                                        
|       | 
|31.1   |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                               
|       | 
|31.2   |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                               
|       | 
|32.1   |  | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|       | 
|32.2   |  | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

---

|1 | Incorporated by reference to Modtech Holdings, Inc.s Registration Statement on Form S-4 filed with the Commission on October 27, 1998 (Commission File No.
333-69033).
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Incorporated by reference to Modtech, Inc.s Registration Statement on form S-8 filed with the Commission on December 11, 1996 (Commission File No. 333-17623).
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|3 | Incorporated by reference to Modtech, Inc.s Registration Statement on Form S-1 filed with the Commission on June 6, 1990 (Commission File No. 033-35239).
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|4 | Incorporated by reference to Modtech Holdings, Inc.s Form 10-K filed with the Commission on April 1, 2002 (Commission File No. 000-25161).
|- | -------------------------------------------------------------------------------------------------------------------------------------------

|5 | Incorporated by reference to Modtech Holdings, Inc.s Form 10-K filed with the Commission on March 15, 2004 (Commission File No. 000-25161).
|- | --------------------------------------------------------------------------------------------------------------------------------------------



---

SIGNATURES



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



|                        |  |     |  |                                  
|----------------------- |  | --- |  | ---------------------------------
|                        |  |     |  | Modtech Holdings, Inc.           
|                        |  |    
|Date: November 12, 2004 |  | by: |  | /s/ Dennis L. Shogren            
|                        |  |     |  | Dennis L. Shogren                
|                        |  |     |  | Chief Financial Officer          
|                        |  |    
|                        |  | by: |  | /s/ David M. Buckley             
|                        |  |     |  | David M. Buckley                 
|                        |  |     |  | President/Chief Executive Officer