**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 WASHINGTON,
        D.C. 20549
 
 ______________
 
 **Form
        10-Q**
  (Mark
        one)
 
 x
              Quarterly
                  Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                  Act of
                  1934For
                  the quarterly period ended June 30,
                  2005
 
 OR
 
  ̈
              Transition
                  report pursuant to Section 13 or 15(d) of the Securities Exchange
                  Act of
                  1934For
                  the transition period from _______________ to
                  ________________
 ______________
 
 **Commission
        File Number**  **333-106356**
 ______________
 
 **CHAAS
        ACQUISITIONS, LLC.**
 *(Exact
        name of registrant as specified in its charter)*
 
 **Delaware**
              **41-2107245***(State
                  or other jurisdiction of*
              *(I.R.S.
                  Employer**incorporation
                  or organization)*
              *Identification
                  No.)*
 
 **12900
                  Hall Road, Suite 200, Sterling Heights, MI**
              **48313***(Address
                  of principal executive offices)*
              *(Zip
                  Code)*
 
 **(586)
        997-2900**
 *(Registrant’s
        telephone number, including area code)*
 
 **NOT
        APPLICABLE**
 *(Former
        name, former address and former fiscal year, if changed since last
        report)*
 
 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 a 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 Exchange Act).
 
 Yes
               ̈
              No
              x
 Indicate
        the number of shares outstanding of each of the issuer’s classes of common
        stock, as of the latest practicable date.
  
  Class
              
              Outstanding
                  at August 15, 2005Membership
                  Units
              
              100
 
 
 
 
 CHAAS
            ACQUISITIONS, LLC
  INDEX
  
 Page
                  No.Part
                  I.Financial
                  InformationItem
                  1.Financial
                  StatementsConsolidated
                  Condensed Balance Sheets as of June 30,
                  2005
              1and
                  December 31, 2004Consolidated
                  Condensed Statements of Operations for the
                  three months and six months
              2ended
                  June 30, 2005 and 2004Consolidated
                  Condensed Statements of Cash Flows for the
                  six months
              3ended
                  June 30, 2005 and 2004Consolidated
                  Condensed Statement of Changes in Members’
                  Equity for the six months
              4ended
                  June 30, 2005Notes
                  to Consolidated Condensed Financial
                  Statements
              5Item
                  2Management's
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              12Item
                  3.Quantitative
                  and Qualitative Disclosures About Market Risk
              17Item
                  4.Controls
                  and Procedures
              18Part
                  II.Other
                  Information and SignatureItem
                  1.Legal
                  Proceedings
              18Item
                  2.Changes
                  in Securities, Use of Proceeds and Issuer Purchases of Equity
                  Securities
              18Item
                  3.Defaults
                  Upon Senior Securities
              18Item
                  4.Submission
                  of Matters to a Vote of Security-Holders
              18Item
                  5.Other
                  Information
              18Item
                  6.   Exhibits
              18Signature
              19
 
 
 
 
 
 PART
            I. FINANCIAL INFORMATION
 Item 1. Financial Statements
 CHAAS
            ACQUISITIONS, LLC
 CONSOLIDATED
            CONDENSED BALANCE SHEETS
 As
            of June 30, 2005 and December 31, 2004
 (Dollars
            in thousands)
 
 
 **June
                  30,**
              
              **December
                  31,****2005**
              
              **2004****ASSETS**
              
              **(Unaudited)**Current
                  assetsCash
              
              $
              5,713
              
              $
              14,747Accounts
                  receivable, less reservesof
                  $1,918 and $2,078, respectively
              
              
              82,479
              
              
              61,745InventoriesRaw
                  materials
              
              
              24,636
              
              
              25,400Work-in-process
              
              
              11,418
              
              
              12,382Finished
                  goods
              
              
              26,613
              
              
              28,937Reserves
              
              
              (4,896
              )
              
              (5,325
              )Total
                  inventories
              
              
              57,771
              
              
              61,394Other
                  current assets
              
              
              13,636
              
              
              13,976Total
                  current assets
              
              
              159,599
              
              
              151,862Property
                  and equipment, net
              
              
              69,612
              
              
              75,113Goodwill
              
              
              39,061
              
              
              39,061Other
                  intangible assets, net
              
              
              96,192
              
              
              102,835Deferred
                  income taxes
              
              
              1,225
              
              
              1,047Other
                  noncurrent assets
              
              
              8,643
              
              
              8,064Total
                  Assets
              
              $
              374,332
              
              $
              377,982**LIABILITIES
                  AND MEMBERS’ EQUITY**Current
                  liabilitiesCurrent
                  maturities of long-term debt
              
              $
              3,386
              
              $
              3,068Accounts
                  payable
              
              
              48,435
              
              
              46,664Accrued
                  liabilities
              
              
              24,274
              
              
              22,951Deferred
                  income taxes
              
              
              1,677
              
              
              1,876Total
                  current liabilities
              
              
              77,772
              
              
              74,559Noncurrent
                  liabilitiesDeferred
                  income taxes
              
              
              6,302
              
              
              7,203Other
                  noncurrent liabilities
              
              
              5,409
              
              
              4,276Long-term
                  debt, less current maturities
              
              
              205,221
              
              
              202,179Total
                  noncurrent liabilities
              
              
              216,932
              
              
              213,658Members’
                  equityUnits
              
              
              100,900
              
              
              100,900Other
                  comprehensive income
              
              
              4,751
              
              
              8,549Accumulated
                  deficit
              
              
              (26,023
              )
              
              (19,684
              )Total
                  Members’ Equity
              
              
              79,628
              
              
              89,765Total
                  Liabilities and Members’ Equity
              
              $
              374,332
              
              $
              377,982
 
 
 
 
  The
              accompanying notes are an integral part of the
 consolidated
              condensed financial statements.
 1
 CHAAS
              ACQUISITIONS, LLC
 CONSOLIDATED
              CONDENSED STATEMENTS OF
              OPERATIONS
 (Dollars
              in thousands)
 (Unaudited)
   
 
 **Three
                  Months Ended**
              
              **Six
                  Months Ended****June
                  30,**
              
              **June
                  30,****2005**
              
              **2004**
              
              **2005**
              
              **2004**Netsales
              
              $
              128,422
              
              $
              108,346
              
              $
              239,692
              
              $
              204,977Cost
                  of sales
              
              
              101,899
              
              
              83,329
              
              
              193,393
              
              
              157,393Gross
                  profit
              
              
              26,523
              
              
              25,017
              
              
              46,299
              
              
              47,584Selling,
                  administrative and product development expenses
              
              
              16,545
              
              
              15,625
              
              
              33,130
              
              
              30,710Amortization
                  of intangible assets
              
              
              2,056
              
              
              2,113
              
              
              4,122
              
              
              4,164Operating
                  income
              
              
              7,922
              
              
              7,279
              
              
              9,047
              
              
              12,710Other
                  expenseInterest
                  expense
              
              
              (5,254
              )
              
              (5,481
              )
              
              (10,937
              )
              
              (10,584
              )Foreign
                  currency gain (loss), net
              
              
              (2,197
              )
              
              (424
              )
              
              (3,528
              )
              
              (1,052
              )Other
                  income (expense)
              
              
              82
              
              
              199
              
              
              72
              
              
              110Income
                  (loss) before income taxes
              
              
              553
              
              
              1,573
              
              
              (5,346
              )
              
              1,184Provision
                  for income taxes
              
              
              1,017
              
              
              587
              
              
              993
              
              
              483Net
                  income (loss)
              
              $
              (464
              )
              $
              986
              
              $
              (6,339
              )
              $
              701
 
 
  The
              accompanying notes are an integral part of the
 consolidated
              condensed financial statements.
 2
 CHAAS
              ACQUISITIONS, LLC
 CONSOLIDATED
              CONDENSED STATEMENTS OF CASH
              FLOWS
 (Dollars
              in thousands)
 (Unaudited)
   
 
 **Six
                  months Ended****June
                  30,****2005**
              
              **2004****CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Netloss
              
              $
              (6,339
              )
              $
              701Adjustments
                  to reconcile net loss to netcash
                  provided by (used for) operating activities:Depreciation
                  and amortization
              
              
              12,604
              
              
              10,810Deferred
                  taxes
              
              
              (671
              )
              
              (3,590
              )Foreign
                  currency (gain) loss
              
              
              3,478
              
              
              166Loss
                  on disposal of assets
              
              
              8
              
              
              123Interest
                  accretion on notes
              
              
              689
              
              
              682Changes
                  in assets and liabilities, net:Accounts
                  receivable
              
              
              (23,718
              )
              
              (20,386
              )Inventories
              
              
              5
              
              
              (3,597
              )Other
                  current assets
              
              
              (3,341
              )
              
              (1,070
              )Other
                  noncurrent assets
              
              
              4,057
              
              
              (255
              )Accounts
                  payable
              
              
              3,876
              
              
              12,263Accrued
                  liabilities
              
              
              3,288
              
              
              5,142Other
                  noncurrent liabilities
              
              
              (572
              )
              
              (41
              )Net
                  cash provided by (used for) operating activities
              
              
              (6,636
              )
              
              948**CASH
                  FLOWS USED FOR INVESTING ACTIVITIES:**Acquisition
                  of property and equipment
              
              
              (6,766
              )
              
              (6,076
              )Net
                  cash used for investing activities
              
              
              (6,766
              )
              
              (6,076
              )**CASH
                  FLOWS USED FOR FINANCING ACTIVITIES:**Net
                  increase (decrease) in revolving loan
              
              
              6,182
              
              
              (769
              )Repayment
                  of debt
              
              
              (1,045
              )
              
              (947
              )Net
                  cash provided by (used for) financing activities
              
              
              5,137
              
              
              (1,716
              )Effect
                  of exchange rate changes
              
              
              (769
              )
              
              475Net
                  (decrease) increase in cash
              
              
              (9,034
              )
              
              (6,369
              )Cash
                  at beginning of period
              
              
              14,747
              
              
              16,686Cash
                  at end of period
              
              $
              5,713
              
              $
              10,317
 
 
 
 
 
  The
              accompanying notes are an integral part of the
 consolidated
              condensed financial statements.
 3
 CHAAS
              ACQUISITIONS, LLC
 CONSOLIDATED
              CONDENSED STATEMENT OF CHANGES IN MEMBERS’
              EQUITY
 For
              the Six Months Ended June 30, 2005
 (Dollars
              in thousands)
 (Unaudited)
   
 
 **Other**
              
              **Total****Members’**
              **comprehensive**
              **Accumulated**
              **members’****capital**
              **income
                  (loss)**
              **deficit**
              **equity**Balanceat
                  December 31, 2004
              $100,900
              $8,549
              $(19,684)
              $89,765Currency
                  translation adjustment
              —
              (3,798)
              
              (3,798)Net
                  loss
              
              
              (6,339)
              (6,339)Balance
                  at June 30, 2005
              $100,900
              $4,751
              $(26,023)
              $79,628
 
 
 
 
 
 
 
  The
              accompanying notes are an integral part of the
 consolidated
              condensed financial statements.
 4
 CHAAS
              ACQUISITIONS, LLC
 NOTES
              TO CONSOLIDATED CONDENSED
              FINANCIAL STATEMENTS
 (Dollars
              in thousands)
 (Unaudited)
   
 **1.**  **BASISOF
        PRESENTATION**
 
 
 On
        April
        15, 2003, substantially all of the equity interests of the Advanced Accessory
        Systems, LLC (åthe Predecessoræ) were acquired by Castle Harlan Partners IV,
        L.P. ("the Acquisition"), a private equity investment fund organized and
        managed
        by Castle Harlan Inc., a private New York based equity firm. CHAAS Holdings,
        LLC
        ("CHAAS Holdings") was formed in April 2003 in connection with the Acquisition
        and was the direct parent of CHAAS Acquisitions, LLC ("CHAAS Acquisitions"
        or
        "the Company") which was also formed pursuant to the Acquisition.
 
 In
        January 2004, Advanced Accessory Holdings Corporation ("AAHC") was formed
        by
        CHAAS Holdings. At that time, CHAAS Holdings made a contribution of all of
        its
        equity interests in CHAAS Acquisitions to AAHC in exchange for all the
        outstanding membership units of AAHC. Subsequent to this transaction, CHAAS
        Holdings is the direct parent of AAHC and AAHC is the direct parent of CHAAS
        Acquisitions and the indirect parent of the Predecessor. Unless the context
        otherwise requires, all information which refers to "we," "our" or "us" refers
        to CHAAS Acquisitions and its subsidiaries.
 
 The
        Acquisition was accounted for in accordance with the purchase method of
        accounting. Accordingly, the purchase price of the Acquisition has been
        allocated to identifiable assets acquired and liabilities assumed based upon
        their estimated fair values at the acquisition date.
 
 The
        North
        American subsidiaries of the Company use a fiscal month-end that corresponds
        to
        two four-week months and one five-week month per quarter, each ending on
        Saturday. The exception to this rule is at year-end, when the subsidiaries
        close
        on December 31. The Company’s Brink subsidiary uses the calendar month-end and
        year-end. The Company’s financial statements are dated as of the end of the
        calendar period, although they reflect the different closing dates identified
        above.
 
 The
        accompanying unaudited consolidated financial statements have been prepared
        in
        accordance with accounting principles generally accepted in the United States
        of
        America for interim financial information and with the instructions to Form
        10-Q. Accordingly, they do not include all information and footnotes required
        by
        accounting principles generally accepted in the United States of America
        for
        complete financial statements and should be read in conjunction with the
        Annual
        Report on Form 10-K for the fiscal year ended December 31, 2004.
 
 In
        the
        opinion of the Company, the accompanying unaudited consolidated condensed
        financial statements contain all adjustments, which are normal and recurring
        in
        nature, necessary to present fairly its financial position as of June 30,
        2005
        and December 31, 2004 and the results of its operations for the three and
        six
        months ended June 30, 2005 and 2004. The Company has reclassified certain
        prior
        year amounts to conform to the presentation of our current consolidated
        financial statements.
 
 
 **2.**
              **COMPREHENSIVE
                  LOSS**
 
 Comprehensive
        loss for the Company is as follows:
 
 Three
                  months ended
              
              Six
                  months endedJune
                  30, 2005
              
              June
                  30, 2004
              
              June
                  30, 2005
              
              June
                  30, 2004Net
                  loss
              
              $
              (464
              )
              $
              986
              
              $
              (6,339
              )
              $
              701Change
                  in the cumulative translation adjustment, net of tax
              
              
              (2,108
              )
              
              (301
              )
              
              (3,798
              )
              
              (1,286
              )Comprehensive
                  loss
              
              $
              (2,572
              )
              $
              685
              
              $
              (10,137
              )
              $
              (585
              )
  5
 CHAAS
              ACQUISITIONS, LLC
 NOTES
              TO CONSOLIDATED CONDENSED
              FINANCIAL STATEMENTS
 (Dollars
              in thousands)
 (Unaudited)
 **3.**
              **CURRENCY
                  CONTRACTS**
 
 The
        Company has significant operations in Europe where the functional currency
        is
        the Euro. On February 12, 2004, when the Euro to the US Dollar exchange rate
        was
        1.28:1.00, the Company entered into a series of foreign currency forward
        option
        contracts related to the Euro ("Euro Collar"), which matured quarterly on
        a
        staggered basis. On May 12, 2004 when the Euro to US Dollar exchange rate
        was
        1.19:1.00, the Company entered into additional foreign currency option
        contracts. The Company provided a $1,900 letter of credit in support of the
        foreign currency option contracts. To the extent that the quarter end exchange
        rate fell between the Euro collar exchange rates, fulfillment of the Euro
        collar
        exchange contracts would have resulted in offsetting foreign currency gains
        and
        losses upon expiration. For each reporting period, the Company recorded the
        fair
        value, as determined by independent financial institutions, of open obligations
        and the resultant gains and losses were recorded in the Statement of Operations.
        For the three and six months ended June 30, 2005 and 2004 the Company recorded
        unrealized gains (losses) on foreign currency options in the amounts of $26,
        $164, ($440) and ($295), respectively. The final three option contracts expired
        during the second quarter of 2005 and five options expired during the first
        six
        months of 2005. Three option contracts expired during the second quarter
        of 2004
        and six option contracts expired during the first six months of
        2004.
 
 One
        of
        the options that expired in the second quarter of 2005 was the sale of a
        call
        option and was based on the average exchange rate of the period for which
        the
        option was active. The option expired in the money, requiring us to make
        a
        payment of $0.1 million. This amount was accrued at June 30, 2005 and was
        paid
        subsequent to that date.
 
 Because
        of the expiration of the option contracts, the $1,900 letter of credit described
        above expired during the second quarter of 2005.
 
 
 
 **4.**  **GOODWILL
        AND INTANGIBLE ASSETS**
 
 The
        carrying amount of goodwill was $39,061 at June 30, 2005 and December 31,
        2004.
        A summary of intangible assets identified by the Company in the allocation
        of
        the April 15, 2003 purchase consideration follows **:**
  
 **Customer**
                **Contracts**
              **Customer**
                **Relationships**
              **Technology**
              **Intangible**
                **Pension
                  Asset**
              **Tradename
                  /**
                **Trademark**
              **Deferred**
                **Financing
                  Costs**
              **Total**Amortization
                  period in years
              *8
                  - 10*
              *18
                  - 21*
              *10*
              *15*
              *Indefinite*Balance
                  at December 31, 2004
              $35,475
              $34,206
              $14,992
              $514
              $11,477
              $6,171
              $102,835Additions
              —
              —
              15
              —
              —
              —
              15Foreign
                  currency translation
              (152)
              (1,428)
              (30)
              —
              (339)
              (55)
              (2,004)Amortization
              (2,059)
              (1,151)
              (900)
              —
              —
              (544)
              (4,654)Balance
                  at June 30, 2005
              $33,264
              $31,627
              $14,077
              $514
              $11,138
              $5,572
              $96,192
 
 Amortization
        expense of identifiable intangible assets for the three and six months ended
        June 30, 2005 was $2,321 and $4,654, respectively.
  
 
 **5.**
              **CONDENSED
                  CONSOLIDATING INFORMATION**
 
 On
        May
        23, 2003, the Company’s wholly-owned subsidiaries, Advanced Accessory Systems,
        LLC and AAS Capital Corporation, issued and sold 103⁄4% Senior Notes - Series A
        due 2011. On November 18, 2003, these notes were exchanged for 103⁄4% Senior Notes
        - Series B , (the "103⁄4% Senior Notes") having substantially the same terms. The
        103⁄4% Senior Notes are guaranteed on a full, unconditional and joint and several
        basis by the Company and all of the Company’s direct and indirect wholly-owned
        domestic subsidiaries.
 
 The
        following condensed consolidating financial information presents the financial
        position, results of operations and cash flows of (i) the Company (the
        "Parent"), as of June 30, 2005 and December 31, 2004 and for the three and
        six
        months ended June 30, 2005 and 2004 as if it accounted for its subsidiaries
        on
        the equity method, (ii) Advanced Accessory Systems, LLC and AAS Capital
        Corporation as issuers; (iii) guarantor subsidiaries which are domestic,
        wholly-owned subsidiaries and include SportRack LLC, Valley Industries, LLC,
        AASA Holdings, LLC and ValTek, LLC; and (iv) the non-guarantor subsidiaries
        which are foreign, wholly-owned subsidiaries and include Brink International
        B.V. and its subsidiaries, SportRack Accessories, Inc. and its subsidiary,
        and
        SportRack Automotive GmbH and its subsidiaries.
 
 
 6
 **CHAAS
            ACQUISITIONS, LLC**
 **NOTES
            TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**
 **(Dollars
            in thousands)**
 **(Unaudited)**
  **5.**
                **CONDENSED
                    CONSOLIDATING INFORMATION —
                    (continued)**
 **June
        30, 2005**
 
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated****ASSETS**Current
                  assetsCash
              
              $
              16
              
              $
              —
              
              $
              1,594
              
              $
              4,103
              
              $
              —
              
              $
              5,713Accounts
                  receivable
              
              
              —
              
              
              —
              
              
              46,410
              
              
              36,069
              
              
              —
              
              
              82,479Inventories
              
              
              —
              
              
              —
              
              
              22,560
              
              
              35,211
              
              
              —
              
              
              57,771Other
                  current assets
              
              
              —
              
              
              633
              
              
              9,417
              
              
              3,586
              
              
              —
              
              
              13,636Total
                  current assets
              
              
              16
              
              
              633
              
              
              79,981
              
              
              78,969
              
              
              —
              
              
              159,599Property
                  and equipment, net
              
              
              —
              
              
              143
              
              
              32,354
              
              
              37,115
              
              
              —
              
              
              69,612Goodwill
              
              
              —
              
              
              —
              
              
              39,061
              
              
              —
              
              
              —
              
              
              39,061Other
                  intangible assets, net
              
              
              —
              
              
              4,881
              
              
              71,493
              
              
              19,818
              
              
              —
              
              
              96,192Deferred
                  income taxes and other noncurrent assets
              
              
              —
              
              
              7,064
              
              
              386
              
              
              2,418
              
              
              —
              
              
              9,868Investment
                  in and advances to subsidiaries
              
              
              104,635
              
              
              228,965
              
              
              13,993
              
              
              245
              
              
              (347,838
              )
              
              —Total
                  assets
              
              $
              104,651
              
              $
              241,686
              
              $
              237,268
              
              $
              138,565
              
              $
              (347,838
              )
              $
              374,332**LIABILITIES
                  AND MEMBERS’ EQUITY**Current
                  liabilitiesCurrent
                  maturities of long-term debt
              
              $
              —
              
              $
              —
              
              $
              61
              
              $
              3,325
              
              $
              —
              
              $
              3,386Accounts
                  payable
              
              
              —
              
              
              —
              
              
              29,440
              
              
              18,995
              
              
              —
              
              
              48,435Accrued
                  liabilities and deferred income taxes
              
              
              —
              
              
              1,295
              
              
              7,245
              
              
              17,411
              
              
              —
              
              
              25,951Total
                  current liabilities
              
              
              —
              
              
              1,295
              
              
              36,746
              
              
              39,731
              
              
              —
              
              
              77,772Deferred
                  income taxes and other noncurrent liabilities
              
              
              —
              
              
              2,348
              
              
              329
              
              
              9,034
              
              
              —
              
              
              11,711Long-term
                  debt, less current maturities
              
              
              —
              
              
              150,000
              
              
              36,704
              
              
              18,517
              
              
              —
              
              
              205,221Intercompany
                  debt
              
              
              25,023
              
              
              —
              
              
              6,172
              
              
              62,661
              
              
              (93,856
              )
              
              —Members’
                  equity
              
              
              79,628
              
              
              88,043
              
              
              157,317
              
              
              8,622
              
              
              (253,982
              )
              
              79,628Total
                  liabilities and members’ equity
              
              $
              104,651
              
              $
              241,686
              
              $
              237,268
              
              $
              138,565
              
              $
              (347,838
              )
              $
              374,332
 
  7
 **CHAAS
              ACQUISITIONS, LLC**
 **NOTES
              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**
 **(Dollars
              in thousands)**
 **(Unaudited)**
  **5.**
              **CONDENSED
                  CONSOLIDATING INFORMATION —
                  (continued)**
 
 **CONDENSED
        CONSOLIDATING BALANCE SHEET**
 **December
        31, 2004**
 
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated****ASSETS**Current
                  assetsCash
              
              $
              16
              
              $
              3⁄4
              
              $
              5,466
              
              $
              9,265
              
              $
              —
              
              $
              14,747Accounts
                  receivable
              
              
              —
              
              
              —
              
              
              37,296
              
              
              24,449
              
              
              —
              
              
              61,745Inventories
              
              
              —
              
              
              —
              
              
              22,834
              
              
              38,560
              
              
              —
              
              
              61,394Other
                  current assets
              
              
              23
              
              
              663
              
              
              10,879
              
              
              2,411
              
              
              —
              
              
              13,976Total
                  current assets
              
              
              39
              
              
              663
              
              
              76,475
              
              
              74,685
              
              
              —
              
              
              151,862Property
                  and equipment, net
              
              
              —
              
              
              133
              
              
              31,084
              
              
              43,896
              
              
              —
              
              
              75,113Goodwill
              
              
              —
              
              
              3⁄4
              
              
              39,061
              
              
              3⁄4
              
              
              —
              
              
              39,061Other
                  intangible assets, net
              
              
              —
              
              
              5,288
              
              
              74,980
              
              
              22,567
              
              
              —
              
              
              102,835Deferred
                  income taxes and other noncurrent assets
              
              
              4,199
              
              
              6,074
              
              
              (4,396
              )
              
              3,205
              
              
              29
              
              
              9,111Investment
                  in and advances to subsidiaries
              
              
              114,749
              
              
              239,156
              
              
              13,682
              
              
              250
              
              
              (367,837
              )
              
              3⁄4Total
                  assets
              
              $
              118,987
              
              $
              251,314
              
              $
              230,886
              
              $
              144,603
              
              $
              (367,808
              )
              $
              377,982**LIABILITIES
                  AND MEMBERS’ EQUITY**Current
                  liabilitiesCurrent
                  maturities of long-term debt
              
              $
              —
              
              $
              —
              
              $
              61
              
              $
              3,007
              
              $
              —
              
              $
              3,068Accounts
                  payable
              
              
              —
              
              
              —
              
              
              27,385
              
              
              19,279
              
              
              —
              
              
              46,664Accrued
                  liabilities and deferred income taxes
              
              
              —
              
              
              1,297
              
              
              6,551
              
              
              16,979
              
              
              —
              
              
              24,827Total
                  current liabilities
              
              
              —
              
              
              1,297
              
              
              33,997
              
              
              39,265
              
              
              —
              
              
              74,559Deferred
                  income taxes and other noncurrent liabilities
              
              
              —
              
              
              2,348
              
              
              (1,157
              )
              
              10,288
              
              
              —
              
              
              11,479Long-term
                  debt, less current maturities
              
              
              —
              
              
              150,000
              
              
              32,260
              
              
              19,919
              
              
              —
              
              
              202,179Intercompany
                  debt
              
              
              29,222
              
              
              —
              
              
              9,879
              
              
              64,946
              
              
              (104,047
              )
              
              —Members’
                  equity
              
              
              89,765
              
              
              97,669
              
              
              155,907
              
              
              10,185
              
              
              (263,761
              )
              
              89,765Total
                  liabilities and members’ equity
              
              $
              118,987
              
              $
              251,314
              
              $
              230,886
              
              $
              144,603
              
              $
              (367,808
              )
              $
              377,982
 
  8
 **CHAAS
              ACQUISITIONS, LLC**
 **NOTES
              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**
 **(Dollars
              in thousands)**
 **(Unaudited)**
  **5.**
              **CONDENSED
                  CONSOLIDATING INFORMATION —
                  (continued)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the three months ended June 30, 2005**
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated****(Dollar
                  amounts in thousands)**Net
                  sales
              
              $
              —
              
              $
              —
              
              $
              77,209
              
              $
              51,213
              
              $
              —
              
              $
              128,422Cost
                  of sales
              
              
              —
              
              
              —
              
              
              65,968
              
              
              35,931
              
              
              —
              
              
              101,899Gross
                  profit
              
              
              —
              
              
              —
              
              
              11,241
              
              
              15,282
              
              
              —
              
              
              26,523Selling,
                  administrative and product development expenses
              
              
              —
              
              
              1,353
              
              
              6,591
              
              
              8,601
              
              
              —
              
              
              16,545Amortization
                  of intangible assets
              
              
              —
              
              
              —
              
              
              1,725
              
              
              331
              
              
              —
              
              
              2,056Operating
                  income (loss)
              
              
              —
              
              
              (1,353
              )
              
              2,925
              
              
              6,350
              
              
              —
              
              
              7,922Interest
                  expense
              
              
              —
              
              
              (3,380
              )
              
              (826
              )
              
              (1,048
              )
              
              —
              
              
              (5,254
              )Equity
                  in income (loss) of subsidiaries
              
              
              (441
              )
              
              —
              
              
              —
              
              
              —
              
              
              441
              
              
              —Foreign
                  currency gain (loss), net
              
              
              —
              
              
              26
              
              
              —
              
              
              (2,223
              )
              
              —
              
              
              (2,197
              )Other
                  income (expense)
              
              
              (23
              )
              
              —
              
              
              41
              
              
              64
              
              
              —
              
              
              82Income
                  (loss) before income taxes
              
              
              (464
              )
              
              (4,707
              )
              
              2,140
              
              
              3,143
              
              
              441
              
              
              553Provision
                  (benefit) for income taxes
              
              
              —
              
              
              —
              
              
              (3
              )
              
              1,020
              
              
              —
              
              
              1,017Net
                  income (loss)
              
              $
              (464
              )
              $
              (4,707
              )
              $
              2,143
              
              $
              2,123
              
              $
              441
              
              $
              (464
              )
 
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the three months ended June 30, 2004**
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated****(Dollar
                  amounts in thousands)**Net
                  sales
              
              $
              —
              
              $
              —
              
              $
              64,327
              
              $
              44,019
              
              $
              —
              
              $
              108,346Cost
                  of sales
              
              
              —
              
              
              —
              
              
              52,987
              
              
              30,342
              
              
              —
              
              
              83,329Gross
                  profit
              
              
              —
              
              
              —
              
              
              11,340
              
              
              13,677
              
              
              —
              
              
              25,017Selling,
                  administrative and product development expenses
              
              
              —
              
              
              896
              
              
              6,464
              
              
              8,265
              
              
              —
              
              
              15,625Amortization
                  of intangible assets
              
              
              —
              
              
              —
              
              
              1,799
              
              
              314
              
              
              —
              
              
              2,113Operating
                  income (loss)
              
              
              —
              
              
              (896
              )
              
              3,077
              
              
              5,098
              
              
              —
              
              
              7,279Interest
                  expense
              
              
              —
              
              
              (2,742
              )
              
              (657
              )
              
              (2,082
              )
              
              —
              
              
              (5,481
              )Equity
                  in income (loss) of subsidiaries
              
              
              986
              
              
              —
              
              
              —
              
              
              —
              
              
              (986
              )
              
              —Foreign
                  currency gain (loss), net
              
              
              —
              
              
              —
              
              
              —
              
              
              (424
              )
              
              —
              
              
              (424
              )Other
                  income (expense)
              
              
              —
              
              
              —
              
              
              (205
              )
              
              404
              
              
              —
              
              
              199Income
                  (loss) before income taxes
              
              
              986
              
              
              (3,638
              )
              
              2,215
              
              
              2,996
              
              
              (986
              )
              
              1,573Provision
                  (benefit) for income taxes
              
              
              —
              
              
              (1,273
              )
              
              829
              
              
              1,031
              
              
              —
              
              
              587Net
                  income (loss)
              
              $
              986
              
              $
              (2,365
              )
              $
              1,386
              
              $
              1,965
              
              $
              (986
              )
              $
              986
 
  9
 **CHAAS
              ACQUISITIONS, LLC**
 **NOTES
              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**
 **(Dollars
              in thousands)**
 **(Unaudited)**
  **5.**
              **CONDENSED
                  CONSOLIDATING INFORMATION —
                  (continued)**
 
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the six months ended June 30, 2005**
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated****(Dollar
                  amounts in thousands)**Net
                  sales
              
              $
              —
              
              $
              —
              
              $
              147,495
              
              $
              92,197
              
              $
              —
              
              $
              239,692Cost
                  of sales
              
              
              —
              
              
              —
              
              
              127,874
              
              
              65,519
              
              
              —
              
              
              193,393Gross
                  profit
              
              
              —
              
              
              —
              
              
              19,621
              
              
              26,678
              
              
              —
              
              
              46,299Selling,
                  administrative and product development expenses
              
              
              —
              
              
              3,019
              
              
              13,209
              
              
              16,902
              
              
              —
              
              
              33,130Amortization
                  of intangible assets
              
              
              —
              
              
              —
              
              
              3,450
              
              
              672
              
              
              —
              
              
              4,122Operating
                  income (loss)
              
              
              —
              
              
              (3,019
              )
              
              2,962
              
              
              9,104
              
              
              —
              
              
              9,047Interest
                  expense
              
              
              —
              
              
              (6,807
              )
              
              (1,579
              )
              
              (2,551
              )
              
              —
              
              
              (10,937
              )Equity
                  in income (loss) of subsidiaries
              
              
              (6,316
              )
              
              —
              
              
              —
              
              
              —
              
              
              6,316
              
              
              —Foreign
                  currency gain (loss)
              
              
              —
              
              
              164
              
              
              7
              
              
              (3,699
              )
              
              —
              
              
              (3,528
              )Other
                  income (expense)
              
              
              (23
              )
              
              —
              
              
              38
              
              
              57
              
              
              —
              
              
              72Income
                  (loss) before income taxes
              
              
              (6,339
              )
              
              (9,662
              )
              
              1,428
              
              
              2,911
              
              
              6,316
              
              
              (5,346
              )Provision
                  for income taxes
              
              
              —
              
              
              —
              
              
              12
              
              
              981
              
              
              —
              
              
              993Net
                  income
              
              $
              (6,339
              )
              $
              (9,662
              )
              $
              1,416
              
              $
              1,930
              
              $
              6,316
              
              $
              (6,339
              )
 
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF OPERATIONS**
 **For
        the six months ended June 30, 2004**
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated****(Dollar
                  amounts in thousands)**Net
                  sales
              
              $
              —
              
              $
              —
              
              $
              126,355
              
              $
              78,622
              
              $
              —
              
              $
              204,977Cost
                  of sales
              
              
              —
              
              
              —
              
              
              102,938
              
              
              54,455
              
              
              —
              
              
              157,393Gross
                  profit
              
              
              —
              
              
              —
              
              
              23,417
              
              
              24,167
              
              
              —
              
              
              47,584Selling,
                  administrative and product development expenses
              
              
              —
              
              
              2,283
              
              
              12,738
              
              
              15,689
              
              
              —
              
              
              30,710Amortization
                  of intangible assets
              
              
              —
              
              
              —
              
              
              3,524
              
              
              640
              
              
              —
              
              
              4,164Operating
                  income (loss)
              
              
              —
              
              
              (2,283
              )
              
              7,155
              
              
              7,838
              
              
              —
              
              
              12,710Interest
                  expense
              
              
              —
              
              
              (6,660
              )
              
              (1,241
              )
              
              (2,683
              )
              
              —
              
              
              (10,584
              )Equity
                  in income (loss) of subsidiaries
              
              
              701
              
              
              —
              
              
              —
              
              
              —
              
              
              (701
              )
              
              —Foreign
                  currency gain (loss)
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,052
              )
              
              —
              
              
              (1,052
              )Other
                  income (expense)
              
              
              —
              
              
              —
              
              
              (296
              )
              
              406
              
              
              —
              
              
              110Income
                  (loss) before income taxes
              
              
              701
              
              
              (8,943
              )
              
              5,618
              
              
              4,509
              
              
              (701
              )
              
              1,184Provision
                  (benefit) for income taxes
              
              
              —
              
              
              (3,130
              )
              
              2,065
              
              
              1,548
              
              
              —
              
              
              483Net
                  income
              
              $
              701
              
              $
              (5,813
              )
              $
              3,553
              
              $
              2,961
              
              $
              (701
              )
              $
              701
 
 
  10
 **CHAAS
              ACQUISITIONS, LLC**
 **NOTES
              TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**
 **(Dollars
              in thousands)**
 **(Unaudited)**
  **5.**
              **CONDENSED
                  CONSOLIDATING INFORMATION —
                  (continued)**
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF CASH FLOWS**
 **For
        the six months ended June 30, 2005**
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated**Net
                  cash provided by (used for) operating activities
              
              $
              —
              
              $
              10
              
              $
              (2,123
              )
              $
              (4,523
              )
              $
              —
              
              $
              (6,636
              )Cash
                  flows used for investing activities:Acquisition
                  of property and equipment
              
              
              —
              
              
              (10
              )
              
              (5,474
              )
              
              (1,282
              )
              
              —
              
              
              (6,766
              )Net
                  cash used for investing activities
              
              
              —
              
              
              (10
              )
              
              (5,474
              )
              
              (1,282
              )
              
              —
              
              
              (6,766
              )Cash
                  flows from financing activities:Net
                  increase (decrease) in revolving loan
              
              
              —
              
              
              —
              
              
              3,654
              
              
              2,528
              
              
              —
              
              
              6,182Repayment
                  of debt
              
              
              —
              
              
              —
              
              
              71
              
              
              (1,116
              )
              
              —
              
              
              (1,045
              )Net
                  cash provided by (used for) financing activities
              
              
              —
              
              
              —
              
              
              3,725
              
              
              1,412
              
              
              —
              
              
              5,137Effect
                  of exchange rate changes
              
              
              —
              
              
              —
              
              
              —
              
              
              (769
              )
              
              —
              
              
              (769
              )Net
                  decrease in cash
              
              
              —
              
              
              —
              
              
              (3,872
              )
              
              (5,162
              )
              
              —
              
              
              (9,034
              )Cash
                  at beginning of period
              
              
              16
              
              
              —
              
              
              5,466
              
              
              9,265
              
              
              —
              
              
              14,747Cash
                  at end of period
              
              $
              16
              
              $
              —
              
              $
              1,594
              
              $
              4,103
              
              $
              —
              
              $
              5,713
 
 
 **CONDENSED
        CONSOLIDATING STATEMENT OF CASH FLOWS**
 **For
        the six months ended June 30, 2004**
 
 **Parent**
              
              **Issuers**
              
              **Guarantor**
                **subsidiaries**
              
              **Non-guarantor**
                **subsidiaries**
              
              **Eliminations/**
                **adjustments**
              
              **Consolidated****(Dollar
                  amounts in thousands)**Net
                  cash provided by (used for) operating activities
              
              $
              (9
              )
              $
              (8,738
              )
              $
              8,220
              
              $
              1,475
              
              $
              —
              
              $
              948Cash
                  flows from investing activities:Acquisition
                  of property and equipment
              
              
              —
              
              
              —
              
              
              (4,314
              )
              
              (1,762
              )
              
              —
              
              
              (6,076
              )Net
                  cash used for investing activities
              
              
              —
              
              
              —
              
              
              (4,314
              )
              
              (1,762
              )
              
              —
              
              
              (6,076
              )Cash
                  flows from financing activities:
                Change
                  in intercompany debt
              
              
              9
              
              
              8,738
              
              
              (4,358
              )
              
              (4,389
              )
              
              —
              
              
              —Net
                  increase (decrease) in revolving loan
              
              
              —
              
              
              —
              
              
              (3,852
              )
              
              3,083
              
              
              —
              
              
              (769
              )Repayment
                  of debt
              
              
              —
              
              
              —
              
              
              (56
              )
              
              (891
              )
              
              —
              
              
              (947
              )Net
                  cash provided by (used for)
                financing
                  activities
              
              
              9
              
              
              8,738
              
              
              (8,266
              )
              
              (2,197
              )
              
              —
              
              
              (1,716
              )Effect
                  of exchange rate changes
              
              
              —
              
              
              —
              
              
              —
              
              
              475
              
              
              —
              
              
              475Net
                  increase (decrease) in cash
              
              
              —
              
              
              —
              
              
              (4,360
              )
              
              (2,009
              )
              
              —
              
              
              (6,369
              )Cash
                  at beginning of period
              
              
              16
              
              
              —
              
              
              12,629
              
              
              4,041
              
              
              —
              
              
              16,686Cash
                  at end of period
              
              $
              16
              
              $
              —
              
              $
              8,269
              
              $
              2,032
              
              $
              —
              
              $
              10,317
 
  
  11
 CHAAS
            ACQUISITIONS, LLC
   **Item
                  2.**
              **Management’sDiscussion
                  and Analysis of Financial
                  Condition and Results of
                  Operations**
 
 The
        following discussion of our results of operations and financial condition
        should
        be read in conjunction with our financial statements and notes thereto included
        elsewhere in this Form 10-Q. This Form 10-Q contains forward-looking statements.
        Discussions containing forward-looking statements may be found in the material
        set forth above, in the material set forth below, as well as in this Form
        10-Q
        generally. Forward-looking statements generally can be identified by the
        use of
        terms such as "may," "will," "should," "expect," "anticipate," "believe,"
        "intend," "plan," "estimate," "predict," "potential," "forecast," "project,"
        "will be," "continue" or variations of such terms, or the use of these terms
        in
        the negative.  Our actual results may differ significantly from the
        results
        discussed in the forward-looking statements, and such differences may be
        material.  General risks that may impact the achievement of such forecasts
        include, but are not limited to: compliance with new laws and regulations,
        general economic conditions in the markets in which we operate, fluctuation
        in
        demand for our products and in the production of vehicles for which we are
        a
        supplier, significant raw material price fluctuations, labor disputes with
        our
        employees or those of our significant customers or suppliers, changes in
        consumer preferences, dependence on significant automotive customers, the
        level
        of competition in the automotive supply industry, pricing pressure from
        automotive customers, our substantial leverage, limitations imposed by our
        debt
        facilities, changes in the popularity of particular vehicle models or towing
        and
        rack systems, the loss of programs on particular vehicle models, risks
        associated with conducting business in foreign countries, other business
        factors
        and other risks detailed from time to time in the Company’s reports filed with
        the Securities & Exchange Commission.  Any such forward-looking
        statements are not guarantees of future performance and involve risks and
        uncertainties.  Actual events or results may differ materially from
        those
        discussed in the forward-looking statements.  All of these forward-looking
        statements are based on estimates and assumptions made by our management
        which,
        although believed to be reasonable, are inherently uncertain.  Given
        these
        risks and uncertainties, readers are cautioned not to place undue reliance
        on
        forward-looking statements.  We disclaim any obligation to update
        any
        forward-looking statements.
 
 **OVERVIEW**
 
 We
        are
        one of the world’s leading designers and manufacturers of exterior accessories
        for automotive original equipment manufacturers and the aftermarket. We design
        and manufacture a wide array of both rack systems and towing systems and
        related
        accessories. Our broad offering of rack systems includes fixed and detachable
        racks and accessories, which can be installed on vehicles to carry items
        such as
        bicycles, skis, luggage, surfboards, and sailboards. Our towing products
        and
        accessories include trailer hitches, trailer balls, ball mounts, electrical
        harnesses, safety chains and locking pins. Our products are sold to OEM’s as
        standard accessories or options for a variety of light vehicles and to the
        aftermarket.
 
 **Company
        Background**
 
 On
        April
        15, 2003, substantially all of the equity interests of Advanced Accessory
        Systems, LLC ("the Predecessor") were acquired by Castle Harlan Partners
        IV,
        L.P. ("the Acquisition"), a private equity investment fund organized and
        managed
        by Castle Harlan Inc., a private New York based equity firm. CHAAS Holdings,
        LLC
        ("CHAAS Holdings") was formed in April 2003 in connection with the Acquisition
        and was the direct parent of CHAAS Acquisitions, LLC ("CHAAS Acquisitions"
        or
        "the Company") which was also formed pursuant to the Acquisition.
 
 In
        January 2004, Advanced Accessory Holdings Corporation ("AAHC") was formed
        by
        CHAAS Holdings. At that time, CHAAS Holdings made a contribution of all of
        its
        equity interests in CHAAS Acquisitions to AAHC in exchange for all the
        outstanding membership units of AAHC. Subsequent to this transaction, CHAAS
        Holdings is the direct parent of AAHC and AAHC is the direct parent of CHAAS
        Acquisitions and the indirect parent of the Predecessor. Unless the context
        otherwise requires, all information which refers to "we", "our" or "us" refers
        to CHAAS Acquisitions and its subsidiaries.
 
  12
 **CHAAS
              ACQUISITIONS, LLC**
  **RESULTS
        OF OPERATIONS**
 
 **Three
        Months Ended June 30, 2005 Compared to the Three Months Ended June 30,
        2004**
 
 *Net
        sales.* Net
        sales for the second quarter of 2005 were $128.4 million, representing an
        increase of $20.1 million, or 18.6%, compared with net sales of $108.3 million
        for the second quarter of 2004. This increase includes approximately $2.0
        million due to the increase of the average exchange rates between the US
        Dollar
        and primarily the Euro, the functional currency of Brink and SportRack Europe.
        Additionally, North American OEM sales increased approximately $11.9 million,
        primarily as a result of new program launches at SportRack. Offsetting these
        increases in sales were agreed-upon price concessions with certain large
        OEM
        customers at SportRack US of $0.9 million. Sales to our aftermarket customers
        in
        both North America and Europe increased $6.2 million of which approximately
        $3.8
        million represented revenue from price increases related to steel economics
        with
        the remainder attributable to other volume increases.
 
 *Gross
        profit.* Gross
        profit for the second quarter of 2005 was $26.5 million, which represents
        an
        increase of $1.5 million, or 6.0%, compared with gross profit of $25.0 for
        the
        second quarter of 2004. Gross profit as a percentage of net sales was 20.7%
        for
        the second quarter of 2005 and 23.1% for the second quarter of 2004. Excluding
        a
        $0.3 million impact for foreign exchange, the increase in gross profit reflects
        the impact of higher volumes offset by OEM price reductions, manufacturing
        performance associated with product launches and depreciation related to
        capital
        investments. Increases in raw material costs on aftermarket products have
        been
        substantially recovered through price increases in the second quarter of
        2005.
        The lower gross profit percentage relates to the factors above as well as
        the
        impact of overall product mix.
 
 *Selling,
        administrative and product development expenses.* Selling,
        administrative and product development expenses for the second quarter of
        2005
        were $16.5 million representing an increase of $0.9 million, or 5.8%, compared
        with $15.6 million for the second quarter of 2004. This increase is primarily
        due to the change in average exchange rates between the US Dollar and local
        currencies. Excluding foreign exchange, selling and engineering costs increased
        slightly and were partially offset by lower tooling and program
        costs.
 
 *Operating
        income.* Our
        operating income for the second quarter of 2005 was $7.9 million representing
        an
        increase of $0.6 million, or 8.2%, compared with operating income of $7.3
        million for the second quarter of 2004. The increase resulted from increased
        gross profit net of increased selling, administrative and product development
        expenses.
 
 *Interest
        expense.* Interest
        expense for the second quarter of 2005 was $5.3 million representing a decrease
        of $0.2 million or 3.6%, compared with interest expense of $5.5 million for
        the
        second quarter of 2004.
 
 *Foreign
        currency loss.* Foreign
        currency loss in the second quarter of 2005 was $2.2 million compared to
        a
        foreign currency loss of $0.4 million in the second quarter
        of 2004.
        The loss in the second quarter of 2005 was primarily attributable to the
        US
        Dollar denominated intercompany indebtedness of Brink, whose functional currency
        is the Euro. During the second quarter of 2005 the US Dollar strengthened
        in
        comparison with the Euro. The intercompany indebtedness for our Canadian
        subsidiaries are deemed to be permanently invested and therefore changes
        in the
        intercompany balances for these subsidiaries caused by foreign currency
        fluctuations have been recorded in the currency translation adjustment account
        and included in other comprehensive income.
 
 *Provision
        for income taxes.* During
        the second quarter of 2005 we recorded a profit before income taxes of $0.6
        million and recorded an income tax provision of $1.0 million. The effective
        tax
        rate differs from the US federal income tax rate primarily due to changes
        in
        valuation allowances on the deferred tax assets of all North American operations
        and differences in the tax rates of foreign countries. During the second
        quarter
        of 2004 we had a net profit before taxes of $1.6 million and recorded an
        income
        tax provision of $0.6 million.
 
 *Net
        loss* .
        We
        recorded a net loss of $0.5 million in the second quarter of 2005 and a net
        profit of $1.0 million in the second quarter of 2004. The net losses were
        a
        result of the items discussed above related to net sales, gross profit, foreign
        currency loss and the other expense and income items.
  13
 **CHAAS
              ACQUISITIONS, LLC**
  **Six
        Months Ended June 30, 2005 Compared to the Six Months Ended June 30,
        2004**
 
 *Net
        sales.* Net
        sales for the first six months of 2005 were $239.7 million, representing
        an
        increase of $34.7 million, or 16.9%, compared with net sales of $205.0 million
        for the first six months of 2004. This increase includes approximately $4.7
        million due to the increase of the average exchange rates between the US
        Dollar
        and primarily the Euro, the functional currency of Brink and SportRack Europe.
        Additionally, North American OEM sales increased approximately $18.7 million,
        primarily as a result of new program launches at SportRack. Offsetting increased
        sales were agreed-upon price concessions with certain large OEM customers
        at
        SportRack US of $2.3 million. Sales to our aftermarket customers in both
        North
        America and Europe increased $12.1 million partially attributable to price
        increases in the aftermarket of $7.0 million to offset raw material economics.
 
 *Gross
        profit.* Gross
        profit for the first six months of 2005 was $46.3 million, which represents
        a
        decrease of $1.3 million, or 2.7%, compared with gross profit of $47.6 for
        the
        first six months of 2004. Gross profit as a percentage of net sales was 19.3%
        for the first six months of 2005 versus 23.2% for the first six months of
        2004.
        The overall decrease in gross profit reflects OEM price reductions, plant
        operating manufacturing performance associated with product launches and
        depreciation related to capital investments offset by the impact of higher
        volumes and favorable exchange rates between the US Dollar and local currencies.
        Increases in raw material costs on aftermarket products have been substantially
        recovered through price increases in the first six months of 2005. The lower
        gross profit percentage relates to the factors above as well as the impact
        of
        overall product mix.
 
 *Selling,
        administrative and product development expenses.* Selling,
        administrative and product development expenses for the first six months
        of 2005
        were $33.1 million representing an increase of $2.4 million, or 7.8%, compared
        with $30.7 million for the first six months of 2004. This increase is due
        to the
        change in average exchange rates between the US Dollar and local currencies
        and
        selling and engineering expense increases, offset by lower tooling and program
        costs.
 
 *Operating
        income.* Our
        operating income for the first six months of 2005 was $9.0 million representing
        a decrease of $3.7 million, or 29.1%, compared with operating income of $12.7
        million for the first six months of 2004. The decrease resulted from decreased
        gross profit and increased tooling costs and Euro value when expressed in
        US
        Dollars.
 
 *Interest
        expense.* Interest
        expense for the first six months of 2005 was $10.9 million representing an
        increase of $0.3 million or 2.8%, compared with interest expense of $10.6
        million for the first six months of 2004.
 
 *Foreign
        currency loss.* Foreign
        currency loss in the first six months of 2005 was $3.5 million compared to
        $1.1
        million in the first six months of 2004. These losses were primarily
        attributable to the US Dollar denominated intercompany indebtedness of Brink,
        whose functional currency is the Euro. During the first six months of both
        2004
        and 2005 the US Dollar strengthened in comparison with the Euro. The
        intercompany indebtedness for our Canadian subsidiaries are deemed to be
        permanently invested and therefore changes in the intercompany balances for
        these subsidiaries caused by foreign currency fluctuations have been recorded
        in
        the currency translation adjustment account and included in other comprehensive
        income.
 
 *Provision
        for income taxes.* During
        the first six months of 2005 we recorded a loss before income taxes of $5.3
        million and recorded an income tax provision of $1.0 million. The effective
        tax
        rate differs from the US federal income tax rate primarily due to changes
        in
        valuation allowances on the deferred tax assets of all North American operations
        and differences in the tax rates of foreign countries. During the first six
        months of 2004 we had a net profit before taxes of $1.2 million and recorded
        an
        income tax provision of $0.5 million.
 
 *Net
        loss* .
        We
        recorded a net loss of $6.3 million in the first six months of 2005 and a
        net
        profit of $0.7 million in the first six months of 2004. The net losses were
        a
        result of the items discussed above related to net sales, gross profit, foreign
        currency loss and the other expense and income items.
 
 
 
 
  14
 **CHAAS
              ACQUISITIONS, LLC**
  **LIQUIDITY
        AND CAPITAL RESOURCES**
 
 Our
        principal liquidity requirements are to service our debt and meet our working
        capital and capital expenditure needs. Our indebtedness at June 30, 2005
        was
        $208.6 million including current maturities of $3.4 million.
 
 In
        2004
        our operating results and operating cash flows were negatively impacted
        primarily by the costs associated with launching an unprecedented number
        of new
        roof rack programs, the high costs of steel and pricing pressures from certain
        OEM customers. As a result of these and other factors, our availability under
        our revolving credit facilities declined to $27.1 million at December 31,
        2004
        from $38.1 million available at September 30, 2004. Although we met our
        covenants for the quarter ended December 31, 2004, we anticipated that we
        would
        be unable to meet our fixed charge coverage ratio and senior secured leverage
        ratio covenants for future quarters. On March 30, 2005, we entered into the
        Fourth Amendment to the Amended and Restated Credit Agreement (the "Fourth
        Amendment") with General Electric Capital Corporation individually as a lender
        and as agent for the lenders referred to therein to modify the fixed charge
        coverage ratio and the senior secured leverage ratio.
 
 Under
        the
        modified fixed charge coverage ratio covenant, the required minimum fixed
        charge
        coverage ratio will be determined quarterly for all borrowers for specified
        quarterly periods and for European borrowers for specified quarterly periods.
        Prior to this modification the required minimum fixed charge coverage ratios
        for
        all borrowers and their subsidiaries were 1.15:1.00. As modified, the required
        minimum fixed charge coverage ratios for all borrowers and their subsidiaries
        range from 1.15:1.00 for each fiscal quarter from the fiscal quarter ending
        June
        30, 2004 through and including the fiscal quarter ending December 31, 2004;
        1.05:1.00 for the fiscal quarter ending December 31, 2005; and 1.15:1.00
        for
        each fiscal quarter ending thereafter. The required minimum fixed charge
        coverage ratio for the European borrowers and their subsidiaries is 1.25:1.00
        for the fiscal quarters ending March 31, 2005, June 30, 2005 and September
        30,
        2005. The actual fixed charge coverage ratio for the European borrowers for
        the
        fiscal quarter ending June 30, 2005 was 1.88:1.0 and we were in compliance
        with
        this covenant as of June 30, 2005.
 
 The
        modified senior secured leverage ratio covenant requires that we meet a senior
        secured leverage ratio of 1.75:1.00 for the fiscal quarters ending March
        31,
        2005 and June 30, 2005; 1.50:1.00 for the fiscal quarter ending September
        30,
        2005; and 1.25:1.00 for each fiscal quarter ending thereafter. Prior to this
        modification, the credit facility required that we meet a senior secured
        leverage ratio of 1.25:1.00 for each fiscal quarter. The actual leverage
        ratio
        for the fiscal quarter ending June 30, 2005 was 1.06:1.00 and we were in
        compliance with this covenant as of June 30, 2005.
 
 Although
        we anticipate the ability to meet our modified covenants, there can be no
        such
        assurance. Our principal sources of liquidity are funds derived from operations
        and borrowings under our revolving credit facilities. Management believes
        that,
        based on current and expected levels of operations, cash flows from operations
        and borrowings under the revolving credit facilities will be sufficient to
        fund
        its debt service requirements, working capital needs, and capital expenditures
        for the next twelve months, although no assurances can be given in this regard.
        Our ability to fund operations, make scheduled payments of interest and
        principal on our indebtedness and maintain compliance with the terms of our
        revolving credit facilities, including our fixed charge coverage ratio covenant
        and senior secured leverage ratio covenant, depends on our future operating
        performance, which is subject to economic, financial, competitive and other
        factors beyond our control. If we are unable to generate sufficient cash
        flows
        from operations to meet our financial obligations and achieve compliance
        with
        our debt covenants, there would be a material adverse effect on our business,
        financial condition and results of operations.
 
  15
 **CHAAS
              ACQUISITIONS, LLC**
  **Working
        Capital and Cash Flows**
 
 Working
        capital and key elements of the consolidated statement of cash flows
        are:
 
 
 
 June
                  30,
                2005
              December
                  31,
                2004(in
                  thousands)Working
                  Capital
              $81,827
              $77,303
 
 Six
                  months ended
                June
                  30,2005
              2004(in
                  thousands)Cash
                  flows provided by (used for) operating activities
              $(6,636)
              $948Cash
                  flows used for investing activities
              $(6,766)
              $(6,076)Cash
                  flows provided by (used for) financing activities
              $5,137
              $(1,716)
 
 *Working
        Capital*
 
 Working
        capital increased by $4.5 million to $81.8 million at June 30, 2005 from
        $77.3
        million at December 31, 2004. This increase is primarily due to an increase
        in
        accounts receivable of $20.7 million, partially offset by decreases in cash,
        inventory and other current assets of $9.0 million, $3.6 million and $0.4
        million, respectively and increases in accounts payable, other accrued
        liabilities and current maturities of long-term debt of $1.8 million, 1.3
        million and $0.3 million. The net working capital increase was also negatively
        impacted by the decreased exchange rate between the US Dollar and local
        currencies as of June 30, 2005 as compared with the exchange rate as of December
        31, 2004.
 
 Two
        of
        the major components of the working capital change were accounts receivable
        and
        inventory. The increase in accounts receivable was attributable to the timing
        of
        payments from OEM customers and to increased sales levels on a year-to-date
        basis as compared with the last several months of 2004. Inventory decreased
        as a
        result of the seasonal nature of certain segments of the business and an
        overall
        company focus on increasing inventory turnover.
 
 *Investing
        Activities*
 
 Cash
        flow
        used for investing activities for the first six months of 2005 and 2004
        represented acquisitions of property and equipment of $6.8 million and $6.1
        million, respectively, and were primarily for the expansion of capacity,
        productivity, process improvements and maintenance.
 
 *Financing
        Activities*
 
 During
        the first six months of 2005, financing cash flows included an increase in
        borrowings under the revolving line of credit of $6.2 million and repayment
        of
        debt of $1.0 million. For the same period in 2004 the financing cash flows
        included a reduction in the revolving line of credit of $0.8 million and
        repayment of debt of $0.9 million.
 
 **Debt
        and Credit Sources**
 
 Our
        indebtedness at June 30, 2005 was $208.6 million. We expect that our primary
        sources of cash will be from operating activities and borrowings under our
        revolving credit facilities. As of June 30, 2005, we had borrowings under
        the
        revolving credit facilities totaling $29.0 million and had $20.2 million
        of
        available borrowing capacity. Standby letters of credit totaling $3.9 million
        providing security for our US workers compensation program reduced borrowing
        availability.
 
 On
        March
        30, 2005 we entered into the Fourth Amendment to the Amended and Restated
        Credit
        Agreement. See the discussion of the amendment to the credit facility in
        "-
        Liquidity and Capital Resources".
  16
 **CHAAS
              ACQUISITIONS, LLC**
  *International
        Operations*
 
 We
        conduct operations in several foreign countries including Canada, the Czech
        Republic, Denmark, France, Germany, Italy, The Netherlands, Poland, Spain,
        Sweden and the United Kingdom. Net sales from international operations during
        the first six months of 2005 were $92.2 million, or 38.5% of our net sales.
        At
        June 30, 2005, assets associated with these operations were approximately
        37.0%
        of total assets, and we had indebtedness denominated in currencies other
        than
        the US Dollar of approximately $21.8 million.
 
 Our
        international operations may be subject to volatility because of currency
        fluctuations, inflation and changes in political and economic conditions
        in
        these countries. Most of the revenues and costs and expenses of our operations
        in these countries are denominated in the local currencies. The financial
        position and results of operations of the Company's foreign subsidiaries
        are
        measured using the local currency as the functional currency.
 
 *Currency
        contracts*
 
 We
        have
        significant operations in Europe where the functional currency is the Euro.
        On
        February 12, 2004, when the Euro to the US Dollar exchange rate was 1.28:1.00,
        we entered into a series of foreign currency forward option contracts related
        to
        the Euro ("Euro Collar"), which matured quarterly on a staggered basis. On
        May
        12, 2004 when the Euro to US Dollar exchange rate was 1.19:1.00, we entered
        into
        additional foreign currency option contracts. We provided a $1.9 million
        letter
        of credit in support of the foreign currency option contracts. To the extent
        that the quarter end exchange rate fell between the Euro collar exchange
        rates,
        fulfillment of the Euro collar exchange contracts would have resulted in
        offsetting foreign currency gains and losses upon expiration. For each reporting
        period we recorded the fair value, as determined by independent financial
        institutions, of open obligations and the resultant gains and losses were
        recorded in the Statement of Operations. For the three and six months ended
        June
        30, 2005 and 2004 the Company recorded unrealized gains (losses) on foreign
        currency options in the amounts of $26, $164, ($440) and ($295), respectively.
        The final three option contracts expired during the second quarter of 2005
        and
        five options expired during the first six months of 2005. Three option contracts
        expired during the second quarter of 2004 and six option contracts expired
        during the first six months of 2004.
 
 One
        of
        the options that expired in the second quarter of 2005 was the sale of a
        call
        option and was based on the average exchange rate of the period for which
        the
        option was active. The option expired in the money, requiring us to make
        a
        payment of $0.1 million. This amount was accrued at June 30, 2005 and was
        paid
        subsequent to that date.
 
 Because
        of the expiration of the option contracts, the $1,900 letter of credit described
        above expired during the second quarter of 2005.
 
 *Recently
        Issued Accounting Standards*
 
 In
        March
        2005, the FASB issued FIN 47, "Accounting for Conditional Asset Retirement
        Obligations." FIN 47 clarifies that a conditional asset retirement obligation,
        as used in SFAS 143, "Accounting for Asset Retirement Obligations," refers
        to a
        legal obligation to perform an asset retirement activity in which the timing
        and/or method of the settlement are conditional on a future event that may
        or
        may not be within the control of the entity. Accordingly, an entity is required
        to recognize a liability for the fair value of a conditional asset retirement
        obligation if the fair value can be reasonably estimated. FIN 47 is effective
        January 1, 2006, with early adoption allowed. We have not yet determined
        the
        impact, if any, FIN 47 will have on the Company's consolidated financial
        statements.
 
 **Item3.**  **Quantitative
        and Qualitative Disclosures About Market Risk**
 
 In
        May
        2004, we executed several foreign currency option contracts. See " -
        Management’s Discussion and Analysis of Financial Condition and Results of
        Operations - Debt and Credit Sources - Currency Contracts".
 
 
  17
 **CHAAS
              ACQUISITIONS, LLC**
  **Item4.**  **Controls
        and Procedures**
 
 Under
        the
        supervision and with the participation of management, including our principal
        executive officer and principal financial officer, the Company has evaluated
        the
        effectiveness of the design and operation of its disclosure controls and
        procedures as of June 30, 2005 and, based on their evaluation, the principal
        executive officer and principal financial officer have concluded that these
        controls and procedures are effective. There were no significant changes
        in
        internal controls or in other factors that could significantly affect these
        controls during the quarter.
 
 Disclosure
        controls and
        procedures are the Company’s controls and other procedures that are designed to
        ensure that information required to be disclosed by the Company in the reports
        that it files or submits under the Securities Exchange Act of 1934, as amended
        (the "Exchange Act"), is recorded, processed, summarized and reported, within
        the time periods specified in the Securities and Exchange Commission’s rules and
        forms. Disclosure controls and procedures include, without limitation, controls
        and procedures designed to ensure that information required to be disclosed
        in
        the reports that the Company files under the Exchange Act is accumulated
        and
        communicated to management, including the principal executive officer and
        principal financial officer, as appropriate to allow timely decisions regarding
        required disclosure.
  
 **PART
        II. OTHER INFORMATION AND SIGNATURE**
  **Item1.**  **Legal
        Proceedings**
 
 From
        time
        to time, we are subject to routine legal proceedings incidental to the operation
        of our business. The outcome of any threatened or pending proceedings is
        not
        expected to have a material adverse effect on our financial condition, operating
        results or cash flows, based on our current understanding of the relevant
        facts.
        The Company maintains insurance coverage against claims in an amount that
        it
        believes to be adequate.
 
 
 **Item2.**  **Changes
        in Securities, Use of Proceeds and Issuer Purchases of Equity
        Security**
 
 None
 
 
 **Item3.**  **Defaults
        Upon Senior Securities**
 
 None
 
 
 **Item4.**  **Submission
        of Matters to a Vote of Security-Holders**
 
 None
 
 
 **Item5.**  **Other
        Information**
 
 None
 
 
 **Item6.**  **Exhibits**
 
 Exhibit
                  31.1
              Certification
                  of Chief Executive Officer Pursuant to Rules 13a-14 and 15d-14,
                  as Adopted
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
 Exhibit
                  31.2
              Certification
                  of Chief Financial Officer Pursuant to Rules 13a-14 and 15d-14,
                  as Adopted
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of
                  2002
 
 Exhibit
                  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
 
 Exhibit
                  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
  
  18
 CHAAS
            ACQUISITIONS, LLC
   
 Pursuantto
        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.
 
 
 
 CHAAS
                  ACQUISITIONS, LLCDate:
                  August 15, 2005
              /s/
                  Ronald J. GardhouseRonald
                  J. GardhouseChief
                  Financial Officer(Principal
                  Financial Officerand
                  Authorized Signatory)
 
 
  19
 **CHAAS
              ACQUISITIONS, LLC**
 
 **EXHIBIT
              INDEX**
  
 
 
 Exhibit
              Description31.1
              Certification
                  of Chief Executive Officer Pursuant to
                  Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of
                  the
                  Sarbanes-Oxley Act of 200231.2
              Certification
                  of Chief Financial Officer Pursuant to
                  Rules 13a-14 and 15d-14, as Adopted Pursuant to Section 302 of
                  the
                  Sarbanes-Oxley Act of 200232.1
              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 200232.2
              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