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, 2005

[ ]      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 & Equipment
     Continental Global Group, Inc.                   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
Securities registered pursuant to Section 12(g) of the Act:   None

Indicate by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act. Yes [ ] No [x]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [x] No [ ]

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [x]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [x]

The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2005 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, 2006, there were 100 shares of the registrant's common stock
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:  None
<PAGE>


                         CONTINENTAL GLOBAL GROUP, INC.

                          2005 FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

 Item Number                                                                                                 Page
                                                                                                           Number
<S>           <C>                                                                                          <C>
                                     PART I
      1        Business                                                                                         1
     1A        Risk Factors                                                                                     4
     1B        Unresolved Staff Comments                                                                        7
      2        Properties                                                                                       8
      3        Legal Proceedings                                                                                9
      4        Submission of Matters to a Vote of Security Holders                                              9
                                     PART II
      5        Market for Registrant's Common Stock and Related Stockholder Matters                             9
      6        Selected Financial Data                                                                         10
      7        Management's Discussion and Analysis of Financial Condition and Results of Operations
                                                                                                               11
     7A        Quantitative and Qualitative Disclosures about Market Risk                                      23
      8        Financial Statements and Supplementary Data                                                     24
      9        Changes in and Disagreements with Accountants on Accounting and Financial Disclosure            59
     9A        Controls and Procedures                                                                         59
                                    PART III
     10        Directors and Executive Officers of the Registrant                                              59
     11        Executive Compensation                                                                          61
     12        Security Ownership of Certain Beneficial Owners and Management                                  62
     13        Certain Relationships and Related Transactions                                                  62
     14        Principal Accountant Fees and Services                                                          64
                                     PART IV
     15        Exhibits, Financial Statement Schedules, and Reports on Form 8-K                                64
               Signatures                                                                                      65
               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 a leading designer and manufacturer of conveyor
systems and components for mining applications, primarily in the coal 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 Continental Conveyor & Equipment Pty. Ltd. ("CCE Pty. Ltd."), an Australian
holding company that owns all of the capital stock of four Australian operating
companies. The Company also owns indirectly all of the capital stock of
Continental Conveyor Ltd., a U.K. operating company; and 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%, 89%, and 87% of net sales for 2005, 2004, and 2003,
respectively, markets its products in four main business areas. The mining
equipment business area includes the design, manufacture and testing 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%, 11%, and 12% of net sales for 2005, 2004, and 2003,
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 72% or $216.9 million of the Company's 2005 net sales were
generated in the United States, 15% or $45.6 million in Australia, 10% or $30.0
million in the United Kingdom, and 3% or $9.7 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, 2005, 2004 and 2003, 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 25%, 23%, and 17% of the Company's total net sales for
2005, 2004 and 2003, 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. During 2005, due to the increase in production, the Company
experienced some delays in the delivery of these materials and components which
created some difficulties in meeting production and delivery obligations. The
Company has addressed these issues and believes that it has adequate sources of
supply for its raw materials and components. The Company is not dependent upon
any single supplier for any materials essential to its business or that are not
otherwise commercially available.


                                       2

<PAGE>


Backlog

Backlog at December 31, 2005 was $137.1 million, an increase of $91.5 million,
or over 200%, from $45.6 million at December 31, 2004 and an increase of $23.2
million, or 20%, from $113.9 million at September 30, 2005. At December 31,
2005, backlog in the domestic operations of the Company's conveyor equipment
segment was $92.4 million, an increase of $15.2 million from September 30, 2005,
and backlog in the foreign operations of the Company's conveyor equipment
segment was $44.7 million, an increase of $8.0 million from September 30, 2005.
Management believes that approximately 90% of the backlog at December 31, 2005
will be shipped in 2006. As of February 28, 2006, backlog had increased to
$144.4 million, an increase of $7.3 million, or 5%, from December 31, 2005.

Employees

As of December 31, 2005, the Company had approximately 1,350 employees,
approximately 890 of whom were located in the United States. Approximately 200
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 May 2007. Approximately 90
production employees at the Company's Australian subsidiary are covered by
collective bargaining agreements that expire in May and June of 2006.
Approximately 120 of the production employees at the Company's United Kingdom
subsidiary are covered by an annual collective bargaining agreement that expires
in December 2006. Approximately 80 of the production employees at the Company's
South African subsidiary are covered by an annual collective bargaining
agreement that expires in June 2006. 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 1A.  Risk Factors

The Company's business can be affected by a number of factors, including but not
limited to those set forth below and elsewhere in this Report on Form 10-K. If
any of the following risks actually occur, the Company's business, financial
condition, results of operations and cash flows could be materially adversely
affected.

Adverse developments in the coal mining industry could have a material adverse
impact on our business and results of operations.

Approximately 58% of our net sales in 2005 related to the manufacture and sale
of conveyor systems and components to companies engaged principally in
underground and surface mining of coal in the United States, Australia, South
Africa, China and various other locations worldwide. Accordingly, our results of
operations and financial condition may be materially affected by adverse
regional or worldwide developments in the coal mining industry, including the
risks and hazards inherent to the coal mining industry. Such factors include:

    o    the price of coal;
    o    mechanical equipment performance;
    o    ease or difficulty of mining reserves;
    o    labor grievances, strikes and other labor disputes;
    o    severe weather;
    o    effects of compliance with environmental, occupational safety and other
         applicable regulations; and
    o    operational and geological factors related to available mine reserves.

Labor stoppages, in particular, can have a particularly significant and
broad-based effect upon the coal industry.

In addition, a significant portion of worldwide coal production is utilized by
electric utilities, and the demand for coal is highly dependent upon the demand
for electricity, which in turn depends to a large extent upon the level of
economic activity. The demand by electric utilities for coal also is related to
the availability and cost in any given location of alternative sources of
energy, such as natural gas, oil or nuclear power. Adverse developments relating
to the demand by electric utilities or the coal mining industry generally could
have an adverse impact on our business and results of operations.

Our business experiences substantial fluctuations between periods and such
fluctuations may adversely affect our business and results of operations in
particular periods.

Our net sales and operating results often fluctuate significantly from period to
period. Because we generally recognize net sales upon shipment of product, the
timing of a small number of contracts in any particular quarter or year may
adversely affect operating results. In addition, net sales and gross profit may
fluctuate due to the size of the contracts and the requirements of each
contract. As a result of these and other factors, we could experience
significant fluctuations in net sales and operating results in future periods,
which could adversely impact business.


                                       4

<PAGE>


A significant reduction in the price of coal could adversely affect our
customers' willingness to consummate capital expenditures and purchase our
products, which would adversely affect results of operations.

Recently, coal prices have increased and we expect such prices to maintain their
current levels in 2006. To the extent that coal prices are increasing, our
customers generally are more likely to consummate capital expenditures, expand
their operations and/or purchase our products or services. Should coal prices
decrease or change suddenly, our customers may cancel their outstanding orders
or delay capital expenditures or other purchases, which would adversely affect
results of operations.

The loss of business of any of our top five customers could have an adverse
impact on our business.

In 2005, net sales to our top five customers represented approximately 25% of
total net sales for the year. The loss of business from any of these customers,
or a significant decrease or interruption in the business from such customers,
could have a material adverse impact on our business.

Our level of international operations subjects us to a number of risks,
including foreign currency fluctuations, political and economic instability and
regulatory and trade restrictions, which could have an adverse impact upon our
results of operations.

During 2005, $85.3 million, or 28%, of our net sales and $3.4 million, or 9%, of
our operating income were generated outside of the United States. We conduct our
international businesses in local currencies and other regional currencies, so
foreign sales and earnings vary with currency exchange fluctuations. In
addition, international manufacturing and sales are subject to other risks
including:

    o    political and economic instability in a particular country or region;

    o    labor unrest;

    o    restrictions on transfer of funds; regulation, import and export duties
         and quotas;

    o    domestic and foreign customs and tariffs;

    o    difficulty in obtaining distribution and support;

    o    difficulty in staffing and managing widespread operations;

    o    restrictions on our ability to own or operate subsidiaries, make
         investments or acquire new businesses in these jurisdictions;

    o    requirements relating to payments by subsidiaries; and

    o    adverse tax consequences.

Significant changes in currency exchange rates or these other factors could have
an adverse impact upon our results of operations.


                                       5

<PAGE>


The loss of management personnel or management services could have an adverse
impact upon our business.

Our success depends in large part upon our management personnel and that of our
operating subsidiaries. The loss of services of some of these employees could
have a material adverse effect upon us or a particular operating subsidiary. In
addition, we have entered into a management agreement with Nesco, Inc. to
perform various management oversight services. The loss of such support also
could have a material adverse effect on our ability to operate our business.

As a controlled company, we are subject to the oversight of our sole shareholder
and the board members that the shareholder appoints, and the interests of the
sole shareholder may differ from the interests of bondholders.

We are a wholly-owned subsidiary of N.E.S. Investment Co. and N.E.S. Investment
Co. controls the election of our directors. Through its interest in the company,
N.E.S. Investment Co. has the right to approve many of our significant company
actions, such as entering into material affiliate contracts or agreements,
acquiring assets outside the ordinary course of business, merging or
consolidating with another person, selling any material assets other than
inventory sold in the ordinary course of business, making certain advances or
loans, making any material capital expenditures, or effecting a liquidation or
dissolution.

Our backlog may not be necessarily indicative of the level of our future
revenues.

In this Report on Form 10-K, we have described our backlog and management's
expectations regarding the fulfillment of that backlog. Although we believe
backlog is an indicator of future revenues, the reported backlog may not be
converted into sales in any particular period and actual sales from such
contracts may not equal backlog estimates. Therefore, our backlog may not be
necessarily indicative of the level of our future revenues.

Some of our employees belong to labor unions, and strikes or work stoppages
could adversely affect our results of operations.

Disputes under our existing collective bargaining agreements or the inability to
negotiate favorable extensions to such agreements could result in strikes, work
stoppages or other slowdowns. Although our relations with our employees have
generally been good, we cannot assure that our relations with employees will
remain positive or that union organizers will not be successful in future
attempts to organize the workforce at other facilities. Any adverse events could
cause a significant disruption in our business operations and higher labor
costs, either of which could adversely affect our results of operations.

We compete in a highly competitive and concentrated industry, and this
competition or industry consolidation may adversely impact our financial
results.

We face aggressive competition by a concentrated group of competitors in all
geographic markets and each industry sector in which we operate. Some of these
companies have greater resources than we have. In addition, at times,
Continental Conveyor and Goodman, which have separate management and operate
independently, compete with each other. The effect of this competition could
reduce our revenues and margins, limit our ability to grow, increase pricing
pressure on products and otherwise affect financial results. In addition,
because of the concentrated nature of competitors and customers, we face a
heightened risk that further consolidation in the industry among or between
competitors and customers could adversely impact our financial results.


                                       6

<PAGE>


The raw material used to produce our products, steel, is subject to price
fluctuations that could increase costs of production and adversely affect
profitability.

The most significant material used to produce our products, steel, is sourced on
a global or regional basis and the prices of that material are susceptible to
price fluctuations due to supply and demand trends, transportation costs,
government regulations and tariffs, changes in currency exchange rates, price
controls, the economic climate, alternative products and other unforeseen
circumstances. If we are unable to pass on material price increases to our
customers, future profitability may be materially adversely affected.

Because a substantial portion of our sales are on a purchase order basis, or
based on arrangements that can be canceled at any time, and because we rely on
estimated forecasts of customers' needs, inaccurate forecasts could adversely
affect our business.

A substantial portion of our sales are on a purchase order basis rather than
long-term purchase commitments. Therefore, we rely on estimated demand
forecasts, based upon input from customers, to determine how much material to
purchase and product to manufacture. Because sales are generally based on
purchase orders, customers may cancel, delay or otherwise modify their purchase
commitments with little or no consequence to them and with little or no notice
to us. In addition, although we have preferred supplier arrangements with
several of the world's largest coal and mineral mining companies, these
arrangements are not governed by long-term contracts and may be terminated at
any time by either party. For these reasons, we cannot provide assurance as to
the quantities or timing required by our customers for our products. Whether in
response to changes affecting the industry or a customer's specific business
pressures, any cancellation, delay or other modification in customers' orders
could significantly reduce revenue, cause operating results to fluctuate from
period to period and make it more difficult to predict revenue. In the event of
a cancellation or reduction of an order, we may not have enough time to reduce
operating expenses to minimize the effect of the lost revenue on business and
may purchase too much inventory and spend more capital than expected.

We may be liable for product liability claims that exceed our insurance
coverage.

The nature of our business subjects us to product liability claims in the event
that the use of our products is alleged to have resulted in injury or other
adverse effects. We maintain reserves and liability insurance coverage at
commercially reasonable levels compared to similarly-sized companies within the
industry and based upon past experience, but we cannot assure that we will be
able to obtain such insurance on acceptable terms in the future, if at all, or
that any such insurance will provide adequate coverage against potential claims.
Product liability claims can be expensive to defend and can divert the attention
of management and other personnel for long periods of time, regardless of the
outcome. An unsuccessful product liability defense could have a material adverse
effect on our business, financial condition, results of operations and
reputation.

Item 1B.  Unresolved Staff Comments

The Company has received no written comments regarding its periodic or current
reports from the staff of the Securities and Exchange Commission that were
issued 180 days or more preceding the end of its 2005 fiscal year and that
remain unresolved.


                                       7

<PAGE>


Item 2.  Properties

The Company conducts its operations through the following primary facilities:

<TABLE>
<CAPTION>
                                            Approximate                                         Owned/
Location                                  Square 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                           55,854     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 2007. The Company has an option to renew the lease for an
    additional two years at the expiration of the current lease period.

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 Company's 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.


                                       8

<PAGE>


Item 3.  Legal Proceedings

There are pending or threatened against the Company or its subsidiaries various
claims and lawsuits, all arising from the ordinary course of business with
respect to commercial and products liability matters, which seek remedies or
damages. The Company believes that any liability that may finally be determined
with respect to commercial and product liability claims should not have a
material adverse effect on its financial condition. Legal costs are generally
expensed when incurred.

At December 31, 2005 and 2004, the Company's Consolidated Balance Sheet includes
an accrued liability for any pending or threatened claim with respect to any
commercial and products liability matter of $0.3 million, and was included in
current liabilities as Other Accrued Liabilities.

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. A settlement of these actions has been
agreed to by the parties involved, pending approval by the courts. The proposed
settlement does not materially impact 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, 2005.


                                     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 2005 or 2004. See Note E, "Financing Arrangements", to the Consolidated
Financial Statements, Part II, Item 8, for limitations on dividends.


                                       9
<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, 2005. 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>
                                               2005        2004        2003         2002        2001
                                           --------------------------------------------------------------
                                                          (Data in 000's, except ratios)
<S>                                         <C>         <C>         <C>          <C>          <C>
Income Statement Data:
Net sales                                    $ 302,246   $ 235,719   $ 194,341    $ 184,976    $192,711
Gross profit                                    66,372      39,949      26,676       29,774      30,155
Operating income                                36,115      13,104       3,475        6,645       7,698
Interest expense, net                            4,809       6,909      15,265       15,220      15,148
Income (loss) before cumulative effect of
   change in accounting principle               22,891       3,860     (12,633)      (8,692)     (6,916)
Net income (loss) (1)                           22,891       3,860     (12,633)     (12,542)     (6,916)

Other Data:
Depreciation and amortization                    2,042       2,297       2,221        2,283       2,884
Cash flows from operating activities            13,756       1,876      (5,394)      (1,560)        268
Cash flows from investing activities            (3,547)       (687)       (688)      (1,227)     (2,452)
Cash flows from financing activities           (10,547)     (1,159)      1,249       (6,283)         21
Adjusted EBITDA (2)                             36,912      12,940       4,857        8,814       9,619
Ratio of earnings to fixed charges (3)            6.18        1.91           -            -           -

Balance Sheet Data:
Cash and cash equivalents                          543         887         851        5,635      14,672
Total assets                                   124,206     100,227      87,763       89,667     108,772
Senior Notes in default                              -           -     120,000            -           -
Long-term debt, including current portion      117,015     122,057       2,916      122,887     123,557
Stockholder's equity (deficit)                 (68,246)    (90,186)    (94,275)     (82,721)    (68,845)
</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 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>
                                         2005        2004         2003         2002        2001
                                      ----------- ------------ ------------ ----------- ------------
<S>                                     <C>        <C>          <C>          <C>         <C>
Net income (loss)                       $ 22,891    $  3,860    $ (12,633)   $ (12,542)  $ (6,916)
Interest expense, net                      4,809       6,909       15,265       15,220     15,148
Income tax expense (benefit)               7,170       3,266            4            3     (1,497)
Depreciation expense                       2,016       2,271        2,195        2,166      2,250
Amortization expense                          26          26           26          117        634
Gain on debt restructuring                     -      (3,392)           -            -          -
Accounting change                              -           -            -        3,850          -
                                      ----------- ------------ ------------ ----------- ------------
Adjusted EBITDA                         $ 36,912    $ 12,940    $   4,857    $   8,814   $  9,619
                                      =========== ============ ============ =========== ============
</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, and 2001 by $12,629, $8,689, and
      $8,413, respectively.

                                       10
<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, 2005,
2004, and 2003.

                                            Year ended December 31
                               ------------------------------------------------
                                     2005              2004             2003

Net sales                           100.0%           100.0%            100.0%
Cost of products sold                78.0             83.1              86.3
Gross profit                         22.0             16.9              13.7
SG&A expenses                         9.3             10.9              11.7
Management fee                        0.7              0.3               0.2
Restructuring charges                 0.1              0.1               -
Operating income                     11.9              5.6               1.8

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

Net Sales
Net sales increased $66.5 million, or 28%, from $235.7 million in 2004 to $302.2
million in 2005. Net sales in the domestic operations of the Company's conveyor
equipment segment increased $68.2 million due to increased sales volumes and
increased sales prices in all business areas of the conveyor equipment segment.
The increase in sales volume was due primarily to improved market conditions in
the coal industry, which created higher demand for coal and resulted in
increased capital spending by the Company's major customers in the coal
industry. The increase in sales prices in 2005 resulted from significant steel
price increases from the Company's vendors which began in March 2004 and
continued through the end of 2004. Net sales in the foreign operations of the
Company's conveyor equipment segment decreased $9.1 million, net of a $1.4
million increase due to changes in foreign currency translation rates. When
adjusted for variations in foreign exchange rates, net sales in the foreign
operations decreased $10.5 million due to decreases in the Company's Australian
and United Kingdom subsidiaries of $6.1 million each, offset by an increase in
the Company's South African subsidiary of $1.7 million. The decrease in
Australia resulted from significant shipments on a major contract in the second
quarter of 2004 which did not reoccur in 2005. The decrease in the United
Kingdom resulted from decreased sales of engineered systems contracts, primarily
to the tunneling industry. The increase in South Africa was due to improved
market conditions in the coal industry in South Africa. Net sales in the
Company's manufactured housing segment increased $7.4 million, or 28%, primarily
due to a change in the product mix with more sales of new manufactured products
which have a higher selling price than refurbished products. Based on the
Manufactured Housing Institute's economic report for December, 2005, production
of manufactured homes for the twelve months ended December 31, 2005 increased
12.3% from the same period in 2004. In the Gulf region, which is the Company's
primary market area, production of manufactured homes in 2005 increased
approximately 19% over 2004 due to FEMA and other hurricane related demand.

Gross Profit
Gross profit increased $26.4 million, or 66%, from $39.9 million in 2004 to
$66.3 million in 2005. This increase in gross profit resulted from a $14.2
million increase due to increased sales volume combined with a $12.2 million
increase due to improved margins. Gross profit in the domestic operations of the
Company's conveyor equipment segment increased $23.5 million. This increase was
primarily due to increased sales volume which contributed to a more efficient
utilization of overhead expense and improved gross profit margins. Gross profit
in the foreign operations of the conveyor equipment segment increased $1.7


                                       11


<PAGE>

million. Changes in foreign currency translation rates caused $0.2 million of
this increase. Adjusted for variations in foreign exchange rates, gross profit
in the Australian, United Kingdom and South African subsidiaries increased $0.2
million, $0.8 million and $0.5 million, respectively. The increase in Australia
resulted from improved product mix with a larger percentage of sales of
manufactured products which have a higher gross margin and a lower percentage of
sales of purchased and resale items. The increase in the United Kingdom resulted
from higher margins due to improved production methods and lower materials
costs. In addition, there was also a change in the product mixture in the United
Kingdom with decreased engineered systems sales in the tunneling industry (which
have lower margins than sales of standard manufactured products) and increased
sales to the mining industry which include higher sales volumes of the more
profitable standard conveyor components. The increase in South Africa resulted
from the increase in sales. Gross profit in the manufactured housing segment
increased $1.2 million due to increased sales volume and increased selling
prices.

Gross profit as a percentage of net sales increased from 16.9% in 2004 to 22.0%
in 2005. This increase primarily resulted from the increased sales volume and
improved utilization in the domestic conveyor equipment operations and the
improved margins in the foreign operations of the Company's conveyor equipment
segment.

SG&A Expenses
SG&A expenses increased $2.3 million, or 9%, from $25.8 million in 2004 to $28.1
million in 2005. As a percentage of net sales, SG&A expenses decreased from
10.9% in 2004 to 9.3% in 2005. SG&A expenses in the domestic operations of the
Company's conveyor equipment segment increased $1.5 million due to increased
personnel costs and insurance expense. SG&A expenses in the foreign operations
of the Company's conveyor equipment segment increased $1.4 million, of which
$0.2 million can be attributed to changes in foreign currency translation rates.
The remaining $1.2 million increase resulted from increases of $0.7 million,
$0.2 million, and $0.3 million at the Company's Australian, United Kingdom and
South African subsidiaries, respectively. The increase in Australia was
primarily due to higher engineering costs and increased insurance and
professional expenses. The increase in the United Kingdom resulted from
increased advertising and trade show expenses. The increase in South Africa was
caused by increased selling expenses as a result of higher net sales. SG&A
expenses at the Company's manufactured housing segment increased $0.1 million.
Corporate SG&A expenses decreased $0.7 million primarily due to lower personnel
expenses.

Operating Income
Operating income increased $23.0 million, or over 100%, from $13.1 million in
2004 to $36.1 million in 2005. This increased resulted from the $26.5 million
increase in gross profit, partially offset by the $2.3 million increase in SG&A
expenses and a $1.2 million increase in management fees. Management fees are
based on the Company's Adjusted EBITDA and this increase is a direct result of
the Company's increased profits.

Interest Expense, Net
Interest expense decreased $2.1 million, or 30%, from $6.9 million in 2004 to
$4.8 million in 2005. This decrease primarily resulted from the reduction of
interest on the Company's Senior Notes. Interest expense related to the 11%
Senior Notes due 2007 decreased $3.0 million from $4.2 million in 2004 to $1.2
million in 2005. 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. During 2005 and 2004, the Company paid interest of $3.4
million and $3.2 million, respectively. Interest paid in 2005 and 2004 does not
include payments of $6.1 million and $3.1 million, respectively, related to the
Company's New Series A and Series B Notes, which were recorded as a reduction in
the balance of outstanding indebtedness. The decrease in interest expense on the
Senior Notes was partially offset by a $0.8 million increase in interest expense


                                       12


<PAGE>

on the Company's note payable to N.E.S. Investment Co. Refer to the Liquidity
and Capital Resources section for further discussion of future interest
payments.

Miscellaneous Expense (Income)
Miscellaneous expenses (income) increased $2.1 million, from income of $0.9
million in 2004 to expense of $1.2 million in 2005. The increase was primarily
due to the fact that in 2004 the Company recorded a gain on debt restructuring,
partially offset by significant debt restructuring expenses and these items did
not recur in 2005.

Income Tax Expense
Income tax expense increased $3.9 million, from $3.3 million in 2004 to $7.2
million in 2005. The increase resulted from the increase in pre-tax income of
the Company's domestic subsidiaries and the loss of all domestic tax attributes
in the fourth quarter of 2004 due to the recognition of cancellation of
indebtedness income which resulted from the restructuring of the Company's
Senior Notes. The Company's effective income tax rate is less than the statutory
rate in 2005 primarily due to a favorable income tax benefit for interest
payments on the New Series A and Series B Notes due 2008 which are recorded as a
reduction of the outstanding indebtedness for financial reporting purposes. In
addition, the Company has not recognized income tax expense in certain of its
foreign subsidiaries due to the reversal of an income tax valuation allowance.

Net Income
Net income increased $19.1 million, from $3.8 million in 2004 to $22.9 million
in 2005. This increase resulted from the $23.0 million increase in operating
income, combined with the $2.1 million decrease in interest expense, and
partially offset by the $2.1 million increase in miscellaneous expense (income)
and the $3.9 million increase in income tax expense.

Restructuring Charges
The Company incurred restructuring charges of approximately $0.1 million, $0.2
million, and $0.1 million in 2005, 2004 and 2003, 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. Since 2002, the Company has incurred
approximately $1.0 million in restructuring charges. As of December 31, 2005,
the Company has paid approximately $0.7 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, 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.


                                       13


<PAGE>

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
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.


                                       14


<PAGE>

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 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.

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.

Income Tax Expense
The Company recorded income tax expense of $3.3 million in the fourth quarter of
2004 due to the increase in income and the loss of all domestic tax attributes
due to the recognition of cancellation of indebtedness income which resulted
from the restructuring of the Company's Senior Notes. The Company's effective
income tax rate is less than the statutory rate in 2004 as the previously
established valuation allowance was reduced, offsetting the net tax expense in
those periods.

Net Income (Loss)
Net income (loss) increased $16.4 million, from a loss of $12.6 million in 2003
to income of $3.8 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 $3.3 million.

Liquidity and Capital Resources

Net cash provided by (used in) operating activities was $13.8 million, $1.9
million, and $(5.4) million for the years ended December 31, 2005, 2004, and
2003, respectively. The increase in operating cash flows from 2003 to 2005 is
primarily the result of the increase in the Company's net income. Net cash
provided by operations in 2005 resulted from the current year net income of
$22.9 million combined with non-cash expenses of $3.9 million and offset by a
net increase in operating assets of $13.0 million. The net increase in operating
assets was primarily attributable to increases in accounts receivable,
inventories, and accounts payable. The increase in accounts receivable resulted
from higher net sales. The increase in inventories was due to higher production
levels to support the Company's increased backlog. The increase in accounts
payable occurred due to higher purchases related to the increased inventories.
Net cash provided by operating activities in 2004 resulted from 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 investing activities was $3.5 million, $0.7 million, and $0.7
million for the years ended December 31, 2005, 2004 and 2003, respectively. Net
cash used in investing activities represents net purchases of property, plant,
and equipment for all years.


                                       15


<PAGE>

Net cash provided by (used in) financing activities was $(10.5) million, $(1.2)
million, and $1.2 million for the years ended December 31, 2005, 2004, and 2003,
respectively. Net cash used in financing activities in 2005 resulted from a net
decrease in borrowings on notes payable of $4.2 million, payments on Senior
Notes of $6.1 million, principal payments on long-term obligations of $0.9
million, and payments of additional consideration to bondholders of $1.8
million, partially offset by proceeds from long-term obligations of $2.5
million. The net decrease in borrowings on notes payable resulted from a
decrease in borrowings in the domestic subsidiaries of $6.1 million, partially
offset by an increase in borrowings in the foreign subsidiaries of $1.9 million.
Interest payments on the New Series A and Series B Notes of $6.1 million were
recorded as a reduction in the outstanding debt balance. The payment of
additional consideration to bondholders of $1.8 million was equivalent to $2.00
per every $120 in Old Notes tendered in the October 2004 debt restructuring.
Proceeds from long-term obligations include $2 million in subordinated
indebtedness to N.E.S. Investment Co. used to fund the payment of additional
consideration to bondholders.

Net cash used in financing activities in 2004 resulted from payments on Senior
Notes of $3.1 million, principal payments on long-term obligations of $1.3
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. 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 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.

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's capital expenditures in
2005 and 2004 were approximately $3.6 million and $0.7 million, respectively,
which included expenditures to improve productivity and for maintenance capital.
In addition to the Company's debt service requirements for interest expense, as
of December 31, 2005, the Company's domestic and foreign credit facilities had
outstanding principal balances of approximately $7.2 million and $5.3 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. 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.
Several times in 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


                                       16


<PAGE>

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.

Several times through 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 extended the Company's
revolving credit facility with Bank One until July 31, 2006. The Credit
Agreement was amended in March 2006 to extend the revolving credit facility
until March 31, 2008.

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 $9.1 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. On October 3, 2005, the
Company made an additional cash payment to the Series A and Series B bondholders
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 each of October 4, 2004, April 1, 2005, and
October 3, 2005 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 each of
October 4, 2004, April 1, 2005, and October 3, 2005 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.


                                       17


<PAGE>

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 Co. 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 Co. accrues interest at a rate of 9%, payable in kind, compounded
annually. The additional consideration paid by the Company on October 3, 2005 to
the Series A and Series B bondholders was funded with an additional $2 million
of subordinated indebtedness to N.E.S. Investment Co.

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
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 $10.7 million of Old Notes not tendered.
All payments related to the New Series A and Series B Notes in 2004 and 2005
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. Associated with
this debt exchange, the Company incurred in 2004 debt restructuring expenses of
approximately $2.6 million and 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 outstanding indebtedness has been classified as short and long-term
liabilities as of December 31, 2005 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, 2005 of Senior Notes, including
     current portion of $6,146,438                                $ 97,463,062
  Interest payments on Series A Notes, 2006-2008                   (15,980,737)
  Interest payments on Series B Notes, 2006-2008                    (2,458,575)
  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, 2005, the Company had cash and cash equivalents of approximately
$0.5 million and approximately $19.4 million available for use under its
domestic credit facility, representing approximately $19.9 million of liquidity.
With the completion of the debt exchange in October 2004, the Company reduced
its annual debt service requirements related to interest payments on its Senior
debt by approximately $5.9 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, down 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 the balance of a term
loan with Bank One by approximately $3.8 million and entered into subordinated
promissory notes with N.E.S. Investment Co. in the amount of $12 million. The


                                       18

<PAGE>

debt service for interest related to these debt instruments in 2005 was
approximately $0.3 million in cash and $1.0 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, 2005:

<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                                     $  12,485       $ 12,485        $       -        $     -
Senior Notes                                         97,463          6,146           91,317              -
Other long-term debt obligations                     18,693          1,340           17,263             90
Capital leases                                          981            398              471            112
Operating leases                                      4,740          1,367            2,180          1,193
Purchase obligations                                      -              -                -              -
                                              --------------- --------------- --------------- ---------------
Total                                             $ 134,362       $ 21,736        $ 111,231        $ 1,395
                                              =============== =============== =============== ===============
</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, 2005 increased by approximately $1.4 million over the prior year
due to changes in foreign currency translation rates, primarily the
strengthening of the Australian dollar against the U.S. dollar. The fluctuation
of the U.S. dollar versus other currencies also resulted in foreign currency
translation gains (losses) included in the accumulated other comprehensive loss
component of stockholder's equity (deficit) of approximately $(0.8) million and
$0.4 million for the years ended December 31, 2005 and 2004, 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
circumstances. Our significant accounting policies are described in Note B to
the consolidated financial statements included in Item 8 of this Form 10-K.


                                       19

<PAGE>


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.


                                       20


<PAGE>

The results of the annual impairment tests completed in the fourth quarters of
2005 and 2004 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, 2005 of $2.7 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 temporary 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, 2005, the Company had a
valuation allowance of approximately $3.4 million against its foreign net
operating loss carryforwards. Should the Company generate pre-tax income in
their foreign subsidiaries in future periods, portions of the valuation
allowance may be reversed against the current period 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 (FASB) 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 adoption of this statement will not materially impact the Company's results
of operations or financial condition.

In May 2005, the FASB issued SFAS No. 154, "Accounting for Changes and Error
Corrections," which replaces APB No. 20, "Accounting Changes" and SFAS No. 3,
"Reporting Accounting Changes in Interim Financial Statements." SFAS No. 154 is
effective for accounting changes and corrections made in fiscal years beginning
after December 15, 2005 and requires retrospective application of voluntary
changes in accounting principles to prior period financial statements, unless it
is impractical to determine either the period-specific or the cumulative effect
of the change. Any future changes in accounting principles or error corrections
will be accounted for in this manner.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional Asset Retirement Obligations." FIN No. 47 requires companies to
recognize a liability for the fair value of a legal obligation to perform asset
retirement activities that are conditional on a future event if the amount can
be reasonably estimated. The Interpretation was effective for the year ended
December 31, 2005. The Company adopted FIN 47 during the fourth quarter of 2005
with no material impact to consolidated financial position, results of
operations or cash flows.


                                       21


<PAGE>

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.


                                       22

<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, 2005 and 2004.

                                        Interest Rate Sensitivity
                                  Principal Amount by Expected Maturity
                                          Average Interest Rate
                                          (dollars in thousands)
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
                                                                                                    Fair
                                                                                                    Value,
As of December 31, 2005:       2006     2007      2008      2009     2010   Thereafter    Total    12/31/05
------------------------------------------------------------------------------------------------------------

<S>                         <C>      <C>      <C>           <C>      <C>        <C>   <C>        <C>
Long-Term Obligations,
  including current portion
     Fixed Rate              $ 6,987  $16,965  $ 87,698      $ 71     $ 19       $ -   $ 111,740  $ 112,340
     Average interest rate        9%       9%        9%        7%       7%

     Variable Rate             $ 500    $ 500   $ 3,417       $ -      $ -       $ -     $ 4,417    $ 4,417
     Average interest rate        8%       8%        8%
</TABLE>


<TABLE>
<CAPTION>
                                                                                                    Fair
                                                                                                    Value,
As of December 31, 2004:       2005     2006      2007      2008      2009  Thereafter    Total    12/31/04
------------------------------------------------------------------------------------------------------------

<S>                         <C>      <C>      <C>       <C>           <C>       <C>   <C>        <C>
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%
</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.


                                       23

<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, 2005 are included herein.


                                       24

<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, 2005 and 2004, 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, 2005. 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 audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, 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, 2005 and 2004, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2005, in conformity with U.S. generally accepted accounting
principles.


                                              /s/ Ernst & Young LLP

Cleveland, Ohio
March 17, 2006


                                       25

<PAGE>


                         Continental Global Group, Inc.

                           Consolidated Balance Sheets


<TABLE>
<CAPTION>
                                                                                  December 31
                                                                    -----------------------------------------
                                                                               2005                 2004
<S>                                                                    <C>                  <C>
Assets:
Current assets:
   Cash and cash equivalents                                            $     543,400        $     887,256
   Accounts receivable, less allowance for doubtful accounts
      of $820,325 in 2005 and $1,246,301 in 2004                           49,294,104           39,633,378
   Inventories                                                             42,170,889           28,551,137
   Deferred income taxes                                                    1,466,751              483,170
   Other current assets                                                     1,980,832            2,578,873
                                                                    -------------------- --------------------
Total current assets                                                       95,455,976           72,133,814

Property, plant and equipment                                              35,387,432           33,281,329
Less accumulated depreciation                                              21,821,194           21,174,697
                                                                    -------------------- --------------------
                                                                           13,566,238           12,106,632

Goodwill                                                                   13,789,054           13,980,994
Deferred financing costs                                                      649,878            1,169,780
Other assets                                                                  745,199              835,481
                                                                    -------------------- --------------------
                                                                        $ 124,206,345        $ 100,226,701
                                                                    ==================== ====================
Liabilities and Stockholder's Equity (Deficit):
Current liabilities:
   Notes payable                                                        $  12,485,090        $  17,220,041
   Trade accounts payable                                                  33,797,142           30,218,195
   Accrued compensation and employee benefits                               7,270,396            6,342,288
   Accrued interest on senior notes                                           295,075              295,075
   Other accrued liabilities                                                9,376,016            7,697,131
   Management fees payable to Nesco, Inc.                                   2,996,054              987,767
   Income taxes payable                                                     2,942,570            1,391,024
   Current maturities of long-term obligations                              7,829,379            9,454,247
                                                                    -------------------- --------------------
Total current liabilities                                                  76,991,722           73,605,768

Pension obligations                                                         1,483,305            1,232,550
Deferred income taxes                                                       4,790,887            2,971,644
Senior Notes                                                               91,316,624           97,463,061
Note payable to N.E.S. Investment Company                                  13,171,985           10,208,973
Other long-term obligations, less current maturities                        4,697,353            4,931,102

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                                                    (63,536,195)         (86,426,940)
   Accumulated other comprehensive loss                                    (6,703,024)          (5,753,145)
                                                                    -------------------- --------------------
                                                                          (68,245,531)         (90,186,397)
                                                                    -------------------- --------------------
                                                                        $ 124,206,345        $ 100,226,701
                                                                    ==================== ====================
</TABLE>

See notes to consolidated financial statements.


                                       26

<PAGE>


                         Continental Global Group, Inc.

                      Consolidated Statements of Operations


<TABLE>
<CAPTION>
                                                                      Year ended December 31
                                                     ----------------------------------------------------------
                                                               2005               2004                2003

<S>                                                      <C>                 <C>                <C>
Net sales                                                $ 302,245,921       $ 235,719,017      $ 194,340,515
Cost of products sold                                      235,873,774         195,770,066        167,664,729
                                                     ------------------- ------------------ -------------------
Gross profit                                                66,372,147          39,948,951         26,675,786
Operating expenses:
   Selling and engineering                                  15,743,125          14,089,996         12,927,482
   General and administrative                               12,355,629          11,714,191          9,880,673
   Management fee                                            2,008,287             810,611            299,793
   Amortization expense                                         26,360              26,360             26,361
   Restructuring charges                                       123,206             203,483             66,796
                                                     ------------------- ------------------ -------------------
Total operating expenses                                    30,256,607          26,844,641         23,201,105
                                                     ------------------- ------------------ -------------------
Operating income                                            36,115,540          13,104,310          3,474,681
Other expense (income):
   Interest expense, net                                     4,809,166           6,908,598         15,264,566
   Miscellaneous expense (income)                            1,245,334            (930,840)           838,678
                                                     ------------------- ------------------ -------------------
Total other expenses                                         6,054,500           5,977,758         16,103,244
                                                     ------------------- ------------------ -------------------
Income (loss) before income taxes                           30,061,040           7,126,552        (12,628,563)
Income tax expense                                           7,170,295           3,266,418              4,365
                                                     ------------------- ------------------ -------------------
Net income (loss)                                        $  22,890,745       $   3,860,134      $ (12,632,928)
                                                     =================== ================== ===================
</TABLE>

See notes to consolidated financial statements.


                                       27

<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, 2003          $   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)
Comprehensive income:
   Net income                           -              -     22,890,745               -       22,890,745
   Foreign currency
     translation adjustment             -              -              -        (765,033)        (765,033)
   Minimum pension liability
     adjustment, net of tax of
     $119,305                           -              -              -        (178,957)        (178,957)
   Reclassification into
     earnings of gains on cash
     flow hedges                        -              -              -          (5,889)          (5,889)
                                                                                           ---------------
Total comprehensive income                                                                    21,940,866
                                 ----------- ------------ --------------- ---------------- ---------------

Balance at December 31, 2005        $   1    $ 1,993,687  $ (63,536,195)   $ (6,703,024)   $ (68,245,531)
                                 =========== ============ =============== ================ ===============
</TABLE>

See notes to consolidated financial statements.


                                       28

<PAGE>


                         Continental Global Group, Inc.

                      Consolidated Statements of Cash Flows


<TABLE>
<CAPTION>
                                                                         Year ended December 31
                                                           ---------------------------------------------------
                                                                  2005              2004             2003
<S>                                                          <C>               <C>             <C>
Operating activities:
   Net income (loss)                                          $ 22,890,745      $ 3,860,134     $ (12,632,928)
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities:
     Provision for depreciation and amortization                 2,041,922        2,297,306         2,221,376
     Amortization of deferred financing costs                      519,902          519,902           519,902
     Deferred income taxes                                         432,744        3,201,531                 -
     Gain on debt restructuring                                          -       (3,391,923)                -
     Interest expense forgiven by bondholders                            -        3,004,925                 -
     Non-cash interest paid in-kind                                963,012          208,973                 -
     Provision (credit) for doubtful accounts                      (73,647)         751,022           458,112
     Loss (gain) on disposal of assets                              (5,321)         (14,707)           26,225
     Changes in operating assets and liabilities:
       Decrease (increase) in accounts receivable              (11,734,830)      (6,531,500)       (3,997,121)
       Decrease (increase) in inventories                      (14,303,413)      (3,593,216)        4,034,911
       Decrease (increase) in other assets                         470,477       (1,548,138)        1,134,700
       Increase (decrease) in accounts payable and other
         liabilities                                            12,554,294        3,111,967         2,840,807
                                                           ---------------- ----------------- ----------------
Net cash provided by (used in) operating activities             13,755,885        1,876,276        (5,394,016)
                                                           ---------------- ----------------- ----------------

Investing activities:
   Purchases of property, plant, and equipment (PP&E)           (3,591,676)        (719,246)         (781,090)
   Proceeds from disposals of PP&E                                  44,184           32,534            92,701
                                                           ---------------- ----------------- ----------------
Net cash used in investing activities                           (3,547,492)        (686,712)         (688,389)
                                                           ---------------- ----------------- ----------------

Financing activities:
   Net increase (decrease) in borrowings on notes payable
                                                                (4,211,931)       2,974,842         1,838,409
   Proceeds from long-term obligations                           2,523,269       14,395,032                 -
   Payments on Senior Notes                                     (6,146,437)      (3,073,220)                -
   Principal payments on long-term obligations                    (890,676)      (1,341,883)         (589,756)
   Payments of additional consideration to bondholders          (1,821,166)     (14,114,042)                -
                                                           ---------------- ----------------- ----------------
Net cash provided by (used in) financing activities            (10,546,941)      (1,159,271)        1,248,653
Effect of exchange rate changes on cash                             (5,308)           6,236            49,437
                                                           ---------------- ----------------- ----------------
Increase (decrease) in cash and cash equivalents                  (343,856)          36,529        (4,784,315)
Cash and cash equivalents at beginning of year                     887,256          850,727         5,635,042
                                                           ---------------- ----------------- ----------------
Cash and cash equivalents at end of year                      $    543,400      $   887,256     $     850,727
                                                           ================ ================= ================
</TABLE>

See notes to consolidated financial statements.


                                       29

<PAGE>


                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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. 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.
Several times in 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.

Several times through 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 extended the Company's
revolving credit facility with Bank One until July 31, 2006. The Credit
Agreement was amended in March 2006 to extend the revolving credit facility
until March 31, 2008.


                                       30

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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. On October 3, 2005, the Company made an additional cash
payment to the Series A and Series B bondholders 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 each of October 4, 2004, April 1, 2005, and October 3, 2005
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 each of October 4, 2004,
April 1, 2005, and October 3, 2005 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 Co. 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 Co. accrues interest at a rate of 9%, payable in kind, compounded
annually. The additional consideration paid by the Company on October 3, 2005 to
the Series A and Series B bondholders was funded with an additional $2,000,000
of subordinated indebtedness to N.E.S. Investment Co.


                                       31

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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 in 2004 and 2005
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. Associated with
this debt exchange, the Company incurred in 2004 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.

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 5% of 2005 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.


                                       32

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

B.   Significant Accounting Policies (Continued)

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 67% and 64% of
inventories at December 31, 2005 and 2004, 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 $4,302,000 and $5,184,000 at December 31,
2005 and 2004, 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.

Goodwill and Other Intangible Assets
The Company accounts for goodwill and other intangible assets according to the
provisions of SFAS No. 142, "Goodwill and Other Intangible Assets." Under SFAS
No. 142, goodwill and intangible assets deemed to have indefinite lives are not
amortized but are subject to annual impairment tests. Other intangible assets
are amortized over their useful lives. Goodwill and other intangibles that have
indefinite lives are 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, if any. The Company engages the assistance of independent valuation
experts to perform the annual impairment tests. The impairment tests are
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.


                                       33

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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>
                                                2005             2004              2003
                                          ----------------- ---------------- -----------------
<S>                                         <C>               <C>              <C>
Balance as of January 1                      $ 1,634,049       $ 1,275,401      $ 1,678,002
Provision for warranties                       1,083,412           927,786          931,835
Settlements made during the year                (933,040)         (617,915)      (1,427,369)
Effect of exchange rate changes                  (52,965)           48,777           92,933
                                          ----------------- ---------------- -----------------
Balance as of December 31                    $ 1,731,456       $ 1,634,049      $ 1,275,401
                                          ================= ================ =================
</TABLE>

Restructuring Charges
The Company incurred restructuring charges of approximately $123,000, $203,000,
and $67,000 in 2005, 2004 and 2003, 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. Since 2002, the Company has incurred approximately $1,033,000
in restructuring charges. As of December 31, 2005, the Company has paid
approximately $744,000 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 $604,000, $506,000, and $613,000 in advertising costs for the
years ended December 31, 2005, 2004, and 2003, 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.


                                       34

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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>
                                                               2005              2004             2003
                                                        ---------------- ----------------- ----------------

<S>                                                       <C>              <C>               <C>
Foreign currency translation adjustments                  $ (4,751,343)    $ (3,986,310)     $ (4,434,862)
Minimum pension liability adjustments (net of tax)          (1,951,681)      (1,772,724)       (1,566,102)
Change in fair value of cash flow hedges (net of tax)                -            5,889            19,212
                                                        ---------------- ----------------- ----------------
                                                          $ (6,703,024)    $ (5,753,145)     $ (5,981,752)
                                                        ================ ================= ================
</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.


                                       35

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

B.   Significant Accounting Policies (Continued)

New Accounting Pronouncements
The Financial Accounting Standards Board (FASB) 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 adoption of this statement will not materially impact the Company's results
of operations or financial condition.

In May 2005, the FASB issued SFAS No. 154, "Accounting for Changes and Error
Corrections," which replaces APB No. 20, "Accounting Changes" and SFAS No. 3,
"Reporting Accounting Changes in Interim Financial Statements." SFAS No. 154 is
effective for accounting changes and corrections made in fiscal years beginning
after December 15, 2005 and requires retrospective application of voluntary
changes in accounting principles to prior period financial statements, unless it
is impractical to determine either the period-specific or the cumulative effect
of the change. Any future changes in accounting principles or error corrections
will be accounted for in this manner.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional Asset Retirement Obligations." FIN No. 47 requires companies to
recognize a liability for the fair value of a legal obligation to perform asset
retirement activities that are conditional on a future event if the amount can
be reasonably estimated. The Interpretation was effective for the year ended
December 31, 2005. The Company adopted FIN 47 during the fourth quarter of 2005
with no material impact to consolidated financial position, results of
operations or cash flows.

Reclassifications
Certain amounts from the prior year financial statements have been reclassified
to conform to current year presentation.


                                       36

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

C.   Goodwill and Other Intangibles

The Company's goodwill had a value of $13,789,054 and $13,980,994 at December
31, 2005 and 2004, respectively. The change in goodwill from December 31, 2004
to December 31, 2005 resulted from foreign currency translation adjustments. All
of the Company's goodwill relates to the conveyor equipment segment. The results
of the annual impairment tests completed in accordance with SFAS No. 142 in the
fourth quarter of 2005, 2004, and 2003 indicated that there was no 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>
                                                    2005                               2004
                                           Carrying       Accumulated          Carrying     Accumulated
                                            Amount        Amortization          Amount      Amortization
                                      ---------------- ----------------- ---------------- -----------------

<S>                                         <C>             <C>                <C>             <C>
Amortized intangible assets                 $ 160,919       $ (132,779)        $ 160,919       $ (106,419)
Other intangible assets                       613,692                -           659,335                -
</TABLE>

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:

            2006                   $ 17,116
            2007                      4,176
            2008                      4,176
            2009                      2,672
                             ----------------
            Total                  $ 28,140
                             ================

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, 2005 and 2004 are as
follows:

                                            2005              2004
                                      ------------------ ----------------

Land and improvements                    $  1,261,579       $  1,323,266
Buildings and improvements                  7,430,781          7,559,753
Machinery and equipment                    26,695,072         24,398,310
                                      ------------------ ----------------
                                         $ 35,387,432       $ 33,281,329
                                      ================== ================

Depreciation expense for the years ended December 31, 2005, 2004, and 2003 was
$2,015,562, $2,270,946, and $2,195,015, 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.


                                       37

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

E.   Financing Arrangements

Long-term obligations consist of the following:

<TABLE>
<CAPTION>
                                                                                   As of December 31
                                                                           ----------------------------------
                                                                                 2005             2004

<S>                                                                         <C>               <C>
Senior Notes due 2007; interest at 11% payable semi-annually in arrears      $ 10,730,000      $ 10,730,000
Series A Notes due 2008; interest at 9% payable semi-annually in arrears       59,187,917        59,187,917
Future payments of interest on Series A Notes and additional
   consideration to bondholders in 2005                                        15,980,737        22,885,993
Series B Notes due 2008; interest payable semi-annually in arrears at
   13% in kind or 9% in cash                                                    9,105,833         9,105,833
Future payments of interest on Series B Notes and additional
   consideration to bondholders in 2005                                         2,458,575         3,520,922
Note payable to N.E.S. Investment Company; interest rate of 9%; maturity
   date of 10/2/2008                                                           13,171,985        10,208,973
Term loan payable by CCE; interest rate of prime plus 1/2 %; payable in
   monthly installments with balance due on 3/31/2008                           4,416,667         4,916,667
Note payable by CCE for manufacturing equipment; interest rate of
   8.845%; payable in monthly installments through 6/13/2005                            -            94,596
Term loan payable by Australian subsidiary; interest rate of  7.50%;
   maturity date of  12/31/2006                                                   730,100           663,085
Notes payable by Australian subsidiary for manufacturing equipment;
   interest rates from 7.13% to 7.6%; payable in monthly installments
   through November 2010                                                          374,652                 -
Obligations under capital leases                                                  858,875           743,397
                                                                           ----------------- ----------------
                                                                              117,015,341       122,057,383
Less current maturities                                                         7,829,379         9,454,247
                                                                           ----------------- ----------------
                                                                             $109,185,962      $112,603,136
                                                                           ================= ================
</TABLE>

Maturities of long-term obligations are as follows:

              2006     $   7,829,379
              2007        17,669,297
              2008        91,321,229
              2009           175,870
              2010            19,566
                    ------------------
                       $ 117,015,341
                    ==================


                                       38

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

E.  Financing Arrangements (Continued)

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 each of October 4, 2004, April 1, 2005, and October 3, 2005
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 each of October 4, 2004,
April 1, 2005, and October 3, 2005 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 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.


                                       39

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

E.  Financing Arrangements (Continued)

The outstanding indebtedness has been classified as short and long-term
liabilities as of December 31, 2005 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, 2005 of Senior Notes, including
      current portion of $6,146,438                               $ 97,463,062
    Interest payments on Series A Notes, 2006-2008                 (15,980,737)
    Interest payments on Series B Notes, 2006-2008                  (2,458,575)
    Maturity of outstanding 11% Senior Notes due 2007              (10,730,000)
                                                                 ---------------
Maturity of Series A and Series B Notes due 2008                  $ 68,293,750
                                                                 ===============

Proceeds from the new subordinated indebtedness to N.E.S. Investment Co. were
used to fund the cash payments made as additional consideration to the Series A
and Series B bondholders. In 2004, the Company received $10,000,000 that was
used to partially fund the cash payment made on October 4, 2004. In 2005, the
Company received an additional $2,000,000 to fund the cash payment made on
October 3, 2005. The note payable to N.E.S. Investment Co. accrues interest at
a rate of 9%, payable in kind, compounded annually.

CCE, GCC and JP Morgan Chase Bank, N.A. (successor by merger to Bank One, N.A)
are parties to the Second Amended and Restated Credit Facility and Security
Agreement dated October 4, 2004, as amended March 9, 2006, ("Credit Agreement")
pursuant to which JP Morgan Chase Bank 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 March 31, 2008, and bears
interest at a fluctuating rate based on the prime rate. At December 31, 2005,
approximately $19.4 million was available for use. At December 31, 2005 and
2004, the Company had an outstanding balance under the Credit Agreement of
$7,172,235 and $13,296,896, respectively. The weighted average interest rate for
this facility was 6.2% and 4.4% in 2005 and 2004, respectively. There were
approximately $3,385,000 and $2,685,000 of letters of credit outstanding at
December 31, 2005 and 2004, respectively.

The Credit Agreement also provided for an increase in CCE's secured term loan
with Bank One to a principal balance of $5 million at October 4, 2004. The term
loan bears interest at a rate of prime plus 1/2% and matures on March 31, 2008.
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 $4.5 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 March 31,
2007. At December 31, 2005, approximately $2.5 (Australian dollars) was
available for use. The outstanding balance under this facility was $1,481,864
(U.S.$) at December 31, 2005. The facility was not utilized at December 31,
2004. The weighted average interest rate for this facility was 7.9% in 2005 and
2004.


                                       40

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

E.   Financing Arrangements (Continued)

In the fourth quarter of 2005, the Company's Australian subsidiary financed the
purchase of new manufacturing equipment through notes payable with the National
Australia Bank. The notes payable bear fixed interest rates ranging from 7.13%
to 7.6% and have maturity dates ranging from November 2007 to November 2010.

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,
2006. At December 31, 2005, approximately 0.2 million British pounds was
available for use. The outstanding balance under this facility was $3,530,601
and $3,263,183 (U.S.$) at December 31, 2005 and 2004, respectively. The weighted
average interest rate for this facility was 6.8% and 6.5% in 2005 and 2004,
respectively.

The Company's South African subsidiary has a credit facility with the Standard
Bank of South Africa of 6.5 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, 2005, approximately 4.6 million rand was
available for use. The outstanding balance under this facility was $300,390 and
$659,962 (U.S.$) at December 31, 2005 and 2004, respectively. The weighted
average interest rate for this facility was 12.0% and 10.5% in 2005 and 2004,
respectively.

During 2005, 2004, and 2003, the Company paid interest of $3,393,666,
$3,175,467, and $14,745,103, respectively. Interest paid in 2005 and 2004 does
not include payments of $6,146,437 and $3,073,220, respectively, related to the
Company's New Series A and Series B Notes, which were recorded as a reduction in
the balance of outstanding indebtedness.


                                       41

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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
$463,000 and $381,000 were incurred in 2005 and 2004, respectively. The gross
amount of assets recorded under capital leases and the related accumulated
amortization at December 31, 2005 and 2004 are as follows:

                                            2005              2004
                                      ----------------- -----------------
Asset Balances:
Buildings                                $    32,847       $    49,513
Machinery and Equipment                    1,377,935         1,043,525
                                      ----------------- -----------------
                                         $ 1,410,782       $ 1,093,038
                                      ================= =================

Accumulated Amortization:
Buildings                                  $  15,055         $  20,631
Machinery and Equipment                      436,673           234,545
                                      ----------------- -----------------
                                           $ 451,728         $ 255,176
                                      ================= =================

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, 2005, 2004, and 2003 was approximately
$2,981,000, $2,765,000, and $2,535,000, 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
                                                --------------- ---------------

2006                                               $ 398,307      $ 1,366,583
2007                                                 244,044        1,244,532
2008                                                 226,538          936,129
2009                                                 111,756          618,995
2010                                                       -          573,854
                                                --------------- ---------------
Total minimum lease payments                         980,645      $ 4,740,093
                                                                ===============
Amounts representing interest                        121,770
                                                ---------------
Present value of net minimum lease payments
(including current portion of $342,598)            $ 858,875
                                                ===============


                                       42

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

G.   Employee Benefit Plans

CCE maintains a defined benefit plan covering all union hourly-paid employees at
its Winfield plant hired prior to February 1, 2004. 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, 2005 and 2004,
of the Company's defined benefit plan.

<TABLE>
<CAPTION>
                                                                      2005                2004
                                                            ------------------- -------------------

<S>                                                              <C>                 <C>
Accumulated benefit obligation                                    $ 9,352,419         $ 8,711,138
                                                            =================== ===================

Change in projected benefit obligation:
Projected benefit obligation at beginning of year                 $ 8,711,138         $ 7,506,886
Service cost                                                          215,428             221,543
Interest cost                                                         513,390             488,948
Amendments recognized                                                       -             426,707
Actuarial loss                                                        196,534             347,054
Benefits paid                                                        (284,071)           (280,000)
                                                            ------------------- -------------------
Projected benefit obligation at end of year                         9,352,419           8,711,138
                                                            ------------------- -------------------

Change in plan assets:
Fair value of plan assets at beginning of year                      7,478,588           4,688,953
Actual return on plan assets                                          424,597             592,538
Employer contributions                                                250,000           2,477,097
Benefits paid                                                        (284,071)           (280,000)
                                                            ------------------- -------------------
Fair value of plan assets at end of year                            7,869,114           7,478,588
                                                            ------------------- -------------------

Funded status:
Funded status of the plan (underfunded)                            (1,483,305)         (1,232,550)
Unrecognized prior service cost                                       599,090             643,733
Unrecognized net actuarial loss                                     2,070,986           1,772,724
                                                            ------------------- -------------------
Net amount recognized                                             $ 1,186,771        $  1,183,907
                                                            =================== ===================

Balance sheet amounts:
Accrued benefit cost                                             $ (1,483,305)       $ (1,232,550)
Intangible asset                                                      599,090             643,733
Accumulated other comprehensive loss                                2,070,986           1,772,724
                                                            ------------------- -------------------
Net amount recognized                                            $  1,186,771        $  1,183,907
                                                            =================== ===================
</TABLE>


                                       43

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

G.   Employee Benefit Plans (Continued)

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

<TABLE>
<CAPTION>
                                                            2005                2004                2003
                                                   ------------------- ------------------- -------------------
<S>                                                        <C>                <C>                 <C>
Service cost                                               $ 215,428          $  221,543          $  186,868
Interest cost                                                513,390             488,948             441,605
Expected return on plan assets                              (585,916)           (511,839)           (313,271)
Amortization of prior service cost                            44,643              44,643              16,533
Recognized loss                                               59,591              59,733              70,504
                                                   ------------------- ------------------- -------------------
Net periodic benefit cost                                  $ 247,136          $  303,028          $  402,239
                                                   =================== =================== ===================
</TABLE>

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

                                                    2005             2004
                                                -------------    -------------
Discount rate                                       5.75%             6.00%
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:

                                               2005         2004        2003
                                            ----------   ----------  -----------
Discount rate                                  6.00%        6.25%       6.75%
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 2005 and 2004.

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:                                 2005             2004
                                          ----------------- ----------------
Equity securities                                58%               55%
Debt securities                                  42                45
                                          ----------------- ----------------
Total                                           100%              100%
                                          ================= ================


                                       44

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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 is not
required to make any contributions to its pension plan in 2006. However, the
Company anticipates that a contribution will be made. The amount of this
contribution has not yet been determined. The Company expects to pay the
following benefit payments, which reflect expected future service, as
appropriate:

2006                 $  418,000
2007                    466,000
2008                    503,000
2009                    517,000
2010                    516,000
2011-2015             2,934,000


CCE also maintains a defined contribution plan covering substantially all
salaried and non-union hourly employees. CCE expenses annual contributions
(approximately $687,000, $590,000, and $571,000 in 2005, 2004, and 2003,
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 $343,000, $317,000, and $297,000 in 2005, 2004,
and 2003, 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, 2005 and 2004 was approximately $128,000 and
$58,000, respectively, which was equal to 3% of eligible employee compensation
in 2005 and 1.5% of eligible employee compensation in 2004. 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, 2005, 2004, and 2003, the
subsidiaries contributed approximately $969,000, $929,000, and $824,000,
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. In 2005, the Company
paid approximately $307,000 in settlement of all vested and accrued phantom
stock units. At December 31, 2004, the Company had an accrual for the value of
vested phantom stock units granted for approximately $292,000.


                                       45

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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 $2,008,000, $811,000, and $300,000, for
the years ended December 31, 2005, 2004, and 2003, respectively. At December 31,
2005 and 2004, the Company had an accrual for management fees owed to Nesco,
Inc. of approximately $2,996,000 and $988,000, 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, 2005 and 2004, 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 fair value of the Company's
Senior Notes at December 31, 2005 is based on the quoted market value. The
carrying amounts of the Company's Senior Notes at December 31, 2004 approximated
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
remaining fixed rate long-term debt is based on the present value of future cash
outflows.

Foreign currency forward contracts: The Company did not have any derivative
financial instruments outstanding at December 31, 2005. Derivative financial
instruments at December 31, 2004 included foreign currency forward contracts
with contractual amounts of $210,000. The contracts matured during January 2005.
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.


                                       46

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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>
                                                                       2005                              2004
                                                              Carrying        Fair             Carrying          Fair
                                                               Amount         Value             Amount           Value
                                                         ---------------- ---------------- ---------------- ----------------
                                                                                   (in thousands)

<S>                                                         <C>              <C>              <C>              <C>
Cash and cash equivalents                                   $     543        $     543        $     887        $     887
Accounts receivable                                            49,294           49,294           39,633           39,633
Accounts payable                                              (33,797)         (33,797)         (30,218)         (30,218)
Notes payable                                                 (12,485)         (12,485)         (17,220)         (17,220)
Long-term debt                                                116,156          116,757         (121,314)        (122,591)
Foreign currency forward contracts                                  -                -                9                9
</TABLE>

Accounts receivable from customers in the coal mining industry were
approximately 63% and 42% of net accounts receivable at December 31, 2005 and
2004, 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 (credits) for credit losses were approximately $(74,000), $751,000,
and $458,000 in 2005, 2004, and 2003, respectively. Accounts written off, net of
recoveries, were approximately $330,000, $507,000, and $645,000 in 2005, 2004,
and 2003, 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. In 2005,
the Company's domestic subsidiaries paid approximately $4,658,000 in income
taxes. The Company did not pay any income taxes during the year ended December
31, 2004.

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

<TABLE>
<CAPTION>
                                2005                 2004                 2003
                      --------------------- -------------------- --------------------

<S>                         <C>                    <C>                <C>
Domestic                    $ 27,547,178           $ 4,488,465        $ (10,018,995)
Foreign                        2,513,862             2,638,087           (2,609,568)
                      --------------------- -------------------- --------------------
                            $ 30,061,040           $ 7,126,552        $ (12,628,563)
                      ===================== ==================== ====================
</TABLE>


                                       47

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

J.   Income Taxes (Continued)

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

<TABLE>
<CAPTION>
                                      2005               2004                2003
                            ------------------- ------------------ -------------------
<S>                              <C>                 <C>                    <C>
Current:
   Domestic:
     Federal                      $ 5,507,221         $    64,887            $     -
     State and local                1,230,330                   -                  -
   Foreign                                  -                   -              4,365
                            ------------------- ------------------ -------------------
                                    6,737,551              64,887              4,365
Deferred:
   Domestic:
     Federal                          705,353           3,346,252                  -
     State and local                  620,642             388,926                  -
   Foreign                           (893,251)           (533,647)                 -
                            ------------------- ------------------ -------------------
                                      432,744           3,201,531                  -
                            ------------------- ------------------ -------------------
                                  $ 7,170,295         $ 3,266,418            $ 4,365
                            =================== ================== ===================
</TABLE>

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, 2005 and 2004, the Company had foreign net operating loss
carryforwards of approximately $11,586,000 and $15,919,000, respectively. The
Company has established a valuation allowance of approximately $3,379,000 and
$4,242,000 at December 31, 2005 and 2004, respectively, 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.

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.

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.


                                       48

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

J.   Income Taxes (Continued)

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

                                                  2005              2004
                                             ---------------- -----------------
Deferred tax assets:
   Operating accruals                           $  4,331,197     $  2,467,770
   Net operating loss carryforwards                3,379,196        5,739,117
   Valuation allowance                            (3,379,196)      (4,242,179)
                                             ---------------- -----------------
                                                   4,331,197        3,964,708

Deferred tax liabilities:
   Inventories                                    (1,607,326)      (2,008,194)
   Property, plant, and equipment                 (1,839,205)      (1,618,639)
   Goodwill                                       (4,208,802)      (2,826,349)
                                             ---------------- -----------------
                                                  (7,655,333)      (6,453,182)
                                             ---------------- -----------------
Net deferred tax liability                      $ (3,324,136)    $ (2,488,474)
                                             ================ =================

Deferred income taxes are not provided on undistributed earnings of
international subsidiaries that are intended to be permanently invested in those
operations. These undistributed earnings aggregated approximately $6,075,000 at
December 31, 2005.

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

<TABLE>
<CAPTION>
                                                                         2005              2004              2003
                                                                   ----------------- ----------------- -----------------

<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                                  4.6               3.2              (3.9)
Effective tax rate differential of earnings outside the U.S.               (2.9)            (12.9)              7.2
Impact of cancellation of debt                                             (1.1)             27.0               -
Valuation allowance                                                         -                (7.5)             31.3
Non-deductible / non-taxable items                                         (7.2)              -                 -
Other - net                                                                (4.5)              1.0               0.4
                                                                   ----------------- ----------------- -----------------
                                                                           23.9%             45.8%              0.0%
                                                                   ================= ================= =================
</TABLE>


                                       49

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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%, 89%, and 87% of net sales for 2005, 2004, and 2003,
respectively, markets its products in four main business areas. The mining
equipment business area includes the design, manufacture and testing 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.

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.


                                       50

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

K.  Segment Information (Continued)

<TABLE>
<CAPTION>
                                                                      Year ended December 31
                                                             2005               2004              2003
                                                       ------------------ ----------------- -----------------
                                                                           (in thousands)
<S>                                                         <C>                <C>               <C>
Net sales:
   Conveyor equipment                                        $ 268,071          $ 208,921         $ 169,524
   Manufactured housing products                                33,475             26,083            23,944
   Other                                                           700                715               873
                                                       ------------------ ----------------- -----------------
Total net sales                                              $ 302,246          $ 235,719         $ 194,341
                                                       ================== ================= =================

Depreciation and amortization:
   Conveyor equipment                                          $ 1,908            $ 2,152           $ 2,060
   Manufactured housing products                                   107                118               134
   Other                                                             1                  1                 1
   Amortization expense                                             26                 26                26
                                                       ------------------ ----------------- -----------------
Total depreciation and amortization                            $ 2,042            $ 2,297           $ 2,221
                                                       ================== ================= =================

Segment operating income:
   Conveyor equipment                                         $ 37,000           $ 14,668         $   3,777
   Manufactured housing products                                 2,532              1,371             1,421
   Other                                                           131                164               277
                                                       ------------------ ----------------- -----------------
Segment operating income                                        39,663             16,203             5,475
   Management fee                                                2,008                811               300
   Amortization expense                                             26                 26                26
   Restructuring charge                                            123                203                67
   Corporate expense                                             1,391              2,059             1,607
                                                       ------------------ ----------------- -----------------
Total operating income                                          36,115             13,104             3,475
   Interest expense, net                                         4,809              6,909            15,265
   Miscellaneous expense (income)                                1,245               (931)              839
                                                       ------------------ ----------------- -----------------
Income (loss) before income taxes                             $ 30,061           $  7,126         $ (12,629)
                                                       ================== ================= =================

Segment assets:
   Conveyor equipment                                        $ 117,015          $  92,914          $ 79,580
   Manufactured housing products                                 6,138              5,653             5,885
   Other                                                           233                336               361
                                                       ------------------ ----------------- -----------------
Total segment assets                                           123,386             98,903            85,826
   Corporate assets                                                820              1,324             1,937
                                                       ------------------ ----------------- -----------------
Total assets                                                 $ 124,206          $ 100,227          $ 87,763
                                                       ================== ================= =================

Capital expenditures:
   Conveyor equipment                                          $ 3,570              $ 699             $ 770
   Manufactured housing products                                    22                 20                11
   Other                                                             -                  -                 -
                                                       ------------------ ----------------- -----------------
Total capital expenditures                                     $ 3,592              $ 719             $ 781
                                                       ================== ================= =================
</TABLE>


                                       51

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

K.   Segment Information (Continued)

Geographic Area Data
<TABLE>
<CAPTION>
                                                                      Year ended December 31
                                                              2005               2004               2003
                                                      ------------------ ------------------ -----------------
                                                                          (in thousands)
<S>                                                         <C>                <C>                <C>
Net sales:
   United States                                             $ 216,855          $ 141,215          $ 114,332
   Australia                                                    45,654             50,241             35,348
   United Kingdom                                               29,995             36,272             39,089
   Other countries                                               9,742              8,015              5,817
   Eliminations - transfers                                          -                (24)              (245)
                                                      ------------------ ------------------ -----------------
Total net sales                                              $ 302,246          $ 235,719          $ 194,341
                                                      ================== ================== =================


Operating income (loss):
   United States                                              $ 32,710           $ 10,011            $ 5,020
   Australia                                                     1,917              2,456                746
   United Kingdom                                                1,113                520             (2,080)
   Other countries                                                 375                117               (254)
   Eliminations                                                      -                  -                 43
                                                      ------------------ ------------------ -----------------
Total operating income                                        $ 36,115           $ 13,104            $ 3,475
                                                      ================== ================== =================

Long lived assets:
   United States                                              $  7,685           $  5,770           $  6,448
   Australia                                                     3,481              3,193              3,282
   United Kingdom                                                1,918              2,594              2,819
   Other countries                                                 482                550                365
                                                      ------------------ ------------------ -----------------
Total long lived assets                                       $ 13,566           $ 12,107           $ 12,914
                                                      ================== ================== =================
</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 2005, 2004 and 2003.


                                       52

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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 2005 and 2004 and consolidating
statements of operations and cash flow statements for 2005, 2004, and 2003 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, 2005:              The Company    Subsidiaries    Subsidiaries    Eliminations          Total
                              -------------------------------------------------------------------------------
<S>                               <C>            <C>              <C>           <C>               <C>
Current assets:
   Cash and cash equivalents       $     40       $     470        $     33      $        -        $     543
   Accounts receivable, net               -          28,139          21,155               -           49,294
   Inventories                            -          33,310           8,861               -           42,171
   Deferred income taxes                 81             759             627               -            1,467
   Other current assets              18,729           2,242           1,804         (20,794)           1,981
                              -------------------------------------------------------------------------------
Total current assets                 18,850          64,920          32,480         (20,794)          95,456
Property, plant, and
   equipment, net                         -           7,685           5,881               -           13,566
Goodwill                                  -          10,986           2,803               -           13,789
Investment in subsidiaries           60,309          35,788               -         (96,097)               -
Deferred financing costs                650               -               -               -              650
Other assets                          1,138           4,916             118          (5,427)             745
                              -------------------------------------------------------------------------------
Total assets                       $ 80,947       $ 124,295        $ 41,282      $ (122,318)       $ 124,206
                              ===============================================================================
Current liabilities:
   Notes payable                   $      -       $   7,172        $  6,082      $     (769)       $  12,485
   Trade accounts payable               239          17,221          18,214          (1,877)          33,797
   Accrued compensation and
     employee benefits                    -           5,139           2,132               -            7,271
   Accrued interest                     295               -               -               -              295
   Other accrued liabilities          5,072           5,482           3,722          (1,904)          12,372
   Income taxes payable                   -          21,623               -         (18,680)           2,943
   Current maturities of
     long-term obligations            6,146             500           1,183               -            7,829
                              -------------------------------------------------------------------------------
Total current liabilities            11,752          57,137          31,333         (23,230)          76,992
Pension obligation                        -           1,483               -               -            1,483
Deferred income taxes                     -           5,929               -          (1,138)           4,791
Senior notes                         91,317               -               -               -           91,317
N/P to N.E.S. Investment Co.         13,172               -               -               -           13,172
Other long-term obligations               -           3,917           3,129          (2,349)           4,697
Stockholder's equity
(deficit)                           (35,294)         55,829           6,820         (95,601)         (68,246)
                              -------------------------------------------------------------------------------
Total liabilities and
   stockholder's equity
   (deficit)                       $ 80,947       $ 124,295        $ 41,282      $ (122,318)       $ 124,206
                              ===============================================================================
</TABLE>


                                       53

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

L.   Guarantor and Non-Guarantor Subsidiaries (Continued)

<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              13,024           2,154           2,518         (15,117)           2,579
                              -------------------------------------------------------------------------------
Total current assets                 13,117          41,362          32,889         (15,234)          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                            300           4,922             126          (4,513)             835
                              -------------------------------------------------------------------------------
Total assets                       $ 74,596        $ 98,017        $ 42,347      $ (114,733)       $ 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
   Income taxes payable                   -          14,355               -         (12,964)           1,391
   Current maturities of
     long-term obligations            7,967             596             891               -            9,454
                              -------------------------------------------------------------------------------
Total current liabilities            11,536          44,643          35,889         (18,463)          73,605
Pension obligation                        -           1,233               -               -            1,233
Deferred income taxes                   247           1,933             792               -            2,972
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)                       $ 74,596        $ 98,017        $ 42,347      $ (114,733)       $ 100,227
                              ===============================================================================
</TABLE>


                                       54

<PAGE>
                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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, 2005:
Net sales                                  $      -     $ 216,855        $ 85,391       $     -     $ 302,246
Cost of products sold                             -       164,563          71,311             -       235,874
                                        ------------------------------------------------------------------------
Gross profit                                      -        52,292          14,080             -        66,372
Total operating expenses                      1,799        17,783          10,675             -        30,257
                                        ------------------------------------------------------------------------
Operating income (loss)                      (1,799)       34,509           3,405             -        36,115
Interest expense, net                         2,663         1,450             696             -         4,809
Miscellaneous expense                           400           650             195             -         1,245
                                        ------------------------------------------------------------------------
Income (loss) before income taxes            (4,862)       32,409           2,514             -        30,061
Income tax expense (benefit)                 (7,101)       15,164            (893)            -         7,170
                                        ------------------------------------------------------------------------
Net income                                 $  2,239     $  17,245        $  3,407       $     -     $  22,891
                                        ========================================================================
</TABLE>

<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>

                                       55

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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, 2005:
Net cash  provided by (used in)
   operating activities                    $ (1,331)     $ 16,861         $ (1,782)        $  8      $ 13,756

Investing activities:
   Purchases of property, plant and
     equipment                                    -        (2,889)            (702)           -        (3,591)
   Proceeds from disposals of PP&E                -            36                8            -            44
                                        ------------------------------------------------------------------------
Net cash used in investing activities             -        (2,853)            (694)           -        (3,547)

Financing activities:
   Net increase (decrease) in
     borrowings on notes payable                  -        (6,125)           1,913            -        (4,212)
   Proceeds from long-term obligations        2,000             -              523            -         2,523
   Payments on Senior Notes                  (6,146)            -                -            -        (6,146)
   Principal payments on long-term
     obligations                                  -          (596)            (295)           -          (891)
   Payments of additional
     consideration to bondholders            (1,821)            -                -            -        (1,821)
   Distributions                              7,326        (7,326)               -            -             -
                                        ------------------------------------------------------------------------
Net cash provided by (used in)
   financing activities                       1,359       (14,047)           2,141            -       (10,547)
Exchange rate changes on cash                     -             -                2           (8)           (6)
                                        ------------------------------------------------------------------------
Increase (decrease) in cash and cash
   equivalents                                   28           (39)            (333)           -          (344)
Cash and cash equivalents at beginning
   of year                                       12           509              366            -           887
                                        ------------------------------------------------------------------------
Cash and cash equivalents at end of
   year                                    $     40      $    470         $     33         $  -      $    543
                                        ========================================================================
</TABLE>


                                       56

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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 (decrease) in
     borrowings on notes payable                  -         4,152           (1,177)           -         2,975
   Proceeds from long-term obligations       10,000         3,768              627            -        14,395
   Payments on Senior Notes                  (3,073)            -                -            -        (3,073)
   Principal payments on long-term
     obligations                                  -          (525)            (817)           -        (1,342)
   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>


                                       57

<PAGE>

                         Continental Global Group, Inc.

                   Notes to Consolidated Financial Statements

                                December 31, 2005

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>

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.


                                       58

<PAGE>



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

None.

Item 9A.  Controls and Procedures

As of December 31, 2005, 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, 2006:

Name                         Age    Position with the Company

Ronald W. Kaplan             54     President and Chief Executive Officer
James L. Smothers            49     Vice President
Jimmy L. Dickinson           63     Vice President and Chief Financial Officer
Edward F. Crawford           66     Director
Donald F. Hastings           77     Director
C. Wesley McDonald           65     Director
Robert J. Tomsich            75     Director
James W. Wert                59     Director

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

Mr. Kaplan was appointed President and Chief Executive Officer of the Company
effective February 13, 2006. Prior to joining the Company, Mr. Kaplan had been
employed since 1979 with Harsco Corporation, a multinational provider of
industrial services and engineered products. Mr. Kaplan held various positions
with Harsco, serving as President of the Harsco GasServ division since 1998.

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.


                                       59


<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
Effective May 19, 2005, the Company's board of directors elected the following
three independent board members to serve on the Audit Committee: Mr. James W.
Wert, Chairman, Mr. Donald F. Hastings, and Mr. Edward F. Crawford. The Audit
Committee's principal function is to assist the board of directors with its
oversight responsibilities with respect to the integrity of the Company's
financial statements and financial reporting process.

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


                                       60

<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>
C. Wesley McDonald, Vice Chairman             2005     $ 181,095      $       -          $       -
    and Interim President and CEO (2)

Robert W. Hale, President and Chief           2005       152,800              -             19,079
    Executive Officer (2)                     2004       458,400        422,206            267,701
                                              2003       458,400        250,000             58,282

Jimmy L. Dickinson, Vice President and        2005       154,140         11,775             13,145
    Chief Financial Officer                   2004       150,720          9,075             10,505
                                              2003       149,985         15,978             11,824

James Smothers, Vice President                2005       165,255         11,209             11,012
                                              2004       163,800          8,342             10,763
                                              2003       156,825         15,892             10,083
</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. Other
     than payment to Mr. Hale for $306,849 in settlement of amounts vested under
     the Phantom Stock Plan, no amounts shown were received by any of the named
     executives.
(2)  Effective April 30, 2005, Mr. Hale resigned as President and CEO of the
     Company. On May 1, 2005, the Company appointed Mr. McDonald as Interim
     President and CEO, where he served until February 13, 2006.

Director Compensation
Each director of the Company not employed by the Company or any entity
affiliated with the Company received $25,000 for serving as a director of the
Company during the year. Mr. McDonald received $6,250 for serving as a director
of the Company prior to being appointed Interim President and CEO of the Company
in May 2005. Also, the Company will reimburse such director for their travel and
other expenses incurred in connection with attending meetings of the Board of
Directors.

Employment Agreement
On February 13, 2006, the Company's Board of Directors appointed Ronald W.
Kaplan as President and Chief Executive Officer of the Company. The terms and
conditions of Mr. Kaplan's employment are governed by a one year employment
agreement in effect as of February 13, 2006. Under the employment agreement, Mr.
Kaplan receives a compensation package including a salary of $33,334 per month,
an annual bonus based on pre-tax profit targets, retirement and health benefits,
a car allowance, eligibility to participate in the Company's life insurance
plan, vacation time and relocation expenses. Additionally, Mr. Kaplan's
employment agreement grants him the right to voluntarily terminate his
employment in the event that the Company experiences a change of control, as
defined in the agreement. This change of control provision entitles Mr. Kaplan
to receive his base salary for a period of 24 months following the effective
date of his resignation. Mr. Kaplan's employment agreement also contains
provisions that permit the Company to terminate his employment for "cause," as
such term is defined in the employment agreement, as well as for specified
events such as disability.


                                       61

<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, 2006:

<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 2005 under the Management
Agreement was $2,008,287. 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.


                                       62

<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, 2005 and 2004, 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 $502,000 and $574,000, respectively.

Audit Related Fees
None.

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, 2005 and 2004 were approximately $44,000 and $42,000, respectively.

All Other Fees
None.

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 2005 were approved by the audit
committee.


                                       63

<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 17, 2006 are included in Item 8.

                Report of Independent Registered Public Accounting Firm.

                Consolidated Balance Sheets at December 31, 2005 and 2004.

                Consolidated Statements of Operations for each of the three
                years in the period ended December 31, 2005.

                Consolidated Statements of Stockholder's Equity (Deficit) for
                each of the three years in the period ended December 31, 2005.

                Consolidated Statements of Cash Flows for each of the three
                years in the period ended December 31, 2005.

                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.


                                       64

<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, 2006.

                                  CONTINENTAL GLOBAL GROUP, INC.

                                  By:  /s/ Ronald W. Kaplan
                                  --------------------------
                                  Name: Ronald W. Kaplan
                                  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/ Ronald W. Kaplan                          President and Chief Executive Officer                March 31, 2006
-----------------------------------------
Ronald W. Kaplan                              (Principal Executive Officer)

/s/ Jimmy L. Dickinson                        Vice President and Chief Financial Officer           March 31, 2006
-----------------------------------------
Jimmy L. Dickinson                            (Principal Financial Officer and Principal
                                               Accounting Officer)

/s/ Edward F. Crawford                        Director                                             March 31, 2006
-----------------------------------------
Edward F. Crawford

/s/ Donald F. Hastings                        Director                                             March 31, 2006
-----------------------------------------
Donald F. Hastings

/s/ C. Wesley McDonald                        Director                                             March 31, 2006
-----------------------------------------
C. Wesley McDonald

/s/ Robert J. Tomsich                         Director                                             March 31, 2006
-----------------------------------------
Robert J. Tomsich

/s/ James W. Wert                             Director                                             March 31, 2006
-----------------------------------------
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.


                                       65
<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.

    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 February 13, 2006, between
              Continental Global Group, Inc. and Ronald Kaplan.  (Filed as
              Exhibit 10.3 to Form 8-K filed by the Company on March 17,
              2006, and is incorporated herein by reference.)

    10.4      Reserved

    10.5      First Amendment to Second Amended and Restated Credit Facility and
              Security Agreement, dated March 9, 2006, by Continental Conveyor &
              Equipment Company, Goodman Conveyor Company, and JP Morgan Chase
              Bank, N.A., successor by merger to Bank One, N.A.
<PAGE>

                         Continental Global Group, Inc.

                                    Form 10-K

                                Index of Exhibits


  Exhibit
   Number     Description of Exhibit

    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.