UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549

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FORM 10-K/A
Amendment No. 1

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COMMISSION FILE NUMBER 333-124543

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EDGEN CORPORATION(Exact name of registrant as specified in its charter)

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|Nevada(State or other jurisdiction of
incorporation or organization)               |  | 13-3908690(I.R.S. Employer
Identification No.)
|---------------------------------------------------------------------------------- |  | ----------------------------------------------
|18444 Highland Road
Baton Rouge, Louisiana(Address of principal executive offices) |  | 70809(Zip Code)                               

225-756-9868(Registrant's telephone number, including area code)

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 o        No ý

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 ý        No o

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 o        No ý

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

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 Exchange Act. Check one:    Large accelerated
filer o        Accelerated filer o        Non-accelerated
filer ý

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant is not applicable as no
public market for the voting stock of the registrant exists.

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 30, 2006, there were 2,681,564 shares of Common Stock, par value $0.01 per share, of the registrant outstanding.

DOCUMENTS
INCORPORATED BY REFERENCE: None



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EXPLANATORY NOTE

We are filing this Amendment No. 1 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 filed with the Securities and Exchange Commission on March 31,
2006 (the "Original Report") in response to comments by the Staff of the Securities and Exchange Commission in connection with its review of our registration statement on Form S-4 filed on
April 14, 2006 and to make certain other clarifications. Specifically, we have made the following changes:



Pursuant to Rule 12b-15 promulgated under the Exchange Act, this Amendment No. 1 presents the complete text of the amended items and also includes new
certifications pursuant to Rules 13a-14(a)/15d-14(a) and Rules 13a-14(b)/15d-14(b) under the Exchange Act. Except as described above, no
substantive change has been made to the Original Report. This Amendment No. 1 does not reflect events occurring after the filing of the Original Report or modify or update those disclosures
affected by subsequent events.

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EDGEN CORPORATION

TABLE OF CONTENTS

|PART I        |  |                                                                                        
|------------- |  | ---------------------------------------------------------------------------------------
|Item 1A.      |  | Risk Factors                                                                           
|PART II       |  |                                                                                        
|Item 6.       |  | Selected Financial Data                                                                
|Item 7.       |  | Management's Discussion and Analysis of Financial Condition and Results of Operations  
|Item 8.       |  | Financial Statements and Supplementary Data                                            
|Item 9A.      |  | Controls and Procedures                                                                
|Item 12.      |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholders
|SIGNATURE     |  | 68                                                                                     
|EXHIBIT INDEX |  | 69                                                                                     

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FORWARD-LOOKING STATEMENTS

This report includes "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"). Forward looking statements are those that do not relate solely to historical fact. They include, but are not limited to,
any statement that may predict, forecast, indicate or imply future results, performance, achievements or events. They may contain words such as "believe," "anticipate," "expect," "estimate," "intend,"
"project," "plan," "should," "may," or "could" or words or phrases of similar meaning. They may relate to, among other things: our expected business outlook, anticipated financial and operating
results, our business strategy and means to implement the strategy, our objectives, the amount and timing of capital expenditures, the likelihood of our success in expanding our business, financing
plans, budgets, working capital needs and sources of liquidity.

Forward-looking statements are only predictions and are not guarantees of performance. These statements are based on our management's beliefs and assumptions,
which in turn are based on currently available information. Important assumptions relating to the forward looking statements include, among others, assumptions regarding demand for our products, the
expansion of product offerings geographically or through new applications, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These
assumptions could prove inaccurate. Forward-looking statements also involve known and unknown risks and uncertainties, which could cause actual results that differ materially from those contained in
any forward looking statement. Many of these factors are beyond our ability to control or predict. Such factors include, but are not limited to, the following:



Given these risks and uncertainties, we urge you to read this report completely and with the understanding that actual future results may
be materially different from what we plan or expect. In addition, these forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing
obligation to disclose material information as required by federal securities laws, we do not intend to update you concerning any future revisions to any forward looking statements to reflect events
or circumstances occurring after the date of this report.

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ITEM 1A. RISK FACTORS

Our results of operations and financial condition can be adversely affected by numerous risks. You should carefully consider the risk
factors detailed below in conjunction with the other information contained in this report. If any of the following risks actually occur, our business, financial condition, operating results, cash
flows and/or future prospects could be materially adversely affected.

Volatility in oil and gas prices and refining margins could reduce demand for our specialty pipe, plates, sections and pipe components, which could cause our
sales to decrease.

Proceeds
from the sale of specialty steel pipe, fittings and flanges, and structural steel plates and sections to the oil and gas industry constitute a significant portion of our sales.
As a result, we depend upon the oil and gas industry and its ability and willingness to make capital expenditures to explore for, develop and produce oil and gas and produce refined products. If these
expenditures decline, our business will suffer. The industry's willingness to explore, develop, produce, and refine depends largely upon the availability of attractive drilling prospects and the
prevailing view of future oil and gas prices. Many factors affect the supply and demand for oil and gas and therefore influence our product prices, including:



Volatility
in the oil and gas markets and general economic conditions could cause demand for our principal products to decrease, which would adversely affect our business, consolidated
financial condition, results of operations and liquidity.

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Oil
and gas, power and refined products prices have been and are expected to remain volatile. This volatility causes oil and gas companies, drilling contractors, power generators and
utilities, MROs and refiners to change their strategies and expenditure levels. We have experienced in the past, and we may experience in the future, significant fluctuations in operating results
based on these changes.

Supply of steel and the price we pay for steel pipe and components and high grade structural steel products may fluctuate due to a number of factors
beyond our control, which could adversely affect our operating results.

We purchase large quantities of carbon and alloy steel pipe, pipe components and high grade structural steel products, which we sell to a variety of
end-users and certain MRO distributors. The prices we pay for these products and the prices we charge for our products may change depending on many factors outside of our control,
including general economic conditions (both domestic and international), competition, production levels, import duties and other trade restrictions, currency fluctuations and surcharges imposed by our
suppliers. Prices for raw materials used in the production of steel have increased significantly in recent years due primarily to international demand. We seek to maintain our profit margin by
attempting to increase the price of our products in response to increases in the prices we pay for our inventories. If, however, we are unable to pass on higher costs to our customers, there is a
delay in our ability to pass on higher costs to our customers or our supply of products is delayed or curtailed, this could have a material adverse effect on our business, financial condition, results
of operations and liquidity. Alternatively, significant steel price decreases can have a
material adverse effect on our business, financial condition, results of operation and liquidity if decreases in steel prices necessitate us to reduce product pricing, especially to the extent
inventory has been purchased by us prior to the steel price decreases.

Our business is sensitive to economic downturns, which could cause our revenues to decrease.

The demand for our products is dependent on the general economy, the oil and gas, processing and power generation industries and other factors. Downturns in the
general economy or in the oil and gas, processing or power generation industries can cause demand for our products to materially decrease. In 2003, the specialty pipe, sections, plates and pipe
components industry experienced softness principally due to weak economic conditions in general and reduced spending on expansion and development projects by end-users. During 2003, we
experienced a significant decline in sales and profitability, primarily as a result of a severely depressed power generation market and reduced spending in the processing and oil and gas industries,
and an internal decision to liquidate inventory of certain low-margin products. In addition, if we are not adequately able to predict demand and if our inventories (or the inventories of
manufacturers, other distributors or our customers) become excessive, there could be a material adverse effect on price levels for our products, the quantity of products sold by us and our revenues.

Significant competition from a number of companies could reduce our market share and have an adverse effect on our selling prices and sales volumes.

We operate in a highly competitive industry and compete against a number of companies, some of which have significantly greater financial, technological and
marketing resources than we do. We believe that our ability to compete depends on high product performance, short lead-time and timely delivery, competitive pricing and superior customer
service and support. We might be unable to compete successfully with respect to these or other factors. If we are unsuccessful, we could lose market share to our competitors. Moreover, actions by our
competitors could have an adverse effect on our selling prices and sales volumes.

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The development of alternatives to specialty pipe and components and high grade structural steel product distributors in the supply chain could cause a
decrease in our sales and operating results and limit our ability to grow our business.

Our customers could begin satisfying more of their product needs by purchasing directly from manufacturers, which could result in decreases in our sales and
earnings. Our suppliers could invest in infrastructure to expand their own local sales force and inventory stocking capabilities and sell more products directly to our customers. These or other
actions that remove us from, or limit our role in, the distribution chain, may harm our competitive position in the marketplace and reduce our sales and earnings.

Increases in customer, manufacturer and distributor inventory levels could reduce our sales and profit.

Customer, manufacturer and distributor inventory levels of specialty pipe, plate, sections and pipe component products can change significantly from period to
period. Increases in our customers' inventory levels can have a direct adverse effect on the demand for these products when customers draw from inventory rather than purchase new products. Reduced
demand, in turn, would likely result in reduced sales volume and overall profitability.

Increased
inventory levels by manufacturers or other distributors can cause an oversupply of specialty products in our markets and reduce the prices that we are able to charge for our
products. Reduced prices, in turn, would likely reduce our margins and overall profitability.

We rely on our information technology systems to manage numerous aspects of our business and customer and supplier relationships and a disruption of
these systems could adversely affect our business.

Our information technology (IT) system is an integral part of our business and growth strategies, and a serious disruption to our IT system could significantly
limit our ability to manage and operate our business efficiently, which in turn could cause our business and competitive position to suffer and cause our results of operations to be reduced. We depend
on our IT system to process orders, track credit risk and manage inventory and accounts receivable collections. Our IT system also allows us to efficiently purchase products from our suppliers and
ship products to our customers on a timely basis, maintain cost-effective operations and provide superior service to our customers. While we have contingency plans in place in case of an
emergency, we cannot assure you that the plans will allow us to continue to operate at our current level of efficiency.

Loss of third-party transportation providers upon whom we depend or conditions negatively affecting the transportation industry could increase our costs
or cause a disruption in our operations.

We depend upon third-party transportation providers for delivery of products to our customers. Strikes, slowdowns, transportation disruptions or other conditions
in the transportation industry, including, but not limited to, shortages of truck drivers, disruptions in rail service, increases in fuel prices and weather conditions, could increase our costs and
disrupt our operations and our ability to service our customers on a timely basis. We cannot predict whether or to what extent recent increases or anticipated increases in fuel prices may impact our
costs or cause a disruption in our operations going forward.

Loss of key suppliers or reduced product availability could decrease our sales and earnings.

For the combined twelve months ended December 31, 2005, our ten largest suppliers accounted for approximately 58% of our purchases and our single largest
supplier accounted for approximately 15% of our purchases. The loss of any of these suppliersor a reduction in purchases by us from these suppliers that results in the loss of volume
discountscould result in a decrease in our sales, operating results and earnings by decreasing the availability, or increasing the prices, of products we distribute,

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which
could limit our ability to satisfy our customers' product needs. Such reduced product availability could put us at a competitive disadvantage.

In
addition, particular products or product lines may not be available to us, or available in quantities sufficient to meet our customer demand. A substantial decrease in the
availability of these products or product lines could result in a decrease in our sales, operating results and earnings as we might not be able to satisfy our customer's product needs. Such reduced
product availability could put us at a competitive disadvantage.

Our ten largest customers account for a substantial portion of our sales and profits, and the loss of these customers could result in materially
decreased sales and profits.

Our top ten customers accounted for approximately 28% of our overall sales for the combined twelve months ended December 31, 2005, and one customer
represented approximately 9.6% of total sales. While we generally have contracts with our major customers, these contracts generally may be discontinued with 30 days' notice by either party,
are not exclusive and do not require minimum levels
of purchases. We may lose a customer for any number of reasons, including as a result of a merger or acquisition, contract expiration, the selection of another provider of our products, business
failure or bankruptcy, or our performance. We may not retain long-term relationships or secure renewals of short-term relationships with our major customers in the future. If
we were to lose major customers, our revenues and profits would materially decrease.

Our substantial indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our senior secured
notes.

Our indebtedness is substantial. As of December 31, 2005, we had approximately $135.0 million of total indebtedness outstanding. We had no
borrowings under our revolving credit facility as of December 31, 2005. We also have the ability to borrow up to an additional approximately $20.0 million under our revolving credit
facility. As a result, we are a highly leveraged company. This level of leverage could have important consequences including the following:



In
addition, the indenture governing the senior secured notes and our revolving credit facility contain restrictive covenants that may limit our ability to engage in activities that may
be in our long-term best interests. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of
our indebtedness.

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Despite existing debt levels, we may still be able to incur substantially more debt, which would increase the risks associated with our leverage.

We and our subsidiaries may be able to incur substantial amounts of additional debt in the future, including debt resulting from the issuance of additional senior
secured notes and borrowings under our revolving credit facility. The terms of the indenture governing the senior secured notes limit our ability to incur additional debt but do not prohibit us from
incurring substantial amounts of additional debt for specific purposes or under certain circumstances. As of December 31, 2005, we had the ability to borrow an additional approximately
$20.0 million under our revolving credit facility, subject to the restrictions contained therein.

In
addition, if we are able to designate some of our restricted subsidiaries under the indenture governing the senior secured notes as unrestricted subsidiaries, those unrestricted
subsidiaries would be permitted to borrow beyond the limitations specified in the indenture and engage in other activities in which restricted subsidiaries may not engage. Adding new debt to current
debt levels could intensify the leverage-related risks that we and our subsidiaries now face.

The indenture governing the senior secured notes, and the instruments governing our other indebtedness, including our revolving credit facility, impose
significant operating and financial restrictions on us that may prevent us from pursuing certain business opportunities and restrict our ability to operate our business.

The indenture governing the senior secured notes and our revolving credit facility contain covenants that restrict our ability and the ability of our subsidiaries
to take various actions, such as the ability to:



Our
ability to comply with these covenants can be affected by events beyond our control, including prevailing economic, financial and industry conditions, and we cannot assure you that
we will satisfy those requirements. A breach of any of these covenants, or failure to meet or maintain ratios or tests could result in a default under the revolving credit facility and /or the
indenture governing the senior secured notes. We cannot assure you that our assets would be sufficient to repay such amounts (including amounts due under the senior secured notes) in full. We may also
be prevented from taking advantage of business opportunities that arise if we fail to meet certain financial ratios or because of the limitations imposed on us by the restrictive covenants under these
instruments. In addition, upon the occurrence of an event of default under the revolving credit facility or the indenture governing the senior secured notes, the lenders could elect to declare all
amounts outstanding under the revolving credit facility, together with accrued interest, to be immediately due and payable. If we were unable to repay those amounts, the lenders could proceed against
the security granted to them to secure that indebtedness. If the lenders accelerate the payment of the indebtedness, our assets may not be sufficient to repay in full the indebtedness under our
revolving credit facility and the senior secured notes.

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The credit ratings assigned to our senior secured notes may be downgraded, which may negatively impact the value of or ability to transfer the notes.

The credit ratings assigned by Standard & Poor's Ratings Group and/or Moody's Investor Service, Inc. (the "Rating Agencies") to our senior secured
notes represent the opinion and assessment of the Rating Agencies of the credit quality of the senior secured notes and are not a guaranty of quality or a recommendation to buy, sell or hold the
senior secured notes. Any ratings assigned by each Rating Agency to the senior secured notes reflect such Rating Agency's assessment of the likelihood that holders of the senior secured notes will
receive timely payments of interest and principal to which they are entitled. Such ratings do not constitute an assessment of the likelihood that principal prepayments (including those caused by
defaults) on the senior secured notes will be made, the degree to which the rate of such prepayments might differ from that originally anticipated or the likelihood of early optional termination of
the senior secured notes. Such ratings do not address the possibility that prepayment at higher or lower rates than anticipated by a holder of the senior secured notes may cause such holder to
experience a lower than anticipated yield or that such holder might fail to recoup its initial investment under certain prepayment scenarios. Such ratings may be downgraded, qualified and/or withdrawn
by the Rating Agencies from time to time if, in their judgment, circumstances in the future warrant such action. Any such downgrade, or any qualification or withdrawal, by one or both Rating Agencies
may adversely affect the value of the senior secured notes and/or the ability of the holders of the senior secured notes to transfer the senior secured notes to certain investors.

In
December 2005, we were notified by Standard & Poor's of a change in their methodology used to assess the credit rating of bonds and, as a result, the credit rating
assigned to our senior secured notes was downgraded by Standard and Poor's from B-1 to CCC+ in December 2005. There was no change in Moody's bond credit rating of B3 in 2005. Holders of the senior
secured notes are advised to consult
with their advisors regarding the effect that a downgrade, qualification or withdrawal of the credit ratings on the senior secured notes may have on the holder's ability to continue to hold or invest
in such senior secured notes.

We may need additional capital in the future and it may not be available on acceptable terms.

We may require more capital in the future to:



We
cannot assure you that additional financing will be available on terms favorable to us, or at all. The terms of available financing may place limits on our financial and operating
flexibility. If adequate funds are not available on acceptable terms, we may be forced to reduce our operations or delay, limit or abandon expansion opportunities. Moreover, even if we are able to
continue our operations, the failure to obtain additional financing could reduce our competitiveness as our competitors may provide better maintained networks or offer an expanded range of services.

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We may not be able to identify or complete transactions with attractive acquisition candidates, and we may be unsuccessful in integrating any
acquisitions we make, which may decrease our profitability and make it more difficult for us to grow our business.

An important element of our growth strategy has been and is expected to continue to be the pursuit of acquisitions of other businesses that either expand or
complement our existing product lines. We cannot assure you, however, that we will be able to identify additional acquisitions or that we would realize any anticipated benefits from such acquisitions.
Integrating businesses involves a number of special risks, including the possibility that management may be distracted from regular business concerns by the need to integrate operations, unforeseen
difficulties in integrating operations and systems, problems concerning assimilating and retaining the employees of the acquired business, accounting issues that arise in connection with the
acquisition, challenges in retaining customers and potential adverse short-term effects on operating results. Acquired businesses may require a greater amount of capital, infrastructure or
other spending than we anticipate. In addition, we may incur debt or issue securities to finance future acquisitions, which could adversely affect our ability to fulfill our obligations under our
senior secured notes. We cannot assure you that we will be successful in consummating future acquisitions on favorable terms or at all. If we are unable to successfully complete and integrate
strategic acquisitions in a timely manner, our growth strategy could be adversely impacted.

Disruptions in the political and economic conditions of the foreign countries in which we purchase and/or distribute our products could adversely affect
our business.

We distribute our products internationally, including to Asia, Canada, Mexico, Middle East, South America, and Western Europe, and expect to expand our
distribution into new regions. In addition, substantially all of our alloy products are imported from international markets such as Germany, Italy, Japan and South Korea, and we also purchase a
portion of our carbon products from abroad. International distribution increases our exposure to risks of war, terrorist attacks, local economic conditions, political disruption, civil disturbance and
governmental policies that may:



Hurricanes or other adverse weather events could negatively affect our local economies or disrupt our operations, which could have an adverse effect on
our business or results of operations.

Our market areas in the southeastern United States are susceptible to hurricanes. Such weather events can disrupt our operations, result in damage to our
properties and negatively affect the local economies in which we operate. Additionally, we may experience communication disruptions with our customers, suppliers and employees. In late
August 2005 and September 2005, Hurricanes Katrina and Rita struck the gulf coast of Louisiana, Mississippi, Alabama and Texas and caused extensive and catastrophic physical damage to
those market areas. As a result of Hurricanes Katrina and Rita, our Louisiana and Texas locations sustained minor physical damage and were closed for a minimal number of days to secure our employees.
Additionally, our sales order backlog and shipments experienced a temporary decline immediately following the hurricanes. We cannot predict whether or to what extent damage caused by future hurricanes
will affect our operations or the economies in those market areas. Such weather events could result in disruption of our purchasing and/or distribution capabilities, interruption of our business that
exceeds our insurance coverage, our inability to collect from customers and increased operating costs. Our business or results of operations may be adversely affected by these and other negative
effects of hurricanes or other adverse weather events.

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If we are unable to retain our key management personnel, our growth and future success may be impaired and our financial condition could suffer as a
result.

Our success depends to a significant degree upon the continued contributions of senior management, certain of whom would be difficult to replace. The departure of
our executive officers could have a material adverse effect on our business, financial condition or results of operations. We do not maintain key-man life insurance on any of our executive
officers. We cannot assure you that the services of such personnel will continue to be available to us. See "Item 10. Directors and Executive Officers of the Registrant."

We might be unable to employ and retain a sufficient number of sales and customer service personnel.

Many of our customers require products that are complex, highly engineered and often must be able to perform in harsh conditions. We believe that our success
depends upon our ability to employ and retain qualified sales and service personnel with the ability to understand our products and provide tailored product solutions to our customer base. A
significant increase in the wages paid by competing employers could result in a reduction of our skilled labor force, increases in the wage rates that we must pay or both. If either of these events
were to occur, our cost structure could increase and our growth potential could be impaired.

We are subject to environmental laws and regulations relating to hazardous materials, substances and waste used in or resulting from our operations.
Liabilities or claims with respect to environmental matters could have a significant negative impact on our business.

Our operations are also governed by laws and regulations relating to workplace safety and worker health which, among other things, regulate employee exposure to
hazardous chemicals in the workplace. As with other companies engaged in like businesses, the nature of our operations expose us to the risk of liabilities or claims with respect to environmental
matters, including those relating to the disposal and release of hazardous substances. We cannot assure you that material costs will not be incurred in connection with such liabilities or claims.

Based
on our company's experience to date, we believe that the future cost of compliance with existing environmental laws and regulations (and liability for known environmental
conditions) will not have a material adverse effect on our business, financial condition or results of operations. We cannot predict, however, what environmental or health and safety legislation or
regulations will be enacted in the future or how existing or future laws or regulations will be enforced, administered or interpreted. Nor can we predict the amount of future expenditures that may be
required in order to comply with such environmental or health and safety laws or regulations or to respond to such environmental claims.

We may not have adequate insurance for potential liabilities.

Our products are sold primarily for use in the oil and gas, processing and power generation industries, which are subject to inherent risks that could result in
death, personal injury, property damage, pollution or loss of production. In addition, defects in our products could result in death, personal injury, property damage, pollution or damage to equipment
and facilities. Actual or claimed defects in the products we distribute may give rise to claims against us for losses and expose us to claims for damages. Our insurance may be inadequate or
unavailable to protect us in the event of a claim or our insurance coverage may be canceled or otherwise terminated. We face the following additional risks under our insurance coverage:



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Even
a partially uninsured claim, if successful and of significant size, could have a material adverse effect on our business, consolidated financial condition, results of operations or
liquidity.

We are subject to litigation risks that may not be covered by insurance.

In the ordinary course of business, we become the subject of various claims, lawsuits and administrative proceedings seeking damages or other remedies concerning
our commercial operations, products, employees and other matters, including occasional claims by individuals alleging exposure to hazardous materials as a result of our products or operations. Some of
these claims relate to the activities of businesses that we have sold, and some relate to the activities of businesses that we have acquired, even though these activities may have occurred prior to
our acquisition of such businesses. We maintain insurance to cover many of our potential losses, and we are subject to various self-retentions and deductibles under our insurance. It is
possible, however, that a judgment could be rendered against us in cases in which we could be uninsured and beyond the amounts that we currently have reserved or anticipate incurring for such matters.

The ownership and control of our company and MIM UK by a single holding company may result in conflicts of interest between our company and MIM UK.

In connection with the acquisition of MIM US and the acquisition of MIM UK by Pipe Acquisition Limited ("PAL"), we became a wholly owned subsidiary of
Edgen/Murray, L.P., an entity organized by Jefferies Capital Partners ("JCP") and our other then existing stockholders. The ownership of our company and MIM UK by a single holding company may result
in conflicts of interest between MIM UK and our company. For example, Edgen/Murray, L.P. may cause MIM UK to pursue opportunities that would be attractive to us. If such potential opportunities were
diverted from our company to MIM UK, our business, financial condition and results of operations could be adversely affected. Additionally, our CEO and CFO are officers of Edgen/Murray, L.P. As
officers of Edgen/Murray, L.P., our CEO and CFO have substantial responsibilities in connection with the management of the business and operations of Edgen/Murray, L.P., which may lead to the
diversion of their time and resources from the day-to-day business and operations of our company. If our CEO or CFO is unable to devote sufficient time and resources to our
company, our business, financial condition or results of operations could be adversely affected.

We are controlled by parties whose interests may not be aligned with yours.

Funds managed by JCP currently control Edgen/Murray, L.P., our parent holding company. Accordingly, JCP has and will continue to have, by virtue of the ownership
interests of these funds and the terms of the limited partnership agreement of Edgen/Murray, L.P., significant influence over our management, and the ability to elect our board of directors and to
determine the outcome of any other matter submitted for shareholder approval, including the power to determine the outcome of all corporate transactions, such as mergers, consolidations and the sale
of all or substantially all of our assets. The interests of JCP may differ from the interests of our noteholders, and as such JCP may take actions that may not be in their interest. For example, if we
encounter financial difficulties or are unable to pay our debts as they mature, the interests of JCP might conflict with the interests of our noteholders. In addition, JCP may have an interest in
pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance its equity investment, even though such transactions might involve risks to the holders of
our senior secured notes.

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Compliance with regulation of corporate governance and public disclosure will result in additional expenses.

Keeping abreast of, and in compliance with, laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley
Act of 2002 and new SEC regulations will require a significant amount of management attention and external resources. We intend to invest all reasonably necessary resources to comply with evolving
standards, and this investment will result in increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance
activities.

Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as
to their effectiveness, which could have a significant and adverse effect on our business and reputation.

We are evaluating our internal controls over financial reporting in order to allow management to report on, and our independent registered public accounting firm
to attest to, our internal controls over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, as amended, and rules and regulations of the SEC thereunder, which we
refer to as "Section 404." We are in the process of documenting and testing our internal control procedures in order to satisfy the requirements of Section 404, which requires annual
management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered public accountants addressing these assessments. During the
course of our testing, we may identify deficiencies which we may not be able





to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. We expect that we will be required to comply with the
requirements of Section 404 for our fiscal year ending December 31, 2007. In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are
modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in
accordance with Section 404. We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations. If we are
not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent registered public accounting firm may not be able to certify as to the
effectiveness of our internal control over financial reporting and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC. As a result, there could be a negative
reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. In addition, we may be required to incur costs in improving our internal control system
and the hiring of additional personnel. Any such action could negatively affect our results of operations.

10

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ITEM 6. SELECTED FINANCIAL DATA

In connection and simultaneously with the purchase of all of our capital stock by Edgen Acquisition Corporation and related financing transactions, on
February 1, 2005, Edgen Corporation merged with Edgen Acquisition Corporation, with Edgen Corporation surviving the merger. In the table below, "Successor" refers to Edgen Corporation following
the merger, and "Predecessor" refers to Edgen Corporation prior to the merger. The Successor conducted no operations from the date of formation of Edgen Acquisition Corporation until the merger on
February 1, 2005.

Our selected statement of operations and balance sheet data for the fiscal years ended December 31, 2005 (Successor) and December 31, 2004, 2003, 2002, and 2001
(Predecessor) have been derived from our audited consolidated financial statements.

Historical results presented below are not necessarily indicative of results of future operations, and the results for any interim period are not necessarily indicative of the results
that may be expected for a full year. The selected financial data presented below should be read in conjunction with, and is qualified in its entirety by reference to, "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations" and our audited consolidated financial statements and the related notes thereto contained elsewhere in this report.

|                                                                         |                                 |   |         | Predecessor(1) |  
|------------------------------------------------------------------------ | ------------------------------- | - | ------- | -------------- | -
|
|
|
|
|
|Statement of Operations Data:                                            |                                 |   |         |                |  
|Sales                                                                    |                                 | $ | 262,746 |                | $
|Cost of sales (exclusive of depreciation and amortization)               |                                 |   | 209,463 |                |  
|Income (loss) from operations                                            |                                 |   | 19,520  |                |  
|Income (loss) from continuing operations before taxes                    |                                 |   | 7,878   |                |  
|Income tax expense (benefit) from continuing operations                  |                                 |   | 2,849   |                |  
|                                                                         |                                 |   |         |                |  
|Income (loss) from continuing operations                                 |                                 |   | 5,029   |                |  
|Loss from discontinued operations before taxes                           |                                 |   |        |                |  
|Income tax benefit from discontinued operations                          |                                 |   |        |                |  
|                                                                         |                                 |   |         |                |  
|Income (loss) before cumulative effect of change in accounting principle |                                 |   | 5,029   |                |  
|Cumulative effect of change in accounting principle (2)                  |                                 |   |        |                |  
|                                                                         |                                 |   |         |                |  
|Net income (loss)                                                        |                                 |   | 5,029   |                |  
|Preferred dividend requirement                                           |                                 |   | (1,703  | )              |  
|                                                                         |                                 |   |         |                |  
|Net income (loss) applicable to common shareholders                      |                                 | $ | 3,326   |                | $
|                                                                         |                                 |   |         |                |  
|Other Financial Data:                                                    |                                 |   |         |                |  
|Depreciation and amortization                                            |                                 |   | 5,466   |                |  
|Capital expenditures                                                     |                                 |   | 1,315   |                |  
|Net cash provided by (used in):                                          |                                 |   |         |                |  
|                                                                         | Cash flowsoperating activities |   |         | 9,527          |  
|                                                                         | Cash flowsinvesting activities |   |         | (135,943       | )
|                                                                         | Cash flowsfinancing activities |   |         | 144,429        |  

11

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|                                       |  | Successor |         | Predecessor
|-------------------------------------- |  | --------- | ------- | -----------
|
|
|
|Balance Sheet Data:                    |  |           |         |            
|Cash                                   |  | $         | 18,014  |            
|Net property, plant, and equipment     |  |           | 11,259  |            
|Total assets                           |  |           | 224,035 |            
|Long-term debt                         |  |           | 134,968 |            
|Redeemable preferred stock(3)          |  |           | 23,303  |            
|Mandatorily redeemable preferred stock |  |           |        |            
|Total shareholder's equity (deficit)   |  |           | 6,085   |            

---

12

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

The following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward looking statements as a result of certain factors, including those set forth
under the heading "Forward-Looking Statements" above and "Item 1A. Risk Factors." Unless otherwise provided below, references to "we," "us," and "our Company" refer to Edgen Corporation and its
consolidated subsidiaries. The following discussion should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this
report.

General

Background

We are a leading global distributor of specialty steel pipe, pipe components and high grade structural sections and plates for use in niche applications,
primarily in the oil and gas, processing and power generation industries. The products we distribute are highly specialized and are used in environments that require high performance characteristics,
such as the ability to withstand highly corrosive or abrasive materials, extremely high or low temperatures, or high-pressure. These products are principally used in maintenance and repair
projects, expansions of infrastructure and development projects. With the acquisition of Murray International Metals, Inc. ("MIM US"), our carbon products group expanded its products to include high
yield and special grade structural steel, primarily high grade steel tubes, plates and sections, used in the construction of offshore drilling oil and gas infrastructures, drilling and production
platforms and well heads used in oil and gas projects.

As of March 31, 2006, we operate in 17 locations, including 15 in the United States, and two in Canada. Fourteen of our locations currently stock inventory for quick turnaround to
our customers. Our inventory generally consists of specialty products that we distribute to over 2,000 customers worldwide. We offer our customers significant breadth in our product offering and
consistently provide products that may not otherwise be available on a quick response basis in quantities that are usable by customers.

Predecessor and Successor

On December 31, 2004, Edgen Acquisition Corporation, a corporation newly formed by Jefferies Capital Partners ("JCP"), entered into a stock purchase
agreement with Edgen Corporation and the stockholders of Edgen Corporation to purchase all of the outstanding capital stock of Edgen Corporation from its then existing stockholders for an aggregate
purchase price of approximately $124.0 million, which included the assumption or repayment of indebtedness of Edgen Corporation but excluded payment of fees and expenses. The acquisition closed
on February 1, 2005 and was funded with proceeds to Edgen Acquisition Corporation from the issuance and sale of $105.0 million 97/8% Senior Secured Notes 2011, which we
refer to as the senior secured notes, as well as an equity investment from funds managed by JCP and certain members of management of Edgen Corporation. We refer to these transactions collectively as
the "Buy-out Transaction." A discussion of our senior secured notes is included below under "Liquidity and Capital Resources."

Concurrently with the acquisition and the offering and issuance of the senior secured notes, Edgen Corporation also entered into a new $20.0 million senior secured revolving
credit facility, which we refer to as the revolving credit facility, and borrowed $2.7 million thereunder.

Simultaneously with the acquisition and the related financing transactions, Edgen Acquisition Corporation was merged with and into Edgen Corporation, which survived the merger and became
liable for all obligations under the senior secured notes and borrowings under the revolving credit

13

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facility. Edgen Corporation following the merger is referred to as the "Successor." Edgen Corporation prior to the merger is referred to as the "Predecessor."

In accordance with accounting principles generally accepted in the United States of America ("GAAP"), we have separated our historical financial results for the Predecessor and the
Successor. The separate presentation is required under GAAP in situations when there is a change in accounting basis, which occurred when purchase accounting was applied to the acquisition of the
Predecessor. Purchase accounting requires that the historical carrying value of assets acquired and liabilities assumed be adjusted to fair value, which may yield results that are not comparable on a
period-to-period basis due to the different, and sometimes higher, cost basis associated with the allocation of the purchase price. Fair value purchase price adjustments
consisted of a $2.0 million increase in inventory related to our alloy segment, a $1.9 million increase in land and buildings, a $24.2 million increase in customer relationships,
a $2.4 million increase in tradenames, and a $22.0 million increase in goodwill. In addition, at the time of the acquisition of the Predecessor, we experienced changes in our business as
a result of the Buy-out Transaction, which was consummated simultaneously with the acquisition of the Predecessor. There have been no material changes to the operations or customer
relationships of our business as a result of the acquisition of the Predecessor.

In
evaluating our results of operations and financial performance, our management has used combined results for the twelve months ended December 31, 2005 as a single measurement
period. Due to the Buy-out Transaction, we believe that comparisons between the fiscal year ended December 31, 2004 and either the Predecessor's results for the period from
January 1, 2005 to January 31, 2005 or the Successor's results for the period from February 1, 2005 to December 31, 2005 may impede the ability of users of our financial
information to understand our operating and cash flow performance.

Consequently,
to enhance an analysis of our operating results and cash flows, we have presented our operating results and cash flows on a combined basis for the twelve month period ended
December 31, 2005. This combined presentation for the twelve month period ended December 31, 2005 simply represents the mathematical addition of the pre-merger results of
operations of the Predecessor for the period from January 1, 2005 to January 31, 2005 and the results of operations of the Successor for the period from February 1, 2005 to
December 31, 2005. The Successor conducted no operations from the date of formation of Edgen Acquisition Corporation until the merger on February 1, 2005. We believe the combined
presentation provides relevant information for investors. These combined results, however, are not intended to represent what our operating results would have been had the Buy-out
Transaction occurred at the beginning of the period. A reconciliation showing the mathematical combination of our operating results for such periods is included below under "Results of
Operations."

Formation of a Holding Company

On December 16, 2005, our stockholders organized a new holding company, Edgen/Murray, L.P., to hold all of the outstanding equity interests of Edgen and a
newly created company, Pipe Acquisition Limited ("PAL"), which acquired Murray International Metals Ltd. ("MIM UK") on December 16, 2005. Edgen/Murray, L.P. is a Delaware
limited partnership and is controlled by funds managed by JCP. Additionally, certain members of Edgen Corporation's management are officers of Edgen/Murray, L.P. In connection with the acquisition of
MIM UK, Edgen/Murray, L.P. also issued additional partnership interests to the funds managed by JCP, certain members of management of Edgen Corporation and MIM UK, and the sellers of MIM UK.

14

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Operating Segments

We have two operating segmentsour alloy products group and our carbon products group. Our alloy products group primarily distributes alloy based
specialty pipes, fittings and flanges that are principally used in high-pressure, extreme temperature and high-corrosion applications in the process and power generation
industries. Our carbon products group primarily distributes prime carbon specialty pipes, fittings and flanges that are principally used in high-yield, high-tensile
applications in the oil and gas production and transmission, the process and the power generation industries. With the acquisition of MIM US, we have expanded our carbon products to include high grade
structural steel products, including steel tubes, plates and sections, used in the construction of offshore drilling rigs, drilling and production platforms and well heads.

Revenue Sources

Total Sales.We generate substantially all of our total revenues from the sale of our products. Our carbon products group
accounts for the most significant portion of our total sales and our alloy products group accounts for the remainder. For the combined twelve months ended December 31, 2005 and the years ended
December 31, 2004 and 2003, approximately 27.2%, 25.1% and 27.9%, respectively, of our total sales were attributable to the alloy products group and approximately 72.8%, 74.9% and 72.1%,
respectively, of our total sales were attributable to the carbon products group. We recognize





revenue on products sales when products are shipped and the customer takes title and assumes risk of loss. Shipping and handling costs incurred are included as a component of cost of sales.

The
products we sell are used principally in maintenance and repair projects, expansions of infrastructure and development projects. Over the last two years most of the products sold by
us have been used in maintenance and repair applications because there have been relatively few new installations in our end-use markets. We fill large orders for new installations or
expansions of infrastructure that sometimes exceed $1.0 million in value but the majority of our product sales orders are smaller, maintenance related orders. In the processing and power
generation markets, and in smaller oil and gas projects, the variety and non-standard nature of the products necessitate procurement from distributors like us. New pipeline construction
projects, however, usually require large quantities of custom specialty steel pipe and are typically obtained directly from the manufacturer due to long lead times and large order quantities. For the
combined twelve months ended December 31, 2005, our product orders were as follows:



For
a discussion of the impact of seasonality on our product sales, see "Seasonality" below.

Alloy Products Group Segment.The alloy products we sell are principally used in high-pressure, extreme
temperature and high-corrosion applications, such as in heating, desulphurization, refrigeration and liquefied natural gas units in the processing and refining industries, and in heat
recovery steam generation units in the power generation industry. Substantially all of our alloy products are imported from international markets such as Germany, Italy, South Korea or Japan. Alloy
pipe and components are more expensive and generally have higher margins than carbon pipe and components.

Carbon Products Group Segment.The carbon products we sell are principally used in high-yield,
high-tensile, abrasive applications such as the gathering and transmission of oil, natural gas and

15

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phosphates,
conductor casing and high yield and high grade structural steel products including tubes, plates and sections used in the construction of offshore drilling oil and gas infrastructures,
drilling and production platforms and well heads. We purchase our carbon products from both domestic and international manufacturers.

Sales
in our alloy product groups segment and our carbon products group segment are primarily driven by the following factors:



Principal Costs and Expenses

Our largest expense is the cost to purchase the products we distribute, which is included in cost of sales. We buy and pay for most of our products on standard
commercial terms (e.g., payment typically





due within 30 to 60 days). For the combined twelve months ended December 31, 2005 and the years ended December 31, 2004 and 2003, cost of sales was $223.6 million,
$155.4 million and $121.1 million, respectively. Costs of sales for the period February 1, 2005 to December 31, 2005 includes $1.7 million in additional expense
related to a fair value purchase price allocation adjustment, which increased the cost of our alloy inventory as of February 1, 2005. Our operating expenses consist principally of selling,
general and administrative expense, depreciation and amortization, and yard and shop expense. For the combined twelve months ended December 31, 2005 and the years ended December 31, 2004
and 2003, our operating expenses were approximately $48.3 million (including approximately $12.0 million of Buy-out Transaction- related fees), $34.4 million and
$31.6 million, respectively.

Principal Cash Flows

We generate cash primarily from our operating activities, and historically we have used cash flows from operating activities, if positive, and our revolving
credit facility as the primary sources of funds to purchase our inventory, fund working capital and capital expenditures, and make acquisitions.

Principal External Factors that Affect our Business

We are subject to a number of external factors that may adversely affect our businesses. These factors, which are discussed below and under the headings "Forward
Looking Statements," "Item 1. Business" and "Item 1A. Risk Factors" and elsewhere in this report, include:



16

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We
believe that our focus on the maintenance and repair market and the diversity of our product offerings, customer base and geographic markets helps temper the effects to us of
downturns in a particular market. We continue to:



Critical Accounting Policies; Use of Estimates

The preparation of financial statements, in conformity with accounting principles generally accepted in the United States of America, requires management to make
judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in our consolidated financial statements. We base our estimates on historical
experience and other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for our judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Our actual results may differ from these estimates under different circumstances or conditions. If actual amounts are ultimately different from these
estimates, the revisions are included in our results of operations for the period in which the actual amounts become known.

We believe the following critical accounting policies and estimates affect our more significant judgments and estimates used in preparing our consolidated financial statements. (See
note 1 to our audited consolidated financial statements included elsewhere in this report for a summary of our significant accounting policies.) There have been no material changes made to our
critical accounting policies and estimates during the periods presented in our consolidated financial statements, except as noted below under "Redeemable Preferred Stock" and
"Income Tax Expense Estimates and Policies."

17

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Accounts Receivable

We maintain an allowance for doubtful accounts to reflect our estimate of the uncollectibility of accounts receivable. Concentration of credit risk with respect
to trade accounts is within several industries and is limited because of our broad customer base. We perform ongoing credit evaluations of customers and set credit limits based upon reviews of
customers' current credit information and payment histories. We monitor customer payments and maintain a provision for estimated uncollectible accounts based on historical experience and specific
customer collection issues that we have identified. Estimation of such losses requires adjusting historical loss experience for current economic conditions
and judgments about the probable effects of economic conditions on certain customers. The rate of future credit losses may not be similar to past experience.

We
record the effect of any necessary adjustments prior to the publication of our consolidated financial statements. We consider all available information when assessing the adequacy of
the provision for allowances, claims and doubtful accounts. Adjustments made with respect to the allowance for doubtful accounts often relate to improved information not previously available.
Uncertainties with respect to the allowance for doubtful accounts are inherent in the preparation of financial statements.

Inventories

We state our inventories at the lower of cost or market. We account for our inventories using the weighted average cost method of accounting. We maintain
allowances for damaged, slow-moving and unmarketable inventory to reflect the difference between the cost of the inventory and the estimated market value. We regularly review our inventory
on hand and update our allowances based on historical and current sales trends. Changes in product demand and our customer base may affect the value of inventory on hand and may require higher
inventory allowances. Uncertainties with respect to the inventory valuation are inherent in the preparation of financial statements.

Goodwill

Goodwill represents the excess of the amount we paid to acquire a company over the estimated fair value of tangible assets and identifiable assets acquired, less
liabilities assumed. As of December 31, 2005, our goodwill balance was $37.1 million, representing 16.6% of total assets.

We
account for goodwill under the provisions of the Financial Accounting Standards Board's ("FASB") Statement of Financial Accounting Standards ("SFAS No.") 142, Goodwill and Other Intangible Assets. Under
these rules we test for goodwill for impairment annually or at any other time when impairment indicators
exist. As of January 1, 2006, we performed our annual goodwill impairment test, which requires comparison of our estimated fair value to our book value including goodwill. As a result of the
test, we believe the goodwill on our balance sheet is not impaired. In assessing the recoverability of our goodwill and other intangibles, we must make assumptions regarding estimated future cash
flows and other factors to determine the fair value of the respective assets. We estimate future cash flows at the reporting unit level. A key assumption that we make is that our business will grow at
approximately 10% per year, adjusted for the current economic outlook. If these estimates or their related assumptions change in the future, we may be required to record impairment charges not
previously recorded for these assets.

Long-Lived Assets

We assess the impairment of long-lived assets, including customer relationships and tradenames, when events or changes in circumstances indicate that
the carrying value of the assets or the asset group may not be recoverable. The asset impairment review assesses the fair value of the assets based on the future cash flows the assets are expected to
generate. An impairment loss is recognized when

18

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estimated
undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from the disposition of the asset (if any) are less than the related asset's carrying
amount. Impairment losses are measured as the amount by which the carrying amounts of the assets exceed their fair values. Estimates of future cash flows are judgments based on our experience and
knowledge of our operations and the industries in which we operate. These estimates can be significantly affected by future changes in market conditions, the economic environment, and capital spending
decisions of our customers and inflation.

Redeemable Preferred Stock

In connection with the preparation of our consolidated financial statements for the year ended December 31, 2005, our management determined that the
Series A Preferred Stock issued in February 2005 should be shown outside of shareholder's equity (deficit) in accordance with Emerging Issues task Force Topic No. D-98,
"Classification and Measurement of Redeemable Securities," because of a redemption feature and the holder of the Series A Preferred Stock through
its ownership of common stock has voting control of the Company. See note 7 to our audited consolidated financial statements included elsewhere in this report.

Income Tax Expense Estimates and Policies

As part of the income tax provision process of preparing our consolidated financial statements, we are required to estimate our income taxes. This process
involves estimating our current tax exposure together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in
deferred tax assets and liabilities. We must then assess the likelihood that our deferred tax assets will be recovered from future taxable income, and to the extent we believe the recovery is not
likely, we must establish a valuation allowance. Further, to the extent that we establish a valuation allowance or increase this allowance in a financial accounting period, we must include a tax
provision, or reduce our tax benefit in our consolidated statement of
operations. We use our judgment to determine our provision or benefit for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets.

We
recorded a valuation allowance in 2002 against a portion of deferred tax assets because management believed that the deferred tax assets related to goodwill impairment (see
note 9 to our audited consolidated financial statements included elsewhere in this report) would not more than likely be realized in full through future operating results and the reversal of
taxable timing differences. Based on operating results for fiscal 2004 and projected operating results for fiscal 2005 and 2006, management believed this was no longer to be the case and the valuation
allowance was reversed as of December 31, 2004. This resulted in an increase in the deferred tax asset and a related decrease in income tax expense of $7.1 million.

There
are various factors that may cause our tax assumptions to change in the near term, and we may have to record a valuation allowance against our deferred tax assets. We cannot
predict whether future U.S. federal and state income tax laws and regulations might be passed that could have a material effect on our results of operations. We assess the impact of significant
changes to the U.S. federal and state income tax laws and regulations on a regular basis and update the assumptions and estimates used to prepare our financial statements when new legislation and
regulations are enacted.

19

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Results of Operations

The following table provides our statements of operations, our sales to international customers and our sales, operating profits and cost of sales as a percentage
of sales for our operating segments. The table shows the segments as they are reported to management, and they are consistent with the segmented reporting in note 12 to our audited consolidated
financial statements included elsewhere in this report. The period-to-period comparisons of financial results are not necessarily indicative of future results, or in the case
of the interim periods, results for a full year.

|                                                                                                    |  | Successor |          | Predecessor |   | Non-GAAP
Combined |    | Predecessor |         
|--------------------------------------------------------------------------------------------------- |  | --------- | -------- | ----------- | - | ----------------- | -- | ----------- | --------
|
|
|
|
|SALES                                                                                               |  | $         | 262,746  |             | $ | 18,945            |    | $           | 281,691 
|OPERATING EXPENSES:                                                                                 |  |           |          |             |   |                   |    |             |         
|Cost of sales (exclusive of depreciation and amortization)                                          |  |           | 209,463  |             |   | 14,153            |    |             | 223,616 
|Yard and shop expense                                                                               |  |           | 4,534    |             |   | 390               |    |             | 4,924   
|Selling, general, and administrative expense                                                        |  |           | 23,763   |             |   | 13,974            |    |             | 37,737  
|Depreciation and amortization expense                                                               |  |           | 5,466    |             |   | 201               |    |             | 5,667   
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|Total operating expenses                                                                            |  |           | 243,226  |             |   | 28,718            |    |             | 271,944 
|INCOME (LOSS) FROM OPERATIONS                                                                       |  |           | 19,520   |             |   | (9,773            | )  |             | 9,747   
|OTHER INCOME (EXPENSE)                                                                              |  |           |          |             |   |                   |    |             |         
|Other income (expense)                                                                              |  |           | (308     | )           |   | (50               | )  |             | (358    
|Interest expense                                                                                    |  |           | (11,334  | )           |   | (333              | )  |             | (11,667 
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE                                  |  |           | 7,878    |             |   | (10,156           | )  |             | (2,278  
|INCOME TAX EXPENSE (BENEFIT)                                                                        |  |           | 2,849    |             |   | (1,916            | )  |             | 933     
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|INCOME (LOSS) FROM CONTINUING OPERATIONS                                                            |  |           | 5,029    |             |   | (8,240            | )  |             | (3,211  
|DISCONTINUED OPERATIONS, NET OF TAX                                                                 |  |           |         |             |   |                  |    |             |        
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|NET INCOME (LOSS)                                                                                   |  |           | 5,029    |             |   | (8,240            | )  |             | (3,211  
|PREFERRED DIVIDEND REQUIREMENT                                                                      |  |           | (1,703   | )           |   | (190              | )  |             | (1,893  
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS                                                 |  | $         | 3,326    |             | $ | (8,430            | )  | $           | (5,104  
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|Sales to International Customers                                                                    |  | $         | 36,355   |             | $ | 2,253             |    | $           | 38,608  
|Segment Sales                                                                                       |  |           |          |             |   |                   |    |             |         
|Alloy Products                                                                                      |  | $         | 72,380   |             | $ | 4,214             |    | $           | 76,594  
|Carbon Products                                                                                     |  |           | 190,366  |             |   | 14,731            |    |             | 205,097 
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|Total                                                                                               |  | $         | 262,746  |             | $ | 18,945            |    | $           | 281,691 
|Segment Operating Profits (Losses)                                                                  |  |           |          |             |   |                   |    |             |         
|Alloy Products                                                                                      |  | $         | 9,786    |             | $ | 960               |    | $           | 10,746  
|Carbon Products                                                                                     |  |           | 17,439   |             |   | 1,980             |    |             | 19,419  
|General Corporate                                                                                   |  |           | (7,705   | )           |   | (12,713           | )  |             | (20,418 
|                                                                                                    |  |           |          |             |   |                   |    |             |         
|Operating Profits (Losses)                                                                          |  | $         | 19,520   |             | $ | (9,773            | )  | $           | 9,747   
|Segment Operating Profits (Losses) as a Percentage of Segment Sales                                 |  |           |          |             |   |                   |    |             |         
|Alloy Products                                                                                      |  |           | 13.5     | %           |   | 22.8              | %  |             | 14.0    
|Carbon Products                                                                                     |  |           | 9.2      | %           |   | 13.4              | %  |             | 9.5     
|Total operations                                                                                    |  |           | 7.4      | %           |   | (51.6             | )% |             | 3.5     
|Segment Cost of Sales (Exclusive of Depreciation and Amortization) as a Percentage of Segment Sales |  |           |          |             |   |                   |    |             |         
|Alloy Products                                                                                      |  |           | 70.9     | %           |   | 58.7              | %  |             | 70.2    
|Carbon Products                                                                                     |  |           | 83.1     | %           |   | 79.3              | %  |             | 82.8    
|Total operations                                                                                    |  |           | 79.7     | %           |   | 74.7              | %  |             | 79.4    
|Net cash provided by (used in):                                                                     |  |           |          |             |   |                   |    |             |         
|Cash flowsoperating activities                                                                     |  | $         | 9,527    |             | $ | 4,249             |    | $           | 13,776  
|Cash flowsinvesting activities                                                                     |  |           | (135,943 | )           |   | (1                | )  |             | (135,944
|Cash flowsfinancing activities                                                                     |  |           | 144,429  |             |   | (1,477            | )  |             | 142,952 

20

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As used under this "Results of Operations" section the terms listed below have the following meanings:



2005 Financial Overview

Significant events in 2005 include:



Subsequent
to the Buy-out Transaction, we focused on the successful execution of the Company's business strategies including maximizing business development opportunities,
expanding our international presence, optimizing purchasing models, and seeking potential growth opportunities which culminated with the acquisitions of Western Flow and MIM US.

We
grew sales 35.5% to $281.7 million in 2005 from $207.8 million in 2004. This increase was primarily the result of strong demand driven by the energy markets, changes in
sales product mix, increased sales prices, and $5.7 million in sales from acquisitions. Our revenues also reflect growth in our international sales which grew to 13.7% of our total sales in
2005 compared to 7.9% in 2004.

Cost of sales increased from $155.4 million, or 74.8% of sales in 2004 to $223.6 million, or 79.4% of sales in 2005. The increase in cost of sales as a percentage of sales
was primarily the result of increased inventory costs related to sales of carbon pipe and fittings as lower cost inventories were replaced at higher costs and these higher costs could not be fully
realized in increased prices to

21

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customers, and from a change in the sales product mix with sales of lower margin pipe used in oil and gas well hook-up installations in 2005 compared to sales of higher margin large
diameter pipe used in gas transmission in 2004. Cost of sales were also negatively impacted by higher freight costs driven by increased fuel and shipping costs. Additionally, alloy pipe cost of sales
in 2005 includes the impact of a $1.7 million purchase price allocation adjustment that increased the value of our alloy inventory as of February 1, 2005, the date of the
Buy-out Transaction.

Operating income decreased from $18.1 million in 2004 to $9.7 million in 2005. Operating income in 2005 includes $12.0 million in Buy-out
Transaction-related expenses, $4.4 million in depreciation and amortization, and a $1.7 million purchase price adjustment as described above. The decrease in operating income was
partially offset by a decrease in selling, general and administrative expenses exclusive of the Buy-out Transaction-related expenses.

During
2005, our operations provided sufficient cash to make the scheduled $5.4 million interest payment on our senior secured notes, to eliminate borrowings under our credit
facility, to meet working capital needs, and to increase our cash on hand at year end. As of December 31, 2005, our cash balance was $18.0 million compared to $0.1 million at
December 31, 2004.

Combined Twelve Months Ended December 31, 2005 Compared to Fiscal 2004

Sales

|Reporting Segment |       | Non-GAAP
Combined
Twelve Months
Ended
December 31, 2005
Sales |         | Fiscal 2004
Sales |   | % Increase |        
|----------------- | ----- | ------------------------------------------------------------- | ------- | ----------------- | - | ---------- | -------
|
|Alloy Products    |       | $                                                             | 76,594  |                   | $ | 52,252     |        
|Carbon Products   |       |                                                               | 205,097 |                   |   | 155,569    |        
|                  |       |                                                               |         |                   |   |            |        
|                  | Total |                                                               | $       | 281,691           |   | $          | 207,821
|                  |       |                                                               |         |                   |   |            |        

Overall.For the combined twelve months ended December 31, 2005, our consolidated sales increased
$73.9 million, or 35.5%, to $281.7 million compared to the year ended December 31, 2004. Sales volumes were positively impacted by the worldwide demand for oil and gas, and
refined products, particularly in energy markets. Sales prices were positively impacted by a favorable change in the mix of products sold and by continued demand for iron ore, nickel, chrome and
copper which are the raw materials of our specialty products. Of the $73.9 million increase, $5.7 million related to revenue from the acquisitions of Western Flow and MIM US. Our sales
order backlog significantly increased from $36.7 million at December 31, 2004 to $88.6 million at December 31, 2005 primarily due to large project orders for three
customers totaling $43.8 million or 49% of the sales backlog at December 31, 2005 and from the acquisition of MIM US which had backlog of $17.6 million as of December 31,
2005. We anticipate substantially all of our backlog will be shipped in 2006.

Alloy Products.For the combined twelve months ended December 31, 2005, our alloy products sales increased
$24.3 million, or 46.6%, to $76.6 million compared to the year ended December 31, 2004. The increase in sales was the result of increased alloy pipe sales volumes, increased
foreign sales and improved pricing, partially offset by a decrease in stainless and low temperature pipe sales volume. For the combined twelve months ended December 31, 2005, our alloy products
sales order backlog increased from $18.5 million at December 31, 2004 to $21.8 million at December 31, 2005. The increase in alloy products sales order backlog reflects a
large customer project order for $11.7 million.

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Carbon Products.For the combined twelve months ended December 31, 2005, our carbon products sales increased
$49.5 million, or 31.8%, to $205.1 million as compared to the year ended December 31, 2004. The increase was driven by a change in product mix as a result of demand for high
priced seamless products primarily from the oil and gas industry. General economic demand for both welded and seamless pipe and for high yield carbon fittings and components provided the basis for
continued sales price increases. Carbon products sales order backlog increased from $18.2 million at December 31, 2004 to $66.8 million at December 31, 2005. The increase
in carbon products sales order backlog is due primarily to several new large project orders totaling $32.1 million and approximately $17.6 million from the acquisition of MIM US.

Cost of Sales (Exclusive of Depreciation and Amortization)

|Reporting Segment |       | Non-GAAP
Combined
Twelve Months
Ended
December 31, 2005
Cost of Sales |         | Fiscal 2004
Cost of Sales |   | % Increase |        
|----------------- | ----- | --------------------------------------------------------------------- | ------- | ------------------------- | - | ---------- | -------
|
|Alloy Products    |       | $                                                                     | 53,797  |                           | $ | 36,285     |        
|Carbon Products   |       |                                                                       | 169,819 |                           |   | 119,072    |        
|                  |       |                                                                       |         |                           |   |            |        
|                  | Total |                                                                       | $       | 223,616                   |   | $          | 155,357
|                  |       |                                                                       |         |                           |   |            |        

|Reporting Segment |       | Non-GAAP
Combined
Twelve Months
Ended
December 31, 2005
Cost of Sales
as a Percentage
of Sales |      | Fiscal 2004
Cost of Sales
as a Percentage
of Sales |     
|----------------- | ----- | ---------------------------------------------------------------------------------------------- | ---- | -------------------------------------------------- | ----
|Alloy Products    |       | 70.2                                                                                           | %    | 69.4                                               | %   
|Carbon Products   |       | 82.8                                                                                           | %    | 76.5                                               | %   
|                  |       |                                                                                                |      |                                                    |     
|                  | Total |                                                                                                | 79.4 | %                                                  | 74.8
|                  |       |                                                                                                |      |                                                    |     

Overall.Our cost of sales for the combined twelve months ended December 31, 2005 was $223.6 million, an
increase of $68.3 million, or 43.9%, compared to the year ended December 31, 2004. The increase in cost of sales is due primarily to the increase in alloy and carbon product sales when
compared to 2004. Our cost of sales as a percentage of sales for the combined twelve months ended December 31, 2005 increased to 79.4% compared to 74.8% for the year ended December 31,
2004. The increase in cost of sales as a percentage of sales was primarily the result of an increase in carbon inventory costs and higher freight costs driven by increased fuel and shipping costs.

The cost of sales and cost of sales as a percentage of sales for the combined twelve months ended December 31, 2005 were also negatively impacted by additional cost of sales of
$1.7 million related to a purchase price allocation adjustment that increased the value of our alloy inventory as of February 1, 2005. The remaining purchase price allocation adjustment
to be recognized in future periods is $0.2 million as of December 31, 2005.

Alloy Products.Cost of sales for our alloy products for the combined twelve months ended December 31, 2005 was
$53.8 million, an increase of $17.5 million, or 48.3%, compared to the year ended December 31, 2004. The increase in cost of sales is attributable to an increase in alloy product
sales compared to the year ended December 31, 2004 including sales from the acquisition of Western Flow. Cost of sales as a percentage of sales increased for the combined twelve months ended

23

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December 31, 2005 compared to 2004 due to the impact of the $1.7 million purchase price adjustment previously discussed.

Carbon Products.Cost of sales for our carbon products for the combined twelve months ended December 31, 2005 was
$169.8 million, an increase of $50.7 million, or 42.6%, compared to the year ended December 31, 2004. The increase in cost of sales and cost of sales as a percentage of sales is
attributable to higher inventory costs as a result of the current market price of steel when compared to 2004. The acquisition of MIM US also increased cost of sales for the combined twelve months
ended December 31, 2005. The increase in cost of sales as a percentage of sales for our carbon products was partially offset by our ability to pass a portion of the higher inventory costs to
our customers.

Yard and Shop Expenses

Yard and shop expenses remained relatively consistent at $4.9 million for the combined twelve months ended December 31, 2005 compared to
$4.6 million for the year ended December 31, 2004 while as a percentage of sales, yard and shop expenses decreased 0.5% primarily as a result of increased sales.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the combined twelve months ended December 31, 2005 increased approximately $10.3 million, or 37.6%,
compared to the year ended December 31, 2004. The increase in selling, general and administrative expenses is related to approximately $12.0 million in Buy-out
Transaction-related expenses previously discussed above. The increase in selling, general and administrative expense reflects the $12.0 million in Buy-out expenses which was offset
by a $3.2 reduction in the employee bonus pool accrual and related payroll taxes, a reduction in management and director fees paid to our previous owners before February 1, 2005, and a decrease
in property taxes for the combined twelve months ended December 31, 2005 compared to 2004. The decrease in selling, general and administrative expenses was partially offset by increases in
employee salaries and related benefits and payroll taxes, increases in travel and selling expenses associated with increased business development efforts, and expenses related to the acquisitions of
Western Flow and MIM US.

Depreciation and Amortization Expense

Depreciation and amortization expense for the combined twelve months ended December 31, 2005 increased approximately $3.3 million, or 136.2%,
compared to the year ended December 31, 2004. The increase in depreciation and amortization reflects amortization of customer relationships acquired in the Buy-out Transaction. In
applying purchase accounting, the Company performed valuation procedures to determine the fair value of tangible and intangible assets acquired. The valuation resulted in the allocation of a portion
of the purchase price to customer relationships. These customer relationships are being amortized over seven years from the date of the Buy-out Transaction.

24

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Operating Income (Loss)

|Reporting Segment |  | Non-GAAP
Combined
Twelve Months
Ended
December 31, 2005
Operating Income (Loss) |         | Fiscal 2004
Operating Income (Loss) |  
|----------------- |  | ------------------------------------------------------------------------------- | ------- | ----------------------------------- | -
|
|Alloy Products    |  | $                                                                               | 10,746  |                                     | $
|Carbon Products   |  |                                                                                 | 19,419  |                                     |  
|General Corporate |  |                                                                                 | (20,418 | )                                   |  
|                  |  |                                                                                 |         |                                     |  
|Total             |  | $                                                                               | 9,747   |                                     | $
|                  |  |                                                                                 |         |                                     |  

Overall.Our consolidated operating income of $9.7 million for the combined twelve months ended December 31,
2005 decreased $8.4 million from operating income of $18.1 million for the year ended December 31, 2004. The consolidated operating income for the combined twelve months ended
December 31, 2005 includes Buy-out Transaction-related expenses of approximately $12.0 million, an increase in depreciation and amortization expense of $3.3 million
related to acquired customer relationships, and as discussed above, a purchase price allocation adjustment in cost of sales of $1.7 million. Consolidated operating income as a percentage of
consolidated sales for the combined twelve months ended December 31, 2005 and the year ended December 31, 2004 was 3.5%, and 8.7%, respectively. The decrease as a percentage of
consolidated sales reflects the $12.0 million in Buy-out Transaction-related expenses, the increase in depreciation and amortization expense of $3.3 million, and the
$1.7 million purchase price allocation adjustment, offset by a reduction of selling, general and administrative expenses which included a reduction in the employee bonus pool accrual and
related payroll taxes.

Alloy Products.Our alloy products operating income for the combined twelve months ended December 31, 2005 was
$10.7 million, an increase of $5.4 million compared to the year ended December 31, 2004. The majority of the increase was the result of sales increases as previously discussed





partially offset by the $1.7 million purchase price allocation adjustment, an increase in salaries and related benefits and payroll taxes, and an increase in travel and selling expenses
associated with increased business development efforts. The acquisition of Western Flow had a modest positive impact on operating income for the combined twelve months ended December 31, 2005.

Carbon Products.Our carbon products operating income for the combined twelve months ended December 31, 2005 was
$19.4 million, a decrease of $2.4 million compared to the year ended December 31, 2004. The decrease in operating income was driven by an increase in cost of sales as previously
discussed which was partially offset by a reduction in the employee bonus pool accrual and related payroll taxes within selling, general and administrative expenses. The acquisition of MIM US had a
modest positive impact on operating income for the combined twelve months ended December 31, 2005.

Interest Expense

Interest expense, net, for the combined twelve months ended December 31, 2005 increased $6.5 million, or 125%, to $11.7 million. Interest
expense, net for the year ended December 31, 2004 was $5.2 million. The increase in interest expense was the result of the issuance of the senior secured notes on February 1, 2005
and borrowings under the Company's new revolving line of credit, partially offset by the retirement of $47.7 million of revolving line of credit and term loan debt as of February 1,
2005. Interest expense for the combined twelve months ended December 31, 2005 included $1.1 million

25

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of
deferred financing costs amortization compared to $1.5 million for the year ended December 31, 2004.

Income Tax Expense

Income tax expense was $2.8 million for the period February 1, 2005 to December 31, 2005 compared to an income tax benefit of
$(1.9 million) for the period January 1, 2005 to January 31, 2005 and income tax benefit of $(3.2 million) for the year ended December 31, 2004. The effective tax
rate was approximately 41% for the combined twelve months ended December 31, 2005 and approximately 25% for the year ended December 31, 2004. The income tax benefit and effective tax
rate for the combined twelve months ended December 31, 2005 reflects the impact of Buy-out Transaction-related expenses, which may not be fully deductible for income tax purposes.
For the year ended December 31, 2004, reflects the reversal of the valuation allowance recorded against the deferred tax asset related to goodwill impairment in 2002. Additionally, deferred tax
liabilities recorded in connection with the Buy-out Transaction include temporary differences consisting of customer relationships being amortized for book purposes but
non-deductible for tax purposes,
non-deductible tradename intangibles with indefinite lives, and a fair value adjustment to inventory which is reduced in the period the inventory is sold.

Preferred Stock Dividends and Related Charges

Preferred stock dividends and related charges were $1.9 million for the combined twelve months ended December 31, 2005 as compared to
$2.2 million for the year ended December 31, 2004. The decrease resulted from our repurchase of all outstanding shares of our mandatorily redeemable preferred stock, partially offset by
the issuance of our Series A cumulative compounding preferred stock in connection with the Buy-out Transaction.

Fiscal 2004 Compared to Fiscal 2003

Sales

|                |       | Fiscal Year
Ended December 31, |         |         |  
|--------------- | ----- | ------------------------------ | ------- | ------- | -
|
|
|Alloy Products  |       | $                              | 52,252  |         | $
|Carbon Products |       |                                | 155,569 |         |  
|                |       |                                |         |         |  
|                | Total |                                | $       | 207,821 |  
|                |       |                                |         |         |  

Overall.For fiscal 2004, our consolidated sales increased $60.8 million, or 41.4%, to $207.8 million as
compared to fiscal 2003. This increase in overall sales was primarily the result of commodity price increases, increased sales volume, strong organic growth (which includes the establishment of a
sales offices in Canada, an international sales office in Houston, Texas and the appointment of sales agents in Scotland, China and Asia, all of which increased our international sales), and of
changes in customer and product mix. The worldwide demand for iron ore, nickel, chrome and copper positively impacted pipe and component prices during 2004, which in turn positively impacted our
overall sales. Overall sales order backlog grew from $13.4 million at January 1, 2004 to $36.7 million at December 31, 2004.

Alloy Products.For fiscal 2004, our alloy products sales increased $11.2 million or 27.4% to $41.0 million.
This increase was primarily the result of increased sales of our products for use in processing and petrochemical maintenance and construction projects as well as our international

26

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business
development efforts. Alloy products sales order backlog grew from $3.9 million at January 1, 2004 to $18.5 million at December 31, 2004.

Carbon Products.For fiscal 2004, our carbon products sales increased $49.6 million or 46.7% to $155.6 million.
This increase was primarily the result of increased sales to the oil and gas industry and our international business development efforts. Carbon products sales order backlog grew from
$9.5 million at January 1, 2004 to $18.2 million at December 31, 2004.

Customers.For fiscal 2004, our top ten customers represented less than 23% of our consolidated sales for that period and no
single customer represented more than 6% of consolidated sales. For fiscal 2004, there was not a material difference between our overall customer concentration levels as compared to our customer
concentration levels on a segment basis.

Cost of Sales (Exclusive of Depreciation and Amortization)

|                |       | Fiscal Year
Ended December 31, |         |         |  
|--------------- | ----- | ------------------------------ | ------- | ------- | -
|
|
|Alloy Products  |       | $                              | 36,285  |         | $
|Carbon Products |       |                                | 119,072 |         |  
|                |       |                                |         |         |  
|                | Total |                                | $       | 155,357 |  
|                |       |                                |         |         |  

|                |       | Fiscal Year
Ended December 31, |     
|--------------- | ----- | ------------------------------ | ----
|
|
|Alloy Products  |       | 69.4                           | %   
|Carbon Products |       | 76.5                           | %   
|                |       |                                |     
|                | Total |                                | 74.8
|                |       |                                |     

Overall.Our consolidated cost of sales for fiscal 2004 was $155.4 million, an increase of $34.2 million, or
28.2%, from fiscal 2003. Our overall cost of sales as a percentage of sales for fiscal 2004 decreased to 74.8% as compared to 82.4% in fiscal 2003. The increase in cost of sales is due primarily to
increased alloy and carbon sales. The reduction in cost of sales as a percentage of sales is primarily the result of increased selling prices for our products, the impact of inventory profits in a
rapidly rising sales price environment and improved purchasing arrangements with key suppliers in 2004.

Alloy Products.Our alloy products cost of sales for fiscal 2004 was $36.3 million, an increase of
$5.6 million, or 18.2%, from fiscal 2003. The increase in cost of sales is the result of increased shipments while the decrease in cost of sales as a percentage of sales is attributable to
improved pricing controls, and to the impact of inventory profits in a rapidly rising sales price environment.

Carbon Products.Our carbon products cost of sales for fiscal 2004 was $119.1 million, an increase of
$28.6 million, or 31.7%, from fiscal 2003. The increase in cost of sales is primarily the result of increased shipments and improved pricing controls. The decrease in cost of sales as a
percentage of sales is attributable to the impact of inventory profits in a rapidly rising sales price environment.

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Yard and Shop Expenses

Yard and shop expenses (excluding employee bonus pool accruals) decreased approximately $0.3 million, or 6.6% for fiscal 2004 compared to fiscal 2003. The
majority of the decrease was the result of low equipment repair and rental costs in 2004.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (excluding employee bonus pool accruals) decreased approximately $1.2 million, or 5.2% for fiscal 2004
compared to fiscal 2003. The majority of the cost savings were the result of reduced staffing levels and reduced expenses for consultants in 2004 as compared to 2003.

Expenses
related to the employee bonus pool were significantly higher during fiscal 2004 compared to fiscal 2003. For fiscal 2004 and 2003, the bonus accruals were $6.1 million
and $0.6 million, respectively. The bonus pool is based on achieving a target EBITDA that excludes bonus expense. The bonus pool achieved in 2004 was higher than expected due to strong business
performance relative to our business plan. Management believes that the normalized bonus pool for our current size and number of full-time-equivalents is approximately
$3.0 million.

Operating Income

|                  |  | Fiscal Year
Ended December 31, |       
|----------------- |  | ------------------------------ | ------
|
|
|Alloy Products    |  | $                              | 5,309 
|Carbon Products   |  |                                | 21,844
|General Corporate |  |                                | (9,098
|                  |  |                                |       
|Total             |  | $                              | 18,055
|                  |  |                                |       

Overall.Our consolidated operating income for fiscal 2004 increased $23.8 million to $18.1 million for fiscal
2004 from an operating loss of $5.7 million for fiscal 2003. Our consolidated operating income as a percentage of consolidated sales increased to 8.7% in fiscal 2004 from a consolidated
operating loss of 3.9% as a percentage of consolidated sales in fiscal 2003. The increase in consolidated operating income was the result of increased sales and a decrease in cost of sales as
previously discussed, improved controls over operating expenses and staff reductions, partially offset by increases in employee performance bonuses.

Alloy Products.Our alloy products operating income for fiscal 2004 was $5.3 million, an increase of
$3.9 million from fiscal 2003. The majority of the increase was the result of sales increases and a decrease in cost of sales as described above and also by reduced staff expenses.

Carbon Products.Our carbon products operating income for fiscal 2004 was $21.8 million, an increase of
$20.2 million from fiscal 2003. Similar to the alloy product group results, the increase in operating income was driven primarily by sales increases and a decrease in cost of sales and also by
reduced staff expenses.

Interest Expense

Interest expense, net increased $2.1 million, or 65.4%, to $5.2 million for fiscal 2004 from $3.1 million for fiscal 2003. The increase in
interest expense was the result of the amortization of

28

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deferred
financing costs incurred in connection with obtaining the revolving credit facility in February 2004 and slightly higher interest rates during 2004 on our variable rate debt.

Income Tax Expense

Income tax benefit decreased to $3.2 million for fiscal 2004 from an income tax benefit of $4.2 million for fiscal 2003. The income tax benefit of
$3.2 million in fiscal 2004 is primarily the result of the reversal of the valuation allowance recorded against the deferred tax asset related to goodwill impairment (see notes 5 and 9 to our
audited consolidated financial statements included elsewhere herein). This reversal created an increase in the deferred tax asset and corresponding decrease in income tax expense of
$7.1 million for fiscal 2004. Net of this adjustment, income tax expense would have been $3.9 million for an effective tax rate of 30.1%.

Preferred Stock Dividends Accumulated and Related Charges

Preferred stock dividends and related charges decreased $6,000 for fiscal 2004 from $2.2 million for fiscal 2003. The decrease was caused by a reduction in
the number of outstanding shares of Series A preferred stock.

Liquidity and Capital Resources

Combined Twelve Months Ended December 31, 2005 Compared to Fiscal 2004

Operating Activities.Net cash provided by operating activities was $13.8 million for the combined twelve months ended
December 31, 2005, compared with net cash provided by operating activities of $5.8 million for the year ended December 31, 2004. The $8.0 million increase in cash provided
by operating activities was offset by approximately $12.0 million in Buy-out Transaction-related expenses paid during the combined twelve months ended December 31, 2005 as
previously discussed. Cash outflows from operating activities for the combined twelve months ended December 31, 2005 was reduced by $12.0 million in Buy-out
Transaction-related expenses and would have significantly increased compared to the year ended December 31, 2004 without these expenses. Cash outflows from operating activities for the combined
twelve months ended December 31, 2005 included a scheduled $5.2 million interest payment on our senior secured notes, an increase in inventory purchases, an increase in accounts
receivable from customers and an increase in accounts payable of $11.9 million. Cash inflows from operating activities included the receipt of approximately $4.7 million in income tax
refunds.

Investing Activities.Net cash outflows from investing activities were $(135.9 million) for the combined twelve months
ended December 31, 2005, compared with net cash outflows from investing activities of $(1.0 million) for the year ended December 31, 2004. The increase in cash outflows is due
primarily to the Buy-out Transaction and the acquisitions of Western Flow and MIM US for a combined cash purchase price of approximately $134.6 million. Capital expenditures
increased to $1.3 million for the combined twelve months ended December 31, 2005 compared to $1.1 million for the year ended December 31, 2004. The $0.2 million
increase in capital expenditures reflects the increase in leasehold improvements, office equipment and machinery and equipment related to our expanded Canadian operations.

Financing Activities.Net cash inflows from financing activities were $143.0 million for the combined twelve months
ended December 31, 2005 compared with net cash outflows of $(7.8 million) from financing activities in the year ended December 31, 2004. The increase in cash flows from financing
activities of $150.8 million is due primarily to the issuance of the senior secured notes for $134.6 million, net of discount, and the issuance of common and preferred stock with
proceeds of $24.0 million in connection with the Buy-out Transaction. Cash outflows from financing activities included the payment of deferred financing fees related to the issuance
of the senior secured notes and

29

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our
revolving credit facility, and a $5.1 million payment to extinguish debt assumed in the MIM US acquisition.

Indebtedness

Senior Secured Notes.We have outstanding $136.0 million aggregate principal amount of 97/8% Secured
Senior Notes due 2011. The $136.0 million includes $105.0 million aggregate principal amount issued in connection with the Buy-out Transaction in February 2005 and
$31.0 million aggregate principal amount issued to fund the MIM US acquisition in December 2005 (see note 2 to our audited consolidated financial statements included elsewhere in
this report). Total cash interest payments required under the senior secured notes are in excess of $13.4 million on an annual basis. The indenture governing the senior secured notes contains
various covenants that limit our discretion in the operation of our business. It, among other things: (i) limits our ability and the ability of our subsidiaries to incur additional
indebtedness, issue shares of preferred stock, incur liens and enter into certain transactions with affiliates; (ii) places restrictions on our ability to pay dividends or make certain other
restricted payments; and (iii) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or
otherwise dispose of all or substantially all of our assets. The indenture provides for a restricted payment pool out of which we are permitted to make certain restricted payments, including cash
dividends, provided that no event of default has occurred and we would be able to incur additional indebtedness under the applicable restrictive covenant. The restricted payment pool is generally an
amount calculated based on 50% of our consolidated net income, as defined in the indenture, and earned during the period beginning on February 1, 2005 and ending on the last day of the most
recent fiscal quarter prior to the restricted payment, as adjusted and subject to certain exceptions as provided in the indenture. All of our domestic subsidiaries fully and unconditionally guarantee
the senior secured notes on a joint and several basis. Neither Edgen/Murray, L.P. nor MIM UK guarantees the senior secured notes. The senior secured notes and the related guarantees are secured by
liens on substantially all of our assets and the assets of our existing and future domestic restricted subsidiaries (other than certain excluded assets such as our leasehold interests and the capital
stock of our existing and future subsidiaries). These liens, in the case of assets consisting of inventory, accounts receivable and certain related assets, are contractually subordinated to liens
thereon that secure our revolving credit facility.

Senior Credit Facility.On February 1, 2005, we entered into a five-year $20.0 million senior
secured revolving credit facility, with a $5.0 million sublimit for letters of credit. Interest is determined based on several alternative rates as stipulated in the revolving credit facility,
including the base lending rate per annum plus an applicable margin, or LIBOR plus an applicable margin. The revolving credit facility contains various affirmative and negative covenants, including
limitations on additional indebtedness and liens, the making of distributions, loans and advances, transactions with affiliates, dispositions or mergers, and the sale of assets. We borrowed
approximately $2.7 million under the revolving credit facility in connection with the consummation of the Buy-out Transaction. As of December 31, 2005, we had no borrowings
outstanding under the revolving credit facility. The revolving credit facility is secured by a first priority security interest in all of our and our domestic subsidiaries' working capital assets,
which is contractually senior to the liens on such assets securing the senior secured notes, and by a second priority security interest in substantially all of our and our domestic subsidiaries' other
assets (other than certain excluded assets such as our leasehold interests and the capital stock of our existing and future subsidiaries), which is contractually subordinated to the liens on such
assets securing the senior secured notes.

Future Capital Needs

Our principal source of liquidity is cash flow generated from operations and borrowings under our revolving credit facility. Our principal liquidity requirements
are to meet debt service requirements,

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finance our capital expenditures and provide working capital. Our ability to make payments on and to refinance our indebtedness, and to fund planned capital expenditures will depend on our ability to
generate cash in the future, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. As of
December 31, 2005, we had $18.0 million in cash in anticipation of a scheduled $6.7 million interest payment related to our senior secured notes. Our total debt, excluding any
related discount, was $136.4 million as of December 31, 2005.

Based
on our current level of operations, we believe our cash flow from operations, available cash and available borrowings under our revolving credit facility will be adequate to meet
our liquidity needs for at least the next twelve months. Additionally, we continue to evaluate appropriate growth strategies for the Company including possible acquisition opportunities. These growth
strategies may require us to use cash on hand, make additional borrowings under our revolving credit facility, or enter into other financing arrangements in order to support these growth strategies.
We cannot assure you, however, that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our revolving credit facility in an amount
sufficient to enable us to service our indebtedness or to fund our other liquidity needs.

Commitments and Contractual Obligations

Our contractual obligations and commitments principally include obligations associated with our outstanding indebtedness and future minimum operating lease
obligations as set forth in the following table as of December 31, 2005:

|                            |       |   |         | Actual Payments Due by Period |   |       
|--------------------------- | ----- | - | ------- | ----------------------------- | - | ------
|
|
|Long term debt(1)           |       | $ | 13,591  |                               | $ | 27,024
|Operating lease obligations |       |   | 1,640   |                               |   | 2,175 
|Purchase commitments(2)     |       |   | 117,118 |                               |   |      
|                            |       |   |         |                               |   |       
|                            | Total |   | $       | 132,349                       |   | $     
|                            |       |   |         |                               |   |       

---

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") which are adopted by us as of the specified
effective date. Unless otherwise discussed, our management believes the impact of recently issued standards which are not yet effective will not have a material impact on our consolidated financial
statements upon adoption.

Related Party Transactions

See "Item 13. Certain Relationships and Related Transactions."

31

---



Financial Instruments

In our business, we may enter into purchase and sales commitments that are denominated in a foreign currency (primarily the Euro). Our practices include entering
into foreign currency forward exchange contracts to minimize foreign currency exposure related to forecasted purchases and sales of certain inventories. As of December 31, 2005, we had 13
contracts related to purchases of inventory, that mature in varying increments through August 2006, to purchase an aggregate notional amount of $20.8 million of foreign currency. We also
had three contracts related to the sale of inventory that mature in varying increments through August 2006, to receive an aggregate notional amount of $2.1 million of foreign currency.
As of December 31, 2005, the fair value of these foreign currency forward exchange contracts of $0.4 million was recorded as a liability on the consolidated balance sheet. For the
combined twelve months ended December 31, 2005, we recognized $(0.4 million) in realized losses on foreign currency forward exchange contracts reflected in other income (expense) on the
statement of operations.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K as of December 31, 2005 or
2004.

Inflation

Inflation has not had a material impact on our results of operations or financial condition during the preceding three years. In the past, we have generally been
successful in adjusting prices to our customers to reflect changes in metal prices. For example, in 2004 we were able to increase the prices of our products in response to higher inventory costs
resulting from higher steel prices. We can provide no assurance that our operating results will not be affected by inflation in the future.

Seasonality

Some of our customers may be in seasonal businesses, especially those customers who purchase our products for use in new capital expenditure projects at
refineries, oil and gas infrastructure, and processing and power generation plants. As a consequence, our results of operations and working capital, including our accounts receivable, inventory and
accounts payable, fluctuate during the year. However, because of our geographic, product and customer diversity, our operations have not shown any material seasonal trends. We believe that our
significant operations in more mild southern climates moderate our seasonality. In addition, our sales to MRO distributors, who tend not to be seasonal purchasers, mitigate the overall effects of
seasonality on our business. Sales in the months of November and December traditionally have been lower than in other months because of a reduced number of working days for shipments of our products
and holiday closures for some of our customers. We cannot assure you that period-to-period fluctuations will not occur in the future. Results of any one or more quarters are,
therefore, not necessarily indicative of annual results.

Capital Expenditures

We currently do not expect to have any significant capital expenditures or upgrades in the near future. Our maintenance capital expenditures have averaged
approximately $1.3 million over the past five years, and management expects annual capital expenditures to remain consistent with prior year amounts in 2006 and 2007.

32

---





ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Edgen CorporationAudited Consolidated Financial Statements

|Report of Independent Registered Public Accounting Firm                                                                                                                                                                                                |  | 34
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --
|Consolidated Balance Sheets at December 31, 2005 (Successor) and 2004                                                                                                                                                                                  |  | 35
|Consolidated Statements of Operations for the period February 1, 2005 to December 31, 2005 (Successor), the period January 1, 2005 to January 31, 2005 (Predecessor), and the years ended December 31, 2004 and 2003 (Predecessor)                     |  | 36
|Consolidated Statements of Shareholder's Equity (Deficit) for the period February 1, 2005 to December 31, 2005 (Successor), the period January 1, 2005 (Predecessor) to January 31, 2005, and the years ended December 31, 2004 and 2003 (Predecessor) |  | 37
|Consolidated Statements of Cash Flows for the period February 1, 2005 to December 31, 2005 (Successor), the period January 1, 2005 to January 31, 2005 (Predecessor), and the years ended December 31, 2004 and 2003 (Predecessor)                     |  | 38
|Notes to Consolidated Financial Statements                                                                                                                                                                                                             |  | 40

33

---





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Shareholder of
Edgen Corporation
Baton Rouge, Louisiana

We
have audited the accompanying consolidated balance sheets of Edgen Corporation and subsidiaries as of December 31, 2005 and 2004 and the related consolidated statements of
operations, shareholder's equity (deficit), and cash flows for the period February 1, 2005 to December 31, 2005, the period January 1, 2005 to January 31, 2005 and each of
the two years in the period ended December 31, 2004 and 2003. 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. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Edgen Corporation and subsidiaries at December 31, 2005
and 2004, and the results of its operations and its cash flows for the period February 1, 2005 to December 31, 2005, the period January 1, 2005 to January 31, 2005 and each
of the two years in the periods ended December 31, 2004 and 2003 in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

New Orleans, Louisiana
March 30, 2006

34

---





EDGEN CORPORATION AND SUBSIDIARIES  CONSOLIDATED BALANCE SHEETS  December 31, 2005 and 2004

|                                                                                                                                                                                      |                                                                                     | Successor
2005                       |             | Predecessor
2004 |            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | ------------------------------------ | ----------- | ---------------- | -----------
|ASSETS                                                                                                                                                                                |                                                                                     |                                      |             |                  |            
|CURRENT ASSETS:                                                                                                                                                                       |                                                                                     |                                      |             |                  |            
|                                                                                                                                                                                      | Cash and cash equivalents                                                           |                                      | $           | 18,013,533       |            
|                                                                                                                                                                                      | Accounts receivablenet of allowance for doubtful accounts of $128,573 and $658,675 |                                      |             | 41,862,061       |            
|                                                                                                                                                                                      | Accounts receivableaffiliated                                                      |                                      |             | 19,483           |            
|                                                                                                                                                                                      | Inventory                                                                           |                                      |             | 81,003,469       |            
|                                                                                                                                                                                      | Income tax receivable                                                               |                                      |             | 21,551           |            
|                                                                                                                                                                                      | Prepaid expenses and other current assets                                           |                                      |             | 1,112,337        |            
|                                                                                                                                                                                      | Deferred tax asset                                                                  |                                      |             | 1,670,166        |            
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|                                                                                                                                                                                      |                                                                                     | Total current assets                 |             |                  | 143,702,600
|PROPERTY, PLANT AND EQUIPMENT  net                                                                                                                                                   |                                                                                     |                                      | 11,258,703  |                  |            
|GOODWILL                                                                                                                                                                              |                                                                                     |                                      | 37,126,769  |                  |            
|OTHER INTANGIBLES                                                                                                                                                                     |                                                                                     |                                      | 23,424,188  |                  |            
|OTHER ASSETS                                                                                                                                                                          |                                                                                     |                                      | 177,581     |                  |            
|DEFERRED TAX ASSET                                                                                                                                                                    |                                                                                     |                                      |            |                  |            
|DEFERRED FINANCING COSTS                                                                                                                                                              |                                                                                     |                                      | 8,345,417   |                  |            
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|TOTAL                                                                                                                                                                                 |                                                                                     | $                                    | 224,035,258 |                  | $          
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDER'S EQUITY (DEFICIT)                                                                                                            |                                                                                     |                                      |             |                  |            
|CURRENT LIABILITIES:                                                                                                                                                                  |                                                                                     |                                      |             |                  |            
|                                                                                                                                                                                      | Managed cash overdrafts                                                             |                                      | $           | 488,748          |            
|                                                                                                                                                                                      | Accounts payable                                                                    |                                      |             | 41,213,411       |            
|                                                                                                                                                                                      | Accounts payableaffiliated                                                         |                                      |             | 218,094          |            
|                                                                                                                                                                                      | Accrued expenses and other current liabilities                                      |                                      |             | 9,382,103        |            
|                                                                                                                                                                                      | Accrued interest payable                                                            |                                      |             | 5,600,278        |            
|                                                                                                                                                                                      | Current portion of long-term debt                                                   |                                      |             | 160,984          |            
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|                                                                                                                                                                                      |                                                                                     | Total current liabilities            |             |                  | 57,063,618 
|DEFERRED TAX LIABILITY                                                                                                                                                                |                                                                                     |                                      | 2,775,879   |                  |            
|LONG-TERM DEBT                                                                                                                                                                        |                                                                                     |                                      | 134,807,164 |                  |            
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|Total liabilities                                                                                                                                                                     |                                                                                     |                                      | 194,646,661 |                  |            
|Redeemable preferred stockSeries A Cumulative Compounding, $.01 par value, 40,000 shares authorized and designated, 21,600 shares issued and outstanding as of December 31, 2005     |                                                                                     |                                      | 23,303,400  |                  |            
|Mandatorily redeemable preferred stock, $.01 par value, 372,644 shares authorized and designated; 367,644 shares plus accrued dividends issued and outstanding, Series A              |                                                                                     |                                      |            |                  |            
|Mandatorily redeemable preferred stock, $.01 par value, 10,000 shares authorized, issued, and outstanding, Series B                                                                   |                                                                                     |                                      |            |                  |            
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|                                                                                                                                                                                      |                                                                                     | Total redeemable preferred stock     |             |                  | 23,303,400 
|COMMITMENTS AND CONTINGENCIES                                                                                                                                                         |                                                                                     |                                      |            |                  |            
|SHAREHOLDER'S EQUITY (DEFICIT):                                                                                                                                                       |                                                                                     |                                      |             |                  |            
|Common stockClass A, $.01 par value, 5,000,000 and 6,000,000 shares authorized; 2,681,564 and 4,307,880 shares issued and outstanding as of December 31, 2005 and 2004, respectively |                                                                                     |                                      | 26,816      |                  |            
|Common stockClass B, $.01 par value, 505,512 shares authorized, issued, and outstanding at December 31, 2004                                                                         |                                                                                     |                                      |            |                  |            
|Paid-in capital                                                                                                                                                                       |                                                                                     |                                      | 2,654,749   |                  |            
|Accumulated comprehensive income                                                                                                                                                      |                                                                                     |                                      | 77,971      |                  |            
|Retained earnings (deficit)                                                                                                                                                           |                                                                                     |                                      | 3,325,661   |                  |            
|Less treasury stock 570,300 shares  at cost at December 31, 2004                                                                                                                     |                                                                                     |                                      |            |                  |            
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|                                                                                                                                                                                      |                                                                                     | Total shareholder's equity (deficit) |             |                  | 6,085,197  
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            
|TOTAL                                                                                                                                                                                 |                                                                                     | $                                    | 224,035,258 |                  | $          
|                                                                                                                                                                                      |                                                                                     |                                      |             |                  |            

See accompanying notes to consolidated financial statements.

35

---



EDGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

Period February 1, 2005 to December 31, 2005, Period January 1, 2005 to January 31, 2005,
Year Ended December 31, 2004 and Year Ended December 31, 2003

|                                                                   |                                                            | Successor                |             | Predecessor |            
|------------------------------------------------------------------ | ---------------------------------------------------------- | ------------------------ | ----------- | ----------- | -----------
|
|SALES                                                              |                                                            | $                        | 262,745,937 |             | $          
|OPERATING EXPENSES:                                                |                                                            |                          |             |             |            
|                                                                   | Cost of sales (exclusive of depreciation and amortization) |                          |             | 209,462,849 |            
|                                                                   | Yard and shop expense                                      |                          |             | 4,533,611   |            
|                                                                   | Selling, general, and administrative expense               |                          |             | 23,763,703  |            
|                                                                   | Depreciation and amortization expense                      |                          |             | 5,466,123   |            
|                                                                   |                                                            |                          |             |             |            
|                                                                   |                                                            | Total operating expenses |             |             | 243,226,286
|INCOME (LOSS) FROM OPERATIONS                                      |                                                            |                          | 19,519,651  |             |            
|OTHER INCOME (EXPENSE):                                            |                                                            |                          |             |             |            
|Other income (expense)                                             |                                                            |                          | (307,644    | )           |            
|Interest expense                                                   |                                                            |                          | (11,334,155 | )           |            
|                                                                   |                                                            |                          |             |             |            
|INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX EXPENSE |                                                            |                          | 7,877,852   |             |            
|INCOME TAX EXPENSE (BENEFIT)                                       |                                                            |                          | 2,848,791   |             |            
|                                                                   |                                                            |                          |             |             |            
|INCOME (LOSS) FROM CONTINUING OPERATIONS                           |                                                            |                          | 5,029,061   |             |            
|DISCONTINUED OPERATIONS:                                           |                                                            |                          |             |             |            
|                                                                   | Loss from discontinued operations before income taxes      |                          |             |            |            
|                                                                   | Income tax benefit                                         |                          |             |            |            
|NET INCOME (LOSS)                                                  |                                                            |                          | 5,029,061   |             |            
|PREFERRED DIVIDEND REQUIREMENT                                     |                                                            |                          | (1,703,400  | )           |            
|                                                                   |                                                            |                          |             |             |            
|NET INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS                |                                                            | $                        | 3,325,661   |             | $          
|                                                                   |                                                            |                          |             |             |            

See
accompanying notes to consolidated financial statements.

36

---



EDGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY (DEFICIT)

Period February 1, 2005 to December 31, 2005, Period January 1, 2005 to January 31, 2005,
Year Ended December 31, 2004 and Year Ended December 31, 2003

|                                         |                                                        | Class A
Common
Stock |        | Class B
Common
Stock |   | Paid-In
Capital |   | Unearned
Stock-based
Compensation |            | Notes
Receivable
from
Shareholders |   | Accumulated Other
Comprehensive
Income |   | Retained
Earnings
(Deficit) |            | Treasury
Stock |   | Total  |       
|---------------------------------------- | ------------------------------------------------------ | -------------------- | ------ | -------------------- | - | --------------- | - | --------------------------------- | ---------- | ---------------------------------- | - | -------------------------------------- | - | --------------------------- | ---------- | -------------- | - | ------ | ------
|PREDECESSOR                              |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|BALANCEJanuary 1, 2003                  |                                                        | $                    | 43,079 |                      | $ | 5,055           |   | $                                 | 22,578,191 |                                    | $ |                                       |   | $                           | (2,117,735 | )              | $ |       |       
|Payment of Shareholder Notes             |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             | 1,028,653  |                |   |       |       
|Net income                               |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|Repurchase of Class A Common Stock       |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|Preferred dividend requirement           |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|BALANCEDecember 31, 2004                |                                                        |                      | 43,079 |                      |   | 5,055           |   |                                   | 22,578,191 |                                    |   |                                       |   |                             | (1,089,082 | )              |   |       |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|Payment of Shareholder Notes             |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             | 1,089,082  |                |   |       |       
|Net income                               |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|Repurchase of Class A Common Stock       |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|Preferred dividend requirement           |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|BalanceDecember 31, 2004                |                                                        |                      | 43,079 |                      |   | 5,055           |   |                                   | 22,578,191 |                                    |   |                                       |   |                             |           |                |   |       |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|Preferred dividend requirement           |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|Net loss                                 |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|BalanceJanuary 31, 2005                 |                                                        | $                    | 43,079 |                      | $ | 5,055           |   | $                                 | 22,578,191 |                                    | $ |                                       |   | $                           |           |                | $ |       |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|SUCCESSOR                                |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|BalanceFebruary 1, 2005                 |                                                        | $                    |       |                      | $ |                |   | $                                 |           |                                    | $ |                                       |   | $                           |           |                | $ |       |       
|Net income                               |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|Other comprehensive income:              |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|                                         | Foreign translation adjustments, net of tax of $19,494 |                      |        |                     |   |                 |  |                                   |            |                                   |   |                                        |  |                             |            |               |   |        | 77,971
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|Comprehensive income                     |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|Issuance of Class A common stock         |                                                        |                      | 24,000 |                      |   |                |   |                                   | 2,376,000  |                                    |   |                                       |   |                             |           |                |   |       |       
|Issuance of stock based compensation     |                                                        |                      | 2,816  |                      |   |                |   |                                   | 278,749    |                                    |   | (281,565                               | ) |                             |           |                |   |       |       
|Amortization of stock-based compensation |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   | 281,565                                |   |                             |           |                |   |       |       
|Preferred dividend requirement           |                                                        |                      |       |                      |   |                |   |                                   |           |                                    |   |                                       |   |                             |           |                |   |       |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       
|BalanceDecember 31, 2005                |                                                        | $                    | 26,816 |                      | $ |                |   | $                                 | 2,654,749  |                                    | $ |                                       |   | $                           |           |                | $ | 77,971 |       
|                                         |                                                        |                      |        |                      |   |                 |   |                                   |            |                                    |   |                                        |   |                             |            |                |   |        |       

See accompanying notes to consolidated financial statements

37

---



EDGEN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period February 1, 2005 to December 31, 2005, Period January 1, 2005 to January 31, 2005,
Year Ended December 31, 2004 and Year Ended December 31, 2003

|                                                                                         |                                                                        | Successor                                                        |                                                                        | Predecessor  |            
|---------------------------------------------------------------------------------------- | ---------------------------------------------------------------------- | ---------------------------------------------------------------- | ---------------------------------------------------------------------- | ------------ | -----------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                                                    |                                                                        |                                                                  |                                                                        |              |            
|Net income (loss)                                                                        |                                                                        | $                                                                | 5,029,061                                                              |              | $          
|Loss from discontinued operations, net of income taxes                                   |                                                                        |                                                                  |                                                                       |              |            
|                                                                                         |                                                                        |                                                                  |                                                                        |              |            
|Net income (loss) from continuing operations                                             |                                                                        |                                                                  | 5,029,061                                                              |              |            
|Adjustments to reconcile net income (loss) to net cash provided by operating activities: |                                                                        |                                                                  |                                                                        |              |            
|                                                                                         | Depreciation and amortization                                          |                                                                  |                                                                        | 5,466,123    |            
|                                                                                         | Amortization of deferred financing costs                               |                                                                  |                                                                        | 1,131,496    |            
|                                                                                         | Accretion of discount on long-term debt                                |                                                                  |                                                                        | 8,914        |            
|                                                                                         | Stock-based compensation expense                                       |                                                                  |                                                                        | 281,565      |            
|                                                                                         | Provision for doubtful accounts                                        |                                                                  |                                                                        | 192,299      |            
|                                                                                         | Inventory purchase price allocation adjustment                         |                                                                  |                                                                        | 1,687,557    |            
|                                                                                         | Deferred income tax benefit                                            |                                                                  |                                                                        | (895,278     | )          
|                                                                                         | Gain on redemption of Preferred and Common Stock                       |                                                                  |                                                                        |             |            
|                                                                                         | Gain on foreign currency transactions                                  |                                                                  |                                                                        | 130,914      |            
|                                                                                         | Gain (loss) on sale of property, plant and equipment                   |                                                                  |                                                                        | 104,150      |            
|                                                                                         | Changes in assets and liabilities:                                     |                                                                  |                                                                        |              |            
|                                                                                         |                                                                        | (Increase) decrease in accounts receivable                       |                                                                        |              | (5,898,360 
|                                                                                         |                                                                        | (Increase) decrease in inventories                               |                                                                        |              | (11,248,142
|                                                                                         |                                                                        | Decrease (increase) in prepaid expenses and other current assets |                                                                        |              | 2,733,628  
|                                                                                         |                                                                        | Increase (decrease) increase in accounts payable                 |                                                                        |              | 5,576,961  
|                                                                                         |                                                                        | (Decrease) increase in accrued liabilities and other expenses    |                                                                        |              | (351,259   
|                                                                                         |                                                                        | Increase (decrease) in income tax payable                        |                                                                        |              | 897,987    
|                                                                                         |                                                                        | Decrease (increase) in income tax receivable                     |                                                                        |              | 4,659,435  
|                                                                                         |                                                                        | Decrease (increase) in other                                     |                                                                        |              | 20,418     
|                                                                                         |                                                                        |                                                                  |                                                                        |              |            
|                                                                                         |                                                                        |                                                                  | Net cash provided by operating activities from continuing operations   |              |            
|                                                                                         |                                                                        |                                                                  | Net cash provided by operating activities from discontinued operations |              |            
|                                                                                         |                                                                        |                                                                  |                                                                        |              |            
|                                                                                         |                                                                        |                                                                  | Net cash provided by operating activities                              |              |            
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                    |                                                                        |                                                                  |                                                                        |              |            
|Purchase of Edgen Corporationnet of cash acquired                                       |                                                                        |                                                                  | (121,836,030                                                           | )            |            
|Purchase of Western Flow Products, Inc.net of cash acquired                             |                                                                        |                                                                  | (1,746,201                                                             | )            |            
|Purchase of Murray International Metals, Inc.net of cash acquired                       |                                                                        |                                                                  | (11,049,097                                                            | )            |            
|Purchase of SISCOnet of cash acquired                                                   |                                                                        |                                                                  |                                                                       |              |            
|Purchase of ProMetals, Inc.net of cash acquired                                         |                                                                        |                                                                  |                                                                       |              |            
|Purchase of property, plant and equipment                                                |                                                                        |                                                                  | (1,315,012                                                             | )            |            
|Proceeds from the sale of capital assets                                                 |                                                                        |                                                                  | 3,422                                                                  |              |            
|                                                                                         |                                                                        |                                                                  |                                                                        |              |            
|                                                                                         | Net cash used in investing activities from continuing operations       |                                                                  |                                                                        | (135,942,918 | )          
|                                                                                         | Net cash provided by investing activities from discontinued operations |                                                                  |                                                                        |             |            
|                                                                                         |                                                                        |                                                                  |                                                                        |              |            
|Net cash used in investing activities                                                    |                                                                        |                                                                  | (135,942,918                                                           | )            |            
|                                                                                         |                                                                        |                                                                  |                                                                        |              |            

38

---



|CASH FLOWS FROM FINANCING ACTIVITIES:                                                  |                                                                                |   |             |             |   |            |            |   |            |            |   |             |            
|-------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | - | ----------- | ----------- | - | ---------- | ---------- | - | ---------- | ---------- | - | ----------- | -----------
|Proceeds from issuance of long-term debt, net of discount                              |                                                                                |   | 134,605,000 |             |   |           |            |   | 1,500,000  |            |   | 6,065,705   |            
|Proceeds from issuance of common stock                                                 |                                                                                |   | 2,400,000   |             |   |           |            |   |           |            |   |            |            
|Proceeds from issuance of preferred stock                                              |                                                                                |   | 21,600,000  |             |   |           |            |   |           |            |   |            |            
|Proceeds from debt issuancenet of payments under revolving credit agreement           |                                                                                |   |            |             |   | 116,438    |            |   | 1,635,175  |            |   | (19,722,267 | )          
|Deferred financing costs                                                               |                                                                                |   | (9,476,913  | )           |   |           |            |   | (1,431,623 | )          |   |            |            
|Principal payments on notes payable and long-term debt                                 |                                                                                |   | (5,179,749  | )           |   | (232,072   | )          |   | (6,225,056 | )          |   | (577,072    | )          
|Purchase of common stock for treasury                                                  |                                                                                |   |            |             |   |           |            |   | (1,313,561 | )          |   | (1,167,749  | )          
|Proceeds from repayment of shareholder notes                                           |                                                                                |   |            |             |   |           |            |   | 1,089,083  |            |   | 1,028,653   |            
|Redemption of preferred stock                                                          |                                                                                |   |            |             |   |           |            |   | (145,141   | )          |   | (464,627    | )          
|Increase (decrease) in managed cash overdraft                                          |                                                                                |   | 480,644     |             |   | (1,361,404 | )          |   | (2,911,801 | )          |   | (3,661,270  | )          
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|                                                                                       | Net cash provided by (used in) financing activities from continuing operations |   |             | 144,428,982 |   |            | (1,477,038 | ) |            | (7,802,924 | ) |             | (18,498,627
|                                                                                       | Net cash provided by financing activities from discontinued operations         |   |             |            |   |            |           |   |            |           |   |             |           
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|                                                                                       | Net cash provided by (used in) financing activities                            |   |             | 144,428,982 |   |            | (1,477,038 | ) |            | (7,802,924 | ) |             | (18,498,627
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                   |                                                                                |   | 18,013,533  |             |   | 2,770,708  |            |   | (2,990,307 | )          |   | 3,124,606   |            
|CASH AND CASH EQUIVALENTS (Beginning of year)                                          |                                                                                |   |            |             |   | 134,299    |            |   | 3,124,606  |            |   |            |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|CASH AND CASH EQUIVALENTS (End of year)                                                |                                                                                | $ | 18,013,533  |             | $ | 2,905,007  |            | $ | 134,299    |            | $ | 3,124,606   |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                      |                                                                                |   |             |             |   |            |            |   |            |            |   |             |            
|Cash paid during the year for:                                                         |                                                                                |   |             |             |   |            |            |   |            |            |   |             |            
|Interest                                                                               |                                                                                | $ | 5,709,887   |             | $ | 280,629    |            | $ | 2,553,693  |            | $ | 3,090,045   |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|Income taxes                                                                           |                                                                                | $ | 211,929     |             |   |           |            | $ | 1,327,110  |            | $ | 338,082     |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|NON-CASH INVESTING AND FINANCING ACTIVITES:                                            |                                                                                |   |             |             |   |            |            |   |            |            |   |             |            
|Equipment acquired through capital leases                                              |                                                                                | $ | 87,538      |             |   |           |            |   |           |            |   |            |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|Issuance of note payable in connection with acquisition of Western Flow Products, Inc. |                                                                                |   | 246,407     |             |   |           |            |   |           |            |   |            |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|Issuance of restricted stock                                                           |                                                                                |   | 281,565     |             |   |           |            |   |           |            |   |            |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           
|Dividends on preferred stock                                                           |                                                                                |   | 1,703,400   |             |   | 189,949    |            |   | 2,205,864  |            |   | 2,211,864   |            
|                                                                                       |                                                                                |   |             |             |   |            |            |   |           

See accompanying notes to consolidated financial statements.

39

---



EDGEN CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2005, 2004 and 2003

1.     ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of BusinessEdgen Corporation ("Edgen" or the
"Company"), a Nevada corporation, was formed on November 30, 2000. Through its wholly owned subsidiaries, Edgen Alloy Products Group, L.L.C.
("Edgen Alloy"), Edgen Carbon Products Group, L.L.C. ("Edgen Carbon"), and Edgen Canada Inc.
("Edgen Canada"), Edgen distributes and sells prime carbon steel pipe, alloy grade pipe, fittings and flanges, high grade structural tubes, sections and
plates, and provides services for the applications of such pipe and steel products. The Company has no assets or operations independent of its wholly owned subsidiaries. During 2005, the Company
acquired Western Flow Products, Inc. in July 2005 and Murray International Metals, Inc. in December 2005 (see note 2).

On
February 1, 2005, Edgen Acquisition Corporation, a corporation newly formed by Jefferies Capital Partners ("JCP") and certain
members of Edgen management, purchased all of the outstanding capital stock of Edgen from its existing stockholders for an aggregate purchase price of approximately $124.0 million, which
included the assumption or repayment of indebtedness of Edgen but excluded the payment of fees and expenses. The acquisition was funded with proceeds to Edgen Acquisition Corporation from the issuance
and sale of $105.0 million aggregate principal amount of 97/8% Senior Secured Notes ("Notes") due 2011 and from an equity
investment from funds managed by JCP and certain members of Edgen management. Concurrently with the purchase, Edgen entered into a new $20 million senior secured revolving credit facility.

Simultaneously
with the acquisition and the related financing transactions, Edgen Acquisition Corporation was merged with and into Edgen Corporation, which survived the merger and became
liable for all obligations under the Notes and borrowings under the new revolving credit facility. We refer to the acquisition of Edgen Corporation, the offering and issuance of the old notes, the
equity investment, the related financing transactions and the merger collectively as the "Buy-out Transaction." Edgen Corporation following the merger
is referred to as the "Successor." Edgen Corporation prior to the merger is referred to as the
"Predecessor."

On
December 16, 2005, our stockholders organized a new holding company, Edgen/Murray L.P., to hold all of the outstanding equity interests of Edgen and a newly created company,
Pipe Acquisition Limited ("PAL") which acquired Murray International Metals Ltd. ("MIM
UK") on December 16, 2005. In a separate but related transaction, Edgen acquired Murray International Metals, Inc. ("MIM
US"), the U.S. subsidiary of MIM UK. Edgen/Murray L.P. is a Delaware limited partnership and is controlled by funds managed by JCP. Additionally, certain members of Edgen's
management are officers of Edgen/Murray, L.P. In connection with the MIM UK acquisition, Edgen/Murray, L.P. also issued additional partnership interests to the funds managed by JCP, to certain members
of management of our company and MIM UK and the sellers of MIM UK.

Basis of PresentationThe consolidated financial statements and notes are presented in accordance with accounting principles
generally accepted in the United States of America ("generally accepted accounting principles" or
"GAAP"). The consolidated financial statements include the accounts of Edgen and its wholly owned subsidiaries. All intercompany transactions are
eliminated in consolidation.

Our
foreign subsidiary, Edgen Canada, maintains its accounting records in its local currency, the Canadian dollar ("CAD"). All of the
assets and liabilities of this subsidiary (including long-term assets, such as goodwill) are converted to U.S. dollars with the effect of the foreign currency translation reflected in
accumulated other comprehensive income, a component of shareholder's equity (deficit), in accordance with the Financial Accounting Standards Board's
("FASB") Statement of Financial

40

---



Accounting
Standards ("SFAS") No. 52, "Foreign Currency Translation," and SFAS No. 130, "Reporting Comprehensive Income." Foreign
transaction gains or losses are charged to income in the period the transactions are settled.

In
accordance with GAAP, we have separated our historical financial results for the Predecessor and the Successor. The separate presentation is required under GAAP in situations when
there is a change in accounting basis, which occurred when purchase accounting was applied to the acquisition of the Predecessor. Purchase accounting requires that the historical carrying value of
assets acquired and liabilities assumed be adjusted to fair value, which may yield results that are not comparable on a period-to-period basis due to the different, and
sometimes higher, cost basis associated with the allocation of the purchase price. In addition, at the time of the acquisition of
the Predecessor, we experienced changes in our business as a result of the other transactions that were consummated in connection with the acquisition of the Predecessor. There were no material
changes to the operations or customer relationships of the business as a result of the acquisition of the Predecessor.

Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates.

Cash EquivalentsThe Company considers all highly-liquid investments with an original maturity of three months or less at the
time of purchase to be cash equivalents.

InventoryInventory consists primarily of prime carbon steel pipe and plate, alloy grade pipe, fittings and flanges and
structural sections and plates. Inventory is stated at the lower of cost or market. Cost is determined by the average cost method.

Property, Plant and EquipmentProperty, plant and equipment are recorded at cost. Depreciation of property, plant and
equipment is provided for financial reporting purposes on the straight-line method over the estimated useful lives of the individual assets, which range from 2 to 39 years. For
income tax purposes, accelerated methods of depreciation are used. Ordinary maintenance and repairs which do not extend the physical or economic lives of the plant or equipment, are charged to expense
as incurred.

Goodwill and Other Intangible AssetsGoodwill represents the excess of the amount we paid to acquire a company over the
estimated fair value of tangible assets and identifiable assets acquired, less liabilities assumed. Other identifiable intangible assets include customer relationships, tradenames,
non-competition agreements and trademarks. Other identifiable intangibles with finite useful lives are amortized to expense over the estimated useful life of the asset. Customer
relationships and non-competition agreements are amortized on a straight-line basis over their estimated useful life, 7 years for customer relationships and 1 to 5 years
for non-competition agreements. Identifiable intangible assets with an indefinite useful life, including goodwill, tradenames and trademarks, are evaluated annually in the first quarter or
more frequently if circumstances dictate, for impairment by comparison with their carrying amounts with the fair value of the individual assets. No goodwill impairment was identified in 2005, 2004 and
2003.

Impairment of Long-lived AssetsWe assess the impairment of long-lived assets, including property,
plant and equipment and customer relationships, when events or changes in circumstances indicate that the carrying value of the assets or the asset group may not be recoverable. The asset impairment
review

41

---



assesses
the fair value of the assets based on the future cash flows the assets are expected to generate. An impairment loss is recognized when estimated undiscounted future cash flows expected to
result from the use of the asset plus net proceeds expected from the disposition of the asset (if any) are less than the related asset's carrying amount. Impairment losses are measured as the amount
by which the carrying amounts of the assets exceed their fair values.

Deferred Financing CostsDeferred financing costs are charged to operations as additional interest expense over the life of
the underlying indebtedness using the interest method. Deferred financing costs charged to operations as interest during the period February 1, 2005 to December 31, 2005, the period
January 1, 2005 to January 31, 2005, and the years ended December 31, 2004 and 2003 were $1,131,491, $35,272, $1,519,002, and $160,226, respectively.

Income TaxesIncome taxes are provided using the liability method in accordance with SFAS No. 109, Accounting for
Income Taxes. Under this method, deferred income taxes are recorded based upon differences between the financial reporting and income tax basis of assets and liabilities and are measured using the
enacted income tax rates and laws that will be in effect when the differences are expected to reverse.

Revenue RecognitionRevenue is recognized on products sales when products are shipped and the customer takes title and assumes
risk of loss. Shipping and handling costs incurred are included as a component of cost of sales.

Stock-Based CompensationThe Company accounts for its stock-based employee compensation plan which allows for the granting of
stock options and restricted stock using the intrinsic value-based method of accounting, as permitted, and discloses, if material, pro forma information as if accounted for using the fair value-based
method as prescribed by accounting principles. Because the exercise price of the Company's employee stock options equals the market price of the underlying stock on the date of grant, no compensation
expense is recognized on options granted.

If
compensation cost for the Company's cost based compensation plan had been determined on the fair value method at the grant dates for awards, there would have been no material impact
on the Company's reported net income or earnings per share. The fair value of options was estimated using a Black-Scholes option pricing model. Because employee stock options have differing
characteristics and changes in the subjective input assumptions can materially affect the fair value estimate, the Black-
Scholes valuation model does not necessarily provide a reliable measure of the fair value of employee options.

The FASB has issued FASB Statement No. 123(R),Share-Based Payment(the
"Statement"), that addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for
(a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity
instruments. The Statement eliminates the ability to account for share-based compensation transactions using the intrinsic value-based method of accounting, and generally requires instead that such
transactions be accounted for using a fair-value based method. The Statement permits use of option pricing models other than the Black-Scholes option pricing model. There was no impact on
the Company's consolidated financial statements as a result of the adoption of this Statement on January 1, 2006.

Derivative Financial InstrumentsThe Company enters into foreign currency forward exchange contracts to minimize our foreign
exchange risks associated with certain inventory purchase transactions

42

---



that
are denominated in a foreign currency (primarily the Euro). We do not monitor these foreign currency forward exchange contracts for hedge effectiveness. Gains and losses associated with these
contracts are accounted for as other income (loss) on the statement of operations.

Fair Values of Financial InstrumentsThe carrying value of cash and cash equivalents, receivables, accounts payable and
accrued liabilities approximate their fair value due to the short maturity of those instruments. The fair value of long-term debt was approximately $132.0 million based on recent
trades by investors.

Other Comprehensive IncomeComprehensive income includes all changes in equity during the period presented that result from
transactions and other economic events other than transactions with shareholders.

Recent Accounting PronouncementsFrom time to time, new accounting pronouncements are issued by the FASB which are adopted by
the Company as of the specified effective date. Unless otherwise discussed, management believes the impact of recently issued standards which are not yet effective will not have a material impact on
the company's consolidated financial statements upon adoption.

ReclassificationsCertain reclassifications have been made to prior year amounts to conform to current period presentation.
All reclassifications have been applied consistently for the periods presented.

2.     ACQUISITIONS

Edgen Corporation

As described in note 1, on February 1, 2005, Edgen Acquisition Corporation purchased all of the outstanding capital stock of Edgen from its existing
stockholders for an aggregate purchase price of approximately $124.0 million, which included the assumption or repayment of indebtedness of Edgen but excluded the payment of certain fees and
expenses. The acquisition was funded with (i) proceeds to Edgen Acquisition Corporation from the issuance and sale of $105.0 million aggregate principal amount of Notes, (ii) from
an equity investment from funds managed by JCP and certain members of Edgen management and (iii) a payable to the sellers of approximately $2,975,164 based upon receipt of certain income tax
refunds for the remainder of the purchase price.

The
estimated fair value of the assets acquired and liabilities assumed relating to the acquisition is summarized below:

Accounts receivable

$
29,733,590Inventory


63,097,410Other current assets


17,982,343Property, plant and equipment


12,110,055Goodwill


22,047,680Customer relationships, tradenames and other intangibles assets


26,624,916Accounts payable


(25,335,643
)Accrued expenses and other current liabilities


(12,959,496
)Deferred tax liability


(11,441,997
)Long-term debt


(22,828
)Purchase price (net of cash received of $3,582,737)

$
121,836,030


43

---



Western Flow Products, Inc.

On July 15, 2005, our subsidiary, Edgen Canada, Inc., acquired the common stock of Western Flow Products, Inc.
("Western Flow") for a purchase price of approximately $1,971,000 (2,400,000 CAD) consisting of a cash payment of approximately $1,725,000 (2,100,000
CAD) and the issuance of a note payable to the sellers for approximately $246,000 (300,000 CAD). Under the purchase agreement, an additional 500,000 CAD of purchase price is contingent upon the
achievement of a specified earnings threshold subsequent to the acquisition. As of January 31, 2006, the earnings threshold was met and the amount became payable to the sellers. Western Flow is
located in Edmonton, Alberta and is a specialty alloy pipe and components distributor primarily to the oil and gas, processing and power generation industries. The operations of this acquisition will
be merged into the Company's subsidiary, Edgen Canada and are included in our operating results from the date of the acquisition.

The
estimated fair value of the assets acquired and liabilities assumed relating to the acquisition is summarized below:

Accounts receivable

$
1,214,760Inventory


877,727Other current assets


6,065Property, plant and equipment


31,647Goodwill


686,438Accounts payable


(680,759
)Note payable to sellers


(258,642
)Accrued expenses and other current liabilities


(131,035
)Purchase price (net of cash received of $83)

$
1,746,201


Murray International Metals, Inc.

On November 29, 2005, our subsidiary, Edgen Carbon Products Group, L.L.C., entered into a purchase agreement with MIM UK to acquire all of the equity
interests of MIM UK's U.S. subsidiary, MIM US, for an aggregate purchase price, including assumption of debt, of approximately $20,600,000. The assumption of debt included a 2,900,000 GBP
(approximately 5,000,000 USD) note payable to MIM UK which was funded and paid by Edgen upon closing. In a separate transaction, PAL entered into a purchase agreement with Murray International
Holdings Limited and the shareholders of MIM UK and acquired all of the equity interests of MIM UK.

MIM
US is a leading supplier of high yield and special grade structural steel to oil and gas projects being engineered and managed by leading operators, engineering houses and offshore
fabricators in the oil and gas industry primarily in North and South America. MIM US offers a complete range of high yield steel plate, sections, and tubulars. MIM US is based in Houston, Texas, and
is presently a wholly owned subsidiary of Edgen Carbon Products Group, L.L.C.

As
of December 31, 2005, the purchase price allocation is preliminary as we have not completed our review and valuation procedures of the assets acquired and the liabilities
assumed on December 16,

44

---



2005
including identified other intangible assets, if any. The preliminary purchase price allocation as of December 31, 2005 includes the following:

Accounts receivable

$
5,180,054Inventory


7,413,860Other current assets


1,319Property, plant and equipment


77,469Goodwill


14,363,647Other assets


33,318Deferred tax asset


171,620Accounts payable


(9,689,915
)Accrued expenses and other current liabilities


(1,327,375
)Current portion of long-term debt


(16,806
)Deferred tax liability


(11,464
)Note payable due to Murray International Holdings Ltd.


(5,146,630
)Purchase price (net of cash received of $10,847,763)

$
11,049,097


The
following table reflects the pro forma revenue and net income for the periods presented as though these acquisitions and related transactions had taken place at the beginning of each
period:

(Unaudited)Successor

PredecessorPeriod
February 1,
2005 to
December 31,
2005

Period
January 1,
2005 to
January 31,
2005

2004Revenue

$
293,601,000

$
24,403,000

$
240,047,000Net income (loss)


5,510,000


(8,162,000
)

12,925,000


3.     PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31, 2005 and 2004 consisted of the following:

Successor
2005

Predecessor
2004Land and land improvements

$
8,462,322

$
5,903,748Building


1,024,413


908,148Equipment and computers


15,083,453


16,250,332Leasehold improvements


798,974


2,255,96825,369,162


25,318,196Less accumulated depreciation


(14,110,459
)

(14,895,419
)Property, plant and equipmentnet

$
11,258,703

$
10,422,777


Substantially
all of the Company's property, plant and equipment serves as collateral for the Company's credit arrangements and long-term debt (see note 6).
Depreciation expense for the period

45

---



February 1,
2005 to December 31, 2005, the period January 1, 2005 to January 31, 2005 and the years ended December 31, 2004 and 2003 was $2,265,398, $189,812,
$2,281,652 and $1,896,045, respectively.

4.     INTANGIBLE ASSETS

Intangible assets consist of the following:

Successor
2005

Predecessor
2004Customer relationships

$
21,014,440

$
Tradenames


2,396,000


Non-compete agreements





45,000Trademarks


13,748


13,748$
23,424,188

$
58,748


In
connection with the Buy-out Transaction on February 1, 2005, customer relationships and tradename intangible assets were identified and recorded in the purchase
price allocation (see note 2).

Amortization
expense was $3,200,725, $10,832, $117,917, and $154,167, for the period February 1, 2005 to December 31, 2005, the period January 1, 2005 to
January 31, 2005, the years ended December 31, 2004 and 2003, respectively. Accumulated amortization of intangible assets at December 31, 2005 and 2004 was $3,416,560 and
$205,000, respectively.

The
following table presents scheduled amortization expense for the next five years:

2006

$
3,454,4292007


3,454,4292008


3,454,4292009


3,454,4292010


3,454,429


5.     GOODWILL

Under SFAS No. 142, an impairment test is required to be performed upon adoption and at least annually thereafter. The impairment test is the result of
adopting a fair value approach to testing goodwill as compared to the previous method utilized in which evaluations of goodwill impairment were made using the estimated future undiscounted cash flows
compared to the carrying amount. Material amounts of recorded goodwill attributable to each of the Company's reporting units were tested on January 1, 2005, 2004, and 2003 for impairment by
comparing the fair value of each reporting unit with its carrying value. Fair value was determined using discounted cash flows, and guideline company multiples. Significant estimates used in the
methodologies include estimates of future cash flows, future short-term and long-term growth rates, weighted average cost of capital and guideline company multiples for each of
the reportable units. On an annual basis (absent any impairment indicators), the Company expects to perform its impairment tests during the first quarter.

Based
on the impairment test, the Company recognized no impairment charge in 2005, 2004 and 2003.

46

---





The following table reflects changes to goodwill by reportable segment and changes to goodwill during the period February 1, 2005 to December 31,
2005, the period January 1, 2005 to January 31, 2005, and the years ended December 31, 2004 and 2003:

Edgen Alloy

Edgen Carbon

ConsolidatedSuccessorBalance at February 1, 2005

$


$


$
Buy-out Transaction


4,319,500


17,728,180


22,047,680Acquisition of Western Flow Products, Inc.


686,438





686,438Acquisition of Murray International Metals, Inc.





14,363,647


14,363,647Foreign currency translation adjustment


29,004





29,004Balance at December 31, 2005

$
5,034,942

$
32,091,827

$
37,126,769


In connection with the Buy-out Transaction, the carrying value of goodwill as of February 1, 2005 of $6,459,345 was replaced
with goodwill derived in the Buy-out Transaction purchase price allocation (see note 2). There were no other changes in the carrying amount of goodwill from January 1, 2004
to January 31, 2005.

6.     CREDIT ARRANGEMENTS AND LONG-TERM DEBT

Credit arrangement and long-term debt consisted of the following at December 31, 2005 and 2004:

|                                                                                                                                                                                                                                                                                         |                      | Successor
2005 |             | Predecessor
2004 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------- | -------------- | ----------- | ---------------- | -
|97/8% Senior Secured Notes due 2011, net of discount of $1,386,086                                                                                                                                                                                                                       |                      | $              | 134,613,914 |                  | $
|Revolving credit facility, interest due monthly at a base rate of the lender's stated prime (7.25% at December 31, 2005) or LIBOR plus 200 basis points (6.16% at December 31, 2005), through maturity in February 2010;
secured by a lien on the assets of Edgen Alloy and Edgen Carbon |                      |                |            |                  |  
|Revolving credit loans; interest due monthly at a base rate of LIBOR plus 300 basis points (5.4% at December 31, 2004), through maturity in February 2008; secured by a lien on the assets of Edgen Alloy and Edgen
Carbon                                                               |                      |                |            |                  | $
|Term loan, quarterly principal payments beginning June 30, 2004, including interest at the base rate of LIBOR plus 300 basis points (5.4% at December 31, 2004) through maturity in February 2008; secured by a lien on the
assets of Edgen Alloy and Edgen Carbon                       |                      |                |            |                  |  
|Demand note; monthly interest payments at LIBOR plus 10 basis points per annum (2.43% at December 31, 2004), commencing October 1, 2002 through maturity to September 2005, payable to Amsouth Bank                                                                                      |                      |                |            |                  |  
|Convertible term notes; interest due at maturity at 12% per annum, commencing October 25, 2000 through maturity in October 2005                                                                                                                                                          |                      |                |            |                  |  
|Note payable to sellers of Western Flow Products, Inc., interest accrues at 6%, due with semi-annual payments scheduled in July 2006 and 2007                                                                                                                                            |                      |                | 257,290     |                  |  
|Various capital leases to a corporation; monthly payments range from $356 to $1,388; at an interest rate of 7.5% per annum, commencing July 2005 through maturity in June 2010; secured by equipment                                                                                     |                      |                | 96,944      |                  |  
|Unsecured subordinated promissory note to a corporation; annual payments of $150,000, including interest at 5.0% per annum, commencing March 31, 2004 through maturity in March 31, 2005                                                                                                 |                      |                |            |                  |  
|Total                                                                                                                                                                                                                                                                                    |                      |                | 134,968,148 |                  |  
|                                                                                                                                                                                                                                                                                         |                      |                |             |                  |  
|                                                                                                                                                                                                                                                                                         | Less current portion |                |             | (160,984         | )
|                                                                                                                                                                                                                                                                                         |                      |                |             |                  |  
|Long-term debt                                                                                                                                                                                                                                                                           |                      | $              | 134,807,164 |                  | $
|                                                                                                                                                                                                                                                                                         |                      |                |             |                  |  

47

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Senior Secured Notes

On February 1, 2005, the Company issued $105.0 million aggregate principal amount of 97/8% Senior Secured Notes due 2011. The
proceeds from the issuance of the Notes were used to retire substantially all of the Company's long-term debt under its existing revolving credit facility and certain other notes and loans
on February 1, 2005. Then on December 16, 2005, the Company issued an additional $31.0 million aggregate principal amount of 97/8% Senior Secured Notes due 2011
with the proceeds funding the acquisition of MIM US (see note 2).

Interest
accrues on the Notes at the stated rate semi-annually and is payable in arrears on each February 1 and August 1, beginning on August 1, 2005.

The
Company may redeem some or all of the Notes at any time prior to February 1, 2008 at a make-whole redemption price set forth in the terms of the Notes. On or after
February 1, 2008, the Company may at its option, redeem some or all of the Notes at the following redemption prices, plus accrued and unpaid interest to the date of redemption:

|On or after: |                  | 
|------------ | ---------------- | 
|             | February 1, 2008 | 
|             | February 1, 2009 | 
|             | February 1, 2010 | 

In
addition, at any time prior to February 1, 2007, the Company may redeem up to 35% of the aggregate principal amounts of the Notes issued under the indenture at a price equal to
109.875% of their principal amount, plus accrued and unpaid interest, to the date of redemption with the net cash proceeds of certain equity offerings. The terms of the Notes also contain certain
change in control and sale of asset provisions where the holders of the Notes have the right to require the Company to repurchase all or any part of the Notes at an offer price in cash equal to 101%
and 100%, respectively, of their principal amount, plus accrued and unpaid interest, to the date of the repurchase.

The
indenture governing the Notes contains various covenants that limit our discretion in the operation of our business. It, among other things: (i) limits our ability and the
ability of our subsidiaries to incur additional indebtedness, issue shares of preferred stock, incur liens and enter into certain transactions with affiliates; (ii) places restrictions on our
ability to pay dividends or make certain other restricted payments; and (iii) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other
person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets. The indenture provides for a restricted payment pool out of which we are permitted to make
certain restricted payments, including cash dividends, provided that no event of default has occurred and we would be able to incur additional indebtedness under the applicable restrictive covenant.
The restricted payment pool is generally an amount calculated based on 50% of our consolidated net income, as defined in the indenture, and earned during the period beginning on February 1,
2005 and ending on the last day of the most recent fiscal quarter prior to the restricted payment, as adjusted and subject to certain exceptions as provided in the indenture.

All
of the Company's domestic subsidiaries fully and unconditionally guarantee the Notes on a joint and several basis. Neither Edgen/Murray, L.P. nor MIM UK guarantees the Notes. The
Notes and the related guarantees are secured by a lien on substantially all of the Company's assets and the assets of our existing and future domestic restricted subsidiaries (other than certain
excluded assets such as our and our existing and future subsidiaries' leasehold interests and the capital stock of our existing and future subsidiaries), subject to certain permitted liens and other
limitations. Under an intercreditor

48

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agreement,
the security interest in those assets consisting of inventory, accounts receivable, lockboxes, deposit accounts, securities accounts and financial assets credited thereto, and certain
related assets that secure the Notes and the related guarantees, are subordinated to a lien thereon that secures our revolving credit facility. As a result of such lien subordination, the Notes are
effectively subordinated to our revolving credit facility to the extent of the value of such assets.

There
are no significant restrictions on the Company's ability and the ability of the subsidiary guarantors to obtain funds from the Company's and the subsidiary guarantors' respective
subsidiaries by dividend or loan.

Revolving Credit Facility

In connection with the Buy-out Transaction, Edgen entered into a new $20 million senior secured revolving credit facility (the "Credit
Agreement") with GMAC Commercial Finance LLC ("GMAC CF"), replacing its $55.5 million revolving credit agreement. The Credit Agreement is subject to certain borrowing limitations and matures on
February 1, 2010. Under the Credit Agreement, interest accrues on borrowings (at the option of the Company) at either (i) the prime rate of interest announced by GMAC CF (7.25% at
December 31, 2005), or (ii) a Eurodollar rate based on LIBOR plus 2.00% per annum (6.16% at December 31, 2005). The Company must also pay a monthly facility fee of 0.50% per annum
on the unused portion of the maximum revolving amount. There were no borrowings under the Credit Agreement as of December 31, 2005.

The
Credit Agreement is guaranteed by all of our domestic subsidiaries and is secured by a first priority security interest in all of the Company's and its domestic subsidiaries' working
capital assets and a second priority security interest in all of the Company's and its domestic subsidiaries' other assets (other than certain excluded assets such as the Company's leasehold interests
and the capital stock of its subsidiaries). Pursuant to the terms of the intercreditor agreement described above, the security interest on the collateral consisting of working capital assets that
secures the Notes and related guarantees is contractually subordinated to the liens thereon securing the Credit Agreement, and the security interest, if any, on substantially all of the Company's and
its domestic subsidiaries' other assets (other than certain excluded assets such as the Company's leasehold interests and the capital stock of its subsidiaries) that secure the Credit Agreement are
contractually subordinated to the liens thereon securing the Notes and related guarantees.

In
addition, the Credit Agreement contains various affirmative and negative covenants, including limitations on additional indebtedness, the making of distributions, loans and advances,
transactions with affiliates, dispositions or mergers, and the sale of assets.

49

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Scheduled
annual maturities for all outstanding credit arrangements and long-term debt for the years after December 31, 2005 are as follows:

|2006                                                  |          | $ | 160,984     |            
|----------------------------------------------------- | -------- | - | ----------- | -----------
|2007                                                  |          |   | 145,538     |            
|2008                                                  |          |   | 18,057      |            
|2009                                                  |          |   | 19,411      |            
|2010                                                  |          |   | 10,244      |            
|Thereafter                                            |          |   | 136,000,000 |            
|                                                      |          |   |            
|                                                      | Subtotal |   |             | 136,354,234
|Less: Discount on 97/8% Senior Secured Notes due 2011 |          |   | (1,386,086  | )          
|                                                      |          |   |            
|Total                                                 |          | $ | 134,968,148 |            
|                                                      |          |   |            

7.     REDEEMABLE AND MANDATORILY REDEEMABLE PREFERRED STOCK

Redeemable Preferred Stock

On February 1, 2005, the Company issued Series A 81/2% Cumulative Compounding Preferred Stock, $0.1 par value
("Series A Preferred Stock"), in connection with the Buy-out Transaction. The holders of Series A Preferred Stock are entitled
to receive annual dividends when, as and if, declared. The dividends are cumulative, whether or not earned or declared, and accrue at a rate of 8.5%, compounding annually, and are payable in cash or
shares of Series A Preferred Stock, at the discretion of the board of directors. Upon the occurrence of certain events, including a public offering, the sale of substantially all the assets of
the Company or a change in control, and the approval of the board of directors, which is controlled by JCP, the Series A Preferred Stock can be redeemed by the Company at a price of $1,000 per
share, plus accrued and unpaid dividends. For the period February 1, 2005 to December 31, 2005, the Company accrued dividends of $1,703,400 on the shares of outstanding Series A
Preferred Stock. As of December 31, 2005, all of the outstanding shares of the Series A Preferred Stock are held by Edgen/Murray, L.P., which is controlled by JCP.

The
Notes indenture restricts the payment of dividends to preferred stock holders as well as the redemption of the Series A Preferred Stock, subject to an incurrence test based on
a consolidated net income threshold, and subject to certain baskets.

In connection with the preparation of these consolidated financial statements, management determined that, based on Emerging Issues Task Force Topic No. D-98
"Classification and Measurement of Redeemable Securities," the Series A Preferred Stock should be presented on the balance sheet and statement of
shareholder's equity outside of shareholder's equity because of a redemption feature and the holder of the preferred stock through its ownership of common stock has voting control of the Company. If
the Series A Preferred Stock had been presented this way, instead of included within shareholder's equity, our balance sheet and statement of shareholder's equity (deficit) as of
June 30,

50

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2005 and September 30, 2005 included in our previously filed Quarterly Reports on Form 10-Q would have been as follows:

|                           |                                   | June 30, 2005 |   | September 30, 2005 |  
|-------------------------- | --------------------------------- | ------------- | - | ------------------ | -
|
|Redeemable preferred stock |                                   | $             |  |                    | $
|SHAREHOLDER'S EQUITY:      |                                   |               |   |                    |  
|                           | Preferred stock                   |               |   | 765,216            |  
|                           | Common stockClass A              |               |   | 26,816             |  
|                           | Unearned stock-based compensation |               |   | (269,833           | )
|                           | Paid-in capital                   |               |   | 24,254,533         |  
|                           | Accumulated comprehensive income  |               |   |                   |  
|                           | Retained earnings                 |               |   | 4,143,069          |  
|                           | Less treasury stock               |               |   |                   |  
|                           |                                   |               |   |                    |  
|                           | Total shareholder's equity        |               | $ | 28,819,801         |  
|                           |                                   |               |   |                    |  

There
was no impact to the statements of operations or statements of cash flows for each of the periods presented above.

Mandatorily Redeemable Preferred Stock

In connection with the Buy-out Transaction on February 1, 2005, all mandatorily redeemable preferred stock was redeemed. Prior to
February 1, 2005, the Holders of the Series A Cumulative Redeemable, $0.01 par value, Preferred Stock are entitled to receive cash dividends at the rate of $6.00 per annum per share.
Outstanding shares of Preferred Stock are mandatorily redeemable by the Company upon the occurrence of certain events including a public offering, the sale of substantially all the assets of the
company or a change in control, at a price of $100.00 per share, plus accrued and unpaid dividends. The Preferred Stock is also subject to optional redemption at the discretion of the Board of
Directors at a price of $100.00 per share, plus accrued and unpaid dividends.

Holders
of the Series B Redeemable, $0.01 par value, Preferred Stock, with respect to rights of liquidation, winding up and dissolution, rank junior to the Series A
Cumulative Redeemable Preferred Stock, but senior to all other Edgen equity securities. The holders of the Series B Redeemable Preferred Stock are not entitled to receive cash dividends. The
outstanding shares of Series B Redeemable Preferred Stock are mandatorily redeemable similarly to the Series A Preferred Stock except that the redemption price is $400 per share plus a
"return" amount up to an additional $400 per share.

8.     SHAREHOLDER'S EQUITY

Common StockThe holders of Common Stock are entitled to vote and all outstanding shares are held by
Edgen/Murray, L.P. In connection with the Buy-out Transaction, the Class B Common Stock, which was exchangeable at the option of the holder into Class A Common Stock on a
one-to-one basis, was cancelled. We now have a single class of common stock, $0.1 par value.

Shareholder LoansThrough December 31, 2003 and pursuant to a Management Stock Purchase Agreement, certain officers,
directors and managers of Edgen purchased 556,033 shares of Class A Common Stock and 7,570 shares of Preferred Stock in exchange for cash and promissory notes. All of

51

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the
outstanding notes were paid in 2004 in conjunction with the buy back of the related outstanding shares by the Company.

Stock Options and Restricted StockIn December 1998, the stockholders of the Company approved a stock option plan to
provide stock options as incentives and rewards for employees of the Company. Under the stock option plan, a maximum of 550,000 shares of the Company's Class A Common Stock could be granted. In
connection with the Buy-out Transaction on February 1, 2005, the Company's stock option plan and all outstanding stock options were cancelled and restricted stock was granted under
a new incentive compensation plan.

Prior
to cancellation, the terms of the stock options included an exercise price at the fair market value of the shares at the date of grant and the options vested ratably over a five
year period. At December 31, 2004 and 2003, 113,283 and 113,283 options were outstanding and unexercised.

A
summary of changes in options is as follows:

Predecessor
December 31,2004

2003Shares

Weighted
Average
Exercise
Price

Shares

Weighted
Average
Exercise
PriceShares under optionbeginning of year

113,283

$
6.53

204,769

$
7.50Shares granted






20,000

$
2.00Shares forfeited






(111,486
)
$
7.50Shares exercised






Shares under optionend of period

113,283

$
6.53

113,283

$
6.53Shares exercisableend of period

68,627




68,627Remaining authorized shares under approved planend of year

386,717




386,717


The
following table presents information relating to the Company's stock options outstanding at December 31, 2004 (share data in thousands):

|            |  |         |  | Options Outstanding |      | Options Exercisable
|----------- |  | ------- |  | ------------------- | ---- | -------------------
|
|$2.00$7.50 |  | 113,283 |  | $                   | 6.53 |                    

On
February 1, 2005, 281,565 shares of restricted stock were granted to certain employees of the Company, including the Chief Executive Officer, the Chief Financial Officer and
the two Operating Segment Presidents under a new incentive compensation plan. Vesting of the restricted stock was based on either time or a combination of performance and time. The
time-based vesting schedule was generally 20% per year over a five year period subject to the holder's continued employment with the Company. Restricted stock grants that used a vesting
schedule that combined performance and time generally vested 10% per year over five years subject to continued employment with the Company plus an additional 10% or more per year for each year that
the Company achieved certain performance goals as determined by the board of directors. Performance based restricted stock was cumulative so if the performance goals were achieved in any year of the
five year period, all restricted stock subject to

52

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the
performance criteria for that year and prior years would vest. If the performance goals were not achieved within five years of the grant date, the restricted stock subject to the performance goals
would be forfeited. Upon a change in control, all restricted stock subject to time based vesting would fully and immediately vest.

Effective
December 15, 2005, the Company's equity incentive plan was cancelled; however, the Company's new parent company, Edgen/Murray, L.P., exchanged all outstanding awards for
awards issued under its equity incentive plan with substantially equivalent terms. The Edgen/Murray, L.P. incentive plan authorizes the granting of awards to Edgen employees of up to 550,000 common
units of Edgen/Murray, L.P. that are subject to restrictions on transfer until such time as they are vested. Vesting is based on either time or a combination of performance and time. For the period
February 1, 2005 to December 31, 2005, the statement of operations includes $281,565 of stock-based compensation expense related to the outstanding restricted stock shares which were
exchanged on December 15, 2005.

Stock-based
compensation expense related to the granting of the Edgen/Murray, L.P. restricted common units to Edgen employees will be allocated to Edgen and expensed within its statement
of operations. For the period February 1, 2005 to December 31, 2005, the statement of operations reflects $9,608 of stock-based compensation expense related to the new Edgen/Murray L.P.,
restricted common units issued on December 16, 2005.

9.     INCOME TAXES

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts for income tax

53

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purposes.
Significant components of the Company's deferred tax assets and liabilities at December 31, 2005 and 2004 are as follows:

|                                      |                                                | Successor                                  |            | Predecessor
|------------------------------------- | ---------------------------------------------- | ------------------------------------------ | ---------- | -----------
|
|
|DEFERRED TAX ASSETS                   |                                                |                                            |            |            
|Current deferred tax assets:          |                                                |                                            |            |            
|                                      | Deferred compensation                          |                                            | $          | 124,701    
|                                      | Inventory                                      |                                            |            | 1,239,316  
|                                      | Bad debt allowance                             |                                            |            | 296,000    
|                                      | Net operating loss carryforwards               |                                            |            | 216,005    
|                                      | Accrued bonuses and professional fees          |                                            |            | 58,905     
|                                      | Other                                          |                                            |            | 98,674     
|                                      |                                                |                                            |            |            
|                                      |                                                | Total current deferred tax assets          |            |            
|Non-current deferred tax assets:      |                                                |                                            |            |            
|                                      | Goodwill impairment                            |                                            |            | 6,231,553  
|                                      | Net operating loss carryforwards               |                                            |            | 207,161    
|                                      | Other                                          |                                            |            | 147,398    
|                                      |                                                |                                            |            |            
|                                      |                                                | Total non-current deferred tax assets      |            |            
|                                      | Total deferred tax assets                      |                                            |            | 8,619,713  
|DEFERRED TAX LIABILITIES              |                                                |                                            |            |            
|Current deferred tax liabilities:     |                                                |                                            |            |            
|                                      | InventoryFair Value Purchase Price Adjustment |                                            |            | 98,374     
|                                      | Cash discounts earned                          |                                            |            | 69,393     
|                                      | Other                                          |                                            |            | 195,668    
|                                      |                                                |                                            |            |            
|                                      |                                                | Total current deferred tax liabilities     |            |            
|                                      |                                                |                                            |            |            
|Non-current deferred tax liabilities: |                                                |                                            |            |            
|                                      | Acquired customer relationships and tradenames |                                            |            | 8,661,863  
|                                      | Depreciation                                   |                                            |            | 697,433    
|                                      | Other                                          |                                            |            | 2,695      
|                                      |                                                |                                            |            |            
|                                      |                                                | Total non-current deferred tax liabilities |            |            
|                                      | Total deferred tax liabilities                 |                                            |            | 9,725,426  
|                                      |                                                |                                            |            |            
|Net deferred tax (liability) asset    |                                                | $                                          | (1,105,713 | )          
|                                      |                                                |                                            |            |            

As of December 31, 2005, deferred tax liabilities include the difference in book and tax basis related to other identifiable intangibles,
customer relationships and tradenames, identified in the Buy-out Transaction (see note 2).

As
presented in the consolidated statement of cash flows, the change in deferred income taxes includes, among other items, the change in deferred income taxes related to the deferred
income tax provision and the change between the deferred income taxes estimated for 2004 and actual deferred income taxes for 2004. The Company also acquired $171,620 in deferred tax assets and
$10,567,724 in deferred tax liabilities in connection with the Buy-out Transaction and the acquisition of MIM US.

54

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Income
(loss) from continuing operations for each jurisdiction follows for the respective period:

|              |  |   |           | Predecessor |  
|------------- |  | - | --------- | ----------- | -
|
|
|
|
|United States |  | $ | 7,735,711 |             | $
|Foreign       |  |   | 142,141   |             |  
|              |  |   |           |             |  
|              |  | $ | 7,877,852 |             | $
|              |  |   |           |             |  

Components
of income tax expense (benefit) are as follows:

|                             |         |   |           | Predecessor |  
|---------------------------- | ------- | - | --------- | ----------- | -
|
|
|
|
|Current                      |         |   |           |             |  
|                             | Federal |   | $         | 3,205,516   |  
|                             | State   |   |           | 601,402     |  
|                             | Foreign |   |           | 40,031      |  
|                             |         |   |           |             |  
|                             |         |   | 3,846,949 |             |  
|Deferredprincipally Federal |         |   | (998,158  | )           |  
|                             |         |   |           |             |  
|Total                        |         | $ | 2,848,791 |             | $
|                             |         |   |           |             |  

For
the period February 1, 2005 to December 31, 2005, we recorded $19,494 of income tax expense related to foreign currency translation included in other comprehensive
income which is not reflected in the table above. For the year ended December 31, 2003, income tax expense (benefit) includes an income tax benefit of $(159,124) related to discontinued
operations on the statement of operations.

For
the period February 1, 2005 to December 31, 2005 and the year ended December 31, 2004, we made payments related to income taxes totaling $211,929 and $1,327,110,
respectively. No tax payments were made for the period January 1, 2005 to January 31, 2005. In 2005, the Company deferred its third and fourth quarter 2005 estimated federal tax payments
as allowed by the Katrina Emergency Tax Relief Act of 2005. These estimated 2005 tax payments were paid on February 28, 2006.

55

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The
total provision for income taxes varied from the U.S. federal statutory rate due to the following:

|                                                       |  |   |           |  |     | Predecessor
|------------------------------------------------------ |  | - | --------- |  | --- | -----------
|
|
|
|
|Federal income tax expense (benefit) at statutory rate |  | $ | 2,678,470 |  | 34% |            
|State income taxes net of federal income tax benefit   |  |   | 78,857    |  | 1%  |            
|Decrease in valuation allowance                        |  |   |          |  |    |            
|Non-deductible Buy-out Transaction expenses            |  |   |          |  |    |            
|Non-deductible expenses and other                      |  |   | 91,464    |  | 1%  |            
|                                                       |  |   |           |  |     |            
|Total provision for income taxes                       |  | $ | 2,848,791 |  | 36% |            
|                                                       |  |   |           |  |     |            

As of December 31, 2005, United States taxes were not provided on earnings of our foreign subsidiaries, as we have invested or expect to
invest the undistributed earnings indefinitely. If in the future these earnings are repatriated to the United States, or if we determine that the earnings will be remitted in the foreseeable future,
additional tax provisions may be required.

As
of December 31, 2002, a valuation allowance was recorded against the deferred tax asset because management believed that the deferred tax assets related to the goodwill
impairment would not more than likely be realized in full through future operating results and the reversal of taxable timing differences. Based on operating results for fiscal 2004 and projected
operating results for fiscal 2005 and 2006, management believed that a valuation allowance was no longer required and the valuation allowance was reversed as of December 31, 2004. This resulted
in an increase in the deferred tax asset as of December 31, 2004 and a corresponding decrease in income tax expense for the year then ended of $7.1 million.

For
state income tax purposes, the Company has net operating loss carryforwards ("NOLs") of approximately $14,100,000 available to reduce
future state taxable income. These NOLs expire in varying amounts beginning in 2008 through 2023.

10.   COMMITMENTS AND CONTINGENCIES

Through its subsidiaries, Edgen leases various properties, warehouses, equipment and office space under operating leases with remaining terms ranging from two to
twelve years with various renewal options. Substantially all leases require payment of taxes, insurance and maintenance costs in addition to rental payments. Total rental expense for all operating
leases was $1,384,595, $100,252, $1,251,180, and $1,355,500 for the period February 1, 2005 to December 31, 2005, the period January 1, 2005 to January 31, 2005, the year
ended December 31, 2004, and the year ended December 31, 2003, respectively.

56

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Future
minimum payments under noncancelable leases with initial or remaining terms in excess of one year for fiscal years beginning after December 31, 2005 are:

|2006       |  | $ | 1,640,025
|---------- |  | - | ---------
|2007       |  |   | 1,203,094
|2008       |  |   | 971,596  
|2009       |  |   | 627,190  
|2010       |  |   | 549,717  
|Thereafter |  |   | 892,036  
|           |  |  
|Total      |  | $ | 5,883,658
|           |  |  

In our business, we may enter into purchase and sales commitments that are denominated in a foreign currency (primarily the Euro). Our practices include entering into foreign currency
forward exchange contracts to minimize foreign currency exposure related to forecasted purchases and sales of certain



inventories. As of December 31, 2005, we had 13 contracts related to purchases of inventory that mature in varying increments through August 2006, to purchase an aggregate notional amount of
$20.8 million of foreign currency, and 3 contracts related to the sale of inventory that mature in varying increments through August 2006, to receive an aggregate notional amount of
$2.1 million of foreign currency. As of December 31, 2005, the fair value of these foreign currency forward exchange contracts of $0.4 million was recorded as a liability on the
consolidated balance sheet. For the combined twelve months ended December 31, 2005, we recognized $(0.4 million) in realized losses on foreign currency forward exchange contracts
reflected in other income (expense) on the statement of operations.

In
the ordinary course of business, the Company has entered into employment contracts with certain executives and former owners; these contracts provide for minimum salary levels and
incentive bonuses.

The
Company is involved in various claims, lawsuits and proceedings arising in the ordinary course of business. While there are uncertainties inherent in the ultimate outcome of such
matters and it is impossible to presently determine the ultimate costs that may be incurred, management believes the resolution of such uncertainties and the incurrence of such costs will not have a
material adverse effect on the Company's consolidated financial position, results of operations or cash flows.

11.   CONCENTRATION OF CREDIT RISK

Financial instruments which would potentially subject Edgen to a significant concentration of credit risk consist primarily of trade accounts receivable. However,
concentration of credit risk with respect to the trade accounts receivable is limited due to a large number of entities comprising the customer base. No one customer typically accounts for 5% or more
of the trade accounts receivable of the Company. An allowance for losses is maintained based on the expected collectibility of accounts receivable.

12.   SEGMENT AND GEOGRAPHIC AREA INFORMATION

Edgen markets and distributes specialty steel pipe, pipe components, and structural plates and sections made of highly engineered prime carbon and alloy steel.
Edgen distributes its products primarily to companies operating within the oil and gas production and transmission, the process/petrochemical and the power generation industries. Edgen aggregates its
operations into two reportable segments: alloy products and carbon products.

57

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The alloy products segment distributes specialty steel pipe and components for use in environments that are highly corrosive, extremely high or low temperature
and/or involve high pressures. These products are sold primarily to the process/petrochemical and power generation industries.

The
carbon products segment distributes specialty carbon steel pipe, pipe components and high grade structural sections and plates primarily for use in high pressure and/or abrasive
environments. The primary industries served are the oil and gas production and transmission, the process and the power generation industries.

The
accounting policies of the segments are the same as those described in the summary of significant accounting policies. Edgen evaluates performance based on profit or losses from
operations before income taxes not including nonrecurring gains or losses and discontinued operations.

The
following table presents the financial information for each reportable segment and selected geographic areas:

|                               |                   | Successor |             | Predecessor |   | Predecessor |            
|------------------------------ | ----------------- | --------- | ----------- | ----------- | - | ----------- | -----------
|
|Sales:                         |                   |           |             |             |   |             |            
|                               | Alloy Products    |           | $           | 72,380,264  |   | $           | 4,214,009  
|                               | Carbon Products   |           |             | 190,365,673 |   |             | 14,730,778 
|                               |                   |           |             |             |   |             |            
|                               |                   | $         | 262,745,937 |             | $ | 18,944,787  |            
|                               |                   |           |             |             |   |             |            
|Operating Income (Loss):       |                   |           |             |             |   |             |            
|                               | Alloy Products    |           | $           | 9,785,998   |   | $           | 959,632    
|                               | Carbon Products   |           |             | 17,438,588  |   |             | 1,980,553  
|                               | General Corporate |           |             | (7,704,935  | ) |             | (12,713,366
|                               |                   |           |             |             |   |             |            
|                               |                   | $         | 19,519,651  |             | $ | (9,773,181  | )          
|                               |                   |           |             |             |   |             |            
|Capital Expenditures:          |                   |           |             |             |   |             |            
|                               | Alloy Products    |           | $           | 669,583     |   | $           |           
|                               | Carbon Products   |           |             | 260,441     |   |             | 4,079      
|                               | General Corporate |           |             | 384,988     |   |             |           
|                               |                   |           |             |             |   |             |            
|                               |                   | $         | 1,315,012   |             | $ | 4,079       |            
|                               |                   |           |             |             |   |             |            
|Depreciation and Amortization: |                   |           |             |             |   |             |            
|                               | Alloy Products    |           | $           | 1,360,440   |   | $           | 14,935     
|                               | Carbon Products   |           |             | 3,017,197   |   |             | 80,338     
|                               | General Corporate |           |             | 1,088,487   |   |             | 105,371    
|                               |                   |           |             |             |   |             |            
|                               |                   | $         | 5,466,124   |             | $ | 200,644     |            
|                               |                   |           |             |             |   |             |            
|Sales:                         |                   |           |             |             |   |             |            
|                               | United States     |           | $           | 226,393,141 |   | $           | 16,691,787 
|                               | Foreign           |           |             | 36,352,796  |   |             | 2,253,000  
|                               |                   |           |             |             |   |             |            
|                               |                   | $         | 262,745,937 |             | $ | 18,944,787  |            
|                               |                   |           |             |             |   |             |            

58

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|                                |                   | Successor |             | Predecessor |   | Predecessor
|------------------------------- | ----------------- | --------- | ----------- | ----------- | - | -----------
|
|
|Total Assets:                   |                   |           |             |             |   |            
|                                | Alloy Products    |           | $           | 50,020,283  |   | $          
|                                | Carbon Products   |           |             | 161,767,216 |   |            
|                                | General Corporate |           |             | 12,247,759  |   |            
|                                |                   |           |             |             |   |            
|                                |                   | $         | 224,035,258 |             | $ | 118,862,148
|                                |                   |           |             |             |   |            
|Property, Plant and Equipment:  |                   |           |             |             |   |            
|                                | Alloy Products    |           | $           | 1,154,304   |   | $          
|                                | Carbon Products   |           |             | 8,120,812   |   |            
|                                | General Corporate |           |             | 1,983,587   |   |            
|                                |                   |           |             |             |   |            
|                                |                   | $         | 11,258,703  |             | $ | 10,422,777 
|                                |                   |           |             |             |   |            
|Goodwill and Other Intangibles: |                   |           |             |             |   |            
|                                | Alloy Products    |           | $           | 12,427,680  |   | $          
|                                | Carbon Products   |           |             | 48,109,529  |   |            
|                                | General Corporate |           |             | 13,748      |   |            
|                                |                   |           |             |             |   |            
|                                |                   | $         | 60,550,957  |             | $ | 6,518,093  
|                                |                   |           |             |             |   |            

13.   EMPLOYEE BENEFIT PLAN

The Company maintains a 401(k) plan for all employees who have met the eligibility requirements to participate. Under the plan, employees may contribute up to 15%
of compensation, subject to an annual maximum as determined under the Internal Revenue Code. The Company matches 50% of up to 6% of the employees' contributions. The plan provides that employees'
contributions will be 100% vested at all times and that the Company's contributions vest over a five year period. Effective
December 16, 2005, the Company began sponsoring a 401(k) profit-sharing plan for its subsidiary, MIM US, which covers eligible employees at least 21 years of age who have completed at
least three months of service. The plan allows for employee contributions through salary deductions up to 19% of total compensation, subject to the statutory limits. Employer matching contributions
can be made at the discretion of the Company. The Company contributed $251,629, $16,694, $250,937 and $272,440 to these plans for the period February 1, 2005 to December 31, 2005, the
period January 1, 2005 to January 31, 2005, and the years ended December 31, 2004 and 2003, respectively.

14.   EFFECTS OF HURRICANES KATRINA AND RITA

In August 2005 and September 2005, Hurricanes Katrina and Rita struck the gulf coast of Louisiana, Mississippi, Alabama and Texas and caused
extensive and catastrophic physical damage to those market areas. As a result of Hurricanes Katrina and Rita, our Louisiana and Texas locations sustained minor physical damage and were closed for a
minimal number of days to secure our employees. Additionally, our sales order backlog and shipments experienced a temporary decline immediately following the hurricanes; however, we believe our sales
orders have returned to a more normal level as of December 31, 2005. In the future, we cannot predict whether, for how long, or to what extent these hurricanes will affect our operations or the
operations of our customers and suppliers in those market areas affected by the storms.

59

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15.   RELATED PARTY TRANSACTIONS

In connection with the Buy-out Transaction and pursuant to a transaction fee agreement with the Company's board of directors and certain members of
management including Edward J. DiPaolo, John B. Elstrott, Edgar Hotard, Daniel J. O'Leary, and David L. Laxton, the Company paid a transaction fee in an amount equal to 2% of the aggregate purchase
price of approximately $124.0 million, or $2,480,000, which was allocated among Messrs. DiPaolo, Elstrott, Hotard, O'Leary and Laxton. At the same time, pursuant to value bonus
compensation awards approved by our board of directors, certain members of management became eligible for value bonuses in an aggregate amount of $3,000,000, which bonuses were distributed to our
named executive officers and other members of management. Furthermore, our board of directors approved an additional senior management bonus equal to 20% of the net proceeds from the sale of Edgen
Corporation in excess of $64.0 million. The amount of this bonus was approximately $1.5 million in the aggregate, and was distributed among the senior management by the mutual agreement
of Mr. Kleinman, a Harvest Partners' board member, and Mr. O'Leary.

Prior to the consummation of the Buy-out Transaction, Harvest Partners and its affiliates owned approximately 63% of our outstanding preferred stock and approximately 70% of
our outstanding Class A common stock. In addition, Harvest Partners and its affiliates held $5.0 million principal amount of our then existing subordinated notes. Pursuant to an amended
and restated management agreement between Harvest Partners and us, the Company paid Harvest Partners a quarterly management fee and reimbursed Harvest Partners for reasonable expenses. Management fees
paid for the period January 1, 2005 to January 31, 2005 and the years ended December 31, 2004 and 2003 were $123,900, $495,600 and $495,600, respectively. Upon the consummation of
the Buy-out Transaction, we paid Harvest Partners a transaction fee in an amount equal to 0.826 times 2% of the aggregate purchase price of $124.0 million, or $2,048,480, at which
time the management agreement was terminated. Effective February 1, 2005, Harvest Partners no longer holds any of the Company's equity or debt securities.

Prior
to the consummation of the Buy-out Transaction, Stonehenge Capital owned approximately 17% of our outstanding preferred stock and approximately 20% of our
Class A common stock. Pursuant to an amended and restated management agreement between Stonehenge Capital and us, the Company paid Stonehenge Capital a quarterly management fee and reimbursed
Stonehenge Capital for reasonable expenses. Management fees paid to Stonehenge for the period January 1, 2005 to January 31, 2005 and the years ended December 31, 2004 and 2003,
were $26,100, $104,000 and $104,400, respectively. Upon the consummation of the Buy-out Transaction, the Company paid Stonehenge Capital a transaction fee in an amount equal to 0.174 times
2% of the aggregate purchase price of approximately $124.0 million, or $431,520, at which time the management agreement was terminated. Effective February 1, 2005, Stonehenge Capital no
longer holds any of the Company's equity or debt securities.

On
October 25, 2000, we issued four convertible term notes, in an aggregate principal amount of $15.0 million, to certain stockholders of our company. Three convertible
term notes were issued to affiliates of Harvest Partners: two notes to Harvest Partners III, L.P. in the initial principal amounts of approximately $8.7 million and approximately
$2.5 million and one note to Harvest Partners III, Beteiligungsgesellschaft buergerlichen Rechts mit Haftungsbeschraenkung in the initial principal amount of approximately $1.5 million.
The fourth convertible term note was issued to Bank One Equity Investors Inc. in the initial principal amount of approximately $2.2 million. In connection with the

60

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consummation
of the Buy-out Transaction, the Company repaid the remaining principal and interest obligations of approximately $2.8 million in the aggregate (as of
December 31, 2004) and these convertible term notes were terminated.

16.   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The table below sets forth unaudited financial information for each of the quarters in fiscal 2005, including the periods February 1, 2005 to
March 31, 2005 and January 1, 2005 to January 31, 2005, and for each of the quarters in fiscal 2004 (in thousands):

|                                                           |  | Successor |        | Predecessor |  
|---------------------------------------------------------- |  | --------- | ------ | ----------- | -
|
|
|Sales                                                      |  | $         | 66,745 |             | $
|Operating expenses:                                        |  |           |        |             |  
|Cost of sales (exclusive of depreciation and amortization) |  |           | 54,070 |             |  
|Yard expenses                                              |  |           | 1,231  |             |  
|Selling, general and administrative expenses               |  |           | 6,485  |             |  
|Depreciation and amortization                              |  |           | 3,777  |             |  
|                                                           |  |           |        |             |  
|Operating expenses                                         |  |           | 65,563 |             |  
|Income (loss) from operations                              |  |           | 1,182  |             |  
|Other income (expense)                                     |  |           | (454   | )           |  
|Interest expense                                           |  |           | (3,212 | )           |  
|                                                           |  |           |        |             |  
|Income (loss) from operations before income tax expense    |  |           | (2,484 | )           |  
|Income tax expense (benefit)                               |  |           | (963   | )           |  
|                                                           |  |           |        |             |  
|Net income (loss)                                          |  | $         | (1,521 | )           | $
|                                                           |  |           |        |             |  

See note 7 for a discussion of redeemable preferred stock and a change in presentation on the balance sheets and statements of
shareholder's equity (deficit) included in our previously filed Quarterly Reports on Form 10-Q.

17.   CONDENSED CONSOLIDATING FINANCIAL INFORMATION

In connection with the issuance of our Notes, our domestic subsidiaries issued joint and several guarantees of the Notes. These subsidiaries are referred to as
the Guarantor Subsidiaries in the condensed consolidating financial information which is presented below. Our subsidiaries which have not issued guarantees for the Notes (our Canadian foreign
subsidiaries including Edgen Canada and its subsidiary Western Flow) are referred to as the Non-Guarantor Subsidiaries. Prior to the acquisition of Western Flow on July 15, 2005,
the Non-Guarantor Subsidiaries were considered to be "minor" as that term is defined in Rule 3-10 of Regulation S-X promulgated by the Securities and
Exchange Commission.

The
following presents the condensed consolidating financial information with respect to our financial position as of December 31, 2005, the results of our operations for the
period January 1, 2005 to January 31, 2005, and the period February 1, 2005 to December 31, 2005 and our cash flows for the period January 1, 2005 to
January 31, 2005, and the period February 1, 2005 to December 31, 2005. The
principal eliminating entries eliminate investment in subsidiaries, intercompany balances and intercompany revenues and expenses.

61

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EDGEN CORPORATION AND SUBSIDIARIES    CONDENSED CONSOLIDATING BALANCE SHEET

|                                   |                                            | As of December 31, 2005
|---------------------------------- | ------------------------------------------ | -----------------------
|
|Current assets                     |                                            | $                      
|Intercompany long-term receivables |                                            |                        
|Investments in subsidiaries        |                                            |                        
|Property, plant and equipment, net |                                            |                        
|Goodwill and other intangibles     |                                            |                        
|Other assets                       |                                            |                        
|                                   |                                            |                        
|                                   | Total Assets                               |                        
|                                   |                                            |                        
|Current liabilities                |                                            | $                      
|Intercompany long-term debt        |                                            |                        
|Long-term debt and capital leases  |                                            |                        
|Other non-current liabilities      |                                            |                        
|Redeemable preferred stock         |                                            |                        
|Shareholder's equity               |                                            |                        
|                                   |                                            |                        
|                                   | Total Liabilities and Shareholder's Equity |                        
|                                   |                                            |                        

62

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

|                                                                             |  | Successor |           
|---------------------------------------------------------------------------- |  | --------- | ----------
|
|
|Sales                                                                        |  | $         |          
|Operating expenses                                                           |  |           | 729,805   
|                                                                             |  |           |           
|Income (loss) from operations                                                |  |           | (729,805  
|Interest expense and other income (expense)                                  |  |           | (5,671,151
|Equity in earnings of subsidiaries                                           |  |           | 9,036,976 
|                                                                             |  |           |           
|Income (loss) from continuing operations before income tax expense (benefit) |  |           | 2,636,020 
|Income tax expense (benefit)                                                 |  |           | (2,393,041
|                                                                             |  |           |           
|Income (loss) from continuing operations                                     |  |           | 5,029,061 
|Preferred dividend requirement                                               |  |           | 1,703,400 
|                                                                             |  |           |           
|Net income (loss) applicable to common shareholders                          |  | $         | 3,325,661 
|                                                                             |  |           |           

|                                                                             |  | Predecessor |            
|---------------------------------------------------------------------------- |  | ----------- | -----------
|
|
|Sales                                                                        |  | $           |           
|Operating expenses                                                           |  |             | 11,998,000 
|                                                                             |  |             |            
|Income (loss) from operations                                                |  |             | (11,998,000
|Interest expense and other income (loss)                                     |  |             | 69,632     
|Equity in earnings of subsidiaries                                           |  |             | 1,116,838  
|                                                                             |  |             |            
|Income (loss) from continuing operations before income tax expense (benefit) |  |             | (10,811,530
|Income tax expense (benefit)                                                 |  |             | (2,571,683 
|                                                                             |  |             |            
|Income (loss) from continuing operations                                     |  |             | (8,239,847 
|Preferred dividend requirement                                               |  |             | 189,949    
|                                                                             |  |             |            
|Net income (loss) applicable to common shareholders                          |  | $           | (8,429,796 
|                                                                             |  |             |            

63

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EDGEN CORPORATION AND SUBSIDIARIES    CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

|                                                    |  | Successor |             
|--------------------------------------------------- |  | --------- | ------------
|
|
|Net cash provided by (used in) operating activities |  | $         | (5,944,514  
|Net cash provided by (used in) investing activities |  |           | (121,836,030
|Net cash provided by financing activities           |  |           | 116,116,589 
|                                                    |  |           |             
|Net increase in cash and cash equivalents           |  |           | (11,663,955 
|Cash and cash equivalents(Beginning of period)     |  |           |            
|                                                    |  |           |             
|Cash and cash equivalents(End of period)           |  | $         | (11,663,955 
|                                                    |  |           |             

|                                                    |  | Predecessor |           
|--------------------------------------------------- |  | ----------- | ----------
|
|
|Net cash provided by (used in) operating activities |  | $           | 1,018,316 
|Net cash used in investing activities               |  |             |          
|Net cash provided by (used in) financing activities |  |             | (1,018,316
|                                                    |  |             |           
|Net increase in cash and cash equivalents           |  |             |          
|Cash and cash equivalents(Beginning of period)     |  |             | 62,476    
|                                                    |  |             |           
|Cash and cash equivalents(End of period)           |  | $           | 62,476    
|                                                    |  |             |           

64

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ITEM 9A. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of the principal executive
officer ("CEO") and principal financial officer ("CFO"), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Exchange Act.) Based on this evaluation, the CEO and CFO concluded that, as of the end of the period ended December 31, 2005, our disclosure controls and
procedures are effective to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed in the reports that we file or submit under
the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, to allow timely decisions regarding required disclosure. There was no change in our internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recently completed fiscal quarter that has materially affected,
or is reasonably likely to materially affect, our internal control over financial reporting.

As of January 1, 2005, the Company was not an "accelerated filer" as defined in Rule 12b-2 under the Exchange Act. Accordingly, pursuant to SEC rules and
regulations, the Company is not required to provide, and we have not provided, Management's Annual Report on Internal Control Over Financial Reporting or the associated report of our independent
registered public accounting firm in this Annual Report on Form 10-K. Management and our Audit Committee are continuing to review our internal control over financial reporting as
part of our preparation for the need to provide Management's Annual Report on Internal Control Over Financial Reporting and the associated report of our independent registered public accounting firm,
and complete phase-in of compliance standards under Section 404 of the Sarbanes-Oxley Act of 2002. Any deficiencies identified by this review will be reported to the Audit Committee
and we will take appropriate action to correct any deficiencies.

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

Our outstanding securities consist of approximately 2,681,564 shares of common stock and 21,600 shares of Series A preferred stock.

Effective December 15, 2006, our stockholders transferred all of their equity interests in our Company to Edgen/Murray, L.P. in exchange for common and preferred partnership
interests of Edgen/Murray, L.P. As a result, 100% of our outstanding common stock and preferred stock is now owned by Edgen/Murray, L.P.

The general partner of Edgen/Murray, L.P. is Edgen/Murray GP, LLC, a company wholly owned by funds managed by JCP. The limited partnership interests of Edgen/Murray, L.P. are divided
into common units and preferred units. The following table sets forth certain information regarding the ownership of Edgen/Murray, L.P.'s common and preferred units as of March 30, 2006 by
(i) each person or entity known to us to own more than 5% of any class of Edgen/Murray, L.P.'s partnership interests, (ii) each member of our board of directors and each of our named
executive officers and (iii) all of the members of the board of directors and executive officers as a group. To our knowledge, each of the security holders listed below has sole voting and
investment power as to the partnership interests shown unless otherwise noted and subject to community property laws where applicable.

65

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Beneficial ownership of the securities listed in the table has been determined in accordance with the applicable rules and regulations promulgated under the Exchange Act.

Preferred Units(1)Common Units(1)Number of UnitsNumber of Units

Percent

PercentPrincipal Stockholders:Funds managed by Jefferies Capital Partners(2)

4,207,067.82

77.0
%
38,382.23

75.9
%Murray Metals Group Limited(3)

282,795.80

5.2
%
6,285.02

12.4
%Named Executive Officers and Directors:Daniel J. O'Leary(4)

197,308.57

3.6
%
819.28

1.6
%David L. Laxton(4)

94,192.68

1.7
%
401.05

0.8
%Robert L. Gilleland(4)

64,123.03

1.2
%
352.68

0.7
%Craig S. Kiefer(4)

64,123.03

1.2
%
352.68

0.7
%Nicholas Daraviras(5)







James L. Luikart(5)(6)







Edward J. DiPaolo(7)

13,653.69

0.3
%
31.20

0.1
%All executive officers and directors as a group (7 persons)(8)

433,401.00

7.9
%
1,956.89

3.9
%


---

66

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Edgen/Murray Partnership Interests

In general, under the limited partnership agreement of Edgen/Murray, L.P., the general partner of Edgen/Murray, L.P. has control over its business and affairs and
the limited partners do not participate, as limited partners, in the business and affairs of Edgen/Murray, L.P. Distributions of cash or property of Edgen/Murray, L.P. may be made only when and if,
and in the amounts, determined by the general





partner. Any such distributions must be made first to the holders of preferred units until each holder of preferred units has received cumulative aggregate distributions in an amount equal to, but not
in excess of, the specified preferred return attributable to his, her or its preferred units. Then any remaining or subsequent distributions may be made to the holders of the common units.

Equity Compensation Plan Information

Equity Compensation Plan Information  As of December 31, 2005

Plan Category

(a)
Number of securities to be issued upon exercise of outstanding options, warrants and rights

(b)
Weighted-average exercise price of outstanding options, warrants and rights

(c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))Equity compensation plans approved by security holders(1)



$


268,454Equity compensation plans not approved by security holders(2)






Total






268,454


---

67

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SIGNATURES

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

|                    |  | EDGEN CORPORATION
|------------------- |  | -----------------
|Date: June 23, 2006 |  | By:              

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EXHIBIT INDEX

|Exhibit No. |  | Description                                                                                                                                                                                                      
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1        |  | Certification of Chief Executive Officer pursuant to Rule 13a  14(a) or 15d  14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                
|31.2        |  | Certification of Chief Financial Officer pursuant to Rule 13a  14(a) or 15d  14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                
|32.1        |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Daniel J. O'Leary, President and Chief Executive Officer of Edgen Corporation
|32.2        |  | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by David L. Laxton, III, Chief Financial Officer of Edgen Corporation           

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