**United States**

**SECURITIES AND EXCHANGECOMMISSION**

**Washington,D.C.  20549**

**FORM10-K/A**

**(Mark one) ****x****ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE**

**SECURITIESEXCHANGE ACT OF 1934**

**For thefiscal year ended December 31, 2006**

**OR**

**o****TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIESEXCHANGE ACT OF 1934**

**For thetransition period from                     to                     **

**Commissionfile number 333-123598**

**J.B. POINDEXTER & CO., INC.**

(Exact name ofregistrant as specified in its charter)

| **Delaware**                     |   | **76-0312814**                        |
|----------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of |   | (I.R.S. Employer  Identification No.) |
| incorporation or  organization)  |   |                                  |

 

**1100Louisiana**

### **Suite 5400**

### **Houston, Texas 77002**

(Address ofprincipal executive offices)

(Zip Code)

**(713)  655-9800**

(Registrant’stelephone number, including area code)

Securities registered pursuant to Section 12(b) of theAct:  **None**

Name of each exchange which registered:  **None**

Securities registered pursuant to Section 12(g) of theAct:  **None**

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yeso No x

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

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days. Yes  x   No  o

Indicate by check mark if disclosure of delinquent filers pursuant toItem 405 of Regulation S-K is not contained herein, and will not be contained,to the best of the registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. x

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

The aggregate market value of the voting and non-voting common equityheld by non-affiliates as of March 30, 2007 was $0.00.

Indicate by check mark whether the registrant is a large acceleratedfiler, an accelerated filer, or a non-accelerated filer (as defined in Rule12b-2 of the Exchange Act).  (Check One):

o   Large acceleratedfiler       o   Acceleratedfiler       x   Non-acceleratedfiler

As of March 30, 2007, the registrant had 100,000 shares authorized and3,059 shares of common stock issued.

Documentsincorporated by reference. None

 

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**J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES**

**Table of Contents**
| **PART I**   | ** **                                                                                                          | ** ** |
|--------------|---------------------------------------------------------------------------------------------------------------------|------------|
| ** **   | ** **                                                                                                          | ** ** |
| Item  1.     | Business                                                                                                            |       |   |
| Item  1a.    | Risk  Factors                                                                                                       |       |   |
| Item 1b.     | Unresolved  Staff Comments                                                                                          |       |   |
| Item  2.     | Properties                                                                                                          |       |   |
| Item 3.      | Legal Proceedings                                                                                                   |       |   |
| Item 4.      | Submission  of Matters to a Vote of Security Holders                                                                |       |   |
|         |                                                                                                                |       |   |
| **PART  II** | ** **                                                                                                          | ** ** |
| Item 5.      | Market for  Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases  of Equity Securities |       |   |
| Item 6.      | Selected  Financial Data                                                                                            |       |   |
| Item 7.      | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                         |       |   |
| Item 7a.     | Quantitative  and Qualitative Disclosure About Market Risk                                                          |       |   |
| Item 8.      | Financial  Statements and Supplementary Data                                                                        |       |   |
| Item 9.      | Changes in  and Disagreements with Accountants on Accounting and Financial Disclosure                               |       |   |
| Item 9a.     | Controls and  Procedures                                                                                            |       |   |
| Item 9b.     | Other Information                                                                                                   |       |   |
|         |                                                                                                                |       |   |
| **Part III** | ** **                                                                                                          | ** ** |
| Item 10.     | Directors,  Executive Officers and Corporate Governance                                                             |       |   |
| Item 11.     | Executive  Compensation                                                                                             |       |   |
| Item 12.     | Security  Ownership of Certain Beneficial Owners and Management and Related Stockholder  Matters                    |       |   |
| Item 13.     | Certain  Relationships and Related Transactions, and Director Independence                                          |       |   |
| Item 14.     | Principal  Accountant Fees and Services                                                                             |       |   |
|         |                                                                                                                |       |   |
| **Part IV**  | ** **                                                                                                          | ** ** |
| Item 15.     | Exhibits and Financial Statement Schedules                                                                          |       |   |

 

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**J.B. POINDEXTER & CO.,INC. AND SUBSIDIARIES**

**PART I**

**Item 1.**                              Business

**Overview**

**J.B.Poindexter & Co., Inc and subsidiaries are filing this amendment to itsAnnual Report on Form 10-K for the year ended December 31, 2006, to amend andrestate consolidated financial statements and other financial information for2006 and for each quarter therein.  Inaddition, we are filing amendments to our Quarterly Reports on Form 10-Q foreach of the periods ended September 30, June 30 and March 31, 2006, to amendand restate condensed consolidated financial statements for the first threequarters of 2006.  The restatementadjusts our accounting for inventory as a result of errors in the inventoryreconciliation process.  As of December31, 2006, we wrote down inventory by $1.1 million, which reduced our operatingincome from $29.9 million to $28.8 million for the year then ended.  Correspondingly, net income was reduced from$8.9 million to $8.2 million.  Theanalysis of this adjustment by quarter is included in Note 3 to theconsolidated financial statements.**

We operate primarily transportation-relatedmanufacturing businesses.  Our operatingsubsidiaries are Morgan Truck Body, LLC (“Morgan”), Morgan Olson, LLC (“MorganOlson”), Truck Accessories Group, LLC (“Truck Accessories”), EFP, LLC (“EFP”),MIC Group, LLC (“MIC Group”), Federal Coach, LLC (“Federal Coach”), and EagleSpecialty Vehicles, LLC (“Eagle Coach”). We acquired Eagle Coach on January 3,2006, and it and Federal Coach comprise the Specialty Vehicle Group.  The Specialty Vehicle Group, MIC Group andEFP comprise our Specialty Manufacturing Division (“Specialty Manufacturing”).

Unlessthe context otherwise requires, the “Company”, “we”, “our” or “us” refers toJ.B. Poindexter & Co., Inc. (“JBPCO”) together with its consolidatedsubsidiaries. We are wholly owned by John Poindexter.  Effective September 30, 2006, each of Morgan(formerly Morgan Corporation), Morgan Olson (formerly Morgan OlsonCorporation), Truck Accessories (formerly Truck Accessories Group, Inc.), EFP(formerly EFP Corporation), MIC Group (formerly MIC Group, Inc.) and EagleCoach (formerly Eagle Specialty Vehicles, Inc.) was, by means of a merger orstatutory conversion, converted into a Delaware limited liability company. Eachof those subsidiaries was and remains a wholly owned subsidiary of the Companywith only the form of entity being changed.

During March 2004, we issued $125 million inaggregate principal amount of 8.75% senior notes due 2014 (“8.75% Notes”). Withthe proceeds of that offering we redeemed the $76 million in aggregateprincipal amount of the then outstanding 12.50% senior secured notes due 2007,paid accrued interest of approximately $4 million and repaid outstandingborrowings under our revolving credit facilities and other loans ofapproximately $37 million.  At thesame time as the issuance of $125 million in aggregate principal amount of8.75% Notes, we entered into a new $30 million revolving credit facilitywith a new lender. We currently have no borrowings outstanding under thisrevolving credit facility.  InMay 2004 and January 2005, we issued an additional $30 million and$45 million, respectively, in aggregate principal amount of our 8.75% Notes,the proceeds from which increased our cash and cash equivalents.  We operate our business in four differentsegments: Morgan, Morgan Olson, Truck Accessories and Specialty Manufacturing.Please see Note 3 of our financial statements included herein for a descriptionof financial information by segments.

**Morgan**

We believe Morgan is the leading United Statesmanufacturer of commercial truck bodies for medium-duty trucks based uponestimated market share and total 2006 sales volume. Morgan generallymanufactures products for medium-duty trucks having a gross vehicular weightrating of between 10,001 pounds (Class 3) and 33,000 pounds(Class 7). Trucks equipped with Morgan’s products are commonly used in awide variety of applications, including general freight deliveries, moving andstorage and distribution of refrigerated consumables. Morgan also offersservice programs for its truck bodies.

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Morgan reaches a broad base of customers in the UnitedStates and Canada through its sales force and its more than 180 authorizeddistributors and Morgan authorized service centers.  Its customers include rental companies, truckdealers, leasing companies and companies that operate fleets of deliveryvehicles. Through nine manufacturing plants and seven service facilities in strategiclocations throughout North America, Morgan can provide timely product deliveryand service to its customers.

Theprincipal products Morgan manufactures and sells are:

·             dry freight bodies that are typicallyfabricated with prepainted aluminum or fiberglass-reinforced plywoodpanels, hardwood floors and various door configurations to accommodate end userloading and unloading requirements;

·             refrigerated van bodies fabricated withinsulated aluminum or fiberglass-reinforced plywood panels thataccommodate controlled temperature and refrigeration needs of end users;

·             aluminum or fiberglass-reinforcedplywood cutaway van bodies that are installed only on cutaway chassis and areavailable with or without access to the cargo area from the cab; and

·             stake bodies, which are flatbeds with variousconfigurations of removable sides.

Morgan manufactures its products to customerspecifications and installs its products on truck chassis supplied by itscustomers.

***Customers and sales. ***Morgan principallygenerates revenue through three sources:

·             sales of truck bodies to commercial divisionsof leasing companies, companies with fleets of delivery vehicles, truck dealersand distributors (“Commercial” sales);

·             sales of truck bodies to consumer rentalcompanies (“Consumer Rental” sales); and

·             sales of parts and service.

Morgan’s net sales constituted 54% of our consolidatednet sales in 2004, 54% in 2005 and 48% in 2006. Morgan makes sales of truck bodies through its sales force directly tolarge end user customers, including Penske and Ryder, and to distributors andtruck dealers. Commercial sales of truck bodies, not including Consumer Rentalsales, constituted 80% of Morgan’s net sales in 2004, 86% in 2005 and 85% in2006.

Morgan has an independent authorized distributor networkof 45 distributors nationwide. Most distributors sell a wide variety of trucksor related equipment to truck dealers and end users. Generally, distributorssell Morgan products in a specified territory with limited exclusivity.  Morgan also sells its products directly totruck dealers, selling to more than 120 dealers in 2006.

Consumer Rental sales are composed of sales to companiesthat maintain large fleets of one-way and local hauling vehicles available forrent to the general public. Morgan makes these sales through a bid process andnegotiation directly with these companies through its sales force. PrimaryConsumer Rental customers include Penske, U-Haul and Budget. Morgan negotiatescontracts for Consumer Rental sales annually, usually in late summer to earlyfall, with products to be shipped during the first half of the next year. Thesesales are seasonal, with substantially all product shipments occurring thefirst six months of the year. Consumer Rental sales tend to be the mostvolatile and price-sensitive aspect of Morgan’s business, and depend on factorssuch as product mix and delivery schedules. Consumer Rental sales constituted13% of Morgan’s net sales in 2004, 9% in 2005 and 10% in 2006.

Morgan’s two largest customers, Ryder and Penske,together have historically represented approximately 40% to 50% of Morgan’stotal net sales. Each has been Morgan’s customer for approximately20 years and we believe

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relations with each are good. Sales to these customersrepresented 25% of our consolidated net sales in 2004, 24% in 2005 and 22% in2006.

Morgan also builds truck bodies and installs them onchassis acquired under a bailment pool agreement with General Motors AcceptanceCorporation.  The truck is then placedwith a dealer for display and ultimate sale. Pool program sales were $0.5 million during 2006.

Morgan offers limited service programs at its own servicefacilities and its authorized distributors. Service sales constituted 5% ofMorgan’s net sales in 2004, 3% in 2005 and 4% in 2006.

***Manufacturing and supplies. ***Morgan, which isheadquartered in Morgantown, Pennsylvania, operates manufacturing, bodymounting, and parts and service facilities in Arizona, California, Florida,Georgia, Pennsylvania, Texas, Wisconsin, and Ontario, Canada. Morgan also hassales, service and body mounting facilities in Colorado, Florida, Georgia,Pennsylvania, Texas, Wisconsin, and Ontario, Canada. All of Morgan’s domesticmanufacturing facilities are ISO 9000 certified.

Generally, Morgan engineers its products to thespecifications of the customer. Typically, the customer places an order andarranges for a truck chassis manufacturer to deliver the truck chassis toMorgan. Morgan monitors delivery schedules from chassis manufacturers to ensureit has appropriate levels of labor and materials to fulfill orders. Morganmanufactures and installs the body on the customer’s chassis and the customeror Morgan arranges for delivery of the completed truck. Morgan’s productioncycle ranges from three to seven days for dry freight products and up to28 days for more complex refrigerated products.  Delays in chassis deliveries can disruptMorgan’s operations and can increase its working capital requirements.

Because contracts for Consumer Rental sales are enteredinto in the summer or fall but production does not begin generally until thefollowing January, Morgan has a significant backlog of Consumer Rental salesorders at the end of each year that is processed through May of the followingyear. In addition, Morgan typically maintains a significant backlog ofCommercial sales. Morgan’s backlog at December 31, 2006 was$114.6 million compared to $94.7 million at December 31, 2005.Morgan expects to complete all of the orders in its 2006 backlog during 2007.

Morgan provides limited warranties against constructiondefects in its products. These warranties generally allow for the replacementor repair of defective parts or workmanship for up to five years following thedate of sale. Warranty costs have not had a material adverse effect on itsbusiness.

Morgan maintains an inventory of raw materials necessaryto build truck bodies according to customers’ orders. Because Morgan usuallymanufactures its products to customer orders, it does not maintain substantialinventories of finished goods.

Morgan’s principal raw materials include aluminum, steel,fiberglass-reinforced plywood and hardwood. Morgan acquires raw materialsfrom a variety of sources and has not experienced significant shortages ofmaterials. However, there are a limited number of suppliers of fiberglass-reinforcedplywood, an important truck body material. While Morgan has not experienced adisruption in supply or a shortage of fiberglass-reinforced plywood, sucha disruption or shortage could occur in the future. Morgan may not be able toreplace its existing supply of fiberglass-reinforced plywood onacceptable terms or at all. To manage its supply costs, Morgan sometimes entersinto long-term supply contracts on principal materials to secure prices for upto one year if considered necessary.

***Industry. ***Industry revenue andgrowth depend primarily on the demand for delivery vehicles in the generalfreight, moving and storage, parcel delivery and food distribution industries,all of which are affected by general economic conditions. Replacement of oldervehicles in fleets represents an important revenue source with replacementcycles of approximately six to seven years, depending on vehicle types. Duringeconomic downturns, replacement orders are often deferred or, in some cases,older vehicles are retired without replacement. During periods of economicgrowth, as customers decide to increase their capital expenditures, sales ofdelivery trucks grow as customers make purchases they deferred in prior years.

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The federally mandated emission standards for dieselengines were changed effective January 1, 2007 and will change again in2010.  These standards reduce the amountof pollutants allowed to be released during the operation of the diesel enginebuilt into the truck chassis that Morgan is provided by its customers.  Historically, approximately 90% of Morgantruck bodies are installed on chassis with diesel engines.  Truck operators must evaluate the economicimpact of the new diesel engines and have the option of changing to analternative power unit such as gasoline engines.  Our operations will be affected in 2007 and2010 as a result of the uncertain impact that the changes will have on ourcustomers’ operations.

***Competition. ***The truck bodymanufacturing industry is highly competitive. Morgan competes with threenational manufacturers: Supreme Industries, Inc., Kidron, a division ofSpecialized Vehicles Corporation, and Utilimaster Corporation, some of whichmay be larger and have more resources than Morgan. There are a large number ofsmaller manufacturers that are regionally focused. Competitive factors in theindustry include product quality, delivery time, geographic proximity ofmanufacturing facilities to customers, warranty terms, service and price. Webelieve customers value Morgan’s high-quality products, competitive pricing anddelivery times.

**Morgan Olson**

MorganOlson is one of two major manufacturers of step vans. Step vans are specializedvehicles designed for multiple-stop delivery applications and they enable thedriver of the vehicle to easily access the cargo area of the vehicle frominside the cab. Step vans are made to customer specifications for use inparcel, food, vending, uniform, linen and other delivery applications. MorganOlson’s step van bodies are installed on International, Ford, Freightliner andWorkhorse truck chassis in body sizes ranging from 11 to 30 feet. Morgan Olsonis headquartered in Sturgis, Michigan, where it has manufacturing and partsdistribution facilities.

MorganOlson’s net sales constituted 12%, 9% and 13% of our consolidated net sales in2004, 2005 and 2006, respectively.

***Customers and sales. ***Customers purchase stepvans through dealers and distributors and directly from Morgan Olson throughits direct sales force. Two customers, United Parcel Service of America, Inc.and FedEx, purchase the majority of step vans produced in the United States.The United States Postal Service has historically been a major buyer of stepvans; however, it has not placed a significant order for new step vans sincethe completion of the prior contract in early 2004 that Morgan Olsonparticipated in through two chassis manufacturers. Morgan Olson’s end usercustomers include these customers along with Frito-Lay, Inc., BimboBakeries, DHL, W.B. Mason, ARAMARK Corporation and others. The preferences andpurchasing decisions of these customers dramatically affect the results ofoperations of Morgan Olson.

Morgan Olson also sells step van body service partsthrough its dealers and distributors and directly to customers. Morgan Olson isa major supplier of service parts for step vans manufactured by it for theUnited States Postal Service under an agreement of indefinite term that isreviewed annually. The United States Postal Service has the right to terminatethe agreement for convenience at any time, but we believe Morgan Olson’srelationship with the United States Postal Service is satisfactory. However,there can be no assurance that the parts supply agreement will continue at allor for any length of time.

Morgan Olson offers aftermarket support through itsService Parts Department for both step vans manufactured by Morgan Olson anddry freight vans manufactured by Morgan.  The Service Partsbusiness allows Morgan and Morgan Olson to consolidate their parts supportfunctions, with dedicated fabrication, warehousing, and shippingfacilities.  This serviceprovides fleet customers with a full range of parts and partsassemblies for their vehicles. Morgan Olson Service Parts and the Morgan Serviceand Repair Centers offer combined support that we believe gives both companiesa competitive advantage.

***Manufacturing and supplies. ***Morgan Olson has ISO9000 certified manufacturing and parts distribution facilities in Sturgis,Michigan.

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Generally, Morgan Olson manufactures its products to customerspecifications. Typically, the customer places an order and arranges for atruck chassis manufacturer to deliver a truck chassis to Morgan Olson. MorganOlson manufactures the complete truck body, including the installation ofwindows, doors, instrument panels, seating, wiring, painting and decalapplication. The customer arranges for delivery of the completed truck.

At December 31, 2006, Morgan Olson’s total backlogwas $25.1 million, compared to $9.3 million at December 31, 2005. Weexpect that Morgan Olson will fill all 2006 backlog orders in 2007.

Morgan Olson provides a limited warranty againstconstruction defects in its products. These warranties generally provide forthe replacement or repair of defective parts or workmanship for up to five yearsfollowing the date of sale. Warranty costs have not had a material adverseeffect on its business.

Morgan Olson maintains an inventory of raw materialsnecessary to build step van bodies. Because Morgan Olson manufactures itsproducts to customer orders, it does not maintain substantial inventories offinished goods.  Principal raw materialsinclude steel and aluminum and raw materials are acquired from a variety ofsources that have not experienced significant shortages. Morgan Olson has takenadvantage of the combined purchasing power of our companies, including Morgan,thereby generating savings on raw materials common to our businesses.

Morgan Olson’s customers purchase their truck chassisfrom major truck manufacturing companies. The delivery of truck chassis toMorgan Olson depends upon truck manufacturers’ production schedules, which arebeyond Morgan Olson’s control. Delays in chassis deliveries can disrupt MorganOlson’s operations and can increase its working capital requirements.

***Industry. ***Industry revenue andgrowth depend primarily on the demand for delivery vehicles, which is affectedby general economic conditions. Because of the concentration of customers inthe industry, the demand for delivery vehicles is significantly influenced bythe requirements of the United States Postal Service, FedEx and United ParcelService of America, Inc. Replacement of older vehicles in fleets represents animportant revenue source, with replacement cycles varying, depending on vehicletypes and usage. During economic downturns, replacement orders are oftendeferred or, in some cases, older vehicles are retired without replacement.During periods of economic growth, as customers decide to increase theircapital expenditures, sales of delivery trucks grow as customers make purchasesthat were deferred in prior years.

The federally mandated emission standards for dieselengines were changed effective January 1, 2007 and will change again in 2010.Morgan Olson’s operations in 2007 and 2010 will be affected by the uncertainimpact changed standards will have on its customers.

***Competition. ***The step van bodymanufacturing industry is highly competitive. Morgan Olson competes with oneother major manufacturer of step van bodies, Utilimaster, which is larger andmay have more resources than Morgan Olson. Competitive factors in the industryinclude product quality, delivery time, warranty terms, aftermarket service andprice.

**TruckAccessories**

We believe Truck Accessories, which isheadquartered in Elkhart, Indiana, is the leading manufacturer of pickup truckcaps and tonneaus for the combined United States and Canadian market.Truck Accessories markets its products under the brand names Leer, Century,Raider, LoRider, BoxTop and Pace Edwards.

Caps and tonneaus provide an engineered,stylized enclosure for the bed of pickup trucks, transforming them intolockable weather-protected storage areas. Truck Accessories’ truck caps andtonneaus offer customers a variety of designs and features, including anumber of distinctive styles, allowing them to customize the look andutility of their pickup trucks.  The Truck Accessories product line oftruck caps and tonneaus ranges from standard to premium andis differentiated by features, styling and brand name.  Pace Edwardsoffers a variety of retractable hard tonneau covers that can be mechanicallyretracted into an integrated storage canister behind the pickup truck cab.

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State Wide manufactures windows and doors used byTruck Accessories, other cap and tonneau manufacturers, and horse trailermanufacturers in the assembly of their products.

Key pickup truck cap features include shape anddesign, color and finish, window configurations, roof racks, glass tint, trim,and interior features such as lighting, carpeting and special gear storageoptions. Tonneaus also offer a range of styling, storage and conveniencealternatives.  Caps and tonneaus can bedesigned to target specific customers.  For example, Leer offers lifestyleequipped caps for hunters, fishermen and outdoors enthusiasts that are styledand designed, through gear storage features and product appearance, to appealto these customers. Through Truck Accessories’ multiple lines of caps andtonneaus, each with numerous features and options, we believe Truck Accessoriesis the industry leader in engineering, product innovation and style.

TruckAccessories’ net sales constituted 23% of our consolidated net sales in 2004,23% in 2005 and 20% in 2006.

***Customers and sales. ***Most of TruckAccessories’ truck caps and tonneaus are purchased by individuals, smallbusinesses and fleet operators through a network of over 1,270 independent,non-exclusive dealers using brand-specific sales forces.

Pace Edwards’ retractable tonneau covers are soldprimarily through automotive accessory warehouse distributors.  State Wide sells directly to manufacturersthrough its dedicated sales team.

Truck Accessories also sells its products in Canada. In2006, foreign sales (primarily in Canada) represented approximately 14% ofTruck Accessories’ net sales and 3% of our consolidated net sales.

***Manufacturing and supplies. ******Thedesign and manufacture of Truck Accessories’ products takes place at six************manufacturingfacilities*********located in California, Indiana, Pennsylvania andWashington. During the fourth quarter of 2006, Truck Accessories announced thatit would discontinue manufacturing operations at its Canadian facility duringthe first quarter of 2007.  Consequently,the Raider product line was transferred to other facilities in the UnitedStates during February 2007.  All Raiderdealers are now supplied Raider products from these new locations although wewill maintain a sales office and sales personnel in Canada.

Typical product delivery times range from one to twoweeks from the time of order. Truck Accessories operates a fleet of trucks andtrailers to manage the efficient and timely delivery of its products to itsdealers.

TruckAccessories provides a warranty period, exclusive to the original truck owner,which is, in general but with exclusions, one year for parts, five years forpaint and lifetime for structure.  Warranty costs have not had a materialadverse effect on its business in recent years.

Truck Accessories obtains raw materials and componentsfrom a variety of sources. The most important are resin, fiberglass, paint,aluminum, locks, windows and doors. Truck Accessories purchases windows and doors for caps from two mainsuppliers, and effective March 17, 2006, acquired State Wide, one of thesesuppliers.  Although the loss of theremaining independent supplier would disrupt production activities untilinternal production is increased, we do not believe that such loss would have asignificant adverse effect on us.  TruckAccessories and three other of our companies have committed to purchase principallyall of their paint requirements through 2008 from one supplier at favorableprices.  As a result of its size andpurchasing power, Truck Accessories has maintained a stable supply of materialsand components on favorable terms and to date has not experienced significantshortages of these items.

Truck Accessories’ products are typically manufacturedupon receipt of an order from its customers and, consequently, its backlogrepresents between one and two weeks of production. Truck Accessories’ backlogwas $4.1 million at December 31, 2006 compared to $4.0 millionat December 31, 2005.

***Industry. ***Sales of caps andtonneaus correspond to the level of new pickup truck sales in the United Statesand Canada. In 2006, we estimate that 18% to 20% of new pickup trucks wereequipped with caps and tonneaus. Based

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on Truck Accessories’ market share in the United Statesand Canada of approximately 39%, we estimate that approximately 8% of newpickup trucks are equipped with Truck Accessories’ caps and tonneaus. Factorsinfluencing the automotive industry, including general economic conditions,customer preferences, new model introductions, interest rates and fuel costs,will directly influence Truck Accessories’ business. Cap and tonneau sales areseasonal, with sales typically being higher in the spring and fall than in thewinter and summer.

***Competition. ***The pickup truck cap andtonneau industry is highly competitive. Truck Accessories competes with oneother national competitor, A.R.E., Inc., and a number of smaller companiesthat are regionally focused. Competitive factors include design, features,delivery times, product availability, warranty terms, quality and price.   Based on the number of products and featuresit offers, and its ability to quickly supply product for newly introducedpickup truck models, we believe Truck Accessories is the industry leader inproduct design and available accessory options.

**Specialty Manufacturing**

Specialty Manufacturing is comprised of Specialty VehicleGroup, MIC Group and EFP, and its sales made up 11% of our consolidated netsales in 2004, 14% in 2005 and 20% in 2006. Specialty Vehicle Group represents approximately 46% of SpecialtyManufacturing’s net sales and is comprised of Federal Coach and EagleCoach.  Specialty Vehicle Groupmanufactures funeral coaches, limousines and specialized transit buses.

MIC Group represents approximately 35% of SpecialtyManufacturing’s net sales and provides contract manufacturing services forcustomers requiring precision machining of metal parts and machining andcasting services with a concentration of customers in the oil and gasexploration and development industry.

EFP represents approximately 19% of SpecialtyManufacturing’s net sales and manufactures and sells expandable polystyrene andpolypropylene foam, engineered to customer specifications for use by theautomotive, electronics, food, furniture, bath and plumbing, and applianceindustries as packaging, shock-absorbing components and material handlingproducts.

***Products.******  ******SpecialtyVehicle Group manufactures a full line of funeral coaches, family cars(modified limousines for use in funerals), limousines and specialized buses.****** ******SpecialtyVehicle’s funeral product sales represent approximately 40% of the domesticfuneral coach market.***

MIC Group is a contract manufacturer that producesprecision metal parts used in energy exploration and production, aerospace andother industries and performs machining and casting services for manufacturersof metal parts and components.

EFP manufactures and sells material handling andprotective packaging products including shock-absorbing packaging material,reusable trays and containers that are used for transporting components and theprotection of customers’ products. EFP also produces block and sheet productsused by the RV industry for producing sidewalls and doors and the constructionindustry for insulation and commercial roofing applications. EFP has alsorecently introduced a line of temperature-controlled shipping containers forthe protection of temperature-sensitive products such as food and medicalproducts.

***Customers and sales. ******SpecialtyVehicle Group manufactures and sells its line of funeral coaches, limousinesand specialized buses to end users, such as livery companies, and approximately48 authorized dealers.  Its largestcustomer represented approximately 8% of the total net sales of SpecialtyManufacturing in 2005 and 2006.***

MIC Group sells products to international oilfieldservice companies and a variety of businesses in various industries. Oneoilfield service customer represented approximately 18% of the total sales ofSpecialty Manufacturing in 2004, 15% in 2005 and 15% in 2006.

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EFP’s customers include manufacturers that requirespecial packaging materials for protecting their products, as well as companiesin the automotive industry.  ***Onecustomer represented approximately 7% of the total sales of SpecialtyManufacturing in 2004, 3% in 2005 and 3% in 2006.***

***Manufacturing and supplies. ***Specialty Manufacturing’soperations are located in Alabama, Arkansas, Indiana, Ohio, Tennessee, Texas,Wisconsin and Mexico. Its facilities in Alabama, Indiana and Texas are ISO 9000certified and its facility in Wisconsin is QS 9000 certified.

Specialty Vehicle Group engineers its product to its ownspecifications as well as those of chassis manufacturers in order to maintainthe original equipment manufacturer’s warranty. Specialty Vehicle Group takes delivery of a truck chassis or a modifiedsedan, usually manufactured by the Cadillac division of General Motors or theLincoln division of Ford, and modifies it to its specifications.  Bus bodies are built on cutaway chassis andfuneral coaches and limousines are manufactured from a modified sedan byremoving part of the interior contents, lengthening the body and building therequired vehicle.  The production processtypically takes between four and six weeks. Specialty VehicleGroup utilizes metals, polymer resins, wood, fiberglass, andpetrochemical-based products (paints, plastics, sealants and lubricants) andparticipates in the paint supply contract negotiated by Truck Accessories.

MIC Group performs a broad range of services includingcomputer-controlled precision machining and welding, electrostaticdischarge machining, electron beam welding, trepanning, gun drilling andinvestment casting. MIC Group utilizes ferrous and nonferrous materialsincluding stainless steel, alloy steels, nickel-based alloys, titanium,brass, beryllium-copper alloys and aluminum.

EFP’s products are manufactured from a wide variety ofmaterials including expandable polystyrene, polypropylene, polyethylene andresins which are subject to cost fluctuations based on changes to the price ofoil and benzene in the international markets.

TheSpecialty Vehicle Group provides a warranty on its products for a period of 36months or 36,000 miles on the section of the body and parts manufactured forfuneral coaches and funeral limousines, 12 months or 12,000 miles on the bodyand parts manufactured for bus bodies and 24 months or 24,000 miles on theportion of the body and parts manufactured for limousines.  MIC Groupand EFP do not provide warranties on their products.  Warranty costs have not had a materialadverse effect on Specialty Manufacturing’s business.

SpecialtyManufacturing’s backlog at December 31, 2006 was $54.1 million compared to$35.7 million at December 31, 2005. Materials are obtained from a varietyof sources and Specialty Manufacturing has not experienced significantshortages in materials.

***Industry. ******SpecialtyVehicle Group’s funeral products are used by funeral operators and salesgenerally increase with the introduction of new models by the OEMs.  VIP limousines and small to medium-sizedbuses are purchased by livery companies, churches and small tour bus operatorswhose businesses are influenced by the general economy.***

MIC Group’s services are used by companies in theautomotive, aerospace and other industries with a concentration of companiesinvolved in oil and gas exploration. The demand for equipment and servicessupplied to the oilfield service industry is directly correlated to the levelof worldwide oil and gas drilling activity.

The majority of EFP’s products are manufactured for useby manufacturing companies in other industries; economic conditions that affectthose other industries will influence its operations.

Growth or downturns in the general economy andspecifically the entertainment, automotive, electronics, furniture andappliance industries have a corresponding effect on Specialty Manufacturing’sbusiness.

***Competition. ******SpecialtyVehicles competes with one major manufacturer of funeral coaches and with otherbusinesses engaged in the manufacture of limousines and***passenger shuttle/executive buses.

9

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MIC Group competes with other businesses engaged in themachining, casting and manufacturing of parts and equipment utilized in the oiland gas exploration, aerospace and other industries.

EFP competes with a large number of other molded,expandable plastic producers.

Some of Specialty Manufacturing’s competitors may belarger and have more resources.  Price,delivery times, technological know-how, design and capacity are the primarycompetitive factors in Specialty Manufacturing’s industries.

**Trademarks and patents**

We own rights to certain presentations of TruckAccessories’ Leer brand name, which we believe are valuable because we believethat Leer is recognized as being a leading brand name.  We own rights to the Federal Coach and EagleCoach names.  We also own rights tocertain other trademarks and trade names, including certain presentations ofMorgan’s name. Although these and other trademarks and trade names used by ushelp customers differentiate our product lines from those of competitors, webelieve that the trademarks or trade names themselves are less important tocustomers than the quality of the products and services. Our subsidiaries,principally Morgan, EFP and Eagle Coach, hold, directly or indirectly throughsubsidiaries, patents on certain products and components used in the manufacturingprocesses. We do not believe that the loss of any one patent would have amaterial adverse effect on us.

**Employees**

At December 31, 2006, we had approximately 4,500full-time employees and an average of 4,625 full-time employees throughout theyear.  Personnel are unionized only atEFP’s Decatur, Alabama facility (covering approximately 60 persons, with acontract expiring in August 2009). We believe that relations with ouremployees are good.

**Environmentalmatters**

Ouroperations are subject to a variety of federal, state and local environmentaland health and safety statutes and regulations, including those relating toemissions to the air, discharges to water, treatment, storage and disposal ofwaste and remediation of contaminated sites. In certain cases, theserequirements may limit the productive capacity of our operations. Certain laws, including the Federal ComprehensiveEnvironmental Response, Compensation, and Liability Act of 1980, as amended (“Superfund”)impose strict, and under certain circumstances, joint and several, liabilityfor costs to remediate contaminated sites upon designated responsible partiesincluding site owners or operators and persons who dispose of wastes at, ortransport wastes to, such sites. Some of our operations also require permitswhich may restrict our activities and which are subject to renewal,modification or revocation by issuing authorities. In addition, we generatenon-hazardous wastes, which are also subject to regulation under applicableenvironmental laws.

From time to time, we have received notices ofnoncompliance with respect to our operations which have typically been resolvedby investigating the alleged noncompliance, correcting any noncompliantconditions and paying minor fines, none of which individually or in theaggregate has had a material adverse effect on us.   Further, we cannot ensure that we have been or will be at all times incompliance with all of these requirements, including those related to reportingor permit restrictions, or that we will not incur material fines, penalties,costs or liabilities in connection with such requirements or a failure tocomply with them.  However, we expect that the nature of ouroperations will continue to make us subject to increasingly stringentenvironmental regulatory standards. Although we believe we have made sufficientcapital expenditures to maintain compliance with existing laws and regulations,future expenditures may be necessary, as compliance standards and technologychange or as unanticipated circumstances arise. Unforeseen and significantexpenditures required, for example, to comply with new or more aggressivelyenforced requirements or newly discovered conditions could limit expansion orotherwise have a material adverse effect on our business and financialcondition.  For a description ofcurrently outstanding environmental issues, see Note 16 of Notes to theFinancial Statements.

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**Reports to Security Holders**

Since all of the Company’sequity securities are privately held, the Company is not required by the SEC’sproxy rules or regulations, or stock exchange requirements, to send an annualreport to security holders. Nonetheless, the Company will send to each securityholder annually a copy of its Annual Report on Form 10-K and quarterly a copy ofeach Quarterly Report on Form 10-Q.

**Item 1A.**                  Risk Factors

Aninvestment in our securities is subject to a number of risks. An investorshould carefully consider the following risk factors in evaluating thisinvestment. Any of the following risks, as well as other risks anduncertainties that we do not know about now or that we do not think areimportant, could seriously harm our business and financial results and causethe value of our securities to decline, which in turn could cause investors tolose all or part of their investment.

**Ourbusinesses are highly cyclical. An economic downturn could adversely affect ourability to generate cash and make required payments on our debt.**

The success of our business depends on generaleconomic conditions and such factors as:

·       corporateprofitability;

·       interestrates;

·       fuelcosts;

·       consumerpreferences;

·       consumerspending patterns;

·       sales oftruck chassis and new pickup trucks; and

·       levelsof oil and gas exploration activity.

In addition, we sell ourproducts to customers in inherently cyclical industries, such as the truckingindustry and the energy services industry, which experience significantdownturns from time to time. As a result of an economic recession and adverseconditions in the trucking industry, we experienced substantially lower salesat Morgan  during 2001 and 2002   Morgan’s business began a recovery in 2003.During the same time period, a decline in oil and gas exploration activityresulted in substantially lower sales at Specialty Manufacturing. As a resultof these conditions and a reduction in the availability of credit from banksand securities markets, we did not expect to have enough cash to retire ourunsecured senior notes, initially issued by us in 1994, when they were due tomature in May 2004. In June 2003, we exchanged those unsecured notes forsecured notes and extended the maturity to May 2007. The secured notes weresubsequently redeemed by us in March 2004 prior to the original maturitydate. Another prolonged economic downturn or recession would result in asignificant decrease in our sales and would materially and adversely affect ouroperating cash flows and our ability to make required payments on our debt.

**Demand forour truck body products depends largely on the replacement cycle of deliverytrucks.**

Morgan and Morgan Olsonproduce and sell truck bodies for new delivery trucks, primarily in the generalfreight, moving and storage, parcel delivery and distribution industries.Demand for these products is driven by customers replacing older vehicles intheir delivery truck fleets and these customers often decide to postpone theirpurchases of new delivery trucks during economic downturns. If economicconditions or other factors, including longer useful lives of delivery trucks, causeour customers to reduce their capital expenditures and decrease investments innew delivery trucks, our sales would be materially and adversely affected. As aresult, our ability to generate cash and make required payments on our debtwould be reduced.

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**Thecyclicality of pickup truck sales could cause a decline in Truck Accessories’sales.**

Truck Accessories’ salesdepend on the sales of new pickup trucks in North America. A decline in pickuptruck sales would cause a decline in Truck Accessories’ sales, which wouldmaterially and adversely reduce Truck Accessories’ ability to generate cash andcould reduce our ability to make required payments on our debt. Sales of pickuptrucks are characterized by periodic fluctuations in demand due to, among otherthings, changes in general economic conditions, interest rates, fuel costs, newmodel introductions, consumer spending levels and consumer preferences.

**We have a substantialamount of debt outstanding and can incur more debt, which could hurt ourbusiness prospects, limit cash flow available from our operations and preventus from fulfilling our obligations under the 8.75% Notes and our other debtobligations.**

We aresignificantly leveraged and will continue to be significantly leveragedalthough we had $19.0 million of stockholder’s equity at December 31, 2006compared to $9.7 million at December 31, 2005.  Of our debt of $207.6 million, $5.8 millionis secured indebtedness and capital lease obligations.  In addition, we had $27.7 million of secureddebt availability under our revolving credit facility and we may be able toincur substantially more debt in the future.

**We may notbe able to compete favorably in our industries.**

We experience directcompetition in each of our product lines and some competitors have greaterfinancial and other resources than we have. We face competition from existingcompetitors with entrenched positions and we could face competition from newones. Changes in the nature of the industries in which we operate and ourbusiness could produce competition from new sources. Increased competition mayhave a material adverse effect on our business, cash flows and ability to makerequired payments on our debt by reducing our sales or margins.

**Most of ourbusinesses rely on a small number of customers, the loss of any of which couldhave a material adverse effect on us.**

Four of our businesses relyon a small number of customers to generate significant revenues.

·                  Morgan’stwo largest customers, Penske and Ryder, together accounted for 46% of Morgan’snet sales in 2004, 47% in 2005 and 46% in 2006 and accounted for 25% of ourconsolidated net sales during 2004, 25% in 2005 and 22% in 2006.

·                  Twocustomers accounted for 81% of Morgan Olson’s net sales during 2004, 38% in2005 and 56% in 2006.

·                  Onecustomer accounted for 18% of Specialty Manufacturing’s net sales during 2004,15% in 2005 and 15% in 2006.

·                  Ourtop ten customers accounted for 40% of our consolidated net sales in 2004, 35%in 2005 and 40% in 2006.

Because of the relativeimportance of large customers and the degree of concentration in the industrieswe serve, we are subject to additional risk. We may not be able to maintainthese customer relationships or maintain our historical levels of sales tothese customers. Because of the size and importance of these customers, thesecustomers may be able to exert pressure on us to lower our prices, which mayreduce our margins and operating cash flow. If one of these customers were toexperience financial difficulties, our ability to collect receivables from itor generate new sales to it would be materially and adversely affected.

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**Disruptionsin delivery of truck chassis to us could impact the profitability of ourbusiness.**

Morgan and Morgan Olsonmount their truck bodies on truck chassis delivered from truck chassismanufacturers. If truck chassis manufacturers experience disruptions in theirbusinesses, Morgan and Morgan Olson may be unable to sell or deliver theirproducts. Work stoppages or slowdowns experienced by the large truck manufacturersthat supply truck chassis could result in delays or slowdowns in our ability todeliver products to our customers.

**Environmentaland health and safety liabilities and requirements could require us to incurmaterial costs.**

Our operations are subject toa variety of federal, state and local environmental and health and safetystatutes and regulations, including those relating to emissions to the air,discharges to water, treatment, storage and disposal of waste, and remediationof contaminated sites. In certain cases, these requirements may limit theproductive capacity of our operations. Laws, including Superfund legislation,impose strict, and under certain circumstances, joint and several, liabilityfor costs to remediate contaminated sites upon designated responsible partiesincluding site owners or operators and persons who dispose of wastes at, ortransport wastes to, such sites.

From time to time, we havereceived notices of noncompliance with respect to our operations, which havetypically been resolved by investigating the alleged noncompliance, correctingany noncompliant conditions and paying of minor fines. We have from time totime been identified as a potentially responsible party at various Superfundsites, which, based on available information, we do not expect to result inmaterial liability. However, new environmental requirements or more aggressiveenforcement of existing ones or discovery of presently unknown conditions couldrequire material expenditures or result in liabilities which could limitexpansion or otherwise have a material adverse effect on our business,financial condition, operating cash flows and our ability to make requiredpayments on our debt.

For a description of currentenvironmental issues, see “Item 1.  Business — Environmental Matters.”

**We mayincur material losses and costs as a result of product liability and warrantyclaims that may be brought against us.**

We face an inherent risk ofexposure to product liability claims if the use of our products result, or are allegedto result, in personal injury and/or property damage. If we manufacture adefective product, we may experience material product liability losses and wemay incur significant costs to defend product liability claims. We also couldincur significant costs in correcting any defects, lose sales and suffer damageto our reputation. Our product liability insurance coverage may not be adequatefor the liabilities we could incur and may not continue to be available onterms acceptable to us.

We also are subject toproduct warranty claims in the ordinary course of our business. If we producepoor-quality products or use defective materials, we may incur unforeseen costsin excess of what we have reserved in our financial statements. These costscould have a material adverse effect on our business, operating cash flows andability to make required payments on our debt.

**We dependon the services of key management personnel, the loss of whom would materiallyharm us.**

Our ability to competesuccessfully and implement our business strategy depends on the efforts of oursenior management personnel, including those of John Poindexter, our Chairmanof the Board, President and Chief Executive Officer. The loss of the servicesof any of these individuals could have a material adverse effect on ourbusiness. We do not maintain key-man life insurance policies on any of ourexecutives.

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**We may beunable to realize our business strategy of improving operating performance andgenerating cost reductions.**

We have either implementedor plan to implement strategic initiatives designed to improve our operatingperformance. The failure to achieve the goals of these initiatives would have amaterial adverse effect on our business. We may decide to make significantexpenditures in an effort to streamline our operations, including combiningsome of our operations at existing facilities, but be unable to successfullyimplement or realize the expected benefits of these initiatives. We also maynot be able to sustain improvements made to date. We may decide to alter ordiscontinue some aspects of our strategy and may adopt alternative oradditional strategies, which may not be in the best interests of our noteholders.

**We may notbe able to consummate future acquisitions or successfully integrateacquisitions into our business.**

Our business strategyincludes growing through strategic acquisitions of other businesses withcomplementary products, manufacturing capabilities or geographic markets. If wefail to integrate acquired businesses successfully into our existingbusinesses, or incur unforeseen expenses in consummating acquisitions, we couldincur unanticipated expenses and losses.

We must successfullyintegrate acquired businesses into our operations to take full advantage ofprojected benefits from those acquired businesses. The integration of futureacquisitions into our operations could result in operating difficulties anddivert management and financial resources that would otherwise be available forthe development and maintenance of our existing operations. Our ability to makeacquisitions may be constrained by our ability to obtain additional financingand by the provisions of the indenture governing our outstanding 8.75% Notesand by the terms of our revolving credit facility.

Acquisitions may involve anumber of special risks, including:

·          unexpected losses of key employees or customers of the acquiredbusiness;

·          conforming the standards, processes, procedures and controls of theacquired business with those of our existing operations;

·          coordinating our product and process development;

·          hiring additional management and critical personnel; and

·          increasingthe scope, geographic diversity and complexity of our operations.

Acquisitions could result inour incurrence of additional debt and contingent liabilities, includingenvironmental, tax, pension and other liabilities. These liabilities could havea material adverse effect on our business, our ability to generate cash and ourability to make required payments on our debt.

**If we areunable to meet future capital requirements, our competitive position may beadversely affected.**

As a manufacturer, we arerequired to expend significant amounts of capital for engineering, development,tooling and other costs. Generally we seek to recover these costs throughrevenue generation, but we may be unsuccessful due to competitive pressures andother market constraints. We expect to fund capital expenditures throughoperating cash flows, borrowings under our revolving credit facility and othersources of borrowing such as capital leases, but we may not have adequate fundsor borrowing availability to make all the necessary capital expenditures. If weare unable to make necessary capital expenditures, our business and ourcompetitive position will be materially and adversely affected.

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**As aprivately held company, we are subject to less stringent corporate governancerequirements than a company with public equity. This provides less protectionto our investors.**

While we are subject tocertain requirements of the Sarbanes-Oxley Act of 2002, we will not be subjectto many of its provisions, including rules requiring us to have independentdirectors or an audit committee composed of independent directors. Two of ourthree directors, John Poindexter, our President and CEO, and Stephen Magee, thechairman of the Audit Committee of our board of directors, are not independent.We will not be subject to the same corporate governance standards as a companywith public equity or a company listed on a national exchange and our securityholders will not have the protections provided by having independent directorsor audit committee members.

Additionally, we restatedthe financial statements as of December 31, 2006 and for the year then endeddue to an error in the accounting for inventory.  The error was related to a failure to performan adequate reconciliation of inventory records as a result of a combination ofinadequate procedures and inventory tracking systems.  This represented a material weakness in theinternal controls over the financial reporting of inventory as of December 31,2006.

While we believe that theseweaknesses have been corrected through the implementation of a new informationsystem and improved procedures, and while we believe that our accountingsystems in the future will provide accurate results, there can be no assurancebased on the occurrence of this matter, that additional matters will not arisewhich could cause restatements in the future.

**Item 1B.**                  Unresolved Staff Comments

**None.**

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**Item 2.**                              Properties

We own or lease the following manufacturing,office and sales facilities as of December 31, 2006:
| **Location**                    | ** **   | **Principal use**      | ** **   | **Approximate  square feet** | ** **   | **Owned  or leased** | ** **   | **Lease  expiration** | ** **   |
|---------------------------------|--------------|-----------------------------|--------------|-----------------------------------|--------------|---------------------------|--------------|-----------------------|--------------|
| *** ***                    |         |                        |         |                              |         |                      |         |                  |         |
| ***Morgan:***                   |         |                        |         |                              |         |                      |         |                  |         |
| Ehrenberg, Arizona              |         | Manufacturing               |         | 125,000                           |         | Owned                     |         | —                |         |
| Riverside, California           |         | Manufacturing/service       |         | 62,000                            |         | Leased                    |         | 2013                  |         |
| Atlanta, Georgia                |         | Parts  & service        |         | 20,000                            |         | Leased                    |         | 2009                  |         |
| Rydal, Georgia                  |         | Manufacturing               |         | 85,000                            |         | Owned                     |         | —                |         |
| Ephrata, Pennsylvania           |         | Manufacturing               |         | 51,000                            |         | Owned                     |         | —                |         |
| New Morgan,  Pennsylvania       |         | Manufacturing               |         | 62,900                            |         | Leased                    |         | 2008                  |         |
| Morgantown,  Pennsylvania       |         | Manufacturing/service       |         | 261,000                           |         | Owned                     |         | —                |         |
| Morgantown,  Pennsylvania       |         | Office/warehouse            |         | 110,000                           |         | Leased                    |         | 2009                  |         |
| Corsicana, Texas                |         | Manufacturing/service       |         | 63,000                            |         | Owned                     |         | —                |         |
| Janesville, Wisconsin           |         | Manufacturing/service       |         | 166,000                           |         | Leased                    |         | 2010                  |         |
| Denver, Colorado                |         | Parts  & service        |         | 15,000                            |         | Leased                    |         | 2012                  |         |
| Lakeland, Florida               |         | Parts  & service        |         | 47,000                            |         | Leased                    |         | 2010                  |         |
| Tampa, Florida                  |         | Parts  & Service        |         | 24,000                            |         | Leased                    |         | 2010                  |         |
| Brampton, Ontario,  Canada      |         | Office  & manufacturing |         | 41,000                            |         | Leased                    |         | 2008                  |         |
| Mississauga, Ontario,  Canada   |         | Manufacturing               |         | 22,000                            |         | Leased                    |         | 2009                  |         |
|                            |         |                        |         |                              |         |                      |         |                  |         |
| ***Morgan  Olson:***            | *** *** | *** ***                | *** *** | *** ***                      | *** *** | *** ***              | *** *** | *** ***          | *** *** |
| Sturgis, Michigan               |         | Office  & manufacturing |         | 380,255                           |         | Owned                     |         | —                |         |
|                            |         |                        |         |                              |         |                      |         |                  |         |
| ***Truck  Accessories:***       | *** *** | *** ***                | *** *** | *** ***                      | *** *** | *** ***              | *** *** | *** ***          | *** *** |
| Woodland, California            |         | Manufacturing               |         | 65,000                            |         | Leased                    |         | 2009                  |         |
| Elkhart, Indiana                |         | Office  & research      |         | 23,500                            |         | Owned                     |         | —                |         |
| Elkhart, Indiana                |         | Manufacturing               |         | 132,500                           |         | Leased                    |         | 2007                  |         |
| Elkhart, Indiana                |         | Office  & manufacturing |         | 80,000                            |         | Owned                     |         | —                |         |
| Elkhart, Indiana                |         | Manufacturing               |         | 10,000                            |         | Leased                    |         | 2008                  |         |
| Elkhart, Indiana                |         | Manufacturing               |         | 150,000                           |         | Leased                    |         | 2011                  |         |
| Chickasha, Oklahoma             |         | Warehouse                   |         | 9,700                             |         | Leased                    |         | 2007                  |         |
| Salem, Oregon                   |         | Warehouse                   |         | 20,900                            |         | Leased                    |         | 2008                  |         |
| Milton, Pennsylvania            |         | Manufacturing/retail        |         | 105,000                           |         | Leased                    |         | 2009                  |         |
| Clackamas, Oregon               |         | Retail                      |         | 10,000                            |         | Leased                    |         | 2008                  |         |
| Centralia, Washington           |         | Manufacturing               |         | 45,950                            |         | Owned                     |         | —                |         |
|                            |         |                        |         |                              |         |                      |         |                  |         |
| ***Specialty  Manufacturing:*** | *** *** | *** ***                | *** *** | *** ***                      | *** *** | *** ***              | *** *** | *** ***          | *** *** |
| Amelia, Ohio                    |         | Office  & manufacturing |         | 44,250                            |         | Leased                    |         | 2010                  |         |
| Brenham, Texas                  |         | Office  & manufacturing |         | 125,000                           |         | Owned                     |         | —                |         |
| Decatur, Alabama                |         | Manufacturing               |         | 175,000                           |         | Leased                    |         | 2009                  |         |
| Elkhart, Indiana                |         | Office  & manufacturing |         | 211,600                           |         | Owned                     |         | —                |         |
| Fort Smith, Arkansas            |         | Office  & manufacturing |         | 170,000                           |         | Leased                    |         | 2010                  |         |
| Gordonsville, Tennessee         |         | Manufacturing               |         | 40,000                            |         | Leased                    |         | 2007                  |         |
| Milwaukee, Wisconsin            |         | Office  & manufacturing |         | 70,000                            |         | Leased                    |         | 2010                  |         |
| Monterrey, Mexico               |         | Manufacturing               |         | 38,000                            |         | Leased                    |         | 2009                  |         |
| Nashville, Tennessee            |         | Manufacturing               |         | 40,900                            |         | Leased                    |         | 2007                  |         |

 

Webelieve that our facilities are adequate for our current needs and are capableof being utilized at higher capacities to supply increased demand, ifnecessary.

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**Item 3.**                              Legal Proceedings

We areinvolved in various lawsuits, which arise in the ordinary course of business.In the opinion of management, the ultimate outcome of known lawsuits will nothave a material adverse effect on us.

**Item4.****                             ****Submission of Matters to a Vote of Security Holders**

**No matters were submitted to avote of security holders during the twelve months ended December 31, 2006covered by this report.**

**PARTII**

**Item 5.****                             ****Market for Registrant’s Common Equity, Related StockholderMatters and Issuer Purchases of Equity Securities**

Theregistrant’s common equity is privately held and not publicly traded.  As of March 30, 2007, John Poindexter ownedall of the registrant’s issue and outstanding common equity.  The Company has never paid cash dividends.

Theindenture regarding the 8.75% Notes, dated as of March 15, 2004, and theRevolving Credit Facility, as amended and dated as of March 15, 2004 withLaSalle Bank National Association, restricts the Company’s ability to paydividends on its common equity.

TheCompany has no securities authorized for issuance under equity compensationplans.

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**Item  6.****                          ****Selected Financial Data**

The following selected consolidated financial data as ofDecember 31, 2006 and 2005, and for the years ended December 31, 2006, 2005 and2004, have been derived from our consolidated audited financial statementsincluded elsewhere in this Form 10-K/A.  Theselected consolidated financial data as of December 31, 2004, 2003 and 2002 andfor the years ended December 31, 2003 and 2002 have been derived from ourconsolidated audited financial statements not included or incorporated byreference in this Form 10-K/A. 

The 2006 consolidated financial statements have beenrestated as described on page 2.  Therestatement increased cost of sales by $1.1 million and related effects.
|                                                 | ** ** | **Year ended December 31,** | ** ** |
|-------------------------------------------------|------------|--------------------------------------------|------------|
| **(Dollars in millions)**             | ** ** | **2002**                                   | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                                      | ** ** | ** **                                 | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **(Restated)** | ** ** |
| **Operating  data:**                            | * *   | * *                                   | * *   | * * | * * | * * | * * | * * | * * | * * | * * |
| Net sales                                       |       | $                                          | 320.5      |   | $ | 435.5 |   | $ | 584.9 |   | $ | 668.1 |   | $ | 795.3 |   |
| Cost of sales                                   |       | 277.9                                      |       | 373.8 |   | 513.4 |   | 593.1 |   | 701.0 |   |
| Selling, general  and administrative expense    |       | 37.4                                       |       | 36.9 |   | 40.6 |   | 50.0 |   | 63.0 |   |
| Refinancing  costs                              |       | —                                     |       | 0.8 |   | — |   | — |   | — |   |
| Loss (gain) on  extinguishment of debt          |       | —                                     |       | (0.4 | ) | 2.4 |   | — |   | — |   |
| Closed and  excess facility costs               |       | 0.3                                        |       | — |   | — |   | 0.4 |   | 2.7 |   |
| Other expense  (income)                         |       | (0.9                                       | )          | — |   | (0.4 | ) | 0.1 |   | (0.2 | ) |
| Operating income                                |       | 5.8                                        |       | 24.4 |   | 28.9 |   | 24.5 |   | 28.8 |   |
| Interest expense                                |       | 12.4                                       |       | 12.4 |   | 14.5 |   | 18.5 |   | 18.9 |   |
| Interest income                                 |       | —                                     |       | — |   | (0.1 | ) | (1.7 | ) | (1.7 | ) |
| Income tax  provision (benefit)                 |       | (1.1                                       | )          | 2.7 |   | 4.1 |   | 2.6 |   | 3.4 |   |
| Income (loss)  before discontinued operations   |       | (5.5                                       | )          | 9.3 |   | 10.4 |   | 5.1 |   | 8.2 |   |
| Loss from  discontinued operations              |       | (6.6                                       | )          | (0.2 | ) | (0.5 | ) | — |   | — |   |
| Net income  (loss)                              |       | $                                          | (12.1      | ) | $ | 9.1 |   | $ | 9.9 |   | $ | 5.1 |   | $ | 8.2 |   |
| Ratio of  earnings to fixed charges(a)          |       | —                                     | (b)        | 1.8 | x | 1.9 | x | 1.4 | x | 1.5 | x |
|                                            |       |                                       |       |   |   |   |   |   |   |   |   |
| **Other  Data:**                                | ** ** | ** **                                 | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| EBITDA(c)                                       |       | $                                          | 15.2       |   | $ | 36.6 |   | $ | 46.4 |   | $ | 37.9 |   | $ | 44.6 |   |
| Consolidated  Coverage Ratio(d)                 |       | 1.3                                        |       | 3.0 |   | 3.2 |   | 2.1 |   | 2.4 |   |
|                                            |       |                                       |       |   |   |   |   |   |   |   |   |
| **Balance  sheet data (at period end):**        | ** ** | ** **                                 | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Working capital                                 |       | $                                          | 6.6        |   | $ | 14.9 |   | $ | 75.8 |   | $ | 114.9 |   | $ | 112.3 |   |
| Total assets                                    |       | 114.0                                      |       | 146.9 |   | 217.5 |   | 273.2 |   | 292.4 |   |
| Total debt                                      |       | 103.0                                      |       | 107.8 |   | 158.4 |   | 205.4 |   | 207.6 |   |
| Stockholder’s equity  (capital deficiency) |       | $                                          | (18.0      | ) | $ | (5.4 | ) | $ | 4.6 |   | $ | 9.7 |   | $ | 18.3 |   |

 

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(a)          Forthe purpose of calculating the ratio of earnings to fixed charges, earningsconsist of net income (loss) plus income taxes and fixed charges (excludingcapitalized interest). Fixed charges consist of interest expense, amortizationof debt issuance costs and the estimated portion of rental expenses deemed areasonable approximation of the interest factor.

(b)         Earningswere insufficient to cover fixed charges by $6.9 million for 2002.

(c)          “EBITDA” is net income from continuingoperations increased by the sum of interest expense, income taxes, depreciationand amortization and other non-cash items for those operations defined asrestricted subsidiaries in the indenture pertaining to the 8.75% Notes.  EBITDA is not included herein as operatingdata and should not be construed as an alternative to operating income(determined in accordance with accounting principles generally accepted in theUnited States) as an indicator of the Company’s operating performance.  The Company has included EBITDA because it isrelevant for determining compliance under the Indenture and because the Companyunderstands that it is one measure used by certain investors to analyze theCompany’s

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operating cash flow and historical ability to service itsindebtedness.  The following are thecomponents of the Company’s EBITDA:
|                                               | ** ** | **Year ended December 31,** | ** ** |
|-----------------------------------------------|------------|--------------------------------------------|------------|
| **(Dollars in millions)**           | ** ** | **2002**                                   | ** ** | **2003** | ** ** | **2004** | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                                    | ** ** | ** **                                 | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **(Restated)** | ** ** |
| Income (loss)  before discontinued operations |       | $                                          | (5.5       | ) | $ | 9.3 |   | $ | 10.4 |   | $ | 5.1 |   | $ | 8.2 |   |
| Income tax  provision (benefit)               |       | (1.1                                       | )          | 2.7 |   | 4.1 |   | 2.6 |   | 3.4 |   |
| Interest expense                              |       | 12.4                                       |       | 12.4 |   | 14.5 |   | 18.5 |   | 18.9 |   |
| Depreciation and  amortization                |       | 9.1                                        |       | 9.2 |   | 9.5 |   | 10.4 |   | 12.8 |   |
| Non-cash charges  (income)                    |       | 0.3                                        |       | (0.4 | ) | 2.4 |   | 0.4 |   | 1.1 |   |
| Pro forma effect  of acquisitions             |       | —                                     |       | 3.4 |   | 5.5 |   | 0.9 |   | 0.2 |   |
|                                          |       | $                                          | 15.2       |   | $ | 36.6 |   | $ | 46.4 |   | $ | 37.9 |   | $ | 44.6 |   |

 

(d)         “Consolidated Coverage Ratio” is the ratio ofEBITDA to interest expense of the Company and its subsidiaries that guaranteethe 8.75% Notes.  It is used in theindenture to limit the amount of indebtedness that the Company may incur.  All the Company’s subsidiaries are restrictedunder the terms of the indenture and guarantee the 8.75% Notes.

**Item 7.**                              Management’sDiscussion and Analysis of Financial Condition and Results of Operations

**Overview**

The following table shows our net sales, operating income and operatingincome as a percentage of net sales for each segment for the years endedDecember 31, 2004, 2005 and 2006.

See page 2 and page 18 regarding restatement.
| ** **                          | ** ** | **Year ended December 31,** | ** ** |
|-------------------------------------|------------|--------------------------------------------|------------|
| **(Dollars in millions)** | ** ** | **2004**                                   | ** ** | **2005** | ** ** | **2006** | ** ** |
| ** **                          | ** ** | ** **                                 | ** ** | ** ** | ** ** | **(Restated)** | ** ** |
| Net Sales                           |       |                                       |       |   |   |   |   |
| Morgan                              |       | $                                          | 315.5      |   | $ | 358.2 |   | $ | 379.4 |   |
| Morgan Olson                        |       | 71.0                                       |       | 60.8 |   | 100.4 |   |
| Truck Accessories                   |       | 135.4                                      |       | 153.7 |   | 159.3 |   |
| Specialty Manufacturing             |       | 64.3                                       |       | 95.7 |   | 155.9 |   |
| Eliminations                        |       | (1.3                                       | )          | (0.3 | ) | 0.4 |   |
| Consolidated                        |       | $                                          | 584.9      |   | $ | 668.1 |   | $ | 795.4 |   |
| Operating Income  (Loss)            |       |                                       |       |   |   |   |   |
| Morgan                              |       | $                                          | 19.6       |   | $ | 20.7 |   | $ | 21.6 |   |
| Morgan Olson                        |       | 1.9                                        |       | (1.9 | ) | 2.8 |   |
| Truck Accessories                   |       | 10.5                                       |       | 8.3 |   | 3.5 |   |
| Specialty Manufacturing             |       | 2.8                                        |       | 2.5 |   | 9.8 |   |
| JBPCO (Corporate)                   |       | (5.9                                       | )          | (5.1 | ) | (8.9 | ) |
| Consolidated                        |       | $                                          | 28.9       |   | $ | 24.5 |   | $ | 28.8 |   |
| Operating Margin  Percentage        |       |                                       |       |   |   |   |   |
| Morgan                              |       | 6.2                                        | %          | 5.8 | % | 5.7 | % |
| Morgan Olson                        |       | 2.7                                        | %          | (3.1 | )% | 2.8 | % |
| Truck Accessories                   |       | 7.8                                        | %          | 5.4 | % | 2.2 | % |
| Specialty Manufacturing             |       | 4.4                                        | %          | 2.6 | % | 6.2 | % |
| Consolidated                        |       | 4.9                                        | %          | 3.7 | % | 3.8 | % |

 

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The following is adiscussion of the key components of our results of operations:

***Sourceof revenues.***  We derive revenues from:

·             Morgan’s sales of truck bodies, parts andservices;

·             Morgan Olson’s sales of step van truckbodies, parts and services;

·             Truck Accessories’ sales of pickup truck capsand tonneaus; and

·             Specialty Manufacturing’s sales of specialtyvehicles, primarily funeral coaches, contract manufacturing services, packagingand other products.

***Discounts, returns and allowances.***  Ourgross sales are reduced by discounts we provide to customers and returns andallowances in the ordinary course of our business.  We provide discounts as deemed necessary togenerate sales volume and remain price competitive. Discounts include paymentterm discounts and discretionary discounts from list price.

***Cost of sales.***  Cost of sales represents thecosts directly associated with manufacturing our products and generally varieswith the volume of products produced. The components of cost of sales arematerials, labor and overhead. We have experienced significant increases in thecost of materials, such as aluminum, steel, fiberglass-reinforcedplywood, lumber, fiberglass resin, plastic beads and truck cap windows thathave affected our operating profit margins. However, increased sales and the prices we charge for our products havemitigated the impact on our financial condition and results of operations.Additionally, we enter into supply contracts for some materials at a fixedprice for up to one year and in some cases pre-buy bulk quantities of materialsto manage materials costs. Overhead costs are allocated to production based onlabor costs and include the depreciation and amortization costs associated withthe assets used in manufacturing.

***Selling, general and administrative expenses.*** Selling, general and administrative expenses are made up of the costs ofselling our products and administrative costs such as information technologies,accounting, finance, human resources and engineering. Costs include personneland related costs, including travel, equipment and facility rent expense, andprofessional services such as audit fees. Selling, general and administrativeexpenses also include our costs at corporate headquarters to manage and providesupport to our operating subsidiaries.

***Other income and expense.*** Income and expenses that we incur during the year that are nonrecurringin nature and not directly comparable to the prior year are included in otherincome and expense or are separately identified such as debt issuance costs.

**Basisof financial statements**

OnMarch 15, 2004, we acquired from John Poindexter, the sole shareholder of theCompany, the stock of Morgan Olson that he had acquired effective July 15,2003. The results of operations for all periods presented have been restated toreflect the merger on a basis similar to a pooling of interests so as tocombine the financial statements of both companies for the period they wereunder common control.

During2004, MIC Group, which is included in Specialty Manufacturing, reclassifiedcertain manufacturing overhead costs from selling, general and administrativeexpense to cost of sales, consistent with our other subsidiaries.

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**Criticalaccounting policies and estimates**

The discussion and analysis of financial condition andthe results of operations are based upon our consolidated financial statements,which have been prepared in conformity with accounting principles generallyaccepted in the United States.  Thepreparation of these consolidated financial statements requires the use ofestimates that affect the reported amounts of assets, liabilities, revenues andexpenses, and related disclosure of contingent assets and liabilities. Theestimates are evaluated continually, including those related to warrantiesoffered on products, self-insurance reserves, bad debts, inventoryobsolescence, investments, intangible assets and goodwill, income taxes,financing operations, workers’ compensation insurance and contingentliabilities. The estimates are based on historical experience and on variousother assumptions that are believed to be reasonable under the circumstances,the results of which form the basis for making judgments about the carryingvalues of assets and liabilities that are not readily apparent from othersources. Actual results may differ from these estimates under differentassumptions or conditions.

Webelieve the following are the most critical accounting policies used in thepreparation of our financial statements.

***Revenue recognition.*** Revenue is recognized upon shipment of the product to customers, exceptfor Morgan and Morgan Olson where revenue is recognized when title transfers tothe customer upon final body assembly, quality inspection and customernotification. We classify amounts billed to customers related to shipping andhandling as revenue. The costs associated with the shipping and handlingrevenue are included in cost of sales.

***Warranties.*** Reserves for costs associatedwith fulfilling warranty obligations offered on Morgan, Morgan Olson, TruckAccessories and Specialty Vehicles Group products are established based onhistorical experience and an estimate of future claims. Increases in theincidence of product defects would result in additional reserves being requiredin the future and would reduce income in the period of such determination.

***Self-insurance risks.***  Weutilize a combination of insurance coverage and self-insurance programs forproperty, casualty, workers’ compensation and health care insurance. We recordan actuarially determined, fully developed self-insurance reserve to cover theself-insured portion of these risks based on known facts and historicalindustry trends. Changes in the assumptions used by the actuary could result ina different self-insurance reserve.

***Income taxes. ***We estimate our income taxes in each of thejurisdictions in which we operate. This process involves estimating our currenttax exposure together with assessing temporary differences resulting from thediffering treatment of items for tax and financial reporting purposes. Thesedifferences result in deferred tax assets and liabilities, which are includedin the consolidated balance sheet. We then assess the likelihood that thedeferred tax assets will be recovered from future taxable income, and, to theextent recovery is not likely, a valuation allowance is established thusreducing the deferred tax asset. When an increase in this allowance within aperiod is recorded, we include an expense in the tax provision in theconsolidated statements of operations. Management’s judgment is required indetermining the provision for income taxes, deferred tax assets and liabilitiesand any valuation allowance recorded against the net deferred tax assets. TheCompany had alternative minimum tax credit carryforwards of approximately $0.5million and $3.0 million at December 31, 2006 and 2005, respectively, for U.S.federal income tax purposes, which may be carried forward indefinitely.   We had a capital loss carryforward deferredtax asset of approximately $3.6 million at December 31, 2006 and 2005, andrecorded a valuation allowance of an equal amount against the asset as it isuncertain as to whether we will generate future capital gains necessary toutilize the loss carryforward.  AtDecember 31, 2006 and 2005, the Company had a state tax net operating losscarryforward deferred tax asset of $4.1 million and $3.4 million, respectively,and at December 31, 2006 had recorded a valuation allowance of $2.5 millionagainst the portion of which it is uncertain as to whether it will berealized.  The Company recognized areduction in the valuation allowance of $1.0 million during 2005 which reducedthe tax provision by an equal amount for the year.  The Company had Canadian net operating losscarryforwards of approximately $5.5 million as of December 31, 2006 andrecognized deferred tax asset of $1.9 million. The Canadian net operating loss carryforwards expire at varying datesranging from 1 to 20****years.  While our deferred tax assets, net of thevaluation allowance, are considered realizable, actual amounts could be reducedif future taxable income is not achieved.

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***Inventory valuation. ***Our inventories mainly consist of rawmaterials, vehicles prior to conversion, supplies and work-in-progress. Becauseour largest segments, Morgan, Morgan Olson and Truck Accessories, primarilyproduce products to their customers’ orders, we maintain a relatively smallstock of finished goods inventories. Inventories are stated at the lower ofcost (first-in, first-out method) or market. We record reserves against thevalue of inventory based upon our determination that the inventory is notusable in our products. These reserves are estimates, which could varysignificantly, either favorably or unfavorably, from actual requirements iffuture economic conditions, customer inventory levels or competitive conditionsdiffer from our expectations.

***Accounts receivable. ***We provide credit to our customers in theordinary course of business. We are not aware of any significant credit risksrelated to our customer base and do not generally require collateral or othersecurity to support customer receivables. Specialty Vehicles sells to certain customers on extended terms andretains title to the vehicle until payment is complete. The carrying amount ofour accounts receivable approximates the fair value of the receivables becauseof their short-term nature with payment typically due within 30 days afteran invoice is sent. We establish an allowance for doubtful accounts on a caseby case basis when we believe that we are unlikely to receive payment in fullof amounts owed to us. We make a judgment in these cases based on availablefacts and circumstances and we may record a reserve against a customer’saccount receivable. We re-evaluate the reserves and adjust them as we obtainmore information regarding the account. The collectibility of trade receivablescould be significantly reduced if there is a greater than expected rate ofdefaults or if one or more significant customers experience financialdifficulties or are otherwise unable to make required payments.

***Goodwill, identified intangibles and long-lived assets impairment.  ***We perform a test of our goodwill forpotential impairment annually as of October 1 as prescribed by Statementof Financial Accounting Standards No. 142, *“Goodwilland Other Intangibles.”* The fair values of our reporting units arebased on multiples of earnings derived from information and analysis of recentacquisitions in the marketplace for companies with similar operations. Changesin the assumptions used in the fair value calculation could result in anestimated reporting unit fair value that is below the carrying value, which maygive rise to an impairment of our goodwill. In addition to the annual review, we also test for impairment of ourlong-lived assets, goodwill and indefinite- lived intangible assets shouldevents or circumstances indicate a potential reduction in the fair value ofthose assets below their carrying value. Lastly, on an annual basis, we determine that the remaining lives ofidentified amortizable intangible assets continue to be appropriate.

**Comparisonof 2006 (restated) to 2005**

***Sales.**** **Our*consolidated net sales increased $127.3million, or 19.0%, to $795.4 million for 2006 compared to$668.1 million for 2005.

·             Morgan’s net sales increased $21.2 million,or 5.9%, to $379.4 million for 2006 compared to $358.2 million for2005.  Truck body sales increased $21.1million or 6.2%.  The increase was dueprimarily to a 5.5% increase in the average unit price of a truck body and a0.7% increase in the number of units shipped. Sales of truck bodies to the commercial divisions of leasing companies,companies with fleets of delivery vehicles, truck dealers and distributors, orCommercial sales, which represented 85% of Morgan’s net sales this year,increased $15.5 million, or 5.0%, to $324.4 million.  Consumer Rental sales increased $5.7 millionor 6.2% on an 11% increase in unit shipments. Sales of parts and services increased slightly to $12.9 million comparedto $11.5 million last year.  Discountsdecreased slightly to $9.9 million in 2006 or 2.6% of net sales compared to$10.6 million or 3.0% of net sales in 2005.

·             Morgan Olson’s net sales increased $39.6million, or 65.1%, to $100.4 million for 2006 compared to $60.8 million for2005.  Step van body sales increased$39.7 million or 91.0% on an 82.0% increase in unit shipments.  The increase in unit shipments was dueprimarily to a 200% increase in sales to UPS from approximately 1,118 units in2005 to 3,340 units this year.  Parts andservice sales were $4.0 million in 2006 and $4.4 million in 2005.

·             Truck Accessories’ net sales increased $5.6million, or 3.6%, to $159.3 million for 2006 compared to $153.7 million for2005.   Excluding State Wide, which wasacquired in March of 2006, sales revenue

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decreased 3.8% or $5.9 million.  Shipments of caps and tonneaus decreased by9.2% partially offset by a 5.4% increase in the average price per unit.   Pickup truck sales in the United States andCanada decreased 10.1% during 2006 compared to 2005.

·             Specialty Manufacturing’s net sales increasedby $60.2 million, or 62.9%, to $155.9 million for 2006 compared to$95.7 million for 2005.  Sales tocustomers in the energy services business increased 46.5% to $41.8 millioncompared to $28.6 million during 2005. Specialty Vehicles Group’s sales increased $49.3 million, or 218%, dueto the acquisition of Eagle Coach on January 3, 2006 and $29.1 million, or128.5%, due to the acquisition of Federal Coach on June 6, 2005.

***Backlog.***** **Consolidated backlog was$198.1 million as of December 31, 2006 compared to $143.6 million as ofDecember 31, 2005.

·             Morgan’s backlog at December 31, 2006 was$114.6 million compared to $94.7 million at December 31, 2005. Theincrease from a year earlier was due primarily to the timing of the receipt offleet orders from its two largest customers.

·             Morgan Olson’s backlog was $25.1 million atDecember 31, 2006 compared to $9.3 million at December 31, 2005.  The increase was due primarily to an orderfrom UPS for $8.9 million included in the 2006 backlog.

·             Truck Accessories’ backlog of approximatelytwo weeks of production was $4.1 million at December 31, 2006 compared to$3.9 million as of December 31, 2005.

·             Specialty Manufacturing’s backlog at December31, 2006 increased $16.6 million to $52.3 million compared to$35.7 million at December 31, 2005. The backlog of machining services increased $14.7 million over lastyear.

***Cost of sales and grossprofit. ******Our***consolidated cost of sales increased by$108.0 million, or 18.2%, to $701.1 million for 2006 compared to$593.1 million for 2005. Consolidated gross profit increased by$19.3 million, or 25.7%, to $94.3 million (11.9% of net sales) for2006 compared to $75.0 million (11.2% of net sales) for 2005.  Material, labor and overhead costs made up53.9%, 14.9% and 19.4%, respectively, of cost of sales during 2006 and 52.9%,15.2% and 20.7%, respectively, during 2005.

·             Morgan’s gross profit increased by$2.6 million, or 6.6%, to $42.2 million (11.1% of its net sales) for2006 compared to $39.6 million (11.1% of its net sales) for 2005.

·             Morgan Olson’s gross profit increased by $6.6 million,or 300.0%, to $8.8 million (8.7% of its net sales) for 2006 compared to$2.2 million (3.7% of its net sales) for 2005.  The increase in gross profit was due toimproved labor efficiencies and overhead absorption on higher productionvolumes.

·             Truck Accessories’ gross profit declined by$1.9 million, or 8.9%, to $19.6 million (12.3% of its net sales) for2006 compared to $21.6 million (14.0% of its net sales) for 2005. Grossprofit decreased $3.9 million excluding the results of State Wide which wasacquired in March 2006.  The decline ingross profit can be attributed to lower volumes, delivery inefficiencies, andongoing labor issues at our Raider plant partially offset by reduced materialcomponent costs as a result of the acquisition of State Wide.

·             Specialty Manufacturing’s gross profitincreased $12.1 million, or 104.2%, to $23.7 million (15.2% of its net sales)for 2006 compared to $11.6 million (12.1% of its net sales) for 2005.  The acquisition of Eagle Coach on January 3,2006 added $3.7 million to gross profit for the Specialty Vehicle Group whichcontributed $10.1 million of gross profit in 2006 compared to $1.9 million in2005.  The remaining operations ofSpecialty Manufacturing increased gross profit by $3.9 million or 40.2%.

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***Selling, general and administrative expenses. ***Our consolidated selling, general andadministrative expenses increased $13.0 million, or 26.0%, to$63.0 million (7.9% of net sales) for 2006 compared to $50.0 million (7.5%of net sales) for 2005.

·             Morgan’s selling, general and administrativeexpenses increased $1.8 million, or 9.7%, to $20.7 million (5.5% ofits net sales) for 2006 compared to $18.9 million (5.3% of its net sales)for 2005.  The majority of the increasewas due to $1.4 million of expenses related to the new Enterprise ResourcePlanning (ERP) system being implemented.

·             Morgan Olson’s selling, general andadministrative expenses increased by $1.8 million, or 42.2%, to$6.0 million (5.9% of its net sales) for 2006 compared to$4.2 million (6.9% of its net sales) for 2005.  An increase in general and administrativeexpenses of $1.8 million was primarily due to an increase in sales personnelfrom 21 to 33.  Selling, general andadministrative expenses as a percentage of sales decreased by 1.0% from 6.9% in2005 to 5.9% for 2006.

·             Truck Accessories’ selling, general andadministrative expenses increased by $0.8 million, or 6.3%, to $13.4million (8.4% of its net sales) for 2006 from $12.6 million (8.2% of its netsales) for 2005. Costs increased primarily due to the incremental expenses of$1.0 million from the acquisition of State Wide.

·             Specialty Manufacturing’s selling, generaland administrative expenses increased by $4.9 million, or 52.5%, to$14.1 million (9.0% of its net sales) for 2006 from $9.2 million(9.6% of its net sales) for 2005. The acquisition of Eagle Coach in 2006 added$2.2 million and the acquisition of Federal Coach in June 2005 added $2.1million of expenses this year.

·             Corporate selling, general and administrativeexpenses increased by $3.8 million, or 74.2%, to $8.9 million for 2006from $5.1 million for 2005, primarily due to approximately $0.5 million inexecutive severance pay and  $3.2 millionof consulting costs related to our productivity initiatives.

***Closed and excess facility costs.***During the fourth quarter of 2006, TruckAccessories announced a plan to close its manufacturing facility in Canada andmove production of its Raider product line to other manufacturing locations. Asa result of this decision, Truck Accessories recorded a closed and excessfacility charge of $2.7 million during this period.  The $2.7 million expense includesapproximately $1.1 million of non-cash charges related to the write-down ofproperty, plant and equipment.  Thecharge also included estimated personnel costs. Manufacturing operations ceasedat this location effective February 2007.

***Operating income. ***Due to the effect of the factors summarizedabove, consolidated operating income increased by $4.3 million, or 17.6%,to $28.8 million (3.6% of net sales) for 2006 from $24.5 million(3.7% of net sales) for 2005.

·             Morgan’s operating income increased by$0.9 million, or 3.9%, to $21.6 million (5.7% of its net sales) for2006 compared to $20.7 million (5.8% of its net sales) for 2005.

·             Morgan Olson’s operating income increased by$4.7 million to $2.8 million for 2006 (2.8% of its net sales) from a$1.9 million operating loss (3.2% of its net sales) for 2005.

·             Truck Accessories’ operating income decreasedby $4.8 million, or 57.8%, to $3.5 million (2.2% of its net sales)for 2006 compared to $8.3 million (5.4% of its net sales) for 2005.  State Wide’s operating income was $1.1million for the 2006 period.

·             Specialty Manufacturing’s operating incomeincreased by $7.3 million, or 295.1%, to $9.8 million (6.2% of itsnet sales) for 2006 compared to $2.5 million (2.6% of its net sales) for 2005.

·             Corporate expenses increased $3.8 million to$8.9 million for 2006 compared to $5.1 million for 2005.

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***Interest expense(income).  ******I***nterest expense increased $0.4 million, or2.6%, to $18.9 million (2.4% of net sales) for 2006 compared to$18.5 million (2.8% of net sales) for 2005.  The increase was due to $0.2 million ofadditional interest in 2006 on the 8.75% Note offering, completed January 21,2005, and interest on additional capital leases of $0.2 million.  We earned $1.8 million of interest income onour cash, cash equivalents and short-term investments during 2006.

***Income taxes.***The effective income tax rate was 29.0% and34.0% of income before income taxes for 2006 and 2005, respectively.  The income tax provisions for 2006 and 2005differ from amounts computed based on the federal statutory rate as a result ofstate and foreign taxes, a $0.7 million increase in the state net operatingloss carryforwards and a $1.0 million reduction in the valuation allowance thatreduced the income tax provision in 2006 and 2005, respectively, and othervarious items.

**Comparison of 2005 to 2004**

***Sales.**** **Our*consolidated net sales increased $83.2million, or 14.2%, to $668.1 million for 2005 compared to$584.9 million for 2004.

·             Morgan’s net sales increased $42.8 million,or 13.6%, to $358.2 million for 2005 compared to $315.5 million for2004.  Excluding Commercial Babcock,which was acquired in December 2004, net sales increased $22.6 million or7.2%.  Truck body sales increased $24.7million or 8.4%.  The increase was dueprimarily to a 16.0% increase in the average unit price of a truck body partlyoffset by a 6.6% decline in the number of units shipped.  Commercial sales, which represented 86% ofMorgan’s net sales in 2005, increased $36.4 million, or 14.4%, to $289.1million.  Shipments of Commercial unitsincreased approximately 2% during 2005; however, compared to a 44% increase in2004, this increase could indicate an unfavorable change in the replacementcycle of our major fleet company customers. Consumer Rental sales decreased $11.7 million or 27.8% on a 35% declinein unit shipments.  Commercial Babcock’snet sales were $20.9 million during 2005. Sales of parts and services decreased $4.9 million or 31.3% dueprimarily to the transfer of the parts business to Morgan Olson.  Discounts decreased slightly to $10.6 millionor 2.9% of net sales in 2005 compared to $10.8 million or 3.3% of net sales in2004.

·             Morgan Olson’s net sales decreased $10.2million, or 14.4% to $60.8 million for 2005. Step van body sales decreased 25.1% or $14.7 million, on a 33.6% declinein unit shipments.  The reduction in unitshipments was due primarily to a 42% reduction in sales to UPS from 1,200 unitsin 2005 compared to approximately 1,800 units in 2004 with a 56% decline in thefourth quarter of 2005.  This trend didnot continue into 2006 as orders from UPS increased to 3,200 units for deliveryin 2006.  Parts and service salesincreased $4.5 million to $17.1 million compared to $12.6 million in 2004; theincrease was due to the transfer of the Morgan parts business to Morgan Olson.

·             Truck Accessories’ net sales increased $18.3million, or 13.5%, to $153.7 million for 2005 compared to $135.4 million for2004.   The increase was due primarily tothe acquisition of Pace Edwards in November of 2004, which contributed $16.1million to net sales in 2005 compared to $2.7 million in 2004.  Sales of caps and tonneaus, excluding Pace Edwards,increased by 3.7%, or $4.9 million, on a 3.3% decrease in unit shipments.  Pickup truck sales in the United States andCanada decreased 1% during 2005 compared to a 3% increase in 2004 with salesincreasing 10% during the first, second and third quarters of 2005 anddeclining 9% in the fourth quarter.

·             Specialty Manufacturing’s net sales(excluding Federal Coach) increased by $8.7 million, or 13.5%, to$73.0 million for 2005 compared to $64.3 million for 2004.  Sales to customers in the energy servicesbusiness increased 28.9% to $28.6 million compared to $22.2 millionduring 2004 due to an increase in demand in the oil and gas industry.  Federal Coach’s net sales were $22.6 millionfor the six-month period subsequent to its acquisition in 2005.

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***Backlog****.* Consolidated backlog was $143.6 million as of December 31, 2005compared to $127.2 million as of December 31, 2004.

·            Morgan’s backlog at December 31, 2005 was$94.7 million compared to $101.9 million at December 31, 2004. Thedecrease from a year earlier was due primarily to the timing of the receipt offleet orders from its two largest customers.

·            Morgan Olson’s backlog was $9.3 million atDecember 31, 2005 compared to $8.1 million at December 31, 2004.

·            Truck Accessories’ backlog of approximatelytwo weeks of production was $3.9 million at December 31, 2005 compared to$4.6 million as of December 31, 2004.

·            Specialty Manufacturing’s backlog at December31, 2005 increased $23.1 million to $35.7 million compared to$12.6 million at December 31, 2004. Excluding Federal Coach’s backlog of $6.6 million at December 31, 2005,the backlog of machining services increased $16.5 million over the previousyear.

***Cost of sales and grossprofit. ******Our***consolidated cost of sales increased by $79.6million, or 15.5%, to $593.1 million for 2005 compared to $513.5 millionfor 2004. Consolidated gross profit increased by $3.5 million, or 5.0%, to$75.0 million (11.2% of net sales) for 2005 compared to $71.5 million(12.2% of net sales) for 2004.

·             Morgan’s gross profit increased by$4.5 million, or 12.9%, to $39.6 million (11.1% of its net sales) for2005 compared to $35.1 million (11.1% of its net sales) for 2004.  Excluding Commercial Babcock, Morgan’s grossprofit increased $1.6 million or 4.7% on higher sales in 2005.

·             Morgan Olson’s gross profit declined by$4.8 million, or 68.2%, to $2.2 million (3.7% of its net sales) for2005 compared to $7.1 million (9.9% of its net sales) for 2004.  The decline in gross profit and gross profitmargins was due to lower labor productivity and higher overhead expensesrelative to sales.

·             Truck Accessories’ gross profit increased by$1.4 million, or 7.0%, to $21.6 million (14.0% of its net sales) for2005 compared to $20.2 million (14.9% of its net sales) for 2004. Grossprofit increased $4.1 million as a result of the incremental gross profit ofPace Edwards, which was part of Truck Accessories for the twelve months of 2005and only for two months of 2004, partially offset by a $2.7 million decrease ingross profits at the remaining Truck Accessories’ operations due primarily toincreased raw material costs and delivery costs.  Delivery costs increased approximately $2.8million in 2005 mainly due to increased fuel prices.

·             Specialty Manufacturing’s gross profitincreased $2.4 million, or 26.4%, to $11.6 million (12.1% of its net sales) for2005 compared to $9.2 million (14.2% of its net sales) for 2004.  The acquisition of Federal Coach in June of2005 added $1.9 million to gross profits for 2005 and the remaining increasewas due to higher sales of machining services.

***Selling, general and administrative expenses. ***Our consolidated selling, general andadministrative expenses increased $9.4 million, or 23.2%, to$50.0 million (7.5% of net sales) for 2005 compared to $40.6 million (7.0%of net sales) for 2004.

·             Morgan’s selling, general and administrativeexpenses increased $3.4 million, or 22.2%, to $18.9 million (5.3% ofits net sales) for 2005 compared to $15.4 million (4.9% of its net sales)for 2004.  $2.4 million of the increasewas due to the addition of Commercial Babcock late in 2004 and to increasedcommissions and promotional expenses related to efforts to increase sales.

·             Morgan Olson’s selling, general andadministrative expenses decreased by $0.7 million, or 14.3%, to$4.2 million (6.9% of its net sales) for 2005 compared to$4.9 million (6.9% of its net sales) for 2004.  A

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reduction in general and administrative expenses of$1.0 million was partly offset by a $0.3 million or 16.2% increase in sellingexpense primarily due to an increase in sales personnel from 17 to 21.

·             Truck Accessories’ selling, general andadministrative expenses increased by $2.9 million, or 30.2%, to $12.6million (8.2% of its net sales) for 2005 from $9.7 million (7.1% of its netsales) for 2004. Costs increased primarily due to the incremental expenses of$2.6 million from the acquisition of Pace Edwards.

·             Specialty Manufacturing’s selling, generaland administrative expenses increased by $2.4 million, or 36.3%, to$9.2 million (9.6% of its net sales) for 2005 from $6.8 million(10.5% of its net sales) for 2004. The acquisition of Federal Coach added $1.7million of expenses in 2005.

·             Corporate selling, general and administrativeexpenses increased by $1.4 million, or 38.2%, to $5.1 million (0.8%of consolidated net sales) for 2005 from $3.7 million (0.6% ofconsolidated net sales) for 2004, primarily due to additional personnel andrelated costs of approximately $0.8 million.

***Loss onextinguishment of debt.***  During 2004, we wrote offdeferred loan costs of $2.4 million as a result of the refinancing of our thenoutstanding debt.

***Closed and excess facility costs. ***In the third quarter of 2005, we decided to consolidate the TruckAccessories plants in Canada which resulted in a write-down in the carryingvalue of our Drinkwater facility.  Thenon-cash write-down of $377,000 was recorded as closed and excess facilitycosts for 2005.

***Operating income. ***Due to the effect of the factors summarizedabove, consolidated operating income decreased by $4.4 million, or 15.2%,to $24.5 million (3.7% of net sales) for 2005 from $28.9 million(4.9% of net sales) for 2004.

·             Morgan’s operating income increased by$1.2 million, or 5.9%, to $20.8 million (5.8% of its net sales) for2005 compared to $19.6 million (6.2% of its net sales) for 2004.  Commercial Babcock’s operating income was$0.7 million (3.4% of its net sales) for 2005.

·             Morgan Olson’s operating income decreased by$3.8 million to a $1.9 million operating loss for 2005 compared tooperating income of $1.9 million for 2004.

·             Truck Accessories’ operating income decreasedby $2.2 million, or 20.9%, to $8.3 million (5.4% of its net sales)for 2005 compared to $10.5 million (7.8% of its net sales) for 2004.  Pace Edwards’ operating income was $1.4 millionfor the 2005 period.

·             Specialty Manufacturing’s operating incomedecreased by $0.3 million, or 10.8%, to $2.5 million (2.6% of its netsales) for 2005 compared to $2.8 million (4.3% of its net sales) for 2004.

·             Corporate expenses decreased $0.8 million to$5.1 million for 2005 compared to $5.9 million for 2004.  The loss on extinguishment of debt of $2.4million in 2004 was included in corporate expenses for that period.

***Interest expense(income).  ******I***nterest expense increased $4.0 million, or27.5%, to $18.5 million (2.8% of net sales) for 2005 compared to$14.5 million (2.5% of net sales) for 2004.  The increase was due to a $56.1 millionincrease in average debt outstanding during 2005, primarily as a result of theadditional 8.75% Note offering totaling $45 million in January of 2005.  We earned $1.6 million of interest on ourcash and short-term investments during 2005.

***Income taxes.***The 2005 income tax rate approximated thestatutory rate.  A reduction in thevaluation allowance of $1.0 million reduced the rate but was offset byrecurring state income tax provisions and various other items.  In 2004, the income tax provision wasapproximately 28% of pre-tax income.  Therate was reduced by a $0.5 million reduction in the valuation allowance andvarious other items.

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**Liquidityand capital resources**

Historically, we have funded our operations with cashavailable from the proceeds of our 8.75% Notes, cash generated from operationsand borrowings under our revolving credit facility, as needed.  Working capital at December 31, 2006 was$112.3 million compared to $114.9 million at December 31, 2005.  Our cash, cash equivalents and short-terminvestments decreased by $26.8 million this year compared to last year dueprimarily to cash paid for acquisitions during 2006 of $13.9 million and areduction in cash provided by operating activities caused by increases inaccounts receivable and inventories. Excluding cash and short-term investments, working capital increased $24.2million primarily as a result of an increase in accounts receivable of $17.1million and inventories of $18.9 million. Average accounts receivable days sales outstanding at December 31, 2006were approximately 31 compared to 27 at December 31, 2005, and inventory turnsduring the year were approximately 9.2 compared to 10.4 during 2005.  Inventory turns declined somewhat due to theinclusion in inventory of vehicle chassis at Morgan and Specialty Vehicle Group(vehicle chassis remain in inventory for extended periods of time and amountedto $10.9 million and $6.9 million at December 31, 2006 and 2005,respectively).  Excluding vehiclechassis, inventory turns were 10.7 for 2006 and 11.8 for 2005.

***Operating cash flows. ***Operating activitiesduring 2006 generated cash of $3.0 million compared to $14.6 millionduring 2005 and $11.8 million during 2004. The decrease in net cash generatedby operating activities during 2006 was due primarily to an increase in theinvestment in working capital, primarily accounts receivable and inventories,of $18.3 million offset by higher net income and increased depreciation.

The increase in cash from operating activities during2005 compared to 2004 was due primarily to a smaller investment in workingcapital in 2005.

***Investing cash flows. ******Net cashused in investing activities decreased $25.0 million in 2006 compared to2005.   During 2006 we realized proceedsof $15.3 million from the sale of short-term investments compared to a netincrease in short-term investment of $10.3 million in 2005.  We acquired two companies in 2006 for acombined purchase price of $13.9 million, compared to a similar amount paid in2005 for one acquisition.  Capitalexpenditures decreased $1.6 million to $13.9 million in 2006 and were comprisedprimarily of information technology costs related to the new ERP system of $3.6million, machinery and equipment of $5.4 million and molds of $2.0 million atTruck Accessories.  We acquiredapproximately $4.0 million of equipment under capital leases that were notincluded in capital expenditures.***

We acquired Federal Coach during the second quarter of2005 using cash proceeds of approximately $12.3 million from our 8.75% Noteofferings.  Capital expenditures for 2005were $15.5 million and included $6.1 million of new machine tools and pressesfor Specialty Manufacturing, $2.4 million of new product molds at TruckAccessories and a $1.5 million investment in information technologyassets.   We acquired approximately $1.0million of equipment under capital leases that were not included in capital expenditures.

As of December 31, 2006, we had no significant opencommitments for capital expenditures.

Net cash used in investing activities increased to $38.0million during 2005 compared to $36.2 million during 2004.

We acquired two new businesses during the fourth quarterof 2004 using cash from the proceeds of our 8.75% Note offering ofapproximately $17.9 million.  Capitalexpenditures for 2004 were $9.4 million, which included Morgan’s purchase ofits manufacturing facility in Georgia for $2.2 million and new productionequipment of $2.0 million. Specialty Manufacturing acquired productionequipment of $1.2 million and Truck Accessories invested in $2.2 million of newproduction molds.  We acquiredapproximately $2.2 million of production equipment for Specialty Manufacturingunder capital leases that are not included in capital expenditures.

During the fourth quarter of 2004, we substituted a cashcollateral deposit for standby letters of credit that had been used to secureour liabilities under our casualty insurance programs.  We deposited $5.5 million of cash into anaccount restricted by the terms of a trust agreement in favor of our insurancecarrier.  The insurance carrier has the

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right to demand payment from the trust in the event thatwe are unable to pay our liabilities for previously incurred insurance claims.

Cash generated from investing activities during 2004 bydiscontinued operations was made up primarily of the proceeds from the sale ofthe distribution business of Truck Accessories for approximately $1.3 million.

***Financing cash flows. ******Net cashused in financing activities totaled $1.6 million in 2006, a decrease of $46.6million compared to the prior year. ***We generated $45.0 million of cash fromfinancing activities for 2005 as the result of obtaining $45.0 million inaggregate principal amount from our sale of 8.75%Notes due 2014 (see below) at a 5% premium, the net proceeds of whichwere approximately $46.4 million of increased cash and short-terminvestments.  During 2004, we generated$43.8 million of cash from financing activities.  We issued $155.0 million of 8.75% Notes due 2014 and used the netproceeds to repay term and revolving debt and debt issuance costs of$112.9 million and pay accrued interest on the retired debt of $3.9 million.

***Long-term debt. ******AtDecember 31, 2006, our long-term debt was $207.6 million and was comprised of$201.8 million of our***8.75% Notes***, whichincluded an unamortized premium on sale of $1.8 million, and $5.8 million ofcapital lease obligations. ***On March 15, 2004, we issued$125.0 million in aggregate principal amount of 8.75% Notes, the proceeds of which we used to repay existingdebt, including (i) $79.8 million of our 12.50% senior secured notesdue 2007, which amount included accrued interest of $3.9 million,(ii) borrowings under our then revolving loan agreement of approximately$22.0 million and (iii) Morgan Olson debt of approximately$14.3 million. Concurrently with issuing $125.0 million in aggregateprincipal amount of 8.75% Notes, weentered into a new revolving credit facility that provides for availableborrowings of up to $30.0 million in revolving loans.

EffectiveMay 15, 2004, we completed an additional sale of $30.0 million inaggregate principal amount of 8.75% Noteswith net proceeds of approximately $30.0 million going to cash. Otherfinancing activities during 2004 included $4.9 million of costs associatedwith our 8.75% Notes and thenegotiation of our new revolving credit facility.

***On January 27, 2005, we completed anoffer to sell $45.0 million of our***8.75% Notes***at apremium of 5% over par on the same terms as the original issue.  Net proceeds of approximately $46.4 millionincreased cash and short-term investments.***

AtDecember 31, 2006, the Consolidated Coverage Ratio, as defined in the indenturerelating to our 8.75% Notes, was 2.4 to 1.0. As a result, we are able to incuradditional borrowings including borrowings for capital expenditures. Ourindenture and revolving loan agreement restrict our ability to incur debt, paydividends and undertake certain corporate activities. We are in compliance withthe terms of the indenture and revolving loan agreement.

The revolving credit facility provides for availableborrowings of up to $30.0 million in revolving loans. We have the option,subject to certain conditions, to increase the amount we are permitted toborrow under the facility to $50.0 million. As of December 31, 2006, webelieve we have satisfied those conditions. Available borrowings are subject toa borrowing base of eligible accounts receivable, inventory, machinery andequipment, and real estate. Borrowings under our revolving credit facility aresecured by substantially all of our assets and the assets of our existingsubsidiaries. Our revolving credit facility also includes a sub-facility for upto $15.0 million of letters of credit. As of December 31, 2006, we had$2.3 million of letters of credit outstanding and our borrowing base wouldhave supported debt borrowings of the entire $30.0 million under our revolvingcredit facility.

In addition, the revolving credit facility includescovenants that place various restrictions on us, including limitation, on ourability to:

·             incur additional debt;

·             create or become subject to liens orguarantees;

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·             make investments or loans;

·             pay dividends or make distributions;

·             prepay the 8.75%Notes or other debt;

·             merge with other entities or makeacquisitions or dissolve;

·             sell assets;

·             change fiscal year or amend organizationaldocuments or terms of any subordinated debt;

·             enter into leases; and

·             enter into transactions with affiliates.

We believe that we will have adequate resources to meetour working capital and capital expenditure requirements consistent with pasttrends and practices for at least the next twelve months. Additionally, webelieve that our cash and borrowing availability under the revolving creditfacility will satisfy our cash requirements for the coming year, given ouranticipated capital expenditures, working capital requirements and knownobligations. Our ability to make payments on our debt, including the 8.75%Notes, and to fund planned capital expenditures will depend on our ability togenerate cash in the future. This is subject to general economic conditions,other factors influencing the industries in which we operate and circumstancesthat are beyond our control.  We cannotbe certain that we will generate sufficient cash flows, and if we do not, wemay have to engage in other activities such as the sale of assets to meet ourcash requirements.

**Off balance sheet arrangements**

We have no off balance sheet arrangements.

**Commitmentsand capital expenditures**

We have entered into an agreement with a major paintmanufacturer whereby Truck Accessories, Morgan, Morgan Olson and SpecialtyVehicles Group are committed to buying principally all of their automotivepaint requirements from this manufacturer for five years.  We receive favorable pricing in return forthe commitment and estimate that we will purchase approximately $8.0 million ofpaint products during 2007 under this agreement.  We sometimes commit to the purchase ofaluminum based on expected levels of future production and at December 31, 2006Morgan had a commitment of $2.2 million. We did not have any material commitments to acquire new capital equipmentas of December 31, 2006.

Certaincash contractualobligations of ours as of December 31, 2006 are summarized in the table below. 
| **Obligations (Dollars in millions)** | ** ** | **Total** | ** ** | **Less than  1 year** | ** ** | **1-3  years** | ** ** | **4-5  years** | ** ** | **After 5  years** | ** ** |
|------------------------------------------------------|------------|-----------|------------|---------------------------------|------------|----------------|------------|----------------|------------|-------------------------|------------|
| 8.75% Notes                                          |       | $         | 200.0      |                            | $          | —         |       | $              | —     |                    | $          | — |   | $ | 200.0 |   |
| Operating leases                                     |       | 46.6      |       | 7.7                             |       | 12.1           |       | 7.3            |       | 19.5                    |       |
| Capital leases                                       |       | 5.8       |       | 1.7                             |       | 3.7            |       | 0.4            |       | —                  |       |
| Total                                                |       | $         | 252.4      |                            | $          | 9.4            |       | $              | 20.4       |                    | $          | 7.2 |   | $ | 215.4 |   |

 

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**Other matters**

We are significantly leveraged and will continueto be significantly leveraged. We had $19.0 million of stockholder’sequity at December 31, 2006 compared to $9.7 million at December 31,2005. We operate in cyclical businesses and the markets for our products arehighly competitive. In addition, we have two customers that accounted for 22%of 2006 consolidated net sales and our top ten customers accounted for 40% ofour 2006 consolidated net sales.

We continually evaluate, depending on market conditions,the most efficient use of our capital and contemplate various strategicoptions, which may include, without limitation, restructuring our business,indebtedness or capital structure. Accordingly, we or our subsidiaries may fromtime to time consider, among other things, purchasing, refinancing or otherwiseretiring certain outstanding indebtedness (whether in the open market or byother means), public or private issuances of debt or equity securities, jointventure transactions, acquisitions or dispositions, new borrowings, tenderoffers, exchange offers or any combination thereof, although there can be noassurances that such financing sources will be available on commerciallyreasonable terms. Additionally, there can be no assurances that these strategicoptions, if pursued, will be consummated or, if consummated, what effect theywill have on us.

Historically, inflation has not materiallyaffected our business; however, a rapid acceleration of material priceinflation reduced our operating profit margins during 2005 and 2004.  We believe that we have increased our sellingprices to levels necessary to offset the raw material cost inflation that hasbeen experienced during both 2005 and 2004. We implemented further price increases at Morgan, Truck Accessories andSpecialty Manufacturing during 2006 and 2007 but cannot predict the impact, ifany, of future raw material price increases on our profitability.  Operating expenses, such as salaries andemployee benefits, are subject to normal inflationary pressures.

During 2006, we paid $0.3 million in fees toSouthwestern Holdings, Inc., which is wholly owned by Mr. Poindexter,for services provided by Mr. Poindexter during 2006. Beginning in July2006, Mr. Poindexter began receiving a salary from the Company.

**Recently issued accountingstandards**

**In September 2006, the Securities and ExchangeCommission (“SEC”) issued Staff Accounting Bulletin (SAB) No. 108, *“Considering the Effects of Prior Year Misstatements When QuantifyingMisstatements in Current Year Financial Statements.”*  SAB No. 108 was issued in order to eliminatethe diversity of practice surrounding how public companies quantify financialstatement misstatements.  In SAB No. 108,the SEC staff established an approach that requires quantification of financialstatement misstatements based on the effects of the misstatements on each ofthe company’s financial statements and the related financial statementdisclosures.  This model is commonlyreferred to as a “dual approach” because it requires quantification of errorsunder both the iron curtain and the roll-over methods.  SAB No. 108 permits existing public companiesto initially apply its provision either by (i) restating prior financialstatements as if the “dual approach” had always been used or (ii) recording thevalue of assets and liabilities as of January 1, 2006 with an offsettingadjustment recorded to the opening balance of retained earnings.  SAB No. 108 is effective for fiscal yearsbeginning after November 15, 2006.**

**The Company has elected to apply the provisions ofSAB No. 108 using the cumulative effect transition method in connection withthe preparation of the financial statements for the year ended December 31,2006.  As a result, the Company recordeda decrease in accrued liabilities and an increase in retained earnings in theamount of $0.4 million, net of tax of $0.2 million, as of January 1, 2006.  This adjustment resulted from the Companyoverstating liabilities for certain compensation agreements, which was deemedimmaterial to the financial statements in each respective period.  This misstatement, decreasing net income inthe year reported, originated as follows: 2005 – $0.1 million; 2004 – $0.1million; and prior to 2004 – $0.2 million.**

**In September 2006, the Financial AccountingStandards Board (“FASB”) issued SFAS No. 158, *“Employers’Accounting for Defined Benefit Pension and Other Postretirement Plans.”*,an amendment to FASB Statements No. 87, 88, 106 and 132(R).  This standard requires an employer torecognize the over-funded or under-funded status of a defined benefit pensionand other postretirement benefit plan as an asset or liability in its statementof financial**

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**position and to recognize changes in that fundedstatus in the year in which the changes occur through comprehensiveincome.  The standard also requiresdisclosure in the notes to the financial statements of additional informationabout certain effects on net periodic benefit costs of the next fiscal yearthat arise from delayed recognition of gains or losses, prior service costs andtransition asset or obligation.  TheCompany will adopt this standard during fiscal year 2007 as required, which isnot expected to have any significant impact on the Company’s financialposition, results of operations or cash flow.**

**In September 2006, the FASB issued SFAS No. 157, *“Fair Value Measurements.”*, which provides a definition offair value, establishes a framework for measuring fair value and requiresexpanded disclosures about fair value measurements.  The Company will adopt this standard duringfiscal year 2007 as required, which is not expected to have any significantimpact on the Company’s financial position, results of operations or cashflows.**

**In July 2006, the FASB released Interpretation No.48, *“Accounting for Uncertainty in Income Taxes.”*  This Interpretation revises the recognitiontests for tax positions taken in tax returns such that a tax benefit isrecorded only when it is more likely than not that the tax provision will beallowed upon examination by taxing authorities. The amount of such a tax benefit to be recorded is the largest amountthat is more likely than not to be allowed. Any reduction in deferred tax assets or increase in tax liabilities uponadoption will correspondingly reduce retained earnings.  The Company has not yet determined the effectof adopting this interpretation, which is effective for periods beginningJanuary 1, 2007.**

**In May 2005, the FASB issued SFAS No. 154, *“Accounting Changes and Error Corrections.”* SFAS 154 changes the requirements for theaccounting for and reporting of voluntary change in accounting principle, andfor changes required by an accounting pronouncement that does not have aspecific transition provision.  Whenrecognizing a change in accounting principle, retrospective application of theprinciple to the prior period’s financial statements is generallyspecified.  The effective date for theCompany is for fiscal year 2006. The adoption of the standard did not  have a significant impact on the Company’sfinancial position, results of operations or cash flows.**

**In December 2004, the FASB issued SFAS No. 153, *“Exchange of Non-monetary Assets – an amendment of APB Opinion No. 29.”*The standard eliminates certain exceptions that were contained in APB OpinionNo. 29 to the principle that exchanges of non-monetary assets should bemeasured based on the fair value of assets exchanged.  The effective date for the Company is forfiscal year 2006.  The adoption of thisstandard did not have a significant impact on the Company’s financial position,results of operations or cash flows.**

**In November 2004, the FASB issued SFAS No. 151, *“Inventory Costs – an amendment of APB No. 43, Chapter 4.”*  The standard states that idle facilityexpense, freight, handling costs and wasted material be accounted for ascurrent-period expense regardless of whether they meet the criterion of “abnormal,”as previously defined.  The effectivedate for the Company is fiscal year 2006. The adoption of this standard did not have a significant impact on theCompany’s financial position, results of operations or cash flows.**

**Item 7a.****       ****Quantitative and Qualitative Disclosure about Market Risk**

Weare subject to certain market risks, including interest rate risk and foreigncurrency risk. The adverse effects of potential changes in these market risksare discussed below.  See the notes toour consolidated financial statements elsewhere in this 10-K for a descriptionof our accounting policies and other information related to these financialinstruments.

***Variable-rate debt. ***We currently have noborrowings outstanding under our revolving credit facility. The interest rateson the revolving credit facility are based upon a spread above either the primeinterest rate or the London Interbank Offered Rate (LIBOR), which rate used isdetermined at our option.

***Fixed-rate debt. ***As of December 31, 2006,the Company had $200.0 million of 8.75% Notes outstanding, with anestimated fair value of approximately $171.0****millionand $186.0 million based upon the traded value at December 

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31, 2006 and March 23, 2007, respectively. Marketrisk, estimated as the potential increase in fair value resulting from ahypothetical 1.0% decrease in interest rates, was approximately $9.1 million asof December 31, 2006

***Foreign currency. ***Morgan and TruckAccessories each had manufacturing plants in Canada during 2006 which generatedsales of approximately $44.0 million for the year. The functional currencyof our Canadian operations is the Canadian dollar.  Specialty Manufacturing has a plant inMexico, however the functional currency is the U.S. dollar.  We do not currently employ risk managementtechniques to manage potential exposure to foreign currency fluctuations.

A significant amount of the production from theTruck Accessories plant was exported to customers in the United States. Theweakening of the United States dollar in relation to the Canadian dollardecreased Truck Accessories’ gross margins in Canada and contributed to thedecision in late 2006 to close the plant and move production to the UnitedStates.

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**Item 8.****                                                             ****Financial Statements andSupplementary Data**
| **J.B. Poindexter & Co., Inc.**                                                                                                                 | ** ** | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------|
| ** **                                                                                                                                          | ** ** | ** ** |
| Report of Independent  Registered Public Accounting Firm as of December 31, 2006 and 2005 and for  the years ended December 31, 2006, 2005 and 2004 |       |       |
| Financial Statements:                                                                                                                               |       |       |
| Consolidated Balance Sheets  as of December 31, 2006 and 2005                                                                                       |       |       |
| Consolidated Statements of  Income for the years ended December 31, 2006, 2005 and 2004                                                             |       |       |
| Consolidated Statements of  Stockholder’s Equity (Capital Deficiency) for the years ended December 31,  2006, 2005 and 2004                    |       |       |
| Consolidated Statements of  Cash Flows for the years ended December 31, 2006, 2005 and 2004                                                         |       |       |
| Notes to Consolidated  Financial Statements                                                                                                         |       |       |

 

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**Report of Independent RegisteredPublic Accounting Firm**

Boardof Directors and Stockholder ofJ.B. Poindexter & Co., Inc.

We have audited the accompanying consolidated balance sheets of J.B.Poindexter & Co., Inc. and subsidiaries (Company) as ofDecember 31, 2006 and 2005 and the related consolidated statements ofincome, stockholder’s equity (capital deficiency), and cash flows for each ofthe three years in the period ended December 31, 2006.  These financial statements are theresponsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the PublicCompany Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to abovepresent fairly, in all material respects, the financial position of J.B.Poindexter & Co., Inc. and subsidiaries as of December 31,2006 and 2005, and the results of its operations and its cash flows for each ofthe three years in the period ended December 31, 2006 in conformity with U.S.generally accepted accounting principles.

As disclosed in Note 1 to the consolidated financial statements, theCompany has adopted Staff Accounting Bulletin No. 108, “Considering the Effectsof Prior Year Misstatements when Quantifying Misstatements in Current YearFinancial Statements” and accordingly adjusted assets and liabilities at thebeginning of 2006 with an offsetting adjustment to the opening balance ofaccumulated deficit.

As disclosed in Note 3 to the consolidated financial statements, theCompany restated its 2006 consolidated financial statements.
| /s/ CROWE CHIZEK AND COMPANY  LLC                                        |
|--------------------------------------------------------------------------|
|                                                                     |
| South Bend, Indiana                                                      |
| March 23, 2007, except for Note 3, for which the  date is August 9, 2007 |

 

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**J.B. POINDEXTER & CO., INC.AND SUBSIDIARIES****CONSOLIDATEDBALANCE SHEETS**

**(Dollars in Thousands)**
| ** **                                                                     | ** ** | **December 31,** | ** ** |
|--------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                     | ** ** | **2006**              | ** ** | **2005** | ** ** |
| ** **                                                                     | ** ** | **(Restated)**        | ** ** | ** ** | ** ** |
| **Assets**                                                                     |       |                  |       |   |   |
| Current assets                                                                 |       |                  |       |   |   |
| Cash and cash equivalents                                                      |       | $                     | 29,304     |   | $ | 40,855 |   |
| Short-term investments                                                         |       | —                |       | 15,266 |   |
| Accounts receivable, net                                                       |       | 67,227                |       | 50,156 |   |
| Inventories, net                                                               |       | 74,954                |       | 57,207 |   |
| Deferred income taxes                                                          |       | 1,771                 |       | 1,399 |   |
| Income tax receivable                                                          |       | —                |       | 1,759 |   |
| Prepaid expenses and other                                                     |       | 1,735                 |       | 2,219 |   |
| Total current assets                                                           |       | 174,991               |       | 168,861 |   |
| Property, plant and equipment, net                                             |       | 60,615                |       | 54,333 |   |
| Goodwill                                                                       |       | 29,814                |       | 24,759 |   |
| Intangible assets, net                                                         |       | 11,414                |       | 9,330 |   |
| Deferred income taxes                                                          |       | 1,135                 |       | 1,073 |   |
| Other assets                                                                   |       | 14,414                |       | 14,820 |   |
| Total assets                                                                   |       | $                     | 292,383    |   | $ | 273,176 |   |
| **Liabilities and stockholder’s equity**                                  | ** ** | ** **            | ** ** | ** ** | ** ** |
| Current liabilities                                                            |       |                  |       |   |   |
| Current portion of long-term debt                                              |       | $                     | 1,934      |   | $ | 1,017 |   |
| Accounts payable                                                               |       | 32,790                |       | 29,288 |   |
| Accrued compensation and benefits                                              |       | 11,142                |       | 7,976 |   |
| Accrued income taxes                                                           |       | 23                    |       | — |   |
| Other accrued liabilities                                                      |       | 16,835                |       | 15,681 |   |
| Total current liabilities                                                      |       | 62,724                |       | 53,962 |   |
| Noncurrent liabilities                                                         |       |                  |       |   |   |
| Long-term debt, less current portion                                           |       | 205,679               |       | 204,365 |   |
| Employee benefit obligations and other                                         |       | 5,646                 |       | 5,198 |   |
| Total noncurrent liabilities                                                   |       | 211,325               |       | 209,563 |   |
| Stockholder’s equity                                                      |       |                  |       |   |   |
| Common stock, par value $0.01 per share (3,059  shares issued and outstanding) |       | —                |       | — |   |
| Capital in excess of par value of stock                                        |       | 19,486                |       | 19,486 |   |
| Accumulated other comprehensive income (loss)                                  |       | 76                    |       | (10 | ) |
| Accumulated deficit                                                            |       | (1,228                | )          | (9,825 | ) |
| Total stockholder’s equity                                                |       | 18,334                |       | 9,651 |   |
| Total liabilities and stockholder’s equity                                |       | $                     | 292,383    |   | $ | 273,176 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

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**J.B. POINDEXTER &CO., INC. AND SUBSIDIARIES****CONSOLIDATED STATEMENTS OF INCOME**

**(Dollars in Thousands)**
| ** **                                                                         | ** ** | **Years ended December 31,** | ** ** |
|------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                                                         | ** ** | **2006**                                    | ** ** | **2005** | ** ** | **2004** | ** ** |
| ** **                                                                         | ** ** | **(Restated)**                              | ** ** | ** ** | ** ** | ** ** | ** ** |
| Net sales                                                                          |       | $                                           | 795,379    |   | $ | 668,118 |   | $ | 584,921 |   |
| Cost of sales                                                                      |       | 701,111                                     |       | 593,120 |   | 513,472 |   |
| Gross profit                                                                       |       | 94,268                                      |       | 74,998 |   | 71,449 |   |
| Selling, general and  administrative expense                                       |       | 63,034                                      |       | 49,965 |   | 40,601 |   |
| Closed and excess facility  costs                                                  |       | 2,678                                       |       | 377 |   | — |   |
| Other expense (income)                                                             |       | (202                                        | )          | 127 |   | (438 | ) |
| Loss on extinguishment  of debt                                                    |       | —                                      |       | — |   | 2,394 |   |
| Operating income                                                                   |       | 28,758                                      |       | 24,529 |   | 28,892 |   |
| Interest expense                                                                   |       | 18,929                                      |       | 18,452 |   | 14,508 |   |
| Interest income                                                                    |       | (1,766                                      | )          | (1,617 | ) | (151 | ) |
| Income from continuing  operations before income taxes and discontinued operations |       | 11,595                                      |       | 7,694 |   | 14,535 |   |
| Income tax provision                                                               |       | 3,370                                       |       | 2,582 |   | 4,134 |   |
| Income before  discontinued operations                                             |       | 8,225                                       |       | 5,112 |   | 10,401 |   |
| Loss from discontinued  operations, net of applicable taxes                        |       | —                                      |       | — |   | (527 | ) |
| Net income                                                                         |       | $                                           | 8,225      |   | $ | 5,112 |   | $ | 9,874 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

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**J.B. POINDEXTER & CO., INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (CAPITAL DEFICIENCY)**

**(Dollars in Thousands)**
| **For the years ended December  31, 2006, 2005 and 2004** | ** ** | **Shares of  common  stock** | ** ** | **Common  stock and  paid-in  capital** | ** ** | **Accumulated  deficit** | ** ** | **Accumulated  other  comprehensive  income (loss)** | ** ** | **Total** | ** ** |
|---------------------------------------------------------------------------------------------------|------------|------------------------------|------------|-----------------------------------------|------------|--------------------------|------------|------------------------------------------------------|------------|-----------|------------|
| **January 1, 2004**                                                                               |       | 3,059                        |       | $                                       | 19,486     |                     | $          | (24,811                                              | )          | $         | (82        | ) | $ | (5,407 | ) |
| Net income                                                                                        |       | —                       |       | —                                  |       | 9,874                    |       | —                                               |       | 9,874     |       |
| Translation adjustment                                                                            |       | —                       |       | —                                  |       | —                   |       | 155                                                  |       | 155       |       |
| Comprehensive income                                                                              |       |                         |       |                                    |       |                     |       |                                                 |       | 10,029    |       |
| **December 31, 2004**                                                                             |       | 3,059                        |       | 19,486                                  |       | (14,937                  | )          | 73                                                   |       | 4,622     |       |
| Net income                                                                                        |       | —                       |       | —                                  |       | 5,112                    |       | —                                               |       | 5,112     |       |
| Translation adjustment                                                                            |       | —                       |       | —                                  |       | —                   |       | (172                                                 | )          | (172      | )          |
| Unrealized gain on investments                                                                    |       | —                       |       | —                                  |       | —                   |       | 89                                                   |       | 89        |       |
| Comprehensive income                                                                              |       |                         |       |                                    |       |                     |       |                                                 |       | 5,029     |       |
| **December 31, 2005**                                                                             |       | 3,059                        |       | 19,486                                  |       | (9,825                   | )          | (10                                                  | )          | 9,651     |       |
| Cumulative effect adjustment,adoption of SAB No.  108, net of tax                                 |       | —                       |       | —                                  |       | 372                      |       | —                                               |       | 372       |       |
| Net income*(Restated)*                                                                            |       | —                       |       | —                                  |       | 8,225                    |       | —                                               |       | 8,225     |       |
| Translation adjustment                                                                            |       | —                       |       | —                                  |       | —                   |       | 86                                                   |       | 86        |       |
| Comprehensive income                                                                              |       |                         |       |                                    |       |                     |       |                                                 |       | 8,311     |       |
| **December 31, 2006 *(Restated)***                                                                |       | 3,059                        |       | $                                       | 19,486     |                     | $          | (1,228                                               | )          | $         | 76         |   | $ | 18,334 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

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**J.B. POINDEXTER &CO., INC. AND SUBSIDIARIES****CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Dollars in Thousands)**
| ** **                                                                             | ** ** | **Years ended December 31,** | ** ** |
|----------------------------------------------------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                                                             | ** ** | **2006**                                    | ** ** | **2005** | ** ** | **2004** | ** ** |
| ** **                                                                             | ** ** | **(Restated)**                              | ** ** | ** ** | ** ** | ** ** | ** ** |
| Cash flows from operating activities:                                                  |       |                                        |       |   |   |   |   |
| Net income                                                                             |       | $                                           | 8,225      |   | $ | 5,112 |   | $ | 9,874 |   |
| Adjustments to reconcile net income to net cash  provided by operating activities:     |       |                                        |       |   |   |   |   |
| Depreciation and amortization                                                          |       | 12,017                                      |       | 10,360 |   | 9,527 |   |
| Amortization of debt issuance costs                                                    |       | 761                                         |       | 598 |   | 592 |   |
| Loss on disposal of discontinued operations                                            |       | —                                      |       | — |   | 175 |   |
| Closed and excess facility costs                                                       |       | 1,161                                       |       | 377 |   | — |   |
| Loss on extinguishment of debt                                                         |       | —                                      |       | — |   | 2,394 |   |
| Provision for excess and obsolete inventory                                            |       | 1,397                                       |       | 563 |   | 382 |   |
| Provision for doubtful accounts receivable                                             |       | 333                                         |       | 195 |   | 470 |   |
| Loss (gain) on sale of property, plant and equipment                                   |       | (7                                          | )          | 223 |   | 1 |   |
| Deferred income tax provision (benefit)                                                |       | (434                                        | )          | 834 |   | 2,123 |   |
| Operating cash flows from discontinued operations                                      |       | —                                      |       | (319 | ) | (48 | ) |
| Other                                                                                  |       | 393                                         |       | (63 | ) | 232 |   |
| Change in assets and liabilities, net of the effect  of acquisitions and dispositions: |       |                                        |       |   |   |   |   |
| Accounts receivable                                                                    |       | (13,092                                     | )          | 2,437 |   | (7,240 | ) |
| Inventories                                                                            |       | (14,655                                     | )          | (1,045 | ) | (10,903 | ) |
| Prepaid expenses and other                                                             |       | (103                                        | )          | (1,647 | ) | 263 |   |
| Accounts payable                                                                       |       | 1,412                                       |       | 910 |   | (1,936 | ) |
| Accrued income taxes                                                                   |       | 1,784                                       |       | (2,481 | ) | 152 |   |
| Other accrued liabilities                                                              |       | 3,847                                       |       | (1,410 | ) | 5,712 |   |
| Net cash provided by operating activities                                              |       | 3,039                                       |       | 14,644 |   | 11,770 |   |
| Cash flows from investing activities:                                                  |       |                                        |       |   |   |   |   |
| Acquisition of businesses, net of cash acquired                                        |       | (13,897                                     | )          | (12,270 | ) | (17,906 | ) |
| Proceeds from disposition of business, property,  plant and equipment                  |       | 214                                         |       | 58 |   | 294 |   |
| Purchase of property, plant and equipment                                              |       | (13,874                                     | )          | (15,501 | ) | (9,428 | ) |
| Purchases of short-term investments                                                    |       | —                                      |       | (53,728 | ) | (30,600 | ) |
| Proceeds from sale of short-term investments                                           |       | 15,266                                      |       | 43,462 |   | 25,600 |   |
| Issuance of insurance collateral deposits                                              |       | (659                                        | )          | — |   | (5,520 | ) |
| Net investing activities of discontinued operations                                    |       | —                                      |       | — |   | 1,343 |   |
| Net cash used in investing activities                                                  |       | (12,950                                     | )          | (37,979 | ) | (36,217 | ) |
| Cash flows from financing activities:                                                  |       |                                        |       |   |   |   |   |
| Net payments of revolving lines of credit and  short-term debt                         |       | —                                      |       | — |   | (19,718 | ) |
| Proceeds from long-term debt                                                           |       | —                                      |       | 47,251 |   | 155,000 |   |
| Payments of long-term debt and capital leases                                          |       | (1,583                                      | )          | (1,047 | ) | (87,636 | ) |
| Debt issuance costs                                                                    |       | —                                      |       | (1,197 | ) | (5,160 | ) |
| Change in restricted cash                                                              |       | —                                      |       | — |   | 1,351 |   |
| Net cash provided by (used in) financing activities                                    |       | (1,583                                      | )          | 45,007 |   | 43,837 |   |
| Effect of exchange rate on cash                                                        |       | (57                                         | )          | (249 | ) | 42 |   |
| Change in cash and cash equivalents                                                    |       | (11,551                                     | )          | 21,423 |   | 19,432 |   |
| Cash and cash equivalents, beginning of year                                           |       | 40,855                                      |       | 19,432 |   | — |   |
| Cash and cash equivalents, end of year                                                 |       | $                                           | 29,304     |   | $ | 40,855 |   | $ | 19,432 |   |

 

*Theaccompanying notes are an integral part of these consolidated financialstatements.*

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**J.B. POINDEXTER & CO., INC. AND SUBSIDIARIES**

**Notes to Consolidated Financial Statements**

**(Dollars in Thousands)**

**1.**                      Organization & Business

J.B. Poindexter & Co., Inc. (“JBPCO”)and its subsidiaries (the “Subsidiaries” and together with JBPCO, the “Company”)operate primarily manufacturing businesses principally in North America. JBPCOis owned and controlled by John Poindexter.

The Company has acquired five businesses duringthe three years ended December 31, 2006 (see Note 5).

The Company’s operating segments are as follows:

***Morgan Truck Body, LLC (“Morgan”)*** manufactures truckbodies in the United States and Canada for dry freight and refrigerated trucksand vans (excluding those made for pickup trucks and tractor-trailertrucks).  Morgan’s operations includeCommercial Babcock, Inc.  The truckbodies are attached to truck chassis provided by its customers.  Customers include rental companies, truckdealers and companies that operate fleets of delivery vehicles. The principalraw materials used by Morgan include steel, aluminum, fiberglass reinforcedplywood, hardwoods and oil acquired from a variety of sources.

***Morgan Olson, LLC (“MorganOlson”)*** manufactures step van bodies for parcel, food, vending,uniform, linen and other delivery applications. Step vans are specializedvehicles designed for multiple stop applications and enable the driver of thetruck to easily access the cargo area. Morgan Olson manufactures the completetruck body, including the installation of windows, doors, instrument panels,seating, wiring and painting. The step van bodies are installed on truckchassis provided by Morgan Olson’s customers. The principal raw materials usedby Morgan Olson include steel and aluminum.

***Truck Accessories Group, LLC(“Truck Accessories”)*** manufactures pickup truck caps and tonneaucovers, which are fabricated enclosures that fit over the open beds of pickuptrucks, converting the beds into weatherproof storage areas. Truck Accessoriesincludes Leer, Century, Raider Industries Inc. (“Raider”), Pace Edwards andState Wide, which was acquired on March 17, 2006 (see Note 5). Effective May28, 2004, the Company sold principally all the assets of Midwest TruckAftermarket (“MTA”), the distribution business of Truck Accessories, and,accordingly, it was presented as a discontinued operation.  The loss from discontinued operations totaled$527 for the year ended December 31, 2004, which included $300, less an incometax benefit of $125, of loss on disposal. The principal raw materials used by Truck Accessories include resin,fiberglass, paint, and manufactured locks and windows.

***Specialty ManufacturingDivision (“Specialty Manufacturing”)*** is comprised of theSpecialty Vehicle Group, MIC Group, LLC (“MIC Group”), and EFP, LLC (“EFP”).The Specialty Vehicle Group is comprised of Federal Coach, LLC (“Federal Coach”)and Eagle Specialty Vehicles, LLC (“Eagle Coach”), which was acquired effectiveJanuary 3, 2006 (see Note 5).  TheSpecialty Vehicle Group manufactures funeral coaches, limousines and specialtybuses.  MIC Group is a manufacturer,investment caster and assembler of precision metal parts for use in theworldwide oil and gas exploration, automotive and aerospace industries andother general industries. EFP molds, fabricates and markets expandable foamproducts which are used as packaging, shock absorbing and materials handlingproducts primarily by the automotive, electronics, furniture, construction,appliance and other industries. It also manufactures products used as thermalinsulators. The principal raw materials used by Specialty Manufacturing areexpandable polystyrene, polypropylene, polyethylene, resins, ferrous andnonferrous materials including stainless steel, alloy steels, nickel-basedalloys, titanium, brass, beryllium-copper alloys and aluminum.  The Specialty Vehicle Group purchases vehiclechassis from the major automotive manufacturers’ dealers for modification andsale to its customers.

Effective September 30, 2006, each of Morgan (formerly MorganCorporation), Morgan Olson (formerly Morgan Olson Corporation), TruckAccessories (formerly Truck Accessories Group, Inc.), EFP (formerly EFPCorporation), MIC Group (formerly MIC Group, Inc.) and Eagle Coach (formerlyEagle Specialty Vehicles, Inc.) was, by means of a merger or statutoryconversion, converted into a Delaware limited liability company. Each of 

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those subsidiaries was and remains a wholly owned subsidiary of theCompany with only the form of entity being changed.

**2.**                      Summary of Significant Accounting Policies

*Principles of Consolidation. *The consolidated financial statements havebeen prepared in accordance with accounting principles generally accepted inthe United States.  All intercompanyaccounts and transactions have been eliminated in consolidation.

*Cash and Cash Equivalents.*  Cash and all highly liquidinvestments with a maturity of three months or less at the date of purchase,including short-term deposits and government agency and corporate obligations,are classified as cash and cash equivalents.

*Short-Term Investments.*  Short-term investments,considered to be available-for-sale investments, include auction rate municipalbond securities with original maturities beyond three months.  Available-for-sale investments are thosewhich the Company may decide to sell if needed for liquidity, asset-liabilitymanagement or other reasons. Available-for-sale investments are reported at fair value withunrealized gains or losses included as a separate component of equity.  There were no auction rate securities atDecember 31, 2006 with maturities beyond three months.  Unrealized gains or losses on auction ratesecurities at December 31, 2005 total $89. Interest and dividend income, adjusted by the amortization of purchasepremium or discount, is included in earnings. Realized gains or losses are determined based on the amortized cost ofthe specific investment sold and are included in earnings.  There were no realized gains or losses on thesale of investments included in the determination of net income for 2006, 2005and 2004.

*Revenue Recognition*.  Revenue is recognized uponshipment of the product to customers, except for Morgan and Morgan Olson whererevenue is recognized when title transfers to the customer upon final bodyassembly, quality inspection and customer notification.  Amounts billed to customers related toshipping and handling is classified as revenue. The costs associated with the shipping and handling revenue are includedin cost of sales.

*Accounts Receivable. *The Company sells to customers as iscustomary in its industries and typically extends its customers 30-day paymentterms.  Interest is not normally chargedon accounts receivable.  Accountsreceivable is stated net of an allowance for doubtful accounts of $1,547 and$1,490 at December 31, 2006 and 2005, respectively.  The Company establishes an allowance fordoubtful accounts receivable on a case by case basis when it believes that therequired payment of specific amounts owed is unlikely to occur.  The activity in the allowance for doubtfulaccounts for the years ended December 31 was:
| ** **                            | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|---------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Balance at the  beginning of the year |       | $        | 1,490      |     | $          | 993      |       | $ | 909 |   |
| Provision for  losses                 |       | 333      |       | 195      |       | 470      |       |
| Charge-offs                           |       | (340     | )          | (153     | )          | (520     | )          |
| Recoveries                            |       | (3       | )          | 30       |       | 2        |       |
| Acquisitions                          |       | 67       |       | 425      |       | 132      |       |
| Balance at the end of  the year.      |       | $        | 1,547      |     | $          | 1,490    |       | $ | 993 |   |

 

The carrying amounts of trade accounts receivable approximate fairvalue because of the short maturity of those instruments.  The Company is not aware of any significantcredit risks related to its customer base and does not generally requirecollateral or other security to support customer receivables.

*Inventories. *Inventories are stated at the lower of costor market.  Cost is determined by thefirst-in, first-out (FIFO) method.

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*Property, Plant and Equipment. *Property, plant and equipment, includingproperty under capital leases, are stated at cost.  The cost of property under capital leasesrepresents the present value of the future minimum lease payments at theinception of the lease.  Depreciation andamortization is computed by using the straight-line method over the estimateduseful lives of the applicable assets. The cost of maintenance and repairs is charged to operating expense asincurred and the cost of major replacements and significant improvements iscapitalized.  The Company recordsimpairment losses on long-lived assets used in operations when events andcircumstances indicate that the assets may be impaired and the undiscountedcash flows estimated to be generated by those assets are less than the carryingamounts of those assets.

*Debt Issuance Costs. *Debt issuance costs are amortized using theeffective interest method over the term of the related debt, which ranges fromfour to ten years.  Amortization of debtissuance costs is included in interest expense.

*Evaluation of Impairment of Long-Lived Assets. *In accordance with Statement of Financial Accounting Standard (“SFAS”)No. 144, *“Impairment or Disposal of Long-Lived Assets*”,the Company evaluates the carrying value of long-lived assets whenever significantevents or changes in circumstances indicate the carrying value of these assetsmay be impaired.  The Company evaluatespotential impairment of long-lived assets by comparing the carrying value ofthe assets to the expected net future cash flows resulting from the use of theassets.  As indicated in Note 7, theCompany recorded impairment charges in 2006 and 2005.

*Warranty. *Morgan provides product warranties forperiods up to five years.  Morgan Olsonprovides a warranty period, which is one year or 12,000 miles for components,three years or 36,000 miles for paint and five years or 50,000 miles for thevan body structure.  Truck Accessoriesprovides a warranty period, exclusive to the original truck owner, which is, ingeneral but with exclusions, one year for parts, five years for paint andlifetime for structure.  The SpecialtyVehicle Group provides a warranty on its products for a period of 36 months or36,000 miles on the section of the body and parts manufactured for funeralcoaches and funeral limousines, 12 months or 12,000 miles on the body and partsmanufactured for bus bodies and 24 months or 24,000 miles on the section of thebody and parts manufactured for limousines. The remaining operations of Specialty Manufacturing do not provide awarranty on their products.  A provisionfor warranty costs is included in cost of sales when goods are sold based onhistorical experience and estimated future claims.  The Company had accrued warranty costs of$4,185 and $4,255 at December 31, 2006 and 2005, respectively.  The activity in the accrued warranty costaccounts for the years ended December 31 was:
| ** **                            | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|---------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Balance at the  beginning of the year |       | $        | 4,255      |     | $          | 4,233    |       | $ | 3,214 |   |
| Provision for  losses                 |       | 4,362    |       | 4,136    |       | 4,273    |       |
| Charge-offs                           |       | (4,545   | )          | (4,180   | )          | (3,548   | )          |
| Acquisitions                          |       | 113      |       | 66       |       | 294      |       |
| Balance at the  end of the year       |       | 4,185    |       | 4,255    |       | 4,233    |       |
| Less: Short-term                      |       | 1,795    |       | 2,219    |       | 1,978    |       |
| Long-term                             |       | $        | 2,390      |     | $          | 2,036    |       | $ | 2,255 |   |

 

*Advertising and Research and Development Expense.*  TheCompany expenses advertising costs and research and development (“R&D”)costs as incurred.  During the yearsended December 31, 2006, 2005 and 2004, advertising expense was $3,474,****$3,340 and $2,371, respectively and R&D expense was$3,495, $2,240 and $1,554, respectively.

*Income Taxes. *The Company accounts for income taxes underthe provisions of SFAS No. 109, *“Accounting for IncomeTaxes.*”  Under SFASNo. 109, deferred tax assets and liabilities are computed based on thedifference between the financial statement and income tax bases of assets andliabilities using the enacted tax rates.

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The Company’s management believes that it is more likely than not thatcurrent and long-term deferred tax assets will reduce future income taxpayments.  The Company has consideredongoing prudent and feasible tax planning strategies in making this assessment.There are significant assumptions inherent in the Company’s prudent andfeasible tax planning strategies. Changes in these assumptions would impact the estimated amount ofdeferred tax assets realized by these tax planning strategies.  Should the Company determine that it is morelikely than not unable to realize all or part of the net deferred tax asset inthe future, a valuation allowance, necessary to reduce the deferred tax asset tothe amount that is more likely than not to be realized,  would reduce income in the period suchdetermination was made.

*Self-Insurance Risks*.  The Company utilizes acombination of insurance coverage and self-insurance programs for property,casualty, workers’ compensation and health care insurance.  The Company records an actuariallydetermined, fully developed self-insurance reserve to cover the self-insuredportion of these risks based on known facts and historical industrytrends.  Changes in the assumptions usedby the actuary could result in a different self-insurance reserve.

*Contingent Liabilities. *Reserves are established for estimatedenvironmental and legal loss contingencies when a loss is probable and theamount of the loss can be reasonably estimated. Revisions to contingent liabilities are reflected in income in theperiod in which different facts or information become known or circumstanceschange that affect the previous assumptions with respect to the likelihood oramount of loss.  Reserves for contingentliabilities are based upon the assumptions and estimates regarding the probableoutcome of the matter.  Should theoutcome differ from the assumptions and estimates, revisions to the estimatedreserves for contingent liabilities would be required.

*Comprehensive Income.*Comprehensive income consists of net income and other comprehensiveincome.  Other comprehensive incomeincludes foreign currency translation adjustments and unrealized gains andlosses on available-for-sale investments, which are also recognized as separatecomponents of equity.

*Translation of Foreign Financial Statements. *Assets and liabilities of foreign operations are translated at year-endrates of exchange, and the income statements are translated at the average ratesof exchanges for the year.  Gains orlosses resulting from translating foreign currency financial statements areaccumulated in a separate component of stockholder’s equity until the foreignoperations are sold or substantially liquidated.  Gains or losses resulting from foreigncurrency transactions (transactions that require settlement in a currency otherthan the Company’s functional currency) are included in net income.

*Fair Value of Financial Instruments*.  TheCompany’s financial instruments consist of cash and cash equivalents,receivables, and debt.  Fair values ofcash and cash equivalents and receivables approximate carrying values for thesefinancial instruments since they are relatively short-term in nature.  The carrying amount of debt, except for theCompany’s 8.75% Notes (see Note 11), approximates the fair value due either tolength of maturity or existence of variable interest rates that approximateprevailing market rates.

*Use of Estimates.*The preparation of financial statements in conformity with accountingprinciples generally accepted in the United States requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period.  Actualresults could differ from those estimates. Significant estimates subject to change include the valuation ofgoodwill and other intangible assets, the allowances for doubtful accounts andshrinkage and excess and obsolete inventory, the valuation of deferred taxassets, and the allowances for self-insurance risks, warranty claims, andenvironmental claims.

*Reclassifications.*  Certain prior year amounts havebeen reclassified to conform to the classifications used in fiscal 2006.

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***Recent Accounting Pronouncements***.  In September 2006, the Securities and ExchangeCommission (“SEC”) issued Staff Accounting Bulletin (SAB) No. 108, *“Considering the Effects of Prior Year Misstatements when QuantifyingMisstatements in Current Year Financial Statements*.*”*  SAB No. 108 wasissued in order to eliminate the diversity of practice surrounding how publiccompanies quantify financial statement misstatements.  In SAB No. 108, the SEC staff established anapproach that requires quantification of financial statement misstatementsbased on the effects of the misstatements on each of the company’s financialstatements and the related financial statement disclosures.  This model is commonly referred to as a “dualapproach” because it requires quantification of errors under both the ironcurtain and the roll-over methods.  SABNo. 108 permits existing public companies to initially apply its provisioneither by (i) restating prior financial statements as if the “dual approach”had always been used or (ii) recording the value of assets and liabilities asof January 1, 2006 with an offsetting adjustment recorded to the openingbalance of retained earnings.  SAB No.108 is effective for fiscal years beginning after November 15, 2006.

**The Company has elected to apply the provisions ofSAB No. 108 using the cumulative effect transition method in connection withthe preparation of the financial statements for the year ended December 31, 2006.  As a result, the Company recorded a decreasein accrued liabilities and an increase in retained earnings in the amount of$372, net of tax of $159, as of January 1, 2006.  This adjustment resulted from the Companyoverstating liabilities for certain compensation agreements, which was deemedimmaterial to the financial statements in each respective period.  This misstatement, decreasing net income inthe year reported, originated as follows: 2005 – $81; 2004 – $81; and, prior to2004– $210.**

**In September 2006, the Financial AccountingStandards Board (“FASB”) issued SFAS No. 158, “*Employers’Accounting for Defined Benefit Pension and Other Postretirement Plans*”,an amendment to FASB Statements No. 87, 88, 106 and 132(R).  This standard requires an employer torecognize the over funded or under funded status of a defined benefit pensionand other postretirement benefit plan as an asset or liability in its statementof financial position and to recognize changes in that funded status in theyear in which the changes occur through comprehensive income.  The standard also requires disclosure in thenotes to the financial statements of additional information about certaineffects on net periodic benefit costs of the next fiscal year that arise fromdelayed recognition of gains or losses, prior service costs and transitionasset or obligation.  The Company willadopt this standard during fiscal year 2007 as required, which is not expectedto have any significant impact on the Company’s financial position, results ofoperations or cash flows.**

**In September 2006, the FASB issued SFAS No. 157, “*Fair Value Measurements*”, which provides a definition offair value, establishes a framework for measuring fair value and requiresexpanded disclosures about fair value measurements.  The Company has not yet determined the effectof adopting this standard, which is effective for fiscal years beginning afterNovember 15, 2007.**

**In July 2006, the FASB released Interpretation No.48 “*Accounting for Uncertainty in Income Taxes.*”  This Interpretation revises the recognitiontests for tax positions taken in tax returns such that a tax benefit isrecorded only when it is more likely than not that the tax provision will beallowed upon examination by taxing authorities. The amount of such a tax benefit to be recorded is the largest amountthat is more likely than not to be allowed. Any reduction in deferred tax assets or increase in tax liabilities uponadoption will correspondingly reduce retained earnings.  The Company has not yet determined the effectof adopting this Interpretation, which is effective for periods beginningJanuary 1, 2007.**

**In May 2005, the FASB issued SFAS No. 154 “*Accounting Changes and Error Corrections”.* SFAS 154 changes the requirements for theaccounting for and reporting of voluntary change in accounting principle, andfor changes required by an accounting pronouncement that does not have aspecific transition provision.  Whenrecognizing a change in accounting principle, retrospective application of theprinciple to the prior period’s financial statements is generallyspecified.  The effective date for theCompany is for fiscal year 2006. The adoption of the standard did not  have a significant impact on the Company’sfinancial position, results of operations or cash flows.**

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**In December 2004, the FASB issued SFAS No. 153, *“Exchange of Non-monetary Assets – an amendment of APB Opinion No. 29.”*The standard eliminates certain exceptions that were contained in APB OpinionNo. 29 to the principle that exchanges of non-monetary assets should bemeasured based on the fair value of assets exchanged.  The effective date for the Company is forfiscal year 2006.  The adoption of thisstandard did not have a significant impact on the Company’s financial position,results of operations or cash flows.**

**In November 2004, the FASB issued SFAS No. 151, *“Inventory Costs – an amendment of APB No. 43, Chapter 4.”*  This standard states that idle facilityexpense, freight, handling costs and wasted material be accounted for ascurrent-period expense regardless of whether they meet the criterion of “abnormal,”as previously defined.  The effectivedate for the Company is fiscal year 2006. The adoption of this standard did not have a significant impact on theCompany’s financial position, results of operations or cash flows.**

**3.**                      Restatement

As a result of the physicalverification of inventory at Morgan Olson as of June 30, 2007, the Companydetermined that it was necessary to write down the value of inventory.  The Company determined that this adjustmentwas the result of errors in the inventory reconciliation process and restatedits results of operations for the year ended December 31, 2006 and the interimperiods included therein.  The restatedoperating results for the year ended December 31, 2006 and each unauditedinterim period included therein were:
| ** **                         | ** ** | **Three Months Ended** | ** ** | **Year Ended**     | ** ** |
|------------------------------------|------------|----------------------------------|------------|-------------------------|------------|
| ** **                         | ** ** | **March 31,  2006**         | ** ** | **June 30,  2006** | ** ** | **September  31, 2006** | ** ** | **December  31, 2006** | ** ** | **December  31, 2006** | ** ** |
| ** **                         | ** ** | **(Unaudited)**                  | ** ** | **(Unaudited)**         | ** ** | **(Unaudited)** | ** ** | **(Unaudited)** | ** ** | ** ** | ** ** |
| Operating Income                   |       |                             |       |                    |       |   |   |   |   |   |   |
| Reported                           |       | $                                | 5,234      |                    | $          | 13,876 |   | $ | 9,251 |   | $ | 1,523 |   | $ | 29,884 |   |
| Error                              |       | (857                             | )          | (37                     | )          | (1,524 | ) | 1,292 |   | (1,126 | ) |
| Restated                           |       | $                                | 4,377      |                    | $          | 13,839 |   | $ | 7,727 |   | $ | 2,815 |   | $ | 28,758 |   |
|                               |       |                             |       |                    |       |   |   |   |   |   |   |
| Income (Loss)  Before Income Taxes |       |                             |       |                    |       |   |   |   |   |   |   |
| Reported                           |       | $                                | 765        |                    | $          | 10,050 |   | $ | 5,007 |   | $ | (3,101 | ) | $ | 12,721 |   |
| Error                              |       | (857                             | )          | (37                     | )          | (1,524 | ) | 1,292 |   | (1,126 | ) |
| Restated                           |       | $                                | (92        | )                       | $          | 10,013 |   | $ | 3,483 |   | $ | (1,809 | ) | $ | 11,595 |   |
|                               |       |                             |       |                    |       |   |   |   |   |   |   |
| Net Income  (Loss)                 |       |                             |       |                    |       |   |   |   |   |   |   |
| Reported                           |       | $                                | 461        |                    | $          | 6,220 |   | $ | 4,155 |   | $ | (1,936 | ) | $ | 8,900 |   |
| Error                              |       | (515                             | )          | (22                     | )          | (914 | ) | 776 |   | (675 | ) |
| Restated                           |       | $                                | (54        | )                       | $          | 6,198 |   | $ | 3,241 |   | $ | (1,160 | ) | $ | 8,225 |   |

 

Additionally, inventory at December 31, 2006 was reduced by $1,126.

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**4.**                      Segment Data

The Company operates and manages its subsidiarieswithin the separate business segments described in Note 1.  The Company evaluates performance andallocates resources based on the operating income of each segment.  The accounting policies of the reportablebusiness segments are the same as those described in the summary of significantaccounting policies.

The following is a summary of the business segmentdata for the years ended December 31:
|                                            | ** ** | **2006**       | ** ** | **2005**   | ** ** | **2004**   | ** ** |
|--------------------------------------------|------------|----------------|------------|------------|------------|------------|------------|
| ** **                                 | ** ** | **(Restated)** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Net  Sales**                             | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** |
| Morgan                                     |       | $              | 379,434    |       | $          | 358,216    |       | $ | 315,454 |   |
| Morgan Olson                               |       | 100,361        |       | 60,793     |       | 70,995     |       |
| Truck  Accessories                         |       | 159,310        |       | 153,726    |       | 135,385    |       |
| Specialty  Manufacturing                   |       | 155,856        |       | 95,658     |       | 64,347     |       |
| Eliminations                               |       | 418            |       | (275       | )          | (1,260     | )          |
| Net Sales                                  |       | $              | 795,379    |       | $          | 668,118    |       | $ | 584,921 |   |
| **Operating  Income**                      | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** |
| Morgan                                     |       | $              | 21,576     |       | $          | 20,771     |       | $ | 19,605 |   |
| Morgan Olson                               |       | 2,778          |       | (1,942     | )          | 1,939      |       |
| Truck  Accessories                         |       | 3,524          |       | 8,327      |       | 10,480     |       |
| Specialty  Manufacturing                   |       | 9,759          |       | 2,470      |       | 2,770      |       |
| JBPCO  (Corporate)                         |       | (8,879         | )          | (5,097     | )          | (5,902     | )          |
| Operating Income                           |       | $              | 28,758     |       | $          | 24,529     |       | $ | 28,892 |   |
| **Depreciation  and Amortization Expense** | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** |
| Morgan                                     |       | $              | 2,241      |       | $          | 2,661      |       | $ | 2,773 |   |
| Morgan Olson                               |       | 958            |       | 901        |       | 809        |       |
| Truck  Accessories                         |       | 4,233          |       | 3,701      |       | 3,275      |       |
| Specialty  Manufacturing                   |       | 4,547          |       | 3,066      |       | 2,653      |       |
| JBPCO  (Corporate)                         |       | 38             |       | 31         |       | 17         |       |
| Depreciation and  Amortization Expense     |       | $              | 12,017     |       | $          | 10,360     |       | $ | 9,527 |   |

 
| Total Assets as of December  31, | ** ** | **(Restated)** | ** ** | ** ** | ** ** |
|----------------------------------|------------|----------------|------------|------------|------------|
| Morgan                           |       | $              | 93,295     |       | $          | 83,620 |   |
| Morgan Olson                     |       | 28,333         |       | 24,430     |       |
| Truck  Accessories               |       | 67,435         |       | 62,186     |       |
| Specialty  Manufacturing         |       | 82,872         |       | 56,113     |       |
| JBPCO  (Corporate)               |       | 20,448         |       | 46,827     |       |
| Identifiable Assets              |       | $              | 292,383    |       | $          | 273,176 |   |

 

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| ** **                | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|---------------------------|------------|----------|------------|----------|------------|----------|------------|
| **Capital  Expenditures** |       |     |       |     |       |     |       |
| Morgan                    |       | $        | 1,764      |     | $          | 2,953    |       | $ | 4,222 |   |
| Morgan Olson              |       | 328      |       | 599      |       | 633      |       |
| Truck  Accessories        |       | 3,569    |       | 4,457    |       | 3,376    |       |
| Specialty Manufacturing   |       | 4,485    |       | 6,740    |       | 1,192    |       |
| JBPCO  (Corporate)        |       | 3,728    |       | 752      |       | 5        |       |
| Capital Expenditures      |       | $        | 13,874     |     | $          | 15,501   |       | $ | 9,428 |   |

 

Morgan has two customers(truck leasing and rental companies) that accounted for, on a combined basis,approximately 46%, 47% and 46% of Morgan’s net sales during 2006, 2005 and2004, respectively.  Accounts receivable from these customers totaled$8,375 and $4,655 at December 31, 2006 and 2005, respectively.  Specialty Manufacturing has one customer inthe international oil field service industry that accounted for approximately15%,****15% and 18% of Specialty Manufacturing’snet sales during 2006, 2005 and 2004, respectively.  Accountsreceivable from this customer totaled $ 2,622 and $1,839 atDecember 31, 2006 and 2005, respectively.

MorganOlson has two customers that accounted for approximately 56%, 38% and 81% ofMorgan Olson’s net sales during 2006, 2005 and 2004 respectively.  Accounts receivable from these customerstotaled $2,170 and $33 at December 31, 2006 and 2005, respectively.  Morgan Olson manufactured and shipped truck bodiesfor Morgan’s Canadian operations and charged Morgan $937 during the year endedDecember 31, 2006 for the products.

The Company, on a consolidated basis, has twocustomers that accounted for approximately, 22%, 25% and 25% of total net salesduring 2006, 2005 and 2004, respectively. Accounts receivable from these customers totaled $8,375 and $4,655 atDecember 31, 2006 and 2005, respectively. These are customers of Morgan.

The Company’s operations are located principally in the UnitedStates.  However, Morgan and TruckAccessories have operations located in Canada and Specialty Manufacturing hasoperations in Mexico.  Long-lived assetsrelating to these foreign operations were $10,185 and****$9,738at December 31, 2006 and 2005, respectively. Consolidated net sales included $29,610, $21,476 and****$17,169in 2006, 2005 and 2004, respectively, of sales to customers outside the UnitedStates.

JBPCO (Corporate) operatingexpenses for all periods comprise the costs of the parent company office andpersonnel that provide strategic direction and support to the subsidiarycompanies.  The JBPCO (Corporate) costs of $8,879, $5,097 and $5,902 for 2006, 2005and 2004, respectively, included consulting fees associated with manufacturingprocess improvements of $3,200 in 2006 and the loss on extinguishment of debtof $2,394 during the 2004 period.

**5.**                      Acquisitions

Effective March 15, 2004,the Company acquired from John Poindexter, the sole shareholder of the Company,the stock of Morgan Olson, a truck body manufacturing company that he acquiredeffective July 15, 2003.  Mr. Poindexteracquired certain assets of Morgan Olson from Grumman Olson Industries, Inc. ina bankruptcy proceeding and contributed those assets to the Company.  Mr. Poindexter paid $13,942 for the assetsincluding $3,000 in cash that he contributed as equity of Morgan Olson andassumed certain liabilities of approximately $1,518.  The purchase price was allocated to theassets based on the estimated fair values as of the date of acquisition.  There was no goodwill recorded with theacquisition. The historical financial statements of the

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Company have beenrestated to reflect the merger on a basis similar to a pooling of interests soas to combine the financial statements of both companies for the period theywere under common control.

The cash purchase price wasallocated to the acquired net assets based on the estimated fair values as ofthe date of the original acquisition as follows:
| **Morgan Olson**              | ** ** | **July 15,  2003** | ** ** |
|------------------------------------|------------|-------------------------|------------|
| Accounts receivable                |       | $                       | 2,905      |   |
| Inventories                        |       | 4,050                   |       |
| Prepaid expenses and  other        |       | 328                     |       |
| Property, plant and  equipment     |       | 8,177                   |       |
| Accrued compensation  and benefits |       | (160                    | )          |
| Accrued warranty                   |       | (450                    | )          |
| Other accrued expenses             |       | (908                    | )          |
|                               |       | $                       | 13,942     |   |

 

EffectiveNovember 5, 2004 the Company acquired substantially all of the assets ofPace Edwards Company (“Pace Edwards”). The results of Pace Edwards’ operations have been included in theconsolidated financial statements since that date.  Pace Edwards is located in Washington stateand is a leading manufacturer of retractable tonneau covers in the pickup truckaccessories business.  Pace Edwardsoperates as a division of Truck Accessories and continues to utilize thepurchased assets in the same manner as prior to the acquisition.  The aggregate purchase price was $9,649 forthe assets of Pace Edwards.  Theacquisition has been accounted for as a purchase and, accordingly, the acquiredassets and liabilities assumed have been recorded at their estimated fairvalues at the date of acquisition and approximated the following:
| **Pace Edwards**          | ** ** | **November 5,  2004** | ** ** |
|--------------------------------|------------|----------------------------|------------|
| Accounts receivable            |       | $                          | 1,532      |   |
| Inventories                    |       | 1,510                      |       |
| Property, plant and  equipment |       | 2,431                      |       |
| Goodwill                       |       | 971                        |       |
| Acquired intangibles           |       | 3,472                      |       |
| Current liabilities            |       | (87                        | )          |
| Accrued warranty               |       | (180                       | )          |
|                           |       | $                          | 9,649      |   |

 

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Effective December 15,2004 the Company acquired all of the outstanding stock of Commercial BabcockInc. (“Commercial Babcock”), a Canadian company located in Brampton, Ontario.The results of Commercial Babcock’s operations have been included in theconsolidated financial statements since that date.  Commercial Babcock is a manufacturer and marketerof medium-duty truck bodies for the eastern Canadian market.  Commercial Babcock operates as a division ofMorgan and continues to utilize the purchased assets in the same manner asprior to the acquisition.  The aggregatepurchase price was $8,850 for the outstanding stock of Commercial Babcock.  Theacquisition has been accounted for as a purchase and, accordingly, the acquiredassets and liabilities assumed have been recorded at their estimated fairvalues at the date of acquisition and approximated the following:

 
| **Commercial Babcock**   | ** ** | **December 15,  2004** | ** ** |
|-------------------------------|------------|-----------------------------|------------|
| Cash                          |       | $                           | 593        |   |
| Accounts receivable           |       | 2,581                       |       |
| Inventories                   |       | 1,783                       |       |
| Other current assets          |       | 89                          |       |
| Property, plant and equipment |       | 701                         |       |
| Goodwill                      |       | 5,422                       |       |
| Acquired intangibles          |       | 2,686                       |       |
| Accounts payable              |       | (2,897                      | )          |
| Accrued warranty              |       | (114                        | )          |
| Other current liabilities     |       | (800                        | )          |
| Other long-term liabilities   |       | (60                         | )          |
| Deferred income taxes         |       | (1,134                      | )          |
|                          |       | $                           | 8,850      |   |

 

Effective June 6, 2005, theCompany acquired 100% of the membership interests in Federal Coach LLC (“FederalCoach”).  The results of Federal Coach’soperations have been included in the consolidated financial statements of theCompany since that date.   Federal Coachis located in Fort Smith, Arkansas and is a manufacturer of funeral coaches,limousines and mid-sized buses.  FederalCoach operates as a division of Specialty Manufacturing and continues toutilize the purchased assets in the same manner as prior to theacquisition.  The acquisition wasaccounted for as a purchase and the aggregate purchase price was $12,270.

The following summarizes thefair values of the assets acquired and liabilities assumed at the date ofacquisition:
| **Federal Coach**        | ** ** | **June 6, 2005** | ** ** |
|-------------------------------|------------|----------------------------|------------|
| Accounts receivable           |       | $                          | 2,465      |   |
| Inventories                   |       | 9,330                      |       |
| Other current assets          |       | 15                         |       |
| Property, plant and equipment |       | 649                        |       |
| Goodwill                      |       | 1,850                      |       |
| Acquired intangibles          |       | 3,650                      |       |
| Accounts payable              |       | (4,336                     | )          |
| Customer deposits             |       | (343                       | )          |
| Accrued warranty              |       | (66                        | )          |
| Other current liabilities     |       | (944                       | )          |
|                          |       | $                          | 12,270     |   |

 

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Effective January 3, 2006,The Company acquired all of the outstanding stock of Kellerman Coach Co., Inc.(“Eagle Coach”).  The results of EagleCoach’s operations have been included in the consolidated financial statementssince that date.  Eagle Coach is locatedin Amelia, Ohio and manufactures funeral coaches.  Eagle Coach and Federal Coach comprise theSpecialty Vehicle Group that operates as a division of the SpecialtyManufacturing segment and Eagle Coach continues to utilize the purchased assetsin the same manner as prior to the acquisition. The acquisition was accounted for as a purchase and the purchase pricewas $7,440.  The following summarizes thefair value of the assets acquired and liabilities assumed at the date ofacquisition:
| **Eagle Coach**          | ** ** | **January 3, 2006** | ** ** |
|-------------------------------|------------|-------------------------------|------------|
| Accounts receivable           |       | $                             | 1,933      |   |
| Inventories                   |       | 1,658                         |       |
| Other current assets          |       | 18                            |       |
| Property, plant and equipment |       | 232                           |       |
| Other long-term assets        |       | 161                           |       |
| Goodwill                      |       | 1,527                         |       |
| Acquired intangibles          |       | 2,900                         |       |
| Current liabilities           |       | (954                          | )          |
| Accrued warranty              |       | (35                           | )          |
|                          |       | $                             | 7,440      |   |

 

Effective March 17, 2006,the Company acquired all of the outstanding stock of State Wide Aluminum, Inc.(“State Wide”).  The results of StateWide’s operation have been included in the consolidated financial statementssince that date.  State Wide is locatedin Elkhart, Indiana and is one of Truck Accessories’ two principal suppliers ofwindows and doors used in the manufacture of pickup truck caps.  State Wide operates as a division of TruckAccessories and continues to utilize the purchased assets in the same manner asprior to the acquisition.  Theacquisition was accounted for as a purchase and the purchase price was$6,457.  The following summarizes thefair value of the assets acquired and liabilities assumed at the date ofacquisition:
| **State Wide**           | ** ** | **March 17, 2006** | ** ** |
|-------------------------------|------------|------------------------------|------------|
| Accounts receivable           |       | $                            | 2,181      |   |
| Inventories                   |       | 2,493                        |       |
| Other current assets          |       | 149                          |       |
| Property, plant and equipment |       | 923                          |       |
| Goodwill                      |       | 3,528                        |       |
| Current liabilities           |       | (2,782                       | )          |
| Other long-term liabilities   |       | (35                          | )          |
|                          |       | $                            | 6,457      |   |

 

The combined results ofoperations of the Company for the years ended December 31, 2006, 2005 and 2004including Pace Edwards, Commercial Babcock, Federal Coach, Eagle Coach andState Wide for the periods prior to their acquisition on an unaudited pro formabasis would be as follows:
| ** **                             | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|----------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Net sales                              |       | $        | 800,861    |     | $          | 722,150  |       | $ | 687,457 |   |
| Operating income                       |       | 28,818   |       | 26,853   |       | 36,434   |       |
| Income before  discontinued operations |       | 7,776    |       | 6,657    |       | 15,878   |       |
|                                        |            |          |            |          |            |          |            |  |  |  |

 

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**6.**                      Inventories

Consolidated net inventories consisted of the following:
| ** **        | ** ** | **December 31,** | ** ** |
|-------------------|------------|-----------------------|------------|
| ** **        | ** ** | **2006**              | ** ** | **2005** | ** ** |
| ** **        | ** ** | **(Restated)**        | ** ** | ** ** | ** ** |
| Raw materials     |       | $                     | 46,217     |   | $ | 36,172 |   |
| Work in process   |       | 21,563                |       | 13,879 |   |
| Finished goods    |       | 7,174                 |       | 7,156 |   |
| Total inventories |       | $                     | 74,954     |   | $ | 57,207 |   |

 

Inventories are stated net of an allowance for excess and obsoleteinventory of $1,919 and****$2,529 atDecember 31, 2006 and 2005, respectively. The activity in the allowance for excess and obsolete inventory accountsfor the years ended December 31 was:
| ** **                            | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|---------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Balance at the  beginning of the year |       | $        | 2,529      |     | $          | 2,753    |       | $ | 2,593 |   |
| Provision for  losses                 |       | 1,397    |       | 563      |       | 382      |       |
| Charge-offs                           |       | (2,049   | )          | (1,137   | )          | (992     | )          |
| Recoveries                            |       | —   |       | —   |       | —   |       |
| Acquisitions                          |       | 42       |       | 350      |       | 770      |       |
| Balance at the end of  the year       |       | $        | 1,919      |     | $          | 2,529    |       | $ | 2,753 |   |

 

**7.**                      Property, Plant and Equipment

Property,plant and equipment, as of December 31, 2006 and 2005, consisted of thefollowing:
|                                            | ** ** | **Range of  Useful Lives  in years** | ** ** | **2006** | ** ** | **2005** | ** ** |
|--------------------------------------------|------------|-----------------------------------------------------|------------|----------|------------|----------|------------|
| Land                                       |       | —                                              |       | $        | 4,785      |     | $          | 4,679 |   |
| Buildings and  improvements                |       | 5-25                                                |       | 29,339   |       | 27,924   |       |
| Machinery and  equipment                   |       | 3-10                                                |       | 104,787  |       | 95,207   |       |
| Furniture and  fixtures                    |       | 2-10                                                |       | 15,861   |       | 17,182   |       |
| Transportation  equipment                  |       | 2-10                                                |       | 5,672    |       | 4,870    |       |
| Leasehold  improvements                    |       | 3-10                                                |       | 6,700    |       | 6,435    |       |
| Construction in  progress                  |       | —                                              |       | 6,365    |       | 3,809    |       |
|                                       |       |                                                |       | 173,509  |       | 160,106  |       |
| Accumulated  depreciation and amortization |       |                                                |       | (112,894 | )          | (105,773 | )          |
| Property, plant and  equipment, net        |       |                                                |       | $        | 60,615     |     | $          | 54,333 |   |

 

Machinery and Equipment included approximately $7,792 and $4,290 ofequipment at cost recorded under capital leases as of December 31, 2006 and2005, respectively, and accumulated depreciation of approximately $2,155 and$1,355 at December 31, 2006 and 2005, respectively.

In the fourth quarter of 2006, the Company decided to close itsremaining Truck Accessories’ Canadian operations, resulting in a write-down ofthe carrying value of the assets by $1,161. A $2,678 charge has been recorded as closed and excess facility coststhat included the write-down of assets and certain personnel related 

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costs.  As of December 31, 2006,none of these amounts have been expended. The Company expects to pay out severance and other employee costs in2007.

In the third quarter of 2005, the Company decided to consolidate itstwo Truck Accessories’ locations in Canada which resulted in a write-down ofits Drinkwater facility.  The write-downof $377 has been recorded as closed and excess facility costs.

Depreciation expense was $11,201,****$9,725 and$9,104 and included $1,044, $742 and $324 for assets recorded under capitalleases, for the years ended December 31, 2006, 2005 and 2004, respectively.

**8.**                      Goodwill, Intangibles and Other Assets

Goodwill represents the excess of costs over fair value of net assetsof businesses acquired.  Pursuant to SFASNo. 142, *“Goodwill and Other Intangible Assets*”,goodwill and intangible assets acquired in a purchase business combination anddetermined to have an indefinite life are not amortized, but instead tested forimpairment at least annually.

The Company completed its annual impairment review effective October 1,2006, 2005 and 2004, which indicated that there was no impairment.  The fair value of our reporting units isbased on acquisition multiples, which are derived from information and analysisof recent acquisitions in the marketplace for companies with similaroperations.

SFAS No. 142 also requires that intangible assets with estimable usefullives be amortized over their respective estimated useful lives and reviewedfor impairment in accordance with SFAS No. 144, “*Accountingfor Impairment or Disposal of Long-Lived Assets*.”

The Company records impairment losses on long-lived assets used inoperations when events and circumstances indicate that the assets may beimpaired and the undiscounted cash flows estimated to be generated by thoseassets are less than the carrying amounts of those assets.  At December 31, 2006 goodwill comprised ofapproximately $7,408, $14,884 and $7,522 for the Morgan, Truck Accessories, andSpecialty Manufacturing reporting units, respectively.

Effective November 5, 2004, the Company acquired substantially all ofthe assets of Pace Edwards, a manufacturing company in the pickup cap andtonneau business (see Note 5) that was combined with the Truck Accessoriessegment.  Goodwill of $971 and acquiredintangibles estimated to be approximately $3,472 was recorded at the time ofpurchase.

Effective December 15, 2004, the Company acquired all of theoutstanding stock of Commercial Babcock, a manufacturer and marketer of truckbodies in the eastern Canadian market and combined it with the Morgan segment(see Note 5).  Goodwill of approximately$5,422 and acquired intangibles estimated to be approximately $2,686 wasrecorded at the time of purchase.

Effective June 6, 2005, the Company acquired all of the membershipinterests in Federal Coach, a manufacturer of funeral coaches, limousines andspecialty buses, and combined it with the Specialty Manufacturing segment.  Goodwill of approximately $1,850 and acquiredintangibles of approximately $3,650 was recorded at the time of purchase.

Effective January 3, 2006, the Company acquired all of the outstandingstock of Eagle Coach, a manufacturer of funeral coaches and combined it withthe Specialty Manufacturing segment. Goodwill of approximately $1,527 and acquired intangibles ofapproximately $2,900 was recorded at the time of purchase.

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Effective March 17, 2006, the Company acquired all of the outstandingstock of State Wide a manufacturer of windows and doors used in pickup truckcaps. State Wide operates as a division of Truck Accessories.  Goodwill of approximately $3,528 was recordedat the time of purchase.

The changes in the carrying amount of goodwill for the years endedDecember 31, 2006 and 2005 were:
| ** **                         | ** ** | **Morgan** | ** ** | **Truck  Accessories** | ** ** | **Specialty  Manufacturing** | ** ** | **Total** | ** ** |
|------------------------------------|------------|------------|------------|------------------------|------------|------------------------------|------------|-----------|------------|
| Balance, January  1, 2005          |       | $          | 7,408      |                   | $          | 11,356                       |       | $         | 4,145      |   | $ | 22,909 |   |
| Goodwill  acquired during the year |       | —     |       | —                 |       | 1,850                        |       | 1,850     |       |
| Balance,  December 31, 2005        |       | 7,408      |       | 11,356                 |       | 5,995                        |       | 24,759    |       |
| Goodwill  acquired during the year |       | —     |       | 3,528                  |       | 1,527                        |       | 5,055     |       |
| Balance, December 31,  2006        |       | $          | 7,408      |                   | $          | 14,884                       |       | $         | 7,522      |   | $ | 29,814 |   |

 

Intangible assets (allacquired in connection with the acquisitions described in Note 5) and therelated accumulated amortization as of December 31, 2006 and 2005 were:
| ** **                        | ** ** | ** **                           | ** ** | **Cost**   | ** ** | ** **             | ** ** |
|-----------------------------------|------------|--------------------------------------|------------|------------|------------|------------------------|------------|
| **December 31,  2006:**           | ** ** | **Useful Lives  in Years** | ** ** | **Morgan** | ** ** | **Truck  Accessories** | ** ** | **SMG** | ** ** | **Total** | ** ** | **Accumulated  Amortization** | ** ** |
| Amortizable intangible  assets:   |       |                                 |       |       |       |                   |       |   |   |   |   |   |   |
| Customer base                     |       | 20                                   |       | $          | 1,588      |                   | $          | 2,575 |   | $ | 2,060 |   | $ | 6,223 |   | $ | 546 |   |
| Non-compete  agreements           |       | 5                                    |       | 188        |       | —                 |       | 110 |   | 298 |   | 103 |   |
| Supplier  relationship            |       | 10                                   |       | —     |       | —                 |       | 3,200 |   | 3,200 |   | 442 |   |
| Patents                           |       | 2                                    |       | —     |       | 300                    |       | — |   | 300 |   | 300 |   |
|                              |       |                                 |       | 1,776      |       | 2,875                  |       | 5,370 |   | 10,021 |   | 1,391 |   |
| Unamortizable  intangible assets: |       |                                 |       |       |       |                   |       |   |   |   |   |   |   |
| Trade names                       |       | —                               |       | 988        |       | 616                    |       | 1,180 |   | 2,784 |   | — |   |
| Balance, December 31,  2006       |       |                                 |       | $          | 2,764      |                   | $          | 3,491 |   | $ | 6,550 |   | $ | 12,805 |   | $ | 1,391 |   |

 
| ** **                        | ** ** | ** **                           | ** ** | **Cost**   | ** ** | ** **             | ** ** |
|-----------------------------------|------------|--------------------------------------|------------|------------|------------|------------------------|------------|
| **December 31,  2005:**           | ** ** | **Useful Lives  in Years** | ** ** | **Morgan** | ** ** | **Truck  Accessories** | ** ** | **SMG** | ** ** | **Total** | ** ** | **Accumulated  Amortization** | ** ** |
| Amortizable  intangible assets:   |       |                                 |       |       |       |                   |       |   |   |   |   |   |   |
| Customer base                     |       | 20                                   |       | $          | 1,588      |                   | $          | 2,575 |   | $ | 1,100 |   | $ | 5,263 |   | $ | 233 |   |
| Non-compete  agreements           |       | 5                                    |       | 188        |       | —                 |       | 50 |   | 238 |   | 45 |   |
| Supplier  relationship            |       | 10                                   |       | —     |       | —                 |       | 1,700 |   | 1,700 |   | 122 |   |
| Patents                           |       | 2                                    |       | —     |       | 300                    |       | — |   | 300 |   | 175 |   |
|                              |       |                                 |       | 1,776      |       | 2,875                  |       | 2,850 |   | 7,501 |   | 575 |   |
| Unamortizable  intangible assets: |       |                                 |       |       |       |                   |       |   |   |   |   |   |   |
| Trade names                       |       | —                               |       | 988        |       | 616                    |       | 800 |   | 2,404 |   | — |   |
| Balance, December 31,  2005       |       |                                 |       | $          | 2,764      |                   | $          | 3,491 |   | $ | 3,650 |   | $ | 9,905 |   | $ | 575 |   |

 

The amortization of intangible assets was $816, $523 and $422 for theyears ended December 31, 2006, 2005 and 2004, respectively. Estimatedamortization expense for each of the subsequent five years ending December 31is as follows: 2007 **–**$699, 2008**–**$699, 2009**–**$686, 2010**–**$651 and 2011**–**$647.

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Otherassets, as of December 31, 2006 and 2005, consisted of the following:
| ** **                             | ** ** | ** **                              | ** ** | **2006**                      | ** ** | **2005**                 | ** ** |
|----------------------------------------|------------|-----------------------------------------|------------|-------------------------------|------------|--------------------------|------------|
| ** **                             | ** ** | **Amortization  Period in  Years** | ** ** | **Accumulated  Amortization** | ** ** | **Net Book  Value** | ** ** | **Accumulated  Amortization** | ** ** | **Net  Book  Value** | ** ** |
| Other Assets:                          |       |                                    |       |                          |       |                     |       |   |   |   |   |
| Cash surrender value of life insurance |       | —                                  |       | $                             | —     |                     | $          | 1,181 |   | $ | — |   | $ | 1,103 |   |
| Debt issuance costs                    |       | 4-10                                    |       | 2,013                         |       | 4,342                    |       | 1,252 |   | 5,101 |   |
| Insurance cash collateral deposit      |       | —                                  |       | —                        |       | 6,179                    |       | — |   | 5,520 |   |
| Other                                  |       | 3-10                                    |       | 1,504                         |       | 2,712                    |       | 695 |   | 3,096 |   |
| Total                                  |       |                                    |       | $                             | 3,517      |                     | $          | 14,414 |   | $ | 1,947 |   | $ | 14,820 |   |

 

The amortization of debtissuance costs was $761, $598 and $592 for the years ended December 31, 2006,2005 and 2004, respectively.  Estimatedamortization expense for each of the subsequent five years ending December 31is $840 per year.

The Company created atrust in favor of its insurance carrier to secure its liabilities under itsself insured, casualty insurance program including workmen’s compensationinsurance.  The liabilities werepreviously secured by an irrevocable standby letter of credit that wascancelled upon the initial deposit of $5,520 into the trust.  During 2006, the Company deposited anadditional $659 to the trust.

**9.****                      Floor PlanNotes Payable**

The Company has a floorplan financing agreement with Ford Motor Credit Company for financing part ofits chassis inventory at Federal Coach and Eagle Coach.  Floor plan notes payable reflect the monetaryvalue of the chassis that are in the Company’s possession as of December 31,2006 and 2005.  These obligations arereflected on the accompanying balance sheet as accounts payables, a currentliability.

The total amount financedunder these agreements was $4,735 and $2,719 as of December 31, 2006 and 2005,respectively.  These borrowings bearinterest at the prime rate plus 150 basis points on balances outstanding over90 days.  As of December 31, 2006 and2005, the weighted average interest rate on all outstanding floor plan notespayable was 2.1% and 1.6%, respectively. The average interest rate on the liabilities that bear interest was9.61% and 8.75% at December 31, 2006 and 2005, respectively.

**10.****               Revolving CreditFacility**

On March 15, 2004,concurrently with the 8.75% Note offering discussed in Note 11, the Companyentered into a secured revolving credit agreement (the “Revolving CreditFacility”) that expires March 15, 2008. The Revolving Credit Facility currently provides for borrowings by theCompany of up to $30,000, which may be increased to $50,000 at the Company’soption. The Revolving Credit Facility allows the Company to borrow funds up tothe lesser of $30,000 or an amount based on the sum of: 1) advance ratesapplied to the total amounts of eligible accounts receivable and inventories ofthe Subsidiaries and 2) up to $20,000 secured by the fixed assets of the Company.  The advance rates are 85% for eligibleaccounts receivable and 60% for eligible inventory, as defined.  Borrowings against inventory may not exceed$20,000.  The Company is entitled toinclude initially in the borrowing base up to an additional $20,000 of fixedassets, as defined.  The availability offunds secured by the fixed assets will amortize to zero over 60 months for thatportion secured by machinery and equipment and 120 months for real estate orthe remaining term of the Revolving Credit Facility, whichever is shorter.  The Revolving Credit Facility includes asub-facility for up to $15,000 of letters of credit.

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The Revolving CreditFacility provides for borrowing at variable rates of interest, based on eitherLIBOR (London Interbank Offered Rate, which was 5.3% at December 31, 2006) plusa margin of 1.75% or the bank’s base rate (the greater of the Federal FundsRate plus 0.5% or its prime rate, which was 8.25% at December 31, 2006).  Interest is payable monthly including a feeof 0.375% on the portion of the maximum amount of borrowings of the $50,000total commitment, including the option to increase the commitment, that remainunused during the period.  TheSubsidiaries are also guarantors of the 8.75% Notes defined in Note 11.

The Revolving CreditFacility contains provisions allowing the lender to accelerate the repayment ofdebt upon the occurrence of an event the lender determines to represent amaterial adverse change.  The RevolvingCredit Facility also contains restrictive covenants, which, among other things,restrict the use of proceeds from the sale of assets, the ability of theCompany to incur additional debt or pay dividends and certain other corporateactivities.  In addition, the Company issubject to a financial covenant requiring it to maintain a minimum fixed chargecoverage ratio, as defined, of 1.0 to 1.0 should availability fall below$10,000.  At December 31, 2006, theCompany was in compliance with all covenants of the Revolving Credit Facility.In the event that the Company’s borrowing availability is below $20,000 theCompany’s cash balances will become restricted.

As of December 31, 2006and 2005, the Company had no borrowings outstanding and $2,322 in standbyletters of credit (see Note 17) and had unused gross borrowing availability,based on eligible accounts receivable and inventory, in excess of the $30,000borrowing limit under the Revolving Credit Facility.

**11.****               Long-term Debt and8.75% Note Offering**

Long-term debt as ofDecember 31, 2006 and 2005 consisted of:
| ** **                                                                           | ** ** | **2006** | ** ** | **2005** | ** ** |
|--------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|
|                                                                                 |       |     |       |     |       |
| 8.75% Notes due  2014, plus unamortized premium of $1.8 million at December 31, 2006 |       | $        | 201,780    |     | $          | 202,025 |   |
| Obligations  under capital leases                                                    |       | 5,833    |       | 3,357    |       |
| Total long-term  debt                                                                |       | 207,613  |       | 205,382  |       |
| Less current  portion                                                                |       | 1,934    |       | 1,017    |       |
| Long-term debt, less  current portion                                                |       | $        | 205,679    |     | $          | 204,365 |   |

 

On March 15, 2004 theCompany completed a note offering of $125,000, 8.75% senior notes due in 2014(the “8.75% Notes”) with interestpayable semiannually.  The proceeds, netof costs, of the note offering of approximately $121,600 were used to: (1)redeem the Company’s 12.5% senior secured notes due 2007 in the amount of$79,800 including accrued interest through the redemption date of April 15,2004 of  $3,900, (2) repay outstandingrevolver debt of the Company of  $22,000including interest, (3) repay outstanding term and revolver debt of MorganOlson of $14,000 including accrued interest and prepayment penalties, (4) repaySpecialty Manufacturing’s outstanding term loan of $773 including accruedinterest and (5) provide temporary cash collateral for standby letters ofcredit of $6,100.  The cash collateralfor standby letters of credit was subsequently refunded upon the cancellationof the letters of credit.  On May 17,2004 and January 21, 2005, the Company completed offers to sell an additional$30,000 and $45,000, respectively, of 8.75%Notes.  The additional $30,000 of 8.75% Notes were issued at par and the$45,000 of 8.75% Notes were issued ata 5% premium.  The additional 8.75% Notes were issued on the same termsas the original issue.  Net proceeds fromthe additional offerings of approximately $46,400 increased the Company’s cashbalance.  The 8.75% Notes mature on March 15, 2014 and bear interest at anannual rate of 8.75% payable each September 15 and March 15 to the holders ofrecord on September 1 and March 1 immediately preceding the interest paymentdate.  Costs associated with the $45,000offering of 8.75% Notes totaling approximately $1,300 have been capitalized asdebt issuance costs (see Note 7) 

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andwill be amortized over the term of the 8.75% Notes.  The debt issuance costs related to theretired 12.5% senior secured notes due 2007 of approximately $2,400 wereexpensed during the year ended December 31, 2004.  On May 11, 2005, the Company completed anoffer to exchange (“2005 Exchange Offer”) $200 million principal amount of its8.75% Notes which had been registered under the Securities Act for any and allof its outstanding unregistered 8.75% Notes.

The 8.75% Notes aresubordinated to borrowings under the Revolving Credit Facility (see Note 10)and other secured indebtedness to the extent of the assets securing thedebt.  Also, the Company’s obligationsunder the 8.75% Notes are guaranteed by each wholly owned subsidiary of theCompany (the “Subsidiary Guarantors”). Each guarantee is a senior unsecured obligation of the Subsidiaryproviding such Guarantee.  The SubsidiaryGuarantors are also borrowers under the Revolving Credit Facility (see Note 9).

The Company has theoption to redeem the 8.75% Notes at any time on or after March 15, 2009, at adefined premium plus accrued and unpaid interest to the date ofredemption.  The Company may redeem up to35% of the 8.75% Notes prior to March 15, 2007, at a defined premium plus accruedand unpaid interest to the date of redemption, in connection with an EquityOffering, as defined.

The 8.75% Notes’ indentureincludes covenants that limit the ability of the Company to: incur additionaldebt, including sale and leaseback transactions; pay dividends or distributionson its capital stock or repurchase capital stock; issue stock of subsidiaries;make certain investments; create liens on its assets to secure debt; enter intotransactions with affiliates; merge or consolidate with another company; andtransfer and sell assets.  As noted, theindenture contains a covenant to limit the incurrence of additionalindebtedness as measured by its Consolidated Coverage Ratio, as defined.  The Company may incur indebtedness if thisratio is greater than 2.0 to 1.0 and there is no other event of default, asdefined.  At December 31, 2006, theConsolidated Coverage Ratio, as defined, was 2.4 to 1.0.

The Company estimates thefair value of the 8.75% Notes at December 31, 2006 and 2005 was approximately$171,000 and $169,000, respectively, based on their market value at that datecompared to a recorded amount of $200,000.

The Company’s obligationunder capital leases is due in varying maturity dates through 2011.  The capital leases are secured by certain equipmentwith a net book value of approximately $6,165 and $2,935 at December 31, 2006and 2005, respectively.

**Maturities.**  Aggregate principal payments on long-termdebt based on scheduled maturities for the next five years and thereafter as ofDecember 31, 2006 are as follows: ** **
| 2007                 |   | $       | 1,934   |   |
|----------------------|--------|---------|---------|--------|
| 2008                 |   | 1,878   |    |
| 2009                 |   | 1,557   |    |
| 2010                 |   | 988     |    |
| 2011                 |   | 668     |    |
| 2012 and  thereafter |   | 200,588 |    |
|                 |   | $       | 207,613 |   |

 

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**12.**               Operating Leases

The Company leases certain manufacturing facilitiesand equipment under non-cancelable operating leases certain of which containrenewal options.  The future minimumlease payments subsequent to December 31, 2006 are as follows:
| 2007                          |   | $      | 7,692  |   |
|-------------------------------|--------|--------|--------|--------|
| 2008                          |   | 6,496  |   |
| 2009                          |   | 5,611  |   |
| 2010                          |   | 4,551  |   |
| 2011                          |   | 2,677  |   |
| 2012 and  thereafter          |   | 19,611 |   |
| Total minimum lease  payments |   | $      | 46,638 |   |

 

Total rental expense included in continuing operations under alloperating leases was approximately $8,933, $8,542 and $9,217 for the yearsended December 31, 2006, 2005 and 2004, respectively.

**13.**               Supplemental Cash Flow Information

Thesupplemental cash flow information for the years ended December 31, 2006, 2005and 2004 was as follows:
| ** **                                             | ** ** | **2006** | ** ** | **2005** | ** ** | **2004** | ** ** |
|--------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|
| Cash paid for  interest                                |       | $        | 18,070     |     | $          | 16,517   |       | $ | 12,069 |   |
| Cash paid for  income taxes                            |       | 2,022    |       | 4,228    |       | 942      |       |
| Non-cash  investing and financing activities:          |       |     |       |     |       |     |       |
| Capital lease  obligations for machinery and equipment |       | 4,051    |       | 970      |       | 2,950    |       |
|                                                        |            |          |            |          |            |          |            |  |  |  |

 

**14.**               Income Taxes

The income tax provision from continuing operations consists of thefollowing for the years ended December 31, 2006, 2005 and 2004:
| ** **           | ** ** | **2006**       | ** ** | **2005**   | ** ** | **2004**   | ** ** |
|----------------------|------------|----------------|------------|------------|------------|------------|------------|
| ** **           | ** ** | **(Restated)** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Current:             |       |           |       |       |       |       |       |
| Federal              |       | $              | 2,995      |       | $          | 1,819      |       | $ | 176 |   |
| State                |       | 809            |       | 362        |       | 1,441      |       |
| Foreign              | ** ** | **—**     |       | (433       | )          | 394        |       |
|                 |       | 3,804          |       | 1,748      |       | 2,011      |       |
| Deferred:            |       |           |       |       |       |       |       |
| Federal              |       | 3,174          |       | 1,784      |       | 1,972      |       |
| State                |       | (1,739         | )          | (950       | )          | 151        |       |
| Foreign              |       | (1,869         | )          | **—** | ** ** | **—** | ** ** |
|                 |       | (434           | )          | 834        |       | 2,123      |       |
| Income tax provision |       | $              | 3,370      |       | $          | 2,582      |       | $ | 4,134 |   |

 

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The following table reconciles the differences between the federalstatutory income tax rate and the effective tax rate for the years endedDecember 31, 2006, 2005 and 2004:
| ** **                                                    | ** ** | **2006**       | ** ** | **2005**   | ** ** | **2004**   | ** ** |
|---------------------------------------------------------------|------------|----------------|------------|------------|------------|------------|------------|
| ** **                                                    | ** ** | **Amount**     | ** ** | **%**      | ** ** | **Amount** | ** ** | **%** | ** ** | **Amount** | ** ** | **%** | ** ** |
| ** **                                                    | ** ** | **(Restated)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Tax provision at  federal statutory income tax rate           |       | $              | 4,058      |       | 35         | %          | $          | 2,616 |   | 34 | % | $ | 4,960 |   | 34 | % |
| Valuation  allowance                                          | ** ** | **—**     | ** ** | **—** |       | (1,000     | )          | (13 | ) | (511 | ) | (4 | ) |
| Increase in  state net operating loss carryforwards           |       | (700           | )          | (6         | )          | **—** | ** ** | **—** | ** ** | **—** | ** ** | **—** | ** ** |
| Non-deductible  expenses                                      |       | 336            |       | 3          |       | 81         |       | 1 |   | (47 | ) | (1 | ) |
| State income  taxes, net of federal income tax benefit        |       | 396            |       | 3          |       | 239        |       | 3 |   | 951 |   | 7 |   |
| Foreign income  and withholding taxes, net of federal benefit |       | (167           | )          | (1         | )          | 106        |       | 2 |   | 260 |   | 2 |   |
| Other                                                         |       | (553           | )          | (5         | )          | 540        |       | 7 |   | (1,479 | ) | (10 | ) |
| Provision for income  taxes and effective tax rates           |       | $              | 3,370      |       | 29         | %          | $          | 2,582 |   | 34 | % | $ | 4,134 |   | 28 | % |

 

The domestic and foreign components of income (loss) from continuingoperations before income taxes and discontinued operations were:
| ** ** | ** ** | **2006**       | ** ** | **2005**   | ** ** | **2004**   | ** ** |
|------------|------------|----------------|------------|------------|------------|------------|------------|
| ** ** | ** ** | **(Restated)** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Domestic   |       | $              | 17,061     |       | $          | 8,934      |       | $ | 13,512 |   |
| Foreign    |       | (5,466         | )          | (1,240     | )          | 1,023      |       |
| Total      |       | $              | 11,595     |       | $          | 7,694      |       | $ | 14,535 |   |

 

Deferred income taxes are based on the estimated future tax effects ofdifferences between the financial statements and tax basis of assets andliabilities given the provisions of the enacted tax laws.  The net deferred tax assets and liabilitiesas of December 31, 2006 and 2005 were: 
| ** **                                         | ** ** | **2006** | ** ** | **2005** | ** ** |
|----------------------------------------------------|------------|----------|------------|----------|------------|
| **Current  deferred tax asset:**                   |       |     |       |     |       |
| Allowance for  doubtful accounts                   |       | $        | 346        |     | $          | 329 |   |
| Employee benefit  accruals and reserves            |       | 1,191    |       | 951      |       |
| Other                                              |       | 234      |       | 119      |       |
|                                               |       |     |       |     |       |
| Total current  deferred tax asset                  |       | 1,771    |       | 1,399    |       |
|                                               |       |     |       |     |       |
| **Long-term  deferred tax asset:**                 |       |     |       |     |       |
| Tax credit and  state operating loss carryforwards |       | 7,858    |       | 7,810    |       |
| Warranty  liabilities                              |       | 1,384    |       | 1,455    |       |
| Other                                              |       | 2,436    |       | 2,271    |       |
| Valuation  allowance                               |       | (3,754   | )          | (3,754   | )          |
|                                               |       |     |       |     |       |
| Total long-term  deferred tax asset                |       | 7,924    |       | 7,782    |       |
|                                                    |            |          |            |          |            |  |  |

 

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| ** **                               | ** ** | **2006** | ** ** | **2005** | ** ** |
|------------------------------------------|------------|----------|------------|----------|------------|
| **Long-term  deferred tax liabilities:** |       |     |       |     |       |
| Depreciation and  amortization           |       | (5,655   | )          | (5,575   | )          |
| Intangible  assets                       |       | (1,134   | )          | (1,134   | )          |
|                                     |       |     |       |     |       |
| Total long-term  deferred tax liability  |       | (6,789   | )          | (6,709   | )          |
| Net long-term deferred tax asset         |       | 1,135    |       | 1,073    |       |
| Net deferred tax  asset                  |       | $        | 2,906      |     | $          | 2,472 |   |
|                                          |            |          |            |          |            |  |  |

 

The Company had alternative minimum tax credit carryforwards ofapproximately $536 and $3,000 at December 31, 2006 and 2005, respectively, forU.S. federal income tax purposes, which may be carried forwardindefinitely.  The Company had capitalloss carryforwards of approximately $3,600 at December 31, 2006 and 2005 forU.S. federal income tax purposes, which may be carried forward for five yearsand can only offset capital gains.  AtDecember 31, 2006 the Company had a full valuation allowance against the capitalloss carryforwards.

**As a result of the Company’s subsidiaries conversion intoDelaware limited liability companies in September 2006, the Company was able togenerate additional state net operating loss carryforwards, which provided anafter tax benefit of $700.  At December31, 2006 and 2005, the Company had state tax net operating loss carryforwardsof approximately $80,000 and $63,000, respectively, and recognized a deferredtax asset of $4,100 and $3,400, respectively. The state net operating loss carryforwards expire at varying datesranging from 1 to 20 years.  At December31, 2006, the Company recorded a valuation allowance of approximately $2,500against this deferred tax asset as it was uncertain as to whether it would berealized.  In 2005, the Company reducedthe state tax valuation reserve by approximately $1,000.  The Company had Canadian net operating losscarryforwards of approximately $5,500 as of December 31, 2006 and recognized adeferred tax asset of $1.9 million.  TheCanadian net operating loss carryforwards expire at varying dates ranging from1 to 20 years, with a significant majority being greater than 10 years.**

**15.**               Common Stock

As of December 31, 2006 and 2005, there were 100,000 sharesauthorized and 3,059 shares issued and outstanding of JBPCO common stock with apar value of $.01 per share.  JBPCO wasincorporated in Delaware.  No otherclasses of common stock, preferred stock or common stock equivalents exist.

**16.**               Employee Benefit Plans

*Employee Incentive Plans*.  The Company has an incentive compensation plan for members of uppermanagement of each of the subsidiaries to provide for the payments of annualbonuses based upon the attainment of performance-based goals. Eligibleemployees are entitled to receive a bonus if the subsidiary attains orsurpasses a stated percentage of that subsidiary’s earnings before interest andtaxes, with the amount of bonus being tied to the subsidiary’s actual pre-taxprofits. Individual bonuses are then allocated among the eligible employeesbased upon their individual achievement of stated performance objectivesincluding working capital performance objectives. The Company incurred expensesrelated to this plan totaling $3,125, $1,539 and $1,508 for the years endedDecember 31, 2006, 2005 and 2004, respectively.

*JBPCO 401(k) Defined Contribution Plan.* The JBPCO-sponsored 401(k) savings planallows participating employees to contribute through salary deductions up to100% of gross compensation and provides for Company matching contributions upto 3 percent of the first 6 percent of gross pay as well as the opportunity foran annual discretionary contribution. The Company increased the matching percentage to 3 percent from 2.5percent effective June 1, 2005.  TheCompany has not made discretionary contributions.  Vesting in the Company matching contributionis 20% per year over the first five years. The Company incurred related employer 

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matching contribution and administrative expenses of$1,634,****$1,366 and $1,029 during the yearsended December 31, 2006, 2005 and 2004, respectively.

*Defined Benefit Plan.*****Truck Accessories assumed future sponsorshipof a defined benefit plan (the “Plan”) covering hourly employees at its Gem Topdivision that was sold with all the employees terminated effective February 28,2003.  The Plan was frozen effectiveMarch 31, 1996 and at December 31, 2006 and 2005 the Plan was under-funded byapproximately $87 and $33, respectively. The Company’s funding policy for the Plan is to make the minimum annualcontributions required by applicable regulations.  Minimum contributions for the 2006 plan yeartotaled $66.

The Plan has invested its assets through a groupannuity contract with an insurance company. The targeted composition is set by the Company and is reallocated periodically.  The long-term portfolio is chosen based onthe duration of the Plan’s individual population and is set toward funding forbenefits payable in the future.  The fairvalue of the Plan’s assets was $314 and $286 as of December 31, 2006 and 2005,respectively.  The pension expenserecognized was $23, $39 and $28 for the years ended December 31, 2006, 2005 and2004, respectively.  Based on theimmateriality of the Plan, Management does not believe expanded disclosure isnecessary.

**17.**               Commitments and Contingencies

*Claims and Lawsuits.*  The Company is involved incertain claims and lawsuits arising in the normal course of business.  In the opinion of management, the ultimateresolution of these matters will not have a material adverse effect on thefinancial position or results of operations of the Company.

*Letters of Credit and Other Commitments.** ***The Company had $2,322 in standby letters ofcredit outstanding at December 31, 2006 and 2005, primarily securing theCompany’s insurance programs.  During 2004,the Company deposited $5,520 into a trust account in favor of its insurancecarrier (see Note 8).  The funds held intrust were increased to $6,179 during 2006 and will be held in trust to securethe Company’s insurance programs.  Incomefrom the trust accrues to the Company.

During 2005, the Company entered into an agreementwith a key supplier, whereby it will exclusively purchase inventory from thissupplier for five years, in return for favorable pricing.  The Company estimates that it will purchase approximately$8,000 from this supplier in 2007.

*Consigned Chassis Inventories. *The Company obtains vehicle chassis forcertain units produced at Morgan and Commercial Babcock directly from thechassis manufacturer under a bailment pool agreement with General MotorsAcceptance Corporation.  Chassis areobtained directly from the manufacturer based on orders from customers, whichare typically manufacturer dealers.  Theagreements generally provide that the Company is restricted to producingcertain conversions or up-fittings on these chassis.  The manufacturer does not transfer thecertificate of origin to the Company and, accordingly, the Company accounts forthe chassis as consigned inventory belonging to the manufacturer.  Under these agreements, if the chassis is notdelivered to a customer within a specified timeframe, the Company is requiredto pay a finance charge based on the value of the chassis.  The finance charges incurred on consignedchassis inventories, included in interest expense in the consolidatedstatements of income totaled $76, $28 and $0 for the years ended December 31,2006, 2005 and 2004, respectively.  Totalconsigned chassis inventory totaled $1,020 and $1,400 at December 31, 2006 and2005, respectively.

*Environmental Matters*.*** *** The Company’s operations are subject to avariety of federal, state and local environmental and health and safetystatutes and regulations, including those relating to emissions to the air,discharges to water, treatment, storage and disposal of waste and remediationof contaminated sites. In certain cases, these requirements may limit theproductive capacity of itsoperations.Certain laws, including Superfund impose strict, and under certaincircumstances, joint and several, liability for costs to remediate contaminated

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sites upon designated responsible parties includingsite owners or operators and persons who dispose of wastes at, or transportwastes to, such sites. Some of the Company’s operations also require permitswhich may restrict its activities and which are subject to renewal,modification or revocation by issuing authorities. In addition, the Companygenerates non-hazardous wastes, which are also subject to regulation underapplicable environmental laws.

From time to time, the Companyhas received notices of noncompliance with respect to its operations which havetypically been resolved by investigating the alleged noncompliance, correctingany noncompliant conditions and paying minor fines, none of which individuallyor in the aggregate has had a material adverse effect on it.   Further, the Company cannot ensure that ithas been or will be at all times in compliance with all of these requirements,including those related to reporting or permit restrictions or that it will notincur material fines, penalties, costs or liabilities in connection with suchrequirements or a failure to comply with them.  However, the Company expects that the nature of its operations willcontinue to make it subject to increasingly stringent environmental regulatorystandards. Although the Company believes it has made sufficient capitalexpenditures to maintain compliance with existing laws and regulations, futureexpenditures may be necessary, as compliance standards and technology change oras unanticipated circumstances arise. Unforeseen and significant expendituresrequired, for example, to comply with new or more aggressively enforcedrequirements or newly discovered conditions could limit expansion or otherwisehave a material adverse effect on the Company’s business and financialcondition.

Morgan Olson’s twomanufacturing sites in Sturgis, Michigan overlie, or are in close proximity to,a regional plume of volatile organic compound groundwater contamination.Available information indicates that one of the sites was a likely source ofpart of the groundwater contamination, and that groundwater contamination ispresent under the second site. In August 2003, Morgan Olson submittedapplications for Baseline Environmental Assessments for each site to theMichigan Department of Environmental Quality (“MDEQ”). In October 2003,the MDEQ accepted these applications and granted to it a liability exemptionfor any pre-acquisition releases of volatile organic compounds from these sitesthat may have contributed to the regional groundwater contamination subject tocertain conditions, including an agreement not to use chlorinated solvents andto implement certain engineering controls to minimize future releases at thesites. Based on the granting of the liability exemption, Morgan Olson does notbelieve that it has any responsibility for the investigation or remediation ofthe regional groundwater contamination. However, the exemption does not applyto other applicable laws or regulations, and there can be no guarantee thatnewly discovered conditions or future activities at the sites will not resultin significant costs.

In June 2005, Morgan Olson was notified by the MDEQthat it had failed to file certain reports related to its air permit,wastewater discharge, and chemical inventory. Morgan Olson agreed to settlethese alleged violations and the final consent order was signed by both partiesin September 2006 with payment of an immaterial penalty.

In July, 2005, Morgan notified the EnvironmentalProtection Agency (“EPA”) that it was investigating the possible need to filereports required pursuant to Section 313 of the Emergency Planning andCommunity Right-to-Know Act, and regulations promulgated thereunder. Allnecessary reports were completed and filed with the EPA by August 31, 2005.  Action by the EPA is probable and thefinancial impact of such enforcement action, if any cannot be eliminated butcould be material. A letter from EPA requesting additional information wasreceived in December 2006 and a response submitted.

Beginning in 2003, Truck Accessories submitted arequest to modify its air permit and increase the emission limits. During thisprocess, the Pennsylvania Department of Environmental Protection (“DEP”) madethe Company aware that it believed that the plant had ongoing violations. TheCompany has investigated the alleged violations and does not fully agree withthe DEP.  In an attempt to settle thematter and improve the operating capacity of the operation, the company has completedpermit and recordkeeping modifications at the request of the DEP.  The proposed penalty is $75 and is subject tofurther negotiation and the consent order should be signed in the secondquarter of 2007.

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**18.**               Related Party Transactions

The Company was party to aManagement Services Agreement with Southwestern Holdings, Inc. (“Southwestern”),a corporation owned by Mr. Poindexter. The services agreement was terminated June 30, 2006 when Mr. Poindexterbecame an employee of the Company. Pursuant to the Management Services Agreement, Southwestern providedservices to the Company, including those of Mr. Poindexter.  The Company paid to Southwestern a base feeof approximately $46 per month for these services, subject to annual automaticincreases based upon the consumer price index. The Company may also pay a discretionary annual bonus to Southwesternsubject to certain limitations; none was paid in 2006, 2005 and 2004. TheCompany paid Southwestern $346, $569 and $549 during 2006, 2005 and 2004,respectively, for all these services.

EffectiveJuly 18, 2004, Morgan acquired from a partnership, of which Mr. Poindexter andMr. Magee were partners, a certain real property located in Georgia.  Morgan paid approximately $2,200 for theproperty, which was determined to be the fair market value of theproperty.  The property had been leasedfrom the partnership since 1990 and is used by Morgan for manufacturing truckbodies.  Morgan paid $174****inrent to the partnership in 2004 pursuant to such lease.

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***19.****              **SelectedQuarterly Information (Unaudited)*

***The Company’s accounting records aremaintained on the basis of four 13 week quarters.  Shown below are the selected unauditedquarterly data.***
| ** **                                   | ** ** | **March  31, 2006** | ** ** | **June 30,  2006** | ** ** | **September  30, 2006** | ** ** | **December  31, 2006** | ** ** |
|----------------------------------------------|------------|--------------------------|------------|-------------------------|------------|------------------------------|------------|-----------------------------|------------|
| ** **                                   | ** ** | **(Restated)**           | ** ** | **(Restated)**          | ** ** | **(Restated)**               | ** ** | **(Restated)**              | ** ** |
| Net sales                                    |       | $                        | 185,541    |                    | $          | 226,046                      |       | $                           | 197,968    |   | $ | 185,824 |   |
| Cost of sales                                |       | 166,205                  |       | 196,642                 |       | 174,104                      |       | 164,160                     |       |
| Gross profit                                 |       | 19,336                   |       | 29,404                  |       | 23,864                       |       | 21,664                      |       |
| Selling, general  and administrative expense |       | 15,140                   |       | 15,569                  |       | 16,127                       |       | 16,198                      |       |
| Closed and excess  facility costs            |       | —                   |       | —                  |       | —                       |       | 2,678                       |       |
| Other expense  (income)                      |       | (181                     | )          | (4                      | )          | 10                           |       | (27                         | )          |
| Operating income                             |       | 4,377                    |       | 13,839                  |       | 7,727                        |       | 2,815                       |       |
| Interest  expense, net                       |       | 4,469                    |       | 3,826                   |       | 4,244                        |       | 4,624                       |       |
| Income tax  provision (benefit)              |       | (38                      | )          | 3,815                   |       | 242                          |       | (649                        | )          |
| Net income (loss)                            |       | $                        | (54        | )                       | $          | 6,198                        |       | $                           | 3,241      |   | $ | (1,160 | ) |
| Depreciation and  amortization               |       | $                        | 2,773      |                    | $          | 2,988                        |       | $                           | 3,185      |   | $ | 3,071 |   |
| Amortization of debt  issuance costs         |       | $                        | 128        |                    | $          | 180                          |       | $                           | 129        |   | $ | 324 |   |

 
| ** **                                   | ** ** | **March  31, 2005** | ** ** | **June 30,  2005** | ** ** | **September  30, 2005** | ** ** | **December  31, 2005** | ** ** |
|----------------------------------------------|------------|--------------------------|------------|-------------------------|------------|------------------------------|------------|-----------------------------|------------|
| Net sales                                    |       | $                        | 162,465    |                    | $          | 178,279                      |       | $                           | 173,927    |   | $ | 153,447 |   |
| Cost of sales                                |       | 144,986                  |       | 155,635                 |       | 152,788                      |       | 139,711                     |       |
| Gross profit                                 |       | 17,479                   |       | 22,644                  |       | 21,139                       |       | 13,736                      |       |
| Selling, general  and administrative expense |       | 11,595                   |       | 12,341                  |       | 13,176                       |       | 12,853                      |       |
| Other expense  (income)                      |       | (49                      | )          | 201                     |       | 409                          |       | (57                         | )          |
| Operating income                             |       | 5,933                    |       | 10,102                  |       | 7,554                        |       | 940                         |       |
| Interest  expense, net                       |       | 4,232                    |       | 3,931                   |       | 4,513                        |       | 4,159                       |       |
| Income tax  provision (benefit)              |       | 488                      |       | 2,304                   |       | 1,657                        |       | (1,827                      | )          |
| Net income  (loss)                           |       | $                        | 1,253      |                    | $          | 3,867                        |       | $                           | 1,384      |   | $ | (1,392 | ) |
| Depreciation and  amortization               |       | $                        | 2,732      |                    | $          | 2,535                        |       | $                           | 2,497      |   | $ | 2,596 |   |
| Amortization of debt  issuance costs         |       | $                        | 138        |                    | $          | 184                          |       | $                           | 133        |   | $ | 143 |   |

 

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**Item 9.     Changes in and Disagreements withAccountants on Accounting and Financial Disclosure**

**None.**

**Item 9a.   Controls and Procedures**

Pursuantto Section 302 of the Sarbanes-Oxley Act and Rule 13a—15 of the SecuritiesExchange Act of 1934 (“Exchange Act”) promulgated thereunder, our chiefexecutive officer and chief financial officer have evaluated the effectivenessof our disclosure controls and procedures as of the end of the period coveredby this report (the “Evaluation Date”).

Based on such evaluation and based on information the Company obtainedin connection with the restatement as described below through August 6, 2007,except as described below, the Company’s chief executive officer and principalfinancial officer have concluded that disclosure controls and procedures wereeffective as of the Evaluation Date to ensure that information required to bedisclosed in reports that are filed or submitted under the Exchange Act arerecorded, processed, summarized and reported within the required time periods.  There have been no changes in internalcontrols over financial reporting during the period covered by this report thatwere identified in connection with the evaluation referred to above that havematerially affected, or are reasonably likely to materially affect, internalcontrol over financial reporting.

The Company restated its results of operations forthe year ended December 31, 2006 due to an error in the accounting forinventory at Morgan Olson.

The error was related to a failure to perform anadequate reconciliation of inventory records as a result of a combination ofinadequate procedures and inventory tracking systems.  This represented a material weakness in theinternal controls over the financial reporting at Morgan Olson as of December31, 2006.  The Company believes thatthese weaknesses have been corrected through the implementation of a newinformation system and improved procedures. The Company remains in compliance with the terms of its senior noteindenture and revolving credit agreement.

**Item 9b.  Other Information**

None.

**PART III**

**Item 10.  Directors, Executive Officers and CorporateGovernance**

The Company’s directors andexecutive officers are set forth below. All directors hold office until thenext annual meeting or until their successors are duly elected and qualified.The executive officers are appointed by the Board of Directors annually andserve at the discretion of the Board of Directors.
| **Name**           | ** ** | **Age** | ** ** | **Position**                                                  |
|--------------------|------------|---------|------------|---------------------------------------------------------------|
| John B. Poindexter |       | 62      |       | Chairman of the Board, President and Chief Executive  Officer |
| Stephen P. Magee   |       | 59      |       | Director                                                      |
| William J. Bowen   |       | 85      |       | Director                                                      |
| Robert S. Whatley  |       | 55      |       | Vice President Finance, Secretary and Treasurer               |
| Joseph M. Fiamingo |       | 57      |       | Senior Vice President of Operations                           |
| Larry T. Wolfe     |       | 58      |       | Vice President Administration and Assistant  Secretary        |

                                                

John B. Poindexter has served as Chairman of the Board ofDirectors since 1988 and Chief Executive Officer since 1994.  He was President from November 2002 untilSeptember 2005 and again from November 2006 to present.  From 1985 through 1994, Mr. Poindexterwas the majority limited partner of J.B. Poindexter & Co., L.P., aprivately 

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held, long-term equity investment and management firmformed by Mr. Poindexter in 1985. From 1983 through 1985, he wasco-managing partner of KD/P Equities, a privately held equity investment firmthat he co-founded. From 1976 through 1983, Mr. Poindexter worked forSmith Barney, Harris Upham & Co. While with Smith Barney, he became asenior vice president in its Smith Barney Venture Corporation and Smith BarneyCapital Corporation affiliates and a partner in First Century Partnership II,an investment fund managed by Smith Barney Capital Corporation.

Stephen P. Magee has served as Director since the Companywas formed in 1988, as Treasurer from 1988 to 2001 and as Chief FinancialOfficer from 1994 to 2001. Mr. Magee also serves as Chairman of the AuditCommittee of the Board of Directors.

William J. Bowen has served as Director since 1988.  Mr. Bowen retired in 1992 as the Chairman ofthe Board of Transco Energy Company, a diversified energy company based inHouston, Texas. Mr. Bowen served as Chief Executive Officer of TranscoEnergy from 1974 until his retirement from that position in 1987.Mr. Bowen serves on the Company’s Audit Committee.

Robert S. Whatley has served as Vice President sinceJune 1994. He served as Chief Financial Officer of a petrochemical tradingcompany and Vice President of Finance and Treasurer of WeatherfordInternational, an energy services company. He is a Certified Public Accountantand a member of the Institute of Chartered Accountants in England and Wales.

Joseph M. Fiamingo was named Senior Vice President ofOperations of J.B. Poindexter & Co. on June 16, 2006.  Prior to joining the Company, he had spentthe prior six years serving as President of a variety of companies owned by theprivate equity company Hicks, Muse, Tate and Furst, Inc.

Larry T. Wolfe has served as Vice President ofAdministration since May 1995. He previously served as Vice-President of HumanResources and Administrative Services for Transco Energy Company.

**Audit Committee**

TheAudit Committee is a standing committee of the Board of Directors. The primarypurpose of the Committee is to assist the Board of Directors in fulfilling itsoversight responsibility relating to (1) the integrity of our financialstatements and financial reporting process and our systems of internalaccounting and financial controls; (2) the performance of the internal auditservices function; (3) the annual independent audit of our financialstatements, the engagement of the independent auditors and the evaluation ofthe independent auditors’ qualifications, independence and performance; and (4)the compliance by the Company with legal and regulatory requirements, includingdisclosure controls and procedures. The Committee also reviews the Company’scritical accounting policies, annual and quarterly reports on Form 10-K andForm 10-Q, and earnings releases before they are published. The Committee hassole authority to engage, evaluate and replace the independent auditor. TheCommittee also has the authority to retain special legal, accounting and otherconsultants it deems necessary in the performance of its duties. The Committeemeets regularly with our management, independent auditors and internal auditorsto discuss internal controls and financial reporting process and also meetsregularly with the independent auditors and internal auditors in private.

Thecurrent members of the Audit Committee are Messrs. Magee (chairman) and Bowen.Since the Company is not a publicly traded company, on a listed exchange, theBoard of Directors has not designated a member of the Audit Committee as an “auditcommittee financial expert” who is independent as the term is used in Item7(d)(3)(iv) of Schedule 14A under the Exchange Act.

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**Other significant persons**

Although not an executiveofficer, each of the following persons is an officer of the referencedsubsidiary or division thereof and is an important contributor to operations:
| **Name**           | ** ** | **Age** | ** ** | **Position**                         |
|--------------------|------------|---------|------------|--------------------------------------|
| Nelson Byman       |       | 60      |       | President of Specialty Manufacturing |
| Bruce Freeman      |       | 53      |       | President of Truck Accessories       |
| Bill Flint, Jr.    |       | 57      |       | President of EFP                     |
| Norbert Markert    |       | 46      |       | President of Morgan Truck Body       |
| Patrick Warmington |       | 53      |       | President of Morgan Olson            |
| Robert Whitehouse  |       | 52      |       | President of Specialty Vehicle Group |

 

Nelson Byman became President of MIC Group in June 1998and President of Specialty Manufacturing in January 2001. Previously,Mr. Byman was Vice President/General Manager of a domestic division of Weatherford/Enterra,a manufacturer of oilfield-related equipment.

Bruce Freeman was named Senior Vice President ofOperations of J.B Poindexter & Co., Inc. on November 15,2001 and became President of Truck Accessories during July 2002.Previously, Mr. Freeman spent 20 years with the General ElectricCompany in a variety of operations and senior management assignments followedby four years as President of AEC Sterling and later as a Senior Vice Presidentwith Northwestern Growth Corporation.

Bill Flint, Jr. was named President of EFP onOctober 6, 2003. Previously, Mr. Flint was President and ChiefOperating Officer of Flambeau Corporation, a plastics manufacturing company.

Norbert Markert became the President and Chief Operating Officer ofMorgan in November 2005.  Previously, heserved two years as the President of Autoliv of North America after having beenthe President of Pilkington Automotive North America for four years.

Patrick Warmington became the President of Morgan Olson on November 21,2005.  Prior to joining Morgan Olson, Mr.Warmington had held a variety of senior management positions in the aluminum,wire and trailer industries that included assignments as President of AkronSpecialized Products, CEO of Transcraft Corporation and President of RavenTrailers.

Robert Whitehouse became the President of the Specialty Vehicles Groupon December 19, 2005.  Mr. Whitehouse hadserved for ten years as the President and CEO of IC Corporation, formerly knownas American Transportation Corporation.

**Code of Ethics**

The Board of Directors has adopted a code of ethics thatapplies to its executive officers. Management does not believe that a code ofethics is a substitute for an obligation to always act in an honest and ethicalfashion.  The code of ethics is includedas an Exhibit to this Form 10-K/A.

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**Item 11. ****Executive Compensation**

**Overviewof Compensation Program**

The Chairman of the Board of Directors (the “Chairman”) along withother Board members and Company senior executives (for the purpose of thisdiscussion, the “Committee”) has the responsibility for establishing,implementing and monitoring adherence to the Company’s compensationprogram.  The Committee ensures that thetotal compensation paid to executives is fair, reasonable and competitive.

**Compensation Philosophy and Objectives**

The Committee believes that the most effective executive compensationprogram is one that is designed to reward the achievement of specific goals andwhich aligns the executive’s interests with those of the Company. The Committeeevaluates both performance and compensation to ensure that it maintains itsability to attract and retain superior employees in key positions and thatcompensation provided to key employees remains competitive relative to thecompensation paid to executives at similar companies.  To that end, the Committee believes executivecompensation provided by the Company to its executives, including the namedexecutive officers, should include a combination of competitive base salariesand performance-driven incentive plans.

**Role of Executive Officers in Compensation Decisions**

The Committee participates in compensation assessments andrecommendations for the executive officers of the Company and the Chairmanreserves the right of final approval. The Chairman further reserves the right to exercise discretion inmodifying any recommended adjustments or awards.

**Setting Executive Compensation**

The Committee has structured the Company’s annual and long-termincentive-based executive compensation to motivate executives to achieve thefinancial goals set by the Company and reward executives for achieving suchgoals.  In furtherance of theseobjectives, the Committee periodically engages the services of outsideexecutive compensation consultants to provide relevant market data andalternatives to consider when making compensation decisions

In making compensation decisions, the Committee compares the totalcompensation opportunity of executives as compared to a nationwide survey ofsimilar-sized companies from a cross section of manufacturing industries.  These data are updated annually and arepresented to the Company by a third-party firm expressed as 25th, 50th and 75th percentiles.  The Company strives to manage the base andincentive compensation to the 50th percentile which is further influenced byindividual performance, Company performance and an executive’s length ofservice.

A significant portion of total compensation is provided as incentivecompensation realized by the executives as a result of the Company achievingestablished objectives.  Historically,and in fiscal 2006, incentive awards were reflective of both the Company’sachievement of established objectives and the individual executive’sperformance.

**2006 Executive Compensation Components**

For the fiscal year ended December 31, 2006, the principal componentsof compensation for named executive officers were:

·                  Base salary

·                  Performance-based annual incentivecompensation

·                  Performance-based long-term incentivecompensation

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The Company does not provide any executives with any form of non-cashcompensation such as retirement plans or perquisites.

**Base Salary**

The Company provides executive officers with a base salary tocompensate them for services rendered during the fiscal year.  Salary ranges for each executive aredetermined based on their position and responsibility and by using marketdata.  The Company strives to manage anexecutive’s base salary compensation to the 50th percentile of the market data provided by anoutside consultant.  Salary levels are typicallyconsidered annually as part of the Company’s performance review process as wellas upon a promotion or other change in job responsibility.  Merit-based increases for executives are aresult of recommendations made by the Committee and subject to the finalapproval of the Chairman.

**Performance Based Annual Incentive Plan**

The Annual Management Incentive Plan (the “Annual Plan”) wasestablished in the mid-1990s to provide an annual incentive opportunity tosenior executives throughout the Company. The purpose of the Annual Plan is to align the interests of theexecutives with the financial performance at either their subsidiary or theparent.  At the beginning of eachcalendar year, the Chairman reviews and approves each participant’s eligibilityin the Annual Plan and his incentive target which is expressed as a proportionof base salary earnings for the year.

Participants in the Annual Plan at the parent level have theirperformance measured by the consolidated earnings performance of the Company inrelationship to the earnings budget established at the beginning of eachcalendar year.  Participants in theAnnual Plan at the subsidiary level have their performance measured by acombination of their subsidiary’s performance to an established earnings budgetand the management of working capital targets. Performance to the earnings budget accounts for 75% of the incentiveaward and the management of working capital accounts for 25%.  However, if the earnings budget is notachieved at least at the threshold level, no incentive awards are paid.

The threshold level is set at 80% of budgeted earnings.  Once the annual audit is complete and theearnings performance verified at both the parent and subsidiary level by theCompany’s outside auditors, the percent of performance to budget isestablished.  If the performance exceeds80%, that number is squared to determine what percent of a participant’s awardis paid. (Example:  If 90% earningsperformance is achieved, then 90 x 90 = 81% of a participant’s incentive targetaward is paid.)  The Annual Plan maximumpayout is achieved when the earning’s performance is 130% of budgeted earningsand 169% of a participant’s incentive target.

In any calendar year where the Company’s or a subsidiary’s performancefalls below the threshold performance level, the Committee may make modestdiscretionary awards to certain Annual Plan participants to reward exceptionalperformance.

In 2007, the income thresholds under the Annual Plan were reduced tooffset negative industry trends that were not anticipated when the grants underthe Annual Plan were established, resulting in greater awards under the AnnualPlan than would have been the case if those adjustment had not been made.

**Long-Term Performance Plan**

The Long-Term Performance Plan (“LTPP”) was established in 1999 and wasdesigned to align the interests and performance goals of the most seniorexecutives in the Company with the long-term financial performance of theCompany.  Each element of the LTPP has athree-year duration and awards are paid only at the end of the three-yearcycle, depending upon performance versus established goals.

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Each year, the Committee designates participants in the LTPP andprovides them with a letter which outlines their participation, their targetedaward and the performance criteria. Because of the three-year cycle, a regular participant in the LTPP willhave three cycles in progress simultaneously, one cycle will be in it’s firstyear, one in the second year and one in the third year.  Targeted participant awards are expressed asa percent of their base annual salary at the end of the three-year cycle.

Performance of the LTPP is determined by the cumulative Profit BeforeTax (“PBT”) financial performance of the Company over each three-year period asmeasured against the budgeted PBT for the same time period.  Threshold performance is achieved when theCompany’s cumulative PBT achieves 80% of budgeted PBT for the same period.  A scale is used to determine a participant’saward so that at the threshold, or 80% performance, a participant receives 20%of the established award.  The maximumaward is achieved when PBT is 130% or greater than plan which, based on thescale, equates to a payment of 200% of a participant’s established award.  Awards are paid at the conclusion of eachthree-year cycle, following the audit of the Company’s results of operations.

For any calendar year that the Company’s performance fails to reach atleast the 80% threshold level, an 80% achievement factor is used for thatyear.  The Chairman has the authority toamend, modify or cancel the Plan at any time following the receipt ofrecommendations from the Committee.

**Nonqualified Deferred Compensation Plan**

The Company sponsors a nonqualified deferred compensation plan thatallows eligible employees to elect to defer a portion of their annualcompensation for tax purposes.  There isno company match and deferred amounts are invested in funds managed by anindependent investment company.  Thefunds earn market rates of return and are subject to normal market risk.

**401-K Plan**

The Company sponsors a 401(k) savings plan that allows participatingemployees to contribute a portion of their gross compensation and provides forCompany matching contributions up to three percent of the first six percent ofgross pay, as well as the opportunity for an annual discretionarycontribution.  The Company has not made adiscretionary contribution to date. Vesting in the Company’s matching contribution is 20% per year over thefirst five years. 

**Perquisites and Other Personal Benefits  **

The Company does not provide any form of perquisite, executive benefitprogram or personal benefits to any of the named executives or any other seniormanagement member at the parent or subsidiary Company level.

**COMMITTEE REPORT**

The Committee of the Company has reviewed this Compensation Discussionand Analysis and, based on such review, the Committee recommended to the Boardthat this Compensation Discussion and Analysis be include in this 10-K/A.

The Committee

JohnPoindexter – Chairman, President & CEO

StephenMagee – Member, Board of Directors

LarryWolfe – Vice President of Administration

Robert Whatley – Vice President Finance & Treasurer

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The following table sets forth certain informationregarding the compensation paid to the Company’s Principal Executive Officer,the Company’s Principal Financial Officer, the Company’s three most highlycompensated executive officers (including executive officers of the Company’ssubsidiaries) other than the Principal Executive Officer and PrincipalFinancial Officer at the end of the last completed fiscal year, and anexecutive officer that would have been included in the above but for the factthat he was no longer employed by the Company at the end of the year(collectively, the “named officers”).

**SummaryCompensation Table**
| **Name and principal position**                                    | ** ** | **Year** | ** ** | **Salary** | ** ** | **Non-Equity   Incentive Plan   Compensation** | ** ** | **All Other   Compensation** | ** ** | **Total** | ** ** |
|-----------------------------------------------------------------------------------|------------|----------|------------|------------|------------|---------------------------------------------------------------|------------|----------------------------------------|------------|-----------|------------|
| John  B. Poindexter(a)   Principal Executive Officer                              |       | 2006     |       | $     | 296,508    |                                                          | —     |                                   | $     | 352,200   |       | $  | 648,708 |   |
|                                                                              |       |     |       |       |       |                                                          |       |                                   |       |      |       |
| Robert  Whatley(b)   Principal Financial Officer                                  |       | 2006     |       | $     | 201,500    |                                                          | $     | 63,362                                 |       | 6,100     |       | $  | 270,962 |   |
|                                                                              |       |     |       |       |       |                                                          |       |                                   |       |      |       |
| Norbert  Markert(c)President, Morgan                                              |       | 2006     |       | $     | 326,848    |                                                          | $     | 136,975                                |       | 7,500     |       | $  | 471,323 |   |
|                                                                              |       |     |       |       |       |                                                          |       |                                   |       |      |       |
| Nelson  Byman(d)   President, Specialty Manufacturing                             |       | 2006     |       | $     | 229,901    |                                                          | $     | 155,535                                |       | 7,500     |       | $  | 392,936 |   |
|                                                                              |       |     |       |       |       |                                                          |       |                                   |       |      |       |
| Patrick  Warmington(e)   President, Morgan Olson                                  |       | 2006     |       | $     | 202,885    |                                                          | $     | 167,153                                |       | 7,500     |       | $  | 377,538 |   |
|                                                                              |       |     |       |       |       |                                                          |       |                                   |       |      |       |
| Stormy  T.W. Hicks(f)President and Chief Operating Officer   through October 2006 |       | 2006     |       | $     | 326,848    |                                                          | —     |                                   | $     | 189,080   |       | $  | 515,928 |   |

 

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(a) Mr. Poindexter began receiving a salary from the Company beginningJuly 2006. He does not receive a bonus and does not participate in either theAnnual Plan or LTPP. Through June 2006, Mr. Poindexter was compensated througha Management Services Agreement between Southwestern Holdings, Inc. and theCompany. (Southwestern Holdings, Inc. is owned by Mr. Poindexter.) For allservices, the Company paid Southwestern Holdings, Inc. $346,000 in 2006. TheCompany matched $6,200 of Mr. Poindexter’s contributions to the Company’s 401-KPlan in 2006.

(b) Mr. Whatley was paid $63,362 pursuant to the Annual Plan that wasaccrued in 2006 but paid in 2007. Mr. Whatley does not participate in the LTPPPlan. The Company matched $6,100 of Mr. Whatley’s contributions to the Company’s401-K Plan in 2006.

(c) Mr. Markert was paid $136,975 pursuant to the Annual Plan that wasaccrued in 2006 but paid in 2007 and received no payment under the LTPP Plan.The Company matched $7,500 of Mr. Markert’s contributions to the Company’s401-K Plan in 2006.  The Companyreimbursed Mr. Markert $17,060 for interest paid on his unsold privateresidence.

(d) Mr. Byman was paid $155,535 pursuant to the Annual Plan that wasaccrued in 2006 but paid in 2007 and received no payment under the LTPP Plan.The Company matched $7,500 of Mr. Byman’s contributions to the Company’s 401-KPlan in 2006.

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(e) Mr. Warmington was paid $167,153 pursuant to the Annual Plan thatwas accrued in 2006 but paid in 2007 and received no payment under the LTPPPlan. The Company matched $7,500 of Mr. Warmington’s contributions to theCompany’s 401-K Plan in 2006.

(f) Mr. Hicks resigned as President and Chief Operating Officer of theCompany and as a member of its Board of Directors effective October 18, 2006.In accordance with the provisions outlined in his employment agreement andfurther outlined to Mr. Hicks in a separation letter agreed to by Mr. Hicks, hewas provided the following separation considerations:  continuation of his base salary for twelvemonths or until he commences new employment, whichever occurs first ($416,416was paid in 2006); the opportunity to continue medical insurance coverageproviding he pays the equivalent employee premium ($3,614 was incurred in2006); and reimbursement of relocation expenses ($35,000 was paid in 2007).

**Estimated Future Payouts Under**

**Non-Equity Incentive Plan Awards**
| Name                  | ** ** | **Grant Date** | ** ** | **Plan**     | ** ** | **Threshold** | ** ** | **Target** | ** ** | **Maximum** | ** ** |
|-----------------------|------------|---------------------|------------|--------------|------------|---------------|------------|------------|------------|-------------|------------|
| John B. Poindexter(a) |       | —              |       | —       |       | —        |       | —     |       | —      |       |
|                  |       |                |       |         |       |          |       |       |       |        |       |
| Robert Whatley(b)     |       | January  1, 2006    |       | Annual  Plan |       | $             | 45,000     |       | $          | 70,527      |       | $ | 119,000 |   |
|                  |       |                |       |         |       |          |       |       |       |        |       |
| Norbert Markert(c)    |       | January  1, 2006    |       | Annual  Plan |       | $             | 105,000    |       | $          | 163,424     |       | $ | 276,000 |   |
|                       |       | January  1, 2006    |       | LTPP         |       | $             | 49,000     |       | $          | 245,136     |       | $ | 490,000 |   |
|                  |       |                |       |         |       |          |       |       |       |        |       |
| Nelson Byman(d)       |       | January  1, 2006    |       | Annual  Plan |       | $             | 73,000     |       | $          | 114,951     |       | $ | 194,000 |   |
|                       |       | January  1, 2006    |       | LTPP         |       | $             | 34,000     |       | $          | 172,426     |       | $ | 345,000 |   |
|                  |       |                |       |         |       |          |       |       |       |        |       |
| Patrick Warmington(e) |       | January  1, 2006    |       | Annual  Plan |       | $             | 65,000     |       | $          | 101,442     |       | $ | 171,000 |   |
|                       |       | January  1, 2006    |       | LTPP         |       | $             | 30,000     |       | $          | 152,164     |       | $ | 304,000 |   |
|                  |       |                |       |         |       |          |       |       |       |        |       |
| Stormy T.W. Hicks(f)  |       | January  1, 2006    |       | Annual  Plan |       | $             | 131,000    |       | $          | 205,000     |       | $ | 346,000 |   |
|                       |       | January 1, 2006     |       | LTPP         |       | $             | 62,000     |       | $          | 308,000     |       | $ | 615,000 |   |

 

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(a) Mr. Poindexter is not eligible to participate in either the AnnualPlan or the LTPP.

(b) Mr. Whatley was granted an award under the Annual Plan with anearnings target of $37.9 million for the Company for 2006. He was eligible forthe threshold amount if the Company reached 80% of that target and for themaximum amount if the Company reached 130% of that target. Mr. Whatley does notparticipate in the LTPP.

(c) Mr. Markert was granted an award under the Annual Plan with anearnings target of $23.4 million for Morgan for 2006. He was eligible for thethreshold amount if Morgan reached 80% of that target and for the maximumamount if Morgan reached 130% of that target. During 2006, Mr. Markert wasgiven a performance target under the LTPP that makes him eligible for an awardbeginning in 2008.  The PBT earningstarget for 2006, the first year of the three year cycle in which he is eligibleto participate was $21.2 million.  Thetarget PBT for the remaining years in the cycle will be determined at a laterdate.

(d) Mr. Byman was granted an award under the Annual Plan with anearnings target of $2.7 million for MIC Group for 2006. He was eligible for thethreshold amount if MIC Group reached 80% of that target and for the maximumamount if MIC Group reached 130% of that target.  During 2006, Mr. Byman was given aperformance target under the LTPP that makes him eligible for an awardbeginning in 2008 at the same threshold and maximum percentages.  The PBT earnings target for 2006, the firstyear of the three year cycle in which he is eligible to participate was $21.2million.

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(e) Mr. Warmington was granted an award under the Annual Plan with anearnings target of $2.7 million for Morgan Olson for 2006. He was eligible forthe threshold amount if Morgan Olson reached 80% of that target and for themaximum amount if Morgan Olson reached 130% of that target. During 2006, Mr.Warmington was given a performance target under the LTTP that makes himeligible for an award beginning in 2008. The PBT earnings target for 2006, the first year of the three year cyclein which he is eligible to participate was $21.2 million.  The target PBT for the remaining years in thecycle will be determined at a later date.

(f) Mr. Hicks was not granted an award under the Annual Plan.  During 2006, Mr. Hicks was given a performancetarget under the LTTP that makes him eligible for an award beginning in2008.  The PBT earnings target for 2006,the first year of the three year cycle that he is eligible to participate in,was $21.2 million.  Mr. Hicks forfeitedhis eligibility to participate in the LTPP upon termination of his employment.

**NonqualifiedDeferred Compensation**

Mr. Byman was the only named executive to elect to defera portion of his annual compensation under the Nonqualified DeferredCompensation.  During the year endedDecember 31, 2006, Mr. Byman contributed $25,976 to the plan, earned $7,035 ofincome for the year, and made no withdrawals. The balance of Mr. Byman’s account at December 31, 2006 was $173,928.

**Director’s Compensation**

Directors who are officers or employees do not receivefees for serving as directors. The Company pays $20,000 per year as director’sfees to each outside director. Additionally, Mr. Magee receives $8,000 peryear as Chairman of the Audit Committee of the Board of Directors.
| **Name**         | ** ** | **Fees Earned or   Paid in Cash** | ** ** | **Non-Equity Incentive   Plan Compensation** | ** ** | **All Other   Compensation** | ** ** | **Total** | ** ** |
|------------------|------------|------------------------------------------------------------|------------|-------------------------------------------------------------|------------|----------------------------------------|------------|-----------|------------|
| William J. Bowen |       | $                                                          | 20,000     |                                                        | —     |                                   | —     |      | $          | 20,000 |   |
|             |       |                                                       |       |                                                        |       |                                   |       |      |       |
| Stephen Magee(a) |       | $                                                          | 28,000     |                                                        | —     |                                   | $          | 69,629    |       | $ | 97,629 |   |
|                  |            |                                                            |            |                                                             |            |                                        |            |           |            |  |  |  |

 

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(a) Mr. Magee is an employee of the Company and theamount in the All Other Compensation Column represents his salary and othercompensation as an employee of the Company.

**Item 12.****       SecurityOwnership of Certain Beneficial Owners and Management and Related StockholderMatters**

Thefollowing table sets forth information regarding beneficial ownership of theCompany’s common stock as of December 31, 2006. No class of the Company’s securities is registered pursuant toSection 13 or 15(d) of the Exchange Act.
| **Directors, officers and 5% stockholders**   | ** ** | **Title of Class** | ** ** | **Beneficial  number of   shares** | ** ** | **Ownership  percent of   class** | ** ** |
|-------------------------------------------------------------------|------------|------------------------------|------------|----------------------------------------------|------------|---------------------------------------------|------------|
| John Poindexter  (director and named executive officer)           |       | Common Stock                 |       | 3,059                                        |       | 100                                         | %          |
| All other directors and executive officers as a group (6 persons) |       | —                       |       | —                                       |       | —                                      |       |

 

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Mr. Poindexterhas sole voting power with respect to all shares of common stock that hebeneficially owns and is the only person who beneficially owns commonstock.  His address is1100 Louisiana St., Suite 5400, Houston, Texas 77002.

TheCompany has not reserved any equity shares for issuance under any equitycompensation plans.

**Item13.  Certain Relationships and RelatedTransactions, and Directors Independence**

Of the Company’s three directors, only Mr. Bowen isindependent under NASDAQ’s independence standards. Mr. Magee is chairman of theaudit committee and is not independent under the standards applicable to auditcommittee members by the SEC or NASDAQ.

TheCompany had entered into a ManagementServices Agreement up until June 2006 with Southwestern Holdings, Inc.,which is owned by Mr. Poindexter and of which Mr. Magee, one of theCompany’s directors, serves as President.Pursuant to the Management Services Agreement, Southwestern Holdings, Inc.provided services to the Company,including those of Mr. Poindexter. The Company paid to Southwestern Holdings, Inc.approximately $46,000 per month for these services, subject to annual automaticincreases based upon the consumer price index. The Company may pay a discretionary annual bonus toSouthwestern Holdings, Inc. or raise the annual increases above normaladjustments subject to certain limitations. For all services, theCompany paid SouthwesternHoldings, Inc., $549,000 in 2004, $569,000 in 2005 and $346,000 in 2006.In addition to the consulting fee, Mr. Poindexter is covered under theCompany’s employee medical insurance plan; he participates in the 401(k) planand the nonqualified deferred compensation plan and is reimbursed for traveland other miscellaneous expenses.

Effective July 18, 2004, Morgan acquired from a partnership,of which Mr. Poindexter and Mr. Magee were partners, real property located inGeorgia.  Morgan paid approximately $2.2million for the property, which was determined to be the fair market value ofthe property.  The property had beenleased from the partnership since 1990 and is used by Morgan for manufacturingtruck bodies.  Morgan paid $174,000****inrent to the partnership in 2004 pursuant to such lease.

In connection with the Morgan Olson acquisition inMarch 2004, Mr. Poindexter contributed all of his shares of MorganOlson to the Company. Mr. Poindexter previously owned 100% of Morgan Olson. Effectivewith his original acquisition of Morgan Olson, the Company,through Morgan, agreed to provide certain management services to Morgan Olsonpursuant to a Management Services Agreement between Morgan Olson and theCompany. The Company charged Morgan Olson management fees ofapproximately $160,000 during 2004.

Mr. Magee provided the Company consultingservices in 2004, 2005 and 2006. The Company paid $44,400, $180,955 and $99,629 in 2004, 2005 and 2006, respectively,for directors’ fees and for consulting services.  In addition the Company reimbursed Mr. Mageefor related business expenses.

Mr. Poindexterpreviously held $4.5 million in aggregate principal amount of the 12.5%senior secured notes due 2007 and Mr. Magee previously held$0.1 million in aggregate principal amount of these senior secured notes.The Company redeemed the notes with the proceeds of the initial offering of$125 million in aggregate principal amount of 8.75% Notes, effectiveMarch, 2004, and paid them 100% of the principal amount plus accrued interest.

TheCompany does not have an established procedure for the review, approval orratification of related-party transactions. Prior to entering into any suchtransaction, however, the executive officers of the Company determine whetherthe transaction is permitted by the terms of the Company’s 8.75% Notesindenture, the credit facility agreement and other relevant contractualobligations.

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**Item 14.  Principal Accountant Fees and Services**

**Thefollowing table sets forth the fees billed to us by our independent auditors,Crowe Chizek and Company LLC (“CCC”):**
|                    | ** ** | **2006** | ** ** | **2005** | ** ** |
|--------------------|------------|----------|------------|----------|------------|
| Audit Fees         |       | $        | 296,500    |     | $          | 303,000 |   |
| Audit-related Fees |       | 8,000    |       | 23,000   |       |
| Tax Fees           |       | —   |       | —   |       |
| Other Fees         |       | —   |       | $        | 20,000     |   |
| Total Fees         |       | $        | 304,500    |     | $          | 346,000 |   |

 

***AuditFees.***

**Auditfees are the charges billed by CCC in connection with the audit of ourconsolidated financial statements as well as reviews of our quarterly reportson Form 10-Q.**

**Audit-relatedfees are the charges billed by CCC for assurance and related services,including accounting advice related to debt offerings in 2005 and for the auditof the Company’s 401(k) Defined Contribution Plan for the year ended December31, 2004.**

**Thesefees were pre-approved by the Audit Committee under the procedures describedbelow.**

**Pre-Approval Procedures**

**TheCompany’s Audit Committee is responsible for the engagement of the independentauditors and for approving, in advance, all auditing services and permittednon-audit services to be provided by the independent auditors. The AuditCommittee maintains a policy governing the engagement of independent auditorsthat is intended to maintain the independence from the Company of theindependent auditors. In adopting this policy, the Company’s Audit Committeeconsidered the various services that independent auditors have historicallyperformed or may be needed to perform for the Company. Under this policy, whichis subject to review and re-adoption annually by the Audit Committee:**

**·**                                          The Audit Committee approves the performance by the independentauditors of audit-related services, subject to restrictions in certain cases,based on the Audit Committee’s determination that this action would not belikely to impair the independence of the independent auditors from the Company;

**·**                                          The Company’s management must obtain the specific prior approval of theCompany’s Audit Committee for each engagement of the independent auditors toperform any auditing or permitted non-audit services; provided however, thatspecific prior approval by the Company’s Audit Committee is not required forany auditing services that are within the scope of a pre-approved engagementand that are consistent with other services provided by the auditor in thepast; and provided further that specific prior approval is not required forpermitted non-audit services that:

| (i)    | in the aggregate do not total more than $25,000;                                                                                                                                       |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                   |
| (ii)   | were not recognized by the Company at the time of  the engagement to be non-audit services; and                                                                                        |
|   |                                                                                                                                                                                   |
| (iii)  | are promptly brought to the attention of the  Company’s Audit Committee and approved by the Audit Committee in accordance  with this policy prior to the completion of the audit. |

 

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**·**                                          The performance by the independent auditors of certain types ofservices (bookkeeping or other services related to the accounting records orfinancial statements of the Company; financial information systems design and implementation;appraisal or valuation services, fairness opinions or contribution-in-kindreports; actuarial services; internal audit outsourcing services; managementfunctions or human resources; broker or dealer, or investment adviser orinvestment banking services; legal services and expert services unrelated tothe audit; and any other service that the applicable federal oversightregulatory authority determines, by regulation, is impermissible) is prohibiteddue to the likelihood that their independence would be impaired.

**Anyapproval required under this policy must be provided by the Company’s AuditCommittee, by the chairman of the Audit Committee in office at the time, or byany other Audit Committee member to whom the Audit Committee has delegated thatauthority. The Company’s Audit Committee will not delegate its responsibilitiesto approve services performed by the independent auditors to any member ofmanagement.**

**Thestandard applied by the Company’s Audit Committee in determining whether togrant approval of an engagement of the independent auditors is whether theservices to be performed, the compensation to be paid for such services andother related factors are consistent with the independent auditor’sindependence under guidelines of the Securities and Exchange Commission andapplicable professional standards. Relevant considerations include, but are notlimited to, whether the work product is likely to be subject to, or implicatedin, audit procedures during the audit of the Company’s financial statements;whether the independent auditors would be functioning in the role of managementor in an advocacy role; whether performance of the service by the independentauditors would enhance the Company’s ability to manage or control risk orimprove audit quality; whether performance of the service by the independentauditors would increase efficiency because of their familiarity with theCompany’s business, personnel, culture, systems, risk profile and otherfactors; and whether the amount of fees involved, or the proportion of thetotal fees payable to the independent auditors in the period that is for taxand other non-audit services, would tend to reduce the ability of theindependent auditors to exercise independent judgment in performing the audit.**

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**Part IV**

**Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 10-K/A**

1.             Financial Statements:

Thefollowing financial statements are included within the text of this report
| **Financial Statement** |
|-------------------------|
| ** **              |
|                    | Consolidated Balance Sheets as of December 31, 2006  and 2005 |
|                    | Consolidated Statements of Income for the years  ended December 31, 2006, 2005 and 2004 |
|                    | Consolidated Statements of Stockholder’s Equity  (Capital Deficiency) for the years ended December 31, 2006, 2005 and 2004 |
|                    | Consolidated Statements of Cash Flows for the years  ended December 31, 2006, 2005 and 2004 |
|                    | Notes to Consolidated Financial Statements |

 

2.             Financial Statement Schedules:

Valuationand Qualifying Accounts disclosures have been incorporated in the Notes toConsolidated Financial Statements.

3.             Exhibits

Thefollowing exhibits are included with this report
| Exhibit   Number | ** ** | **Description**                                                                                                                                                                                                                                                                                                     |
|------------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|             |       |                                                                                                                                                                                                                                                                                                                |
| 3.1 (1)          |       | Second Restated  Certificate of Incorporation of J.B. Poindexter & Co., Inc. dated January  21, 1994.                                                                                                                                                                                                           |
|             |       |                                                                                                                                                                                                                                                                                                                |
| 3.2 (2)          |       | Certificate of  First Amendment to the Second Restated Certificate of Incorporation of J.B.  Poindexter & Co., Inc. dated December 29, 1994.                                                                                                                                                                    |
|             |       |                                                                                                                                                                                                                                                                                                                |
| 3.3 (2)          |       | Amended and  Restated Bylaws of J.B. Poindexter & Co., Inc. dated July 29, 1994                                                                                                                                                                                                                                 |
|             |       |                                                                                                                                                                                                                                                                                                                |
| 4.1(4)           |       | Indenture dated  as of March 15, 2004, with respect to J.B. Poindexter & Co., Inc.’s 8.75%  Senior Notes due 2014, among J.B. Poindexter & Co., Inc., the subsidiary  guarantors named therein and Wilmington Trust Company, as trustee.                                                               |
|             |       |                                                                                                                                                                                                                                                                                                                |
| 4.2(5)           |       | Form of 8.75%  Senior Note due 2014.                                                                                                                                                                                                                                                                                |
|             |       |                                                                                                                                                                                                                                                                                                                |
| 4.3(5)           |       | Form of Senior  Note Guarantee of 8.75% Senior Notes due 2014.                                                                                                                                                                                                                                                      |
|             |       |                                                                                                                                                                                                                                                                                                                |
| 4.4(5)           |       | First  Supplemental Indenture dated December 14, 2004, to the Indenture dated as of  March 15, 2004, with respect to J.B. Poindexter & Co., Inc.’s 8.75%  Senior Notes due 2014, among J.B. Poindexter & Co., Inc., the subsidiary  guarantors named therein and Wilmington Trust Company, as trustee. |
|             |       |                                                                                                                                                                                                                                                                                                                |
| 4.5(4)           |       | Registration  Rights Agreement dated March 15, 2004, among J.B. Poindexter & Co., Inc.,                                                                                                                                                                                                                         |
|                  |            |                                                                                                                                                                                                                                                                                                                     |  |

 

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|         |   | certain  guarantors listed therein, J.P. Morgan Securities Inc. and certain initial  purchasers listed therein.                                                                                                                                                                                                                                        |   |
|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 4.6(5)  |   | Registration  Rights Agreement dated May 17, 2004, among J.B. Poindexter & Co., Inc.,  certain guarantors listed therein and J.P. Morgan Securities Inc.                                                                                                                                                                                           |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 4.7(5)  |   | Registration  Rights Agreement dated January 27, 2005, among J.B. Poindexter & Co.,  Inc., certain guarantors listed therein and J.P. Morgan Securities Inc.                                                                                                                                                                                       |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 4.8(7)  |   | Second Supplemental  Indenture dated June 10, 2005, to the Indenture dated as of March 15, 2004,  with respect to J.B. Poindexter & Co., Inc.’s 8.75% Senior Notes due  2014, among J.B. Poindexter & Co., Inc., the subsidiary guarantors named  therein and Wilmington Trust Company, as trustee.                                       |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 4.9(8)  |   | Third  Supplemental Indenture dated January 9, 2006, to the Indenture dated as of  March 15, 2004, with respect to J.B. Poindexter & Co., Inc.’s 8.75%  Senior Notes due 2014, among J.B. Poindexter & Co., Inc., the subsidiary  guarantors named therein and Wilmington Trust Company, as trustee.                                      |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 4.10(8) |   | Fourth  Supplemental Indenture dated April 17, 2006, to the Indenture dated as of  March 15, 2004, with respect to J.B. Poindexter & Co., Inc.’s 8.75%  Senior Notes due 2014, among J.B. Poindexter & Co., Inc., the subsidiary  guarantors named therein and Wilmington Trust Company, as trustee.                                      |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 4.11*   |   | Fifth  Supplemental Indenture dated September 30, 2006, to the Indenture dated as of  March 15, 2004, with respect to J.B. Poindexter & Co., Inc.’s 8.75%  Senior Notes due 2014, among J.B. Poindexter & Co., Inc., the subsidiary  guarantors named therein and Wilmington Trust Company, as trustee.                                   |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 10.1(4) |   | Loan and  Security Agreement dated March 15, 2004, among J.B. Poindexter & Co.,  Inc., certain subsidiaries thereof, certain other loan parties signatories  thereto and LaSalle Bank National Association, a national banking  association, for itself, as a lender, and as the agent for the lenders.                                            |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 10.2(4) |   | First Amendment  to Loan and Security Agreement dated May 13, 2004, among J.B. Poindexter  & Co., Inc., certain subsidiaries thereof, certain other loan parties  signatories thereto and LaSalle Bank National Association, a national banking  association, for itself, as a lender, and as the agent for the lenders.                           |   |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |   |
| 10.3(5) |   | Limited Consent  and Second Amendment to Loan and Security Agreement dated November 3, 2004,  among J.B. Poindexter & Co., Inc., certain subsidiaries thereof, certain  other loan parties signatories thereto and LaSalle Bank National Association,  a national banking association, for itself, as a lender, and as the agent for  the lenders. |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.4(5) |   | Third Amendment  to Loan and Security Agreement dated January 20, 2005, among J.B. Poindexter  & Co., Inc., certain subsidiaries thereof, certain other loan parties  signatories thereto and LaSalle Bank National Association, a national banking  association, for itself, as a lender, and as the agent for the lenders.                       |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.5(4) |   | Sales Agreement  dated October 1, 2004 between E. I. du Pont de Nemours and Company and Morgan  Trailer Mfg. Co.                                                                                                                                                                                                                                       |
|    |   |                                                                                                                                                                                                                                                                                                                                                   |
| 10.6(4) |   | Sales Agreement  dated October 1, 2004 between E. I. du Pont de Nemours and Company and Truck  Accessories Group, Inc.                                                                                                                                                                                                                                 |

 

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| # 10.7 (1)  |   | Form of Incentive  Plan for certain employees of the subsidiaries of J.B. Poindexter & Co.,  Inc.                                                                                                                                                                                                                                    |
|-------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| # 10.8 (1)  |   | Morgan Trailer  Mfg. Co. Long-Term Management Equity Appreciation Program dated May 10, 1990.                                                                                                                                                                                                                                            |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| # 10.9(5)   |   | Management  Services Agreement dated as of May 23, 1994, between J.B. Poindexter &  Co., Inc. and Southwestern Holdings, Inc.                                                                                                                                                                                                        |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| # 10.10 (3) |   | Management  Services Agreement effective as of December 19, 2003, between J.B. Poindexter  & Co., Inc., Morgan Trailer Mfg. Co., and Morgan Olson.                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 10.11 (6)   |   | Fourth Amendment  to Loan and Security Agreement dated April 25, 2005, among J.B. Poindexter  & Co., Inc., certain subsidiaries thereof, certain other loan parties  signatories thereto and LaSalle Bank National Association, a national banking  association, for itself, as a lender, and as the agent for the lenders.          |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 10.12 (9)   |   | Limited Consent,  Joinder and Fourth Omnibus Amendment dated October 10, 2006, among J.B.  Poindexter & Co., Inc., certain subsidiaries thereof, certain other loan  parties signatories thereto and LaSalle Bank National Association, a national  banking association, for itself, as a lender, and as the agent for the  lenders. |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 12*         |   | Computation of  Ratio of Earnings to Fixed Charges.                                                                                                                                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 14(9)       |   | Code of Ethics                                                                                                                                                                                                                                                                                                                           |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 21(9)       |   | List of subsidiaries  of J.B. Poindexter & Co., Inc.                                                                                                                                                                                                                                                                                 |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 31.1*       |   | Rule  13(a)-14(a)/15d-14(a) Certificate of the Chief Executive Officer.                                                                                                                                                                                                                                                                  |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 31.2*       |   | Rule  13(a)-14(a)/15d-14(a) Certificate of the Chief Financial Officer                                                                                                                                                                                                                                                                   |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 32.1*       |   | Section 1350  Certificate of the Chief Executive Officer                                                                                                                                                                                                                                                                                 |
|        |   |                                                                                                                                                                                                                                                                                                                                     |
| 32.2*       |   | Section 1350  Certificate of the Chief Financial Officer                                                                                                                                                                                                                                                                                 |

 

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#      Management contracts orcompensatory plans.

*      Filed herewith.

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| (1)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Registration Statement on Form  S-1 (No. 33-75154) as filed with the SEC on February 10, 1994                                     |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                   |
| (2)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Annual Report on Form 10-K for  the year ended December 31, 1994, as filed with the SEC on March 31,  1995.             |
|   |                                                                                                                                                                                                   |
| (3)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Quarterly Report on Form 10-Q  for the quarter ended September 30, 2003, as filed with the SEC on  November 14, 2003.   |
|   |                                                                                                                                                                                                   |
| (4)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Registration Statement on Form  S-4 (No. 333-123598) as filed with the SEC on March 25, 2005.                                     |
|   |                                                                                                                                                                                                   |
| (5)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Registration Statement as  amended on Form S-4A (No. 333-123598) as filed with the SEC on April 7, 2005.                          |
|   |                                                                                                                                                                                                   |
| (6)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Quarterly Report on Form 10-Q  for the quarter ended September 30, 2005, as filed with the SEC on  November 14, 2005.   |
|   |                                                                                                                                                                                                   |
| (7)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Annual Report on Form 10-K for  the year ended December 31, 2005, as filed with the SEC on March 31, 2006.                        |
|   |                                                                                                                                                                                                   |
| (8)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Quarterly Report on Form 10-Q/A  for the quarter ended September 30, 2006, as filed with the SEC on September  5, 2007. |
|   |                                                                                                                                                                                                   |
| (9)    | Incorporated by  reference to J.B. Poindexter & Co., Inc.’s Annual Report on Form 10-K for  the year ended December 31, 2006, as filed with the SEC on April 2,  2007.              |

 

79

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the SecuritiesExchange Act of 1934, the registrant has duly caused this report to be signedon its behalf by the undersigned, thereunto duly authorized.
|                         | **J.B. POINDEXTER &  CO., INC.**        |
|-------------------------|---------------------------------------------|
|                    |                                        |
|                    |                                        |
| Date: September 5, 2007 | By                                          |   /s/ John B. Poindexter |   |
|                    | John B. Poindexter, Chairman of the Board,  |
|                    |  Chief Executive Officer and President |
|                    |  (Principal Executive Officer)         |

 

Pursuant to the requirements of the Securities Exchange Act of 1934,this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated.
| Date: September 5, 2007 | By                                          |   /s/ John B. Poindexter |   |
|-------------------------|---------------------------------------------|------------------------------------|--------|
|                    | John B. Poindexter, Chairman of the Board,  |
|                    |  Chief Executive Officer and President |
|                    |  (Principal Executive Officer)         |

 
| Date: September 5, 2007 | By                         |   /s/ Stephen P. Magee |   |
|-------------------------|----------------------------|----------------------------------|--------|
|                    | Stephen P. Magee, Director |

 

 
| Date: September 5, 2007 | By                          |   /s/ William J.  Bowen |   |
|-------------------------|-----------------------------|-----------------------------------|--------|
|                    | William J. Bowen,  Director |

 

 
| Date: September 5, 2007 | By                                            |   /s/ Robert S.  Whatley |   |
|-------------------------|-----------------------------------------------|------------------------------------|--------|
|                    | Robert S. Whatley, Vice  President Finance,   |
|                    | Secretary and Treasurer                       |
|                    | (Principal Financial and  Accounting Officer) |

 

80

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