Deregulation and consolidation of the railroad industry, market competition between railroads and trucking and the state of the global economy all have had a significant impact on the North American rail services and supply market. In recent years, these factors—combined with an aging fleet and capacity constraints, resulting from continued growth in RTMs—have contributed to new cost management strategies and an increase in outsourcing of maintenance and repair as railroads focus on their core transportation business.

Currently, there are seven Class I railroads operating in North America, compared with approximately 40 in operation in 1970. The Class I railroads are: Burlington Northern/Santa Fe Railway, Canadian National, Canadian Pacific, CSX Transportation, Kansas City Southern Railway, Norfolk Southern Railway Company and Union Pacific Railroad. The ongoing consolidation of the Class I railroads during the past few decades has created a number of construction and maintenance projects as track systems were reconfigured and integrated. At the same time, consolidation intensified competition, leading railroads to refocus on improving their core operations. Railroads are continuing to pursue strategies to increase freight volume, improve delivery performance and reduce both operating and capital costs.

The most important driver of the maintenance and repair part of the rail services and supply market is rail freight traffic, which is primarily measured by RTMs. An RTM is the revenue generated by moving one ton of freight one mile. RTMs generally correlate with both industrial production and gross domestic product. As an example, if coal consumption were to increase due to increased industrial demand for energy, RTMs would also increase as coal comprises a substantial amount of the freight carried by railroads in North America. According to the AAR, RTMs have increased by an average of 2.6% annually in the last decade.

The Company operates one of the most extensive networks of freight car repair facilities in North America, stretching from Montreal to Mexico City, and providing everything from routine maintenance to total rebuilds. The Company also repairs intermodal flat cars waiting to be loaded at various ramps dispersed across North America.

The Company provides locomotive parts and repair as well as the specialized parts used in rail transit vehicles, such as traction motors. The Company also operates repair shops that can rebuild locomotives as well as provide regular maintenance. The Company has facilities located in East Chicago, Indiana; Chicago, Illinois; Lawrence, Kansas; Morrill, Nebraska; Knoxville, Tennessee; Patterson, Georgia; Rocklin, California; and Montreal, Canada.

As one of the largest providers of trackwork services in North America, the Company provides Class I railroads and metro transit systems with fabricated rail products such as turnouts, those parts of a turnout that allow rails to cross each other, or frogs, and switchpoints and other highly engineered transit components.

The Company manufactures, installs and maintains key components for highway grade crossing safety devices, and provide complete signal device assemblies and maintenance support services to railroad infrastructure across North America.

The Company manufactures, sells and leases new, used and remanufactured maintenance-of-way equipment to the Class I and shortline railroads, municipalities and contractors that help them manage their right-of-way construction and maintenance. The Company also sells vegetation management equipment to utilities and the forest management companies to allow them to maintain their right-of-way along highways and railroads, and clean vegetation around power lines.

The Company provides welding and engineering support to the railroad industry, offering both plant operations and mobile operations.

The Company’s relay operations consist of sourcing reusable rail track, which can either be reconditioned and relayed or sold as scrap or for other uses.

Gross profit increased by $9.7 million, or 8.1%, to $129.7 million for the twelve months ended November 30, 2005 from $120.0 million for fiscal 2004.

General and administrative expenses were $19.2 million in the predecessor period and $31.7 million in the successor period, compared to $52.6 million in fiscal 2004.

Operating income was $9.2 million in the predecessor period and $68.8 million in the successor period, compared to $66.6 million for fiscal 2004.

Other income was $(0.1) million in the predecessor period and $(0.7) million in the successor period, compared to $(0.4) million in fiscal 2004.