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SECURITIES AND EXCHANGE COMMISSION 
WASHINGTON, D.C. 20549FORM 10-K

|             |                                                          | 
|------------ | -------------------------------------------------------- | 
|(Mark
  One) |                                                          | 
|x            | ANNUAL
  REPORT UNDER SECTION 13 OR 15(d)                | 
|             | OF
  THE SECURITIES EXCHANGE ACT OF 1934                 | 
|             | For the fiscal year ended December 31, 2007              | 
|             | OR                                                       | 
|o            | TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d)      | 
|             | OF
  THE SECURITIES EXCHANGE ACT OF 1934                 | 
|             | For
  the transition period from ________to_________     | 
|             | Commission
  File Number 001-14789                       | 
|             | GENTEK INC.                                              | 
|             | (Exact
  name of Registrant as specified in its charter) | 

|                                                                 |  |                                          
|---------------------------------------------------------------- |  | -----------------------------------------
|Delaware                                                         |  | 02-0505547                               
|(State
  of other jurisdiction of incorporation or organization) |  | (I.R.S.
  Employer Identification Number)
|90 East Halsey Road                                              |  |                                          
|Parsippany, New Jersey                                           |  | 07054                                    
|(Address
  of principal executive offices)                       |  | (Zip
  Code)                             

Registrants telephone number, including area code:
(973) 515-3221
Securities registered pursuant to Section 12(b) of the Act:NoneSecurities registered pursuant to Section
12(g) of the Act:Common stock, no par value (Title of class)

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 x

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

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

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

Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the
Act). 
Large Accelerated Filer  o     Accelerated
Filer x          Non-accelerated
Filer  o

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

State
the aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrants most recently completed second
fiscal quarter $335,737,749.

Applicable
to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes x     No o

The
number of outstanding shares of the Registrants Common Stock as of February
29, 2008 was 10,344,622.

Documents Incorporated by Reference:

Portions
of the Registrants definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on May 15, 2008, to be filed within 120 days after the
close of the Registrants fiscal year, are incorporated by reference into Part
III of this Annual Report on Form 10-K.

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PART I

Item 1. Business.

Overview

GenTek
Inc. (the Company or GenTek) is a holding company whose subsidiaries manufacture
industrial components and performance chemicals. GenTek has no independent
operations and, therefore, is dependent upon cash flow from its subsidiaries to
meet its obligations. GenTeks subsidiaries operate through two primary
business segments: valve actuation systems and performance chemicals. The valve
actuation systems segment provides precision engineered valve actuation systems
and components for gasoline and diesel engines in two principal markets:
automotive and heavy duty/commercial. The performance chemicals segment
provides value-added chemical products to four principal markets: water
treatment, chemical processing, pharmaceutical and personal care, and
technology. The Companys products are frequently highly engineered and are
important components of, or provide critical attributes to, its customers end
products or operations. The Company operates over 50 manufacturing and
production facilities located primarily in the U.S. and Canada.

Acquisitions

On December 31, 2007, the Company
acquired
Bay Chemical and Supply Company. The acquisition included the manufacturing
facility in Odem, Texas. Bay Chemical and Supply Company produces and
distributes aluminum sulfate and other water treatment chemicals for the south
Texas municipal water treatment market. The purchase price was $7 million.

On February 6, 2007, the Company
acquired the
assets of Chalum, Inc. The acquisition included the manufacturing facility in
Sacaton, Arizona. Chalum produces aluminum sulfate for the greater Phoenix,
Arizona municipal water treatment market. The purchase price was $3 million.

On September 21, 2006, the Company
acquired
the assets of GAC MidAmerica, Inc. The acquisition included manufacturing
facilities in Toledo, Ohio, Indianapolis, Indiana, and Saukville, Wisconsin.
GAC produces aluminum sulfate and bleach, as well as distributing specialty
water treatment chemicals, sulfuric acid and caustic soda. The purchase price
of the transaction was $8 million.

On July 31, 2006, the Company
acquired the
assets of Precision Engine Products Corp., a wholly owned subsidiary of
Stanadyne Corporation. Precision Engine Products is dedicated principally to
the manufacturing of hydraulic lash adjusters and die cast aluminum rocker arm
assemblies utilized in valve train systems for both OEM and after market
applications to the global automotive and light truck markets. Precision Engine
Products has manufacturing facilities in Tallahassee, Florida and Curitiba,
Brazil. The purchase price of the transaction was $26 million.

On July 27, 2006, the Company
acquired the
assets of Repauno Products, LLC. The acquisition included the manufacturing
facility in Gibbstown, New Jersey. Repauno Products manufactures sodium nitrite
which is used in a wide range of industries including metal finishing, heat
transfer salts, rubber processing, meat curing, odor control and inks and dyes.
The purchase price of the transaction was $6 million.

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Discontinued Operations

On
July 17, 2007, the Company completed the sale of its wholly-owned subsidiary
Defiance Testing and Engineering Services, Inc. On February 16, 2007, the
Company completed the sale of its Noma wire and cable harness assembly
business. The net proceeds from these transactions were used to repay
outstanding debt. During April 2006, the Company completed the sale of its
cable and wire manufacturing business in Stouffville, Canada. Proceeds from the
transaction were used to repay $22 million of the Companys second lien term
loan. During the second quarter of 2005, the Company ceased operations of its
printing plate business. The business had become unprofitable as it had
experienced severe competitive pressures over the last several years and had
been hurt by a continued shift in technology in the printing plate market.
Accordingly, all financial information included herein has been reclassified to
reflect these businesses as discontinued operations.

Products and Services by Segment

The
Companys segment presentation has been revised to reflect its industrial wire
and fluid handling equipment product lines within corporate and other. These
product lines were formerly included within the Companys manufacturing
segment, which is no longer a reportable segment. The remaining businesses of
the former manufacturing segment comprise the new valve actuation systems
segment. Prior year information has been restated to conform to the current
presentation.

The
following table sets forth the Companys sales by segment:

|                        |  |                            |       |      |   |       |  |   |       | 
|----------------------- |  | -------------------------- | ----- | ---- | - | ----- |  | - | ----- | 
|                        |  | Years
  Ended December 31, |      
|                        |  |                            |      
|                        |  | 2007                       |       | 2006 |   | 2005  | 
|                        |  |                            |       |      |   |       | 
|                        |  | (In
  millions)            |      
|Valve actuation systems |  | $                          | 152.1 |      | $ | 146.1 |  | $ | 142.2 | 
|Performance chemicals   |  |                            | 396.7 |      |   | 373.3 |  |   | 334.1 | 
|Corporate and other     |  |                            | 59.5  |      |   | 73.8  |  |   | 61.1  | 
|                        |  |                            |       |      |   |       |  |   |       | 
|Consolidated            |  | $                          | 608.2 |      | $ | 593.3 |  | $ | 537.4 | 
|                        |  |                            |       |      |   |       |  |   |       | 

Valve Actuation Systems Segment

The
valve actuation systems segment provides precision engineered valve actuation
systems and components for gasoline and diesel engines in two principal
markets: automotive and heavy duty/commercial. The Companys products for these markets are described below:

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Automotive.For the automotive market, the Company manufactures
  precision-engineered valve actuation systems and components, including
  complete valve actuation sub-assemblies as well as components such as stamped
  and machined rocker and roller-rocker arms, cam follower rollers, cam
  follower roller axles, antifriction needle roller bearings, hydraulic lash
  adjusters, hydraulic flat and roller lifters, mechanical roller tappets and
  other hardened/machined components;
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | Heavy
  Duty/Commercial.
  For the heavy duty/commercial market, the Company manufactures valve and high
  pressure fuel pump actuation components such as precision machined roller bearings, mechanical roller tappets,
and valve
  actuation system assemblies.                                                                                                                                                                                                                              

The
Companys precision-engineered stamped and machined engine components for valve
actuation systems improve engine efficiency by reducing engine friction and
component mass. These

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components are used both in
traditional overhead valve and in the increasingly popular single and double
overhead cam engines which power cars, light trucks and sport utility vehicles.
Over the last several years, the Company has benefited from the design
transition of overhead valve engines to overhead cam engines providing a strong
position with which to participate in the industrys latest efforts to improve
fuel efficiency and power. Increased design use of additional valves per
cylinder to improve fuel/air throughput have resulted in volume growth on
specific engine applications. The majority of the Companys valve actuation
system production is sold to U.S. automobile engine manufacturers and their
Tier 1 suppliers.

Automotive
and heavy duty/commercial engine manufacturers generally award business to
their suppliers by individual engine line for the life of the engine. The loss
of any single engine line contract would not be material to the Company.
However, a continued economic downturn in the automotive or the heavy
duty/commercial industry as a whole or other events (e.g., labor disruptions)
resulting in significantly reduced operations of Chrysler or Ford could have a
material adverse impact on the results of the Companys valve actuation systems
segment. Neither of these customers accounted for 10 percent or more of the
Companys revenues in 2007.

Performance Chemicals Segment

The
Companys performance chemicals segment provides value-added products to four
principal markets: (i)water treatment; (ii)chemical processing;
(iii)pharmaceutical and personal care; and (iv)technology. The Companys
products and services for these markets are described below.

Water
Treatment.With a
network of 38 water treatment chemical plants located throughout the United
States and Canada, the Company is the largest North American producer of
aluminum sulfate, or alum, which is used as a coagulant in potable water and
waste water treatment applications, and a leading supplier of ferric sulfate
and other specialty flocculants (polymer-based materials used for settling
and/or separating solids from liquids), ammonium sulfate and sodium nitrite.
The Companys water treatment products are designed to address important
environmental issues confronting its customers. These value-added products
provide cleaner drinking water, restore algae-infested lakes, reduce damaging
phosphorus runoff from agricultural operations, and significantly reduce
pollution from industrial waste water.

Chemical
Processing.The
Company operates three sulfuric acid production facilities which produce
various grades of sulfuric acid which is used in the manufacture of titanium
pigments, fertilizers, synthetic fibers, steel, petroleum and paper, as well as
many other products. In addition, the Company provides sulfuric acid
regeneration services to the refining and chemical industries, and pollution
abatement and sulfur recovery services to selected refinery customers.
Refineries use sulfuric acid as a catalyst in the production of alkylate, a
gasoline blending component with favorable performance and environmental
properties. The alkylation process contaminates and dilutes the sulfuric acid,
thereby creating the need to dispose of or regenerate the contaminated acid.
The Company transports the contaminated acid back to the Companys facilities
for recycling and redelivers the fresh, recycled acid back to customers. This
closed loop process offers customers significant savings versus alternative
disposal methods and also benefits the environment by significantly reducing
refineries waste streams.

Pharmaceutical
and Personal Care.
The Company is a leading supplier of the active chemical ingredients used in
the manufacture of antiperspirants, and also supplies ingredients used in
prescription pharmaceuticals, nutritional supplements, veterinary health
products and other personal care products. The customer base includes many of
the worlds leading pharmaceutical and personal care companies.

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Technology. The Company
provides ultrahigh-purity
electronic chemicals for the semiconductor and disk drive industries. The
Companys electronic chemicals include ultrahigh-purity acids, caustics,
solvents, etchants and formulated photo ancillaries for use in the manufacture
of semiconductor processing chips and computer disk drives.

Corporate and Other

The
corporate and other segment provides industrial components for two primary
markets; wire and cable, and fluid handling equipment. The Company provides
wire and cable for a broad range of applications in the electronic, appliance,
automotive and consumer electrical markets. These products are sold to OEMs
throughout North America. The Company provides fluid handling equipment sold
primarily for automotive service applications.

Competition

Competition
in the valve actuation systems segments markets is based upon a number of
factors including design and engineering capabilities, quality, price and the
ability to meet customer delivery requirements. The Company competes with,
among others, Delphi, Eaton, INA, Timken, and captive OEMs.

Although
the Companys performance chemicals segment generally has significant market
share positions in the product areas in which it competes, most of its end
markets are highly competitive. In the pharmaceuticals and personal care
market, the Companys major competitors include BK Giulini Corp. and Summit
Research Labs as well as the captive production facilities of certain personal
care companies. The Companys competitors in the chemical processing market
include the refineries that perform their own sulfuric acid regeneration, as
well as DuPont, Marsulex, Chemtrade Logistics, PVS and Rhodia, which also have
sulfuric acid regeneration facilities that are generally located near their
major customers. In water treatment, the Company competes with Geo Specialty
Chemicals, Kemira Water Solutions Inc., U.S. Aluminates and other regional
players. Competitors in the technology market include KMG Chemicals, Honeywell
Electronic Materials and Mallinckrodt-Baker.

Suppliers; Availability of Raw Materials

The
Company purchases a variety of raw materials for its businesses. The primary
raw material used by the valve actuation systems segment is steel. The
Companys performance chemicals segments competitive cost position is, in
part, attributable to its sourcing relationships for certain raw materials that
serve as the feedstock for many of its products. Major raw material purchases
include sulfuric acid where it is uneconomical for the Company to supply itself
due to distribution costs, bauxite and aluminum tri-hydrate (for the
manufacture of alum), zirconium based products (for the manufacture of
antiperspirant active ingredients), sulfur (for the manufacture of sulfuric
acid), and soda ash (for the manufacture of sodium nitrite).

The Company purchases raw
materials from a number of suppliers and, in most cases, believes that
alternative sources are available to fulfill its needs. A number of the raw
materials the Company will purchase are subject to cyclical price movements. In
the performance chemicals segment, the Company is able to pass through all or a
portion of raw material price increases, but often on a lagged basis. The
Company has had limited success in doing so with steel cost increases to its
automotive market customers. The Company continues its efforts to ensure it has
sufficient access to required raw materials at competitive prices and to pass along
raw material price increases where possible.

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Sales and Distribution

The
Companys valve actuation systems segment has approximately 40 sales,
marketing, engineering and customer service personnel. Generally, the Company
markets its products directly to its customers, but in certain markets a
distribution network is used. The valve actuation systems segments technical
and engineering staff is an integral part of the segments sales and
distribution effort. Since many of the Companys products are
precision-engineered and custom-designed to customer specifications, the
Companys sales force and engineers work closely with its customers in
designing, producing, testing and improving its products.

In
the Companys performance chemicals segment, the Company employs approximately
70 sales, marketing, distribution and customer service personnel. The sales
force is divided into several specialized groups which focus on specific
products, end-users and geographic regions. This targeted approach provides the
Company with insight into emerging industry trends and creates opportunities
for product development.

Seasonality; Backlog

The
business of the valve actuation systems segment is generally not seasonal.
Within the performance chemicals segment, the water treatment and sulfur products
businesses have higher volumes in the second and third quarters of the year,
owing to (i) higher spring and summer demand for sulfuric acid regeneration
services from gasoline refinery customers to meet peak summer driving season
demand and (ii) higher spring and summer demand from water treatment chemical
customers to manage seasonally high and low water conditions. The other markets
that the performance chemicals segment serves are generally not seasonal. Due
to the nature of the Companys businesses, there are no significant backlogs.

Subsequent Event

On
February 29, 2008, the Company completed the sale of its antiperspirant actives
business to Summit Research Labs, Inc. for $18 million, subject to a working
capital adjustment. As part of this transaction, the Company will continue to
operate the antiperspirant actives manufacturing unit for up to one year under
a transition services contract. This business continues to be classified as
continuing operations.

Environmental Matters

The
Companys various manufacturing operations, which have been conducted at a
number of facilities for many years, are subject to numerous laws and
regulations relating to the protection of human health and the environment in
the U.S., Canada and other countries. The Company believes that it is in
substantial compliance with such laws and regulations. However, as a result of
its operations, the Company is involved from time to time in administrative and
judicial proceedings and inquiries relating to environmental matters. Based on
information available at this time with respect to potential liability
involving these facilities, the Company believes that any such liability will
not have a material adverse effect on its financial condition, cash flows or
results of operations. However, modifications of existing laws and regulations
or the adoption of new laws and regulations in the future, particularly with
respect to environmental and safety standards, or the discovery of additional
or unknown environmental contamination of any of the Companys current or
former facilities, could require the Company to make expenditures which may be
material or otherwise adversely impact the Companys operations.

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The
Company maintains a program to manage its facilities compliance with
environmental laws and regulations. Expenditures for 2007 approximated $13
million (of which approximately $4 million represented capital expenditures and
approximately $9 million related to ongoing operations and the management of
potential environmental contamination from prior operations). Expenditures for
2006 approximated $8 million (of which approximately $1 million represented
capital expenditures and approximately $7 million related to ongoing operations
and the management of potential environmental contamination from prior
operations). The Company expects expenditures similar to 2007 levels in 2008.
In addition, if environmental laws and regulations affecting the Companys
operations become more stringent, costs for environmental compliance may
increase above historical levels.

The
Comprehensive Environmental Response Compensation and Liability Act of 1980
(CERCLA) and similar statutes, have been construed as imposing joint and
several liability, under certain circumstances, on present and former owners
and operators of contaminated sites, and transporters and generators of
hazardous substances, regardless of fault. The Companys facilities have been
operated for many years by the Company or its prior owners and operators, and
adverse environmental conditions of which the Company is not aware may exist.
Modifications of existing laws and regulations and discovery of additional or
unknown environmental contamination at any of the Companys current or former facilities
could have a material adverse effect on the Companys financial condition, cash
flows and/or results of operations. In addition, the Company has received
written notice from the Environmental Protection Agency that it has been
identified as a potentially responsible party under CERCLA at two third-party
sites. The Company does not believe that its liability, if any, for these sites
will be material to its results of operations, cash flows or financial
condition.

At
any time, the Company may be involved in proceedings with various regulatory
authorities which could require the Company to pay various fines and penalties
due to violations of environmental laws and regulations at its sites, remediate
contamination at some of these sites, comply with applicable standards or other
requirements, or incur capital expenditures to modify certain pollution control
equipment or processes at its sites. Again, although the amount of any
liability that could arise with respect to these matters cannot be accurately
predicted, the Company believes that the ultimate resolution of these matters
will have no material adverse effect on its results of operations, cash flows
or financial condition.

Delaware
Valley Facility.On September 7, 2000, the EPA issued to the Company
an Initial Administrative Order (an IAO) pursuant to Section 3008(h) of the
Resource Conservation and Recovery Act (RCRA), which requires that the
Company conduct an environmental investigation of the Companys Delaware Valley
facility (the Facility) and, if necessary, propose and implement corrective
measures to address any historical environmental contamination at the Facility.
Over the past seven years, the Company has been working cooperatively with the
EPA and Honeywell, a prior owner of the Facility and current owner of a plant
adjacent to the Facility, to implement the actions required under the IAO. The
Company conducted the first investigatory steps required by the IAO, the
evaluation of potential soil and groundwater contamination, in both the North
Plant (the area of the facility north of US Route 18) and the South Plant (the
area south of US Route 18) that borders the Delaware River. As a result of the
Companys bankruptcy filing in 2002, the Company entered into an agreement with
Honeywell dated April 30, 2004 in which Honeywell agreed to take back all
environmental liability at the North Plant, past, present and future, as well
as ownership of the North Plant. In addition, Honeywell took responsibility for
the cost to address groundwater contamination at the South Plant. The Company
remains responsible only for soil contamination at the South Plant. Although
the EPA refused to formally drop the Company from the IAO, the EPA signed a
letter acknowledging Honeywells agreement to be responsible
for all liability at the North Plant and for groundwater contamination at the
South Plant and to seek recourse against Honeywell for those liabilities and
only look to the Company in

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the event of a default by Honeywell. The remaining
requirements of the IAO will be performed over the course of the next several
years. The Company closed the South Plant operations of its Delaware Valley
facility on November 10, 2003. This closure resulted in an expansion of the
investigation to be performed under the IAO. Depending on the results of that
additional investigation, additional remedial activity may be required for
soils in the South Plant. The Company has provided for the estimated costs of
$2 million for compliance with the IAO in its accrual for environmental
liabilities. As such, the Company believes that compliance with the IAO will
not have a material effect on its results of operations or financial condition.

Employees/Labor Relations

At
December 31, 2007, the Company had approximately 1,475 employees, of whom
approximately 550 were full-time salaried employees, approximately 555 were
full-time hourly employees (represented by 8 different unions) and
approximately 370 were hourly employees working in nonunion facilities.

The
Companys union contracts have durations which vary from three to four years.
The Companys relationships with its unions are generally good.

Executive Officers and Key Employees

Set
forth below is information with respect to each of the Companys executive
officers and/or key employees.

William
E. Redmond, Jr., 48, President and Chief Executive Officer of the Company since
May, 2005 and a Director of the Company since November 2003. Mr. Redmond is
also a Director of Eddie Bauer Inc. From 1996 until 2003, Mr. Redmond held the
position of Chairman, President and Chief Executive Officer of Garden Way
Incorporated.

George
G. Gilbert, 59, Vice President and General Manager  Valve Actuation Systems
Group since 2001. From 1997 to 2001, Mr. Gilbert held the position of Vice
President Technical Services/Strategic Development, for Simpson Industries.

Douglas
J. Grierson, 43, Vice President and Controller since April 2005. Mr. Grierson
served as Director of Accounting and Assistant Controller from June 1999 to
April 2005.

James
Imbriaco, 55, Vice President, General Counsel and Secretary since July 2005.
From May 2004 to June 2005, Mr. Imbriaco held the position of Consulting
Corporate Counsel with Bowne & Co., Inc. From October 2000 to August 2003,
Mr. Imbriaco held the position of Vice President, General Counsel and Secretary
with Agency.com, Ltd.

Robert
D. Novo, 50, Vice President of Human Resources and Environmental Health and Safety
since August 2004. Mr. Novo served as the Vice President of Human Resources
from July 2003 to August 2004. Prior to July 2003, Mr. Novo held various senior
level human resource positions with Honeywell International since 1995.

Vincent
J. Opalewski, 45, Vice President and General Manager  Performance Chemicals
Group since September 2006. Mr. Opalewski served as Vice President - Sales and
Marketing, for the Performance
Chemicals Group from July 2005 to September 2006. He previously served as
General Manager of the Sulfur Products Group from January 2000 to July 2005.

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Thomas
B. Testa, 46, Vice President and Chief Financial Officer since September 2006.
Mr. Testa served as Vice President and General Manager  Performance Chemicals
Group since August 2004. From April 2002 to August 2004, Mr. Testa served as
Vice President  Operations for the Performance Chemicals Group. He previously
served as General Manager of the Electronic Chemicals business group from
October 1997 to April 2002.

Corporate Governance and Internet Address

The
Company emphasizes the importance of professional business conduct and ethics
through its corporate governance initiatives. The Companys board of directors
has adopted a code of business conduct and ethics that applies to all
employees, directors and officers, including the Companys principal executive
officer, principal financial officer and principal accounting officer. The
Companys board of directors consists of a majority of independent directors.

The
Companys internet address is www.gentek-global.com. The Company makes
available, free of charge through a link on its site, the annual reports on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to such reports, if any, as filed with the SEC as soon as reasonably
practicable after such filing. The site also contains the Companys code of
business conduct and ethics and the charters of the audit committee, corporate
governance and nominating committee and compensation committee of its board of
directors. The Companys principal executive offices are located at 90 East
Halsey Road, Parsippany, New Jersey 07054, and its telephone number is (973)
515-3221.

Item 1A. Risk
Factors.

The
following is a discussion of certain factors that currently impact or may
impact the Companys business, operating results and/or financial condition. An
investment in the Companys common stock involves a high degree of risk. You
should carefully consider the risks described below before deciding to invest
in its common stock. In assessing these risks, you should also refer to the
other information in this Annual Report on Form 10-K, including the Companys
financial statements and the related notes. Various statements in this Annual
Report on Form 10-K, including some of the following risk factors, constitute
forward-looking statements.

Risks Related to the Companys Capital
Structure

The Companys
ability to make payments on its debt will be contingent on GenTeks future
operating performance, which will depend on a number of factors that are
outside of its control.

The
Companys debt service obligations are estimated to be approximately $19
million to $21 million in 2008, including approximately $3 million of principal
repayments. This debt service may have an adverse impact on the Companys
earnings and cash flow, which could in turn negatively impact GenTeks stock
price.

The
Companys ability to make principal and interest payments on its debt is
contingent on its future operating performance, which will depend on a number
of factors, many of which are outside of its control. The degree to which
GenTek is leveraged could have other important negative consequences, including
the following:

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| |   |                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the Company
  must dedicate a substantial portion of its cash flows from operations to the
  payment of its indebtedness, reducing the funds available for future working
  capital requirements, capital expenditures, acquisitions or other general
  corporate requirements;
| |   |                                                                                                                                                                                                                                                                                
| |  | a
  significant portion of its borrowings are, and will continue to be, at
  variable rates of interest, which may result in higher interest expense in
  the event of increases in interest rates;                                                                            
| |   |                                                                                                                                                                                                                                                                                
| |  | the Company
  may be more vulnerable to a downturn in the industries in which it operates
  or a downturn in the economy in general;                                                                                                                                           
| |   |                                                                                                                                                                                                                                                                                
| |  | the Company
  may be limited in its flexibility to plan for, or react to, changes in its
  businesses and the industries in which it operates;                                                                                                                                 
| |   |                                                                                                                                                                                                                                                                                
| |  | the Company
  may be placed at a competitive disadvantage compared to its competitors that
  have less debt;                                                                                                                                                                   
| |   |                                                                                                                                                                                                                                                                                
| |  | the Company
  may be limited in its ability to react to unforeseen increases in certain
  costs and obligations arising in its businesses, including environmental, pension
  and tax liabilities;                                                                             
| |   |                                                                                                                                                                                                                                                                                
| |  | the Company
  may determine it to be necessary to dispose of certain assets or one or more
  of its businesses to reduce its debt; and                                                                                                                                         
| |   |                                                                                                                                                                                                                                                                                
| |  | the
  Companys ability to borrow additional funds in excess of its current financing
  may be limited.                                                                                                                                                                        

The
Company can provide no assurance that its businesses will generate sufficient
cash flow from operations or that future borrowings will be available in
amounts sufficient to enable the Company to pay its indebtedness or to fund its
other liquidity needs. Moreover, the Company may need to refinance all or a
portion of its indebtedness on or before maturity. In such a case, the Company
cannot make assurances that it will be able to refinance any of its
indebtedness on commercially reasonable terms or at all. If the Company is
unable to make scheduled debt payments or comply with the other provisions of
its debt instruments, the Companys various lenders may be permitted under
certain circumstances to accelerate the maturity of the indebtedness owed to
them and exercise other remedies provided for in those instruments and under
applicable law.

The Company is
subject to restrictive debt covenants pursuant to its indebtedness. These
covenants may restrict its ability to finance its business and, if the Company
does not comply with the covenants or otherwise default under them, the Company
may not have the funds necessary to pay all amounts that could become due and
the lenders could foreclose on substantially all of its assets.

The
Companys indebtedness contains covenants that, among other things,
significantly restricts and, in some cases, effectively eliminates the
Companys ability and the ability of most of its subsidiaries to:

| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | incur
  additional debt;                                                              
| |   |                                                                                       
| |  | create or
  incur liens;                                                              
| |   |                                                                                       
| |  | pay
  dividends or make other equity distributions to the Companys shareholders;     
| |   |                                                                                       
| |  | make
  investments;                                                                   
| |   |                                                                                       
| |  | sell assets;                                                                          
| |   |                                                                                       
| |  | issue or
  sell share capital of certain subsidiaries;                                
| |   |                                                                                       
| |  | engage in
  transactions with affiliates;                                             
| |   |                                                                                       
| |  | issue or
  become liable on a guarantee;                                              
| |   |                                                                                       
| |  | create or
  acquire new subsidiaries; and                                             
| |   |                                                                                       
| |  | effect a
  merger or consolidation of, or sell all or substantially all of its assets.

-9-

---



In
addition, the Company and its subsidiaries must comply with certain financial
covenants. In the event the Company was to fail to meet any of such covenants
and were unable to cure such breach or otherwise renegotiate such covenants,
the Companys lenders would have significant rights to deny future access to
liquidity and/or seize control of substantially all of its assets. The material
financial covenants with which the Company must comply include a maximum
leverage ratio of 3.5, a minimum interest coverage ratio of 3.00, and a maximum
amount of capital expenditures of $42 million in 2008 and $33 million in 2009.
The maximum amount of capital expenditures will be increased if the prior
years maximum amount was not reached by the amount of the shortfall up to a
maximum increase of $15 million.

The
covenants contained in the Companys indebtedness and any credit agreement
governing future debt may significantly restrict its future operations.
Furthermore, upon the occurrence of any event of default, the Companys lenders
could elect to declare all amounts outstanding under such agreements, together
with accrued interest, to be immediately due and payable. If those lenders were
to accelerate the payment of those amounts, the Company cannot assure you that
its assets and the assets of its subsidiaries would be sufficient to repay
those amounts in full.

The
Company is also subject to interest rate risk due to its indebtedness at
variable interest rates, based on a base rate or LIBOR plus an applicable
margin. The Company cannot assure you that shifts in interest rates will not
have a material adverse effect on it.

The Company may be
required to prepay its indebtedness prior to its stated maturity, which may
limit its ability to pursue business opportunities.

Pursuant
to the terms of certain of the Companys indebtedness, in certain instances it
is required to prepay outstanding indebtedness prior to its stated maturity
date. Specifically, certain non-recurring cash inflows such as proceeds from
asset sales, insurance recoveries, and equity offerings may have to be used to
pay down indebtedness and may not be reborrowed. These prepayment provisions
may limit the Companys ability to utilize this cash flow to pursue business
opportunities.

The Companys
business is capital intensive. It cannot assure you that it will have
sufficient liquidity to fund its working capital and capital expenditures and
to meet its obligations under existing debt instruments.

The
Companys business is capital intensive and it cannot be certain that it will
achieve sufficient cash flow in the future. Failure to maintain profitability
and generate sufficient cash flow could diminish its ability to sustain
operations, meet financial covenants, obtain additional required funds and make
required payments on any indebtedness it may have incurred or may incur in the
future. If the Company does not comply with the covenants in its credit
agreements or otherwise default under them, it may not have access to
borrowings under its $60 million revolving credit facility or the funds
necessary to pay amounts that become due.

Although
the Company believes that its current levels of cash and cash equivalents,
along with available borrowings on its revolving credit facility, will be
sufficient for its cash requirements during the next twelve months, it is
possible that these sources of cash will be insufficient, resulting in the
Company having to raise additional funds for liquidity. There can be no
assurance the Company will have access to additional funding should the need
arise.

-10-

---



The Company is a
holding company that is dependent upon cash flow from its subsidiaries to meet
its financial obligations; its ability to access that cash flow may be limited
in some circumstances.

The
Company is a holding company with no independent operations or significant
operating assets other than its investments in, and advances to, its
subsidiaries. The Company depends upon the receipt of sufficient funds from its
subsidiaries through its centralized cash management system from its domestic
subsidiaries and through dividends, loans or other distributions from its
foreign subsidiaries to meet its financial obligations. In addition, the terms
of the Company and its subsidiaries existing indebtedness, and the laws of the
jurisdictions under which it and its subsidiaries are organized, limit the
payment of dividends, loan repayments and other distributions by its
subsidiaries to the Company under some circumstances. Any indebtedness that it,
or its subsidiaries, may incur in the future may contain similar restrictions.

Risks Related to the
Companys Operations

The industries in
which the Company operates are highly competitive. This competition may prevent
it from raising prices at the same pace as its costs increase, making it
difficult for the Company to maintain existing business and win new business.

The
Company faces significant competition in most of its businesses. Certain of its
competitors have large market shares and substantially greater financial and
technical resources than it does. The Company may be required to reduce prices
if its competitors reduce prices, or as a result of any other downward pressure
on prices for its products and services, which could have an adverse effect on
the Company.

In
each of its business segments, the Company operates in competitive markets. Its
valve actuation systems segment competes with numerous international and North
American companies, including various captive operations of automotive original
equipment manufacturers (OEMs) and Tier 1 suppliers to automotive
manufacturers. Competition in the valve actuation systems segments markets is
based on a number of factors, including design and engineering capabilities,
price, quality and the ability to meet customer delivery requirements. Due to
the level of competition, its customers have regularly requested price
decreases and maintaining or raising prices has been difficult over the past
several years and will likely continue to be so in the near future. Most of the
markets in which its performance chemicals segment does business are highly
competitive, with competitors typically segregated by end market. Competition
in the performance chemicals segments markets is based on a number of factors,
including price, freight economics, product quality and technical support. If
the Company is unable to compete successfully, its financial condition and
results of operations could be adversely affected.

The industries the
Company competes in are subject to economic downturns.

An
economic downturn in the automotive industry as a whole or other events (e.g.,
labor disruptions) resulting in significantly reduced operations at Chrysler or
Ford, or at certain of its manufacturing plants, could have a material adverse
impact on the results of its valve actuation systems segment. For the Companys
performance chemicals business, weakness in the pulp and paper, electronics or
petroleum refining industries could have an adverse effect on its results of
operations.

-11-

---



The Company may
experience increased costs and production delays if suppliers fail to deliver
materials to the Company or if prices increase for raw materials and other
goods and services that it purchases from third parties.

The
Company purchases raw materials from a number of domestic and foreign
suppliers.  Although it believes that
the raw materials it requires will be available in sufficient supply on a
competitive basis for the foreseeable future, continued increases in the cost
of raw materials, including energy and other inputs used to make the Companys
products, could affect future sales volumes, prices and margins for its
products.  If a supplier should cease to
deliver goods or services to the Company, it would probably find other sources,
however, such a disruption could result in added cost and manufacturing
delays.  In addition, political
instability, war, terrorism and other disruptions to international transit
routes control could adversely impact its ability to obtain key raw materials
in a timely fashion, or at all.

The Companys
revenues are dependent on the continued operation of its manufacturing
facilities, and breakdowns or other problems in its operations could adversely
affect its results of operations.

The
Companys revenues are dependent on the continued operation of its various
manufacturing facilities. In particular, the operation of chemical
manufacturing plants involves many risks, including the breakdown, failure or
substandard performance of equipment, natural disasters, acts of terrorism,
power outages, the need to comply with directives of government agencies, and
dependence on the ability of railroads and other shippers to transport raw
materials and finished products in a timely manner.  The occurrence of material operational problems, including but
not limited to the foregoing events, at one or more of the Companys facilities
could have a material adverse effect on its results of operations or financial
condition.  Certain facilities within
each of its business segments account for a significant share of its
profits.  Disruption to operations at
one of these facilities could have a material adverse impact on segment
financial performance and its overall financial condition.  In addition, in certain circumstances, the
Company could also be materially affected by a disruption or closure of a
customers plant or facility to which it supplies its products.

A significant
portion of the Companys revenue and operating income from its valve actuation
systems segment has been, and is expected to continue to be, concentrated in a
small number of customers.

The
Company derives and is expected to continue to derive significant portions of
its revenues and operating income in its valve actuation systems segment from
sales of products to Ford and Chrysler. 
As a result, the loss of, or reduced demand from these customers could
adversely effect the Companys revenues and operating income.

Material changes in
pension and other postretirement benefit costs may occur in the future.  In addition, investment returns on pension
assets may be lower than assumed, which could result in larger cash funding
requirements for the Companys pension plans, which could have an adverse
impact on the Company.

The
Company maintains several defined benefit pension plans covering certain
employees in Canada and the United States. 
It records pension and postretirement benefit costs in amounts developed
from actuarial valuations.  Inherent in
these valuations are key assumptions including the discount rate and expected
long-term rate of return on plan assets. 
Material changes in pension and other postretirement benefit costs may
occur in the future due to changes in these assumptions, differences

-12-

---



between actual
experience and the assumptions used, and changes in the benefit plans.  Amounts required to be funded are also
dependent upon interest rates.  Some of
the plans are underfunded.  The Company
is required to rectify this underfunding in accordance with federal
guidelines.  The Company expects to be
required to make substantial cash contributions beginning in 2010 and
continuing beyond such time. Moreover, if investment returns on pension assets
are lower than assumed, it may have substantially larger cash funding
requirements for its pension plans, which may have a material adverse impact on
its liquidity.

The Companys
principal businesses are subject to government regulation, including
environmental regulation, and changes in current regulations may adversely
affect it.

The
Companys principal business activities are regulated and supervised by various
governmental bodies.  Changes in laws,
regulations or governmental policy or the interpretations of those laws or
regulations affecting its activities and those of its competitors could have a
material adverse effect on it.

For
example, the Companys various manufacturing operations, which have been
conducted at a number of facilities for many years, are subject to numerous
laws and regulations relating to the protection of human health and the
environment in the U.S., Canada and other countries. The Company believes that
it is in substantial compliance with such laws and regulations.  However, as a result of its operations, from
time to time it is involved in administrative and judicial proceedings and
inquiries relating to environmental matters. 
Based on information available to it at this time with respect to
potential liability involving these facilities, the Company believes that any
such liability will not have a material adverse effect on its financial
condition, cash flows or results of operations.  However, modifications to existing laws and regulations or the
adoption of new laws and regulations in the future, particularly with respect
to environmental and safety standards, could require it to make expenditures
which may be material or may otherwise adversely impact its operations.

The production of
chemicals is associated with a variety of hazards, which could create significant
liabilities or cause the Companys facilities to suspend its operations.

The
Companys operations are subject to various hazards incident to the production
of chemicals, including the use, handling, processing, storage and
transportation of certain hazardous materials. 
These hazards, which include the risk of explosions, fires and chemical
spills or releases, can cause personal injury and loss of life, severe damage
to and destruction of property and equipment, environmental damage, suspension
of operations and potentially subject us to lawsuits relating to personal
injury and property damages.  Any such
event or circumstance could have a material adverse effect on its results of
operations or financial condition.

The
Companys facilities have been operated for many years by it or prior owners
and operators, and adverse environmental conditions of which it is not aware
may exist. The discovery of additional or unknown environmental contamination
at any of its current or former facilities could have a material adverse effect
on its financial condition, cash flows and/or results of operations.

The seasonal nature
of the water treatment and chemical processing businesses could increase the
Companys costs or have other negative effects.

Within
its performance chemicals segment, the water treatment and chemical processing
businesses have higher volumes in the second and third quarters of the year,
owing to higher spring and summer demand for sulfuric acid regeneration services
from gasoline refinery customers to meet peak

-13-

---



summer driving
season demand and higher spring and summer demand from water treatment chemical
customers to manage seasonally high and low water conditions.  The degree of seasonal peaks and declines in
the volumes of its business could increase its costs, negatively impact its
manufacturing efficiency, or have other negative effects on its operations or
financial performance.

The Company may not
be able to obtain insurance at its historical rates and its insurance coverage
may not cover all claims and losses.

The
Company maintains insurance coverage on its properties, machines, supplies and
other elements integral to its business and against certain third party
litigation, environmental matters and similar events.  Due to recent changes in market conditions in the insurance
industry and other factors, the Company may not be able to secure insurance at
a similar cost to what it may have previously paid, if at all.  In addition, there are certain types of
losses, such as earthquakes, floods, hurricanes, terrorism, acts of war or
product warranty that may be uninsurable or not economically insurable.  Inflation, changes in building codes and
ordinances, environmental considerations, and other factors, including
terrorism or acts of war, also may make insurance proceeds insufficient to
repair or replace a property if it is damaged or destroyed.

The Company is
dependent upon many critical systems and processes, many of which are dependent
upon hardware that is concentrated in a limited number of locations.  If a catastrophe were to occur at one or
more of those locations, it could have a material adverse effect on its
business.

The
business is dependent on certain critical systems, which support various
aspects of its operations, from its computer network to its billing and
customer service systems.  The hardware
supporting a large number of such systems is housed in a small number of
locations.  If one or more of these
locations were to be subject to fire, natural disaster, terrorism, power loss,
or other catastrophe, it could have a material adverse effect on its
business.  While the Company believes
that it maintains reasonable disaster recovery programs, there can be no
assurance that, despite these efforts, any disaster recovery, security and
service continuity protection measures it may have or may take in the future
will be sufficient.

In
addition, computer viruses, electronic break-ins or other similar disruptive
technological problems could also adversely affect its operations.  The Companys insurance policies may not
adequately compensate it for any losses that may occur due to any failures or
interruptions in its computer systems.

The Company cannot
predict the impact of any asset or business disposition.

From
time to time, the Company considers dispositions of assets or businesses.  The Company cannot predict the types of
dispositions that may be undertaken in the future or the financial impact of
such actions.  For example, after-tax
cash proceeds received in connection with any disposition would be dependent on
levels of interest from potential purchasers and the tax and other structuring
elements of such transaction.  As a
result, there can be no assurance as to the terms of any such disposition, the
level of any disruption to the operations of the Company caused by such
transaction, or the long-term effect of such transaction on the Companys
financial condition.

The Company has
recently completed several acquisitions and may continue to pursue new
acquisitions or joint ventures, and any such transaction could adversely affect
operating results or result in increased costs or other operating or management
problems.  The Company remains subject

-14-

---



to the ongoing risks
of successfully integrating and managing the acquisitions that have been
completed.

The
Company has recently completed several acquisitions.  These transactions expose the Company to the risk of successfully
integrating those acquisitions.  Such
integration could impact various areas of the Companys business, including,
but not limited to, its workforce, management, production facilities,
information systems, accounting and financial reporting, and customer
service.  Disruption to any of these
areas could materially harm the Companys financial condition or results of
operations.

The
Company may continue to pursue new acquisitions or joint ventures in the
future, a pursuit which could consume substantial time and resources.  The successful implementation of the
Companys operating strategy in current and future acquisitions and joint
ventures may require substantial attention from its management team, which
could divert management attention from existing businesses.  The businesses acquired, or the joint
ventures entered into, may not generate the cash flow and earnings, or yield
the other benefits anticipated at the time of their acquisition or formation.  The risks inherent in any such strategy
could have an adverse impact on the Companys results of operation or financial
condition.

The Company may be
unable to identify liabilities associated with the properties that may be
acquired or obtain protection from sellers against them.

The
acquisition of properties requires assessment of a number of factors, including
physical condition and potential environmental and other liabilities. Such
assessments are inexact and inherently uncertain.  The assessments made result from a due diligence review of the
subject properties, but such a review will not reveal all existing or potential
problems.  The Company may not be able
to obtain contractual indemnities from the seller for liabilities that it
created or that were created by any predecessor of the seller.  The Company may be required to assume the
risk of the physical or environmental condition of the properties in addition
to the risk that the properties may not perform in accordance with
expectations.

Risks Related to The Companys Common Stock

The market price of
the Companys common stock is subject to volatility.

The
market price of the Companys common stock could be subject to wide
fluctuations in response to numerous factors, many of which are beyond its
control.  These factors include, among
other things, actual or anticipated variations in its operating results and
cash flow, the nature and content of its earnings releases and its competitors
earnings releases, announcements of technological innovations that impact its
products, customers, competitors or markets, changes in financial estimates by
securities analysts, business conditions in its markets and the general state
of the securities markets and the market for similar stocks, changes in capital
markets that affect the perceived availability of capital to companies in its
industries, governmental legislation or regulation, as well as general economic
and market conditions, such as recessions.

Sales
of large amounts of the Companys common stock, or the perception that large sales
could occur, may cause volatility in its stock price.  As of December 31, 2007, the Company had approximately 11 million
shares of common stock outstanding. 
This relatively small float of shares available for purchase/sale may
result in share price volatility in cases where an investor seeks, or is
perceived to be seeking, to acquire or divest a large block of shares in the
public market.

-15-

---



The exercise of the
Companys Tranche B and Tranche C warrants could create substantial dilution,
or there may be other events which could have a dilutive effect on its common
stock.

The
Company currently has options and warrants outstanding covering the purchase of
approximately 3 million shares of common stock.  If options or warrants to purchase the Companys common stock are
exercised, or other equity interests are granted under its management and
directors incentive plan or under other plans adopted in the future, such
equity interests will have a dilutive effect on its common stock.  The Company cannot predict the effect any
such dilution may have on the price of its common stock.

Item 1B. 
Unresolved Staff Comments.

NONE

Item 2. 
Properties.

The
Company operates over 50 manufacturing and production facilities located primarily
in the United States and Canada. The Companys headquarters are located in
Parsippany, New Jersey.

Set forth below are the
locations and uses of the Companys major properties:

| |                                   |  |                                  
| | --------------------------------- |  | ---------------------------------
| | Location                          |  | Use                              
| |                                   |  |                                  
| | Valve
Actuation Systems Segment   |  |                                  
| | Tallahassee,
  Florida            |  | Production
  Facility            
| | Westland,
  Michigan(1)           |  | R&D
  Center and Offices         
| | Toledo, Ohio                      |  | Production
  Facility            
| | Defiance,
  Ohio(2)               |  | Production
  Facility            
| | Curitiba,
  Brazil(1)             |  | Production
  Facility            
| |                                   |  |                                  
| | Performance
Chemicals Segment     |  |                                  
| | Hollister, California(2)          |  | Production
  Facility and Offices
| | Pittsburg,
  California(2)        |  | Production
  Facility            
| | Richmond,
  California(2)         |  | Production
  Facility            
| | Augusta,
  Georgia                |  | Production
  Facility            
| | East St.
  Louis, Illinois        |  | Production
  Facility            
| | Berkeley
  Heights, New Jersey(2) |  | Production
  Facility and Offices
| | Solvay, New
  York                |  | Production
  Facility            
| | Celina,
  Texas                   |  | Production
  Facility            
| | Midlothian,
  Texas               |  | Production
  Facility            
| | Anacortes,
  Washington           |  | Production
  Facility            
| | Thorold,
  Ontario                |  | Production
  Facility            
| | Valleyfield,
  Quebec             |  | Production
  Facility            
| |                                   |  |                                  
| | Corporate
and Other               |  |                                  
| | Weaverville,
  North Carolina(2)  |  | Production
  Facility and Offices
| | Mineral
  Wells, Texas            |  | Production
  Facility and Offices
| | Parsippany,
  New Jersey(1)       |  | Headquarters                     



---

(1) Leased.


(2) Mortgaged as security
under the Companys debt facilities.

-16-

---



Item 3. 
Legal Proceedings.

The
Company is involved in claims, litigation, administrative proceedings and
investigations of various types and certain environmental proceedings
previously discussed.  See Item 1.
Business - Environmental Matters above. 
Although the amount of any liability that could arise with respect to
these actions cannot be accurately predicted, the opinion of management based
upon currently-available information is that any such liability not covered by
insurance will have no material adverse effect on the Company's results of
operations, cash flows or financial condition.

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

No
items were submitted to a vote of security holders of the Company, through the
solicitation of proxies or otherwise, during the fourth quarter of fiscal 2007.

-17-

---



PART II

|        |                                                                                                               
|------- | --------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity,
 Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

The
common stock is quoted on the NASDAQ National Market under the symbol GETI.
The following table sets forth, for the period indicated, the high and low sale
prices in dollars as quoted on the NASDAQ National Market for its common stock.

|               |  |      |       |     |   |       | 
|-------------- |  | ---- | ----- | --- | - | ----- | 
|               |  | High |       | Low |  
|               |  |      |       |     |  
|2007           |  |      |       |     |   |       | 
|First Quarter  |  | $    | 38.00 |     | $ | 31.25 | 
|Second Quarter |  | $    | 36.39 |     | $ | 32.76 | 
|Third Quarter  |  | $    | 36.53 |     | $ | 28.14 | 
|Fourth Quarter |  | $    | 36.09 |     | $ | 27.96 | 
|               |  |      |       |     |   |       | 
|2006           |  |      |       |     |   |       | 
|First Quarter  |  | $    | 20.96 |     | $ | 17.77 | 
|Second Quarter |  | $    | 29.04 |     | $ | 22.60 | 
|Third Quarter  |  | $    | 30.47 |     | $ | 26.57 | 
|Fourth Quarter |  | $    | 36.15 |     | $ | 27.46 | 

As
of March 6, 2008, there were 2,874 stockholders of record of the Companys
common stock.

Dividends

The
Company currently intends to retain its earnings for use in the operation and
expansion of its business and for debt service and, therefore, it does not
anticipate paying regular cash dividends in the foreseeable future.
Additionally, the Companys credit facilities directly limit the ability of the
Company to pay cash dividends.

-18-

---



Equity Compensation Plan Information

The
following table gives information about its existing Common Stock that may be
issued upon the exercise of options, warrants and rights under its Amended and
Restated 2003 Management and Directors Incentive Plan as of December 31, 2007.

|                                                            |  |                                                                                                      |  |                                                                                     |  |                                                                                                                                                       |       |  |  |         |  | 
|----------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- | ----- |  |  | ------- |  | 
|                                                            |  | Equity Compensation Plan Information                                                                 | 
|                                                            |  |                                                                                                      | 
|Plan Category                                               |  | Number of Securities
 to be issued upon
 exercise of outstanding
 options, warrants and
 rights
 (a) |  | Weighted average
 exercise price of
 outstanding options,
 warrants and rights
 (b) |  | Number of Securities
 remaining available for
 future issuance under
 equity compensation plans
 (excluding securities
 reflected in column (a))
 (c) |      
|                                                            |  |                                                                                                      |  |                                                                                     |  |                                                                                                                                                       |      
|Equity compensation plans approved by security
 holders     |  | 347,556                                                                                              |  |                                                                                     |  | $                                                                                                                                                     | 19.47 |  |  | 757,754 |  | 
|                                                            |  |                                                                                                      |  |                                                                                     |  |                                                                                                                                                       |       |  |  |         |  | 
|Equity compensation plans not approved by security
 holders |  | 0                                                                                                    |  |                                                                                     |  |                                                                                                                                                       | N/A   |  |  | 0       |  | 
|                                                            |  |                                                                                                      |  |                                                                                     |  |                                                                                                                                                       |       |  |  |         |  | 
|Total                                                       |  | 347,556                                                                                              |  |                                                                                     |  | $                                                                                                                                                     | 19.47 |  |  | 757,754 |  | 
|                                                            |  |                                                                                                      |  |                                                                                     |  |                                                                                                                                                       |       |  |  |         |  | 

Performance Graph

In
accordance with the rules of the SEC, this section entitled Performance Graph
shall not be incorporated by reference into any of our future filings under the
Securities Act or the Exchange Act, and shall not be deemed to be soliciting
material or to be filed under the Securities Act or the Exchange Act.

The following
graph illustrates the cumulative total stockholder return that would have been
realized (assuming reinvestment of dividends) by an investor who invested $100
on November 11, 2003 (the first trading day of the Companys Common Stock
following the Companys emergence from Bankruptcy) in each of: (i) GenTek Inc.
Common Stock, (ii) the Russell 2000 Index, (iii) the Standard & Poors
MidCap Auto Components Index, and (iv) the Standard & Poors SmallCap
Chemicals Index.

-19-

---



(LINE GRAPH)

Indexed Performance

|                                 |  |            |  |            |  |            |  |            |  |            |  |            | 
|-------------------------------- |  | ---------- |  | ---------- |  | ---------- |  | ---------- |  | ---------- |  | ---------- | 
|                                 |  | 11/11/2003 |  | 12/31/2003 |  | 12/31/2004 |  | 12/31/2005 |  | 12/31/2006 |  | 12/31/2007 | 
|                                 |  |            |  |            |  |            |  |            |  |            |  |            | 
|GenTek (GETI)                    |  | 100.00     |  | 99.72      |  | 147.02     |  | 159.94     |  | 309.41     |  | 261.82     | 
|Russell 2000 Index               |  | 100.00     |  | 105.57     |  | 125.03     |  | 130.81     |  | 154.94     |  | 152.53     | 
|S&P MidCap Auto Components Index |  | 100.00     |  | 111.27     |  | 112.82     |  | 95.30      |  | 92.47      |  | 107.30     | 
|S&P SmallCap Chemicals Index     |  | 100.00     |  | 114.69     |  | 138.00     |  | 108.48     |  | 132.10     |  | 123.71     | 

Issuer Purchases of Equity
Securities

|                    |  |                                          |        |                                     |   |                                                                                    |  |                                                                                           |        |  |   |            | 
|------------------- |  | ---------------------------------------- | ------ | ----------------------------------- | - | ---------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------- | ------ |  | - | ---------- | 
|                    |  | (a)
 Total
 Number of
 Shares
 Purchased |        | (b)
 Average
 Price Paid per
 Share |   | (c)
 Total
 Number of
 Shares
 Purchased as
 Part of
 Publicly
 Announced
 Program |  | (d)
 Approximate
 Dollar Value
 Of Shares
 That May Yet
 Be Purchased
 Under the
 Program |       
|                    |  |                                          |        |                                     |   |                                                                                    |  |                                                                                           |       
|                    |  |                                          |        |                                     |   |                                                                                    |  |                                                                                           |        |  |   |            | 
|October 1-31, 2007  |  |                                          |       |                                     | $ |                                                                                   |  |                                                                                           |       |  | $ | 27,750,353 | 
|November 1-30, 2007 |  |                                          | 8,900  |                                     |   | 29.26                                                                              |  |                                                                                           | 8,900  |  |   | 27,489,954 | 
|December 1-31, 2007 |  |                                          | 36,861 |                                     |   | 28.52                                                                              |  |                                                                                           | 36,861 |  |   | 26,438,628 | 
|                    |  |                                          |        |                                     |   |                                                                                    |  |                                                                                           |        |  |   |            | 
|Total               |  |                                          | 45,761 |                                     | $ | 28.66                                                                              |  |                                                                                           | 45,761 |  | $ | 26,438,628 | 
|                    |  |                                          |        |                                     |   |                                                                                    |  |                                                                                           |        |  |   |            | 

On
August 7, 2007, the Company announced a stock repurchase program pursuant to
which the Company may purchase in the aggregate up to $30 million of its common
stock. The program expires on August 7, 2010.

-20-

---



Item 6. Selected
Financial Data.

The
following selected consolidated financial data of the Company have been derived
from and should be read in conjunction with the Companys Consolidated
Financial Statements. In connection with its
emergence from bankruptcy on November 10, 2003, the Company has adopted
fresh-start reporting in accordance with Statement of Position 90-7, Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code. Accordingly, the Companys post-emergence
financial statements (Successor) will not be comparable with its
pre-emergence financial statements (Predecessor).

|                                                   |  |                                        |         |                                   |   |                                   |   |      |         |   |   |         |  |   |           |   |   |         |       
|-------------------------------------------------- |  | -------------------------------------- | ------- | --------------------------------- | - | --------------------------------- | - | ---- | ------- | - | - | ------- |  | - | --------- | - | - | ------- | ------
|                                                   |  | Successor                              |         | Predecessor                       |  
|                                                   |  |                                        |         |                                   |  
|                                                   |  | Years
 Ended December 31,              |         | Period
 Ended
 December 31,
 2003 |   | Period
 Ended
 November 10,
 2003 |  
|                                                   |  |                                        |         |                                   |  
|                                                   |  | 2007                                   |         | 2006                              |   | 2005                              |   | 2004 |         |   |  
|                                                   |  |                                        |         |                                   |   |                                   |   |      |         |   |   |         | 
|                                                   |  | (In
 thousands, except per share data) |        
|Statement of Operations Data:                      |  |                                        |         |                                   |   |                                   |   |      |         |   |   |         |  |   |           |   |   |         |       
|Net revenues                                       |  | $                                      | 608,219 |                                   | $ | 593,254                           |   | $    | 537,433 |   | $ | 509,813 |  | $ | 62,672    |   | $ | 456,356 |       
|Restructuring and impairment charges               |  |                                        | 4,964   |                                   |   | 2,974                             |   |      | 6,989   |   |   | 8,934   |  |   | 293       |   |   | 24,783  |       
|Operating profit                                   |  |                                        | 62,130  |                                   |   | 51,575                            |   |      | 36,893  |   |   | 30,091  |  |   | 3,190     |   |   | 9,942   |       
|Interest expense                                   |  |                                        | 22,685  |                                   |   | 29,137                            |   |      | 24,733  |   |   | 7,930   |  |   | 2,426     |   |   | 856     |       
|Income (loss) from continuing operations           |  |                                        | 38,092  |                                   |   | 14,131                            |   |      | 7,773   |   |   | 15,067  |  |   | 1,259     |   |   | 443,110 | (1)(2)
|Income (loss) from discontinued operations         |  |                                        | (8,325  | )                                 |   | (16,234                           | ) |      | (8,595  | ) |   | 180,251 |  |   | (167      | ) |   | 51,282  |       
|Net income (loss)                                  |  | $                                      | 29,767  |                                   | $ | (2,103                            | ) | $    | (822    | ) | $ | 195,318 |  | $ | 1,092     |   | $ | 494,392 | (1)(2)
|                                                   |  |                                        |        
|Per Share:                                         |  |                                        |         |                                   |   |                                   |   |      |         |   |   |         |  |   |           |   |   |         |       
|Income (loss) from continuing operationsbasic     |  | $                                      | 3.69    |                                   | $ | 1.39                              |   | $    | 0.77    |   | $ | 1.51    |  | $ | 0.13      |   | $ | 17.33   | (1)(2)
|Income (loss) from continuing operationsdiluted   |  |                                        | 3.29    |                                   |   | 1.29                              |   |      | 0.77    |   |   | 1.50    |  |   | 0.13      |   |   | 17.33   | (1)(2)
|Income (loss) from discontinued operationsbasic   |  |                                        | (0.81   | )                                 |   | (1.60                             | ) |      | (0.86   | ) |   | 18.03   |  |   | (0.02     | ) |   | 2.01    |       
|Income (loss) from discontinued operationsdiluted |  |                                        | (0.72   | )                                 |   | (1.48                             | ) |      | (0.85   | ) |   | 17.98   |  |   | (0.02     | ) |   | 2.01    |       
|Net income (loss)basic                            |  |                                        | 2.89    |                                   |   | (0.21                             | ) |      | (0.08   | ) |   | 19.53   |  |   | 0.11      |   |   | 19.34   | (1)(2)
|Net income (loss)diluted                          |  |                                        | 2.57    |                                   |   | (0.19                             | ) |      | (0.08   | ) |   | 19.48   |  |   | 0.11      |   |   | 19.34   | (1)(2)
|Dividends(3)                                       |  |                                        |        |                                   |   |                                  |   |      | 31.00   |   |   | 7.00    |  |   |          |   |   |        |       
|                                                  
|Balance Sheet Data (at end of period):             |  |                                        |         |                                   |   |                                   |   |      |         |   |   |         |  |   |           |   |   |         |       
|Total assets                                       |  | $                                      | 613,979 |                                   | $ | 730,206                           |   | $    | 761,075 |   | $ | 755,519 |  | $ | 1,067,534 |   |   |         |       
|Long-term debt (including current portion)         |  |                                        | 240,132 |                                   |   | 345,299                           |   |      | 360,269 |   |   | 11,793  |  |   | 251,188   |   |   |         |       
|Total equity                                       |  |                                        | 145,609 |                                   |   | 98,479                            |   |      | 85,375  |   |   | 400,427 |  |   | 278,787   |   |   |         |       

|    |                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------
|   
|(1) | Includes a decrease to the
 deferred tax asset valuation allowance of $98.5 million.                  
|    |                                                                                                       
|(2) | Includes reorganization
 items of $400.1 million of income.                                           
|    |                                                                                                       
|(3) | During 2005 and 2004, the
 Company paid special dividends of $31.00 and $7.00 per share, respectively.

-21-

---



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

The
following section should be read in conjunction with the consolidated financial
statements and the notes indicated elsewhere in this Annual Report. This Annual
Report on Form 10-K includes forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Certain statements, other
than statements of historical facts, included in this Annual Report may
constitute forward-looking statements. Forward-looking statements are generally
identifiable by use of forward-looking terminology such as may, will,
should, potential, intend, expect, endeavor, seek,
anticipate,
estimate, overestimate, underestimate, believe, could,
project,
predict, continue or other similar words or expressions. The Company has
based these forward-looking statements on its current expectations and
projections about future events. Although the Company believes that its
assumptions made in connection with the forward-looking statements are
reasonable, there can be no assurances that these assumptions and expectations
will prove to have been correct. Important factors that could cause actual
results to differ from these expectations are disclosed in this Annual Report
and include various risks, uncertainties and assumptions. Such factors include,
but are not limited to, those set forth in the section of this annual report
captioned Business  Risk Factors.

The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this Annual Report might not occur.

Acquisitions

On
December 31, 2007, the Company acquired Bay Chemical and Supply Company. The
acquisition included the manufacturing facility in Odem, Texas. Bay Chemical
and Supply Company produces and distributes aluminum sulfate and other water
treatment chemicals for the south Texas municipal water treatment market. The
purchase price was $7 million.

On
February 6, 2007, the Company acquired the assets of Chalum, Inc. The
acquisition included the manufacturing facility in Sacaton, Arizona. Chalum
produces aluminum sulfate for the greater Phoenix, Arizona municipal water
treatment market. The purchase price was $3 million.

On
September 21, 2006, the Company acquired the assets of GAC MidAmerica, Inc. The
acquisition included manufacturing facilities in Toledo, Ohio, Indianapolis,
Indiana, and Saukville, Wisconsin. GAC produces aluminum sulfate and bleach, as
well as distributing specialty water treatment chemicals, sulfuric acid and caustic
soda. The purchase price of the transaction was $8 million.

On
July 31, 2006, the Company acquired the assets of Precision Engine Products
Corp., a wholly owned subsidiary of Stanadyne Corporation. Precision Engine
Products is dedicated principally to the manufacturing of hydraulic lash
adjusters and die cast aluminum rocker arm assemblies utilized in valve train
systems for both OEM and after market applications to the global automotive and
light truck markets. Precision Engine Products has manufacturing facilities in
Tallahassee, Florida and Curitiba, Brazil. The purchase price of the
transaction was $26 million.

On
July 27, 2006, the Company acquired the assets of Repauno Products, LLC. The
acquisition included the manufacturing facility in Gibbstown, New Jersey.
Repauno Products manufactures sodium nitrite which is used in a wide range of
industries including metal finishing, heat transfer salts, rubber processing,
meat curing, odor control and inks and dyes. The purchase price of the
transaction was $6 million.

-22-

---



Discontinued Operations

On
July 17, 2007, the Company completed the sale of its wholly-owned subsidiary
Defiance Testing and Engineering Services, Inc. On February 16, 2007, the
Company completed the sale of its Noma wire and cable harness assembly
business. The net proceeds from the transaction were used to repay outstanding
debt. During April 2006, the Company completed the sale of its cable and wire
manufacturing business in Stouffville, Canada. Proceeds from the transaction
were used to repay $22 million of the Companys second lien term loan. During
the second quarter of 2005, the Company ceased operations of its printing plate
business. The business had become unprofitable as it has experienced severe
competitive pressures over the last several years and has been hurt by a
continued shift in technology in the printing plate market. Accordingly, all
financial information included herein has been reclassified to reflect these
businesses as discontinued operations.

Overview

The
Company is a holding company whose subsidiaries manufacture industrial
components and performance chemicals. GenTek has no independent operations and,
therefore, is dependent upon cash flow from its subsidiaries to meet its
obligations. It operates through two primary business segments: valve actuation
systems and performance chemicals. Its products are frequently highly
engineered and are important components of, or provide critical attributes to,
its customers end products or operations. The Company operates over 50
manufacturing and production facilities located primarily in the U.S. and
Canada.

Valve Actuation Systems

The
valve actuation systems segment provides precision engineered valve actuation
systems and components for gasoline and diesel engines in two principal
markets: automotive and heavy duty/commercial. Over the last several years the
Companys automotive sales and operating profits have been adversely impacted
by industry conditions affecting its major customers operations. Volume
reductions and pricing pressure by auto manufacturers and Tier 1 suppliers has
resulted in lower volumes and selling prices. Sales to the automotive market,
which accounted for approximately 82 percent of the valve actuation systems
segments revenue in 2007, increased approximately 7 percent during the past
year, due in large part to the full year impact of the acquisition of Precision
Engine Products. The Company expects that revenues for 2008 will decline due to
reduced demand in both the automotive and heavy duty/commercial markets. In
response to competitive pressures within the automotive market, the valve
actuation systems segment has taken aggressive action to improve its cost
position. The Company has closed certain facilities, reduced headcount and
other operating expenses, and expanded production in its lower cost, non-union
facility in Tallahassee, FL.

Due
to the Companys dependence on the North American automotive market, production
levels of the automotive OEMs influence the valve actuation systems segments
sales and profitability. The North American automobile and light truck build
rate is one commonly used indicator of such production levels. More
specifically, though, the production levels of the individual engine programs
that it supplies impact its sales and profitability in the automotive market.
The Companys revenues in this market are also influenced, to a lesser degree,
by the North American class 8 heavy duty diesel truck build rate.

-23-

---



Profitability
in the Companys valve actuation systems segment can be influenced by a number
of factors, including: production levels at its individual manufacturing
facilities, as well as the volume and consistency of production levels at its
customers manufacturing facilities; demands from its customers to reduce the
prices of its products; the prices it pays for key raw materials and
transportation costs.

Performance Chemicals

The
performance chemicals segment provides a broad range of value-added chemical
products to four principal markets: water treatment, chemical processing,
pharmaceutical and personal care, and technology. In the water treatment market
its revenues are derived from the sale of water treatment chemicals to large
municipal treatment facilities and pulp and paper operations. Sales to the
water treatment market which accounts for approximately 51 percent of the
performance chemicals segments revenues, have increased approximately 17
percent over the last year. This increase is principally due to price increases
as well as the impact of the acquisitions made over the course of the last two
years. The Company anticipates that sales to the water treatment market will
grow in 2008 primarily due to the full year impact of the acquisitions made in
2007. In the chemical processing market, its revenues are derived principally
from the sale of sulfuric acid regeneration services to large oil refineries on
the West Coast of the United States and from the sale of sulfuric acid which is
used in the manufacture of synthetic fibers, paper, fertilizers as well as many
other products. Sales to the chemical processing market which account for
approximately 17 percent of the performance chemicals segments revenues, have
decreased by approximately 13 percent over the last year. This decrease is
primarily due to the closure of the Newark, NJ sulfuric acid facility. The
Company anticipates that sales to the chemical processing market will grow in
2008 based on the investment in the Augusta Plant expansion. In the
pharmaceutical and personal care market, GenTeks revenues are driven by sales
of active ingredients to manufacturers of antiperspirants and pharmaceuticals.
Sales to the pharmaceutical and personal care market, which account for
approximately 19 percent of the performance chemicals segments revenue,
increased by approximately 5 percent over the last year primarily due to price
increases. The Company anticipates sales to this market in the year 2008 will
decrease based on the recently completed sale of the antiperspirant actives
business. In the technology market, GenTeks revenues are derived primarily
from the sale of high purity chemicals to producers of semiconductor devices.
Sales to the technology market, which account for approximately 13 percent of
the performance chemicals segments revenues, have increased 3 percent over the
last year. The Company anticipates that sales into this market will be flat
year over year. Operating efficiency and price improvements offsetting raw
material and other cost increases are expected to maintain the performance
chemicals segments profitability in 2008.

Profitability
in its performance chemicals segment can be influenced by a number of factors,
including: competitive market conditions; the volume and consistency of
production levels at its customers consuming locations, production levels at
its individual manufacturing facilities; the prices it pays for its key raw
materials, including sulfur, sulfuric acid, bauxite, aluminum tri-hydrate and
zirconium-based products; and transportation costs.

Corporate and Other

The
corporate and other segment provides industrial components for two primary
markets; wire and cable, and fluid handling equipment. The Company provides
wire and cable for a broad range of applications in the electronic, appliance,
automotive and consumer electrical markets. Sales to the wire and cable market
which account for approximately 81 percent of corporate and other segment
revenue, decreased by approximately 22 percent over the last year. This
decrease was the result of reduced sales

-24-

---



of commodity wire to the former Noma
wire and cable harness assembly operations which were sold in early 2007. The
Company expects wire and cable sales in 2008 to be essentially flat. The
Company provides fluid handling equipment sold primarily for automotive service
applications. Sales to the fluid handling market which account for
approximately 19 percent of corporate and other segment revenue, decreased by
approximately 5 percent over the last year. The Company expects fluid handling
equipment sales in 2008 to be essentially flat.

Profitability
in the corporate and other segment can be influenced by a number of factors:
production levels at its individual manufacturing facilities, as well as the
volume and consistency of production levels at its customers manufacturing
facilities; demands from its customers to reduce the prices of its products;
the prices it pays for key raw materials and transportation costs.

Subsequent Event

On
February 29, 2008, the Company completed the sale of its antiperspirant actives
business to Summit Research Labs, Inc. for $18 million, subject to a working
capital adjustment. As part of this transaction the Company will continue to
operate the antiperspirant actives manufacturing unit for up to one year under
a transition services contract. This business continues to be classified as
continuing operations.

Results of Operations

The
following table sets forth certain line items from its Consolidated Statements
of Operations for the three years ended December 31, 2007 and the corresponding
percentage of net revenues for the relevant periods presented as a percentage
of revenue for the periods indicated.

|                                                    |  |                           |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  
|--------------------------------------------------- |  | ------------------------- | ----- | ---- |  | ---- | - | - | ----- | - |  | --- | - | - | ----- | - |  | --- | -
|                                                    |  | Years
 Ended December 31, |      
|                                                    |  |                           |      
|                                                    |  | 2007                      |       | 2006 |  | 2005 |  
|                                                    |  |                           |       |      |  |      |  
|                                                    |  | (In
 millions)            |      
|Net revenues                                        |  | $                         | 608.2 |      |  | 100  | % | $ | 593.3 |   |  | 100 | % | $ | 537.4 |   |  | 100 | %
|Cost of sales                                       |  |                           | 502.6 |      |  | 83   |   |   | 488.6 |   |  | 82  |   |   | 437.9 |   |  | 81  |  
|Selling, general and administrative expense         |  |                           | 51.8  |      |  | 9    |   |   | 50.2  |   |  | 8   |   |   | 54.9  |   |  | 10  |  
|Net (gain) loss on disposition of long-term
 assets |  |                           | (10.0 | )    |  | (2   | ) |   | 0.5   |   |  |    |   |   | 0.2   |   |  |    |  
|Restructuring and impairment charges                |  |                           | 5.0   |      |  | 1    |   |   | 3.0   |   |  | 1   |   |   | 7.0   |   |  | 1   |  
|Pension curtailment and settlement (gains)
 losses  |  |                           | (3.3  | )    |  | (1   | ) |   | (0.6  | ) |  |    |   |   | 0.6   |   |  |    |  
|                                                    |  |                           |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  
|Operating profit                                    |  |                           | 62.1  |      |  | 10   |   |   | 51.6  |   |  | 9   |   |   | 36.9  |   |  | 7   |  
|Interest expense                                    |  |                           | 22.7  |      |  | 4    |   |   | 29.1  |   |  | 5   |   |   | 24.7  |   |  | 5   |  
|Interest income                                     |  |                           | 0.6   |      |  |     |   |   | 0.6   |   |  |    |   |   | 0.6   |   |  |    |  
|Other (income) expense, net                         |  |                           | (0.9  | )    |  |     |   |   | 0.3   |   |  |    |   |   | (2.4  | ) |  |    |  
|Income tax provision (benefit)                      |  |                           | 2.9   |      |  |     |   |   | 8.6   |   |  | 1   |   |   | 7.3   |   |  | 1   |  
|                                                    |  |                           |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  
|Income from continuing operations                   |  | $                         | 38.1  |      |  | 6    | % | $ | 14.1  |   |  | 2   | % | $ | 7.8   |   |  | 1   | %
|                                                    |  |                           |       |      |  |      |   |   |       |   |  |     |   |   |       |   |  |     |  

2007 Compared with 2006

Net
revenues were $608 million for the year 2007 compared with $593 million for the
prior year. This increase was due to higher sales of $23 million in the
performance chemicals segment and $6

-25-

---



million in the valve actuation systems segment partly offset by reduced
sales of $14 million in the corporate and other segment.
The increase in the performance chemicals segment was due to increased sales
into the water treatment market driven in part by the impact of the
acquisitions of GAC, Repauno and Chalum. The increase in the valve actuation
systems segment was primarily the result of higher sales revenues in the
automotive market resulting from the full year impact of the acquisition of
Precision Engine Products. Lower sales in the corporate and other segment were
due to reduced sales into the wire and cable market.

Gross
profit was $106 million for the year 2007 compared with $105 million for the
prior year. Gross profit performance was the result of increased gross profit
of $15 million in the performance chemicals segment partly offset by reduced gross
profit in the valve actuation systems segment of $12 million and the corporate
and other segment of $1 million. The increase in the performance chemicals
segment gross profit was driven primarily by the strong revenue performance
primarily in the water treatment market resulting from the impact of the
acquisitions combined with increased prices and higher volumes which more than
offset the impact of increased raw material costs. The decrease in gross profit
in the valve actuation systems segment was principally due to unfavorable
product mix and increased cost related to operational issues in the automotive
market.

Net
gains on disposition of long-term assets of $10 million were the result of the
sale of surplus real estate in the performance chemicals segment located in
Denver, CO, El Segundo, CA, and Atlanta, GA.

Selling,
general and administrative expense was $52 million for the year ended December
31, 2007 as compared with $50 million in the prior year. This increase is
primarily attributable to increased compensation costs of $2 million and
increased IT systems costs in the performance chemicals segment of $1 million
partly offset by a one-time $1 million insurance settlement realized in the
first quarter.

Restructuring
and impairment charges were $5 million for the year ended December 31, 2007 as
compared with charges of $3 million for the prior year. During 2007, impairment
charges of $1 million were recorded to reflect estimated fair values of two
closed facilities that are held for sale. Restructuring charges recorded in
2007 included $2 million associated with the closure of a production facility
and $2 million for continuing costs from activities initiated during prior
years. These restructuring actions have been completed. The Company expects
that the closure of the production facility during the current year will result
in an estimated annual reduction in employee and facility related expenses of
approximately $3 million. The Company began to realize these reductions during
2007. The Company will continue to review its operations, and may record
additional restructuring charges to tailor its cost structure to current
economic conditions.

During
2007, the Company adopted plan amendments that froze pension plan benefits for
hourly employees covered by certain collective bargaining agreements, and
closed one of its manufacturing facilities. These actions resulted in a net
curtailment gain of $3 million. During 2006, the Company adopted plan
amendments that froze pension plan benefits for hourly employees covered by
certain collective bargaining agreements, and announced the closure of one of
its manufacturing facilities. These actions resulted in a net curtailment gain
of $0.6 million.

Operating
profit was $62 million for the year 2007 as compared with $52 million for the
prior year. The higher operating profit was the result of the gain on
disposition of long-term assets and pension curtailments partly offset by lower
gross profit and increased selling, general and administrative expense and
increased restructuring costs as compared with 2006.

-26-

---



Interest
expense was $23 million for the year 2007 as compared to $29 million for the
prior year.
The reduction
in interest expense was the result of lower average principal balances and
lower interest rates during 2007 as compared to the prior year.

Income
tax expense for the year 2007 was $3 million as compared to $9 million for the
year 2006. During 2007, income tax expense was reduced by the reversal of an
uncertain tax position of $8 million relating to a prior period and the
recognition of a net deferred tax asset for the difference between the tax
basis in the stock of a subsidiary and its book basis of $8 million, due to the
expectation that the difference will reverse in the foreseeable future, as a
result of the impending sale of the subsidiary.

Loss
from discontinued operations was $8 million for the year 2007 versus $16
million in 2006. Included in loss from discontinued operations in 2007 is an
impairment charge of $6 million related to the Defiance Testing and Engineering
Services business. Included in loss from discontinued operations in 2006 are
impairment charges of $2 million related to the Canadian wire and cable
business and $12 million related to the Noma wire and cable harness assembly
business.

2006 Compared with
2005

Net
revenues were $593 million for the year 2006 compared with $537 million for the
prior year. This increase was due to higher sales of $39 million in the
performance chemicals segment, $4 million in the valve actuation systems
segment and $13 million in the corporate and other segment. The increase in the
performance chemicals segment was due to broad based strength across all market
segments as well as the partial year impact of the acquisitions of GAC and
Repauno. The increase in the valve actuation systems segment was primarily the
result of increased sales in the heavy duty/commercial market as reduced sales
in the automotive base business were directly offset by the favorable impact of
the acquisition of Precision Engine Products. Higher sales revenues in the
corporate and other segment were the result of increased sales into the wire
and cable market.

Gross
profit was $105 million for the year 2006 as compared with $100 million for
2005. This reflects higher gross profit in performance chemicals of $10 million
and corporate and other of $1 million partly offset by lower gross profit in
valve actuation systems of $6 million. The increase in the performance
chemicals segment gross profit was driven primarily by the strong revenue
performance. The increase in gross profit in corporate and other was the result
of the sales performance in the wire and cable market. The decrease in gross
profit in the valve actuation systems segment was principally due to
unfavorable product mix in the automotive market.

Selling,
general and administrative expense was $50 million for the year ended December
31, 2006 as compared with $55 million in the prior year. This decrease is
primarily attributable to the Companys cost reduction efforts. In addition,
2005 was adversely impacted by a $2 million charge relating to the former Chief
Executive Officers separation from the Company.

Restructuring
and impairment charges were $3 million for the year ended December 31, 2006 as
compared with charges of $7 million for the prior year ended December 31, 2005.
During 2006, impairment charges of $1 million were recorded relating to machinery
and equipment for a discontinued product line. Restructuring charges recorded
in 2006 included $1 million associated with the closure of two production
facilities and $1 million for continuing costs from activities initiated during
prior years. Revenues from the affected products were approximately $6 million
in 2006, and were discontinued in

-27-

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December, 2006.

During
2006, the Company adopted plan amendments that froze pension plan benefit
accruals for
hourly
employees covered by certain collective bargaining agreements, and announced
the closure of one of its manufacturing facilities. These actions resulted in a
net curtailment gain of $0.6 million. During 2005, the Company terminated its
two defined benefit pension plans relating to former employees of the Companys
personal care chemicals manufacturing operations in Ireland, which were closed
in 2004. As a result of this action, a settlement loss of $0.6 million was
recorded.

Operating
profit was $52 million for the year 2006 as compared with $37 million for the
prior year. The higher operating profit was the result of higher gross margin
and lower selling, general and administrative expense plus the reduction in
restructuring costs as compared with 2005.

Interest
expense was $29 million for the year 2006 as compared to $25 million for the
prior year. The increase in interest expense was the result of higher average
principal balances and higher interest rates during 2006 as compared to the
prior year.

Income
tax expense for the year 2006 was $9 million as compared to $7 million for the
year 2005. In both years, the effective tax rate was negatively affected by the
impact of the Companys foreign operations. During 2006, this impact was partially
offset by a one-time benefit related to the payment of dividends on restricted
stock.

Loss
from discontinued operations for the year 2006 was $16 million versus $9
million in 2005. Included in loss from discontinued operations in 2006 are
impairment charges of $2 million related to the Canadian wire and cable
business and $12 million related to the Noma wire and cable harness assembly
business. Included in loss from discontinued operations in 2005 is an
impairment charge of $7 million relating to the Canadian wire and cable
business.

Results of Operations by Segment

2007 Compared with
2006

|                         |  |                           |       |      |   |        |   |   |       |  
|------------------------ |  | ------------------------- | ----- | ---- | - | ------ | - | - | ----- | -
|                         |  | Years
 Ended December 31, |       |      |   |       
|                         |  |                           |       |      |   |       
|                         |  | 2007                      |       | 2006 |   | Change |  
|                         |  |                           |       |      |   |        |  
|                         |  | (In
 millions)            |       |      |   |       
|Net Revenues:            |  |                           |       |      |   |        |   |   |       |  
|Valve actuation systems  |  | $                         | 152.1 |      | $ | 146.1  |   | $ | 6.0   |  
|Performance chemicals    |  |                           | 396.7 |      |   | 373.3  |   |   | 23.4  |  
|Corporate and other      |  |                           | 59.5  |      |   | 73.8   |   |   | (14.3 | )
|                         |  |                           |       |      |   |        |   |   |       |  
|Total                    |  | $                         | 608.2 |      | $ | 593.3  |   | $ | 14.9  |  
|                         |  |                           |       |      |   |        |   |   |       |  
|Operating Profit (Loss): |  |                           |       |      |   |        |   |   |       |  
|Valve actuation systems  |  | $                         | (0.3  | )    | $ | 10.5   |   | $ | (10.8 | )
|Performance chemicals    |  |                           | 64.8  |      |   | 44.7   |   |   | 20.1  |  
|Corporate and other      |  |                           | (2.4  | )    |   | (3.7   | ) |   | 1.3   |  
|                         |  |                           |       |      |   |        |   |   |       |  
|Total                    |  | $                         | 62.1  |      | $ | 51.6   |   | $ | 10.5  |  
|                         |  |                           |       |      |   |        |   |   |       |  

-28-

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Valve Actuation Systems Segment

Net
revenues for the valve actuation systems segment were $152 million for the year
2007 as compared to $146 million for 2006. This increase was primarily the
result of higher sales to the automotive market of $8 million partly offset by
lower sales to the heavy duty/commercial market of $2
million. The
increase in revenues in the automotive market was primarily due to the full
year impact of the acquisition of Precision Engine Products. The decrease in
sales in the heavy duty/commercial market was due to reduced volume as
customers built inventory in 2006 in anticipation of 2007 changes in engine
emission standards as well as engine program losses which more than offset
gains. Gross profit was $14 million for the year 2007 as compared to $27
million in 2006. The reduced gross profit was driven by unfavorable product mix
in the automotive market as reduced sales of higher margin products sold to the
Companys historical OEM customer base were directly offset by increased sales
of lower margin products resulting from the acquisition of Precision Engine
Products. In addition, 2007 results were adversely impacted by $6 million in
operational issues in the automotive market; which included a $3 million
expense related to a warranty claim from a customer, $1 million in
inefficiencies incurred in the transition of operations from the Perrysburg, OH
facility into the lower cost Tallahassee, FL facility, and $1 million in higher
costs to support a new product launch in the Toledo, OH facility. Selling,
general and administrative expense was $14 million for 2007 which was flat to
the comparable prior year period as reduced spending offset the addition of $1
million in added technical resources required to support the new business
awards. Restructuring and impairment charges were $3 million for 2007 as
compared to $2 million for 2006. Postretirement liability curtailment gains
were $2 million for 2007 resulting from the closure of the Perrysburg, OH
facility which drove the accelerated recognition of unrecognized gains
resulting from previous amendments to the postretirement medical benefits
plans. The valve actuation systems segment was at break-even operating profit
for 2007 as compared with a $10 million operating profit for 2006. This
reduction in operating profit was primarily as a result of the lower gross
margin performance in 2007 and higher restructuring and impairment charges
partly offset by the postretirement liability curtailment gains.

Performance Chemicals Segment

Net
revenues were $397 million for the year 2007 as compared with $373 million for
the prior year. This increase was principally the result of higher sales into
the water treatment, pharmaceutical and personal care and technology markets of
$29 million, $4 million and $1 million, respectively, partially offset by lower
sales into the chemical processing market of $11 million. The increase in
revenues is primarily the result of the pass through of higher raw material
prices and freight costs. In addition, the impact of acquisitions in the water
treatment market contributed increased revenues of $15 million as compared to
prior year. The reduced revenues in the chemical processing market were
primarily the result of the closure of the Newark, NJ sulfuric acid facility.
Gross profit for 2007 was $86 million as compared to $71 million for the prior
year. The increase was principally the result of the strong volumes and
increased prices in excess of previously incurred raw material cost increases.
The acquisitions made in the water treatment market resulted in an increase in gross
profit of $3 million as compared to prior year. 2007 gross profit benefited by
the recovery of $3 million in expenses associated with the previously settled
Richmond lawsuit and $2 million resulting from credits for the transfer of
excess emission allowances partly offset by a $3 million increase to the
environmental liability based on new information and regulatory requirements.
Gains on disposition of long term assets of $10 million were driven by the sale
of surplus real estate. Selling, general and administrative expense was $30
million for the year 2007 as compared with $26 million for 2006. The increase
was principally due to increased IT system operating costs of $1 million,
higher incentive compensation expenses of $1 million and increased allocations
of corporate overhead costs of $2 million reflective of the performance
chemicals segment comprising a larger portion of the Company. Restructuring and
impairment charges were $2 million for the year 2007 as compared with a $1
million charge recorded during 2006. The 2007 charges relate to

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the actions to exit the Newark, NJ sulfuric acid production facility. Pension liability
curtailment gains were $1 million for 2007 which was flat with the prior year.
Operating income for 2007 was $65 million as compared with $45 million for
2006. The increase was principally due to the increased gross profit plus
the gain on disposition of long term assets partly offset by the increased selling, general
and administrative expense and restructuring charges in the current year.

Corporate and Other Segment

Net
revenues were $59 million for the year 2007 as compared with $74 million for
the prior year period. Reduced revenue was the result of lower sales in the
wire and cable market. Gross profit for the year 2007 was $5 million as
compared to $7 million for the prior period. The reduced gross profit was the
result of the lower revenue performance and increased raw material costs in the
wire and cable market. Selling, general and administrative expense was $8
million for 2007 as compared to $10 million in 2006. Operating loss for 2007
was $2 million, as compared to $4 million in the prior year. The operating loss
    was the result of lower gross profit offset by reduced selling, general and
administrative expense.

2006 Compared with
2005

|                          |  |                           |       |      |   |        |   |   |      |  
|------------------------- |  | ------------------------- | ----- | ---- | - | ------ | - | - | ---- | -
|                          |  | Years
 Ended December 31, |       |      |   |       
|                          |  |                           |       |      |   |       
|                          |  | 2006                      |       | 2005 |   | Change |  
|                          |  |                           |       |      |   |        |  
|                          |  | (In
 millions)            |       |      |   |       
|Net
 Revenues:            |  |                           |       |      |   |        |   |   |      |  
|Valve actuation systems   |  | $                         | 146.1 |      | $ | 142.2  |   | $ | 3.9  |  
|Performance chemicals     |  |                           | 373.3 |      |   | 334.1  |   |   | 39.2 |  
|Corporate and other       |  |                           | 73.8  |      |   | 61.1   |   |   | 12.7 |  
|                          |  |                           |       |      |   |        |   |   |      |  
|Total                     |  | $                         | 593.3 |      | $ | 537.4  |   | $ | 55.9 |  
|                          |  |                           |       |      |   |        |   |   |      |  
|Operating
 Profit (Loss): |  |                           |       |      |   |        |   |   |      |  
|Valve actuation systems   |  | $                         | 10.5  |      | $ | 17.4   |   | $ | (6.9 | )
|Performance chemicals     |  |                           | 44.7  |      |   | 29.4   |   |   | 15.3 |  
|Corporate and other       |  |                           | (3.7  | )    |   | (9.8   | ) |   | 6.1  |  
|                          |  |                           |       |      |   |        |   |   |      |  
|Total                     |  | $                         | 51.6  |      | $ | 36.9   |   | $ | 14.7 |  
|                          |  |                           |       |      |   |        |   |   |      |  

Valve Actuation Systems Segment

Net
revenues for the valve actuation systems segment were $146 million for the year
2006 as compared to $142 million for 2005. This increase was the result of
higher sales into the heavy duty/commercial market. Revenues in the automotive
market were flat as reduced sales to the Companys existing North American
automotive customer base of $20 million were directly offset by revenue
resulting from the acquisition of Precision Engine Products. Gross profit was
$27 million for the year 2006 as compared to $33 million for 2005. This
decrease is principally due to reduced volumes and unfavorable product mix in
the automotive market. Selling, general and administrative expense was $14
million for 2006 as compared to $13 million in 2005. Restructuring and
impairment charges were $2 million for 2006 and $3 million for 2005. Operating
profit for 2006 was $11 million as compared with $17 million for 2005. This
decrease was the result of the above-mentioned lower gross profit and the
slightly higher selling, general and administrative expense and higher
restructuring charges.

-30-

---



Performance Chemicals Segment

Net
revenues were $373 million for the year 2006 as compared with $334 million for
the prior year period. This was due to higher sales in the Companys water
treatment, chemical processing, technology, and pharmaceutical and personal
care product lines of $22 million, $6 million, $5 million, and $5 million,
respectively. The increase in sales was due to increased pricing of $24 million
which was primarily the result of the pass through of higher raw material
costs, increased volumes in the sulfur products and technology markets of $8
million as well $7 million attributable to the acquisition of the assets of
Repauno and GAC during 2006. Gross profit was $71 million as compared with $61
million for the prior year. The increase in gross profit was primarily
attributable to the increase in revenues. Reduced environmental remediation
costs of $3 million versus the prior period were offset by an insurance
recovery of $3 million in 2005 related to the Companys closed Delaware Valley
Works South Plant. Selling, general and administrative expense was $26 million
for the year 2006 as compared with $29 million for 2005. This decrease was
primarily due to cost reduction efforts. There were no net restructuring and
pension curtailment charges in 2006 as compared with $3 million of charges
recorded during 2005. Operating profit for 2006 was $45 million as compared
with $29 million for 2004. The increase was principally due to the increased
gross profit, lower selling, general and administrative expense and increased
operating efficiencies.

Corporate and Other Segment

Net
revenues were $74 million for the year 2006 as compared with $61 million for
the prior year period. Increased revenue was the result of higher sales in the
wire and cable market. Gross profit for the year 2006 was $7 million as
compared to $6 million for the prior period. The increased gross profit was the
result of the strong revenue performance in the wire and cable market. Selling,
general and administrative expense was $10 million for 2006 as compared to $14
million in 2005. This reduced spending was a result of the Companys cost
reduction efforts. In addition, 2005 was adversely impacted by a $2 million
charge relating to the former Chief Executive Officers separation from the Company.
There were no net restructuring and pension curtailment charges in 2006 as
compared with $2 million of charges recorded during 2005. The charges recorded
in 2005 were the result of the closure of the Companys Southfield, MI offices.
Operating loss for 2006 was $4 million as compared with $10 million for 2005.
This improvement was the result of the above-mentioned increased gross profit
and the lower selling, general and administrative expense and restructuring
charges.

Liquidity and Capital Resources

Cash
and cash equivalents were $16 million at December 31, 2007, compared with $5
million at December 31, 2006. Significant cash flows during 2007 included
acquisitions of $10 million, capital expenditures of $29 million, and net debt
payments of $104 million offset by proceeds from asset sales of $15 million and
cash provided by operations of $45 million. The Company had working capital
(current assets minus current liabilities) of $93 million at December
31, 2007 as compared with working capital of $168 million at December 31, 2006.
This decrease is primarily a result of a decrease in assets and liabilities
held for sale in connection with the sale of the Noma wire and cable harness
assembly business.

Cash
payments for employee termination costs and facility exit costs totaled $5
million in the year ended December 31, 2007. These restructuring actions have
been completed.

The
Companys primary credit facilities consists of a first lien term loan and a
$60 million revolving credit facility (the Credit Facilities). The first lien
loan is due on February 28, 2011 and carries an interest rate of LIBOR plus 2
percent or base rate plus 1 percent. The $60 million revolving

-31-

---



credit
facility matures on February 28, 2010 and currently carries an interest rate of
LIBOR plus 2.25 percent subject to rate changes under a pricing grid if the
Companys leverage ratio changes. The Credit Facilities are secured by liens on
substantially all of the personal property and certain real property of the
Company and its domestic subsidiaries. The Credit Facilities contain covenants
which impose certain restrictions on the Companys ability to, among other
things, incur additional debt, pay dividends, make investments or sell assets.
Additionally, certain non-recurring cash inflows such as proceeds from asset
sales, insurance recoveries, and equity offerings may have to be used to pay
down indebtedness and may not be reborrowed. The material financial covenants
with which the Company must comply include a maximum leverage ratio of 3.5, a
minimum interest coverage ratio of 3.00, and a maximum amount of capital
expenditures of $42 million in 2008 (plus $15 million of available carryover
from 2007) and $33 million in 2009. The maximum amount of capital expenditures
will be increased if the prior years maximum amount was not reached by the
amount of the shortfall up to a maximum increase of $15 million. At December
31, 2007, the Company was in compliance with the covenants in the Credit
Facilities.

In
April 2005, the Company entered into two no-cost interest rate collar
agreements, effectively hedging $185 million of its LIBOR-based floating rate
term debt for five years. As a result of entering into the agreements, the
interest rate to be paid by the Company relating to the hedged portion of its
debt will be based on a minimum three-month LIBOR rate of 4.05 percent on
average and a maximum three-month LIBOR rate of 5.00 percent.

During
2007, the Company made $29 million of capital expenditures. Capital
expenditures are expected to be approximately $45 to $50 million in 2008.
Contributions to pension plan trusts are expected to be approximately $3
million in 2008.

On
August 7, 2007, the Companys board of directors authorized a stock repurchase
program pursuant to which the Company will purchase in the aggregate up to $30
million of its common stock in open market and negotiated purchases over a
period of three years, dependent upon market conditions. This program does not
obligate the Company to acquire any particular amount of common stock and the
program may be suspended at any time at the Companys discretion. During 2007,
the Company repurchased 121,354 shares for a total of $4 million in accordance
with the terms of a Rule 10b5-1 trading program which the Company entered into
to effectuate the stock repurchase program.

Management
believes that the Company's cash flow from operations and availability under
its revolving credit facility will be sufficient to cover debt service
requirements, capital expenditures, and working capital requirements during
2008.

Off-Balance Sheet Agreements

The
Company has approximately $8 million of standby letters of credit outstanding
as of December 31, 2007.

-32-

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Contractual Obligations

|                                |  |                           |        |           |   |           |  |                 |        |       |   |     |  |   |         | 
|------------------------------- |  | ------------------------- | ------ | --------- | - | --------- |  | --------------- | ------ | ----- | - | --- |  | - | ------- | 
|                                |  | Payments Due by Period(1) |       
|                                |  |                           |       
|                                |  | (In thousands)            |       
|                                |  | Less than
  1 Year        |        | 1-3 Years |   | 4-5 Years |  | After
  5 Years |        | Total |  
|                                |  |                           |        |           |   |           |  |                 |        |       |  
|Long-term debt                  |  | $                         | 2,851  |           | $ | 178,640   |  | $               | 58,505 |       | $ | 136 |  | $ | 240,132 | 
|Interest on outstanding debt(2) |  |                           | 15,402 |           |   | 27,455    |  |                 | 631    |       |   | 10  |  |   | 43,498  | 
|Operating leases                |  |                           | 3,576  |           |   | 5,364     |  |                 | 1,170  |       |   | 170 |  |   | 10,280  | 
|                                |  |                           |        |           |   |           |  |                 |        |       |   |     |  |   |         | 
|Total contractual
  obligations |  | $                         | 21,829 |           | $ | 211,459   |  | $               | 60,306 |       | $ | 316 |  | $ | 293,910 | 
|                                |  |                           |        |           |   |           |  |                 |        |       |   |     |  |   |         | 

|    |                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Unrecognized
  tax benefits and interest theron totaling $7,342 have not been included in
    these amounts as the Company is unable to make reasonably reliable estimates
    of the periods of potential settlement.
|    |                                                                                                                                                                                                                       
|(2) | Reflects
  interest on debt balances outstanding at year end using interest rates in
  effect at December 31, 2007. Interest is calculated based on contractual
  maturity dates and does not reflect any prepayments.

Environmental Matters

The
Companys various manufacturing operations, which have been conducted at a
number of facilities for many years, are subject to numerous laws and
regulations relating to the protection of human health and the environment in
the U.S., Canada and other countries. The Company believes that it is in
substantial compliance with such laws and regulations. However, as a result of
its operations, the Company is involved from time to time in administrative and
judicial proceedings and inquiries relating to environmental matters. Based on
information available at this time with respect to potential liability
involving these facilities, the Company believes that any such liability will
not have a material adverse effect on its financial condition, cash flows or
results of operations. However, modifications of existing laws and regulations or
the adoption of new laws and regulations in the future, particularly with
respect to environmental and safety standards, could require the Company to
make expenditures which may be material or otherwise adversely impact the
Companys operations. See also Item 1. Business - Environmental Matters.

The
Companys accruals for environmental liabilities are recorded based on current
interpretation of environmental laws and regulations when it is probable that a
liability has been incurred and the amount of such liability can be reasonably
estimated. At December 31, 2007, accruals for environmental matters were $25
million. The Company maintains a comprehensive insurance program, including
customary comprehensive general liability insurance for bodily injury and
property damage caused by various activities and occurrences and significant
excess coverage to insure against catastrophic occurrences. However, the
Company generally does not maintain insurance other than as described above for
potential liabilities related specifically to remediation of existing
environmental contamination or future environmental contamination, if any.

The
Company maintains a program to manage its facilities compliance with
environmental laws and regulations. Expenditures for 2007 approximated $13
million (of which approximately $4 million represented capital expenditures and
approximately $9 million related to ongoing operations and the management of
potential environmental contamination from prior operations). Expenditures for
2006 approximated $8 million (of which approximately $1 million represented
capital expenditures and approximately $7 million related to ongoing operations
and the management of potential environmental contamination from prior
operations). The Company expects expenditures similar to 2007 levels in 2008.
In addition, if environmental laws and regulations affecting the Companys
operations become more stringent, costs for environmental compliance may
increase above historical levels.

Recent Accounting Pronouncements

In December
2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R, Share-Based
Payment (Revised 2004) (SFAS 123R). This statement addresses the
accounting for

-33-

---



share-based payment transactions in which a company receives employee
services in exchange for the companys equity instruments or liabilities that
are based on the fair value of the companys equity securities or may be
settled by the issuance of these securities. SFAS No. 123R eliminates the
ability to account for share-based compensation using the intrinsic value
method and generally requires that such transactions be accounted for using a
fair value method. The Company adopted SFAS 123R using the modified prospective
transition method. Under this method, compensation cost is recognized for the
unvested portion of share-based payments granted prior to January 1, 2006 and
all share-based payments granted subsequent to December 31, 2005 over the
related vesting period. Prior to January 1, 2006, the Company applied the
intrinsic value method prescribed in APB Opinion No. 25 in accounting for
employee stock based compensation. Prior period results have not been restated.

In
June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB Statement No. 109 (FIN 48). FIN
48 clarifies the accounting for uncertainty in income taxes recognized in a
companys financial statements and prescribes a recognition threshold and measurement
attribute for the financial statement recognition and measurement of tax
positions taken or expected to be taken in a tax return. The interpretation
also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. The
Company adopted FIN 48 on January 1, 2007. The adoption, which was accounted
for as a cumulative effect adjustment, resulted in an increase to the January
1, 2007 balance of retained earnings (deficit) of $2.8 million.

In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
(SFAS 157), to define fair value, establish a framework for measuring fair
value in accordance with generally accepted accounting principles and expand
disclosures about fair value measurements. SFAS 157 requires quantitative
disclosures using a tabular format in all periods (interim and annual) and
qualitative disclosures about the valuation techniques used to measure fair
value in all annual periods. Certain provisions of this Statement were
effective for financial statements issued for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years. In February
2008, the FASB deferred the implementation of SFAS No. 157 for all non-financial
assets and non-financial liabilities, except those recognized or disclosed at
fair value in the financial statements on a recurring basis (at least
annually). The Company does not anticipate that the adoption of this statement
will have a material impact on the Companys results of operation or financial
condition.

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pensions and Other Postretirement Plans-an Amendment of FASB Statements
No. 87, 88, 106 and 132(R), (SFAS 158). SFAS 158 requires an
employer to recognize the overfunded or underfunded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liability
in its statement of financial position and to recognize changes in that funded
status in the year in which the changes occur through comprehensive income.
Employers are required to initially recognize the funded status and provide the
required disclosures beginning for fiscal year ends after December 15, 2006.
The net impact on the December 31, 2006 balance sheet was to decrease prepaid
pension costs by $1.7 million, decrease other current liabilities by $0.9
million, reduce accrued pension and postretirement benefit costs by $10.4
million and increase deferred tax liabilities by $1.2 million, with the offset
increasing stockholders equity by $8.3 million. Additionally, for fiscal years
ending after December 15, 2008, SFAS 158 will require employers to measure the
plan assets and obligations as of the date of the employers fiscal year end.
The Company currently utilizes a measurement date of October 31. The Company
does not anticipate the change in the fiscal year end measurement date to have
a material impact on the Companys results of operations or financial
condition.

-34-

---



In
February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and
Financial Liabilities  including an Amendment of SFAS No. 115,
(SFAS No. 159), which permits an entity to measure many financial assets and
financial liabilities at fair value that are not currently required to be
measured at fair value. Entities that elect the fair value option will report
unrealized gains and losses in earnings at each subsequent reporting date. The
fair value option may be elected on an instrument-by-instrument basis, with few
exceptions. SFAS No. 159 amends previous guidance to extend the use of the fair
value option to available-for-sale and held-to-maturity securities. The
Statement also establishes presentation and disclosure requirements to help
financial statement users understand the effect of the election. SFAS No. 159
is effective as of the beginning of the first fiscal year beginning after
November 15, 2007.
The Company does not anticipate that the adoption of this statement will have a
material impact on the Companys results of operation or financial condition.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (SFAS 141R). SFAS 141R establishes principles and
requirements for how an acquirer recognizes and measures the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the
acquiree and the goodwill acquired. SFAS 141R also establishes disclosure
requirements to enable the evaluation of the nature and financial effects of
the business combination. FAS 141(R) is to be applied prospectively to
business combinations for which the acquisition date is on or after an entity's
fiscal year that begins after December 15, 2008. The Company will assess
the impact of SFAS 141R if and when a future acquisition occurs.

In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51
(SFAS 160). SFAS 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS 160 is effective for fiscal years beginning on or after
December 15, 2008. Earlier adoption is prohibited. The Company does not
anticipate that the adoption of this statement will have a material impact on
the Companys results of operation or financial condition.

Critical Accounting Policies and Estimates

The
preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of 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. The Companys significant accounting policies are described in Note
2 to the audited consolidated financial statements. The significant accounting
policies which it believes are the most critical to the understanding of
reported financial results include the following:

Revenue
Recognition  GenTek recognizes revenue when
persuasive evidence of an arrangement exists, delivery has occurred, the fee is
fixed or determinable, and collectibility is reasonably assured. Revenue is
recognized from product sales when title and risk of loss has passed to the
customer consistent with the related shipping terms, generally at the time
products are shipped. The Company records a provision for estimated sales
returns and other allowances as a reduction of revenue at the time of revenue
recognition. Provisions for sales returns and other allowances are determined
using managements judgments of required amounts, based upon the Companys
historical experience. Actual returns could differ from these estimates.
However, if the total actual level of sales returns differed from managements
estimates by 10 percent, the effect would not be material.

Deferred
Taxes  GenTek records a valuation allowance to reduce
its deferred tax assets to the amount the Company believes is more likely than
not to be realized based upon historical taxable income,

-35-

---



projected
future taxable income and available tax planning strategies. Its estimates of
future taxable income are based upon its current operating forecast, which it
believes to be reasonable. The Company will continue to monitor the likelihood
of realizing its net deferred tax assets and future adjustments to the deferred
tax asset valuation allowances will be recorded as necessary. However, different
assumptions regarding its current operating forecast could materially affect
its estimates.

Unrecognized
tax benefits  In accordance with FIN 48,
the Company evaluates a tax position to determine whether it is more
likely than not that the tax position will be sustained upon examination, based
on the technical merits of the position. A tax position that meets the
more-likely-than-not recognition threshold is subject to a measurement
assessment to determine the amount of benefit to recognize in the consolidated
statement of operations and the appropriate reserve to establish, if any. If
a tax position does not meet the more-likely-than-not recognition threshold a
tax reserve is established and no benefit is recognized. While it is often
difficult to predict the final outcome or the timing of resolution of any
particular tax matter, the Company believes that its reserve for uncertain tax
positions is properly recorded pursuant to the recognition and measurement
provisions of FIN 48.

Purchase
Accounting GenTek applies the purchase method of
accounting for acquisitions. Under this method, the purchase price, including
any capitalized acquisition costs is allocated to the underlying tangible and
intangible assets acquired and liabilities assumed based on their respective
fair market values, with any excess recorded as goodwill. The determination of
fair values of such assets and liabilities require significant judgments and
estimates such as projected cash flows, discount rates, royalty rates, and
remaining useful lives. The initial fair values assigned to certain of these
acquisitions are preliminary and may be revised prior to finalization, which is
to be completed within a reasonable period, generally within one year of
acquisition. Different assumptions and estimates that underlie the fair value
assessments could materially affect its results.

Impairment
of Goodwill and Indefinite Lived Intangible Assets 
GenTek records impairment losses on goodwill and indefinite lived intangible
assets based upon an annual review of the value of the assets or when events
and circumstances indicate that the asset might be impaired and when the recorded
value of the asset is more than its fair value. The Company performs its
goodwill impairment testing utilizing a two-step process. In the first step,
the fair value of the reporting units is compared with their carrying amounts,
including goodwill. Estimates of fair value are based on a number of factors,
including independent appraisals and current operating forecasts. If required,
the second step of the goodwill impairment test compares the implied fair value
of the goodwill with its carrying amount. The implied fair value of the
goodwill is determined by allocating the fair value determined in the first
step to all of the assets and liabilities included in the reporting unit as if
the unit had been acquired in a business combination, then comparing the fair
value of the unit to the amounts assigned to the assets and liabilities, with
any excess becoming the implied fair value of goodwill. Impairment testing for
indefinite lived intangible assets is performed separately from goodwill
impairment testing. Significant assumptions that underlie the fair value
estimates include future growth rates and weighted average cost of capital
rates. However, different assumptions regarding its current operating forecast
could materially affect its results.

Impairment
of Long-Lived Assets  GenTek records impairment
losses on long-lived assets when events and circumstances indicate that the
assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than their carrying amount. In this case,
the Company records an impairment loss equal to the difference between the fair
value of the long-lived assets and their carrying amount. Managements
estimates of fair value are based on discounted cash flow analyses

-36-

---



and/or
independent appraisals. Significant assumptions underlying these estimates
include future growth rates and weighted average cost of capital rates. Its
estimates of future cash flows are based upon its current operating forecast,
which it believes to be reasonable. However, different assumptions regarding
such cash flows or other assumptions that underlie its fair value estimates
could materially affect its results.

Pension
and Other Postretirement Benefits  GenTek records
pension and other postretirement benefit costs based on amounts developed from
actuarial valuations. Inherent in these valuations are key assumptions,
including the discount rate and expected long-term rate of return on plan
assets. For example, holding all other components of the calculations constant,
a change in the assumed discount rate by 1⁄4 percent would change 2007 pension
and other postretirement benefit costs by approximately $0.1 million and the
projected pension and other postretirement benefit obligations by approximately
$7 million. A change in the expected long-term rate of return on plan assets of
1 percent would change 2007 pension cost by approximately $2 million. Material
changes in pension and other postretirement benefit costs may occur in the
future due to changes in these assumptions, differences between actual
experience and the assumptions used and changes in the benefit plans.

Environmental
Liabilities  GenTek has recorded accruals for
environmental liabilities based on current interpretation of environmental laws
and regulations when it is probable that a liability has been incurred and the
amount of such liability can be reasonably estimated. These estimates are
established based upon information available to management to date, including the
nature and extent of any environmental contamination, the available remedial
alternatives, cost estimates obtained from outside consultants for the
implementation of such remedial alternatives, the Companys experience with
similar activities undertaken at similar sites, and the legal and regulatory
framework in the jurisdiction in which the liability arose. Differences between
actual amounts incurred and its estimates or the receipt of new information
with respect to these liabilities could have a material effect on its estimates
and results of operations. In addition, discovery of unknown environmental
contamination, the adoption of new laws or regulations or modifications or
changes in enforcement of existing laws and regulations could require adjustments
to these accruals.

The
impact and any associated risks related to these policies on its business
operations is discussed throughout Managements Discussion and Analysis of
Financial Condition and Results of Operations where such policies affect its
reported and expected financial results.

-37-

---



Item 7A. Quantitative
and Qualitative Disclosures About Market Risk.

The
Companys cash flows and earnings are subject to fluctuations resulting from
changes in interest rates, foreign currency exchange rates and commodity prices
and the Company selectively uses financial instruments to manage these risks.
The Companys objective in managing its exposure to changes in interest rates,
foreign currency exchange rates and commodity prices is to reduce volatility on
earnings and cash flow associated with such changes. The Company has not
entered, and does not intend to enter, into financial instruments for
speculation or trading purposes.

Interest rate risk

At
December 31, 2007, the Companys debt financing consisted primarily of amounts
outstanding under the Companys credit facility. The borrowings outstanding
under the Companys credit facility are collateralized by substantially all of
the personal property and certain real property of the Company and its domestic
subsidiaries. Borrowings under the Companys credit facility are sensitive to
changes in interest rates. Given the existing level of borrowings under the
credit facility of $239 million as of December 31, 2007, a one percent change
in the weighted-average interest rate would have an interest impact of
approximately $0.1 million each month.

|                  |  |              |  |                                                       |  |                   
|----------------- |  | ------------ |  | ----------------------------------------------------- |  | ------------------
|Principal Balance |  | Fair Value   |  | Weighted-Average Interest Rate at
  December 31, 2007 |  | Scheduled Maturity
|                  |  |              |  |                                                       |  |                   
|$239 million      |  | $234 million |  | 7.13%                                                 |  | February 28, 2011 

The
Company has two interest rate collar agreements in the aggregate notional
amount of $185 million, in order to hedge against the effect that interest rate
fluctuations may have on the Companys floating rate debt. The interest rate to
be paid is based on a minimum three-month LIBOR of 4.05 percent on average and
a maximum three-month LIBOR of 5.00 percent. These interest rate collar
agreements are scheduled to mature in 2010. The fair value of the agreements was
$(2.4) million at December 31, 2007.

Foreign currency exchange rate and commodity
price risks

The
Company measures the market risk related to its holding of financial
instruments based on changes in foreign currency rates and commodity prices
using a sensitivity analysis. The sensitivity analysis measures the potential
loss in fair values, cash flows and earnings based on a hypothetical 10 percent
change in foreign currency exchange rates and commodity prices. Such analysis
indicates that a hypothetical 10 percent change in foreign currency exchange
rates or commodity prices would not have a material impact on the fair values,
cash flows or earnings of the Company.

-38-

---



Item 8. Financial Statements and
Supplementary Data.

Index

|                                                                                                                   |  |         
|------------------------------------------------------------------------------------------------------------------ |  | --------
|                                                                                                                   |  | Page No.
|                                                                                                                   |  |         
|                                                                                                                  
|Report of Independent Registered Public
  Accounting Firm                                                          |  | 40      
|                                                                                                                   |  |         
|Consolidated Statements of Operations 
  Years Ended December 31, 2007, 2006 and 2005                             |  | 41      
|                                                                                                                   |  |         
|Consolidated Balance Sheets  As of
  December 31, 2007 and 2006 (as Restated)                                     |  | 42      
|                                                                                                                   |  |         
|Consolidated Statements of Cash Flows 
  Years Ended December 31, 2007, 2006 (as Restated) and 2005 (as Restated) |  | 43-44   
|                                                                                                                   |  |         
|Consolidated Statement of Changes in Equity
   Years Ended December 31, 2007, 2006 (as Restated) and 2005         |  | 45      
|                                                                                                                   |  |         
|Notes to the Consolidated Financial
  Statements                                                                   |  | 46-75   

-39-

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Board of Directors
and Stockholders of
GenTek Inc.
Parsippany, New Jersey

We have audited the
accompanying consolidated balance sheets of GenTek Inc. and subsidiaries (the
Company) as of December 31, 2007 and 2006, and the related consolidated
statements of operations, changes in equity, and cash flows for each of the
three years in the period ended December 31, 2007. Our audits also included the
financial statement schedule listed in the Index at Item 15. These financial
statements and financial statement schedule are the responsibility of the
Companys management. Our responsibility is to express an opinion on the
financial statements and financial statement schedule 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes 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 GenTek Inc. and subsidiaries as of December 31, 2007 and
2006, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2007, in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to
the consolidated financial statements, the Company adopted (1) Financial
Accounting Standards Boards Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an interpretation of
FASB
Statement No. 109 as of January 1, 2007 which changed the
accounting for uncertain tax positions; (2) the recognition and disclosure
provisions of Statement of Financial Accounting Standards (SFAS) No. 158, Employers Accounting for Defined
Benefit Pension and
Other Postretirement Plans  an Amendment of FASB Statements No. 87, 88, 106
and 132(R)as of December 31, 2006, which changed its method of
accounting for pension and postretirement benefits; and (3) SFAS No. 123(R),
Share-Based Payment, as of January 1, 2006, which changed its method of
accounting for stock-based compensation.

We have also audited, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Companys internal control over financial reporting as of
December 31, 2007, based on the criteria established in Internal ControlIntegrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated March 17, 2008 expressed an unqualified opinion on the
Companys internal control over financial reporting.

/s/ Deloitte
& Touche LLPParsippany, New Jersey
March 17, 2008

-40-

---



GENTEK INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(In
thousands, except per share data)

|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|------------------------------------------------------------------------------------------------------------ |  | -------------------------- | ------- | ---- | - | ------- | - | - | ------- | -
|                                                                                                             |  | Years
  Ended December 31, |        
|                                                                                                             |  |                            |        
|                                                                                                             |  | 2007                       |         | 2006 |   | 2005    |  
|                                                                                                             |  |                            |         |      |   |         |  
|Net revenues                                                                                                 |  | $                          | 608,219 |      | $ | 593,254 |   | $ | 537,433 |  
|Cost of sales                                                                                                |  |                            | 502,596 |      |   | 488,637 |   |   | 437,883 |  
|Selling, general and administrative expense                                                                  |  |                            | 51,820  |      |   | 50,240  |   |   | 54,884  |  
|Net (gain) loss on disposition of long-term
  assets                                                         |  |                            | (10,031 | )    |   | 472     |   |   | 158     |  
|Restructuring and impairment charges                                                                         |  |                            | 4,964   |      |   | 2,974   |   |   | 6,989   |  
|Pension and postretirement liability
  curtailment and settlement (gains) losses                             |  |                            | (3,260  | )    |   | (644    | ) |   | 626     |  
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Operating profit                                                                                             |  |                            | 62,130  |      |   | 51,575  |   |   | 36,893  |  
|Interest expense                                                                                             |  |                            | 22,685  |      |   | 29,137  |   |   | 24,733  |  
|Interest income                                                                                              |  |                            | 646     |      |   | 604     |   |   | 557     |  
|Other (income) expense, net                                                                                  |  |                            | (854    | )    |   | 347     |   |   | (2,388  | )
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Income from continuing operations before
  income taxes                                                      |  |                            | 40,945  |      |   | 22,695  |   |   | 15,105  |  
|Income tax provision                                                                                         |  |                            | 2,853   |      |   | 8,564   |   |   | 7,332   |  
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Income from continuing operations                                                                            |  |                            | 38,092  |      |   | 14,131  |   |   | 7,773   |  
|Income (loss)
    from discontinued operations (net of tax of $641, $(7,160) and $(4,363),
    respectively) |  |                            | (8,325  | )    |   | (16,234 | ) |   | (8,595  | )
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Net income (loss)                                                                                            |  | $                          | 29,767  |      | $ | (2,103  | ) | $ | (822    | )
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Earnings per common share  basic:                                                                           |  |                            |         |      |   |         |   |   |         |  
|Income from continuing operations                                                                            |  | $                          | 3.69    |      | $ | 1.39    |   | $ | 0.77    |  
|Income (loss) from discontinued operations                                                                   |  |                            | (0.81   | )    |   | (1.60   | ) |   | (0.86   | )
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Net income (loss)                                                                                            |  | $                          | 2.89    |      | $ | (0.21   | ) | $ | (0.08   | )
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Earnings per common share  assuming
  dilution:                                                             |  |                            |         |      |   |         |   |   |         |  
|Income from continuing operations                                                                            |  | $                          | 3.29    |      | $ | 1.29    |   | $ | 0.77    |  
|Income (loss) from discontinued operations                                                                   |  |                            | (0.72   | )    |   | (1.48   | ) |   | (0.85   | )
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  
|Net income (loss)                                                                                            |  | $                          | 2.57    |      | $ | (0.19   | ) | $ | (0.08   | )
|                                                                                                             |  |                            |         |      |   |         |   |   |         |  

See the accompanying notes to the consolidated financial statements.

-41-

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GENTEK INC.CONSOLIDATED
BALANCE SHEETS(In
thousands, except share data)

|                                                                                                                                                     |  |                |         |      |                          |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- | ------- | ---- | ------------------------ | ------- | -
|                                                                                                                                                     |  | December
  31, |        
|                                                                                                                                                     |  |                |        
|                                                                                                                                                     |  | 2007           |         | 2006 |                         
|                                                                                                                                                     |  |                |         |      |                         
|                                                                                                                                                     |  |                |         |      | As Restated See Note 18 |        
|ASSETS                                                                                                                                               |  |                |         |      |                          |         |  
|Current assets:                                                                                                                                      |  |                |         |      |                          |         |  
|Cash and cash equivalents                                                                                                                            |  | $              | 16,089  |      | $                        | 5,237   |  
|Receivables, net                                                                                                                                     |  |                | 74,004  |      |                          | 77,305  |  
|Inventories                                                                                                                                          |  |                | 51,184  |      |                          | 46,885  |  
|Deferred income taxes                                                                                                                                |  |                | 39,675  |      |                          | 31,578  |  
|Assets held for sale                                                                                                                                 |  |                | 5,617   |      |                          | 136,294 |  
|Other current assets                                                                                                                                 |  |                | 6,320   |      |                          | 6,511   |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|Total current assets                                                                                                                                 |  |                | 192,889 |      |                          | 303,810 |  
|Property, plant and equipment, net                                                                                                                   |  |                | 218,525 |      |                          | 224,102 |  
|Goodwill                                                                                                                                             |  |                | 147,158 |      |                          | 139,497 |  
|Intangible assets, net                                                                                                                               |  |                | 48,488  |      |                          | 54,703  |  
|Other assets                                                                                                                                         |  |                | 6,919   |      |                          | 8,094   |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|Total assets                                                                                                                                         |  | $              | 613,979 |      | $                        | 730,206 |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|LIABILITIES AND EQUITY                                                                                                                               |  |                |         |      |                          |         |  
|Current liabilities:                                                                                                                                 |  |                |         |      |                          |         |  
|Accounts payable                                                                                                                                     |  | $              | 44,707  |      | $                        | 42,639  |  
|Accrued liabilities                                                                                                                                  |  |                | 52,260  |      |                          | 56,181  |  
|Current portion of long-term debt                                                                                                                    |  |                | 2,851   |      |                          | 4,612   |  
|Liabilities of businesses held for sale                                                                                                              |  |                |        |      |                          | 32,753  |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|Total current liabilities                                                                                                                            |  |                | 99,818  |      |                          | 136,185 |  
|Long-term debt                                                                                                                                       |  |                | 237,281 |      |                          | 340,687 |  
|Pension and postretirement obligations                                                                                                               |  |                | 51,270  |      |                          | 85,501  |  
|Other liabilities                                                                                                                                    |  |                | 80,001  |      |                          | 69,354  |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|Total liabilities                                                                                                                                    |  |                | 468,370 |      |                          | 631,727 |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|Equity:                                                                                                                                              |  |                |         |      |                          |         |  
|Preferred stock, $.01 par value;
  authorized: 10,000,000 shares; none issued or outstanding                                                         |  |                |        |      |                          |        |  
|Common stock, no par value; authorized:
  100,000,000 shares; issued: 10,605,265 and 10,359,716 shares at December
  31, 2007 and 2006, respectively |  |                | 86,444  |      |                          | 83,516  |  
|Warrants                                                                                                                                             |  |                | 7,776   |      |                          | 8,355   |  
|Accumulated other comprehensive income                                                                                                               |  |                | 21,510  |      |                          | 8,550   |  
|Retained earnings (deficit)                                                                                                                          |  |                | 30,890  |      |                          | (1,678  | )
|Treasury stock, at cost: 35,081 and 12,198
  shares at December 31, 2007 and 2006, respectively                                                      |  |                | (1,011  | )    |                          | (264    | )
|                                                                                                                                                     |  |                |         |      |                          |         |  
|Total equity                                                                                                                                         |  |                | 145,609 |      |                          | 98,479  |  
|                                                                                                                                                     |  |                |         |      |                          |         |  
|Total liabilities and equity                                                                                                                         |  | $              | 613,979 |      | $                        | 730,206 |  
|                                                                                                                                                     |  |                |         |      |                          |         |  

See the accompanying notes to the consolidated financial
    statements.

-42-

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GENTEK
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|----------------------------------------------------------------------------------------- |  | ------------------------- | -------- | ------------- | - | ------------- | - | - | -------- | -
|                                                                                          |  | Years
 Ended December 31, |         
|                                                                                          |  |                           |         
|                                                                                          |  | 2007                      |          | 2006          |   | 2005          |  
|                                                                                          |  |                           |          |               |   |               |  
|                                                                                          |  |                           |          | As Restated  |   | As Restated  |  
|                                                                                          |  |                           |          | See Note 18   |   | See Note 18   |  
|                                                                                         
|Cash flows from operating activities:                                                     |  |                           |          |               |   |               |   |   |          |  
|Net income (loss)                                                                         |  | $                         | 29,767   |               | $ | (2,103        | ) | $ | (822     | )
|Adjustments to reconcile net income (loss)
 to net cash provided by operating activities: |  |                           |          |               |   |               |   |   |          |  
|Loss from discontinued operations                                                         |  |                           | 8,325    |               |   | 16,234        |   |   | 8,595    |  
|Pension and postretirement liability curtailment
 gains                                   |  |                           | (3,260   | )             |   | (644          | ) |   |         |  
|Depreciation and amortization                                                             |  |                           | 35,705   |               |   | 33,836        |   |   | 34,372   |  
|Asset impairment charges                                                                  |  |                           | 914      |               |   | 1,231         |   |   | 1,852    |  
|Net (gain) loss on disposition of long-term
 assets                                       |  |                           | (10,031  | )             |   | 472           |   |   | (1,633   | )
|Long-term incentive plan costs, net                                                       |  |                           | 3,698    |               |   | 1,793         |   |   | 1,176    |  
|Excess tax benefit from long-term incentive
 plan                                         |  |                           | (703     | )             |   | (318          | ) |   |         |  
|(Increase) decrease in receivables                                                        |  |                           | 6,639    |               |   | 3,501         |   |   | (7,840   | )
|(Increase) decrease in inventories                                                        |  |                           | (3,088   | )             |   | (2,229        | ) |   | 21       |  
|(Increase) decrease in deferred tax assets                                                |  |                           | (12,158  | )             |   | (4,961        | ) |   | (14,828  | )
|Increase (decrease) in accounts payable                                                   |  |                           | (1,403   | )             |   | 3,415         |   |   | 796      |  
|Increase (decrease) in accrued liabilities                                                |  |                           | (434     | )             |   | 5,609         |   |   | (6,282   | )
|Increase (decrease) in other liabilities
 and assets, net                                 |  |                           | (6,448   | )             |   | 2,073         |   |   | (16,469  | )
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Net cash provided by (used for) continuing
 operations                                    |  |                           | 47,523   |               |   | 57,909        |   |   | (1,062   | )
|Net cash provided by (used for)
 discontinued operations                                  |  |                           | (2,339   | )             |   | (17,539       | ) |   | 7,244    |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Net cash provided by operating activities                                                 |  |                           | 45,184   |               |   | 40,370        |   |   | 6,182    |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Cash flows from investing activities:                                                     |  |                           |          |               |   |               |   |   |          |  
|Capital expenditures                                                                      |  |                           | (28,822  | )             |   | (20,106       | ) |   | (24,305  | )
|Proceeds from sales or disposals of
 long-term assets                                     |  |                           | 14,997   |               |   | 849           |   |   | 2,499    |  
|Proceeds from (purchase of) short-term
 investments                                       |  |                           |         |               |   | 2,367         |   |   | (2,229   | )
|Acquisition of businesses net of cash
 acquired*                                          |  |                           | (9,946   | )             |   | (40,119       | ) |   |         |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Net cash used for continuing operations                                                   |  |                           | (23,771  | )             |   | (57,009       | ) |   | (24,035  | )
|Net cash provided by (used for)
 discontinued operations                                  |  |                           | 96,945   |               |   | 28,383        |   |   | (6,892   | )
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Net cash provided by (used for) investing
 activities                                     |  |                           | 73,174   |               |   | (28,626       | ) |   | (30,927  | )
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Cash flows from financing activities:                                                     |  |                           |          |               |   |               |   |   |          |  
|Proceeds from revolving credit facility                                                   |  |                           | 77,750   |               |   | 17,750        |   |   | 54,500   |  
|Repayments of revolving credit facility                                                   |  |                           | (87,750  | )             |   | (7,750        | ) |   | (54,500  | )
|Issuance of long-term debt                                                                |  |                           | 50,000   |               |   | 929           |   |   | 382,000  |  
|Repayment of long-term debt                                                               |  |                           | (143,333 | )             |   | (24,589       | ) |   | (26,561  | )
|Deferred financing costs                                                                  |  |                           | (378     | )             |   | (396          | ) |   | (10,733  | )
|Dividends                                                                                 |  |                           |         |               |   | (2,367        | ) |   | (310,742 | )
|Exercise of stock options and warrants                                                    |  |                           | 887      |               |   | 872           |   |   | 708      |  
|Excess tax benefit from long-term incentive
 plan                                         |  |                           | 703      |               |   | 318           |   |   |         |  
|Payments to acquire treasury stock                                                        |  |                           | (747     | )             |   | (178          | ) |   | (86      | )
|Repurchase and retirement of common stock                                                 |  |                           | (3,560   | )             |   |              |   |   |         |  
|Other                                                                                     |  |                           | 382      |               |   |              |   |   |         |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Net cash provided by (used for) continuing
 operations                                    |  |                           | (106,046 | )             |   | (15,411       | ) |   | 34,586   |  
|Net cash used for discontinued operations                                                 |  |                           | (2,163   | )             |   | (1,738        | ) |   | (7,319   | )
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Net cash provided by (used for) financing
 activities                                     |  |                           | (108,209 | )             |   | (17,149       | ) |   | 27,267   |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Effect of exchange rate changes on cash                                                   |  |                           | 703      |               |   | 10            |   |   | (151     | )
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Increase (decrease) in cash and cash
 equivalents                                         |  |                           | 10,852   |               |   | (5,395        | ) |   | 2,371    |  
|Cash and cash equivalents at beginning of
 period                                         |  |                           | 5,237    |               |   | 10,632        |   |   | 8,261    |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Cash and cash equivalents at end of period                                                |  | $                         | 16,089   |               | $ | 5,237         |   | $ | 10,632   |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Supplemental information:                                                                 |  |                           |          |               |   |               |   |   |          |  
|Cash paid (refunded) for income
taxes(1)                                                  |  | $                         | 3,899    |               | $ | (287          | ) | $ | (287     | )
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Cash paid for interest(2)                                                                 |  | $                         | 23,240   |               | $ | 29,730        |   | $ | 19,500   |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  
|Capital expenditures incurred but not yet
 paid                                           |  | $                         | 9,163    |               | $ | 5,716         |   | $ | 3,519    |  
|                                                                                          |  |                           |          |               |   |               |   |   |          |  

-43-

---



GENTEK
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

|*Acquisition of businesses, net of cash
 acquired: |  |   |        |   |   |         |   |   |   | 
|-------------------------------------------------- |  | - | ------ | - | - | ------- | - | - | - | 
|Working capital, other than cash                   |  | $ | (1,641 | ) | $ | (10,771 | ) | $ |  | 
|Property, plant and equipment                      |  |   | (1,665 | ) |   | (21,647 | ) |   |  | 
|Other assets                                       |  |   | (7,642 | ) |   | (13,438 | ) |   |  | 
|Current liabilities                                |  |   | 378    |   |   |        |   |   |  | 
|Non-current laibilities                            |  |   | 624    |   |   | 5,737   |   |   |  | 
|                                                   |  |   |        |   |   |         |   |   |   | 
|Total cash used to acquire businesses              |  | $ | (9,946 | ) | $ | (40,119 | ) | $ |  | 
|                                                   |  |   |        |   |   |         |   |   |   | 

|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Includes cash paid for
 income taxes related to discontinued operations of $0 and $(4) for the years
 ended December 31, 2006 and 2005, respectively.
|    |                                                                                                                                                      
|(2) | Includes cash paid for
 interest related to discontinued operations of $372 and $408 for the years
 ended December 31, 2006 and 2005, respectively.  

See the accompanying notes to the consolidated financial statements.

-44-

---



GENTEK INC.CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Years Ended December 31, 2007 
(In thousands, except per share data)

|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|--------------------------------------------------------------------------------------------------------- |  | ------------- | -------- | ---------------------- | - | -------- | - | --------------- | ----- | ------------------------------------------------- | - | ----------------------------- | - | ----- | ------ | - | - | -------- | - | - | -------- | -
|                                                                                                          |  | Common
 Stock |          | Unearned
 Compensation |   | Warrants |   | Treasury
 Stock |       | Accumulated
 Other
 Comprehensive
 Income
 (Loss) |   | Retained
 Earnings
 (Deficit) |   | Total |       
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |       
|                                                                                                         
|Balance at January 1, 2005                                                                                |  | $             | 271,690  |                        | $ | (2,123   | ) | $               | 8,361 |                                                   | $ |                              |   | $     | (886   | ) | $ | 123,385  |   | $ | 400,427  |  
|Components of comprehensive loss:                                                                         |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Net loss                                                                                                  |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   | (822     | ) |   | (822     | )
|Minimum pension liability adjustments (net
 of tax of $(2,197))                                           |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | (3,357 | ) |   |         |   |   | (3,357   | )
|Foreign currency translation adjustments
 (net of tax of $(95))                                           |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | (145   | ) |   |         |   |   | (145     | )
|Change in unrealized gain on derivative
 instruments (net of tax of $345)                                 |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | 527    |   |   |         |   |   | 527      |  
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Comprehensive loss                                                                                        |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   | (3,797   | )
|Long-term incentive plan grants, net                                                                      |  |               | (88      | )                      |   | 1,264    |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 1,176    |  
|Exercise of warrants                                                                                      |  |               | 2        |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 2        |  
|Dividends ($31.00 per share)                                                                              |  |               | (190,917 | )                      |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   | (122,138 | ) |   | (313,055 | )
|Exercise of stock options                                                                                 |  |               | 708      |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 708      |  
|Acquisition of treasury stock                                                                             |  |               |         |                        |   |         |   |                 |      |                                                   |   | (86                           | ) |       |       |   |   |         |   |   | (86      | )
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Balance at December 31, 2005                                                                              |  |               | 81,395   |                        |   | (859     | ) |                 | 8,361 |                                                   |   | (86                           | ) |       | (3,861 | ) |   | 425      |   |   | 85,375   |  
|Components of comprehensive income:                                                                       |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Net loss                                                                                                  |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   | (2,103   | ) |   | (2,103   | )
|Minimum pension liability adjustment (net
 of tax of $2,494) (as Restated  see Note 18)                  |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | 3,811  |   |   |         |   |   | 3,811    |  
|Foreign currency translation adjustments
 (net of tax of $59)                                             |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | 92     |   |   |         |   |   | 92       |  
|Change in unrealized gain on derivative
 instruments (net of tax of $157)                                 |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | 239    |   |   |         |   |   | 239      |  
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Comprehensive income (as Restated  see
 Note 18)                                                         |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   | 2,039    |  
|Adjustment to initially apply FASB
 Statement No. 158 (net of tax of $1,198)
 (as Restated  see Note 18) |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | 8,269  |   |   |         |   |   | 8,269    |  
|Long-term incentive plan grants, net                                                                      |  |               | 1,243    |                        |   | 859      |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 2,102    |  
|Exercise of warrants                                                                                      |  |               | 48       |                        |   |         |   |                 | (6    | )                                                 |   |                              |   |       |       |   |   |         |   |   | 42       |  
|Exercise of stock options                                                                                 |  |               | 830      |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 830      |  
|Acquisition of treasury stock                                                                             |  |               |         |                        |   |         |   |                 |      |                                                   |   | (178                          | ) |       |       |   |   |         |   |   | (178     | )
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Balance at December 31, 2006  as Restated
 see Note 18                                                   |  |               | 83,516   |                        |   |         |   |                 | 8,355 |                                                   |   | (264                          | ) |       | 8,550  |   |   | (1,678   | ) |   | 98,479   |  
|Cumulative effect of change in accounting
 for uncertain tax positions                                    |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   | 2,801    |   |   | 2,801    |  
|Components of comprehensive income:                                                                       |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Net income                                                                                                |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   | 29,767   |   |   | 29,767   |  
|Pension and postretirement liability
 adjustments (net of tax $12,722)                                    |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | 15,271 |   |   |         |   |   | 15,271   |  
|Foreign currency translation adjustments
 (net of tax of $41)                                             |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | 61     |   |   |         |   |   | 61       |  
|Change in unrealized gain/(loss) on
 derivative instruments (net of tax of
 $(1,552)                      |  |               |         |                        |   |         |   |                 |      |                                                   |   |                              |   |       | (2,372 | ) |   |         |   |   | (2,372   | )
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Comprehensive income                                                                                      |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   | 42,727   |  
|Long-term incentive plan grants, net                                                                      |  |               | 4,640    |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 4,640    |  
|Exercise and cancellation of warrants                                                                     |  |               | 586      |                        |   |         |   |                 | (579  | )                                                 |   |                              |   |       |       |   |   |         |   |   | 7        |  
|Exercise of stock options                                                                                 |  |               | 880      |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 880      |  
|Acquisition of treasury stock                                                                             |  |               |         |                        |   |         |   |                 |      |                                                   |   | (747                          | ) |       |       |   |   |         |   |   | (747     | )
|Repurchase and retirement of common stock                                                                 |  |               | (3,560   | )                      |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | (3,560   | )
|Other                                                                                                     |  |               | 382      |                        |   |         |   |                 |      |                                                   |   |                              |   |       |       |   |   |         |   |   | 382      |  
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  
|Balance at December 31, 2007                                                                              |  | $             | 86,444   |                        | $ |         |   | $               | 7,776 |                                                   | $ | (1,011                        | ) | $     | 21,510 |   | $ | 30,890   |   | $ | 145,609  |  
|                                                                                                          |  |               |          |                        |   |          |   |                 |       |                                                   |   |                               |   |       |        |   |   |          |   |   |          |  

See the accompanying notes to the consolidated
financial statements.

-45-

---



GENTEK INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)

Note 1  Basis of Presentation

GenTek
Inc. (GenTek or the Company) is a holding company with no independent
operations and, therefore, is dependent upon cash flow from its subsidiaries to
meet obligations. GenTeks subsidiaries operate through two primary business
segments: valve actuation systems and performance chemicals. The valve
actuation systems segment provides precision engineered valve actuation systems
and components to two principal markets: automotive and heavy duty/commercial.
The performance chemicals segment provides a broad range of value-added
chemical products to four principal markets: water treatment, chemical
processing, pharmaceutical and personal care and technology. The Company
operates over 50 manufacturing and production facilities located primarily in
the U.S. and Canada.

During
the second quarter of 2005, the Company ceased operations of its printing plate
business. During April 2006, the Company completed the sale of its cable and
wire manufacturing business in Stouffville, Canada. On February 16, 2007, the
Company completed the sale of its Noma wire and cable harness assembly
business. On July 17, 2007, the Company completed the sale of its wholly owned
subsidiary Defiance Testing and Engineering Services, Inc. Accordingly, these
businesses have been classified as discontinued operations. See Note 16.

Note 2  Summary of Significant Accounting
Policies

The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of 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.

The
consolidated financial statements include the accounts of the Company and all
of its majority owned subsidiaries. Investments in affiliates in which
ownership is at least 20 percent, but less than a majority voting interest, are
accounted for using the equity method. Investments in less than 20 percent
owned affiliates are accounted for using the cost method. Intercompany balances
and transactions are eliminated in consolidation.

All
highly liquid instruments purchased with a maturity of three months or less are
considered to be cash equivalents.

Inventories
are valued at the lower of cost or market, using the last-in, first-out
(LIFO) method for certain domestic production inventories and the first-in,
first-out (FIFO) or average-cost method for all other inventories. Production
inventory costs include material, labor and factory overhead.

Property,
plant and equipment are carried at cost and are depreciated principally using
the straight-line method. Estimated lives range from five to 35 years for
buildings and leasehold improvements and three to 15 years for machinery and
equipment.

-46-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

Intangible
assets that have finite lives are amortized using the straight-line method,
over their estimated useful lives, which range from four to 15 years.

The
Company reviews long-lived assets for impairment whenever events and
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by
comparing the carrying amount of these assets against the estimated
undiscounted future cash flows to be generated by the assets. At the time such
evaluations indicate that the future cash flows are not sufficient to recover
the carrying value of such assets, the carrying values are adjusted to their
fair values, which have been determined on a discounted cash flow basis. Assets
to be disposed of are reported at the lower of their carrying amount or fair
value less costs to sell.

The
Company reviews goodwill and indefinite lived intangible assets separately for
impairment annually (as of October 31) and whenever events and circumstances
indicate that the recorded value of the assets might be more than its fair
value. Estimated fair values are determined based upon a number of factors,
including market information and current operating forecasts.

Accruals
for product warranties are estimated based upon historical warranty experience
and are recorded at the time revenue is recognized or when a specific claim is
both probable and can be estimated.

Accruals
for environmental liabilities are recorded based on current interpretations of
environmental laws and regulations when it is probable that a liability has
been incurred and the amount of such a liability can be reasonably estimated.

Accruals
for pension and other postretirement benefit costs utilize a number of
accounting mechanisms that reduce the volatility of reported costs. Differences
between actuarial assumptions and actual plan results are deferred and are
amortized into expense only when the accumulated differences exceed 10 percent
of the greater of the projected benefit obligation or the market-related value
of plan assets. If necessary, the excess is amortized over the average
remaining service period of active employees. Additionally, the impact of asset
performance on pension expense is recognized over a five-year phase-in period
though a market-related value of assets calculation. Since the market-related
value of assets recognizes investment gains or losses over a five-year period,
the future value of assets will be impacted as previously deferred gains or
losses are recognized.

Assets
and liabilities of foreign subsidiaries are translated into US dollars at
the year-end exchange rate while revenues and expenses are translated monthly
at the average exchange rate for each month. The resulting translation
adjustments are made directly to accumulated other comprehensive income. Gains
and losses resulting from transactions of the Company and its subsidiaries,
which are made in currencies other than their functional currency (different
from their own), are included in earnings as they occur and reflected within
other income (expense).

The
Company recognizes revenue when persuasive evidence of an arrangement exists,
delivery has occurred, the amount is fixed or determinable, and collectibility
is reasonably assured. Revenue is recognized from product sales when title and
risk of loss has passed to the customer consistent with the

-47-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

related shipping
terms, generally at the time products are shipped. The Company records a
provision for estimated sales returns and other allowances as a reduction of
revenue at the time of revenue recognition.

The
Company records shipping and handling costs in cost of sales.

Effective
January 1, 2006, the Company adopted SFAS No. 123R, Share-Based Payment (Revised 2004)
(SFAS 123R). This statement addresses the accounting for share-based payment
transactions in which a company receives employee services in exchange for the
companys equity instruments or liabilities that are based on the fair value of
the companys equity securities or may be settled by the issuance of these
securities. SFAS 123R eliminates the ability to account for share-based
compensation using the intrinsic value method and generally requires that such
transactions be accounted for using a fair value method. The Company adopted
SFAS 123R using the modified prospective transition method. Under this method,
compensation cost is recognized for the unvested portion of share-based
payments granted prior to January 1, 2006 and all share-based payments granted
subsequent to December 31, 2005 over the related vesting period. Prior to
January 1, 2006, the Company applied the intrinsic value method prescribed in
APB Opinion No. 25, Accounting for Stock Issued to Employees
in accounting for employee stock based compensation. Prior period results have
not been restated.

The
following table illustrates the effect on net income and net income per share
if the Company had applied the fair value based method to recognize stock-based
employee compensation for the year ended December 31, 2005:

|                                                                                                                                                  |  |                                |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------ | ------ | -
|                                                                                                                                                  |  | Year Ended
 December 31,
 2005 |       
|                                                                                                                                                  |  |                                |       
|Net loss as reported                                                                                                                              |  | $                              | (822   | )
|Add: Stock-based
    employee compensation expense included in net income determined under intrinsic
    value method, net of related tax effects |  |                                | 1,176  |  
|Deduct: Total stock-based employee
 compensation expense determined under fair value based method for all awards,
 net of related tax effects     |  |                                | (1,430 | )
|                                                                                                                                                  |  |                                |        |  
|Pro forma net loss                                                                                                                                |  | $                              | (1,076 | )
|                                                                                                                                                  |  |                                |        |  
|Loss per share:                                                                                                                                   |  |                                |        |  
|Basic  as reported                                                                                                                               |  | $                              | (0.08  | )
|                                                                                                                                                  |  |                                |        |  
|Basic  pro forma                                                                                                                                 |  | $                              | (0.11  | )
|                                                                                                                                                  |  |                                |        |  
|Diluted  as reported                                                                                                                             |  | $                              | (0.08  | )
|                                                                                                                                                  |  |                                |        |  
|Diluted  pro forma                                                                                                                               |  | $                              | (0.11  | )
|                                                                                                                                                  |  |                                |        |  

For
purposes of this calculation, the fair value of each option grant was estimated
on the grant date using the Black-Scholes option-pricing model with the
following assumptions:

|                                    |  |      |      |  
|----------------------------------- |  | ---- | ---- | -
|                                    |  | 2005 |     
|                                    |  |      |     
|Dividend
 yield                     |  |      |     |  
|Expected
 volatility                |  |      | 22   | %
|Risk-free
 interest rate            |  |      | 3.97 | %
|Expected
 holding period (in years) |  |      | 4    |  
|Weighted
 average fair value        |  | $    | 2.94 |  

-48-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

Income
taxes are accounted for under the asset and liability method. Under this
method, deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases, and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted
tax rates in effect for the year in which those temporary differences are
expected to be recovered or settled. A valuation allowance is recorded to
reduce the carrying amounts of deferred tax assets if it is more likely than
not that such assets will not be realized.

The
Company does not hold or issue financial instruments for trading purposes. The
Company uses derivative financial instruments primarily for purposes of hedging
exposures to fluctuations in interest rates and commodity prices. Gains and
losses related to qualifying hedges of firm commitments or anticipated
transactions are deferred and are recognized in earnings or as adjustments of
carrying amounts when the hedged transaction occurs.

The
components of accumulated other comprehensive income (loss) are as follows:

|                                                         |  |              |        |      |   |       | 
|-------------------------------------------------------- |  | ------------ | ------ | ---- | - | ----- | 
|                                                         |  | December 31, |       
|                                                         |  |              |       
|                                                         |  | 2007         |        | 2006 |  
|                                                         |  |              |        |      |  
|Foreign
 currency translation                            |  | $            | 613    |      | $ | 552   | 
|Unrecognized
 pension and postretirement (costs) credits |  |              | 22,451 |      |   | 7,180 | 
|Net
 unrealized gain/(loss) on derivative instruments    |  |              | (1,554 | )    |   | 818   | 
|                                                         |  |              |        |      |   |       | 
|Accumulated
 other comprehensive income                  |  | $            | 21,510 |      | $ | 8,550 | 
|                                                         |  |              |        |      |   |       | 

In
June 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109 (FIN 48). FIN 48
clarifies the accounting for uncertainty in income taxes recognized in a
companys financial statements and prescribes a recognition threshold and
measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. The interpretation
also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. The
Company recognizes interest and penalties related to uncertain tax positions as
a component of the provision for income taxes. See Note 6.

In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements,
(SFAS 157), to define fair value, establish a framework for measuring fair
value in accordance with generally accepted accounting principles and expand
disclosures about fair value measurements. SFAS 157 requires quantitative
disclosures using a tabular format in all periods (interim and annual) and
qualitative disclosures about the valuation techniques used to measure fair
value in all annual periods. Certain provisions of this Statement were
effective for financial statements issued for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years. In February
2008, the FASB deferred the implementation of SFAS No. 157 for all
non-financial assets and non-financial liabilities, except those recognized or
disclosed at fair value in the financial statements on a recurring basis (at
least annually). The Company does not anticipate that the adoption of this statement
will have a material impact on the Companys results of operation or financial
condition.

-49-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for Defined
Benefit Pensions and Other Postretirement Plans  Amendment of FASB Statements
No. 87, 88, 106 and 132(R), (SFAS 158). SFAS 158 requires an
employer to recognize the overfunded or underfunded status of a defined
benefit postretirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income. Employers are required to initially recognize the funded status and
provide the required disclosures beginning for fiscal year ends after December
15, 2006. The net impact on the December 31, 2006 balance sheet was to decrease
prepaid pension costs by $1,749, decrease other current liabilities by $862,
reduce accrued pension and postretirement benefit costs by $10,354 and increase
deferred tax liabilities by $1,198, with the offset increasing stockholders
equity by $8,269. These amounts have been restated from what was previously
reported. See Note 18. Additionally, for fiscal years ending after December 15,
2008, SFAS 158 will require employers to measure the plan assets and
obligations as of the date of the employers fiscal year end. The Company currently
utilizes a measurement date of October 31. The Company does not anticipate the
change in the fiscal year end measurement date to have a material impact on the
Companys results of operations or financial condition.

In
February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and
Financial Liabilities  including an Amendment of SFAS No. 115,
(SFAS No. 159), which permits an entity to measure many financial assets and
financial liabilities at fair value that are not currently required to be
measured at fair value. Entities that elect the fair value option will report
unrealized gains and losses in earnings at each subsequent reporting date. The
fair value option may be elected on an instrument-by-instrument basis, with few
exceptions. SFAS No. 159 amends previous guidance to extend the use of the fair
value option to available-for-sale and held-to-maturity securities. The
Statement also establishes presentation and disclosure requirements to help
financial statement users understand the effect of the election. SFAS No. 159
is effective as of the beginning of the first fiscal year beginning after
November 15, 2007. The Company does not anticipate that the adoption of this
statement will have a material impact on the Companys results of operation or
financial condition.

In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations (SFAS 141R). SFAS 141R establishes principles and
requirements for how an acquirer recognizes and measures the identifiable
assets acquired, the liabilities assumed, any noncontrolling interest in the
acquiree and the goodwill acquired. SFAS 141R also establishes disclosure
requirements to enable the evaluation of the nature and financial effects of
the business combination. FAS 141(R) is to be applied prospectively to
business combinations for which the acquisition date is on or after an entitys
fiscal year that begins after December 15, 2008. The Company will assess
the impact of SFAS 141R if and when a future acquisition occurs.

-50-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51
(SFAS 160). SFAS 160 establishes accounting and reporting standards for the
noncontrolling interest in a subsidiary and for the deconsolidation of a
subsidiary. SFAS 160 is effective for fiscal years beginning on or after
December 15, 2008. Earlier adoption is prohibited. The Company does not
anticipate that the adoption of this statement will have a material impact on
the Companys results of operations or financial condition.

Certain
locations within the Companys performance chemicals segment have permitted
allowances for air emissions. These locations monitor their emissions and
routinely invest funds to maintain compliance levels or to improve performance.
Costs for environmental maintenance and improvement projects are recorded in
cost of sales and the gains from sales or transfers of these credits are likewise
recorded in cost of sales. During December 2007, the Company sold excess
emission credits through an open market created specifically to trade such
emission credits, and recorded a gain from these sales in the amount of $1,591.

Losses
on disposition of long-term assets in prior years have been reclassified in the
consolidated statement of operations to conform to the current period
presentation. These losses were previously included in cost of sales. Non-current
deferred tax assets have been reclassified in the consolidated balance sheets to
conform to the current period presentation in other assets.

Note 3  Acquisitions

On
December 31, 2007, the Company acquired Bay Chemical and Supply Company. The
acquisition included the manufacturing facility in Odem, Texas. Bay Chemical
and Supply is a producer of water treatment chemicals. The total cost of the
acquisition was $6,750 before any working capital adjustments. As a result of
the acquisition of Bay Chemical and Supply, the Company recognized $4,741 of
goodwill, which will not be deductible for tax purposes. The goodwill is the
result of synergies and cost reductions expected to be realized as the facility
is assimilated into the Companys network of water treatment chemical
production facilities in the performance chemicals segment.

On
February 6, 2007, the Company acquired the assets of Chalum, Inc. The total
cost of the acquisition was $3,203. The acquisition included the manufacturing
facility in Sacaton, Arizona. Chalum produces aluminum sulfate for the greater
Phoenix, Arizona municipal water treatment market. As a result of the
acquisition of Chalum, the Company recognized $2,901 of goodwill, all of which
is expected to be deductible for tax purposes. The goodwill is the result of
synergies and cost reductions expected to be realized as the facility is
assimilated into the Companys network of water treatment chemical production
facilities in the performance chemicals segment.

On
September 21, 2006, the Company acquired the assets of GAC MidAmerica, Inc.
(GAC). The acquisition included manufacturing facilities in Toledo, Ohio,
Indianapolis, Indiana, and Saukville, Wisconsin. GAC produces aluminum sulfate
and bleach, as well as distributing specialty water treatment chemicals,
sulfuric acid and caustic soda. The total cost of the acquisition was $8,266.
The GAC acquisition resulted in goodwill of $2,879 related to synergies and
cost reductions expected to be realized as the facility is assimilated into the
Companys network of water treatment chemical production facilities in the
performance chemicals segment.

-51-

---



GENTEK INC.NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

On
July 31, 2006, the Company acquired the assets of Precision Engine Products
Corp., a wholly owned subsidiary of Stanadyne Corporation. Precision Engine
Products is dedicated principally to the manufacturing of hydraulic lash
adjusters and die cast aluminum rocker arm assemblies utilized in valve
actuation systems for both OEM and after market applications to the global
automotive and light truck markets. Precision Engine Products has manufacturing
facilities in Tallahassee, Florida and Curitiba, Brazil. The total cost of the
acquisition was $26,262, plus the potential of an earn out for Stanadyne of up
to $10,000, payable, if at all, based on certain performance metrics being
achieved during the twelve months following the closing date. As part of the
initial purchase price allocation, the Company recorded a liability for the
excess of the fair value of assets purchased over the preliminary purchase
price due to the potential for an earn-out payment. During the third quarter of
2007, it was determined that these performance metrics had not been achieved,
and that no additional consideration was due. Accordingly, the liability representing
the excess of the values assigned to the assets purchased over the preliminary
purchase price was reversed, and the values assigned to property, plant and
equipment were adjusted from $15,990 to $11,172 and the values assigned to
intangible assets were adjusted from $4,100 to $3,822.

On
July 27, 2006, the Company acquired the assets of Repauno Products, LLC. The
acquisition included the manufacturing facility in Gibbstown, New Jersey.
Repauno Products manufactures sodium nitrite which is used in a wide range of
industries including metal finishing, heat transfer salts, rubber processing,
meat curing, odor control and inks and dyes. The total cost of the acquisition
was $6,057. During the second quarter of 2007, the Company increased the value
    assigned to intangible assets by $1,560.

The
allocation of the purchase price of the acquisitions is based on valuation
information available to the Company which is subject to change as such
information is finalized. Purchase price allocations have been finalized for
all acquisitions in 2006 and Chalum, Inc. The Company expects to finalize the
purchase price allocation for the Bay Chemical and Supply Company acquisition
    by the end of 2008. Operating results for the acquired entities have
been reflected in the Companys consolidated financial statements from date
of acquisition.

Note 4  Restructuring and Impairment Charges

Restructuring
Actions  2007

During
2007, the Company initiated actions to close its Perrysburg, Ohio facility,
which is included in its valve actuation systems segment. This action has been
completed as of December 31, 2007. The following tables summarize the Companys
costs and accruals for these restructuring actions:

|                                                |  |   |        |  
|----------------------------------------------- |  | - | ------ | -
|Employee Termination Costs                      |  |   |        |  
|Costs
 incurred in current period               |  | $ | 421    |  
|Costs
 anticipated to be incurred in the future |  |   |       |  
|                                                |  |   |        |  
|Total costs
 expected to be incurred            |  | $ | 421    |  
|                                                |  |   |        |  
|                                                |  |   |        |  
|Provisions                                      |  | $ | 421    |  
|Amounts paid                                    |  |   | (384   | )
|                                                |  |   |        |  
|Accrual
 balance at December 31, 2007           |  | $ | 37     |  
|                                                |  |   |        |  
|                                                |  |   |        |  
|Facility Exit Costs                             |  |   |        |  
|Costs
 incurred in current period               |  | $ | 1,870  |  
|Costs
 anticipated to be incurred in the future |  |   |       |  
|                                                |  |   |        |  
|Total costs
 expected to be incurred            |  | $ | 1,870  |  
|                                                |  |   |        |  
|                                                |  |   |        |  
|Provisions                                      |  | $ | 1,870  |  
|Amounts paid                                    |  |   | (1,870 | )
|                                                |  |   |        |  
|Accrual
 balance at December 31, 2007           |  | $ |       |  
|                                                |  |   |        |  

-52-

---



GENTEK INC.NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

Restructuring
Actions  Prior to 2007

During
2006, the Company initiated actions to close two production facilities in its
performance chemicals segment. During 2005, the Company initiated actions to
close three manufacturing facilities in its valve actuation systems segment. In
addition, the Company initiated a workforce reduction affecting corporate and
performance chemicals employees. As of December 31, 2007, these restructuring
actions have been completed. The following tables summarize the Companys costs
and accruals for these restructuring actions:

|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|----------------------------------------------- |  | ------------------------ | ---- | ---------------------- | - | --------- | - | ----- | ------ | - | - | ------ | -
|                                                |  | Valve Actuation
 Systems |      | Performance
 Chemicals |   | Corporate |   | Total |       
|                                                |  |                          |      |                        |   |           |   |       |       
|Employee Termination Costs                      |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|Cumulative
 costs incurred                      |  | $                        | 675  |                        | $ | 9,148     |   | $     | 2,145  |   | $ | 11,968 |  
|Costs
 anticipated to be incurred in the future |  |                          |     |                        |   |          |   |       |       |   |   |       |  
|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|Total costs
 incurred                           |  | $                        | 675  |                        | $ | 9,148     |   | $     | 2,145  |   | $ | 11,968 |  
|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|Accrual
 balance at December 31, 2004           |  |                          |     |                        |   | 944       |   |       |       |   |   | 944    |  
|Provisions                                      |  |                          | 338  |                        |   | 219       |   |       | 2,014  |   |   | 2,571  |  
|Amounts paid                                    |  |                          | (249 | )                      |   | (1,114    | ) |       | (2,014 | ) |   | (3,377 | )
|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|Accrual
 balance at December 31, 2005           |  |                          | 89   |                        |   | 49        |   |       |       |   |   | 138    |  
|Provisions                                      |  |                          | 337  |                        |   | 390       |   |       |       |   |   | 727    |  
|Amounts paid                                    |  |                          | (426 | )                      |   | (49       | ) |       |       |   |   | (475   | )
|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|Accrual
 balance at December 31, 2006           |  |                          |     |                        |   | 390       |   |       |       |   |   | 390    |  
|Provisions                                      |  |                          |     |                        |   | 174       |   |       |       |   |   | 174    |  
|Amounts paid                                    |  |                          |     |                        |   | (564      | ) |       |       |   |   | (564   | )
|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  
|Accrual
 balance at December 31, 2007           |  | $                        |     |                        | $ |          |   | $     |       |   | $ |       |  
|                                                |  |                          |      |                        |   |           |   |       |        |   |   |        |  

|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|----------------------------------------------- |  | ------------------------ | ------ | ---------------------- | - | --------- | - | ----- | - |  | - | ------ | -
|                                                |  | Valve Actuation
 Systems |        | Performance
 Chemicals |   | Corporate |   | Total |  
|                                                |  |                          |        |                        |   |           |   |       |  
|Facility Exit Costs                             |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Cumulative
 costs incurred                      |  | $                        | 1,808  |                        | $ | 17,612    |   | $     |  |  | $ | 19,420 |  
|Costs
 anticipated to be incurred in the future |  |                          |       |                        |   |          |   |       |  |  |   |       |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Total costs
 incurred                           |  | $                        | 1,808  |                        | $ | 17,612    |   | $     |  |  | $ | 19,420 |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2004           |  |                          |       |                        |   | 843       |   |       |  |  |   | 843    |  
|Provisions                                      |  |                          | 1,169  |                        |   | 1,397     |   |       |  |  |   | 2,566  |  
|Amounts paid                                    |  |                          | (1,035 | )                      |   | (2,240    | ) |       |  |  |   | (3,275 | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2005           |  |                          | 134    |                        |   |          |   |       |  |  |   | 134    |  
|Provisions                                      |  |                          | 502    |                        |   | 514       |   |       |  |  |   | 1,016  |  
|Amounts paid                                    |  |                          | (636   | )                      |   | (302      | ) |       |  |  |   | (938   | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2006           |  |                          |       |                        |   | 212       |   |       |  |  |   | 212    |  
|Provisions                                      |  |                          | 137    |                        |   | 1,448     |   |       |  |  |   | 1,585  |  
|Amounts paid                                    |  |                          | (137   | )                      |   | (1,660    | ) |       |  |  |   | (1,797 | )
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  
|Accrual
 balance at December 31, 2007           |  | $                        |       |                        | $ |          |   | $     |  |  | $ |       |  
|                                                |  |                          |        |                        |   |           |   |       |   |  |   |        |  

-53-

---



GENTEK INC.NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

Impairment Charges

During
2007, the Company recorded non-cash impairment charges of $914 to reflect
estimated fair values of closed facilities in Waterdown, Ontario, Canada, which
is included in the valve actuation systems segment, and Saukville, Wisconsin,
which is included in the performance chemicals segment. The estimated fair
values were determined based upon offers to purchase these facilities.

During
the fourth quarter of 2006, the Company recorded a non-cash impairment charge
of $728 to reflect revised fair values of machinery and equipment used for a
discontinued product line in the valve actuation systems segment, based on its
estimated salvage value.

During
the second quarter of 2006, the Company recorded a non-cash impairment charge
of $503 to reflect revised estimated fair values of fixed assets at its
previously closed facilities in Waterdown, Ontario, Canada and Guelph, Ontario,
Canada, which were included in the valve actuation systems segment. The revised
estimates of fair values were determined based upon sales of and offers to
purchase these assets.

During
December 2005, the Company announced its intention to close a facility in
Waterdown, Ontario, Canada, which is included in the valve actuation systems
segment. Accordingly, the long-lived assets at this facility were assessed for
impairment. Based on the results of this assessment, the Company recorded a
non-cash impairment charge of $452 to reduce the fixed assets at this facility
to fair value, which was determined based upon market prices for similar
assets.

During
August 2005, the Company closed a facility in Guelph, Ontario, Canada, which is
included in the valve actuation systems segment. Accordingly, the long-lived
assets at the facility were assessed for impairment. Based on the results of
the assessment, the Company recorded a non-cash impairment charge of $642 to
reduce the fixed assets at this facility to fair value, which was determined
based upon market prices for similar assets.

During
July 2005, the Company closed a facility in Cleveland, Ohio, which is included
in the performance chemicals segment. Accordingly, the long-lived assets at the
facility were assessed for impairment. Based on the results of this assessment,
the Company recorded a non-cash impairment charge of $758 to reduce the fixed
assets at this facility to fair value, which was determined based on market
transactions for similar assets.

-54-

---



GENTEK INC.NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

Note 5  Earnings Per
Share

The
computation of basic earnings per share is based on the weighted average number
of common shares outstanding during the period. The computation of diluted
earnings per share assumes the foregoing and, in addition, the exercise of all
warrants, stock options and restricted stock, using the treasury stock method.

The
components of the denominator for basic earnings per common share and diluted
earnings per common share are reconciled as follows:

|                                           |  |                           |            |      |  |            |  |  |            | 
|------------------------------------------ |  | ------------------------- | ---------- | ---- |  | ---------- |  |  | ---------- | 
|                                           |  | Years
 Ended December 31, |           
|                                           |  |                           |           
|                                           |  | 2007                      |            | 2006 |  | 2005       | 
|                                           |  |                           |            |      |  |            | 
|Basic
 earnings per common share:          |  |                           |            |      |  |            |  |  |            | 
|Weighted average common shares outstanding |  |                           | 10,314,526 |      |  | 10,166,614 |  |  | 10,040,709 | 
|                                           |  |                           |            |      |  |            |  |  |            | 
|Diluted
 earnings per common share:        |  |                           |            |      |  |            |  |  |            | 
|Weighted average common shares outstanding |  |                           | 10,314,526 |      |  | 10,166,614 |  |  | 10,040,709 | 
|Warrants, options and restricted stock     |  |                           | 1,248,531  |      |  | 808,566    |  |  | 72,243     | 
|                                           |  |                           |            |      |  |            |  |  |            | 
|Total                                      |  |                           | 11,563,057 |      |  | 10,975,180 |  |  | 10,112,952 | 
|                                           |  |                           |            |      |  |            |  |  |            | 

For
the year ended December 31, 2007, 2006 and 2005, there were potentially
dilutive securities totaling 161,591, 819,615 and 3,035,877, respectively,
which were not included in the computation of diluted earnings per common share
due to their anti-dilutive effect.

Note 6  Income Taxes

Income
from continuing operations before income taxes is as follows:

|               |  |                           |        |      |   |        |  |   |        | 
|-------------- |  | ------------------------- | ------ | ---- | - | ------ |  | - | ------ | 
|               |  | Years
 Ended December 31, |       
|               |  |                           |       
|               |  | 2007                      |        | 2006 |   | 2005   | 
|               |  |                           |        |      |   |        | 
|United
 States |  | $                         | 37,984 |      | $ | 20,038 |  | $ | 11,631 | 
|Foreign        |  |                           | 2,961  |      |   | 2,657  |  |   | 3,474  | 
|               |  |                           |        |      |   |        |  |   |        | 
|Total          |  | $                         | 40,945 |      | $ | 22,695 |  | $ | 15,105 | 
|               |  |                           |        |      |   |        |  |   |        | 

The
components of the income tax provision (benefit) are as follows:

|                |  |                           |        |      |   |        |   |   |       |  
|--------------- |  | ------------------------- | ------ | ---- | - | ------ | - | - | ----- | -
|                |  | Years
 Ended December 31, |       
|                |  |                           |       
|                |  | 2007                      |        | 2006 |   | 2005   |  
|                |  |                           |        |      |   |        |  
|United
 States: |  |                           |        |      |   |        |   |   |       |  
|Current         |  | $                         | (4,349 | )    | $ | 650    |   | $ | 386   |  
|Deferred        |  |                           | 4,999  |      |   | 6,347  |   |   | 5,732 |  
|Foreign:        |  |                           |        |      |   |        |   |   |       |  
|Current         |  |                           | 1,435  |      |   | 771    |   |   | (7    | )
|Deferred        |  |                           | (500   | )    |   | (461   | ) |   | 357   |  
|State:          |  |                           |        |      |   |        |   |   |       |  
|Current         |  |                           | (148   | )    |   | 2,410  |   |   | 1,510 |  
|Deferred        |  |                           | 1,416  |      |   | (1,153 | ) |   | (646  | )
|                |  |                           |        |      |   |        |   |   |       |  
|Total           |  | $                         | 2,853  |      | $ | 8,564  |   | $ | 7,332 |  
|                |  |                           |        |      |   |        |   |   |       |  

-55-

---



GENTEK INC.NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

A
summary of the components of deferred tax assets and liabilities is as follows:

|                                         |  |               |         |      |                         |         | 
|---------------------------------------- |  | ------------- | ------- | ---- | ----------------------- | ------- | 
|                                         |  | December
 31, |        
|                                         |  |               |        
|                                         |  | 2007          |         | 2006 |                        
|                                         |  |               |         |      |                        
|                                         |  |               |         |      | As Restated-See Note 18 |        
|                                        
|Net
 operating loss carry forwards       |  | $             | 9,925   |      | $                       | 19,149  | 
|Postretirement
 benefits                 |  |               | 14,376  |      |                         | 36,676  | 
|Other
 accruals not currently deductible |  |               | 26,838  |      |                         | 33,018  | 
|Goodwill                                 |  |               | 16,622  |      |                         | 19,291  | 
|Stock basis
 difference in subsidiary    |  |               | 21,874  |      |                         |        | 
|Foreign tax
 credits                     |  |               | 19,705  |      |                         | 19,705  | 
|                                         |  |               |         |      |                         |         | 
|Deferred tax assets                      |  |               | 109,340 |      |                         | 127,839 | 
|                                         |  |               |         |      |                         |         | 
|Intangibles                              |  |               | 18,103  |      |                         | 20,056  | 
|Property,
 plant and equipment           |  |               | 46,422  |      |                         | 61,439  | 
|Basis
 differences in partnerships       |  |               | 8,101   |      |                         | 8,592   | 
|Taxes on
 unremitted foreign earnings    |  |               | 3,856   |      |                         | 5,657   | 
|Other                                    |  |               | 995     |      |                         | 3,146   | 
|                                         |  |               |         |      |                         |         | 
|Deferred tax liabilities                 |  |               | 77,477  |      |                         | 98,890  | 
|Valuation
 allowance                     |  |               | 34,965  |      |                         | 20,694  | 
|                                         |  |               |         |      |                         |         | 
|Net deferred tax assets (liabilities)    |  | $             | (3,102  | )    | $                       | 8,255   | 
|                                         |  |               |         |      |                         |         | 

At
December 31, 2007 and 2006, the Company had deferred tax assets of $19,705 and
$19,705 related to foreign tax credits, for which a full valuation allowance
had been provided. The increase to the valuation allowance during 2007 is
primarily due to the portion of the basis difference in the stock of a
subsidiary recognized during the year for which the Company has concluded that
it is more likely than not that the deferred asset will not be realized. Net
operating loss carryforwards in foreign countries expire in future years
through 2015. The Company has an unrecognized deferred tax liability for a
temporary difference related to an investment in a foreign subsidiary that is
essentially permanent in duration. It is not currently practicable to determine
the tax effect of this temporary difference. The Company will continue to
monitor the likelihood of realizing its net deferred tax assets and future
adjustments to the deferred tax asset valuation allowances will be recorded as
necessary.

Included
in other assets on the balance sheet are deferred tax assets of $693 and $611
as of December 31, 2007 and 2006, respectively. Included in other liabilities
on the balance sheet are deferred tax liabilities of $43,470 and $23,934 as of
December 31, 2007 and 2006, respectively.

The
difference between the Company's effective income tax rate and the United
States statutory rate is reconciled below:

|                                                        |  |                           |   |  |      |   |  |      |  
|------------------------------------------------------- |  | ------------------------- | - |  | ---- | - |  | ---- | -
|                                                        |  | Years
 Ended December 31,
|                                                        |  |                           |  
|                                                        |  | 2007                      |   |  | 2006 |   |  | 2005 |  
|                                                        |  |                           |   |  |      |   |  |      |  
|U.S. federal
 statutory rate                            |  | 35.0                      | % |  | 35.0 | % |  | 35.0 | %
|State income
 taxes, net of federal benefit             |  | 6.9                       |   |  | 3.6  |   |  | 3.7  |  
|Tax effect
 of foreign operations                       |  | (0.6                      | ) |  | 3.6  |   |  | 6.1  |  
|Benefit on
 restricted stock dividend payment           |  |                          |   |  | (3.5 | ) |  |     |  
|Recognition
 of subsidiary tax basis difference         |  | (53.4                     | ) |  |     |   |  |     |  
|Valuation
 allowance on subsidiary tax basis difference |  | 34.9                      |   |  |     |   |  |     |  
|Change in
 unrecognized tax benefits                    |  | (16.3                     | ) |  |     |   |  |     |  
|Other                                                   |  | 0.5                       |   |  | (1.0 | ) |  | 3.7  |  
|                                                        |  |                           |   |  |      |   |  |      |  
|Total                                                   |  | 7.0                       | % |  | 37.7 | % |  | 48.5 | %
|                                                        |  |                           |   |  |      |   |  |      |  

-56-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

The
Company adopted the provisions of FIN 48 on January 1, 2007. The adoption, which was accounted for as a
cumulative effect adjustment, resulted in an increase to the January 1, 2007
balance of retained earnings (deficit) of $2,801. A reconciliation of the beginning and ending amount of
unrecognized tax benefits is as follows:

|                                                              |  |   |        |  
|------------------------------------------------------------- |  | - | ------ | -
|Balance at January 1, 2007                                    |  | $ | 11,863 |  
|Additions based on tax positions related to
 the current year |  |   |       |  
|Additions for tax positions of prior years                    |  |   | 698    |  
|Expiration of statue of limitations                           |  |   |       |  
|Settlements                                                   |  |   | (7,621 | )
|                                                              |  |   |        |  
|Balance at December 31, 2007                                  |  | $ | 4,940  |  
|                                                              |  |   |        |  

Included
in the balance at December 31, 2007 is $3,211 of unrecognized tax benefits that
would, if recognized, affect the effective tax rate. During the next twelve months,
    it is reasonably possible that the total amount of unrecognized tax benefits
    will significantly change by up to approximately $3,368 due to the expiration
    of statute of limitations or the settlement of examinations. These
unrecognized tax benefits arose in conjunction with the Companys emergence
from bankruptcy.

The
Company recognizes interest and penalties related to uncertain tax positions as
a component of the provision for income taxes.
During the year ended December 31, 2007, the Company recognized $719 in
interest and penalties. The Company had
$2,402 accrued for interest and penalties at December 31, 2007.

The
Company and its affiliates are subject to tax in various jurisdictions,
including the United States, various states, Canada and several other foreign
jurisdictions. The Company, joined by
its domestic subsidiaries, files a consolidated income tax return for Federal
income tax purposes. With few
exceptions, the Company is no longer subject to income tax examinations by tax
authorities for tax years before 2003.

Note 7  Pension Plans and Other
Postretirement Benefits

The
Company maintains several defined benefit pension plans covering certain
employees in Canada and the United States.
A participating employee's annual postretirement pension benefit is
determined by the employee's credited service and, in most plans, final average
annual earnings with the Company. Vesting requirements are from two to five
years. In addition, the Company made a
discretionary contribution to a defined contribution plan based upon a formula
utilizing an employees credited service and annual salary totaling $1,108 for
the year ended December 31, 2005.
Defined contributions to this plan have been discontinued.

The
Company also maintains several plans providing postretirement benefits other
than pensions covering certain hourly and salaried employees in Canada and the
United States. The Company funds these
benefits on a pay-as-you-go basis.

-57-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

Accruals
for pension and other postretirement benefit costs utilize a number of
accounting mechanisms that reduce the volatility of reported costs. Differences between actuarial assumptions
and actual plan results are deferred and are amortized into expense only when
the accumulated differences exceed 10 percent of the greater of the projected
benefit obligation or the market-related value of plan assets. If necessary, the excess is amortized over
the average remaining service period of active employees. Additionally, the impact of asset
performance on pension expense is recognized over a five-year phase-in period
though a market-related value of assets calculation. Since the market-related value of assets
recognizes investment gains or losses over a five-year period, the future value
of assets will be impacted as previously deferred gains or losses are
recognized.

|                                         |  |                          |         |                               |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|---------------------------------------- |  | ------------------------ | ------- | ----------------------------- | - | ------- | - | ---- | ------- | ---- | - | ------ | - | - | ------ | - | - | ------ | -
|                                         |  | Pension Benefits         |         | Other Postretirement Benefits |  
|                                         |  |                          |         |                               |  
|                                         |  | Years Ended December 31, |         | Years Ended December 31,      |  
|                                         |  |                          |         |                               |  
|                                         |  | 2007                     |         | 2006                          |   | 2005    |   | 2007 |         | 2006 |   | 2005   |  
|                                         |  |                          |         |                               |   |         |   |      |         |      |   |        |  
|Components of net periodic benefit cost: |  |                          |         |                               |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Service cost                             |  | $                        | 1,191   |                               | $ | 1,613   |   | $    | 1,540   |      | $ | 966    |   | $ | 1,343  |   | $ | 1,164  |  
|Interest cost                            |  |                          | 13,478  |                               |   | 13,417  |   |      | 13,094  |      |   | 2,666  |   |   | 2,674  |   |   | 2,551  |  
|Expected return on plan assets           |  |                          | (15,168 | )                             |   | (14,867 | ) |      | (14,226 | )    |   |       |   |   |       |   |   |       |  
|Amortization of net:                     |  |                          |         |                               |   |         |   |      |         |      |   |        |   |   |        |   |   |        |  
|Prior service cost                       |  |                          | 128     |                               |   | 135     |   |      | 74      |      |   | (4,778 | ) |   | (4,342 | ) |   | (3,672 | )
|(Gain)/loss                              |  |                          | 100     |                               |   | 92      |   |      | 5       |      |   | 177    |   |   | 105    |   |   | (68    | )
|                                         |  |                          |         |                               |   |         |   |      |         |      |   |        |  
|Net periodic benefit cost (income)       |  | $                        | (271    | )                             | $ | 390     |   | $    | 487     |      | $ | (969   | ) | $ | (220   | ) | $ | (25    | )
|                                         |  |                          |         |                               |   |         |   |      |         |      |   |        |  

During
2007, the Company adopted plan amendments that froze pension plan benefit
accruals for hourly employees covered by certain collective bargaining agreements,
and announced the closure of one of its manufacturing facilities. These actions
resulted in net pension curtailment gains of $745.

During
2007, the Company implemented plan amendments to one of its postretirement
medical plans which cap the Companys cost for providing these benefits. The
effect of these changes was a reduction to the accumulated postretirement
benefit obligation of $7,247 which will be amortized as a component of net
periodic postretirement benefit cost over the average remaining service period
until full eligibility of active plan participants. In addition, the Company completed the closure of one of its
manufacturing facilities, resulting in a postretirement liability curtailment
gain of $2,515.

During
2006, the Company adopted plan amendments that froze pension plan benefit
accruals for hourly employees covered by certain collective bargaining
agreements, and announced the closure of one of its manufacturing
facilities. These actions resulted in a
net curtailment gain of $644.

On
August 31, 2005, the Company terminated and settled its two pension plans in
Ireland, which resulted in a settlement loss of $626.

-58-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|--------------------------------------------------------------- |  | ------------------------------ | ------- | -------------------------------------------- | - | ------- | - | ---- | ------- | - | - | ------- | -
|                                                                |  | Pension Benefits
 December 31, |         | Other
 Postretirement Benefits
 December 31, |  
|                                                                |  |                                |         |                                              |  
|                                                                |  | 2007                           |         | 2006                                         |   | 2007    |   | 2006 |        
|                                                                |  |                                |         |                                              |   |         |   |      |        
|Change in benefit obligation:                                   |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Benefit obligation at prior measurement
 date                   |  | $                              | 240,239 |                                              | $ | 240,045 |   | $    | 50,621  |   | $ | 48,281  |  
|Service cost                                                    |  |                                | 1,191   |                                              |   | 1,613   |   |      | 966     |   |   | 1,343   |  
|Interest cost                                                   |  |                                | 13,478  |                                              |   | 13,417  |   |      | 2,666   |   |   | 2,674   |  
|Actuarial (gain)/loss                                           |  |                                | (10,993 | )                                            |   | 418     |   |      | (1,681  | ) |   | 3,552   |  
|Foreign currency translation                                    |  |                                | 1,311   |                                              |   | 17      |   |      | 1,040   |   |   | 10      |  
|Benefits paid                                                   |  |                                | (16,526 | )                                            |   | (15,754 | ) |      | (3,748  | ) |   | (5,239  | )
|Plan amendments                                                 |  |                                | 31      |                                              |   | 949     |   |      | (7,247  | ) |   |        |  
|Settlements and curtailments                                    |  |                                | (955    | )                                            |   | (466    | ) |      | (641    | ) |   |        |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Benefit obligation at measurement date                          |  | $                              | 227,776 |                                              | $ | 240,239 |   | $    | 41,976  |   | $ | 50,621  |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Change in plan assets:                                          |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Fair value of assets at prior measurement
 date                 |  | $                              | 201,557 |                                              | $ | 191,608 |   | $    |        |   | $ |        |  
|Actual return on plan assets                                    |  |                                | 29,087  |                                              |   | 25,260  |   |      |        |   |   |        |  
|Employer contributions                                          |  |                                | 1,483   |                                              |   | 355     |   |      | 3,748   |   |   | 5,239   |  
|Foreign currency translation                                    |  |                                | 1,426   |                                              |   | 88      |   |      |        |   |   |        |  
|Benefits paid                                                   |  |                                | (16,526 | )                                            |   | (15,754 | ) |      | (4,326  | ) |   | (5,239  | )
|Medicare subsidy                                                |  |                                |        |                                              |   |        |   |      | 578     |   |   |        |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Fair value of assets at measurement date                        |  | $                              | 217,027 |                                              | $ | 201,557 |   | $    |        |   | $ |        |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Funded status:                                                  |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Funded status                                                   |  | $                              | (10,749 | )                                            | $ | (38,682 | ) | $    | (41,976 | ) | $ | (50,621 | )
|Amounts recognized in the balance sheet:                        |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Noncurrent assets                                               |  | $                              | 1,884   |                                              | $ | 45      |   | $    |        |   | $ |        |  
|Current
 liabilities                                            |  |                                |        |                                              |   |        |   |      | (3,318  | ) |   | (3,492  | )
|Noncurrent
 liabilities                                         |  |                                | (12,633 | )                                            |   | (38,727 | ) |      | (38,617 | ) |   | (47,110 | )
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Net amount recognized                                           |  | $                              | (10,749 | )                                            | $ | (38,682 | ) | $    | (41,935 | ) | $ | (50,602 | )
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Amounts recognized in accumulated other
 comprehensive income:  |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Prior service cost (credit)                                     |  | $                              | 1,340   |                                              | $ | 1,584   |   | $    | (16,468 | ) | $ | (16,515 | )
|Net actuarial (gain) loss                                       |  |                                | (22,920 | )                                            |   | 2,211   |   |      | 2,390   |   |   | 5,055   |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Net amount recognized                                           |  | $                              | (21,580 | )                                            | $ | 3,795   |   | $    | (14,078 | ) | $ | (11,460 | )
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Amounts expected to be recognized during
 the next fiscal year: |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Prior service cost (credit)                                     |  | $                              | 148     |                                              | $ | 137     |   | $    | (4,851  | ) | $ | (4,342  | )
|Actuarial loss                                                  |  |                                | (65     | )                                            |   | 115     |   |      | 89      |   |   | 127     |  
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  
|Total                                                           |  | $                              | 83      |                                              | $ | 252     |   | $    | (4,762  | ) | $ | (4,215  | )
|                                                                |  |                                |         |                                              |   |         |   |      |         |   |   |         |  

The
accumulated benefit obligations for the defined benefit pension plans were
$226,885 and $237,758 at December 31, 2007 and 2006, respectively. For pension plans included above with
aggregate benefit obligations and accumulated benefit obligations in excess of
plan assets, at December 31, 2007 and 2006, the projected benefit obligations
were $224,131 and $236,639, respectively, the accumulated benefit obligations
were $223,102 and $234,410, respectively, and the fair values of plan assets
for these plans were $212,417 and $197,912, respectively.

-59-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

Gross
benefits expected to be paid from the plans and Medicare Part D federal subsidy
payments expected to be received are as follows:

|          |  |                   |        |                                 |   |                    |  |   |       | 
|--------- |  | ----------------- | ------ | ------------------------------- | - | ------------------ |  | - | ----- | 
|          |  | Pension
 Benefits |        | Other
 Postretirement
 Benefits |   | Federal
 Subsidies | 
|          |  |                   |        |                                 |   |                    | 
|2008      |  | $                 | 16,100 |                                 | $ | 3,300              |  | $ | 400   | 
|2009      |  |                   | 16,300 |                                 |   | 3,200              |  |   | 500   | 
|2010      |  |                   | 16,400 |                                 |   | 3,300              |  |   | 500   | 
|2011      |  |                   | 16,400 |                                 |   | 3,300              |  |   | 500   | 
|2012      |  |                   | 16,500 |                                 |   | 3,100              |  |   | 600   | 
|2013-2017 |  |                   | 83,800 |                                 |   | 14,600             |  |   | 3,400 | 

The
weighted-average assumptions used to determine benefit obligations for the
plans were:

|                                                   |  |      |   |      |    |      |  |    |   | 
|-------------------------------------------------- |  | ---- | - | ---- | -- | ---- |  | -- | - | 
|                                                   |  | 2007 |   | 2006 |    | 2005 | 
|                                                   |  |      |   |      |    |      | 
|Discount
 rate                                     |  | 61⁄4   | % |      | 53⁄4 | %    |  | 53⁄4 | % | 
|Average rate
 of increase in employee compensation |  | 4    | % |      | 4  | %    |  | 4  | % | 

The
weighted-average assumptions used to determine net periodic benefit cost for
the plans were:

|                                                   |  |      |   |      |    |      |  |    |   | 
|-------------------------------------------------- |  | ---- | - | ---- | -- | ---- |  | -- | - | 
|                                                   |  | 2007 |   | 2006 |    | 2005 | 
|                                                   |  |      |   |      |    |      | 
|Discount
 rate                                     |  | 53⁄4   | % |      | 53⁄4 | %    |  | 53⁄4 | % | 
|Long-term
 rate of return on assets                |  | 8    | % |      | 8  | %    |  | 8  | % | 
|Average rate
 of increase in employee compensation |  | 4    | % |      | 4  | %    |  | 4  | % | 

The
health care cost trend rate used in accounting for the medical plans in the
United States was 9% - 10% in 2007 (decreasing to 5.5% in the year 2011 and
beyond) and 7% - 8% in 2006 (decreasing to six percent in the year 2009 and
beyond). The health care cost trend
rate used in accounting for the medical plans in Canada was 8% in 2007
(decreasing to 5.0% in the year 2016 and beyond) and 7.5% in 2006 (decreasing
to 6% in the year 2009 and beyond). A
one percent increase in the health care trend rate would increase the
accumulated postretirement benefit obligation by $1,366 at year-end 2007 and
the net periodic cost by $221 for the year.
A one percent decrease in the health care trend rate would decrease the
accumulated postretirement benefit obligation by $1,136 at year-end 2007 and
the net periodic cost by $174 for the year.

The
expected long-term rate of return on assets is developed based upon the
expected future return of asset classes the plans invest in, along with the
expected future mix of investments in the pension trusts. The Company considers historical returns of
the pension assets, independent market forecasts and management estimates when
developing the expected long-term rate of return on assets.

The
dates used to measure plan assets and liabilities were October 31, 2007 and
2006 for all plans.

-60-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in thousands, except per
share data)

The
pension trusts weighted-average asset allocations at October 31, 2007 and 2006
were:

|                                |  |      |     |      |  |     |  
|------------------------------- |  | ---- | --- | ---- |  | --- | -
|                                |  | 2007 |     | 2006 | 
|                                |  |      |     |      | 
|Asset Category                  |  |      |     |      |  |     |  
|Cash and short-term investments |  |      | 5   | %    |  | 4   | %
|Debt securities                 |  |      | 45  | %    |  | 37  | %
|Equity securities               |  |      | 50  | %    |  | 58  | %
|Real estate                     |  |      |    | %    |  | 1   | %
|                                |  |      |     |      |  |     |  
|                                |  |      | 100 | %    |  | 100 | %
|                                |  |      |     |      |  |     |  

The
Companys investment policy for its pension trusts is to balance risk and
return through a diversified portfolio of fixed income securities, equity
securities and private equity investments. Maturities for fixed income
securities are managed such that sufficient liquidity exists to meet near-term
benefit payment obligations. In 2008,
the Company expects to contribute approximately $2,604 to its pension plan
trusts.

Note 8  Commitments and Contingencies

Future
minimum rental payments for operating leases (primarily for transportation
equipment, offices and warehouses) having initial or remaining noncancellable
lease terms in excess of one year as of December 31, 2007 are as follows:

|                          |  |   |        | 
|------------------------- |  | - | ------ | 
|Years Ending December 31, |  |   |        | 
|                          |  |   |        | 
|2008                      |  | $ | 3,576  | 
|2009                      |  |   | 2,892  | 
|2010                      |  |   | 2,472  | 
|2011                      |  |   | 780    | 
|2012                      |  |   | 390    | 
|thereafter                |  |   | 170    | 
|                          |  |   |        | 
|                          |  | $ | 10,280 | 
|                          |  |   |        | 

Rental
expense for the years ended December 31, 2007, 2006 and 2005 was $6,624, $7,068
and $6,901, respectively.

Environmental
Matters

Accruals
for environmental liabilities are recorded based on current interpretations of
applicable environmental laws and regulations when it is probable that a
liability has been incurred and the amount of such liability can be reasonably
estimated. Estimates are established
based upon information available to management to date, the nature and extent
of the environmental liability, the Company's experience with similar
activities undertaken, estimates obtained from environmental studies and the
legal and regulatory framework in the jurisdiction in which the liability
arose. The potential costs related to
environmental matters and their estimated impact on future operations are
difficult to predict due to the uncertainties regarding the extent of any
required remediation, the complexity and interpretation of applicable laws and
regulations, possible modification of existing laws and regulations or the
adoption of new laws or regulations in the future, and the numerous alternative
remediation methods and their related varying costs. The material components of the Company's environmental accruals
include potential costs, as applicable, for investigation, monitoring,
remediation and ongoing maintenance activities at any affected site. Accrued liabilities for environmental
matters do not include third-party recoveries nor have they been
discounted. The time frame over which
these liabilities will be paid out is subject to significant uncertainties, and
is not presently determinable. Activity
in the aggregate accrued liability for environmental matters is summarized as
follows:

-61-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in thousands, except per share data)

|                                 |  |   |        |   |   |        |  
|-------------------------------- |  | - | ------ | - | - | ------ | -
|                                 |  |   | 2007   |   |   | 2006   |  
|                                 |  |   |        |   |   |        |  
|Balance at
  beginning of period |  | $ | 25,014 |   | $ | 27,325 |  
|Accruals,
  net                  |  |   | 3,126  |   |   | 495    |  
|Payments                         |  |   | (1,192 | ) |   | (2,808 | )
|Assumption
  by third parties    |  |   | (2,012 | ) |   |       |  
|Foreign
  exchange and other     |  |   | 80     |   |   | 2      |  
|                                 |  |   |        |   |   |        |  
|Balance at
  end of period       |  | $ | 25,016 |   | $ | 25,014 |  
|                                 |  |   |        |   |   |        |  

Product Warranties

Accruals
for product warranties are estimated based upon historical warranty experience
and are recorded at the time revenue is recognized or when a specific claim is
both probable and can be estimated.
Activity in the aggregate product warranty liability is summarized as
follows:

|                                 |  |                |        |      |   |      |  
|-------------------------------- |  | -------------- | ------ | ---- | - | ---- | -
|                                 |  | December
  31, |       
|                                 |  |                |       
|                                 |  | 2007           |        | 2006 |  
|                                 |  |                |        |      |  
|Balance at
  beginning of period |  | $              | 165    |      | $ | 220  |  
|Accruals                         |  |                | 3,052  |      |   | 147  |  
|Payments                         |  |                | (1,602 | )    |   | (202 | )
|                                 |  |                |        |      |   |      |  
|Balance at
  end of period       |  | $              | 1,615  |      | $ | 165  |  
|                                 |  |                |        |      |   |      |  

Contingencies

The
Company is involved in various claims, litigation, administrative proceedings
and investigations. Although the amount of any ultimate liability which could
arise with respect to these matters cannot be accurately predicted, it is the
opinion of management, based upon currently available information, that any
such liability will have no material adverse effect on the Company's financial
condition, results of operations or cash flows.

Note 9  Additional Financial Information

|                                |  |                |        |      |   |        |  
|------------------------------- |  | -------------- | ------ | ---- | - | ------ | -
|                                |  | December
  31, |       
|                                |  |                |       
|                                |  | 2007           |        | 2006 |  
|                                |  |                |        |      |  
|Receivables                     |  |                |        |      |   |        |  
|Trade                           |  | $              | 74,836 |      | $ | 78,060 |  
|Other                           |  |                | 2,502  |      |   | 2,426  |  
|Allowance for doubtful accounts |  |                | (3,334 | )    |   | (3,181 | )
|                                |  |                |        |      |   |        |  
|                                |  | $              | 74,004 |      | $ | 77,305 |  
|                                |  |                |        |      |   |        |  

|                        |  |                |        |      |   |        | 
|----------------------- |  | -------------- | ------ | ---- | - | ------ | 
|                        |  | December
  31, |       
|                        |  |                |       
|                        |  | 2007           |        | 2006 |  
|                        |  |                |        |      |  
|Inventories             |  |                |        |      |   |        | 
|Raw materials           |  | $              | 30,930 |      | $ | 24,888 | 
|Work in process         |  |                | 6,211  |      |   | 6,389  | 
|Finished products       |  |                | 12,717 |      |   | 14,430 | 
|Supplies and containers |  |                | 1,326  |      |   | 1,178  | 
|                        |  |                |        |      |   |        | 
|                        |  | $              | 51,184 |      | $ | 46,885 | 
|                        |  |                |        |      |   |        | 

-62-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(Dollars in thousands, except per share data)

Inventories
valued at LIFO amounted to $18,221 and $14,376 at December 31, 2007 and 2006,
respectively, which were below estimated replacement cost by $3,240 and $2,550,
respectively. The impact of LIFO liquidations in 2007, 2006 and 2005 was not
significant.

|                                                  |  |                |          |      |   |         |  
|------------------------------------------------- |  | -------------- | -------- | ---- | - | ------- | -
|                                                  |  | December
  31, |         
|                                                  |  |                |         
|                                                  |  | 2007           |          | 2006 |  
|                                                  |  |                |          |      |  
|Property, Plant
  and Equipment                   |  |                |          |      |   |         |  
|Land and improvements                             |  | $              | 37,321   |      | $ | 45,865  |  
|Machinery and equipment                           |  |                | 220,212  |      |   | 204,829 |  
|Buildings and leasehold improvements              |  |                | 36,978   |      |   | 37,012  |  
|Construction in progress                          |  |                | 34,076   |      |   | 18,973  |  
|                                                  |  |                |          |      |   |         |  
|                                                  |  |                | 328,587  |      |   | 306,679 |  
|Less:
  accumulated depreciation and amortization |  |                | (110,062 | )    |   | (82,577 | )
|                                                  |  |                |          |      |   |         |  
|                                                  |  | $              | 218,525  |      | $ | 224,102 |  
|                                                  |  |                |          |      |   |         |  

Depreciation
expense was $26,611, $26,512 and $27,198 for the years ended December 31, 2007,
2006 and 2005, respectively.

|                             |  |                           |         |                         |   |                         |  |       |       |  |   |         | 
|---------------------------- |  | ------------------------- | ------- | ----------------------- | - | ----------------------- |  | ----- | ----- |  | - | ------- | 
|                             |  | Valve
  Actuation Systems |         | Performance
  Chemicals |   | Corporate
  and
  Other |  | Total |      
|                             |  |                           |         |                         |   |                         |  |       |      
|Goodwill                     |  |                           |         |                         |   |                         |  |       |       |  |   |         | 
|Balance at January 1, 2006   |  | $                         | 122,842 |                         | $ | 12,127                  |  | $     | 1,644 |  | $ | 136,613 | 
|Foreign currency translation |  |                           | 5       |                         |   |                        |  |       |      |  |   | 5       | 
|Acquisitions                 |  |                           |        |                         |   | 2,879                   |  |       |      |  |   | 2,879   | 
|                             |  |                           |         |                         |   |                         |  |       |       |  |   |         | 
|Balance at December 31, 2006 |  |                           | 122,847 |                         |   | 15,006                  |  |       | 1,644 |  |   | 139,497 | 
|Purchase price finalization  |  |                           |        |                         |   | 19                      |  |       |      |  |   | 19      | 
|Acquisitions                 |  |                           |        |                         |   | 7,642                   |  |       |      |  |   | 7,642   | 
|                             |  |                           |         |                         |   |                         |  |       |       |  |   |         | 
|Balance at December 31, 2007 |  | $                         | 122,847 |                         | $ | 22,667                  |  | $     | 1,644 |  | $ | 147,158 | 
|                             |  |                           |         |                         |   |                         |  |       |       |  |   |         | 

|                               |  |                |         |                         |   |         |   |  |            | 
|------------------------------ |  | -------------- | ------- | ----------------------- | - | ------- | - |  | ---------- | 
|                               |  | December
  31, |         |                         |   |        
|                               |  |                |         | Weighted
  Average Life |  
|                               |  | 2007           |         | 2006                    |   |        
|                               |  |                |         |                         |   |         |  
|Intangible Assets              |  |                |         |                         |   |         |   |  |            | 
|Patents  gross                |  | $              | 12,997  |                         | $ | 12,997  |   |  | 13 1⁄2 years | 
|Accumulated amortization       |  |                | (3,967  | )                       |   | (3,003  | ) |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Patents  net                  |  |                | 9,030   |                         |   | 9,994   |   |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Customer related  gross       |  |                | 35,354  |                         |   | 35,000  |   |  | 9 years    | 
|Accumulated amortization       |  |                | (18,259 | )                       |   | (13,770 | ) |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Customer related  net         |  |                | 17,095  |                         |   | 21,230  |   |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Technology  gross             |  |                | 3,468   |                         |   | 4,100   |   |  | 7 years    | 
|Accumulated amortization       |  |                | (892    | )                       |   | (240    | ) |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Technology  net               |  |                | 2,576   |                         |   | 3,860   |   |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Non-compete agreements  gross |  |                | 6,505   |                         |   | 4,941   |   |  | 5 years    | 
|Accumulated amortization       |  |                | (1,718  | )                       |   | (322    | ) |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Non-compete agreements  net   |  |                | 4,787   |                         |   | 4,619   |   |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|Trademarks  indefinite life   |  |                | 15,000  |                         |   | 15,000  |   |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 
|                               |  | $              | 48,488  |                         | $ | 54,703  |   |  |            | 
|                               |  |                |         |                         |   |         |   |  |            | 

-63-

---



GENTEK
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

During
the years ended December 31, 2007, 2006 and 2005, the Company recognized
$7,501, $5,942 and $5,382 of amortization expense, respectively. The estimated
amortization expense for each of the next 5 years is $6,706, $6,450, $5,171,
$4,663 and $3,958.

|                                |  |              |        |      |   |        | 
|------------------------------- |  | ------------ | ------ | ---- | - | ------ | 
|                                |  | December 31, |       
|                                |  |              |       
|                                |  | 2007         |        | 2006 |  
|                                |  |              |        |      |  
|Accrued
 Liabilities            |  |              |        |      |   |        | 
|Wages, salaries
 and benefits   |  | $            | 17,026 |      | $ | 20,306 | 
|Interest                        |  |              | 2,422  |      |   | 4,559  | 
|Environmental                   |  |              | 9,136  |      |   | 4,291  | 
|Taxes, other
 than income taxes |  |              | 2,191  |      |   | 3,558  | 
|Other                           |  |              | 21,485 |      |   | 23,467 | 
|                                |  |              |        |      |   |        | 
|                                |  | $            | 52,260 |      | $ | 56,181 | 
|                                |  |              |        |      |   |        | 

Note 10
 Long-Term Debt

|                                           |  |            |  |              |         |      |   |         | 
|------------------------------------------ |  | ---------- |  | ------------ | ------- | ---- | - | ------- | 
|                                           |  |            |  | December 31, |        
|                                           |  |            |  |              |        
|                                           |  | Maturities |  | 2007         |         | 2006 |  
|                                           |  |            |  |              |         |      |  
|Revolving credit facility  floating rates |  | 2010       |  | $            |        |      | $ | 10,000  | 
|First lien term loan  floating rates      |  | 2011       |  |              | 238,928 |      |   | 219,053 | 
|Second lien term loan  floating rates     |  | 2012       |  |              |        |      |   | 113,000 | 
|Other debt  various rates                 |  | 2008-2018  |  |              | 1,204   |      |   | 3,246   | 
|                                           |  |            |  |              |         |      |   |         | 
|Total debt                                 |  |            |  |              | 240,132 |      |   | 345,299 | 
|Less: current
 portion                     |  |            |  |              | 2,851   |      |   | 4,612   | 
|                                           |  |            |  |              |         |      |   |         | 
|Net long-term
 debt                        |  |            |  | $            | 237,281 |      | $ | 340,687 | 
|                                           |  |            |  |              |         |      |   |         | 

Aggregate
maturities of long-term debt are as follows: 2008, $2,851; 2009, $2,807; 2010,
$175,833; 2011, $58,471; 2012, $34; thereafter, $136.

On
February 28, 2005, the Company closed on a secured financing consisting of
$370,000 of term loans and a $60,000 revolving credit facility (the Credit
Facilities). In conjunction with securing the Credit Facilities, all amounts
outstanding under the Companys then-outstanding revolving credit facility were
repaid and the underlying credit agreement was terminated, and the Company
recorded a charge in interest expense of $3,030 to write-off the related
deferred financing costs. The term loans included a $235,000 first lien loan
due on February 28, 2011 with an initial interest rate of LIBOR plus 2.75 percent
or base rate plus 1.75 percent, subject to a rate reduction of 0.25 percent if
such term loan is rated B1 or better by Moodys Investor Services, Inc. and a
$135,000 second lien loan due on February

-64-

---



GENTEK
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

28, 2012 with an initial interest rate of LIBOR plus
5.75 percent or base rate plus 4.75 percent. On April 26, 2006, the Company
entered into amendments of its first and second lien term loan agreements,
which reduced the interest rate margins by 50 and 150 basis points,
respectively. In addition, the debt holders agreed to allow a redemption of the
second lien term loan. On May 1, 2006, the Company repaid $22,000 of its second
lien term loan. In connection with the amendments, the Company recorded charges
in interest expense of $3,572 for certain costs related to the amendment and to
write-off certain deferred financing costs. In September, 2006, Moodys
Investor Services upgraded the first lien loan to B1, which resulted in a 0.25
percent rate reduction. On March 19, 2007, the Company completed an amendment
to its credit facilities which enabled it to increase borrowings under the
first lien term loan by $50 million and to use these borrowings and the net
proceeds from the Noma wire and cable harness assembly business sale to redeem
the entire second lien term loan. The interest rates in effect at December 31,
2006 were 7.38 percent and 9.62 percent on the first lien and second lien loans,
respectively. The interest rate in effect at December 31, 2007 was 7.0 percent
on the first lien loan. The $60,000 revolving credit facility matures on
February 28, 2010 and carried an initial interest rate of LIBOR plus 2.75
percent or base rate plus 1.75 percent, subject to rate reductions under a
pricing grid if the Companys leverage ratio decreases. In October, 2006, the
interest rate on the revolving credit facility decreased 0.25 percent as a
result of the Companys improved leverage ratio. The interest rate in effect on
the revolving credit facility at December 31, 2006 was 7.85 percent. The Credit
Facilities are secured by liens on substantially all of the personal property
and certain real property of the Company and its domestic subsidiaries. The
Credit Facilities contain covenants which impose certain restrictions on the
Companys ability to, among other things, incur additional debt, pay dividends,
make investments or sell assets. Additionally, certain non-recurring cash
inflows such as proceeds from asset sales, insurance recoveries, and equity
offerings may have to be used to pay down indebtedness and may not be
reborrowed. In addition, the Credit Facilities contain certain financial
covenants which include a maximum leverage ratio, minimum interest coverage
ratio and maximum annual capital expenditures.

Commitment
fees paid for the Companys credit facilities were $237, $212 and $249 for the
years ended December 31, 2007, 2006 and 2005, respectively. The unused letter
of credit balance available under the Companys credit facilities was $31,927
and $29,634 at December 31, 2007 and 2006, respectively.

Note 11
 Warrants

The
Company has the following warrants outstanding:

|          |  |                   |  |                           |  |                   |       |                           |           |              |   |       | 
|--------- |  | ----------------- |  | ------------------------- |  | ----------------- | ----- | ------------------------- | --------- | ------------ | - | ----- | 
|          |  |                   |  | December 31, 2007         |  | December 31, 2006 |      
|          |  |                   |  |                           |  |                   |      
|          |  | Expiration Date   |  | Number of
 shares covered |  | Strike Price      |       | Number of
 shares covered |           | Strike Price |  
|          |  |                   |  |                           |  |                   |       |                           |           |              |  
|Tranche B |  | November 10, 2008 |  | 1,786,099                 |  | $                 | 19.98 |                           | 1,996,735 |              | $ | 19.98 | 
|Tranche C |  | November 10, 2010 |  | 963,013                   |  | $                 | 22.03 |                           | 975,147   |              | $ | 22.03 | 

The
warrants were issued on November 10, 2003. During 2007, 340 shares of common stock
were issued upon exercise of the warrants for cash proceeds of $7 and 88,102 shares of common
stock were issued upon exercise of warrants utilizing the cashless exercise
feature of the warrants. During 2006 and 2005, 2,037 and 91 shares of common
stock were issued upon the exercise of warrants for cash proceeds of $42 and
    $2, respectively.

-65-

---



GENTEK
INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

Note 12
 Stock Incentive Plans

The
Company has an incentive plan under which stock options, restricted stock and
other stockbased awards may be granted to employees, officers and directors.
Grants under the plan generally vest over three years and options have a
maximum term of ten years. Certain restricted stock grants vest based on the
achievement of performance based measures. Exercise prices for stock option
grants are set at market value on the grant date. Compensation cost recorded
for stock-based compensation under this plan was $3,698, $1,793 and $1,176 for
the years ended December 31, 2007, 2006 and 2005, respectively. As of December
31, 2007, the total number of shares authorized for grant under this plan was
1,750,000 with 757,754 shares available for future grant.

Information
with respect to restricted stock is summarized below:

|                                  |  |         |  |                                            |       | 
|--------------------------------- |  | ------- |  | ------------------------------------------ | ----- | 
|                                  |  | Shares  |  | Weighted
 Average Grant-
 Date
 Fair Value |      
|                                  |  |         |  |                                            |      
|Outstanding at
 December 31, 2006 |  | 128,592 |  | $                                          | 24.40 | 
|Granted                           |  | 214,752 |  |                                            | 34.60 | 
|Vested                            |  | 85,729  |  |                                            | 26.83 | 
|Forfeited                         |  | 1,041   |  |                                            | 27.52 | 
|                                  |  |         |  |                                           
|Outstanding at
 December 31, 2007 |  | 256,574 |  | $                                          | 32.11 | 
|                                  |  |         |  |                                           

The
weighted average grant date fair value of restricted stock granted in 2007 and
2006 were $34.60 and $27.90, respectively, per share.

Information
with respect to stock options is summarized below:

|                                                 |  |         |         |                                   |   |                                                 |  |                             |  |   |       | 
|------------------------------------------------ |  | ------- | ------- | --------------------------------- | - | ----------------------------------------------- |  | --------------------------- |  | - | ----- | 
|                                                 |  | Options |         | Weighted
 Average
 Exercise Price |   | Weighted
 Average
 Remaining
 Contractual
 Life |  | Aggregate
 Intrinsic
 Value | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             | 
|Outstanding at
 December 31, 2006                |  |         | 366,848 |                                   | $ | 15.28                                           |  | 8.3                         |  | $ | 6,388 | 
|Granted                                          |  |         | 64,129  |                                   |   | 35.10                                           |  |                             |  |   |       | 
|Exercised                                        |  |         | 73,372  |                                   |   | 12.02                                           |  |                             |  |   |       | 
|Forfeited                                        |  |         | 10,049  |                                   |   | 20.92                                           |  |                             |  |   |       | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |  |   |       | 
|Outstanding at
 December 31, 2007                |  |         | 347,556 |                                   | $ | 19.47                                           |  | 7.8                         |  | $ | 3,781 | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |  |   |       | 
|Vested or
 expected to vest at December 31, 2007 |  |         | 277,792 |                                   | $ | 18.87                                           |  | 7.7                         |  | $ | 3,187 | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |  |   |       | 
|Exercisable at
 December 31, 2007                |  |         | 174,381 |                                   | $ | 13.65                                           |  | 7.1                         |  | $ | 2,723 | 
|                                                 |  |         |         |                                   |   |                                                 |  |                             |  |   |       | 

The fair
value of each option grant was estimated using the Black-Scholes option pricing
model that uses the assumptions noted in the following table. The expected term
of the options was based on the contractual term of the option and expected
employee exercise and post-vesting employment termination behavior. Expected
volatility was calculated based on the historic volatility of the Companys
stock. The risk-free rate was based on U.S. Treasury issues with a remaining
term equal to the expected term of the options at the grant date.

-66-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)(Dollars in
thousands, except per
share data)

|                                     |  |      |      |      |   |      |  
|------------------------------------ |  | ---- | ---- | ---- | - | ---- | -
|                                     |  | 2007 |      | 2006 |  
|                                     |  |      |      |      |  
|Dividend yield                       |  |      |     |      |   |     |  
|Expected volatility                  |  |      | 19   | %    |   | 31   | %
|Risk-free interest rate              |  |      | 4.79 | %    |   | 5.02 | %
|Expected holding period
  (in years) |  |      | 4    |      |   | 4    |  
|Weighted average fair
  value        |  | $    | 8.39 |      | $ | 8.74 |  

The
total intrinsic value of options exercised was $1,562, $1,126 and $241 during
the years ended December 31, 2007, 2006 and 2005, respectively.  The total fair value of options vested
during the year ended December 31, 2007 and 2006 was $646 and $473,
respectively.  The Company generally
issues new shares upon the exercise of stock options.  The total tax benefit realized as a result of stock option
exercises was $618, $445 and $95 during the years ended December 31, 2007, 2006
and 2005, respectively.

As
of December 31, 2007, there was $3,991 of total unrecognized compensation cost
that is expected to be recognized over a weighted average period of 2.0
years.  The remaining unrecognized
compensation cost for performance based restricted stock may vary each
reporting period based on changes in the expected achievement of performance
measures.

Note 13  Financial Instruments

Interest
Rate Collar Agreements

The
Company periodically enters into derivative financial instruments to reduce the
Companys exposure to investments in variable interest rates on its outstanding
debt.  Derivative financial instruments
are only entered into with creditworthy counterparties.  In April, 2005, the Company entered into two
no-cost interest rate collar agreements, economically hedging $185,000 of its
LIBOR-based floating rate debt for five years.
In September 2005, the Company designated these agreements as cash flow
hedges.  On December 14, 2007, the
Company de-designated $4,400 of one of the interest rate collar as a cash flow
hedge.  Accordingly, the effected
portion of the accumulated unrealized loss ($32) related to this portion of the
instrument will remain in accumulated other comprehensive income and be
reclassified into earnings when the original hedged interest rate payments
occur.  In addition, any change in fair
value on this portion of the instrument after this date will be recognized
currently in other income and expense.
The remaining balance of the hedge is 100 percent effective and
therefore has no impact on earnings due to hedge ineffectiveness.  As a result of entering into the agreements,
the interest rate to be paid by the Company relating to the hedged portion of
its debt will be based on a minimum three-month LIBOR rate of 4.05 percent on
average and a maximum three-month LIBOR rate of 5.00 percent.

Fair
Value of Financial Instruments

|                         |  |                   |         |            |   |                   |   |            |         |  |   |         | 
|------------------------ |  | ----------------- | ------- | ---------- | - | ----------------- | - | ---------- | ------- |  | - | ------- | 
|                         |  | December 31,      |        
|                         |  |                   |        
|                         |  | 2007              |         | 2006       |  
|                         |  |                   |         |            |  
|                         |  | Carrying
  Amount |         | Fair Value |   | Carrying
  Amount |   | Fair Value |        
|                         |  |                   |         |            |   |                   |   |            |        
|Long-term
  debt         |  | $                 | 240,132 |            | $ | 235,353           |   | $          | 345,299 |  | $ | 348,236 | 
|Derivative
  instruments |  | $                 | (2,365  | )          | $ | (2,365            | ) | $          | 1,614   |  | $ | 1,614   | 

-67-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

The
fair values of cash and cash equivalents, receivables and payables approximate
their carrying values due to the short-term nature of the instruments. The fair
value of the Companys long-term debt was based on quoted market prices for
traded debt and discounted cash flow analyses on its nontraded debt. The fair
value of the Companys interest rate collar agreements is the estimated amount
the Company would pay or receive to terminate the collar agreements based upon
quoted market prices as provided by financial institutions which are
counterparties to the collar agreements.

Note 14  Geographic and Industry Segment
Information

The
Companys segment presentation has been changed to reflect its industrial wire
and fluid handling equipment product lines within corporate and other. These
product lines were formerly included within the Companys manufacturing
segment, which is no longer a reportable segment. The remaining businesses of
the former manufacturing segment comprise the new valve actuation systems
segment. Prior year information has been restated to conform to the current
presentation.

GenTek
operates through two primary business segments: valve actuation systems and
performance chemicals. The business segments were determined based on several
factors including products and services provided and markets served. The valve
actuation systems segment provides precision engineered valve actuation systems
and components to the automotive and heavy duty/commercial markets. The
performance chemicals segment provides chemical products to four principal
markets: water treatment, chemical processing, pharmaceutical and personal care
and technology. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies.

Industry
segment information is summarized as follows:

|                                                                     |  |                          |         |                          |   |         |  |      |         |      |   |        |   |   |        |   |   |        |  
|-------------------------------------------------------------------- |  | ------------------------ | ------- | ------------------------ | - | ------- |  | ---- | ------- | ---- | - | ------ | - | - | ------ | - | - | ------ | -
|                                                                     |  | Net Revenues             |         | Operating Profit (Loss)  |  
|                                                                     |  |                          |         |                          |  
|                                                                     |  | Years Ended December 31, |         | Years Ended December 31, |  
|                                                                     |  |                          |         |                          |  
|                                                                     |  | 2007                     |         | 2006                     |   | 2005    |  | 2007 |         | 2006 |   | 2005   |  
|                                                                     |  |                          |         |                          |   |         |  |      |         |      |   |        |  
|Valve actuation systems(1)                                           |  | $                        | 152,076 |                          | $ | 146,131 |  | $    | 142,176 |      | $ | (290   | ) | $ | 10,521 |   | $ | 17,356 |  
|Performance chemicals                                                |  |                          | 396,683 |                          |   | 373,347 |  |      | 334,113 |      |   | 64,825 |   |   | 44,710 |   |   | 29,377 |  
|Corporate and other(1)                                               |  |                          | 59,460  |                          |   | 73,776  |  |      | 61,144  |      |   | (2,405 | ) |   | (3,656 | ) |   | (9,840 | )
|                                                                     |  |                          |         |                          |   |         |  |      |         |      |   |        |   |   |        |   |   |        |  
|Consolidated                                                         |  | $                        | 608,219 |                          | $ | 593,254 |  | $    | 537,433 |      |   | 62,130 |   |   | 51,575 |   |   | 36,893 |  
|                                                                     |  |                          |         |                          |   |         |  |      |         |      |   |        |   |   |        |   |   |        |  
|Interest expense                                                     |  |                          |         |                          |   |         |  |      |         |      |   | 22,685 |   |   | 29,137 |   |   | 24,733 |  
|Other (income), expense net                                          |  |                          |         |                          |   |         |  |      |         |      |   | (1,500 | ) |   | (257   | ) |   | (2,945 | )
|                                                                     |  |                          |         |                          |   |         |  |      |         |      |   |        |   |   |        |   |   |        |  
|Consolidated income from continuing
  operations before income taxes |  |                          |         |                          |   |         |  |      |         |      | $ | 40,945 |   | $ | 22,695 |   | $ | 15,105 |  
|                                                                     |  |                          |         |                          |   |         |  |      |         |      |   |        |   |   |        |   |   |        |  

|    |                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Revenues of $73,776 and
  $61,144 for the years ended December 31, 2006 and 2005, respectively, have
  been restated and included in corporate and other. Operating profit of $2,650
  and $1,296 for the years ended December 31, 2006 and 2005, respectively, have
  been restated and included in corporate and other.

-68-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

|                           |  |                          |        |                               |   |        |  |      |        |      |   |        |  |   |        |  |   |        | 
|-------------------------- |  | ------------------------ | ------ | ----------------------------- | - | ------ |  | ---- | ------ | ---- | - | ------ |  | - | ------ |  | - | ------ | 
|                           |  | Capital Expenditures     |        | Depreciation and Amortization |  
|                           |  |                          |        |                               |  
|                           |  | Years Ended December 31, |        | Years Ended December 31,      |  
|                           |  |                          |        |                               |  
|                           |  | 2007                     |        | 2006                          |   | 2005   |  | 2007 |        | 2006 |   | 2005   | 
|                           |  |                          |        |                               |   |        |  |      |        |      |   |        | 
|Valve actuation systems(1) |  | $                        | 6,277  |                               | $ | 3,871  |  | $    | 4,542  |      | $ | 13,206 |  | $ | 12,692 |  | $ | 13,851 | 
|Performance chemicals      |  |                          | 21,202 |                               |   | 16,095 |  |      | 19,512 |      |   | 19,629 |  |   | 18,466 |  |   | 17,648 | 
|Corporate and other(1)     |  |                          | 1,343  |                               |   | 140    |  |      | 251    |      |   | 2,870  |  |   | 2,678  |  |   | 2,873  | 
|                           |  |                          |        |                               |   |        |  |      |        |      |   |        |  |   |        |  |   |        | 
|Consolidated               |  | $                        | 28,822 |                               | $ | 20,106 |  | $    | 24,305 |      | $ | 35,705 |  | $ | 33,836 |  | $ | 34,372 | 
|                           |  |                          |        |                               |   |        |  |      |        |      |   |        |  |   |        |  |   |        | 

|    |                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Capital expenditures of
  $21 and $251 for the years ended December 31, 2006 and 2005, respectively,
  have been restated and included in corporate and other. Depreciation and
  amortization of $1,070 for each of the years ended December 31, 2006 and 2005 have
  been restated and included in corporate and other.

|                           |  |                     |         |      |   |         | 
|-------------------------- |  | ------------------- | ------- | ---- | - | ------- | 
|                           |  | Identifiable Assets |        
|                           |  |                     |        
|                           |  | December 31,        |        
|                           |  |                     |        
|                           |  | 2007                |         | 2006 |  
|                           |  |                     |         |      |  
|Valve actuation systems(2) |  | $                   | 266,454 |      | $ | 270,228 | 
|Performance chemicals(1)   |  |                     | 297,442 |      |   | 289,978 | 
|Corporate and other(2)     |  |                     | 44,466  |      |   | 33,706  | 
|Assets held for sale       |  |                     | 5,617   |      |   | 136,294 | 
|                           |  |                     |         |      |   |         | 
|Consolidated               |  | $                   | 613,979 |      | $ | 730,206 | 
|                           |  |                     |         |      |   |         | 

|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Includes equity method
  investments of $215 and $288, respectively.                                                           
|    |                                                                                                                                
|(2) | Identifiable assets of
  $20,140 for the year ended December 31, 2006 have been restated and included
  in corporate and other.
|    |                                                                                                                                
|    | Geographic
  area information is summarized as follows:                                                                        

|                |  |                         |         |                      |   |         |  |      |         |      |   |         |  |   |         | 
|--------------- |  | ----------------------- | ------- | -------------------- | - | ------- |  | ---- | ------- | ---- | - | ------- |  | - | ------- | 
|                |  | External Revenues(1)    |         | Long-Lived Assets(2) |  
|                |  |                         |         |                      |  
|                |  | Year Ended December 31, |         | December 31,         |  
|                |  |                         |         |                      |  
|                |  | 2007                    |         | 2006                 |   | 2005    |  | 2007 |         | 2006 |  
|                |  |                         |         |                      |   |         |  |      |         |      |  
|United
  States |  | $                       | 499,422 |                      | $ | 493,037 |  | $    | 442,165 |      | $ | 213,544 |  | $ | 223,095 | 
|Canada          |  |                         | 44,326  |                      |   | 46,618  |  |      | 53,560  |      |   | 8,813   |  |   | 6,603   | 
|Other
  foreign |  |                         | 64,471  |                      |   | 53,599  |  |      | 41,708  |      |   | 2,394   |  |   | 1,887   | 
|                |  |                         |         |                      |   |         |  |      |         |      |   |         |  |   |         | 
|Consolidated    |  | $                       | 608,219 |                      | $ | 593,254 |  | $    | 537,433 |      | $ | 224,751 |  | $ | 231,585 | 
|                |  |                         |         |                      |   |         |  |      |         |      |   |         |  |   |         | 

|    |                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------
|   
|(1) | Revenues are
  attributed to geographic areas based on the locations of customers.                     
|    |                                                                                                        
|(2) | Represents
  all non-current assets except deferred tax assets, goodwill and other
  intangible assets.

Note 15  Related Party Transactions

GenTek
provided General Chemical Industrial Products (GCIP) with certain
administrative services pursuant to a transition support agreement entered into
in connection with the spinoff of GenTek from GCIP in 1999. These services
terminated in 2006. For the years ended December 31, 2007, 2006 and 2005,
GenTek charged GCIP $0, $561 and $842, respectively, related to this agreement.
GCIP supplies soda ash to GenTek. For the years ended December 31, 2007, 2006
and 2005, purchases from GCIP amounted to $2,863, $2,934 and $2,386,
respectively.

-69-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

Note 16  Discontinued Operations

During
the second quarter of 2005, the Company ceased operations of its printing plate
business. The business had become unprofitable as it has experienced severe
competitive pressures over the last several years and has been hurt by a
continued shift in technology in the printing plate market. This business was
formerly reported as part of the communications segment, which is no longer a
reportable segment.

During
April 2006, the Company completed the sale of its cable and wire manufacturing
business in Stouffville, Canada. All requirements for classifying this business
as held for sale were met during the first quarter of 2006. Accordingly, the
Company recorded an impairment charge of $2,458 in order to reflect assets to
be sold at net realizable value, which has been included in income (loss) from
discontinued operations, related to property, plant and equipment and goodwill
allocated to the business. This business was formerly reported as part of the
manufacturing segment, which is no longer a reportable segment.

On
December 22, 2006, the Company announced that it had signed a definitive
agreement to sell its Noma wire and cable assembly business to Electrical
Components International, Inc. Accordingly, the Company recorded an impairment
charge of $11,907 in order to reflect the net assets to be sold at net
realizable value, which has been included in income (loss) from discontinued
operations, related to property, plant and equipment, goodwill and other
intangible assets. The sale was completed on February 16, 2007. This business
was formerly reported as part of the manufacturing segment, which is no longer
a reportable segment. GenTeks wire and cable manufacturing business has and
will continue to supply the Noma wire and cable assembly business with wire
used as a raw material. These sales continued through 2007, after which time
any future sales will be subject to open market bidding. The principal factors
used to conclude that the expected continuing cash flows are not direct cash
flows were the length of time the transactions are expected to continue and the
magnitude of the expected transactions versus the expected amount of revenue
for the Noma wire and cable assembly business. Based on the factors, the
expected continuing cash flows are not expected to be significant. Revenues
between the wire and cable manufacturing business and the Noma wire and cable
assembly business that were previously eliminated in consolidation were $3,007,
$37,578 and $28,886 for the years ended December 31, 2007, 2006 and 2005,
respectively.

Because
the net proceeds of the Noma wire and cable assembly business sale are required
to be used to repay certain outstanding indebtedness, interest expense of $677,
$5,380 and $3,660 for the years ending December 31, 2007, 2006 and 2005,
respectively, has been allocated to discontinued operations. This allocation
was performed using the estimated net proceeds of the sale and the interest
costs incurred in the periods on the debt that requires the repayment.

On
April 27, 2007, the Company signed an agreement to sell its wholly owned subsidiary
Defiance Testing and Engineering Services, Inc. to Ashok Leyland of Chennai,
India for $17,000 in cash, minus a working capital adjustment of $300. During
the first quarter of 2007, the Company recorded an impairment charge of $6,150
to reflect the revised estimated fair value of goodwill of the business based
upon the purchase offers which has been included in loss from discontinued
operations. The transaction was completed on July 17, 2007. The business was
formerly reported as part of the manufacturing segment, which is no longer a
reportable segment.

-70-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

The
components of assets held for sale were as follows:

|                              |  |                |       |      |   |         | 
|----------------------------- |  | -------------- | ----- | ---- | - | ------- | 
|                              |  | December
  31, |      
|                              |  |                |      
|                              |  | 2007           |       | 2006 |  
|                              |  |                |       |      |  
|Accounts receivable           |  | $              |      |      | $ | 41,073  | 
|Inventories                   |  |                |      |      |   | 40,686  | 
|Other current assets          |  |                |      |      |   | 3,166   | 
|Property, plant and equipment |  |                | 5,617 |      |   | 31,086  | 
|Other assets                  |  |                |      |      |   | 20,283  | 
|                              |  |                |       |      |   |         | 
|                              |  | $              | 5,617 |      | $ | 136,294 | 
|                              |  |                |       |      |   |         | 

At
December 31, 2007, amounts remaining in assets held for sale represent land and
buildings at idle facilities expected to be sold within the next 12 months.

The
components of liabilities of businesses held for sale were as follows:

|                                  |  |                |   |      |   |        | 
|--------------------------------- |  | -------------- | - | ---- | - | ------ | 
|                                  |  | December
  31, |  
|                                  |  |                |  
|                                  |  | 2007           |   | 2006 |  
|                                  |  |                |   |      |  
|Accounts payable                  |  | $              |  |      | $ | 20,389 | 
|Accrued liabilities               |  |                |  |      |   | 10,307 | 
|Current portion of long-term debt |  |                |  |      |   | 457    | 
|Long-term debt                    |  |                |  |      |   | 589    | 
|Other liabilities                 |  |                |  |      |   | 1,011  | 
|                                  |  |                |   |      |   |        | 
|                                  |  | $              |  |      | $ | 32,753 | 
|                                  |  |                |   |      |   |        | 

The
businesses included in discontinued operations had revenues of $40,014,
$317,278 and $386,535 and pretax profit (loss) of $(7,684), $(23,394) and
$(12,958) for the years ended December 31, 2007, 2006 and 2005, respectively.

Note 17 
Unaudited Quarterly Information

|                                            |  |       |         |        |   |         |     |        |         |     |   |         |    
|------------------------------------------- |  | ----- | ------- | ------ | - | ------- | --- | ------ | ------- | --- | - | ------- | ---
|                                            |  | 2007  |        
|                                            |  |       |        
|                                            |  | First |         | Second |   | Third   |     | Fourth |        
|                                            |  |       |         |        |   |         |     |        |        
|Net revenues(1)                             |  | $     | 154,930 |        | $ | 159,459 |     | $      | 151,334 |     | $ | 142,496 |    
|Gross profit                                |  |       | 27,055  |        |   | 27,930  |     |        | 22,596  |     |   | 28,042  |    
|Net income (loss)                           |  |       | (3,261  | )(2)   |   | 5,045   | (3) |        | 9,183   | (4) |   | 18,800  | (5)
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |    
|Earnings (loss) per common share  basic:   |  |       |         |        |   |         |     |        |         |     |   |         |    
|Net income (loss)                           |  | $     | (0.32   | )      | $ | 0.49    |     | $      | 0.89    |     | $ | 1.82    |    
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |    
|Earnings (loss) per common share  diluted: |  |       |         |        |   |         |     |        |         |     |   |         |    
|Net income (loss)                           |  | $     | (0.28   | )      | $ | 0.43    |     | $      | 0.80    |     | $ | 1.64    |    
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |    

|    |                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------
|   
|(1) | Excludes
  revenues relating to discontinued operations of $36,706, $2,906, $402, and
  $0, respectively.       
|    |                                                                                                                 
|(2) | Includes
  restructuring charges of $1,282 and a pension curtailment gain of $555.                              
|    |                                                                                                                 
|(3) | Includes
  restructuring charges of $1,587 and a pension curtailment gain of $140.                              
|    |                                                                                                                 
|(4) | Includes
  restructuring charges of $783, impairment charges of $925 and a pension
  curtailment gain of $2,565.
|    |                                                                                                                 
|(5) | Includes
  restructuring charges of $388.                                                                       

-71-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|------------------------------------------- |  | ----- | ------- | ------ | - | ------- | --- | ------ | ------- | --- | - | ------- | ----
|                                            |  | 2006  |        
|                                            |  |       |        
|                                            |  | First |         | Second |   | Third   |     | Fourth |        
|                                            |  |       |         |        |   |         |     |        |        
|Net revenues(1)                             |  | $     | 138,589 |        | $ | 148,372 |     | $      | 158,545 |     | $ | 147,748 |     
|Gross profit                                |  |       | 25,904  |        |   | 28,758  |     |        | 27,376  |     |   | 22,579  |     
|Net income (loss)                           |  |       | 3,387   | (2)    |   | 4,153   | (3) |        | 2,882   | (4) |   | (12,525 | )(5)
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|Earnings (loss) per common share  basic:   |  |       |         |        |   |         |     |        |         |     |   |         |     
|Net income (loss)                           |  | $     | 0.33    |        | $ | 0.41    |     | $      | 0.28    |     | $ | (1.23   | )   
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     
|Earnings (loss) per common share  diluted: |  |       |         |        |   |         |     |        |         |     |   |         |     
|Net income (loss)                           |  | $     | 0.33    |        | $ | 0.38    |     | $      | 0.26    |     | $ | (1.09   | )   
|                                            |  |       |         |        |   |         |     |        |         |     |   |         |     

|    |                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------
|   
|(1) | Excludes
  revenues relating to discontinued operations of $112,098, $75,386, $66,399,
  and $63,395, respectively.
|    |                                                                                                                    
|(2) | Includes
  restructuring charges of $501.                                                                          
|    |                                                                                                                    
|(3) | Includes
  restructuring charges of $851 and a pension curtailment gain of $635.                                   
|    |                                                                                                                    
|(4) | Includes
  restructuring charges of $246.                                                                          
|    |                                                                                                                    
|(5) | Includes
  restructuring and impairment charges of $1,376 and a pension curtailment gain
  of $9.                  

Note 18  Restatements

In
September 2006, the FASB issued SFAS No. 158, Employers Accounting for
Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB
Statements No. 87, 88, 106, and 132(R) (SFAS 158). Under this standard,
a company must recognize a net liability or asset to report the funded status
of its defined benefit pension and other postretirement benefit plans on its
balance sheet as well as recognize changes in that funded status in the year in
which the changes occur, through charges or credits to comprehensive income.
Subsequent to the issuance of the consolidated financial statements as of and
for the year ended December 31, 2006, management identified the following
errors in their adoption of the recognition and disclosure provisions of SFAS
158 as of December 31, 2006.

The
transition adjustment classified as the adjustment to initially apply SFAS 158
was incorrectly included as part of comprehensive income in the consolidated
statement of changes in equity for the year ended December 31, 2006 rather than
reflected as an adjustment to the ending balance of accumulated other comprehensive
income as of December 31, 2006.

The
adjustment to initially apply SFAS 158 incorrectly included a portion of the
minimum pension liability adjustment, which is recognized as part of
comprehensive income. This immaterial error resulted in an understatement of
comprehensive income as the minimum pension liability adjustment was
understated by $3,379 and the adjustment to initially apply SFAS 158 was
overstated by the same amount in the consolidated statement of changes in
equity for the year ended December 31, 2006.

The
Company incorrectly included the portion of the transition adjustment related
to previously unrecognized accumulated actuarial gains due to the impact of the
federal subsidy provided under the Medicare Prescription Drug, Improvement and
Modernization Act of 2003 in calculating the deferred tax impact of the
transition adjustment to the accumulated projected benefit obligation for other
postretirement benefits. However, no deferred taxes should have been recorded
related to this portion of the transition adjustment as the federal subsidy is
non-taxable. As a result of this immaterial error, the adjustment to initially
apply SFAS 158 to accumulated other comprehensive income was understated by
$2,546 and the net deferred tax balance included in other long term liabilities
was overstated by the same amount at December 31, 2006.

-72-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

Management
also determined, subsequent to the issuances of the consolidated financial
statements as of and for the year ended December December 31, 2006, that the
consolidated statements of cash flows as reported for the years ended December
31, 2006 and 2005, contained a classification error in the treatment of costs
of property, plant and equipment included in accounts payable. In accordance
with SFAS No. 95, Statement of Cash Flows, these costs should have been
reported within cash flows from investing activities when paid. The Company
reported capital expenditures in its consolidated statements of cash flows on
an accrual basis rather than on a cash basis, and as a result, reported capital
expenditures in the period in which the Company acquired legal title to the
related property, plant and equipment rather than when the Company actually
paid for such property, plant and equipment. Further, the unpaid portion of the
transaction should have been disclosed as a non-cash investing activity in the
supplemental disclosure of cash flow information. In addition, the consolidated
statements of cash flows as reported for the years ended December 31, 2006 and
2005 reported on a net basis issuance of long-term debt, deferred financing
costs paid and amounts borrowed on the Companys revolving credit facility as
opposed to being reported separately.

The
segment presentation for the years ended December 31, 2006 and 2005 included in
Note 14 has been restated to remove certain operating segments from the former
manufacturing segment, which are now presented in corporate and other.

None
of the aforementioned errors have an impact on the previously reported
consolidated statements of operations for the years ended December 31, 2006 and
2005.

-73-

---



GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
(Dollars in thousands, except per share data)

As
a result of the items discussed above, the accompanying consolidated balance
sheet as of December 31, 2006, the consolidated statement of changes in equity
for the year ended December 31, 2006 and the consolidated statement of cash
flows for the years ended December 31, 2006 and 2005 have been restated as
follows:

|                                                                              |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|----------------------------------------------------------------------------- |  | ----------------------- | ------- | ---------- | - | ------------------------------------------------- | - | ------------- | ------ | - | - | ------- | -
|                                                                              |  | As
  PreviouslyReported |         | Adjustment |   | Discontinued
  OperationsAdjustments(See Note 16) |   | As
  Restated |       
|                                                                              |  |                         |         |            |   |                                                   |   |               |       
|Consolidated balance sheet  December 31, 2006:                               |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Other liabilities                                                             |  | $                       | 72,910  |            | $ | (2,546                                            | ) | $             | (1,010 | ) | $ | 69,354  |  
|Total liabilities                                                             |  |                         | 634,273 |            |   | (2,546                                            | ) |               |       |   |   | 631,727 |  
|Accumulated other comprehensive income                                        |  |                         | 6,004   |            |   | 2,546                                             |   |               |       |   |   | 8,550   |  
|Total equity                                                                  |  |                         | 95,933  |            |   | 2,546                                             |   |               |       |   |   | 98,479  |  
|                                                                              |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Consolidated statement of changes in equity  year ended
December 31,
  2006: |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Minimum pension liability adjustment                                          |  |                         | 432     |            |   | 3,379                                             |   |               |       |   |   | 3,811   |  
|Comprehensive income                                                          |  |                         | 7,762   |            |   | (5,723                                            | ) |               |       |   |   | 2,039   |  
|Adjustment to initially apply FASB Statement
No.158                           |  |                         | 9,102   |            |   | (833                                              | ) |               |       |   |   | 8,269   |  
|Accumulated other comprehensive income                                        |  |                         | 6,004   |            |   | 2,546                                             |   |               |       |   |   | 8,550   |  
|                                                                              |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Consolidated statement of cash flows  year ended December 31,
2006:          |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Cash flows from operating activities:                                         |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Increase in accounts payable                                                  |  |                         | 5,549   |            |   | (2,197                                            | ) |               | 63     |   |   | 3,415   |  
|Net cash provided by continuing
operations                                    |  |                         | 61,466  |            |   | (2,197                                            | ) |               | (1,360 | ) |   | 57,909  |  
|Net cash provided by operating activities                                     |  |                         | 42,032  |            |   | (2,197                                            | ) |               | 535    |   |   | 40,370  |  
|Cash flows from investing activities:                                         |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Capital expenditures                                                          |  |                         | (22,409 | )          |   | 2,197                                             |   |               | 106    |   |   | (20,106 | )
|Net cash used for continuing operations                                       |  |                         | (59,312 | )          |   | 2,197                                             |   |               | 106    |   |   | (57,009 | )
|Net cash used for investing activities                                        |  |                         | (30,823 | )          |   | 2,197                                             |   |               |       |   |   | (28,626 | )
|Cash flows from financing activities:                                         |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Proceeds from revolving credit facility                                       |  |                         |        |            |   | 17,750                                            |   |               |       |   |   | 17,750  |  
|Repayments of revolving credit facility                                       |  |                         |        |            |   | (7,750                                            | ) |               |       |   |   | (7,750  | )
|Issuance of long-term debt                                                    |  |                         | 15,533  |            |   | (14,604                                           | ) |               |       |   |   | 929     |  
|Repayment of long-term debt                                                   |  |                         | (29,589 | )          |   | 5,000                                             |   |               |       |   |   | (24,589 | )
|Deferred financing costs                                                      |  |                         |        |            |   | (396                                              | ) |               |       |   |   | (396    | )
|Supplemental information                                                      |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Capital expenditures incurred but not yet
paid                                |  |                         |        |            |   | 5,716                                             |   |               |       |   |   | 5,716   |  
|Consolidated statement of cash flows  year ended December 31,
2005:          |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Cash flows from operating activities:                                         |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Increase in accounts payable                                                  |  |                         | (2,149  | )          |   | 3,010                                             |   |               | (65    | ) |   | 796     |  
|Net cash provided by (used for) continuing
operations                         |  |                         | 561     |            |   | 3,010                                             |   |               | (4,633 | ) |   | (1,062  | )
|Net cash provided by operating activities                                     |  |                         | 3,725   |            |   | 3,010                                             |   |               | (553   | ) |   | 6,182   |  
|Cash flows from investing activities:                                         |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Capital expenditures                                                          |  |                         | (21,605 | )          |   | (3,010                                            | ) |               | 310    |   |   | (24,305 | )
|Net cash used for continuing operations                                       |  |                         | (21,335 | )          |   | (3,010                                            | ) |               | 310    |   |   | (24,035 | )
|Net cash provided by investing activities                                     |  |                         | (27,917 | )          |   | (3,010                                            | ) |               |       |   |   | (30,927 | )
|Cash flows from financing activities:                                         |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Proceeds from revolving credit facility                                       |  |                         |        |            |   | 54,500                                            |   |               |       |   |   | 54,500  |  
|Repayments of revolving credit facility                                       |  |                         |        |            |   | (54,500                                           | ) |               |       |   |   | (54,500 | )
|Issuance of long-term debt                                                    |  |                         | 400,767 |            |   | (18,767                                           | ) |               |       |   |   | 382,000 |  
|Repayment of long-term debt                                                   |  |                         | (56,061 | )          |   | 29,500                                            |   |               |       |   |   | (26,561 | )
|Deferred financing costs                                                      |  |                         |        |            |   | (10,733                                           | ) |               |       |   |   | (10,733 | )
|Supplemental information                                                      |  |                         |         |            |   |                                                   |   |               |        |   |   |         |  
|Capital expenditures incurred but not yet
paid                                |  |                         |        |            |   | 3,519                                             |   |               |       |   |   | 3,519   |  

-74-

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GENTEK INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS  (Concluded)
(Dollars in thousands, except per share data)

Note 19  Subsequent Event

On
February 29, 2008, the Company completed the sale of its antiperspirant actives
business to Summit Research Labs, Inc. for $18 million, subject to a working
capital adjustment. As part of this transaction, the Company will continue to
operate the antiperspirant actives manufacturing unit for up to one year under
a transition services contract. This business continues to be classified as
continuing operations.

-75-

---



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

None.

Item 9A.  Controls
and Procedures

Disclosure Controls and Procedures

The
Companys management, with the participation of the Companys Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of the
Companys disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
Exchange Act)) as of the end of the period covered by this report. Based on
such evaluation, the Companys Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of such period, the Companys
disclosure controls and procedures are effective at the reasonable assurance
level in recording, processing, summarizing and reporting, on a timely basis,
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act.

Managements Report
On Internal Control Over Financial Reporting

The
management of GenTek Inc is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company, as such
term is defined in Exchange Act Rules 13a-15(f). The Companys internal control
over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with U.S. generally accepted
accounting principles.

Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Projections of any evaluation of effectiveness
to future periods are subject to risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Under
the supervision of its principal executive and principal financial officer and
with the participation of its management, the Company conducted an evaluation
of the effectiveness of its internal control over financial reporting based on
the framework in the Internal Control 
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on its evaluation under
the framework in the Internal Control 
Integrated Framework issued by COSO, its management concluded that
the Companys internal control over financial reporting was effective at a reasonable assurance level as of December 31,
2007.

GenTeks
independent registered public accounting firm, Deloitte & Touche LLP, has
audited GenTeks financial statements for the year ended December 31, 2007
included in this annual report on Form 10-K (and issued a report dated March
17, 2008 which expressed an unqualified opinion on those financial statements
and included an explanatory paragraph which indicated that the company changed
its method of accounting for uncertain tax positions to adopt the provisions
of Financial Accounting Standards Boards Interpretation No. 48, Accounting
for Uncertainty in Income Taxes- an interpretation of FASB Statement No. 109
as of January 1, 2007) and, as part of that audit, have issued a report on
internal control over financial reporting, a copy of which is included in this
annual report on Form 10-K.

-76-

---



REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Board of Directors and
Stockholders of
GenTek Inc.
Parsippany, New Jersey

We have audited the internal
control over financial reporting of GenTek Inc. and subsidiaries (the
Company) as of December 31, 2007 based on criteria established in Internal
Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Companys management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Managements Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on
the Companys internal control over financial reporting based on our audit.

We conducted our audit 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 effective internal control over
financial reporting was maintained in all material respects. Our audit included
obtaining an understanding of internal control over financial reporting,
assessing the risk that a material weakness exists, testing and evaluating the
design and operating effectiveness of internal control based on the assessed
risk, and performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinion.

A companys internal control
over financial reporting is a process designed by, or under the supervision of,
the companys principal executive and principal financial officers, or persons
performing similar functions, and effected by the companys board of directors,
management, and other personnel to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. A companys internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.

Because of the inherent
limitations of internal control over financial reporting, including the
possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may not be prevented or detected on a
timely basis. Also, projections of any evaluation of the effectiveness of the
internal control over financial reporting to future periods are subject to the
risk that the controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the Company
maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2007, based on the criteria established in Internal
Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission.

We have also audited, in
accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated financial statements and financial statement
schedule as of and for the year ended
December 31, 2007 of the Company and our report dated March 17, 2008 expressed
    an unqualified opinion on those financial statements and financial statement
    schedule and included an explanatory paragraph which indicated that the company
    changed its method of accounting for uncertain tax positions to adopt the
    provisions of Financial Accounting Standards Boards Interpretation No. 48, Accounting for Uncertainty in Income Taxes- an interpretation of
FASB
Statement No. 109 as of January 1, 2007.

/s/ Deloitte & Touche LLPParsippany, New Jersey
March 17, 2008

-77-

---



Changes in Internal Control Over Financial
Reporting

There
have not been any changes in the Companys internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

PART III

Item 10. Directors
and Executive Officers of the Registrant.

Directors. For information relating to the
Companys Directors, see the information under the caption Election of
Directors in the Companys definitive Proxy Statement to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A of the Securities
Exchange Act of 1934, as amended, within 120 days after the fiscal year ended
December 31, 2007 (the Proxy Statement), which is hereby incorporated by
reference.

Executive
Officers. For information relating to the Companys
executive officers, see the information contained under the caption Executive
Officers and Key Employees in Part I of this report.

Compliance
with Section 16(a) of the Exchange Act. For
information relating to the compliance of the directors and officers of the
Company, as well as any holder of ten percent or more of any registered class
of the equity securities of the Company with Section 16(a) of the Exchange Act,
see the information under the caption Section 16(a) Beneficial Ownership
Reporting Compliance in the Companys Proxy Statement, which is hereby
incorporated by reference.

Item 11. Executive
Compensation.

Executive Compensation. For information
relating to the compensation of the Companys executives, see the information
under the caption Executive Compensation in the Companys Proxy Statement,
which is hereby incorporated by reference.

Item 12. Security
Ownership of Certain Beneficial Owners and Management.

Security
Ownership of Certain Beneficial Owners. For
information relating to the beneficial ownership of more than five percent of
the Companys Common Stock, see the information under the caption Security
Ownership of Management and Certain Beneficial Owners in the Companys Proxy Statement,
which is hereby incorporated by reference.

Security Ownership of Management. For
information relating to the beneficial ownership of the Companys Common Stock
by Management, see the information under the caption Security Ownership of Management
and Certain Beneficial Owners in the Companys Proxy Statement, which is
hereby incorporated by reference.

Securities
      Authorized for Issuance Under Equity Compensation Plans. For certain
      information relating to equity compensation plans, see the information
      under the caption Equity Compensation
Plan Information in Part II of this report.

Item 13. Certain
Relationships and Related Transactions.

Certain Relationships and Related Transactions.
For information relating to certain relationships and related transactions of
the Company, see the information under the caption Certain Relationships

-78-

---



and Related
Transactions in the Companys Proxy Statement, which is hereby incorporated by
reference.

Item 14. Principal
Accounting Fees and Services

Principal Accountant Fees and Services.
For information relating to the principal accountant fees and services, see the
information under the caption Principal Accountant Fees and Services in the
Companys Proxy Statement, which is hereby incorporated by reference.

PART IV

Item 15. Exhibits and Financial Statement
Schedules.

Financial
Statements

See Item 8.

Financial
Statement Schedules

See Index to Financial Statement Schedule on
page 84.

List
of Exhibits

|            |     |             |                                                                                                                                                                                                                                                                                                                                                                                                          
|----------- | --- | ----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |     | Description
|            |     |            
|            |     |             |                                                                                                                                                                                                                                                                                                                                                                                                          
|            | 2.1 |             | Joint Plan
 of Reorganization Under Chapter 11, Title 11, United States Code of GenTek
 Inc., et al., and Noma Company, Debtors, dated August 28, 2003, as filed with
 the United States Bankruptcy Court for the District of Delaware on August 28,
 2003 (incorporated by reference to Exhibit 2.1 of the Registrants Form 8-K,
 filed with the Commission on October 21, 2003).                      
|            |     |             |                                                                                                                                                                                                                                                                                                                                                                                                          
|            | 2.2 |             | First
 Modification to Joint Plan of Reorganization Under Chapter 11, Title 11,
 United States Code of GenTek Inc., et al., and Noma Company, Debtors, dated
 October 3, 2003 as filed with the United States Bankruptcy Court for the
 District of Delaware on October 3, 2003 (incorporated by reference to Exhibit
 2.2 of the Registrants Form 8-K, filed with the Commission on October 21,
 2003).
|            |     |             |                                                                                                                                                                                                                                                                                                                                                                                                          
|            | 2.3 |             | Order
 confirming Joint Plan of Reorganization Under Chapter 11, Title 11, United
 States Code of GenTek Inc., et al., and Noma Company, Debtors, as Modified,
 as entered by the United States Bankruptcy Court for the District of Delaware
 on October 7, 2003 (incorporated by reference to Exhibit 2.3 of the
 Registrants Form 8-K, filed with the Commission on October 21, 2003).               
|            |     |             |                                                                                                                                                                                                                                                                                                                                                                                                          
|            | 3.1 |             | Third
 Amended and Restated Certificate of Incorporation of GenTek Inc., effective
 as of May 9, 2006 (incorporated by reference to the Registrants Form 10-Q,
 dated March 31, 2006, as filed with the Securities and Exchange Commission).                                                                                                                                                            
|            |     |             |                                                                                                                                                                                                                                                                                                                                                                                                          
|            | 3.2 |             | Second
 Amended and Restated By-Laws of GenTek Inc., effective as of August 7, 2007
 (incorporated by reference to the Registrants Form 8-K, dated August 7,
 2007, as filed with the Securities and Exchange Commission).                                                                                                                                                                              

-79-

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| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 4.1   |  | GenTek Inc.
 Tranche B Warrant Agreement, dated as of November 10, 2003 (incorporated by
 reference to the Registrants Form 8-A to amend its Form 10, dated November
 10, 2003, as filed with the Securities and Exchange Commission).                                                                                                                                             
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 4.2   |  | GenTek Inc.
 Tranche C Warrant Agreement, dated as of November 10, 2003 (incorporated by
 reference to the Registrants Form 8-A to amend its Form 10, dated November
 10, 2003, as filed with the Securities and Exchange Commission).                                                                                                                                             
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.1  |  | Form of
 Registration Rights Agreement by and among the Company and the holders named
 therein dated as of November 10, 2003 (incorporated by reference to the
 Registrants Form 8-A to amend its Form 10, dated November 10, 2003, as filed
 with the Securities and Exchange Commission).                                                                                        
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.2  |  | GenTek Inc.
 Amended and Restated 2003 Management and Directors Incentive Plan
 (incorporated by reference to the Registrants proxy statement dated April
 17, 2007, as filed with the Securities and Exchange Commission).                                                                                                                                                        
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.3  |  | GenTek Key
 Employee Retention Plan (incorporated by reference to Exhibit 10.14 to the
 Registrants Form 10-K/A dated April 30, 2003, as filed with the Securities
 and Exchange Commission).                                                                                                                                                                                      
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.4  |  | Form of
 Indemnification Agreement (incorporated by reference to the Registrants Form
 10-K dated December 31, 2003, as filed with the Securities and Exchange
 Commission).                                                                                                                                                                                                       
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.5  |  | GenTek
 Performance Plan (incorporated by reference to the Exhibit 10.3 to the
 Registrants Amendment No. 2 to Form 10, dated April 8, 1999, as filed with
 the Securities and Exchange Commission).                                                                                                                                                                               
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.6  |  | Share
 Purchase Agreement by and among ADC Telecommunications Inc., Krone
 International Holding Inc., Krone Digital Communications Inc., GenTek Holding
 Corporation, and GenTek Inc., dated March 25, 2004 (incorporated by reference
 to Exhibit 10.14 of the Registrants Form 10-Q for the period ended March 31,
 2004, as filed with the Securities and Exchange Commission).
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.7  |  | Form of
 Director Restricted Stock Agreement (incorporated by reference to the
 Registrants Form 10-Q dated June 30, 2004, as filed with the Securities and
 Exchange Commission).                                                                                                                                                                                                 
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.8  |  | Form of
 Performance Contingent Restricted Stock Agreement (incorporated by reference
 to the Registrants Form 10-Q dated June 30, 2007, as filed with the
 Securities and Exchange Commission).                                                                                                                                                                                   
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.9  |  | Form of
 Restricted Stock Agreement (incorporated by reference to the Registrants
 Form 10-Q dated June 30, 2004, as filed with the Securities and Exchange
 Commission).                                                                                                                                                                                                          
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                     
| | 10.10 |  | Form of
 Stock Option Agreement (incorporated by reference to the Registrants Form
 10-Q dated June 30, 2004, as filed with the Securities and Exchange
 Commission).                                                                                                                                                                                                              

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| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.11 |  | Form of
 Performance Cash Award Agreement (incorporated by reference to the
 Registrants Form 10-Q dated June 30, 2004, as filed with the Securities and
 Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                                                
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.12 |  | Master
 Settlement Agreement, dated April 30, 2004, among GenTek Holding Corporation,
 General Chemical LLC, and Honeywell International Inc. (incorporated by
 reference to the Registrants Form 10-Q dated September 30, 2004, as filed
 with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                       
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.13 |  | First Lien
 Credit and Guaranty Agreement among GenTek, Inc., GenTek Holding LLC, as
 borrower, the other guarantors party thereto, the lenders party thereto from
 time to time, Goldman Sachs Credit Partners L.P., as joint lead arranger,
 General Electric Capital Corporation, as co-administrative agent, and Bank of
 America, N.A., as co-administrative agent and collateral agent, dated
 February 28, 2005 (incorporated by reference to the Registrants Form 10-K
 dated December 31, 2005, as filed with the Securities and Exchange
 Commission).                                               
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.14 |  | Second Lien
 Credit and Guaranty Agreement among GenTek, Inc., GenTek Holding LLC, as
 borrower, the other guarantors party thereto, the lenders party thereto from
 time to time, Goldman Sachs Credit Partners L.P., as joint lead arranger,
 sole bookrunner, syndication agent, administrative agent and as collateral
 agent, Bank of America Securities LLC, as joint lead arranger and Bank of
 America, N.A., as documentation agent, dated February 28, 2005 (incorporated
 by reference to the Registrants Form 10-K dated December 31, 2005, as filed
 with the Securities and Exchange Commission).
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.15 |  | Employment
 Agreement with William E. Redmond, Jr., dated May 23, 2005 (incorporated by
 reference to the Registrants Form 10-Q dated September 30, 2005, as filed
 with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                              
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.16 |  | Employment
 agreement with Andrew Hines, dated September 21, 2005 (incorporated by
 reference to the Registrants Form 10-Q dated September 30, 2005, as filed
 with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                   
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.17 |  | Employment
 agreement with Maximo Vargas, dated September 22, 2005 (incorporated by
 reference to the Registrants Form 10-Q dated September 30, 2005, as filed
 with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                                  
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.18 |  | Asset
 Purchase Agreement dated April 3, 2006 between Noma Company and Southwire
 Canada Company (incorporated by reference to the Registrants Form 8-K dated
 April 3, 2006, as filed with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                           
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.19 |  | First
 Amendment to First Lien Credit and Guaranty Agreement and Pledge and Security
 Agreement dated April 26, 2006 (incorporated by reference to the Registrants
 Form 8-K dated April 26, 2006, as filed with the Securities and Exchange
 Commission).                                                                                                                                                                                                                                                                                                                                                     
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 10.20 |  | First
 Amendment to Second Lien Credit and Guaranty Agreement dated April 26, 2006
 (incorporated by reference to the Registrants Form 8-K dated April 26, 2006,
 as filed with the Securities and Exchange Commission).                                                                                                                                                                                                                                                                                                                                                                                       

-81-

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| |       |  |                                                                                                                                                                                                                                                                                  
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 10.21 |  | Asset
 Purchase Agreement dated June 30, 2006 between Defiance, Inc., Precision
 Engine Products Corp. and Stanadyne Corporation (incorporated by reference to
 the Registrants Form 8-K dated June 30, 2006, as filed with the Securities
 and Exchange Commission).           
| |       |  |                                                                                                                                                                                                                                                                                  
| | 10.22 |  | Second
 Amendment to First Lien Credit and Guaranty Agreement dated July 14, 2006
 (incorporated by reference to the Registrants Form 10-Q dated June 30, 2006,
 as filed with the Securities and Exchange Commission).                                                         
| |       |  |                                                                                                                                                                                                                                                                                  
| | 10.23 |  | Second
 Amendment to Second Lien Credit and Guaranty Agreement dated July 14, 2006
 (incorporated by reference to the Registrants Form 10-Q dated June 30, 2006,
 as filed with the Securities and Exchange Commission).                                                        
| |       |  |                                                                                                                                                                                                                                                                                  
| | 10.24 |  | Letter
 Agreement with James Imbriaco, dated July 27, 2006 (incorporated by reference
 to the Registrants Form 8-K dated August 4, 2006, as filed with the
 Securities and Exchange Commission).                                                                                
| |       |  |                                                                                                                                                                                                                                                                                  
| | 10.25 |  | Asset
 Purchase Agreement dated December 22, 2006 between Electrical Components
 International, Inc., Noma Holding Inc. and GenTek Inc. (incorporated by
 reference to the Registrants Form 8-K dated December 22, 2006, as filed with
 the Securities and Exchange Commission).
| |       |  |                                                                                                                                                                                                                                                                                  
| | 10.26 |  | Third
 Amendment to First Lien Credit and Guaranty Agreement and waiver dated March
 19, 2007 (incorporated by reference to the Registrants Form 10-K dated
 December 31, 2006, as filed with the Securities and Exchange Commission).                                          
| |       |  |                                                                                                                                                                                                                                                                                  
| | 10.27 |  | GenTek Inc.
 Directors Deferred Compensation Program (incorporated by reference to the
 Registrants Form 10-Q dated September 30, 2007, as filed with the Securities
 and Exchange Commission).                                                                                 
| |       |  |                                                                                                                                                                                                                                                                                  
| | 21    |  | Subsidiaries
 of the Registrant.                                                                                                                                                                                                                                                 
| |       |  |                                                                                                                                                                                                                                                                                  
| | 23    |  | Consent of
 Independent Registered Public Accounting Firm.                                                                                                                                                                                                                       
| |       |  |                                                                                                                                                                                                                                                                                  
| | 31.1  |  | GenTek
 Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
 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)/15d-14(a) as adopted
 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                            
| |       |  |                                                                                                                                                                                                                                                                                  
| | 32    |  | Certification
 of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C.
 Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
 2002.                                                                                                

-82-

---



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, on the 17 day of March, 2008.

| |             |                             |                                        
| | ----------- | --------------------------- | ---------------------------------------
| | GENTEK INC.
| |            
| | By:         | /s/ William E. Redmond, Jr.
| |             |                            
| |             | Name:                       | William E. Redmond, Jr.                
| |             | Title:                      | President and Chief Executive
  Officer

Pursuant
to the requirements of the Securities Exchange Act of 1934, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

|                                              |  |                                            |  |               
|--------------------------------------------- |  | ------------------------------------------ |  | --------------
|Signature                                     |  | Title                                      |  | Date          
|                                              |  |                                            |  |               
|                                              |  |                                            |  |               
|Principal executive officer:                  |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ William E. Redmond, Jr.                   |  | President and Chief Executive Officer      |  | March 17, 2008
|                                              |  |                                            |  |               
|William
  E. Redmond, Jr.                     |  |                                            |  |               
|                                              |  |                                            |  |               
|Principal financial and
  accounting officer: |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ Thomas B. Testa                           |  | Vice President and Chief Financial Officer |  | March 17, 2008
|                                              |  |                                            |  |               
|Thomas
  B. Testa                             |  |                                            |  |               
|                                              |  |                                            |  |               
|Directors:                                    |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ John G. Johnson, Jr.                      |  | Chairman and Director                      |  | March 17, 2008
|                                              |  |                                            |  |               
|John
  G. Johnson, Jr.                        |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ Henry L. Druker                           |  | Director                                   |  | March 17, 2008
|                                              |  |                                            |  |               
|Henry
  L. Druker                             |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ Kathleen R. Flaherty                      |  | Director                                   |  | March 17, 2008
|                                              |  |                                            |  |               
|Kathleen
  R. Flaherty                        |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ John F. McGovern                          |  | Director                                   |  | March 17, 2008
|                                              |  |                                            |  |               
|John
  F. McGovern                            |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ William E. Redmond, Jr.                   |  | Director                                   |  | March 17, 2008
|                                              |  |                                            |  |               
|William
  E. Redmond, Jr.                     |  |                                            |  |               
|                                              |  |                                            |  |               
|/s/ Richard A. Rubin                          |  | Director                                   |  | March 17, 2008
|                                              |  |                                            |  |               
|Richard
  A. Rubin                            |  |                                            |  |               

-83-

---



GENTEK
INC.
INDEX TO FINANCIAL STATEMENT SCHEDULE

|                                                  |   
|------------------------------------------------- | --
|Schedule II  Valuation and
  Qualifying Accounts | 85

Schedules required by Article 12 of Regulation S-X, other than those
listed above, are omitted because of the absence of the conditions under which
they are required or because the required information is included in the
consolidated financial statements or notes thereto.

-84-

---



GENTEK INC.Valuation and Qualifying Accounts

|                                                              |  |                                    |       |                                 |   |                            |  |        |        |                            |   |       |   |   |       | 
|------------------------------------------------------------- |  | ---------------------------------- | ----- | ------------------------------- | - | -------------------------- |  | ------ | ------ | -------------------------- | - | ----- | - | - | ----- | 
|                                                              |  | Balance at
  Beginning of
  Period |       | Additions
  Charged
  To Income |   | Deductions
  From Reserves |  | Other* |        | Balance at
  End of Period |  
|                                                              |  |                                    |       |                                 |   |                            |  |        |        |                            |  
|                                                              |  |                                    |       |                                 |   |                            |  |        |        |                            |   |       |   |   |       | 
|Year ended December 31, 2007Allowance for
  doubtful accounts |  | $                                  | 3,181 |                                 | $ | 272                        |  | $      | (1,143 | )                          | $ | 1,024 |   | $ | 3,334 | 
|Year ended December 31, 2006Allowance for
  doubtful accounts |  | $                                  | 2,757 |                                 | $ | 409                        |  | $      | (670   | )                          | $ | 685   |   | $ | 3,181 | 
|Year ended December 31, 2005Allowance for
  doubtful accounts |  | $                                  | 4,801 |                                 | $ | 576                        |  | $      | (2,411 | )                          | $ | (209  | ) | $ | 2,757 | 

|  |                                                                                                                       
|- | ----------------------------------------------------------------------------------------------------------------------
|* | Primarily
  foreign exchange, except for an $809 addition in 2007 for a customer deduction
related to a warranty issue

-85-

---