UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

[x]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the fiscal year ended December 31, 2004

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the transition period from _______________ to ________________

                          Commission File No. 333-27665

                         CONTINENTAL GLOBAL GROUP, INC.
             (Exact Name of Registrant as Specified in its Charter)

             Delaware                                     31-1506889
             --------                                     ----------
  (State or other Jurisdiction of                      (I.R.S. Employer
   Incorporation or Organization)                     Identification No.)

                    CO-REGISTRANTS AND SUBSIDIARY GUARANTORS

Continental Conveyor & Equipment Company      Delaware          34-1603197
Goodman Conveyor Company                      Delaware          34-1603196

<TABLE>
<S>                                  <C>                               <C>
                                      Continental Conveyor &
Continental Global Group, Inc.          Equipment Company                  Goodman Conveyor Company
   438 Industrial Drive                438 Industrial Drive                    Route 178 South
  Winfield, Alabama 35594             Winfield, Alabama 35594            Belton, South Carolina 29627
     (205) 487-6492                      (205) 487-6492                          (864) 338-7793
</TABLE>

  (Address, including zip code, and telephone number, including area code, of
   registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:   None

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (sec. 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [x]

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

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2004 was $-0-.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
As of March 15, 2005, there were 100 shares of the registrant's common stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:  None


<PAGE>


                         CONTINENTAL GLOBAL GROUP, INC.

                          2004 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
    Item                                                                                                    Page
   Number                                                                                                  Number
                                     PART I
<S>           <C>                                                                                         <C>
      1        Business                                                                                         1
      2        Properties                                                                                       4
      3        Legal Proceedings                                                                                5
      4        Submission of Matters to a Vote of Security Holders                                              5
                                     PART II
      5        Market for Registrant's Common Stock and Related Stockholder Matters                             5
      6        Selected Financial Data                                                                          6
      7        Management's Discussion and Analysis of Financial Condition and Results of Operations            7
     7A        Quantitative and Qualitative Disclosures about Market Risk                                      17
      8        Financial Statements and Supplementary Data                                                     18
      9        Changes in and Disagreements with Accountants on Accounting and Financial Disclosure            51
     9A        Controls and Procedures                                                                         51
                                    PART III
     10        Directors and Executive Officers of the Registrant                                              51
     11        Executive Compensation                                                                          53
     12        Security Ownership of Certain Beneficial Owners and Management                                  54
     13        Certain Relationships and Related Transactions                                                  54
     14        Principal Accountant Fees and Services                                                          55
                                     PART IV
     15        Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                56
               Signatures                                                                                      57
               Index of Exhibits
</TABLE>



<PAGE>



                                     PART I

Item 1.  Business

General

Continental Global Group, Inc. (hereinafter referred to as the "Company"),
through its subsidiaries, is primarily engaged in the manufacture and
distribution of bulk material handling and replacement equipment, primarily for
use in the mining industry. The Company is a holding company organized under the
Delaware General Corporation Law and conducts all of its business through its
direct and indirect operating subsidiaries. The Company's direct operating
subsidiaries are Continental Conveyor and Equipment Company ("Continental")and
Goodman Conveyor Company ("Goodman"). The Company also owns indirectly all of
the capital stock of: (i) Continental Conveyor & Equipment Pty. Ltd. ("CCE Pty.
Ltd."), an Australian holding company that owns all of the capital stock of four
Australian operating companies;  (ii) Continental Conveyor Ltd., a U.K.
operating company; and (iii) Continental MECO (Pty.) Ltd., a South African
operating company.

While the Company primarily manages its operations on a geographical basis, the
Company operates in two principal business segments: conveyor equipment and
manufactured housing products. The conveyor equipment business, which comprised
approximately 89%, 87%, and 83% of net sales for 2004, 2003, and 2002,
respectively, markets its products in four main business areas. The mining
equipment business area includes the design, manufacture and testing (and,
outside the United States, installation and maintenance) of complete belt
conveyor systems and components for mining application primarily in the coal
industry. The conveyor components business area manufactures and sells
components for conveyor systems primarily for resale through distributor
networks. The engineered systems business area uses specialized project
management and engineering skills to combine mining equipment products,
purchased equipment, steel fabrication and other outside services for sale as
complete conveyor equipment systems that meet specific customer requirements.
The bulk conveyor equipment business area designs and manufactures a complete
range of conveyor equipment sold to transport bulk materials, such as cement,
lime, food products and industrial waste.

The Company's manufactured housing products business, which comprised
approximately 11%, 12%, and 16% of net sales for 2004, 2003, and 2002,
respectively, manufactures and/or refurbishes axle components sold directly to
the manufactured housing industry. As part of this segment, the Company also
sells mounted tire and rim assemblies to the manufactured housing industry.
Included in the other category is primarily the manufacture and sale of air
filtration equipment for use in enclosed environments, principally in the
textile industry.

Approximately 60% or $141.2 million of the Company's 2004 net sales were
generated in the United States, 21% or $50.2 million in Australia, 16% or $36.3
million in the United Kingdom, and 3% or $8.0 million in other countries.

                                       1

<PAGE>


Customers

The Company's conveyor equipment business segment markets its products worldwide
through a variety of marketing channels with different customer focuses. The
Company sells its mining equipment and bulk conveyor equipment products and
services primarily to mining companies and other end users, original equipment
manufacturers and engineering contractors. The Company sells its conveyor
components products to original equipment manufacturers, engineering contractors
and replacement part distributors, primarily in the following industries:
aggregates, such as rock, gravel, glass and cement materials; coal processing
and mining; pulp, paper and forest products; above ground hard rock and mineral
mining; food and grains; and environmental, sewage and waste water treatment.
The Company sells its engineered systems products and services primarily to
contractors and end users for applications in coal processing and mining, pulp
and paper, composting systems, grain handling, cement products, open-pit mining
and tunneling. The Company markets its manufactured housing products business
segment directly to the manufactured housing industry in the United States.

For the years ended December 31, 2004, 2003 and 2002, the Company did not have
sales to any single customer which exceeded 10% of the Company's total net
sales. Net sales to the Company's top five conveyor equipment customers
represented approximately 23%, 17%, and 20% of the Company's total net sales for
2004, 2003 and 2002, respectively. Although the Company has preferred supplier
arrangements with a number of its major customers pursuant to which the Company
and such customers effectively operate on a long-term basis, such arrangements
generally are not governed by long-term contracts and may be terminated by
either party at any time. A substantial portion of the Company's sales is on a
project by project basis.

Competition

The Company faces strong competition throughout the world in all of its product
lines. The various markets in which the Company competes are fragmented into a
large number of competitors, many of which are smaller businesses that operate
in relatively specialized or niche areas. In addition, a number of the Company's
competitors have financial and other resources greater than those of the
Company. Competitive considerations vary for each business area, but generally
include quality, price, reliability, availability and service.

Suppliers

The primary raw materials used by the Company to produce its products are steel
and miscellaneous purchased parts such as bearings, electric motors and gear
reducers. All materials are readily available in the marketplace. The Company is
not dependent upon any single supplier for any materials essential to its
business or that are not otherwise commercially available. The Company has been
able to obtain an adequate supply of raw materials and no shortage of raw
materials is currently anticipated.

Backlog

Backlog at December 31, 2004 was $45.6 million, an increase of $10.6 million, or
30%, from $35.0 million at December 31, 2003 and an increase of $5.2 million, or
13%, from $40.4 million at September 30, 2004. At December 31, 2004, backlog in
the domestic operations of the Company's conveyor equipment segment was $21.5
million, an increase of $2.4 million from September 30, 2004, and backlog in the
foreign operations of the Company's conveyor equipment segment was $24.1
million, an increase of $2.8 million from September 30, 2004. Management
believes that in excess of 90% of the backlog at December 31, 2004 will be
shipped in 2005. As of February 28, 2005, backlog had increased to $77.6
million, an increase of $32.0 million, or 70%, from December 31, 2004.

                                       2

<PAGE>


Employees

As of December 31, 2004, the Company had approximately 1,200 employees,
approximately 730 of whom were located in the United States. Approximately 180
of the employees at the Company's Winfield, Alabama facility are represented by
The United Steelworkers of America Union and are covered by a three year
collective bargaining agreement that expires in 2007. Approximately 80
production employees at the Company's Australian subsidiary are covered by
collective bargaining agreements that expire in 2006. Approximately 220 of the
production employees at the Company's United Kingdom and South African
facilities are covered by annual collective bargaining agreements that expire in
2005 and negotiations for new agreements are underway. The Company has not
experienced any work stoppages since 1971 and believes its relations with its
employees are good.

Environmental and Health and Safety Matters

The Company is subject to a variety of environmental standards imposed by
federal, state, local and foreign environmental laws and regulations. The
Company is also subject to the federal Occupational Health and Safety Act and
similar foreign and state laws. The Company periodically reviews its procedures
and policies for compliance with environmental and health and safety laws and
regulations and believes that it is in substantial compliance with all such
material laws and regulations applicable to its operations. Historically the
costs of compliance with environmental, health and safety requirements have not
been material to the Company.

                                       3

<PAGE>


Item 2.  Properties

The Company conducts its operations through the following primary facilities:

<TABLE>
<CAPTION>
                                         Approximate Square                                     Owned/
Location                                      Footage                Principal Function         Leased
<S>                                           <C>           <C>                                <C>

United States:
   Winfield, Alabama                             220,000     Headquarters, manufacturing        Owned
   Belton, South Carolina                        191,000     Administration, manufacturing      Owned
   Salyersville, Kentucky                        111,000     Manufacturing                      Owned
   Pueblo, Colorado                               75,600     Manufacturing, warehouse           Owned
   Eatonton, Georgia                              22,000     Manufacturing, warehouse           Owned
   Phil Campbell, Alabama                         47,000     Administration, manufacturing      Owned

Australia:
   Somersby, New South Wales                      49,655     Administration, engineering,       Owned
                                                               sales, and manufacturing
   Mackay, Queensland                             21,086     Manufacturing, and installation    Leased(1)
                                                               support
                                                  31,151     Manufacturing, and installation    Leased (2)
                                                               support
   Minto,  New South Wales                        23,024     Manufacturing                      Owned

England
   Gateshead, UK                                 186,000     Administration, engineering,       Leased(3)
                                                               sales, and manufacturing

South Africa
   Alrode, South Africa                           24,456     Administration, engineering,       Leased(4)
                                                               sales, and manufacturing
</TABLE>
   -----------

(1) Lease expires in December 2013.
(2) Leased on a month to month lease.
(3) Expires in August 2008. The Company has an option to purchase at market
    value at the end of the lease term.
(4) Expires in May 2005.

In addition to the foregoing facilities, the Company has a number of leased
warehouses and field sales offices in various locations throughout the United
States and Australia. The Company believes that substantially all of its
property and equipment is in a condition appropriate for its operations and that
it has sufficient capacity to meet its current operational needs. Each of the
Company-owned United States facilities is subject to a mortgage securing payment
of indebtedness under the Revolving Credit Facility. In addition, the Company's
owned facilities in Australia are subject to mortgage securing payment of
indebtedness under the Australian Revolving Credit Facility. See Note E,
"Financing Arrangements," to the Consolidated Financial Statements.

                                       4

<PAGE>


Item 3.  Legal Proceedings

In August and September 2003, Continental Conveyor & Equipment Company was
served as one of fifty-eight known and unknown defendants in nineteen separate
actions pending in various state courts in the State of Alabama alleging various
contract, tort and warranty claims. All claims in such actions arose out of
alleged injuries and deaths occurring at the Jim Walters Resources No. 5 Mine
which occurred on September 23, 2001. The plaintiffs in such actions do not
allege a particular set of actions or omissions by Continental Conveyor &
Equipment Company that give rise to the claims, nor is there a specific amount
of damages sought. The Company believes that these claims are without merit and
intends to vigorously defend all claims. The Company considers such claims to be
the type of claims that arise in the normal course of its business. While it is
not feasible to predict the outcome of these matters with certainty, management
is of the opinion that their ultimate disposition should not have a material
adverse effect on the Company's financial condition.

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

No matters were submitted to a vote of the Company's security holders during the
fourth quarter of the fiscal year ended December 31, 2004.


                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

The Company is a direct wholly-owned subsidiary of N.E.S. Investment Co. There
is no established public trading market for the Company's common stock. As of
March 15, 2005, the Company had one stockholder. The Company paid no dividends
in 2004 or 2003. See Note E, "Financing Arrangements", to the Consolidated
Financial Statements, Part II, Item 8, for limitations on dividends.


                                       5

<PAGE>

Item 6.  Selected Financial Data

The following table presents selected financial and operating data of the
Company for each of the five years in the period ended December 31, 2004. The
data should be read in conjunction with the Consolidated Financial Statements
and related Notes included in this report on Form 10-K.

<TABLE>
<CAPTION>
                                               2004        2003        2002         2001        2000
                                           --------------------------------------------------------------
                                                          (Data in 000's, except ratios)
<S>                                         <C>         <C>         <C>          <C>         <C>
Income Statement Data:
Net sales                                    $ 235,719   $ 194,341   $ 184,976    $ 192,711   $ 168,178
Gross profit                                    39,949      26,676      29,774       30,155      26,526
Operating income                                13,104       3,475       6,645        7,698       3,592
Interest expense, net                            6,909      15,265      15,220       15,148      14,794
Income (loss) before cumulative effect of
   change in accounting principle                3,860     (12,633)     (8,692)      (6,916)    (13,114)
Net income (loss) (1)                            3,860     (12,633)    (12,542)      (6,916)    (13,114)

Other Data:
Depreciation and amortization                    2,297       2,221       2,283        2,884       3,077
Cash flows from operating activities             1,876      (5,394)     (1,560)         268      (6,458)
Cash flows from investing activities              (687)       (688)     (1,227)      (2,452)     (1,373)
Cash flows from financing activities            (1,159)      1,249      (6,283)          21       6,519
Adjusted EBITDA (2)                             12,940       4,857       8,814        9,619       6,671
Ratio of earnings to fixed charges (3)            1.91           -           -            -           -

Balance Sheet Data:
Cash and cash equivalents                          887         851       5,635       14,672      16,942
Total assets                                   100,227      87,763      89,667      108,772     110,136
Senior Notes in default                              -     120,000           -            -           -
Long-term debt, including current portion      122,057       2,916     122,887      123,557     124,722
Stockholder's equity (deficit)                 (90,186)    (94,275)    (82,721)     (68,845)    (61,063)
</TABLE>

(1)   In 2002, the Company adopted Statement of Financial Accounting Standards
      (SFAS) No. 142, "Goodwill and Other Intangible Assets," and as a result no
      longer amortizes goodwill. Net loss in 2002 includes a non-cash goodwill
      impairment write-down recorded as a cumulative effect of change in
      accounting principle of $3,850. Net loss for 2001 and 2000 includes
      goodwill amortization expense, net of tax, of $431.

(2)   Adjusted EBITDA represents earnings before interest, taxes, depreciation,
      amortization, unusual and non-recurring gains or losses, and accounting
      changes. Adjusted EBITDA is not a measure of performance under generally
      accepted accounting principles ("GAAP"). While Adjusted EBITDA should not
      be considered in isolation or as a substitute for net income, cash flows
      from operating, investing and financing activities and other income or
      cash flow statement data prepared in accordance with GAAP or as a measure
      of profitability or liquidity, management understands that Adjusted EBITDA
      is customarily used as an indication of a company's ability to incur and
      service debt. Adjusted EBITDA is calculated as follows for the years
      ending December 31:
<TABLE>
<CAPTION>
                                         2004        2003         2002         2001        2000
                                      ----------- ------------ ------------ ----------- ------------
<S>                                    <C>         <C>          <C>          <C>        <C>
Net income (loss)                       $  3,860   $ (12,633)   $ (12,542)   $ (6,916)   $(13,114)
Interest expense, net                      6,909      15,265       15,220      15,148      14,794
Income tax expense (benefit)               3,266           4            3      (1,497)      1,914
Depreciation expense                       2,271       2,195        2,166       2,250       2,467
Amortization expense                          26          26          117         634         610
Gain on debt restructuring                (3,392)          -            -           -           -
Accounting change                              -           -        3,850           -           -
                                      ----------- ------------ ------------ ----------- ------------
Adjusted EBITDA                         $ 12,940   $   4,857    $   8,814    $  9,619    $  6,671
                                      =========== ============ ============ =========== ============
</TABLE>

(3)   Earnings consist of income before income taxes and accounting change plus
      fixed charges. Fixed charges consist of interest expense, amortization of
      deferred financing costs and one-third of rent expense from operating
      leases, which management believes is a reasonable approximation of an
      interest factor. Earnings were inadequate to cover fixed charges in the
      years ended December 31, 2003, 2002, 2001 and 2000 by $12,629, $8,689,
      $8,413, and $11,200, respectively.

                                       6

<PAGE>


Item 7.    Management's Discussion and Analysis of Financial Condition and
           Results of Operations

Results of Operations

The following table sets forth, on a comparative basis, certain income statement
data as a percentage of net sales for the fiscal years ended December 31, 2004,
2003, and 2002.

                                            Year ended December 31
                               ------------------------------------------------
                                    2004             2003              2002

Net sales                          100.0%           100.0%            100.0%
Cost of products sold               83.1             86.3              83.9
Gross profit                        16.9             13.7              16.1
SG&A expenses                       10.9             11.7              11.8
Management fee                       0.3              0.2               0.3
Amortization expense                 -                -                 0.1
Restructuring charges                0.1              -                 0.3
Operating income                     5.6              1.8               3.6

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

Net Sales
Net sales increased $41.4 million, or 21%, from $194.3 million in 2003 to $235.7
million in 2004. During 2004, the Company received significant steel price
increases from its vendors requiring the Company to increase selling prices on
its products in order to recover these increased costs. The Company passed these
steel price increases along to its customers in the form of additional sales
surcharges and sales price increases. These increased selling prices along with
increased sales volume contributed to the improved sales results. Net sales in
the domestic operations of the Company's conveyor equipment segment increased
$24.9 million due to increased sales volume and increased selling prices in the
mining equipment and conveyor components business areas. This increase in sales
volume was due primarily to the improved market conditions in the coal industry
creating higher demand for coal which resulted in increased capital spending by
the Company's major customers in the coal industry. Net sales in the foreign
operations of the Company's conveyor equipment segment increased $14.5 million.
Changes in foreign currency translation rates resulted in $10.2 million of this
increase. Adjusted for variations in foreign currency translation rates, net
sales in Australia increased $9.8 million due to improved market conditions in
the coal industry and significant shipments on a major contract in the second
quarter of 2004. Net sales in the United Kingdom decreased $6.7 million (after
adjustments for foreign currency fluctuations) due to decreased sales of
engineered systems contracts, primarily to the tunneling industry, offset
partially by an increase in the more profitable standard manufactured products
business. Net sales in South Africa increased $1.2 million, adjusted for foreign
currency fluctuations, due to improved market conditions in the coal industry.
Net sales in the Company's manufactured housing segment increased $2.1 million
due to improved market conditions in the manufactured housing industry in the
fourth quarter of 2004 combined with a change in the product mix with more sales
of new manufactured products which have a higher selling price than refurbished
products. Net sales in the Company's other segment decreased $0.1 million.

Gross Profit
Gross profit increased $13.2 million, or 49%, from $26.7 million in 2003 to
$39.9 million in 2004. This increase in gross profit is the result of a $7.0
million increase due to increased sales volume combined with a $6.2 million
increase due to improved margins. Gross profit in the domestic operations of the
Company's conveyor equipment segment increased $7.8 million ($5.0 million due to
increased volume and $2.8 million due to improved margins). This increase in
gross profit resulted from a more favorable product mixture in the mining

                                       7


<PAGE>

equipment business area and increased sales volume in the higher margin conveyor
components business area. In addition, the increased sales volumes contributed
to a more efficient utilization of overhead expenses which improved the gross
profit margins. Gross profit in the foreign operations of the Company's conveyor
equipment segment increased $5.3 million, of which $1.3 million resulted from
increases in foreign currency translation rates. The remaining increase was
primarily attributable to increases in Australia and the United Kingdom of $1.5
million and $2.0 million, respectively. The increase in Australia was primarily
attributable to improved profit margins due to the increased sales volume which
resulted in more efficient utilization of overhead expenses. The increase in the
United Kingdom primarily resulted from a more favorable mixture of the higher
margin standard manufactured products business. In addition, during the third
quarter of 2003, the estimated cost to complete two large conveyor systems
contracts in the United Kingdom was increased, resulting in a decrease in gross
profit in 2003 of $0.6 million. Gross profit in the Company's manufactured
housing segment increased $0.2 million while gross profit in the Company's other
segment decreased $0.1 million.

Gross profit as a percentage of net sales increased from 13.7% in 2003 to 16.9%
in 2004. This increase primarily resulted from improved margins due to increased
sales volume in the Company's conveyor equipment segment.

SG&A Expenses
SG&A expenses increased $3.0 million, or 13%, from $22.8 million in 2003 to
$25.8 million in 2004. SG&A expenses in the domestic operations of the Company's
conveyor equipment segment increased $1.6 million primarily due to increased
selling expenses which resulted from increased sales. SG&A expenses in the
foreign operations of the Company's conveyor equipment segment increased $0.7
million due to increases in foreign currency translation rates. SG&A expenses in
the Company manufactured housing segment increased $0.2 million due to higher
administrative expenses. Corporate SG&A expenses increased $0.5 million due to
higher insurance and personnel costs.

Operating Income
Operating income increased $9.6 million, or more than 200%, from $3.5 million in
2003 to $13.1 million in 2004. This increase resulted from the $13.2 million
increase in gross profit, offset by the $3.0 million increase in SG&A expenses,
a $0.5 million increase in management fees, and a $0.1 million increase in
restructuring charges.

Interest Expense, Net
Interest expense decreased $8.4 million, or 55%, from $15.3 million in 2003 to
$6.9 million in 2004. This decrease resulted from the reduction of interest on
the Company's Senior Notes. On October 4, 2004, the Company completed a
restructuring of its 11% Senior Notes due 2007 which was accounted for according
to Statement of Financial Accounting Standards ("SFAS") No. 15, "Accounting by
Debtors and Creditors for Troubled Debt Restructurings". According to the
provisions of SFAS No. 15, all interest payments on the Company's newly issued
Series A and Series B Notes due 2008 are recorded as a reduction of outstanding
indebtedness rather than interest expense. Interest expense related to the 11%
Senior Notes due 2007 decreased $9.0 million from $13.2 million in 2003 to $4.2
million in 2004. During 2004 and 2003, the Company paid interest of $3.2 million
and $14.7 million, respectively. Interest paid in 2004 does not include payments
of $3.1 million related to the Company's New Series A and Series B Notes, which
were recorded as a reduction in the balance of outstanding indebtedness. Refer
to the Liquidity and Capital Resources section for further discussion of future
interest payments.

Miscellaneous Expense (Income)
Miscellaneous expense (income) decreased $1.7 million, from expense of $0.8
million in 2003 to income of $0.9 million in 2004. Miscellaneous expense
(income) in 2004 included debt restructuring expenses of $2.6 million and the
gain on debt restructuring of $(3.4) million, which are both non-recurring
items.

                                       8

<PAGE>


Net Income (Loss)
Net income (loss) increased $16.5 million, from a loss of $12.6 million in 2003
to income of $3.9 million in 2004. This increase resulted from the $9.6 million
increase in operating income, combined with decreases in interest expense and
miscellaneous expense (income) of $8.4 million and $1.7 million, respectively,
and partially offset by an increase in income tax expense of $3.2 million.

Restructuring Charges
The Company incurred restructuring charges of approximately $0.2 million, $0.1
million, and $0.6 million in 2004, 2003 and 2002, respectively, related to
changes in staffing and production requirements in its domestic operations.
These charges consist primarily of severance costs associated with a reduction
in personnel which occurred in 2002 and 2003. As part of this restructuring, in
2002 the Company developed a plan to discontinue the manufacturing operations in
certain of its domestic facilities and merge these operations with other
existing facilities. The process of merging the domestic operations began in
2003 and continued throughout 2004. As of December 31, 2004, the Company has
paid approximately $0.5 million of the charges incurred to date, with the
majority of the remainder expected to be paid by 2008. Due to increases in the
Company's domestic backlog, the Company does not expect any further
consolidation at this time.

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Net Sales
Net sales increased $9.3 million, or 5%, from $185.0 million in 2002 to $194.3
million in 2003. Net sales in the domestic operations of the Company's conveyor
equipment segment decreased $4.6 million. This decrease primarily resulted from
a $5.2 million decrease in the engineered systems business due to the shipment
of a significant project in 2002 which did not recur in 2003. After a period of
lower capital spending by the Company's major customers in the coal industry,
net sales in the domestic mining equipment business increased $1.4 million. Net
sales in the domestic conveyor components business decreased $0.8 million. Net
sales in the foreign operations of the Company's conveyor equipment segment
increased $19.6 million. Changes in foreign currency translation rates resulted
in $10.8 million of this increase. Adjusted for the effects of foreign currency
fluctuations, net sales in the Company's Australian and United Kingdom
subsidiaries increased $5.5 million and $3.3 million, respectively. The increase
in Australia resulted from increased sales of conveyor equipment for new mining
projects. The increase in the United Kingdom was due to increased sales of
engineered system contracts, primarily to the tunneling industry, offset by
reduced sales of standard manufactured products. Net sales in the Company's
manufactured housing segment decreased $5.7 million, or 19%, due to the decrease
by the Company's customers in the production and shipment of manufactured homes.
Based upon the Manufactured Housing Institute's economic report for December
2003, production and shipment of new manufactured homes in 2003 was down 22%
from 2002.

Gross Profit
Gross profit decreased $3.1 million, or 10%, from $29.8 million in 2002 to $26.7
million in 2003. Gross profit in the domestic operations of the Company's
conveyor equipment segment decreased $1.8 million. Approximately $1.4 million of
the decrease was due to a decline in profit margins in the mining equipment
business which primarily resulted from the Company's inability to pass through
raw material price increases, predominantly in steel and steel-related products,
beginning in the second half of 2002. The balance of the gross profit decrease
in the domestic conveyor equipment operations was largely due to lower sales
volume in the engineered systems business area. Gross profit in the foreign
operations of the Company's conveyor equipment segment decreased $0.9 million.
Changes in foreign currency translation rates resulted in a $1.0 million
increase in gross profit at the foreign subsidiaries. Adjusted for the effects
of foreign currency fluctuations, gross profit in the Company's Australian
subsidiary increased $0.4 million while gross profit in the Company's United
Kingdom subsidiary decreased $2.3 million. The increase in the Australian
subsidiary was due to increased sales volume. The decrease in the United Kingdom
primarily resulted from lower profit margins in complete conveyor systems and

                                       9


<PAGE>

reduced sales volume of the higher margin standard manufactured products
business. Gross profit in the Company's manufactured housing segment decreased
$0.4 million due to the decrease in net sales.

Gross profit as a percentage of net sales decreased from 16.1% in 2002 to 13.7%
in 2003. This decline primarily resulted from the decreased profit margins in
the United Kingdom combined with the lower margins on mining equipment business
in the Company's domestic operations.

SG&A Expenses
SG&A expenses increased $0.9 million, or 4%, from $21.9 million in 2002 to $22.8
million in 2003. SG&A expenses in the domestic operations of the Company's
conveyor equipment segment decreased $0.8 million, primarily due to a $0.5
million decrease in selling expenses which resulted from reduced sales personnel
and related expenses and a $0.3 million decline in administrative expenses. SG&A
expenses in the foreign operations of the Company's conveyor equipment segment
increased $1.4 million. Of this increase in the foreign operations, $1.2 million
resulted from changes in the foreign currency translation rates and the
remaining $0.2 million increase primarily resulted from increased administrative
expenses. Corporate SG&A expenses increased $0.5 million due to higher personnel
and insurance expenses. SG&A expenses in the Company's other segment decreased
$0.2 million.

Operating Income
Operating income decreased $3.1 million, or 47%, from $6.6 million in 2002 to
$3.5 million in 2003. This decrease resulted from the $3.1 million decrease in
gross profit combined with the $0.9 million increase in SG&A expenses, offset by
decreases in management fees, amortization expense, and restructuring charges of
$0.2 million, $0.1 million, and $0.6 million, respectively.

Liquidity and Capital Resources

Net cash provided by (used in) operating activities was $1.9 million, $(5.4)
million, and $(1.6) million for the years ended December 31, 2004, 2003, and
2002, respectively. The increase in operating cash flows from 2003 to 2004 is
primarily the result of the increase in the Company's net income. Net cash
provided by operations in 2004 resulted from the current year net income of $3.9
million combined with non-cash expenses of $6.6 million and offset by a net
increase in operating assets of $8.6 million. The net increase in operating
assets in 2004 was primarily caused by an increase in accounts receivable due to
increased net sales. Net cash used in operating activities in 2003 resulted from
the net loss of $12.6 million offset by significant non-cash expenses of $3.2
million and a net decrease in operating assets of $4.0 million. Net cash used in
operating activities in 2002 resulted from the net loss of $12.5 million offset
by significant non-cash expenses of $7.1 million and a net decrease in operating
assets of $3.8 million.

Net cash used in investing activities was $0.7 million, $0.7 million, and $1.2
million for the years ended December 31, 2004, 2003 and 2002, respectively. Net
cash used in investing activities represents net purchases of property, plant,
and equipment for all years.

Net cash provided by (used in) financing activities was $(1.2) million, $1.2
million, and $(6.3) million for the years ended December 31, 2004, 2003, and
2002, respectively. Net cash used in financing activities in 2004 resulted from
principal payments on long-term obligations of $4.4 million and payments of
additional consideration to bondholders of $14.1 million, offset by a net
increase in borrowings on notes payable of $2.9 million and proceeds from
long-term obligations of $14.4 million. Principal payments on long-term
obligations included $3.1 million in interest payments on the New Series A and
Series B Notes recorded as a reduction in the outstanding indebtedness balance.
The Payment of additional consideration to bondholders of $14.1 million was
equivalent to $15.50 per every $120 in Old Notes tendered in the debt
restructuring. Proceeds from long-term obligations primarily included a $10.0
million note payable to N.E.S. Investment Co. used to partially fund the

                                       10

<PAGE>

additional consideration payment to bondholders and a $3.8 million increase in a
term loan with Bank one. Borrowings on notes payable at the Company's domestic
subsidiaries increased $4.1 million in 2004 while borrowings on notes payable at
the Company's foreign subsidiaries decreased $1.2 million in 2004.

Net cash provided by financing activities in 2003 resulted from a net increase
in borrowings on notes payable of $1.8 million offset by principal payments on
long-term obligations of $0.6 million. Borrowings on notes payable at the
Company's domestic subsidiaries increased $1.1 million and borrowings on notes
payable at the Company's foreign subsidiaries increased $0.7 million. Net cash
used in financing activities in 2002 resulted from a net decrease in borrowings
on notes payable of $5.4 million and principal payments on long-term obligations
of $0.9 million. Borrowings on notes payable at the Company's domestic
subsidiaries decreased $6.4 million while borrowings on notes payable at the
Company's foreign subsidiaries increased $1.0 million.

The Company's primary capital requirements consist of capital expenditures and
debt service. The Company utilizes cash on hand and its available credit
facilities to satisfy these requirements. The Company anticipates that capital
expenditures in 2005 will be approximately $3 million, which will include
expenditures to improve productivity and for maintenance capital. In addition to
the Company's debt service requirements for interest expense, as of December 31,
2004, the Company's domestic and foreign credit facilities had outstanding
principal balances of approximately $13.3 million and $3.9 million,
respectively.

The Company was not in compliance with certain covenants under its revolving
credit facilities as of December 31, 2003 or the subsequent ending quarters
through September 30, 2004, resulting in a cross default under the terms of the
Company's Senior Notes. In addition, the Company failed to make its $6.6 million
semi-annual interest payment for the Senior Notes due on April 1, 2004.
Following expiration of the 30-day grace period provided for in the indenture,
the Senior Notes were in default and the Company received a notice of default
from the Trustee for the Senior Notes. Accordingly, the Senior Notes were
recorded as current liabilities in the consolidated balance sheet as of December
31, 2003. However, on April 26, 2004, the Company entered into a forbearance
agreement with the holders of a majority interest ("Majority Holders") of the
Senior Notes which instructed the Trustee for the Senior Notes to refrain from
taking any action with respect to the default prior to May 31, 2004. On May 27,
2004, June 14, 2004 and July 13, 2004, this agreement was amended to extend the
forbearance agreement until July 23, 2004.

On July 22, 2004, the Company entered into a restructuring agreement with the
Majority Holders of the Senior Notes pursuant to which the Company agreed to
commence an offer to exchange new notes and a cash payment for all of the
outstanding Senior Notes. The restructuring agreement extended the forbearance
agreement with the Majority Holders until the restructuring was consummated or
the restructuring agreement was terminated.

On August 5, 2004, the Company commenced an offer to exchange (i) cash in the
aggregate amount of $17.5 million, (ii) 9% Series A Senior Secured Notes due
2008 in the aggregate principal amount of $65 million, and (iii) 13% Series B
Senior Secured Notes due 2008 in the aggregate principal amount of $10 million,
for all of its outstanding 11% Senior Notes due 2007 in the aggregate principal
amount of $120 million and all interest accrued thereon. The exchange offer was
made exclusively to holders of the 11% Senior Notes due 2007.

On May 1, 2004, June 1, 2004, June 15, 2004, July 13, 2004, July 29, 2004 and
August 31, 2004, the Company and Bank One, N.A. entered into forbearance
agreements under which Bank One agreed not to exercise its rights with respect
to the defaults, including the right to demand payment, under the revolving
credit facility for a stated period while the Company negotiated a restructuring
of its Senior Notes. On July 12, 2004, the Company received a commitment letter
from Bank One for a waiver of the covenant violations and an extension of the
revolving credit facility. On October 4, 2004, the Company's wholly-owned
subsidiaries, CCE and GCC entered into a Second Amended and Restated Credit
Facility and Security Agreement (the "Credit Agreement") with Bank One, N.A. The

                                       11

<PAGE>

Credit Agreement extends the Company's revolving credit facility with Bank One
until July 31, 2006.

On October 4, 2004, the Company completed the exchange offer with respect to its
outstanding 11% Senior Notes due 2007 (the "Old Notes") and entered into an
Indenture by and among the Company, two of its wholly-owned subsidiaries, CCE
and GCC (collectively, the "Subsidiary Guarantors") and Wells Fargo Bank,
National Association, as trustee (the "Indenture"). Tenders with respect to Old
Notes representing approximately $109.3 million or 91% of the $120 million of
Old Notes outstanding principal amount were received by Wells Fargo Bank, N.A.,
which acted as depositary in the exchange offer. All Old Notes that were validly
tendered were accepted for exchange. According to the terms of the exchange
offer, on October 4, 2004, the Company issued approximately $59.2 million of 9%
New Series A Notes due 2008 and approximately $9.2 million of 13% New Series B
Notes due 2008. In addition, the Company made a cash payment as additional
consideration to the Series A and Series B bondholders of approximately $14.1
million, or $15.50 for every $120 of Old Notes tendered. In October 2005, the
Series A and Series B bondholders will receive cash of approximately $1.8
million, or $2.00 for every $120 of Old Notes tendered.

According to the terms of the Indenture, the New Series A Notes will mature on
October 1, 2008. Interest will accrue at the rate of 9% per annum and will be
payable semiannually in arrears, in cash, on each April 1 and October 1 until
maturity. Interest accrued on the New Series A Notes from April 1, 2004, as if
the New Series A Notes had been issued on such date. The Company paid interest
of approximately $2.7 million on October 4, 2004 related to the Series A Notes.
The New Series B Notes will also mature on October 1, 2008. Interest will accrue
at the rate of 13% per annum and will be payable semiannually in arrears, in
kind, on each April 1 and October 1 until maturity. However, the Company has the
right to make interest payment on the New Series B Notes in cash at the same
rate and on the same terms as the New Series A Notes. The Company has assumed
the interest will be paid in cash at a rate of 9% in all calculations involving
the interest payments on the Series B Notes in these consolidated financial
statements. Interest accrued on the New Series B Notes from April 1, 2004, as if
the New Series B Notes had been issued on such date. The Company paid interest
of approximately $0.4 million on October 4, 2004 related to the Series B Notes.
The New Series A and Series B Notes are jointly and severally guaranteed by the
Subsidiary Guarantors and secured by substantially all of the assets of the
Subsidiary Guarantors.

The cash payment made on October 4, 2004 as additional consideration to the
Series A and Series B bondholders was funded by new subordinated indebtedness to
N.E.S. Investment Company in the amount of $10 million and additional borrowings
from the Company's revolving line of credit. The note payable to N.E.S.
Investment Company accrues interest at a rate of 9%, payable in kind, compounded
annually. The additional consideration to be paid by the Company in October 2005
to the Series A and Series B bondholders will be funded with an additional $2
million of subordinated indebtedness to N.E.S. Investment Company.

The debt exchange was accounted for according to Statement of Financial
Accounting Standards ("SFAS") No. 15, "Accounting by Debtors and Creditors for
Troubled Debt Restructurings". According to the requirements of SFAS No. 15, in
the fourth quarter of 2004, the Company recorded a gain on the exchange of bonds
of approximately $3.4 million, representing the difference between the future
cash outlays of the Series A and Series B Notes and the carrying value of the
Old Notes. All cash payments as additional consideration to Series A and Series
B bondholders and interest payments on the New Series A and Series B Notes will
be recorded as a reduction in the balance of outstanding indebtedness throughout
the terms of the Series A and Series B Notes, and accordingly, the Company will
not recognize any interest expense in the income statement related to the New
Series A and Series B Notes.

Because the debt exchange meets the definition of a troubled debt restructuring,
U.S. generally accepted accounting principles require that the Company follow
the provisions of SFAS No. 15. However, the Company believes that additional

                                       12

<PAGE>

information is necessary in order to keep the consolidated financial statements
from being misleading. The Company accrued interest expense on the $120 million
Old Notes during the first quarter of 2004. Beginning in the second quarter of
2004, under the provisions of SFAS No. 15, the Company accrued interest expense
related to its Senior Notes only on the approximately $10.7 million of Old Notes
not tendered. All payments related to the New Series A and Series B Notes were
recorded as a reduction in the balance of the Senior Notes. In future periods,
the Company will not record any of the interest payments on the Series A and
Series B Notes as interest expense in the statement of operations but rather as
a reduction of the debt balance on the balance sheet. If the restructuring of
the Company's Senior Notes had not occurred, the Company's interest expense for
the year ended December 31, 2004 would have been approximately $8.8 million
higher than reported. In addition, the Company would not have incurred debt
restructuring expenses of approximately $2.6 million, and the Company would not
have recorded a gain on debt restructuring of approximately $3.4 million, which
are both included in miscellaneous expense (income) in the consolidated
statement of operations.

The following table compares the Company's results of operations as presented in
the consolidated statement of operations to the results which would have been
reported if the Company had not completed the debt restructuring:

                                           Year ended December 31, 2004
                                       ------------------ -------------------
                                                              Pro-forma
                                           With debt         Without debt
                                         restructuring      restructuring
                                       ------------------ -------------------

Operating income, as reported             $ 13,104,310       $ 13,104,310
Other expenses:
   Interest expense, net                     6,908,598         15,667,188
   Miscellaneous, net                         (930,840)          (116,467)
                                       ------------------ -------------------
Total other expenses                         5,977,758         15,550,721
                                       ------------------ -------------------

Income (loss) before income taxes         $  7,126,552       $ (2,446,411)
                                       ================== ===================

The outstanding indebtedness has been classified as short and long-term
liabilities as of December 31, 2004 based upon the payment terms of the new
debt. The following table summarizes the reduction in the balance of the Senior
Notes based upon the payment requirements over the terms of the Series A and
Series B Notes:

Balance at December 31, 2004 of Senior Notes, including
  current portion of $7,967,604                                 $ 105,430,665
October 2005 payment as additional consideration                   (1,821,166)
Interest payments on Series A Notes, 2004-2008                    (21,307,650)
Interest payments on Series B Notes, 2004-2008                     (3,278,099)
Maturity of outstanding 11% Senior Notes due 2007                 (10,730,000)
                                                               ---------------
Maturity of Series A and Series B Notes due 2008                $  68,293,750
                                                               ===============

At December 31, 2004, the Company had cash and cash equivalents of approximately
$0.9 million and approximately $9.9 million available for use under its domestic
credit facility, representing approximately $10.8 million of liquidity. With the
completion of the debt exchange in October 2004, the Company has reduced its
annual debt service requirements related to interest payments by approximately
$4.8 million. Annual debt service on the New Series A and Series B Notes due
2008 combined with the outstanding Senior Notes due 2007 is approximately $7.3
million, a decrease of $5.9 million from $13.2 million prior to the debt
exchange. In order to partially fund the cash payments as additional
consideration to the Series A and Series B bondholders, the Company increased

                                       13

<PAGE>

the balance of a term loan with Bank One by approximately $3.8 million and
entered into a subordinated promissory note with N.E.S. Investment Company in
the amount of $10 million. The annual debt service requirements for interest
related to these debt instruments are approximately $0.2 million in cash and
$0.9 million in kind. In October 2005, the Company will make a cash payment as
additional consideration to the Series A and Series B bondholders for
approximately $2 million, funded by an increase in the subordinated promissory
note with N.E.S. Investment Company and increasing the annual debt service
requirements by approximately $0.2 million in kind. The Company expects current
financial resources, existing lines of credit, and funds from operations to be
adequate to meet anticipated cash requirements.

The table below summarizes the Company's contractual payments under debt
agreements, capital leases, operating leases, and material purchase obligations
as of December 31, 2004:

<TABLE>
<CAPTION>
                                                                  Payments due by period
                                              ---------------------------------------------------------------
                                                                Less than
(dollars in thousands)                            Total           1 year       1 - 3 years     3 - 5 years
                                              --------------- --------------- --------------- ---------------
<S>                                             <C>              <C>            <C>             <C>

Notes payable                                     $  17,220       $ 17,220         $      -       $      -
Senior Notes                                        105,431          7,968           23,023         74,440
Other long-term debt obligations                     15,883          1,257            4,417         10,209
Capital leases                                          857            276              462            119
Operating leases                                      5,290          1,361            2,427          1,502
Purchase obligations                                    415            415                -              -
                                              --------------- --------------- --------------- ---------------
Total                                             $ 145,096       $ 28,497         $ 30,329       $ 86,270
                                              =============== =============== =============== ===============
</TABLE>

International Operations

The Company transacts business in a number of countries throughout the world and
has facilities in the United States, Australia, the United Kingdom, and South
Africa. As a result, the Company is subject to business risks inherent in
non-U.S. operations, including political and economic uncertainty, import and
export limitations, exchange controls and currency fluctuations. The Company
believes that the risks related to its foreign operations are mitigated by the
relative political and economic stability of the countries in which its largest
foreign operations are located. The principal foreign currencies in which the
Company transacts business are the Australian dollar, the British pound
sterling, and the South African rand. As the U.S. dollar strengthens and weakens
against these foreign currencies, the Company's financial results will be
affected. As discussed previously, the Company's net sales for the year ended
December 31, 2004 increased by approximately $10.2 million over the prior year
due to changes in foreign currency translation rates, primarily the
strengthening of the Australian dollar and the British pound sterling against
the U.S. dollar. The fluctuation of the U.S. dollar versus other currencies also
resulted in foreign currency translation gains included in the accumulated other
comprehensive loss component of stockholder's equity (deficit) of approximately
$0.4 million and $0.8 million for the years ended December 31, 2004 and 2003,
respectively.

Critical Accounting Policies

Management's discussion and analysis of its financial position and results of
operations are based upon the Company's consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted
in the United States. The preparation of these financial statements requires
management to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. The Company evaluates its estimates
on an on-going basis. The Company bases its estimates on historical experience
and on various other assumptions that are believed to be reasonable under the

                                       14

<PAGE>

circumstances. Our significant accounting policies are described in Note B to
the consolidated financial statements included in Item 8 of this Form 10-K.

The Company believes the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of its consolidated
financial statements:

Revenue Recognition
The Company recognizes revenue, other than from long-term contracts of its
foreign subsidiaries, at the time of shipment. On long-term contracts of its
foreign subsidiaries, revenues are accounted for using the percentage of
completion method based on the cost of partial shipments and on the ratio of
actual costs incurred to date to the estimated total costs to complete. Net
sales include freight invoiced to customers with the related costs incurred
recorded in cost of sales.

Warranty Costs
New manufactured products sold are generally covered by a warranty for periods
ranging from six months to two years. Goods purchased for resale normally carry
the warranty of the respective manufacturer. The Company records a warranty
reserve for estimated costs to satisfy warranty obligations. The Company's
estimate of costs to service its warranty obligations is based on historical
experience and expectation of future conditions. To the extent the Company
experiences changes in warranty claims activity or costs associated with
servicing those claims, its warranty accrual is adjusted accordingly.

Allowance for Doubtful Accounts
The Company maintains allowances for doubtful accounts for estimated losses
based upon its evaluations of the probability of collection. The Company
evaluates the allowance for doubtful accounts based on the length of time the
receivables are past due, historical collection experience, and customer
credit-worthiness. In cases where the Company is aware of circumstances that may
affect the collectibility of accounts receivable from a specific customer, the
Company may record a specific allowance against the amount due from such
customer.

Inventories
The Company's inventories consists of raw material, manufactured and purchased
parts, and work in process. Since inventory records are maintained on a job
order basis, it is not practical to segregate inventories into their major
classes. The value of a portion of the inventories is determined using the
last-in, first-out ("LIFO") method with the remainder determined using the
first-in, first-out ("FIFO") method. The Company provides allowances for excess
and obsolete inventory based on the age and quality of its products.

Goodwill
The Company accounts for its goodwill under SFAS No. 142, "Goodwill and Other
Intangible Assets," and accordingly performs annual impairment tests of
goodwill. The goodwill impairment test is a two-step process, which requires
management to make judgments in determining what assumptions to use in the
calculation. The first step of the process consists of estimating the fair value
of each reporting unit to determine if there is impairment and the second step
of the process consists of determining the amount of the impairment. The Company
engages the assistance of independent valuation experts to assist in performing
the annual impairment test.

The Company uses the combination of two valuation methodologies, a market
approach and a discounted cash flow approach to develop its estimate of the fair
value of the reporting units. These two methodologies use a number of factors
and estimates that depend on, among other factors, projected future operating
results and future cash flows, estimated cash flow periods, terminal values
based on anticipated growth rates, discount rates, and market place data of
comparable companies.

                                       15

<PAGE>

The results of the annual impairment tests completed in the fourth quarters of
2004 and 2003 indicated that there was no impairment. Changes in any of the
assumptions underlying these estimates could result in a future impairment of
goodwill.

Employee Benefit Plans
The Company accounts for its defined benefit pension plan using SFAS No. 87.
Annual pension benefits under the Company's defined benefit plan are calculated
by third party actuaries using standard actuarial methodologies. Significant
assumptions used in the valuation of pension benefits include expected return on
plan assets, discount rate, and any plan amendments. As a result of declines in
interest rates and the market value of the Company's defined benefit pension
plan assets in recent years, the Company has an additional minimum pension
liability at December 31, 2004 of $2.4 million. This additional liability has
had no impact on earnings. For further details regarding the Company's defined
benefit pension plan, see Note G to the consolidated financial statements.

Deferred Taxes
Deferred income taxes reflect the timing differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. Tax credits are recognized as a reduction
of income tax expense in the year the credit arises. A valuation allowance is
established when necessary to reduce deferred tax assets to the amount more
likely than not to be realized. At December 31, 2004, the Company had a
valuation allowance of approximately $4.2 million against its deferred tax
assets. Should the Company continue to generate pre-tax income in future
periods, portions of the valuation allowance may be reversed against the current
period domestic federal tax expense (to the extent that the allowance is
available to be reversed), resulting in higher net income for that period.

New Accounting Pronouncements

The Financial Accounting Standards Board issued SFAS No. 151, "Inventory Costs,"
in November 2004. SFAS No. 151 amends Accounting Research Bulletin (ARB) No. 43
and requires idle facility expense, excessive spoilage, double freight and
rehandling costs to be treated as current period charges regardless of whether
they meet the ARB No. 43 criteria of "so  abnormal". In addition, SFAS No. 151
requires fixed overhead costs to be allocated to conversion costs based upon the
normal capacity of the production facility. SFAS No. 151 is effective for
inventory costs incurred during fiscal years beginning after June 15, 2005. The
Company has not determined the impact the adoption will have on its results of
operations or financial condition.

Cautionary Statement for Safe Harbor Purposes

This Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) contains forward-looking statements within the meaning of the
federal securities laws. As a general matter, forward-looking statements are
those focused upon future plans, objectives or performance as opposed to
historical items and include statements of anticipated events or trends and
expectations and beliefs relating to matters that are not historical in nature.
Such forward looking statements are subject to uncertainties and factors
relating to the Company's operations and business environment, all of which are
difficult to predict and many of which are beyond the control of the Company,
that could cause actual results of the Company to differ materially from those
matters expressed in or implied by such forward-looking statements.

In addition, the Company's future results of operations, financial condition,
liquidity and capital resources could be materially adversely affected by, among
other things, economic and political uncertainties or prolonged economic
recession.

                                       16

<PAGE>


Item 7A.   Quantitative and Qualitative Disclosures about Market Risk

The following tables provide information about the Company's financial
instruments that are sensitive to changes in interest rates. The tables present
principal cash flows and related weighted-average interest rates by expected
maturity dates for debt obligations as of December 31, 2004 and 2003.

<TABLE>
<CAPTION>
                                        Interest Rate Sensitivity
                                  Principal Amount by Expected Maturity
                                          Average Interest Rate
                                          (dollars in thousands)
-----------------------------------------------------------------------------------------------------------
<S>                         <C>        <C>      <C>      <C>          <C>   <C>         <C>       <C>
                                                                                                   Fair
                                                                                                   Value,
As of December 31, 2004:        2005     2006     2007      2008      2009  Thereafter    Total    12/31/04
------------------------------------------------------------------------------------------------------------

Long-Term Obligations,
 including current portion
     Fixed Rate              $ 8,725   $ 6,146  $ 16,877  $ 84,649     $ -       $ -    $ 116,397  $ 117,674
     Average interest rate        9%        9%        9%        9%

     Variable Rate             $ 500   $ 4,417       $ -       $ -     $ -       $ -      $ 4,917    $ 4,917
     Average interest rate        6%        6%


                                                                                                   Fair
                                                                                                   Value,
As of December 31, 2003:        2004     2005     2006      2007      2008  Thereafter    Total    12/31/03
------------------------------------------------------------------------------------------------------------

Long-Term Obligations,
 including current portion
 and Senior Notes in default
     Fixed Rate               $ 122,401   $ -      $ -      $ -        $ -       $ -    $ 122,401   $ 26,413
     Average interest rate          11%

     Variable Rate                 $ 16   $ -      $ -      $ -        $ -       $ -      $ 16       $ 16
     Average interest rate          12%
</TABLE>



The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in U.S. interest
rates affect the interest earned on the Company's cash equivalents as well as
interest paid on its debt. To mitigate the impact of fluctuations in U.S.
interest rates, the Company generally borrows on a long-term basis to maintain a
debt structure that is fixed rate in nature.

A portion of the Company's operations consists of manufacturing and sales
activities in foreign jurisdictions. The Company manufactures and sells its
products in the United States, Australia, the United Kingdom, and South Africa.
As a result, the Company's financial results could be significantly affected by
factors such as changes in foreign currency exchange rates or weak economic
conditions in the foreign markets in which the Company distributes its products.
The Company's operating results are exposed to changes in exchange rates between
the U.S. dollar and the Australian dollar, the British pound sterling, and the
South African rand.

                                       17

<PAGE>


Item 8.  Financial Statements and Supplemental Data

The Report of Independent Registered Public Accounting Firm and the Consolidated
Financial Statements of Continental Global Group, Inc. for each of the three
years in the period ended December 31, 2004 are included herein.



                                       18

<PAGE>


             Report of Independent Registered Public Accounting Firm


To the Stockholder
Continental Global Group, Inc.

We have audited the accompanying consolidated balance sheets of Continental
Global Group, Inc. as of December 31, 2004 and 2003, and the related
consolidated statements of operations, stockholder's equity (deficit), and cash
flows for each of the three years in the period ended December 31, 2004. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Company's internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Continental Global
Group, Inc. at December 31, 2004 and 2003, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2004, in conformity with U.S. generally accepted accounting
principles.

As explained in Note C to the financial statements, effective January 1, 2002,
the Company changed its method of accounting for goodwill.


                                               /s/ Ernst & Young LLP

Cleveland, Ohio
March 18, 2005

                                       19

<PAGE>


                         Continental Global Group, Inc.

                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                  December 31
                                                                    -----------------------------------------
                                                                                2004                 2003
<S>                                                                    <C>                   <C>
Assets:
Current assets:
   Cash and cash equivalents                                            $     887,256        $     850,727
   Accounts receivable, less allowance for doubtful accounts of
     $1,246,301 in 2004 and $987,873 in 2003                               39,633,378           32,225,793
   Inventories                                                             28,551,137           24,534,307
   Deferred income taxes                                                      483,170              264,770
   Other current assets                                                     2,578,873              942,179
                                                                    -------------------- --------------------
Total current assets                                                       72,133,814           58,817,776

Property, plant and equipment                                              33,281,329           32,269,483
Less accumulated depreciation                                              21,174,697           19,355,298
                                                                    -------------------- --------------------
                                                                           12,106,632           12,914,185

Goodwill                                                                   13,980,994           13,863,527
Deferred financing costs                                                    1,169,780            1,689,682
Other assets                                                                  835,481              477,631
                                                                    -------------------- --------------------
                                                                        $ 100,226,701        $  87,762,801
                                                                    ==================== ====================
Liabilities and Stockholder's Equity (Deficit):
Current liabilities:
   Notes payable                                                        $  17,220,041        $  13,960,369
   Trade accounts payable                                                  30,218,195           24,703,137
   Accrued compensation and employee benefits                               6,342,288            7,422,648
   Accrued interest on senior notes                                           295,075            3,300,000
   Other accrued liabilities                                                8,684,898            8,520,662
   Current maturities of long-term obligations                              9,454,247            2,546,055
   Senior Notes in default                                                          -          120,000,000
                                                                    -------------------- --------------------
Total current liabilities                                                  72,214,744          180,452,871

Pension obligations                                                         1,232,550              340,836
Deferred income taxes                                                       4,362,668              874,783
Senior Notes                                                               97,463,061                    -
Note payable to N.E.S. Investment Company                                  10,208,973                    -
Other long-term obligations, less current maturities                        4,931,102              369,449

Stockholder's equity (deficit):
   Common stock, $0.01 par value, authorized 5,000,000 shares,
     issued and outstanding 100 shares                                              1                    1
   Paid-in capital                                                          1,993,687            1,993,687
   Accumulated deficit                                                    (86,426,940)         (90,287,074)
   Accumulated other comprehensive loss                                    (5,753,145)          (5,981,752)
                                                                    -------------------- --------------------
                                                                          (90,186,397)         (94,275,138)
                                                                    -------------------- --------------------
                                                                        $ 100,226,701        $  87,762,801
                                                                    ==================== ====================
</TABLE>

See notes to consolidated financial statements.

                                       20

<PAGE>


                         Continental Global Group, Inc.

                      Consolidated Statements of Operations


<TABLE>
<CAPTION>
                                                                      Year ended December 31
                                                     ----------------------------------------------------------
                                                               2004               2003                2002

<S>                                                      <C>                 <C>                <C>
Net sales                                                $ 235,719,017       $ 194,340,515      $ 184,975,955
Cost of products sold                                      195,770,066         167,664,729        155,201,713
                                                     ------------------- ------------------ -------------------
Gross profit                                                39,948,951          26,675,786         29,774,242
Operating expenses:
   Selling and engineering                                  14,089,996          12,927,482         13,085,675
   General and administrative                               11,714,191           9,880,673          8,816,821
   Management fee                                              810,611             299,793            469,922
   Amortization expense                                         26,360              26,361            116,651
   Restructuring charges                                       203,483              66,796            639,909
                                                     ------------------- ------------------ -------------------
Total operating expenses                                    26,844,641          23,201,105         23,128,978
                                                     ------------------- ------------------ -------------------
Operating income                                            13,104,310           3,474,681          6,645,264
Other expense (income):
   Interest expense, net                                     6,908,598          15,264,566         15,219,599
   Miscellaneous expense (income)                             (930,840)            838,678            114,165
                                                     ------------------- ------------------ -------------------
Total other expenses                                         5,977,758          16,103,244         15,333,764
                                                     ------------------- ------------------ -------------------
Income (loss) before income taxes and cumulative
   effect of change in accounting principle                  7,126,552         (12,628,563)        (8,688,500)
Income tax expense                                           3,266,418               4,365              3,846
                                                     ------------------- ------------------ -------------------
Income (loss) before cumulative effect of change
   in accounting principle                                   3,860,134         (12,632,928)        (8,692,346)
Cumulative effect of change in accounting principle                  -                   -         (3,850,000)
                                                     ------------------- ------------------ -------------------
Net income (loss)                                        $   3,860,134       $ (12,632,928)     $ (12,542,346)
                                                     =================== ================== ===================
</TABLE>

See notes to consolidated financial statements.

                                       21

<PAGE>


                         Continental Global Group, Inc.

            Consolidated Statements of Stockholder's Equity (Deficit)


<TABLE>
<CAPTION>
                                                                            Accumulated
                                                                               Other
                                  Common       Paid-in     Accumulated     Comprehensive
                                   Stock       Capital       Deficit        Income (Loss)       Total
                                 ----------- ------------ --------------- ---------------- ---------------
<S>                               <C>       <C>          <C>              <C>             <C>
Balance at January 1, 2002         $    1    $ 1,993,687  $ (65,111,800)   $ (5,726,548)   $ (68,844,660)
Comprehensive loss:
   Net loss                             -              -    (12,542,346)              -      (12,542,346)
   Foreign currency
     translation adjustment             -              -              -         445,061          445,061
   Minimum pension liability
     adjustment, net of tax             -              -              -      (1,779,515)      (1,779,515)
                                                                                           ---------------
Total comprehensive loss                                                                     (13,876,800)
                                 ----------- ------------ --------------- ---------------- ---------------
Balance at December 31, 2002            1      1,993,687    (77,654,146)     (7,061,002)     (82,721,460)
Comprehensive loss:
   Net loss                             -              -    (12,632,928)              -      (12,632,928)
   Foreign currency
     translation adjustment             -              -              -         846,625          846,625
   Minimum pension liability
     adjustment, net of tax             -              -              -         213,413          213,413
   Unrealized gains on cash
     flow hedges, net of tax            -              -              -         145,753          145,753
   Reclassification into
     earnings                           -              -              -        (126,541)        (126,541)
                                                                                           ---------------
Total comprehensive loss                                                                     (11,553,678)
                                 ----------- ------------ --------------- ---------------- ---------------
Balance at December 31, 2003            1      1,993,687    (90,287,074)     (5,981,752)     (94,275,138)
Comprehensive income:
   Net income                           -              -      3,860,134               -        3,860,134
   Foreign currency
     translation adjustment             -              -              -         448,552          448,552
   Minimum pension liability
     adjustment, net of tax             -              -              -        (206,622)        (206,622)
   Unrealized losses on cash
     flow hedges, net of tax            -              -              -        (241,209)        (241,209)
   Reclassification into
     earnings                           -              -              -         227,886          227,886
                                                                                           ---------------
Total comprehensive income                                                                     4,088,741
                                 ----------- ------------ --------------- ---------------- ---------------
Balance at December 31, 2004       $    1    $ 1,993,687  $ (86,426,940)   $ (5,753,145)   $ (90,186,397)
                                 =========== ============ =============== ================ ===============
</TABLE>

See notes to consolidated financial statements.

                                       22

<PAGE>


                         Continental Global Group, Inc.

                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                         Year ended December 31
                                                           ---------------------------------------------------
                                                                  2004              2003             2002
<S>                                                           <C>            <C>                <C>
Operating activities:
   Net income (loss)                                           $ 3,860,134    $ (12,632,928)     $(12,542,346)
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
     Provision for depreciation and amortization                 2,297,306        2,221,376         2,283,227
     Amortization of deferred financing costs                      519,902          519,902           519,903
     Deferred income taxes                                       3,201,531                -                 -
     Gain on debt restructuring                                 (3,391,923)               -                 -
     Interest expense forgiven by bondholders                    3,004,925                -                 -
     Non-cash interest paid in-kind                                208,973                -                 -
     Cumulative effect of change in accounting principle                 -                -         3,850,000
     Provision for doubtful accounts                               751,022          458,112           453,738
     Loss (gain) on disposal of assets                             (14,707)          26,225            26,042
     Changes in operating assets and liabilities:
       Decrease (increase) in accounts receivable               (6,531,500)      (3,997,121)        7,361,266
       Decrease (increase) in inventories                       (3,593,216)       4,034,911          (728,139)
       Decrease (increase) in other assets                      (1,548,138)       1,134,700           (50,606)
       Increase (decrease) in accounts payable and other
         liabilities                                             3,111,967        2,840,807        (2,733,479)
                                                           ---------------- ----------------- ----------------
Net cash provided by (used in) operating activities              1,876,276       (5,394,016)       (1,560,394)
                                                           ---------------- ----------------- ----------------

Investing activities:
   Purchases of property, plant, and equipment (PP&E)             (719,246)        (781,090)       (1,280,466)
   Proceeds from disposals of PP&E                                  32,534           92,701            53,943
                                                           ---------------- ----------------- ----------------
Net cash used in investing activities                             (686,712)        (688,389)       (1,226,523)
                                                           ---------------- ----------------- ----------------

Financing activities:
   Net increase (decrease) in borrowings on notes payable        2,974,842        1,838,409        (5,380,102)
   Proceeds from long-term obligations                          14,395,032                -                 -
   Principal payments on long-term obligations                  (4,415,103)        (589,756)         (902,671)
   Payments of additional consideration to bondholders
                                                               (14,114,042)               -                 -
                                                           ---------------- ----------------- ----------------
Net cash provided by (used in) financing activities             (1,159,271)       1,248,653        (6,282,773)
Effect of exchange rate changes on cash                              6,236           49,437            32,926
                                                           ---------------- ----------------- ----------------
Increase (decrease) in cash and cash equivalents                    36,529       (4,784,315)       (9,036,764)
Cash and cash equivalents at beginning of year                     850,727        5,635,042        14,671,806
                                                           ---------------- ----------------- ----------------
Cash and cash equivalents at end of year                       $   887,256    $     850,727      $  5,635,042
                                                           ================ ================= ================
</TABLE>

See notes to consolidated financial statements.

                                       23

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

A.   Organization and Basis of Presentation

Continental  Global Group, Inc. (the "Company") was formed on February 4, 1997,
for the purpose of owning all of the common stock of Continental Conveyor &
Equipment Company ("CCE") and Goodman Conveyor Company ("GCC"). The Company,
which is a holding company with limited assets and operations other than its
investments in its subsidiaries, is owned 100% by N.E.S. Investment Co.

Prior to January 1, 1997, CCE and GCC were limited partnerships under common
control by NES Group, Inc. (the parent company of N.E.S. Investment Co.), the
99% limited partner. Effective January 1, 1997, NES Group, Inc., transferred
its interest in the limited  partnerships to CCE and GCC. Effective February
1997, NES Group, Inc. transferred to the Company all of the outstanding capital
stock of CCE and GCC.

The Company was not in compliance with certain covenants under its revolving
credit facilities as of December 31, 2003 or the subsequent ending quarters
through September 30, 2004, resulting in a cross default under the terms of the
Company's Senior Notes. In addition, the Company failed to make its $6,600,000
semi-annual interest payment for the Senior Notes due on April 1, 2004.
Following expiration of the 30-day grace period provided for in the indenture,
the Senior Notes were in default and the Company received a notice of default
from the Trustee for the Senior Notes. Accordingly, the Senior Notes were
recorded as current liabilities in the consolidated balance sheet as of December
31, 2003. However, on April 26, 2004, the Company entered into a forbearance
agreement with the holders of a majority interest ("Majority Holders") of the
Senior Notes which instructed the Trustee for the Senior Notes to refrain from
taking any action with respect to the default prior to May 31, 2004. On May 27,
2004, June 14, 2004 and July 13, 2004, this agreement was amended to extend the
forbearance agreement until July 23, 2004.

On July 22, 2004, the Company entered into a restructuring agreement with the
Majority Holders of the Senior Notes pursuant to which the Company agreed to
commence an offer to exchange new notes and a cash payment for all of the
outstanding Senior Notes. The restructuring agreement extended the forbearance
agreement with the Majority Holders until the restructuring was consummated or
the restructuring agreement was terminated.

On August 5, 2004, the Company commenced an offer to exchange (i) cash in the
aggregate amount of $17,500,000, (ii) 9% Series A Senior Secured Notes due 2008
in the aggregate principal amount of $65,000,000, and (iii) 13% Series B Senior
Secured Notes due 2008 in the aggregate principal amount of $10,000,000, for all
of its outstanding 11% Senior Notes due 2007 in the aggregate principal amount
of $120,000,000 and all interest accrued thereon. The exchange offer was made
exclusively to holders of the 11% Senior Notes due 2007.

On May 1, 2004, June 1, 2004, June 15, 2004, July 13, 2004, July 29, 2004 and
August 31, 2004, the Company and Bank One, N.A. entered into forbearance
agreements under which Bank One agreed not to exercise its rights with respect
to the defaults, including the right to demand payment, under the revolving
credit facility for a stated period while the Company negotiated a restructuring
of its Senior Notes. On July 12, 2004, the Company received a commitment letter
from Bank One for a waiver of the covenant violations and an extension of the
revolving credit facility. On October 4, 2004, the Company's wholly-owned
subsidiaries, CCE and GCC entered into a Second Amended and Restated Credit
Facility and Security Agreement (the "Credit Agreement") with Bank One, N.A. The
Credit Agreement extends the Company's revolving credit facility with Bank One
until July 31, 2006.

                                       24

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

A.  Organization and Basis of Presentation (Continued)

On October 4, 2004, the Company completed the exchange offer with respect to its
outstanding 11% Senior Notes due 2007 (the "Old Notes") and entered into an
Indenture by and among the Company, two of its wholly-owned subsidiaries, CCE
and GCC (collectively, the "Subsidiary Guarantors") and Wells Fargo Bank,
National Association, as trustee (the "Indenture"). Tenders with respect to Old
Notes representing approximately $109,270,000 or 91.06% of the $120,000,000 of
Old Notes outstanding principal amount were received by Wells Fargo Bank, N.A.,
which acted as depositary in the exchange offer. All Old Notes that were validly
tendered were accepted for exchange. According to the terms of the exchange
offer, on October 4, 2004, the Company issued $59,187,917 of 9% New Series A
Notes due 2008 and $9,105,833 of 13% New Series B Notes due 2008. In addition,
the Company made a cash payment as additional consideration to the Series A and
Series B bondholders of approximately $14,114,000, or $15.50 for every $120 of
Old Notes tendered. In October 2005, the Series A and Series B bondholders will
receive cash of approximately $1,821,000, or $2.00 for every $120 of Old Notes
tendered.

According to the terms of the Indenture, the New Series A Notes will mature on
October 1, 2008. Interest will accrue at the rate of 9% per annum and will be
payable semiannually in arrears, in cash, on each April 1 and October 1 until
maturity. Interest accrued on the New Series A Notes from April 1, 2004, as if
the New Series A Notes had been issued on such date. The Company paid interest
of $2,663,457 on October 4, 2004 related to the Series A Notes. The New Series B
Notes will also mature on October 1, 2008. Interest will accrue at the rate of
13% per annum and will be payable semiannually in arrears, in kind, on each
April 1 and October 1 until maturity. However, the Company has the right to make
interest payment on the New Series B Notes in cash at the same rate and on the
same terms as the New Series A Notes. The Company has assumed the interest will
be paid in cash at a rate of 9% in all calculations involving the interest
payments on the Series B Notes in these consolidated financial statements.
Interest accrued on the New Series B Notes from April 1, 2004, as if the New
Series B Notes had been issued on such date. The Company paid interest of
$409,763 on October 4, 2004 related to the Series B Notes. The New Series A and
Series B Notes are jointly and severally guaranteed by the Subsidiary Guarantors
and secured by substantially all of the assets of the Subsidiary Guarantors.

The cash payment made on October 4, 2004 as additional consideration to the
Series A and Series B bondholders was funded by new subordinated indebtedness to
N.E.S. Investment Company in the amount of $10,000,000 and additional borrowings
from the Company's revolving line of credit. The note payable to N.E.S.
Investment Company accrues interest at a rate of 9%, payable in kind, compounded
annually. The additional consideration to be paid by the Company in October 2005
to the Series A and Series B bondholders will be funded with an additional
$2,000,000 of subordinated indebtedness to N.E.S. Investment Company.

                                       25

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

A.  Organization and Basis of Presentation (Continued)

The debt exchange was accounted for according to Statement of Financial
Accounting Standards ("SFAS") No. 15, "Accounting by Debtors and Creditors for
Troubled Debt Restructurings". According to the requirements of SFAS No. 15, in
the fourth quarter of 2004, the Company recorded a gain on the exchange of bonds
of approximately $3,392,000, representing the difference between the future cash
outlays of the Series A and Series B Notes and the carrying value of the Old
Notes. All cash payments as additional consideration to Series A and Series B
bondholders and interest payments on the New Series A and Series B Notes will be
recorded as a reduction in the balance of outstanding indebtedness throughout
the terms of the Series A and Series B Notes, and accordingly, the Company will
not recognize any interest expense in the income statement related to the New
Series A and Series B Notes.

Because the debt exchange meets the definition of a troubled debt restructuring,
U.S. generally accepted accounting principles require that the Company follow
the provisions of SFAS No. 15. However, the Company believes that additional
information is necessary in order to keep the consolidated financial statements
from being misleading. The Company accrued interest expense on the $120 million
Old Notes during the first quarter of 2004. Beginning in the second quarter of
2004, under the provisions of SFAS No. 15, the Company accrued interest expense
related to its Senior Notes only on the $10,730,000 of Old Notes not tendered.
All payments related to the New Series A and Series B Notes were recorded as a
reduction in the balance of the Senior Notes. In future periods, the Company
will not record any of the interest payments on the Series A and Series B Notes
as interest expense in the statement of operations but rather as a reduction of
the debt balance on the balance sheet. In addition, the Company incurred debt
restructuring expenses of approximately $2,578,000 and recorded a gain on debt
restructuring of approximately $3,392,000, which are both included in
miscellaneous expense (income) in the consolidated statement of operations.

                                       26

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

B.  Significant Accounting Policies

Principles of Consolidation
The financial statements include the accounts of the Company and its
wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.

Revenue Recognition
The Company recognizes revenue, other than from long-term contracts of its
foreign subsidiaries, at the time of shipment. On long-term contracts of its
foreign subsidiaries, which represent less than 10% of 2004 consolidated
revenues, revenues are accounted for using the percentage of completion method
based on the cost of partial shipments and on the ratio of actual costs incurred
to date to the estimated total costs to complete. Net sales include freight
invoiced to customers with the related costs incurred recorded in cost of sales.

Cash Equivalents
The Company considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents.

Allowance for Doubtful Accounts
The Company maintains allowances for doubtful accounts for estimated losses
based upon its evaluations of the probability of collection. The Company
evaluates the allowance for doubtful accounts based on the length of time the
receivables are past due, historical collection experience, customer
credit-worthiness, and other circumstances that may impair the collectibility of
accounts receivable from specific customers.

Inventories
Inventories, which consist of raw materials, manufactured and purchased parts,
and work in process are stated at the lower of cost or market. Since inventory
records are maintained on a job order basis, it is not practical to segregate
inventories into their major classes. The cost for approximately 64% and 57% of
inventories at December 31, 2004 and 2003, respectively, is determined using the
last-in, first-out ("LIFO") method with the remainder determined using the
first-in, first-out ("FIFO") method. Had the FIFO method of inventory (which
approximates replacement cost) been used to cost all inventories, inventories
would have increased by approximately $5,184,000 and $1,316,000 at December 31,
2004 and 2003, respectively.

Impairment of Long-Lived Assets
Long-lived assets, other than goodwill, are reviewed for impairment when events
or changes in circumstances indicate that the carrying amount of the asset, or
related groups of assets, may not be recoverable. The asset would be considered
impaired when the Company's estimate of future undiscounted cash flows over the
assets remaining estimated useful life is less than the asset's carrying value.
Measurement of the amount of impairment may be based on appraisal, market values
of similar assets, or estimated discounted future cash flows resulting from the
use and ultimate disposition of the asset.

                                       27

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

B.  Significant Accounting Policies (Continued)

Warranty Costs
The Company's products are generally covered by warranties against defects in
material and workmanship for periods up to two years from the date of sale or
installation of the product. The Company records a provision for estimated
warranty cost based on historical experience and expectations of future
conditions and continuously assesses the adequacy of its product warranty
accrual and makes adjustments as needed. A summary of accrued warranty costs
follows:

<TABLE>
<CAPTION>
                                                2004             2003              2002
                                          ----------------- ---------------- -----------------
<S>                                         <C>               <C>              <C>
Balance as of January 1                      $ 1,275,401       $ 1,678,002      $   768,313
Provision for warranties                         927,786           931,835        1,293,518
Settlements made during the year                (617,915)       (1,427,369)        (420,257)
Effect of exchange rate changes                   48,777            92,933           36,428
                                          ----------------- ---------------- -----------------
Balance as of December 31                    $ 1,634,049       $ 1,275,401      $ 1,678,002
                                          ================= ================ =================
</TABLE>

Restructuring Charges
The Company incurred restructuring charges of approximately $203,000, $67,000
and $640,000 in 2004, 2003 and 2002, respectively, related to changes in
staffing and production requirements in its domestic operations. These charges
consist primarily of severance costs associated with a reduction in personnel
which occurred in 2002 and 2003. As part of this restructuring, in 2002 the
Company developed a plan to discontinue the manufacturing operations in certain
of its domestic facilities and merge these operations with other existing
facilities. The process of merging the domestic operations began in 2003 and
continued throughout 2004. As of December 31, 2004, the Company has paid
approximately $536,000 of the charges incurred to date, with the majority of the
remainder expected to be paid by 2008. Due to increases in the Company's
domestic backlog, the Company does not expect any further consolidation at this
time.

Advertising Expense
The cost of advertising is expensed as incurred. The Company incurred
approximately $506,000, $613,000, and $644,000 in advertising costs for the
years ended December 31, 2004, 2003, and 2002, respectively.

Income Taxes
The provision for income taxes is calculated in accordance with SFAS No. 109,
"Accounting for Income Taxes," which requires the recognition of deferred income
taxes using the liability method. The Company's operations will be included in
the consolidated income tax returns filed by N.E.S. Investment Co. Income tax
expense in the Company's consolidated statement of operations is calculated on a
separate tax return basis as if the Company had operated as a stand-alone
entity.

Foreign Currency Translation
The assets and liabilities of the Company's foreign subsidiaries are translated
at current exchange rates, while revenues and expenses are translated at average
rates prevailing during the year. The effects of exchange rate fluctuations have
been reported in accumulated other comprehensive loss. The effect on the
statements of operations of currency transaction gains and losses was not
material for all years presented.

                                       28

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

B.  Significant Accounting Policies (Continued)

Derivative Financial Instruments
The Company recognizes all derivative financial instruments as either assets or
liabilities at fair value. Derivative instruments that are not hedges are
adjusted to fair value through earnings. Changes in the fair value of derivative
instruments that are classified as fair value hedges are offset against changes
in the fair value of the hedged assets, liabilities, or firm commitments,
through earnings. Changes in the fair value of derivative instruments that are
classified as cash flow hedges are recognized in other comprehensive income
until such time as the hedged items are recognized in earnings. The ineffective
portions of a derivative instrument's change in fair value are immediately
recognized in earnings.

The Company uses forward exchange contracts (principally against the Australian
dollar and the U.S. dollar) to hedge certain firm sales commitments of its
foreign subsidiaries. Foreign currency forward contracts reduce the Company's
exposure to the risk that the eventual net cash inflows resulting from the sale
of products denominated in a currency other than the functional currency of the
respective business will be adversely impacted by changes in exchange rates.

Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss at December 31 consisted of the following:

<TABLE>
<CAPTION>
                                                            2004              2003             2002
                                                    ---------------- ----------------- ----------------

<S>                                                   <C>              <C>               <C>
Foreign currency translation adjustments              $ (3,986,310)    $ (4,434,862)     $ (5,281,487)
Minimum pension liability adjustments (net of tax)      (1,772,724)      (1,566,102)       (1,779,515)
Change in fair value of cash flow  hedges
   (net of tax)                                              5,889           19,212                 -
                                                    ---------------- ----------------- ----------------
                                                      $ (5,753,145)    $ (5,981,752)     $ (7,061,002)
                                                    ================ ================= ================
</TABLE>

Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

New Accounting Pronouncements
The Financial Accounting Standards Board issued SFAS No. 151, "Inventory Costs,"
in November 2004. SFAS No. 151 amends Accounting Research Bulletin (ARB) No. 43
and requires idle facility expense, excessive spoilage, double freight and
rehandling costs to be treated as current period charges regardless of whether
they meet the ARB No. 43 criteria of "so  abnormal". In addition, SFAS No. 151
requires fixed overhead costs to be allocated to conversion costs based upon the
normal capacity of the production facility. SFAS No. 151 is effective for
inventory costs incurred during fiscal years beginning after June 15, 2005. The
Company has not determined the impact the adoption will have on its results of
operations or financial condition.

                                       29

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

C.  Goodwill and Other Intangibles

The Company adopted SFAS No. 142, "Goodwill and Other Intangible Assets,"
effective January 1, 2002. Under SFAS No. 142, goodwill and intangible assets
deemed to have indefinite lives are no longer amortized but are subject to
annual impairment tests. Other intangible assets will continue to be amortized
over their useful lives.

Goodwill and other intangibles that have indefinite lives will be tested for
impairment at least annually, using a two step process. The first step
identifies if there is impairment using a fair-value-based test and the second
step determines the amount of the impairment. The Company engaged the assistance
of independent valuation experts to perform the initial analysis as of January
1, 2002 as well as the annual impairment tests. The impairment tests were
conducted using both a discounted cash flow valuation model, incorporating an
appropriate discount rate for the risks associated with the reporting unit, and
a market approach based on comparable public companies guidelines. Based on
findings from the initial impairment test as of January 1, 2002, the Company
concluded that the carrying value of its Australian reporting unit (part of the
Company's conveyor equipment segment) exceeded its estimated fair value and the
Company recorded a non-cash impairment write-down for goodwill of $3,850,000.
This transition adjustment was reported as a cumulative effect of a change in
accounting principle. The results of the annual impairment tests completed in
the fourth quarter of 2004, 2003, and 2002 indicated that there was no further
impairment.

The carrying amounts and related accumulated amortization balances of the
Company's other intangible assets as of December 31 are listed below:

<TABLE>
<CAPTION>
                                                    2004                               2003
                                           Carrying        Accumulated         Carrying      Accumulated
                                            Amount         Amortization         Amount       Amortization
                                      ---------------- ----------------- ---------------- -----------------

<S>                                         <C>             <C>                <C>             <C>
Amortized intangible assets                 $ 160,919       $ (106,419)        $ 506,468       $ (425,608)
Other intangible assets                       659,335                -           276,659                -
</TABLE>

The change in goodwill reflected on the balance sheet from December 31, 2003 to
December 31, 2004 resulted from foreign currency translation adjustments. All of
the Company's goodwill relates to the conveyor equipment segment. Other
intangible assets consist primarily of intangible assets related to a minimum
pension liability for the Company's pension plan. Estimated amortization expense
related to other intangible assets for each of the next five fiscal years is:

               2005                   $ 26,360
               2006                     17,116
               2007                      4,176
               2008                      4,176
               2009                      2,672
                                ----------------
               Total                  $ 54,500
                                ================

                                       30

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

D.  Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. The balances of the major
classes of property, plant and equipment at December 31, 2004 and 2003 are as
follows:

                                              2004              2003
                                      ------------------ ----------------

Land and improvements                    $  1,323,266      $  1,283,233
Buildings and improvements                  7,559,753         7,303,338
Machinery and equipment                    24,398,310        23,682,912
                                      ------------------ ----------------
                                         $ 33,281,329      $ 32,269,483
                                      ================== ================

Depreciation expense for the years ended December 31, 2004, 2003, and 2002 was
$2,270,946, $2,195,015, and $2,166,576, respectively. Depreciation is primarily
computed using the straight-line method based on the expected useful lives of
the assets. The estimated useful lives for buildings and improvements range from
10 to 39 years; the estimated useful lives for machinery and equipment range
from 2.5 to 12.5 years. Repair and maintenance costs are expensed as incurred.

E.  Financing Arrangements

Long-term obligations consist of the following:
<TABLE>
<CAPTION>
                                                                                   As of December 31
                                                                           ----------------------------------
                                                                                 2004             2003

<S>                                                                        <C>               <C>
Senior Notes due 2007; interest at 11% payable semi-annually in arrears     $ 10,730,000      $120,000,000
Series A Notes due 2008; interest at 9% payable semi-annually in arrears      82,073,910                 -
Series B Notes due 2008; interest payable semi-annually in arrears at
   13% in kind or 9% in cash                                                  12,626,755                 -
Note payable to N.E.S. Investment Company; interest rate of 9%; maturity
   date of 10/2/2008                                                          10,208,973                 -
Term loan payable by CCE; interest rate of prime plus 1/2 %; payable in
   monthly installments with balance due on 7/31/2006                          4,916,667         1,292,547
Note payable by CCE for manufacturing equipment; interest rate of
   8.845%; payable in monthly installments through 6/13/2005                      94,596           472,009
Term loan payable by Australian subsidiary; interest rate of 7.50%;
   maturity date of  12/31/2005                                                  663,085           637,075
Note payable by South African subsidiary for purchase of computer
   system; variable interest rate (11.55% at December 31, 2003)                        -            15,732
Obligations under capital leases                                                 743,397           498,141
                                                                          ----------------- ----------------
                                                                             122,057,383       122,915,504
Less current maturities                                                        9,454,247       122,546,055
                                                                          ----------------- ----------------
                                                                            $112,603,136      $    369,449
                                                                          ================= ================
</TABLE>

                                       31

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

E.  Financing Arrangements (Continued)

Maturities of long-term obligations are as follows:

              2005     $   9,454,247
              2006        10,819,428
              2007        17,028,192
              2008        84,737,135
              2009            18,381
                    ------------------
                       $ 122,057,383
                    ==================

On October 4, 2004, the Company completed an exchange offer with respect to its
outstanding 11% Senior Notes due 2007 (the "Old Notes") and entered into an
Indenture by and among the Company, two of its wholly-owned subsidiaries, CCE
and GCC (collectively, the "Subsidiary Guarantors") and Wells Fargo Bank,
National Association, as trustee (the "Indenture"). Tenders with respect to Old
Notes representing approximately $109,270,000 or 91.06% of the $120,000,000 of
Old Notes outstanding principal amount were received by Wells Fargo Bank, N.A.,
which acted as depositary in the exchange offer. All Old Notes that were validly
tendered were accepted for exchange. According to the terms of the exchange
offer, on October 4, 2004, the Company issued $59,187,917 of 9% New Series A
Notes due 2008 and $9,105,833 of 13% New Series B Notes due 2008.

The Old Notes are registered under the Securities Act of 1933. Interest of 11%
on the notes is payable semi-annually in arrears. The Old Notes are redeemable
at the option of the Company, in whole or in part, any time subject to certain
call premiums. The Old Notes are guaranteed by the Company's domestic
subsidiaries and contain various restrictive covenants that, among other things,
place limitations on the sale of assets, payment of dividends, and incurring
additional indebtedness and restrict transactions with affiliates.

According to the terms of the Indenture, the New Series A Notes will mature on
October 1, 2008. Interest will accrue at the rate of 9% per annum and will be
payable semiannually in arrears, in cash, on each April 1 and October 1 until
maturity. Interest accrued on the New Series A Notes from April 1, 2004, as if
the New Series A Notes had been issued on such date. The Company paid interest
of $2,663,457 on October 4, 2004 related to the Series A Notes. The New Series B
Notes will also mature on October 1, 2008. Interest will accrue at the rate of
13% per annum and will be payable semiannually in arrears, in kind, on each
April 1 and October 1 until maturity. However, the Company has the right to make
interest payments on the New Series B Notes in cash at the same rate and on the
same terms as the New Series A Notes. The Company has assumed the interest will
be paid in cash at a rate of 9% in all calculations involving the interest
payments on the Series B Notes in these consolidated financial statements.
Interest accrued on the New Series B Notes from April 1, 2004, as if the New
Series B Notes had been issued on such date. The Company paid interest of
$409,763 on October 4, 2004 related to the Series B Notes. The New Series A and
Series B Notes are jointly and severally guaranteed by the Subsidiary Guarantors
and secured by substantially all of the assets of the Subsidiary Guarantors.

                                       32

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

E.  Financing Arrangements (Continued)

The debt exchange was accounted for according to Statement of Financial
Accounting Standards ("SFAS") No. 15, "Accounting by Debtors and Creditors for
Troubled Debt Restructurings". According to the requirements of SFAS No. 15, in
the fourth quarter of 2004, the Company recorded a gain on the exchange of bonds
of approximately $3,392,000, representing the difference between the future cash
outlays of the Series A and Series B Notes and the carrying value of the Old
Notes. All cash payments as additional consideration to Series A and Series B
bondholders and interest payments on the New Series A and Series B Notes will be
recorded as a reduction in the balance of outstanding indebtedness throughout
the terms of the Series A and Series B Notes, and accordingly, the Company will
not recognize any interest expense in the income statement related to the New
Series A and Series B Notes.

The outstanding indebtedness has been classified as short and long-term
liabilities as of December 31, 2004 based upon the payment terms of the new
debt. The following table summarizes the reduction in the balance of the Senior
Notes based upon the payment requirements over the terms of the Series A and
Series B Notes:

Balance at December 31, 2004 of Senior Notes, including
   current portion of $7,967,604                                 $ 105,430,665
October 2005 payment as additional consideration                    (1,821,166)
Interest payments on Series A Notes, 2004-2008                     (21,307,650)
Interest payments on Series B Notes, 2004-2008                      (3,278,099)
Maturity of outstanding 11% Senior Notes due 2007                  (10,730,000)
                                                               ----------------
Maturity of Series A and Series B Notes due 2008                 $  68,293,750
                                                               ================

The new subordinated indebtedness to N.E.S. Investment Company in the amount of
$10,000,000 was used to partially fund the cash payment made on October 4, 2004
as additional consideration to the Series A and Series B bondholders. The note
payable to N.E.S. Investment Company accrues interest at a rate of 9%, payable
in kind, compounded annually. The additional consideration to be paid by the
Company in October 2005 to the Series A and Series B bondholders will be funded
with an additional $2,000,000 of subordinated indebtedness to N.E.S. Investment
Company.

On October 4, 2004, CCE and GCC entered into a Second Amended and Restated
Credit Facility and Security Agreement ("Credit Agreement") with Bank One, N.A.,
pursuant to which Bank One has provided CCE and GCC jointly with a line of
credit of $30 million. The availability under the Credit Agreement is equal to
the sum of (i) 85% of eligible accounts receivable and (ii) 55% of eligible
inventory. The Credit Agreement is guaranteed by the Company and secured by a
lien on substantially all of the assets of CCE and GCC. In addition, the Credit
Agreement contains various restrictive covenants including financial covenants
related to debt coverage and minimum net worth and requires the Company to pay a
monthly unused commitment fee equal to 1/4% of the average daily availability.
The Credit Agreement matures on July 31, 2006, and bears interest at a
fluctuating rate based on the prime rate. At December 31, 2004, approximately
$9.9 million was available for use. At December 31, 2004 and 2003, the Company
had an outstanding balance under the Credit Agreement of $13,296,896 and
$9,144,546, respectively. The weighted average interest rate for this facility
was 4.4% and 4.1% in 2004 and 2003, respectively. There were approximately
$2,685,000 and $3,474,000 of letters of credit outstanding at December 31, 2004
and 2003, respectively.

                                       33

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

E.  Financing Arrangements (Continued)

The Credit Agreement also provided for an increase in CCE's secured term loan
with Bank One to a principal balance of $5 million. The term loan bears interest
at a rate of prime plus 1/2% and matures on July 31, 2006. Principal and
interest payments are made monthly with a balloon payment due at maturity.

The Company's Australian subsidiary has a revolving credit facility with the
National Australia Bank Limited which provides a line of credit of $2.8 million
(Australian dollars). The facility is secured by a lien on substantially all of
the assets of the Australian subsidiary, bears interest at a fluctuating rate
based on the base rate of the National Australia Bank, and matures on December
31, 2005. At December 31, 2004, the facility was not utilized. The outstanding
balance under this facility was $2,153,409 (U.S.$) at December 31, 2003. The
weighted average interest rate for this facility was 7.9% and 11.3% in 2004 and
2003, respectively.

The Company's United Kingdom subsidiary has a revolving credit facility with the
Bank of Scotland of 2.25 million British pounds sterling. The facility is
secured by certain assets of the subsidiary, bears interest at a fluctuating
rate of 2.1% above the Bank of Scotland base rate, and matures on December 31,
2005. At December 31, 2004, approximately 0.6 million British pounds was
available for use. The outstanding balance under this facility was $3,263,183
and $2,070,234 (U.S.$) at December 31, 2004 and 2003, respectively. The weighted
average interest rate for this facility was 6.5% and 5.9% in 2004 and 2003,
respectively.

The Company's South African subsidiary has a credit facility with the Standard
Bank of South Africa of 5.5 million South African rand. The facility is secured
by the trade receivables of the subsidiary and bears interest at a fluctuating
rate of 1.5% above the bank's prime lending rate. The agreement continues
indefinitely until termination by either party with a minimum of three months
written notice. At December 31, 2004, approximately 1.8 million rand was
available for use. The outstanding balance under this facility was $659,962 and
$592,180 (U.S.$) at December 31, 2004 and 2003, respectively. The weighted
average interest rate for this facility was 10.5% and 11.5% in 2004 and 2003,
respectively.

During 2004, 2003, and 2002, the Company paid interest of $3,175,467,
$14,745,103, and $14,901,698, respectively. Interest paid in 2004 does not
include payments of $3,073,220 related to the Company's New Series A and Series
B Notes, which were recorded as a reduction in the balance of outstanding
indebtedness.

                                       34

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

F.  Leasing Arrangements

The Company's subsidiaries have numerous capital leases for certain machinery
and equipment. Amortization of these assets is included in depreciation expense
in the statement of operations. Capital lease obligations of approximately
$381,000 and $401,000 were incurred in 2004 and 2003, respectively. The gross
amount of assets recorded under capital leases and the related accumulated
amortization at December 31, 2004 and 2003 are as follows:

                                            2004              2003
                                      ----------------- -----------------
Asset Balances:
Buildings                                $    49,513         $       -
Machinery and Equipment                    1,043,525           658,491
                                      ----------------- -----------------
                                         $ 1,093,038         $ 658,491
                                      ================= =================

Accumulated Amortization:
Buildings                                  $  20,631          $      -
Machinery and Equipment                      234,545            90,820
                                      ----------------- -----------------
                                           $ 255,176          $ 90,820
                                      ================= =================

The subsidiaries of the Company also have various leases for office space,
warehouse facilities, office equipment, and automobiles and trucks which are
accounted for as operating leases. Rent expense related to these operating
leases for the years ended December 31, 2004, 2003, and 2002 was approximately
$2,765,000, $2,535,000, and $2,032,000, respectively. Future minimum lease
payments for obligations under capital leases and for operating leases having
initial or remaining noncancelable lease terms in excess of one year are as
follows:

                                                      Capital        Operating
                                                      Leases           Leases
                                                  -------------- --------------

2005                                                 $ 275,886     $ 1,361,133
2006                                                   287,574       1,263,841
2007                                                   173,800       1,162,509
2008                                                    97,599         921,350
2009                                                    21,773         580,982
                                                  -------------- --------------
Total minimum lease payments                           856,632     $ 5,289,815
                                                                 ==============
Amounts representing interest                          113,235
                                                  --------------
Present value of net minimum lease payments
   (including current portion of $228,962)           $ 743,397
                                                  ==============

                                       35

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

G.  Employee Benefit Plans

CCE maintains a defined benefit plan covering all union hourly-paid employees at
its Winfield plant. The actuarial computations use the "projected unit credit
cost method" and a measurement date of December 31. Actuarial gains and losses
are amortized over a 15 year period, and funding of the initial prior service
costs plus interest thereon is over a 30 year period. The following table sets
forth the accumulated benefit obligation, change in benefit obligation, change
in plan assets, funded status and amounts recognized in the Consolidated Balance
Sheets as of December 31, 2004 and 2003, of the Company's defined benefit plan.

<TABLE>
<CAPTION>
                                                                      2004                2003
                                                            ------------------- -------------------

<S>                                                              <C>                 <C>
Accumulated benefit obligation                                    $ 8,711,138         $ 7,506,886
                                                            =================== ===================

Change in benefit obligation:
Benefit obligation at beginning of year                           $ 7,506,886         $ 6,686,880
Service cost                                                          221,543             186,868
Interest cost                                                         488,948             441,605
Amendments recognized                                                 426,707                   -
Actuarial loss                                                        347,054             438,887
Benefits paid                                                        (280,000)           (247,354)
                                                            ------------------- -------------------
Benefit obligation at end of year                                   8,711,138           7,506,886
                                                            ------------------- -------------------

Change in plan assets:
Fair value of plan assets at beginning of year                      4,688,953           4,041,240
Actual return on plan assets                                          592,538             895,067
Employer contributions                                              2,477,097                   -
Benefits paid                                                        (280,000)           (247,354)
                                                            ------------------- -------------------
Fair value of plan assets at end of year                            7,478,588           4,688,953
                                                            ------------------- -------------------

Funded status:
Funded status of the plan (underfunded)                            (1,232,550)         (2,817,933)
Unrecognized prior service cost                                       643,733             261,669
Unrecognized net actuarial loss                                     1,772,724           1,566,102
                                                            ------------------- -------------------
Net amount recognized                                            $  1,183,907        $   (990,162)
                                                            =================== ===================

Balance sheet amounts:
Accrued benefit cost                                             $ (1,232,550)       $ (2,817,933)
Intangible asset                                                      643,733             261,669
Accumulated other comprehensive loss                                1,772,724           1,566,102
                                                            ------------------- -------------------
Net amount recognized                                            $  1,183,907        $   (990,162)
                                                            =================== ===================
</TABLE>

                                       36

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

G.  Employee Benefit Plans (Continued)

The components of net periodic benefit cost for the years ended December 31 are
as follows:

<TABLE>
<CAPTION>
                                                             2004                2003                2002
                                                   ------------------- ------------------- -------------------
<S>                                                       <C>                 <C>                 <C>
Service cost                                              $  221,543          $  186,868          $  175,383
Interest cost                                                488,948             441,605             419,914
Expected return on plan assets                              (511,839)           (313,271)           (372,615)
Amortization of prior service cost                            44,643              16,533              16,533
Recognized loss                                               59,733              70,504                   -
                                                   ------------------- ------------------- -------------------
Net periodic benefit cost                                 $  303,028          $  402,239          $  239,215
                                                   =================== =================== ===================
</TABLE>

The weighted-average assumptions used to determine benefit obligations at
December 31 were:

                                                      2004             2003
                                                ----------------  -------------
Discount rate                                         6.00%             6.25%
Expected long-term return on plan assets              8.00              8.00

The weighted-average assumptions used to determine the net periodic benefit cost
for the years ended December 31 were:

                                                  2004        2003       2002
                                              -----------  ----------- ---------
Discount rate                                     6.25%       6.75%      7.25%
Expected long-term return on plan assets          8.00        8.00       8.00

To determine the expected long-term rate of return on plan assets, the Company
considered the long-term investment objectives of the plan, the target asset
allocation of the pension portfolio, as well as the future expectations for
returns for each asset category. This resulted in the selection of the 8.00%
expected long-term rate of return on plan assets assumption for 2004 and 2003.

The Company's investment policies and strategies for plan assets are to achieve
the greatest return consistent with the fiduciary character of the plan and to
maintain a level of liquidity that is sufficient to meet the need for timely
payment of benefits. The goals of the investment manager include minimizing risk
and achieving growth in principal value so that the purchasing power of such
value is maintained with respect to the rate of inflation. The Company has
established target asset allocations for plan assets of 60% equity securities
and 40% fixed income securities. The Company's defined benefit pension plan
weighted-average asset allocations at December 31, by asset category, are as
follows:

Asset Category:                                 2004             2003
                                          ----------------- ----------------
Equity securities                                55%               68%
Debt securities                                  45                18
Guaranteed income fund                            -                14
                                          ----------------- ----------------
Total                                           100%              100%
                                          ================= ================

                                       37

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

G.  Employee Benefit Plans (Continued)

The contributions of CCE are made in amounts sufficient to fund the plan's
service cost on a current basis and meet the minimum funding requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Company does
not expect to make any contributions to its pension plan in 2005. The Company
expects to pay the following benefit payments, which reflect expected future
service, as appropriate:

2005               $    357,000
2006                    425,000
2007                    471,000
2008                    507,000
2009                    520,000
2010-2014             2,822,000


CCE also maintains a defined contribution plan covering substantially all
salaried and non-union hourly employees. CCE expenses annual contributions
(approximately $590,000, $571,000, and $588,000 in 2004, 2003, and 2002,
respectively) which fully fund retirement benefits. No participant contributions
to the plan are permitted. CCE also maintains a defined contribution savings and
profit sharing plan which covers substantially all salaried and non-union hourly
employees. Employees may elect to contribute up to 100% of their compensation.
CCE will match (approximately $317,000, $297,000, and $329,000 in 2004, 2003,
and 2002, respectively) a percentage of employee contributions up to 6% of each
employee's compensation.

GCC has a retirement savings plan covering all employees meeting certain
eligibility requirements. Under the terms of the plan, GCC voluntarily makes
annual cash contributions based on eligible employees' compensation. Expense for
the years ended December 31, 2004 and 2002 was approximately $58,000 and
$41,000, respectively, which was equal to 1.5% of eligible employee compensation
in 2004 and 1% of eligible employee compensation in 2002. No contribution was
made for the year ended December 31, 2003.

The foreign subsidiaries of the Company have various defined contribution plans
and retirement saving plans covering substantially all salaried and production
employees. For the years ended December 31, 2004, 2003, and 2002, the
subsidiaries contributed approximately $929,000, $824,000, and $601,000,
respectively, to the plans.

In 2002, the Company implemented a Phantom Stock Plan (the "Plan") whereby
officers and certain employees may be granted phantom stock units, which vest
over a certain period of time as determined for each grant. At December 31, 2004
and 2003, the Company had an accrual for the value of vested phantom stock units
granted for approximately $292,000 and $42,000, respectively.

                                       38

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

H.  Related Party Transactions

Management fees are charged by Nesco, Inc., an affiliate of N.E.S. Investment
Co., to provide general management oversight services, including legal,
financial, strategic planning and business development evaluation for the
benefit of the Company. Under the management agreement, the Company has agreed
to pay Nesco, Inc. fees for such services equal to 5% of the Company's Adjusted
EBITDA earnings (earnings before interest and estimated taxes, depreciation,
amortization and miscellaneous expense or income). The Company incurred
management fee expenses of approximately $811,000, $300,000, and $470,000, for
the years ended December 31, 2004, 2003, and 2002, respectively. At December 31,
2004 and 2003, the Company had an accrual for management fees owed to Nesco,
Inc. of approximately $988,000 and $177,000, respectively.

Prior to electing C Corporation status for income tax purposes on October 6,
2000, the subsidiaries of the Company were parties to a tax payment agreement
with NES Group, Inc., the parent company of N.E.S. Investment Co., providing for
payments by each subsidiary to NES Group, Inc. to fund the income tax liability
attributable to the Company's operations. At December 31, 2004 and 2003, the
Company had an accrual for income tax payments owed to NES Group, Inc. of
approximately $20,000.

I.  Fair Value of Financial Instruments and Concentration of Risk

The following methods and assumptions were used by the Company in estimating its
fair value disclosures for financial instruments:

Cash and cash equivalents: The carrying amount reported in the balance sheet for
cash and cash equivalents approximates its fair value.

Accounts receivable and accounts payable: The carrying amounts reported in the
balance sheet for accounts receivable and accounts payable approximate their
fair value.

Notes payable and long-term debt: The carrying amounts of the Company's
borrowings under its short-term revolving credit arrangements and variable rate
long-term debt approximate their fair value. The carrying amounts of the
Company's Senior Notes at December 31, 2004 approximate their fair value due to
the fact that substantially all of these notes were issued during the fourth
quarter of 2004. The fair value of the Company's Senior Notes at December 31,
2003 was based on the quoted market value. The fair value of the Company's
remaining fixed rate long-term debt is based on the present value of future cash
outflows.

Foreign currency forward contracts: Derivative financial instruments at December
31, 2004 and 2003 included foreign currency forward contracts with contractual
amounts of $210,000 and $180,000, respectively. The 2004 contracts matured
during January 2005 and the 2003 contracts matured in January 2004. The
counterparty to the contracts was a major U.S. commercial bank. The Company
entered into the foreign currency forward contracts to hedge certain firm sales
commitments denominated in a foreign currency. The fair value of the Company's
foreign currency forward contracts was estimated based on the quoted market
price of a comparable contract and was included in other current assets on the
balance sheet.

                                       39

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

I. Fair Value of Financial Instruments and Concentration of Risk (Continued)

The carrying amounts and fair values of the Company's financial instruments at
December 31 are as follows:

<TABLE>
<CAPTION>
                                                                       2004                              2003
                                                             Carrying            Fair          Carrying       Fair
                                                              Amount             Value          Amount        Value
                                                         ---------------- ---------------- ---------------- ----------------
                                                                                   (in thousands)

<S>                                                         <C>              <C>              <C>              <C>
Cash and cash equivalents                                   $     887        $     887        $     851        $     851
Accounts receivable                                            39,633           39,633           32,226           32,226
Accounts payable                                              (30,218)         (30,218)         (24,703)         (24,703)
Notes payable                                                 (17,220)         (17,220)         (13,960)         (13,960)
Long-term debt                                               (121,314)        (122,591)        (122,417)         (26,429)
Foreign currency forward contracts                                  9                9               30               30
</TABLE>

Accounts receivable from customers in the coal mining industry were
approximately 42% and 36% of net accounts receivable at December 31, 2004 and
2003, respectively. The Company's subsidiaries perform periodic credit
evaluations of their customers' financial condition and generally do not require
collateral. Credit losses relating to customers in the coal mining industry have
consistently been within management's expectations and are comparable to losses
for the portfolio as a whole.

Provisions for credit losses were approximately $751,000, $458,000, and $454,000
in 2004, 2003, and 2002, respectively. Accounts written off, net of recoveries,
were approximately $507,000, $645,000, and $342,000 in 2004, 2003, and 2002,
respectively.

J.  Income Taxes

Income taxes are provided using the liability method in accordance with SFAS No.
109, "Accounting for Income Taxes." For tax reporting purposes, the Company is
included in the consolidated federal tax return of N.E.S. Investment Co.
However, for financial reporting purposes, the Company's tax provision has been
calculated on a stand-alone basis.

The Company has subsidiaries located in Australia, the United Kingdom, and South
Africa which are subject to income taxes in their respective countries. The
Company did not pay any income taxes during the year ended December 31, 2004.
The Company's United Kingdom subsidiary paid income taxes of approximately
$4,000 and $5,000 in 2003 and 2002, respectively.

Income (loss) before income taxes for the years ended December 31 consists of
the following:

                          2004                 2003                 2002
               --------------------- -------------------- --------------------

Domestic              $ 4,488,465         $ (10,018,995)        $ (8,788,660)
Foreign                 2,638,087            (2,609,568)             100,160
               --------------------- -------------------- --------------------
                      $ 7,126,552         $ (12,628,563)        $ (8,688,500)
               ===================== ==================== ====================

                                       40

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

J.  Income Taxes (Continued)

Income taxes for the years ended December 31 are summarized as follows:

                                   2004               2003                2002
                            ----------------- ---------------- -----------------
Current:
   Domestic:
     Federal                    $    64,887           $     -         $      -
     State and local                      -                 -                -
   Foreign                                -             4,365            3,846
                            ----------------- ---------------- -----------------
                                     64,887             4,365            3,846
Deferred:
   Domestic:
     Federal                      3,346,252                 -                -
     State and local                388,926                 -                -
   Foreign                         (533,647)                -                -
                            ----------------- ---------------- -----------------
                                  3,201,531                 -                -
                            ----------------- ---------------- -----------------
                                $ 3,266,418           $ 4,365         $  3,846
                            ================= ================ =================

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. At December 31, 2004,
pursuant to Section 108 of the Internal Revenue Code, the Company lost all
domestic tax attributes due to the recognition of cancellation of indebtedness
income. At December 31, 2003, the Company had domestic net operating loss
carryforwards of approximately $22,875,000. At December 31, 2004, the Company
had foreign net operating loss carryforwards of approximately $15,919,000 that
may be carried forward indefinitely. The Company has established a valuation
allowance of approximately $4,242,000 at December 31, 2004 against certain
foreign net operating loss carryforwards. This is based upon management's
assessment that it is more likely than not that the carryforwards and related
assets will not be realized. During 2004, the Company reversed approximately
$534,000 of the valuation allowance against its net operating loss carryforward
in Australia due to the continued profitability of the Australian subsidiary.

Significant components of the Company's deferred income taxes at December 31 are
as follows:

                                                     2004              2003
                                               ---------------  ---------------
Deferred tax assets:
   Operating accruals                            $  2,467,770     $  2,132,730
   Net operating loss carryforwards                 5,739,117       14,647,485
   Valuation allowance                             (4,242,179)     (12,658,216)
                                               ---------------  ---------------
                                                    3,964,708        4,121,999

Deferred tax liabilities:
   Inventories                                     (2,008,194)      (1,949,214)
   Property, plant, and equipment                  (2,058,684)      (1,431,167)
   Goodwill                                        (3,777,328)      (1,351,631)
                                               ---------------  ---------------
                                                   (7,844,206)      (4,732,012)
                                               ---------------  ---------------
Net deferred tax liability                       $ (3,879,498)    $   (610,013)
                                               ===============  ===============

                                       41

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

J.  Income Taxes (Continued)

A reconciliation of income taxes computed at the statutory rate to the effective
rate for the years ended December 31 follows:

<TABLE>
<CAPTION>
                                                                           2004              2003              2002
                                                                   ----------------- ----------------- -----------------

<S>                                                                     <C>              <C>               <C>
Income taxes at the United States statutory rate                           35.0%            (35.0)%           (35.0)%
State income taxes, net of federal benefit                                  3.2              (3.9)             (5.1)
Effective tax rate differential of earnings outside the U.S.              (12.9)              7.2              (0.3)
Impact of cancellation of debt                                             27.0               -                 -
Valuation allowance                                                        (7.5)             31.3              39.8
Other - net                                                                 1.0               0.4               0.6
                                                                   ----------------- ----------------- -----------------
                                                                           45.8%              0.0%              0.0%
                                                                   ================= ================= =================
</TABLE>

Congress passed the American Jobs Creation Act in October 2004. The new law
contains numerous changes to existing tax laws. Among other things, the Act will
provide a deduction with respect to income of certain U.S. manufacturing
activities and allow for favorable taxing on repatriation of certain offshore
earnings. The Company has not yet determined what impact, if any, the new law
may have on future results of operations and financial condition.

K.  Segment Information

While the Company primarily manages its operations on a geographical basis, the
Company operates in two principal business segments: conveyor equipment and
manufactured housing products. The conveyor equipment business, which comprised
approximately 89%, 87%, and 83% of net sales for 2004, 2003, and 2002,
respectively, markets its products in four main business areas. The mining
equipment business area includes the design, manufacture and testing (and,
outside the United States, installation and maintenance) of complete belt
conveyor systems and components for mining application primarily in the coal
industry. The conveyor components business area manufactures and sells
components for conveyor systems primarily for resale through distributor
networks. The engineered systems business area uses specialized project
management and engineering skills to combine mining equipment products,
purchased equipment, steel fabrication and other outside services for sale as
complete conveyor equipment systems that meet specific customer requirements.
The bulk conveyor equipment business area designs and manufactures a complete
range of conveyor equipment sold to transport bulk materials, such as cement,
lime, food products and industrial waste.

The Company's manufactured housing products business manufactures and/or
refurbishes axle components sold directly to the manufactured housing industry.
As part of this segment the Company also sells mounted tire and rim assemblies
to the manufactured housing industry. Included in the other category is
primarily the manufacture and sale of air filtration equipment for use in
enclosed environments, principally in the textile industry.

                                       42

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

K.  Segment Information (Continued)

The Company evaluates performance and allocates resources based on operating
income before restructuring charges and allocation of management fees,
amortization and corporate expenses. The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies under Note B. The reportable segments are each managed
separately because they manufacture and distribute distinct products.


<TABLE>
<CAPTION>
                                                                      Year ended December 31
                                                             2004               2003              2002
                                                       ------------------ ----------------- -----------------
                                                                           (in thousands)
<S>                                                      <C>               <C>               <C>
Net sales:
   Conveyor equipment                                        $ 208,921          $ 169,524         $ 154,473
   Manufactured housing products                                26,083             23,944            29,633
   Other                                                           715                873               870
                                                       ------------------ ----------------- -----------------
Total net sales                                              $ 235,719          $ 194,341         $ 184,976
                                                       ================== ================= =================

Depreciation and amortization:
   Conveyor equipment                                          $ 2,152            $ 2,060           $ 2,023
   Manufactured housing products                                   118                134               137
   Other                                                             1                  1                 6
   Amortization expense                                             26                 26               117
                                                       ------------------ ----------------- -----------------
Total depreciation and amortization                            $ 2,297            $ 2,221           $ 2,283
                                                       ================== ================= =================

Segment operating income:
   Conveyor equipment                                         $ 14,668          $   3,777          $  7,058
   Manufactured housing products                                 1,371              1,421             1,862
   Other                                                           164                277                68
                                                       ------------------ ----------------- -----------------
Segment operating income                                        16,203              5,475             8,988
   Management fee                                                  811                300               470
   Amortization expense                                             26                 26               117
   Restructuring charge                                            203                 67               640
   Corporate expense                                             2,059              1,607             1,116
                                                       ------------------ ----------------- -----------------
Total operating income                                          13,104              3,475             6,645
   Interest expense, net                                         6,909             15,265            15,220
   Miscellaneous expense (income)                                 (931)               839               114
                                                       ------------------ ----------------- -----------------
Income (loss) before income taxes                             $  7,126          $ (12,629)         $ (8,689)
                                                       ================== ================= =================

Segment assets:
   Conveyor equipment                                        $  92,914           $ 79,580          $ 75,902
   Manufactured housing products                                 5,653              5,885             6,482
   Other                                                           336                361               431
                                                       ------------------ ----------------- -----------------
Total segment assets                                            98,903             85,826            82,815
   Corporate assets                                              1,324              1,937             6,852
                                                       ------------------ ----------------- -----------------
Total assets                                                 $ 100,227           $ 87,763          $ 89,667
                                                       ================== ================= =================

Capital expenditures:
   Conveyor equipment                                            $ 699              $ 770           $ 1,012
   Manufactured housing products                                    20                 11               267
   Other                                                             -                  -                 1
                                                       ------------------ ----------------- -----------------
Total capital expenditures                                       $ 719              $ 781           $ 1,280
                                                       ================== ================= =================
</TABLE>

                                       43

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

K.  Segment Information (Continued)

Geographic Area Data
<TABLE>
<CAPTION>
                                                                      Year ended December 31
                                                            2004               2003               2002
                                                      ------------------ ------------------ -----------------
                                                                          (in thousands)
<S>                                                    <C>               <C>                 <C>
Net sales:
   United States                                             $ 141,215          $ 114,332          $ 124,588
   Australia                                                    50,241             35,348             23,974
   United Kingdom                                               36,272             39,089             32,437
   Other countries                                               8,015              5,817              3,977
   Eliminations - transfers                                        (24)              (245)                 -
                                                      ------------------ ------------------ -----------------
Total net sales                                              $ 235,719          $ 194,341          $ 184,976
                                                      ================== ================== =================


Operating income (loss):
   United States                                              $ 10,011            $ 5,020            $ 5,958
   Australia                                                     2,456                746                349
   United Kingdom                                                  520             (2,080)               493
   Other countries                                                 117               (254)              (190)
   Eliminations                                                      -                 43                 35
                                                      ------------------ ------------------ -----------------
Total operating income                                        $ 13,104            $ 3,475            $ 6,645
                                                      ================== ================== =================

Long lived assets:
   United States                                              $  5,770           $  6,448           $  7,213
   Australia                                                     3,193              3,282              2,721
   United Kingdom                                                2,594              2,819              2,667
   Other countries                                                 550                365                280
                                                      ------------------ ------------------ -----------------
Total long lived assets                                       $ 12,107           $ 12,914           $ 12,881
                                                      ================== ================== =================
</TABLE>

Net sales are attributed to countries based on the location of the subsidiary
where the sale occurs.

The Company did not have sales to any single customer which exceeded 10% of the
Company's total net sales in 2004, 2003 and 2002.

                                       44

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

L.  Guarantor and Non-Guarantor Subsidiaries

Effective October 4, 2004, the Company's domestic subsidiaries, Continental
Conveyor & Equipment Company (CCE) and Goodman Conveyor Company (GCC), both of
which are wholly owned, are the guarantors of the Senior Notes. Prior to this
date, CCE, GCC, and certain of the Company's Australian subsidiaries were the
guarantors of the Senior Notes. The guarantees are full, unconditional, and
joint and several. Separate financial statements of these guarantor subsidiaries
are not presented as management has determined that they would not be material
to investors. The Company's United Kingdom and South African subsidiaries are
not guarantors of the Senior Notes. The 2004 operations and cash flows of the
Company's Australian subsidiaries are included in the "Combined Non-Guarantor
Subsidiaries" column in the following summarized consolidating financial
statements.

Summarized consolidating balance sheets for 2004 and 2003 and consolidating
statements of operations and cash flow statements for 2004, 2003, and 2002 for
the Company, the guarantor subsidiaries, and the non-guarantor subsidiaries are
as follows (in thousands):

<TABLE>
<CAPTION>
                                                 Combined        Combined
                                                 Guarantor     Non-Guarantor
December 31, 2004:              The Company    Subsidiaries    Subsidiaries    Eliminations       Total
                              -------------------------------------------------------------------------------
<S>                               <C>             <C>             <C>           <C>               <C>
Current assets:
   Cash and cash equivalents       $     12        $    509        $    366      $        -        $     887
   Accounts receivable, net               -          16,281          23,353               -           39,634
   Inventories                            -          22,418           6,133               -           28,551
   Deferred income taxes                 81               -             519            (117)             483
   Other current assets                  60           2,154           2,518          (2,153)           2,579
                              -------------------------------------------------------------------------------
Total current assets                    153          41,362          32,889          (2,270)          72,134
Property, plant, and
   equipment, net                         -           5,770           6,337               -           12,107
Goodwill                                  -          10,986           2,995               -           13,981
Investment in subsidiaries           60,009          34,977               -         (94,986)               -
Deferred financing costs              1,170               -               -               -            1,170
Other assets                         13,017           4,922             126         (17,230)             835
                              -------------------------------------------------------------------------------
Total assets                       $ 74,349        $ 98,017        $ 42,347      $ (114,486)       $ 100,227
                              ===============================================================================
Current liabilities:
   Notes payable                   $      -        $ 13,297        $  5,971      $   (2,048)       $  17,220
   Trade accounts payable                72           9,806          22,348          (2,008)          30,218
   Accrued compensation and
     employee benefits                  717           3,149           2,476               -            6,342
   Accrued interest                     295               -               -               -              295
   Other accrued liabilities          2,485           3,440           4,203          (1,443)           8,685
   Current maturities of
     long-term obligations            7,967             596             891               -            9,454
                              -------------------------------------------------------------------------------
Total current liabilities            11,536          30,288          35,889          (5,499)          72,214
Pension obligation                        -           1,233               -               -            1,233
Deferred income taxes                     -          16,288             792         (12,717)           4,363
Senior notes                         97,463               -               -               -           97,463
N/P to N.E.S. Investment Co.         10,209               -               -               -           10,209
Other long-term obligations               -           4,417           3,097          (2,583)           4,931
Stockholder's equity
(deficit)                           (44,859)         45,791           2,569         (93,687)         (90,186)
                              -------------------------------------------------------------------------------
Total liabilities and
   stockholder's equity
   (deficit)                       $ 74,349        $ 98,017        $ 42,347      $ (114,486)       $ 100,227
                              ===============================================================================
</TABLE>

                                       45

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

L.  Guarantor and Non-Guarantor Subsidiaries (Continued)

<TABLE>
<CAPTION>
                                                Combined         Combined
                                                Guarantor     Non-Guarantor
December 31, 2003:              The Company    Subsidiaries    Subsidiaries      Eliminations       Total
                              -------------------------------------------------------------------------------
<S>                               <C>             <C>             <C>            <C>               <C>
Current assets:
   Cash and cash equivalents       $    114        $    734        $      3       $       -         $    851
   Accounts receivable, net               -          17,951          14,338             (63)          32,226
   Inventories                            -          19,925           4,609               -           24,534
   Deferred income taxes                 81               -             372            (188)             265
   Other current assets                  51             647           2,061          (1,817)             942
                              -------------------------------------------------------------------------------
Total current assets                    246          39,257          21,383          (2,068)          58,818
Property, plant, and
   equipment, net                         -           8,182           4,732               -           12,914
Goodwill                                  -          13,031             832               -           13,863
Investment in subsidiaries           60,009          21,520               -         (81,529)               -
Deferred financing costs              1,690               -               -               -            1,690
Other assets                         12,285           2,023               -         (13,830)             478
                              -------------------------------------------------------------------------------
Total assets                       $ 74,230        $ 84,013        $ 26,947       $ (97,427)        $ 87,763
                              ===============================================================================
Current liabilities:
   Notes payable                   $      -        $ 11,298        $  3,393       $    (731)        $ 13,960
   Trade accounts payable                34          12,922          11,810             (63)          24,703
   Accrued compensation and
     employee benefits                   42           6,006           1,375               -            7,423
   Accrued interest                   3,300               -               -               -            3,300
   Other accrued liabilities            878           5,737           4,441          (2,535)           8,521
   Current maturities of
     long-term obligations                -           2,456              90               -            2,546
   Senior Notes in default          120,000               -               -               -          120,000
                              -------------------------------------------------------------------------------
Total current liabilities           124,254          38,419          21,109          (3,329)         180,453
Pension obligation                        -             341               -               -              341
Deferred income taxes                     -          12,860               -         (11,985)             875
Other long-term obligations               -             196           1,131            (958)             369
Stockholder's equity
(deficit)                           (50,024)         32,197           4,707         (81,155)         (94,275)
                              -------------------------------------------------------------------------------
Total liabilities and
   stockholder's equity
   (deficit)                       $ 74,230        $ 84,013        $ 26,947       $ (97,427)        $ 87,763
                              ===============================================================================
</TABLE>

                                       46

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

L.  Guarantor and Non-Guarantor Subsidiaries (Continued)


<TABLE>
<CAPTION>
                                                        Combined       Combined
                                                        Guarantor    Non-Guarantor
                                         The Company  Subsidiaries   Subsidiaries   Eliminations      Total
                                        ------------------------------------------------------------------------
<S>                                      <C>         <C>                <C>             <C>        <C>
Year ended December 31, 2004:
Net sales                                 $       -   $   141,215        $ 94,512        $   (8)    $ 235,719
Cost of products sold                             -       113,663          82,115            (8)      195,770
                                        ------------------------------------------------------------------------
Gross profit                                      -        27,552          12,397             -        39,949
Total operating expenses                      1,419        16,123           9,303             -        26,845
                                        ------------------------------------------------------------------------
Operating income (loss)                      (1,419)       11,429           3,094             -        13,104
Interest expense, net                         4,962         1,008             939             -         6,909
Miscellaneous expense (income)               (1,054)          606            (483)            -          (931)
                                        ------------------------------------------------------------------------
Income (loss) before income taxes            (5,327)        9,815           2,638             -         7,126
Income tax expense (benefit)                   (733)        3,999               -             -         3,266
                                        ------------------------------------------------------------------------
Net income (loss)                         $  (4,594)  $     5,816        $  2,638        $    -     $   3,860
                                        ========================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                        Combined       Combined
                                                        Guarantor    Non-Guarantor
                                         The Company  Subsidiaries   Subsidiaries   Eliminations      Total
                                        ------------------------------------------------------------------------
<S>                                      <C>         <C>                <C>             <C>        <C>
Year ended December 31, 2003:
Net sales                                 $       -   $   149,680        $ 44,906        $ (245)    $ 194,341
Cost of products sold                             -       125,581          42,329          (245)      167,665
                                        ------------------------------------------------------------------------
Gross profit                                      -        24,099           2,577             -        26,676
Total operating expenses                      1,434        16,899           4,868             -        23,201
                                        ------------------------------------------------------------------------
Operating income (loss)                      (1,434)        7,200          (2,291)            -         3,475
Interest expense, net                        13,716         1,200             349             -        15,265
Miscellaneous expense (income)                  473           607            (241)            -           839
                                        ------------------------------------------------------------------------
Income (loss) before income taxes           (15,623)        5,393          (2,399)            -       (12,629)
Income tax expense (benefit)                 (2,294)        2,294               4             -             4
                                        ------------------------------------------------------------------------
Net income (loss)                         $ (13,329)  $     3,099        $ (2,403)       $    -     $ (12,633)
                                        ========================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                        Combined       Combined
                                                        Guarantor    Non-Guarantor
                                         The Company  Subsidiaries   Subsidiaries   Eliminations      Total
                                        ------------------------------------------------------------------------
<S>                                      <C>          <C>               <C>              <C>       <C>
Year ended December 31, 2002:
Net sales                                 $       -    $  148,561        $ 36,415         $   -     $ 184,976
Cost of products sold                             -       123,391          31,811             -       155,202
                                        ------------------------------------------------------------------------
Gross profit                                      -        25,170           4,604             -        29,774
Total operating expenses                      1,151        17,712           4,266             -        23,129
                                        ------------------------------------------------------------------------
Operating income (loss)                      (1,151)        7,458             338             -         6,645
Interest expense, net                        13,572         1,541             107             -        15,220
Miscellaneous expense (income)                   13           126             (25)            -           114
                                        ------------------------------------------------------------------------
Income (loss) before income taxes and
   cumulative effect of change in
   accounting principle                     (14,736)        5,791             256             -        (8,689)
Income tax expense (benefit)                 (2,436)        2,436               3             -             3
                                        ------------------------------------------------------------------------
Income (loss) before cumulative effect
of change in accounting principle           (12,300)        3,355             253             -        (8,692)
Cumulative effect of change in
   accounting principle                           -        (3,850)              -             -        (3,850)
                                        ------------------------------------------------------------------------
Net income (loss)                         $ (12,300)   $     (495)       $    253         $   -     $ (12,542)
                                        ========================================================================
</TABLE>


                                       47

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

L.  Guarantor and Non-Guarantor Subsidiaries (Continued)

<TABLE>
<CAPTION>
                                                        Combined       Combined
                                                        Guarantor    Non-Guarantor
                                         The Company  Subsidiaries   Subsidiaries   Eliminations      Total
                                        ------------------------------------------------------------------------

<S>                                       <C>            <C>                <C>           <C>        <C>
Year ended December 31, 2004:
Net cash  provided by (used in)
   operating activities                    $ (2,674)      $ 3,633            $ 924         $ (7)      $ 1,876

Investing activities:
   Purchases of property, plant and
     equipment                                    -          (344)            (375)           -          (719)
   Proceeds from disposals of PP&E                -             6               26            -            32
                                        ------------------------------------------------------------------------
Net cash used in investing activities             -          (338)            (349)           -          (687)

Financing activities:
   Net increase in borrowings on notes
     payable                                      -         4,152           (1,177)           -         2,975
   Proceeds from long-term obligations       10,000         3,768              627            -        14,395
   Principal payments on long-term
     obligations                             (3,073)         (525)            (817)           -        (4,415)
   Payments of additional
     consideration to bondholders           (14,114)            -                -            -       (14,114)
   Distributions                              9,759        (9,759)               -            -             -
   Intercompany loan activity                     -        (1,156)           1,156            -             -
                                        ------------------------------------------------------------------------
Net cash provided by (used in)
   financing activities                       2,572        (3,520)            (211)           -        (1,159)
Exchange rate changes on cash                     -             -               (1)           7             6
                                        ------------------------------------------------------------------------
Increase (decrease) in cash and cash
   equivalents                                 (102)         (225)             363            -            36
Cash and cash equivalents at beginning
   of year                                      114           734                3            -           851
                                        ------------------------------------------------------------------------
Cash and cash equivalents at end of
   year                                    $     12       $   509            $ 366         $  -       $   887
                                        ========================================================================
</TABLE>

                                       48

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

L.  Guarantor and Non-Guarantor Subsidiaries (Continued)

<TABLE>
<CAPTION>
                                                        Combined       Combined
                                                        Guarantor    Non-Guarantor
                                         The Company  Subsidiaries   Subsidiaries   Eliminations      Total
                                        ------------------------------------------------------------------------

<S>                                      <C>            <C>              <C>             <C>       <C>
Year ended December 31, 2003:
Net cash  provided by (used in)
   operating activities                   $ (14,785)     $  8,332         $  1,068        $  (9)    $  (5,394)

Investing activities:
   Purchases of property, plant and
     equipment                                    -          (454)            (327)           -          (781)
   Proceeds from disposals of PP&E                -            90                3            -            93
                                        ------------------------------------------------------------------------
Net cash used in investing activities             -          (364)            (324)           -          (688)

Financing activities:
   Net increase in borrowings on notes
     payable                                      -         1,257              581            -         1,838
   Principal payments on long-term
     obligations                                  -          (512)             (77)           -          (589)
   Distributions                             10,550       (10,550)               -            -             -
   Intercompany loan activity                  (175)        1,415           (1,240)           -             -
                                        ------------------------------------------------------------------------
Net cash provided by (used in)
   financing activities                      10,375        (8,390)            (736)           -         1,249
Exchange rate changes on cash                     -            47               (7)           9            49
                                        ------------------------------------------------------------------------
Increase (decrease) in cash and cash
   equivalents                               (4,410)         (375)               1            -        (4,784)
Cash and cash equivalents at beginning
   of year                                    4,524         1,109                2            -         5,635
                                        ------------------------------------------------------------------------
Cash and cash equivalents at end of
   year                                   $     114      $    734         $      3        $   -     $     851
                                        ========================================================================
</TABLE>

                                       49

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2004

L.  Guarantor and Non-Guarantor Subsidiaries (Continued)

<TABLE>
<CAPTION>
                                                        Combined       Combined
                                                        Guarantor    Non-Guarantor
                                         The Company  Subsidiaries   Subsidiaries   Eliminations      Total
                                        ------------------------------------------------------------------------

<S>                                      <C>            <C>               <C>            <C>       <C>
Year ended December 31, 2002:
Net cash  provided by (used in)
   operating activities                   $ (14,449)     $ 13,191          $  (303)       $   1     $  (1,560)

Investing activities:
   Purchases of property, plant and
     equipment                                    -          (736)            (544)           -        (1,280)
   Proceeds from disposals of PP&E                -            36               17            -            53
                                        ------------------------------------------------------------------------
Net cash used in investing activities             -          (700)            (527)           -        (1,227)

Financing activities:
   Net increase (decrease) in
     borrowings on notes payable                  -        (6,559)           1,179            -        (5,380)
   Principal payments on long-term
     obligations                                  -          (874)             (29)           -          (903)
   Distributions                              6,550        (6,550)               -            -             -
   Intercompany loan activity                  (125)        1,119             (994)           -             -
                                        ------------------------------------------------------------------------
Net cash provided by (used in)
   financing activities                       6,425       (12,864)             156            -        (6,283)
Exchange rate changes on cash                     -           (36)              70           (1)           33
                                        ------------------------------------------------------------------------
Decrease in cash and cash equivalents        (8,024)         (409)            (604)           -        (9,037)
Cash and cash equivalents at beginning
   of year                                   12,548         1,518              606            -        14,672
                                        ------------------------------------------------------------------------
Cash and cash equivalents at end of
   year                                   $   4,524      $  1,109          $     2        $   -     $   5,635
                                        ========================================================================
</TABLE>

M.  Commitments and Contingencies

The Company is not a party to any pending legal proceeding which it believes
could have a material adverse effect upon its results of operations or financial
condition, or to any other pending legal proceedings other than ordinary,
routine litigation incidental to its business.

                                       50

<PAGE>



Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

None.

Item 9A.  Controls and Procedures

As of December 31, 2004, the Company carried out an evaluation, under the
supervision and with the participation of the Company's management, including
the Company's Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the Company's disclosure controls
and procedures. Based upon that evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
relating to the Company (including its consolidated subsidiaries) required to be
included in the Company's periodic filings with the Securities and Exchange
Commission. There were no significant changes in the Company's internal controls
over financial reporting that occurred during the Company's most recent fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.

                                    PART III

Item 10.  Directors and Executive Officers of the Registrant

The following table sets forth certain information regarding the directors and
executive officers of the Company, as of March 15, 2005:

Name                          Age    Position with the Company

Robert W. Hale                58     President and Chief Executive Officer
James L. Smothers             48     Vice President
Jimmy L. Dickinson            62     Vice President and Chief Financial Officer
Edward F. Crawford            65     Director
Donald F. Hastings            76     Director
C. Wesley McDonald            64     Director
Robert J. Tomsich             74     Director
James W. Wert                 58     Director

Set forth below is a brief description of the business experience of each
director and executive officer of the Company.

Mr. Hale was appointed President and Chief Executive Officer of the Company
effective November 4, 2002. Before joining the Company, Mr. Hale had served as
President and Chief Executive Officer of Joy Global's P&H Mining Equipment
Company since 1995 and prior to that time, he served as Vice President and
General Manager of P&H Material Handling.

Mr. Smothers has served as Vice President of the Company since October 2001 and
has also served as Vice President of Continental Conveyor & Equipment Company
since August 1999 and Executive Vice President of Continental Conveyor &
Equipment Company since October 2001. In addition to the foregoing, Mr. Smothers
served as Director of International Sales and Manager of Systems Engineering of
Continental Conveyor & Equipment Company from 1992 through 1999 and Managing
Director of CCE Pty. Ltd. in 1999.

                                       51

<PAGE>

Mr. Dickinson has served as Vice President and Chief Financial Officer of the
Company since its inception. Mr. Dickinson has also served as Vice President of
Finance of Continental Conveyor & Equipment Company since 1973 and as a Director
of CCE Pty. Ltd. since 1996.

Mr. Crawford has served as a Director of the Company since its inception. In
addition to his service with the Company, Mr. Crawford has served as Chairman
and Chief Executive Officer and a Director of Park-Ohio Industries, Inc. since
1992.

Mr. Hastings has served as a Director of the Company since its inception. In
addition to his service with the Company, Mr. Hastings served as Chairman and
Chief Executive Officer and as Director of Lincoln Electric Company from 1992 to
1997.

Mr. McDonald has served as a Director of the Company since August 2000. Prior to
his service with the Company, Mr. McDonald served as Executive Vice President of
Operations for Consol Inc. from 1985 to his retirement in 1999.

Mr. Tomsich has served as a Director of the Company since its inception. In
addition, Mr. Tomsich has served as President and Director of Nesco, Inc.
(including predecessors of Nesco, Inc.) since 1956.

Mr. Wert has served as a Director of the Company since its inception. In
addition, Mr. Wert is President of Clanco Management Corporation, an investment
advisory firm located in Cleveland, Ohio. Prior to his service with the Company,
he held a number of executive management positions including Chief Financial
Officer and Chief Investment Officer over his twenty year career with KeyCorp, a
financial services company based in Cleveland, Ohio, and its predecessor,
Society Corporation. He serves on the Board of Directors of Park-Ohio Holdings,
Inc., Cleveland, Ohio, and Marlin Leasing Corporation, Philadelphia,
Pennsylvania.

Audit Committee Membership
The Company does not have a separately designated audit committee. The Company's
entire board of directors acts as the audit committee.

Audit Committee Financial Expert
The Company's board of directors has determined that the Company does not have
an audit committee financial expert as defined by Item 401(h) of Regulation S-K
of the Securities Exchange Act of 1934.

                                       52

<PAGE>


Item 11.  Executive Compensation

The following table sets forth certain information concerning compensation of
the Company's Chief Executive Officer and other most highly compensated officers
of the Company having total annual salary and bonus in excess of $100,000.


<TABLE>
<CAPTION>
                                                                                      Other Annual
Name and Principal Position                   Year       Salary        Bonus        Compensation (1)


<S>                                           <C>       <C>           <C>                <C>
Robert W. Hale, President and Chief           2004      $ 458,400     $ 422,206          $ 267,701
    Executive Officer                         2003        458,400       250,000             58,282
                                              2002         76,400             -                  -

Jimmy L. Dickinson, Vice President and        2004        150,720         9,075             10,505
    Chief Financial Officer                   2003        149,985        15,978             11,824
                                              2002        146,700        44,443             18,257

James Smothers, Vice President                2004        163,800         8,342             10,763
                                              2003        156,825        15,892             10,083
                                              2002        151,125        18,588              9,597
</TABLE>


(1)  Amounts shown reflect contributions made by the Company on behalf of the
     named executives under the Continental Conveyor & Equipment Company Savings
     and Profit Sharing Plan, the Continental Conveyor & Equipment Retirement
     Plan for Salaried and Hourly (Non-Union) Employees at Salyersville,
     Kentucky, and the Continental Global Group, Inc. Phantom Stock Plan. No
     amounts shown were received by any of the named executives.

Director Compensation

Each director of the Company not employed by the Company or any entity
affiliated with the Company received $37,500 for serving as a director of the
Company during the year. In addition, Mr. Crawford and Mr. Wert received an
additional $50,000 for serving on a special committee. Also, the Company will
reimburse such director for their travel and other expenses incurred in
connection with attending meetings of the Board of Directors.

                                       53

<PAGE>


Item 12.  Security Ownership of Certain Beneficial Owners and Management

The following table sets forth the beneficial ownership of the outstanding
equity securities of the Company as of March 15, 2005:

<TABLE>
<CAPTION>
Number of Shares             Title of Class                          Name and Address of Beneficial Owner

<C>                         <C>                                     <C>
100                          Common Stock, $0.01 par value           N.E.S. Investment Co.
                                                                     6140 Parkland Boulevard
                                                                     Mayfield Heights, OH  44124
</TABLE>

All of the Company's issued and outstanding capital stock is owned by N.E.S.
Investment Co., which is 100 percent beneficially owned by Mr. Robert J.
Tomsich.  Mr. Tomsich may be deemed to be the beneficial owner of the Company's
capital stock.

Item 13.  Certain Relationships and Related Transactions

Company Formation

The Company is a Delaware Corporation formed on February 4, 1997, for the
purpose of owning all of the common stock of Continental Conveyor & Equipment
Company ("CCE") and Goodman Conveyor Company ("GCC"). The Company, which is a
holding company with limited assets and operations other than its investments in
its subsidiaries, is owned 100% by N.E.S. Investment Co.

Prior to January 1, 1997, CCE and GCC were limited partnerships under common
control by NES Group, Inc. (the parent company of N.E.S. Investment Co.), the
99% limited partner. Effective January 1, 1997, NES Group, Inc., transferred its
interest in the limited partnerships to CCE and GCC. Effective February 1997,
NES Group, Inc. transferred to the Company all of the outstanding capital stock
of CCE and GCC.

Management Agreement

Effective April 1, 1997, the Company and Nesco, Inc. entered into a management
agreement ("Management Agreement"), the material terms of which are summarized
below. All of the outstanding capital stock of Nesco, Inc. is beneficially owned
by Robert J. Tomsich. Under the Management Agreement, Nesco, Inc., has agreed to
provide general management oversight services on a regular basis for the benefit
of the Company, in regard to business activities involving financial results,
legal issues, and long term planning relative to current operations and
acquisitions. Business development services include assistance in identifying
and acquiring potential acquisition candidates, including negotiations and
contractual preparations in connection therewith. Financial planning includes
assistance in developing banking relationships and monitoring cash investments
through professional money management accounts. Under the terms of the
Management Agreement, the Company has agreed to pay Nesco, Inc. a management fee
for such services equal to 5% of the Company's earnings before interest and
estimated taxes, depreciation, amortization, and other expense (income). The
aggregate amount expensed for management fees in 2004 under the Management
Agreement was $810,611. The management fee is payable in monthly installments.
The Management Agreement will remain in effect until terminated by either party
upon not less than 60 days written notice prior to an anniversary date of the
Management Agreement.

The Company will also separately employ, as required, independent auditors,
outside legal counsel, and other consulting services. Such services will be paid
directly by the Company.

                                       54

<PAGE>


Item 14.  Principal Accountant Fees and Services

Audit Fees
The aggregate fees for professional services rendered by Ernst & Young LLP in
connection with the audit of the Company's annual financial statements for the
fiscal years ended December 31, 2004 and 2003, for review of the financial
information included in the Company's quarterly reports on Form 10-Q for such
fiscal years, and in connection with statutory and regulatory filings for such
fiscal years, were approximately $574,000 and $454,000, respectively.

Tax Fees
The aggregate fees for services rendered by Ernst & Young LLP in connection with
income tax compliance, tax advice and tax planning for the fiscal years ended
December 31, 2004 and 2003 were approximately $42,000 and $22,000, respectively.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit
Services
The audit committee has considered whether the provision of non-audit services
by the auditors is compatible with maintaining the independence of the auditors.

All auditing services and permitted non-audit services (including the fees and
terms thereof) to be performed for the Company by its independent auditor must
be pre-approved by the audit committee. All audit and non-audit services
provided by the independent auditors during 2004 were approved by the audit
committee.

                                       55

<PAGE>


                                     PART IV

Item 15.  Exhibits and Financial Statement Schedules

             Documents Filed as Part of this Report:

             1. Consolidated Financial Statements.

                The consolidated financial statements listed below together with
                the report thereon of the independent registered public
                accounting firm dated March 18, 2005 are included in Item 8.

                Report of Independent Registered Public Accounting Firm.

                Consolidated Balance Sheets at December 31, 2004 and 2003.

                Consolidated Statements of Operations for each of the three
                years in the period ended December 31, 2004.

                Consolidated Statements of Stockholder's Equity (Deficit) for
                each of the three years in the period ended December 31, 2004.

                Consolidated Statements of Cash Flows for each of the three
                years in the period ended December 31, 2004.

                Notes to Consolidated Financial Statements.

             2. Financial Statement Schedules

                No consolidated financial statement schedules are presented
                because the schedules are not required, the information is not
                present, or not present in amounts sufficient to require
                submission of the schedules or the required information is
                included in the Consolidated Financial Statements.

             3. Exhibits Required to be Filed by Item 601 of Regulation S-K.

                The information required by this paragraph is contained in the
                Index of Exhibits to this report.


                                       56

<PAGE>


Signatures

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on the 31st day of March, 2005.

                                  CONTINENTAL GLOBAL GROUP, INC.

                                  By:  /s/ Robert W. Hale
                                       ---------------------------------------
                                  Name: Robert W. Hale
                                  Title: President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:

<TABLE>
<CAPTION>
Signature                                                  Title                                   Date

<S>                                          <C>                                                  <C>
/s/ Robert W. Hale                            President and Chief Executive Officer                March 31, 2005
-----------------------------------------
Robert W. Hale                                (Principal Executive Officer)

/s/ Jimmy L. Dickinson                        Vice President and Chief Financial Officer           March 31, 2005
-----------------------------------------
Jimmy L. Dickinson                            (Principal Financial Officer and Principal
                                               Accounting Officer)

/s/ Edward F. Crawford                        Director                                             March 31, 2005
-----------------------------------------
Edward F. Crawford

/s/ Donald F. Hastings                        Director                                             March 31, 2005
-----------------------------------------
Donald F. Hastings

/s/ C. Wesley McDonald                        Director                                             March 31, 2005
-----------------------------------------
C. Wesley McDonald

/s/ Robert J. Tomsich                         Director                                             March 31, 2005
-----------------------------------------
Robert J. Tomsich

/s/ James W. Wert                             Director                                             March 31, 2005
-----------------------------------------
James W. Wert
</TABLE>

Supplemental information to be furnished with reports filed pursuant to Section
15(d) of the Act by registrants which have not registered securities pursuant to
Section 12 of the Act.

No annual report to security holders covering the registrant's last fiscal year
and no proxy statement, form of proxy, or other proxy soliciting material with
respect to any annual or other meeting of security holders has been or will be
sent to security holders.

                                       57

<PAGE>


                         Continental Global Group, Inc.

                                    Form 10-K

                                Index of Exhibits


Exhibit
Number        Description of Exhibit

    3.1
    (a)       Certificate of Incorporation of Continental Global Group, Inc.,
              as currently in effect.                                          *

    (b)       Certificate of Amendment of Certificate of Incorporation of
              Continental Global Group, Inc. (Filed as Exhibit 3.1(b) to the
              Company's Form 10-Q for the quarter ended September 30, 2000,
              and is incorporated herein by reference.)

    3.2       By-Laws of Continental Global Group, Inc., as currently in
              effect.                                                          *

    3.3       Certificate of Incorporation of Continental Conveyor & Equipment
              Company, as currently in effect                           .      *

    3.4       By-Laws of Continental Conveyor & Equipment Company, as currently
              in effect.                                                       *

    3.5       Certificate of Incorporation of Goodman Conveyor Company, as
              currently in effect.                                             *

    3.6       By-Laws of Goodman Conveyor Company, as currently in effect.     *

    4.1       Indenture, dated as of April 1, 1997, among Continental Global
              Group, Inc., Continental Conveyor & Equipment Company, Goodman
              Conveyor Company, and the Trustee (containing, as exhibits,
              specimens of the Series A Notes and the Series B Notes).         *

    4.2       Supplemental Indenture, dated as of October 4, 2004, between
              Continental Global Group, Inc., Continental Conveyor & Equipment
              Pty., Ltd., Continental ACE Pty., Goodman Conveyor Company,
              Continental Conveyor & Equipment Company, and Wells Fargo Bank,
              National Association, as trustee. (Filed as Exhibit 4.2 to the
              Company's Form 10-Q for the quarter ended September 30, 2004,
              and is incorporated herein by reference.)

    4.3       Indenture, dated October 4, 2004, among Continental Global Group,
              Inc., Continental Conveyor & Equipment Company, Goodman Conveyor
              Company, and Wells Fargo Bank, National Association. (Filed as
              Exhibit 4.1 to Form 8-K filed by the Company on October 7, 2004,
              and is incorporated herein by reference.)

    4.4       9% Convertible Subordinated Promissory Note, dated October 4,
              2004, from Continental Global Group, Inc. to N.E.S. Investment
              Co. in the amount of $10,000,000. (Filed as Exhibit 4.3 to
              Form 8-K filed by the Company on October 7, 2004, and is
              incorporated herein by reference.)

    10.1      Second Amended and Restated Credit Facility and Security
              Agreement, dated October 4, 2004, by and among Continental
              Conveyor & Equipment Company, Goodman Conveyor Company, and Bank
              One, N.A. (Filed as Exhibit 4.2 to Form 8-K filed by the Company
              on October 7, 2004, and is incorporated herein by reference.)

    10.2      Management Agreement, dated as of April 1, 1997, between
              Continental Global Group, Inc. and Nesco, Inc.                   *

    10.3      Employment Agreement, effective November 4, 2002, between
              Continental Global Group, Inc. and Robert Hale.  (Filed as
              Exhibit 10.3 to the Company's Form 10-K for the year ended
              December 31, 2002, and is incorporated herein by reference.)

    10.4      Reserved

<PAGE>

                         Continental Global Group, Inc.

                                    Form 10-K

                                Index of Exhibits

  Exhibit
   Number     Description of Exhibit

    10.5      Reserved

    10.6      Forbearance Agreement, effective as of April 26, 2004, by and
              among Continental Global Group, Inc., N.E.S. Investment Co.,
              and CFSC Wayland Advisers, Inc. (Filed as Exhibit 10.6 to the
              Company's Form 10-K for the year ended December 31, 2003, and
              is incorporated herein by reference.)

    10.7      Forbearance Agreement, effective as of May 1, 2004, by and among
              Bank One, NA, Continental Conveyor & Equipment Company, and
              Goodman Conveyor Company. (Filed as Exhibit 10.7 to the Company's
              Form 10-K for the year ended December 31, 2003, and is
              incorporated herein by reference.)

    10.8      Amendment 1, dated as of May 27, 2004, to Forbearance Agreement
              effective as of April 26, 2004, by and among Continental Global
              Group, Inc., N.E.S. Investment Co., and CFSC Wayland Advisers,
              Inc. (Filed as Exhibit 10.8 to the Company's Form 10-K for the
              year ended December 31, 2003, and is incorporated herein by
              reference.)

    10.9      Forbearance Agreement, effective as of June 1, 2004, by and among
              Bank One, NA, Continental Conveyor & Equipment Company, and
              Goodman Conveyor Company. (Filed as Exhibit 10.9 to the Company's
              Form 10-K for the year ended December 31, 2003, and is
              incorporated herein by reference.)

   10.10      Amendment 2, dated as of June 14, 2004, to Forbearance Agreement
              effective as of April 26, 2004, by and among Continental Global
              Group, Inc., N.E.S. Investment Co., and CFSC Wayland Advisers,
              Inc. (Filed as Exhibit 10.10 to the Company's Form 10-K for the
              year ended December 31, 2003, and is incorporated herein by
              reference.)

   10.11      Forbearance Agreement, effective as of June 15, 2004, by and among
              Bank One, NA, Continental Conveyor & Equipment Company, and
              Goodman Conveyor Company. (Filed as Exhibit 10.11 to the Company's
              Form 10-K for the year ended December 31, 2003, and is
              incorporated herein by reference.)

   10.12      Commitment Letter, dated as of July 12, 2004, from Bank One, NA to
              Continental Conveyor & Equipment Company, Goodman Conveyor
              Company, and Continental Global Group, Inc. (Filed as Exhibit
              10.12 to the Company's Form 10-K for the year ended December 31,
              2003, and is incorporated herein by reference.)

   10.13      Amendment 3, dated as of July 13, 2004, to Forbearance Agreement
              effective as of April 26, 2004, by and among Continental Global
              Group, Inc., N.E.S. Investment Co., and Wayzata Advisers LLC.
              (Filed as Exhibit 10.13 to the Company's Form 10-K for the year
              ended December 31, 2003, and is incorporated herein by reference.)

   10.14      Forbearance Agreement, effective as of July 13, 2004, by and among
              Bank One, NA, Continental Conveyor & Equipment Company, and
              Goodman Conveyor Company. (Filed as Exhibit 10.14 to the Company's
              Form 10-K for the year ended December 31, 2003, and is
              incorporated herein by reference.)

   10.15      Forbearance Agreement, effective as of July 29, 2004, by and among
              Bank One, NA, Continental Conveyor & Equipment Company, and
              Goodman Conveyor Company. (Filed as Exhibit 10.15 to the Company's
              Form 10-Q for the quarter ended June 30, 2004, and is incorporated
              herein by reference.)



<PAGE>

                         Continental Global Group, Inc.

                                    Form 10-K

                                Index of Exhibits

  Exhibit
   Number     Description of Exhibit

   10.16      Forbearance Agreement, effective as of August 31, 2004, by and
              among Bank One, NA, Continental Conveyor & Equipment Company, and
              Goodman Conveyor Company. (Filed as Exhibit 10.16 to the Company's
              Form 10-Q for the quarter ended September 30, 2004, and is
              incorporated herein by reference.)

   10.17      Restructuring Agreement, dated as of July 22, 2004, by and among
              Continental Global Group, Inc., N.E.S. Investment Co. and Wayzata
              Investment Partners LLC. (Filed as Exhibit 99.1 to Form 8-K filed
              by the Company on July 23, 2004, and is incorporated herein by
              reference.)

   10.18      First Amendment, dated as of July 30, 2004, to Restructuring
              Agreement, dated as of July 22, 2004, by and among Continental
              Global Group, Inc., N.E.S. Investment Co. and Wayzata Investment
              Partners LLC. (Filed as Exhibit 99.1 to Form 8-K filed by the
              Company on August 3, 2004, and is incorporated herein by
              reference.)

   10.19      Second Amendment, dated as of October 1, 2004, to Restructuring
              Agreement, dated as of July 22, 2004, by and among Continental
              Global Group, Inc., N.E.S. Investment Co. and Wayzata Investment
              Partners LLC. (Filed as Exhibit 10.19 to the Company's Form 10-Q
              for the quarter ended September 30, 2004, and is incorporated
              herein by reference.)

     12       Statement regarding computation of ratio of earnings to fixed
              charges

     21       Subsidiaries of registrant

    31.1      Certification of the Chief Executive Officer pursuant to Section
              302 of the Sarbanes-Oxley Act of 2002

    31.2      Certification of the Chief Financial Officer pursuant to Section
              302 of the Sarbanes-Oxley Act of 2002

     32       Certifications of the Chief Executive Officer and Chief Financial
              Officer pursuant to 18, U.S.C. 1350, as adopted pursuant to
              Section 906 of the Sarbanes-Oxley Act of 2002


Certain instruments with respect to long-term debt have not been filed as
exhibits as the total amount of securities authorized under any one of such
instruments does not exceed 10 percent of the total assets of the registrant and
its subsidiaries on a consolidated basis. The registrant agrees to furnish to
the Commission a copy of each such instrument upon request.

* Incorporated by reference from Form S-4 Registration Number 333-27665 filed
under the Securities Act of 1933.