10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2005

OR

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

For the transition period from            to

Commission file number 333-115267

ERICO INTERNATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-0201460
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

30575 Bainbridge Road
Suite 300
Solon, Ohio 44139
(440) 349-2630
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
None	Not Applicable

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 þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes þ 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 þ

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ

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

As of March 10, 2006, the registrant had one share of common stock outstanding, which was owned by ERICO Holding Company.

FORWARD-LOOKING STATEMENTS

     ERICO International Corporation is making this statement in order to satisfy the “safe harbor” provisions contained in the Private Securities Litigation Reform Act of 1995. This Annual Report on Form 10-K includes forward-looking statements relating to the business of the Company that are not historical facts. These “forward-looking statements” can be identified by the use of terminology such as “believe,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “continue,” “positioned,” “strategy” and similar expressions. You should be aware that those statements are only our predictions. The forward-looking statements included in this report are not guarantees of future performance, and should one or more of these, or other, risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those contemplated by these forward-looking statements. In the light of these risks and uncertainties, we cannot assure you that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which, unless otherwise noted, speak only as of the date of this report. The Company undertakes no obligation, except as required by law, to update these statements.

     Risks, uncertainties and contingencies that could cause actual results to vary materially from those anticipated in forward-looking statements in this report include general economic conditions in the markets in which we operate and industry related and other factors including, without limitation, the following:

• the availability of sufficient amounts of raw materials, particularly steel and copper, and our ability to acquire these raw materials on an economic basis;

• risks associated with foreign operations, including fluctuations in exchange rates of foreign currencies;

• competitive pressures on pricing;

• operational issues at our facilities;

• availability of financing to fund operations at anticipated rates and terms;

• prolonged work stoppages;

• governmental or regulatory policies;

• product warranty, product liability and product recall costs;

• rapid increases in health care costs;

• our acquisition activities;

• our substantial debt and leverage and our ability to service our debt;

• the restrictive covenants contained in the agreements governing our indebtedness;

• our ability to realize revenue growth;

• our ability to implement initiatives designed to increase operating efficiencies and improve results;

• the loss of major customers; and

• acts of war or terrorism.

     For more information on risks and uncertainties that could cause results to vary materially from those anticipated in the forward-looking statements included in this report, see the discussion under “Risk Factors” in Part I, Item 1A of this report.

MARKET AND INDUSTRY DATA

     The market and industry data estimates included in this report are based on information obtained from our customers, distributors, suppliers, trade and business organizations and our contacts in markets in which we operate and on our management’s knowledge and experience. However, market share, ranking and other data included in this report are subject to change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data and the voluntary nature of the data gathering process. In addition, technical requirements and customer preferences can and do change. Although we have not independently verified the accuracy of all such data included in this report, we believe these estimates to be accurate in all material respects.

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TABLE OF CONTENTS

PART I
	ITEM 1. BUSINESS
	ITEM 1A. RISK FACTORS
	ITEM 1B. UNRESOLVED STAFF COMMENTS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	ITEM 9A. CONTROLS AND PROCEDURES
	ITEM 9B. OTHER INFORMATION
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
	Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
SIGNATURES
EXHIBIT INDEX
EX-10.8 1st Amendment and Lease Extension Agreement
EX-10.9 2nd Amendment and Lease Extension Agreement
EX-21.1 Subsidiaries of ERICO International Corporation
EX-31.1 302 CEO Certification
EX-31.2 302 CFO Certification
EX-32.1 906 CEO and CFO Certification

PART I

ITEM 1. BUSINESS.

Our Company

     ERICO International Corporation (“ERICO” or the “Company”) was founded in 1903 in Cleveland, Ohio, as the Electric Railway Improvement Company. Today, we are a leading designer, manufacturer and marketer of precision-engineered specialty metal products serving global niche product markets in a diverse range of electrical, construction, utility and rail applications. Our product lines share a number of common characteristics, including leading market positions, innovative solutions, quality product offerings, superior technical performance and strong brand names. In the majority of cases, we developed proprietary products that created the market niches in which we compete. We benefit from marketing, manufacturing and engineering economies of scale versus competitors in most of our product lines. Our product lines must meet stringent technical specifications, including in some cases industry or governmental specifications and codes. We sell our products through well-established distribution networks to a highly diversified customer base, which includes many companies that have been ERICO customers for decades. Approximately 60% of our sales are generated within North America, with the remaining 40% generated in Europe, Asia and Latin America. For the year ended December 31, 2005, we had net sales of $390.7 million, cash flow from operations of $47.1 million and earnings before interest, taxes, depreciation and amortization (“EBITDA”) of $58.5 million. For a reconciliation of EBITDA to net cash provided by operating activities, which we believe to be the closest measure under accounting principles generally accepted in the United States (“GAAP”) to EBITDA, and for an explanation of why we present EBITDA, see Note 1 in Item 6, Selected Financial Data, in this report.

     In 2002, our current management, together with Citigroup Venture Capital Equity Partners, L.P. and its affiliates, led a buy-out of the Company from the former management group. As a result of the buy-out, current management owns over one-third of the equity of ERICO Global Company (“Global”), our ultimate parent, with Citigroup Venture Capital Equity Partners, L.P. and its affiliates owning the remainder. The Company is wholly owned by ERICO Holding Company (“Holding”), which in turn is wholly owned by Global.

Our Products

     We have seven product lines used in electrical, construction, utility and rail applications. Each of these product lines benefits from our long-standing reputation of providing premium, precision-engineered products marketed under trusted brand names. Our products are sold through a well-established global sales and distribution network. Our product lines are:

     CADDY Electrical. Our CADDY Electrical fixings, fasteners and supports consist of a broad line of specialty clips, clamps, hangers and straps. Electricians and information transport system installers use our products to hang, support or affix wire, cable or conduit to drywall, studs or metal substructures, primarily in electrical, construction and telecommunications applications. Our products provide significant labor savings and technical superiority compared to the traditional methods of installation. We sell our electrical fixings, fasteners and support products under the CADDY brand name, which benefits from global customer recognition and has a strong reputation for quality in the marketplace. We market directly to tens of thousands of electricians and information transport system installers worldwide who often request our products by brand name. We invented the concept of using spring steel fasteners for hanging electrical wire in the 1950s, and we currently offer a very broad range of products representing over 700 different stock products.

     ERITECH. Our ERITECH electrical products consist of grounding, bonding, surge and lightning protection products and systems used to protect facilities from electrical hazards. Electricians, utilities, telecommunications companies and construction contractors use our products to ground and dissipate electrical energy and protect against lightning and other electrical surges in buildings and other facilities. Our electrical protection products are marketed under our CADWELD, CRITEC and ERITECH brand names through electrical distributors and direct to certain utilities and facility owners. Our products are broadly recognized as the quality standard for electrical hazard protection and the CADWELD brand name is synonymous with exothermic bonding (low-resistance molecular connections). We invented copper exothermic welding connections and developed the most advanced manufacturing process for exothermics and copper-bonded ground rods.

     CADDY Mechanical. Our CADDY Mechanical fixings, fasteners and supports consist of specialty metal hangers, clamps, clips, fasteners and support products. Plumbers, heating, ventilation and air conditioning, or HVAC, and sprinkler installers use our products to hang, support and position pipes, ducts and fire protection and seismic systems. We market directly to tens of thousands of

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plumbers and HVAC installers worldwide under the CADDY brand name. We established this product line in 1997 to take advantage of expansion of our hanger innovation and manufacturing expertise.

     LENTON. Our LENTON concrete reinforcement products consist of a complete line of rebar-splicing systems and other reinforcing products, which are utilized to connect the steel reinforcement rods that provide the essential structural support and integrity for concrete construction methods. Our rebar couplers offer improved architectural and structural solutions over traditional lapping methods, which translates into engineering and architectural benefits to end-users. We sell these products under our LENTON brand name primarily to steel fabricators and large construction contractors.

     ERIFLEX. Our ERIFLEX low voltage panel components consist of current-carrying connectors, supports and other non-active electrical panel components designed to reduce the size of, and facilitate the easy assembly of, electrical panels. We market these products through the ERIFLEX brand name to electricians and original equipment manufacturer panel builders. Our products offer unlimited twisting and bending possibilities and provide space optimization and cost reduction advantages for our customers. We invented flexible insulated laminated copper busbar in the early 1980s.

     ERICO Rail & Industrial. Our ERICO Rail and Industrial products include a wide variety of connecting and bonding products based on our exothermic connection technology. Our exothermic bonds produce a permanent low-resistance molecular connection that is suitable for use in the field or in volatile environments. In addition to our industrial connection products sold under our CADWELD brand, our rail product line, which includes rail bonds and surge protection products, is marketed directly to the railroad industry and sold under the ERICO brand name.

     ERICO Specialty Products. Our ERICO specialty products for electrical and construction applications include a variety of products designed for residential construction, the retail sales channel and other sales channels. The products include electrical and construction products. This product line is sold under the recognized brand names of CADDY and ERITECH. We continue to develop specialty products for these channels and are also adapting existing products from our other product lines.

Customers

     We serve a diverse range of customers in the electrical, construction, utility and rail industries. In addition to the breadth of our customer base, we have established long-term relationships with many of our customers and can trace some relationships back more than 80 years. Our CADDY Electrical fixings, fasteners and supports and ERITECH electrical products are primarily distributed through electrical and information transport system distributors, as well as directly to certain utilities and telecommunications companies. All major electrical distributors worldwide carry our CADDY, CADWELD and ERITECH brand products. All of the ten largest U.S. electrical utilities use the CADWELD and ERITECH products. Our concrete reinforcement and rail and industrial products are sold directly to steel fabricators, construction contractors and rail companies. The five largest steel fabricators in the U.S. and in Europe purchase the LENTON product line. All major North American rail companies and four of the five largest international railroads purchase our rail products. In Europe, our ERIFLEX low voltage panel components are sold exclusively through distributors, while in the U.S. most ERIFLEX products are sold directly to OEMs. The six largest worldwide OEMs that produce electrical panels purchase our ERIFLEX product line. Our CADDY Mechanical fixings, fasteners and supports are sold through mechanical distributors, with the exception of those products sold into the fire protection market, which are primarily sold directly to installers.

     For the years ended December 31, 2005, 2004 and 2003, no single end-user exceeded 1% of our net sales and no single distributor exceeded 5% of our net sales. Customers located outside of the United States accounted for 40.1%, 41.1% and 39.6% of our net sales for the years ended December 31, 2005, 2004 and 2003, respectively.

Marketing and Sales

     As of December 31, 2005, we had approximately 360 professionals employed in sales, customer service, marketing and marketing management activities. Our marketing and sales activities are focused on end-user customers and the various distribution channels serving these customers. We employ dedicated regional sales personnel who provide customer service, product information and marketing support working in conjunction with independent sales representatives calling on the distributors. In addition, we also conduct direct sales activity at retailers, utilities, telecommunication companies, fire sprinkler and HVAC installers, steel fabricators and steel construction contractors, OEMs and rail companies. In Europe, we primarily employ our own sales staff to represent our products to the distribution channels, as the independent sales representative role is not prevalent in this region.

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     For those products sold through distribution channels, we focus our marketing efforts toward educating the end-users who make the decision to purchase our products. In some cases, the decision-maker is the end user, such as an electrician who purchases and uses a CADDY fastener from a distributor. In other cases, the decision-maker is a building owner, or engineer or architect who has been hired by a building owner to design a project on behalf of the owner. In this case, we market to that engineer or architect because he or she will determine the specifications for the project, and may specify our products by name. By targeting these decision-makers and influencers, we encourage them to request our products.

     Our marketing programs, targeted at these decision-makers, include the following:

• Training programs through our CADDY School and ERITECH University, which are conducted periodically in North America and in other areas of the world. As these training programs have become established, we have been able to replicate them at the local level so that our manufacturer representatives, agents and distributors conduct their own mini-CADDY and ERITECH schools at their own sites for end users, such as electrical contractors. Our regional sales and technical support teams also conduct training in the field with end-users through “lunch and learn” programs or hands-on demonstrations of our products.

• Direct mailings to over 100,000 electricians, engineers and other industry professionals.

• Strong relationships with licensing bodies and unions, including BICSI, an association for the information transport systems industry, the National Joint Apprenticeship and Training Committee for the Electrical Industry, AREMA, the American Railway Engineering and Maintenance of Way Association and the International Brotherhood of Electrical Workers. In connection with these relationships, we sponsor some of the organizations’ training classes and training and licensing programs, and in many cases the curriculum includes using our branded products or our training processes.

     We believe these programs have fostered a strong sense of loyalty for our products from our underlying end-user and decision-maker customer base, which prompts those customers to choose ERICO products from our manufacturer representatives, agents and distributors.

Manufacturing

     Our manufacturing strategy includes process-focused factories that provide economies of scale for our worldwide product offerings. Our operating philosophy emphasizes delivery of a high-quality product, on time and at the lowest achievable cost. We also strive to run efficient operations through automation and advanced manufacturing technologies. We have designed and developed proprietary manufacturing processes that provide us with a significant competitive advantage based on operational cost savings from decreased labor costs and increased efficiency. For example, we have the world’s only continuous copper-bonded ground rod production facility and the only automated exothermic material production process. We continually review our manufacturing processes to identify areas for improvement. We update and maintain the various production and quality standards certifications as required by particular markets, including ISO certifications for all of our major manufacturing facilities and Underwriters Laboratory inspections and certifications for our products and manufacturing processes where applicable. We believe that our manufacturing facilities have sufficient capacity for our present needs.

     The following table sets forth the locations and principal products of our significant manufacturing facilities:

Location	Principal Products	Principal Processes
Solon, Ohio (two facilities)	Electrical and mechanical fasteners, concrete couplers, earth electrodes, grounding products, lightning protection, large busbar exothermic connections, rail mechanical connections, rail electrical bonds and exothermic rail connections	Steel stamping and threading, exothermic material processing equipment, light metal fabrications and coating
Aberdeen, North Carolina	Strut and copper-bonded ground rods	Continuous steel rod copper electroplating and finishing, and metal forming
Tilburg, Netherlands	Electrical and mechanical fasteners and concrete couplers	Steel stamping, forging, coating and threading
Andrezieux, France	Insulated laminated flexible copper busbar, system power components, fasteners, supports and insulators	Flat strip lamination and inline insulation (low- voltage PVC extrusion)

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Engineering, Research and Development

     We believe our success is attributable in part to our commitment to innovation and product development, which has provided us with a significant competitive advantage. Our product development strategy is fueled by our ability to design, develop and test our own products, which is evidenced by over 100 issued patents that we hold worldwide. We employ over 60 persons dedicated exclusively to engineering and development of our products and manufacturing processes who hold various advanced degrees in civil, chemical, electrical and mechanical engineering.

     We maintain a research and development facility in Solon, Ohio that is recognized by Underwriters Laboratory where we perform our extensive design, prototyping and testing of our products. Engineering, product design and fatigue testing are performed using computer-aided design and finite element analysis. Our engineering team also develops application software for our products that are made available to our customers on our website or by CD-ROM. For example, we have developed software that calculates resistance to earth with the use of ERICO’s Ground Enhancement Material, or GEM, which estimates the quantity of GEM required and is valid for horizontal and vertical earth electrodes. Our strategy includes extensive product testing programs in an effort to assure high-quality, reliable and safe product performance while effectively reducing manufacturing costs.

     During the years 2005, 2004 and 2003, we recorded expenditures of approximately $7.4 million, $7.0 million and $6.2 million, respectively, for engineering, research and development. Although most of our products are developed internally, we have in the past and may in the future acquire, invest in or license from companies or businesses that offer products or services complementary to our offerings.

Competition

     The markets for our products are highly fragmented and are characterized by numerous smaller suppliers or single product lines of larger businesses. For the strongest and largest of our competitors, our niche product lines are relatively small and non-core. Few of our competitors maintain significant market shares in more than one specific product area. Competitive factors in the markets for our products include breadth of product offering, quality and reliability, cost, timely delivery, customer service and design and engineering capability. We believe we are well positioned relative to our competitors because of our broad range of products, the strength of our brands and distribution channels, excellence in customer service and product training, superior quality and price-value and strong commitment to innovation and product development.

Raw Materials

     Steel and copper are the primary raw materials we use in our products. We purchase these materials from several sources, but have no material long-term contracts. The cost of steel and copper is subject to fluctuation. We have some product lines that adjust product prices to reflect these fluctuations, primarily flexible busbar products and ground rods. These adjustments will lag the current market price for these materials.

     We employ just-in-time manufacturing and sourcing processes to meet customer requirements for faster deliveries and to minimize the need to carry significant inventory levels. Although we are dependent upon a limited number of suppliers for certain raw materials, we have not experienced significant problems in procurement or delivery of any essential materials or parts.

Employees

     As of December 31, 2005, we employed 1,230 persons, including 676 in North America. Of the persons we employed in North America, 380 were manufacturing personnel while the remainder were clerical, distribution, sales and management personnel. Our U.S. operations are not unionized. We employed 399 persons in Europe at December 31, 2005, including 103 manufacturing personnel. Our employees in Europe are commonly members of trade unions or workers councils, as is customary. Our remaining 155 employees are employed in Asia and Latin America. Employee relations throughout our worldwide operations have generally been good.

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Patents, Trademarks and Tradenames

     We hold a number of U.S. and foreign patents, patent applications, licenses and trademarks. We will continue to dedicate technical resources toward the further development of our products and processes to maintain our competitive position in the electrical, construction, utility and rail markets that we serve. We continue to invest in the design, development and testing of proprietary technologies that we believe will set our products apart from those of our competitors. We consider our patents, patent applications, licenses, trademarks and tradenames to be valuable, but do not believe there is any reasonable likelihood of a loss of such rights that would have a material adverse effect on us.

     We own rights in the United States and other jurisdictions to the following registered trademarks and tradenames named in this report: ERICO, CADDY, CADWELD, CRITEC, ERIFLEX, ERITECH and LENTON. All references in this report to any of these terms lacking the ® symbol are defined terms that reference the products, technologies or businesses bearing the trademarks or tradenames with this symbol.

International Operations

     We have significant international operations conducted through foreign subsidiaries. Our foreign subsidiaries generated 39.2%, 39.9% and 39.6%, of our net sales for the years ended December 31, 2005, 2004 and 2003, respectively, and held 21.6% and 22.5% of our assets as of December 31, 2005 and 2004, respectively. In the future, we may significantly expand our international operations through geographic expansion and acquisitions. For information pertaining to the net sales and operating net assets attributed to our international operations, refer to Note 9, “Geographic Information,” to the financial statements included in this report.

     Sales outside of the United States, particularly sales to emerging markets, are subject to various risks that are not present in sales within U.S. markets, including governmental embargoes or foreign trade restrictions such as antidumping duties, changes in U.S. and foreign governmental regulations, tariffs and other trade barriers, the potential for nationalization of enterprises, foreign exchange risk and other political, economic and social instability. In addition, there are tax inefficiencies in repatriating portions of our cash flow from non-U.S. subsidiaries.

Acquisitions

     Since 1996, we have completed and successfully integrated a number of relatively small acquisitions. These were primarily smaller “tuck-under” acquisitions that expanded our product offerings or geographic coverage, or in some cases provided economies of scale in production or distribution. We have achieved synergies following our acquisitions by closing redundant facilities and consolidating labor and production. We believe there will be further opportunities to expand our business through acquisitions.

Seasonality

     Our business is not dramatically affected by the seasons, but our sales and results are generally stronger in the second and third quarters of each year.

Backlog

     Most of our business involves supplying products to our customers pursuant to a specific purchase order. Because our products are generally needed immediately or within a two-week period, we do not have material backlog.

Environmental Matters

     As with most industrial companies, our facilities and operations are required to comply with and are subject to a wide variety of environmental laws and regulations. Some of these environmental laws impose strict, and in certain circumstances joint and several, liability on current and former owners or operators of sites where hazardous substances have been released. Compliance with environmental laws also may require the acquisition of permits or other authorizations for some activities and compliance with various standards or procedural requirements. Compliance with environmental requirements has not had, and we do not expect it to have, any material adverse effects on us. However, there can be no assurance that changes in environmental laws and regulations or changes in the enforcement of these laws and regulations, or any failure to comply in the future with newly discovered conditions, will not result in material costs.

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ITEM 1A. RISK FACTORS

     The Company’s business involves risks and uncertainties, including among other things those set forth below. The risks and uncertainties we describe below are not the only ones we face. Additional risks and uncertainties of which we are currently unaware or that we currently believe to be immaterial may also adversely affect our business.

We depend on individuals and relationships, the loss of which would materially harm us.

     Our success and our ability to implement our business strategy depend upon the continued contributions of management, engineering, sales and marketing, finance and manufacturing personnel. Our future success will also depend on, among other factors, our ability to attract and retain qualified personnel. The loss of the services of our key employees or the failure to attract or retain employees could have a material adverse effect on us.

We may be adversely affected by a general deterioration in economic conditions.

     Our business, consolidated results of operations, financial condition and cash flows may be adversely affected by various economic factors, including economic conditions in the markets in which we operate. Unfavorable economic conditions may make it more difficult for us to maintain past levels of growth, revenue and income in some or all of our product lines.

     Demand for many of our products follows general economic conditions and is sensitive to activity in the construction market, industrial production levels, electronic component production and spending by utilities for replacements, expansions and efficiency improvements. At various times in our history, we have experienced a softening in demand in some of the end markets that we serve, and weak conditions across geographic regions. Such economic conditions may occur again, and their effects on our products and financial results may be pronounced.

Our profits will decline if the price of raw materials rises and we cannot increase the price of our products.

     We use various raw materials, such as steel and copper. We have limited sources of supply for some of our raw materials. We cannot assure you that we will be able to maintain adequate supplies or that sufficient quantities will be available in the future. We may be subject to adverse price fluctuations when purchasing raw materials and we may be unable to increase our prices to offset unexpected increases in raw material costs without suffering losses in unit volume, revenue and operating income.

Our operations make us subject to environmental laws.

     We are subject to foreign, federal, state and local environmental protection laws and regulations governing our operations, including those relating to emissions to air, discharges to water, handling, storage and disposal of waste, and remediation of contaminated sites. A risk of environmental liability is inherent in our current and former manufacturing activities in the event, for example, of a release or discharge of a hazardous substance that we have generated. Under some environmental laws, we could be subject to strict, and in some circumstances joint and several, liability for the remediation of any hazardous substance contamination at our facilities and at third party waste disposal sites and could also be held liable for any consequences arising out of human exposure to these substances or other environmental damage. We cannot assure you that the costs of complying with environmental, health and safety laws in our current operations or the liabilities arising from past releases of, or exposure to, hazardous substances, will not result in future expenditures that could have a material adverse effect on our operating and financial results.

International operations are subject to various risks that may lead to declines in our results of operations, financial condition and cash flows.

     Sales generated by our international operations represented 39.2% of our consolidated net sales for the year ended December 31, 2005. Our business strategy includes continued expansion of international activities. However, foreign operations are subject to various risks, including:

• restrictive trade policies;

• inconsistent product regulation or policy changes by foreign agencies or governments;

• duties, taxes or government royalties;

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• foreign exchange rate risks;

• difficulty in collecting international accounts receivable;

• potentially longer payment cycles;

• increased costs in maintaining international manufacturing and marketing efforts;

• non-tariff barriers and higher duty rates;

• interruptions in international shipping;

• difficulties in enforcement of contractual obligations and intellectual property rights;

• stringent labor regulations;

• exchange controls; and

• national and regional labor strikes.

The markets in which we compete are highly competitive and our failure to effectively compete could erode our market share.

     Our failure to effectively compete in the niche product markets we serve could erode our market share. In addition, we compete against many companies, including divisions of larger companies that may have substantially greater financial resources. Competitive factors in the markets for our products include breadth of product offering, quality and reliability, cost, timely delivery, customer service and design and engineering capability. We may not be able to maintain our current market positions in our niche product markets.

Our products are typically precision-engineered or customer-driven and, as such, we are subject to risks associated with design innovation by our competitors, which could place us at a competitive disadvantage.

     We believe that our customers rigorously evaluate their suppliers on the basis of product quality, price competitiveness, technical expertise and development capability, new product innovation, reliability and timeliness of delivery, product design capability, manufacturing expertise, operational flexibility, customer service and overall management. Our success will depend on our ability to continue to meet our customers’ changing specifications with respect to these criteria. We must remain committed to product research and development and service to our customers to remain competitive. We cannot assure you that one of our competitors will not design a lower cost substitute to any of our products that will place us at a competitive disadvantage. Furthermore, we cannot assure you that we can adequately protect any of our own product designs to produce a sustainable competitive advantage.

We may be unable to identify attractive acquisition candidates, successfully integrate our acquired operations or realize the intended benefits of our acquisitions.

     One of our growth strategies is to pursue selective strategic acquisition opportunities. We intend to continually evaluate potential acquisitions, some of which could be material, and engage in discussions with acquisition candidates. We cannot assure you that suitable acquisition candidates will be identified and acquired in the future or that we will be able to accomplish our strategic objectives as a result of any acquisition. Nor can we assure you that our acquisition strategies will be successfully received by customers or achieve their intended benefits. We will encounter various risks in acquiring other companies, including the possible inability to integrate an acquired business into our operations, diversion of management’s attention and unanticipated problems or liabilities, some or all of which could materially and adversely affect us.

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

     We face an inherent business risk of exposure to product warranty and product liability claims, as well as product recall costs, in the event that the use of our current and formerly manufactured or sold products results, or is alleged to result, in bodily injury or

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property damage. We cannot assure you that we will not experience any material product warranty, product liability or product recall losses in the future or that we will not incur significant costs to defend such claims. We cannot assure you that our product liability insurance coverage will be adequate for any liabilities that may ultimately be incurred or that it will continue to be available on terms acceptable to us. A successful claim brought against us in excess of our available insurance coverage may have a materially adverse effect on our business.

Our principal stockholders could exercise their influence over us.

     As a result of their stock ownership of our ultimate parent, Global, Citigroup Venture Capital Equity Partners, L.P. and its affiliates exercise significant influence over our management. Citigroup Venture Capital Equity Partners, L.P., together with some of its affiliates, employees and other persons affiliated or otherwise associated with Citigroup Venture Capital Equity Partners, L.P., own approximately two-thirds of the voting power of Global. The interests of Citigroup Venture Capital Equity Partners, L.P. and its affiliates as equity owners of Global may differ from the interests of others, and, as such, they may take actions that may not be in others’ interest. In addition, pursuant to a stockholders agreement, some stockholders have agreed to vote their stock so that three members of the board of directors of Global are selected by Citigroup Venture Capital Equity Partners, L.P. together with its affiliates. Currently, there are four members of the board of directors of Global.

Our substantial debt could adversely affect our financial condition.

     We have a substantial amount of debt, which requires significant interest and principal payments. As of December 31, 2005, we had $141.7 million total debt outstanding, excluding approximately $74.9 million of unused revolving commitments under the Credit Facility. Subject to the limits contained in the indenture governing the Subordinated Notes, our Credit Facility and our other debt instruments, we may be able to incur additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could intensify. Specifically, our high level of debt could have important consequences, including the following:

• making it more difficult for us to satisfy our obligations with respect to our debt;

• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;

• requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes;

• increasing our vulnerability to general adverse economic and industry conditions;

• limiting our flexibility in planning for and reacting to changes in the industry in which we compete;

• placing us at a disadvantage compared to other less leveraged competitors;

• making it more difficult for us to comply with the financial covenants required by our Credit Facility; and

• increasing our cost of borrowing.

We may be unable to service our debt.

     Our ability to make scheduled payments on or to refinance our obligations with respect to our debt will depend on our financial and operating performance, which will be affected by general economic, financial, competitive, business and other factors beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our Credit Facility in an amount sufficient to enable us to service our debt or to fund our other liquidity needs. If we are unable to meet our debt obligations or fund our other liquidity needs, we may need to restructure or refinance all or a portion of our debt or sell certain of our assets on or before maturity. We cannot assure you that we will be able to restructure or refinance any of our debt on commercially reasonable terms, if at all, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.

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Our operations may be restricted by the terms of our debt, which could adversely affect us.

     The agreements relating to our indebtedness include a number of significant restrictive covenants. These covenants could adversely affect us by limiting our ability to plan for or react to market conditions or to meet our capital needs. These covenants will, among other things, restrict our ability to:

• incur more debt;

• create liens;

• pay dividends and make distributions or repurchase stock;

• make investments;

• merge or consolidate or transfer or sell assets;

• issue preferred stock of subsidiaries; and

• engage in transactions with affiliates.

     In addition, our Credit Facility requires us to maintain certain financial ratios and meet other financial tests. Our failure to comply with these covenants or tests would cause a default which, if not cured or waived, could result in lenders not being required to advance any more funds to us, as well as our being required to repay the borrowings under our Credit Facility before their respective due dates. If we are unable to make this repayment or otherwise refinance these borrowings, the lenders under our Credit Facility could foreclose on our assets. If we refinance these borrowings on less favorable terms, our results of operations and financial condition could be adversely impacted by increased costs and rates.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

     Not applicable.

ITEM 2. PROPERTIES.

     The following table sets forth the location of our principal owned and leased facilities as of December 31, 2005:

		Approximate
Location	Interest	Square Footage		Use
Aberdeen, North Carolina	Owned		161,500	Office/Manufacturing/Warehouse
Andrezieux, France	Owned		78,428	Office/Manufacturing
Solon, Ohio	Leased		164,940	Office/Manufacturing
Solon, Ohio	Owned		240,000	Office/Manufacturing/Warehouse
Tilburg, Netherlands	Owned		140,071	Office/Manufacturing/Warehouse

ITEM 3. LEGAL PROCEEDINGS.

     We are a party to a number of legal proceedings in the ordinary course of our business. We do not believe that such pending or threatened legal proceedings to which we are a party, or to which any of our property is subject, will have a material adverse effect on our consolidated results of operations, financial position or cash flows.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

     No trading market for the Company’s common stock exists. On March 10, 2006, there was one share of the Company’s common stock outstanding, which was held by Holding.

     In February 2004 and January 2005, the Company paid dividends of $25.0 million and $15.0 million, respectively, to Holding, and Holding, in turn, paid dividends of $25.0 million and $15.0 million to Global, as holder of Holding’s common stock. Global then paid dividends of $25.0 million and $15.0 million to the holders of Global’s Class L common stock. In addition, on December 2, 2005, the Company declared a $9.9 million dividend that was paid to Holding on January 10, 2006, and Holding, in turn, paid a $9.9 million dividend to Global, as holder of Holding’s common stock. Global then paid an $11.0 million dividend to the holders of Global’s Class L common stock. Our general policy is to retain earnings to repay debt and finance our operations and acquisition strategies. In addition, the terms of the indenture governing our 8.875% senior subordinated notes due 2012 (the “Subordinated Notes”) as well as our $75.0 million Multicurrency Credit and Security Agreement (the “Credit Facility”) restrict the payment of dividends on common stock. See the discussion under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and Note 3 to the Company’s consolidated financial statements captioned “Debt and Financing Arrangements,” included in Item 8 of this report.

ITEM 6. SELECTED FINANCIAL DATA.

     The following table sets forth selected historical consolidated financial data of the Company for each of the five years in the period ended December 31, 2005. We are a wholly owned subsidiary of Holding, which is a wholly owned subsidiary of Global, our ultimate parent. Global and Holding are holding companies that do not have separate operations or other investments. As a result, all operating activity and all account balances of Global and Holding have been “pushed down” and are included in our stand-alone financial information.

     The selected historical consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited consolidated financial statements and related notes included in Item 8 of this report.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)

	Years Ended December 31,
	2005			2004			2003			2002			2001
Income statement data
Net sales	$	390,735		$	352,618		$	309,871		$	295,882		$	291,180
Cost of sales		250,738			227,870			199,324			183,650			186,265
Gross profit		139,997			124,748			110,547			112,232			104,915
Operating expenses		93,361			87,770			81,296			91,562			89,186
Operating income		46,636			36,978			29,251			20,670			15,729
Interest expense, net		15,208			15,083			12,739			4,180			4,460
Other expense (income), net		791			(157	)		(3,943	)		(2,245	)		1,821
Income before income taxes		30,637			22,052			20,455			18,735			9,448
Income taxes		10,274			8,684			7,257			7,981			3,431
Net income	$	20,363		$	13,368		$	13,198		$	10,754		$	6,017
Other financial data:
Net cash provided by operating activities		47,130			22,665			18,041			29,035			14,517
Net cash used in investing activities		(4,221	)		(3,664	)		(9,028	)		(10,790	)		(16,444	)
Net cash (used in) provided by financing activities		(25,360	)		(19,370	)		(9,828	)		(16,594	)		1,498
EBITDA (1)		58,508			51,055			45,277			33,847			26,668
Depreciation and amortization		12,663			12,184			12,083			10,932			12,760
Capital expenditures		3,649			3,571			5,252			5,960			9,733
Dividends declared		11,000			40,000			—			—			—
Balance sheet data:
Cash and cash equivalents		19,561			2,321			2,421			3,374			1,592
Working capital		51,631			44,573			45,152			38,458			46,997
Total assets		311,271			322,721			323,767			302,662			197,638
Total debt		141,675			152,175			140,920			151,097			55,337
Stockholder’s net investment		52,983			48,125			72,430			60,571			75,056

(1) The Company has chosen to present EBITDA because the Company believes it is a widely accepted financial indicator of a company’s ability to service and incur indebtedness, and because EBITDA is used in the Company’s financial covenants under our Credit Facility and the indenture governing our Subordinated Notes. Additionally, management uses EBITDA, among other financial measures, for planning and forecasting purposes. However, EBITDA should not be considered as an alternative to net cash provided by operating activities as a measure of liquidity in accordance with GAAP. Since EBITDA is not calculated identically by all companies, the Company’s method of computation may not be comparable to those disclosed by other companies. Following is a reconciliation of EBITDA to net cash provided by operating activities, which the Company believes is the most directly comparable GAAP measure of a company’s ability to service and incur indebtedness:

	Years Ended December 31,
	2005			2004			2003			2002			2001
Net cash provided by operating activities	$	47,130		$	22,665		$	18,041		$	29,035		$	14,517
Interest expense, net		15,208			15,083			12,739			4,180			4,460
Income taxes		10,274			8,684			7,257			7,981			3,431
Foreign exchange (loss) gain		(791	)		1,893			3,943			2,245			(2,241	)
Benefit (provision) for deferred income taxes		1,218			(4,372	)		(2,230	)		(1,235	)		628
Amortization of financing fees and discount on senior subordinated notes included in interest expense, net		(891	)		(910	)		(697	)		—			—
Net changes in operating assets and liabilities:
Accounts receivable		7,106			(5,469	)		(710	)		(1,939	)		(741	)
Inventory and other current assets		(11,254	)		11,715			(3,993	)		5,632			(1,302	)
Accounts payable and other current liabilities		(9,492	)		(3,914	)		10,927			(12,052	)		7,916
Pension plan termination		—			5,680			—			—			—
EBITDA	$	58,508		$	51,055		$	45,277		$	33,847		$	26,668

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

     The following discussion and analysis of our consolidated financial condition and results of operations should be read in conjunction with our audited consolidated financial statements, “Selected Historical Consolidated Financial Data” and the accompanying notes, which are included elsewhere in this report. The following discussion and analysis also contains forward-looking statements, which reflect the expectations, beliefs, plans and objectives of management about future financial performance and assumptions underlying our judgments concerning matters discussed below. These statements, accordingly, involve estimates, assumptions, judgments and uncertainties. In particular, this discussion pertains to management’s comments on financial resources, capital spending and the outlook for our business. In addition to other contingency matters and related cautionary statements discussed elsewhere in this report, you should also read and review the discussion under “Risk Factors” below for some important factors that could cause actual results or outcomes to differ materially from those addressed in forward-looking statements.

Overview

     We are a leading designer, manufacturer and marketer of precision-engineered specialty metal products serving global niche product markets in a diverse range of electrical, construction, utility and rail applications, with our principal manufacturing facilities in North America and Europe. We distribute our products to customers through a well-established global sales and distribution network serving more than 25 countries.

     The Company is a wholly owned subsidiary of Holding. On December 2, 2002, a newly formed wholly owned subsidiary of Global merged with Holding, with Holding as the surviving company. As a result, Holding became a wholly owned subsidiary of Global. In connection with the buy-out, affiliates of Citigroup Venture Capital Equity Partners, L.P. and its affiliates acquired approximately two-thirds of the stock of Global.

Market Outlook

     Due to continual new product introductions and further market penetration, we expect continued sales growth in 2006 in the electrical, construction, utility and rail markets. The prices we pay for raw materials, primarily steel and copper, continue to be a driver in our overall profitability. During 2005, prices for steel and copper substantially continued at the elevated prices we began to experience in 2004. We will continue to closely monitor our raw material costs and price our products accordingly. To the extent we experience any additional future raw material cost increases, we intend to pass these costs on to our customers to the extent feasible in light of the competitive dynamics in our industry. We may not be successful in recovering all of the increases in steel, copper and other raw material costs.

Results of Operations

     The following table sets forth statements of operations data expressed as a percentage of net sales:

	Years Ended December 31,
	2005			2004			2003
Net sales		100.0	%		100.0	%		100.0	%
Cost of sales		64.2			64.6			64.3
Gross profit		35.8			35.4			35.7
Operating expenses		23.9			24.9			26.2
Operating income		11.9			10.5			9.5
Interest expense, net		3.9			4.3			4.1
Other expense (income), net		0.2			(0.1	)		(1.2	)
Income before income taxes		7.8			6.3			6.6
Provision for income taxes		2.6			2.5			2.3
Net income		5.2			3.8			4.3

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Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

     Net sales. Net sales for the year ended December 31, 2005 were $390.7 million, an increase of $38.1 million, or 10.8%, from the $352.6 million reported for the year ended December 31, 2004. Favorable foreign currency exchange rates contributed $2.5 million toward the 2005 sales increase. The remaining $35.6 million increase in net sales for the year ended December 31, 2005 compared with the year ended December 31, 2004 was due to a combination of increased selling prices and higher sales volume.

     Gross profit. Gross profit for the year ended December 31, 2005 increased by $15.3 million, or 12.2%, to $140.0 million from the $124.7 million reported for the year ended December 31, 2004. Gross profit margin was relatively constant at 35.8% for the year ended December 31, 2005 compared with 35.4% for the year ended December 31, 2004. Gross profit and gross profit margin increased primarily due to sales volume, increased selling prices and the favorable effect on net sales of foreign currency exchange rates.

     Operating expenses. Operating expenses include engineering, research and development expenses, selling and marketing expenses and general and administrative expenses. Operating expenses increased by $5.6 million, or 6.4%, to $93.4 million for the year ended December 31, 2005 from $87.8 million for the year ended December 31, 2004. As a percentage of net sales, operating expenses decreased to 23.9% for the year ended December 31, 2005 from 24.9% for the year ended December 31, 2004. The decrease in operating expenses as a percent of sales for the year ended December 31, 2005 was primarily due to the higher sales level along with management’s continued focus on controlling expenses.

     Interest expense, net. Interest expense for the year ended December 31, 2005 was $15.2 million compared with $15.1 million for the year ended December 31, 2004. The increase in interest expense was primarily due to the inclusion of $0.4 million of interest expense related to the Company’s purchase and retirement of $10.5 million of Subordinated Notes.

     Other expense (income), net. Other expense for the year ended December 31, 2005 consisted of a $0.8 million loss on the exchange of foreign currencies caused by the strengthening of the U.S. dollar compared to many currencies, primarily the Euro. Other income for the year ended December 31, 2004 included a $1.9 million gain on the exchange of foreign currencies, partially offset by a non-cash charge of $1.2 million to write off previously deferred financing costs and original issue discount costs resulting from the February 2004 refinancing of our Credit Facility and a non-cash charge of $0.5 million to write off previously deferred financing costs and original issue discount costs related to the August 2004 exchange of 11.0% senior subordinated notes for our Subordinated Notes.

     Provision for income taxes. The provision for income taxes was $10.3 million for the year ended December 31, 2005 compared with $8.7 million for the year ended December 31, 2004. The effective tax rate was 33.5% for the year ended December 31, 2005 compared with 39.4% for the year ended December 31, 2004. A 2005 change in state tax laws and its effect on deferred income taxes is the primary reason for the decrease in the Company’s effective tax rate in 2005.

     Net income. As a result of the foregoing, the Company reported net income of $20.4 million for the year ended December 31, 2005, an increase of $7.0 million, or 52.3%, from net income of $13.4 million for the year ended December 31, 2004.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

     Net sales. Net sales for the year ended December 31, 2004 were $352.6 million, an increase of $42.7 million, or 13.8%, from the $309.9 million reported for the year ended December 31, 2003. Favorable foreign currency exchange rates contributed $10.7 million toward the 2004 sales increase. The remaining $32.0 million increase in net sales for the year ended December 31, 2004 compared with the year ended December 31, 2003 was due to a combination of increased sales volume and increased selling prices as we passed on significant increases in raw material costs to our customers.

     Gross profit. Gross profit for the year ended December 31, 2004 increased by $14.2 million, or 12.8%, to $124.7 million from the $110.5 million reported for the year ended December 31, 2003. Gross profit margin was relatively constant at 35.4% for the year ended December 31, 2004 compared with 35.7% for the year ended December 31, 2003. Gross profit increased primarily due to sales volume, increased selling prices and the favorable effect on net sales of foreign currency exchange rates. Gross profit margin decreased primarily due to the significant increase in raw material costs, primarily steel and copper.

     Operating expenses. Operating expenses include engineering, research and development expenses, selling and marketing expenses and general and administrative expenses. Operating expenses increased by $6.5 million, or 8.0%, to $87.8 million for the year ended December 31, 2004 from $81.3 million for the year ended December 31, 2003. As a percentage of net sales, operating expenses

15

decreased to 24.9% for the year ended December 31, 2004 from 26.2% for the year ended December 31, 2003. The decrease in operating expenses as a percent of sales for the year ended December 31, 2004 was primarily due to the higher sales level along with management’s continued focus on controlling expenses.

     Interest expense, net. Interest expense for the year ended December 31, 2004 was $15.1 million compared with $12.7 million for the year ended December 31, 2003. The increase in interest expense was primarily caused by higher average debt balances in the twelve months ended December 31, 2004 compared with the twelve months ended December 31, 2003 as a result of the February 2004 debt refinancing.

     Other (income) expense, net. Other income for the year ended December 31, 2004 included a $1.9 million gain on the exchange of foreign currencies caused by the weakening of the U.S. dollar compared to many currencies, primarily the Euro. This gain was partially offset by a non-cash charge of $1.2 million to write off previously deferred financing costs and original issue discount costs resulting from the February 2004 refinancing of our Credit Facility and a non-cash charge of $0.5 million to write off previously deferred financing costs and original issue discount costs related to the August 2004 exchange of 11.0% senior subordinated notes for our Subordinated Notes. Other income for the year ended December 31, 2003 included a $3.9 million gain on the exchange of foreign currencies. The largest component of this gain in 2003 was $2.2 million associated with debt held by our Australian subsidiary, denominated in U.S. dollars, which was paid off in May 2003.

     Provision for income taxes. The provision for income taxes was $8.7 million for the year ended December 31, 2004 compared with $7.3 million for the year ended December 31, 2003. The effective tax rate was 39.4% for the year ended December 31, 2004 compared with 35.5% for year ended December 31, 2003. During 2003, we recognized foreign currency transaction gains for which there was no income tax expense, which resulted in a lower effective tax rate in 2003.

     Net income. As a result of the foregoing, the Company reported net income of $13.4 million for the year ended December 31, 2004, an increase of $0.2 million, or 1.2%, from net income of $13.2 million for the year ended December 31, 2003.

Liquidity and Capital Resources

     Short-term liquidity requirements consist of activities related to day-to-day operations, required debt service, capital expenditure funding and meeting working capital requirements. Long-term liquidity requirements include principal payments relating to long-term debt and acquisition funding. Sources for our short-term liquidity needs are primarily cash generated from operations and borrowings under the revolving credit portion of our Credit Facility.

     On February 20, 2004, we refinanced substantially all of our long-term debt outstanding. We issued $140.9 million aggregate principal amount of Subordinated Notes, of which $19.4 million was exchanged for our 11.0% senior subordinated notes. The proceeds of $140.9 million were used in part to reduce amounts outstanding under the previous revolving credit facility, to repay $39.0 million of term loans outstanding and to repay $35.0 million of the 11.0% senior subordinated notes of Holding. In addition, we paid a dividend of $25.0 million to Holding, as our sole stockholder. On August 13, 2004, we exchanged the remaining $10.6 million of 11.0% senior subordinated notes for $10.6 million of our Subordinated Notes. In October 2005, we purchased and retired $10.5 million of our Subordinated Notes that were offered for sale in the open market.

     In connection with the February 20, 2004 refinancing, the Company amended its Credit Facility, which expires December 2, 2007. The Credit Facility provides a revolving credit line of $75.0 million, of which $25.0 million may be used for the issuance of letters of credit. The Credit Facility allows for multicurrency borrowing options in Australian dollars, Euros, Swiss francs, Swedish kronas, British pounds and other currencies that are readily available and freely traded. Borrowings under the Credit Facility are secured by substantially all of the assets of the Company and accrue interest at the Alternate Base Rate (as defined in the Credit Facility) or LIBOR plus a 1.75% margin. The Credit Facility provides for a commitment fee of 0.25% on the revolving credit line.

     The Credit Facility and the Subordinated Notes contain certain customary covenants that impose limitations on the Company, including covenants limiting the ability of the Company and its subsidiaries to sell, pledge or incur liens on assets and to incur additional debt. The Credit Facility also includes requirements to meet certain financial tests and to maintain on a quarterly basis certain consolidated financial ratios, including minimum net worth, minimum fixed charge coverage ratio, maximum leverage ratio and minimum EBITDA. The Company was in compliance with all covenants of the Credit Facility and the Subordinated Notes, and the conditions of the Credit Facility, at December 31, 2005.

16

     At December 31, 2005, the Company did not have any borrowings outstanding under the revolving credit line of the Credit Facility, and had letters of credit outstanding of $0.1 million supported by the Credit Facility. The amount available for additional borrowing under the Credit Facility at December 31, 2005 was $74.9 million.

     We believe that cash forecasted to be generated from operations, together with amounts available under our Credit Facility, will be adequate to meet our debt service requirements, capital expenditures and working capital needs for at least the next 12 months, although no assurance can be given. Our future operating performance and ability to extend or refinance our indebtedness will be dependent on future economic conditions and general financial, business and other factors, many of which are beyond our control.

     We have significant future cash commitments, primarily maturities of long-term debt and scheduled lease payments. The commitments related to long-term debt and lease payments are fully described in Notes 3 and 8 of the accompanying financial statements.

     The following table summarizes our contractual obligations and commercial commitments at December 31, 2005:

	Cash Payments Due by Period
			Less Than						After
Contractual Obligations	Total		1 Year		2-3 Years		4-5 Years		5 Years
	(Dollars in millions)
Long-term debt	$	141.7	$	—	$	—	$	0.7	$	141.0
Interest payments		81.6		12.6		25.1		25.1		18.8
Operating leases		7.3		3.2		2.9		1.2		—
Dividend payable (1)		11.0		11.0		—		—		—
Total contractual obligations	$	241.6	$	26.8	$	28.0	$	27.0	$	159.8

(1) On December 2, 2005, we declared a $9.9 million dividend payable to Holding, as our sole stockholder, who in turn declared a $9.9 million dividend payable to Global. We and Holding paid these dividends on January 10, 2006. On December 2, 2005, Global declared an $11.0 million dividend payable to the Holders of its Class L common stock, which was paid on January 10, 2006.

Year Ended December 31, 2005 Compared to Year Ended December 31, 2004

     Cash provided by operating activities for the year ended December 31, 2005 was $47.1 million, an increase of $24.4 million, or 107.9%, from cash provided by operations of $22.7 million in 2004. The increase was primarily attributable to a change of $23.0 million in inventory and other current assets based upon our successful efforts to reduce inventory quantities.

     Capital expenditures were $3.6 million for the years ended December 31, 2005 and 2004.

     Cash used in financing activities was $25.4 million for the year ended December 31, 2005, and principally represented the payment in January 2005 of a $15.0 million dividend to the Holders of Global’s Class L common stock and the purchase and retirement in October 2005 of $10.5 million of our Subordinated Notes that were offered for sale in the open market. Cash used in financing activities was $19.4 million for the year ended December 31, 2004 and principally represented the effects of the February 2004 debt refinancing transaction.

Year Ended December 31, 2004 Compared to Year Ended December 31, 2003

     Cash provided by operating activities for the year ended December 31, 2004 was $22.7 million and includes a $5.7 million use of cash to fund the defined benefit pension plan termination liability. This represented an increase of $4.7 million from cash provided by operations of $18.0 million in 2003. The increase was primarily attributable to a change of $4.8 million in accounts receivable based upon improved collections.

     Capital expenditures were $3.6 million for the year ended December 31, 2004 compared with $5.3 million for the year ended December 31, 2003.

17

     Cash used in financing activities was $19.4 million for the year ended December 31, 2004, and principally represented the effects of the February 2004 debt refinancing transaction. Cash used in financing activities was $9.8 million for the year ended December 31, 2003 and principally represented payments on long-term debt and a revolving line of credit.

Critical Accounting Policies and Estimates

     Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and are based on the selection and application of significant accounting policies. These accounting policies require us to make estimates and assumptions that affect amounts reported in our consolidated financial statements and the accompanying notes. We base our estimates on historical experience, available information and various other assumptions that we believe to be reasonable under the circumstances. On an ongoing basis, we evaluate our estimates to ensure that they appropriately reflect changes in our business or new information as it becomes available. Actual results are likely to differ from our estimates, but we do not believe such differences will materially affect our consolidated results of operations, financial position or cash flows for the periods presented in this report. We believe the following are some of the more critical judgmental areas in the application of our accounting policies.

Trade Accounts Receivable and Allowance for Doubtful Accounts

     Receivables are presented net of allowances for doubtful accounts of $1.5 million and $2.5 million at December 31, 2005 and 2004, respectively. We evaluate the collectibility of accounts receivable and record the related allowance for doubtful accounts based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings or substantial downgrading of credit scores), a specific reserve is recorded to reduce the receivable to the amount we believe will be collected. We also record allowances for doubtful accounts based on the length of time the receivables are past due and historical experience. If circumstances change (e.g., higher-than-expected defaults or an unexpected material adverse change in a customer’s ability to meet its financial obligations), our estimates of the collectibility of amounts due could be changed by a material amount. Historically, bad debt losses have not been significant and have not differed materially from our estimates. In 2005, based upon improved collection efforts, the average length of time receivables were past due significantly decreased in comparison to 2004, resulting in a reduction in the allowance for doubtful accounts at December 31, 2005.

Inventory Valuation Reserves

     We determine inventory valuation reserves based on a combination of factors. In circumstances where we are aware of a specific problem in the valuation of a certain item, a specific reserve is recorded to reduce the item to its net realizable value. We also recognize reserves based on the actual usage in recent history and projected usage in the near-term. If circumstances change (e.g., lower-than-expected or higher-than-expected usage), our estimates of the net realizable value could be changed by a material amount.

Goodwill and Indefinite-Lived Intangible Assets

     As of December 31, 2005, we had $95.5 million of goodwill and $33.6 million of trademarks, an indefinite-lived intangible asset. As a result of the adoption of Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, we evaluate goodwill and indefinite-lived intangible assets for impairment on an annual basis, using October 1, or when indicators of impairment exist.

     To estimate fair value for potential goodwill impairment, we use both a discounted cash flows approach and an EBITDA multiple approach. To estimate fair value for potential impairment of other intangibles, we use a relief royalty approach. Absent fair value from a potential buyer or similar specific transactions, we believe the use of these methodologies provides reasonable estimates of the fair value of goodwill and other intangible assets. The fair value computed by these methodologies is derived using a number of factors such as projected future operating results and business plans, economic projections, anticipated future cash flows, marketplace data of comparable companies or near comparable companies from within a consistent industry grouping and cost of capital. There are inherent uncertainties related to these factors and to management’s judgment when applied to the analysis of goodwill and other indefinite-lived intangible asset impairment. Accordingly, we believe the combination of these methodologies provides a reasonable approach by which to estimate the fair value of goodwill and other indefinite-lived intangible assets.

     We determined that goodwill and indefinite-lived intangible assets were not impaired as of the annual assessment performed as of October 1, 2005. However, the occurrence of a potential indicator of impairment, such as a significant adverse change in legal factors or business climate, an adverse action or assessment by a regulator, unanticipated competition, loss of key personnel or a more-likely-than-not expectation that a significant portion of our business will be sold or disposed of, would result in our having to perform an

18

impairment analysis in addition to our annual assessment. These types of events and the resulting analysis could result in additional charges for goodwill write-offs or other asset impairments in the future. To date, we have not identified any indicators of impairment that would require a further impairment assessment.

Post-Retirement Benefits Other Than Pensions

     We sponsor a post-retirement health care benefit plan for U.S. employees hired prior to January 1993 who also had at least 24 years of service as of December 31, 2004. We account for this post-retirement health care plan in accordance with SFAS No. 106, Employers’ Accounting for Post-Retirement Benefits Other Than Pensions, which requires that amounts recognized in financial statements be determined on an actuarial basis. The measurement of liabilities of the post-retirement health care benefit plan is based on management’s assumptions related to future events, including interest rates and health care cost trend rates. The discount rate used to determine the present value of future benefits is based on yields of investment grade AA quality or better fixed-income securities over a length of time matching the benefit payment stream. The discount rate used to value post-retirement obligations was 5.65% for 2005 and 6.35% for 2004 and 2003. The health care cost trend rate used to determine the present value of future benefits is based on general economic trends and expectations in health care costs and our specific health care cost trends. The health care cost trend rate assumption was 11.2% for 2005 and is assumed to decrease linearly to 4% over eight years and remain at that level thereafter. A one percent increase or decrease in the health care cost trend rate would have decreased the total service and interest cost by less than $0.1 million. A one percent increase in the health care cost trend rate would have decreased the post-retirement benefit obligation by approximately $0.1 million and a one percent decrease would have decreased the post-retirement benefit obligation by less than $0.1 million.

Accrued Expenses

     We estimate certain material expenses in an effort to record those expenses in the period incurred. The most material estimates relate to insurance-related expenses, including employee-related matters and reserves associated with asserted and unasserted litigation, claims and assessments. Workers’ compensation and general liability insurance accruals are recorded based on insurance claims processed as well as historical claims experience for claims incurred but not yet reported. These estimates are based on historical loss development factors. Employee medical insurance accruals are recorded based on medical claims processed as well as historical medical claims experience for claims incurred but not yet reported. Differences in estimates and assumptions could result in an accrual requirement materially different from the calculated accrual.

Income Taxes

     Our provision for income taxes is calculated in accordance with SFAS No. 109, Accounting for Income Taxes, which requires the recognition of deferred income taxes using the liability method. The Company’s operations will be included in the consolidated income tax returns filed by Global. Income tax expense in the Company’s consolidated statement of operations is calculated on a separate tax return basis as if the Company had operated as a stand-alone entity.

     We make certain estimates and judgments to determine income for financial statement purposes. These estimates and judgments affect the calculation of certain tax liabilities and the determination of the recoverability of certain deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expense. Deferred tax assets are also reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. As of December 31, 2005, we have recorded valuation allowances of $10.1 million for certain foreign tax jurisdictions that we intend to maintain until it is more likely than not the deferred tax assets will be realized. $7.8 million of the valuation allowance relates to deferred tax assets created prior to the 2002 merger transaction. Future decreases to this portion of the valuation allowance will therefore be recorded as adjustments to goodwill rather than as reductions of income tax expense. In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations. We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities.

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Other Matters

     We do not have any off-balance sheet arrangements, financings or other relationships with unconsolidated entities or other persons, also known as “special purpose entities.” Transactions with related parties are in the ordinary course of business, are conducted on an arms-length basis, and are not material to our consolidated results of operations, financial condition or cash flows.

Recently Issued Accounting Standards

     In November 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4. SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material, and requires that such items be recognized as current-period charges regardless of whether they meet the “so abnormal” criterion outlined in ARB No. 43. SFAS No. 151 also introduces the concept of “normal capacity” and requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. Unallocated overheads must be recognized as an expense in the period incurred. SFAS No. 151 is effective for the Company on January 1, 2006. We have completed our evaluation of the impact of adopting this statement, and determined that it does not have a material impact on our consolidated results of operations, financial position or cash flows.

     In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment, which replaces the prior SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123(R) requires compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards will be re-measured each reporting period. Compensation cost will be recognized over the period that an employee provides services in exchange for the award. SFAS 123(R) is effective for the Company on January 1, 2006. We have completed our evaluation of the impact of adopting this statement, and determined that it does not have a material impact on our consolidated results of operations, financial position or cash flows.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     In the normal course of business, we are exposed to various changes in financial market conditions, including fluctuations in interest rates, foreign currency exchange rates and commodity prices. We manage our exposure to such risks through various operating and financing activities.

     We are exposed to interest rate risk when there are borrowings under our Credit Facility. Borrowings under the Credit Facility bear interest at variable rates, based upon published indices. In order to partially mitigate this exposure, we have occasionally entered into interest rate swaps to fix a portion of our interest payable. At December 31, 2005, the Company did not have any borrowings outstanding under the revolving credit line of the Credit Facility, and had letters of credit outstanding of $0.1 million supported by the Credit Facility. There were no interest rate swaps outstanding as of December 31, 2005 or December 31, 2004.

     We are also exposed to various foreign currency risks, i.e., there is a risk that we will incur economic losses due to adverse changes in foreign currency exchange rates. Our foreign currency exchange rate risks primarily relate to the Euro, the Australian dollar and the Brazilian real. We monitor these risks, and attempt to establish offsetting positions, when practical, between our various subsidiaries. Under our Credit Facility, we also have the option of denominating a portion of our borrowings in multiple foreign currencies. There are no amounts outstanding under the multi-currency borrowing options at December 31, 2005. We had net assets denominated in foreign currencies of approximately $43.0 million associated with our foreign subsidiaries at December 31, 2005.

     We utilize various raw material commodities in our manufacturing processes, including steel and copper. These materials are obtained from various supply sources, and there have historically been adequate levels of material available. We are exposed to adverse price fluctuations when purchasing these materials, and may not necessarily be able to offset such increases through increased selling prices for our products. We do not hedge our commodity price risks via the derivatives markets.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Report of Independent Registered Public Accounting Firm

Board of Directors
ERICO International Corporation

     We have audited the accompanying consolidated balance sheets of ERICO International Corporation and subsidiaries as of December 31, 2005 and 2004, and the related statements of consolidated income, stockholder’s net investment and cash flows for each of the three years in the period ended December 31, 2005. 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. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and 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 consolidated financial position of ERICO International Corporation and subsidiaries at December 31, 2005 and 2004, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP  

Cleveland, Ohio
February 27, 2006

21

ERICO International Corporation and Subsidiaries

Consolidated Balance Sheets
(Dollars in thousands, except per share data)

	December 31,
	2005			2004
Assets
Current assets:
Cash and cash equivalents	$	19,561		$	2,321
Trade accounts receivable, net		54,802			50,485
Inventories, net		46,710			59,600
Prepaid expenses		1,986			2,049
Other current assets		4,772			6,860
Total current assets		127,831			121,315
Property, plant and equipment, net		42,799			52,522
Goodwill		95,524			101,303
Trademarks and other intangible assets, net		36,802			36,905
Deferred income taxes		3,311			4,835
Deferred financing fees and other assets		5,004			5,841
Total assets	$	311,271		$	322,721
Liabilities and stockholder’s net investment
Current liabilities:
Trade accounts payable	$	29,157		$	26,422
Accrued compensation		15,699			13,446
Dividend payable		11,000			15,000
Other current liabilities		20,344			21,874
Total current liabilities		76,200			76,742
Long-term debt		141,675			152,175
Deferred income taxes		26,561			28,894
Other long-term liabilities		13,852			16,785
Stockholder’s net investment:
Common stock, $1.00 par value, 1,500,000 shares authorized, 1 share issued		—			—
Parent company investment		56,202			46,699
Accumulated other comprehensive (loss) income		(3,219	)		1,426
Total stockholder’s net investment		52,983			48,125
Total liabilities and stockholder’s net investment	$	311,271		$	322,721

See notes to consolidated financial statements.

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ERICO International Corporation and Subsidiaries

Consolidated Statements of Income
(Dollars in thousands)

	Years Ended December 31,
	2005		2004			2003
Net sales	$	390,735	$	352,618		$	309,871
Cost of products sold		250,738		227,870			199,324
Gross profit		139,997		124,748			110,547
Operating expenses:
Selling		62,973		57,698			53,225
Administrative		22,997		23,119			21,847
Engineering, research and development		7,391		6,953			6,224
		93,361		87,770			81,296
Operating income		46,636		36,978			29,251
Other expense (income):
Interest expense, net		15,208		15,083			12,739
Foreign exchange loss (gain), net		791		(1,893	)		(3,943	)
Other expense		—		1,736			—
Income before income taxes		30,637		22,052			20,455
Provision for income taxes		10,274		8,684			7,257
Net income	$	20,363	$	13,368		$	13,198

See notes to consolidated financial statements.

23

ERICO International Corporation and Subsidiaries

Consolidated Statements of Stockholder’s Net Investment
(Dollars in thousands)

						Accumulated
			Parent			Other
	Common		Company			Comprehensive
	Stock		Investment			Income (Loss)			Total
Balance at January 1, 2003	$	¾	$	59,092		$	1,479			$	60,571
Comprehensive income:		¾
Net income		¾		13,198			¾				13,198
Foreign currency translation adjustment				¾			(1,717	)			(1,717	)
Total comprehensive income		¾		—			—				11,481
Net transfers from parent company		¾		378			¾				378
Balance at December 31, 2003		¾		72,668			(238	)			72,430
Comprehensive income:
Net income		¾		13,368			—				13,368
Foreign currency translation adjustment		¾		—			1,664				1,664
Total comprehensive income		¾		—			—				15,032
Dividends declared		¾		(40,000	)		—				(40,000	)
Net transfers from parent company		¾		663			—				663
Balance at December 31, 2004		—		46,699			1,426				48,125
Comprehensive income:
Net income		¾		20,363			¾				20,363
Foreign currency translation adjustment		¾		¾			(4,645	)			(4,645	)
Total comprehensive income		¾		¾			¾				15,718
Dividends declared		¾		(11,000	)		¾				(11,000	)
Net transfers from parent company		¾		140							140
Balance at December 31, 2005	$	¾	$	56,202		$	(3,219	)		$	52,983

See notes to consolidated financial statements.

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ERICO International Corporation and Subsidiaries

Consolidated Statements of Cash Flows
(Dollars in thousands)

	Years Ended December 31,
	2005			2004			2003
Operating activities
Net income	$	20,363		$	13,368		$	13,198
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		12,040			11,543			11,610
Amortization expense		623			641			473
Amortization of financing fees and discount		891			910			697
Write-off of financing fees and discount		—			1,736			—
Foreign exchange loss (gain)		791			(1,893	)		(3,943	)
(Benefit) provision for deferred income taxes		(1,218	)		4,372			2,230
Change in operating assets and liabilities:
Accounts receivable		(7,106	)		5,469			710
Inventory and other current assets		11,254			(11,715	)		3,993
Accounts payable and other current liabilities		9,492			3,914			(10,927	)
Pension plan termination		¾			(5,680	)		¾
Net cash provided by operating activities		47,130			22,665			18,041
Investing activities
Acquisition payments, net of cash acquired		¾			¾			(3,329	)
Capital expenditures		(3,649	)		(3,571	)		(5,252	)
Other investing activities		(572	)		(93	)		(447	)
Net cash used in investing activities		(4,221	)		(3,664	)		(9,028	)
Financing activities
Net transfers from parent company		140			663			378
Dividends paid		(15,000	)		(25,000	)		—
Net payments on revolving line of credit		¾			(38,000	)		(4,206	)
Proceeds from the issuance of subordinated debt		¾			121,500			—
Principal payments on long-term debt		(10,500	)		(72,950	)		(6,000	)
Financing fees paid		—			(5,583	)		—
Net cash used in financing activities		(25,360	)		(19,370	)		(9,828	)
Effect of exchange rate changes on cash and cash equivalents		(309	)		269			(138	)
Increase (decrease) in cash and cash equivalents		17,240			(100	)		(953	)
Cash and cash equivalents at beginning of year		2,321			2,421			3,374
Cash and cash equivalents at end of year	$	19,561		$	2,321		$	2,421

See notes to consolidated financial statements.

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ERICO International Corporation and Subsidiaries

Notes to Consolidated Financial Statements
(Dollars in thousands)

1. Description of Business and Basis of Presentation

     ERICO International Corporation (“ERICO” or the “Company”) is a wholly owned subsidiary of ERICO Holding Company (“Holding”), which is a wholly owned subsidiary of ERICO Global Company (“Global”), the Company’s ultimate parent. All activity associated with Holding and Global relates to the operations of the Company. All operating costs incurred by Holding and Global are reflected in the Company’s financial statements. In addition, in accordance with Staff Accounting Bulletin (“SAB”) No. 73, “Pushdown” Basis of Accounting Required in Certain Limited Circumstances, senior subordinated notes issued by Holding and outstanding through February 20, 2004, including related financing costs, have been “pushed down” and are reflected in the accompanying financial statements.

     The Company is a leading designer, manufacturer and marketer of precision-engineered specialty metal products serving global niche product markets in a diverse range of electrical, construction, utility and rail applications. The Company is headquartered in Solon, Ohio, USA with a network of sales locations serving more than 25 countries and with manufacturing and distribution facilities worldwide.

     On December 2, 2002, a wholly owned subsidiary of Global merged with and into Holding, and as a result, Holding became a wholly owned subsidiary of Global. In connection with the merger, which had a transaction value of $188,200, Citigroup Venture Capital Equity Partners, L.P. and its affiliates (“CVC”) acquired approximately two-thirds ownership of Global for cash, and management acquired approximately one-third ownership of Global for a combination of Holding common stock (“rollover” shares) and cash. The purchase was financed by these capital contributions from CVC and management and the issuance of long-term debt by the Company and Holding. The debt proceeds were transferred upstream to Global by the Company and Holding, and Global used the cash as consideration for the merger (collectively, the “Merger Transaction”). For financial reporting purposes the Merger Transaction was accounted for as a leveraged buyout (“LBO”). Accordingly, the Merger Transaction resulted in a new basis of accounting for the new shareholders’ ownership percentage with a partial step-up in fair value for assets and liabilities of Holding. The carry-over ownership from the rollover shares was accounted for at Holding’s historical basis. In accordance with SAB No. 54, “Pushdown” Basis of Accounting in Financial Statements of Subsidiaries, Global’s investment in Holding and the partial step-up in basis has been pushed down and is reflected in the financial statements of the Company.

2. Summary of Significant Accounting Policies

  Principles of Consolidation

     The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and accounts are eliminated in consolidation.

   Cash and Cash Equivalents

     The Company considers all highly liquid investments with an initial maturity of three months or less when purchased to be cash equivalents. The December 31, 2005 balance includes money market investments and cash. The December 31, 2004 balance includes only cash.

  Concentrations of Credit Risk

     Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of trade accounts receivable. Concentrations of credit risk with respect to trade receivables are limited due to the large number of customers comprising the Company’s customer base and their dispersion across different businesses and geographic regions. The Company sells its products to a diverse range of customers in the electrical, construction, utility and rail industries all over the world. Approximately 40.1%, 41.1% and 40.9% of net sales were to customers located outside of the United States in 2005, 2004 and 2003, respectively. No single customer exceeded ten percent of consolidated sales in 2005, 2004 or 2003. To minimize credit risk from trade receivables, the Company reviews the financial conditions of potential customers in relation to established credit requirements before sales credit is

26

extended and performs periodic credit evaluations of existing customers’ financial condition, but generally does not require collateral. Credit losses have been historically within management expectations.

     The Company is also subject to concentrations of credit risk with respect to its cash and cash equivalents and marketable securities. To minimize credit risk from these financial investments, the Company enters into these arrangements with major banks and other high credit quality financial institutions and invests only in high-quality instruments. The Company does not expect any counterparties to be unable to meet their obligations.

   Revenue Recognition

     Revenue is recognized when products are shipped, title has transferred, collection is reasonably assured, persuasive evidence of an arrangement exists and the selling price to the buyer is fixed or determinable. Shipping and handling costs billed to customers are included in net sales and the related cost in cost of products sold in the consolidated statements of income.

  Allowance for Doubtful Accounts

     On a regular basis, the Company evaluates the collectibility of its accounts receivable and establishes an allowance for doubtful accounts based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations (e.g., bankruptcy filings, substantial downgrading of credit scores), a specific reserve is recorded to reduce the receivable to the amount the Company believes will be collected. The Company also records allowances for doubtful accounts based on the length of time the receivables are past due and historical experience.

     The allowance for doubtful accounts at December 31, 2005 and 2004 was $1,501 and $2,504, respectively. The activity in the allowance for doubtful accounts for the years ended December 31, 2005, 2004 and 2003 is as follows

	December 31,
	2005			2004			2003
Balance at beginning of year	$	2,504		$	1,942		$	2,163
(Benefit) provision		(349	)		860			532
Foreign currency translation adjustments		(183	)		57			258
Write-offs and payments		(471	)		(355	)		(1,011	)
Balance at end of year	$	1,501		$	2,504		$	1,942

   Inventories

     The Company values its inventories at the lower of cost or market, with cost being determined by the first-in, first-out method. The major categories of inventories at December 31, 2005 and 2004 are as follows:

	December 31,
	2005		2004
Finished goods	$	38,779	$	51,439
Work in process		4,333		4,166
Raw materials		8,665		9,515
	$	51,777	$	65,120

  Inventory Valuation Reserves

     The Company determines inventory valuation reserves based on a combination of factors. In circumstances where the Company is aware of a specific problem in the valuation of a certain item, a specific reserve is recorded to reduce the item to its net realizable value. The Company also recognizes reserves based on the actual usage in recent history and projected usage in the near-term. If circumstances change, (e.g., lower-than-expected or higher-than-expected usage), estimates of the net realizable value could be changed by a material amount.

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     The inventory valuation reserve for slow-moving and obsolete inventories was $5,067 and $5,520 at December 31, 2005 and 2004, respectively. The activity in the reserve for slow-moving and obsolete inventories for the years ended December 31, 2005, 2004 and 2003 is as follows:

	December 31,
	2005			2004			2003
Balance at beginning of year	$	5,520		$	3,562		$	4,316
Provision		1,910			2,903			1,633
Foreign currency translation adjustments		(396	)		137			660
Write-offs		(1,967	)		(1,082	)		(3,047	)
Balance at end of year	$	5,067		$	5,520		$	3,562

   Property, Plant and Equipment

     Property, plant and equipment, and capital expenditures for such assets, are stated on the basis of cost. Expenditures for maintenance, repairs and renewals are charged to expense as incurred, whereas major improvements are capitalized. Depreciation is provided for the cost of depreciable assets at rates based on the estimated economic lives. Such provisions are computed using the straight-line method for financial reporting purposes and accelerated methods for income tax purposes. Depreciation expense was $12,040, $11,543 and $11,610 for the years ended December 31, 2005, 2004 and 2003, respectively.

     The components of property, plant and equipment at December 31, 2005 and 2004, and their related depreciable lives, are as follows:

			December 31,
	Depreciable Life		2005			2004
Land and land improvements		—	$	2,414		$	2,447
Buildings	20 – 25 years			13,254			13,145
Machinery and equipment	5 – 10 years			49,051			51,454
Furniture and fixtures	3 – 5 years			10,138			8,072
Property, plant and equipment, at cost				74,857			75,118
Accumulated depreciation				(32,058	)		(22,596	)
Property, plant and equipment, net			$	42,799		$	52,522

  Impairment of Long-Lived Assets

     In accordance with Financial Accounting Standards Board (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets, except goodwill, are reviewed for impairment when circumstances indicate that the carrying value of an asset may not be recoverable. For assets that are to be held and used, an impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets are less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and the fair value. Assets to be disposed of are recorded at the lower of carrying value or estimated net realizable value.

   Goodwill and Other Intangible Assets

     Goodwill represents the excess of purchase price paid over the fair value of the net assets acquired. In accordance with SFAS No. 142, Goodwill and Other Intangible Assets, goodwill and indefinite-lived intangible assets are no longer amortized but are subject to annual impairment testing. Impairment exists when the carrying amount of goodwill or indefinite-lived intangible assets exceeds its fair value. The 2005, 2004 and 2003 annual impairment assessments confirmed that the fair value of the Company exceeded its carrying value, and no impairment loss recognition was required for goodwill or indefinite-lived intangible assets.

     Other intangible assets, which consist primarily of patents and customer relationships, continue to be amortized on a straight-line basis over the shorter of the economic or statutory lives for varying periods of six to twenty years.

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     The following table displays the gross carrying amount and accumulated amortization amount for finite-lived intangible assets and indefinite-lived intangible assets:

		December 31, 2005					December 31, 2004
	Weighted Average	Gross Carrying		Accumulated			Gross Carrying		Accumulated
	Amortization Period	Amount		Amortization			Amount		Amortization
Finite-lived intangible assets:
Patents	15 years	$	4,120	$	(1,569	)	$	3,647	$	(1,010	)
Customer relationships	20 years		787		(121	)		787		(82	)
		$	4,907	$	(1,690	)	$	4,434	$	(1,092	)
Indefinite-lived intangible assets:
Trademarks		$	33,585				$	33,563
Goodwill			95,524					101,303
		$	129,109				$	134,866

     Amortization expense for intangible assets subject to amortization was $623, $641 and $473 for the years ended December 31, 2005, 2004, and 2003, respectively. Based upon the gross carrying amount of finite-lived intangible assets as of December 31, 2005, amortization expense is expected to be approximately $560 annually for fiscal years 2006 through 2010.

     Goodwill was recorded in connection with the Merger Transaction. In accordance with SFAS 141, Business Combinations, and Emerging Issues Task Force (“EITF”) 95-3, Recognition of Liabilities in a Purchase Business Combination, during 2005 and 2004 the Company recorded adjustments to the purchase price allocation based upon the termination of the defined benefit pension plan and the resolution of certain income tax matters. All of these purchase price allocation adjustments have been pushed down to the Company and are reflected in the Company’s December 31, 2005 consolidated balance sheet. Changes in the carrying amount of goodwill during the years ended December 31, 2005 and 2004 are as follows:

	Years Ended December 31,
	2005			2004
Balance at beginning of year	$	101,303		$	105,194
Adjustments associated with finalization of purchase price allocation:
Pension termination, net of tax		—			(383	)
Resolution of income tax matters		(5,779	)		(3,508	)
Balance at end of year	$	95,524		$	101,303

  Foreign Currency Translation

     The functional currency for the majority of the Company’s subsidiaries outside the United States is the applicable local currency. Assets and liabilities for these subsidiaries are translated using exchange rates in effect at the balance sheet date, while income and expenses are translated using weighted-average exchange rates during the period. Translation adjustments resulting from this process are charged or credited to other comprehensive income (loss) in stockholder’s net investment. Gains and losses resulting from trade foreign currency translations are charged to operations as incurred. Gains and losses resulting from intercompany foreign currency transactions that are of a long-term-investment nature, where settlement is not planned or anticipated in the foreseeable future, are also included in other comprehensive income (loss) in the stockholder’s net investment. Accumulated other comprehensive income (loss) consists only of translation adjustments at December 31, 2005 and 2004.

  Fair Value of Balance Sheet Financial Instruments

     The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the immediate or short-term maturity of these financial instruments. The carrying amount of long-term debt approximates but is less than its fair value of approximately $145,000 because the fixed 8.875% interest rate for the Company’s subordinated notes is greater than prevailing market rates.

  Derivative Financial Instruments

     In the normal course of business, the Company is exposed to changes in foreign currencies and fluctuations of interest rates. The Company has established policies and procedures that govern the management of these exposures including the use of interest rate

29

swap agreements and other financial instruments. By policy, the Company does not enter into such instruments for trading purposes or speculation. At December 31, 2005, the Company did not have any derivative financial instruments outstanding.

     All derivative financial instruments are recognized in the financial statements and measured at fair value. Changes in the fair value of derivative financial instruments are recognized periodically in either income or stockholders’ net investment depending upon the purpose and designation of the underlying derivative instrument.

  Advertising Costs

     Advertising costs are expensed as incurred. Advertising expense was $2,002, $2,209, and $2,030 for the years ended December 31, 2005, 2004, and 2003, respectively.

   Engineering, Research and Development Costs

     The Company incurred engineering, research and development costs of $7,391, $6,953, and $6,224 for the years ended December 31, 2005, 2004, and 2003, respectively. These costs are expensed as incurred.

  Income Taxes

     The Company’s operations have been included in the consolidated income tax returns filed by its parent company. Income tax expense in the Company’s consolidated statements of income is calculated on a separate tax return basis as if the Company had operated as a stand-alone entity. The provision for income taxes is calculated in accordance with SFAS No. 109, Accounting for Income Taxes. Deferred income taxes are provided for temporary differences between financial reporting and the consolidated tax return in accordance with the liability method. A valuation allowance is provided against net deferred tax assets when conditions indicate that it is more likely than not that the benefit related to such assets will not be realized.

   Accounting 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

  Reclassifications

     Certain prior year amounts have been reclassified to conform to the current year presentation.

  Recently Issued Accounting Standards

     In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4. SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material, and requires that such items be recognized as current-period charges regardless of whether they meet the “so abnormal” criterion outlined in ARB No. 43. SFAS No. 151 also introduces the concept of “normal capacity” and requires the allocation of fixed production overheads to inventory based on the normal capacity of the production facilities. Unallocated overheads must be recognized as an expense in the period incurred. SFAS No. 151 is effective for the Company on January 1, 2006. We have completed our evaluation of the impact of adopting this statement, and determined that it does not have a material impact on our consolidated results of operations, financial position or cash flows.

     In December 2004, the FASB issued SFAS No. 123(R), Share-Based Payment, which replaces the prior SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123(R) requires compensation costs related to share-based payment transactions to be recognized in the financial statements. With limited exceptions, the amount of compensation cost will be measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards will be re-measured each reporting period. Compensation cost will be recognized over the period that an employee provides services in exchange for the award. SFAS 123(R) is effective for the Company on January 1, 2006. We have completed our evaluation of the impact of adopting this statement, and determined that it does not have a material impact on our consolidated results of operations, financial position or cash flows.

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3. Debt and Financing Arrangements

     Long-term debt at December 31, 2005 and 2004 consists of the following:

	December 31,
	2005		2004
8.875% subordinated notes, due 2012 — ERICO International Corporation	$	141,000	$	151,500
Other notes, due 2009, average interest rate of 6.59% at December 31, 2005		675		675
	$	141,675	$	152,175

     On February 20, 2004 the Company refinanced substantially all of its long-term debt. The Company issued $140,900 of 8.875% senior subordinated notes due 2012 (the “Subordinated Notes”), of which $19,400 was exchanged for its 11.0% senior subordinated notes. The proceeds of $140,900 were used in part to reduce amounts outstanding under the Company’s previous revolving credit facility, to repay $39,000 of term loans outstanding, to repay $35,000 of the 11.0% senior subordinated notes of Holding and to pay a dividend of $25,000 to the holders of Global Class L shares. On August 13, 2004, the Company exchanged the remaining $10,600 of 11.0% senior subordinated notes for $10,600 of its Subordinated Notes. The Company recorded non-cash charges of $1,736 in 2004 to write-off original issue discount costs and deferred financing costs related to the February 2004 refinancing and August 2004 debt exchange transactions. In October 2005, the Company paid $10,940 to purchase and retire $10,500 of its Subordinated Notes that were offered for sale in the open market, and the premium of $440 was recognized by the Company as interest expense. Deferred financing fees associated with the Subordinated Notes are being amortized to interest expense over the remaining term.

     In connection with the February 20, 2004 refinancing, the Company amended its $75,000 Multicurrency Credit and Security Agreement (the “Credit Facility”) that expires December 2, 2007. The Credit Facility provides a revolving credit line of $75,000, of which $25,000 may be used for the issuance of letters of credit. The Credit Facility allows for multicurrency borrowing options in Australian dollars, Euros, Swiss francs, Swedish kronas, British pounds and other currencies that are readily available and freely traded. Borrowings under the Credit Facility are secured by substantially all of the assets of the Company and accrue interest at the Alternate Base Rate (as defined in the Credit Facility) or LIBOR plus a 1.75% margin. The Credit Facility provides for a commitment fee of 0.25% on the revolving credit line.

     The Credit Facility and the Subordinated Notes contain certain customary covenants that impose limitations on the Company, including covenants limiting the ability of the Company and its subsidiaries to sell, pledge or incur liens on assets and to incur additional debt. The Credit Facility also includes requirements to meet certain financial tests and to maintain on a quarterly basis certain consolidated financial ratios, including minimum net worth, minimum fixed charge coverage ratio, maximum leverage ratio and minimum net income before interest expense, net, income taxes, depreciation, amortization and certain other non-cash, non-recurring items (“EBITDA”). The Company was in compliance with all covenants of the Credit Facility and the Subordinated Notes, and the conditions of the Credit Facility, at December 31, 2005.

     At December 31, 2005, the Company did not have any borrowings outstanding under the revolving credit line of the Credit Facility, but did have letters of credit outstanding of $40 supported by the Credit Facility. The amount available for additional borrowing under the Credit Facility at December 31, 2005 was $74,960.

     The scheduled annual maturities of long-term debt at December 31, 2005 total $141,675 and are payable as follows: $675 in 2009 and $141,000 in 2012.

     Interest payments were $14,925, $12,462, and $10,479 for the years ended December 31, 2005, 2004, and 2003, respectively.

4. Other Liabilities

     Other current liabilities and other long-term liabilities at December 31, 2005 and 2004 consist of the following:

	Other Current Liabilities				Other Long-term Liabilities
	2005		2004		2005		2004
Value-added and other taxes	$	4,012	$	4,422	$	3,610	$	5,507
Post-retirement benefits		—		—		5,887		6,717
Interest payable		4,182		4,532		—		—
Rebates payable		3,858		4,527		—		—
Other		8,292		8,393		4,355		4,561
	$	20,344	$	21,874	$	13,852	$	16,785

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5. Income Taxes

     Income taxes are provided using the liability method in accordance with SFAS No. 109, Accounting for Income Taxes. For tax reporting purposes, the Company is included in the consolidated federal tax return of Global. For financial reporting purposes, however, the Company’s tax provision has been calculated on a stand-alone basis.

     Income before income taxes consists of the following:

	Years Ended December 31,
	2005		2004		2003
Domestic	$	20,582	$	12,062	$	12,072
Foreign		10,055		9,990		8,383
	$	30,637	$	22,052	$	20,455

     Significant components of the provision for income taxes are as follows:

	Years Ended December 31,
	2005			2004		2003
Current:
Domestic	$	9,097		$	3,274	$	4,029
Foreign		2,395			1,038		998
		11,492			4,312		5,027
Deferred:
Domestic		(2,704	)		1,890		624
Foreign		1,486			2,482		1,606
		(1,218	)		4,372		2,230
Provision for income taxes	$	10,274		$	8,684	$	7,257

     Significant components of deferred tax assets and liabilities are as follows:

	December 31,
	2005			2004
Deferred tax assets:
Accrued liabilities and reserves	$	3,332		$	2,820
Retirement plan obligations		2,600			3,277
Accrued liabilities		529			502
Tax effect of operating loss carryforwards, net of valuation allowance of $10,057 in 2005 and $10,490 in 2004		140			985
Other, net		42			71
		6,643			7,655
Deferred tax liabilities:
Fixed assets		4,691			7,525
Intangible assets		15,383			14,802
Unrealized foreign exchange gains		5,563			5,847
Other, net		924			720
		26,561			28,894
Net deferred tax liabilities	$	(19,918	)	$	(21,239	)

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     The reconciliation of income taxes computed at the United States federal statutory tax rate to income tax expense follows:

	Years Ended December 31,
	2005			2004			2003
Income taxes at U.S. statutory rate		35.0	%		35.0	%		35.0	%
Tax effects from:
State income taxes, net of federal benefit		2.6			3.7			4.0
Tax rate differential on foreign operations		3.7			1.2			(2.3	)
Nondeductible expenses		0.4			0.4			0.4
Deferred tax impact of state law changes		(3.7	)		—			—
Extraterritorial income exclusion		(2.8	)		(2.6	)		(1.7	)
Other, net		(1.7	)		1.7			0.1
		33.5	%		39.4	%		35.5	%

     The Company made income tax payments of $6,950, $719, and $5,019 for the years ended December 31, 2005, 2004, and 2003, respectively.

     At December 31, 2005, certain foreign subsidiaries have tax loss carryforwards aggregating $45,670 that are available to offset future taxable income. Carryforwards of $31 expire in 2011, and the balance of the carryforwards have no expiration date. These losses are available for offset against future taxable income of such subsidiaries and are substantially reserved at December 31, 2005. A valuation allowance of $10,057 has been recorded for the deferred tax effect of these tax loss carryforwards. $7,822 of the valuation allowance relates to deferred tax assets created prior to the 2002 Merger Transaction. Future decreases to this portion of the valuation allowance will therefore be recorded as adjustments to goodwill rather than as reductions of income tax expense. Deferred income taxes are not provided on undistributed earnings of international subsidiaries of $11,457, which are intended to be permanently invested in the operations.

6. Acquisitions

     In April 2003, the Company acquired the net assets of Hunt Manufacturing Ltd. (“Hunt”), a British Columbia corporation, for approximately $3,329 in cash. Hunt is a manufacturer and distributor of various mechanical hangers and related products.

     This acquisition was accounted for as a purchase, and accordingly, its results of operations are included in the consolidated statements of income from their respective dates of acquisition.

7. Retirement and Post-Retirement Benefit Plans

     The Company has a health care post-retirement benefits plan (the “Health Care Plan”) that provides benefits to certain employees in the United States hired prior to January 1993. On February 10, 2005, the Company amended the Health Care Plan to limit eligibility to those employees hired prior to January 1, 1993 that also have at least 24 years of service as of December 31, 2004. This amendment eliminated approximately 50 employees from eligibility and caused the Company to recognize a curtailment gain of $68 in the first quarter of 2005. At the same time, the Company increased retiree contributions such that retirees will pay 100% of medical costs by January 1, 2010. This change in assumption resulted in an unrecognized net gain that is being amortized to income as a component of periodic benefit income. The Company has the right to amend or change the plan periodically. The Company continues to fund benefits on a pay-as-you-go basis, with retirees paying a portion of the cost.

     On December 8, 2003, Congress passed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Medicare Act”). The Medicare Act provides for prescription drug benefits under Medicare Part D and contains a subsidy to plan sponsors who provide actuarial equivalent medical plans. On May 19, 2004, the FASB issued Financial Staff Position Number 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (“FSP”). The FSP became effective July 1, 2004. In September 2005, the Company determined the benefits provided by the Company’s Health Care Plan were actuarially equivalent to Medicare Part D under the Medicare Act, and the Company applied to receive the applicable subsidy from Medicare. As a result, the Company’s accumulated post-retirement benefit obligation at December 31, 2005 reflects a reduction of $279. However, net periodic benefit costs for the years ended December 31, 2005 and 2004 do not reflect any amount associated with the Medicare Act. The Company expects net periodic benefit income of $525 in 2006, which reflects a reduction of $50 due to the Medicare Act.

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     A summary of the components of net periodic benefit (income) expense for the Health Care Plan follows:

	Health Care Plan
	2005			2004		2003
Service cost	$	5		$	94	$	117
Interest cost		38			388		395
Amortization of net gain		(521	)		—		—
Curtailment gain		(68	)		—		—
Net periodic benefit (income) expense	$	(546	)	$	482	$	512

     The following table presents the funded status of the Health Care Plan, using a measurement date of October 31, and amounts recognized in the Company’s balance sheets at December 31, 2005 and 2004:

	Health Care Plan
	2005			2004
Change in benefit obligation:
Benefit obligation at beginning of year	$	6,562		$	6,380
Service cost		5			94
Interest cost		38			388
Participants’ contributions		50			64
Actuarial loss (gain)		214			(705	)
Benefits paid		(334	)		(286	)
Change in actuarial assumptions		182			627
Curtailment gain		(68	)		—
Plan amendment		(5,826	)		—
Impact of Medicare Part D		(279	)		—
Benefit obligation at end of year		544			6,562
Change in plan assets:
Fair value of plan assets at beginning of year		—			—
Employer contribution		284			222
Participants’ contributions		50			64
Benefits paid		(334	)		(286	)
Fair value of plan assets at end of year		—			—
Funded status (unfunded)		(544	)		(6,562	)
Unrecognized net actuarial gain		(5,343	)		(155	)
Accrued benefit cost	$	(5,887	)	$	(6,717	)

     The Company used discount rate assumptions of 5.65% for 2005 and 6.35% for 2004 and 2003 to determine the funded status information and subsequent net periodic benefit (income) expense for the Health Care Plan.

     The weighted-average annual assumed rate of increase in the per-capita cost of covered benefits (i.e., health care cost trend rate) was 11.2% for 2005, and is assumed to decrease linearly to 4% over eight years and remain at that level thereafter. A one percent increase or decrease in the health care cost trend rate would have the following effects:

	1% Increase			1% Decrease
Effect on total service and interest cost	$	(7	)	$	(2	)
Effect on post-retirement benefit obligation		(113	)		(38	)

     In 2006, the Company expects Health Care Plan contributions, including the impact of the Medicare Part D subsidy, to be $109, and expects benefit payments to be $296.

     The Company also sponsors a defined contribution retirement savings plan covering U.S. employees. Company contributions are based on employee contributions and the level of Company match and discretionary contributions. Expenses under the plan were $1,371, $1,210, and $1,205 for the years ended December 31, 2005, 2004, and 2003, respectively.

     The Company sponsored a defined benefit pension plan covering U.S. employees hired prior to January 1, 1997 (the “Pension Plan”), and the Company froze all benefits under the Pension Plan as of that date. In connection with the Merger Transaction, in

34

December 2002 the Company terminated the Pension Plan. At December 31, 2003, the Company had a pension termination liability of $6,335 recorded. In November 2004, the Company completed the Pension Plan termination by liquidating the Pension Plan assets and paying $5,680 as the final settlement amount to fund the participant lump-sum payouts, the purchase of the guaranteed annuity obligations and to cover expenses of the settlement. The $655 difference between the estimated settlement liability and the actual amount paid was recorded as an adjustment, net of taxes, to goodwill in the fourth quarter of 2004.

8. Commitments and Contingencies

     Future minimum lease payments under non-cancelable operating leases with initial or remaining terms of one year or more consisted of the following at December 31, 2005:

2006	$	3,198
2007		1,912
2008		998
2009		645
2010		527
Thereafter		—
Total minimum lease payments	$	7,280

     Total rental expense for all operating leases was $4,158, $4,447 and $4,537 for the years ended December 31, 2005, 2004 and 2003, respectively.

     On December 2, 2005, the Company declared a $9,927 dividend payable to Holding, who in turn declared a $9,927 dividend payable to Global. The Company and Holding paid these dividends on January 10, 2006. On December 2, 2005, Global declared an $11,000 dividend payable to the holders of its Class L common stock, which was paid on January 10, 2006. This $11,000 dividend is reflected on the Company’s consolidated balance sheet at December 31, 2005.

     The Company’s facilities and operations are required to comply with and are subject to a wide variety of environmental laws and regulations. Some of these environmental laws impose strict, and in certain circumstances joint and several, liability on current and former owners or operators of sites where hazardous substances have been released. Compliance with environmental laws also may require the acquisition of permits or other authorizations for some activities and compliance with various standards or procedural requirements. Compliance with environmental requirements has not had, and management does not expect it to have, any material adverse effects on the Company. However, there can be no assurance that changes in environmental laws and regulations or changes in the enforcement of these laws and regulations, or any failure to comply in the future with newly discovered conditions, will not result in material costs.

     The Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business. The Company’s management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows.

9. Geographic Information

     The Company operates in one reportable segment. The Company’s sales are principally to customers in the United States and Europe, and a majority of its assets are located in these same geographic areas. Following is a summary of sales based on geographic areas from which the third-party sales originated and long-lived assets by geographic location:

	2005		2004		2003
Net sales:
United States	$	237,634	$	212,043	$	187,045
Europe		104,070		98,369		87,483
Other		49,031		42,206		35,343
	$	390,735	$	352,618	$	309,871
Long-lived assets:
United States	$	33,395	$	39,211	$	45,528
Europe		8,907		12,352		13,767
Other		497		959		1,335
	$	42,799	$	52,522	$	60,630

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10. Quarterly Data (Unaudited)

     Selected quarterly data for the years ended December 31, 2005 and 2004 follows:

	Year Ended December 31, 2005
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter		Total
Sales	$	89,950	$	100,128	$	104,435	$	96,222	$	390,735
Gross profit		30,949		36,039		39,117		33,892		139,997
Net income		3,210		5,793		7,621		3,739		20,363

	Year Ended December 31, 2004
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter		Total
Sales	$	83,450	$	92,112	$	92,398	$	84,658	$	352,618
Gross profit		29,839		33,583		32,930		28,396		124,748
Net income		2,022		5,822		3,586		1,938		13,368

11. Guarantor and Non-Guarantor Subsidiaries

     The following condensed consolidating financial statements set forth the Company’s balance sheets as of December 31, 2005 and 2004 and the statements of income and statements of cash flows for each of the three years in the period ended December 31, 2005. In the following schedules “Parent” refers to the Company, Holding and Global, collectively, “Guarantor Subsidiary” refers to ERICO Products, Inc., the Company’s sole domestic subsidiary, and “Non-Guarantor Subsidiaries” refers to foreign subsidiaries. “Eliminations” represent the adjustments necessary to (a) eliminate intercompany transactions and (b) eliminate the investments in the Company’s subsidiaries.

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Condensed Consolidating Balance Sheets
December 31, 2005

			Guarantor			Non-Guarantor
	Parent		Subsidiary			Subsidiaries			Eliminations			Consolidated
Cash and cash equivalents	$	9,435	$	17		$	10,109		$	—		$	19,561
Trade accounts receivable, net		—		29,515			25,287			—			54,802
Inventories, net		—		27,046			19,664			—			46,710
Prepaid expenses and other current assets		1,868		2,391			2,499			—			6,758
Total current assets		11,303		58,969			57,559			—			127,831
Property, plant and equipment, net		152		33,243			9,404			—			42,799
Goodwill		95,524		—			—			—			95,524
Trademarks and other intangible assets		36,802		—			—			—			36,802
Deferred income taxes		943		2,247			121			—			3,311
Investment in and advances to subsidiaries		95,587		—			—			(95,587	)		¾
Deferred financing fees and other assets		4,879		99			26			—			5,004
Total assets	$	245,190	$	94,558		$	67,110		$	(95,587	)	$	311,271
Trade accounts payable	$	312	$	20,937		$	7,908		$	—		$	29,157
Accrued compensation		1,933		8,267			5,499			—			15,699
Dividend payable		11,000		—			—			—			11,000
Other current liabilities		5,159		6,669			8,516			—			20,344
Total current liabilities		18,404		35,873			21,923			—			76,200
Long-term debt		141,000		675			—			—			141,675
Deferred income taxes		23,387		2,775			399			—			26,561
Intercompany balance		—		(8,345	)		56,581			(48,236	)		¾
Other long-term liabilities		6,197		5,917			1,738			—			13,852
Total stockholder’s net investment		56,202		57,663			(13,531	)		(47,351	)		52,983
Total liabilities and stockholder’s net investment	$	245,190	$	94,558		$	67,110		$	(95,587	)	$	311,271

Condensed Consolidating Balance Sheets
December 31, 2004

			Guarantor		Non-Guarantor
	Parent		Subsidiary		Subsidiaries			Eliminations			Consolidated
Cash and cash equivalents	$	398	$	21	$	1,902		$	—		$	2,321
Trade accounts receivable, net		—		24,646		25,839			—			50,485
Inventories, net		—		32,709		26,891			—			59,600
Prepaid expenses and other current assets		2,801		2,498		3,610			—			8,909
Total current assets		3,199		59,874		58,242			—			121,315
Property, plant and equipment, net		224		38,986		13,312			—			52,522
Goodwill		101,303		—		—			—			101,303
Trademarks and other intangible assets		36,905		—		—			—			36,905
Deferred income taxes		1,002		2,867		966			—			4,835
Investment in and advances to subsidiaries		102,684		—		—			(102,684	)		¾
Deferred financing fees and other assets		5,678		116		47			—			5,841
Total assets	$	250,995	$	101,843	$	72,567		$	(102,684	)	$	322,721
Trade accounts payable	$	—	$	15,972	$	10,450		$	—		$	26,422
Accrued compensation		1,555		6,547		5,344			—			13,446
Dividend payable		15,000		—		—			—			15,000
Other current liabilities		5,664		6,184		10,026			—			21,874
Total current liabilities		22,219		28,703		25,820			—			76,742
Long-term debt		151,500		675		—			—			152,175
Deferred income taxes		22,030		5,761		1,103			—			28,894
Intercompany balance		—		31,906		59,444			(91,350	)		¾
Other long-term liabilities		8,547		6,860		1,378			—			16,785
Total stockholder’s net investment		46,699		27,938		(15,178	)		(11,334	)		48,125
Total liabilities and stockholder’s net investment	$	250,995	$	101,843	$	72,567		$	(102,684	)	$	322,721

37

Condensed Consolidating Statements of Income
Year Ended December 31, 2005

				Guarantor		Non-Guarantor
	Parent			Subsidiary		Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	252,910	$	158,340	$	(20,515	)	$	390,735
Cost of products sold		—			165,002		106,251		(20,515	)		250,738
Gross profit		—			87,908		52,089		—			139,997
Operating expenses		6,845			45,713		40,803		—			93,361
Operating (loss) income		(6,845	)		42,195		11,286		—			46,636
Other expense (income):
Interest expense, net		11,768			2,727		713		—			15,208
Foreign exchange (gain) loss, net		1			272		518		—			791
Income (loss) before income taxes and equity income		(18,614	)		39,196		10,055		—			30,637
Provision (benefit) for income taxes		(2,960	)		9,471		3,763		—			10,274
Income (loss) before equity income		(15,654	)		29,725		6,292		—			20,363
Equity income from subsidiaries		36,017			—		—		(36,017	)		¾
Net income	$	20,363		$	29,725	$	6,292	$	(36,017	)	$	20,363

Condensed Consolidating Statements of Income
Year Ended December 31, 2004

				Guarantor		Non-Guarantor
	Parent			Subsidiary		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	223,058	$	146,273		$	(16,713	)	$	352,618
Cost of products sold		—			146,760		97,823			(16,713	)		227,870
Gross profit		—			76,298		48,450			—			124,748
Operating expenses		7,096			41,125		39,549			—			87,770
Operating (loss) income		(7,096	)		35,173		8,901			—			36,978
Other expense (income):
Interest expense, net		11,577			2,716		790			—			15,083
Foreign exchange (gain) loss, net		(711	)		504		(1,686	)		—			(1,893	)
Other expense (income)		1,917			12		(193	)		—			1,736
Income (loss) before income taxes and equity income		(19,879	)		31,941		9,990			—			22,052
Provision (benefit) for income taxes		(7,461	)		12,758		3,387			—			8,684
Income (loss) before equity income		(12,418	)		19,183		6,603			—			13,368
Equity income from subsidiaries		25,786			—		—			(25,786	)		¾
Net income	$	13,368		$	19,183	$	6,603		$	(25,786	)	$	13,368

Condensed Consolidating Statements of Income
Year Ended December 31, 2003

				Guarantor		Non-Guarantor
	Parent			Subsidiary		Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	194,446	$	127,514		$	(12,089	)	$	309,871
Cost of products sold		—			126,152		85,261			(12,089	)		199,324
Gross profit		—			68,294		42,253			—			110,547
Operating expenses		5,375			37,461		38,460			—			81,296
Operating (loss) income		(5,375	)		30,833		3,793			—			29,251
Other expense (income):
Interest expense, net		9,127			2,716		896			—			12,739
Foreign exchange loss (gain), net		3			1,540		(5,486	)		—			(3,943	)
Income (loss) before income taxes and equity income		(14,505	)		26,577		8,383			—			20,455
Provision (benefit) for income taxes		(5,392	)		11,826		823			—			7,257
Income (loss) before equity income		(9,113	)		14,751		7,560			—			13,198
Equity income from subsidiaries		22,311			—		—			(22,311	)		—
Net income	$	13,198		$	14,751	$	7,560		$	(22,311	)	$	13,198

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Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2005

				Guarantor			Non-Guarantor
	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	25,966		$	44,625		$	12,556		$	(36,017	)	$	47,130
Cash flows from investing activities
Capital expenditures		(10	)		(2,415	)		(1,224	)		—			(3,649	)
Other investing activities		(711	)		(66	)		205			—			(572	)
Net cash used in investing activities		(721	)		(2,481	)		(1,019	)		—			(4,221	)
Cash flows from financing activities
Net transfers from parent company		140			—			—			—			140
Dividends paid		(15,000	)		—			—			—			(15,000	)
Change in intercompany payables/receivables		9,152			(42,148	)		(3,021	)		36,017			¾
Net borrowing (payments) on revolving line of credit		—			—			—			—			¾
Principal payments on long-term debt		(10,500	)		—			—			—			(10,500	)
Net cash used in financing activities		(16,208	)		(42,148	)		(3,021	)		36,017			(25,360	)
Effect of exchange rates on cash		—			—			(309	)		—			(309	)
Increase (decrease) increase in cash and cash equivalents		9,037			(4	)		8,207			—			17,240
Cash and cash equivalents at beginning of year		398			21			1,902			—			2,321
Cash and cash equivalents at end of year	$	9,435		$	17		$	10,109		$	—		$	19,561

Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2004

				Guarantor			Non-Guarantor
	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	23,281		$	17,668		$	7,502		$	(25,786	)	$	22,665
Cash flows from investing activities
Capital expenditures		(24	)		(2,296	)		(1,251	)		—			(3,571	)
Other investing activities		(1,052	)		579			380			—			(93	)
Net cash used in investing activities		(1,076	)		(1,717	)		(871	)		—			(3,664	)
Cash flows from financing activities
Net transfers from parent company		663			—			—			—			663
Dividends paid		(25,000	)		—			—			—			(25,000	)
Change in intercompany payables/receivables		(2,837	)		(15,933	)		(7,016	)		25,786			¾
Net borrowing (payments) on revolving line of credit		(38,000	)		—			—			—			(38,000	)
Proceeds from the issuance of subordinated debt		121,500			—			—			—			121,500
Principal payments on long-term debt		(72,950	)		—			—			—			(72,950	)
Financing fees paid		(5,583	)		—			—			—			(5,583	)
Net cash used in financing activities		(22,207	)		(15,933	)		(7,016	)		25,786			(19,370	)
Effect of exchange rates on cash		—			—			269			—			269
(Decrease) increase in cash and cash equivalents		(2	)		18			(116	)		—			(100	)
Cash and cash equivalents at beginning of year		400			3			2,018			—			2,421
Cash and cash equivalents at end of year	$	398		$	21		$	1,902		$	—		$	2,321

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Condensed Consolidating Statements of Cash Flows
Year Ended December 31, 2003

				Guarantor			Non-Guarantor
	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	15,802		$	26,442		$	(1,893	)	$	(22,310	)	$	18,041
Cash flows from investing activities
Acquisition payments, net of cash acquired		—			(3,329	)		—			—			(3,329	)
Capital expenditures		(15	)		(3,942	)		(1,295	)		—			(5,252	)
Other investing activities		(447	)		—			—			—			(447	)
Net cash used in investing activities		(462	)		(7,271	)		(1,295	)		—			(9,028	)
Cash flows from financing activities
Net transfers from parent company		378			—			—			—			378
Change in intercompany payables/receivables		(15,436	)		(24,378	)		17,504			22,310			—
Net borrowing (payments) on revolving line of credit		5,980			5,207			(15,393	)		—			(4,206	)
Principal payments on long-term debt		(6,000	)		—			—			—			(6,000	)
Net cash (used in) provided by financing activities		(15,078	)		(19,171	)		2,111			22,310			(9,828	)
Effect of exchange rates on cash		—			—			(138	)		—			(138	)
Increase (decrease) in cash and cash equivalents		262			—			(1,215	)		—			(953	)
Cash and cash equivalents at beginning of year		138			3			3,233			—			3,374
Cash and cash equivalents at end of year	$	400		$	3		$	2,018		$	—		$	2,421

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

     None.

ITEM 9A. CONTROLS AND PROCEDURES.

     The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Annual Report on Form 10-K. Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this Annual Report on Form 10-K.

     There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION.

     A Second Amendment and Lease Extension Agreement was entered into as of November 1, 2005, by and between Weston Property Investments XV, Ltd. and ERICO Products, Inc., a wholly-owned subsidiary of the Company, in connection with the lease extension for one of the Company’s properties in Solon, Ohio. The amendment extends the term of the lease through October 31, 2010 and makes certain other changes to the lease terms. A copy of the amendment is attached as Exhibit 10.9 to this Annual Report on Form 10-K.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Directors and Executive Officers

     Set forth below are the names, ages and positions of the persons who served as our directors and executive officers as of December 31, 2005.

Name	Age		Title
William H. Roj		56	Chairman, President and Chief Executive Officer
Peter B. Korte		41	Director, Vice President of Product Management and Marketing
Daniel S. Mominee		41	Executive Vice President
Stephan R. Rohacz		47	Executive Vice President
Jeffrey R. Steinhilber		48	Director, Executive Vice President and Chief Financial Officer

     William H. Roj has served as our President and Chief Executive Officer since December 1995, a Director since 1984 and also as our Chairman since December 2002. Prior to serving as our President, Mr. Roj was a corporate partner of the law firm of Jones Day from 1982 to 1995, as well as a corporate associate from 1975 to 1981. Mr. Roj has also served as a Director and the Chairman of ERICO Global Company, our ultimate parent, since December 2002. In addition, he currently serves as a Director of the Austin Powder Company and Davis Mining and Manufacturing, Inc. Mr. Roj earned his B.A. in Economics from Western Maryland College, his M.A. in Developmental Economics from Duke University and his J.D. from the University of Virginia.

     Peter B. Korte has served as our Vice President of Product Management and Marketing since January 1, 2005, and as a Director since December 2002. Previously, he served as our General Counsel from January 2000 to December 31, 2004 and as Secretary from December 2002 to December 31, 2004. Prior to joining us, Mr. Korte served as a senior associate in the corporate practice group of Benesch, Friedlander, Coplan & Arnoff LLP from 1995 to 2000. He also served as a tax attorney in the corporate tax planning group of Price Waterhouse, an accounting firm, from 1993 to 1995. Mr. Korte earned his B.S. in Finance from Ohio State University and his J.D. from Case Western Reserve University.

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     Daniel S. Mominee currently serves as our Executive Vice President. From 2001 to 2003, he served as our Vice President of Corporate Operations. From 2000 to 2001, he served as our Product Development & Manufacturing Manager for North and South America. Mr. Mominee also served as our Engineering Manager, North and South America, from January 1997 to 2000. Prior to that time, he served as Assistant Plant Manager, Vehicle Safety Systems, for TRW Inc. (“TRW”), a manufacturer of products for the automotive, space, electronics and computer markets, from 1994 to 1997 and as Manager of Manufacturing, Vehicle Safety Systems, from 1992 to 1994. Mr. Mominee also served as Operations Manager for TRW’s Propellant Operations from 1990 to 1992. Mr. Mominee earned his B.S. in Mechanical Engineering from the University of Toledo and is currently completing his M.B.A. at Western International University.

     Stephan R. Rohacz currently serves as our Executive Vice President. He joined us in June 1999 as our General Manager, North and South America. Mr. Rohacz served as President of the Telecommunications Business Unit of the Thomas & Betts Corporation, a manufacturer of electrical components and connectors, from January 1997 to June 1999. Prior to that time, he served as Director, Sales and Marketing for the Americas, Marketing Manager and High Voltage Business Unit Manager of the Electrical Productions Division of Raychem Corporation (“Raychem”), a manufacturer of electrical components and connectors. Mr. Rohacz also served as District Sales Manager of Raychem’s Energy Division from 1988 to 1990 and as Regional Sales Manager of Raychem’s Chemelex and Energy Division from 1987 to 1988. Mr. Rohacz earned his B.S. in Engineering from Michigan State University, his M.S. in Engineering from the University of Michigan and his M.B.A. from Harvard Business School.

     Jeffrey R. Steinhilber has served as our Executive Vice President and Chief Financial Officer since August 2002 and as a Director since December 2002. Mr. Steinhilber served as Chief Financial Officer of Athersys, Inc., a biopharmaceutical company, from 2000 to 2002. Prior to that time, Mr. Steinhilber served as Executive Vice President and Chief Operating Officer for NCS Healthcare, a provider of pharmacy and related services, from 1998 to 1999 and as Senior Vice President and Chief Financial Officer for NCS Healthcare from 1994 to 1998. Mr. Steinhilber also worked at the Austin Powder Company, serving as Vice President and Chief Financial Officer from 1986 to 1994, Director of Finance from 1984 to 1986 and Financial Analyst from 1981 to 1984. Mr. Steinhilber earned his B.A. in Economics from Duke University and his M.B.A. from Northwestern University.

Code of Ethics

     The Company has adopted a code of ethics that is applicable to all employees, including the Company’s principal executive officer, principal financial officer and controller. Any person may request a free copy of the code of ethics by writing to:

ERICO International Corporation
Attention: Investor Relations
30575 Bainbridge Road, Suite 300
Solon, Ohio 44139

Audit Committee and Audit Committee Financial Expert

     The Company’s equity securities are not publicly traded. Our board of directors consists of members of our management, and interacts closely with our ultimate parent. We do not have a separate audit committee. Instead, our board of directors performs the functions that an audit committee would customarily perform. None of the current members of our board of directors has been formally designated as an “audit committee financial expert” as that term is defined under the rules and regulations of the Securities and Exchange Commission. Our board of directors believes, however, that each of its members is fully qualified to address any issue that is likely to come before it that would customarily be addressed by an audit committee, including the evaluation of our financial statements and supervision of our financial auditors.

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ITEM 11. EXECUTIVE COMPENSATION.

Director Compensation and Other Arrangements

     All of the members of the Company’s board of directors receive compensation in connection with their service as officers of the Company, and do not receive additional compensation for their service as directors. The Company reimburses its directors for any out-of-pocket expenses incurred in connection with their service as directors.

Executive Compensation

     The following table summarizes the compensation paid or accrued for the years ending December 31, 2005, 2004 and 2003 to our Chairman, President and Chief Executive Officer and the four other most highly paid executive officers.

Summary Compensation Table

			Annual Compensation					All Other
Name and Principal Position	Year		Base Salary			Bonus (2)		Compensation
William H. Roj		2005	$	697,523		$	949,721	$	10,692	(3)
Chairman, President and Chief Executive Officer		2004		670,687	(1)		872,142		10,719	(4)
		2003		620,103			526,588		9,924	(5)
Peter B. Korte		2005		192,816			86,885		17,068	(3)
Vice President of Product Management and Marketing		2004		185,400			87,493		15,623	(4)
		2003		180,000			51,636		14,189	(5)
Daniel S. Mominee		2005		205,920			205,266		4,044	(3)
Executive Vice President		2004		197,436			183,389		4,058	(4)
		2003		186,264			112,629		3,870	(5)
Stephan R. Rohacz		2005		251,196			249,299		15,609	(3)
Executive Vice President		2004		242,700			225,427		15,566	(4)
		2003		228,960			138,446		13,517	(5)
Jeffrey R. Steinhilber		2005		225,780			229,581		13,490	(3)
Executive Vice President and Chief Financial Officer		2004		217,308			221,836		10,864	(4)
		2003		205,000			123,958		8,024	(5)

(1)	This amount includes $24,769 paid in 2004 but attributable to services rendered in 2003.
(2)	This amount represents the bonus accrued for services performed in the year indicated and paid in the current year, subsequent year or both.
(3)	“All Other Compensation” in 2005 includes the following amounts: for William H. Roj, a 401K matching contribution of $4,800, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $2,997 in the aggregate, $1,605 for the personal use of an automobile and $1,290 of Company-paid premiums for life insurance; for Peter B. Korte, a 401K matching contribution of $5,784, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,473 in the aggregate, $7,511 for the personal use of an automobile and $300 of Company-paid premiums for life insurance; for Daniel S. Mominee, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,840 in the aggregate and $204 of Company-paid premiums for life insurance; for Stephan R. Rohacz, a 401K matching contribution of $5,773, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,840 in the aggregate, $5,546 for the personal use of an automobile and $450 of Company-paid premiums for life insurance; for Jeffrey R. Steinhilber, a 401K matching contribution of $6,209, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,840 in the aggregate, $2,991 for the personal use of an automobile and $450 of Company-paid premiums for life insurance.

43

(4)

“All Other Compensation” in 2004 includes the following amounts: for William H. Roj, a 401K matching contribution of $4,800, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,035 in the aggregate, $1,594 for the personal use of an automobile and $1,290 of Company-paid premiums for life insurance; for Peter B. Korte, a 401K matching contribution of $5,562, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,794 in the aggregate, $5,967 for the personal use of an automobile and $300 of Company-paid premiums for life insurance; for Daniel S. Mominee, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,794 in the aggregate and $264 of Company-paid premiums for life insurance; for Stephan R. Rohacz, a 401K matching contribution of $6,150, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,794 in the aggregate, $5,172 for the personal use of an automobile and $450 of Company-paid premiums for life insurance; for Jeffrey R. Steinhilber, a 401K matching contribution of $6,150, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,794 in the aggregate, $470 for the personal use of an automobile and $450 of Company-paid premiums for life insurance.

(5)

“All Other Compensation” in 2003 includes the following amounts: for William H. Roj, a 401K matching contribution of $4,800, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $2,936 in the aggregate, $1,498 for the personal use of an automobile and $690 of Company-paid premiums for life insurance; for Peter B. Korte, a 401K matching contribution of $5,143, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,346 in the aggregate, $5,430 for the personal use of an automobile and $270 of Company-paid premiums for life insurance; for Daniel S. Mominee, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,670 in the aggregate and $200 of Company-paid premiums for life insurance; for Stephan R. Rohacz, a 401K matching contribution of $6,000, a profit sharing contribution and reallocation of forfeitures of other participants’ non-vested profit sharing contribution of $3,670 in the aggregate, $3,397 for the personal use of an automobile and $450 of Company-paid premiums for life insurance; for Jeffrey R. Steinhilber, a 401K matching contribution of $6,000, $1,574 for the personal use of an automobile and $450 of Company-paid premiums for life insurance.

Employment Agreements

     On December 2, 2002, Global entered into a new employment agreement with William H. Roj, pursuant to which Mr. Roj serves as the Chairman, Chief Executive Officer and President of Global and its principal subsidiaries, including the Company. The employment agreement provides Mr. Roj with an annual base salary of $620,000, subject to increase each year. In addition, Mr. Roj’s employment agreement provides for a contingent bonus of a maximum amount of 140% of salary pursuant to the terms of the bonus plan for senior managers. The annual salary shall increase each year by the percentage determined in the Watson Wyatt Global 50 for expected salary and bonus increases in the U.S. for that year.

     If Mr. Roj’s employment agreement is terminated by us, Mr. Roj shall receive a severance payment in an amount equal to two times the sum of his salary and bonus earned in the 12 months preceding his termination. The employment agreement shall terminate upon Mr. Roj’s death or disability, however in such case we will continue to pay to Mr. Roj or his heirs or beneficiaries his salary and bonus earned in the 12 months preceding his death or disability for three years following his death or disability.

     For the term of the employment agreement and for two years after his termination of employment, Mr. Roj may not participate in any business that competes with us. Mr. Roj may not solicit any of our employees for two years after the termination of his employment agreement.

     The Company entered into amended and restated employment agreements on March 24, 2004 with Peter B. Korte, Daniel S. Mominee, Stephan R. Rohacz and Jeffrey R. Steinhilber, each for an indefinite period. We may terminate these agreements at any time without prior notice. Mr. Steinhilber serves as our Executive Vice President and Chief Financial Officer. His employment agreement provides for an annual salary of $217,308, subject to increase each year, plus an annual discretionary bonus of up to 100% of his salary based upon our bonus plan for senior managers. Mr. Rohacz serves as our Executive Vice President. His employment agreement provides for an annual salary of $242,700, subject to increase each year, plus an annual discretionary bonus of up to 100% of his salary based upon our bonus plan for senior managers. Mr. Mominee serves as our Executive Vice President. His employment agreement provides for an annual salary of $197,436, subject to increase each year, plus an annual discretionary bonus of up to 100% based on our bonus plan for senior managers. Mr. Korte serves as our Vice President of Product Management and Marketing and in 2004 served as our General Counsel and Secretary. His employment agreement provides for an annual salary of $185,400, subject to increase each year, plus an annual discretionary bonus of up to 45% of his salary based on our bonus plan for senior managers.

44

     All employment agreements prohibit the executive officers from engaging in any business while employed by us that is competitive to our business. Mr. Korte, Mr. Mominee and Mr. Rohacz are prohibited from engaging in any business that is competitive with ours for a period of one year from the effective date of their respective termination of employment. Mr. Steinhilber is prohibited from engaging in any business that is competitive with ours for a period of two years from the effective date of the termination of his employment. Each executive officer is required to keep confidential all proprietary information gained by reason of his employment, during his employment and upon termination of his employment for as long as permitted by law. Each executive officer has agreed to assign to us all intellectual and industrial property rights arising from any discoveries, inventions or secret industrial processes made by the executive officer during his employment and for a period of two years thereafter.

     Mr. Steinhilber’s employment agreement also contains a change-of-control provision. This provision is triggered if we are sold or merge with another company so that after the merger a majority of our shares are not owned by our existing management or if the majority of the shares are sold in any transaction or series of related transactions other than to our existing management. If this provision is triggered, Mr. Steinhilber may terminate his employment and receive severance equal to his prior year’s total W-2 wages. This change-of-control provision does not apply to any sale or merger where Mr. Steinhilber receives consideration equal to or greater than $1.0 million for his shares.

Compensation Committee Interlocks and Insider Participation

     The Company does not have a standing compensation committee. The compensation arrangements with our Chief Executive Officer were negotiated with our Chief Executive Officer by Citigroup Venture Capital Equity Partners, L.P., which is the holder of a majority of the stock of our ultimate parent. The compensation arrangements for the Company’s other executive officers were negotiated by our Chief Executive Officer and such other executive officers.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

     As of March 10, 2006 we had one share of common stock outstanding, which was owned by Holding.

     Holding is a wholly owned subsidiary of Global. The following table sets forth information as of March 10, 2006 with respect to the beneficial ownership of the common stock of Global, as our ultimate parent, by each holder of 5% or more of the outstanding shares of Global, by each director and each executive officer of the Company, and all directors and executive officers of the Company as a group. The percentages reflect beneficial ownership of the common stock of Global as determined under Rule 13d-3 of the Securities Exchange Act of 1934. We believe that each of the stockholders listed has sole voting and investment power with respect to their beneficially owned shares of common stock in Global.

	Number and Percent of Global Shares
	Class A				Class L				Combined
	Common Stock				Common Stock				Class A and Class L
Beneficial Owners	Number		Percent		Number		Percent		Number		Percent
Citigroup Venture Capital Equity Partners, L.P. (1)		—		—		4,901,807		66.0		4,901,807		60.9
399 Park Avenue
New York, NY 10043
William H. Roj (2)		326,325		52.4		1,893,245		25.5		2,219,570		27.6
c/o ERICO International
Corporation
30575 Bainbridge Road,
Suite 300
Solon, OH 44139
Peter B. Korte		17,750		2.9		8,386		*		26,136		*
Daniel S. Mominee		42,825		6.9		9,731		*		52,556		*
Stephan R. Rohacz		42,825		6.9		91,549		1.2		134,374		1.7
Jeffrey R. Steinhilber		42,825		6.9		12,883		*		55,708		*
All directors and executive officers as a group (5)		472,550		75.9		2,015,794		27.1		2,488,344		30.9

* Represents less than 1% of the shares of Global.

45

(1) Messrs. Michael A. Delaney and Charles E. Corpening are the nominees of Citigroup Venture Capital Equity Partners, L.P to the board of Global and have beneficial ownership of 33,464 shares and 1,673 shares, respectively, of the Class L common stock of Global. These holdings represent less than 1% of the holdings of Class L common stock and of Class A and Class L common stock combined.

(2) Shares are beneficially owned by JDBR Holding Company, LLC. Pursuant to an irrevocable power of attorney, Mr. Roj exercises sole voting and dispositive power with respect to all shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Certain Transactions Related to our 11% Senior Subordinated Notes and our 8.875% Senior Subordinated Notes

     Pursuant to the purchase agreement, dated September 9, 2002, as amended November 29, 2002, between us and CVC Capital Funding, LLC, we issued $30.0 million aggregate principal amount of our 11.0% senior subordinated notes due 2012 (the “11% ERICO Notes”). CVC Capital Funding, LLC is an affiliate of CVC, the majority owner of our ultimate parent, Global. In connection with the private placement of the Subordinated Notes on February 20, 2004, an aggregate principal amount of $19.4 million of the 11% ERICO Notes were exchanged by CVC Capital Funding, LLC for an aggregate principal amount of $19.4 million of Subordinated Notes. The remaining $10.6 million aggregate principal amount of 11% ERICO Notes remained outstanding. We and CVC Capital Funding, LLC amended the terms of the purchase agreement and the indenture relating to the 11% ERICO Notes to permit CVC Capital Funding, LLC to exchange these remaining 11% ERICO Notes for Subordinated Notes, and if CVC Capital Funding, LLC did not so exchange its 11% ERICO Notes by August 15, 2004, then we would have the right to redeem all 11% ERICO Notes at a purchase price in cash equal to 101% of the principal amount of these notes, plus accrued but unpaid interest, if any, to the date of repurchase. On August 12, 2004, CVC Capital Funding, LLC exchanged the remaining $10.6 million of 11% ERICO Notes for Subordinated Notes.

     On February 20, 2004, we entered into a registration rights agreement with the initial purchasers of $121.5 million of the Subordinated Notes issued in the private placement, which agreement required us to file a registration statement relating to the registration of notes with terms substantially identical to such $121.5 million of Subordinated Notes, and to conduct an exchange offer in which we would offer to exchange such registered notes for such unregistered notes. In accordance with this agreement we commenced such an exchange offer on July 16, 2004 and closed the exchange offer on August 25, 2004. All $121.5 million of the subject Subordinated Notes were tendered in the exchange offer and exchanged for registered notes with substantially identical terms.

     On February 20, 2004, we also entered into a registration rights agreement with CVC Capital Funding, LLC relating to the $19.4 million of Subordinated Notes issued to CVC Capital Funding, LLC on that date. This registration rights agreement requires us, at the request of CVC Capital Funding, to file up to two registration statements relating to the registration of notes with terms substantially identical to such $19.4 million of Subordinated Notes and to conduct an exchange offer in which we would offer to exchange such registered notes for such unregistered notes. We will be required to pay all fees and expenses relating to these registration statements, other than underwriting fees and some other specified expenses. In the event we fail to file the required registration statements or fail to have them declared effective within the required periods, we will be required to pay CVC Capital Funding special interest equal to 0.25% per annum on the principal amount of the notes subject to the registration rights agreement with respect to the first 90-day period immediately following the occurrence of that registration default. The amount of special interest will increase by an additional 0.25% per annum on the principal amount of the notes subject to the registration rights agreement with respect to each subsequent 90-day period until that registration default has been cured, up to a maximum amount of special interest for all registration defaults of 1.5% per annum.

Redemption of Holding’s 11% Senior Subordinated Notes

     Under the indenture, dated as of December 2, 2002, Holding issued $35.0 million aggregate principal amount of its 11.0% senior subordinated notes due 2012 (the “11% Holding Notes”). Subsequently, Holding loaned the $35.0 million to us. In connection with the issuance of the Subordinated Notes, we repaid our intercompany loan from Holding, and Holding redeemed in full all of the 11% Holding Notes outstanding. The holders of the 11% Holding Notes were Antonius M. Kies; William H. Roj; Citigroup Venture Capital Equity Partners, L.P.; CVC Executive Fund LLC; CVC/SSB Employee Fund, L.P.; Michael T. Bradley; Charles Corpening; Michael A. Delaney; Richard Mayberry; Alchemy, L.P.; David Thomas; and John Weber. Messrs. Kies, Roj, Delaney and Corpening owned $10.0 million, $5.0 million, $131,897 and $6,595 principal amount of the 11% Holding Notes, respectively. The remaining

46

$19,861,508 aggregate principal of 11% Holding Notes were held by the other individuals named above. Messrs. Bradley, Mayberry, Thomas and Weber and Alchemy, L.P. are affiliated with CVC.

Dividends to Holders of Class L Common Stock

     In February of 2004 the Company paid a $25.0 million dividend to Holding, as holder of the Company’s common stock, and Holding, in turn, paid a $25.0 million dividend to Global, as holder of Holding’s common stock. Global then paid a $25.0 million dividend to the holders of Global’s Class L common stock. In January of 2005 the Company paid a $15.0 million dividend to Holding, as holder of the Company’s common stock, and Holding, in turn, paid a $15.0 million dividend to Global, as holder of Holding’s common stock. Global then paid a $15.0 million dividend to the holders of Global’s Class L common stock. In January of 2006 the Company paid a $9.9 million dividend to Holding, as holder of the Company’s common stock, and Holding, in turn, paid a $9.9 million dividend to Global, as holder of Holding’s common stock. Global then paid an $11.0 million dividend to the holders of Global’s Class L common stock. In each case, the holders of Class L common stock receiving the dividend included, among others, Peter B. Korte, Daniel S. Mominee, Stephan R. Rohacz, William H. Roj, Jeffrey R. Steinhilber, Citigroup Venture Capital Equity Partners, L.P., CVC Executive Fund LLC, CVC/SSB Employee Fund, L.P., Michael T. Bradley, Charles Corpening, Michael A. Delaney, Richard Mayberry, Alchemy, L.P., David Thomas and John Weber. Each dividend paid in full the aggregate cumulated but unpaid yield on the Class L common stock outstanding through the date of each such dividend and a portion of the holders’ unreturned cost of such shares.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

     Fees for services rendered by Ernst & Young LLP, the Company’s registered public accounting firm, for each of the last two fiscal years were:

Year	Audit Fees		Audit Related Fees (1)		Tax Fees (2)		All Other Fees
2005	$	514,800	$	19,500	$	135,700		¾
2004		903,200		15,600		230,900		¾

(1)	The nature of the services comprising “audit related fees” primarily includes pension audits.
(2)	The nature of the services comprising “tax fees” includes debt restructuring planning, general consulting, tax audit engagement management and review of income tax returns.

     The Company’s equity securities are not publicly traded. Our board of directors consists of members of our management, and interacts closely with our ultimate parent. We do not have a separate audit committee. Instead, our board of directors performs the functions that an audit committee would customarily perform.

     The board of directors has adopted a policy that requires advance approval of all audit and non-audit services provided by the Company’s registered public accounting firm prior to the engagement of the registered public accounting firm with respect to such services. All of the auditing and permissible non-audit services provided by the Company’s registered public accounting firm were pre-approved by the board of directors. The board of directors has approved the retention of Ernst & Young LLP to audit the financial statements of the Company for its fiscal year ended December 31, 2006.

47

PART IV

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

     a) Documents filed as part of this report:

     The following is a listing of the financial statements, schedules and exhibits included in this report or incorporated herein by reference.

1.	Financial Statement Schedules.
	Report of Independent Registered Public Accounting Firm	Page 21
	Consolidated Balance Sheets as of December 31, 2005 and 2004	Page 22
	Consolidated Statements of Income for the years ended December 31, 2005, 2004 and 2003	Page 23
	Consolidated Statements of Stockholder’s Net Investment for the years ended
	December 31, 2005, 2004 and 2003	Page 24
	Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003	Page 25
	Notes to Consolidated Financial Statements	Page 26
2.	Consolidated Financial Statement Schedules.
	None.
3.	Exhibits.

     The listing of exhibits attached to this report after the “Signatures” page is incorporated herein by reference.

48

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ERICO International Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Solon, State of Ohio, on March 10, 2006.

ERICO INTERNATIONAL CORPORATION
By:	/s/ WILLIAM A. FULLMER
	Name: William A. Fullmer
	Title: Vice President, General Counsel and Secretary

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

Signature	Title	Date
/s/ WILLIAM H. ROJ William H. Roj	Chairman, Chief Executive Officer, President and Director (Principal Executive Officer)	March 10, 2006
/s/ JEFFREY R. STEINHILBER Jeffrey R. Steinhilber	Executive Vice President, Chief Financial Officer and Director (Principal Financial Officer and Principal Accounting Officer)	March 10, 2006
/s/ PETER B. KORTE	Vice President of Marketing and Product Management and Director	March 10, 2006
Peter B. Korte

49

EXHIBIT INDEX

Exhibit	Description of Exhibit (and document from
Number	which incorporated by reference, if applicable)
3.1	Amended and Restated Articles of Incorporation filed with the Secretary of State of Ohio by ERICO International Corporation on March 30, 2004 (incorporated by reference to Exhibit 3.1 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
3.2	Amended and Restated Code of Regulations of ERICO International Corporation (incorporated by reference to Exhibit 3.2 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.1	Indenture, dated as of February 20, 2004, by and among ERICO International Corporation, ERICO Products, Inc. and WellsFargo Bank, N.A (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.2	Registration Rights Agreement, dated as of February 20, 2004, by and among ERICO International Corporation, ERICO Products, Inc. and Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., ABN AMRO Incorporated, NatCity Investments, Inc. and McDonald Investments Inc (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.3	Form of 8 7/8% Senior Subordinated Notes Due 2012 (included in Exhibit 4.1) (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.4	Form of Guarantee of ERICO Products, Inc. for 8 7/8% Senior Subordinated Notes Due 2012 (included in Exhibit 4.1).
4.5	Second Amended and Restated Indenture, dated as of February 20, 2004, by and among ERICO International Corporation, ERICO Products, Inc. and CVC Capital Funding, LLC (incorporated by reference to Exhibit 4.5 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.6	Registration Rights Agreement, dated as of February 20, 2004, by and among ERICO International Corporation, ERICO Products, Inc. and CVC Capital Funding, LLC (incorporated by reference to Exhibit 4.6 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.7	Form of 11% Senior Subordinated Notes Due 2012 (included in Exhibit 4.5).
4.8	Form of Guarantee of ERICO Products, Inc. for 11% Senior Subordinated Notes Due 2012 (included in Exhibit 4.5).
4.9	Purchase Agreement, dated September 9, 2002, by and among ERICO International Corporation and Citibank, N.A (incorporated by reference to Exhibit 4.14 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.10	First Amendment to Purchase Agreement, dated as of February 20, 2004, by and among ERICO International Corporation, ERICO Products, Inc. and CVC Capital Funding, LLC (as successor to Citibank, N.A.) (incorporated by reference to Exhibit 4.15 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
4.11	Purchase Agreement, dated February 12, 2004, by and among ERICO International Corporation, ERICO Products, Inc., Deutsche Bank Securities Inc., JP Morgan Securities, Inc., ABN AMRO Incorporated, NatCity Investments, Inc. and McDonald Investments, Inc (incorporated by reference to Exhibit 4.16 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.1	Second Amended and Restated Multicurrency Credit and Security Agreement, dated as of December 2, 2002, by and among ERICO International Corporation, ERICO Products, Inc. and ERICO Europa B.V., as Borrowers, and the Banks that are signatories thereto and LaSalle National Bank National Association, as Administrative Agent, Lead Arranger and Issuing Bank, and General Electric Capital Corporation, as Co-Lead Arranger and Co-Documentation Agent, National City Bank, as Syndication Agent, and Key Bank National Association, as Documentation Agent (the “Second Amended and Restated Multicurrency Credit and Security Agreement”) (incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).

50

Exhibit	Description of Exhibit (and document from
Number	which incorporated by reference, if applicable)
10.2	Amendment No. 1 to Second Amended and Restated Multicurrency Credit and Security Agreement, dated April 10, 2003 (incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.3	Amendment No. 2 to Second Amended and Restated Multicurrency Credit and Security Agreement, dated February 20, 2004 (incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.4	Amendment No. 3 to Second Amended and Restated Multicurrency Credit and Security Agreement, dated as of December 22, 2004 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2005).
10.5	Amendment No. 4 to Second Amended and Restated Multicurrency Credit and Security Agreement, dated as of June 16, 2005 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2005).
10.6	Amendment No. 5 to Second Amended and Restated Multicurrency Credit and Security Agreement, dated as of September 30, 2005 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed with the Commission on December 15, 2005).
10.7	Lease Agreement Industrial/Warehouse, September 13, 2000, by and between Weston Property Investments XV, Ltd. and ERICO Products, Inc. for the lease of the property at 31700 Solon Road, Solon, Ohio 44139 (the “Solon Lease Agreement”) (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.8	First Amendment and Lease Extension Agreement dated October 19, 2004 to the Solon Lease Agreement.
10.9	Second Amendment and Lease Extension Agreement dated as of November 1, 2005 to the Solon Lease Agreement.
10.10	Employment Agreement among ERICO Global Company and William H. Roj, effective December 2, 2002 (incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.11	Employment Agreement among ERICO International Corporation and Jeffrey R. Steinhilber, effective March 24, 2004 (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.12	Employment Agreement among ERICO International Corporation and Stephan R. Rohacz, effective March 24, 2004 (incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.13	Employment Agreement among ERICO International Corporation and Daniel S. Mominee, effective March 24, 2004 (incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.14	Employment Agreement among ERICO International Corporation and Peter B. Korte, effective March 24, 2004 (incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-4 (Reg. No. 333-115267), as amended).
10.15	Bonus Plan For Senior Managers – Plan Summary (incorporated by reference to Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K for the period ended December 31, 2004).
21.1	Subsidiaries of ERICO International Corporation.
31.1	Certification by the Chief Executive Officer pursuant to Rules 13a-14/15d-14(a) of the Securities Act of 1934.
31.2	Certification by the Chief Financial Officer pursuant to Rules 13a-14/15d-14(a) of the Securities Act of 1934.
32.1	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

51

EX-10.8

Exhibit 10.8

FIRST AMENDMENT AND LEASE EXTENSION AGREEMENT

     THIS FIRST AMENDMENT AND LEASE EXTENSION AGREEMENT is made this 19^th day of October, 2004 by and between WESTON PROPERTY INVESTMENT XV, LTD., an Ohio limited liability company (“Landlord”) and ERICO PRODUCTS, INC., an Ohio corporation (“Tenant”).

WITNESSETH

     WHEREAS, the parties entered into a Lease Agreement dated September 13, 2000 (the “Lease”) for Landlord’s property located at 31700 Solon Road, Solon, OH 44139, deemed to contain 164,940 square feet of space (the “Premises”); and

     WHEREAS, the Original Term of the Lease expires on October 31, 2005; and

     WHEREAS, Section 2.1(d) of the Lease provides that, so long as Tenant is not in default of the Lease beyond any applicable grace periods, Tenant shall have two (2) options to renew the Lease for five (5) year Terms upon the provision of twelve (12) months advance written notice to Landlord due by October 31, 2004 and October 31, 2009, respectively, at an increased monthly rental rate for each successive five (5) year renewal period of 15% over the annual rent for the prior Term of the Lease; and

     WHEREAS, the parties desire to amend the Lease to (i) extend the Original Term of the Lease; (ii) establish the Base Rent for the Extended Term and (iii) modify Sections 2.1 (d), (e) and (f).

     NOW THEREFORE, in consideration of the mutual benefits to be derived, the Lease is hereby amended as follows:

1)	The Original Term of the Lease is extended for one (1) year commencing November 1, 2005 and continuing through and including October 31, 2006 (the “Extended Term”).
2)	The Base Rent for the Extended Term shall be Fifty-Seven Thousand, Seven Hundred Twenty-Nine Dollars ($57,729.00) which represents a 20% increase over the annual Base Rent at the expiration of the Original Term.
3)	Section 2.1(d) shall be modified to reflect that the date by which Tenant must notify Landlord of the exercise of Tenant’s options to renew shall be changed to October 31, 2005 and October 31, 2010, respectively, The first option term shall commence on November 1, 2006 and continue through and including October 31, 2011. The second option term shall commence on November 1, 2011 and continue through and including October 31. 2016.

4)	If tenant exercises its first option to renew for a five (5) year Term, Landlord shall refund to Tenant the 5% difference between the monthly rental rate the Tenant would have paid for the first year of the first option term and the monthly rental rate for the Extended Term, or Twenty-Eight Thousand, Thirty-Nine and 80/100 Dollars ($28,039.80), within thirty (30) days of the exercise of the option.
5)	While the parties understand and agree that the Option to Terminate has expired, the last sentence of Section 2.1 (e) shall be modified to reflect that the Lease shall remain in full force and effect through the sixth lease year, ending on October 31, 2006.
6)	Section 2.1 (f) shall be modified to reflect that Tenant shall on November 1, 2006, have the option to purchase the premises by providing Landlord with twelve months advance written notice (due October 31, 2005) of Tenant’s intent to exercise this purchase option.
7)	All of the terms, conditions, provisions and covenants of the original Lease Agreement, except as specifically modified or amended herein, shall remain in full force and effect and apply hereto, and Landlord and Tenant agree that the terms of said Lease as amended herein, shall continue to govern their respective rights and duties.

     IN WITNESS WHEREOF, the Landlord and Tenant have executed this First Amendment and Lease Extension Agreement as of the day and year first above written.

WESTON PROPERTY INVESTMENTS XV, LTD
an Ohio limited liability company
By:	Weston Inc., Agent
By:	/s/ James A. Asher
	James Asher, Exec. V.P./Sec.

                              “Landlord”

STATE OF OHIO	)
	)	SS
COUNTY OF CUYAHOGA	)

     BEFORE ME, a Notary Public, in and for said county and state, personally appeared the above named Weston Inc, Agent for WESTON PROPERTY INVESTMENTS XV, LTD., by James A. Asher, its Exec. V.P./Sec., who acknowledged that he did sign the foregoing instrument and that the same is the free act and deed of said corporation and his free act and deed as such officer.

     IN WITNESS WHEREOF, I have hereunder set my hand and official seal at Cleveland, Ohio, this 19^th day of October, 2004.

/s/ Jennifer L. Brosius

NOTARY PUBLIC

Jennifer L. Brosius

Notary Public, State of Ohio

Recorded in Cuyahoga County

My Commission Expires July 27, 2008

ERICO PRODUCTS, INC.
an Ohio corporation

By:	/s/ Peter B. Korte
	Peter B. Korte, General Counsel

                              “Tenant”

STATE OF OHIO	)
	)	SS
COUNTY OF CUYAHOGA	)

     BEFORE ME, a Notary Public, in and for said county and state, personally appeared the above named ERICO PRODUCTS, INC. by Peter B. Korte, its General Counsel, who acknowledged that he did sign the foregoing instrument and that the same is the free act and deed of said corporation and his free act and deed as such officer.

     IN WITNESS WHEREOF, I have hereunder set my hand and official seal at Cleveland, Ohio, this 12^th day of October, 2004.

/s/ Sandra C. Ketchaver

NOTARY PUBLIC

Sandra C. Ketchaver

Notary Public, State of Ohio

Recorded in Cuyahoga County

My Commission Expires October 18, 2004

EX-10.9

Exhibit 10.9

SECOND AMENDMENT AND LEASE EXTENSION AGREEMENT

     THIS SECOND AMENDMENT AND LEASE EXTENSION AGREEMENT is made as of the 1^st day of November, 2005 by and between WESTON PROPERTY INVESTMENT XV, LTD., an Ohio limited liability company (“Landlord”) and ERICO PRODUCTS, INC., an Ohio corporation (“Tenant”).

WITNESSETH

     WHEREAS, the parties entered into a Lease Agreement dated September 13, 2000 (the “Lease”) for Landlord’s property located at 31700 Solon Road, Solon, OH 44139, deemed to contain 164,940 square feet of space (the “Premises”), which Lease was amended and extended on October 19, 2004 such that it does not expire until October 31, 2006; and

     WHEREAS, the parties desire to amend the Lease to (i) modify and extend the Term and (ii) establish the Base Rent for the Modified Extended Term.

     NOW THEREFORE, in consideration of the mutual benefits to be derived, the Lease is hereby amended as follows:

1)	The Lease is extended for a five (5) year Term commencing November 1, 2005 and continuing through and including October 31, 2010 (the “Modified Extended Term”).
2)	The Base Rent for the Modified Extended Term shall be Fifty-Two Thousand Dollars ($52,000.00) per month.
3)	The second option term set forth in Paragraph 3 of the First Amendment and Lease Extension Agreement is null, void and of no further force and effect.
4)	Tenant acknowledges that the Landlord shall have no obligation to refund any excess rent pursuant to Paragraph 4 of the First Amendment and Lease Extension Agreement.
5)	Paragraph 6 of the First Amendment and Lease Extension Agreement shall be deleted in its entirety and the Option to Purchase shall be null and void as of November 1, 2005.
6)	All of the terms, conditions, provisions and covenants of the original Lease Agreement, except as specifically modified or amended herein, shall remain in full force and effect and apply hereto, and Landlord and Tenant agree that the terms of said Lease as amended herein, shall continue to govern their respective rights and duties.

     IN WITNESS WHEREOF, the Landlord and Tenant have executed this Second Amendment and Lease Extension Agreement as of the day and year first above written.

WESTON PROPERTY INVESTMENTS XV, LTD
an Ohio limited liability company

By:	Weston Inc., Agent
By:	/s/ Frank J. Capretta
	Frank J. Capretta, Sr. V.P.
	“Landlord”

STATE OF OHIO	)
	)	SS
COUNTY OF CUYAHOGA	)

     BEFORE ME, a Notary Public, in and for said county and state, personally appeared the above named Weston Inc, Agent for WESTON PROPERTY INVESTMENTS XV, LTD., by Fred J. Capretta, its Sr. V.P., who acknowledged that he did sign the foregoing instrument and that the same is the free act and deed of said corporation and his free act and deed as such officer.

     IN WITNESS WHEREOF, I have hereunder set my hand and official seal at Cleveland, Ohio, this 30^th day of November, 2005.

/s/ Mary C. Knotts

NOTARY PUBLIC

Mary C. Knotts

Notary Public, State of Ohio, Cuy. Cty.

My Commission expires Sept. 18, 2010

ERICO PRODUCTS, INC.
an Ohio corporation

By:	/s/ William R. Hasler
	William R. Hasler, Treasurer
		“Tenant”

STATE OF OHIO	)
	)	SS
COUNTY OF CUYAHOGA	)

     BEFORE ME, a Notary Public, in and for said county and state, personally appeared the above named ERICO PRODUCTS, INC. by William R. Hasler, its Treasurer, who acknowledged that he did sign the foregoing instrument and that the same is the free act and deed of said corporation and his free act and deed as such officer.

     IN WITNESS WHEREOF, I have hereunder set my hand and official seal at Cleveland, Ohio, this 30^th day of November, 2005.

/s/ Sandra C. Ketchaver

NOTARY PUBLIC

Sandra C. Ketchaver

Notary Public, State of Ohio

Recorded in Cuyahoga County

My Commission Expires October 18, 2009

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF THE COMPANY

	JURISDICTION OF
NAME	INCORPORATION
ERICO B.V.	Netherlands
ERICO Canada Inc.	Canada
ERICO Chile Comércio e Indústria Ltda.	Chile
ERICO do Brasil Comércio e Indústria Ltda.	Brazil
ERICO Europa Ltd. (G.B.)	United Kingdom
ERICO Europe B.V.	Netherlands
ERICO Europe Holding B.V.	Netherlands
ERICO France SARL	France
ERICO Global Company	Delaware
ERICO GmbH	Germany
ERICO Holding Company	Ohio
ERICO International Corporation	Ohio
ERICO Italia S.r.l.	Italy
ERICO Lightning Technologies Pty. Ltd.	Australia
ERICO Limited	Hong Kong
ERICO Mexico, S.A.	Mexico
ERICO Poland Sp. Z.o.o.	Poland
ERICO Products Australia Pty. Limited	Australia
ERICO Products, Inc. (d/b/a ERICO, Inc.)	Ohio
ERICO SARL	France
Productos ERICO S.A.	Spain

EX-31.1

Exhibit 31.1

CERTIFICATION

I, William H. Roj, certify that:

1.	I have reviewed this annual report on Form 10-K of ERICO International Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2006	By:	/s/ William H. Roj
	Name:	William H. Roj
	Title:	Chairman, Chief Executive Officer and Director

EX-31.2

Exhibit 31.2

CERTIFICATION

     I, Jeffrey R. Steinhilber, certify that:

1.	I have reviewed this annual report on Form 10-K of ERICO International Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2006	By:	/s/ Jeffrey R. Steinhilber
	Name:	Jeffrey R. Steinhilber
	Title:	Chief Financial Officer and Director

EX-32.1

Exhibit 32.1

CERTIFICATION

In connection with the annual report of ERICO International Corporation (the “Company”) on Form 10-K for the year ended December 31, 2005, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to such officer’s knowledge:

1.	The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date: March 10, 2006
	By:	/s/ William H. Roj
	Name:	William H. Roj
	Title:	Chairman, Chief Executive Officer and Director
	By:	/s/ Jeffrey R. Steinhilber
	Name:	Jeffrey R. Steinhilber
	Title:	Chief Financial Officer and Director

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of report or as a separate disclosure document.