United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2010~~2011

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

For the transition period from to

Commission file number ~~333~~033-~~123598~~75154

J.B. POINDEXTER & CO., INC.

(Exact name of registrant as specified in its charter)

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

600 Travis

Suite 200

Houston, Texas 77002

(Address of principal executive offices)

(Zip Code)

(713) 655-9800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Name of each exchange which registered: None

Securities registered pursuant to Section 12(g) of the Act: None

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 404 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o x No o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act). (Check One):

o – Large accelerated filer		o – Accelerated filer

x – Non-accelerated filer		o – Smaller reporting company

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of ~~April 13~~February 23, ~~2011~~2012 was $0.00.

As of ~~April 13~~February 23, ~~2011~~2012, the registrant had 3,059 shares of common stock issued and outstanding.

Documents incorporated by reference. None

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

Table of Contents

PART I
Item 1.	Business	3
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	18
Item 2.	Properties	19
Item 3.	Legal Proceedings	20
Item 4.	(Removed and Reserved)	20
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	20
Item 6.	Selected Financial Data	21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	34
Item 8.	Financial Statements and Supplementary Data	35
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	61
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	61
Item 11.	Executive Compensation	63
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	68
Item 13.	Certain Relationships and Related Transactions, and Director Independence	69
Item 14.	Principal Accountant Fees and Services	70
Part IV
Item 15.	Exhibits and Financial Statement Schedules	71

Cautionary Statements Regarding Forward-Looking Statements

PART I
Item 1.	Business	4
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	16
Item 2.	Properties	17
Item 3.	Legal Proceedings	18
Item 4.	Mine Safety Disclosures	18

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	18
Item 6.	Selected Financial Data	19
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7A.	Quantitative and Qualitative Disclosure About Market Risks	35
Item 8.	Financial Statements and Supplementary Data	37
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	59
Item 9A.	Controls and Procedures	59
Item 9B.	Other Information	60

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	61
Item 11.	Executive Compensation	63
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	69
Item 13.	Certain Relationships and Related Transactions, and Director Independence	70
Item 14.	Principal Accountant Fees and Services	70

PART IV
Item 15.	Exhibits and Financial Statement Schedules	73

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Cautionary Statements Regarding Forward-Looking Statements

All statements other than statements of historical fact included in this document including, without limitation, statements regarding our future financial position, budgets, projected costs and plans and objectives of management for future operations, are forward-looking statements and involve risks and uncertainties. These statements often include words such as “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends, “may,” “will” or “should” and similar expressions. Forward-looking statements include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Factors that could cause actual results to differ materially from our expectations include, among others, such things as:

· acquisitions and other business opportunities (or lack thereof) that may be pursued by us;

· continued availability of capital and financing;

· general economic, market or industry conditions;

· changes in applicable laws or regulations;

· other factors, which may be beyond our control; and

· the risk factors discussed in this offering memorandum.

These forward-looking statements are made based upon our expectations and beliefs concerning future events impacting us and therefore involve a number of risks and uncertainties. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industries in which we operate may differ materially and adversely from those made in or suggested by the forward-looking statements contained in this offering memorandum.

You should read carefully the items described in ‘‘Risk Factors’’ in Item 1A of this document to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements.

Any forward-looking statements that we make in this document speak only as of their respective dates, and we undertake no obligation to review, revise or update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, and such comparisons should only be viewed as historical in nature.

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PART I

Item 1. Business

~~This~~Executive document includes statements that are, or may be deemed to be, ‘‘forward-looking statements.’’ These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ‘‘believes,’’ ‘‘estimates,’’ ‘‘anticipates,’’ ‘‘expects,’’ ‘‘intends,’’ ‘‘may,’’ ‘‘will’’ or ‘‘should’’ or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this document and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which we operate.Overview

~~These~~J.B. ~~forward-looking~~Poindexter & ~~statements~~Co., Inc. ~~are~~designs, ~~made~~manufactures ~~based~~and ~~upon~~markets ~~our~~commercial ~~expectations~~truck ~~and~~bodies, ~~beliefs~~step ~~concerning~~vans, ~~future~~pickup ~~events~~truck ~~impacting~~caps us and ~~therefore~~tonneaus, ~~involve~~funeral acoaches ~~number of risks~~ and ~~uncertainties. By their nature~~limousines, ~~forward-looking~~specialty ~~statements~~oil ~~involve risks~~ and ~~uncertainties~~gas ~~because~~industry ~~they~~equipment, ~~relate to events~~ and ~~depend~~expanded onfoam ~~circumstances that may or may not occur in the future~~packaging. WeThe ~~caution~~Company ~~you~~operates ~~that~~under ~~forward~~a semi-~~looking~~decentralized ~~statements~~business ~~are not guarantees of future performance and that our actual results of operations~~model, ~~financial~~with ~~condition~~six ~~and~~business ~~liquidity,~~units ~~and~~reported ~~developments~~ in ~~the~~four ~~industries~~operating ~~in which we operate may differ materially and adversely from the forward-looking statements contained in this document.~~segments:

~~You~~Business ~~should~~Unit ~~read~~Segment ~~carefully~~Products ~~the~~Morgan ~~items~~Truck ~~described~~Body, inLLC ~~‘‘Risk~~Morgan ~~Factors’’~~Truck inbodies ~~Item~~Morgan 1AOlson, ofLLC ~~this~~Morgan ~~document~~Olson toStep ~~better~~vans ~~understand~~Truck ~~the~~Accessories ~~risks~~Group, LLC TAG Pickup truck caps and ~~uncertainties~~tonneaus ~~inherent~~MIC inGroup, ~~our~~LLC ~~business~~(“MIC”) Specialty Manufacturing Oil and ~~underlying~~gas ~~any~~industry ~~forward-looking~~equipment ~~statements.~~Specialty Vehicle Group (“SVG”) Specialty Manufacturing Funeral coaches and limousines EFP, LLC (“EFP”) Specialty Manufacturing Expanded foam packaging

~~Any~~Unless ~~forward-looking~~the ~~statements~~context ~~that~~otherwise werequires, ~~make~~the in“Company,” ~~this~~“we,” ~~document refer only to~~ “our,” ~~opinions~~or ~~prevailing~~“us” onrefers ~~the~~to ~~date~~J.B. ofPoindexter & ~~such statement~~Co., Inc. ~~and~~(“JBPCO” weor ~~undertake no obligation to review~~“Parent”), ~~revise~~together orwith ~~update~~its ~~such~~operating ~~statements~~subsidiaries. ~~Comparisons~~Our ofsix ~~results~~business ~~for~~units ~~current~~are ~~and~~overseen ~~prior~~by ~~periods~~a ~~are~~corporate ~~not~~executive ~~intended~~team, tolocated ~~express~~in ~~future~~Houston, ~~trends~~Texas. All orbusiness ~~indications~~unit ofheadquarters ~~future~~are ~~performance;~~located ~~such~~outside ~~comparisons~~Houston, ~~should~~Texas. The ~~only~~Company beis ~~viewed~~wholly asowned ~~historical~~by inJohn ~~nature~~B. Poindexter.

~~Overview~~For the year ended December 31, 2011, our revenues were approximately $708 million, of which 42% were derived from Morgan, 15% from Morgan Olson, 17% from TAG and 26% from Specialty Manufacturing (18% from MIC, 5% from SVG and 3% from EFP). Please refer to Note 2 of our Financial Statements, included herein, for a more detailed description of financial information by segment.

J.B. Poindexter & Co., Inc. designs, manufactures and markets commercial truck bodies, step vans, pickup truck caps and tonneaus, funeral coaches and limousines, specialty oil and gas industry equipment, and expanded foam packaging. The company operates under a semi-decentralized business model with six business units reported in four operating segments:

Business Unit Segment Products Morgan Truck Body, LLC Morgan Truck bodies Morgan Olson, LLC Morgan Olson Step vans Truck Accessories Group, LLC Truck Accessories Pickup truck caps and tonneaus MIC Group, LLC Specialty Manufacturing Oil and gas equipment Specialty Vehicle Group Specialty Manufacturing Funeral coaches and limousines EFP, LLC Specialty Manufacturing Expanded foam packaging

Unless the context otherwise requires, the “Company,” “we,” “our” or “us” refers to J.B. Poindexter & Co., Inc. (“JBPCO” or “Parent”) together with its operating subsidiaries. Our six business units are overseen by a corporate executive team at the Parent located in Houston, Texas. All of the business units’ headquarters are located outside Houston, Texas. The company is wholly owned by John B. Poindexter.

For the year ended December 31, 2010, our revenues were approximately $553 million, of which 36% were derived from Morgan, 15% from Morgan Olson, 22% from Truck Accessories and 27% from Specialty Manufacturing. Please see Note 2 of our financial statements included herein for a description of financial information by segment.

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Accomplishments in 2010

Our strategic goals are to grow revenues faster than our competitors, and to increase net income and net cash provided by operating activities faster than revenues. We believe operational excellence, upgrading executive talent and internal process improvements will help us achieve our goals.

Over the last several years the Company has embarked upon a focused profit improvement strategy with five key initiatives:

· Upgrade executive talent at the Parent and at each business unit.

· Execute lean manufacturing principles.

· Globalize and diversify sources of procurement.

· Rationalize and consolidate facilities.

· Divest unprofitable lines of business.

Guided by these initiatives, the Company during 2010 enhanced its Parent management team by adding new positions and upgrading others. Business units progressed in their lean implementation programs and are delivering efficiency improvements while global and diversified sourcing has become ingrained in the Company’s culture. The Company completed its facility rationalization program in 2010 with the successful consolidation of Specialty Vehicle Group’s Fort Smith, Arkansas facility into Specialty Vehicle Group’s Amelia, Ohio facility, a curtailment of costly and inefficient activities at EFP’s Elkhart, Indiana facility and the finalization of the sale of MIC’s Milwaukee facility. Divestiture of uneconomic lines of business positively impacted the Company as MIC canceled a highly unprofitable customer contract in the fourth quarter of 2010, Specialty Vehicle Group benefitted from the sale of its loss making transit bus business and EFP exited a number of marginal product lines.

These improvements and others produced a 128% operating income improvement in three of our four segments which were unfortunately offset by a decline in operating income at MIC Group, a business unit of Specialty Manufacturing.

Specifically in 2010 we:

· Realized an improvement in operating income of 128% or $14.8 million from $11.6 million in 2009 to $26.4 million in 2010, in three of our four segments.

· Increased our operating margin as a percentage of sales in the three segments noted above to 6.5% in 2010 from 3.6% in 2009 as a result of cyclical factors in the industries in which we compete and, more meaningfully, operating improvements.

· Improved working capital performance by reducing accounts receivable days outstanding to 24 days from 27 days and inventory turnover to 8 from 7 turns per year.

· Maintained cash reserves of $58 million and an available revolver of $49 million ($50 million of untapped revolver less $1 million of insurance letters of credit).

· Developed new products that incorporate the voice of our customers, provide differentiation from competition and strengthen our position as a leader in innovation. Examples include Morgan Olson’s development of a composite vehicle on an all-electric chassis and Morgan’s “Green” initiative for light-duty truck bodies that are more fuel-efficient to operate.

· Increased international lower-cost-country sourcing by 450%, which improved operating income by $2 million in 2010 compared to 2009.

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· Upgraded key positions on the Parent staff including the newly created positions of Chief Operating Officer, Vice President of Operational Improvement and Vice President of International Development.

Shortcomings in 2010

Early in the third quarter, Parent management recognized the onset of a deterioration in the earnings of MIC, the largest component of the Specialty Manufacturing segment. This deterioration, ultimately a $7.7 million reduction in operating income compared to the year ended 2009, which itself was a cyclically depressed year, was primarily attributable to: (1) startup costs of a new facility in Malaysia; (2) poor management practices; (3) inappropriately priced contracts; and (4) operational inefficiencies. Our Parent executive team became intensively involved in MIC and has, among other things:

· Replaced, or is replacing, most senior management personnel at MIC.

· Canceled unprofitable contracts and established new product quoting techniques.

· Reduced operating costs in Malaysia.

· Increased prices where mandated by inadequate margins.

· Improved lean manufacturing and purchasing procedures.

· Transferred Parent executives to permanent positions at MIC.

Due to the changes above, we expect MIC’s operating income to significantly improve in 2011.

Morgan

~~We believe~~ Morgan is one of the leading ~~United~~North ~~States~~American ~~manufacturer~~manufacturers of commercial truck bodies for ~~medium~~Class 5-~~duty~~7 trucks. We ~~based~~believe ~~upon~~Morgan ~~estimated~~had a 45% market share ~~and~~in ~~total~~2011, ~~2010~~which ~~sales~~we ~~volume.~~estimate ~~Morgan~~was ~~generally~~30% ~~manufactures~~larger ~~products~~than ~~for~~its ~~medium-duty~~next ~~trucks~~largest ~~having~~competitor abased ~~gross~~on ~~vehicular~~2011 ~~weight~~sales ~~rating~~volume. ofMorgan’s ~~between~~truck ~~10,001~~bodies ~~pounds~~are ~~(Class 3)~~used ~~and~~for ~~33,000~~general ~~pounds~~freight ~~(Class 7).~~deliveries, ~~Trucks~~moving ~~equipped~~and ~~with~~storage, ~~Morgan’s~~and ~~products~~distribution ~~are~~of ~~commonly~~refrigerated ~~used~~consumables. inCustomers ainclude ~~wide~~rental ~~variety~~companies, ofsuch ~~applications~~as U-Haul, ~~including~~leasing ~~general~~companies, ~~freight~~such ~~deliveries,~~as ~~moving~~Penske and ~~storage~~Ryder, truck dealers and ~~distribution~~companies that operate fleets of ~~refrigerated~~delivery ~~consumables~~vehicles. We estimate that Morgan ~~also~~provided ~~offers~~approximately ~~service~~70% ~~programs~~of ~~for~~the ~~its~~2011 Class 5-7 truck ~~bodies~~body requirements of Penske and Ryder, the largest participants in the industry.

Morgan reaches a broad base of customers in the United States and Canada through its sales force and its more than 200 authorized distributors and authorized service centers. Its customers include rental companies, truck dealers, leasing companies and companies that operate fleets of delivery vehicles. Through nine manufacturing plants and six service facilities in strategic locations throughout North America, Morgan can provide timely product delivery and service to its customers.

The principal products Morgan manufactures and sells are:

· ~~dry~~Dry freight bodies ~~that~~for ~~are~~general ~~typically~~delivery fabricated with prepainted aluminum or fiberglass-reinforced plywood panels or Morganplate® or composite panels, and hardwood floors and various door configurations to accommodate end-user loading and unloading requirementsapplications;

· ~~refrigerated~~Refrigerated van bodies ~~fabricated~~for ~~with insulated aluminum or fiberglass~~end-~~reinforced~~user ~~plywood panels that accommodate~~ controlled temperature and ~~refrigeration~~refrigerated ~~needs~~transportation ~~of end users~~applications;

· ~~aluminum~~Aluminum or fiberglass-reinforced plywood cutaway van bodies that are installed ~~only~~ on cutaway chassis ~~(a chassis and cutaway cab) and are~~ available with or without ~~access~~ cab-to ~~the~~ -cargo ~~area~~space ~~from the cab~~access; and

· ~~stake~~Stake bodies, which are flatbeds with various configurations ofand removable sides.

Customers and sales. Morgan’s revenues constituted 42% of JBPCO’s consolidated revenues in 2011, 36% in 2010 and 30% in 2009. Morgan has an independent authorized distributor network of 38 distributors nationwide. Most distributors sell a wide variety of trucks and related equipment to truck dealers and end users. Generally, distributors sell Morgan

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products in a specified territory with limited exclusivity. Morgan also sells its products directly to truck dealers, selling to approximately 500 dealers in 2011.

Morgan generates revenue from three sources:

· Sales of truck bodies to commercial divisions of leasing companies, companies with fleets of delivery vehicles, and truck dealers and distributors, for ultimate sale or lease to end users such as retailers, building supply companies, contractors, delivery companies and food distribution businesses. These “commercial” truck body sales represented 86% of Morgan’s revenues in 2011, 79% in 2010 and 80% in 2009;

· Sales of truck bodies to companies that maintain large fleets of one-way and local hauling vehicles for rent to the general public. These “consumer rental” sales constituted 8% of Morgan’s revenues in 2011, 14% in 2010 and 11% in 2009; and

· Sales of service and parts, and delivery charges. These revenues constituted 6% of Morgan’s sales in 2011, 7% in 2010 and 9% in 2009.

Consumer Rental sales are composed of sales to companies that maintain large fleets of one-way and local hauling vehicles available for rental to the general public. Morgan makes these sales through a bidding process and negotiation directly with these companies through its sales force. Morgan negotiates contracts for Consumer Rental sales annually, usually in late summer to early fall, with products to be shipped during the first half of the following year. These sales are seasonal, with substantially all product shipments occurring in the first six months of the year. Consumer Rental sales tend to be the most volatile and price-sensitive aspect of Morgan’s business and profitability depends on factors such as product mix and delivery performance.

The demand for Class 5-7 truck bodies is improving. According to the February 2012 ACT N.A. Commercial Vehicle Outlook, Class 5 -7 truck sales for 2012 are forecasted to rise 11% over 2011 levels. In 2011, national fleet customers such as Penske and Ryder, with whom Morgan enjoys longstanding relationships, saw demand continue to increase disproportionately relative to smaller participants in the truck rental and leasing market. Morgan has secured a substantial proportion of the growing demand of both national fleet and smaller customers as evidenced by its backlog at December 31, 2011 of $161.9 million, which is up 87% over its $86.7 million backlog at December 31, 2010.

Morgan’s two largest customers, Penske and Ryder together, have historically represented approximately 45% to 60% of Morgan’s total revenues. These customers have been purchasing products from Morgan for approximately 25 years; we believe relations remain positive. Sales to these customers represented 25% of JBPCO’s consolidated revenues in 2011, 20% in 2010 and 17% in 2009. Aggregated accounts receivable from these customers were $6.6 million and $2.3 million at December 31, 2011 and 2010, respectively.

Morgan also sells its products in Canada and Mexico. In 2011, foreign sales (primarily in Canada) represented approximately 4% of Morgan’s revenues and 2% of JBPCO’s consolidated revenues.

Manufacturing and supplies. Morgan engineers, manufactures and installs truck bodies to exacting specifications on truck chassis supplied by its customers. Morgan operates twelve facilities with manufacturing operations at nine and service operations at five of these facilities. These facilities enable them to reduce delivery costs for, and accelerate shipments to, a wide spectrum of customers in the United States and Canada.

Morgan provides limited product warranties against construction defects. These warranties generally allow for the replacement or repair of defective parts or workmanship for up to five years from the date of sale. Warranty costs have not had a material adverse effect on its business.

Morgan’s principal raw materials include aluminum, steel, fiberglass-reinforced plywood and hardwood. Morgan acquires raw materials from a variety of sources and has not experienced significant shortages of materials. To manage its supply costs and secure favorable prices, Morgan occasionally enters into long-term supply contracts for its principal materials. Morgan has taken advantage of the combined purchasing power of various of our companies, thereby generating savings on raw materials common to our four business segments.

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~~Morgan~~Industry. Industry ~~manufactures~~revenue ~~its~~and ~~products~~growth todepend ~~customer~~primarily ~~specifications~~on the demand for delivery vehicles in the general freight, moving and ~~installs~~storage, ~~its~~parcel ~~products~~delivery onand ~~truck~~food ~~chassis~~distribution ~~supplied~~industries, all of which are affected by ~~its~~general economic conditions. Replacement of older vehicles in fleets reflects an important revenue source. Replacement cycles are approximately six to seven years, depending on vehicle types. During economic downturns, replacement orders are often deferred or, in some cases, older vehicles are retired without replacement. During periods of economic growth, sales of delivery trucks grow as customers increase their capital expenditures and make previously deferred purchases.

~~Customers~~Competition. ~~and~~The ~~sales~~truck body manufacturing industry is highly competitive. Morgan ~~principally~~competes ~~generates~~with ~~revenue through~~ three ~~sources~~national manufacturers: Supreme Industries, Inc., Kidron (a division of Specialized Vehicles Corporation) and America’s Body Company. There are also a large number of smaller manufacturers that are regionally focused. Competitive factors in the industry include product quality, delivery time and geographic proximity of manufacturing facilities to customers, warranty terms, service and price.

~~· sales~~Morgan of truck bodies to commercial divisions of leasing companies, companies with fleets of delivery vehicles and to truck dealers and distributors for ultimate sale or lease to end users such as retailers, building supply companies, contractors, delivery companies and food distribution companies (“Commercial” sales);Olson

~~· sales~~In the United States and Canada, Morgan Olson is one of ~~truck~~two ~~bodies~~major manufacturers of a type of delivery vehicle often referred to ~~national~~as ~~consumer~~a ~~rental~~step ~~companies~~van. ~~that~~Morgan ~~then~~Olson ~~become~~competes ~~available~~primarily with one other step van manufacturer in its market. Step vans are specialized vehicles designed for ~~rental~~multiple-stop applications that enable the driver to easily access the ~~general~~cargo ~~public~~area from the cab. We believe that Morgan Olson had a 47% share of the overall step van market as measured in units sold in 2011. In 2011, Morgan Olson supplied United Parcel Service of America, Inc. (“~~Consumer Rental~~UPS” ~~sales~~);, ~~and~~the world’s largest operator of step vans, with 52% of its 2011 requirements, measured in number of step vans manufactured.

· Customers and sales. Morgan Olson’s revenues constituted 15% of ~~parts~~JBPCO’s consolidated revenues in 2011 and ~~services~~2010 and 13% in 2009. Customers purchase step vans from dealers and distributors or directly from Morgan Olson’s sales force. Morgan Olson’s customers include, in addition to UPS and FedEx, companies such as Bimbo Bakeries, W.B. Mason and ARAMARK Corporation.

~~Morgan’s~~Two ~~revenues~~customers, ~~constituted~~UPS ~~36%~~and ofFedEx, ~~JBPCO’s~~purchase ~~consolidated~~the ~~revenues~~majority inof ~~2010,~~step ~~31%~~vans produced in ~~2009~~the ~~and~~United ~~33% in 2008~~States. The timing of Morgan ~~generates~~Olson’s ~~sales~~profitability ofis ~~truck~~highly ~~bodies~~influenced ~~through~~by ~~its~~the ~~sales~~distribution ~~force~~of ~~directly~~shipments toof large ~~end-user~~fleet ~~customers,~~orders ~~including~~to ~~Penske~~UPS and ~~Ryder~~FedEx. In 2011, ~~and~~the tomajority ~~distributors~~of ~~and~~Morgan ~~truck~~Olson’s ~~dealers.~~fleet ~~Commercial~~volume ~~sales~~was ofshipped ~~truck~~in ~~bodies~~the ~~constituted~~second ~~79%~~and ofthird ~~Morgan’s~~quarters, ~~revenues~~whereas in 2010, ~~80%~~the majority was shipped in ~~2009~~the first and ~~78%~~second quarters. Fleet orders at the end of December 2011 for production in ~~2008~~2012 decreased $2.9 million compared to 2010 while retail orders increased $3.6 million over the same period in 2010.

Morgan ~~has~~Olson ansupplies ~~independent~~aftermarket ~~authorized~~support ~~distributor~~through ~~network~~its ofservice 41parts ~~distributors~~department ~~nationwide.~~for ~~Most~~its ~~distributors~~step ~~sell~~vans and for truck bodies manufactured by Morgan. It is also a ~~wide~~key ~~variety~~supplier of ~~trucks~~van ~~and~~body ~~related~~parts ~~equipment~~for tothe ~~truck~~U.S. ~~dealers~~Postal ~~and~~Service’s ~~end~~(“USPS”) ~~users.~~fleet ~~Generally~~of 142,000 ~~distributors~~long-life ~~sell~~vehicles, the majority of which its predecessor manufactured. Morgan ~~products~~Olson inenjoys a ~~specified~~competitive ~~territory~~advantage with ~~limited~~this ~~exclusivity~~customer due to its ownership of the tools, jigs and patterns for the body parts manufactured under the original vehicle supply agreement. Morgan Olson also sells ~~its~~step ~~products~~van ~~directly~~body service parts to ~~truck~~customers through its dealers, ~~selling~~and distributors. Parts sales to ~~approximately~~the ~~460~~USPS ~~dealers~~were $5.9 million and $6.5 million in 2011 and 2010, respectively.

~~Consumer~~The ~~Rental~~service ~~sales~~parts ~~are~~business ~~composed~~allows ofMorgan ~~sales to companies that maintain large fleets of one-way~~ and ~~local~~Morgan ~~hauling~~Olson ~~vehicles available for rental~~ to ~~the~~consolidate their ~~general~~parts ~~public.~~support ~~Morgan~~functions, ~~makes~~with dedicated ~~these~~fabrication, ~~sales~~warehousing ~~through a bidding process~~ and ~~negotiation~~shipping ~~directly with these companies through its sales force~~facilities. ~~Morgan~~This ~~negotiates~~service ~~contracts~~provides fleet ~~for Consumer Rental sales annually, usually in late summer to early fall,~~ customers with ~~products~~a tofull berange ~~shipped during the first half~~ of ~~the~~parts ~~following~~and ~~year.~~parts ~~These~~assemblies ~~sales~~for ~~are~~their ~~seasonal, with substantially all product shipments occurring in the first six months of the year~~vehicles. Morgan ~~Consumer~~Olson ~~Rental~~Service ~~sales~~Parts ~~tend~~and ~~to be~~ the ~~most volatile and price-sensitive aspect of~~ Morgan’s Service ~~business~~ and ~~profitability~~Repair ~~depends~~Centers onoffer ~~factors~~combined ~~such~~support, aswhich ~~product~~we ~~mix~~believe ~~and~~gives ~~delivery~~both ~~schedules.~~companies ~~Consumer~~a ~~Rental~~competitive ~~sales constituted 14% of Morgan’s revenues in 2010, 11% in 2009 and 15% in 2008~~advantage.

Morgan’s ~~two~~Olson ~~largest~~has ~~customers~~one ~~have~~customer, ~~historically~~UPS, ~~represented~~which ~~approximately~~accounted ~~45% to 60% of Morgan’s total revenues. Both have been Morgan’s customer~~ for approximately ~~25 years~~53%, 41% and ~~we believe our relations with both are good. Sales to these customers represented 20~~31% of ~~JBPCO’s~~its ~~consolidated~~ revenues induring ~~2010~~2011, ~~17%~~2010 inand 2009, ~~and 16% in 2008~~respectively. Accounts receivable from ~~these~~this ~~customers~~customer were $20.31 million ~~and $2.8 million~~ at December 31, ~~2010~~2011 and ~~2009, respectively~~2010.

~~Morgan~~Manufacturing ~~offers~~and ~~limited~~supplies. Morgan ~~service~~Olson ~~programs~~has atISO ~~its~~9000-certified ~~service~~manufacturing ~~facilities~~ and ~~its~~parts ~~authorized~~distribution ~~distributors.~~facilities ~~Service sales constituted 5% of Morgan’s revenues~~ in ~~2010~~Sturgis, ~~5% in 2009 and 5% in 2008~~Michigan.

Generally, Morgan ~~also~~Olson ~~sells~~manufactures its products into ~~Canada~~customer specifications. Typically, the customer places an order and ~~Mexico~~arranges for a manufacturer to deliver a truck chassis to Morgan Olson. InMorgan ~~2010~~Olson manufactures the complete truck body, ~~foreign~~including ~~sales~~installing ~~(primarily~~windows, indoors, ~~Canada)~~instrument ~~represented~~panels, ~~approximately~~seating 6%and ofwiring, as well applying paint and decals. Once the truck is completed, the customer arranges for delivery. Morgan Olson’s ~~revenues~~production ~~and~~cycle 2%varies offrom ~~JBPCO~~eight to fifteen days. Delays in chassis deliveries can disrupt Morgan Olson’s ~~consolidated~~operations ~~revenues~~and can increase its working capital requirements.

Manufacturing and supplies. Morgan, which is headquartered in Morgantown, Pennsylvania, operates manufacturing, body mounting, and parts and service facilities in Arizona, California, Florida, Georgia, Pennsylvania, Texas, Wisconsin, and Ontario, Canada. Morgan has sales, service and body mounting facilities in Colorado, Georgia, Pennsylvania, Texas, Wisconsin, and Ontario, Canada.

Generally, Morgan engineers its products to the specifications of the customer. Typically, the customer places an order and arranges for a truck chassis manufacturer to deliver the truck chassis to Morgan. Morgan manufactures

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~~and~~Morgan ~~installs~~Olson ~~the~~provides ~~body~~a onlimited ~~the~~warranty ~~customer-owned~~against ~~chassis~~construction ~~and~~defects in its products. These warranties generally provide for the ~~customer~~replacement or ~~Morgan~~repair ~~arranges~~of defective parts or workmanship for ~~delivery~~up ofto five years from the ~~completed~~date ~~truck~~of sale. Warranty costs have not had a material adverse effect on its business.

~~Because~~Morgan ~~contracts~~Olson ~~for~~maintains ~~Consumer~~an ~~Rental~~inventory ~~sales~~of ~~are~~the ~~entered~~raw ~~into~~materials innecessary ~~the~~to ~~summer~~build orstep ~~fall~~van ~~but~~bodies. Since ~~production~~Morgan ~~does~~Olson ~~not~~manufactures ~~begin~~its ~~generally~~products ~~until~~to ~~the~~customer ~~following January~~order, ~~Morgan~~it ~~typically~~does ~~has~~not amaintain ~~significant~~substantial ~~backlog~~inventories of ~~Consumer~~finished ~~Rental~~goods. Principal ~~sales~~raw ~~orders~~materials atinclude ~~the~~steel ~~end~~and ofaluminum; ~~each~~raw ~~year~~materials ~~that~~ are ~~produced~~acquired ~~and~~from ~~shipped~~a ~~through~~variety ~~June~~ of ~~the~~sources ~~following~~that ~~year.~~have Innot ~~addition,~~experienced ~~Morgan typically maintains a~~ significant ~~backlog of Commercial sales~~shortages. Morgan’s ~~backlog~~Olson athas ~~December~~taken ~~31,~~advantage ~~2010~~of ~~was~~the ~~$86.7~~combined ~~million~~purchasing ~~compared~~power toof ~~$73.1~~various ~~million~~of atour ~~December 31~~companies, ~~2009.~~thereby ~~Morgan~~generating ~~expects~~savings toon ~~complete~~raw ~~all~~materials ofcommon ~~the~~to ~~orders~~our infour ~~its~~business ~~2010 year-end backlog during 2011~~segments.

~~Morgan~~Industry. Industry ~~provides~~revenue ~~limited~~and ~~warranties~~growth ~~against~~depend ~~construction~~on ~~defects~~the indemand ~~its~~for ~~products.~~delivery ~~These~~vehicles, ~~warranties~~which ~~generally~~is ~~allow~~influenced ~~for~~by ~~the~~general ~~replacement~~economic orconditions. Because ~~repair~~of the concentration of ~~defective~~customers ~~parts~~in orthe ~~workmanship~~industry, the demand for updelivery tovehicles ~~five~~is ~~years~~significantly ~~following~~influenced by the ~~date~~requirements of ~~sale~~UPS and FedEx. Replacement ~~Warranty~~of ~~costs~~older ~~have~~vehicles ~~not~~in ~~had~~fleets areflects ~~material~~an ~~adverse~~important ~~effect~~revenue source, with replacement cycles varying, depending on ~~Morgan’s~~vehicle ~~business~~type and usage. During economic downturns, replacement orders are often deferred or, in some cases, older vehicles are retired without replacement. During periods of economic growth, sales of delivery trucks grow, as customers increase their capital expenditures and make previously deferred purchases.

~~Morgan’s principal raw materials include aluminum, steel, fiberglass-reinforced plywood and hardwood~~Competition. Although Morgan ~~acquires~~Olson ~~raw~~competes ~~materials~~with ~~from~~only aone ~~variety~~other ofmajor ~~sources~~manufacturer ~~and has not experienced significant shortages of materials. However~~(Utilimaster, ~~there are~~ a ~~limited~~subsidiary ~~number~~ of ~~suppliers~~Spartan Motors) of ~~fiberglass-reinforced~~step ~~plywood~~van bodies, anthe ~~important~~step ~~truck~~van body ~~material. To~~manufacturing ~~manage~~industry ~~its~~is ~~supply~~highly ~~costs, Morgan occasionally enters into long-term supply contracts on principal materials to secure prices for up to one year if considered necessary~~competitive. ~~Morgan~~ ~~has~~Competitive ~~taken~~factors ~~advantage~~include ofproduct ~~the~~quality, ~~combined~~delivery ~~purchasing~~time, ~~power~~warranty ~~of our companies~~terms, ~~thereby~~aftermarket ~~generating~~service ~~savings~~and ~~on raw materials common to our four business segments~~price.

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

~~Competition. The~~TAG ~~truck~~is ~~body~~the ~~manufacturing~~leading ~~industry~~North isAmerican ~~highly~~manufacturer ~~competitive.~~of ~~Morgan~~fiberglass ~~competes~~and ~~with~~aluminum ~~three~~pickup ~~national~~truck ~~manufacturers:~~caps ~~Supreme~~and ~~Industries~~tonneaus, ~~Inc~~ based on total caps and tonneaus sold., TAG ~~Kidron,~~markets aits ~~division~~products ofunder ~~Specialized~~the ~~Vehicles~~brand ~~Corporation~~names Leer, Century, Raider, LoRider, Pace Edwards and ~~America’s~~State ~~Body~~Wide ~~Company~~Aluminum. ~~There~~Leer ~~are~~is ~~also~~the amost ~~large~~widely ~~number~~recognized ofand ~~smaller~~the ~~manufacturers~~only ~~that~~truly ~~are~~national ~~regionally~~brand ~~focused.~~name ~~Competitive~~for ~~factors~~truck caps and tonneaus in the ~~industry~~United ~~include~~States ~~product~~and ~~quality~~Canada. With production facilities in Indiana, ~~delivery~~California, ~~time~~Pennsylvania and Washington, ~~geographic~~TAG ~~proximity~~is ofthe ~~manufacturing~~only ~~facilities~~market toparticipant ~~customers,~~with ~~warranty~~a ~~terms~~national manufacturing footprint, ~~service~~a factor that reduces the company’s distribution costs and ~~price~~accelerates delivery of its products to customers.

~~Morgan~~Caps ~~Olson~~and tonneaus provide an engineered, stylized enclosure for the beds of pickup trucks, transforming them into lockable, weather-protected storage areas. Most of TAG’s truck caps and tonneaus are purchased by individuals, small businesses and fleet operators through a network of 1,938 independent, nonexclusive dealers. Due to TAG’s multiple lines of caps and tonneaus, each with numerous features and options, we believe TAG is the industry leader in engineering, product innovation and styling. Pace Edwards offers a variety of retractable hard tonneau covers that can be mechanically withdrawn into an integrated storage enclosure behind the pickup truck cab. TAG also manufactures windows and doors under the State Wide Aluminum brand which are used internally and by other cap manufacturers and horse trailer manufacturers in the assembly of their products.

~~Morgan~~Key ~~Olson~~pickup istruck ~~one~~cap offeatures ~~two~~include ~~major~~shape ~~manufacturers~~and ofdesign, ~~step~~color ~~vans~~and ~~servicing~~finish, ~~the~~window ~~United~~configurations, ~~States~~roof ~~and~~racks, ~~Canada.~~glass ~~Step~~tint, ~~vans~~trim, ~~are~~and ~~specialized~~interior ~~vehicles~~features ~~designed~~such ~~for~~as ~~multiple-stop~~lighting, ~~delivery~~carpeting ~~applications~~ and ~~they~~special ~~enable~~storage ~~the~~options. ~~driver~~Tonneaus ofalso ~~the~~offer ~~vehicle~~a torange ~~easily access the cargo area~~ of ~~the~~styling, ~~vehicle~~storage ~~from~~and ~~inside~~convenience ~~the cab~~alternatives. Caps ~~Step~~and ~~vans~~tonneaus ~~are~~can ~~made~~be designed to ~~customer~~target ~~specifications~~specific ~~for~~customers. For ~~use in parcel~~example, ~~food~~Leer, ~~vending,~~Century ~~uniform, linen~~ and ~~other~~Raider ~~delivery~~offer ~~applications.~~lifestyle-equipped ~~Morgan~~caps ~~Olson’s~~for ~~step van bodies are installed on International (Workhorse)~~hunters, ~~Ford~~ ~~and Freightliner truck~~fishermen ~~chassis for light-~~ and ~~medium-duty~~outdoors ~~trucks~~enthusiasts ~~with~~that ~~gross~~are ~~vehicular~~styled ~~weight ratings between 10,001~~ and 33designed,~~000~~ ~~pounds~~through ~~(Class 3-7)~~storage ~~with~~features ~~body~~and ~~sizes~~product ~~ranging~~appearance, ~~from~~to 11appeal to 30these ~~feet~~customers. ~~Morgan Olson is headquartered in Sturgis, Michigan, where it has manufacturing and service parts distribution facilities.~~

~~Morgan~~The ~~Olson’s~~management ~~revenues~~team ~~constituted~~at ~~15%~~TAG has implemented a successful lean strategy since 2007, ~~13%~~focusing ~~and~~on ~~15%~~cost reduction, low-cost country sourcing of ~~JBPCO’s~~raw ~~consolidated~~materials ~~revenues~~and new product development. Operating income increased in ~~2010~~2011 to $11.0 million, ~~2009~~8.9% ~~and~~of revenue, compared to 2008 operating income of $2.4 million, ~~respectively~~1.8% of revenue.

~~Customers~~TAG ~~and~~Specialty ~~sales. Customers~~Products, ~~purchase~~a ~~step~~new ~~vans~~group ~~through~~of ~~dealers~~fiberglass ~~and~~products ~~distributors~~for ~~and~~the ~~from~~commercial ~~Morgan~~market, ~~Olson~~was ~~through~~launched ~~its~~in ~~direct sales force~~2011. These ~~Two~~products ~~customers,~~include ~~United~~components ~~Parcel~~for ~~Service~~both ofinternal ~~America, Inc.~~customers ~~and~~such ~~FedEx,~~as ~~purchase~~Morgan ~~the~~Olson’s ~~majority of~~ step vans ~~produced~~and inutility ~~the~~caps ~~United~~for ~~States.~~external ~~Morgan~~commercial ~~Olson’s~~service ~~customers~~vehicle ~~include~~applications ~~these~~in ~~customers~~industries ~~along~~such ~~with~~as telecommunications and light construction.

Customers and sales. TAG’s revenues constituted 17% of JBPCO’s consolidated revenues in 2011, 22% in 2010 and 24% in 2009. Most of TAG’s truck caps and tonneaus are purchased by individuals, small businesses and fleet operators through a network of more than 1,800 independent, nonexclusive dealers. Pace Edwards’ retractable tonneau covers are sold

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~~Frito-Lay,~~primarily ~~Inc.,~~through ~~Bimbo~~automotive ~~Bakeries,~~accessory Wwarehouse distributors.B. State ~~Mason,~~Wide ~~ARAMARK~~sells ~~Corporation~~directly ~~and~~to ~~others~~manufacturers through its dedicated sales team. TAG ~~The~~also ~~preferences~~sells its products in Canada and ~~purchasing~~Europe. ~~decisions~~In of2011, ~~these~~foreign ~~customers~~sales ~~dramatically~~(primarily ~~affect~~in ~~the~~Canada) ~~results~~represented approximately 20% of ~~operations~~TAG’s revenues and 4% of ~~Morgan~~our ~~Olson~~consolidated revenues.

~~Morgan~~Intercompany ~~Olson~~sales ~~also sells step van body service parts through its dealers and distributors and directly~~ to ~~customers.~~ Morgan Olson, isSVG aand ~~major~~Morgan ~~supplier~~which ofhave ~~service~~been ~~parts~~eliminated ~~for~~from ~~long-lived~~TAG’s ~~vehicles~~revenues ~~manufactured by it~~ for ~~the~~financial ~~United~~reporting ~~States~~purposes, ~~Postal~~were ~~Service under an agreement that is reviewed annually~~$2.3 ~~The~~million, ~~United States Postal Service has the right to terminate the agreement for its convenience at any time~~$1. We7 ~~believe~~million, ~~Morgan~~and ~~Olson’s relationship with the United States Postal Service is satisfactory~~$0. ~~There~~7 ~~can~~million bein ~~no assurance~~2011, ~~however~~2010, ~~that~~and ~~the~~2009, ~~parts supply agreement will continue~~respectively.

~~Morgan~~TAG’s ~~Olson~~products ~~offers~~are ~~aftermarket~~typically ~~support~~manufactured ~~through~~upon ~~its~~receipt ~~service~~of ~~parts~~an ~~department~~order ~~for~~from ~~step~~its ~~vans~~customer. Consequently, ~~manufactured~~its bybacklog ~~Morgan~~reflects ~~Olson~~approximately ~~and~~two ~~dry~~weeks ~~freight~~of ~~vans manufactured by Morgan~~production. ~~The~~ TAG’s ~~Service~~backlog ~~Parts~~was ~~business~~$3.3 ~~allows~~million ~~Morgan~~at ~~and Morgan Olson to consolidate~~December ~~their parts support functions~~31, ~~with dedicated fabrication~~2011, ~~warehousing~~compared ~~and~~to ~~shipping facilities~~$2. ~~This~~7 ~~service~~million ~~provides fleet~~at ~~customers~~December ~~with~~31, ~~a full range of parts and parts assemblies for their vehicles~~2010. ~~Morgan Olson Service Parts and the Morgan Service and Repair Centers offer combined support that we believe gives both companies a competitive advantage.~~

~~Morgan~~Manufacturing ~~Olson~~and ~~has~~supplies. The ~~one~~design ~~customer,~~and ~~United~~manufacture ~~Parcel~~of ~~Service~~TAG’s ofproducts ~~America,~~takes ~~Inc.,~~place ~~which~~at ~~accounted~~eight ~~for~~manufacturing ~~approximately~~facilities ~~41%~~located in California (two), Indiana ~~31%~~(four), Pennsylvania and ~~44%~~Washington. ofTypical ~~Morgan~~product ~~Olson’s~~delivery ~~revenues~~times ~~during~~range ~~2010,~~from ~~2009~~one ~~and~~to ~~2008,~~two ~~respectively. Accounts~~weeks ~~receivable~~ from ~~this~~the ~~customer~~time ~~were~~of $0order.1 ~~million~~TAG atoperates ~~both~~a ~~December 31,~~fleet ~~2010~~of tractor units and ~~2009~~trailers for the efficient and timely delivery of its products to its dealers.

~~Manufacturing~~TAG provides a warranty period, exclusive to the original truck owner, which is with some exceptions, one year for parts, five years for paint and ~~supplies~~lifetime for structure. ~~Morgan~~Warranty ~~Olson~~costs ~~has~~have ~~ISO~~not ~~9000~~had ~~certified~~a ~~manufacturing~~material ~~and~~adverse ~~parts~~effect ~~distribution~~on ~~facilities~~TAG’s business in ~~Sturgis,~~recent ~~Michigan~~years.

~~Generally,~~TAG ~~Morgan~~obtains ~~Olson~~raw ~~manufactures~~materials ~~its~~and ~~products~~components tofrom ~~customer~~a ~~specifications.~~variety ~~Typically,~~of ~~the~~sources. ~~customer~~The ~~places~~most animportant ~~order~~are ~~and~~resin, ~~arranges~~fiberglass, ~~for~~paint, aaluminum, ~~truck~~locks ~~chassis~~and ~~manufacturer~~automotive-quality toglass. TAG ~~deliver~~and athree ~~truck~~of ~~chassis~~our toother ~~Morgan~~companies ~~Olson.~~have ~~Morgan~~committed ~~Olson~~to ~~manufactures~~purchase ~~the~~principally ~~complete~~all ~~truck body, including the installation~~ of ~~windows,~~their ~~doors,~~paint ~~instrument~~requirements ~~panels,~~through ~~seating,~~2016 ~~wiring,~~from ~~painting~~one ~~and~~supplier ~~decal~~at ~~application~~negotiated prices. As ~~The~~a ~~customer~~result ~~arranges~~of ~~for~~its ~~delivery~~size ofand ~~the~~purchasing ~~completed~~power, ~~truck. Morgan~~TAG ~~Olson’s~~has ~~production~~maintained ~~cycle~~a ~~varies~~stable ~~from~~supply 8of tomaterials 15and ~~days. Delays~~components inon ~~chassis~~terms ~~deliveries~~we ~~can~~believe ~~disrupt~~to ~~Morgan~~be ~~Olson’s~~favorable ~~operations~~ and ~~can~~has ~~increase~~not ~~its~~experienced ~~working~~significant ~~capital~~shortages ~~requirements~~of these items.

AtIndustry. Factors ~~December~~influencing 31the automotive industry, ~~2010~~including general economic conditions, ~~Morgan~~customer ~~Olson’s~~preferences, ~~total~~new ~~backlog~~model ~~was~~introductions, ~~$8.9~~interest ~~million~~rates and fuel costs, ~~compared~~directly toinfluence ~~$38~~TAG’s sales volume.1 Cap ~~million~~and attonneau ~~December~~sales 31are seasonal, ~~2009.~~with Wesales ~~expect~~typically ~~that~~being ~~Morgan~~higher ~~Olson~~in ~~will~~the ~~fill~~spring ~~all~~and ~~2010~~fall ~~backlog~~than ~~orders~~ in ~~2011~~the winter and summer.

~~Morgan~~Competition. The ~~Olson~~pickup ~~provides~~truck afiberglass ~~limited~~cap ~~warranty~~and ~~against~~tonneau ~~construction~~industry ~~defects~~is inhighly ~~its products~~competitive. TAG ~~These~~competes ~~warranties~~with ~~generally~~one ~~provide~~other ~~for~~national ~~the~~competitor, ~~replacement~~A.R.E., Inc., orand ~~repair~~a number of ~~defective~~smaller ~~parts~~companies orthat ~~workmanship~~are ~~for~~regionally upfocused. toCompetitive ~~five~~factors ~~years~~include ~~following~~design, ~~the~~features, ~~date~~delivery oftimes, ~~sale.~~product ~~Warranty~~availability, ~~costs~~warranty ~~have~~terms, ~~not~~quality ~~had~~and ~~a material adverse effect on its business~~price.

~~Morgan~~Specialty Olson maintains an inventory of raw materials necessary to build step van bodies. Because Morgan Olson manufactures its products to customer orders, it does not maintain substantial inventories of finished goods. Principal raw materials include steel and aluminum, and raw materials are acquired from a variety of sources that have not experienced significant shortages. Morgan Olson has taken advantage of the combined purchasing power of our companies, including Morgan, thereby generating savings on raw materials common to our four business segments.Manufacturing

~~Industry. Industry~~Specialty ~~revenue~~Manufacturing ~~and growth depend primarily on the demand for delivery vehicles, which~~ is ~~affected~~comprised ~~by general economic conditions. Because~~ of ~~the~~MIC ~~concentration~~(70% of ~~customers in the industry~~revenues), ~~the~~SVG ~~demand~~(20% ~~for delivery vehicles is significantly influenced by the requirements~~ of ~~the~~revenues) ~~United~~and ~~Parcel~~EFP ~~Service~~(10% of ~~America, Inc~~revenues)., Its ~~FedEx~~sales ~~and~~comprised ~~potentially~~26% ~~the United States Postal Service. Replacement~~ of ~~older~~JBPCO’s ~~vehicles~~consolidated revenues in ~~fleets represents an important revenue source~~2011, ~~with~~27% ~~replacement~~in ~~cycles~~2010 ~~varying,~~and ~~depending~~33% onin ~~vehicle types and usage~~2009. Specialty ~~During~~Manufacturing’s ~~economic~~backlog ~~downturns,~~at ~~replacement orders are often deferred or~~December 31, in2011 ~~some~~was ~~cases, older vehicles are retired without replacement~~$57.3 ~~During periods of economic growth~~million, ascompared ~~customers decide~~ to ~~increase~~$67.3 ~~their~~million ~~capital~~at ~~expenditures~~December 31, ~~sales~~2010. This ofreduction ~~delivery~~was ~~trucks~~primarily ~~grow~~attributable asto ~~customers~~MIC ~~make~~exiting ~~purchases~~unprofitable ~~that were previously deferred and expand their fleets~~products.

MIC. MIC provides manufacturing services for customers requiring precision machining of metal parts, casting products and assembly services.

MIC’s customers are concentrated in the oil and gas exploration and production service industries, and two oilfield service customers, Schlumberger Limited and Halliburton Company, represented approximately 54% of Specialty Manufacturing’s total sales in 2011, 44% in 2010 and 39% in 2009. The demand for equipment and services supplied to the oilfield service industry is directly related to the level of worldwide oil and gas drilling activity.

MIC is a global manufacturer and operates facilities in Texas (3), Oklahoma, Mexico and Malaysia. Its facilities in Oklahoma, Texas and Mexico are ISO 9000-certified: MIC performs a broad range of services, including computer-controlled precision machining and welding, electrical discharge machining, electron beam welding, trepanning, gun drilling, investment casting and electromechanical assembly. MIC utilizes ferrous and nonferrous materials, including stainless steel, alloy steels, nickel-based alloys, titanium, brass, beryllium-copper alloys and aluminum.

SVG. SVG manufactures funeral coaches and limousines for funeral homes, livery companies and authorized dealers in the United States and Canada. Through its brand names, Eagle Coach and Federal Coach, we believe that SVG’s market share

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~~Competition. Although~~of ~~Morgan~~funeral ~~Olson~~vehicles ~~competes~~has ~~with~~grown ~~one~~substantially ~~other~~since ~~major~~2008 ~~manufacturer~~to of49% ~~step~~in ~~van~~2011. ~~bodies,~~SVG ~~the~~is ~~step~~one ~~van~~of ~~body~~North ~~manufacturing~~America’s ~~industry~~two isfuneral ~~highly~~vehicle ~~competitive. Competitive~~manufacturers ~~factors~~and init ~~the~~attributes ~~industry~~market ~~include~~share ~~product~~growth ~~quality,~~since ~~delivery~~2008 ~~time,~~to ~~warranty~~an ~~terms~~emphasis on quality, ~~aftermarket~~vehicle ~~service~~design and ~~price~~on-time delivery.

~~Truck~~SVG ~~Accessories~~engineers products to its own specifications, as well as those of chassis manufacturers, in a manner that maintains the original equipment manufacturer’s warranty. SVG takes delivery of a sedan and modifies it to SVG specifications. SVG utilizes metals, polymer resins, wood, fiberglass, and petrochemical-based products, including paints, plastics, sealants and lubricants.

WeSVG ~~believe~~provides ~~Truck~~a ~~Accessories,~~warranty ~~which~~on isits ~~headquartered~~products infor ~~Elkhart~~a period of 48 months, ~~Indiana~~or 50,000 ismiles, on the ~~leading~~section ~~manufacturer~~ of ~~fiberglass~~the body and ~~aluminum~~parts it ~~pickup~~manufactures ~~truck~~for ~~caps~~funeral coaches and ~~tonneaus~~funeral ~~for~~limousines; ~~the~~36 ~~combined United~~months, ~~States~~or ~~and~~50,000 ~~Canadian~~miles, ~~market.~~on ~~Truck~~the ~~Accessories~~body ~~markets~~and ~~its~~parts ~~cap~~formerly ~~and~~manufactured ~~tonneau~~for ~~products~~bus ~~under~~bodies; ~~the~~and ~~brand~~48 ~~names Leer~~months, ~~Century,~~or ~~Raider~~100,000 ~~LoRider~~miles, ~~BoxTop~~on the portion of the body and ~~Pace~~parts ~~Edwards. Truck~~it ~~Accessories~~manufactures ~~also~~for ~~markets~~limousines. Warranty ~~window~~costs ~~and~~have ~~door~~not ~~components~~had ~~under~~a ~~the~~material ~~State~~adverse ~~Wide~~effect ~~name~~on its business.

~~Caps~~In ~~and tonneaus provide an engineered~~2010, ~~stylized~~SVG ~~enclosure~~consolidated ~~for~~its ~~the~~two ~~beds~~funeral ofcoach ~~pickup~~and ~~trucks,~~limousine ~~transforming~~manufacturing ~~them~~operations into ~~lockable~~one ~~weather-protected~~facility ~~storage~~in ~~areas. Truck Accessories’ truck caps and tonneaus offer customers a variety of designs and features~~Amelia, ~~including a~~Ohio. Prior ~~number~~to ofthis ~~distinctive styles~~consolidation, ~~allowing~~ ~~them~~SVG toexited ~~customize~~ the ~~look~~specialized ~~and~~transit ~~utility~~bus ofbusiness ~~their~~and ~~pickup~~sold ~~trucks. The~~this ~~Truck Accessories~~ product line ~~of truck caps~~ and ~~tonneaus~~related ~~ranges~~assets ~~from~~on ~~standard to premium and is~~December ~~differentiated by features~~31, ~~styling and brand name~~2009. ~~Pace~~ ~~Edwards~~Please ~~offers~~refer ato ~~variety~~Note 4 of ~~retractable~~our ~~hard~~Financial ~~tonneau~~Statements ~~covers~~included ~~that can be mechanically withdrawn into an integrated storage enclosure behind the pickup truck cab. State Wide manufactures windows and doors used by Truck Accessories~~herein, ~~other~~for ~~cap~~a ~~manufacturers~~more ~~and~~detailed ~~horse~~description ~~trailer~~of ~~manufacturers in~~ the ~~assembly~~SVG ofplant ~~their products~~consolidation.

~~Key~~SVG ~~pickup~~competes ~~truck~~with ~~cap~~one ~~features~~major ~~include~~manufacturer ~~shape and design, color and finish, window configurations, roof racks, glass tint, trim, and interior features such as lighting, carpeting and special storage options. Tonneaus also offer a range~~ of ~~styling,~~funeral ~~storage~~coaches and ~~convenience~~with ~~alternatives. Caps~~other ~~and~~manufacturers tonneaus can be designed to target specific customers. For example, Leer, Century and Raider offer lifestyle-equipped caps for hunters, fishermen and outdoors enthusiasts that are styled and designed, through storage features and product appearance, to appeal to these customers. Through Truck Accessories’ multiple lines of ~~caps and tonneaus, each with numerous features and options, we believe Truck Accessories is the industry leader in engineering, product innovation and styling~~limousines.

~~Truck~~EFP. EFP ~~Accessories’~~manufactures ~~revenues~~and ~~constituted~~sells ~~22%~~expandable ofpolystyrene ~~JBPCO~~and polypropylene foam, engineered to customer specification. EFP’s ~~consolidated~~products ~~revenues~~are inused ~~2010~~by the medical, ~~24%~~electronics, infood, ~~2009~~furniture, plumbing and ~~19%~~appliance ~~in 2008~~industries.

~~Customers~~EFP operates facilities in Alabama, Tennessee and ~~sales~~Indiana. ~~Most~~EFP ofcompleted ~~Truck~~facility ~~Accessories’~~and ~~truck~~product ~~caps~~line ~~and~~rationalizations ~~tonneaus~~during ~~are~~2010, ~~purchased~~including byeliminating ~~individuals,~~production ~~small~~for ~~businesses~~the recreational vehicle and ~~fleet~~construction ~~operators~~industries ~~through~~and areducing ~~network~~the scope of ~~over~~operations ~~1,800~~at ~~independent~~its Elkhart, Indiana ~~nonexclusive~~plant. These ~~dealers~~changes contributed to increased operating income from $0.1 million in 2008 to $1.2 million in 2011.

~~Pace Edwards~~EFP’s ~~retractable~~products ~~tonneau~~are ~~covers~~manufactured ~~are~~from ~~sold~~a ~~primarily~~variety ~~through~~of ~~automotive~~materials, ~~accessory~~including ~~warehouse~~expandable ~~distributors. State~~polystyrene, ~~Wide~~polypropylene, ~~sells~~polyethylene ~~directly~~and resins, which are subject to ~~manufacturers~~cost ~~through~~fluctuations ~~its~~based ~~dedicated~~on ~~sales~~changes ~~team~~in the price of oil and benzene in the international markets.

~~Truck~~EFP ~~Accessories~~competes ~~also~~with ~~sells~~a ~~its~~large ~~products~~number ~~in Canada and Europe. In 2010, foreign sales (primarily in Canada) represented approximately 20%~~ of ~~Truck~~other ~~Accessories’~~producers ~~revenues and 4%~~ of ~~JBPCO’s~~molded, ~~consolidated~~expandable ~~revenues~~foam products.

Manufacturing and supplies. The design and manufacture of Truck Accessories’ products takes place at eight manufacturing facilities located in California (two), Indiana (four), Pennsylvania and Washington.Parent

~~Typical~~The ~~product~~Parent ~~delivery~~has ~~times~~historically ~~range~~provided ~~from~~strategic ~~one~~direction toand ~~two~~support ~~weeks~~to ~~from~~ the ~~time~~business ~~of order~~units. This ~~Truck~~role ~~Accessories~~has ~~operates~~been aexpanded ~~fleet~~to ofinclude ~~tractor~~coordination ~~units~~ and ~~trailers~~direction ~~for~~of ~~the~~lean ~~efficient~~activities, international sourcing, and ~~timely~~the ~~delivery~~expansion of ~~its~~information ~~products~~technology resources to ~~its~~install ~~dealers~~common platforms across the business.

~~Truck~~Trademarks ~~Accessories provides a warranty period, exclusive to the original truck owner, which is with some exceptions, one year for parts, five years for paint~~ and ~~lifetime for structure. Warranty costs have not had a material adverse effect on its business in recent years.~~Patents

~~Truck~~We ~~Accessories~~own ~~obtains~~rights ~~raw~~to ~~materials~~certain ~~and~~presentations ~~components~~of ~~from~~TAG’s Leer brand name, which we believe are valuable because we believe that Leer is recognized as being a ~~variety~~leading ofbrand ~~sources~~name. We ~~The~~own ~~most~~rights ~~important~~to ~~are~~the ~~resin,~~Federal ~~fiberglass,~~Coach ~~paint,~~and ~~aluminum,~~Eagle ~~locks~~Coach names. We also own rights to certain other trademarks and ~~automotive-quality~~trade ~~glass~~names, including certain presentations of Morgan’s name. ~~Truck~~Although ~~Accessories~~these and ~~three~~ other oftrademarks and trade names used by us help customers differentiate our ~~companies~~product ~~have~~lines ~~committed~~from those of competitors, we believe that the trademarks or trade names themselves are less important to ~~purchase~~customers ~~principally~~than ~~all~~the quality of ~~their~~the ~~paint~~products ~~requirements~~and services. Our subsidiaries, principally Morgan, EFP and Eagle Coach, hold, directly or indirectly through ~~2014~~subsidiaries, ~~from~~patents ~~one~~on ~~supplier~~certain atproducts ~~negotiated~~and ~~prices~~components used in their manufacturing processes. AsWe ado ~~result~~not ofbelieve ~~its~~that ~~size~~the ~~and~~loss ~~purchasing~~of ~~power,~~any ~~Truck~~one ~~Accessories~~patent ~~has~~would ~~maintained~~have a ~~stable~~material ~~supply~~adverse ofeffect on us.

Employees (“Team Members”)

At December 31, 2011, we had 3,348 full-time team members; we maintained an average of 3,356 full-time team members throughout the year. Team members are unionized only at EFP’s Decatur, Alabama facility, where approximately 35 persons are parties to a contract expiring in August 2012. We believe that relations with our team members are good.

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~~materials~~Environmental ~~and components on terms we believe to be favorable and has not experienced significant shortages of these items.~~Matters

~~Truck~~The ~~Accessories’~~Company ~~products~~is ~~are~~subject ~~typically~~to ~~manufactured~~numerous ~~upon~~federal, ~~receipt~~state, local and foreign laws and regulations relating to the storage, handling, emission, disposal and discharge of anmaterials ~~order~~into ~~from~~the environment. The Company believes that its ~~customers~~existing environmental control procedures are adequate, and it has no current plans for substantial capital expenditures in this area. ~~Consequently,~~JBPCO has an environmental policy that confirms its ~~backlog~~commitment ~~represents~~to ~~approximately~~a ~~two~~clean ~~weeks~~environment ofand ~~production~~compliance with environmental laws. JBPCO ~~Truck~~has ~~Accessories’~~an ~~backlog~~active ~~was~~environmental ~~$2.7~~management ~~million~~program aimed at ~~December~~compliance ~~31,~~with ~~2010~~existing ~~compared~~environmental regulations and developing methods to ~~$2.6~~eliminate ~~million~~or atsignificantly ~~December~~reduce ~~31,~~the ~~2009~~generation of pollutants in the manufacturing processes.

~~Industry. Sales~~From time to time, we have received notices of ~~caps~~noncompliance ~~and~~with ~~tonneaus~~respect to our operations which have typically been resolved by investigating the alleged noncompliance, incorrecting ~~general~~any noncompliant conditions and, ~~correspond~~in tosome ~~the~~cases, ~~level~~paying offines, ~~new~~none ~~pickup~~of ~~truck~~which ~~sales~~individually or in the ~~United~~aggregate ~~States~~has ~~and~~had ~~Canada.~~a Inmaterial ~~2010~~adverse effect on us. Further, we ~~estimate~~cannot ensure that ~~16%~~we tohave ~~18%~~been ofor ~~new~~will ~~pickup~~be ~~trucks~~at ~~were~~all ~~equipped~~times in compliance with ~~caps~~all ~~and~~of ~~tonneaus.~~these ~~Based~~requirements, onincluding ~~Truck~~those ~~Accessories’~~related ~~market~~to ~~share~~reporting inor ~~the~~permit ~~United~~restrictions, ~~States~~or ~~and~~that ~~Canada~~we ofwill ~~approximately~~not ~~48%~~incur material fines, wepenalties, ~~estimate~~costs or liabilities in connection with such requirements or a failure to comply with them. We expect that ~~approximately~~the 8%nature of ~~new~~our ~~pickup~~operations ~~trucks~~will ~~are~~continue ~~equipped~~to ~~with~~make ~~Truck~~us ~~Accessories’~~subject ~~caps~~to increasingly stringent environmental regulatory standards, including those relating to decommissioning and ~~tonneaus~~closure of discontinued facilities. Although ~~Factors~~we ~~influencing~~believe ~~the~~we ~~automotive~~have ~~industry,~~made ~~including~~sufficient ~~general~~capital ~~economic~~expenditures ~~conditions,~~to ~~customer~~maintain ~~preferences,~~compliance ~~new~~with ~~model~~existing ~~introductions~~laws and regulations, ~~interest~~future ~~rates~~expenditures ~~and~~may ~~fuel~~be ~~costs~~necessary, ~~directly~~as ~~influence~~compliance ~~Truck~~standards ~~Accessories’~~and ~~sales~~technology ~~volume~~change or as unanticipated circumstances arise. ~~Cap~~Unforeseen and ~~tonneau~~significant ~~sales~~expenditures ~~are~~required ~~seasonal,~~to comply with ~~sales~~new ~~typically~~or ~~being~~more ~~higher~~aggressively inenforced ~~the~~requirements ~~spring~~or newly discovered conditions, for example, could limit expansion, require us to undertake remedial actions or otherwise have a material adverse effect on our business and ~~fall~~financial ~~than~~condition. For ina description of currently outstanding environmental issues, see the ~~winter~~notes ~~and~~to ~~summer~~our audited consolidated financial statements included in this offering memorandum.

~~Competition. The~~For ~~pickup truck fiberglass cap and tonneau industry is highly competitive. Truck Accessories competes with one other national competitor, A.R.E., Inc., and~~ a ~~number~~description of ~~smaller~~currently ~~companies~~outstanding ~~that~~environmental ~~are regionally focused. Competitive factors include design~~issues, ~~features,~~refer ~~delivery times, product availability, warranty terms, quality and price. Based on the number of products and features it offers, and its ability~~ to ~~quickly~~Note ~~supply product for newly introduced pickup truck models, we believe Truck Accessories is the industry leader in product design and available accessory options~~15.

Specialty Manufacturing

Specialty Manufacturing is comprised of Specialty Vehicle Group, MIC and EFP, and its sales made up 27% of JBPCO’s consolidated revenues in 2010, 33% in 2009 and 34% in 2008.

Specialty Vehicle Group represents approximately 21% of Specialty Manufacturing’s 2010 revenues and is comprised of Federal Coach and Eagle Coach. Specialty Vehicle Group manufactures funeral coaches, limousines and specialized transit buses. Specialty Vehicle Group consolidated its two funeral coach and limousine manufacturing operations into one facility in 2010. As part of this decision to consolidate, Specialty Vehicle Group decided to exit the specialized transit bus business and sold this product line and related assets, including certain equipment, inventory and intangible assets on December 31, 2009. See Note 4 of Notes to the Consolidated Financial Statements.

MIC represents approximately 62% of Specialty Manufacturing’s 2010 revenues and provides manufacturing services for customers requiring precision machining of metal parts and casting services, with a concentration of customers in the oil and gas exploration and production services industry.

EFP represents approximately 17% of Specialty Manufacturing’s 2010 revenues and manufactures and sells expandable polystyrene and polypropylene foam, engineered to customer specifications for use by the medical, electronics, food, furniture, plumbing, and appliance industries.

Products. Specialty Vehicle Group manufactures a full line of funeral coaches and limousines. We estimate that Specialty Vehicle’s funeral product sales represent approximately 46% of the domestic funeral coach market. On December 31, 2009, Specialty Vehicle Group exited the specialized transit bus business and sold the assets related to these operations.

MIC is a contract manufacturer that produces precision metal parts used in energy exploration and production, aerospace and other industries and performs machining and casting services for manufacturers of metal parts and components.

EFP manufactures and sells material-handling and protective packaging products including shock-absorbing packaging material, reusable trays, and containers that are used for transporting components and the protection of

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those products. EFP also fabricates block and sheet products used by the recreational vehicle industry for producing sidewalls and doors and by the construction industry for insulation and commercial roofing applications. Additionally, EFP manufactures a line of temperature-controlled shipping containers for the protection of temperature-sensitive products such as food and medical products.

Customers and sales. Specialty Vehicle Group manufactures and sells its line of funeral coaches and limousines to end users, such as livery companies, funeral directors and approximately 24 authorized dealers. Its largest customer represented approximately 4% of the total revenues of Specialty Manufacturing in 2010, 1% in 2009 and 3% in 2008. Specialty Vehicle Group also sells its products in Canada and Europe. In 2010, foreign sales represented approximately 3% of Specialty Manufacturing’s revenues and 1% of JBPCO’s consolidated revenues.

MIC sells products to international oilfield service companies and a variety of businesses in various industries. Two oilfield service customers, Schlumberger Limited and Halliburton Company, represented approximately 44% of the total sales of Specialty Manufacturing in 2010, 39% in 2009 and 42% in 2008.

EFP’s customers include manufacturers from a wide range of industries that require special packaging materials for protecting their products.

Manufacturing and supplies. Specialty Manufacturing’s operations are located in Alabama, Indiana, Oklahoma, Ohio, Tennessee, Texas (three), Malaysia and Mexico. Its facilities in Alabama, Oklahoma, Texas and Mexico are ISO 9000 certified and its facility in Indiana is ISO 9000, ISO 14001 and ISO/TS 16949 certified.

Specialty Vehicle Group engineers its products to its own specifications as well as those of chassis manufacturers in order to maintain the original equipment manufacturer’s warranty. Specialty Vehicle Group takes delivery of a modified sedan, usually manufactured by the Cadillac division of General Motors or the Lincoln division of Ford, and modifies it to its specifications. Specialty Vehicle Group utilizes metals, polymer resins, wood, fiberglass, and petrochemical-based products including paints, plastics, sealants and lubricants.

MIC performs a broad range of services including computer-controlled precision machining and welding, electrical discharge machining, electron beam welding, trepanning, gun drilling, investment casting and electromechanical assembly. MIC utilizes ferrous and nonferrous materials including stainless steel, alloy steels, nickel-based alloys, titanium, brass, beryllium-copper alloys and aluminum.

EFP’s products are manufactured from a variety of materials including expandable polystyrene, polypropylene, polyethylene and resins which are subject to cost fluctuations based on changes to the price of oil and benzene in the international markets.

The Specialty Vehicle Group provides a warranty on its products for a period of 48 months or 50,000 miles on the section of the body and parts manufactured for funeral coaches and funeral limousines, 36 months or 50,000 miles on the body and parts formerly manufactured for bus bodies, and 48 months or 100,000 miles on the portion of the body and parts manufactured for limousines. Warranty costs have not had a material adverse effect on Specialty Manufacturing’s business.

Specialty Manufacturing’s backlog at December 31, 2010 was $67.3 million compared to $36.1 million at December 31, 2009. Materials are obtained from a variety of sources and Specialty Manufacturing has not experienced significant shortages in materials.

Industry. Specialty Vehicle Group’s funeral products are used by funeral operators. Sales generally increase with the introduction of new models by the chassis manufacturers. VIP limousines and small to medium-sized buses are purchased by livery companies whose operations are influenced by the general economy.

MIC’s services are used by companies involved in oil and gas exploration and production as well as automotive and aerospace. The demand for equipment and services supplied to the oilfield service industry is directly related to the level of worldwide oil and gas drilling activity.

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The majority of EFP’s products are manufactured for use by companies in the automotive, electronics, furniture, construction, appliance and other industries. It also manufactures products used as thermal insulators for the medical and healthcare industry. Economic conditions that affect these industries will almost immediately affect EFP’s operations.

Competition. Specialty Vehicle Group competes with one major manufacturer of funeral coaches and with other businesses engaged in the manufacturing of limousines.

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

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

JBPCO (Parent)

The Parent has historically provided strategic direction and support to the business units. This role has been expanded to include coordination and direction over lean activities, international sourcing activities and the expansion of information technology resources to develop initiatives across all business.

Trademarks and patents

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

Employees (“team members”)

At December 31, 2010, we had 2,800 full-time team members and an average of 3,022 full-time team members throughout the year. Team members are unionized only at EFP’s Decatur, Alabama facility, where approximately 35 team members are parties to a contract expiring in August 2012. We believe that relations with our team members are good.

Environmental matters

Our operations are subject to a variety of federal, state and local environmental and health and safety statutes and regulations, including those relating to emissions to the air, discharges to water, treatment, storage and disposal of waste, and remediation of contaminated sites. In certain cases, these requirements may limit the productive capacity of our operations. Certain laws, including the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (“Superfund”) impose strict, and under certain circumstances, joint and several, liability for costs to remediate contaminated sites upon designated responsible parties including site owners or operators and persons who dispose of wastes at, or transport wastes to, such sites. Some of our operations also require permits concerning, without limitation, water quality and air quality, which may restrict our activities and which are subject to renewal, modification or revocation by issuing authorities. In addition, we generate hazardous wastes, which are also subject to regulation under applicable environmental laws.

The Clean Water Act imposes strict controls on the discharge of pollutants into the navigable waters of the United States. The Clean Water Act also provides for civil, criminal and administrative penalties for any unauthorized discharge of hazardous substances in reportable quantities and imposes liability for the costs of removal and

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remediation of an unauthorized discharge. Many states have laws that are analogous to the Clean Water Act and also require remediation of accidental releases in reportable quantities. Both the Clean Water Act and many related state statutes and regulations require permit authorizations for certain operations. We hold all of the required permits pertaining to our operations under the Clean Water Act and its state counterparts.

The Clean Air Act limits the ambient air discharge of certain materials deemed to be hazardous and establishes a federal air quality permitting program for such discharges. Many states have laws and programs that are analogous to the Clean Air Act. We hold and maintain all of the required air quality permits applicable to our operations. In addition, the EPA has promulgated, under the Clean Air Act, emissions standards for heavy-duty vehicles that may increase the cost of heavy-duty trucks manufactured after 2010. These standards may negatively impact the market for new heavy-duty trucks, which may negatively impact the market for our products.

On December 15, 2009, the EPA officially published its “Endangerment Finding,” an official finding that emissions of carbon dioxide, methane and other greenhouse gases (GHGs) present an endangerment to human health and the environment because emissions of such gases are, according to the EPA, contributing to warming of the Earth’s atmosphere and other climatic changes. The Endangerment Finding allows the agency to proceed with the adoption and implementation of regulations that would restrict emissions of GHGs under existing provisions of the CAA. The agency has proceeded to promulgate and implement regulations concerning this Finding, including the Light Duty Vehicle Rule, which sets more stringent emissions standards for vehicles, and the Tailoring Rule, which requires new and modified large emitting sources of greenhouse gases to use the Best Available Control Technology to reduce greenhouse gas emissions. These rules could negatively impact the market for our products because of either increased fuel costs due to carbon regulations or increased engine manufacturing costs. Moreover, lawsuits have been filed seeking to require individual companies to reduce GHG emissions from their operations. These and other lawsuits relating to GHG emissions may result in decisions by state and federal courts and agencies that could impact our operations.

The Resource Conservation and Recovery Act regulates the generation, transportation, storage, treatment and disposal of hazardous and nonhazardous wastes and requires states to develop programs to ensure the safe disposal of wastes. We believe that all of the wastes that we generate are handled in all material respects in compliance with the Resource Conservation and Recovery Act and analogous state statutes and regulations.

From time to time, we have received notices of noncompliance with respect to our operations which have typically been resolved by investigating the alleged noncompliance, correcting any noncompliant conditions and paying fines, none of which individually or in the aggregate has had a material adverse effect on us. Further, we cannot ensure that we have been or will be at all times in compliance with all of these requirements, including those related to reporting or permit restrictions, or that we will not incur material fines, penalties, costs or liabilities in connection with such requirements or a failure to comply with them. We expect that the nature of our operations will continue to make us subject to increasingly stringent environmental regulatory standards. Although we believe we have made sufficient capital expenditures to maintain compliance with existing laws and regulations, future expenditures may be necessary, as compliance standards and technology change or as unanticipated circumstances arise. Unforeseen and significant expenditures required to comply with new or more aggressively enforced requirements or newly discovered conditions, for example, could limit expansion or otherwise have a material adverse effect on our business and financial condition. For a description of currently outstanding environmental issues, see Note 14 of Notes to Consolidated Financial Statements.

Reports to Security Holders

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

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Item 1A. Risk Factors

~~You~~Our ~~should~~businesses ~~carefully~~are ~~consider~~highly ~~the~~cyclical ~~following~~and ~~risks~~are insubject ~~addition~~ to ~~the~~factors ~~other~~beyond ~~information~~our ~~included in this report~~control. ~~Each~~Cyclical ofdownturns ~~these risks~~ could adversely affect our ~~business,~~ability ~~operating~~to ~~results~~generate cash and ~~financial~~make ~~condition,~~required aspayments ~~well~~on ~~as adversely affect the value of an investment in~~ our ~~securities~~debt.

~~Our~~The ~~businesses~~success ~~are~~of ~~highly~~our ~~cyclical.~~business Adepends ~~continuation~~on ofgeneral ~~the~~economic ~~present~~conditions. The economic ~~downturn~~slowdown, ~~could~~which ~~adversely~~started ~~affect~~for our ~~ability~~products toin ~~generate~~2008, ~~cash~~and resulting economic volatility has caused in the past, and ~~make~~may ~~required~~cause ~~payments~~in onthe future, a reduction in demand. During the recent 2008-2010 cyclical decline in demand for our ~~debt~~products, our revenues were reduced from $706.4 million in 2008 to $553.6 million in 2010 before recovering in 2011 to $708.1 million. Our business is also subject to several other factors, including:

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

· corporate profitability;

· interest rates;

· ~~retail~~the ability of our customers to obtain financing;

· fuel costs;

· consumer preferences;

· consumer spending patterns;

· sales of truck chassis and new pickup trucks; and

· levels of oil and gas exploration activity.

InWe ~~addition, we~~ sell our products to customers in the transportation and energy services industries, which are inherently cyclical industries, ~~such~~subject asto ~~the~~significant ~~trucking~~downturns from time to time. The transportation industry is highly susceptible to large swings in economic activity. In addition, when individuals and ~~the~~companies ~~energy~~purchase ~~services~~and ~~industry~~produce fewer goods, our transportation customers transport fewer goods, which ~~experience~~directly ~~significant~~affects ~~downturns~~the ~~from~~volume ~~time~~of toproducts ~~time~~and services these customers require from us.

~~Demand~~The level of machining and assembly services we provide for ~~our~~the ~~truck~~energy ~~body~~services ~~products~~industry ~~depends~~is ~~largely~~dependent onupon demand in that sector, which in turn is highly correlated to energy prices. A reduction in the ~~replacement~~activity ~~cycle~~levels of ~~delivery~~exploration ~~trucks~~and production companies would lead to a decrease in demand in the energy services industry, which could result in a decrease in demand from our customers. For example, in 2009, adverse changes in capital and credit markets and declines in prices for oil and natural gas caused many exploration and production companies to reduce capital budgets and drilling activity. This trend resulted in a significant decline in demand for the services provided by energy services companies and the services they require from us. Future cuts in spending levels or drilling activity may result in material adverse effects on our operating results and financial condition in this sector.

Morgan and Morgan Olson produce and sell truck bodies for new delivery trucks, primarily in the general freight, moving and storage, parcel delivery and distribution industries. Demand for these products is driven by customers replacing older vehicles in their delivery truck fleets, and these customers often decide to postpone their purchases of new delivery trucks during economic downturns. If economic conditions or other factors, including longer useful lives of delivery trucks, cause our customers to reduce their capital expenditures and decrease investments in new delivery trucks, our sales could be materially and adversely affected. As a result, our ability to generate cash and make required payments on our debt could be negatively impacted.

The cyclicality of pickup truck sales could cause a decline in Truck Accessories’ sales.

Truck Accessories’ sales depend heavily on sales of new pickup trucks in North America. A decline in pickup truck sales would cause a decline in Truck Accessories’ sales, which could materially and adversely reduce Truck Accessories’ ability to generate cash and could reduce our ability to make required payments on our debt. Sales of pickup trucks are characterized by periodic fluctuations in demand due to, among other things, changes in general economic conditions, interest rates, fuel costs, new model introductions, consumer spending levels and consumer preferences.

We have a substantial amount of debt outstanding and we may incur more debt, which could hurt our business prospects, limit cash flow available from our operations and prevent us from fulfilling our obligations under our 8.75% Senior Notes (“8.75% Notes”) and our other debt obligations.

We are significantly leveraged and will continue to be significantly leveraged. We had $17.6 million of stockholder’s equity at December 31, 2010 and long-term debt of $203.5 million, including $199.6 million in aggregate principal amount of 8.75% Notes due 2014 and $3.9 million of capital lease obligations. We had $48.6 million of secured debt availability under our revolving credit facility.

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We may not be able to compete favorably in our industries.

Most of our businesses rely on a small number of customers, the loss of any of which could have a material adverse effect on us.

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

· Morgan’s two largest customers together accounted for 56%, 54% and 48% of Morgan’s revenues during 2010, 2009 and 2008, respectively, and accounted for 20%, 17% and 16% of JBPCO’s consolidated revenues during 2010, 2009 and 2008, respectively.

· One customer accounted for 41%, 31% and 44% of Morgan Olson’s revenues during 2010, 2009 and 2008, respectively, and accounted for 6%, 7% and 7% of JBPCO’s consolidated revenues during 2010, 2009 and 2008, respectively.

· Two customers accounted for 44%, 39% and 42% of Specialty Manufacturing’s revenues during 2010, 2009 and 2008, respectively, and accounted for 12%, 13% and 14% of JBPCO’s consolidated revenues in 2010, 2009 and 2008, respectively.

· Our top ten customers accounted for 45%, 39% and 44% of JBPCO’s consolidated revenues in 2010, 2009 and 2008, respectively.

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

Future operations could be affected by interruptions of production beyond our control.

Our business, financial condition or results of operations may be adversely affected by certain events that we cannot anticipate or that are beyond our control, such as earthquakes, fires, floods, hurricanes, wars, terrorist attacks, computer viruses, pandemics, breakdowns or impairments of our information system or communication network, or other natural disasters or national emergencies that could curtail production at our facilities and may cause delayed deliveries and canceled orders. Even if the facilities are not directly affected by such events, we could be affected by interruptions at our suppliers. Such suppliers may be less likely to be able to quickly recover from such events and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. In addition, global supply disruptions, such as those caused by political or other dislocations, could lead to shortages of materials used in our products. These could delay or increase the cost of our products and result in an adverse effect on our future profitability.

Disruptions in delivery of truck or car chassis to us could impact the profitability of our business.

If truck and car chassis manufacturers or their suppliers experience disruptions in their businesses, resulting from plant closures or other cost-cutting initiatives, lack of cash resources, bankruptcy proceedings or other potential

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causes, Morgan, Morgan Olson and Specialty Vehicle Group may be unable to sell or deliver their products. Work stoppages or slowdowns experienced by the large truck and car manufacturers that supply chassis could result in delays or slowdowns in our ability to deliver products to our customers.

Environmental and health and safety liabilities and requirements could require us to incur material costs.

From time to time we have received notices of noncompliance with respect to our operations which have typically been resolved by investigating the alleged noncompliance, correcting any noncompliant conditions and paying fines. We have from time to time been identified as a potentially responsible party at various Superfund sites, which, based on available information, we do not anticipate will result in any material liability. However, new environmental requirements or more aggressive enforcement of existing ones or discovery of presently unknown conditions could require material expenditures or result in liabilities which could limit expansion or otherwise have a material adverse effect on our business, financial condition, operating cash flows and our ability to make required payments on our debt.

For a description of current environmental issues, see Note 14 of Notes to Consolidated Financial Statements.

We may incur material losses and costs as a result of product liability and warranty claims that may be brought against us.

We face an inherent risk of exposure to product liability claims if the use of our products results, or is alleged to result, in personal injury and/or property damage. If we manufacture a defective product, we may experience material product liability losses and we may incur significant costs to defend product liability claims. We also could incur significant costs in correcting any defects, lose sales and suffer damage to our reputation. Our product liability insurance coverage may not be adequate for the liabilities we could incur and may not continue to be available on terms acceptable to us.

We also are subject to product warranty claims in the ordinary course of our business. If we produce poor-quality products or use defective materials, we may incur unforeseen costs in excess of what we have reserved in our financial statements. These costs could have a material adverse effect on our business, operating cash flows and ability to make required payments on our debt.

Insurance coverage may be inadequate to cover all significant risk exposures.

We may be exposed to liabilities that are unique to our products. While we maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It is also not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition or results of operations.

We depend on the services of key management personnel, the loss of whom would materially harm us.

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Executive Officer. The loss of the services of any of these individuals could have a material adverse effect on our business. We do not maintain key-man life insurance policies on any of our executives.

We may be unable to realize our business strategy of improving operating performance and generating cost reductions.

We have either implemented or plan to implement strategic initiatives designed to improve our operating performance. The failure to achieve the goals of these initiatives could have a material adverse effect on our business. We may decide to make significant expenditures in an effort to streamline or improve our operations, including combining some of our operations at existing facilities, but we may be unable to successfully implement or realize the expected benefits of these initiatives. We also may not be able to sustain improvements made to date.

We may not be able to consummate future acquisitions or successfully integrate acquisitions into our business.

Our business strategy includes growing through strategic acquisitions of other businesses with complementary products, manufacturing capabilities and/or geographic markets. We may not be able to continue to identify attractive acquisition opportunities or successfully acquire identified targets. If we fail to integrate acquired businesses successfully into our existing businesses or incur unforeseen expenses in consummating acquisitions, we could incur unanticipated expenses and losses.

We must successfully integrate acquired businesses into our operations to take full advantage of projected benefits from those acquired businesses. The integration of future acquisitions into our operations could result in operating difficulties and divert management and financial resources that would otherwise be available for the development and maintenance of our existing operations. Our ability to make acquisitions may be constrained by our ability to obtain additional financing and by the provisions of the ~~Indenture~~indenture governing our outstanding ~~8.75%~~notes ~~Notes dated as of March 15, 2004, as amended (the “Indenture”),~~ and by the terms of our revolving credit facility.

Acquisitions involve a number of special risks, including:

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· unexpected losses of key employees or customers of the acquired business;

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

· coordinating our product and process development;

· hiring additional management and other critical personnel; and

· increasing the scope, geographic diversity and complexity of our operations.

Acquisitions could result in our incurrence of additional debt and contingent liabilities, including environmental, tax, pension and other liabilities. These liabilities could have a material adverse effect on our business, our ability to generate cash and our ability to make required payments on our debt.

We may be unable to realize our business strategy of continuing to improve earnings through lean implementation.

We have either implemented or plan to implement strategic initiatives designed to improve our operational performance by implementing the principles of lean manufacturing and continuous improvement. Our ability to realize benefits from such initiatives within the anticipated time frames or at all is subject to a number of factors, including: the loss of management personnel charged with execution of such initiatives; the unwillingness of our labor forces to accept measures designed to improve efficiency; sizable and difficult to project investments in equipment, which may be beyond our financial means; and adverse governmental actions. The failure to achieve the goals of these initiatives could have a material adverse effect on our business. We may decide to make significant expenditures in an effort to streamline or improve our operations, including combining some of our operations at existing facilities, but we may be unable to successfully implement these initiatives or realize their expected benefits within anticipated time frames or at all. We also may not be able to sustain improvements made to date.

If we are unable to meet future capital requirements, our competitive position may be adversely affected.

As a manufacturer, we are required to expend significant amounts of capital for engineering, development, tooling and other costs. Generally, we seek to recover these costs through revenue generation, but we may be unsuccessful due to competitive pressures and other market constraints. We expect to fund capital expenditures through operating cash flows, borrowings under our revolving credit facility and other sources of borrowing such as capital leases, but we may not have adequate funds or borrowing availability to make all the necessary capital expenditures. If we are unable to make necessary capital expenditures, our business and our competitive position may be materially and adversely affected.

17Future operations could be affected by interruptions of production beyond our control.

Our business, financial condition, or results of operations may be adversely affected by certain events that we cannot anticipate or that are beyond our control. Earthquakes, fires, floods, hurricanes, wars, terrorist attacks, computer viruses, pandemics, breakdowns or impairments of our information system or communication network, or other natural disasters or national emergencies could curtail production at our facilities and cause delayed deliveries and canceled orders. Even if the facilities are not directly affected by such events, we could be affected by interruptions at our suppliers. For example, the earthquakes, tsunamis and power plant failures in Japan in March 2011, and the resulting economic disruption, have caused some of our suppliers of truck bodies to slow down or suspend production. Certain suppliers may not be able to recover quickly from such events and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. Supply interruptions such as this can result in increased costs and the inability to timely meet orders for our products.

In addition, global supply disruptions, such as those caused by political or other dislocations, could lead to shortages of materials used in our products. These could delay or increase the cost of our products and result in an adverse effect on our future profitability. While our purchases of raw materials from international sources are currently not sizable and are modest in proportion to our total raw material spend, we are in the process of attempting to greatly increase the proportion of purchases from outside the United States. This policy will expose us to new sets of risks including, but not limited to, political instability, adverse changes in foreign exchange rates and other factors associated with international operations.

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Environmental and health and safety liabilities and requirements could require us to incur material costs.

Our operations are subject to a variety of federal, state and local environmental and health and safety statutes and regulations, including those relating to emissions to the air, discharges to water, treatment, storage and disposal of waste, remediation of contaminated sites and appropriate decommissioning of closed facilities. In certain cases, these requirements may limit the productive capacity of our operations or require pollution controls or other capital improvements. Certain laws, including federal and state Superfund legislation, impose strict, and, under certain circumstances, joint and several, liability for costs to remediate contaminated sites upon designated responsible parties, including site owners or operators and persons who dispose of wastes at, or transport wastes to, such sites.

From time to time, we have received notices of noncompliance with respect to our operations, which have typically been resolved by investigating the alleged noncompliance, correcting any noncompliant conditions and, in some cases, paying fines. We have from time to time been identified as a potentially responsible party at various Superfund sites, which, based on available information, we do not anticipate will result in any material liability. However, new environmental requirements, more aggressive enforcement of existing ones, or discovery of presently unknown conditions could require material expenditures or result in liabilities that could limit expansion, require us to undertake remedial actions or otherwise have a material adverse effect on our business, financial condition, operating cash flows and our ability to make required payments on our debt.

For a description of current environmental issues, refer to “Item 1. Business – Environmental Matters.”

We may not be able to compete favorably in our industries.

We experience direct competition in all of our product lines and some competitors have greater financial and other resources than we have. We face competition from existing competitors with entrenched positions and we could face competition from new ones due to changes in the nature of the industries in which we operate, including foreign competition. Competition in our businesses is based on a variety of factors such as the quality of goods sold and services provided and the prices and terms under which services are provided. Our competitors may be able to provide higher-quality services or more flexible terms or prices. Unconventional production and transport methodologies could result in the appearance of new entrants in the North American market, capable of assembling and distributing truck bodies, delivery vehicles and funeral hearses, as well as manufacturing pickup truck accessories. Increased competition may have a material adverse effect on our business, cash flows and ability to make required payments on our debt by reducing our sales or profit margins.

Increased costs, including costs of raw materials, component parts and labor costs, potentially impacted by changes in labor rates and practices, could reduce our operating income.

Our results of operations may be significantly affected by the availability and pricing of manufacturing components and labor, as well as changes in labor rates and practices. Increased pricing for key commodities and production parts used in our products could affect the cost of our materials and components, as demonstrated by rising steel and aluminum prices. We cannot be certain that we will be able to effectively negotiate with current or new suppliers, increase productivity or, if necessary, increase the sales prices of our products without causing an adverse impact on the competitiveness of our products and, therefore, our sales volume. If we cannot successfully offset increases in our manufacturing costs, this could have a material adverse impact on our margins, operating income and cash flows. Our profit margins may decrease if prices of purchased component parts or labor rates increase and we are unable to pass on those increases to our customers. Even if we were able to offset higher manufacturing costs by increasing the sales prices of our products, the realization of any such increases often lags behind the rise in manufacturing costs, especially in our operations, due in part to our commitment to give our customers and dealers price protection with respect to previously placed orders.

Demand for our truck body products depends largely on the replacement cycle of delivery trucks.

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materially and adversely affected. As a result, our ability to generate cash and make required payments on our debt could be negatively impacted.

Fuel shortages, or higher prices for fuel, could have a negative effect on our sales.

Gasoline or diesel fuel is required for the operation of the step vans and trucks we manufacture and the pickup trucks upon which our accessories are mounted. Particularly in view of increased international tensions and increased global demand for oil, there can be no assurance that the supply of these petroleum products will continue to be uninterrupted, that rationing will not be imposed or that the price of or tax on these petroleum products will not significantly increase in the future. Increases in gasoline and diesel prices and speculation about potential fuel shortages have had an unfavorable effect on consumer demand for step vans and trucks from time to time in the past and may continue to do so in the future. This, in turn, has a material adverse effect on our sales volume. Certain competitors that operate on a local scale and have a more limited delivery radius may have an advantage during periods of increased delivery costs due to fuel costs. Increases in the price of oil also can result in significant increases in the price of many components in our products and limit our ability to leverage low-cost country sourcing, which may have an adverse impact on our margins or sales volumes.

Most of our businesses rely on a small number of customers, the loss of any of which could have a material adverse effect on us.

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

· Morgan’s two largest customers together accounted for 59%, 56% and 54% of Morgan’s revenues during 2011, 2010 and 2009, respectively, and accounted for 25%, 20% and 17% of JBPCO’s consolidated revenues during 2011, 2010 and 2009, respectively.

· One customer accounted for 53%, 41% and 31% of Morgan Olson’s revenues during 2011, 2010 and 2009, respectively, and accounted for 8%, 6% and 7% of JBPCO’s consolidated revenues during 2011, 2010 and 2009, respectively.

· Two customers accounted for 54%, 44% and 39% of Specialty Manufacturing’s revenues during 2011, 2010 and 2009, respectively, and accounted for 14%, 12% and 13% of JBPCO’s consolidated revenues in 2011, 2010 and 2009, respectively.

· Our top 10 customers accounted for 52%, 45% and 39% of JBPCO’s consolidated revenues in 2011, 2010 and 2009, respectively.

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

Disruptions in delivery of truck or car chassis to us could impact the profitability of our business.

If truck and car chassis manufacturers or their suppliers experience disruptions in their businesses resulting from plant closures or other cost-cutting initiatives, lack of cash resources, bankruptcy proceedings or other potential causes, Morgan, Morgan Olson and SVG may be unable to sell or deliver their products. Work stoppages or slowdowns experienced by the large truck and car manufacturers that supply chassis could result in delays or slowdowns in our ability to deliver products to our customers.

The cyclicality of pickup truck sales could cause a decline in TAG’s sales.

TAG’s sales depend heavily on sales of new pickup trucks in North America. A decline in pickup truck sales would cause a decline in TAG’s sales, which could materially and adversely reduce TAG’s ability to generate cash and reduce our ability to make required payments on our debt. Sales of pickup trucks are characterized by periodic fluctuations in demand

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due to, among other things, changes in general economic conditions, interest rates, fuel costs, new model introductions, consumer spending levels and consumer preferences.

We depend on the services of key management personnel, the loss of whom would materially harm us.

Our ability to compete successfully and implement our business strategy depends on the efforts of our senior management personnel, including those of John Poindexter, our Chairman of the Board, President and Chief Executive Officer. The loss of the services of any of these individuals could have a material adverse effect on our business. We do not maintain key-man life insurance policies on any of our executives.

We are controlled by John B. Poindexter, and his interests may conflict with the interests of our noteholders or other creditors.

John B. Poindexter owns 100% of our equity and therefore has the ability to control all matters requiring shareholder approval, including the election of our board of directors, significant transactions and other matters. Mr. Poindexter could prevent a transaction that would result in a change of control, even though it may be in the best interest of noteholders, or Mr. Poindexter may pursue acquisitions, divestitures, financings or other transactions that could enhance his interest in our company but which could involve risks to our noteholders or other creditors. Therefore, from time to time, the interests of Mr. Poindexter in our business may not be aligned with, or may conflict with, the interests of our noteholders.

We may incur material losses and costs as a result of product liability and warranty claims that may be brought against us.

We also are subject to product warranty claims in the ordinary course of our business. If we produce poor-quality products or use defective materials, we may incur unforeseen costs in excess of what we have reserved in our financial statements. For example, MIC manufactures high-precision metal parts and therefore is particularly susceptible to claims that its products do not meet a customer’s exacting specifications. Such customer claims could result in the customer rejecting the product, leaving MIC to pay for the production costs. These costs could have a material adverse effect on our business, operating cash flows and ability to make required payments on our debt.

Insurance coverage may be inadequate to cover all significant risk exposures.

We may be exposed to liabilities that are unique to our products. While we maintain insurance for certain risks, the amount of our insurance coverage may not be adequate to cover all claims or liabilities, and we may be forced to bear substantial costs resulting from risks and uncertainties of our business. It also is not possible to obtain insurance to protect against all operational risks and liabilities. The failure to obtain adequate insurance coverage on terms favorable to us, or at all, could have a material adverse effect on our business, financial condition or results of operations.

As a privately held company, we are subject to less stringent corporate governance requirements than a company with public equity. This provides less protection to our investors.

While we are subject to certain requirements of the Sarbanes-Oxley Act of 2002, we are not subject to many of its provisions, including rules requiring us to have independent directors or an audit committee composed of independent directors. Our ~~Both of our~~ directors, John Poindexter, ~~our~~ (President and CEO,) and Stephen Magee, ~~the~~(Chairman ~~chairman~~ of the Audit Committee ~~of our board of directors~~), are not independent. We are not subject to the same corporate governance standards as a company with public equity or a company listed on a national exchange, and our security holders do not have the protections provided by having independent directors or audit committee members.

Increased safety, emissions, fuel economy or other regulation could result in higher costs, cash expenditures or reduction in sales.

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The transportation and energy industries are governed by a substantial amount of governmental regulation. Governmental regulation has risen, and proposals for additional regulation are advanced, primarily out of concern for the environment (including concerns about the possibility of global climate change and its impact), safety and energy independence. We are cooperating with our customers to design bodies to fit on chassis for electrical and other energy sources intended to reduce natural resource consumption and emissions. There are limits on our ability to achieve these improvements over a given time frame, however, primarily due to the cost and effectiveness of available technologies, customer acceptance of new technologies, willingness of customers to absorb the additional costs of new technologies, the appropriateness (or lack thereof) of certain technologies for use in particular vehicles, and the human, engineering and financial resources necessary to deploy new technologies across a wide range of products. There can also be no assurance that such efforts can be commercialized. As is typical with new technologies and the development of different vehicle configurations, the risk of an unsuccessful outcome is significant. The cost to comply with existing governmental regulations is substantial, and future, additional regulations (already enacted, adopted or proposed) could have a substantial adverse impact on our financial condition and results of operations.

We may be unable to adequately protect our intellectual property.

Although our portfolio of intellectual property is not substantial, we depend on the integrity and protection of a sizable group of trademarks, brand names and trade styles, including, but not limited to, Morgan, Morgan Plate, Morgan Olson, Federal Coach, Eagle Coach, Leer, Century, Raider, LoRider, Pace Edwards, MIC and Master Manufacturer. The loss or impairment in use of any of these trademarks, brand names or trade styles could be injurious to our business. Further, we expect to expand our operations outside the United States and Canada and may discover that some of these trademarks, brand names or trade styles are already in use elsewhere. Policing unauthorized use of our intellectual property is difficult and expensive, and we may not be able to, or have the resources to, prevent misappropriation of our proprietary rights, particularly in jurisdictions where the laws may not protect such rights as fully as in the United States. The cost of protecting our intellectual property may be significant and have a material adverse effect on our financial condition and future results of operations.

Item 1B. Unresolved Staff Comments

~~None.~~N/A

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Item 2. Properties

We own or lease the following manufacturing, office and sales facilities, as of December 31, ~~2010~~2011:

Location	Principal use	Approximate square feet	Owned or leased	Lease expiration
Morgan:
Ehrenberg, Arizona	Manufacturing	119,000	Leased**	~~2025~~2015
Riverside, California	Manufacturing~~/service~~	6277,000	Leased	2013
Atlanta, Georgia	Parts/service	20,000	Leased	2012
Rydal, Georgia	Manufacturing/service	96,647	Leased*	2026
Rydal, Georgia	Manufacturing	85,000	Owned	—
Ephrata, Pennsylvania	Manufacturing	56,575	Leased*	2025
Ephrata, Pennsylvania	Manufacturing	51,000	Leased*	2025
New Morgan, Pennsylvania	Manufacturing	62,900	Leased	2012
New Morgan, Pennsylvania	Manufacturing	62,900	Leased	2011
Morgantown, Pennsylvania	Manufacturing/service	262,233	Leased*	2025
Morgantown, Pennsylvania	Manufacturing/service	261,000	Leased*	2025
Corsicana, Texas	Manufacturing	66,110	Leased*	2025
Corsicana, Texas	Manufacturing	63,000	Leased*	2025
Janesville, Wisconsin	Manufacturing/service	162,101	Leased	2015
Janesville, Wisconsin	Manufacturing/service	166,000	Leased	2015
Denver, Colorado	Parts/service	15,147	Leased	2016
Denver, Colorado	Parts/service	15,000	Leased	2012
Lakeland, Florida	Parts/service	46,865	Leased	2013
Lakeland, Florida	Parts/service	47,000	Leased	2013
Brampton, Ontario, Canada	Manufacturing/office	35,000	Leased	2013
Brampton, Ontario, Canada	Manufacturing/office	35,000	Leased	2013
Morgan Olson:
Morgan Olson:
Sturgis, Michigan	Manufacturing/office	211,000	Leased*	2025
Sturgis, Michigan	Manufacturing/office	~~211~~176,~~000~~400	Leased**	~~2025~~2026
Sturgis, Michigan	Manufacturing/office	176,400	Leased**	2025
TAG:
Truck Accessories:
Woodland, California	Manufacturing	65,000	Leased	2012
Woodland, California	Manufacturing	6517,~~000~~250	Leased	2012
Woodland, California	Manufacturing	17,250	Leased	2012
Elkhart, Indiana	Manufacturing	132,500	Leased	2015
Elkhart, Indiana	Manufacturing/office	~~132~~84,~~500~~960	~~Leased~~Owned	~~2013~~—
Elkhart, Indiana	Manufacturing/~~office~~retail	8075,000	~~Owned~~Leased	—2015
Elkhart, Indiana	Manufacturing~~/retail~~	75150,000	Leased	~~2013~~2014
Elkhart, Indiana	~~Manufacturing~~Office/research	~~150~~21,~~000~~645	Leased*	~~2011~~2025
Elkhart, Indiana	Office/research	23,500	Leased**	2025
Milton, Pennsylvania	Manufacturing/retail	97,600	Leased	2012
Milton, Pennsylvania	Manufacturing/retail	97,600	Leased	2012
Clackamas, Oregon	Retail	12,700	Leased	2013
Clackamas, Oregon	Retail	12,700	Leased	2013
Centralia, Washington	Manufacturing	47,825	Leased*	2026
Centralia, Washington	Manufacturing	45,950	Owned	—
Specialty Manufacturing:
Specialty Manufacturing:
Amelia, Ohio	Manufacturing/office	54,100	Leased	2014
Amelia, Ohio	Manufacturing/office	54,100	Leased	2014
Brenham, Texas	Manufacturing/office	121,500	Leased*	2025
Brenham, Texas	Manufacturing/office	~~125~~153,~~000~~850	Leased**	2025
Brenham, Texas	Manufacturing/office	151,000	Leased**	2025
Decatur, Alabama	Manufacturing	175,000	Leased	2012
Decatur, Alabama	Manufacturing	175,000	Leased	2012
Duncan, Oklahoma	Manufacturing/office	53,000	Leased	2012
Duncan, Oklahoma	Manufacturing/office	53,000	Leased	2012
Elkhart, Indiana	Manufacturing/office	200,000	Owned	—
Elkhart, Indiana	Manufacturing/office	211,600	Owned	—
Houston, Texas	Manufacturing/office	36,000	Leased	2012
Houston, Texas	Manufacturing/office	97,000	Leased	2012
Selangor Darul Ehsan, Malaysia	Manufacturing/office	30,000	Leased	2012
Selangor Darul Ehsan, Malaysia	Manufacturing/office	30,000	Leased	2012
Monterrey, Mexico	Manufacturing	38,050	Leased	2012
Monterrey, Mexico	Manufacturing	38,000	Leased	2011
Nashville, Tennessee	Manufacturing	40,800	Leased	2012
Nashville, Tennessee	Manufacturing	40,900	Leased	2011
JBPCO (Parent):
JBPCO (Parent):
Houston, Texas	Office	9,900	Leased	2019
Houston, Texas	Office	10,000	Leased	2019

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*~~Effective~~During ~~December~~the ~~12,~~period 2008 through 2011, these facilities were sold to and leased back from an entity owned by John Poindexter. ~~See~~Please refer to Note 1516 of ~~Notes~~our ~~to Consolidated~~ Financial Statements, included herein, for a more detailed description of the sale/lease-back transactions.

**EffectiveWe ~~December~~believe ~~17,~~that ~~2010,~~our ~~these~~ facilities ~~were~~are ~~sold~~adequate tofor ~~and~~our ~~leased~~current ~~back~~needs ~~from~~and anare ~~entity~~capable ~~owned~~of bybeing ~~John~~utilized ~~Poindexter. See~~at ~~Note~~higher 15capacities ofto ~~Notes~~supply toincreased ~~Consolidated~~demand, ~~Financial~~if ~~Statements~~necessary.

We believe that our facilities are adequate for our current needs and are capable of being utilized at higher capacities to supply increased demand, if necessary. All owned properties are pledged as collateral against our revolving credit facility.

Item 3. Legal Proceedings

We are involved in various lawsuits, which arise in the ordinary course of business. In the opinion of management, the ultimate outcome of known lawsuits will not have a material adverse effect on us.

Item 4. ~~(Removed~~Mine ~~and~~Safety ~~Reserved)~~Disclosures

~~PART II~~N/A

PART II

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

The registrant’s common equity is privately held and not publicly traded. As of ~~March 31~~February 23, ~~2011~~2012, John Poindexter owned all of the registrant’s issued and outstanding common equity. The Company has never paid cash dividends.

~~The~~Both the covenants in the indenture governing our outstanding notes (the “Indenture”) and in the loan agreement for the Company’s revolving credit facility ~~both~~ restrict the Company’s ability to pay dividends on its common equity.

The Company has no securities authorized for issuance under equity compensation plans.

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Item 6. Selected Financial Data

The selected financial data, shown below for each of the five years infor the period ended December 31, ~~2010~~2011, has been derived from the Consolidated Financial Statements of the Company. The following data should be read in conjunction with the Consolidated Financial Statements and related Notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in this Form 10-K.

	Year ended December 31,
	Years ended December 31,
(Dollars in Millions)	~~2010~~2011			~~2009~~2010			~~2008~~2009			~~2007~~2008			~~2006~~2007
Operating data:
Revenues	$	708.1		$	553.6		$	480.6		$	706.4		$	792.2
Revenues	$	553.6		$	480.6		$	706.4		$	792.2		$	795.4
Operating income	40.2			14.4			10.9			29.7			20.2
Cost of sales	481.9			420.1			610.8			707.2			701.1
Interest expense	17.9			17.9			18.2			18.5			18.7
Gross profit	71.7			60.5			95.6			85.0			94.3
Net income (loss)	14.7			(2.0		)	(4.9		)	6.8			(0.8		)
Selling and administrative expenses	53.7			49.0			66.3			64.9			63.0
Ratio of earnings to fixed charges(a)	2.1		x	0.8		x	0.6		x	1.5		x	1.1		x
Closed and excess facility costs	1.0			0.6			0.8			0.2			2.7
Loss (gain) on sale lease-back of real estate	2.5			(0.3		)	—			—			—
Gain on repurchase of 8.75% Notes	—			(0.2		)	(0.4		)	—			—
Other expense (income)	0.1			0.5			(0.8		)	(0.3		)	(0.2		)
Operating income	14.4			10.9			29.7			20.2			28.8
Interest expense	17.9			18.2			18.5			18.7			18.9
Interest income	—			(0.2		)	(0.4		)	(0.8		)	(1.7		)
Income tax provision (benefit)	(1.5		)	(2.2		)	4.8			3.1			3.4
Net income (loss)	$	(2.0	)	$	(4.9	)	$	6.8		$	(0.8	)	$	8.2
Ratio of earnings to fixed charges(a)	0.8x			0.6x			1.5x			1.1x			1.5x
Other data:
EBITDA(b)	$	33.2		$	28.4		$	48.6		$	43.5		$	43.8
Adjusted EBITDA(b)	$	59.4		$	34.5		$	28.4		$	48.6		$	43.5
Consolidated Coverage Ratio(c)	13.93		x	1.69		x	21.6		x	2.36		x	2.43		x
Balance sheet data (at year end):
Working capital	$	112.9		$	99.4		$	99.2		$	83.3		$	112.3
Net working capital	$	110.2		$	112.9		$	99.4		$	99.2		$	83.3
Total assets	$	~~286~~277.72		$	286.07		$	~~295~~286.90		$	~~297~~295.29		$	~~292~~297.42
Total debt	$	~~203~~167.57		$	~~205~~203.25		$	~~207~~205.42		$	~~213~~207.64		$	~~207~~213.6
Stockholder’s equity	$	1732.62		$	1917.46		$	2319.84		$	1823.38		$	18.3

(a) For the purpose of calculating the ratio of earnings to fixed charges, earnings consist of net income (loss), plus income taxes and fixed charges (excluding capitalized interest). Fixed charges consist of interest expense, amortization of debt issuance costs, and the estimated portion of rental expenses deemed a reasonable approximation of the interest factor.

(b) ~~“EBITDA”~~ We ispresent ~~net~~EBITDA ~~income from continuing operations increased by the sum of interest expense, income taxes, depreciation~~ and ~~amortization,~~Adjusted ~~and~~EBITDA ~~other noncash items for those operations defined~~ as ~~restricted~~a ~~subsidiaries~~supplemental inmeasure ~~the~~of ~~Indenture~~our performance. ~~EBITDA~~We isdefine ~~not~~EBITDA ~~included herein~~ as ~~operating~~net ~~data and should not be construed as an alternative to operating~~ income (~~determined~~loss) inplus ~~accordance~~(i) interest ~~with~~expense, ~~accounting~~(ii) provision ~~principles~~for ~~generally~~taxes ~~accepted~~and ~~in the United States~~(iii) depreciation asand anamortization, ~~indicator~~and ofAdjusted ~~the~~EBITDA ~~Company’s~~as ~~operating performance. The Company has included~~ EBITDA ~~because~~further itadjusted isto ~~relevant~~eliminate ~~for determining compliance under~~ the ~~Indenture~~impact ~~and~~of ~~because~~certain ~~the~~items ~~Company understands~~ that itwe isdo ~~one~~not ~~measure~~consider ~~used~~indicative byof ~~certain~~our ~~investors~~ongoing ~~to analyze the Company’s~~ operating ~~cash~~performance. These ~~flow~~further ~~and~~adjustments ~~historical~~are ~~ability~~itemized ~~to service its indebtedness~~below. The following are the components of the Company’s EBITDA and Adjusted EBITDA:

	Years ended December 31,
(Dollars in Millions)	2011			2010			2009			2008		2007

Net income (loss)	$	14.7		$	(2.0	)	$	(4.9	)	$	6.8	$	(0.8	)
Income tax provision (benefit)	7.6			(1.5		)	(2.2		)	4.8		3.1
Interest expense	17.9			17.9			18.2			18.5		18.7
Depreciation and amortization	17.6			16.6			17.0			17.7		15.1
EBITDA	57.8			31.0			28.1			47.8		36.1
Loss on sale/lease-back of real estate	1.6			2.8			—			—		—
Deferred gain amortization on sale/lease-back	(0.5		)	(0.3		)	(0.3		)	—		—
Expenses associated with proposed Notes issuance	0.5			—			—			—		—
Facility closures	—			1.0			0.6			0.8		—
Pro forma effect of acquisitions	—			—			—			—		7.4
Adjusted EBITDA	$	59.4		$	34.5		$	28.4		$	48.6	$	43.5

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	Year ended December 31,
(Dollars in Millions)	2010			2009			2008		2007			2006
Net income (loss)	$	(2.0	)	$	(4.9	)	$	6.8	$	(0.8	)	$	8.2
Income tax provision (benefit)	(1.5		)	(2.2		)	4.8		3.1			3.4
Interest expense	17.9			18.2			18.5		18.7			18.9
Depreciation and amortization	15.3			17.0			17.7		15.1			12.0
Loss (gain) on sale lease-back of real estate	2.5			(0.3		)	—		—			—
Noncash charges	1.0			0.6			0.8		—			1.1
Pro forma effect of acquisitions	—			—			—		7.4			0.2
EBITDA	$	33.2		$	28.4		$	48.6	$	43.5		$	43.8

EBITDA and Adjusted EBITDA are not included herein as operating data and should not be construed as an alternative to operating income (determined in accordance with accounting principles generally accepted in the United States) as an indicator of the Company’s operating performance. The Company has included EBITDA and Adjusted EBITDA because it is relevant for determining compliance under the Indenture and because the Company understands that it is one measure used by certain investors to analyze the Company’s operating cash flow and historical ability to service its indebtedness.

(c) “Consolidated Coverage Ratio” is the ratio of EBITDA to interest expense. ~~Among other things, it is used in the Indenture to limit the amount of indebtedness that the Company may incur.~~ All the Company’s subsidiaries are restricted under the terms of the Indenture and guarantee the 8.75% Notes.

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

Management’s Discussion and Analysis

The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements and the related notes thereto that appear in this Annual Report on Form 10-K.

The Company has determined its reportable segments in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, Segment Reporting. The Company evaluates the performance of its reportable segments based on operating income, ~~which is~~ (defined as income before interest expense, other income, net, and income taxes). Reportable segment operating income and segment operating margin (defined as segment operating income divided by segment revenues) are indicative of short-term operational performance and ongoing profitability. Management closely monitors the operating income and operating margin of each business segment to evaluate past performance and identify actions required to improve profitability.

Overview and Description of Business

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

The Company’s operating segments are as follows:

Morgan ~~Truck~~manufactures ~~Body,~~commercial ~~LLC~~medium-duty ~~(“Morgan”) manufactures~~ truck bodies in the United States and Canada for dry freight and refrigerated trucks and vans (excluding those ~~made~~produced for pickup trucks and tractor-trailer trucks). ~~Morgan’s~~Truck ~~operations include our Canadian subsidiary Commercial Babcock, Inc. The truck~~ bodies are attached to truck chassis, which are provided by ~~its~~ customers. Customers include truck rental and leasing companies, truck dealers, and companies that operate fleets of delivery vehicles. The principal raw materials used by Morgan include steel, aluminum, fiberglass-reinforced plywood, hardwoods and lubricants, which are acquired from a variety of sources. Morgan conducts its Canadian operations through its subsidiary, Commercial Babcock, Inc.

Morgan Olson, ~~LLC (“Morgan Olson”)~~ manufactures step van bodies for parcel, food, newspaper, uniform, ~~linen~~ and ~~other~~linen delivery ~~applications~~. These ~~Step vans are~~ specialized vehicles are designed for multiple-stop applications and enable the driver ~~of the truck~~ to easily access the cargo area. from the cab. Morgan Olson manufactures the ~~complete~~entire truck body, including ~~the~~installing ~~fabrication of the body, the installation of~~ windows, doors, ~~the~~ instrument panel, seating and wiring, ~~and~~as ~~finishing~~well ~~the~~as ~~truck with~~ applying paint and ~~decal application~~decals. Step ~~The step~~ van bodies are installed on truck chassis provided by customers. Morgan Olson uses steel, aluminum and automotive components.

TAG manufactures pickup truck caps and tonneau covers; these fabricated enclosures fit over the open beds of pickup trucks, converting the beds into weatherproof storage areas. TAG produces numerous brands, including Leer, Century, Raider, LoRider, BoxTop, Pace Edwards and State Wide Aluminum. The materials used by TAG are resin, fiberglass, aluminum, paint, glass, and manufactured components such as locks and gas struts.

Specialty Manufacturing Division (“Specialty Manufacturing”) consists of three business units: MIC, SVG and EFP.

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MIC provides high-precision machining, casting services and parts assembly for the oil and gas services industry. MIC offers an array of services, including computer-controlled precision machining, electrical discharge machining, electron beam welding, trepanning, gun drilling and electromechanical assembly. MIC operates six plants, located in the United States, Mexico and Malaysia. The principal raw materials used by MIC are ferrous and nonferrous materials, including stainless steel, alloy steels, nickel-based alloys, titanium, brass, beryllium copper alloys and aluminum.

SVG manufactures funeral coaches and limousines, most of which are sold through authorized dealers in the United States and Canada to funeral directors and livery companies. The components of SVG are Federal Coach, LLC (“Federal Coach”) and Eagle Specialty Vehicles, LLC (“Eagle Coach”). SVG purchases vehicle chassis from the major automotive manufacturers’ dealers for modification and sale. Effective December 31, 2009, SVG exited the specialized transit bus business and sold the assets employed in that business. Please refer to Note 4 of our Financial Statements, included herein, for a more detailed description of the SVG plant consolidation undertaken in 2010.

EFP manufactures expandable polystyrene and polypropylene foam for packaging applications. Its products are engineered to customer specifications for use in the medical, electronics, food, furniture, plumbing and appliance industries. The principal raw materials used by EFP include expandable polystyrene, polypropylene, polyethylene and other resins.

Business environment and outlook

While the six business units of J.B. Poindexter & Co. are subject to common influences, such as macroeconomic cycles, each business has specific external factors that impact its financial performance.

Morgan. Morgan’s sales depend on the replacement cycle for delivery trucks, primarily in general freight, parcel delivery and distribution applications. While customers typically replace delivery trucks every 6 to 7 years, timing is directly impacted by general economic conditions. In a weaker economy, as was the case between 2008 and 2010, customers often defer the purchase of new delivery trucks or retire old trucks without replacement. In a stronger economy, customers may make purchases that were deferred in prior years, replacing vehicles at a more rapid rate.

Customer mix also influences sales at Morgan. In recent years, demand from large fleet operators such as Penske and Ryder has outpaced industry rates of growth as many smaller companies turn to leasing. As a result of its historically high market shares with large fleet operators, Morgan has recently capitalized on this trend reporting a sales increase of 50% in 2011, compared to 2010, much of which was derived from fleet operators.

Morgan Olson. Morgan Olson’s revenues are affected by factors similar to those that influence Morgan. Additionally, the step van market is not growing, and may be declining, probably as a consequence of the inferior fuel efficiency of smaller step van models. To provide an alternative for customers seeking enhanced fuel economy in smaller vehicles, Morgan Olson partnered with Sprinter and introduced a new product for the Sprinter chassis, the “Ultimate Delivery Vehicle” (UDV). The UDV has a walk-thru door behind the passenger seat thus adding the convenience and larger capacity of a step van to the fuel efficient Sprinter powerplant. In addition, Morgan Olson partnered with Workhorse and Freightliner Custom Chassis to adapt their fuel efficient chassis to the system body style. These vehicles are scheduled for introduction in 2012 and 2013.

Morgan Olson’s revenue is also partly dependent on parts and service sales. Its largest parts customer is the United States Postal Service (USPS) which operates 142,000 vehicles manufactured by the predecessor of Morgan Olson. Due to USPS’s limited capital budget, it is expected that these vehicles will be operated, and therefore continue to generate parts and service revenue, for several more years before replacement vehicles are obtained.

TAG. TAG’s sales are directly related to the sales of new pickup trucks. Pickup truck sales are cyclical and depend on general economic conditions and factors that affect the automotive industry such as consumer preferences, fuel costs, consumer spending levels, new model introductions and interest rates.

While light duty pickup truck sales continued to improve in 2011, TAG’s sales have not increased. We believe this is due to caution on the part of consumers and a higher proportion of pickup trucks being sold to commercial customers that are less

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likely to install tonneaus and caps. However, better economic conditions have increased demand for TAG’s recently upgraded commercial fleet and vocational products such as marine dock boxes and UPS step van hoods. TAG’s near term growth rate is anticipated to increase, as it uses its scale and national footprint to further its relationships with fleet operators, leasing companies and vehicle fleet upfitters.

MIC. MIC’s sales depend on activity levels in the energy services industry. Global consumption of energy, with oil as the major component, is projected to increase steadily, partly as a result of demand in China and other economically developing nations. In addition, technical advances in drilling will likely cause more challenging oil exploration activities. Advanced drilling methods such as horizontal drilling, hydraulic fracking, and deep-hole and deep-sea excavation tend to require the high-precision and highly machined assemblies produced by MIC, which we believe will lead to increased revenue despite the challenges facing the industry.

SVG. In the funeral industry, despite a growing population, services are slowly trending away from traditional burials and toward cremations. Funeral directors have not yet fully adapted to this trend, and as a result there has been consolidation in the industry and its supplier base, including the funeral vehicle segment. SVG is now one of two funeral vehicle manufacturers in the United States and Canada and its improving market share has more than compensated for decreased industry demand. To compensate for the decline of the funeral services industry SVG is now utilizing its skilled workforce, design skills and reputation for quality to develop and merchandise other vehicles, including armored limousines.

SVG’s short-term demand is also impacted by the introduction of new chassis platforms. After 10 years of unchanged chassis, SVG has begun to sell vehicles fabricated on the new Lincoln MKT coach and the Cadillac executive sedan; and it will offer a completely redesigned hearse based on another Cadillac chassis in 2012.

EFP. EFP is a relatively small part of our company and a miniscule participant in the packaging market. Similar to its competitors, EFP’s sales are limited to customers within a fixed geographical distance from its three locations. Recently, EFP began to target opportunities in the growing refrigerated shipping market for food, medical and pharmaceutical products, and away from RV and construction customers.

The following table shows our revenues, operating income and operating income as a percentage of revenues for each segment for the years ended December 31, 2011, 2010 and 2009.

	Years Ended December 31,
(Dollars in Millions)	2011			2010			2009
Revenues
Morgan	$	296.1		$	197.3		$	146.5
Morgan Olson	104.1			85.6			61.3
TAG	123.1			122.2			114.9
Specialty Manufacturing	184.8			148.5			157.9
Consolidated	$	708.1		$	553.6		$	480.6

Operating Income (Loss)
Morgan	$	21.3		$	8.6		$	1.1
Morgan Olson	6.1			5.1			2.6
TAG	11.0			12.7			7.9
Specialty Manufacturing	11.8			(1.8		)	2.9
JBPCO (Parent)	(10.0		)	(10.2		)	(3.6		)
Consolidated	$	40.2		$	14.4		$	10.9

Operating Margin Percentage
Morgan	7.2		%	4.4		%	0.7		%
Morgan Olson	5.9		%	5.9		%	4.2		%
TAG	8.9		%	10.2		%	6.8		%
Specialty Manufacturing	6.4		%	(1.2		)%	1.9		%
Consolidated	5.7		%	2.6		%	2.3		%

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by Morgan Olson’s customers. The principal raw materials used by Morgan Olson include steel and aluminum and a variety of automotive components.

Truck Accessories Group, LLC (“Truck Accessories”) manufactures pickup truck caps and tonneau covers, which are fabricated enclosures that fit over the open beds of pickup trucks, converting the beds into weatherproof storage areas. Truck Accessories’ brands include Leer, Century, Raider, LowRider, BoxTop and Pace Edwards, and State Wide Aluminum. The principal raw materials used by Truck Accessories are resin, fiberglass, paint, glass and manufactured components such as locks and gas struts.

Specialty Manufacturing Division (“Specialty Manufacturing”) is comprised of the Specialty Vehicle Group, MIC Group, LLC (“MIC”) and EFP, LLC (“EFP”). The Specialty Vehicle Group is comprised of Federal Coach, LLC (“Federal Coach”) and Eagle Specialty Vehicles, LLC (“Eagle Coach”). The Specialty Vehicle Group manufactures funeral coaches and limousines. The Specialty Vehicle Group purchases vehicle chassis from the major automotive manufacturers’ dealers for modification and sale to its customers. Effective December 31, 2009, Specialty Vehicle Group exited the specialized transit bus business and sold its specialized transit bus business (see Note 4). MIC is a manufacturer, investment caster and assembler of precision metal parts for use in the worldwide oil and gas exploration, automotive and aerospace industries, and other general industries. EFP molds, fabricates and markets expandable foam products used for packaging and thermal insulation by various industries. The principal raw materials used by Specialty Manufacturing are ferrous and nonferrous materials including stainless steel, alloy steels, nickel-based alloys, titanium, brass, beryllium-copper alloys, aluminum, expandable polystyrene, polypropylene, polyethylene and other resins.

The following table shows our revenues, operating income and operating income as a percentage of revenues for each segment for the years ended December 31, 2010, 2009 and 2008.

	Year ended December 31,
(Dollars in Millions)	2010			2009			2008
Revenues
Morgan	$	197.4		$	146.9		$	233.9
Morgan Olson	85.8			61.6			104.4
Truck Accessories	123.9			115.6			131.9
Specialty Manufacturing	148.4			157.9			238.3
Eliminations	(1.9		)	(1.4		)	(2.1		)
Consolidated	$	553.6		$	480.6		$	706.4
Operating Income (Loss)
Morgan	$	8.6		$	1.1		$	4.0
Morgan Olson	5.1			2.6			5.4
Truck Accessories	12.7			7.9			2.4
Specialty Manufacturing	(1.8		)	2.9			25.9
JBPCO (Parent)	(10.2		)	(3.6		)	(8.0		)
Consolidated	$	14.4		$	10.9		$	29.7
Operating Margin Percentage
Morgan	4.4		%	0.7		%	1.7		%
Morgan Olson	5.9		%	4.2		%	5.2		%
Truck Accessories	10.2		%	6.8		%	1.8		%
Specialty Manufacturing	(1.2		)%	1.9		%	10.9		%
Consolidated	2.6		%	2.3		%	4.2		%

The following is a discussion of the key components of our results of operations:

Source of revenues. We derive revenues from:

· Morgan’s sales of truck bodies, parts and services;

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

· TAG’s sales of pickup truck caps and tonneaus, as well as trailer doors and window components; and

· Specialty Manufacturing’s sales of products and services, specifically through:

· MIC’s sales of precision-machined parts and assembly services;

· SVG’s sales of funeral hearses and limousines; and

· EFP’s sales of expandable polystyrene and polypropylene foam products.

Discounts, returns and allowances. Our gross revenues are reduced by discounts we provide to customers, returns and allowances in the ordinary course of business. We provide discounts as deemed necessary to generate sales volume and remain price-competitive. Discounts include payment term discounts and discretionary discounts from list price.

Cost of revenues. Cost of revenue reflects the costs directly associated with manufacturing our products and generally varies with the volume of products produced. The components of cost of revenue are materials, labor and overhead including transportation costs. Overhead costs are allocated to production based on labor costs and include the depreciation and amortization costs associated with the assets used in manufacturing, including rent associated with manufacturing and indirect labor and other costs.

Selling and administrative expenses. Our selling and administrative expenses are comprised of the costs of selling our products, as well as administrative costs related to information technology, accounting, finance and human resources. Specifically, costs consist of personnel and related expenses, including travel, equipment and facility rent (not associated with manufacturing activities), as well as professional services, such as auditors. Selling, general and administrative expenses also include the costs incurred at corporate headquarters to manage and support the operating subsidiaries.

Other income and expense. Income and expenses that we incur during the year, which are nonrecurring in nature and not directly comparable to the prior year, are included in other income and expense or are separately identified.

Year Ended December 31, 2011, Compared with Year Ended December 31, 2010

Revenues. Our consolidated revenues increased $154.5 million, or 27.9%, to $708.1 million for 2011, compared to $553.6 million for 2010. This increase reflects higher sales volume of $143.3 million, or 25.9%, and price increases of $11.2 million, or 2.0%. Morgan, Morgan Olson, MIC and SVG experienced volume increases due to cyclical demand and increased market share. Revenues at TAG increased as a result of price increases partially offset by softening demand for consumer pickup truck caps. Revenues at EFP decreased following its exit from unprofitable product lines associated with construction and recreational vehicle customers.

· Morgan’s revenues increased $98.8 million, or 50.1%, to $296.1 million for 2011, compared to $197.3 million for 2010. This increase reflects higher sales volume of $93.2 million and price increases of $5.6 million. The volume increase was attributable to an increase of $60.9 million in sales to retail customers, supplemented by an increase of $29.9 million in sales to fleet customers. Parts, service and delivery sales also increased $2.4 million. The price increases were comprised of $1.8 million attributable to fleet units, and $3.8 million attributable to retail units.

· Morgan Olson’s revenues increased $18.5 million, or 21.6%, to $104.1 million for 2011, compared to $85.6 million for 2010. The increase solely reflects higher sales volume, as no price increases were initiated during the

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~~· Morgan~~period. The ~~Olson’s~~volume ~~sales~~increase ofwas ~~step~~due ~~van~~to ~~truck~~a ~~bodies~~$21.0 million increase in revenue from commercial fleet customers, ~~parts~~such as UPS and ~~services;~~FedEx, and a $3.0 million increase in sales to retail customers. The increase was partially offset by reduced cutaway shipments mainly attributable to an atypical $6.4 million shipment in this revenue category in 2010. Parts and service revenues remained flat as increased service revenue offset decreases in parts shipments to the USPS of $0.6 million.

· ~~Truck Accessories~~TAG’s revenues increased $0.9 million, or 0.7%, to $123.1 million for 2011, compared to $122.2 million for 2010. This increase reflects lower sales volume of ~~pickup~~$2.8 ~~truck~~million, offset by price increases of $3.7 million. The volume change was due to decreases in shipments of consumer caps and tonneaus and ~~trailer~~window and door ~~and~~products, ~~window~~partially ~~components;~~offset by increased shipment of commercial specialty products. The price increase was attributable primarily to consumer pickup truck caps and tonneaus.

· Specialty Manufacturing’s ~~sales~~revenues ofincreased ~~manufacturing~~$36.3 million, ~~services~~or 24.4%, to ~~customers~~$184.8 ~~requiring~~million ~~precision~~for ~~machining~~2011, ofcompared ~~metal~~to ~~parts~~$148.5 million ~~and~~for ~~casting~~2010. The ~~services~~increase ~~and~~was ~~specialty~~attributable ~~vehicles,~~to ~~including~~higher ~~funeral~~unit ~~coaches,~~volume ~~buses~~at ~~and~~MIC ~~limousines, contract manufacturing services, packaging~~ and ~~other products~~SVG.

~~Discounts,~~· MIC’s ~~returns~~revenues ~~and~~increased ~~allowances~~$37. ~~Our~~5 ~~gross~~million, ~~revenues~~or ~~are~~41.0%, ~~reduced~~to by$128.9 ~~discounts~~million wefor ~~provide~~2011, compared to ~~customers~~$91.4 ~~and~~million ~~returns~~for ~~and~~2010. This ~~allowances~~increase inreflects ~~the~~higher ~~ordinary~~sales ~~course~~volume of ~~our business~~$36. We8 ~~provide~~million ~~discounts~~and asprice ~~deemed~~increases ~~necessary~~of to$0.7 ~~generate~~million. The ~~sales~~ volume ~~and~~increase ~~remain~~was ~~price~~attributable ~~competitive.~~to ~~Discounts~~increased ~~include~~demand ~~payment~~from ~~term~~oil ~~discounts~~ and ~~discretionary~~gas ~~discounts~~services ~~from~~customers ~~list~~for ~~price~~machined products and assembly services.

~~Cost~~· SVG’s of revenues~~. Cost~~ ofincreased ~~revenue represents the costs directly associated with manufacturing our products and generally varies with the volume of products produced~~$5.3 ~~The components of cost of revenue are materials~~million, ~~labor~~or ~~and overhead including transportation costs~~16. ~~We have experienced significant fluctuations in transportation costs and in the cost of materials~~6%, ~~such~~to ~~as aluminum, steel, fiberglass-reinforced plywood, lumber, fiberglass resin and plastic pellets, over the previous year that have affected our operating profit margins~~$37. ~~However,~~2 ~~increased~~million ~~prices we charge~~ for ~~our~~2011, ~~products~~compared ~~and the cost~~ to ~~transport them mitigated the impact of rising prices on our financial condition and results of operations~~$31.9 ~~The~~million ~~benefit of lower raw material and transportation costs are also mitigated by any decrease in the prices we charge~~ for ~~our products necessary to remain competitive~~2010. WeThe ~~have~~increase ~~entered~~reflects ~~into~~higher ~~supply~~unit ~~contracts~~volume ~~for~~of ~~some~~$4.3 ~~materials~~million atand ~~a fixed~~ price ~~and~~increases ~~in some cases prepurchased bulk quantities~~ of ~~materials~~$1.0 ~~to reduce rising prices as deemed necessary in the current economic environment~~million. WeThe ~~increasingly~~volume ~~source~~increase ~~materials~~was ~~from~~attributable ~~overseas~~ to ~~take~~increased ~~advantage~~market ofshare ~~lower~~from ~~prices. Overhead~~two ~~costs~~new ~~are~~customers, ~~allocated to production based on labor costs and include~~ the ~~depreciation~~largest ~~and~~funeral ~~amortization~~services ~~costs~~providers ~~associated~~in ~~with~~ the ~~assets~~United ~~used~~States ~~in manufacturing including rent associated with manufacturing~~ and ~~indirect labor and other costs~~Canada.

~~Selling~~· EFP’s ~~and~~revenues ~~administrative~~decreased ~~expenses~~$6. ~~Selling~~5 ~~and~~million, ~~administrative~~or ~~expenses~~25.8%, ~~are~~to ~~made~~$18.7 upmillion offor ~~the~~2011, ~~costs~~compared ~~of selling our products and administrative costs related~~ to ~~information~~$25.2 ~~technology,~~million ~~accounting,~~for ~~finance and human resources~~2010. ~~Costs~~The ~~include~~decrease ~~personnel~~was ~~and~~attributable ~~related~~to ~~costs,~~lower ~~including~~unit ~~travel,~~volume ~~equipment~~shipments ~~and~~following ~~facility~~the ~~rent~~Company’s ~~expense~~decision ~~not~~to ~~associated~~exit ~~with~~unprofitable ~~manufacturing~~product ~~activities~~lines, ~~and~~principally ~~professional~~within ~~services~~the ~~such~~recreational asvehicle ~~audit fees. Selling, general~~ and ~~administrative~~construction ~~expenses also include our costs at corporate headquarters to manage and provide support to our operating subsidiaries~~markets.

~~Other income and expense~~Backlog. ~~Income~~Consolidated ~~and~~backlog ~~expenses~~was ~~that~~$232.1 wemillion ~~incur~~as ~~during~~of ~~the~~December 31, ~~year~~2011, ~~that~~compared ~~are nonrecurring in nature and not directly comparable~~ to ~~the~~$165.6 ~~prior~~million ~~year~~as ~~are~~of ~~included~~December 31, in2010, ~~other~~an ~~income~~increase ~~and~~of ~~expense~~$66.5 million, or ~~are separately identified~~40.2%.

~~Year~~· Morgan’s ~~Ended~~backlog at December 31, ~~2010~~2011 ~~Compared~~was ~~with~~$161.9 ~~Year~~million, ~~Ended~~compared to $86.7 million at December 31, ~~2009~~2010, an increase of $75.2 million, or 86.7%. The increase in backlog was primarily due to increases in backlog from retail customers of $49.0 million and fleet customers of $26.2 million.

~~Revenues~~· Morgan Olson’s backlog was $9. ~~Our~~6 ~~consolidated~~million ~~revenues~~at ~~increased~~December 31, 2011, compared to $738.9 million at December 31, 2010, an increase of $0.7 million, or 157.29%,. The increase was due to higher retail orders of $~~553~~8.67 million ~~for~~and ~~2010~~an ~~compared~~increase toin orders from FedEx of $~~480~~0.6 7 million ~~for~~offset ~~2009~~by a decrease in backlog from UPS of $3.6 million.

· ~~Morgan~~TAG’s ~~revenues~~backlog ~~increased~~was $503.53 million, orat ~~34.4%~~December 31, 2011, compared to $~~197~~2.4 7 million ~~for~~at December 31, 2010, ~~compared~~an toincrease of $~~146~~0.96 million, ~~for~~or ~~2009~~22. ~~The increase was attributable to unit sales volume~~2%. ~~The~~Production ~~volume~~consists ~~increase~~primarily ~~was~~of ~~attributable~~ made-to ~~improvement in general economic conditions related to the Class 3~~-7order ~~truck~~units, ~~market~~and ~~positively~~backlog ~~impacting~~reflects ~~demand~~approximately ~~for~~two ~~both~~weeks ~~commercial~~of ~~and consumer-related customers~~production.

· ~~Morgan~~ Specialty ~~Olson~~Manufacturing’s ~~revenues~~backlog ~~increased~~was $2457.23 million, orat ~~39.4%~~December 31, to2011, ~~$85.8 million for 2010~~ compared to $6167.6 3 million ~~for~~at ~~2009. The~~December 31, ~~increase~~2010, ~~reflects~~a ~~higher~~decrease ~~sales~~of ~~volume~~$10.0 ~~with~~million, noor ~~price increases in the period~~14.9%. The ~~volume~~decline ~~increase~~ was ~~due~~attributable to ~~improved~~MIC ~~demand~~exiting ~~for~~unprofitable ~~step~~product ~~vans~~lines ~~from commercial fleet customers, partially offset by lower shipments to retail customers~~ and ~~lower~~increasing ~~part~~its ~~sales~~production throughput.

· MIC’s backlog was $46.5 million at December 31, 2011, compared to $62.1 million at December 31, 2010, a decrease of $15.6 million, or 25.1%.

· SVG’s backlog was $10.8 million at December 31, 2011, compared to $5.2 million at December 31, 2010, an increase of $5.6 million, or 107.7%. The backlog increase was primarily attributed to new customers and increased market share.

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· ~~Truck~~ EFP ~~Accessories’~~maintains ~~revenues~~a ~~increased~~minimal ~~$8.3~~backlog ~~million,~~and ordoes ~~7.2%,~~not tocalculate ~~$123.9~~it ~~million~~as ~~for~~a ~~2010~~matter ~~compared to $115.6 million for 2009. This increase reflects higher sales volume~~ of $3practice.5 million (3.0%) and price increases of $4.8 million (4.1%). The volume increase was due to improvement in demand for truck caps and tonneaus attributable to improvement in demand for pickup trucks in the United States and Canada.

~~· Specialty~~Gross ~~Manufacturing’s~~profit. Gross ~~revenues~~profit ~~decreased~~increased by $928.5 7 million, or 640.0%, to $~~148~~100.4 million for ~~2010~~2011, compared to $~~157~~71.97 million for ~~2009. This~~2010; ~~decrease~~gross ~~reflects~~margin ~~lower~~improved ~~sales~~to ~~volume of $3~~14.~~6 million (~~2.3%) ~~and~~in ~~price~~2011, ~~decreases~~compared ofto $512.9% ~~million~~in (32010.~~7%).~~ The ~~price~~increase ~~decrease~~in ~~was~~gross ~~primarily~~profit ~~attributable~~reflects toincreased ~~price~~sales ~~declines~~volume, inwhile ~~oil~~the ~~and~~improvement ~~gas~~in ~~machined~~gross ~~products~~margin atis ~~MIC. The~~attributable ~~volume~~to ~~decrease~~increased isabsorption ~~primarily~~of ~~attributable~~overhead toon ~~the~~increased ~~Specialty~~sales, ~~Vehicle~~operational ~~Group’s~~improvements ~~exit~~related ~~from~~to the ~~specialty~~continuing ~~transit~~implementation ~~bus~~of ~~business~~lean attechniques ~~the~~and ~~end~~improved ofprocurement ~~2009~~activities.

~~Backlog. Consolidated~~· Morgan ~~backlog~~generated ~~was~~gross profit and gross margin of $~~165~~37.67 million asand of12.7%, ~~December 31~~respectively, ~~2010~~for 2011, compared to $~~149~~22.96 million asand ~~of December 31~~11.4%, ~~2009~~respectively, anfor 2010. The increase ofin ~~$15~~gross profit was due to increased sales and margin improvement.7 The ~~million~~margin orimprovement 10was attributable to proactive pricing actions negating the impact of higher commodity costs associated with steel and aluminum-based materials and higher absorption of overhead on increased sales.~~5%.~~

· Morgan’s ~~backlog~~Olson atgenerated ~~December 31,~~gross ~~2010~~profit ~~was~~and ~~$86.7~~gross ~~million~~margin ~~compared~~of to $7311.1 8 million atand ~~December 31~~11.4%, ~~2009~~respectively, anfor ~~increase~~2011, ofcompared to $1310.62 million orand 1812.60%, respectively, for 2010. The increase in ~~backlog~~gross profit was ~~primarily~~directly ~~due~~related to ~~commercial~~the ~~rental~~increase ~~orders~~in ofsales ~~$32~~volume.9 The ~~million~~decrease ~~compared~~in gross margin was attributable to ~~$22.5~~a ~~million~~higher mix of lower-margin fleet business and an increase in staffing in engineering and operations personnel, partially offset by the ~~prior~~impact ~~year~~of higher volume on fixed overhead expenses.

· ~~Morgan~~TAG ~~Olson’s~~generated ~~backlog~~gross ~~was~~profit and gross margin of $823.95 million atand ~~December 31~~19.1%, ~~2010~~respectively, for 2011, compared to $3824.1 9 million atand ~~December 31~~20.4%, ~~2009~~respectively, afor 2010. The decrease ofin ~~$29.2~~gross ~~million~~profit orand ~~76.6%. The~~gross ~~decrease~~profit margin was due to ~~the~~expenses ~~timing~~associated ofwith ~~fleet~~a ~~orders~~lean ofimprovement ~~$15.4~~project ~~million~~at ~~and~~the ~~two~~Midwest ~~large~~plant, ~~retail~~start-up ~~orders~~costs ofrelated ~~$12.6~~to ~~million~~new ~~received~~product atintroductions, increased distribution costs and the ~~end~~implementation of ~~2009~~a ~~that~~tariff ~~were~~increase ~~not~~on ~~replicated~~a atkey ~~the~~raw ~~end~~material, ofpartially ~~2010~~offset by product price increases.

· ~~Truck~~Specialty ~~Accessories’~~Manufacturing ~~backlog~~generated ~~was~~gross profit and gross margin of $227.74 million atand ~~December 31~~14.8%, ~~2010~~respectively, for 2011, compared to $214.6 0 million asand ~~of December 31~~9.4%, ~~2009~~respectively, anfor 2010. This increase ofwas ~~$0.1~~attributable ~~million~~to orthe ~~3.8%.~~following:

· ~~Specialty~~ MIC ~~Manufacturing’s~~generated ~~backlog~~gross ~~was~~profit and gross margin of $6717.37 million atand ~~December 31~~13.8%, ~~2010~~respectively, for 2011, compared to $366.1 6 million atand ~~December 31~~7.2%, ~~2009~~respectively, anfor 2010. The increase ofin ~~$31.2~~gross ~~million~~profit orand ~~86.4%. The~~gross ~~backlog~~margin ofwas ~~machining~~primarily ~~services~~due ~~increased~~to ~~$36.4~~product ~~million~~price ~~over~~increases ~~last~~and ~~year~~decreased asmaterial ~~demand~~costs; ~~from~~it ~~customers~~was inpartially ~~the~~offset ~~energy~~by ~~services~~increases ~~industry~~in ~~increased~~labor and overhead.

~~Gross~~· SVG ~~profit. Gross~~generated gross profit ~~increased~~and bygross margin of $116.2 million, orand 1816.56%, torespectively, ~~$71.7 million~~ for ~~2010~~2011, compared to $603.5 2 million ~~for 2009,~~ and ~~as a percentage of revenues improved to 12~~10.91%, inrespectively, ~~2010~~for ~~compared to 12~~2010.~~6% in 2009.~~ The increase in gross profit ~~primarily~~and ~~reflects~~gross ~~operational~~margin ~~improvements~~was primarily attributable to the ~~continuing~~closure ~~implementation~~ of ~~lean~~the ~~techniques~~Fort ~~and improved procurement activities at Morgan~~Smith, ~~Morgan~~Arkansas ~~Olson~~facility ~~and Truck Accessories offset by operational inefficiencies and a significantly underpriced contract undertaken by MIC~~ in 2010.

~~Selling~~· EFP ~~and~~generated ~~administrative~~gross ~~expenses. Our~~profit ~~consolidated selling~~ and ~~administrative~~gross ~~expenses~~margin ~~increased~~of $43.75 million, orand 918.75%, torespectively, ~~$53.7 million~~ for ~~2010~~2011, compared to $494.02 million and 16.6%, respectively, for ~~2009~~2010. ~~This~~The ~~increase~~decrease ~~reflects~~in ~~the~~gross ~~additions~~profit ofwas ~~key~~attributable ~~personnel~~to at the ~~Parent,~~decrease ~~increased~~in ~~amortization~~sales ofwhile ~~previously~~the ~~capitalized~~increase ~~software~~in ~~cost~~gross ~~and~~margin ~~increased~~was ~~benefits~~due ~~costs. As~~to athe ~~percentage~~improved ofproduct ~~revenues,~~mix ~~selling~~resulting ~~and~~from ~~administrative~~the ~~expenses~~elimination ~~improved to 9.7%~~ of ~~revenues~~the inunprofitable ~~2010~~recreational ~~compared~~vehicle toand ~~10.2%~~construction inproduct ~~2009~~lines; ~~due~~it towas ~~the leverage of higher revenues and cost reductions~~ partially offset by ~~cost~~the ~~increases~~loss atof ~~the~~volume ~~Parent~~leverage.

~~Closed~~Selling and ~~excess~~administrative ~~facility costs~~expenses. Our ~~Specialty~~consolidated ~~Manufacturing~~selling ~~completed~~and ~~the~~administrative ~~closure~~expenses ofincreased ~~its~~$4.8 ~~facility~~million, inor ~~Fort Smith~~9.0%, ~~Arkansas~~to at$58.5 amillion ~~cost~~for of2011, compared to $053.97 million for 2010. AnThe ~~additional~~increase $0is due to increased variable selling expenses associated with higher revenue volume.1 As ~~million~~a percentage of ~~noncash~~revenues, ~~charges~~selling ~~related~~and toadministrative ~~the~~expenses ~~2009~~improved ~~closure~~to 8.3% of ~~Specialty~~revenues ~~Manufacturing’s~~in ~~Milwaukee~~2011, ~~Wisconsin~~compared ~~facility~~to ~~was~~9.7% ~~recorded~~ in 2010, due to the impact of higher revenues and cost reductions, partially offset by increased management incentive expenses attributable to improved financial performance.

~~Loss~~· Morgan ~~(gain)~~incurred onselling ~~sale~~and ~~lease-back~~administrative expenses of ~~real~~$16.3 ~~estate: During 2010~~million, ~~Poindexter~~or ~~Properties,~~5.5% ~~LLC purchased six~~ of ~~our~~its ~~real~~revenues, ~~estate~~for ~~properties~~2011, ~~and~~compared isto ~~leasing~~$13.9 ~~the~~million, ~~properties~~or ~~back to us~~7. ~~Three~~1% of ~~the~~its ~~six~~revenues, ~~properties included in the transaction were sold~~ for an2010. The ~~aggregated~~increase ~~loss~~in ofspending ~~$2.8~~was ~~million~~primarily asattributable ~~the~~to ~~sale~~additional ~~prices~~sales personnel, ~~based~~and onmarketing ~~appraised~~support ~~values~~costs, ~~were~~and ~~less~~increased ~~than~~sales ~~the~~commissions ~~book~~corresponding ~~values~~to ofhigher ~~the~~sales ~~assets~~volume. The ~~loss~~reduction ~~was~~in ~~recognized~~selling atand ~~the~~administrative ~~time~~expenses ofas ~~the~~a ~~transaction. The~~percentage ~~remaining~~of ~~three~~sales ~~properties~~was ~~were~~due ~~sold~~to ~~for~~the animpact ~~aggregated gain~~ of ~~$3.6~~higher ~~million. The~~volume ~~gain~~on ofsemi-fixed ~~$3.6~~administrative ~~million has been deferred and will be~~ expenses.

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~~recognized~~· Morgan asOlson ~~income~~incurred ~~over~~selling ~~the~~and ~~life~~administrative expenses of ~~the~~$5.7 ~~leases~~million, or 5. ~~During~~5% ~~the~~of ~~years~~its ~~ended~~revenues, ~~December 31~~for 2011, ~~2010~~compared ~~and~~to ~~2009~~$5.1 million, ~~the~~or ~~Company~~6.0% ~~recognized~~of $0its revenues, for 2010.3 This ~~million~~increase aswas ~~income~~caused onprimarily ~~the~~by ~~deferred~~higher ~~gain~~managerial ofincentives $1due to improved performance and hiring-related expenses associated with labor force additions required to process increased production requirements.9 ~~million~~The ~~originating~~reduction ~~from~~in selling and administrative expenses as a ~~2008~~percentage ~~sale~~of ~~lease-back~~sales ~~arrangement~~was ~~with~~due ~~Poindexter~~to ~~Properties,~~the ~~LLC~~impact of higher volume on semi-fixed administrative expenses.

~~Gain~~· TAG onincurred ~~repurchase~~selling and administrative expenses of 8$12.~~75%~~5 ~~Notes.~~million, ~~During~~or ~~the~~10.2% ~~year~~of ~~ended~~its ~~December 31~~revenues, ~~2009~~for 2011, ~~the~~compared ~~Company~~to ~~purchased~~ $012.40 million, or 9.8% of its 8revenues, for 2010.~~75%~~ These ~~Notes~~increases onwere the ~~open~~result ~~market~~of ~~and~~activities ~~recognized~~associated awith ~~gain~~low-cost country sourcing, the start-up of ~~$0.2~~TAG ~~million~~Specialty Products and increases in workers’ compensation expense.

~~Other~~· Specialty ~~expense~~Manufacturing ~~(income). Other~~incurred ~~expense~~selling and administrative expenses of $015.16 million, inor ~~2010~~8.4% ~~consisted~~ of ~~various~~its ~~nonrecurring~~revenues, ~~charges. In~~for ~~2009~~2011, ~~other~~compared ~~expense was primarily attributable~~ to ~~the~~$14.8 ~~loss~~million, onor ~~the~~10.0% ~~sale~~ of ~~the~~its ~~specialized~~revenues, ~~transit~~for ~~bus business by Specialty Vehicle Group~~2010.

~~Operating~~· MIC ~~income. Operating~~incurred ~~income~~selling ~~increased~~and administrative expenses of $310.57 million, or 328.3%, toof ~~$14.4~~its ~~million~~revenues, infor ~~2010~~2011, compared to $~~10.~~9.3 million, inor ~~2009,~~10.1% ~~and~~of asits arevenues, ~~percentage~~for of2010. The ~~revenues~~increase ~~improved~~was attributable to ~~2.6%~~higher ininformation ~~2010~~technology ~~compared~~support tocosts, ~~2.3%~~depreciation inof ~~2009~~enterprise resource planning software costs, and increased variable selling expenses. ~~Operating~~The ~~income~~decrease in ~~2010~~selling ~~reflects~~and ~~charges~~administrative expense as a percentage of ~~$1.0~~sales ~~million~~was ~~for~~due ~~facility~~to ~~closure~~the ~~expense~~impact ~~associated~~of ~~with~~higher ~~Specialty~~volume ~~Manufacturing’s~~on ~~plant~~semi-fixed ~~closure~~administrative ~~activities~~expenses.

· ~~Morgan’s~~ SVG ~~operating~~incurred ~~income~~selling ~~increased~~and byadministrative expenses of $72.4 6 million, or ~~644~~7.0% of its revenues, for 2011, compared to $82.6 million, inor ~~2010~~8.1% ~~compared~~of toits $1revenues, for 2010.2 ~~million~~The decrease in ~~2009,~~selling and admistiratev3e expense as a percentage of ~~revenues~~sales ~~improved~~was todue ~~4.4% in 2010 compared~~ to ~~0.7%~~reduced ~~in 2009~~headcount. The ~~increase~~decrease in ~~operating~~selling ~~income~~ and ~~operating~~administrative ~~income~~expense as a percentage of ~~revenues~~sales iswas ~~primarily~~due ~~attributable~~ to ~~operational~~the ~~improvements~~impact ~~including~~of ~~labor~~higher ~~efficiency,~~volume ~~material~~on ~~procurement~~semi-fixed ~~and expense controls in manufacturing overhead, and selling and~~ administrative expenses.

· ~~Morgan~~ EFP ~~Olson’s~~incurred ~~operating~~selling ~~income~~and ~~increased~~administrative byexpenses of $2.53 million, or 9612.3%, toof ~~$5.1~~its ~~million~~revenues, infor ~~2010~~2011, compared to $2.69 million ~~in 2009~~, ~~and~~or as11.6% ~~a percentage~~ of its revenues, ~~improved~~for ~~to 5~~2010.9% The indecrease ~~2010~~was ~~compared~~due primarily to ~~4.2%~~reduced invariable ~~2009~~selling expenses. The increase in ~~operating~~selling ~~income~~ and ~~operating~~administrative ~~income~~expense as a percentage of ~~revenue~~sales iswas ~~primarily~~due ~~attributable~~ to ~~operational~~the ~~improvements~~impact ~~including~~of ~~labor~~lower ~~efficiency,~~volume ~~material~~on ~~procurement~~semi-fixed ~~and expense controls in manufacturing overhead, and selling and~~ administrative expenses.

· ~~Truck~~The ~~Accessories’~~Parent ~~operating~~incurred ~~income~~selling ~~increased~~and byadministrative ~~$4.8 million,~~expenses orof ~~61%, to~~ $128.7 4 million infor ~~2010~~2011, compared to $7.9 million infor ~~2009, and as a percentage of revenues improved to 10.2% in~~ 2010 ~~compared to 6~~.8% ~~in 2009.~~ The increase inwas ~~operating~~mainly ~~income and operating income as a percentage of revenues is primarily~~ attributable to ~~operational~~increased ~~improvements~~amortization ~~including~~of ~~labor~~previously ~~efficiency,~~capitalized ~~material~~software ~~procurement and expense controls in manufacturing overhead, and selling and administrative expenses~~costs.

~~· Specialty~~Closed ~~Manufacturing incurred an operating loss of $1.8 million~~ and ~~operating~~excess ~~margins~~facility ~~of negative 1~~costs.2% Specialty inManufacturing ~~2010~~completed ~~compared~~the toclosure ~~operating income~~ of ~~$2.9~~its ~~million~~facility ~~and operating margin of 1.9%~~ in ~~2009. The~~Fort ~~decline in year-over-year performance was primarily attributable to MIC. In 2010~~Smith, ~~MIC~~Arkansas ~~undertook~~at a ~~new~~cost contract which was significantly underpriced and poorly managed. This contract, in addition to operational inefficiencies and management deficiencies at MIC and the Specialty Vehicle Group plant closing costs of $1.0.9 million, ~~was responsible for the majority of the decline~~ in ~~Specialty Manufacturing’s operating income~~2010.

~~· Corporate~~Loss ~~Parent~~(gain) ~~expenses~~on ~~increased~~sale/lease-back ~~$6.6~~of ~~million~~real toestate: During ~~$10.2~~2011, ~~million~~Poindexter ~~for~~Properties, ~~2010~~LLC, ~~compared~~which ~~to $3.6 million for 2009. The increase~~ is ~~primarily~~controlled ~~attributable~~by toJohn ~~additions~~Poindexter ofpurchased two ~~key~~real ~~executive~~estate ~~personnel,~~properties ~~including~~and ~~our~~leased ~~Chief~~the ~~Operating~~properties ~~Officer,~~back ~~Vice~~to ~~President~~the ofCompany. The ~~International~~properties ~~Business~~were ~~Development~~sold ~~and~~at ~~Vice~~appraised ~~President~~values of ~~Operational~~$2.1 ~~Improvement~~million, ~~increased~~which ~~depreciation~~resulted ofin ~~prior~~an ~~years’~~aggregate ~~capitalized~~loss ~~enterprise resource planning costs, and the recognition~~ of a $21.86 million. This loss onwas ~~sale~~recognized ofat ~~real estate related to~~ the ~~2010 sale lease-back arrangement with Poindexter Properties~~Parent, ~~LLC~~as ~~offset~~was bythe ~~$0.3~~amortization ~~million recognition~~ of ~~deferred~~gains ~~gain~~ of $10.95 million ~~originating~~ from ~~the~~prior ~~2008~~year sale ~~lease~~-~~back arrangement with Poindexter Properties, LLC~~leasebacks.

~~Interest~~During ~~expense~~2010, ~~(income)~~Poindexter Properties, LLC purchased six real estate properties and leased those properties back to the Company. ~~Interest~~Three ~~expense~~properties ~~decreased~~were ~~$0.3~~sold ~~million,~~for oran ~~1.6%,~~aggregated togain of $173.96 million. The (3gain has been deferred and will be recognized as income over the life of the fifteen year leases.2% Three of ~~revenues)~~the six properties included in the transaction were sold for ~~2010~~an ~~compared~~aggregated toloss of $~~18.~~2 ~~million (3~~.8% ofmillion. The ~~revenues)~~entire ~~for~~loss ~~2009. Interest~~was ~~income~~recognized at the Parent in 2010 as was the amortization of gains of $0.13 million ~~and~~from $0prior year sale-leasebacks.2 Please ~~million~~refer ~~for~~to ~~2010~~Note ~~and~~16 ~~2009~~of our financial statements, ~~respectively~~included herein, for a more detailed description of related-party transactions.

Loss on repurchase of 8.75% Notes. During the year ended December 31, 2011, the Company purchased $39.5 million of its 8.75% Notes on the open market and recognized a loss of $0.2 million.

Other expense (income). For 2011, other expense of $0.5 million consisted of expenses incurred for a proposed bond issuance which was not completed during the year. In 2010, other expense of $0.1 million consisted of various nonrecurring charges.

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~~Income~~Operating ~~tax provision (benefit)~~income. ~~The~~Operating ~~effective~~ income ~~tax~~increased ~~provision~~$25.8 ~~(benefit)~~million, ~~rate~~or ~~was 42~~179.6%, ~~and~~to ~~31%~~$40.2 ofmillion ~~income before income taxes~~ for ~~2010~~2011, ~~and~~compared ~~2009,~~to ~~respectively~~$14. ~~The~~4 ~~income~~million ~~tax provision~~ for 2010; ~~differs from amounts computed based on the federal statutory rate~~ as a ~~result~~percentage of ~~state~~revenues, ~~and~~it ~~foreign~~increased ~~taxes~~to 5.7% in ~~certain tax jurisdictions~~2011, ~~research~~compared ~~and~~to ~~development~~2.6% ~~credits, and releases of reserves~~ for ~~uncertain~~2010. Operating ~~tax~~income ~~positions~~in ~~due~~2010 toreflects ~~expiration~~charges of ~~statutes and settlements~~$1.0 ~~The~~million ~~income tax benefit~~ for ~~2009 differs from amounts computed based on the federal statutory rate largely as~~ a ~~result~~facility ofclosure ~~state taxes in certain tax jurisdictions~~expense.

~~Year~~· Morgan’s ~~Ended~~operating ~~December~~income increased by $12.7 31million, ~~2009~~or ~~Compared~~147.7%, ~~with~~to ~~Year~~$21.3 million ~~Ended~~for ~~December 31~~2011, ~~2008~~compared to $8.6 million for 2010; as a percentage of revenues, it increased to 7.2% for 2011, compared to 4.4% for 2010. The increase in operating income and operating income as a percentage of revenues was attributable primarily to improved revenues, pricing actions, operational improvements and the impact of higher volume on fixed expenses.

~~Revenues. Our~~· Morgan ~~consolidated~~Olson’s ~~revenues~~operating ~~decreased~~income increased by $~~225~~1.80 million, or 3219.08%, to $~~480.~~6.1 million for ~~2009~~2011, compared to $~~706~~5.4 1 million for ~~2008~~2010; as a percentage of revenues, it remained flat with 2010 at 5.9%. The increase in operating income was due to increased revenue, and operating income as a percentage of revenue remained flat primarily due to increased fixed expenses.

· ~~Morgan~~TAG’s ~~revenues~~operating income decreased by $871.07 million, or 3713.24%, to $~~146~~11.9 0 million for ~~2009~~2011, compared to $~~233~~12.97 million for ~~2008.~~2010; ~~This~~as ~~decrease~~a ~~reflects~~percentage ~~lower~~of ~~volume~~revenues, ofit ~~$84.7~~decreased ~~million~~to ~~(36~~8.29%) ~~and~~for ~~price~~2011, ~~decreases~~compared ofto $210.34% ~~million~~for (12010.~~0%).~~ ~~General~~The ~~economic~~decrease ~~conditions~~in ~~continued~~operating income was due to ~~deteriorate~~the aforementioned reduction in ~~2009~~gross ~~evidenced~~margins byand ~~lower~~increased ~~demand~~selling ~~for~~and ~~Class 3-7~~administrative ~~truck~~expenses, ~~bodies~~partially onoffset ~~already~~by ~~depressed~~price ~~levels~~increases.

· ~~Morgan~~Specialty ~~Olson~~Manufacturing’s ~~revenues~~operating ~~decreased~~income ~~$42.8~~increased ~~million,~~by ~~or 41.0%, to~~ $6113.6 million, ~~for 2009 compared~~ to $~~104~~11.4 8 million for ~~2008. The decrease reflects lower volume with no price increases in the period. Step van sales declined $33.6 million~~2011, orcompared ~~43.0%, on a 48.4% decrease in unit shipments for 2009. Step van sales~~ to ~~customers~~an ~~with~~operating ~~large~~loss ~~fleets~~ of ~~vehicles were down~~ $331.48 million, ~~or 63.8%, compared to the prior year. Service parts sales~~ and ~~delivery~~operating ~~income~~margins ~~decreased~~of $91.2% ~~million~~for ~~due mainly to a one-time service parts purchase of $5~~2010.~~5 million by the United States Postal Service in the prior period and decreased delivery income on lower service parts sales.~~

· ~~Truck Accessories~~ MIC’s ~~revenues~~operating ~~decreased~~income increased $169.37 million, ~~or 12.3%,~~ to $~~115~~7.61 million for ~~2009~~2011, compared to ($~~131~~2.96 million) for ~~2008. This~~2010; ~~decrease~~as ~~reflects~~a ~~lower~~percentage ~~volume~~ of ~~$18.7~~revenues, ~~million~~operating ~~(14.2%)~~income ~~and~~increased ~~price~~to ~~increases of $2~~5.4% ~~million~~for 2011, from (12.89%) for 2010. ~~This~~The ~~decrease~~improvement isin ~~primarily~~operating ~~attributable~~income towas ~~lower~~due ~~sales~~primarily ofto ~~pickup~~increased ~~trucks~~revenues, inimproved ~~the~~pricing, ~~United~~labor ~~States~~efficiencies and ~~Canada~~procurement ~~due~~initiatives; toit ~~deteriorating~~was ~~economic~~partially ~~conditions~~offset by losses incurred in ~~2009~~fulfilling unprofitable or low-margin contracts.

· ~~Specialty Manufacturing~~ SVG’s ~~revenues~~operating ~~decreased~~income byincreased $803.4 8 million, ~~or 33.7%,~~ to $~~157~~3.95 million for ~~2009~~2011, compared to ($~~238~~0.3 million) for ~~2008. This~~2010; ~~decrease~~as ~~reflects~~a ~~lower~~percentage ~~volume~~ of ~~$52.6~~revenues, ~~million~~operating ~~(22.1%)~~income ~~and~~increased ~~price~~to ~~decreases~~9.5% offor ~~$27.8~~2011, ~~million~~from (110.79%)~~. This~~ ~~decrease~~for ~~in volume was primarily attributable to the deterioration of general economic conditions and declining oil prices~~2010. The ~~decrease~~increase in ~~price~~operating ~~was~~income ~~primarily attributable to price decrease at MIC driven by large oil~~ and ~~gas~~margin ~~equipment~~mainly ~~suppliers~~reflects ~~imposing~~the ~~industrywide~~impact ~~price~~of ~~concessions on suppliers in response to steep declines to~~ the ~~price~~closure of ~~oil~~the inFort ~~2009~~Smith, ~~compared~~Arkansas ~~to 2008~~facility.

~~Backlog. Consolidated~~· EFP’s ~~backlog~~operating income was $~~149~~1.92 million for both 2011 and 2010, and as a percentage of ~~December 31~~revenues, ~~2009~~operating ~~compared~~income increased to ~~$149~~6.24% ~~million~~for 2011, from 4.7% for 2010. The increase in operating income as a percentage of ~~December 31~~revenues was due primarily to exiting unprofitable product lines, ~~2008~~partially offset by decreases in revenue and the impact of a reduction on fixed expenses.

· ~~Morgan~~ The Parent’s ~~backlog~~overall atexpenses ~~December 31,~~decreased ~~2009~~$0.2 ~~was~~million to $7310.10 million for 2011, compared to $4710.6 2 million atfor ~~December 31~~2010. The decrease is attributable to a reduced loss on real estate sale/lease-back partially offset by bond issuance expenses, ~~2008~~increased amortization of previously capitalized software costs and higher management incentive expenses. Other ~~The~~expenses ~~increase~~included in ~~backlog~~the ~~was~~Parent ~~due~~segment toinclude ~~commercial~~a ~~rental~~net ~~orders~~loss ofon ~~$22~~real estate sale/lease-back transactions and bond issuance expenses.5 ~~million~~Please ~~compared~~refer to ~~$0.1~~Notes ~~million~~6 inand ~~the~~16 ~~prior~~of ~~year~~our Financial Statements, included herein, for a more detailed description of these items.

~~· Morgan~~Interest ~~Olson’s~~expense ~~backlog~~(income). Interest expense was $3817.19 million at(2.5% ~~December 31,~~of ~~2009~~revenues) ~~compared~~for to2011 and $1817.29 million at(3.2% ~~December 31,~~of ~~2008~~revenues) for 2010. ~~The~~Interest ~~increase~~income was ~~due~~$0.1 ~~primarily~~million tofor ~~two~~2011 ~~retail~~and ~~orders of $12~~2010.~~6 million.~~

~~· Truck~~Income ~~Accessories’~~tax ~~backlog~~provision of(benefit). The ~~approximately~~effective ~~two~~income ~~weeks~~tax ofprovision ~~production~~(benefit) rate was ~~$2.6~~34% ~~million~~and at42% ~~December 31~~of income before income taxes for 2011 and 2010, ~~2009~~respectively. The ~~compared~~decrease in the effective income tax rate is due to $2the current year benefit of foreign losses and the reversal of foreign valuation allowances.~~2 million~~ The income tax provision for 2011 and 2010 differs from amounts computed based on the federal statutory rate as a result of ~~December 31~~state and foreign taxes in certain tax jurisdictions, ~~2008~~research and development credits, and releases of reserves for uncertain tax positions due to expiration of statutes.

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~~· Specialty~~Year ~~Manufacturing’s~~Ended ~~backlog at~~ December 31, ~~2009~~2010, ~~decreased~~Compared ~~$45.2~~with ~~million~~Year toEnded ~~$36.1 million compared to $81.3 million at~~ December 31, ~~2008. The backlog of machining services decreased $46.8 million over the prior year as demand from customers in the energy services industry continued to decline.~~2009

~~Gross Profit~~Revenues. ~~Gross~~Our ~~profit~~consolidated ~~decreased~~revenues byincreased $3573.10 million, or 3615.72%, to $60553.5 6 million infor ~~2009~~2010, compared to $95480.6 million for ~~2008, and as a percentage of revenues decreased to 12.6% in~~ 2009 ~~compared to 13~~.5% in 2008. The decrease in gross profit primarily reflects the volume declines discussed above. The decrease in gross profit percent is attributable to the loss of volume leverage and price reductions at MIC.

~~Selling~~· Morgan’s ~~and~~revenues ~~administrative~~increased ~~expenses. Our consolidated selling and administrative expenses decreased~~ $1750.38 million, or 2634.17%, to $49197.03 million for ~~2009~~2010, compared to $66146.35 million for ~~2008,~~2009. The ~~and~~increase aswas aattributable ~~percentage of revenues increased~~ to ~~10.2%~~growth in ~~2009~~unit ~~compared~~sales ~~to 9~~volume.~~4% in 2008.~~ The ~~decrease~~volume inincrease ~~selling and administrative expenses~~ was ~~primarily~~due ~~attributable~~ to ~~the~~improvement ~~reduction~~ in ~~headcount~~general ~~and~~economic ~~management~~conditions ~~incentives. The increase~~ in ~~selling~~the ~~and~~Class 5-7 ~~administrative~~truck ~~expenses~~market, aswhich apositively ~~percent~~impacted ofdemand ~~revenue~~for ~~was~~both ~~attributable~~commercial toand ~~the~~retail ~~loss of volume leverage~~customers.

~~Closed~~· Morgan ~~and~~Olson’s ~~excess~~revenues ~~facility~~increased ~~costs~~$24.3 ~~Specialty~~million, ~~Manufacturing~~or ~~completed~~39.6%, ~~the~~to ~~closure~~$85.6 ofmillion ~~its~~for ~~facility~~2010, incompared ~~Milwaukee,~~to ~~Wisconsin~~$61.3 inmillion for 2009. The atincrease areflects ~~cost~~higher ofsales $0volume with no price increases in the period.6 The ~~million~~volume increase was due to improved demand for step vans from commercial fleet customers; the revenue increases were partially offset by lower shipments to retail customers and lower part sales.

~~Loss~~· TAG’s ~~(gain)~~revenues onincreased ~~sale~~$7.3 ~~lease-back~~million, ofor ~~real~~6.4%, ~~estate: We~~to ~~recognized~~$122.2 million for 2010, compared to $0114.39 million asfor ~~income~~2009. The onincrease ~~the~~reflects ~~deferred~~higher ~~gain~~sales volume of $13.95 million, ~~resulting~~or ~~from~~3.0%, ~~the~~and ~~sale~~price increases of ~~three~~$4.8 ofmillion, ~~our~~or ~~manufacturing~~4.1%. The ~~properties~~volume increase was due to ~~Poindexter~~improved ~~Properties,~~demand ~~LLC~~for truck caps and tonneaus, anattributable ~~entity~~to ~~owned~~the byincrease ~~our~~in ~~sole~~demand ~~shareholder,~~for pickup trucks in ~~2008~~the United States and Canada.

~~Gain~~· Specialty onManufacturing’s ~~repurchase~~revenues ofdecreased 8$9.~~75%~~4 ~~Notes~~million, or 6.0%, ~~During~~to ~~the~~$148.5 ~~year~~million ~~ended~~for ~~December 31~~2010, ~~2009,~~compared ~~the~~to ~~Company purchased~~ $0157.49 million offor ~~its 8~~2009.~~75%~~ The ~~Notes~~decrease onreflects ~~the~~lower ~~open~~sales ~~market~~volume ~~and~~of ~~recognized~~$3.6 amillion, ~~gain~~or 2.3%, and price decreases of $05.29 million, or 3.7%.

~~Other~~· MIC’s ~~expense~~revenues ~~(income)~~decreased $1. ~~The~~5 ~~sale~~million, ofor ~~the~~1.6%, ~~Specialty~~to ~~Vehicle~~$91.4 ~~Group~~million ~~specialized~~for ~~transit~~2010, ~~bus~~compared ~~business~~to ~~was responsible for a~~ $092.69 million ~~loss~~for 2009. The ~~allocation~~decrease ofwas ~~goodwill~~driven ~~associated~~by ~~with~~large ~~the~~oil ~~bus~~and ~~business~~gas ~~accounted~~equipment ~~for~~suppliers ~~$0.5~~imposing ~~million~~industrywide ofprice ~~the~~concessions ~~loss. Specialty~~on ~~Manufacturing’s~~suppliers ~~machining~~in ~~business~~response ~~recognized~~to ~~$0.2~~steep ~~million~~oil ~~from~~price ~~the~~declines ~~sale~~in ~~of assets~~2009.

~~Operating~~· SVG’s ~~income. Operating~~revenues ~~income~~ decreased $1811.80 million, or 6325.46%, to $1031.9 million infor ~~2009~~2010, compared to $2942.79 million infor ~~2008, and as a percentage of revenues decreased to 2.3% in~~ 2009 ~~compared to 4~~.~~2% in 2008.~~ The decrease ~~in operating income~~ was ~~primarily~~due ~~attributable~~ to ~~lower~~the ~~revenues~~Company’s ~~brought~~divestiture ~~on by deteriorating economic conditions. The decrease in operating income as a percentage~~ of ~~sales~~its ~~was~~specialized ~~primarily~~transit ~~attributable~~bus ~~to reduced sales and price decreases at MIC~~business.

· ~~Morgan~~ EFP’s ~~operating~~revenues ~~income~~increased ~~decreased by~~ $23.9 1 million, or 7214.50%, to $125.1 2 million infor ~~2009~~2010, compared to $422.0 1 million infor ~~2008, and as a percentage of revenues decreased to 0.8% in~~ 2009 ~~compared to 1~~.~~7% in 2008.~~ The ~~decline~~increase ~~in operating income~~ was ~~primarily~~driven ~~attributable to the reduction in revenues caused~~ by ~~deteriorating~~increases ~~economic conditions~~ in ~~the~~shape ~~Class 3-7~~molding ~~truck market. The decrease in operating income as a percentage of revenues was attributable to reduced sales~~ and ~~declining~~special ~~prices~~foam demand.

~~· Morgan Olson’s operating income decreased by $2~~Backlog.8 Consolidated ~~million,~~backlog orwas ~~52.6%, to~~ $2165.6 million inat ~~2009~~December 31, 2010, compared to $5149.49 million inat ~~2008~~December 31, ~~and~~2009, asan aincrease ~~percentage~~ of ~~revenues decreased to 4~~$15.2%7 inmillion, ~~2009~~or ~~compared to 5~~10.25% ~~in 2008~~. The decrease in operating income and operating income as a percentage to revenues was primarily attributable to reduced sales due to lower demand for Class 3-7 trucks attributable to deteriorating economic conditions.

· ~~Truck Accessories~~Morgan’s ~~operating~~backlog ~~income~~was ~~increased by~~ $586.4 7 million, orat ~~226.2%~~December 31, to2010, ~~$7.8 million in 2009~~ compared to $273.41 million inat ~~2008~~December 31, ~~and~~2009, asan aincrease ~~percentage~~ of ~~revenues increased to 6~~$13.8%6 inmillion, ~~2009~~or ~~compared to 1~~18.86% ~~in 2008~~. The increase in ~~operating~~backlog ~~income~~was ~~and~~due ~~operating~~to ~~income~~commercial asrental aorders ~~percent~~ of ~~revenues~~$32.9 ~~was~~million, ~~primarily~~compared ~~attributable~~ to ~~operational~~$22.5 ~~improvements~~million ~~and~~the ~~price~~prior ~~increases partially offset by reduced sales~~year.

· Morgan Olson’s backlog was $8.9 million at December 31, 2010, compared to $38.1 million at December 31, 2009, a decrease of $29.2 million, or 76.6%. The decrease was due to the timing of fleet orders of $15.4 million and two large retail orders of $12.6 million received at the end of 2009 that were not replicated at the end of 2010.

· TAG’s backlog was $2.7 million at December 31, 2010, compared to $2.6 million at December 31, 2009, an increase of $0.1 million, or 3.8%.

· Specialty Manufacturing’s backlog was $67.3 million at December 31, 2010, compared to $36.1 million at December 31, 2009, an increase of $31.2 million, or 86.4%.

· MIC’s backlog was $62.1 million at December 31, 2010, compared to $27.5 million at December 31, 2009, an increase of $34.6 million, or 125.8%. The increase in backlog was due to increased demand from MIC’s oil and gas services customers.

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· ~~Specialty Manufacturing~~ SVG’s ~~operating~~backlog ~~income~~was ~~decreased by~~ $235.0 2 million, orat ~~88.7%~~December 31, to2010, ~~$2.9 million in 2009~~ compared to $258.96 million inat ~~2008~~December 31, ~~and~~2009, as a ~~percentage~~decrease of ~~revenues decreased to 1~~$3.9%4 inmillion, ~~2009~~or ~~compared to 10~~39.95% ~~in 2008~~. The decrease in ~~operating~~backlog ~~income and operating income as a percentage of revenues~~ was ~~primarily~~due ~~attributable~~ to ~~price~~the ~~decreases~~divestiture atof ~~MIC driven by customers in~~ the ~~oil~~specialized ~~and~~transit ~~gas~~bus ~~equipment supply~~ business ~~demanding lower prices~~ in ~~response~~late ~~to a significant decline in oil prices~~2009.

· ~~Corporate~~ EFP ~~Parent~~maintains ~~expenses~~a ~~decreased~~minimal ~~$4.4~~backlog ~~million~~and todoes ~~$3.6~~not ~~million~~calculate init ~~2009~~as ~~compared~~a tomatter ~~$8.0~~of ~~million in 2008~~practice. ~~The decrease was primarily attributable to reductions in headcount, salaries and incentive compensation.~~

~~Interest~~Gross ~~expense (income)~~Profit. ~~Interest~~Gross ~~expense~~profit ~~decreased~~increased $011.32 million, or 118.85%, to $1871.2 7 million ~~(3.8% of revenues)~~ for ~~2009~~2010, compared to $1860.5 million ~~(2.6%~~for 2009; as a percentage of revenues), gross profit improved to 12.9% for ~~2008~~2010, compared to 12.6% for 2009. ~~Interest~~The ~~income~~increase ~~was~~in ~~$0.2~~gross ~~million~~profit primarily reflects operational improvements attributable to the continuing implementation of lean techniques and $0improved procurement expertise at Morgan, Morgan Olson and TAG.4 The ~~million~~increase ~~for~~in ~~2009~~gross profit was partially offset by operational inefficiencies and ~~2008,~~a ~~respectively~~significantly underpriced contract that MIC entered into in 2010.

~~Income~~· Morgan ~~tax~~generated ~~provision~~gross ~~(benefit). The~~profit ~~effective~~and ~~income~~gross ~~tax~~margin ~~provision~~of ~~(benefit)~~$22.6 ~~rate~~million ~~was 31%~~ and 4111.4%, ofrespectively, ~~income~~for ~~before~~2010, ~~income~~compared ~~taxes~~to ~~for~~$13.3 ~~2009~~million and ~~2008~~9.1%, respectively~~. The~~, ~~income tax benefit~~ for 2009 ~~differs from amounts computed based on the federal statutory rate largely as a result of state taxes in certain tax jurisdictions~~. The ~~income~~increase ~~tax~~in ~~provision~~gross ~~for~~profit ~~2008~~and ~~differs~~gross ~~from~~margin ~~amounts~~was ~~computed~~attributable ~~based~~to onimprovements ~~the federal statutory rate as a result of state taxes of $1.4 million, a $0.8 million increase~~ in ~~the~~labor ~~valuation~~efficiency; ~~allowance~~it ~~for~~was ~~foreign~~partially ~~net operating loss carryforwards,~~ offset by amaterial $1costs.~~1 million reduction in the valuation allowance against capital loss carryforwards and $0.3 million of research and development credits.~~

~~Liquidity~~· Morgan Olson generated gross profit and ~~capital~~gross ~~resources~~margin of $10.2 million and 12.0%, respectively, for 2010, compared to $7.6 million and 12.4%, respectively, for 2009. The increase in gross profit was primarily attributable to higher sales of step vans to fleet customers which carry a slightly lower margin.

~~Historically,~~· TAG ~~we have funded our operations with cash available from the proceeds of our 8.75% Notes, cash~~ generated ~~from~~gross ~~operations~~profit and ~~borrowings~~gross ~~under~~margin our revolving credit facility, as needed. Working capital at December 31, 2010 was $112.9 million compared to $99.4 million at December 31, 2009. Our cash and cash equivalents increased $4.2 million as a result of ~~cash provided by operating activities of~~ $324.9 million, ~~cash provided by investing activities of $2.0 million~~ and ~~reduced by cash used in financing activities of $1~~20.~~7 million. Working capital~~4%, ~~excluding cash and cash equivalents~~respectively, ~~increased~~for ~~$9.4 million as a result of an increase in accounts receivable of $1.2 million~~2010, ancompared ~~increase~~to ~~in inventories of~~ $1019.75 million, ~~an increase in prepaid expenses of $0.3 million, reduced by an increase in current payables~~ and ~~accruals of $4~~17.~~2 million. Average accounts receivable days sales outstanding at December 31~~0%, ~~2010 were approximately 24 compared to 27 at December 31~~respectively, ~~2009~~for ~~and inventory turns during 2010 were approximately 7.8 compared to 7.0 during~~ 2009. ~~Excluding~~The ~~vehicle~~increase ~~chassis at Specialty Vehicle Group (vehicle chassis remain~~ in ~~inventory~~gross ~~for~~profit ~~extended~~and ~~periods~~gross ofmargin ~~time~~was ~~and~~attributable ~~amounted~~ to ~~$9.5~~product ~~million~~price ~~and $8~~increases.~~0 million at December 31, 2010 and 2009, respectively) inventory turns were 9.2 and 7.6 for 2010 and 2009, respectively.~~

~~Operating~~· Specialty ~~cash~~Manufacturing ~~flows. Operating~~generated ~~activities~~gross ~~during~~profit ~~2010~~and ~~generated~~gross ~~cash~~margin of $314.~~9 million~~0 ~~compared to $29.2~~ million ~~in 2009~~ and ~~$45~~9.54%, ~~million~~respectively, infor ~~2008. The decrease in net cash generated by operating activities during~~ 2010, ~~was due primarily to a $10.7 million investment in inventories~~ compared to ~~a reduction of inventories of~~ $1320.0 million ~~in 2009~~ and ~~a $1~~12.~~2 million increase in accounts receivable compared to a $~~7.8%, ~~million~~respectively, ~~decrease~~for in 2009.

~~The~~· MIC ~~decrease~~generated ingross ~~net~~profit ~~cash~~and ~~generated~~gross bymargin ~~operating~~of ~~activities~~$6.6 ~~during~~million ~~2009~~and 7.2%, respectively, for 2010, compared to ~~2008~~$14.6 ~~was~~million ~~due~~and 15.8%, respectively, for 2009. The decrease in gross profit and gross margin was primarily due to ~~the~~large ~~$18.8~~oil ~~million~~and ~~decrease~~gas equipment customers imposing in ~~operating~~2010 ~~income~~industrywide price concessions on suppliers in response to steep oil price declines in 2009.

~~Investing~~· SVG ~~cash flows. Net cash~~ generated bygross ~~investing~~profit ~~activities~~and ingross ~~2010~~margin ~~was~~of $23.02 million ~~compared~~and to10.1%, ~~cash~~respectively, ~~used~~for of2010, ~~$9.8~~compared ~~million~~to ~~and~~ $82.64 million ~~in 2009~~ and ~~2008~~5.5%, respectively, for 2009. The increase ~~of $11.8 million~~ in ~~2010~~gross ~~compared~~margin toand ~~2009~~gross profit was primarily ~~due~~attributable to the ~~Morgan,~~closure ~~Morgan Olson, Truck Accessories Group and Specialty Manufacturing sale~~ of ~~six~~the ofFort ~~its manufacturing properties to Poindexter Properties~~Smith, ~~LLC~~Arkansas ~~for~~facility ~~$15.0 million (see Note 15~~ in ~~the “Notes to Consolidated Financial Statements”). Capital expenditures during~~ 2010 ~~were $14~~.8 million and were comprised mainly of machinery and equipment of $7.0 million for Specialty Manufacturing, new product molds of $2.1 million for Truck Accessories Group and $2.9 million of equipment related to a Company-wide Enterprise

· EFP generated gross profit and gross margin of $4.2 million and 16.6%, respectively, for 2010, compared to $3.0 million and 13.7%, respectively, for 2009. The increase in gross profit and gross margin was due to an improved product mix and the elimination of the unprofitable recreational vehicle and construction product lines; it was partially offset by the loss of volume leverage.

Selling and administrative expenses. Our consolidated selling and administrative expenses increased $4.7 million, or 9.6%, to $53.7 million for 2010, compared to $49.0 million for 2009. The increase reflects the additions of key personnel at the Parent, increased amortization of previously capitalized software costs and increased benefits costs. As a percentage of revenues, selling and administrative expenses improved to 9.7% of revenues in 2010, compared to 10.2% in 2009.

· Morgan incurred selling and administrative expenses of $13.9 million, 7.1% of revenues, for 2010, compared to $12.2 million, 8.3% of revenues, for 2009. The increase in spending was due to higher variable selling expenses and the decrease as a percentage of revenue was attributable primarily to the impact of increased revenue on fixed expenses.

· Morgan Olson incurred selling and administrative expenses of $5.1 million, 6.0% of revenues, for 2010, compared to $5.0 million, 8.2% of revenues, for 2009. This increase was caused primarily by higher professional service and marketing expenses.

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~~Resource~~· TAG’s ~~Planning~~selling ~~project. We~~and ~~acquired~~administrative ~~approximately~~expenses increased to $012.70 million, 9.8% of ~~equipment~~revenues, ~~under~~for ~~capital~~2010, ~~leases~~compared ~~that~~to ~~were~~$11.7 ~~not~~million, ~~included~~10.2% inof ~~capital~~revenues, ~~expenditures~~for 2009. This Asincrease ofwas ~~December 31,~~due ~~2010,~~to wean ~~had~~increase noin ~~significant~~variable ~~open~~selling ~~commitments~~expenses ~~for~~partially ~~capital~~offset ~~expenditures~~by lower workers’ compensation and health insurance expense.

~~Financing~~· Specialty ~~cash~~Manufacturing ~~flows. Net~~decreased ~~cash~~selling ~~used~~and byadministrative ~~financing~~expenses ~~activities~~to ~~totaled~~ $114.7 million, in9.9% ~~both~~of ~~2010~~revenues, ~~and~~for ~~2009~~2010, compared to $616.10 million, in10.1% ~~2008~~of revenues, for 2009.

~~Our~~· MIC ~~Revolving~~incurred ~~Credit~~selling ~~Agreement~~and ~~was~~administrative ~~scheduled~~expenses toof ~~terminate~~$9.2 ~~on March 15~~million, ~~2010;~~10.1% ~~however~~of revenues, ~~neither~~for ~~party~~2010, compared to ~~the~~$9.0 ~~agreement~~million, ~~gave~~9.7% ~~notice~~ of ~~termination~~revenues, for 2009. ~~The~~This ~~Agreement~~increase was ~~amended~~attributable ~~and~~to ~~extended~~higher oninformation ~~December 13~~technology support costs, ~~2010~~depreciation ~~with~~of aenterprise ~~new~~resource ~~termination~~planning ~~date~~software ofcosts ~~March 14,~~and ~~2012~~increased variable selling expenses.

At· SVG ~~December 31,~~incurred ~~2010,~~selling ~~the~~and ~~Consolidated~~administrative ~~Coverage~~expenses ~~Ratio,~~of ~~as defined in the Indenture relating to our 8~~$2.~~75%~~6 ~~Notes~~million, ~~was 1~~8.~~9 to~~ 1.0% ~~which~~of ~~was~~revenues, ~~less~~for ~~than~~2010, ~~the~~compared ~~indenture debt incurrence covenant of 2.0~~ to 1$4.0~~. As~~ ~~a result~~million, ~~we are limited in our ability to incur additional indebtedness~~9. ~~The~~2% ~~Indenture~~of ~~permits~~revenues, ~~certain exceptions with respect to capitalized lease obligations and other arrangements that are incurred~~ for ~~the purpose of financing all or part of the purchase price or cost of construction or improvements of property used in our business~~2009. ~~Already existing obligations and any amounts available to be drawn on our existing revolving credit agreement are not subject to this limitation.~~

~~The~~· EFP ~~revolving~~incurred ~~credit~~selling ~~facility~~and ~~provides~~administrative ~~for~~expenses ~~available borrowings~~ of ~~up to~~ $502.0 9 million, ~~in revolving loans~~11.6% ~~Available borrowings are subject to a borrowing base~~ of ~~eligible accounts receivable~~revenues, ~~inventory,~~for ~~machinery and equipment~~2010, ~~and~~compared real estate. Borrowings under our revolving credit facility are collateralized by substantially all of our assets and the assets of our existing subsidiaries. Our revolving credit facility also includes a sub-facility for up to $153.0 million, ~~of letters of credit~~13.4% As of ~~December 31~~revenues, ~~2010,~~for ~~we had no borrowings under the facility, $1~~2009.~~3 million~~ This ofdecrease ~~letters~~was ofdue ~~credit~~primarily ~~outstanding~~to ~~and~~reduced ~~our~~variable ~~borrowing~~selling ~~base would have supported debt borrowings of $48~~expenses.~~7 million under our revolving credit facility.~~

In· Parent ~~addition~~selling and administrative expenses increased to $7.9 million for 2010, ~~the~~compared ~~revolving~~to ~~credit~~$4.1 ~~facility~~million ~~includes~~for ~~covenants~~2009. The ~~that~~increase ~~place~~was ~~various~~the ~~restrictions~~result onof ~~us,~~higher ~~including~~management ~~limitation~~incentive onexpense ~~our~~and ~~ability~~amortization ~~to:~~of previously capitalized software costs.

~~· incur~~Closed and excess facility costs. Specialty Manufacturing completed the closure of its facility in Fort Smith, Arkansas at a cost of $0.9 million. An additional ~~debt;~~$0.1 million of noncash charges related to the 2009 closure of Specialty Manufacturing’s Milwaukee, Wisconsin facility was recorded in 2010.

~~· create~~Loss or(gain) ~~become~~on ~~subject~~sale/lease-back of real estate. During 2010, Poindexter Properties, LLC purchased six real estate properties and leased the properties back to ~~liens~~the orCompany. Three ~~guarantees;~~of the six properties included in the transaction were sold for an aggregated loss of $2.8 million, as the sale prices (based on appraised values) were less than the book values of the assets. The loss was recognized at the time of the transaction. The remaining three properties were sold for an aggregated gain of $3.6 million. The gain of $3.6 million has been deferred and will be recognized as income over the life of the leases. During the years ended December 31, 2010 and 2009, the Company recognized $0.3 million as income on the deferred gain of $1.9 million originating from a 2008 sale/lease-back arrangement with Poindexter Properties, LLC.

~~· make~~Gain ~~investments~~on orrepurchase ~~loans;~~of 8.75% Notes. During the year ended December 31, 2009, the Company purchased $0.4 million of its 8.75% Notes on the open market and recognized a gain of $0.2 million.

~~· pay~~Other ~~dividends~~expense or(income). For ~~make~~2010, ~~distributions;~~other expense of $0.1 million consisted of several nonrecurring charges. For 2009, other expense was primarily attributable to the loss on the sale of the assets of the specialized transit bus business by SVG.

~~· prepay~~Operating ~~the~~income. Operating 8income increased $3.~~75%~~5 ~~Notes~~million, or ~~other~~32.1%, ~~debt~~to $14.4 million for 2010, compared to $10.9 million for 2009; as a percentage of revenues, operating income improved to 2.6% for 2010, compared to 2.3% for 2009. Operating income in 2010 reflects charges of $1.0 million for a facility closure expense at Specialty Manufacturing.

· ~~merge~~ Morgan’s ~~with~~operating ~~other~~income ~~entities~~increased orby ~~make~~$7.4 ~~acquisitions~~million, or ~~dissolve~~644%, to $8.6 million for 2010, compared to $1.2 million for 2009; as a percentage of revenues, it improved to 4.4% for 2010, compared to 0.7% for 2009. The increase in operating income and operating income as a percentage of revenues was attributable to operational improvements, including labor efficiency, material procurement, and expense controls in manufacturing overhead, sales and administration.

· ~~sell~~ Morgan ~~assets~~Olson’s operating income increased by $2.5 million, or 96.2%, to $5.1 million for 2010, compared to $2.6 million for 2009; as a percentage of revenues, it improved to 5.9% for 2010, compared to 4.2% for 2009. The increase in operating income and operating income as a percentage of revenue was attributable to operational improvements, including labor efficiency, material procurement, and expense controls in manufacturing overhead, sales and administration.

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

· enter into leases; and

· enter into transactions with affiliates.

We believe that we will have adequate resources to meet our working capital and capital expenditure requirements consistent with past trends and practices for at least the next 12 months. Additionally, we believe that our cash and borrowing availability under the revolving credit facility will satisfy our cash requirements for 2011, given our

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~~anticipated~~· TAG’s ~~capital~~operating ~~expenditures,~~income ~~working~~increased ~~capital~~by ~~requirements and known obligations~~$4.8 ~~Our ability to make payments on our debt~~million, ~~including~~or ~~the 8~~60.758% ~~Notes~~, ~~and~~ to ~~fund~~$12.7 ~~planned~~million ~~capital~~for ~~expenditures~~2010, ~~will~~compared ~~depend~~to on$7.9 ~~our~~million ~~ability~~for to2009; ~~generate~~as ~~cash~~a inpercentage ~~the~~of ~~future.~~revenues, ~~This~~it isimproved ~~subject~~ to ~~general~~10.2% ~~economic~~for ~~conditions~~2010, ~~other~~compared ~~factors~~to ~~influencing~~6.8% ~~the~~for ~~industries~~2009. The increase in ~~which~~operating weincome ~~operate~~ and ~~circumstances~~operating ~~that~~income ~~are~~as ~~beyond~~a ~~our~~percentage ~~control. We~~of ~~cannot~~revues bewas ~~certain~~primarily ~~that~~attributable weto ~~will~~operational ~~generate~~improvements, ~~sufficient~~including ~~cash~~labor ~~flows~~efficiency, ~~and~~material ~~if we do not~~procurement, weand ~~may~~expense ~~have~~controls ~~to engage~~ in ~~other~~manufacturing ~~activities~~overhead, ~~such~~sales asand ~~the sale of assets to meet our cash requirements~~administration.

~~Off-balance-sheet~~· Specialty ~~arrangements~~Manufacturing incurred an operating loss of $1.8 million and an operating margin of (1.2%), compared to operating income of $2.9 million and operating margin of 1.9% for 2009.

We· MIC’s ~~have~~operating noincome ~~off-balance-sheet~~was ~~arrangements~~($2.6 million) for 2010, compared to $5.0 million for 2009; as a percentage of revenues, operating income decreased to (2.9%) for 2010, from 5.4% for 2009. In 2010, MIC undertook a new contract, which was significantly underpriced and poorly managed. This contract, in addition to industry wide price concessions, operational inefficiencies and management deficiencies, accounted for the erosion in operating income.

~~Commitments~~· SVG’s operating income was ($0.3 million) for 2010, compared to ($2.2 million) for 2009; as a percentage of revenues, operating income increased to (0.9%) for 2010, from (5.1%) for 2009. The increase in operating income and ~~capital~~margin ~~expenditures~~reflects the impact of the closure of the Fort Smith, Arkansas facility.

We· EFP’s ~~have~~operating ~~entered~~income ~~into~~was an$1.1 ~~agreement~~million ~~with~~for ~~a paint manufacturer under which Truck Accessories~~2010, ~~Morgan,~~compared ~~Morgan Olson and Specialty Vehicle Group are committed~~ to ~~buy principally all of their automotive paint for five years ending October 2014. We estimate that we will purchase approximately~~ $50.21 million offor ~~paint~~2009; ~~products~~as ~~during~~a ~~2011~~percentage ~~under~~of ~~this~~revenues, ~~agreement. We~~operating ~~occasionally~~income ~~commit~~increased to ~~the~~4.7% ~~purchase~~for ~~of aluminum based on expected levels of future production and at December 31,~~ 2010, ~~Morgan~~from ~~and Morgan Olson had commitments of $3~~0.4% ~~million~~for ~~to buy aluminum through 2011~~2009. WeThe ~~did~~increase ~~not~~in ~~have~~operating ~~any~~income ~~material~~was ~~commitments~~driven toby ~~acquire~~improved ~~new~~product ~~capital~~mix ~~equipment~~and asreduced ofvariable ~~December 31,~~selling ~~2010~~expenses.

~~Certain~~· Corporate ~~cash~~Parent ~~contractual~~expenses ~~obligations~~increased $6.6 million, to $10.2 million for 2010, compared to $3.6 million for 2009. The increase is primarily attributable to the addition of ~~ours~~key asexecutive personnel, including a Chief Operating Officer, a Vice President of ~~December 31~~International Business Development, ~~2010~~and ~~are~~a ~~summarized~~Vice inPresident of Operational Improvement; increased depreciation of prior years’ capitalized enterprise resource planning costs; and the ~~table~~recognition ~~below~~of a $2.8 million loss on the sale of real estate related to the 2010 sale/lease-back arrangement with Poindexter Properties, LLC. The increases were offset by a $0.3 million recognition of a deferred gain of $1.9 million originating from a 2008 sale/lease-back arrangement with Poindexter Properties, LLC.

Obligations (Dollars in Millions)	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
8.75% Notes, excluding interest	$	198.8	$	—	$	—	$	198.8	$	—
Operating leases	50.3		9.2		11.9		6.6		22.6
Capital leases	3.9		2.0		1.9		—		—
Total	$	253.0	$	11.2	$	13.8	$	205.4	$	22.6

Interest expense (income). Interest expense decreased $0.3 million, or 1.6%, to $17.9 million (3.2% of revenues) for 2010, compared to $18.2 million (3.8% of revenues) for 2009. Interest income was $0.1 million and $0.2 million for 2010 and 2009, respectively.

Income tax provision (benefit). The ~~Company~~effective ~~has~~income ~~recorded~~tax aprovision ~~long-term~~(benefit) ~~liability~~rate was 42% and 31% of ~~approximately~~income $0before income taxes for 2010 and 2009, respectively.9 The ~~million~~income tax provision for 2010 differs from amounts computed based on the federal statutory rate as a result of ~~December 31,~~state ~~2010~~and ~~related~~foreign totaxes ~~uncertain~~in certain tax ~~positions~~jurisdictions and settlements. ~~Given~~The ~~the~~income ~~uncertainty~~tax ofbenefit ~~these~~for ~~positions,~~2009 differs from amounts computed based on the ~~Company~~federal ~~has~~statutory ~~not~~rate, ~~reflected~~largely ~~obligations~~as a result of state taxes in ~~the~~certain ~~above~~tax ~~table~~jurisdictions.

~~Other~~Liquidity ~~matters~~and Capital Resources

WeOur ~~are~~cash ~~significantly leveraged~~ and ~~will~~cash ~~continue~~equivalents todecreased ~~be significantly leveraged. We had~~ $1713.65 million ofdue ~~stockholder’s~~to ~~equity~~the atrepurchase ~~December 31,~~and ~~2010~~retirement ~~and~~of ~~2009~~$39.5 Wemillion ~~operate~~of ~~in cyclical businesses and the markets for~~ our ~~products are highly competitive~~8.75% InNotes ~~addition,~~partially weoffset ~~have~~by ~~two~~cash ~~customers~~provided ~~that~~by ~~accounted~~operating ~~for~~activities ~~20%~~ of ~~2010~~$22.3 ~~consolidated~~million ~~revenues~~ and ~~our~~proceeds ~~top~~from ~~ten~~equipment ~~customers~~financing ~~accounted for 45%~~ of ~~our~~$6.8 ~~2010 consolidated revenues~~million.

WeNet ~~continually~~working ~~evaluate,~~capital ~~depending~~(defined onas ~~market~~total ~~conditions,~~current ~~the~~assets ~~most~~less ~~efficient~~total ~~use~~current ofliabilities) ~~our~~decreased ~~capital~~to ~~and~~$110.2 ~~contemplate~~million ~~various~~at ~~strategic options~~December 31, ~~which~~2011 ~~may~~compared ~~include,~~to ~~without~~$112.9 million ~~limitation,~~at ~~restructuring our business~~December 31, ~~indebtedness or capital structure~~2010. ~~Accordingly,~~Operating weworking orcapital ~~our~~(defined ~~subsidiaries~~as ~~may~~accounts ~~from~~receivable ~~time~~plus ~~to time consider~~inventories, ~~among~~less ~~other~~accounts ~~things,~~payable ~~purchasing,~~and ~~refinancing~~accrued orliabilities) ~~otherwise~~increased ~~retiring~~$19.6 ~~certain~~million ~~outstanding~~to ~~indebtedness~~$63.8 ~~(whether~~million inat ~~the~~December 31, ~~open~~2011 ~~market~~from or$44.2 bymillion ~~other~~at ~~means)~~December 31, ~~public~~2010 ordue ~~private~~to ~~issuances~~higher ofaccounts ~~debt~~receivable orand ~~equity~~inventory ~~securities~~levels, ~~joint~~partially ~~venture~~offset ~~transactions,~~by ~~acquisitions~~higher oraccounts ~~dispositions,~~payable ~~new~~and ~~borrowings,~~accrued ~~tender~~liabilities. Accounts ~~offers,~~receivable ~~exchange~~increased ~~offers,~~$13.4 ormillion ~~any~~during ~~combination~~2011 ~~thereof,~~due ~~although~~primarily ~~there~~to ~~can~~year—over-year berevenue nogrowth ~~assurances~~in ~~that~~the ~~such~~fourth ~~financing~~quarter. ~~sources~~The ~~will~~inventory beincrease ~~available~~is ondue ~~commercially~~to ~~reasonable~~higher ~~terms.~~raw ~~Additionally,~~material ~~there~~levels ~~can~~at beDecember 31, no2011 ~~assurances~~associated ~~that~~with ~~these~~the ~~strategic~~$60 ~~options,~~million ifincrease ~~pursued,~~in ~~will~~backlog beat ~~consummated~~the ~~or,~~end ifof ~~consummated,~~2011 ~~what~~compared ~~effect~~to ~~they~~the ~~will~~end ~~have~~of ~~on us~~2010.

Historically, inflation has not materially affected our business. We believe that we have the ability to increase our selling prices to levels necessary to offset the raw material cost inflation.

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~~Recent~~Average ~~economic~~accounts ~~conditions~~receivable ~~have~~days ~~resulted~~sales inoutstanding ~~fluctuations~~at inDecember 31, ~~raw~~2011 ~~material~~were ~~prices~~approximately 25, ~~but~~compared weto ~~cannot~~24 ~~predict~~at ~~the~~December 31, ~~effect~~2010; ~~that~~inventory ~~this~~turns ~~will~~during ~~have~~2011 onwere ~~the~~approximately ~~selling~~7.6 ~~price~~compared ofto ~~our~~7.8 ~~manufactured~~during ~~products~~2010. ~~Operating~~Excluding ~~expenses,~~vehicle ~~such~~chassis asat ~~salaries~~SVG (vehicle chassis remain in inventory for extended periods of time and ~~employee~~amounted ~~benefits~~to $12.7 million and $9.5 million at December 31, ~~are~~2011 ~~subject~~and to2010, ~~normal~~respectively), ~~inflationary~~inventory ~~pressures~~turns were 9.1 and 9.2 for 2011 and 2010, respectively.

~~During~~Operating ~~2008,~~cash ~~Poindexter~~flows. Operating ~~Properties,~~activities ~~LLC,~~during ~~which~~2011 isgenerated ~~wholly~~cash ~~owned~~of ~~by Mr~~$22. ~~Poindexter~~3 million, ~~purchased~~compared ~~three~~to ~~real~~$3.9 ~~estate~~million ~~properties~~in ~~from~~2010 ~~the~~and ~~Company for approximately~~ $729.12 million in ~~cash~~2009. The ~~and~~increase isin ~~leasing~~2011 ~~the~~compared ~~properties back~~ to ~~the~~2010 ~~Company. The~~was ~~Company~~accomplished ~~recorded~~through aan ~~gain~~increase onin ~~the~~net ~~sale~~income of approximately $117.90 million ~~that has been deferred~~ and ~~will~~the beutilization ~~recognized~~of asan income ~~over~~tax ~~the~~receivable ~~term~~ of ~~the~~$8.6 ~~leases,~~million ofthat ~~which~~was ~~$265~~used ~~was~~to ~~recorded~~offset as2011 income intax ~~both 2010 and 2009~~payable. ~~The~~ ~~transaction~~These ~~was~~factors ~~financed~~more bythan anoffset ~~independent~~increases ~~lender~~in ~~and~~net ~~the~~working ~~properties~~capital ~~were sold for prices determined by an independent appraisal~~items.

~~During~~Investing ~~2010,~~cash ~~Poindexter~~flows. Net ~~Properties,~~cash ~~LLC~~used ~~purchased~~by ~~six~~investing ~~real~~activities ~~estate~~in ~~properties~~2011 ~~from~~was ~~the Company for approximately~~ ($~~15.~~0.6 million), incompared ~~cash and is leasing the properties back~~ to ~~the~~cash ~~Company. Three~~provided of ~~the~~$2.0 ~~properties~~million ~~included~~ in ~~the~~2010 ~~transaction~~and ~~were sold for an aggregate loss of~~ ($29.8 million) asused ~~the~~in ~~sales~~2009. The ~~prices,~~decrease ~~based~~from on2011 ~~appraised~~compared ~~values,~~to ~~were~~2010 ~~less~~relates ~~than~~primarily ~~the~~to ~~book~~a ~~value~~reduction of ~~the~~proceeds ~~assets. The~~from ~~aggregate~~real ~~loss~~estate ~~was~~sale/lease-backs ~~recognized as~~ of ~~the~~$12.9 ~~transaction~~million ~~date~~partially asoffset ~~loss~~by onreduced ~~sale~~capital ~~lease-back~~expenditures of ~~real estate~~$5. ~~The~~1 ~~remaining~~million ~~three~~and ~~properties~~a ~~were~~reduction ~~sold~~of ~~for~~insurance ancollateral ~~aggregated~~deposits ~~gain~~ of $36.6 million. ~~The~~Capital ~~gain~~expenditures during 2011 of $39.67 million ~~has~~were ~~been~~comprised ~~deferred~~mainly of machinery and ~~will~~equipment beacross ~~recognized~~all asbusiness ~~income~~segments. The ~~over~~decrease ~~the~~in ~~life~~capital expenditures of ~~the~~approximately ~~leases~~$5. ~~The~~0 ~~transaction~~million ~~was~~from ~~financed~~2010 byto an2011 ~~independent~~is ~~lender~~due ~~and~~to the ~~properties~~postponement ~~were~~of ~~sold~~further ~~for~~ERP ~~prices~~software ~~determined~~implementation byat anthe ~~independent~~end ~~appraisal~~of 2010.

~~Beginning~~During ~~in July 2006~~2011, ~~Mr. Poindexter~~we ~~began~~acquired ~~receiving~~approximately ~~a salary from the Company~~$6. ~~Effective~~8 ~~July 31,~~million ~~2008,~~of ~~Mr. Poindexter~~equipment ~~ceased~~that ~~receiving~~is aincluded ~~salary~~in ~~from~~capital ~~the~~expenditures ~~Company~~ and wewas ~~paid~~subsequently ~~$0.5~~financed ~~million~~with inproceeds ~~fees~~from tolong-term ~~Southwestern~~debt. At ~~Holdings,~~December ~~Inc.~~31, ~~(“Southwestern”)~~2011, ~~for~~we ~~the~~had ~~services~~no ofsignificant ~~Mr. Poindexter~~open ~~during~~commitments ~~each~~for ofcapital ~~2010 and 2009~~expenditures.

~~Southwestern~~Financing ~~was~~cash aflows. Net ~~named~~cash ~~insured~~used ~~under~~by ~~the~~financing ~~Company’s general liability~~activities ~~and~~in ~~excess~~2011 ~~umbrella~~totaled ~~insurance~~$35.2 ~~policies~~million, ~~during~~compared ~~2007~~to ~~when~~$1.7 ~~Southwestern~~million ~~became the defendant~~ in aboth ~~suit~~2010 ~~for~~and ~~damages resulting from a vehicle accident not involving the Company’s assets or any of its employees~~2009. The ~~lawsuit~~increase ~~was~~in ~~settled~~cash ~~during~~used ~~2008~~is ~~and~~attributable ~~Southwestern~~to ~~paid~~our ~~the~~repurchase ~~amount~~ of ~~the self-insured reserve of~~ $039.35 million~~. Southwestern~~ isof noour ~~longer~~outstanding a8.75% ~~named~~Notes ~~insured~~partially ~~under~~offset ~~the~~by ~~Company’s general liability policy effective July 1, 2007~~$6. ~~Any~~8 ~~increased~~million ~~premiums under~~proceeds ~~the~~from ~~Company’s~~equipment ~~umbrella~~financing ~~policy~~(which ~~incurred~~was done in ~~the~~lieu ~~future~~of bypurchasing the ~~Company by reason of the settlement will be reimbursed by Southwestern~~equipment).

~~Recently~~Our ~~issued~~Revolving ~~accounting~~Credit ~~standards~~Agreement is scheduled to terminate on March 14, 2012. As more fully described in Note 17 to our Financial Statement included herein, we have executed a commitment letter for a new four-year revolving line of credit on terms similar to our existing facility.

~~The~~At ~~effect~~December 31, on2011, the ~~Company~~Consolidated ofCoverage ~~recently~~Ratio, ~~issued~~as ~~accounting~~defined ~~standards~~in on the ~~Company~~Indenture isrelating ~~addressed~~to inour ~~Note~~8.75% Notes, was 3.3 to 1.0; which was greater than the indenture debt incurrence covenant of ~~Notes~~2.0 to ~~Consolidated~~1.0. As ~~Financial~~a ~~Statements~~result, we are not limited, with certain exceptions, in our ability to incur additional indebtedness.

~~Critical~~The ~~accounting~~revolving ~~policies~~credit facility provides for available borrowings of up to $50.0 million in revolving loans. Borrowings available are subject to a borrowing base of eligible accounts receivable, inventory, machinery and ~~estimates~~equipment, and real estate. Borrowings under our revolving credit facility are collateralized by substantially all of our assets and the assets of our existing domestic subsidiaries. Our revolving credit facility also includes a subfacility for up to $15.0 million of letters of credit. At December 31, 2011, we had no borrowings under the facility and $6.3 million of letters of credit outstanding; our borrowing base collateral would have supported debt borrowings of $60.2 million under our revolving credit facility criteria.

~~This~~In ~~discussion and analysis of financial condition and the results of operations are based upon our consolidated financial statements~~addition, ~~which have been prepared in conformity with accounting principles generally accepted in~~ the ~~United~~revolving ~~States. The~~credit ~~preparation~~facility ofincludes ~~these~~covenants ~~consolidated financial statements requires the use of estimates~~ that ~~affect~~place ~~the~~various ~~reported~~restrictions ~~amounts~~on ~~of assets~~us, ~~liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates,~~ including ~~those~~limitations ~~related to warranties offered~~ on ~~products,~~our ~~self-insurance~~ability reserves, bad debts, inventory obsolescence, investments, intangible assets and goodwill, income taxes, financing operations, workers’ compensation insurance and contingent liabilities, are evaluated continually. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.:

We· Incur ~~believe~~additional ~~the following are the most critical accounting policies used in the preparation of our financial statements.~~debt;

· Create or become subject to liens or guarantees;

· Make investments or loans;

· Pay dividends or make distributions;

· Prepay the 8.75% Notes or other debt;

· Merge with other entities or make acquisitions or dissolve;

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~~Revenue~~· Sell recognition. Revenue is recognized upon shipment of the product to customers, except for Morgan and Morgan Olson where revenue is recognized when title transfers to the customer upon final body assembly, quality inspection and customer notification. We classify amounts billed to customers related to shipping and handling as revenue. The costs associated with shipping and handling revenue are included in cost of revenue.assets;

~~Warranties. Reserves~~· Change ~~for~~fiscal ~~costs~~year ~~associated~~or ~~with~~amend ~~fulfilling~~organizational ~~warranty~~documents ~~obligations~~or ~~offered~~terms ~~on Morgan, Morgan Olson, Truck Accessories and Specialty Vehicle Group products are established based on historical experience and an estimate~~ of ~~future~~any ~~claims.~~subordinated ~~Increases in the incidence of product defects would result in additional reserves being required in the future and would reduce income in the period of such determination.~~debt;

~~Self-insurance~~· Enter ~~reserves. We~~into ~~utilize~~leases; ~~a combination of insurance coverage~~ and self-insurance programs for property, casualty, workers’ compensation and healthcare insurance. We use internally determined development factors to record a fully developed self-insurance reserve to cover the self-insured portion of these risks based on known facts and historical industry and company trends. Changes in the assumptions used could result in a different self-insurance reserve.

~~Income~~· Enter ~~taxes. We~~into ~~estimate~~transactions ~~our~~with ~~income taxes in each of the jurisdictions in which we operate~~affiliates. This process involves estimating our current tax exposure and assessing temporary differences resulting from the differing treatment of items for tax and financial reporting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheet. We then assess the likelihood that the deferred tax assets will be recovered from future taxable income and, to the extent recovery is not likely, a valuation allowance is established thereby reducing the deferred tax asset. When an increase in this allowance within a period is recorded, we include an expense in the tax provision in the consolidated statements of operations. Management’s judgment is required in determining the provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against the net deferred tax assets. We assess our uncertain income tax positions on an annual basis and make adjustments accordingly (see Note 11 of our Consolidated Financial Statements for a summary of this activity).

InWe ~~June 2006~~believe that we will have adequate resources to meet our working capital and capital expenditure requirements, ~~the~~consistent ~~Financial~~with ~~Accounting~~past ~~Standards~~trends ~~Board~~and ~~(“FASB”)~~practices, ~~issued~~for ~~guidance~~at least the next 12 months. In addition, we believe that ~~clarifies~~our cash and borrowing availability under the ~~accounting~~revolving credit facility will satisfy our cash requirements for ~~uncertainty~~2012, ingiven ~~income~~our ~~taxes~~anticipated ~~and~~capital ~~prescribes~~expenditures, aworking ~~recognition~~capital ~~threshold~~requirements, and ~~measurement~~known ~~attribute~~obligations. Our ~~for~~ability ~~financial~~to ~~statement~~make ~~recognition~~payments on our debt, including the 8.75% Notes, and ~~measurement~~to offund aplanned ~~tax~~capital ~~position~~expenditures ~~taken~~will ordepend ~~expected~~on our ability to begenerate ~~taken~~cash in athe ~~tax~~future. This ~~return~~is subject to general economic conditions, other factors influencing the industries in which we operate, and ~~also~~circumstances ~~provides~~beyond ~~guidance~~our oncontrol. We ~~various~~cannot ~~related~~be ~~matters~~certain that we will generate sufficient cash flows; if we do not, we may have to engage in other activities, such as ~~derecognition,~~the ~~interest~~sale ~~and~~of ~~penalties~~assets, ~~and~~to ~~disclosure~~meet our cash requirements.

~~Inventory valuation. Our inventories consist mainly of raw materials, vehicles prior to conversion, supplies and work~~Off-inBalance-~~progress.~~Sheet Because we primarily produce products to our customers’ orders, we maintain a relatively small stock of finished goods inventories. Inventories are stated at the lower of cost (first-in, first-out method) or market. We record reserves against the value of inventory based upon our determination that the inventory is not usable in our products. These reserves are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer inventory levels or competitive conditions differ from our expectations.Arrangements

~~Accounts receivable.~~ We ~~provide~~have ~~credit~~no to our customers in the ordinary course of business. We are not aware of any significant credit risks related to our customer base and do not generally require collateral or other security to support customer receivables. Specialty Vehicle Group sells to certain customers on extended terms and retains title to the vehicle until payment is complete. The carrying amount of our accounts receivable approximates the fair value of the receivables because of their shortoff-~~term nature with payment typically due within 30 days of transfer of title to the product. We establish an allowance for doubtful accounts on a case~~balance-~~by-case~~sheet ~~basis when we believe that we are unlikely to receive payment in full of amounts owed to us~~arrangements. We make a judgment in these cases based on available facts and circumstances and we may record a reserve against a customer’s account receivable. We reevaluate the reserves and adjust them as we obtain more information regarding the account. The collectability of trade receivables could be significantly reduced if there is a greater than expected rate of defaults or if one or more significant customers experience financial difficulties or are otherwise unable to make required payments.

Commitments and Capital Expenditures

We have a pricing agreement with a paint manufacturer that obligates Morgan, Morgan Olson, TAG, and SVG to purchase nearly all of their automotive paint from this manufacturer for five years, ending October 2016. During 2012, we estimate that we will purchase approximately $10.0 million of paint products under this agreement. We occasionally commit to the purchase of aluminum based on expected levels of future production. At December 31, 2011, Morgan, Morgan Olson and TAG had 2012 aluminum purchase commitments of $9.8 million at prices ranging from $1.02 to $1.11 per pound. We did not have any material commitments to acquire new capital equipment at December 31, 2011.

Our cash contractual obligations at December 31, 2011 are summarized in the following table.

Obligations (Dollars in Millions)	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
8.75% Notes, excluding interest	$	159.3	$	—	$	159.3	$	—	$	—
Operating leases	52.4		8.6		12.1		8.3		23.4
Capital leases and equipment notes	8.0		2.5		4.5		1.0		—
Total	$	219.7	$	11.1	$	175.9	$	9.3	$	23.4

Other Matters

We are, and will continue to be, significantly leveraged. We had $32.2 million of stockholder’s equity at December 31, 2011, compared to $17.6 million at December 31, 2010. We operate in cyclical businesses and the markets for our products are highly competitive. In addition, our top two customers accounted for 25% of 2011 consolidated revenues, while our top 10 customers accounted for 52% of 2011 consolidated revenues.

We continually evaluate, depending on market conditions, the most efficient use of our capital and contemplate various strategic options, which may include, without limitation, restructuring our business, indebtedness, or capitalization. Accordingly, we or our subsidiaries may, from time to time, consider, among other things:

· Purchasing, refinancing, or otherwise retiring certain outstanding indebtedness (whether in the open market or by other means);

· Public or private issuances of debt or equity securities;

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~~Goodwill, identified intangibles and long~~· Joint-~~lived~~venture assets impairment. We perform a test of our goodwill and indefinite-lived intangible assets for potential impairment annually as of October 1. The fair values of our reporting units for testing goodwill are based on various valuation methods, including multiples of earnings derived from information and analysis of recent acquisitions in the marketplace for companies with similar operations and discounted cash flow analysis. Changes in the assumptions used in the fair value calculation could result in an estimated reporting unit fair value that is below the carrying value, which may give rise to an impairment of our goodwill. In addition to the annual review, we also test for impairment of our long-lived assets, goodwill and intangible assets should events or circumstances indicate a potential reduction in the fair value of those assets below their carrying value. Lastly, on an annual basis, we determine that the remaining lives of identified amortizable intangible assets continue to be appropriate.transactions;

· Acquisitions or dispositions;

· New borrowings;

· Tender or exchange offers; and/or

· Any combination thereof.

Recent economic conditions have resulted in fluctuations in raw material prices, and we cannot predict the effect that this will have on the selling price of our manufactured products. Operating expenses, such as salaries and employee benefits, are subject to normal inflationary pressures.

Between 2008 and 2011, Poindexter Properties, LLC, which is wholly owned by Mr. Poindexter, purchased from and leased back to the Company eleven real estate properties. Please refer to Note 16 of our Financial Statements, included herein, for a more detailed description of the financial aspects of these transactions.

The Company is party to a Management Services Agreement with Southwestern Holdings, Inc. (“Southwestern”), a corporation owned by Mr. Poindexter. Pursuant to the Management Services Agreement, Southwestern provides services to the Company, including those of Mr. Poindexter. The Company pays Southwestern a base fee of approximately $51,400 per month for these services, subject to annual automatic increases based upon the consumer price index. The Company paid Southwestern approximately $0.6 million, $0.5 million and $0.5 million during 2011, 2010 and 2009, respectively, for all these services. Mr. Poindexter receives no salary from the Company.

Recently Issued Accounting Standards

The effect of recently issued accounting standards on the Company is addressed in Note 1 of our Financial Statements, included herein.

Critical Accounting Policies and Estimates

This discussion and analysis of financial condition and the results of operations are based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires the use of estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates, including those related to warranties offered on products, self-insurance reserves, bad debts, inventory obsolescence, investments, intangible assets and goodwill, income taxes, financing operations, workers’ compensation insurance and contingent liabilities, are evaluated continually. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following are the most critical accounting policies used in the preparation of our financial statements.

Revenue recognition. Revenue is recognized upon shipment of the product to customers, except for Morgan and Morgan Olson, where revenue is recognized when the title transfers to the customer upon final body assembly, quality inspection and customer notification. We classify amounts billed to customers related to shipping and handling as revenue. The costs associated with shipping and handling revenue are included in the cost of revenue.

Warranties. Reserves for costs associated with fulfilling warranty obligations offered on Morgan, Morgan Olson, TAG and SVG products are established based on historical experience and an estimate of future claims. Increases in the incidence of product defects would result in additional reserves being required in the future and would reduce income in the period of such determination.

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Self-insurance reserves. We utilize a combination of insurance coverage and self-insurance programs for property, casualty, workers’ compensation and healthcare insurance. We use internally determined development factors to record a fully developed self-insurance reserve to cover the self-insured portion of these risks, based on known facts and historical industry and company trends. Changes in the assumptions used could result in a different self-insurance reserve.

Income Taxes. Income taxes are accounted for under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities and the respective operating losses and tax credit carryforwards. Deferred assets and liabilities are measured using enacted tax rates and laws in effect for the year in which the differences are expected to be recovered or settled. The effect of a change in the tax rates on deferred tax assets and liabilities is recognized in income in the period that included the enactment date.

Net deferred assets are recorded to the extent it is believed that these assets will more likely than not be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies and recent financial results. In the event we determine that we will be able to realize on deferred income tax assets in the future in excess of the their net recorded amount, we make an adjustment to the valuation allowance, which reduces the provision for income taxes.

JBPCO and its subsidiaries have both foreign and state operating losses available to carry forward to future years. These losses have a carryforward period of 15 to 20 years from the date created. If unused, the losses are set to expire throughout the period 2021 through 2030, with the most significant portion of the losses expiring during the period 2029 through 2030.

Inventory valuation. Our inventories consist mainly of raw materials, chassis, supplies and work in progress. Because we primarily produce products to our customers’ orders, we maintain a relatively small stock of finished goods inventories. Inventories are stated at the lower of cost (first-in, first-out method) or market. We record reserves against the value of inventory, based upon our determination that the inventory is not usable in our products. These reserves are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer requirements or competitive conditions differ from our expectations.

Accounts receivable. We provide credit to our customers in the ordinary course of business. We are not aware of any significant credit risks related to our customer base and do not generally require collateral or other security to support customer receivables. The carrying amount of our accounts receivable approximates the fair value of the receivables because of their short-term nature (with payment typically due within 30 days of transfer of title to the product). We establish an allowance for doubtful accounts when we believe that we are unlikely to receive payment in full of amounts owed to us. We reevaluate these reserves and adjust them as we obtain more information regarding the account. The collectability of trade receivables could be significantly reduced if there is a greater than expected rate of defaults, if one or more significant customers experience financial difficulties, or if one or more significant customers are otherwise unable to make required payments.

Goodwill, identified intangibles and long-lived assets impairment. We perform a test of our goodwill and indefinite-lived intangible assets for potential impairment annually. The fair values of our reporting units for testing goodwill are based on various valuation methods, including multiples of earnings derived from information and analysis of recent acquisitions in the marketplace for companies with similar operations and discounted cash flow analysis. Changes in the assumptions used in the fair value calculation could result in an estimated reporting unit fair value that is below the carrying value, which may give rise to an impairment of our goodwill. In addition to the annual review, we also test for impairment of our long-lived assets, goodwill and intangible assets, should events or circumstances indicate a potential reduction in the fair value of those assets below their carrying value. Lastly, on an annual basis, we determine that the remaining lives of identified amortizable intangible assets continue to be appropriate.

Item 7A. Quantitative and Qualitative Disclosure About Market Risks

We are subject to certain market risks, including interest rate risk and foreign currency risk. The adverse effects of potential changes in these market risks are discussed ~~below~~in the following paragraphs. ~~See~~Refer to the Notes to Consolidated Financial Statements elsewhere in this Form 10-K for a description of our accounting policies and other information related to these financial instruments.

Variable-rate debt. From time to time, we borrow funds under our revolving credit facility. The interest rates on the revolving credit facility are based upon a spread above either the prime interest rate or the London Interbank Offered Rate (LIBOR), which rate used is determined at our option. The Company had no revolver borrowings outstanding at December 31, 2010 and 2009.35

Fixed-rate debt. As of December 31, 2010, the Company had $198.8 million of 8.75% Notes outstanding, with an estimated fair value of approximately $199.3 million and $200.8 million based upon the traded value at December 31, 2010 and March 15, 2011, respectively. Market risk, estimated as the potential increase in fair value resulting from a hypothetical 1.0% decrease in interest rates, was approximately $6.9 million as of December 31, 2010.

Foreign currency. Morgan has a manufacturing plant in Canada that during 2010 generated sales of approximately $8.1 million for the year. The functional currency of Morgan’s Canadian operations is the Canadian dollar. Specialty Manufacturing has one plant in Mexico and one in Malaysia; however, the functional currency is the U.S. dollar. We do not currently employ risk management techniques to manage potential exposure to foreign currency fluctuations.

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Variable-rate debt. From time to time, we borrow funds under our revolving credit facility. The interest rates on the revolving credit facility are based upon a spread above either the prime interest rate or the London Interbank Offered Rate (LIBOR), which rate used is determined at our option. The Company had no revolver borrowings outstanding at December 31, 2011 and 2010.

Fixed-rate debt. At December 31, 2011, the Company had $159.3 million of 8.75% Notes outstanding, with an estimated fair value of approximately $161.3 million and $160.1 million, based upon the traded value at December 31, 2010 and February 10, 2012, respectively. Market risk, estimated as the potential increase in fair value resulting from a hypothetical 1.0% decrease in interest rates, was approximately $5.8 million at December 31, 2011.

Foreign currency. During 2011, Morgan’s manufacturing plant in Canada generated sales of approximately $12.6 million. The functional currency of Morgan’s Canadian operations is the Canadian dollar. Specialty Manufacturing has one plant in Mexico and one in Malaysia; however, the functional currency is the U.S. dollar. We do not currently employ risk management techniques to manage potential exposure to foreign currency fluctuations.

Raw materials. Our purchases of raw materials and components equal approximately 53.1% of our revenues in 2011. Hence, fluctuations in underlying commodity prices and the costs of production of our principal vendors of components and parts are material to our level of profitability.

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Item 8. Financial Statements and Supplementary Data

J.B. Poindexter & Co., Inc. and Subsidiaries

J.B. Poindexter & Co., Inc. and Subsidiaries

Report of Independent Registered Public Accounting Firm	38
Financial Statements:
Consolidated Balance Sheets	39
Consolidated Statements of Operations	40
Consolidated Statements of Stockholder’s Equity	41
Consolidated Statements of Cash Flows	42
Notes to Consolidated Financial Statements	43

Report of Independent Registered Public Accounting Firm	36
Financial Statements:
Consolidated Balance Sheets	37
Consolidated Statements of Operations	38
Consolidated Statements of Stockholder’s Equity	39
Consolidated Statements of Cash Flows	40
Notes to Consolidated Financial Statements	41

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Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholder of
J.B. Poindexter & Co., Inc.

We have audited the accompanying consolidated balance sheets of J.B. Poindexter & Co., Inc. and subsidiaries (Company) as of December 31, ~~2010~~2011 and ~~2009~~2010, and the related consolidated statements of operations, stockholder’s equity, and cash flows for each of the three years in the period ended December 31, ~~2010~~2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal controls over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of J.B. Poindexter & Co., Inc. and subsidiaries as of December 31, ~~2010~~2011 and ~~2009~~2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, ~~2010~~2011 in conformity with U.S. generally accepted accounting principles.

/s/ CROWE HORWATH LLP

South Bend, Indiana ~~April~~February 1323, ~~2011~~2012

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

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

	December 31,
	2010			2009
	2011			2010
Assets
Current assets
Cash and cash equivalents	$	5844,~~382~~920		$	5458,~~176~~382
Accounts receivable, net	3649,~~023~~385			3436,~~982~~023
Inventories, net	6179,~~578~~739			5261,~~718~~578
Deferred income taxes	~~463~~1,257			~~1,368~~463
Income tax receivable	~~9,287~~674			69,~~356~~287
Prepaid expenses and other	2,~~891~~224			2,~~590~~891
Total current assets	~~168~~178,~~624~~199			~~152~~168,~~190~~624
Property, plant and equipment, net	56,436			70,073
Property, plant, and equipment, net	46,564			56,436
Goodwill	35,000			35,000
Intangible assets, net	1412,~~299~~714			1514,~~836~~299
Other assets	12,365			12,865
Debt issuance costs	1,008			1,817
Total assets	$	286,724		$	285,964
Restricted cash	—			6,610
Other assets	3,680			3,938
Total assets	$	277,165		$	286,724
Liabilities and stockholder’s equity
Current liabilities
Current portion of long-term debt	$	2,~~260~~726		$	2,~~259~~260
Accounts payable	2636,~~966~~988			2726,~~699~~966
Accrued compensation and benefits	910,~~647~~830			69,~~431~~647
Other accrued liabilities	1617,~~805~~504			16,~~420~~805
Total current liabilities	5568,~~678~~048			5255,~~809~~678
Noncurrent liabilities
Non-current liabilities
Long-term debt, less current portion	~~201~~164,~~233~~991			~~202~~201,~~935~~233
Deferred income taxes	32,~~614~~718			3,~~818~~614
Employee benefit obligations and other	89,~~554~~178			68,~~966~~554
Total noncurrent liabilities	213,401			213,719
Total non-current liabilities	176,887			213,401
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	~~529~~387			~~290~~529
Accumulated deficit	(2,370		)	(340		)
Retained earnings (accumulated deficit)	12,357			(2,370		)
Total stockholder’s equity	1732,~~645~~230			1917,~~436~~645
Total liabilities and stockholder’s equity	$	~~286~~277,~~724~~165		$	~~285~~286,~~964~~724

The accompanying notes are an integral part of these consolidated financial statements.

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

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands)

	Years ended December 31,
	2010			2009			2008
	2011			2010			2009
Revenues	$	~~553~~708,~~561~~064		$	~~480~~553,~~647~~561		$	~~706~~480,~~409~~647
Cost of revenues	~~481~~607,~~888~~709			~~420~~481,~~146~~888			~~610~~420,~~799~~146
Gross profit	71100,~~673~~355			6071,~~501~~673			9560,~~610~~501
Selling and administrative expenses	5358,~~699~~510			4853,~~961~~699			6648,~~290~~961
Closed and excess facility costs	~~951~~—			~~642~~951			~~788~~642
Loss (gain) on sale lease-back of real estate	2,555			(265		)	—
Loss (gain) on sale/lease-back of real estate, net	1,053			2,555			(265		)
Gain on repurchase of 8.75% Notes	—			(186		)	(416		)
Loss (gain) on repurchase of 8.75% Notes	187			—			(186		)
Other expense (income)	105			489			(733		)
Other expense	450			105			489
Operating income	1440,~~363~~155			1014,~~860~~363			2910,~~681~~860
Interest expense	17,~~917~~887			1817,~~163~~917			18,~~491~~163
Interest income	(6245		)	(~~197~~62		)	(~~410~~197		)
Income (loss) before income taxes	(322,~~492~~313		)	(73,~~106~~492		)	11(7,~~600~~106		)
Income tax provision (benefit)	(17,~~462~~586		)	(21,~~210~~462		)	4(2,~~810~~210		)
Net income (loss)	$	(214,~~030~~727	)	$	(42,~~896~~030	)	$	6(4,~~790~~896	)

The accompanying notes are an integral part of these consolidated financial statements.

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

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

(Dollars in Thousands)

For the years ended December 31, 2010, 2009 and 2008	Shares of common stock	Common stock and paid-in capital		Retained earnings (accumulated deficit)			Accumulated other comprehensive income (loss)			Total
For the years ended December 31, 2011, 2010 and 2009	Shares of common stock	Common stock and paid-in capital		Retained earnings (accumulated deficit)			Accumulated other comprehensive income (loss)			Total
January 1, 2008	3,059	$	19,486	$	(2,234	)	$	1,017		$	18,269
January 1, 2009	3,059	$	19,486	$	4,556		$	(254	)	$	23,788
Net income	—	—		6,790			—			6,790
Translation adjustment	—	—		—			(1,271		)	(1,271		)
Comprehensive income										5,519
December 31, 2008	3,059	19,486		4,556			(254		)	23,788
Net loss	—	—		(4,896		)	—			(4,896		)
Translation adjustment	—	—		—			544			544
Comprehensive loss										(4,352		)
December 31, 2009	3,059	19,486		(340		)	290			19,436
Net loss	—	—		(2,030		)	—			(2,030		)
Translation adjustment	—	—		—			239			239
Comprehensive loss										(1,791		)
December 31, 2010	3,059	$19,486	~~19,486~~	$(2,370	~~(2,370~~	)	$529	~~529~~		$17,645	~~17,645~~
Net income	—	—		14,727			—			14,727
Translation adjustment	—	—		—			(142		)	(142		)
Comprehensive income										14,585
December 31, 2011	3,059	$	19,486	$	12,357		$	387		$	32,230

The accompanying notes are an integral part of these consolidated financial statements.

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

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

	Years ended December 31,
	2010			2009			2008
	2011			2010			2009
Cash flows from operating activities:
Net income (loss)	$	(214,~~030~~727	)	$	(42,~~896~~030	)	$	6(4,~~790~~896	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1517,~~278~~634			16,~~998~~551			1716,~~658~~998
Amortization of debt issuance costs	559			~~584~~559			~~691~~584
Loss (gain) on sale lease-back of real estate	2,555			(265		)	—
Loss (gain) on sale / lease-back of real estate	1,053			2,555			(265		)
Gain on redemption of 8.75% Notes	—			(186		)	(416		)
Loss (gain) on repurchase of 8.75% Notes	187			—			(186		)
Provision for excess and obsolete inventory	12,~~809~~024			1,~~181~~809			21,~~218~~181
Provision for doubtful accounts receivable	~~151~~119			~~154~~151			~~1,181~~154
Loss on sale of property, plant and equipment	425			355			199
Loss (gain) on sale of property, plant, and equipment	(202		)	425			355
Deferred income tax provision	701			1,529			3,036
Deferred income tax provision (benefit)	(1,241		)	701			1,704
Impairment of intangible assets	—			—			300
Other	(45		)	(419		)	267
Other	854			442			127
Change in assets and liabilities:
Change in assets and liabilities, net of the effect of business acquisitions and dispositions:
Accounts receivable	(13,481		)	(1,192		)	7,820
Accounts receivable	(1,192		)	7,820			8,594
Inventories	(20,185		)	(10,669		)	12,998
Inventories	(10,669		)	12,998			9,179
Prepaid expenses and other	(127		)	(301		)	300
Prepaid expenses and other	(301		)	300			(93		)
Income tax receivable	8,613			(2,931		)	—
Accounts payable	~~(733~~10,022		)	~~1,100~~(733		)	(41,~~715~~100		)
Accrued income taxes	~~(2,225~~—		)	(12,~~668~~225		)	(1,~~076~~668		)
Other accrued liabilities	(12,~~287~~630		)	(71,~~224~~644		)	(~~355~~7,224		)
Net cash provided by operating activities	322,~~895~~287			293,~~222~~895			4529,~~470~~222
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired	—			—			(233		)
Proceeds from sale / lease-back of real estate	2,075			14,975			—
Proceeds from sale lease-back of real estate	14,975			—			7,135
Proceeds from disposition of business, property, plant, and equipment	507			857			1,811
Proceeds from disposition of business, property, plant and equipment	857			1,811			—
Purchase of property, plant and equipment	(9,746		)	(14,816		)	(11,320		)
Purchase of property, plant and equipment	(14,816		)	(11,320		)	(14,719		)
Reduction (issuance) of insurance collateral deposits	6,610			982			(315		)
Reduction (issuance) of insurance collateral deposits	982			(315		)	(736		)
Net cash provided by (used in) investing activities	(554		)	1,998			(9,824		)
Net cash provided by (used in) investing activities	1,998			(9,824		)	(8,553		)
Cash flows from financing activities:
Net proceeds from revolving credit facility	—			~~(379~~—		)	(~~3,321~~379		)
Payments of long-term debt and capital leases	(1,726		)	(1,346		)	(2,758		)
Net proceeds from long-term debt	6,813			—			—
Net cash used in financing activities	(1,726		)	(1,725		)	(6,079		)
Payments of long-term debt	(42,023		)	(1,726		)	(1,346		)
Translation impacts	39			252			(1,271		)
Net cash used in financing activities	(35,210		)	(1,726		)	(1,725		)
Change in cash and cash equivalents	4,206			17,925			29,567
Translation impacts	15			39			252
Cash and cash equivalents, beginning of year	54,176			36,251			6,684
Change in cash and cash equivalents	(13,462		)	4,206			17,925
Cash and cash equivalents, end of year	$	58,382		$	54,176		$	36,251
Cash and cash equivalents, beginning of year	58,382			54,176			36,251
Cash and cash equivalents, end of year	$	44,920		$	58,382		$	54,176

The accompanying notes are an integral part of these consolidated financial statements.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

Note 1. : Summary of Significant Accounting Policies

Principles of Consolidation. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. All ~~intercompany~~inter-company accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents. Cash and all highly liquid investments 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. At times, the Company has maintained deposits in financial institutions in excess of federally insured limits.

Revenue Recognition. Revenue is recognized upon shipment of the product to customers, except for Morgan and Morgan Olson, where revenue is recognized when the title transfers to the customer upon final body assembly, quality inspection and customer notification. Amounts billed to customers related to shipping and handling ~~are~~is classified as revenue. The costs associated with the shipping and handling revenue are included in the cost of revenues.

Accounts Receivable. The Company sells to customers on terms customary in its industries. Discounts are allowed for early payment; ~~but~~however, only if economically justified, based on the cost of capital. Accounts receivable is stated net of an allowance for doubtful accounts of $~~603~~480 and $~~1,028~~603 at December 31, ~~2010~~2011 and ~~2009~~2010, respectively. The Company establishes an allowance for doubtful accounts receivable on a case-by-case basis, when it believes that the required payment of specific amounts owed is unlikely to occur. The activity in the allowance for doubtful accounts for the years ended December 31 was:

	2010			2009			2008
	2011			2010			2009
Balance at the beginning of the year	$	1,028		$	1,740		$	1,182
Balance at beginning of the year	$	603		$	1,028		$	1,740
Provision for losses	~~151~~119			~~154~~151			~~1,181~~154
Charge-offs	(~~232~~43		)	(~~620~~232		)	(~~576~~620		)
Recoveries	(~~344~~199		)	(~~246~~344		)	(47246		)
Balance at the end of the year	$	~~603~~480		$	~~1,028~~603		$	1,~~740~~028

The carrying amounts of trade accounts receivable approximate fair value because of the short maturity of those instruments. The Company is not aware of any significant credit risks related to its customer base and does not generally require collateral or other security to support customer receivables.

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

Property, Plant and Equipment. Property, plant and equipment, including property under capital leases, are stated at cost. The cost of property under capital leases is the lower of the present value of the future minimum lease payments or fair value at the inception of the lease. Depreciation and amortization is computed by using the straight-line method over the estimated useful lives of the applicable assets or over the shorter of the lease term or the estimated useful life of leasehold improvements. The cost of maintenance and repairs is charged to operating expense, as incurred, and the cost of major replacements and significant improvements is capitalized.

Goodwill and Intangible Assets. Goodwill and intangible assets with indefinite useful lives are not amortized, but are evaluated ~~at least~~ annually for impairment, or more frequently, if facts and circumstances indicate that the assets may be impaired. Intangible assets, ~~that are~~ determined to have finite lives, are amortized on a straight-line basis over the period in which we expect to receive economic benefit. ~~See~~Refer to Note 5 for further discussion on goodwill and intangible assets.

41Debt Issuance Costs. Debt issuance costs are amortized using the effective interest method over the term of the related debt, which ranges from four to ten years. Amortization of debt issuance costs is included in interest expense (refer to Note 6).

~~Table~~Evaluation of ~~Contents~~Impairment of Long-Lived Assets. The Company evaluates the carrying value of long-lived assets whenever significant events or changes in circumstances indicate the carrying value of these assets may be impaired. The Company evaluates potential impairment of long-lived assets by comparing the carrying value of the assets to the expected net future cash flows resulting from the use of the assets.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

Debt Issuance Costs. Debt issuance costs are amortized using the effective interest method over the term of the related debt, which ranges from four to ten years. Amortization of debt issuance costs is included in interest expense (see Note 5).

Evaluation of Impairment of Long-Lived Assets. The Company evaluates the carrying value of long-lived assets whenever significant events or changes in circumstances indicate the carrying value of these assets may be impaired. The Company evaluates potential impairment of long-lived assets by comparing the carrying value of the assets to the expected net future cash flows resulting from the use of the assets. As indicated in Note 5, the Company recorded impairment charges in 2008.

Warranty. Morgan provides product warranties for periods of up to five years. Morgan Olson provides a warranty period, which is one year or 12,000 miles for certain components, three years or 36,000 miles for paint, and five years or 50,000 miles for the van body structure. Truck Accessories provides a warranty period, exclusive to the original truck owner, which is, in general but with exclusions, one year for parts, five years for paint and lifetime for structure. The Specialty Vehicle Group provides a warranty on its products for a period of 48 months or 50,000 miles on the section of the body and parts manufactured for funeral coaches and funeral limousines, 36 months or 50,000 miles on the body and parts manufactured for bus bodies, and 48 months or 100,000 miles on the section of the body and parts manufactured for limousines. The remaining operations of Specialty Manufacturing do not provide a warranty on their products. A provision for warranty costs is included in cost of sales when goods are sold based on historical experience and estimated future claims. The Company had accrued warranty costs of $4,029 and $3,481 at December 31, 2010 and 2009, respectively. The activity in the accrued warranty cost accounts for the years ended December 31 was:

	2010			2009			2008
Balance at the beginning of the year	$	3,481		$	3,631		$	4,343
Provision for losses	2,696			1,354			1,739
Charge-offs	(2,148		)	(1,504		)	(2,451		)
Balance at the end of the year	4,029			3,481			3,631
Less: Short-term	2,610			1,687			1,246
Long-Term	$	1,419		$	1,794		$	2,385

Advertising and Research and Development Expense. The Company expenses advertising costs and research and development (“R&D”) costs as incurred. During the years ended December 31, 2010, 2009 and 2008, advertising expense was $1,082, $1,749 and $3,324 respectively, and R&D expense was $1,396, $1,192 and $2,298, respectively.

Income Taxes. The provision (benefit) for income taxes is based on income recognized for financial statement purposes and includes the effects of temporary and permanent differences between such income and that recognized for tax return purposes. Deferred tax assets and liabilities are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the enacted tax rates. The Company considers the earnings in its Canadian operations to be permanently invested and as such has not provided for deferred taxes related to potential distributions of those earnings. The amount of undistributed earnings at December 31, 2010 was not material.

The Company’s management believes it is more likely than not that current and long-term deferred tax assets will reduce future income tax payments. Should the Company determine it is more likely than not that it will be unable to realize all or part of the net deferred tax asset in the future, a valuation allowance, necessary to reduce the deferred tax asset to the amount that is more likely than not to be realized, would reduce income in the period such determination was made.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

The Company accounts for uncertain tax positions and reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense.

Self-Insurance Reserves. The Company utilizes a combination of insurance coverage and self-insurance programs for property, casualty, workers’ compensation and healthcare insurance. The Company records a fully developed self-insurance reserve to cover the self-insured portion of these risks based on known facts and historical industry trends. Changes in management’s assumptions may result in a different self-insurance reserve.

Contingent Liabilities. Reserves are established for estimated environmental and legal loss contingencies when a loss is probable and the amount of the loss can be reasonably estimated. Revisions to contingent liabilities are reflected in income in the period in which different facts or information become known or circumstances change that affect the previous assumptions with respect to the likelihood or amount of loss. Reserves for contingent liabilities are based upon the assumptions and estimates regarding the probable outcome of the matter. Should the outcome differ from the assumptions and estimates, revisions to the estimated reserves for contingent liabilities would be required.

Comprehensive Income. Comprehensive income consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustments, which are also recognized as a separate component of equity.

Translation of Foreign Financial Statements. Assets and liabilities of foreign operations are translated at year-end rates of exchange, and the income statements are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholder’s equity until the foreign operations are sold or substantially liquidated. Gains or losses resulting from foreign currency transactions (transactions that require settlement in a currency other than the Company’s functional currency) are included in net income (loss).

Fair Value of Financial Instruments. The Company’s financial instruments consist of cash and cash equivalents, receivables and debt. Fair values of cash and cash equivalents and receivables approximate carrying values for these financial instruments since they are relatively short-term in nature. The carrying amount of debt, except for the Company’s 8.75% Notes (see Note 8), approximates the fair value due either to length of maturity or existence of variable interest rates that approximate prevailing market rates. The fair value of the Company’s 8.75% Notes is determined under the provisions of applicable guidance, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates subject to change include the valuation of goodwill and other intangible assets, the allowances for doubtful accounts, shrinkage and excess and obsolete inventory, the valuation of deferred tax assets, and the allowances for self-insurance risks, warranty claims, and environmental claims.

Recent Accounting Pronouncements. In June 2009, the Financial Accounting Standards Board issued Accounting Standards Update No. 2009-17 (an amendment to Accounting Standards Codification 810, Consolidation), Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities, “ASU No. 2009-17.” This update significantly changes the consolidation rules as they related to variable interest entities (“VIEs”). The update specifically changes how a reporting entity determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a reporting entity is required to consolidate another entity is based on, among other things, the other entity’s

Table of Contents

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

~~purpose~~Warranty. Morgan ~~and~~provides ~~design~~product ~~and~~warranties ~~the~~for ~~reporting~~periods ~~entity’s~~of ~~ability~~up to ~~direct~~five ~~the~~years. Morgan ~~activities~~Olson ofprovides ~~the~~a ~~other~~warranty ~~entity~~period, ~~that~~which ~~most~~is ~~significantly~~one ~~impact~~year, ~~the~~or ~~other~~12,000 ~~entity’s~~miles, ~~economic~~for ~~performance~~certain components; three years, or 36,000 miles, for paint; and five years, or 50,000 miles, for the van body structure. AsTAG provides a ~~result~~warranty period, itexclusive isto ~~expected~~the ~~that~~original ~~many~~purchaser, ~~off-balance-sheet~~which ~~entities~~is, ~~previously~~in ~~exempt~~general, ~~from~~but ~~consolidation~~with —exclusions, ~~qualified~~one ~~special-purpose~~year ~~entities~~for ~~(QSPEs)~~parts, —five ~~will~~years befor ~~subject~~paint, toand ~~consolidation~~lifetime for structure. The ~~Due~~SVG toprovides ~~the~~a ~~elimination~~warranty on its products for a period of ~~the~~48 ~~QSPE~~months, ~~scope~~or ~~exception~~50,000 miles, on the ~~impact~~section of the ~~changes~~body ~~resulting~~and ~~from~~parts ~~this~~manufactured ~~update~~for ~~may~~funeral becoaches ~~more~~and ~~evident~~funeral tolimousines; ~~financial~~36 ~~services~~months, ~~companies;~~or ~~however~~50,000 ~~the~~miles, ~~new~~on ~~guidance~~the ~~will~~body ~~have~~and ~~broad~~parts ~~applicability~~manufactured ~~across~~for ~~all~~bus ~~industries.~~bodies; Inand ~~addition~~48 months, ~~ASU~~or No100,000 ~~2009-17~~miles, ~~requires~~on athe ~~number~~section of ~~new~~the ~~disclosures,~~body ~~including~~and ~~the~~parts ~~requirements~~manufactured for alimousines. The ~~reporting~~remaining ~~entity~~operations toof ~~provide~~Specialty ~~additional~~Manufacturing ~~disclosures~~do ~~about~~not ~~its~~provide ~~involvement~~a ~~with~~warranty ~~VIEs,~~on ~~any~~their ~~significant~~products. Based ~~changes~~on inhistorical ~~risk~~experience ~~exposure~~and ~~due~~estimated tofuture ~~that involvement~~claims, ~~and~~a ~~how~~provision ~~its~~for ~~involvement~~warranty ~~with~~costs ais ~~VIE~~included ~~affects~~in ~~the~~cost ~~reporting~~of ~~entity’s~~sales ~~financial~~when ~~statements~~goods are sold. The ~~adoption~~Company accrued warranty costs of ~~this~~$4,663 ~~update~~and ~~did~~$4,029 ~~not~~at ~~have~~December 31, a2011 ~~material~~and ~~effect~~2010, onrespectively. The ~~our~~activity ~~consolidated~~in ~~financial~~the ~~statements.~~accrued warranty cost accounts for the years ended December 31 was:

2. Segment Data

	2011			2010			2009
Balance at the beginning of the year	$	4,029		$	3,481		$	3,631
Provision for losses	3,377			2,696			1,354
Charge-offs	(2,743		)	(2,148		)	(1,504		)
Balance at the end of the year	4,663			4,029			3,481
Less: Short-term	2,964			2,610			1,687
Long-term	$	1,699		$	1,419		$	1,794

Advertising and Research and Development Expense. The Company ~~operates~~expenses ~~and~~advertising ~~manages~~costs ~~its~~and ~~subsidiaries~~research ~~within~~and ~~the~~development ~~separate~~(“R&D”) ~~business~~costs ~~segments~~as incurred. ~~The~~During ~~Company~~the ~~evaluates~~years ~~performance~~ended ~~and~~December 31, ~~allocates~~2011, ~~resources~~2010 ~~based~~and on2009, ~~the~~advertising ~~operating~~expenses ~~income~~were of$2,644, ~~each~~$1,082 ~~segment~~and $1,749, respectively. ~~The~~During ~~accounting policies of~~ the ~~reportable~~years ~~business~~ended ~~segments~~December 31, ~~are~~2011, ~~the~~2010 ~~same~~and as2009, ~~those~~R&D ~~described~~expenses inwere ~~the~~$1,722, ~~summary~~$1,396 ofand ~~significant~~$1,192, ~~accounting policies~~respectively.

Income Taxes. The ~~following~~provision (benefit) for income taxes is abased ~~summary~~on ofincome recognized for financial statement purposes and includes the ~~business~~effects ~~segment~~of ~~data~~temporary and permanent differences between such income and that recognized for tax return purposes. Deferred tax assets and liabilities are computed based on the ~~years~~difference ~~ended~~between the financial statement and income tax bases of assets and liabilities using the enacted tax rates. The Company considers the earnings in its Canadian and Malaysian operations to be permanently invested; as such, it has not provided for deferred taxes related to potential distributions of those earnings. The amount of undistributed earnings at December 31:, 2011 was not material.

Revenues	2010			2009			2008
Morgan	$	197,383		$	146,902		$	233,893
Morgan Olson	85,834			61,593			104,437
Truck Accessories	123,890			115,607			131,871
Specialty Manufacturing	148,409			157,925			238,337
Eliminations	(1,955		)	(1,380		)	(2,129		)
Revenues	$	553,561		$	480,647		$	706,409

The Company’s management generally believes it is more likely than not those current and long-term deferred tax assets recognized will reduce future income tax payments. When the Company determines it is more likely than not that it will be unable to realize all or part of the net deferred tax asset in the future, a valuation allowance, necessary to reduce the deferred tax asset to the amount that is more likely than not to be realized, reduces income in the period such a determination was made.

Operating Income	2010			2009			2008
Morgan	$	8,601		$	1,156		$	3,953
Morgan Olson	5,101			2,565			5,415
Truck Accessories	12,687			7,839			2,403
Specialty Manufacturing	(1,760		)	2,937			25,895
JBPCO (Parent)	(10,266		)	(3,637		)	(7,985		)
Operating Income	$	14,363		$	10,860		$	29,681

Depreciation and Amortization Expense	2010		2009		2008
Morgan	$	1,816	$	1,921	$	2,054
Morgan Olson	795		761		1,027
Truck Accessories	3,129		4,057		4,191
Specialty Manufacturing	8,812		10,141		10,281
JBPCO (Parent)	726		118		105
Depreciation and Amortization Expense	$	15,278	$	16,998	$	17,658

Self-Insurance Reserves. The Company utilizes a combination of insurance coverage and self-insurance programs for property, casualty, workers’ compensation and healthcare insurance. The Company records a fully developed self-insurance reserve to cover the self-insured portion of these risks, based on known facts and historical industry trends. Changes in management’s assumptions may result in a different self-insurance reserve.

Contingent Liabilities. Reserves are established for estimated environmental and legal loss contingencies when a loss is probable and the amount of the loss can be reasonably estimated. Revisions to contingent liabilities are reflected in income in the period in which different facts or information become known or circumstances change that affect the previous assumptions, with respect to the likelihood or amount of loss. Reserves for contingent liabilities are based upon the assumptions and estimates regarding the probable outcome of the matter. Should the outcome differ from the assumptions and estimates, revisions to the estimated reserves for contingent liabilities would be required.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

Total Assets as of December 31,	2010		2009
Morgan	$	38,574	$	39,819
Morgan Olson	9,430		19,311
Truck Accessories	56,553		58,371
Specialty Manufacturing	118,242		112,712
JBPCO (Parent)	63,925		55,751
Identifiable Assets	$	286,724	$	285,964

Comprehensive Income. Comprehensive income consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustments, which are also recognized as a separate component of equity.

Capital Expenditures	2010		2009		2008
Morgan	$	1,601	$	1,276	$	735
Morgan Olson	1,400		361		799
Truck Accessories	2,065		2,200		3,070
Specialty Manufacturing	6,970		5,034		9,176
JBPCO (Parent)	2,780		2,449		939
Capital Expenditures	$	14,816	$	11,320	$	14,719

Translation of Foreign Financial Statements. Assets and liabilities of foreign operations are translated at year-end rates of exchange, and the income statements are translated at the average rates of exchange for the year. Gains or losses resulting from translating foreign currency financial statements are accumulated in a separate component of stockholder’s equity, until the foreign operations are sold or substantially liquidated. Gains or losses resulting from foreign currency transactions (transactions that require settlement in a currency other than the Company’s functional currency) are included in net income (loss).

~~Morgan~~Fair ~~had~~Value ~~two~~of ~~customers~~Financial ~~that~~Instruments. The ~~accounted~~Company’s ~~for,~~financial oninstruments aconsist ~~combined~~of ~~basis,~~cash ~~approximately~~and ~~56%~~cash equivalents, ~~54%~~receivables and ~~48%~~debt. Fair values of ~~Morgan~~cash and cash equivalents and receivables approximate carrying values for these financial instruments, since they are relatively short-term in nature. The carrying amount of debt, except for the Company’s ~~revenues~~8.75% ~~during~~Notes ~~2010~~(refer to Note 9), ~~2009~~approximates ~~and~~the ~~2008~~fair value, ~~respectively~~due either to length of maturity or existence of variable interest rates that approximate prevailing market rates. ~~Accounts~~The ~~receivable~~fair ~~from~~value ~~these~~of ~~customers~~the ~~totaled~~Company’s ~~$2,323~~8.75% ~~and~~Notes ~~$2,816~~is atdetermined ~~December 31~~under the provisions of applicable guidance, ~~2010~~which requires an entity to maximize the use of observable inputs and ~~2009,~~minimize ~~respectively~~the use of unobservable inputs when measuring fair value.

~~Morgan~~Reclassifications. Certain ~~Olson~~amounts ~~had~~in ~~one~~the ~~customer~~prior ~~that~~year ~~accounted~~consolidated ~~for~~financial ~~approximately~~statements ~~41%,~~have ~~31%~~been ~~and~~reclassified ~~44%~~to ofconform ~~Morgan~~with ~~Olson’s~~the ~~revenues~~current ~~during~~year ~~2010, 2009 and 2008, respectively~~presentation. ~~Accounts~~ ~~receivable~~These ~~from~~reclassifications ~~this~~had ~~customer~~no ~~were~~effect ~~$109~~on ~~and~~stockholders ~~$123~~equity ator ~~December 31,~~net ~~2010~~loss ~~and~~as ~~2009,~~previously ~~respectively~~reported.

~~Specialty~~Use ~~Manufacturing~~of ~~has~~Estimates. The ~~two~~preparation ~~customers~~of financial statements in conformity with accounting principles generally accepted in the ~~international~~United ~~oilfield~~States ~~service~~requires ~~industry~~management to make estimates and assumptions that ~~accounted~~affect ~~for~~the ~~approximately~~reported ~~44%,~~amounts ~~39%~~of assets and ~~42%~~ liabilities and disclosure of ~~Specialty~~contingent ~~Manufacturing’s~~assets ~~revenues~~and ~~during~~liabilities ~~2010,~~at ~~2009~~the date of the financial statements and ~~2008,~~the ~~respectively~~reported amounts of revenues and expenses during the reporting period. ~~Accounts~~Actual ~~receivable~~results could differ from ~~these~~those ~~customers~~estimates. Significant ~~totaled~~estimates ~~$8,272~~subject to change include the valuation of goodwill and $4other intangible assets,~~882~~ atthe ~~December 31~~allowances for doubtful accounts, ~~2010~~shrinkage, and ~~2009~~excess and obsolete inventory, ~~respectively~~the valuation of deferred tax assets, and the allowances for self-insurance risks, warranty claims and environmental claims.

~~The~~Recent ~~Company~~Accounting Pronouncements. In June 2011, onthe aFinancial ~~consolidated~~Accounting ~~basis,~~Standards ~~had~~Board ~~five~~(“FASB”) ~~customers~~issued ~~that~~Accounting ~~accounted~~Standards ~~for~~Update ~~approximately~~(“ASU”) ~~38%~~No. 2011-5, ~~33%~~Presentation ~~and~~of ~~37%~~Comprehensive ofIncome, ~~total~~which ~~revenues~~requires ~~during~~entities ~~2010,~~to ~~2009~~present ~~and~~comprehensive ~~2008,~~income ~~respectively. Accounts~~either ~~receivable~~in ~~from~~a ~~these~~single ~~customers~~continuous ~~totaled~~financial ~~$10,704~~statement ~~and~~or ~~$7,821~~in attwo ~~December 31,~~separate ~~2010~~but ~~and~~consecutive ~~2009,~~financial ~~respectively~~statements. ~~These~~Entities ~~were~~will ~~customers~~no oflonger ~~Morgan,~~have ~~Morgan~~the ~~Olson~~option ~~and~~to ~~Specialty~~present ~~Manufacturing. Morgan~~components ~~had~~of ~~two~~other ~~customers,~~comprehensive ~~Penske~~income ~~and~~(“OCI”) ~~Ryder,~~as ~~which~~part ~~individually~~of ~~accounted~~the ~~for~~statement ~~more~~of ~~than~~stockholders’ ~~10%~~equity. In ofaddition, the ~~Company’s~~amended ~~revenues~~guidance ~~during~~requires ~~any~~entities ~~one~~to orshow ~~more~~the effect of ~~2010,~~items ~~2009~~reclassified ~~and~~from ~~2008. Penske~~OCI ~~accounted~~to ~~for~~net ~~approximately~~income ~~10%,~~on ~~11%~~the ~~and~~face 8% of the ~~Company’s~~financial ~~total~~statements. The ~~revenues~~amended ~~during~~guidance ~~2010,~~is ~~2009~~required ~~and~~for ~~2008,~~fiscal ~~respectively. Accounts~~years ~~receivable~~and ~~for~~interim ~~Penske~~periods ~~was~~within ~~$1,036~~those ~~and $1~~years,~~696~~ atbeginning after December 3115, ~~2010 and 2009, respectively~~2011. ~~Ryder~~Early ~~accounted~~adoption ~~for~~is ~~approximately 10%~~permitted, 6% and 8%retrospective ofapplication ~~the~~is ~~Company’s total revenues during 2010, 2009 and 2008, respectively~~required. ~~Accounts~~This ~~receivable~~update ~~for~~will ~~Ryder~~require ~~was~~the ~~$1,287~~Company ~~and~~to ~~$1,120~~change atthe ~~December 31,~~presentation ~~2010~~of ~~and~~comprehensive ~~2009,~~income ~~respectively~~in future periods.

~~The~~In ~~Company’s~~September 2011, ~~operations~~the ~~are~~FASB ~~located~~issued ~~principally~~ASU inNo. 2011-08 ~~the~~(an ~~United~~amendment ~~States~~to Accounting Standards Codification (“ASC”) 350, Intangibles — Goodwill and Other), Testing Goodwill for Impairment. ~~However~~This update simplifies the current two-step goodwill impairment test previously required by ASC 350-20, ~~Morgan~~by ~~has~~permitting ~~operations~~entities ~~located~~to infirst ~~Canada~~perform ~~and~~a ~~Specialty~~qualitative ~~Manufacturing~~assessment ~~has~~to ~~operations~~determine inwhether ~~Mexico~~it ~~and~~is ~~Malaysia~~more likely than not (a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amounts. ~~Long-lived~~Based ~~assets~~on ~~relating~~the toresults ~~these~~of ~~foreign~~the ~~operations~~qualitative ~~were $10~~assessment,~~423~~ ~~and $9,168~~if atthe ~~December 31~~entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amounts, ~~2010~~it ~~and~~would ~~2009~~then perform the first step of the goodwill impairment test; otherwise, ~~respectively~~no further impairment test would be required. ~~Consolidated~~The ~~revenues~~amended ~~included~~guidance ~~$44,545,~~is ~~$31,881~~effective for annual and ~~$31,888~~interim ingoodwill ~~2010,~~impairment ~~2009~~tests ~~and~~performed ~~2008,~~for ~~respectively~~fiscal years beginning after December 15, 2011. Early adoption is permitted. The Company is continuing to assess the implications of ~~sales~~this update, but does not expect it to ~~customers~~have ~~outside~~a ~~the~~significant ~~United~~impact ~~States~~on future financial reporting.

JBPCO (Parent) operating expenses for all periods comprise the costs of the parent company office and personnel who provide strategic direction and support to the subsidiary companies. JBPCO (Parent) costs were $10,266, $3,637, and $7,985 for 2010, 2009 and 2008, respectively.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

~~The~~Note ~~sale lease-back transaction consummated in December 2010 with Poindexter Properties, LLC resulted in a recognized loss on sale of real estate of $~~2~~,820~~: Segment and a deferred gain on sale lease-back of $3,595. The Company considers the loss related to the sale of real estate under the sale lease-back arrangement to be an unusual transaction that is not considered by the Company’s chief operating decision maker in his assessment of segment profitability and as a result has been included in JBPCO (Parent) category. To be consistent with treatment of the 2010 loss, the Company reclassified the $265 income recognized in 2009 on the deferred gain originating from the 2008 sale lease-back arrangement with Poindexter Properties, LLC that was previously presented as Morgan operating income.Data

3The Company operates and manages its subsidiaries within the separate business segments. ~~Inventories~~ The Company evaluates performance and allocates resources based on the operating income of each segment. The accounting policies of the reportable business segments are the same as those described in the summary of significant accounting policies. The following is a summary of the business segment data for the years ended December 31:

Consolidated net inventories consisted of the following:

Revenues	2011		2010		2009
Morgan	$	296,082	$	197,304	$	146,555
Morgan Olson	104,068		85,631		61,290
TAG	123,140		122,213		114,875
Specialty Manufacturing	184,774		148,413		157,927
Revenues	$	708,064	$	553,561	$	480,647

	December 31,
Operating Income	2011			2010			2009
	2010			2009
Morgan	$	21,330		$	8,601		$	1,156
Raw materials	$	27,246		$	24,946
Morgan Olson	6,113			5,101			2,565
Work in process	19,978			14,894
TAG	11,007			12,687			7,839
Finished goods	14,354			12,878
Specialty Manufacturing	11,724			(1,760		)	2,937
Total inventories	$	61,578		$	52,718
JBPCO (Parent)	(10,019		)	(10,266		)	(3,637		)
Operating Income	$	40,155		$	14,363		$	10,860

Inventories are stated net of an allowance for excess and obsolete inventory of $2,975 and $3,391 at December 31, 2010 and 2009, respectively. The activity in the allowance for excess and obsolete inventory accounts for the years ended December 31 was:

Depreciation and Amortization Expense	2011		2010		2009
Morgan	$	1,726	$	1,816	$	1,921
Morgan Olson	768		795		761
TAG	2,727		3,129		4,057
Specialty Manufacturing	11,070		10,085		10,141
JBPCO (Parent)	1,343		726		118
Depreciation and Amortization Expense	$	17,634	$	16,551	$	16,998

	2010			2009			2008
Total Assets as of December 31,	2011			2010			2009
Balance at the beginning of the year	$	3,391		$	3,166		$	1,707
Morgan	$	62,767		$	38,574		$	39,819
Provision for losses	1,809			1,181			2,218
Morgan Olson	18,321			9,430			19,311
Charge-offs	(2,225		)	(956		)	(759		)
TAG	55,461			56,553			58,371
Balance at the end of the year	$	2,975		$	3,391		$	3,166
Specialty Manufacturing	113,480			118,242			112,712
JBPCO (Parent)	27,136			63,925			55,751
Total Assets	$	277,165		$	286,724		$	285,964

4. Property, Plant and Equipment

Capital Expenditures	2011		2010		2009
Morgan	$	2,846	$	1,601	$	1,276
Morgan Olson	1,736		1,400		361
TAG	1,793		2,065		2,200
Specialty Manufacturing	3,188		6,970		5,034
JBPCO (Parent)	183		2,780		2,449
Capital Expenditures	$	9,746	$	14,816	$	11,320

Property, plant and equipment, as of December 31, 2010 and 2009, consisted of the following:

	Range of Useful Lives in Years	2010			2009
Land	—	$	1,012		$	3,079
Buildings and improvements	5-25	10,349			24,576
Machinery and equipment	3-10	134,903			128,978
Furniture and fixtures	2-10	17,602			14,648
Transportation equipment	2-10	5,745			5,543
Leasehold improvements	3-10	7,498			8,187
Construction in progress	—	7,546			8,680
		184,655			193,691
Accumulated depreciation and amortization		(128,219		)	(123,618		)
Property, plant and equipment, net		$	56,436		$	70,073

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

~~Machinery~~Morgan ~~and~~had ~~equipment~~two ~~included~~customers ~~approximately~~that ~~$14,189~~accounted ~~and $14~~for,~~150~~ ofon ~~equipment~~a atcombined ~~cost~~basis, ~~recorded~~approximately ~~under~~59%, ~~capital~~56% ~~leases~~and as54% of ~~December 31~~Morgan’s revenues during 2011, 2010 and 2009, respectively,. Accounts ~~and~~receivable ~~accumulated~~from ~~depreciation~~these ofcustomers ~~approximately~~totaled $76,~~470~~554 and $72,~~118~~323 at December 31, ~~2010~~2011 and ~~2009~~2010, respectively.

~~Effective~~Morgan ~~December 17,~~Olson ~~2010,~~had ~~the~~one ~~Company~~customer ~~sold~~that ~~and~~accounted ~~leased~~for ~~back~~approximately ~~six~~53%, of41% ~~its~~and ~~manufacturing~~31% ~~facilities~~of toMorgan ~~Poindexter~~Olson’s ~~Properties~~revenues during 2011, ~~LLC~~2010 and 2009, arespectively. Accounts ~~company~~receivable ~~owned~~from bythis ~~Mr.~~customer were $40 and $109 at December ~~Poindexter~~31, ~~(see~~2011 ~~Note~~and ~~15)~~2010, respectively.

InSpecialty ~~2010~~Manufacturing ~~and~~had ~~2009,~~two customers in the ~~Company~~international ~~capitalized~~oilfield ~~$512~~service industry that accounted for approximately 54%, 44% and ~~$485~~39% of Specialty Manufacturing’s revenues during 2011, ~~respectively~~2010 and 2009, ofrespectively. Accounts ~~interest~~receivable ~~costs~~from ~~incurred~~these ~~related~~customers tototaled ~~constructed~~$9,981 ~~assets~~and in$8,272 ~~progress~~at December 31, 2011 and 2010, respectively.

~~During~~On ~~2009~~a consolidated basis, the Company ~~decided~~had tofive ~~consolidate~~customers ~~the~~that ~~two~~accounted ~~Specialty~~for ~~Vehicle~~approximately ~~Group~~46%, ~~funeral~~38% and ~~limousine~~33% ~~manufacturing~~of ~~facilities~~total revenues during 2011, 2010 and ~~combine~~2009, ~~their~~respectively. Accounts ~~production~~receivable infrom ~~the~~these ~~Amelia~~customers totaled $16,575 ~~Ohio~~and ~~plant~~$10,704 at December 31, 2011 and 2010, respectively. AsThese ~~part~~were customers of ~~the~~Morgan, ~~decision~~Morgan toOlson ~~consolidate~~and Specialty Manufacturing. Morgan had two customers, Penske and Ryder, which individually accounted for more than 10% of the Company’s ~~sold~~revenues ~~its~~during ~~specialized~~any ~~transit~~one ~~bus~~or ~~business~~more ~~and~~of ~~related~~the ~~assets~~years 2011, ~~including~~2010 ~~equipment~~and 2009. Penske accounted for approximately 14%, ~~inventory~~10% and ~~intangible~~11% ~~assets~~of onthe ~~December 31~~Company’s total revenues during 2011, 2010 and 2009, respectively. Accounts receivable for ~~total~~Penske ~~proceeds~~was of$2,819 and $1,~~375~~036 at December 31, ~~which~~2011 ~~resulted~~and in2010, arespectively. Ryder ~~net~~accounted ~~loss~~for onapproximately ~~sale~~11%, 10% and 6% of ~~$584~~the ~~recorded~~Company’s intotal ~~other~~revenues ~~income~~during on2011, ~~the~~2010 ~~consolidated~~and ~~financial~~2009, ~~statements~~respectively. ~~The~~ Accounts ~~allocation~~receivable offor ~~goodwill~~Ryder ~~associated~~was ~~with~~$3,735 ~~the~~and ~~bus~~$1,287 ~~business~~at ~~accounted~~December 31, ~~for~~2011 ~~$550~~and of2010, ~~the loss~~respectively.

The Company’s ~~decided~~operations toare ~~close~~located ~~and~~principally ~~consolidate~~in ~~one~~the ofUnited ~~Specialty~~States; ~~Manufacturing~~however, ~~machining~~Morgan ~~plants~~has ~~into~~operations ~~another~~located ofin ~~its manufacturing facilities~~Canada, ~~resulting~~and inSpecialty aManufacturing ~~write-down~~has ofoperations ~~the~~in ~~carrying~~Mexico ~~value~~and ofMalaysia. Long-lived ~~the~~ assets byrelating ~~$677~~to inthese ~~2008. The~~foreign ~~Company~~operations ~~also~~were ~~combined~~$8,937 ~~two~~and of$10,423 ~~its~~at ~~Truck Accessories manufacturing facilities located in Elkhart,~~December ~~Indiana~~31, ~~resulting~~2011 inand a2010, ~~write-down of the carrying value of the assets by $111 in 2008~~respectively. ~~Specialty~~Consolidated ~~Manufacturing~~revenues ~~completed~~included ~~the~~$54,225, ~~closure~~$44,545 ofand ~~its~~$31,881 ~~facility~~ in ~~Fort Smith~~2011, ~~Arkansas in~~ 2010 and ~~expenditures~~2009, ~~related~~respectively, of sales to ~~the~~customers ~~closure~~outside ~~were~~the ~~$937~~United States.

~~Depreciation~~JBPCO ~~expense~~(Parent) ~~was~~operating ~~$13,535,~~expenses ~~$15,299 and $16,064~~for ~~and~~all ~~included~~periods ~~$1,612,~~comprise ~~$1,688~~the costs of the Parent company office and ~~$1,725~~personnel ~~for~~who ~~assets~~provide ~~recorded~~strategic ~~under~~direction ~~capital~~and ~~leases~~support ~~for~~to the ~~years~~subsidiary ~~ended~~companies. JBPCO ~~December 31~~costs were $10,019, ~~2010~~$10,266 ~~2009~~and $3,637 for 2011, 2010 and ~~2008~~2009, respectively.

~~5. Goodwill,~~The sale/lease-back transaction consummated in December ~~Intangibles~~2011 ~~and~~with ~~Other~~Poindexter ~~Assets~~Properties, LLC resulted in a recognized loss on sale of real estate of $1,556. Deferred gain amortization from prior year sale/lease-back transactions amounts to $503 of income in 2011.

~~Goodwill~~The ~~represents~~sale/lease-back ~~the~~transaction ~~excess~~consummated ofin ~~costs~~December 2010 ~~over~~with ~~fair~~Poindexter ~~value~~Properties, ofLLC ~~net~~resulted ~~assets~~in ofa ~~businesses~~recognized ~~acquired. The~~loss ~~Company~~on ~~paid~~sale aof ~~premium~~real ~~over~~estate ~~the fair value~~ of ~~net~~$2,820 ~~tangible~~ and ~~identifiable~~a ~~intangible~~deferred ~~assets~~gain ~~acquired~~on ~~for~~sale/lease-back ~~reasons such as the profitable expansion~~ of ~~its business~~$3,595. Deferred ~~strategic~~gain ~~fit,~~amortization ~~economies~~from ofprior ~~scale~~year ~~and~~sale/lease-back ~~the~~transactions ~~value~~amounts ofto an$265 ~~assembled~~of ~~workforce,~~income ~~among~~in ~~others~~2010. ~~Goodwill~~ The ~~and~~Company ~~intangible~~considers ~~assets~~the ~~acquired~~gains ~~in a purchase business combination~~ and ~~determined~~losses toassociated ~~have~~with anthe ~~indefinite~~sale ~~life~~of ~~are~~real ~~not~~estate ~~amortized~~under ~~but~~the ~~instead~~sale/lease-back ~~tested~~arrangements ~~for~~unusual ~~impairment at least annually~~transactions.

~~The~~These ~~Company~~transactions ~~completed~~are ~~its~~not ~~annual~~considered ~~impairment~~by ~~review~~the ~~effective~~Company’s ~~October 1,~~chief ~~2010,~~operating ~~2009~~decision ~~and~~maker ~~2008,~~in ~~which~~his ~~indicated~~assessment ~~that~~of ~~there~~segment ~~was~~profitability; as a ~~$300~~result, ~~impairment~~they have been included in the ~~carrying~~JBPCO ~~value~~(Parent) category. To be consistent with treatment of ~~Federal~~the ~~Coach’s~~2011 ~~trade~~and ~~name~~2010 transactions, the Company reclassified the $265 income recognized in ~~2008. The~~2009 ~~fair~~on ~~value~~the ofdeferred ~~our~~gain ~~reporting~~originating ~~units~~from isthe ~~based~~2008 onsale/lease-back ~~various~~arrangement ~~valuation~~with ~~methods~~Poindexter Properties, ~~including~~LLC ~~acquisition~~that ~~multiples~~was ofpreviously ~~earnings~~presented ~~and~~as ~~discounted~~Morgan ~~cash~~operating ~~flow analysis~~income.

~~Intangible~~Note assets with estimable useful lives are amortized over their respective estimated useful lives and are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows.3: Inventories

~~The~~Consolidated ~~Company~~net ~~records~~inventories ~~impairment~~consisted ~~losses~~of ~~on long-lived assets used in operations when events and circumstances indicate that~~ the ~~assets may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets.~~following:

The Company sold its specialized transit bus business on December 31, 2009 and allocated $550 of goodwill associated with the business sold. Revenues related to the specialized transit bus business were $9,504 and $11,337 in 2009 and 2008, respectively, and approximated 2.0% and 1.6% of consolidated revenues in 2009 and 2008, respectively.

	December 31,
	2011		2010
Raw materials	$	54,604	$	37,169
Work in process	19,220		19,978
Finished goods	5,915		4,431
Balance at the end of the year	$	79,739	$	61,578

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

AtInventories ~~December 31,~~are ~~2010,~~stated ~~goodwill~~net ~~was~~of an allowance for excess and obsolete inventory of $72,~~408,~~636 and $142,~~884~~975 at December 31, 2011 and ~~$12~~2010,~~708~~ ~~for~~respectively. The activity in the ~~Morgan,~~allowance ~~Truck~~for ~~Accessories~~excess and ~~Specialty~~obsolete ~~Manufacturing~~inventory ~~reporting~~accounts ~~units,~~for ~~respectively.~~the years ended December 31 was:

The changes in the carrying amount of goodwill for the years ended December 31, 2010 and 2009 were:

	2011			2010			2009
Balance at the beginning of the year	$	2,975		$	3,391		$	3,166
Provision for losses	2,024			1,809			1,181
Charge-offs	(2,363		)	(2,225		)	(956		)
Balance at the end of the year	$	2,636		$	2,975		$	3,391

	Morgan		Truck Accessories		Specialty Manufacturing			Total
Balance, December 31, 2008	$	7,408	$	14,884	$	13,258		$	35,550
Changes to goodwill during the year	—		—		(550		)	(550		)
Balance, December 31, 2009	7,408		14,884		12,708			35,000
Changes to goodwill during the year	—		—		—			—
Balance, December 31, 2010	$	7,408	$	14,884	$	12,708		$	35,000

Note 4: Property, Plant and Equipment

~~Intangible~~Property, ~~assets~~plant and ~~the~~equipment, ~~related~~at ~~accumulated amortization as of~~ December 31, ~~2010~~2011 and ~~2009~~2010, ~~were~~consisted of the following:

		Cost
	Lives	2011			2010
December 31, 2010:	Useful Lives in Years	Morgan			Truck Accessories			SMG		Total		Accumulated Amortization
Land	—	$	385		$	1,012
Amortizable intangible assets:
Buildings and improvements	5-25	6,754			10,349
Customer base	5-20	$	1,852		$	2,556		$	10,400	$	14,808	$	4,806
Machinery and equipment	3-10	129,185			134,903
Noncompete agreements	5	216			—			663		879		771
Furniture and fixtures	2-10	24,148			17,602
Supplier relationship	10	—			—			3,228		3,228		1,705
Transportation equipment	2-10	5,559			5,745
Patents	2	—			300			—		300		300
Leasehold improvements	3-10	8,513			7,498
		2,068			2,856			14,291		19,215		7,582
Construction in progress	—	1,960			7,546
Unamortizable intangible assets:
		176,504			184,655
Trade names	—	1,170			616			880		2,666		—
Accumulated depreciation and amortization		(129,940		)	(128,219		)
Balance, December 31, 2010		$	3,238		$	3,472		$	15,171	$	21,881	$	7,582
Property, plant and equipment, net		$	46,564		$	56,436

		Cost
December 31, 2009:	Useful Lives in Years	Morgan		Truck Accessories		SMG		Total		Accumulated Amortization
Amortizable intangible assets:
Customer base	5-20	$	1,760	$	2,556	$	10,430	$	14,746	$	3,605
Noncompete agreements	5	216		—		663		879		646
Supplier relationship	10	—		—		3,228		3,228		1,374
Patents	2	—		300		—		300		300
		1,976		2,856		14,321		19,153		5,925
Unamortizable intangible assets:
Trade names	—	1,112		616		880		2,608		—
Balance, December 31, 2009		$	3,088	$	3,472	$	15,201	$	21,761	$	5,925

Machinery and equipment included approximately $21,002 and $14,189 of equipment, at cost, recorded under capital leases or equipment notes at December 31, 2011 and 2010, respectively, and accumulated depreciation of approximately $8,996 and $7,470 at December 31, 2011 and 2010, respectively.

The ~~amortization~~Company ofsold ~~intangible~~and ~~assets~~leased ~~was~~back ~~$1,635,~~two ~~$1,700~~ and ~~$1,594~~six ~~for~~of ~~the~~its ~~years~~manufacturing ~~ended~~facilities ~~December 31,~~to ~~2010~~Poindexter Properties, ~~2009 and 2008~~LLC, ~~respectively. Estimated~~a ~~amortization~~company ~~expense~~owned ~~for~~by ~~each~~Mr. Poindexter ofduring ~~the subsequent five years ending~~ December 31 isof ~~$1,571 —~~ 2011, ~~$1,377~~and ~~— 2012~~2010, ~~$1,073~~respectively —(refer ~~2013,~~to ~~$1,073~~Note ~~— 2014 and $997 — 2015~~16).

In 2011 and 2010, the Company capitalized $0 and $512, respectively, of interest costs incurred related to constructed assets in progress.

SVG completed the closure of its facility in Fort Smith, Arkansas in 2010 combining its limousine production business into its Amelia, Ohio facility. Expenditures incurred related to the closure were $937 in 2010. During 2009, and prior to the consolidation, SVG sold its specialized transit bus business and related assets for total proceeds of $1,375 resulting in a net loss of $584. The allocation of goodwill associated with the bus business accounted of $550 of the loss.

Depreciation expense was $16,014, $14,916 and $15,298 and included $1,527, $1,612 and $1,688 for assets recorded under capital leases for the years ended December 31, 2011, 2010 and 2009, respectively.

Note 5: Goodwill and Other Intangible Assets

Goodwill reflects the excess of costs over fair value of net assets of businesses acquired. The Company paid a premium over the fair value of net tangible and identifiable intangible assets acquired for reasons, such as the profitable expansion of its business, strategic fit, economies of scale and the value of an assembled workforce. Goodwill and intangible assets acquired

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

~~Other~~in ~~assets~~a aspurchase ofbusiness ~~December 31~~combination, ~~2010~~which ~~and~~are ~~2009~~determined ~~consisted~~to ofhave ~~the~~an ~~following:~~indefinite life, are not amortized, but instead tested for impairment at least annually.

		2010				2009
	Amortization Period in Years	Accumulated Amortization		Net Book Value		Accumulated Amortization		Net Book Value
Other Assets:
Debt issuance costs	4-10	$	4,637	$	1,817	$	4,078	$	2,376
Insurance cash collateral deposit	—	—		6,610		—		7,592
Other	—	—		3,938		—		2,897
Total		$	4,637	$	12,365	$	4,078	$	12,865

The Company evaluates the carrying value of goodwill and intangibles during the fourth quarter of each year, or earlier if events occur or circumstances change and would more likely than not reduce the fair value of goodwill or an intangible assets below its carrying amount. The Company estimates the fair value of its reporting units by utilizing a discounted cash flow methodology based on projected operating results and discount rates as determined by application of the capital asset pricing model. These estimates represent Level 3 inputs as defined under FASB Fair Value Hierarchy and assume that the Company’s operations will not suffer a material adverse change in future periods. Should the Company’s reporting units not meet the projected operating results in future periods as a result of certain operational risks or other unforeseen reason, the resulting fair values could be materially different from the calculated estimates.

The ~~amortization~~Company ofrecords ~~debt~~impairment ~~issuance~~losses ~~costs~~on ~~was~~long-lived ~~$559,~~assets ~~$584~~used ~~and~~in ~~$691~~operations ~~for~~when ~~the~~events ~~years ended December 31, 2010, 2009~~ and ~~2008,~~circumstances ~~respectively. Estimated~~indicate ~~amortization~~that ofthe ~~debt~~assets ~~issuance~~may ~~costs~~be ~~for~~impaired ~~each~~and ofwhen the ~~subsequent~~undiscounted ~~four~~cash ~~years~~flows ~~ending~~estimated ~~December 31~~to isbe ~~$559~~generated —by ~~2011,~~those ~~$559~~assets —are ~~2012,~~less ~~$559~~than —the ~~2013~~carrying ~~and~~amounts ~~$140~~of —those ~~2014~~assets.

The Company ~~created~~sold ~~a trust in favor of~~ its ~~insurance~~specialized ~~carrier~~transit tobus ~~secure~~business ~~its~~in ~~liabilities~~2009 ~~under~~and ~~its~~allocated ~~self-insured,~~$550 ~~casualty insurance program including workers’ compensation insurance. The liabilities were previously secured by an irrevocable standby letter~~ of ~~credit~~goodwill ~~that~~associated ~~was~~with ~~canceled upon~~ the ~~initial~~business ~~deposit of $5,520 into the trust~~sold. ~~For~~Revenues ~~the~~related ~~year~~to ~~ended December 31, 2010~~ the ~~trust~~specialized ~~was~~transit ~~reduced~~bus bybusiness were $~~982~~9,504 ~~due~~in ~~to a decreased claims experience rate. For the year ended~~ 2009, ~~the~~which ~~Company~~approximated ~~contributed~~2.0% anof ~~additional~~consolidated ~~$315~~revenues toin ~~the trust~~2009.

~~6. Floor~~At ~~Plan~~December 31, ~~Notes~~2011, ~~Payable~~consolidated goodwill was $35,000, or $7,408, $14,884, $9,861 and $2,847 for the Morgan, TAG, MIC and SVG reporting units, respectively, which reflects no change since December 31, 2009.

~~The~~Intangible ~~Company~~assets ~~had floor plan financing agreements with Ford Motor Credit Company for financing part of its chassis inventory at Federal Coach~~ and ~~Eagle Coach. Floor plan notes payable reflect~~ the ~~monetary~~related ~~value~~accumulated ofamortization ~~the chassis that are in the Company’s possession~~ as of December 31, ~~2010~~2011 and ~~2009. These~~2010 ~~obligations are reflected on the accompanying balance sheet as accounts payable, a current liability.~~were:

The total amount financed under these agreements was $274 and $791 as of December 31, 2010 and 2009, respectively. These borrowings bear interest at the prime rate plus 150 basis points on balances outstanding over 90 days. As of December 31, 2010 and 2009, the weighted average interest rate on all outstanding floor plan notes payable was 0.3% and 0.2%, respectively. The average interest rate for 2010 and 2009 on the liabilities that bear interest was 8.3% and 6.8%, respectively.

		Cost
December 31, 2011:	Useful Lives	Morgan		TAG		MIC		SVG		Total		Accumulated Amortization
Amortizable intangible assets:
Customer base	5-20	$	1,887	$	2,556	$	8,340	$	2,060	$	14,843	$	6,008
Noncompete agreements	5	216		—		553		110		879		852
Supplier relationship	10	—		—		—		3,228		3,228		2,042
Patents	2	—		300		—		—		300		300
		2,103		2,856		8,893		5,398		19,250		9,202
Unamortizable intangible assets:
Trade names	—	1,170		616		—		880		2,666		—
Balance, December 31, 2011		$	3,273	$	3,472	$	8,893	$	6,278	$	21,916	$	9,202

7. Revolving Credit Facility

		Cost
December 31, 2010:	Useful Lives	Morgan		TAG		MIC		SVG		Total		Accumulated Amortization
Amortizable intangible assets:
Customer base	5-20	$	1,852	$	2,556	$	8,340	$	2,060	$	14,808	$	4,806
Noncompete agreements	5	216		—		553		110		879		771
Supplier relationship	10	—		—		—		3,228		3,228		1,705
Patents	2	—		300		—		—		300		300
		2,068		2,856		8,893		5,398		19,215		7,582
Unamortizable intangible assets:
Trade names	—	1,170		616		—		880		2,666		—
Balance, December 31, 2010		$	3,238	$	3,472	$	8,893	$	6,278	$	21,881	$	7,582

On March 15, 2004, concurrently with the 8.75% Notes offering discussed in Note 8, the Company entered into a revolving credit agreement (the “Revolving Credit Facility”) that expired March 15, 2008. The Revolving Credit Facility automatically renewed for a 12-month period after March 15 of each year until December 13, 2010 at which time the agreement was amended and extended until March 14, 2012. The annual automatic renewal feature was not incorporated into the new agreement.

The Revolving Credit Facility currently provides for borrowings by the Company of up to $50,000. The Revolving Credit Facility allows the Company to borrow funds up to the lesser of $50,000 or an amount based on the sum of: 1) advance rates applied to the total amounts of eligible accounts receivable and inventories of the subsidiaries and 2) up to $20,000 collateralized by the fixed assets of the Company. The advance rates are 85% for eligible accounts receivable and 60% for eligible inventory, as defined. Borrowings against inventory may not exceed $20,000. The Company is entitled to borrow up to an additional $20,000 against fixed assets not to

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

~~exceed~~The ~~the~~amortization ~~maximum~~of ~~amount~~intangible ofassets ~~credit~~was ~~under~~$1,620, $1,635 and $1,700 for the ~~facility~~years ended December 31, 2011, 2010 and 2009, respectively. ~~The~~Estimated ~~Revolving~~amortization ~~Credit~~expense ~~Facility~~for ~~includes~~each aof ~~sub-facility~~the subsequent five years ending December 31 is $1,377 for up2012, to$1,073 for 2013, $151,~~000~~073 offor ~~letters~~2014, of$997 ~~credit~~for 2015, $752 for 2016 and $4,776 thereafter.

~~The~~Note ~~Revolving~~6: Debt ~~Credit~~Issuance Facility provides for borrowing at variable rates of interest, based on either LIBOR (London Interbank Offered Rate, which was .455% at December 31, 2010) plus a margin of 1.75% or the bank’s base rate (the greater of the Federal Funds Rate plus 0.5% or its prime rate, which was 3.25% at December 31, 2010). Interest is payable monthly including a fee of 0.5% on the portion of the $50,000 total commitment that remains unused during the period.Costs

The ~~Revolving~~amortization ~~Credit Facility contains provisions allowing the lender to accelerate the repayment~~ of debt ~~upon~~issuance ~~the~~costs ~~occurrence~~was ~~of an event the lender determines to represent a material adverse change. The Revolving Credit Facility also contains restrictive covenants~~$559, ~~which,~~$559 ~~among~~and ~~other~~$584 ~~things,~~for ~~restrict~~ the ~~use~~years ofended ~~proceeds~~December 31, ~~from the sale of assets~~2011, ~~the~~2010 ~~ability~~and ~~of the Company to incur additional debt or pay dividends~~2009, ~~and certain other corporate activities~~respectively. In addition, the Company isexpensed ~~subject~~$250 toof adebt ~~financial~~issuance ~~covenant~~costs ~~requiring~~allocable it to ~~maintain~~the ~~a minimum fixed charge coverage ratio, as defined, of 1~~8.075% toNotes ~~1.0~~repurchased ~~should~~during ~~availability~~the ~~fall~~year ~~below~~ending ~~$10,000. At~~ December 31, ~~2010~~2011, ~~the~~which ~~Company~~is ~~was~~included in ~~compliance~~net ~~with~~loss ~~all~~on ~~covenants~~repurchase of ~~the~~8.75% ~~Revolving~~Notes. Estimated ~~Credit~~amortization ~~Facility.~~of Indebt ~~the~~issuance ~~event~~costs ~~that~~for each of the ~~Company’s~~subsequent ~~borrowing~~three ~~availability~~years isending ~~below~~December 31 is $20448 for 2012,~~000,~~ ~~the~~$448 ~~Company’s~~for ~~cash~~2013 ~~balances~~and ~~will~~$112 ~~become~~for ~~restricted~~2014.

AtDuring ~~December 31,~~the ~~2010~~second and ~~2009~~third quarter of 2011, the Company ~~had~~incurred nocosts ~~borrowings,~~of ~~and~~$465 associated with a prospective $~~1,358~~200 inmillion ~~standby~~bond ~~letters~~offering ofto ~~credit~~replace ~~(see~~the ~~Note~~current ~~14)~~8.75% atNotes ~~December 31,~~due ~~2010,~~in ~~and~~2014. Due ~~had~~to ~~unused~~market ~~gross~~conditions, ~~borrowing~~the ~~availability~~offering ofwas ~~$48~~postponed and these costs,~~615~~ atoriginally ~~December 31~~capitalized, ~~2010~~were expensed in the fourth quarter of 2011.

~~8. Long-Term~~Note ~~Debt~~7: Restricted ~~and 8.75% Notes Offering~~Cash

~~Long~~Restricted cash reflects a cash reserve deposited in an escrow account to secure the self-~~term~~insured ~~debt~~portion of the Company’s insurance programs. This reserve was based on known facts and historical industry trends. The balance of the reserve as of December 31, 2010 ~~and~~was ~~2009~~$6,610. During ~~consisted~~December 2011, the Company’s insurance program administrator agreed to release the cash reserve in lieu of: a stand-by letter of credit in the amount of $6,220. This letter of credit was provided under the terms of a Revolving Credit Agreement.

	2010		2009
8.75% Notes due 2014, plus unamortized premium of $0.8 million at December 31, 2010	$	199,598	$	199,839
Obligations under capital leases	3,895		5,355
Total long-term debt	203,493		205,194
Less current portion	2,260		2,259
Long-term debt, less current portion	$	201,233	$	202,935

Note 8: Revolving Credit Facility

On March 15, 2004, ~~the~~concurrently ~~Company~~with ~~completed a note offering of $125,000, 8.75% Notes due in 2014 (~~the “8.75% Notes”) ~~with~~offering ~~interest~~discussed ~~payable~~in ~~semiannually. On~~Note ~~May 17~~9, ~~2004 and January 21, 2005,~~ the Company ~~completed~~entered ~~offers~~into toa ~~sell~~revolving ancredit ~~additional~~agreement ~~$30,000 and $45,000, respectively, of~~ (the ~~8.75%~~“Revolving ~~Notes. The~~Credit ~~additional~~Facility”) ~~$30,000~~with ofan ~~8.75%~~initial ~~Notes~~term ~~were~~through ~~issued at par and the $45~~March 15,~~000~~ ~~of 8~~2008.~~75% Notes were issued at a 5% premium.~~ The ~~additional~~Revolving ~~8.75%~~Credit ~~Notes~~Facility ~~were~~automatically ~~issued~~renewed onfor ~~the~~a ~~same~~12-month ~~terms~~period asafter ~~the~~March 15 ~~original issue. Net proceeds from the additional offerings~~ of ~~approximately~~each ~~$46~~year,~~400~~ ~~increased~~until ~~the Company’s cash and short-term investments. The 8.75% Notes mature on March~~December 1513, ~~2014~~2010, ~~and bear interest~~ at anwhich ~~annual~~time, ~~rate~~the ofagreement ~~8.75%~~was ~~payable~~amended ~~each September 15~~ and ~~March 15~~extended tountil ~~the holders of record on September 1 and~~ March 114, ~~immediately preceding the interest payment date~~2012. OnThe ~~May 11,~~annual ~~2005,~~automatic ~~the~~renewal ~~Company~~feature ~~completed~~was annot ~~offer~~incorporated tointo ~~exchange (“2005 Exchange Offer”) $200 million principal amount of its 8.75% Notes which had been registered under~~ the ~~Securities~~new ~~Act for any and all of its outstanding unregistered 8~~agreement.~~75% Notes.~~

The ~~8.75%~~Revolving ~~Notes~~Credit ~~are~~Facility ~~subordinated~~currently toprovides for borrowings ~~under~~by the Company of up to $50,000. The Revolving Credit Facility ~~(see~~allows ~~Note~~the 7)Company ~~and~~to ~~other~~borrow ~~secured~~funds ~~indebtedness~~up to the ~~extent~~lesser of $50,000 or an amount based on the ~~assets~~sum ~~securing~~of: 1) advance rates applied to the ~~debt. Also~~total amounts of eligible accounts receivable and inventories of the subsidiaries and 2) up to $20,000, collateralized by the ~~Company’s~~fixed ~~obligations~~assets ~~under~~of the 8Company.~~75%~~ The ~~Notes~~advance rates are ~~guaranteed~~85% byfor ~~each~~eligible ~~wholly~~accounts ~~owned~~receivable ~~subsidiary~~and of60% ~~the~~for ~~Company~~eligible ~~(the~~inventory, ~~“Subsidiary~~as ~~Guarantors”)~~defined. ~~Each~~Borrowings ~~guarantee~~against isinventory amay ~~senior~~not ~~unsecured~~exceed ~~obligation~~$20,000. The ofCompany ~~the~~is ~~Subsidiary~~entitled ~~providing~~to ~~such~~borrow ~~Guarantee. All~~up ~~the~~to an additional $20,000 against fixed assets, ofnot ~~the~~to ~~Company~~exceed ~~and~~the ~~its~~maximum ~~subsidiaries~~amount ~~are~~of ~~encumbered~~credit under the ~~guarantee~~facility. The ~~arrangement~~Revolving ~~related~~Credit Facility includes a subfacility for up to ~~the~~$15,000 ~~8.75%~~of ~~Notes~~letters of credit.

The Revolving Credit Facility provides for borrowing at variable rates of interest, based on either LIBOR (London Interbank Offered Rate, which was 0.797% at December 31, 2011), plus a margin of 1.75%, or the bank’s base rate (the greater of the Federal Funds Rate, plus 0.5% or its prime rate, which was 3.25% at December 31, 2011). Interest is payable monthly, including a fee of 0.5% on the portion of the $50,000 total commitment that remains unused during the period.

The Revolving Credit Facility contains provisions allowing the lender to accelerate the repayment of debt upon the occurrence of an event the lender determines to represent a material adverse change. The Revolving Credit Facility also contains restrictive covenants, which, among other things, restrict the use of proceeds from the sale of assets, the ability of the Company to incur additional debt or pay dividends, and certain other corporate activities. In addition, the Company is subject to a financial covenant requiring it to maintain a minimum fixed charge coverage ratio, as defined, of 1.0 to 1.0, should availability fall below $10,000. At December 31, 2011, the Company was in compliance with all covenants of the

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

~~Relevant~~Revolving ~~groupings~~Credit ofFacility. In ~~individual assets of~~ the ~~guarantors,~~event ~~including~~that the ~~corporate~~Company’s ~~level~~borrowing ~~assets,~~availability ~~and pertinent individual operating information related to guarantor operations~~ is ~~included~~below in$20,000, the ~~disclosure~~Company’s ofcash ~~the~~balances ~~segment~~will ~~information~~become ~~included in Note 2 of the Consolidated Financial Statements~~restricted. ~~The Subsidiary Guarantors are also borrowers under the Revolving Credit Facility (see Note 7).~~

~~The~~At ~~Company~~December 31, ~~has~~2011, the ~~option~~Company tohad ~~redeem~~no ~~the 8.75% Notes at any time on or after March 15~~borrowings, ~~2010~~$6,279 atin astand-by ~~defined~~letters ~~premium~~of ~~plus~~credit, ~~accrued~~ and ~~unpaid~~unused ~~interest~~gross toborrowing ~~the~~availability ~~date~~ of ~~redemption~~$43,721. OnAt ~~February~~December ~~5 and February 9~~31, ~~2009~~2010, the Company ~~purchased~~had ~~$150~~no ~~and~~borrowings, $~~250~~1,358 ~~respectively,~~in stand-by letters of ~~the~~credit, ~~8.75%~~and ~~Notes~~unused onborrowing ~~the~~availability ~~open~~of ~~market~~$48,615. Refer ~~resulting~~to inNote a15 ~~gain~~for information on stand-by letters of ~~$186~~credit.

~~The~~Note ~~8.75% Notes’ Indenture includes covenants that limit the ability of the Company to~~9: Long-Term ~~incur~~Debt ~~additional debt, including sale~~ and leaseback transactions; pay dividends or distributions on its capital stock or repurchase capital stock; issue stock of subsidiaries; make certain investments; create liens on its assets to secure debt; enter into transactions with affiliates; merge or consolidate with another company; and transfer and sell assets8. ~~The~~75% ~~Indenture~~Notes contains a covenant to limit the incurrence of additional indebtedness as measured by its Consolidated Coverage Ratio, as defined. The Company and its subsidiaries are prohibited from incurring additional indebtedness when the Consolidated Coverage ratio is below 2.0 to 1.0. The Indenture permits certain exceptions with respect to capitalized lease obligations and other arrangements that are incurred for the purpose of financing all or part of the purchase price or cost of construction or improvements of property used in the business of the Company or its subsidiaries. Already existing obligations and any amounts available to be drawn under the Company’s existing revolving credit agreement are not subject to this limitation. At December 31, 2010, the Company’s consolidated coverage ratio was approximately 1.9 to 1.00, which is below the level at which the Indenture would permit additional debt to be incurred. Therefore, until the ratio improves to 2.0 to 1.0, the Company is prohibited from incurring additional or new indebtedness, except as permitted in the Indenture. At December 31, 2010, the Company had $50.0 million of current availability under the Company’s existing revolving credit agreement.Offering

~~The~~Long-term ~~Company~~debt, ~~using~~as ~~level 1 inputs, estimates the fair value~~ of ~~the 8.75% Notes at~~ December 31, ~~2010~~2011 and ~~2009 was approximately $199~~2010,~~300~~ ~~and~~consisted ~~$168,000, respectively, based on their market values at those dates compared to a recorded amounts~~ of ~~$199,598 and $199,839 at December 31, 2010 and 2009, respectively.~~:

The Company’s obligation under capital leases is due in varying maturity dates through 2014. The capital leases are collateralized by certain equipment with a net book value of approximately $6,719 and $7,031 at December 31, 2010 and 2009, respectively.

	2011		2010
8.75 % Notes, due 2014	$	159,315	$	198,800
Unamortized bond premium	442		798
Obligations under capital leases and equipment notes	7,960		3,895
Total long-term debt	167,717		203,493
Less current portion	2,726		2,260
Long-term debt, less current portion	$	164,991	$	201,233

~~Maturities~~On March 15, 2004, the Company completed a note offering of $125,000, 8.75% Notes, due in 2014 (the “8.75% Notes”); interest is payable semiannually. ~~Aggregate~~On ~~principal~~May 17, ~~payments~~2004 onand ~~long-term~~January 21, ~~debt~~2005, ~~based~~the onCompany ~~scheduled~~completed ~~maturities~~offers ~~for~~to sell an additional $30,000 and $45,000, respectively, of the ~~next~~8.75% ~~four~~Notes. The ~~years~~additional as$30,000 of ~~December 31~~8.75% Notes were issued at par, ~~2010~~and ~~are~~the $45,000 of 8.75% Notes were issued at a 5% premium. The additional 8.75% Notes were issued on the same terms as ~~follows:~~the original issue. Net proceeds from the additional offerings of approximately $46,400 increased the Company’s cash and short-term investments.

2011	$	2,260
2012	1,471
2013	594
2014	199,168
	$	203,493

The 8.75% Notes mature on March 15, 2014 and bear interest at an annual rate of 8.75%, payable each September 15 and March 15 to the holders of record on September 1 and March 1, immediately preceding the interest payment date. On May 11, 2005, the Company completed an offer to exchange (“2005 Exchange Offer”) $200 million principal amount of its 8.75% Notes, which had been registered under the Securities Act, for any and all of its outstanding unregistered 8.75% Notes.

The 8.75% Notes are subordinated to borrowings under the Revolving Credit Facility (refer to Note 8) and other secured indebtedness to the extent of the assets securing the debt. Also, the Company’s obligations under the 8.75% Notes are guaranteed by each wholly owned subsidiary of the Company (the “Subsidiary Guarantors”). Each guarantee is a senior unsecured obligation of the Subsidiary providing such Guarantee. All the assets of the Company and its subsidiaries are encumbered under the guarantee arrangement related to the 8.75% Notes. Relevant groupings of individual guarantors’ assets (including the corporate-level assets) and pertinent individual operating information (related to guarantor operations) is provided in the disclosure of the segment information in Note 2 of our Consolidated Financial Statements. The Subsidiary Guarantors are also borrowers under the Revolving Credit Facility (refer to Note 8).

The Company has the option to redeem the 8.75% Notes at any time on or after March 15, 2010, at a defined premium, plus accrued and unpaid interest to the date of redemption. On February 5 and February 9, 2009, the Company repurchased $150 and $250, respectively, of the 8.75% Notes on the open market, resulting in a gain of $186. During November and December of 2011, the Company repurchased $39,485 of the 8.75% Notes on the open market resulting in a loss of $187.

The 8.75% Notes’ Indenture includes covenants that limit the ability of the Company to: incur additional debt, including sale/lease-back transactions; pay dividends or distributions on its capital stock or repurchase capital stock; issue stock of subsidiaries; make certain investments; create liens on its assets to secure debt; enter into transactions with affiliates; merge or consolidate with another company; and transfer and sell assets. The Indenture contains a covenant to limit the incurrence of additional indebtedness, as measured by its Consolidated Coverage Ratio, as defined. The Company and its subsidiaries are prohibited from incurring additional indebtedness when the Consolidated Coverage ratio is below 2.0 to 1.0. The

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

9Indenture permits certain exceptions, with respect to capitalized lease obligations and other arrangements that are incurred for the purpose of financing all or part of the purchase price or cost of construction or improvements of property used in the business of the Company or its subsidiaries. ~~Operating~~ Already-existing ~~Leases~~obligations and any amounts available to be drawn under the Company’s existing revolving credit agreement are not subject to this limitation. At December 31, 2011, the Company’s consolidated coverage ratio was approximately 3.3 to 1.0, which is above the level at which the Indenture would permit additional debt to be incurred. At December 31, 2011, the Company had $43,721 of current availability under the Company’s existing revolving credit agreement.

The Company, ~~leases~~using ~~certain~~level ~~manufacturing~~1 ~~facilities~~inputs, estimates the fair value of the 8.75% Notes at December 31, 2011 and ~~equipment~~2010 ~~under~~to ~~noncancelable~~be ~~operating~~approximately ~~leases~~$161,306 ~~certain~~and of$199,300, ~~which~~respectively, ~~contain~~based ~~renewal~~on ~~options. The~~their ~~future~~market ~~minimum~~values ~~lease~~at ~~payments~~those ~~subsequent~~dates, compared to recorded amounts of $159,758 and $199,598 at December 31, ~~2010~~2011 ~~are~~and as2010, ~~follows:~~respectively.

2011	$	9,187
2012	7,278
2013	4,661
2014	3,719
2015	2,907
2016 and thereafter	22,546
Total minimum lease payments	$	50,298

The Company’s obligations under capital leases and equipment notes are due in varying maturity dates through 2014. The capital leases and equipment notes are collateralized by certain equipment, with a net book value of approximately $12,006 and $6,719 at December 31, 2011 and 2010, respectively.

~~Total~~Maturities. Aggregate ~~rental~~principal ~~expense~~payments ~~included~~on inlong-term ~~continuing~~debt ~~operations~~based ~~under~~on ~~all~~scheduled ~~operating~~maturities ~~leases was approximately $9,587 $10,042 and $9,711~~ for the next four years ~~ended~~as of December 31, ~~2010,~~2011 ~~2009~~are ~~and~~as ~~2008, respectively.~~follows:

10. Supplemental Cash Flow Information

2012	$	2,726
2013	1,899
2014	161,077
2015	990
2016	1,025
	$	167,717

~~The~~Note ~~supplemental cash flow information for the years ended December 31, 2010, 2009 and 2008 was as follows~~10: Operating Leases

	2010		2009			2008
Cash paid for interest	$	18,364	$	18,187		$	18,371
Cash paid (refunded) for income taxes, net of foreign refunds	1,419		(2,037		)	508
Noncash investing and financing activities:
Capital lease obligations for machinery and equipment	722		1,219			438

The Company leases certain manufacturing facilities and equipment under noncancelable operating leases, certain of which contain renewal options. The future minimum lease payments subsequent to December 31, 2011 are as follows:

11. Income Taxes

2012	$	8,644
2013	6,598
2014	5,499
2015	4,863
2016	3,454
2017 and thereafter	23,341
Total minimum lease payments	$	52,399

~~The~~Total ~~income~~rental ~~tax~~expense ~~provision~~included ~~(benefit)~~in ~~consists~~continuing ofoperations ~~the~~under ~~following~~all operating leases was approximately $10,012, $9,587 and $10,042 for the years ended December 31, ~~2010~~2011, ~~2009~~2010 and ~~2008:~~2009, respectively.

	2010			2009			2008
Current:
Federal	$	(1,065	)	$	(4,497	)	$	1,478
State	(314		)	564			1,162
Foreign	(784		)	19			(866		)
	(2,163		)	(3,914		)	1,774
Deferred:
Federal	378			1,732			1,733
State	323			(28		)	411
Foreign	—			—			892
	701			1,704			3,036
Income tax provision (benefit)	$	(1,462	)	$	(2,210	)	$	4,810

Note 11: Supplemental Cash Flow Information

The supplemental cash flow information for the years ended December 31, 2011, 2010 and 2009 was as follows:

		2011			2010			2009
Cash paid for interest

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