----

----

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

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

----

----

| PART      I—FINANCIAL INFORMATION  |
|-----------------------------------------------|
|                                          | Item      1. | Financial      Statements:  |   |
|                                          |   | Consolidated      Statements of Operations for the Three Months Ended March 31, 2008 and      2007  | 3 |
|                                          |   | Consolidated      Balance Sheets as of March 31, 2008 and December 31, 2007   | 4 |
|                                          |   | Consolidated      Statements of Cash Flows for the Three Months Ended March 31, 2008 and      2007  | 5 |
|                                          |   | Notes      to Consolidated Financial Statements  | 6 |
|                                          | Item      2. | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations  | 17 |
|                                          | Item      3. | Quantitative      and Qualitative Disclosures About Market Risk  | 24 |
|                                          | Item      4. | Controls      and Procedures  | 25 |
| PART      II—OTHER INFORMATION     |   |
|                                          | Item      1. | Legal      Proceedings  | 26 |
|                                          | Item      1A. | Risk      Factors  | 26 |
|                                          | Item      6. | Exhibits        | 26 |
| SIGNATURE                                | 27 |
| INDEX      TO EXHIBITS                        | 28 |

----

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                                           | For      the Three MonthsEnded      March 31,                                       |
|------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|
|                                                                                           | 2008                                                       | 2007           |
|                                                                                           |                                                                                |   |
| Revenues                                                                                       | $      125,927                                        | $      114,982 |
| Cost      of revenues                                                                          | 99,041                                                                              | 94,599 |
| Gross      profit                                                                              | 26,886                                                                              | 20,383 |
| Operating      expenses                                                                        | 23,631                                                                              | 24,185 |
| Operating      income (loss)                                                                   | 3,255                                                                               | (3,802) |
| Other      income (expense):                                                                   |                                                                                |   |
| Interest      expense                                                                          | (1,227)                                                                             | (1,493) |
| Interest      income                                                                           | 848                                                                                 | 949 |
| Other                                                                                          | 767                                                                                 | 702 |
| Total      other income                                                                        | 388                                                                                 | 158 |
| Income      (loss) before taxes on income (tax benefits)                                       | 3,643                                                                               | (3,644) |
| Taxes      on income (tax benefits)                                                            | 1,074                                                                               | (710) |
| Income      (loss) before minority interests and equity in losses of affiliated      companies | 2,569                                                                               | (2,934) |
| Minority      interests                                                                        | (156)                                                                               | (48) |
| Equity      in losses of affiliated companies                                                  | (383)                                                                               | (306) |
| Income      (loss) from continuing operations                                                  | 2,030                                                                               | (3,288) |
| Loss      from discontinued operations, net of tax                                             | (87)                                                                                | (11,988) |
| Net      income (loss)                                                                         | $            1,943      | $       (15,276) |
|                                                                                           |                                                                                |   |
| Earnings      (loss) per share:                                                                |                                                                                |   |
| Basic:                                                                                         |                                                                                |   |
| Income      (loss) from continuing operations                                                  | $             0.07 | $          (0.12) |
| Loss      from discontinued operations                                                         | (0.00)                                                                              | (0.44) |
| Net      income (loss)                                                                         | $             0.07 | $          (0.56) |
| Diluted:                                                                                       |                                                                                |   |
| Income      (loss) from continuing operations                                                  | $             0.07 | $          (0.12) |
| Loss      from discontinued operations                                                         | (0.00)                                                                              | (0.44) |
| Net      income (loss)                                                                         | $             0.07 | $          (0.56) |

----

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                 | March      31,   2008                     | December      31,   2007               |
|--------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|
| Assets                                                                                                                               |                                                                         |                                                                                |
|  Current      assets                                                                                                            |                                                                         |                                                                                |
|      Cash      and cash equivalents                                                                         | $       88,783                            | $        78,961                             |
|      Restricted      cash                                                                                   | 2,781                                                                        | 2,487                                                                               |
|  Receivables,      net                                                                                                          | 90,638                                                                       | 85,774                                                                              |
|  Retainage                                                                                                                      | 22,425                                                                       | 23,444                                                                              |
|  Costs      and estimated earnings in excess of billings                                                                        | 37,639                                                                       | 40,590                                                                              |
|  Inventories                                                                                                                    | 17,849                                                                       | 17,789                                                                              |
|  Prepaid      expenses and other assets                                                                                         | 28,991                                                                       | 28,975                                                                              |
|  Current      assets of discontinued operations                                                                                 | 23,130                                                                       | 31,269                                                                              |
|  Total      current assets                                                                                                      | 312,236                                                                      | 309,289                                                                             |
|  Property, plant and      equipment, less accumulated depreciation                                                              | 72,813                                                                       | 73,368                                                                              |
|  Other      assets                                                                                                              |                                                                         |                                                                                |
|  Goodwill                                                                                                                       | 122,566                                                                      | 122,560                                                                             |
|  Other      assets                                                                                                              | 26,284                                                                       | 26,532                                                                              |
|  Total      other assets                                                                                                        | 148,850                                                                      | 149,092                                                                             |
|  Non-current      assets of discontinued operations                                                                             | 9,287                                                                        | 9,391                                                                               |
|                                                                                                                                 |                                                                         |                                                                                |
| Total      Assets                                                                                                                    | $     543,186                                       | $       541,140                                  |
|                                                                                                                                 |                                                                         |                                                                                |
| Liabilities and      Stockholders’ Equity                                                                                      |                                                                         |                                                                                |
|  Current      liabilities                                                                                                       |                                                                         |                                                                                |
|  Current      maturities of long-term debt and line of credit                                                                   | $            365 | $           1,097            |
|  Accounts      payable and accrued expenses                                                                                     | 91,630                                                                       | 87,935                                                                              |
|  Billings      in excess of costs and estimated earnings                                                                        | 9,813                                                                        | 8,602                                                                               |
|  Current      liabilities of discontinued operations                                                                            | 8,918                                                                        | 14,830                                                                              |
|  Total      current liabilities                                                                                                 | 110,726                                                                      | 112,464                                                                             |
|  Long-term debt,      less current maturities                                                                                   | 65,000                                                                       | 65,000                                                                              |
|  Other      liabilities                                                                                                         | 6,483                                                                        | 7,465                                                                               |
|  Non-current      liabilities of discontinued operations                                                                        | 1,048                                                                        | 953                                                                                 |
|  Total      liabilities                                                                                                         | 183,257                                                                      | 185,882                                                                             |
|  Minority      interests                                                                                                        | 2,895                                                                        | 2,717                                                                               |
|                                                                                                                                 |                                                                         |                                                                                |
|  Stockholders’      equity                                                                                                |                                                                         |                                                                                |
|  Preferred      stock, undesignated, $.10 par – shares authorized 2,000,000; none      outstanding                        | –                                                                      | –                                                                             |
|  Common stock, $.01 par –      shares authorized 60,000,000; shares issued and outstanding      27,750,677 and 27,470,623 | 278                                                                          | 275                                                                                 |
|  Additional      paid-in capital                                                                                                | 105,220                                                                      | 104,332                                                                             |
|  Retained      earnings                                                                                                         | 240,919                                                                      | 238,976                                                                             |
|  Accumulated      other comprehensive income                                                                                    | 10,617                                                                       | 8,958                                                                               |
|  Total      stockholders’ equity                                                                                          | 357,034                                                                      | 352,541                                                                             |
|                                                                                                                                 |                                                                         |                                                                                |
| Total      Liabilities and Stockholders’ Equity                                                                                | $     543,186                                       | $      541,140                                        |

----

CONSOLIDATED STATEMENTS OF CASHFLOWS

|                                                                                                | For      the Three MonthsEnded      March 31,        |
|-----------------------------------------------------------------------------------------------------|------------------------------------------------------|
|                                                                                                | 2008              | 2007                 |
|                                                                                                |                                                 |   |
| Cash flows from      operating activities:                                                          |                                                 |   |
| Net      income (loss)                                                                              | $       1,943     | $        (15,276) |
| Loss      from discontinued operations                                                              | (87)                                                 | (11,988) |
| Income      (loss) from continuing operations                                                       | 2,030                                                | (3,288) |
| Adjustments      to reconcile to net cash provided by operating activities:                         |                                                 |   |
| Depreciation      and amortization                                                                  | 3,968                                                | 4,152 |
| Gain      on sale of fixed assets                                                                   | (1,118)                                              | (471) |
| Equity-based      compensation expense                                                              | 901                                                  | 1,664 |
| Deferred      income taxes                                                                          | (2,021)                                              | (2,280) |
| Other                                                                                               | (300)                                                | (282) |
| Changes      in operating assets and liabilities:                                                   |                                                 |   |
| Restricted      cash                                                                                | (294)                                                | (354) |
| Receivables      net, retainage and costs and estimated earnings in excess of      billings         | 2,228                                                | 7,224 |
| Inventories                                                                                         | 1                                                    | (391) |
| Prepaid      expenses and other assets                                                              | (1,496)                                              | 710 |
| Accounts      payable and accrued expenses                                                          | 4,281                                                | (10,358) |
| Net      cash provided by (used in) operating activities of continuing      operations              | 8,180                                                | (3,674) |
| Net      cash provided by operating activities of discontinued      operations                      | 3                                                    | 244 |
| Net      cash provided by (used in) operating activities                                            | 8,183                                                | (3,430) |
|                                                                                                |                                                 |   |
| Cash flows from      investing activities:                                                          |                                                 |   |
| Capital      expenditures                                                                           | (3,151)                                              | (4,199) |
| Proceeds      from sale of fixed assets                                                             | 644                                                  | 78 |
| Net      cash used in investing activities of continuing operations                                 | (2,507)                                              | (4,121) |
| Net      cash used in investing activities of discontinued    operations                            | (5)                                                  | (246) |
| Net      cash used in investing activities                                                          | (2,512)                                              | (4,367) |
|                                                                                                |                                                 |   |
| Cash flows from      financing activities:                                                          |                                                 |   |
| Proceeds      from issuance of common stock                                                         | –                                              | 637 |
| Additional      tax benefit from stock option exercises recorded in additional paid-in      capital | –                                              | 45 |
| Principal      payments on notes payable                                                            | (732)                                                | (727) |
| Principal      payments on long-term debt                                                           | –                                              | (15,713) |
| Proceeds      from lines of credit                                                                  | –                                              | 5,000 |
| Net      cash used in financing activities                                                          | (732)                                                | (10,758) |
| Effect      of exchange rate changes on cash                                                        | 4,883                                                | 1,838 |
| Net      increase (decrease) in cash and cash equivalents for the      period                       | 9,822                                                | (16,717) |
| Cash      and cash equivalents, beginning of period                                                 | 78,961                                               | 96,393 |
| Cash      and cash equivalents, end of period                                                       | $       88,783    | $        79,676 |

----

NOTES TO CONSOLIDATED FINANCIALSTATEMENTS

| 1.   |           GENERAL |
|----------------|---------------------------------------|

----

|                                                                                                            | Three      Months Ended      |
|-----------------------------------------------------------------------------------------------------------------|------------------------------|
|                                                                                                            | March      31,               |
|                                                                                                            | 2008     | 2007     |
| Weighted      average number of common shares used for basic EPS                                                | 27,470,623                   | 27,254,380 |
| Effect      of dilutive stock options and restricted stock                                                      | 463,346                      | – |
| Weighted      average number of common shares and dilutive potential common stock used      indilutive      EPS | 27,933,969                   | 27,254,380 |

|                                                   | 2008                   | 2007        |
|--------------------------------------------------------|--------------------------------------------|---------------------------------|
|                                                   |                                       |                            |
| Revenues                                               | $      5,608 | $    15,966 |
| Gross      profit (loss)                               | (34)                                       | 187                             |
| Operating      expenses                                | 513                                        | 1,043                           |
| Closure      charges (reversals) of tunneling business | (477)                                      | 16,843                          |
| Operating      loss                                    | (70)                                       | (17,699)                        |
| Loss      before tax benefits                          | (132)                                      | (17,660)                        |
| Tax      benefits                                      | (45)                                       | (5,672)                         |
| Net      loss                                          | (87)                                       | (11,988)                        |

----

|                                                              | March      31,      2008                 | December      31, 2007             |
|-------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------|
|                                                              |                                                                                                           |                                                             |
| Receivables,      net                                             | $        4,963                                                         | $      9,001                       |
| Retainage                                                         | 8,262                                                                                                          | 9,122                                                            |
| Costs      and estimated earnings in excess of billings           | 8,084                                                                                                          | 9,063                                                            |
| Property,      plant and equipment, less accumulated depreciation | 6,298                                                                                                          | 6,434                                                            |
| Total      assets                                                 | 32,417                                                                                                         | 40,660                                                           |
| Billings      in excess of costs and estimated earnings           | 387                                                                                                            | 2,768                                                            |
| Total      liabilities                                            | 9,966                                                                                                          | 15,783                                                           |

|                        |                                                 | As      of March 31, 2008             |                                         | As      of December 31, 2007         |
|-----------------------------|------------------------------------------------------|---------------------------------------|----------------------------------------------|--------------------------------------|
|                        | Weighted      Average      Useful      Lives (Years) |  Gross      Carrying Amount |   AccumulatedAmortization          |  Net      CarryingAmount        |   |  Gross      CarryingAmount |   AccumulatedAmortization |  Net      CarryingAmount |
|                        |                                                 |                                  |                                         |                                 |   |   |   |   |
| License      agreements     | 23                                                   | $     3,894  | $      (2,017) | $     1,877 |   | $      3,894 | $        (1,976) | $      1,918 |
| Customer      relationships | 15                                                   | 1,797                                 | (541)                                        | 1,256                                |   | 1,797 | (512) | 1,285 |
| Patents      and trademarks | 13                                                   | 18,414                                | (13,688)                                     | 4,726                                |   | 17,942 | (13,613) | 4,329 |
| Total                       |                                                 | $   24,105             | $    (16,246)            | $     7,859 |   | $    23,633 | $      (16,101) | $      7,532 |

|                                      | 2008                                  | 2007             |
|-------------------------------------------|-----------------------------------------------------------|------------------------------------------------|
| For      the three months ended March 31: |                                                      |                                           |
| Aggregate      amortization expense:      | $         63 | $     70              |
|                                      |                                                      |                                           |
| Estimated      amortization expense:      |                                                      |                                           |
| For year ending December 31,      2008    | 708                                                       |                                           |
| For year ending December 31,      2009    | 860                                                       |                                           |
| For year ending December 31,      2010    | 804                                                       |                                           |
| For year ending December 31,      2011    | 748                                                       |                                           |
| For year ending December 31,      2012    |    705                                     |                                           |

----

|                                |  Stock      Awards | WeightedAverageAward      DateFair      Value |
|-------------------------------------|-------------------------|-----------------------------------------------|
| Outstanding      at January 1, 2008 | 102,089                 | $   19.39                      |
| Awarded                             | 286,677                 | 12.78                                         |
| Vested                              | –                 | –                                       |
| Forfeited                           | –                 | –                                       |
| Outstanding      at March 31, 2008  | 388,766                 | $   14.50                      |

----

|                                |  DeferredStockUnits        | WeightedAverageAward      DateFair      Value |
|-------------------------------------|---------------------------------|-----------------------------------------------|
| Outstanding      at January 1, 2008 | 155,098          | $    18.51                |
| Awarded                             | 26,236(1)                       | 13.34                                         |
| Shares      distributed             | (17,382)                   | 20.78                                         |
| Outstanding      at March 31, 2008  | 163,952               | $    17.44                |

|   | (1) | Mr.      Woods was awarded 26,236 deferred stock units on March 3, 2008 as      compensation for his service as Interim Chief Executive Officer for the      period from February 13, 2008 through August 12, 2008. Pursuant to the      terms of the award agreement, however, the amount of deferred stock units      vested on April 14, 2008 was adjusted downward to 8,745 deferred stock      units to reflect his actual period ofservice. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                |  Shares | WeightedAverageExercisePrice   |
|-------------------------------------|--------------|--------------------------------|
| Outstanding      at January 1, 2008 | 909,987      | $    21.27 |
| Granted                             | 305,624      | 12.99                          |
| Exercised                           | –      | –                        |
| Forfeited/Expired                   | (22,494)     | 23.16                          |
| Outstanding      at March 31, 2008  | 1,193,117    | $    19.12 |
| Exercisable      at March 31, 2008  | 738,244      | $    21.67 |

----

| Range      ofExercise      Price                      | NumberOutstanding | WeightedAverageExercisePrice                                                                     | AggregateIntrinsicValue    | WeightedAverageRemainingContractualTerm      (Yrs) |
|-------------------------------------------------------|-------------------|--------------------------------------------------------------------------------------------------|----------------------------|----------------------------------------------------|
| $10.00      - $15.00                                  | 488,751           | $       13.41         | $   300,599 | 5.5                                                |
|    15.01      -   20.00 | 275,480           | 17.86                                                                                            | –                    | 4.7                                                |
|    20.01      -   25.00 | 173,404           | 23.92                                                                                            | –                    | 3.9                                                |
|    25.01      -   30.00 | 255,482           | 28.12                                                                                            | –                    | 3.6                                                |
| Total      Outstanding                                | 1,193,117         | $      19.12               | $   300,599 | 4.7                                                |

| Range      ofExercise      Price                | NumberOutstanding | WeightedAverageExercisePrice                                                                           | AggregateIntrinsicValue         | WeightedAverageRemainingContractualTerm      (Yrs) |
|-------------------------------------------------|-------------------|--------------------------------------------------------------------------------------------------------|---------------------------------|----------------------------------------------------|
| $10.00      - $15.00                            | 146,533           | $       13.98          | $    40,494 | 2.8                                                |
|   15.01      -   20.00 | 200,651           | 17.90                                                                                                  | –                         | 4.5                                                |
|   20.01      -   25.00 | 171,404           | 23.91                                                                                                  | –                         | 3.9                                                |
|   25.01      -   30.00 | 219,656           | 28.48                                                                                                  | –                         | 3.3                                                |
| Total      Exercisable                          | 738,244           | $       21.67          | $    40,494 | 3.6                                                |

|                       | For      the Three Months Ended March 31, |
|----------------------------|-------------------------------------------|
|                       | 2008                                      |   | 2007 |
|                       |  Range                               | WeightedAverage |   |  Range | WeightedAverage |
| Volatility                 | 37.3%      – 41.9%                  | 37.9% |   | 45.0% | 45.0% |
| Expected      term (years) | 5.0                                       | 5.0 |   | 4.5 | 4.5 |
| Dividend      yield        | 0.0%                                      | 0.0% |   | 0.0% | 0.0% |
| Risk-free      rate        | 4.0%                                      | 4.0% |   | 4.4% | 4.4% |

----

----

|                                                                                     | DocumentedRemediationCosts                                                                                                                       | Pre-JudgmentInterest                                                                                                                     |   Total                                                                                                  |
|------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|
|                                                                                     | (in      thousands)                                                                                                                              |
| Claim      recorded June 30, 2005                                                        | $         5,872               | $          275             | $       6,147            |
| Interest      recorded July through December 31, 2005                                    | –                                                                                                                                          | 165                                                                                                                                      | 165                                                                                                                |
| Additional      documented remediation costs recorded in the second quarter of      2006 | 526                                                                                                                                              | –                                                                                                                                  | 526                                                                                                                |
| Adjustment      based on subsequent developments(1)                                      | (343)                                                                                                                                            | –                                                                                                                                  | (343)                                                                                                              |
| Interest      recorded(2)                                                                | –                                                                                                                                          | 1,189                                                                                                                                    | 1,189                                                                                                              |
| Claim      receivable balance, March 31, 2008                                            | $        6,055                                    | $       1,629                                            | $      7,684                                 |

| (1)   | During      the second quarter of 2007, the claim was adjusted down by $0.3 million as      a result of subsequent developments in the matter. Interest was adjusted      accordingly. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | During      the first quarter of 2008, the Company recorded in other income $0.1      million of pre-judgment interest. The remaining $7.6 million, which      include documented remediation costs, was recorded in prior      periods. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                 |     |                               | Weighted       |     |
|----------------------|----------|------------------------------------|----------------|----------|
|                 |     |                               | Average        |     |
|                 |     |                               | Remaining      | Average  |
|                 |     | Notional                           | Maturity       | Exchange |
|                 | Position | Amount                             | in      Months | Rate     |
| Canadian      Dollar | Sell     | $      20,000,000                  | 1.0            | 1.001    |
| Canadian      Dollar | Buy      | $   7,500,000       | 1.0            | 1.028    |
| Euro                 | Sell     | €   5,000,000 | 1.0            | 1.426    |
| Pound      Sterling  | Sell     | £   5,000,000  | 1.0            | 2.033    |

|                                              | Derivatives,      net                               |
|---------------------------------------------------|-----------------------------------------------------|
| Beginning      balance, January 1, 2008           | $       (55)     |
| Gains      included in other comprehensive income |              164 |
| Ending      balance, March 31, 2008               | $       109      |

|                               | Three      Months EndedMarch      31,                                    |
|------------------------------------|--------------------------------------------------------------------------|
|                               | 2008                                            | 2007      |
|                               |                                                                     |   |
| Revenues:                          |                                                                     |   |
|   Rehabilitation         | $      110,075                             | $      103,321 |
|   Tite      Liner        | 15,852                                                                   | 11,661 |
| Total      revenues                | $      125,927                             | $      114,982 |
|                               |                                                                     |   |
| Gross      profit:                 |                                                                     |   |
|   Rehabilitation         | $        21,652                  | $        15,417 |
|   Tite      Liner        | 5,234                                                                    | 4,966 |
| Total      gross profit            | $        26,886                  | $        20,383 |
|                               |                                                                     |   |
| Operating      income (loss):      |                                                                     |   |
|   Rehabilitation         | $           (130) | $         (7,095) |
|   Tite      Liner        | 3,385                                                                    | 3,293 |
| Total      operating income (loss) | $         3,255             | $         (3,802) |

----

|                               | Three      Months EndedMarch      31,                        |
|------------------------------------|--------------------------------------------------------------|
|                               | 2008                                | 2007            |
|                               |                                                         |   |
| Revenues:                          |                                                         |   |
|   United      States     | $            78,634            | $         81,015 |
|   Canada                 | 12,204                                                       | 10,831 |
|   Europe                 | 26,542                                                       | 20,448 |
|   Other      foreign     | 8,547                                                        | 2,688 |
| Total      revenues                | $     125,927                       | $       114,982 |
|                               |                                                         |   |
| Gross      profit:                 |                                                         |   |
|   United      States     | $       15,983            | $         11,908 |
|   Canada                 | 3,922                                                        | 3,517 |
|   Europe                 | 4,784                                                        | 3,684 |
|   Other      foreign     | 2,197                                                        | 1,274 |
| Total      gross profit            | $       26,886            | $         20,383 |
|                               |                                                         |   |
| Operating      income (loss):      |                                                         |   |
|   United      States     | $         1,250 | $          (4,596) |
|   Canada                 | 2,190                                                        | 1,524 |
|   Europe                 | (1,571)                                                      | (1,722) |
|   Other      foreign     | 1,386                                                        | 992 |
| Total      operating income (loss) | $         3,255 | $          (3,802) |

----

Item 2.   Management’s Discussion andAnalysis of Financial Condition and Results of Operations

----

|                                                          | Three      Months Ended March 31,                                            |                                             |   |
|---------------------------------------------------------------|------------------------------------------------------------------------------|--------------------------------------------------|--------|
|                                                          | 2008                                                | 2007                    |   | Increase      (Decrease) |
|                                                          |                                                                         |                                             |   |   |   |
| Consolidated                                                  |                                                                         |                                             |   |   |   |
|   Revenues                                          | $     125,927                                       | $     114,982           |   | $    10,945 | 9.5% |
|   Gross      profit                                 | 26,886                                                                       | 20,383                                           |   | 6,503 | 31.9 |
|   Gross      margin                                 | 21.4%                                                                        | 17.7%                                            |   | 3.7(1) |   |
|   Operating      expenses                           | 23,631                                                                       | 24,185                                           |   | (554) | (2.3) |
|   Operating      income (loss)                      | 3,255                                                                        | (3,802)                                          |   | 7,057 | 185.6 |
|   Operating      margin                             |             2.6% |        (3.3)% |   |   5.9(1) |   |
|   Net      income (loss) from continuing operations | 2,030                                                                        | (3,288)                                          |   | 5,318 | 161.7 |
|                                                          |                                                                         |                                             |   |   |   |
| Rehabilitation                                                |                                                                         |                                             |   |   |   |
|   Revenues                                          | 110,075                                                                      | 103,321                                          |   | 6,754 | 6.5 |
|   Gross      profit                                 | 21,652                                                                       | 15,417                                           |   | 6,235 | 40.4 |
|   Gross      margin                                 | 19.7%                                                                        | 14.9%                                            |   | 4.8(1) |   |
|   Operating      expenses                           | 21,782                                                                       | 22,512                                           |   | (730) | (3.2) |
|   Operating      loss                               | (130)                                                                        | (7,095)                                          |   | 6,965 | 98.2 |
|   Operating      margin                             |            (0.1)%     |       (6.9)%       |   | 6.8(1) |   |
|                                                          |                                                                         |                                             |   |   |   |
| Tite      Liner                                               |                                                                         |                                             |   |   |   |
|   Revenues                                          | 15,852                                                                       | 11,661                                           |   | 4,191 | 35.9 |
|   Gross      profit                                 | 5,234                                                                        | 4,966                                            |   | 268 | 5.4 |
|   Gross      margin                                 | 33.0%                                                                        | 42.6%                                            |   | (9.6)      (1) |   |
|   Operating      expenses                           | 1,849                                                                        | 1,673                                            |   | 176 | 10.5 |
|   Operating      income                             | 3,385                                                                        | 3,293                                            |   | 92 | 2.8 |
|   Operating      margin                             |           21.4%            |      28.2%              |   | (6.8)      (1) |   |

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|  Backlog                                                                                                                                                                                    | March      31,2008                               | December      31,2007                            | September      30,2007                           | June      30,2007                                | March      31,2007                               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------|--------------------------------------------------|--------------------------------------------------|--------------------------------------------------|--------------------------------------------------|
|                              (in      millions) |
| Rehabilitation                                                                                                                                                                                   | $       253.4 | $       232.8 | $       208.3 | $       193.1 | $       187.2 |
| Tite      Liner                                                                                                                                                                                  | 32.2                                             | 26.2                                             | 16.3                                             | 12.5                                             | 14.5                                             |
| Total                                                                                                                                                                                            | $       285.6 | $       259.0 | $       224.6 | $       205.6 | $       201.7 |

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|                           | March      31,2008                                | December      31,2007                             |
|--------------------------------|---------------------------------------------------|---------------------------------------------------|
|                           | (in      thousands)                               |
| Cash      and cash equivalents | $       88,783 | $       78,961 |
| Restricted      cash           | 2,781                                             | 2,487                                             |

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| Payments      Due by Period             |
|-----------------------------------------|
| Cash      Obligations(1)(2)(3)(4)       |    Total    |    2008   |         2009   |    2010   |         2011    |         2012   | Thereafter |
| Long-term      debt                     | $    65,000 |  $            - | $             - | $            - | $            - | $            - | $    65,000 |
| Interest      on long-term debt         |     23,380 | 4,251 | 4,251 | 4,251 | 4,251 | 4,251 | 2,125 |
| Operating      leases                   |     22,854 | 7,510 | 6,278 | 3,618 | 2,155 | 1,395 | 1,898 |
| Total      contractual cash obligations |  $  111,234 | $    11,761 | $    10,529 | $     7,869 | $     6,406 | $     5,646 | $    69,023 |

|  | (1) | Cash      obligations are not discounted. See Notes 6 and 9 to the consolidated      financial statements contained in this report regarding our long-term debt      and credit facility, commitments and contingencies and financings,      respectively. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | Resin      supply contracts are excluded from this table. See “Commodity Risk” under      Part I, Item 3 of this report for further  discussion. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (3) | As      of March 31, 2008, we had no outstanding borrowings on our $35.0 million      credit facility. The available balance was $19.6 million,      and the commitment fee was 0.2%. The remaining $15.4 million was used for      non-interest bearing letters of credit, $14.5 million of which was      collateral for insurance and $0.9 million of which was collateral for work      performance. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (4) | Liabilities      related to Interpretation No. 48, Accounting for Uncertainty in      Income Taxes, have not been included in the table above because we      are uncertain as to if or when such amounts may be  settled. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Item 4.   Controls andProcedures

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Item 1.     LegalProceedings

Item 1A.   Risk Factors

Item 6.   Exhibits 

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SIGNATURE

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INDEX TO EXHIBITS

| 31.1 | Certification      of J. Joseph Burgess pursuant to Section 302 of the Sarbanes-Oxley Act of      2002, filed herewith. |
|------|-------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification      of David A. Martin pursuant to Section 302 of the Sarbanes-Oxley Act of      2002, filed herewith. |
|------|-----------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification      of J. Joseph Burgess pursuant to 18 U.S.C. Section 1350, as adopted      pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed      herewith. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification      of David A. Martin pursuant to 18 U.S.C. Section 1350, as adopted pursuant      to Section 906 of the Sarbanes-Oxley Act of 2002, filed      herewith. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|