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

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

                        Commission File Number 333-43089

                               THE GSI GROUP, INC.
             (Exact name of registrant as specified in its charter)

                             DELAWARE     37-0856587
                (State or other jurisdiction     (I.R.S. Employer
            of incorporation or organization)     Identification No.)

             1004 E. ILLINOIS STREET, ASSUMPTION, ILLINOIS     62510
             (Address of principal executive offices)     (Zip Code)

       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (217) 226-4421

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE

        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:  NONE


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


     Indicate  by check mark if disclosure of delinquent filers pursuant to Item
405 or 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.  [X]

     Indicate by check mark whether the registrant is an accelerated filer:  Yes
[  ]  No  [X]

     Indicate  by  check  mark  whether  the  registrant  is a shell company (as
defined  in  Rule  12b-2  of  the  Exchange  Act):    Yes[  ]  No  [X]

     Aggregate  market  value of the voting and non-voting common equity held by
non-affiliates  of  the  registrant:  $0

     Indicate  the  number  of  shares  outstanding  of each of the registrant's
classes  of  common  stock as of the latest practicable date:  Common stock, par
value  $0.01  per share, 826,948 shares outstanding as of April 14, 2006 (all of
which  are  held  by  an  affiliate  of  the  registrant).

                   Documents Incorporated by Reference:  None
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FORWARD-LOOKING  STATEMENTS


     This  report  contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 concerning, among other things,
the  prospects  and  developments  of  The  GSI  Group, Inc. (the "Company") and
business  strategies  for  our operations, all of which are subject to risks and
uncertainties.  Among these forward-looking statements and among those risks and
uncertainties,  are  obtaining  suitable  financing  to  support  our  growth in
operations;  possible  acquisition  or  divestiture  transactions;  managing our
growth to achieve operating efficiencies; successfully competing in our markets;
adequately  protecting  our  proprietary  information  and  technology  from
competitors; assuring that our products are not rendered obsolete by products or
technologies  of competitors; successfully managing product liability risks; and
avoiding  problems with third parties, including key personnel, upon whom we may
be dependent.  These forward-looking statements are included in various sections
of  this report. These statements are identified as "forward-looking statements"
or  by their use of terms (and variations thereof) such as "will," "may," "can,"
"anticipate,"  "intend,"  "continue,"  "estimate,"  "expect,"  "plan," "should,"
"outlook,"  "believe," and "seek" and similar terms (and variations thereof) and
phrases.

     When a forward-looking statement includes a statement of the assumptions or
bases  underlying  the  forward-looking  statement,  we  caution  that, while we
believe  such assumptions or bases to be reasonable and make them in good faith,
assumed  facts  or  bases  almost  always  vary  from  actual  results,  and the
differences  between  assumed facts or bases and actual results can be material,
depending upon the circumstances. Where, in any forward-looking statement, we or
our  management  expresses  an  expectation  or  belief as to future results, we
express that expectation or belief in good faith and believe it has a reasonable
basis,  but we can give no assurance that the statement of expectation or belief
will  result  or  be  achieved  or  accomplished.

     Our  actual  results may differ significantly from the results discussed in
the  forward-looking  statements.

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<TABLE>
<CAPTION>

                                          TABLE OF CONTENTS

                                                                                                PAGE
                                                                                                ----
PART I
          Item 1.                                    Business                                    4
          Item 1A.                                 Risk Factors                                  10
          Item 1B.                          Unresolved Staff Comments                            15
          Item 2.                                   Properties                                   15
          Item 3.                               Legal Proceedings                                16
          Item 4.              Submission of Matters to a Vote of Security Holders               16
<S>       <C>       <C>                                                                         <C>
PART II
          Item 5.   Market for the Registrant's Common Equity, Related Stockholder Matters and
                    Registrant's Purchases of Equity Securities                                   17
          Item 6.   Selected Financial Data                                                       18
          Item 7.   Management's Discussion and Analysis of Financial Condition and Results of
                    Operations                                                                    19
          Item 7A.  Quantitative and Qualitative Disclosure About Market Risk                     30
          Item 8.   Financial Statements and Supplementary Data                                   31
          Item 9.   Changes in and Disagreements with Accountants on Accounting and Financial
                    Disclosure                                                                    65
          Item 9A.  Controls and Procedures                                                       65
          Item 9B.  Other Information                                                             66

PART III
          Item 10.  Directors and Executive Officers of the Registrant                            67
          Item 11.  Executive Compensation                                                        70
          Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related
                    Stockholder Matters                                                           71
          Item 13.  Certain Relationships and Related Transactions                                73
          Item 14.  Principal Accountant Fees and Services                                        75

PART IV
          Item 15.  Exhibits and Financial Statement Schedules                                    77

</TABLE>




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                                     PART I


ITEM  1.  BUSINESS.

GENERAL

     The  Company  is  a major worldwide manufacturer of agricultural equipment.
The  Company  believes  that  it  is the largest global manufacturer of both (i)
grain  storage bins and related conditioning and handling systems and (ii) swine
feed  storage and delivery, ventilation and confinement systems.  The Company is
also  one  of the largest global providers of equipment to the poultry producing
industry, providing feed storage and delivery, watering, ventilation and nesting
systems.  The  Company  markets  its  agricultural equipment primarily under its
GSI,  DMC,  FFI,  Zimmerman,  AP  and Cumberland brand names in approximately 75
countries  through  a  network  of over 2,500 independent dealers, with whom the
Company  generally  has  long-term  relationships.  The Company's leading market
position  in  the  industry reflects both the strong, long-term relationships it
has developed with its customers as well as the breadth, quality and reliability
of  its  products.

     Through  the  Company's  distribution  network  of independent dealers, the
Company  markets  and  sells  a  broad  range of fully integrated grain storage,
conditioning  and handling products to farm operators and commercial businesses,
such  as  the Archer-Daniels-Midland Company and Cargill, Inc.  The end users of
the  Company's  equipment operate grain farms, feed mills, grain elevators, port
storage  facilities  and  commercial  grain  processing facilities.  The Company
believes that its grain storage, conditioning and handling equipment is superior
to  that  of  its  principal  competitors  on the basis of strength, durability,
reliability,  design  efficiency  and  breadth  of  product  offering.

     The  Company markets and sells its feeding and ventilation systems to swine
and  poultry  growers, who purchase equipment through the Company's distribution
network  of independent dealers.  The Company also markets its products to large
integrators,  such  as  Pilgrim's  Pride  Corporation,  Tyson  Foods,  Inc.  and
Smithfield  Foods, Inc., who purchase swine and poultry from growers pursuant to
contracts  that  specify  that  particular agricultural equipment be used in the
growing  process.  The  Company  believes that its swine and poultry systems are
the  most  effective in the industry in minimizing the feed-to-meat ratio, a key
measure of operational efficiency.  The Company also believes that its swine and
poultry  systems  are  superior to those of its principal competitors due to its
proprietary,  patented  designs and its broad range of fully integrated products
and  systems.

     On  April  6,  2005, all of the Company's stockholders entered into a stock
purchase  agreement  with  GSI  Holdings,  Inc. ("GSI Holdings"), a newly formed
holding  company  owned primarily by entities affiliated with Charlesbank Equity
Fund  V,  Limited Partnership, pursuant to which GSI Holdings purchased for cash
all  of  the issued and outstanding shares of the Company's common stock. On May
16,  2005,  under the "successor" basis of accounting, the closing of that stock
purchase  ("the Acquisition") occurred. Upon the closing of that stock purchase,
the  Company  became a direct, wholly owned subsidiary of GSI Holdings. The cash
costs  of  the  Acquisition  together  with  the  fees and expenses necessary to
consummate  the  transaction  were  financed  by  equity  contributions of $56.3
million,  issuance  of $110.0 million of senior subordinated notes (the "Notes")
due  May  15,  2013,  and  a  five year $60.0 million revolving credit facility.

     The  Company was incorporated in Delaware on April 30, 1964.  The Company's
principal  executive office is located at 1004 East Illinois Street, Assumption,
Illinois  62510  and  its  telephone  number  is  (217)  226-4421.

COMPANY  COMPETITIVE  STRENGTHS

The  Company  believes  that  its  competitive  strengths include the following:

     Leading  Market  Positions.  The  Company  believes  that it is the largest
global  manufacturer of both (i) grain storage bins and related conditioning and
handling  systems  and  (ii)  swine  feed  storage and delivery, ventilation and
confinement systems.  The Company is also one of the largest global providers of
equipment  to  the  poultry  producing  industry,  providing  feed  storage  and
delivery,  watering,  ventilation  and  nesting systems.    The Company believes
that it has achieved its leading market position due to the breadth, quality and
reliability  of  its  products,  its  commitment  to  customer  service  and the
effectiveness  of  its  distribution  network  of  independent  dealers.
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     Provider  of Fully Integrated Systems with Strong Brand Names.  The Company
offers  a  broad range of integrated products and systems that permits customers
to  purchase  all  of  their grain, swine and poultry production equipment needs
through  its distribution network of independent dealers.  Through the Company's
manufacturing  expertise  and  experience,  its GSI, DMC, FFI, Zimmerman, AP and
Cumberland  brand  names  have  achieved strong recognition in its markets.  The
Company  designs  its  fully  integrated  systems to help its end-user customers
achieve  operational  efficiencies  and  maximize  operating results by lowering
their total production costs and enhancing their productivity.  The Company also
believes  that  its dealers benefit from purchasing fully integrated systems due
to  the  strong  after-market  support  for  its  end-user  customers,  lower
administrative  and  shipping  costs and the efficiencies they gain from dealing
with  a  single  supplier.

     Effective  Global  Distribution  Network.  The Company believes that it has
developed  a  highly  effective  global  distribution network consisting of over
2,500 independent dealers that market the Company's products in approximately 75
countries.  To  ensure a high level of customer service, the Company selects and
trains  its  dealers.  This approach to dealer selection and training has helped
the  Company  to  maintain  a  very low turnover rate within its dealer network,
thereby  providing  its  end-user  customers  with  consistency and stability of
equipment  and system supply.  As a result, over the last three fiscal years, no
domestic  dealer  representing  sales to the Company in excess of $1 million per
year  has discontinued sales of any of the Company's principal products in favor
of  those  of  a  competitor.  The  Company's  distribution  network is also the
principal  supplier  of  repair  parts  to  the end users of its products, which
enables  the  Company to maintain strong ongoing relationships with its end-user
customers  and  dealers.  These  relationships  often  result in long-term brand
loyalty  to the Company's products on the part of end-user customers, and create
a  steady  base of recurring revenues for the Company.  For example, within each
of  the Company's three product lines (grain, swine and poultry), its 10 largest
dealers  have been purchasing the Company's equipment and systems for an average
of  over  10  years.

     Highly  Diversified  Revenue  Base.  The  Company  is  well  diversified by
product  line,  geography  and customer base.  The Company sells its products to
customers  in  approximately  75  countries  through  a  network  of  over 2,500
independent dealers.  In each of the last three fiscal years, no single customer
or  product  class  represented  more  than  10%  of  the  Company's  sales.

     Experienced  Management Team.  The Company is led by a management team with
significant  experience  in  the agricultural products industry.   The Company's
executive  management  team  has an average of 26 years of industry and industry
related  experience,  which  the  Company believes helps it to establish strong,
credible  customer  relationships  and  identify  and  respond quickly to market
opportunities.

BUSINESS  STRATEGY

     The  Company  is  a  major  provider  of  agricultural  equipment,  and its
objective  is  to  continue  to  pursue  profitable  growth in its markets.  The
Company's  business  strategy  includes  the  following  principal  elements:

     Capitalize  on Favorable Market Conditions and Trends.  The Company intends
to  capitalize  on the strong conditions and attractive market trends that exist
in  its  industry.  According to the United States Department of Agriculture, or
USDA,  from  2003  to 2004 U.S. net farm income increased 24.0% to $74.0 billion
and decreased 12.5% to $64.4 billion from 2004 to 2005.  With the decrease, 2005
net  farm  income  of  $64.4 billion is still above the 2003 record level of net
farm income of $59.2 billion.  The Company believes that the forecasted level of
net  farm  income  will  lead  to increased domestic demand for its equipment in
2006.  In  addition,  the  Company  believes  there are several trends that will
continue  to  drive demand for its grain equipment.  As described in more detail
below under "Industry Overview," these trends include (i) conversion of domestic
cropland  from  soybeans to corn which continues to result in an increase in the
aggregate  volume  of  bushels  produced,  (ii) growth in demand for corn driven
primarily  by  an  increase  in  ethanol  production in the United States, (iii)
growth  in  genetically modified grains, which have greater storage and handling
needs  and  (iv)  continued  increases  in domestic corn yields.  Demand for the
Company's  products  is  also being driven by producers' increasing focus on the
efficiency  of  their  agricultural  equipment  and by the increased presence of
protein  (for  example,  poultry  and  pork)  in  the  diets  of  consumers.

     Leverage  Extensive Global Distribution Network.  The Company has developed
a  highly  effective and established global distribution network, and it intends
to continue to use its distribution network and strong brand names to deepen its
relationships with existing customers as well as to attract new customers.  Part
of  this  strategy  involves  using  its  distribution  network to introduce new
products  into  the market.  For example, in 1998 the Company introduced through
its  distribution network its grain handling equipment, including the Grain King
line  of  transport  products for the movement of grain, which has accounted for
more  than  $36.0  million  of  its  sales.
                                        5
<PAGE>
     Capitalize on Growth in International Markets. The Company believes that it
has  a  strong market position in key international growth markets for grain and
livestock  equipment,  such  as  Brazil,  China and Eastern Europe.  The Company
intends  to  continue  to  leverage its worldwide brand name recognition, market
positions  and  international distribution network to capture the growing demand
for its products that exists in the international marketplace.  The Company also
believes  that  the  economic growth occurring in its international markets will
result  in  consumers  devoting  larger portions of their income to improved and
higher-protein  diets, stimulating demand for poultry and pork and, in turn, the
Company's  products.

     Continue  Development  of  Proprietary  Product Innovations.  The Company's
research  and  development  efforts  focus  on  the  development  of  new  and
technologically advanced products to respond to customer demands, changes in the
marketplace  and  new  technology.  The Company works closely with its customers
and  capitalizes on existing technology to improve existing products and develop
new  value-added  products.  For example, the Company's HI-LO pan feeder has the
unique  ability  to  adjust from floor feeding to regulated feed levels, thereby
minimizing  the  feed-to-meat  ratio  and  increasing  growers' efficiency.  The
Company  intends  to  continue  to  actively  develop  product  improvements and
innovations  to  more  effectively  serve  its  customers.

     Focus  on  Improving  Profitability and Cash Flow Generation.  In 2002, the
Company  began  to implement a lean manufacturing initiative, which is primarily
responsible  for  reducing  our labor expense as a percent of sales from 2002 to
2005.  The  Company  believes  that significant opportunity exits to continue to
enhance  its  profitability  and  capital  efficiency  by  further applying lean
techniques  to  its  manufacturing  operations.

INDUSTRY  OVERVIEW

     The  industry  in  which  the  Company  operates  is  characterized  both
domestically  and  internationally  by  a few large companies with broad product
offerings, such as the Company, CTB, Inc., a Berkshire Hathaway company, and Big
Dutchman  International GmbH, and numerous small manufacturers of single product
lines.  Competition  is  based on product value, reputation, quality, design and
price  as well as customer service.  The Company believes that its leading brand
names,  diversified  high-quality  product lines and strong distribution network
enable  it  to  compete  effectively.

     Demand  for agricultural equipment such as the Company's products is driven
by  the  overall  level of grain, swine and poultry production, the level of net
farm  income, agricultural real estate values and producers' increasing focus on
improving productivity.  The USDA projects U.S. net farm income to average $54.0
billion  per  year  over  the  next  10  years, a decrease of $10.4 billion from
estimated  2005  levels,  as compared to an average of $48.0 billion per year in
the  1990s.

     Demand  for  grain  equipment  is  increasing,  due  in  large  part to the
following  factors:

-     Conversion  of  Domestic Cropland from Soybeans to Corn.  U.S. farmers are
increasingly converting cropland to corn production due to expanded applications
for corn and the increased relative profitability of corn production as compared
to  soybean  production.  According  to  the USDA, 2005 corn yields averaged 148
bushels  per  acre,  compared  to  an  average  yield  of 43 bushels per acre of
soybeans.  In  addition,  the harvesting, processing and distribution of corn is
more  equipment  intensive than that of soybeans, due principally to the greater
conditioning  needs  of  corn.  These  factors are driving demand for additional
infrastructure  for  grain  storage,  conditioning  and  handling.

-     Increase  in Domestic Ethanol Production.  Ethanol, produced from corn, is
used  as  an  additive to gasoline.  According to the USDA, corn used in ethanol
production  grew  at  a  compound  annual  growth rate of 16% from 1997 to 2005.
Approximately 18% of 2005 domestic corn production was devoted to the production
of ethanol.  The USDA projects that demand for ethanol will continue to increase
due  to,  among  other factors, continued strong petroleum prices and regulatory
bans  on  methyl  tertiary  butyl ether (MTBE) as an alternative fuel oxygenate.

-     Proliferation  of Genetically Modified Organisms ("GMOs").  GMO acceptance
among consumers has been growing, as has the breadth of GMO offerings.  In order
to  ensure  traceability,  genetically  modified grains must be separated during
storage,  transfer  and conditioning, which requires that farmers and processors
maintain multiple storage units and related conditioning and handling equipment.

-     Long-term  Increases  in  Corn  Yields.  The  increase in grain production
attributable  to  advancements  in  seed and fertilizer engineering necessitates
additional  storage and other equipment to keep pace with production.  According
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to  the  USDA,  from  1984  to 2005, domestic corn production increased from 107
bushels  per  acre to 148 bushels per acre, which the Company believes resulted,
in  part,  from  these engineering changes and other technological advancements.

     The  Company's  sales of swine and poultry equipment historically have been
affected  by the level of construction of new facilities undertaken by swine and
poultry  producers,  which is affected by feed prices, environmental regulations
and  domestic  and international demand for pork and poultry.  Increases in feed
and grain prices, which historically have supported sales of the Company's grain
equipment  and systems, have also historically resulted in a decline in sales of
feeding,  watering  and  ventilation  systems  to  swine  and poultry producers.
Demand for the Company's swine and poultry equipment is also impacted by changes
in  consumers'  dietary  habits,  as  consumers  in  the  U.S.  increase  their
consumption  of poultry and pork and as consumers in developing countries devote
larger  portions  of  their  income  to improved and higher protein-based diets.

PRODUCTS

     The  Company  manufactures  (i) grain storage bins and related conditioning
and  handling  systems,  (ii)  swine  feed storage and delivery, ventilation and
confinement  systems  and  (iii)  poultry  feed  storage and delivery, watering,
ventilation  and  nesting systems.  The Company offers a broad range of products
that  permits  customers  to  purchase their grain, swine and poultry production
equipment  needs  from  one  supplier.  The Company believes that its ability to
offer  integrated  systems  provides it with a competitive advantage by enabling
its  customers to purchase complete, integrated production systems from a single
supplier  who  can  offer  high-quality  installation  and  service.


   Grain  Product  Line

     The  Company  manufactures  the  following  grain  production equipment and
systems:

     Grain  Storage  Bins.  The Company manufactures and markets a complete line
of  over  1,000  models of both flat and hopper bottomed grain storage bins with
capacities  of  over 730,000 bushels.  The Company markets its bins to both farm
and  commercial end users under its GSI brand name.  The Company's grain storage
bins  are  manufactured using high-yield, high-tensile, galvanized steel and are
assembled  with  high-strength,  galvanized  bolts  and  anchor  brackets.  The
Company's  grain  storage  bins  offer  efficient design enhancements, including
patented  walk-in  doors  and  a roof design that provides specialized vents for
increased  efficiency,  extruded  lips for protection against leakage, large and
accessible  eave and peak openings for ease of access, and reinforced supportive
bends  to  increase  rigidity.  The Company believes that its grain storage bins
are  the  most  reliable  in  the  industry.

     Grain  Conditioning  Equipment.  To meet the need to dry grain for storage,
the Company manufactures and markets a complete line of over 100 models of grain
drying  devices  with  capacities  to  dry  up  to 10,000 bushels per hour.  The
Company markets its grain drying equipment to both farm and commercial end users
under  its  GSI,  DMC,  Zimmerman  and  FFI  brand  names.  The Company's drying
equipment,  which includes fans, heaters, top dryers, stirring devices, portable
dryers,  stack  dryers,  tower  dryers and process dryers, is manufactured using
galvanized  steel  and  high-grade  electrical  components  and utilize patented
control  systems,  which  offer computerized control of all dryer functions from
one  panel.

     Grain  Handling Equipment.  The Company manufactures and markets a complete
line  of  grain  handling  equipment  to complement its grain storage and drying
product  offerings.  The  Company  markets  its  grain handling equipment, which
includes bucket elevators, conveyors and augers, to both farm and commercial end
users  under  its  GSI and Grain King brand names.  The Company's grain handling
equipment  can  be easily integrated into the Company's systems and those of its
competitors  and enables the Company to offer a fully integrated product line to
grain  producers.

   Swine  Product  Line

     The  Company  manufactures  the  following  swine  production equipment and
systems:

     Feeding Systems.  The Company manufactures its swine feeding products under
its  AP brand name.  The Company custom designs a wide array of state-of-the-art
feeding  systems  used  in  today's  modern swine facilities.  These include the
popular  Flex-Flo  auger  systems that are typically used to transport feed from
the  bulk  feed  storage tanks located outside of the buildings to the inside of
the  structure.  Once inside it is moved either by additional Flex-Flo equipment
or  is  transferred  to the Company's versatile "Chain Disk System", which makes
turns  and changes in elevation much more easily.  The feed is then delivered to
the  swine using a wide variety of ad lib feeders that are specifically designed
to  minimize  feed  waste  by  allowing  a consistent setting to a predetermined
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level,  provide  the swine with a high degree of comfort and be user-friendly to
the  producer.  The  Company  also  manufactures  and  sells  individual  feed
dispensers,  which producers use at times to feed each animal an exact amount of
feed  daily.  All  of  these  systems  are  highly automated and are designed to
address  the continually changing, multifaceted production practices in the pork
industry,  such  as  "wean  to  finish"  technology (where pigs are started on a
feeder  at  a  very  young  age,  using  special designs that allow them to feed
without  being injured) or "sorting technology" (where pigs are sorted by weight
daily  and  fed  in  accordance  with  selective  parameters).

     Ventilation  Systems.  The  Company  manufactures  ventilation  systems for
swine  buildings  under its AP and Airstream brand names.  These systems consist
of  fans,  heating  and  evaporative  cooling systems, winches, inlets and other
accessories  (including  computer based automated control devices) that regulate
temperature  and air flow. Proper ventilation systems perform a critical role in
minimizing the grower's feed-to-meat conversion ratio because they reduce stress
caused  by  extreme  temperature  fluctuation,  allowing  for  higher-density
productions and facilitate optimum swine health through disease prevention.  The
Company's  swine  ventilation  systems  produce high levels of air output at low
levels  of  power consumption, adapt to a wide array of specialty fans and other
accessories,  operate  with little maintenance or cleaning and provide precision
monitoring of environmental control.  The Company further specializes in designs
that work with the new emerging production practices as they are being developed
by  producers  so  that  the  designs  are  market-ready  when  these production
practices  gain  more  widespread  market  acceptance.

     Other  Production  Equipment.  The  Company manufactures and markets a wide
array  of  equipment  used  in  the  balance  of  the  swine production process,
including  plastic  slated  flooring,  highly efficient watering devices, a wide
variety  of PVC extrusions used for construction applications in the facilities,
rubber  floor mats for pig comfort, creep heating systems for baby pigs, several
styles  of steel confinement equipment, and the latest in practical feed, water,
and  environmental  monitoring  equipment.


   Poultry  Product  Line

     The  Company  manufactures  the  following poultry production equipment and
systems:

     Feeding  Systems.  The  Company  manufactures  its  poultry feeding systems
under  its Cumberland brand name.  The Company manufactures feeding systems that
are  custom  tailored  to  both the general industry needs of different types of
poultry  producers and to the specialized needs of individual poultry producers.
The  Company's  poultry  feeding  systems  consist of a feed storage bin located
outside  the  poultry  house, a feed delivery system that delivers the feed from
the  feed  storage  bin  into the house and an internal feed distribution system
that  delivers  feed  to  the  birds.  The  Company's  poultry feed storage bins
contain  a number of patented features designed to maximize capacity, manage the
quality of stored feed, prevent rain and condensation from entering feed storage
bins  and  provide first-in, first-out material flow, thereby keeping feed fresh
to  help  prevent spoilage, and blended to provide uniform quality rations.  The
Company's poultry feed delivery systems use non-corrosive plastic and galvanized
steel  parts  specially  engineered  for  durability and reliable operations and
specialized  tubing  and  auguring  or  chain  components  that allow feed to be
conveyed  up,  down  and around corners.  The Company believes that its patented
HI-LO  pan feeder is superior to competitors' products due to its unique ability
to adjust from floor feeding for young chicks to regulated feed levels for older
birds,  thereby  lowering  the  feed-to-meat  ratio.

     Watering  Systems.  The  Company  manufactures  nipple watering systems for
poultry  producers  under  its  Cumberland brand name.  The ability of a bird to
obtain  water  easily  and rapidly is an essential factor in facilitating weight
gain.  The  Company's  poultry watering system consists of pipes that distribute
water  throughout  the  house to drinking units supported by winches, cables and
other  components, which units contain a regulator designed to provide different
levels  of  water  pressure according to demand.  The Company's poultry watering
systems  are  distinguished by their toggle action nipples, which transmit water
from  nipple to beak without causing undue stress on the bird or excess water to
be splashed onto the floor.  The Company's watering nipples are also designed to
allow  large  water  droplets  to  form  on  the  cavity  of the nipple, thereby
attracting  young  birds  to  drink,  which  ultimately  promotes  weight  gain.

     Ventilation  Systems.  The  Company  manufactures  ventilation  systems for
poultry  producers  under  its  Cumberland and Airstream brand names.  Equipment
utilized  in  such  systems  include fiberglass and galvanized fans, the Komfort
Kooler  evaporative  cooling  systems,  manual  and  automated curtains, heating
systems  and  automated  controls  for complete ventilation, cooling and heating
management.  The  Company believes its poultry ventilation products are reliable
and  easy  to  assemble in the field, permit energy-efficient airflow management
and  are  well-suited  for  international  sales because they ship compactly and
                                        8
<PAGE>
inexpensively  and  assemble  with little hardware and few tools.  Accurate bird
weighing  systems  integrate with the environmental controls to give growers and
integrators  running  averages  of  their  flock  weights.

     Nesting  Systems.  The  Company  manufactures  nesting  systems for poultry
producers  under its Cumberland brand name.  These systems consist of mechanical
nests and egg collection tables.  The Company's nesting systems are manufactured
using  high-yield,  high-tensile  galvanized  steel  and are designed to promote
comfort  for nesting birds and efficiency for production personnel.  The Company
believes that its nesting systems are among the most reliable and cost-effective
in  the  poultry  industry.

PRODUCT  DISTRIBUTION

     The  Company  distributes  its products primarily through a network of U.S.
and  international independent dealers who offer targeted geographic coverage in
key  grain,  swine  and  poultry  producing  markets  throughout the world.  The
Company's  dealers  sell  products  to  grain,  swine  and  poultry  producers,
agricultural  companies  and  various  other farm and commercial end users.  The
Company  believes  that  its distribution network is one of the strongest in the
industry,  providing  its  customers  with  high  levels  of service.  Since its
inception,  the  Company  has  experienced  a  very  low turnover rate among its
dealers.  The  Company believes this has resulted in a reputation of consistency
in  its products and stability with its customers.  The Company further believes
that  the  high level of commitment its dealers have to the Company is evidenced
by  the  fact  that many of the Company's dealers choose not to sell products of
the  Company's  competitors.

     The  Company also maintains a sales force to provide oversight services for
its  distribution  network,  interact  with  integrators  and end users, recruit
additional  dealers  for  the Company's products, and educate the dealers on the
uses  and functions of those products.  The Company further supports and markets
its  products with a technical service and support team, which provides training
and  advice  to  dealers  and  end  users  regarding installation, operation and
service  of  products  and,  when  necessary,  on-site  service.

     For  information  regarding  the  Company's sales by geographic region, see
Note  13  to  the  Consolidated  Financial Statements included in Item 8 hereof.

COMPETITION

     The  market  for  the  Company's products is competitive.  Domestically and
internationally,  the  Company  competes  with  a few large companies with broad
product  offerings,  such  as  CTB,  Inc.  a  Berkshire Hathaway company and Big
Dutchman  International GmbH, and numerous small manufacturers of single product
lines.  Competition  is  based on product value, reputation, quality, design and
price  as well as customer service.  The Company believes that its leading brand
names,  diversified  high-quality  product lines and strong distribution network
enable it to compete effectively.  The Company further believes that its ability
to  offer  integrated  systems  to  grain,  swine  and  poultry producers, which
significantly  lowers  their  total  production  costs  and  enhances  their
productivity,  provides  it with a competitive advantage versus competitors that
do  not  provide  integrated  systems.

NEW  PRODUCT  DEVELOPMENT

     The Company has a product development and design engineering staff, most of
whom  are  located  in  Assumption,  Illinois.  Expenditures  by the Company for
product  research  and development were approximately $3.9 million, $3.5 million
and  $2.5  million  for  the  years  ended  December  31,  2005,  2004 and 2003,
respectively.  The  Company charges research and development costs to operations
as  incurred.

RAW  MATERIALS

     The  primary  raw materials used by the Company to manufacture its products
are  steel  and  polymer  materials,  including  PVC  pipe,  polypropylene  and
polyethylene.  The  Company  also  purchases  various  component  parts, such as
motors,  that  are  integrated  into the Company's products.  The Company is not
dependent on any one of its suppliers, however in certain instances, the Company
purchases  resin  and steel based on market availability and cost.  In addition,
materials  and  components  purchased  by the Company are readily available from
alternative  suppliers.  The  Company  has  no  long-term  supply  contracts for
materials  or  components,  except  for  steel.

REGULATORY  AND  ENVIRONMENTAL  MATTERS

     The  Company  is  subject  to  a  broad  range of federal, state, local and
foreign  laws  and requirements, including those governing discharges to the air
and  water,  the  handling  and  disposal  of solid and hazardous substances and
wastes,  the  remediation of contamination associated with releases of hazardous
substances at the Company's facilities and offsite disposal locations, workplace
                                        9
<PAGE>

safety  and equal employment opportunities.  Expenditures made by the Company to
comply  with  such  laws  and  requirements historically have not been material.

BACKLOG

     Backlog  is not a significant factor in the Company's business because most
of  the  Company's  products  are  delivered  within seasonal requirements.  The
Company's  backlog  at  December  31,  2005  was $60.3 million compared to $29.9
million  at December 31, 2004.  The significant increase in backlog from 2004 to
2005  is  due  primarily to increased orders for grain storage both domestically
and  internationally.  The  increase in domestic grain storage is due in part to
hurricane  Katrina.  The  Company  believes that the 2005 ending backlog will be
filled  during  2006.

PATENTS  AND  TRADEMARKS

     The Company protects its technological and proprietary developments through
a  combination  of trade secrets, patents and trademarks.  The Company currently
has several active U.S. and foreign patents, trademarks and various licenses for
other intellectual property.  While the Company believes its patents, trademarks
and  licensed  information  have significant value, the Company does not believe
that  its  competitive  position  or  that  its  operations are dependent on any
individual  patent  or  trademark  or  group  of  related patents or trademarks.

EMPLOYEES

     As of December 31, 2005, the Company had 1,829 employees of whom 1,783 were
permanent  and 46 were seasonal.  The Company's employees are not represented by
a  union.  Management  believes  that  its  relationships  with  the  Company's
employees  are  good.

ITEM  1A.  RISK  FACTORS.

RISKS  RELATED  TO  THE  COMPANY'S  BUSINESS

THE  CYCLICALITY  OF  THE  AGRICULTURAL  INDUSTRY  COULD  CAUSE A DECLINE IN THE
COMPANY'S  FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS.

     Sales  of  the  Company's  products  are  related  to  the  health  of  the
agricultural  industry,  which  is affected by farm income and debt levels, farm
land  values  and  farm  cash receipts, all of which reflect levels of commodity
prices, acreage planted, crop yields, demand, government policies and government
subsidies. Historically, the agricultural industry has been cyclical and subject
to a variety of general economic, governmental and regulatory factors as well as
weather  conditions. Regulatory and business trends in the agricultural industry
may  also  affect  sales  of  products  for use in the agricultural industry. In
addition,  weather  conditions,  such  as  heat waves or droughts, and pervasive
livestock  diseases  (such  as  avian bird flu) can also affect buying decisions
within  the agricultural industry. Downturns in the agricultural industry due to
these  and  other  factors  are  likely  to  decrease the sales of the Company's
products, which could adversely affect the Company's growth, financial condition
and  results  of  operations.

THE  COMPANY FACES SIGNIFICANT COMPETITION FROM OTHER COMPANIES IN THE INDUSTRY.

     The  market for the Company's products is competitive. The Company competes
with  a variety of domestic and international manufacturers and suppliers. While
the  Company believes that CTB, Inc. is its only competitor that offers products
across  most  of  the  Company's product lines, in each of the Company's product
lines  the Company competes with numerous companies, including, for example, Big
Dutchman  International  GmbH  in  the  sale  of  poultry  and  swine production
equipment.  Consolidation  in  the  agricultural  industry  has also intensified
competition.  Competition is based on product value, reputation, quality, design
and  price,  as  well  as  the  customer  service  provided  by  dealers  and
manufacturers.  Although  the  Company believes that it is competitive in all of
these  categories,  the Company cannot assure you that it will be able to remain
competitive  in  general or in any particular area of the Company's business. To
the  extent  that  the  Company's  competitors  provide  more  innovative and/or
higher-quality  products,  better-designed  products,  better  pricing  or offer
better  customer  service  through  their dealers, then the Company's ability to
compete  could be adversely affected, which could have a material adverse effect
on  the  Company's  business,  financial  condition  and  results of operations.
Independent dealers who market, sell and install the Company's products may also
market,  sell  and  install  competing  product  lines.  To  the extent that the
Company's  independent  dealers no longer actively market the Company's products
or focus their marketing efforts on products from the Company's competitors, the
Company's business, financial condition and results could be adversely affected.
                                       10
<PAGE>

THE  COMPANY  EXPERIENCES  QUARTERLY  FLUCTUATIONS  IN  ITS  SALES.

     The  Company's  quarterly  operating results fluctuate primarily because of
seasonality.  Sales  of  agricultural  equipment  are  seasonal,  with  farmers
traditionally purchasing grain storage bins in the summer and fall in connection
with the harvesting season, and poultry and swine producers purchasing equipment
during  prime construction periods in the spring, summer and fall. The Company's
sales  have  historically been lower during the first and fourth fiscal quarters
as  compared  to  the  second  and  third  fiscal quarters. In 2005, the Company
generated  approximately  26.2% and 31.3% of the Company's consolidated sales in
the  second  and  third  fiscal  quarters,  respectively.

THE  COMPANY RECENTLY RESTATED CERTAIN INFORMATION IN ITS CONSOLIDATED FINANCIAL
STATEMENTS  FOR  THE  FISCAL YEARS ENDED DECEMBER 31, 2000, 2001, 2002, 2003 AND
2004  AND  THE  QUARTER  ENDED  APRIL  1,  2005.

     The  Company  recently  restated  certain  information  in its consolidated
financial statements for the years ended December 31, 2000, 2001, 2002, 2003 and
2004  and the quarter ended April 1, 2005 because of errors the Company believed
to  exist  in  those  financial  statements  due  to  weaknesses in its internal
controls. In April 2005 the Company restated its financial statements to include
all  inventory charges associated with its DMC subsidiary, whose facilities were
consolidated  with  the  Company's in 2002. The Company had erroneously assigned
the write-down of approximately $6.5 million in overstated inventory from DMC to
its  cost  of sales in 2003 and 2004, when such inventory write-down should have
been  taken  entirely in 2002. In addition to reallocating the cost of inventory
associated  with  DMC,  the Company also recorded charges in connection with its
shift from a premium-based stop-loss workers' compensation insurance policy to a
self-insured  policy  in  2001,  2002  and  2003  and  increased  the  Company's
compensation  expense  during  each of those years to reflect the estimated fair
market  value of non-voting shares of the Company's common stock held by certain
of  its  employees  and  the accrual of its chief executive officer's salary and
board  of director fees that were being refused by the Company's chief executive
officer  at  that  time.  Subsequently, in August 2005, the Company filed a Form
10-K/A  for  the  year  ending December 31, 2004 and a Form 10-Q/A for the three
months ending April 1, 2005 to correct for further errors the Company discovered
in  its  historical  financial  results.  These  errors relate to three separate
issues:

1)     capitalization  rates  of  overhead  expense  in  inventory,  which  were
inconsistent  with  actual  spending;

2)     the  capitalization  of  warranty  and  R&D  costs  in  inventory,  which
management  believes  should  be  expensed  in  their  entirety;  and

3)     improper  application  of  our  policy for establishing reserves for slow
moving  inventory,  which  resulted  in  inadequate  historical  reserve levels.

     For  a  discussion  of  these  restatements,  see  note 18 to the Company's
audited consolidated financial statements beginning on page 59 and "Management's
Discussion  and  Analysis  of  Financial  Condition  and Results of Operations."

     The  Company  believes  that  it  has addressed its accounting policies and
practices  that  caused  the  errors necessitating the restatement. However, the
Company cannot assure you that it, or its independent auditors during the course
of  subsequent  reviews,  will  not  identify  further items that will require a
future  restatement  of  the  Company's  operating  results.

THE  COMPANY HAS IDENTIFIED MATERIAL WEAKNESSES IN ITS INTERNAL CONTROLS. IF THE
COMPANY  FAILS TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, THE COMPANY
MAY  NOT  BE ABLE TO ACCURATELY REPORT ITS FINANCIAL RESULTS, AND ITS MANAGEMENT
MAY  CONCLUDE THAT ITS INTERNAL CONTROLS ARE INEFFECTIVE IN THEIR REPORTS ON THE
COMPANY'S  INTERNAL  CONTROLS AS REQUIRED BY THE SARBANES-OXLEY ACT FOR THE YEAR
ENDING  DECEMBER  31,  2007.

     In  connection with the audit of the Company's financial statements for the
fiscal  year  ended  December  31,  2004,  and the subsequent restatement of its
results  for  the  same period the Company identified material weaknesses in its
internal  control  over  financial  reporting,  including  insufficient internal
controls  relating  to accounting for inventory, consolidation of majority owned
subsidiaries,  certain  subsidiaries'  functional  currency, differences between
U.S.  and  foreign GAAP, accounting for non-operating expenses, the treatment of
repurchases  and  resales  of  debt  securities,  executive  salary and board of
director  payment  accrual  methodology,  the  identification  and  treatment of
workers'  compensation,  the  treatment  of  certain  equity-based  compensation
arrangements  and  weaknesses in financial reporting processes. In addition, the
Company  determined  that  its control environment at December 31, 2005 and 2004
lacked  certain  controls  related  to  the  prevention  of  improper accounting
entries.  The  Company's management has discussed these material weaknesses with
our  independent  public accounting firm, BKD, LLP, which has issued a "material
weakness"  letter  to the Company in connection with its review of our financial
results  for  the fiscal years ended December 31, 2005 and 2004. The presence of
material  weaknesses  resulted  in  errors in the Company's historical financial
statements,  which  caused  us  to  restate certain information in our financial
                                       11
<PAGE>
statements  for  the  years ended December 31, 2000, 2001, 2002, 2003, and 2004,
and  the  quarter ended April 1, 2005. The letter the Company received from BKD,
LLP  also  noted a deficiency in its internal controls relating to its inventory
accounting  and  recommended  that  the  Company update its inventory accounting
system.

     The  Company believes that substantial remediation measures are required in
order  to improve its internal controls, and the Company has begun to take steps
to  correct  these  internal control deficiencies. The Company believes that the
material  weaknesses  identified above resulted in part from inadequate staffing
and  training  within  its  finance  and  accounting  group  and  the  Company's
management  is  in  the  process  of reviewing whether additional accounting and
financial  management  staff  should  be  retained  and  whether it needs to use
additional or different outside resources. The efficacy of the steps the Company
has  taken to date and the steps it is still in the process of taking to improve
the  reliability  of its financial statements is subject to continued management
review.  The  Company  cannot be certain that these measures will ensure that it
implements  and  maintains adequate internal control over financial reporting in
the  future.  Any  failure  to  implement  required new or improved controls, or
difficulties  encountered  in  their  implementation, could adversely affect the
Company's  operating  results  or  cause  it  to  fail  to  meet  its  reporting
obligations.  The  Company  cannot  assure you that it will not identify further
material  weaknesses  or  significant  deficiencies in its internal control over
financial  reporting  in  the  future  that  it  has  not  discovered  to  date.

     Beginning  with  the year ending December 31, 2007, pursuant to Section 404
of  the Sarbanes-Oxley Act, the Company's management will be required to deliver
a  report that assesses the effectiveness of the Company's internal control over
financial reporting, and it will be required to deliver an attestation report of
our  independent  auditors  on  the  effectiveness of its internal controls. The
Company  has  substantial  effort  ahead  of it to complete documentation of its
internal control system and financial processes, information systems, assessment
of their design, remediation of control deficiencies identified in these efforts
and  management  testing  of  the design and operation of internal controls. The
Company  cannot  assure  you  that  it  will  be  able  to complete the required
management  assessment  by  its reporting deadline. An inability to complete and
document  this  assessment could result in a scope limitation qualification or a
scope  limitation  disclaimer  by the Company's auditors on their attestation of
its  internal controls. In addition, if a material weakness were identified with
respect to the Company's internal control over financial reporting, it would not
be  able  to  conclude  that  its  internal control over financial reporting was
effective,  which  could  result  in  the  inability  of  the Company's external
auditors  to  deliver an unqualified report on its internal control. Ineffective
internal  control could also cause investors to lose confidence in the Company's
reported  financial  information,  which  could  have  a  negative effect on the
trading  price  of  its  securities.

THE  COMPANY  IS  SUBJECT TO GOVERNMENT REGULATION AND POLICY-MAKING BOTH IN THE
UNITED  STATES  AND  INTERNATIONALLY.

     Domestic  and foreign political developments and government regulations and
policies,  including,  without  limitation,  import-export  quotas,  government
subsidies and reserve programs, directly affect the agricultural industry in the
United  States  and abroad and thereby indirectly affect the Company's business.
Foreign  trade embargoes and import quotas have in the past reduced U.S. exports
of  grain, swine and poultry, which have adversely affected the Company's sales.
The application or modification of existing laws, regulations or policies or the
adoption  of  new  laws,  regulations  or policies could have a material adverse
effect  on  the  Company's  business.

THE  COMPANY  IS SUBJECT TO ENVIRONMENTAL, HEALTH AND SAFETY AND EMPLOYMENT LAWS
AND  REGULATIONS  AND  RELATED  COMPLIANCE  EXPENDITURES  AND  LIABILITIES.

     Like  other  manufacturers, the Company is also subject to a broad range of
federal,  state,  local  and  foreign  laws  and  requirements,  including those
governing  discharges  to  the air and water, the handling and disposal of solid
and hazardous substances and wastes, the remediation of contamination associated
with  releases  of  hazardous substances at the Company's facilities and offsite
disposal  locations,  workplace  safety  and  equal  employment  opportunities.
Expenditures  made  by  the  Company  to  comply with such laws and requirements
historically  have  not  been  material.  However,  future developments, such as
additional  or increasingly strict requirements of laws and regulations of these
types  and  enforcement  policies  under  such  laws  and  regulations,  could
significantly increase the Company's costs of operations and may impose material
costs.

     Governmental  authorities  have  the  power to enforce compliance with such
laws  and  regulations and violators may be subject to penalties, injunctions or
both.  Third parties may also have the right to enforce compliance with laws and
regulations.  Like  most other industrial companies, the Company's manufacturing
operations  entail  some  risk  of  future  noncompliance  with  environmental
regulations,  and  there  can be no assurance that material costs or liabilities
will  not  be  incurred  by  the  Company  as  a  result  of such noncompliance.
                                       12
<PAGE>

     Environmental laws also impose obligations and liability for the cleanup of
properties affected by hazardous substance spills or releases. These liabilities
can  be  imposed on the parties generating or disposing of such substances or on
the  owner or operator of affected property, often without regard to whether the
owner  or  operator  knew  of, or was responsible for, the presence of hazardous
substances.  Accordingly, the Company may become liable, either contractually or
by  operation of law, for remediation costs even if the contaminated property is
not  presently  owned  or  operated  by the Company, or if the contamination was
caused  by  third  parties  during or prior to our ownership or operation of the
property.  Although the Company has conducted site assessments or investigations
at all of its currently owned domestic properties, it cannot assure you that all
potential  instances  of soil or groundwater contamination have been identified.
While liabilities for remediation are not anticipated to have a material adverse
effect  upon  the  Company's  business,  results  of  operations  or  financial
condition,  future events, such as changes in existing laws or policies or their
enforcement,  or the discovery of currently unknown contamination, may give rise
to  additional  remediation  liabilities  which  may  be  material.

IF  THE  COMPANY  DOES NOT RETAIN ITS KEY PERSONNEL AND ATTRACT AND RETAIN OTHER
HIGHLY  SKILLED  EMPLOYEES,  THE  COMPANY'S  BUSINESS  WILL  SUFFER.

     The  Company's  continued  success  will depend, among other things, on the
efforts  and  skills  of  a  few  key  executive  officers,  including its chief
executive  officer  and  chief  financial  officer, and the Company's ability to
attract  and  retain  additional  highly  qualified  personnel  with  industry
experience.  The  Company  does not maintain "key man" life insurance for any of
its employees, and all of its employees are employed at will. The Company cannot
assure  you  that  it will be able to attract and hire suitable replacements for
any  of  its  key  employees.  The  Company believes the loss of a key executive
officer  or  other  key  employee  could  have  a material adverse effect on its
business  operations.

THE  COMPANY'S CUSTOMERS AND DEALERS ARE NOT CONTRACTUALLY OBLIGATED TO PURCHASE
PRODUCTS  FROM  US.

     The  Company's  customers  and  dealers  are not contractually obligated to
purchase products from us. The Company relies upon the relationships that it and
its  independent dealers have with the Company's customers to drive the purchase
of its products. While the Company believes that these relationships are strong,
its  customers  may  decrease the amount of products that they purchase from the
Company  or even stop purchasing from the Company altogether at any time, either
of  which  could  have a material adverse effect on its sales and profitability.

A  DOWNTURN  IN  GENERAL  ECONOMIC CONDITIONS MAY ADVERSELY AFFECT THE COMPANY'S
RESULTS  OF  OPERATIONS.

     The  strength  and  profitability  of the Company's business depends on the
overall  demand  for  its  products  and  growth  in  the agricultural industry.
Agricultural  industry revenues are sensitive to general economic conditions and
are  influenced  by  consumer  confidence  in  the  economy and other factors. A
recession  or  downturn  in  the  general economy, or in a region constituting a
significant  source  of  customers  for  the Company's products, could result in
fewer  customers  purchasing  our  products,  which  would  adversely affect the
Company's  results  of  operations.

THE  RAW  MATERIALS USED IN THE COMPANY'S MANUFACTURING PROCESSES ARE SUBJECT TO
PRICE  AND  SUPPLY  FLUCTUATIONS  THAT  COULD  INCREASE  ITS  COSTS OF SALES AND
ADVERSELY  AFFECT  ITS  RESULTS  OF  OPERATIONS.

     The Company's products are made from several basic raw materials, including
steel  and  resins. The Company generally purchases raw materials at spot prices
(except  where  the Company has enforceable long-term supply contracts) and does
not  hedge  its  exposure  to  price  changes.  The  Company's business could be
adversely  affected  by increases in the cost of its raw materials, particularly
steel,  and  the Company may not be able to pass these costs on to its customers
as  it  has  been  able  to  do  in  the  past.

THE  COMPANY  MAY  BE  SUBJECT  TO  PRODUCT  LIABILITY  CLAIMS.

     The  Company  may  be exposed to product liability claims in the event that
the  use  of  its  products  results,  or is alleged to result, in bodily injury
and/or  property  damage.  The  Company  cannot  assure  you  that  it  will not
experience  any  material product liability losses in the future or that it will
not  incur  significant costs to defend such claims. While the Company currently
has product liability insurance, it cannot assure you that its 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 the
Company.  A  successful  claim  brought  against  the  Company  in excess of its
available insurance coverage or a requirement to participate in a product recall
may  have  a  materially  adverse  effect  on  the  Company's  business.

THE  COMPANY'S  CONTROLLING  STOCKHOLDER  MAY  HAVE INTERESTS THAT CONFLICT WITH
YOURS.

     As  of  the  closing  of  the  Acquisition,  GSI  Holdings owned all of the
outstanding  shares  of  the Company's common stock. Although certain members of
the Company's senior management team and certain other individual investors have
purchased  approximately  10%  of the outstanding shares of GSI Holdings' common
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<PAGE>
stock,  Charlesbank  will  continue  to own a controlling equity interest in GSI
Holdings  and,  indirectly,  the  Company.  By  virtue  of  its stock ownership,
Charlesbank can determine the outcome of matters required to be submitted to the
Company's stockholders for approval, including the election of its directors and
the approval of mergers, consolidations and the sale of substantially all of its
assets.  The  interests  of  Charlesbank  and GSI Holdings may conflict with the
interests of other holders of the Company's or GSI Holdings', securities and may
present  risks  to  those  holders.

THE  COMPANY OPERATES AND SOURCES INTERNATIONALLY, WHICH EXPOSES IT TO THE RISKS
OF  DOING  BUSINESS  ABROAD.

     The  Company  has operations in a number of countries outside of the United
States.  The  Company's  foreign  operations  are  subject to the risks normally
associated  with  conducting  business  in  foreign  countries,  including:

-     limitations  on  ownership  and  on  repatriation  of  earnings;

-     import  and  export  restrictions  and  tariffs;

-     additional expenses relating to the difficulties and costs of staffing and
managing  international  operations;

-     labor  disputes  and  uncertain  political  and  economic  environments,
including risks of war and civil disturbances and the impact of foreign business
cycles;

-     change  in  laws  or  policies  of  a  foreign  country;

-     delays  in  obtaining  or  the  inability to obtain necessary governmental
permits;

-     potentially  adverse  consequences  resulting  from  the  applicability of
foreign  tax  laws;

-     cultural  differences;  and

-     increased  expenses  due  to  inflation.

     The Company's foreign operations may also be adversely affected by laws and
policies  of  the  United  States  and  the other countries in which it operates
affecting  foreign  trade,  investment  and  taxation.

BUSINESSES  THE  COMPANY  MAY ACQUIRE IN THE FUTURE MAY NOT PERFORM AS EXPECTED.

     The  Company  may  be  adversely  affected if businesses it acquires in the
future  do not perform as expected. An acquired business could perform below the
Company's  expectations  for  a  number  of  reasons,  including  legislative or
regulatory  changes  that  affect  the  areas  in  which  the  acquired business
specializes,  the  loss  of customers and dealers, general economic factors that
directly  affect  the  acquired business and the cultural incompatibility of its
management  team or business with the Company. Any or all of these reasons could
adversely  affect the Company's financial position and results of operations. In
addition,  the  Company  could  face  many challenges to integrating an acquired
business,  including  eliminating  redundant operations, facilities and systems,
coordinating  management  and  personnel,  retaining  key  employees,  managing
different  corporate  cultures  and  achieving cost reductions and cross-selling
opportunities.  The Company cannot assure you that it will be able to meet these
challenges  in  the  future  to  the  extent  it  acquires  other  businesses.

     CONCENTRATION  OF  PRODUCTION  IN  ILLINOIS  FACILITIES.

     The  company  produces approximately three quarters of its total production
in  facilities  located in Central Illinois.    Some of the production equipment
is specifically designed for company product requirements.    A natural disaster
(e.g.  tornado)  in  this  region could temporary limit production capabilities.
The  company  has business disruption insurance, but an incident could result in
seasonal  production  requirements  being  missed.

     THE COMPANY'S SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT ITS BUSINESS,
FINANCIAL  CONDITION  AND  RESULTS  OF  OPERATIONS.

     The  Company  now  has  a  significant  amount  of  indebtedness,  being
approximately  $120.2  million  of  total  consolidated debt outstanding for the
Company  and  its subsidiaries as of December 31, 2005.  This indebtedness could
limit  the  Company's  ability  to  obtain  additional financing to fund working
capital  requirements,  capital expenditures, debt service, general corporate or
other  obligations.  This  could place the Company at a competitive disadvantage
compared  to competitors who may not be as highly leveraged and may increase the
Company's  vulnerability,  and  limit  its  ability to react, to changing market
conditions,  a  rise  in  interest  rates,  changes  in  industry  and  economic
downturns.  In  addition,  the  indenture  governing  the  Company's  senior
                                       14
<PAGE>
indebtedness  and  its  refinanced  credit  facility contain financial and other
restrictive  covenants  which may limit its ability to engage in activities that
may  be in its long-term best interests.  Failure to comply with those covenants
could  result in an event of default which, if not cured or waived, could result
in  the  acceleration  of  all  of  its  debt.

RISKS  RELATED  TO  THE  COMPANY'S  PRIOR  AUDITORS

ARTHUR  ANDERSEN  LLP,  THE COMPANY'S FORMER AUDITORS, AUDITED CERTAIN FINANCIAL
INFORMATION  SET  FORTH  IN  THIS  ANNUAL  REPORT.  IN  THE EVENT SUCH FINANCIAL
INFORMATION  IS  LATER DETERMINED TO CONTAIN FALSE STATEMENTS, A SECURITY HOLDER
MAY  BE  UNABLE  TO  RECOVER  DAMAGES  FROM  ARTHUR  ANDERSEN  LLP.

     Arthur  Andersen  LLP  completed  its  audit  of  the  Company's  financial
statements as of December 31, 2001 and for the three years then ended and issued
its  report with respect to such financial statements on February 25, 2002. This
audit covered financial information for the 2001 fiscal year that is included in
this  Form  10-K  under  "Selected  Financial  Data."

     In  2002, the Company's board of directors approved the appointment of BKD,
LLP  as its independent accountants to audit its financial statements for fiscal
year  2002.  BKD, LLP, replaced Arthur Andersen LLP, which had previously served
as  its  independent  auditors.  The  Company  had  no disagreements with Arthur
Andersen  LLP  on  any  matter  of  accounting  principle or practice, financial
statement  disclosure,  auditing  scope  or  procedure required to be disclosed.

     Arthur  Andersen  LLP  has  stopped conducting business before the SEC, has
ceased accounting and audit-related practice and has limited assets available to
satisfy the claims of creditors. As a result, security holders may be limited in
your  ability to recover damages from Arthur Andersen LLP under federal or state
law  if it is later determined that there are false statements contained in this
Form  10-K  relating  to  financial  data  audited  by  Arthur  Andersen LLP. In
addition,  the  ability  of Arthur Andersen LLP to satisfy any claims (including
claims arising from its provision of auditing and other services to the Company)
is limited as a result of the diminished amount of assets of Arthur Andersen LLP
that  are  now  or  may  in  the  future  be  available  to  satisfy  claims.

ITEM  1B.  UNRESOLVED  STAFF  COMMENTS.

      Not  applicable.

<TABLE>
<CAPTION>

ITEM  2.  PROPERTIES.

     The  principal  properties  of  the  Company  as of April 14, 2006, were as
follows:



Location                Owned/Leased     Description of Property
----------------------  ------------  -----------------------------
<S>                     <C>           <C>
Assumption, Illinois    Own           Manufacturing/Sales
Paris, Illinois         Own           Manufacturing/Assembly
Newton, Illinois        Own           Manufacturing/Assembly
Vandalia, Illinois*     Own           Manufacturing/Assembly
Flora, Illinois         Own           Manufacturing/Assembly
Clear Lake, Iowa        Own           Sales/Warehouse
Sioux City, Iowa        Lease         Sales/Warehouse
Marau, Brazil           Own           Manufacturing/Sales
Penang, Malaysia        Lease         Manufacturing/Sales/Warehouse
Queretero, Mexico       Lease         Sales/Warehouse
Honeydew, South Africa  Lease         Sales/Warehouse
Poznan, Poland          Lease         Sales
Shanghai, China         Lease         Sales/Warehouse
</TABLE>


*  A  decision  has  been  made  since  December  31, 2005 to close the Vandalia
facility.  The  estimated  closing  date  is  July  1,  2006.  Approximately  75
employees  will  be  affected by the closing. All of the affected employees have
been  offered  an  opportunity to relocate, although it is too early to know how
many  will  take  advantage  of  the offer.  Vandalia accounts for approximately
93,000  square  feet,  which  is approximately 6.3% of the total domestic square
footage  of  the  Company.

     The  corporate  headquarters  for  the  Company  is  located in Assumption,
Illinois.
                                       15
<PAGE>

     The Company's owned facilities (other than its Brazil facility) are subject
to  mortgages held by Wachovia Capital Finance.  The Company's leased facilities
are  leased  through  operating  lease agreements with varying expiration dates.
For  information  on operating leases, see Note 12 to the Consolidated Financial
Statements  included  in  Item  8  hereof.

     The Company believes that its facilities are suitable for their present and
intended purposes and have adequate capacity for the Company's current levels of
operation.


ITEM  3.  LEGAL  PROCEEDINGS.

     The  Company  is  involved in various legal matters arising in the ordinary
course of business which, in the opinion of management, are not expected to have
a  material  adverse  effect  on  the Company's financial position or results of
operations.


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

     No  matters  were submitted to a vote of the security holder of the Company
during  the  fourth  quarter  of  the  fiscal  year  ended  December  31,  2005.


                                       16
<PAGE>

                                     PART II

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

     There  is  no  established  public  trading  market  for  any  class of the
Company's  common  stock.  As of April 14, 2006, the Company had 1 holder of its
common stock.  See Item 12, "Security Ownership of Certain Beneficial Owners and
Management".

     The  Company generally has not paid dividends in the past, except to enable
its  stockholders  to  pay  taxes  resulting  from  the  Company's  status  as a
subchapter  "S"  corporation.  As  of  May 16, 2005 the Company's tax status was
changed  to  a  "C"  corporation.  During  the  year ended December 31, 2005 the
Company  declared  dividends  totaling $7.9 million for tax purposes under the S
corporation status and $0.1 million under the C corporation status.  The Company
is  subject to certain restrictions on the payment of dividends contained in the
indenture  governing  the Company's 12 % Senior Subordinated Notes due 2013 (the
"Notes")  and  the  Company's credit facility with Wachovia Capital Finance (the
"Credit  Facility").  Future  dividends,  if  any, will depend upon, among other
things,  the  Company's  operations,  capital  requirements,  surplus,  general
financial  condition,  contractual  restrictions  and  such other factors as the
Board  of  Directors  of  the  Company,  may  deem  relevant.
<TABLE>
<CAPTION>


PURCHASES  OF  EQUITY  SECURITIES  BY  THE  ISSUER  AND  AFFILIATED  PURCHASERS


               Total  Number  of     Maximum  Number
               Shares  Purchased  as     of  Shares  that  may
     Total  Number  of     Average  Price  Paid     part  of Publicly     yet be
Purchased

          Shares Purchased  Per Share   Announced Plan  under the Plan
<S>       <C>               <C>         <C>             <C>
5/16/05*           826,948  $    52.90         826,948              --

</TABLE>



     * 826,948 shares purchased by GSI Holdings Corp. through publicly announced
plan  which  was  a  transaction  contemplated  and  provided  by  the  Board of
Directors.

                                       17
<PAGE>
<TABLE>
<CAPTION>
ITEM  6.  SELECTED  FINANCIAL  DATA.

     Set  forth  below  is  certain selected historical consolidated financial data for the Company as of and for the years ended
December  31,  2001, 2002, 2003, 2004 and 2005.  The selected historical consolidated financial data for the years indicated were
derived  from  the  audited  consolidated financial statements of the Company.  The information set forth below should be read in
conjunction  with  Item  7,  "Management's  Discussion  and  Analysis  of  Financial Condition and Results of Operations" and the
Consolidated  Financial  Statements  and  notes  thereto  included  in  Item  8  hereof.

     As  discussed  in  Item  7  and  Note  18  to  the  Consolidated Financial Statements, certain historical information in the
Consolidated  Financial Statements has been restated. Please read Item 7 and Note 18 to the Consolidated Financial Statements for
additional  information  about these restatements. The selected financial data set forth below has been adjusted to reflect these
restatements  for  all  periods.


                                                       YEARS ENDED DECEMBER 31,

                                                                    2001               2002        2003        2004       2005
                                                           -----------------------
                                                                  RESTATED           RESTATED    RESTATED    RESTATED
                                                           (dollars in thousands)
                                                           -----------------------
<S>                                                        <C>                      <C>         <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
 Sales                                                     $              228,938   $ 229,518   $ 236,868   $ 288,131   $344,144
 Cost of sales                                                            173,395     184,831     185,667     220,497    263,448
 Gross profit                                                              55,543      44,687      51,201      67,634     80,696
                                                           -----------------------  ----------  ----------  ----------  ---------
 Operating expenses                                                        43,960      41,641      43,580      48,882     63,300
 Operating income                                                          11,583       3,046       7,621      18,752     17,396
                                                           -----------------------  ----------  ----------  ----------  ---------
 Interest expense                                                         (14,397)    (13,010)    (13,215)    (14,104)   (15,074)
 Other income (expense)                                                       310        (610)        256         (90)       964
 Income (loss) before income taxes and minority interest                   (2,504)    (10,574)     (5,338)      4,558      3,286
                                                           -----------------------  ----------  ----------  ----------  ---------
 Provision (benefit) for income taxes                                        (762)        106        (995)        499        319
 Minority interest in net income of subsidiary                                 --         (26)        (77)        (92)      (178)
 Income (loss) from continuing operations                                  (1,742)    (10,706)     (4,420)      3,967      2,789
                                                           -----------------------  ----------  ----------  ----------  ---------
 Discontinued Operations:
 Gain from sale of discontinued operations                                     --          --          --         118         --
 Gain from discontinued operations, net of tax                                 95         303         142         (93)        --
 Net income (loss)                                         $               (1,647)  $ (10,403)  $  (4,278)  $   3,992   $  2,789
                                                           -----------------------  ----------  ----------  ----------  ---------

BASIC AND DILUTED EARNINGS PER SHARE:
 Continuing operations                                     $                (0.98)  $   (6.03)  $   (2.49)  $    3.04   $   3.37
 Discontinued operations                                                     0.05        0.17        0.08        0.02         --
 Net income (loss)                                         $                (0.93)  $   (5.86)  $   (2.41)  $    3.06   $   3.37
                                                           -----------------------  ----------  ----------  ----------  ---------

BALANCE SHEET DATA :
 Total Assets                                              $              150,238   $ 136,898   $ 129,131   $ 130,677   $227,648
 Long-term obligations                                     $              136,211   $ 139,735   $ 129,563   $ 133,963   $119,306
 Dividends per share                                       $                 0.60   $    1.01   $    0.65   $    1.24   $   9.71

</TABLE>






                                       18
<PAGE>

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

     The  following  discussion  of  the  financial  condition  and  results  of
operations  of  the  Company should be read in conjunction with the Consolidated
Financial  Statements  and  the  notes  included  in  Item  8  hereof.

GENERAL

     The  Company is a major worldwide manufacturer and supplier of agricultural
equipment. The Company's grain, swine and poultry products are used by producers
and  purchasers  of grain, and by producers of swine and poultry. Demand for our
agricultural  equipment  is  driven  by  the  overall  level of grain, swine and
poultry  production,  the  level  of  net  farm income, agricultural real estate
values  and  producers'  increasing  focus  on  improving  productivity in their
operations. In addition, fluctuations in grain and feed prices affect our sales,
with  sustained  increases  in  grain  and feed prices increasing demand for our
grain  equipment  and  decreasing demand for our swine and poultry equipment. We
believe  that  our  diversified  product  offerings  mitigate  the  effects  of
fluctuations in the price of grain. Sales of our swine and poultry equipment are
also  affected  by long-term trends in consumer demand for pork and poultry both
domestically  and  internationally.

     Sales  of  agricultural  equipment are seasonal, with farmers traditionally
purchasing  grain  storage bins and grain conditioning and handling equipment in
the  summer  and  fall  in conjunction with the harvesting season, and swine and
poultry  producers purchasing equipment during prime construction periods in the
spring,  summer  and  fall. The Company's sales, operating income and net income
have  historically  been  lower  during  the first and fourth fiscal quarters as
compared  to  the  second and third quarters. Traditionally, this has caused the
Company  to  have  increased  working  capital needs during the second and third
quarters  as  material  is  purchased  and  converted  to  inventory  and  then
receivables  during  the  year.

     Although  our  sales  are primarily denominated in U.S. dollars and are not
generally  affected  by  currency fluctuations (except for transactions from the
Company's  Brazilian  operation),  our  production  costs,  profit  margins  and
competitive position are affected by the strength of the U.S. dollar relative to
the  strength  of  the  currencies  in  countries  where  our products are sold.

     Our  international  sales have historically comprised a significant portion
of  our  total  sales. In 2005, 2004 and 2003, the Company's international sales
accounted for 32.7%, 34.9% and 34.1% of total sales, respectively. International
operations  generally  are  subject  to  various  risks  that are not present in
domestic  operations,  including  restrictions  on  dividends,  restrictions  on
repatriation  of  funds, unexpected changes in tariffs and other trade barriers,
difficulties in staffing and managing foreign operations, political instability,
fluctuations  in  currency  exchange  rates, reduced protection for intellectual
property  rights in some countries, seasonal reductions in business activity and
potentially  adverse  tax  consequences, any of which could adversely impact our
international  operations.

     The  primary raw materials we use to manufacture our products are steel and
polymers.  Fluctuations  in the prices of steel and, to a lesser extent, polymer
materials  can  impact  our  cost  of  sales.

RESTATEMENT

FIRST  RESTATEMENT

     During  the  Company's  year-end  review  of 2004, it discovered accounting
errors  in prior years' financial statements.  The errors have been corrected in
the  2003,  2002 and 2001 financial statements.  A description of the errors and
related  impact of each on the financial statements follows.  Amounts are stated
in  whole  dollars.

     At  the  end  of  2001,  the Company began the process of shutting down its
Mason City, Iowa plant, which served as the headquarters for its DMC subsidiary.
As  the  Company  began the revenue cycle process at its corporate headquarters,
cost  of  sales  estimates  were  understated during 2002, while cost accounting
records  were  being  developed for the products previously handled by the Mason
City  employees,  which  caused  the  remaining  inherited inventory costs to be
overstated  by  approximately  $6,470,000.  The  Company  became  aware  of  the
overstatement  in  early  2003, but erroneously assigned the overstated value to
inventory  that  would  flow  through the cost of sales over the next few years.
This  erroneous  correction  reduced  the  stated  value  of  the  inventory  by
approximately  $2,206,000  in  2003  and  $4,264,000  in  2004.  During the 2004
year-end closing process, this issue was re-examined, and the Company determined
that  it  would  be  appropriate  to restate the 2002 cost of sales and year-end
inventory,  the  period  when  the  overstatement  occurred.
                                       19
<PAGE>

     In 1997, the Company's majority stockholder began selling non-voting shares
to  certain  employees.  The  Company's majority stockholder helped finance each
employee's  purchase  with  a non-recourse loan (in the form of interest-bearing
notes)  to  each  employee with the shares as the only collateral for the notes.
APB  Opinion  25  and  its  interpretations  require  that these transactions be
imputed  to  the Company's financial statements and be accounted for as variable
stock awards, which practice the Company had not previously followed.  Treatment
of  the  transaction as a variable stock award requires the Company to recognize
as  compensation  expense  the  extent  to  which  the  fair market value of the
underlying  shares exceeds the original purchase price for such shares. The fair
value  of  the underlying shares first exceeded the price paid for the shares in
2002.  The  effect  of  recording  the  resulting  compensation  expense reduced
previously  reported  net  income  for  2003  by $484,097 and reduced previously
reported  net  income for 2002 by $89,511.  The dividends paid to the non-voting
shareholders  are  classified  as  compensation  expense  and reduced previously
reported  net  income  for 2003, 2002 and 2001 by $62,584, $113,647 and $84,810,
respectively.

     In  2002,  the  Company  entered  into an agreement with the manager of its
Brazilian  subsidiary  whereby  the  Company  agreed  to issue him shares of the
Brazilian subsidiary's stock primarily based on the financial performance of the
Brazilian  subsidiary.  This  agreement  constitutes  a  stock  compensation
arrangement  for  which  the  Company  did not previously recognize compensation
expense.  The  effect  of  recording  compensation  expense  related  to  this
arrangement  reduced  previously  reported  net  income for 2003 by $340,000 and
reduced  previously  reported  net  income  for  2002  by  $401,000.

     Prior to the 2004 closing process, the Company had been using Mexican Pesos
as  the  functional currency of its Mexican subsidiary.  During the 2004 closing
process,  the  Company  determined  that  the correct functional currency of its
Mexican subsidiary should be U.S. Dollars rather than Mexican Pesos.  The effect
of  this  change reduced previously reported 2003 and 2002 net income by $98,644
and $315,917, respectively, and increased previously reported 2001 net income by
$69,692.

     In  2001, 2002 and 2003, the Company's CEO and majority stockholder elected
not  to  accept  salary and board fees that were subsequently paid in 2004.  The
Company  did  not  accrue these amounts in those years.  The effects of accruing
compensation  for  the  Company's CEO reduced previously reported 2003, 2002 and
2001  net  income  by  $100,000,  $507,515  and  $257,000,  respectively.

     The Company changed from a stop-loss workers' compensation insurance policy
to a high-deductible self-insured policy in 2000 and did not subsequently accrue
a  liability  for  claims incurred but not reported.  The effect of accruing for
such  claims  in  2003,  2002 and 2001 reduced previously reported net income by
$289,506,  $698,246  and  $603,090,  respectively.

     The  Company  also  made  adjustments  in  2003,  2002  and 2001 to correct
previous  reporting  of overhead adjustments in overseas inventories and gain on
inter-company  sales.

SECOND  RESTATEMENT

     Subsequent  to the sale of all of the stock of the Company on May 16, 2005,
the  new  management  appointed  by  the  new  owner  of  the Company discovered
additional  accounting  errors  in prior years' financial statements. The errors
have  been  corrected  in  the  accompanying  2004,  2003  and  2002  financial
statements.  A  description  of  the  errors  and  related impact on each of the
financial  statements  follows.  Amounts  are  stated  in  whole  dollars.

     The  Company  made  adjustments  in  2004,  2003  and  2002  to correct its
allowance  for obsolete inventory to conform to the Company's historical policy.
The  effect  of  these  changes  reduced  net  income  by  $559,000  in 2004 and
$1,307,000  in  2002,  and  increased  net  income  by  $283,000  in  2003.

     The Company made adjustments in 2004, 2003 and 2002 to expense warranty and
research  and  development  costs, which were erroneously included in inventory.
The effect of these changes increased net income by $654,000 and $51,000 in 2004
and  2002,  respectively,  and  decreased  net  income  by  $558,000  in  2003.

     The  Company  made adjustments in 2004, 2003 and 2002 to correct the amount
of  overhead  that  was  included  in  inventory. The previous inventory balance
included  an excessive amount of overhead. The effect of these changes increased
net  income  by  $2,188,000  and  $1,777,000 in 2004 and 2003, respectively, and
decreased  net  income  by  $2,951,000  in  2002.

     The combined effect of these changes increased net income by $2,283,000 and
$1,502,000  in  2004  and 2003, respectively. With respect to prior fiscal years
summarized  in  Item  6  -  Selected  Financial Data, the combined effect of the
                                       20
<PAGE>
changes effected by the these restatements decreased net income by $4,207,000 in
2002  and  $1,836,000  in  2001.

The  impact of the above noted adjustments on the Company's financial statements
for  the  twelve  months  of  2004  and  2003 are summarized in the table below.
Amounts  are  stated  in  thousands  of dollars except for per share line items.

<TABLE>
<CAPTION>

          FIRST     AS     SECOND     AS

                                              AS PREVIOUSLY REPORTED   RESTATEMENT  RESTATED   RESTATEMENT    RESTATED
<S>                                           <C>                      <C>          <C>       <C>            <C>
FISCAL YEAR 2004(Note *)
Consolidated Balance Sheet:
     Inventory                                $                53,588            -         -  $     (4,935)  $  48,653
     Retained earnings                                          3,944            -         -        (4,935)       (991)

Consolidated Statement of Income:
     Cost of sales                                            222,780            -         -        (2,283)    220,497
     Operating income                                          16,469            -         -         2,283      18,752
     Net income                                                 1,709            -         -         2,283       3,992

     Basic and diluted earnings per   share   $                  1.31            -         -  $       1.75   $    3.06
</TABLE>


<TABLE>
<CAPTION>

          FIRST     AS     SECOND     AS

                                                        AS PREVIOUSLY REPORTED    RESTATEMENT    RESTATED    RESTATEMENT
<S>                                                    <C>                       <C>            <C>         <C>
FISCAL YEAR 2003 (Note *)
Consolidated Balance Sheet:
     Inventory                                         $                54,165   $     (4,562)  $  49,603   $     (7,218)

     Payroll and payroll related   expenses                              3,071            565       3,636             --
     Other accrued expenses                                              4,057          1,891       5,948             --
     Paid in capital                                                     3,006            574       3,580             --

     Accumulated other   comprehensive loss                            (11,929)           345     (11,584)            --
     Retained earnings                                                  12,531         (8,678)      3,853         (7,218)

Consolidated Statement of Income:
     Cost of sales                                                     187,650           (481)    187,169         (1,502)

     Selling, general and   administrative expenses                     36,354          3,602      39,956             --
     Operating income                                                    9,240         (3,121)      6,119          1,502
     Foreign currency transaction loss                                    (215)           (99)       (314)            --
     Other, net                                                         (3,544)         3,749         205             --

     Minority interest in net income of   subsidiary                        --            (77)        (77)            --
     Net income (loss)                                                  (6,232)           452      (5,780)         1,502

     Basic and diluted earnings per   share            $                 (3.51)  $       0.25   $   (3.26)  $       0.85

                                                        RESTATED
<S>                                                    <C>
FISCAL YEAR 2003 (Note *)
Consolidated Balance Sheet:
     Inventory                                         $  42,385

     Payroll and payroll related   expenses                3,636
     Other accrued expenses                                5,948
     Paid in capital                                       3,580

     Accumulated other   comprehensive loss              (11,584)
     Retained earnings                                    (3,365)

Consolidated Statement of Income:
     Cost of sales                                       185,667

     Selling, general and   administrative expenses       39,956
     Operating income                                      7,621
     Foreign currency transaction loss                      (314)
     Other, net                                              205

     Minority interest in net income of   subsidiary         (77)
     Net income (loss)                                    (4,278)

     Basic and diluted earnings per   share            $   (2.41)
</TABLE>


Note  *  The  reported  figures in these tables may differ from the Consolidated
Statement  of  Operations  that  have  been  previously  reported  due  to  the
reclassification  of certain amounts for discontinued operations now being shown
in  the  "As  Previously  Reported"  column.

HISTORICAL  PERFORMANCE

     Our  financial  statements  shown in Item 8 of this 10K have been presented
under two different bases of accounting, with all historical Company activity up
to  and  including  May  16,  2005  under the predecessor basis, and all Company
activity  from May 17, 2005 to December 31, 2005 under the successor basis.  The
following  discussion  and  analysis  is based upon the aggregation of these two
bases  of  accounting  for  the  twelve  months ended December 31, 2005, and our
review of the business and operations during such period as compared to the same
period  of  2004.
                                       21
<PAGE>


     ITEMS  AFFECTING  COMPARABILITY

     On  April  6,  2005, all of the Company's stockholders entered into a stock
purchase  agreement  with  GSI  Holdings,  Inc.  (GSI  Holdings), a newly formed
holding  company  owned  primarily by an affiliate of Charlesbank Equity Fund V,
Limited  Partnership,  pursuant  to which GSI Holdings purchased for cash all of
the  issued  and  outstanding  shares  of the Company's common stock. On May 16,
2005,  under the "successor" basis of accounting, the closing of the Acquisition
occurred.  Consequently,  the  Company's financial statements shown in Item 8 of
this Form 10-K have been presented under two different bases of accounting, with
all  historical  Company  activity  up  to  and including May 16, 2005 under the
predecessor  basis,  and  all Company activity from May 17, 2005 to December 31,
2005  under the successor basis.  The following discussion and analysis is based
upon  the  aggregation  of  these  two bases of accounting for the twelve months
ended December 31, 2005, and the Company's review of the business and operations
during  such  period  as  compared  to  the  same  period  of  2004.

     As  a  result of the Acquisition, the Company's assets and liabilities have
been  adjusted  to  their  fair  value as of the closing date.  Depreciation and
amortization  expenses  are higher in successor accounting due to the fair value
assessments  resulting in increases to the carrying value of our property, plant
and  equipment  and  intangible assets.  The financial statements for the twelve
months  ended  December  31,  2005  include  the  following  expenses related to
purchase  accounting:  cost  of goods sold includes non-cash purchase accounting
charges  related  to  inventory  fair  value  adjustments  of  $5.3  million and
operating  expenses  include  $14.1  million  of  extraordinary items related to
seller  transaction  expenses,  transition  expenses  and  stock  compensation
expenses.

     The  Company  believes the discussion and analysis of The GSI Group, Inc.'s
financial  condition  and combined results of operations set forth below are not
indicative  nor  should  they  be  relied  upon  as  an  indicator of our future
performance.  Senior  management  appointed  by  the  board  of directors of the
purchaser  in  the  Acquisition  is  relatively new to the Company, and is still
engaged in an ongoing analysis of trends and operating indicators as they relate
to  future  performance.  Please  refer  to  the  footnotes  to  the  Financial
Statements  included in Item 8 of this report, including "Summary of Significant
Accounting  Policies-Basis  of  Statement Presentation" for important additional
information  concerning  the  basis  of  presentation  of  financial information
included  in  this  report.

                                       22
<PAGE>

RESULTS  OF  OPERATIONS

     The  following  table  sets forth a summary of the Company's operations and
their  percentages  of  total  revenue  for  the  periods indicated based on the
aggregation  of  historical  predecessor  and  successor  accounting (dollars in
thousands):
<TABLE>
<CAPTION>

                                        TWELVE MONTHS ENDED
                                                RESTATED
                                           2005     2004
                                           ----     ----


<S>                                                     <C>        <C>     <C>          <C>
                                                        AMOUNT          %  AMOUNT            %
                                                        ---------  ------  -----------  ------
Sales                                                   $344,144   100.0   $  288,131   100.0

Cost of sales                                            262,729    76.4      217,628    75.5
Warranty                                                     719     0.2        2,869     1.0
 Total cost of sales                                     263,448    76.6      220,497    76.5
                                                        ---------  ------  -----------  ------

   Gross profit                                           80,696    23.4       67,634    23.5

Selling, general and administrative expenses              53,157    15.5       37,551    13.1
FarmPro loss                                                  --     0.0        7,152     2.5
Amortization expense                                       6,213     1.8          649     0.2
Research and development expense                           3,930     1.1        3,530     1.2
 Total operating expenses                                 63,300    18.4       48,882    17.0
                                                        ---------  ------  -----------  ------

Operating income                                          17,396     5.0       18,752     6.5

Other income (expense):
 Interest expense                                        (15,074)   (4.3)     (14,104)   (4.9)
 Other, net                                                  964     0.2          (90)   (0.0)

Income before income tax expense and minority interest     3,286     0.9        4,558     1.6

Income tax provision                                         319     0.1          499     0.2
Minority interest in net income of subsidiary               (178)   (0.0)         (92)    0.0

Income before discontinued operations                      2,789     0.8        3,967     1.4

Gain from discontinued operations net of income taxes         --     0.0           25     0.0

Net income                                              $  2,789     0.8   $    3,992     1.4


Basic and diluted earnings per share                    $   3.37           $     3.06

Weighted average common shares outstanding               826,948            1,304,870
</TABLE>



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

     Sales  increased 19.4% to $344.1 million in 2005 compared to $288.1 million
in  2004.  Swine  equipment  sales  increased  49.5%  due  to  improving  market
conditions.  Grain  equipment  sales  increased  7.5%  in 2005 to $190.2 million
primarily as a result of strong grain storage demand due to increased crop size,
higher  realized  prices, and market share penetration of newer products such as
grain  transportation  equipment.  Poultry  equipment  sales  increased  30.5%
year-over-year,  primarily  as  a  result  of gains in domestic market share and
higher  realized  prices.

     Gross  profit  increased  to $80.7 million in 2005, or 23.4% of sales, from
$67.6  million  or  23.5%  of  sales in 2004. This increase was primarily due to
increased  volume,  which allowed the company to leverage its fixed expenses and
higher  realized  prices,  but was mostly offset by a one-time expensing of fair
value  adjustments  of  $5.3 million.  The 2005 results included $4.6 million of
expense  for  workers  compensation  compared  to  $2.1  million  in 2004.  This
increase  in  workers  compensation expense, which was mainly non-cash, resulted
substantially from a comparable year over year increase in the Company's workers
compensation  reserve.  This  increase  was  driven by significantly higher cost
estimates  for 2005 claims compared to preceding years as a result of forecasted
increases  in  medical  and  legal  costs  for unsettled claims and was based on
market  loss  development  factors  estimated  by  a  third  party  provider.

                                       23
<PAGE>
     Operating  expenses  increased 29.5%, or $14.4 million, to $63.3 million in
2005  from  $48.9  million  in  2004.  This  increase  in operating expenses was
primarily  the  result  of a $3.9 million year-over-year increase in stock-based
compensation,  seller  transaction  expenses  of  $4.0  million  and  transition
expenses which includes consulting fees and management fees of $2.4 million.  In
total,  approximately  $14.1  million  of our operating expenses recorded during
2005  were extraordinary and non-recurring in nature (see Items of Comparability
above).  As a percentage of sales, operating expenses increased to 18.4% in 2005
from  17.0%  in  2004.

     Operating  income  decreased to $17.4 million in 2005 from $18.8 million in
2004.  Operating  income margins decreased to 5.1% of sales in 2005 from 6.5% in
2004.

     Interest  expense  increased  $1.0 million due to slightly higher borrowing
costs,  as well as increased levels of debt incurred to fund the issuance of 12%
bonds  in  2005.

     Net  income  in  2005  was  $2.8 million, compared to $4.0 million in 2004.

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

     Sales  increased 21.6% to $288.1 million in 2004 compared to $236.9 million
in  2003.  Swine  equipment  sales  increased  11.0%  due  to  improving  market
conditions.  Grain  equipment  sales  increased  26.6% in 2004 to $177.6 million
primarily as a result of strong grain storage demand due to increased crop size,
higher  realized  prices, and market share penetration of newer products such as
grain transportation equipment. Strong sales of grain equipment in our Agromarau
subsidiary  also  contributed to the increase. Poultry equipment sales increased
16.5%  year-over-year,  primarily  as a result of gains in domestic market share
and  higher realized prices. In October 2004, we sold the assets of our Canadian
subsidiary,  which  accounted for $0.6 million in 2004 sales as compared to $0.8
million  in  2003  sales.

     Gross  profit  increased  to $67.6 million in 2004, or 23.5% of sales, from
$51.2  million  or  21.6%  of  sales in 2003. This increase was primarily due to
increased  volume,  which allowed the company to leverage its fixed expenses and
higher  realized  prices,  but  was  mostly  offset  by  higher  material costs.

     Operating  expenses  increased  12.2%, or $5.3 million, to $48.9 million in
2004  from  $43.6  million  in 2003. This increase in operating expenses was the
result  of a $2.0 million year-over-year increase in stock-based compensation, a
$7.2  million increase in expenses associated with the simultaneous purchase and
sale  of  FarmPRO  in  December  2004,  offset  in part by $1.8 million in lower
litigation  and  other  expenses  in  2004  relating to a dispute with the Yemen
Company for Industrial Investment ("YCII") and cost reduction initiatives.  As a
percentage of sales, operating expenses decreased to 17.0% in 2004 from 18.4% in
2003.

     Operating  income  increased  to $18.8 million in 2004 from $7.6 million in
2003.  Operating  income margins increased to 6.5% of sales in 2004 from 3.2% in
2003.

     Interest  expense  increased  $0.9 million due to slightly higher borrowing
costs, as well as increased levels of debt incurred to fund stock repurchases in
2004.

     Net income in 2004 was $4.0 million, compared to a net loss of $4.3 million
in  2003.

Year  Ended  December  31,  2003  Compared  to  Year  Ended  December  31,  2002

     Sales  increased 3.2% or $7.4 million to $236.9 million in 2003 compared to
$229.5  million  in  2002.  Poultry  equipment  sales  were  essentially  flat.
Increases  in  demand  for  grain products were partially offset by decreases in
demand  for  swine  products.

     Gross  profit  increased  to  $51.2  million in 2003 or 21.6% of sales from
$44.7  million or 19.5% of sales in 2002.  This increase was primarily due to an
improvement in production efficiencies following the 2002 consolidation efforts.

     Operating  expenses increased 4.8% or $2.0 million to $43.6 million in 2003
from  $41.6  million  in  2002.  As  a  percentage  of sales, operating expenses
increased  to 18.4% in 2003 from 18.1% in 2002.  This increase was primarily the
result  of  the  write  off  of  the  Yemen  receivable.

     Operating  income  increased  to  $7.6 million in 2003 from $3.0 million in
2002.  Operating  income margins increased to 3.2% of sales in 2003 from 1.3% in
2002.
                                       24
<PAGE>

     Interest  expense  increased  $0.2 million due to slightly higher borrowing
costs.

     Net  loss  decreased  to  $4.3  million in 2003 from $10.4 million in 2002.

LIQUIDITY  AND  CAPITAL  RESOURCES

     The  Company  has historically funded capital expenditures, working capital
requirements,  debt  service,  stockholder  dividends and stock repurchases from
cash flow from its operations, augmented by borrowings made under various credit
agreements  and  the  sale  of  the  Notes.

     The Company's working capital requirements for its operations are seasonal,
with  investments  in working capital typically building in the second and third
quarters  and  then  declining  in  the  first and fourth quarters.  The Company
defines  working  capital  as  current  assets  less current liabilities.  As of
December 31, 2005, the Company had $51.5 million of working capital, an increase
of  $11.2 million as compared to its restated working capital as of December 31,
2004.  This  increase  in  working  capital  was  due  largely to an increase in
accounts  receivable  and  current  deferred  tax assets, partially offset by an
increase  in  accounts  payable.

     Operating  activities  generated  $18.5  million,  $9.9  million  and $13.4
million  of cash in 2005, 2004 and 2003, respectively. The increase in cash flow
from  operating  activities  from 2004 to 2005 of $8.6 million was primarily the
result of a change in inventory, depreciation and amortization, accounts payable
and  accrued  expenses  of  $27.2 million offset by changes in net income, other
current  assets,  accounts receivable and deferred taxes totaling $19.4 million.

     The  Company's  capital expenditures totaled $6.0 million, $6.3 million and
$1.7  million  in  2005, 2004 and 2003, respectively.  Capital expenditures have
primarily been for machinery and equipment and the expansion of facilities.  The
Company  anticipates  that  its  capital  expenditures in 2006 will be more than
those  in  2005  as  a  result  of  our  lean  enterprise  initiative.

     Cash  used  in  financing  activities  in 2005 consisted primarily of  $5.0
million  payment  of shareholder loans, $98.8 million payments of long-term debt
(including  the 10-1/4% bonds), $25.8 million payments under the Credit Facility
and  $8.0 million dividend for taxes offset by the issuance of $110.0 million of
long-term  debt (12% bonds) and $15.3 million infusion of capital.  Cash used in
financing  activities  in  2004 consisted primarily of $14.6 million of treasury
stock  purchases,  a  $2.3  million payment of shareholder loans, a $1.6 million
dividend for taxes offset by $2.9 million of borrowing under the Credit Facility
and  a  $7.1 million shareholder loan. Cash used in financing activities in 2003
consisted  primarily  of  $15.2  million  of  payments of long-term debt, a $2.2
million  payment  of  shareholder  loans  and  a $1.1 million dividend for taxes
offset by $2.2 million of borrowing under the Credit Facility and a $1.6 million
shareholder  loan.

     The  Company  believes  that  existing  cash, cash flow from operations and
available borrowings under the Credit Facility will be sufficient to support its
working  capital,  capital  expenditures  and  debt service requirements for the
foreseeable  future.

     On  October 31, 2003, the Company entered into a three-year credit facility
of  up  to  $75.0  million  with  lenders  led by Congress Financial Corporation
(Central) to replace its then existing senior credit facility limited to maximum
borrowings  of  $60.0  million.  A  $12.5 million term loan was included in that
facility.  On  July  9,  2004, the credit facility was amended to provide for an
additional  $14.6  million  term  loan,  the  proceeds  of  which  were  used to
repurchase shares of the Company's voting common stock from Craig Sloan upon his
retirement.  On  October  19,  2004,  the  credit  facility was again amended to
decrease  the interest rate on the term loan and to permit additional term loans
on  or  prior  to April 19, 2005, subject to an aggregate limit of $17.5 million
for  all term loans.  On February 2, 2005, the credit facility was again amended
to  permit  the  payment  of  annual  dividends under certain conditions, not to
exceed  $2.0  million  in  the  aggregate.

     On  April  6,  2005, all of the Company's stockholders entered into a stock
purchase  agreement  with  GSI  Holdings,  Inc. ("GSI Holdings"), a newly formed
holding  company  owned primarily by entities affiliated with Charlesbank Equity
Fund  V,  Limited Partnership, pursuant to which GSI Holdings purchased for cash
all  of  the issued and outstanding shares of the Company's common stock. On May
16,  2005,  under the "successor" basis of accounting, the closing of that stock
                                       25
<PAGE>
purchase  ("the Acquisition") occurred. Upon the closing of that stock purchase,
the  Company  became a direct, wholly owned subsidiary of GSI Holdings. The cash
costs  of  the  Acquisition  together  with  the  fees and expenses necessary to
consummate  the  transaction  were  financed  by  equity  contributions of $56.3
million,  issuance  of $110.0 million of senior subordinated notes (the "Notes")
due  May  15,  2013,  and  a  five year $60.0 million revolving credit facility.

     The  closing of our refinanced senior secured credit facility with Wachovia
Capital  Finance, which replaced the Congress Financial facility, consisted of a
$60.0  million  revolving  credit  facility.     The  Company's  credit facility
contains a number of covenants that, among other things, restrict our ability to
dispose  of  assets,  incur  additional  indebtedness,  pay or make dividends or
distributions  to  the Company's stockholder, create liens on assets, enter into
sale  and  leaseback  transactions  and otherwise restrict our general corporate
activities.  The Company is also required to comply with a fixed charge coverage
ratio  if  a  "trigger  event"  has  occurred.

     The Company's credit facility contains various events of default, including
defaults  relating  to  payments,  breaches  of  representations, warranties and
covenants,  certain  events  of  bankruptcy  and  insolvency,  defaults on other
indebtedness,  certain  liens  and encumbrances on assets and certain changes of
control  of  the  Company.

     Borrowings  under  the  credit facility are secured by substantially all of
the  Company's  assets.

     As  of  December  31,  2005 the Company had $9.2 million of revolving loans
outstanding  and  $5.1  million  of  standby  letters of credit under the credit
facility,  which  reduced  the overall availability under the credit facility to
$30.2  million.

     In  connection  with  the  closing  of the Acquisition on May 16, 2005, the
Company  entered  into  the  following  financing  transactions,  each  of which
occurred  prior  to  or  concurrently  with  the  closing  of  the  Acquisition:

-     the  closing  of  the  issuance  of  the  Notes;
-     the  closing  of  our  refinanced senior secured credit facility described
above.  Approximately  $29.5  million was drawn on the revolving credit facility
on the closing date, with additional availability of approximately $22.5 million
under  the  revolving  credit  facility  on  the  closing;
-     the call for redemption of all of our existing 10 1/4% senior subordinated
notes  due 2007, the deposit of all amounts necessary to redeem those notes with
the trustee, and the subsequent retirement of all of those notes upon completion
of  the  redemption;
-     the repayment in full of all amounts outstanding under our existing credit
facility;
-     the repayment in full of all amounts outstanding under loans made to us by
our  founder  and  selling  majority  stockholder;  and
-     the  cash  equity  contribution  to  GSI  Holdings  by our equity sponsor,
Charlesbank Equity Fund V, Limited Partnership (a small amount of which was made
by  nonaffiliated  funds) of $56.3 million, of which approximately $43.8 million
(less  certain expenses and other amounts) was paid to our selling stockholders,
and  approximately  $12.5  million  was  contributed  to  our  common  equity.

     Immediately  following the closing, the Company converted from a subchapter
"S"  corporation  to  a subchapter "C" corporation, which means that it became a
taxable entity for federal and state income tax purposes. For the portion of the
2005  fiscal year preceding the closing date, the Company made tax distributions
to its selling stockholders at the closing in an amount sufficient to allow them
to  pay  income  taxes  relating  to  such  period.

     The  Acquisition  of  the Company has been accounted for in accordance with
SFAS  No.  141  "Business  Combinations"  and  reflects  the  "push down" of GSI
Holdings'  basis into our financial statements. The purchase price was allocated
to  the  assets  acquired  and the liabilities assumed based on the estimates of
respective  fair  values  at  the  date  of  acquisition.  The  fair values were
determined  by  management  estimates and by independent third party valuations,
which  were  finalized  in  the  fourth  quarter.

                                       26
<PAGE>

     The following table summarizes the fair value of the assets acquired and of
the  liabilities  assumed  at  the  date  of  the  Acquisition.
<TABLE>
<CAPTION>



<S>                                    <C>
Cash                                   $     2,437
Accounts receivable, net                    36,044
Inventories, net                            60,910
Property, plant and equipment               33,418
Other intangible assets                     57,780
Goodwill                                    39,162
Other assets                                 4,163
                                       -----------

Total assets acquired                      233,914

Accounts payable and accrued expenses       38,282
Customer deposits                            5,641
Long-term debt                             150,212
Minority interest                            2,250
Deferred income taxes                          224
                                       -----------

Total liabilities assumed                  196,609
                                       -----------

Purchase price                         $    37,305
                                       ===========
</TABLE>


<TABLE>
<CAPTION>



ACQUISITION AND FINANCING                               AS OF MAY 17, 2005
-----------------------------------------------------

<S>                                                    <C>
Cash paid upon acquisition                             $            34,934
Repay old indebtedness                                             149,864
Bond repayment penalty                                               1,729
Repayment of interest                                                1,252
Estimate of acquisition expenses                                     2,371
                                                       --------------------
Acquisition Consideration                                          190,150


Historical net book value of tangible assets acquired               87,583
                                                       --------------------
Excess purchase price to be allocated                              102,567

Inventory step-up                                                   (5,288)
Property, plant and equipment step-up                                 (561)
Other intangibles                                                  (57,780)
Deferred tax liability                                                 224
Goodwill                                                           (39,162)
                                                       --------------------

                                                       $                 0
                                                       ====================
</TABLE>



     The  aggregate  amortization  expense  for  the period May 17, 2005 through
December  31,  2005  for  the identified intangible assets was $6.1 million. The
identified  intangible  assets are being amortized on a straight-line basis over
their  individual  estimated useful lives.  The tax goodwill of $44.5 million is
amortized  over  15  years.

     The carrying value of inventory was increased by approximately $5.3 million
to  reflect  the  inventory  fair  value at May 16, 2005. The effect of the fair
value  adjustment is to increase the cost of goods sold and thereby reduce gross
profit in future periods when this inventory is sold.  During the period May 17,
2005 through December 31, 2005, cost of goods sold included $5.3 million of this
fair  value  adjustment.
                                       27
<PAGE>

     The  carrying  value  of  property,  plant  and  equipment was increased by
approximately $0.6 million to reflect the fair value at May 16, 2005. The effect
of  the  fair  value adjustment is to increase costs and expenses for additional
depreciation  in  future  periods  over  the  useful  lives  of  the  assets.

     The  following  schedule  explains the changes in Stockholders' Equity as a
result  of  the  purchase:
<TABLE>
<CAPTION>


                                                              TOTAL
<S>                                                         <C>
Predecessor as of December 31, 2004 as restated             $(46,835)

Change to predecessor equity (January 1 - May 16, 2005)(1)    (4,600)

Predecessor balance as of May 16, 2005                       (51,435)

Change to successor equity (May 17 - December 31, 2005)(2)   111,274

Successor equity at December 31, 2005                       $ 59,839
</TABLE>



(1)     The  details  of  the  change to predecessor equity from January 1, 2005
through  May  16, 2005 consists of a net loss, stock-based compensation, foreign
currency  translation  adjustments  and  dividends.

(2)     The  details of the change to successor equity from May 17, 2005 through
December  31, 2005 consists of purchase accounting, net income, foreign currency
translation  adjustments  and  dividends.

     The Company does not have any off-balance sheet arrangements as of December
31,  2005.
<TABLE>
<CAPTION>

CONTRACTUAL  OBLIGATIONS


                                  PAYMENTS DUE BY PERIOD
                                 ------------------------
                                      (IN THOUSANDS)
                                 ------------------------
                                          TOTAL             2006     2007     2008    THEREAFTER
                                 ------------------------  -------  -------  -------  -----------
<S>                              <C>                       <C>      <C>      <C>      <C>
Debt Obligations (a)             $                120,182  $   876  $   104  $    --  $   119,202
Operating Lease Obligations (b)                     3,858    1,445    1,143      777          493
Purchase Obligations  (c)                          57,148   57,148       --       --           --
Interest Obligation (d)                            99,000   13,200   13,200   13,200       59,400

Total                            $                280,188  $72,669  $14,447  $13,977  $   179,095
</TABLE>


(a)     Included  principal  payments  due on debt.  For additional information,
see  note  9  "Long-Term  Debt".
(b)     For  U.S. operations only. Lease obligations of foreign subsidiaries are
not material and therefore not included. For additional information, see note 12
"Commitments  and  Contingencies".
(c)     Purchase  obligation  amounts represent the minimum obligation under our
supply  arrangements  related  to    product and/or services entered into in the
normal  course  of  our  business.
(d)     Interest  related  to  the  12%  Senior  Subordinated  Notes.

INFLATION

     The  Company  believes  that inflation has not had a material effect on its
results  of  operations  or  financial  condition  during  recent periods.  As a
significant  portion  of the cost of goods sold is based on commodity costs, the
Company  practice is to modify its price structure for these economic movements.

CRITICAL  ACCOUNTING  POLICIES

     The  preparation  of  financial  statements  and  related  disclosures  in
conformity with accounting principles generally accepted in the United States of
America  requires  management to make judgments, assumptions, and estimates that
affect  the  amounts  reported  in  the  Consolidated  Financial  Statements and
accompanying  notes.  Note  2 to the consolidated financial statements describes
the  significant  accounting policies and methods used in the preparation of the
consolidated  financial statements.  Estimates are used for, but not limited to,
the  accounting  for  the  allowance  for  doubtful  accounts and sales returns,
                                       28
<PAGE>
inventory  allowances,  warranty  costs, self-insurance, investment impairments,
goodwill  impairments,  contingencies,  restructuring  costs  and  other special
charges,  equity  based  compensation  expense  and taxes.  Actual results could
differ  materially  from  these  estimates.  The  following  critical accounting
policies  are  impacted  significantly  by judgments, assumptions, and estimates
used  in  the  preparation  of  the  consolidated  financial  statements.

ALLOWANCE  FOR  DOUBTFUL  ACCOUNTS

     The  allowance  for  doubtful  accounts  is  based on our assessment of the
collectibility  of  specific  customer  accounts  and  the aging of the accounts
receivable.  If  there  were  a  deterioration  of  a  major  customer's
creditworthiness, or actual defaults were higher than our historical experience,
our  estimates  of  the recoverability of amounts due to us could be overstated,
which  could  have  an  adverse  impact  on  our  revenue.

REVENUE  RECOGNITION

     Revenue  is  recorded  when  products are shipped, collection is reasonably
assured, the price is fixed and determinable and there is persuasive evidence of
an arrangement.  Provisions are made at that time, when applicable, for warranty
costs  to  be  incurred.

     Revenues  on  long-term,  fixed-price  contracts  are  recognized using the
percentage  of  completion  method.  Percentage  of  completion is determined by
comparing the actual costs incurred to date to the total estimated cost for each
contract.  If  the  estimate  indicates  a  loss  on  a  particular  contract, a
provision  is  made  for  the entire estimated loss.  Retainages are included as
current  and  noncurrent assets in the accompanying consolidated balance sheets.
Revenue  earned  in  excess  of  billings  is comprised of revenue recognized on
certain contracts in excess of contractual billings on such contracts.  Billings
in  excess  of  costs  are  classified  as  a  current  liability.

INVENTORY

     Inventories  are  stated at the lower of cost or market, net of reserve for
obsolete  or  slow moving inventory.  Cost includes the cost of materials, labor
and factory overhead. The cost of all domestic and international inventories was
determined  using  the  first-in-first-out"  ("FIFO") method. As of December 31,
2005,  the  Company's policy for reserving for obsolete or slow moving inventory
was  to  accrue  reserves in the amount of the excess of amounts on hand over an
estimated  36 month usage, unless such excess amounts relate to newly introduced
SKUs  (stocked  items)  for which the Company has no long term sales history, in
which  case  no  reserve  is  applied.

WARRANTY

     We  accrue  for warranty costs based on historical trends in product return
rates  and  the  expected material and labor costs to provide warranty services.
If  we  were  to  experience  an  increase  in warranty claims compared with our
historical  experience  or  costs of servicing warranty claims were greater than
the expectations on which the accrual had been based, our gross margins could be
adversely  affected.

GOODWILL  IMPAIRMENT

     We  perform  goodwill  impairment tests on an annual basis.  In response to
changes  in  industry and market conditions, we may be required to strategically
realign  our  resources  and  consider  restructuring,  disposing,  or otherwise
exiting  businesses,  which  could  result  in  impairment  of  goodwill.

CONTINGENCIES

     We  are subject to the possibility of various loss contingencies arising in
the  ordinary  course  of  business.  We  consider  the  likelihood  of  loss or
impairment  of an asset or the incurrence of a liability, as well as our ability
to reasonably estimate the amount of loss in determining loss contingencies.  An
estimated loss contingency is accrued when it is probable that an asset has been
impaired  or  a  liability  has  been  incurred  and  the  amount of loss can be
reasonably estimated.  We regularly evaluate current information available to us
to  determine  whether  such  accruals  should  be  adjusted.

SELF  INSURANCE

     A  reserve for workers compensation IBNR (incurred but not reported) claims
is  established  based  on  information provided by the insurance carrier.  This
reserve  is  reviewed  quarterly.


                                       29
<PAGE>
ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

     The  Company  is  subject to market risk associated with adverse changes in
interest  rates  and foreign currency exchange rates.  The Company does not hold
any  market  risk  sensitive  instruments for trading purposes.  At December 31,
2005,  principal  exposed  to interest rate risk was limited to $10.2 million in
variable  rate  debt.  The  interest  rates  on  the  Company's  various  debt
instruments  range  from  4.5% to 12.0%.  The Company measures its interest rate
risk  by  estimating the net amount by which potential future net earnings would
be  impacted  by  hypothetical  changes  in market interest rates related to all
interest  rate  sensitive  assets and liabilities.  By this measure, a change in
the  interest  rate  of  1% would change the Company's earnings by $0.1 million.

     At  December  31,  2005,  approximately  15.8%  of the Company's sales were
derived from international operations with exposure to foreign currency exchange
rate  risk.  The  Company  mitigates  its  foreign  currency  exchange rate risk
principally by establishing local production facilities in the markets it serves
and  by  invoicing customers in the same currency as the source of the products.
The  Company  also  monitors  its  foreign currency exposure in each country and
implements  strategies  to  respond  to  changing  economic  and  political
environments.  The  Company's  exposure  to  foreign currency exchange rate risk
relates primarily to the financial position and the results of operations of its
Brazilian  subsidiary.  The  Company's exposure to such exchange rate risk as it
relates  to  the Company's financial position and results of operations would be
adversely  impacted by devaluation of the Brazilian Real per U.S. dollar.  These
amounts are difficult to accurately estimate due to factors such as the inherent
fluctuations  of  intercompany  account balances, balance sheet accounts and the
existing  economic  uncertainty  and  future  economic  conditions  in  the
international  marketplace.










                                       30
<PAGE>


ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA.
<TABLE>
<CAPTION>


                     INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF THE GSI GROUP, INC.


                                                                                                       PAGE
                                                                                                       ----
<S>                                                                                                    <C>
Report of Independent Registered Public Accounting Firms                                                 32
Consolidated Balance Sheets as of December 31, 2005 and 2004                                             42
Consolidated Statements of Operations for the years ended December 31, 2005, 2004 and 2003               43
Consolidated Statements of Stockholders' Equity (Deficit) for the years ended December 31, 2005, 2004
 and 2003                                                                                                44
Consolidated Statements of Cash Flows for the years ended December 31, 2005, 2004 and 2003               45
Notes to Consolidated Financial Statements                                                               46
</TABLE>








                                       31
<PAGE>
             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Audit  Committee  and  Board  of  Directors
The  GSI  Group,  Inc.
Assumption,  Illinois


We  have  audited  the accompanying consolidated balance sheet of The GSI Group,
Inc.  as  of December 31, 2005 and 2004, and the related consolidated statements
of operations, stockholders' equity (deficit) and cash flows for the periods May
17,  2005  through  December 31, 2005, January 1, 2005 through May 16, 2005, and
for  the two years ended December 31, 2004 and 2003.  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 did
not  audit the financial statements of certain foreign, wholly owned or majority
owned  subsidiaries,  which statements reflect total assets of $34.7 million and
$25.4  million  as of December 31, 2005 and 2004, respectively and total revenue
of $53.0 million, $16.8 million, $35.0 million and $21.5 million for the periods
ended  December  31, 2005 and May 16, 2005 and the years ended December 31, 2004
and  2003,  respectively.  Those  statements  were  audited by other accountants
whose  reports have been furnished to us, and our opinion, insofar as it relates
to  the amounts included for the certain foreign, wholly owned or majority owned
subsidiaries,  is  based  solely  on  the  reports  of  other  accountants.
We  conducted  our audits in accordance with the standards of the Public Company
Accounting  Oversight  Board  (United  States).  Those standards require that we
plan  and  perform  the  audit  to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.
Our  audits  also  included  auditing  the  adjustments to convert the financial
statements  of  all  foreign  subsidiaries  into accounting principles generally
accepted  in  the  United  States  of  America  for  purposes  of consolidation.
In  our  opinion, based on our audits and the reports of the other auditors, the
consolidated  financial  statements  referred  to  above  present fairly, in all
material  respects, the financial position of The GSI Group, Inc. as of December
31,  2005 and 2004, and the results of its operations and its cash flows for the
periods  May 17, 2005 through December 31, 2005, January 1, 2005 through May 16,
2005, and for the two years ended December 31, 2004 and 2003, in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

                                       32
<PAGE>
Audit  Committee  and  Board  of  Directors
The  GSI  Group,  Inc.
Page  2.

As  discussed  in  Note 18 to the consolidated financial statements, the Company
has  restated its financial statements for the years ended December 31, 2004 and
2003.


     /s/  BKD,  LLP


St.  Louis,  Missouri
April  6,  2006

                                       33
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


1.     We  have audited the accompanying balance sheets of Agromarau Ind stria e
Com  rcio  Ltda. as of December 31, 2005 and 2004, and the related statements of
income,  changes  in  shareholders' equity and changes in financial position for
the  period  then  ended,  all  expressed  in  Brazilian  reais. 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.

2.     We  conducted  our  audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we  plan  and perform the audit to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial  statement presentation. We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

3.     In  our  opinion,  the  financial  statements  referred  to above present
fairly,  in all material respects, the financial position of Agromarau Ind stria
e  Com  rcio  Ltda.  as  of  December  31,  2005 and 2004 and the results of its
operations  and  changes  in its financial position for each of the periods then
ended  in  conformity  with  accounting  practices  adopted  in  Brazil.

Rokembach  &  Cia.  Auditores

January  19,  2006.
Porto  Alegre,  Rio  Grande  do  Sul  -  Brazil



                                       34
<PAGE>






REPORT  OF  INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING  FIRM

1.  We have audited the accompanying balance sheets of Agromarau Ind stria e Com
rcio  Ltda. as of May 16, 2005 and December 31, 2004, and the related statements
of income, changes in shareholders' equity and changes in financial position for
the  period  then  ended,  all  expressed  in  Brazilian reais. 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.

2.  We  conducted  our  audits  in  accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we  plan  and perform the audit to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial  statement presentation. We believe that our
audits  provide  a  reasonable  basis  for  our  opinion.

3. In our opinion, the financial statements referred to above present fairly, in
all  material respects, the financial position of Agromarau Ind stria e Com rcio
Ltda. as of May 16, 2005 and December 31, 2004 and the results of its operations
and  changes  in  its  financial  position for each of the periods then ended in
conformity  with  accounting  practices  adopted  in  Brazil.


Rokembach  &  Cia.  Auditores


June  3,  2005

Porto  Alegre,  Rio  Grande  do  Sul  -  Brazil

                                       35
<PAGE>
REPORT  OF  INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING  FIRM


We  have  audited  the  accompanying  balance  sheets  of  Agromarau Industria e
Comercio Ltda. (the "Company") as of December 31, 2003 and 2002, and the related
statements  of  income, changes in shareholders' equity and changes in financial
position  for  each of the years in the two-year period ended December 31, 2003.
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 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 misstatements. An audit includes 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, as well as evaluating the
overall  financial statement presentation.  We believe that our audits provide a
reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material respects, the financial position of Agromarau Industria e Comercio
Ltda.  as  of  December 31, 2003 and 2002, and the results of its operations and
changes  in  its financial position for each of the years in the two-year period
ended  December  31,  2003,  in  conformity with accounting practices adopted in
Brazil.

DELOITTE  TOUCHE  TOHMATSU
Auditores  Independentes

January  23,  2004
Porto  Alegre,  RS,  Brazil




                                       36
<PAGE>

REPORT  OF  THE  INDEPENDENT  AUDITORS

TO  THE  SHAREHOLDERS  OF
GSI  GROUP  AFRICA  (PROPRIETARY)  LIMITED


We  have  audited  the  financial  statements  of GSI Group Africa (Proprietary)
Limited  set  out  on  pages 3 to 16 for the year ended 31 December 2005.  These
financial  statements  are  the  responsibility of the company's directors.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

SCOPE
We  conducted  our  audit in accordance with the standards of the Public Company
Accounting  Oversight  Board  (United  States).  Those standards require that we
plan  and  perform  the  audit to obtain reasonable assurance that the financial
statements  are  free of material misstatement.  The company has determined that
it  is  not  required  to  have, nor were we engaged to perform, an audit of its
internal  control  over  financial  reporting.  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  audit  provides  a  reasonable  basis  for  our opinion.

AUDIT  OPINION
In  our  opinion,  the  financial  statements  fairly  present,  in all material
respects,  the  financial  position  of  the company at 31 December 2005 and the
results  of  its  operations and cash flow for the year then ended in accordance
with  South African Statements of Generally Accepted Accounting Practice, and in
the  manner  required  by  the  Companies  Act  in  South  Africa.

GOING  CONCERN
Without  qualifying  our  opinion  above  we draw attention to the fact that the
liabilities  of  the  company  exceed  its assets.  The holding company, The GSI
Group, Inc., has issued a letter of continued financial support to The GSI Group
Africa  (Pty)  Ltd.  Refer  to  note  15  of  the  financial  statements.

PUBLIC  COMPANY  ACCOUNTING  OVERSIGHT  BOARD  (UNITED  STATES)
Without  qualifying  our  opinion  above  we draw attention to the fact that the
audit  was  not conducted in accordance with PCAOB Auditing Standard No. 2 - "An
Audit  of  Internal  Control  Over Financial Reporting, Conducted in Conjunction
With  An  Audit  of  Financial  Statements"

                            DETAILED INCOME STATEMENT
                            -------------------------
The  detailed  income  statement set out on pages 17 to 18 does not form part of
the  annual  financial statements and is presented as additional information. We
have  not  audited  this  detailed  income  statement  and accordingly we do not
express  an  opinion  on  it.



PRICEWATERHOUSECOOPERS  INC.
CHARTERED  ACCOUNTANTS  (SA)
REGISTERED  ACCOUNTANTS  AND  AUDITORS

PRETORIA

DATE:  3  FEBRUARY  2006

*The  page  numbers  noted  above  relate  to  the legal entity audit report not
contained  in  this  Annual  Report  Form  10-K.

                                       37
<PAGE>
                                     ------

REPORT  OF  THE  INDEPENDENT  AUDITORS
TO  THE  SHAREHOLDERS  OF
GSI  GROUP  AFRICA  (PROPRIETARY)  LIMITED


We  have  audited  the  financial  statements  of GSI Group Africa (Proprietary)
Limited  set  out  on  pages  3  to  16 for the period ended 16 May 2005.  These
financial  statements  are  the  responsibility of the company's directors.  Our
responsibility  is  to express an opinion on these financial statements based on
our  audit.

SCOPE
We  conducted  our  audit in accordance with the standards of the Public Company
Accounting  Oversight  Board  (United  States).  Those standards require that we
plan  and  perform  the  audit to obtain reasonable assurance that the financial
statements  are  free of material misstatement.  The company has determined that
it  is  not  required  to  have, nor were we engaged to perform, an audit of its
internal  control  over  financial  reporting.  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  audit  provides  a  reasonable  basis  for  our opinion.

AUDIT  OPINION
In  our  opinion,  the  financial  statements  fairly  present,  in all material
respects,  the  financial position of the company at 16 May 2005 and the results
of  its  operations  and  cash flow for the period then ended in accordance with
South  African  Statements of Generally Accepted Accounting Practice, and in the
manner  required  by  the  Companies  Act  in  South  Africa.

GOING  CONCERN
Without  qualifying  our  opinion  above  we draw attention to the fact that the
liabilities  of  the  company  exceed  its assets.  The holding company, The GSI
Group, Inc., has issued a letter of continued financial support to The GSI Group
Africa  (Pty)  Ltd.  Refer  to  note  15  of  the  financial  statements.

PUBLIC  COMPANY  ACCOUNTING  OVERSIGHT  BOARD  (UNITED  STATES)
Without  qualifying  our  opinion  above  we draw attention to the fact that the
audit  was  not conducted in accordance with PCAOB Auditing Standard No. 2 - "An
Audit  of  Internal  Control  Over Financial Reporting, Conducted in Conjunction
With  An  Audit  of  Financial  Statements".



PRICEWATERHOUSECOOPERS  INC.
CHARTERED  ACCOUNTANTS  (SA)
REGISTERED  ACCOUNTANTS  AND  AUDITORS

PRETORIA

DATE:  21  JULY  2005

                                       38
<PAGE>
                                     ------


Report of Independent Auditors to the Members of GSI Group Africa (Proprietary)
                                     Limited

We  have  audited  the  annual  financial  statements  of  GSI  Group  Africa
(Proprietary)  Limited  set  out on pages 3 to 16 for the year ended 31 December
2004.  These  financial  statements  are  the  responsibility  of  the company's
directors.  Our  responsibility  is  to  express  an  opinion on these financial
statements  based  on  our  audit.

SCOPE

We  conducted  our audits in accordance with the standards of the Public Company
Accounting  Oversight  Board (United States), except for PCAOB Auditing Standard
No.-2"-  "An  audit  of  internal control over financial reporting, conducted in
conjunction with an audit of financial statements". Those standards require that
we  plan  and perform the audit to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement. An audit includes:

-     Examining,  on  a  test  basis,  evidence  supporting  the  amounts  and
disclosures  in  the  financial  statements,

-     Assessing the accounting principles used and significant estimates made by
management,  and

-     Evaluating  the  overall  financial  statement  presentation.

We  believe  that  our  audit  provides  reasonable  basis  for  our  opinion.

AUDIT  OPINION

In  our  opinion,  the  financial  statements  fairly  present,  in all material
respects,  the  financial  position  of the company at 31 December 2004, and the
results  of  its  operations and cash flow for the year then ended in accordance
with  South African Statements of Generally Accepted Accounting Practice, and in
the  manner  required  by  the  Companies  Act  in  South  Africa.

GOING  CONCERN

Without  qualifying  our  opinion  above  we draw attention to the fact that the
liabilities  of  the company exceed the assets. The holding company has issued a
letter  of  continued financial support to The GSI Group Africa (pty) Ltd. Refer
to  note  15  of  the  financial  statements.

PUBLIC  COMPANY  ACCOUNTING  OVERSIGHT  BOARD  (UNITED  STATES)

Without  qualifying  our  opinion  above  we draw attention to the fact that the
audit  was  not conducted in accordance with PCAOB Auditing Standard No.-2"- "An
audit  of  internal  control  over financial reporting, conducted in conjunction
with  an  audit  of  financial  statements".

PricewaterhouseCoopers  Inc.
Chartered  Accountants  (SA)
Registered  Accountants  and  Auditors

Pretoria
13  April  2005


*The  page  numbers  noted  above  relate  to  the legal entity audit report not
contained  in  this  Annual  Report  Form  10-K.


                                       39
<PAGE>
                                     ------

REPORT  OF  THE  AUDITORS  TO  THE  DIRECTORS  OF
THE  GSI  ASIA  GROUP  SDN.  BHD.
(Company  No.  392746  V)
(Incorporated  in  Malaysia)

1.     We  have audited the financial statements of The GSI Asia Group Sdn. Bhd.
for  the  financial  year ended 31 December 2005 in accordance with our terms of
engagement  dated 12 December 2005. These financial statements, set out on pages
3  to  25 are the responsibility of the Company's directors.  Our responsibility
is  to  express an opinion on these financial statements based on our audit.  We
conducted  our  audit  in  accordance  with  the standards of the Public Company
Accounting Oversight Board (United States).  The relevant standards require that
we  plan  and perform the audit to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
these  financial  statements  which  have  been  prepared  by  the  Directors in
accordance  with  the  accounting  policies normally adopted by the Company.  An
audit  also  includes  assessing  the accounting principles used and significant
estimates  made  by  the  Directors, as well as evaluating the overall financial
statement  presentation.  We  believe that our audit provides a reasonable basis
for  our  opinion.
2.     These  financial  statements  have  been  prepared  to  be used solely in
connection  with the preparation of the consolidated financial statements of The
GSI  Group,  Inc.  as at 31 December 2005. Our audit opinion is intended for the
purpose  and  benefit to the Directors of The GSI Asia Group Sdn. Bhd. The audit
has  not  been  planned  or  conducted in contemplation of reliance by any third
party  or with respect to any specific transaction. Therefore, items of possible
interest  to  a third party have not been specifically addressed and matters may
exist  that  would  be  assessed  differently  by  a  third  party,  possibly in
connection  with  a  specific  transaction.
3.     In  our  opinion,  the  financial  statements as set out on pages 3 to 25
present  fairly, in all material respects, the financial position of the Company
as at 31 December 2005, and the results and cash flows of its operations for the
financial  year  ended  31  December  2005,  in  accordance  with the accounting
policies  normally  adopted by the Company as set out in Note 2 to the financial
statements.


PricewaterhouseCoopers
Chartered  Accountants

Penang



*The page numbers and footnote references noted above relate to the legal entity
audit  report  not  contained  in  this  Annual  Report  Form  10-K.

                                       40
<PAGE>





REPORT  OF  THE  AUDITORS  TO  THE  DIRECTORS  OF
THE  GSI  ASIA  GROUP  SDN.  BHD.
(Company  No.  392746  V)
(Incorporated  in  Malaysia)

1.     As  per  our  terms  of engagement dated 27 May 2005, we have audited the
balance sheet of The GSI Asia Group Sdn. Bhd. as of 16 May 2005, and its related
statement  of income and cash flows for the financial period from 1 January 2005
to  16  May  2005.  These financial statements, set out on pages 3 to 25 are the
responsibility  of the Company's directors.  Our responsibility is to express an
opinion  on  these  financial  statements  based on our audit.  We conducted our
audit  in  accordance  with  the  standards  of  the  Public  Company Accounting
Oversight  Board  (United  States) except for PCAOB Auditing Standard No. 2- "An
audit  of  internal  control  over financial reporting, conducted in conjunction
with  an audit of financial statements".  The relevant standards require that we
plan  and  perform  the  audit  to obtain reasonable assurance about whether the
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
these  financial  statements  which  have  been  prepared  by  the  directors in
accordance  with  the  accounting  policies normally adopted by the Company.  An
audit  also  includes  assessing  the accounting principles used and significant
estimates  made  by  directors,  as  well  as  evaluating  the overall financial
statement  presentation.  We  believe that our audit provides a reasonable basis
for  our  opinion.
2.     In  accordance  with  The  GSI  Group,  Inc.  guidelines, these financial
statements  have  been  prepared  to  be  used  solely  in  connection  with the
preparation  of the consolidated financial statements of The GSI Group, Inc, for
the  financial  period  from 1 January 2005 to 16 May 2005. Our audit opinion is
intended for the purpose and benefit of those to whom it is addressed. The audit
will not be planned or conducted in contemplation of reliance by any third party
or  with  respect  to  any  specific  transaction.  Therefore, items of possible
interest  to  a  third  party will not be specifically addressed and matters may
exist  that  would  be  assessed  differently  by  a  third  party,  possibly in
connection  with  a  specific  transaction.
3.     In  our  opinion,  the  financial  statements as set out on pages 3 to 25
present  fairly, in all material respects, the financial position of the Company
as  of  16  May  2005,  and the results and cash flows of its operations for the
financial  period  from  1  January  2005 to 16 May 2005, in accordance with the
accounting  policies normally adopted by the Company as set out in Note 2 to the
financial  statements.







PricewaterhouseCoopers

Chartered  Accountants

Penang



*The page numbers and footnote references noted above relate to the legal entity
audit  report  not  contained  in  this  Annual  Report  Form  10-K.


                                       41
<PAGE>
<TABLE>
<CAPTION>

                                        THE GSI GROUP, INC.
                                    CONSOLIDATED BALANCE SHEETS
                                     DECEMBER 31, 2005 AND 2004
                          (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

                                                                          SUCCESSOR    PREDECESSOR
                                                                         -----------  -------------
ASSETS                                                                      2005          2004
-----------------------------------------------------------------------  -----------  -------------
                                                                                        RESTATED
                                                                                      -------------
<S>                                                                      <C>          <C>
Current Assets:
 Cash and cash equivalents                                               $    2,522   $      2,304
 Accounts receivable, net                                                    35,801         24,656
 Inventories, net                                                            46,746         48,653
 Prepaids                                                                     2,961          3,489
 Income tax receivable                                                        1,499             --
 Deferred taxes                                                               4,645             --
 Other                                                                        3,165          3,416
     Total current assets                                                    97,339         82,518
                                                                         -----------  -------------

Property, Plant and Equipment, net                                           33,933         32,548

Other Assets:
 Goodwill                                                                    39,162         10,264
 Other intangible assets, net                                                51,684          1,494
 Deferred financing costs, net                                                5,105          2,449
 Deferred taxes, net                                                            323          1,309
 Other                                                                          102             95
     Total other assets                                                      96,376         15,611
                                                                         -----------  -------------
     Total assets                                                        $  227,648   $    130,677
                                                                         -----------  -------------

LIABILITIES AND  STOCKHOLDERS' EQUITY (DEFICIT)
-----------------------------------------------------------------------
Current Liabilities:
 Accounts payable                                                        $   20,989   $     16,629
 Payroll and payroll related expenses                                         6,683          4,652
 Accrued warranty                                                             2,335          2,764
 Other accrued expenses                                                       9,710          5,881
 Customer deposits                                                            5,256          7,090
 Current maturities of long-term debt                                           876          5,167
     Total current liabilities                                               45,849         42,183
                                                                         -----------  -------------

Long-Term Debt, less current maturities                                     119,306        133,963

minority interest                                                             2,654          1,366

Stockholders' Equity (Deficit):
 Common stock, $.01 par value, voting (authorized 6,900,000 shares;
issued 6,633,652 shares; outstanding 626,948 shares)                             16             16
 Common stock, $.01 par value, nonvoting (authorized 1,100,000 shares;
   issued 1,059,316 shares; outstanding 200,000 shares)                           2              2
 Additional paid-in capital                                                  97,881          5,821
 Accumulated other comprehensive income (loss)                                  762        (10,124)
 Retained earnings                                                            2,737           (991)
 Treasury stock, at cost, voting (6,006,704 shares)                         (41,550)       (41,550)
 Treasury stock, at cost, nonvoting (859,316 shares)                             (9)            (9)
     Total stockholders' equity (deficit)                                    59,839        (46,835)
                                                                         -----------  -------------
     Total liabilities and stockholders' equity (deficit)                $  227,648   $    130,677
                                                                         -----------  -------------
</TABLE>


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

                                       42
<PAGE>
<TABLE>
<CAPTION>

THE  GSI  GROUP,  INC.
CONSOLIDATED  STATEMENTS  OF  OPERATIONS

FOR  THE  YEARS  ENDED  DECEMBER  31,  2005,  2004  AND  2003
(IN  THOUSANDS,  EXCEPT  SHARE  AND  PER  SHARE  DATA)



                                                                     Successor    Predecessor
                                                                     May 17 -      Jan. 1 -
                                                                    -----------  -------------
                                                                      Dec. 31       May 16,      RESTATED     RESTATED
                                                                                                -----------  -----------
                                                                       2005          2005          2004         2003
                                                                    -----------  -------------  -----------  -----------
<S>                                                                 <C>          <C>            <C>          <C>
Sales                                                               $  229,509   $    114,635   $  288,131   $  236,868

Cost of sales                                                          178,996         83,733      217,628      183,400
Warranty expense                                                         1,238           (519)       2,869        2,267
 Total cost of sales                                                   180,234         83,214      220,497      185,667
                                                                    -----------  -------------  -----------  -----------

   Gross profit                                                         49,275         31,421       67,634       51,201

Selling, general and administrative expenses                            28,824         24,333       37,551       39,956
FarmPro loss                                                                --             --        7,152           --
Amortization expense                                                     6,047            166          649        1,094
Research and development expense                                         2,695          1,235        3,530        2,530
 Total operating expenses                                               37,566         25,734       48,882       43,580
                                                                    -----------  -------------  -----------  -----------

   Operating income                                                     11,709          5,687       18,752        7,621

Other income (expense):
 Interest expense                                                       (9,836)        (5,238)     (14,104)     (13,215)
 Interest income                                                           316            134          446          615
 Gain(loss) on sale of equipment                                            23             84         (452)        (250)
 Foreign currency transaction gain (loss)                                 (154)           370         (146)        (314)
 Other, net                                                                 72            119           62          205

Income (loss) from continuing operations before income taxes
   and minority interest                                                 2,130          1,156        4,558       (5,338)

Income tax provision (benefit)                                            (796)         1,115          499         (995)
Minority interest in net income from subsidiary                            (73)          (105)         (92)         (77)
Income (loss) from continuing operations                                 2,853            (64)       3,967       (4,420)
                                                                    -----------  -------------  -----------  -----------

Discontinued operations:
    Gain from sale of discontinued operations                               --             --          118           --
    Gain (loss) from discontinued operations, net of income taxes           --             --          (93)         142

   Net income (loss)                                                $    2,853   $        (64)  $    3,992   $   (4,278)

Basic and diluted earnings (loss) per share                         $     3.45   $      (0.08)  $     3.06   $    (2.41)

Weighted average common shares outstanding                             826,948        826,948    1,304,870    1,775,000
</TABLE>



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


                                       43
<PAGE>
<TABLE>
<CAPTION>

THE  GSI  GROUP,  INC.
CONSOLIDATED  STATEMENTS  OF  STOCKHOLDERS'  EQUITY  (DEFICIT)
                                FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                                          (IN THOUSANDS, EXCEPT SHARE DATA)

                                                        Common Stock
                                                        -------------
                                                           Voting      Nonvoting
                                                        -------------
<S>                                                     <C>            <C>         <C>          <C>      <C>

                                                                                                         Additional
                                                        Shares                     Shares                Paid-In
                                                        Outstanding    Amount      Outstanding  Amount   Capital
Restated Balance, December 31, 2002                        1,575,000   $       16      200,000  $     2  $     3,096
                                                        -------------  ----------  -----------  -------  -----------
 Stock-based compensation                                          -            -            -        -          484
 Other comprehensive loss-foreign currency
   translation adjustments                                         -            -            -        -            -
Restated Balance, December 31, 2003                        1,575,000   $       16      200,000  $     2  $     3,580
                                                        -------------  ----------  -----------  -------  -----------
 Stock-based compensation                                          -            -            -        -        2,241
 Other comprehensive loss-foreign currency
   translation adjustments                                         -            -            -        -            -
 Purchase of treasury stock                                 (948,052)           -            -        -            -
Predecessor Balance, December 31, 2004 as restated           626,948   $       16      200,000  $     2  $     5,821
                                                        -------------  ----------  -----------  -------  -----------
 Predecessor stock-based compensation                              -            -            -        -        2,841
 Predecessor other comprehensive loss-foreign currency
   translation adjustments                                         -            -            -        -            -
Predecessor Balance, May 16, 2005                            626,948   $       16      200,000  $     2  $     8,662
                                                        -------------  ----------  -----------  -------  -----------
 Change in equity due to acquisition-May 17                        -            -            -        -       89,219
 Successor other comprehensive loss-foreign currency
   translation adjustments                                         -            -            -        -            -
Successor Balance, December 31, 2005                         626,948   $       16      200,000  $     2  $    97,881
                                                        -------------  ----------  -----------  -------  -----------





<S>                                                     <C>
                                                        Accumulated
                                                        Other
                                                        Comprehensive
                                                        Income (Loss)
Restated Balance, December 31, 2002                     $      (14,090)
                                                        ---------------
 Stock-based compensation                                            -
 Other comprehensive loss-foreign currency
   translation adjustments                                       2,506
Restated Balance, December 31, 2003                     $      (11,584)
                                                        ---------------
 Stock-based compensation                                            -
 Other comprehensive loss-foreign currency
   translation adjustments                                       1,460
 Purchase of treasury stock                                          -
Predecessor Balance, December 31, 2004 as restated      $      (10,124)
                                                        ---------------
 Predecessor stock-based compensation                                -
 Predecessor other comprehensive loss-foreign currency
   translation adjustments                                         536
Predecessor Balance, May 16, 2005                       $       (9,588)
                                                        ---------------
 Change in equity due to acquisition-May 17                      9,588
 Successor other comprehensive loss-foreign currency
   translation adjustments                                         762
Successor Balance, December 31, 2005                    $          762
                                                        ---------------
</TABLE>


<TABLE>
<CAPTION>


                                                                Treasury Stock
                                                                    Voting       Nonvoting
                                                                --------------
<S>                                                 <C>         <C>             <C>          <C>      <C>       <C>

                                                                                                                Total
                                                    Retained                                                    Stockholders'
                                                    Earnings    Shares          Amount       Shares   Amount    Equity(Deficit)
Restated Balance, December 31, 2002                 $   2,059        5,058,652  $  (26,950)  859,316  $    (9)  $       (35,876)
                                                    ----------  --------------  -----------  -------  --------  ----------------
 Net loss                                              (4,278)               -           -         -        -            (4,278)
 Stock-based compensation                                   -                -           -         -        -               484
 Other comprehensive loss-foreign
   currency translation adjustments                         -                -           -         -        -             2,506
 Dividends                                             (1,146)               -           -         -        -            (1,146)
Restated Balance, December 31, 2003                 $  (3,365)       5,058,652  $  (26,950)  859,316  $    (9)  $       (38,310)
                                                    ----------  --------------  -----------  -------  --------  ----------------
 Net income                                             3,992                -           -         -        -             3,992
 Stock-based compensation                                   -                -           -         -        -             2,241
 Other comprehensive loss-foreign
   currency translation adjustments                         -                -           -         -        -             1,460
 Dividends                                             (1,618)               -           -         -        -            (1,618)
 Purchase of treasury stock                                 -          948,052     (14,600)        -        -           (14,600)
Predecessor Balance, December 31, 2004 as restated  $    (991)       6,006,704  $  (41,550)  859,316  $    (9)  $       (46,835)
                                                    ----------  --------------  -----------  -------  --------  ----------------
 Predecessor net loss                                     (64)               -           -         -        -               (64)
 Predecessor stock-based compensation                       -                -           -         -        -             2,841
 Predecessor other comprehensive loss-foreign
   currency translation adjustments                         -                -           -         -        -               536
 Predecessor dividends                                 (7,913)               -           -         -        -            (7,913)

Predecessor Balance, May 16, 2005                   $  (8,968)       6,006,704  $  (41,550)  859,316  $    (9)  $       (51,435)
                                                    ----------  --------------  -----------  -------  --------  ----------------
 Change in equity due to acquisition-May 17             8,968                -           -         -        -           107,775
 Successor net income                                   2,853                -           -         -        -             2,853
 Successor other comprehensive loss-foreign
   currency translation adjustments                         -                -           -         -        -               762
 Successor dividends                                     (116)               -           -         -        -              (116)

Successor Balance, December 31, 2005                $   2,737        6,006,704  $  (41,550)  859,316  $    (9)  $        59,839
                                                    ----------  --------------  -----------  -------  --------  ----------------




<S>                                                 <C>
                                                    Compre-
                                                    hensive
                                                    Income
                                                       (Loss)
Restated Balance, December 31, 2002

 Net loss                                             (4,278)
 Stock-based compensation
 Other comprehensive loss-foreign
   currency translation adjustments                    2,506
 Dividends                                          $ (1,772)
Restated Balance, December 31, 2003

 Net income                                            3,992
 Stock-based compensation
 Other comprehensive loss-foreign
   currency translation adjustments                    1,460
 Dividends
 Purchase of treasury stock                         $  5,452
Predecessor Balance, December 31, 2004 as restated

 Predecessor net loss                                    (64)
 Predecessor stock-based compensation
 Predecessor other comprehensive loss-foreign
   currency translation adjustments                      536
 Predecessor dividends                              $    472
                                                    ---------
Predecessor Balance, May 16, 2005

 Change in equity due to acquisition-May 17
 Successor net income                                  2,853
 Successor other comprehensive loss-foreign
   currency translation adjustments                      762
 Successor dividends                                $  3,615
                                                    ---------
Successor Balance, December 31, 2005

</TABLE>


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


                                       44
<PAGE>
<TABLE>
<CAPTION>

THE  GSI  GROUP,  INC.
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS

FOR  THE  YEARS  ENDED  DECEMBER  31,  2005,  2004  AND  2003
 (IN  THOUSANDS)

                                                                   Successor    Predecessor
                                                                   May 17 -      Jan, 1 -
                                                                  -----------  -------------
                                                                    Dec. 31       May 16,      RESTATED    RESTATED
                                                                                              ----------  ----------
                                                                     2005          2005          2004        2003
                                                                  -----------  -------------  ----------  ----------
<S>                                                               <C>          <C>            <C>         <C>
Cash Flows From Operating Activities:
 Net income (loss)                                                $    2,853   $        (64)  $   3,992   $  (4,278)
 Adjustments to reconcile net income (loss) to cash provided
   by operating activities:
     Depreciation and amortization                                     9,013          2,070       5,303       6,350
     Amortization of deferred financing costs and debt discount          466            494         916         928
     Loss (gain) on sale of assets                                       (23)           (84)        452         249
     Deferred taxes                                                   (3,590)           (69)       (244)     (1,473)
     Minority interest in net income of subsidiaries                      73            105          92          77
     Minority interest compensation expense                              331            779         533         263
     Stock-based compensation                                             --          2,841       2,241         484
     Changes in:
       Accounts receivable, net                                          243        (11,388)      2,427      (3,809)
       Inventories, net                                               14,164         (6,968)     (6,268)      6,399
       Other current assets                                           (5,879)         5,160         445         (50)
       Accounts payable                                               (1,028)         5,388        (510)      6,076
       Payroll and payroll related expenses                             (383)         2,414       1,016          84
       Accrued warranty                                                  367           (796)      1,385          38
       Other accrued expenses                                          2,317          1,512         (67)        303
       Customer deposits                                                (385)        (1,449)     (1,785)      1,716
                                                                  -----------  -------------  ----------  ----------
Net cash flows provided by (used in) operating activities             18,539            (55)      9,928      13,357
                                                                  -----------  -------------  ----------  ----------

Cash Flows From Investing Activities:
 Capital expenditures                                                 (3,958)        (2,046)     (6,322)     (1,739)
 Proceeds from sale of equipment                                          83            268       1,657       2,742
 Other                                                                 1,052            (48)         13         687
                                                                  -----------  -------------  ----------  ----------
Net cash flows provided by (used in) investing activities             (2,823)        (1,826)     (4,652)      1,690
                                                                  -----------  -------------  ----------  ----------

Cash Flows From Financing Activities:
 Payments on stockholder loans                                        (5,012)            --      (2,295)     (2,194)
 Proceeds from stockholder loans                                                         12       7,146       1,574
 Proceeds from issuance of long-term debt                            110,000             --       1,850          --
 Payments on debt                                                         --            (90)         --     (15,227)
 Net borrowings under line-of-credit agreement                         9,832         10,369       2,881       2,242
 Payment of deferred financing costs                                  (3,108)          (407)         --          --
 Contributed capital                                                  15,326             --          --          --
 Repayment of predecessor debt                                      (144,160)            --          --          --
 Purchase of treasury stock                                               --             --     (14,600)         --
 Dividends                                                              (116)        (7,913)     (1,619)     (1,146)
 Other                                                                 1,511             50         169        (106)
                                                                  -----------  -------------  ----------  ----------
Net cash flows provided by (used in) financing activities            (15,727)         2,021      (6,468)    (14,857)
                                                                  -----------  -------------  ----------  ----------

Effect of Exchange Rate Changes on Cash                                   96             (7)         57         313
                                                                  -----------  -------------  ----------  ----------

CHANGE in Cash and Cash Equivalents                               $       85   $        133   $  (1,135)  $     503
Cash and Cash Equivalents, beginning of year                           2,437          2,304       3,439       2,936
                                                                  -----------  -------------  ----------  ----------
Cash and Cash Equivalents, end of year                            $    2,522   $      2,437   $   2,304   $   3,439
                                                                  ===========  =============  ==========  ==========
</TABLE>


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


                                       45
<PAGE>
                               THE GSI GROUP, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.     NATURE  OF  OPERATIONS

          The  GSI  Group,  Inc.,  a  Delaware corporation, and its subsidiaries
(collectively,  the  "Company")  manufacture  and  sell  equipment  for  the
agricultural  industry.  In  limited cases, the Company enters into contracts to
manufacture and supervise the assembly of grain handling systems.  The Company's
product  lines  include:  grain  storage  bins  and  related drying and handling
equipment  systems  and swine and poultry feed storage and delivery, ventilation
and  watering  systems.  The  Company's  headquarters  and  main  manufacturing
facility  are  in  Assumption,  Illinois, with other manufacturing facilities in
Illinois.  In addition, the Company has manufacturing and assembly operations in
Brazil,  Malaysia  and  China and selling and distribution operations in Mexico,
South  Africa  and  Poland.

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Basis  of  Consolidation

     The  accompanying  financial statements reflect the consolidated results of
the  Company.  All  intercompany transactions and balances have been eliminated.
The  Company  records  income  or loss on the sales to its foreign subsidiaries.
That  income  or  loss  is  not  recognized  until  the inventory is sold by the
subsidiary.  There  were  no  significant  differences  between  the  foreign
subsidiaries accounting principles pertinent to the countries they are domiciled
in  and  those  accounting principles generally accepted in the United States of
America.  The  Company's  subsidiaries  are  as  follows:

<TABLE>
<CAPTION>



COMPANY NAME                                           LOCATION
---------------------------------------------------  ------------
<S>                                                  <C>
The GSI Asia Group Sdn.Bhd                           Malaysia
GSI Cumberland C.A.A.                                Malaysia
The GSI Group Africa (Proprietary) Limited           South Africa
The GSI Group (Europe) sp. Z o.o                     Poland
GSI Cumberland de Mexico, S. de R.L. de C.V.         Mexico
Agromarau Industria E Comercio Ltda.                 Brazil
The GSI Group (Shanghai) Co., Ltd.                   China
The GSI Agricultural Equipments (Shanghai) Co., Ltd  China
</TABLE>



     Use  of  Estimates

     The  preparation  of  financial  statements  in  conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets  and  liabilities  and disclosure of contingent assets and liabilities at
the  date  of  the  financial statements and the reported amounts of revenue and
expenses  during  the  reporting period.  Actual results could differ from those
estimates.

     Cash  and  Cash  Equivalents

     The  Company  considers all short-term investments with original maturities
of  three  months  or  less  to  be  cash  equivalents.

     Concentration  of  Credit  Risk

     The  Company's  financial instruments that are exposed to concentrations of
credit  risk  consist  primarily of cash and cash equivalents and trade accounts
receivable.  The  Company  places  its  cash and temporary investments with high
quality  financial institutions.  At times, such investments may be in excess of
the  FDIC  insurance  limit  or may not be covered by insurance in the Company's
foreign  operations.  Temporary  investments  are valued at the lower of cost or
market  and  at  the  balance  sheet  dates approximate fair value.  The Company
primarily  serves customers in the agricultural industry.  This risk exposure is
limited  due  to the large number of customers comprising the Company's customer
base  and  its  dispersion  across  many  geographic  areas.  The Company grants
unsecured  credit  to  its  customers.  In  doing  so,  the  Company  reviews  a
                                       46
<PAGE>
customer's  credit  history  before  extending credit.  In addition, the Company
routinely  assesses  the  financial  strength  of  its  customers,  and,  as  a
consequence,  believes  that its trade accounts receivable risk is limited.  The
Company limits its international exposure to credit risk through the purchase of
insurance.

     Fair  Value  of  Financial  Instruments

     The  carrying  amounts  of  cash, receivables, accounts payable and accrued
expenses  approximate  fair value because of the short-term nature of the items.
The  carrying  amount of the Company's line of credit, notes and other payables,
approximate  their  fair  values  either  due  to  their  short term nature, the
variable  rates associated with these debt instruments or based on current rates
offered  to  the  Company  for  debt  with  similar  characteristics.

     Accounts  and  Notes  Receivable

     Accounts  receivable  are stated at the amount billed to customers plus any
accrued  and  unpaid  interest.  The  Company provides an allowance for doubtful
accounts,  which  is  based upon a review of outstanding receivables, historical
collection  information  and  existing economic conditions.  Accounts receivable
are  ordinarily due 30-60 days after the issuance of the invoice.  Accounts that
are  unpaid  after  the  due  date  bear interest at 1% per month.    Delinquent
receivables  are  written off based on individual credit evaluation and specific
circumstances  of  the  customer.

     Notes  receivable  are stated at their outstanding principal amount, net of
allowance  for  uncollectible  notes.  The  Company  provides  an  allowance for
uncollectible  notes,  which  is based upon a review of outstanding receivables,
historical collection information and existing economic conditions.  Outstanding
notes  accrue  interest based on the terms of the respective note agreements.  A
note  receivable  is  considered  delinquent when the debtor has missed three or
more  payments.    Delinquent  notes  are written off based on individual credit
evaluation  and  specific  circumstances  of  the  borrower.

     Inventories

     Inventories  are  stated at the lower of cost or market, net of reserve for
obsolete  or  slow moving inventory.  Cost includes the cost of materials, labor
and factory overhead. The cost of all domestic and international inventories was
determined  using  the  first-in-first-out"  ("FIFO") method. As of December 31,
2005,  the  Company's policy for reserving for obsolete or slow moving inventory
was  to  accrue  reserves in the amount of the excess of amounts on hand over an
estimated  36 month usage, unless such excess amounts relate to newly introduced
SKUs  (stocked  items)  for which the Company has no long term sales history, in
which  case  no  reserve  is  applied.

     Property,  Plant  and  Equipment

     Property,  plant  and  equipment  are  stated  at  cost  less  accumulated
depreciation.  The  cost  of property, plant and equipment acquired as part of a
business  acquisition  represents the estimated fair value of such assets at the
acquisition  date.  Depreciation is provided using the straight-line method over
the  following  estimated  useful  lives.
<TABLE>
<CAPTION>


                                YEARS
                                -----
<S>                             <C>
Building and Improvements       10-25
Machinery and Equipment          3-10
Office Equipment and Furniture   3-10
</TABLE>


     Repairs  and  maintenance  are  charged  to  expense as incurred.  Gains or
losses  resulting  from  sales or retirements are recorded as incurred, at which
time  related  costs and accumulated depreciation are removed from the accounts.

     Product  Warranties

     The  Company  provides  limited  warranties on certain of its products, for
periods  up to 1 year.  The Company records an accrued liability and expense for
estimated  future  warranty  claims  based  upon  historical  experience  and
management's  estimate  of the level of future claims.  Changes in the estimated
amounts  recognized  in prior years are recorded as an adjustment to the accrued
liability  and  expense  in  the  current  year.


                                       47
<PAGE>


     Research  and  Development

     Costs  associated  with  research and development are expensed as incurred.
Such  costs  incurred  were  $3.9 million, $3.5 million and $2.5 million for the
years  ended  December  31,  2005,  2004  and  2003,  respectively.

     Intangible  Assets

     Goodwill  is  tested annually for impairment.  If the implied fair value of
goodwill  is  lower than its carrying amount, a goodwill impairment is indicated
and goodwill is written down to its implied fair value.  Subsequent increases in
goodwill  value  are  not  recognized  in  the  financial  statements.  Other
intangibles  related  to  trade  names,  product  technology,  non-competes  and
customer  relationships  are  amortized  on  a  straight  line  basis.

     Deferred  Financing  Costs

     Costs  incurred  in connection with obtaining financing are capitalized and
amortized  to  the  maturity  period  of  the  debt.

     Revenue  Recognition

     Revenue  is  recorded  when  products are shipped, collection is reasonably
assured, the price is fixed and determinable and there is persuasive evidence of
an arrangement.  Provisions are made at that time, when applicable, for warranty
costs  to  be  incurred.

     Revenues  on  long-term,  fixed-price  contracts  are  recognized using the
percentage  of  completion  method.  Percentage  of  completion is determined by
comparing the actual costs incurred to date to the total estimated cost for each
contract.  If  the  estimate  indicates  a  loss  on  a  particular  contract, a
provision  is  made  for  the entire estimated loss.  Retainages are included as
current  and  noncurrent assets in the accompanying consolidated balance sheets.
Revenue  earned  in  excess  of  billings  is comprised of revenue recognized on
certain contracts in excess of contractual billings on such contracts.  Billings
in  excess  of  costs  are  classified  as  a  current  liability.

     Shipping  and  Handling  Fees

     Shipping and handling costs of $11.1 million, $9.5 million and $8.6 million
for  2005,  2004  and  2003,  respectively,  are included in cost of goods sold.

     Translation  of  Foreign  Currency

     The Company translates the financial statements of its foreign subsidiaries
in  accordance with Statement of Financial Accounting Standards ("SFAS") No. 52,
"Foreign  Currency  Translation."  The Company's foreign operations are reported
in  the  local  currency  and  translated to U.S. dollars, with the exception of
Mexico, whose functional currency is the U.S. dollar.  The balance sheets of the
Company's  foreign  operations  are translated at the exchange rate in effect at
the  end  of  the periods presented.  The revenues and expenses of the Company's
foreign  operations  are  translated  at  the average rates in effect during the
period.  For  locations  where  the  U.S. dollar is not the functional currency,
exchange  losses  resulting  from  translations for the years ended December 31,
2005,  2004  and  2003  have  been  recorded  in  the  accompanying Consolidated
Statements  of Stockholders' Equity (Deficit).  For Mexico, exchange losses from
translations  for  the  years  ended  December 31, 2005, 2004 and 2003 have been
recorded  in  the  accompanying  Consolidated  Statements  of  Operations.

     Income  Taxes

     The  Company  accounts  for  income  taxes in accordance with SFAS No. 109,
"Accounting  for  Income  Taxes."  This  approach  results in the recognition of
deferred  tax assets and liabilities for the expected future tax consequences of
temporary  differences  between  the  book carrying amounts and the tax basis of
assets  and  liabilities.

     Earnings  Per  Share

     The  Company  computes  earnings per share in accordance with SFAS No. 128,
"Earnings  Per  Share."  Under  the provisions of SFAS No. 128, basic net income
per  share is computed by dividing the net income for the period by the weighted
average  number  of  common  shares  outstanding during the period.  Diluted net
income  per  share  is computed by dividing the net income for the period by the
                                       48
<PAGE>
weighted  average  number  of  common  and  common equivalent shares outstanding
during  the  period.  Diluted earnings per share equals basic earnings per share
for  all  periods  presented.

     Self  Insurance

     The  Company  has  elected  to  self-insure certain costs related to health
insurance,  workers'  compensation  and general liability.  Costs resulting from
noninsured losses are charged to income when incurred.  The Company has reserves
of  $5.4  million,  $3.3 million and $2.5 million at December 31, 2005, 2004 and
2003,  respectively.

     Change  in  Accounting  Principle

     During  2003,  the  Company  changed its method of accounting and financial
reporting  for  guarantees by adopting the provisions of FASB Interpretation No.
45  ("FIN  45").  The  adoption  of FIN 45 did not have a material impact on the
Company's  results  of  operation  or  financial  position.

     Stock  Based  Compensation  Plan

     The Company was party to a stock based employee compensation plan, which is
described  more  fully in note 10. The Company accounted for this plan under the
recognition  and  measurement  principles of APB Opinion No. 25, "Accounting for
Stock  Issued  to  Employees," and related interpretations. Stock based employee
compensation  cost  was  reflected  in  net  income  as  the market value of the
underlying  common  stock  exceeds  the  purchase  price.

     Thirteen  Week  Fiscal  Periods

     The  Company  uses thirteen-week fiscal quarter periods for operational and
financial  reporting  purposes.  The  Company's  year-end  will  continue  to be
December  31.

     Reclassifications

     Certain  reclassifications  have  been  made to the 2004 and 2003 financial
statements  to  conform  to  the  2005  financial statement presentation.  These
reclassifications  had  no  effect  on  net  earnings.

     Basis  of  Statement  Presentation

     The  accompanying  combined  financial  statements  are presented under two
different  ("Predecessor"  and "Successor") bases of accounting. The predecessor
and  successor  financial  statements  are  consolidated  and include all of the
accounts  of GSI Group, Inc. and its subsidiaries. All intercompany transactions
and  balances  have  been  eliminated.

3.     NEW  ACCOUNTING  PRONOUNCEMENTS

     In  November  2004,  the  FASB  issued  SFAS  No. 151, "Inventory Costs, an
amendment of ARB No. 43, Chapter 4." SFAS No. 151 amends the guidance in ARB No.
43, "Inventory Pricing," for abnormal amounts of idle facility expense, freight,
handling  costs,  and  wasted  material (spoilage) requiring that those items be
recognized  as  current-period  expenses  regardless  of  whether  they meet the
criterion  of  "so  abnormal."  This  statement also requires that allocation of
fixed  production  overheads  to  the costs of conversion be based on the normal
capacity  of the production facilities. The statement is effective for inventory
costs  incurred  during  the  fiscal  years  beginning  after June 15, 2005. The
Company  does not expect this statement to have a material impact on the results
of  operations  or  financial  position.

     In  December  2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets, an amendment of APB Opinion No. 29." APB Opinion No. 29, "Accounting for
Nonmonetary  Transactions,"  is  based  on  the  principle  that  exchanges  of
nonmonetary  assets  should  be  measured  based on the fair value of the assets
exchanged.  SFAS No. 153 amends APB Opinion No. 29, eliminating the exception to
fair value accounting for nonmonetary exchanges of similar productive assets and
replaces  it  with  a general exception to fair value accounting for nonmonetary
exchanges  that  do  not  have  commercial substance. A nonmonetary exchange has
commercial  substance  if  the  future  cash flows of the entity are expected to
change significantly as a result of the exchange. The statement is effective for
nonmonetary asset exchanges occurring in fiscal periods beginning after June 15,
2005.  The  Company  does not expect this statement to have a material impact on
the  results  of  operations  or  financial  position
                                       49
<PAGE>

     In  May  2005,  the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections,  a  replacement  of  APB  Opinion No. 20 and FASB Statement No. 3."
SFAS  No.  154  will  become effective for accounting changes and corrections of
errors made in fiscal year 2006 and beyond.  The effect of this statement on the
Company's  financial  statements  will  depend on the nature and significance of
future  accounting  changes  subject  to  this  statement.

     In  March  2005,  the  FASB  issued  FASB  Interpretation  ("FIN")  No. 47,
"Accounting  for  Conditional Asset Retirement Obligations, an interpretation of
FASB  Statement  No.  143"  (FIN  47).  FIN  47  describes how conditional asset
retirement  obligations  meet  the  definition  of  liabilities  and  should  be
recognized  when incurred if their fair values can be reasonably estimated.  The
Company  does  not  expect  this interpretation to have a material impact on the
results  of  operations  or  financial  position.

4.     TRADE  RECEIVABLES  ALLOWANCE

     The following summarizes trade receivables allowance activity for the years
ended  December  31,  2003,  2004  and  2005  (in  thousands):

<TABLE>
<CAPTION>


                                AMOUNT
                               --------
<S>                            <C>
Balance, December 31, 2002     $ 3,058
Increase to operating expense      936
Charge to allowance             (1,265)
Balance, December 31, 2003       2,729
                               --------
Increase to operating expense      904
Charge to allowance               (231)
Balance, December 31, 2004       3,402
                               --------
Increase to operating expense      825
Charge to allowance             (2,281)
Balance, December 31, 2005     $ 1,946
                               --------


</TABLE>


5.     BUSINESS  SEGMENT

     In  January  1998,  the  Company  adopted  SFAS  No. 131, "Disclosure About
Segments  of  an  Enterprise and Related Information" ("SFAS 131").  The Company
has  no  separately  reportable  segments  under  this  standard.  Under  the
enterprise-wide  disclosure requirements of SFAS 131, the Company reports sales,
by  each group of product lines.  Amounts for the years ended December 31, 2005,
2004  and  2003  are  as  shown  in  the  table  below  (in  thousands):
<TABLE>
<CAPTION>


                         DECEMBER 31,
                             2005         2004       2003
                         -------------  ---------  ---------
<S>                      <C>            <C>        <C>
Grain product line       $     190,188  $177,622   $140,290
Swine product line              69,997    46,809     42,152
Poultry product line            83,959    64,348     55,227
Discontinued operations             --      (648)      (801)
                         -------------  ---------  ---------
     Sales               $     344,144  $288,131   $236,868
                         =============  =========  =========
</TABLE>


     For  the years ended December 31, 2005, 2004 and 2003, sales in Brazil were
$40.1  million,  $28.9  million  and $17.4 million, respectively.  Net income in
Brazil  was  $1.2 million, $1.3 million and $1.4 million in 2005, 2004 and 2003,
respectively.  Long-lived assets in Brazil were $5.8 million and $4.3 million at
December  31,  2005  and  2004,  respectively.

6.     RISKS  AND  UNCERTAINTIES

International  operations  generally  are  subject to various risks that are not
present  in  domestic  operations,  including  restrictions  on  dividends,
restrictions  on  repatriation of funds, unexpected changes in tariffs and other
trade  barriers,  difficulties  in  staffing  and  managing  foreign operations,
political  instability,  fluctuations  in  currency  exchange  rates,  reduced
protection  for  intellectual  property  rights  in  some  countries,  seasonal
reductions in business activity and potentially adverse tax consequences, any of
                                       50
<PAGE>
which could adversely impact the Company's international operations.  Net assets
of the Company's international operations totaling $39.6 million are included in
the  Company's  consolidated  balance  sheet  at  December  31,  2005.

7.     DETAIL  OF  CERTAIN  ASSETS  AND  LIABILITIES
<TABLE>
<CAPTION>


                                                                    AS OF DECEMBER 31,
                                                                   --------------------
                                                                                            2004
                                                                                         ----------
                                                                           2005           RESTATED
                                                                   --------------------  ----------
<S>                            <C>                                 <C>                   <C>
                                                                         (IN THOUSANDS)
                                                                   --------------------
Accounts Receivable
                               Trade receivables                   $            37,747   $  28,058
                               Allowance for doubtful accounts                  (1,946)     (3,402)
                               Total                               $            35,801   $  24,656
                                                                   --------------------  ----------

Inventories
                               Raw materials                       $            16,039   $  22,876
                               Work-in-process                                   8,758       7,581
                               Finished goods                                   21,949      18,196
                               Total                               $            46,746   $  48,653

Property, Plant and Equipment
                               Land                                $               594   $     803
                               Buildings and improvements                       12,817      25,061
                               Machinery and equipment                          24,279      48,277
                               Office equipment and furniture                    2,523       9,242
                               Construction-in-progress                            868         488
                                                                                41,081      83,871
                                                                   --------------------  ----------
                               Accumulated depreciation                         (7,148)    (51,323)
                               Property, plant and equipment, net  $            33,933   $  32,548
Intangible Assets
                               Goodwill                            $            39,162   $  10,264

                               Non-compete agreements              $             2,890   $   8,227
                               Technology                                        5,700         383
                               Trade names                                      14,300           -
                               Customer relations                               31,400           -
                               Backlog                                           3,490           -
                                                                                57,780       8,610
                                                                   --------------------  ----------
                               Accumulated amortization                         (6,096)     (7,116)
                               Total                               $            51,684   $   1,494
Deferred Financing Costs
                               Deferred financing costs            $             5,570   $   7,008
                               Accumulated amortization                           (465)     (4,559)
                               Total                               $             5,105   $   2,449
Accrued Warranty
                               Beginning reserve                   $             2,764   $   1,379
                               Increase to expense                               1,630       3,012
                               Charge to reserve                                (2,059)     (1,627)
                               Ending reserve                      $             2,335   $   2,764

</TABLE>


Amortization  of non-compete agreements, patents and other intangible assets are
as  follows  (in  thousands):
<TABLE>
<CAPTION>



<S>   <C>
2006  $4,281
2007  $4,211
2008  $4,211
2009  $4,211
2010  $4,211
</TABLE>



                                       51
<PAGE>

8.     SUPPLEMENTAL  CASH  FLOW  INFORMATION

     The  Company  paid  approximately  $13.0  million,  $12.6 million and $12.4
million  in  interest  during  the years ended December 31, 2005, 2004 and 2003,
respectively.  The  Company  paid income taxes (in thousands) of $5,503, $31 and
$6  during  the  years  ended  December  31,  2005, 2004 and 2003, respectively.

9.     LONG-TERM  DEBT

     Long-term debt at December 31, 2005 and 2004 consisted of the following (in
thousands):
<TABLE>
<CAPTION>


                                                                                                     2005       2004
                                                                                                   ---------  ---------
<S>                                                                                                <C>        <C>
Wachovia Capital Finance revolving line of credit                                                  $  9,202   $     --
Congress Financial Corporation (Central) revolving line of credit                                        --     23,511
Congress Financial Corporation (Central) term note                                                       --     10,972
Stockholder note, unsecured, payable on demand, under the same interest terms
 as the Congress Financial Corporation (Central) revolving line of credit                                --      5,000
10.25% senior subordinated notes payable, principal due November, 2007, net of
 unamortized debt discount of $792 as of December 31, 2004, amortization of debt
 discount was $157 for the year ended December 31, 2004, interest was payable
 semi-annually each May 1, and November 1                                                                --     99,208
12% senior subordinated notes payable, principal due May 2013, interest payable
 semi-annually each May 15 and November 15                                                          110,000         --
Brazil note, secured by equipment, interest rate is LIBOR plus 4.5%, principal due long term debt
     August 10, 2007                                                                                    980        439
   Total                                                                                            120,182    139,130
                                                                                                   ---------  ---------
Less:
 Current maturities                                                                                    (876)    (5,167)
   Total long-term debt                                                                            $119,306   $133,963
</TABLE>


     Maturities  of long-term debt during the next five years are as follows (in
thousands):
<TABLE>
<CAPTION>



<S>         <C>
2006        $    876
2007             104
2008              --
2009              --
            --------
2010           9,202
            --------
Thereafter   110,000
            --------
 Total      $120,182
            ========

</TABLE>


     In  November 1997, the Company issued $100.0 million aggregate principal of
senior  subordinated  note ("Notes") which are due in 2007.  The Notes represent
unsecured  senior subordinated obligations of the Company.  Upon occurrence of a
change in control (as defined in the indenture governing the Notes), the Company
is  required  to  repurchase the Notes at a price equal to 101% of the principal
amount  thereof,  plus  accrued  and  unpaid  interest,  if  any, to the date of
repurchase.  The  indenture  governing  the  Company's senior subordinated notes
provides  for  certain  restrictive  covenants.  The  more  significant  of  the
covenants  restrict  the  ability  of  the  Company  to dispose of assets, incur
additional  indebtedness, pay dividends or make distributions and other payments
affecting  subsidiaries.  The  Company  was  in  compliance  with  the covenants
contained  in  the indenture as of December 31, 2004.  These Notes were redeemed
at  the  date  of  acquisition.

     In  2002,  a  stockholder of the Company extended an additional loan to the
Company for $1.5 million which is payable on demand.  The Loan had revolver type
characteristics where the rate and outstanding balance could fluctuate depending
on  the  terms of the Company's senior credit facility. As of December 31, 2004,
this  loan  had  the  same  interest terms as the Congress Financial Corporation
(Central)  revolving line of credit and the balance of the loan was $5.0 million
and was included in current maturities of long-term debt.  This loan was paid at
the  date  of  the  acquisition.
                                       52
<PAGE>

     On  October  31,  2003,  The GSI Group, Inc. (the "Company") entered into a
three-year  credit  facility  with lenders led by Congress Financial Corporation
(Central)  to  provide  up  to  a  maximum  amount  of  $75.0 million subject to
borrowing  base  availability  (the  "Credit Facility") to replace the Company's
existing  senior  credit  facility,  which  provided  for  maximum  outstanding
borrowings  of  $60.0  million.  Revolving loans and letters of credit under the
Credit  Facility  were  based  on  a  borrowing  base,  which  included accounts
receivable,  inventory  and  fixed  assets.  A  $12.5  million  term loan due on
October  31,  2006 was also included in the Credit Facility.  The revolving loan
borrowings bore interest at a floating rate per annum equal to (at the Company's
option) 2.5% to 3.0% over LIBOR or 0.0% to 0.50% over the Prime Rate, both based
on  excess availability under the borrowing base.  The term loan borrowings bore
interest  at  a floating rate per annum equal to 8% over the Prime Rate provided
that the minimum interest rate will not be less than 12.25% and the maximum will
not  be  greater  than  14.5%.   The  Credit  Facility  required  the Company to
maintain  a  senior  debt  to  EBITDA  ratio  and a fixed charge coverage ratio.
Borrowings  under  the  Credit Facility were secured by substantially all of the
assets  of  the  Company,  including the capital stock of any existing or future
subsidiaries, except the Brazilian subsidiary.  The Company had $23.5 million of
revolving loans outstanding and $4.4 million of standby letters of credit, which
reduced the overall availability on the line to $14.8 million as of December 31,
2004.  This  Credit Facility was replaced with the refinanced Credit Facility at
the  date  of  the  acquisition.

     On July 9, 2004, Congress Financial Corporation and the Company amended the
existing credit facility (the "Credit Facility") to provide for term loans up to
a  maximum  of  $20.8  million,  as  well as to increase the Sloan Participation
Obligations  set forth therein from $2.5 million to $5.0 million.  Proceeds from
the  increased  term  loan  were used to purchase Voting Common Stock from Craig
Sloan  upon  his  retirement.  A  Capital Call Agreement was also signed on this
date  requiring Craig Sloan to invest in the Company, if Excess Availability, as
defined  in  the  Credit  Facility,  falls below $5.0 million, in an amount that
causes  such  availability  to  be  at  least  $10.0  million.

     On October 19, 2004, Congress Financial Corporation and the Company amended
the  existing  credit  facility (the "Credit Facility") to decrease the interest
rate  on the term note by 1.25% and to provide for a revolving feature where the
line  could  be  between  $8.0  million and $17.5 million for the period between
October  19,  2004  and  April  19,  2005.

     On  February  2,  2005, the Company's credit facility was amended to permit
under  certain  conditions  the  payment of annual dividends in an amount not to
exceed  $2.0  million  in  the  aggregate.

     On  April  6,  2005, all of the Company's stockholders entered into a stock
purchase  agreement  with  GSI  Holdings,  Inc. ("GSI Holdings"), a newly formed
holding  company  owned primarily by entities affiliated with Charlesbank Equity
Fund  V,  Limited Partnership, pursuant to which GSI Holdings purchased for cash
all  of  the issued and outstanding shares of the Company's common stock. On May
16,  2005,  under the "successor" basis of accounting, the closing of that stock
purchase  ("the Acquisition") occurred. Upon the closing of that stock purchase,
the  Company  became a direct, wholly owned subsidiary of GSI Holdings. The cash
costs  of  the  Acquisition  together  with  the  fees and expenses necessary to
consummate  the  transaction  were  financed  by  equity  contributions of $56.3
million,  issuance  of $110.0 million of senior subordinated notes (the "Notes")
due  May  15,  2013,  and  a  five year $60.0 million revolving credit facility.

     The  closing of our refinanced senior secured credit facility with Wachovia
Capital  Finance, which replaced the Congress Financial facility, consisted of a
$60.0  million  revolving  credit  facility.     The  Company's  credit facility
contains a number of covenants that, among other things, restrict our ability to
dispose  of  assets,  incur  additional  indebtedness,  pay or make dividends or
distributions  to  the Company's stockholder, create liens on assets, enter into
sale  and  leaseback  transactions  and otherwise restrict our general corporate
activities.  The Company is also required to comply with a fixed charge coverage
ratio  if  a  "trigger  event"  has  occurred.

     The Company's credit facility contains various events of default, including
defaults  relating  to  payments,  breaches  of  representations, warranties and
covenants,  certain  events  of  bankruptcy  and  insolvency,  defaults on other
indebtedness,  certain  liens  and encumbrances on assets and certain changes of
control  of  the  Company.

     Borrowings  under  the  credit facility are secured by substantially all of
the  Company's  assets.

     As  of  December  31,  2005 the Company had $9.2 million of revolving loans
outstanding  and  $5.1  million  of  standby  letters of credit under the credit
facility,  which  reduced  the overall availability under the credit facility to
$30.2  million.
                                       53
<PAGE>

     In  connection  with  the  closing  of the Acquisition on May 16, 2005, the
Company  entered  into  the  following  financing  transactions,  each  of which
occurred  prior  to  or  concurrently  with  the  closing  of  the  Acquisition:

-     the  closing  of  the  issuance  of  the  Notes;
-     the  closing  of  our  refinanced senior secured credit facility described
above.  Approximately  $29.5  million was drawn on the revolving credit facility
on the closing date, with additional availability of approximately $22.5 million
under  the  revolving  credit  facility  on  the  closing;
-     the call for redemption of all of our existing 10 1/4% senior subordinated
notes  due 2007, the deposit of all amounts necessary to redeem those notes with
the trustee, and the subsequent retirement of all of those notes upon completion
of  the  redemption;
-     the repayment in full of all amounts outstanding under our existing credit
facility;
-     the repayment in full of all amounts outstanding under loans made to us by
our  founder  and  selling  majority  stockholder;  and
-     the  cash  equity  contribution  to  GSI  Holdings  by our equity sponsor,
Charlesbank Equity Fund V, Limited Partnership (a small amount of which was made
by  nonaffiliated  funds) of $56.3 million, of which approximately $43.8 million
(less  certain expenses and other amounts) was paid to our selling stockholders,
and  approximately  $12.5  million  was  contributed  to  our  common  equity.

     The  Company's  credit  facility contains a number of covenants that, among
other  things,  restrict  our  ability  to  dispose  of assets, incur additional
indebtedness,  pay  or  make  dividends  or  distributions  to  the  Company's
stockholders, create liens on assets, enter into sale and leaseback transactions
and  otherwise  restrict  our general corporate activities.  The Company is also
required  to  comply with specified financial ratios and tests including a fixed
charge  coverage  ratio.

     Immediately  following the closing, the Company converted from a subchapter
"S"  corporation  to  a subchapter "C" corporation, which means that it became a
taxable entity for federal and state income tax purposes. For the portion of the
2005  fiscal year preceding the closing date, the Company made tax distributions
to its selling stockholders at the closing in an amount sufficient to allow them
to  pay  income  taxes  relating  to  such  period.

     The  Acquisition  of  the Company has been accounted for in accordance with
SFAS  No.  141  "Business  Combinations"  and  reflects  the  "push down" of GSI
Holdings'  basis  into  our  financial  statements.  The purchase price is being
allocated  to  the  assets  acquired  and  the  liabilities assumed based on the
estimates  of respective fair values at the date of acquisition. The fair values
are  being  determined  by  management  estimates and by independent third party
valuations.

                                       54
<PAGE>

     The following table summarizes the fair value of the assets acquired and of
the  liabilities  assumed  at  the  date  of  the  Acquisition.
<TABLE>
<CAPTION>



<S>                                    <C>
Cash                                   $  2,437
Accounts receivable, net                 36,044
Inventories, net                         60,910
Property, plant and equipment            33,418
Other intangible assets                  57,780
Goodwill                                 39,162
Other assets                              4,163
                                       --------

Total assets acquired                   233,914

Accounts payable and accrued expenses    38,282
Customer deposits                         5,641
Long-term debt                          150,212
Minority interest                         2,250
Deferred income taxes                       224
                                       --------

Total liabilities assumed               196,609
                                       --------

Purchase price                         $ 37,305
                                       ========
</TABLE>


<TABLE>
<CAPTION>



ACQUISITION AND FINANCING                               AS OF MAY 17, 2005
-----------------------------------------------------

<S>                                                    <C>
Cash paid upon acquisition                             $            34,934
Repay old indebtedness                                             149,864
Bond repayment penalty                                               1,729
Repayment of interest                                                1,252
Estimate of acquisition expenses                                     2,371
                                                       --------------------
Acquisition Consideration                              $           190,150


Historical net book value of tangible assets acquired               87,583
                                                       --------------------
Excess purchase price to be allocated                              102,567

Inventory step-up                                                   (5,288)
Property, plant and equipment step-up                                 (561)
Other intangibles                                                  (57,780)
Deferred tax liability                                                 224
Goodwill                                                           (39,162)
                                                       --------------------

                                                       $                 0
                                                       ====================
</TABLE>



     The  aggregate  amortization  expense  for  the period May 17, 2005 through
December  31,  2005  for  the identified intangible assets was $6.1 million. The
identified  intangible  assets are being amortized on a straight-line basis over
their  individual  estimated useful lives.  The tax goodwill of $44.5 million is
amortized  over  15  years.

     The carrying value of inventory was increased by approximately $5.3 million
to  reflect  the  inventory  fair  value at May 16, 2005. The effect of the fair
value  adjustment is to increase the cost of goods sold and thereby reduce gross
profit in future periods when this inventory is sold.  During the period May 17,
2005 through December 31, 2005, cost of goods sold included $5.3 million of this
fair  value  adjustment.
                                       55
<PAGE>

     The  carrying  value  of  property,  plant  and  equipment was increased by
approximately $0.6 million to reflect the fair value at May 16, 2005. The effect
of  the  fair  value adjustment is to increase costs and expenses for additional
depreciation  in  future  periods  over  the  useful  lives  of  the  assets.

     The  following  schedule  explains  the  changes  in  Stockholders'  Equity
(Deficit)  as  a  result  of  the  purchase:
<TABLE>
<CAPTION>


                                                              TOTAL
<S>                                                         <C>
Predecessor as of December 31, 2004 as restated             $(46,835)

Change to predecessor equity (January 1 - May 16, 2005)(1)    (4,600)

Predecessor balance as of May 16, 2005                       (51,435)

Change to successor equity (May 17 - December 31, 2005)(2)   111,274

Successor equity at December 31, 2005                       $ 59,839
</TABLE>



(1)     The  details  of  the  change to predecessor equity from January 1, 2005
through  May  16, 2005 consists of a net loss, stock-based compensation, foreign
currency  translation  adjustments  and  dividends.

(2)     The  details of the change to successor equity from May 17, 2005 through
December  31, 2005 consists of purchase accounting, net income, foreign currency
translation  adjustments  and  dividends.

10.     EMPLOYEE  BENEFIT  PLANS

Profit  Sharing  Plan

     The  Company  has  a  defined  contribution  plan  covering  virtually  all
full-time  employees.  Under  the plan, Company contributions are discretionary.
During  2005, 2004 and 2003, the Company provided a 25% matching contribution up
to  1%  of the employees' compensation.  Company contributions to this plan were
$254,400,  $245,027  and  $244,366  during  2005,  2004  and 2003, respectively.

Stock  Based  Compensation  Plan

     The  Company's  former  majority  stockholder  had, from time to time, sold
shares  of  non-voting  common  stock  to  members of management in exchange for
non-recourse  promissory notes. The notes were interest bearing and pre-payable.
The  shares  were  sold subject to a Stockholders Agreement, as described below.
The  Company  accounted  for this plan under APB Opinion No. 25, "Accounting for
Stock  Issued to Employees," and related interpretations. As the market value of
the  underlying  common  stock exceeded the purchase price, the Company recorded
compensation  cost  for  the  difference. For the years 2005, 2004 and 2003, the
Company  had  recognized  $2,840,809,  $2,241,354  and  $484,097 of compensation
expense  under  this  plan  with  a  corresponding  credit to additional paid-in
capital.  The  dividends  paid to the non-voting stockholders were classified as
compensation  expense  and  reduced  previously  reported net income for 2003 by
$62,584.  The 2005 and 2004 dividend that was classified as compensation expense
was  $642,218  and $381,178, respectively.  This plan was terminated on the date
of  the  acquisition.

A  summary  of  the status of the plan at December 31, 2004 and 2003 and changes
during  the  years  then  ended  is  presented  below:
<TABLE>
<CAPTION>




                                        2004     2003
                                       -------  ------
<S>                                    <C>      <C>
Outstanding shares, beginning of year   89,958  92,356
Shares sold by Craig Sloan             101,684     599
Shares purchased by Craig Sloan            599   2,997

Outstanding shares, end of year        191,043  89,958
</TABLE>



                                       56
<PAGE>
11.     INCOME  TAX  MATTERS

     The  following  tables represent the successor and predecessor income taxes
for  the period May 17 to December 31, 2005, January 1 to May 16, 2005 and years
ended  December  31,  2004  and  2003.

<TABLE>
<CAPTION>

                                      SUCCESSOR
                                May 17, - December 31,
                                ----------------------
                                         2005

                       Income/(Loss)    Income Tax
                       --------------
                           Before        Expense/
                        Income Taxes    (Benefit)
<S>                    <C>             <C>
U.S.                   $        (651)  $      (520)
Brazil                           828           356
Malaysia                       1,126           107
Mexico                           323          (116)
China                           (130)           --
Poland                            93             3
South Africa                     468          (626)
                       --------------  ------------

Total                  $       2,057   $      (796)
                       ==============  ============


Current income taxes                   $     2,794
Deferred income taxes                       (3,590)
                                       ------------

Total                                  $      (796)
                                       ============
</TABLE>



<TABLE>
<CAPTION>
                                      Successor

                            May 17, - December 31,
                                     2005
<S>                        <C>
Income taxes at U.S.
 statutory rate            $                   720
Effect of conversion to a
 "C" corporation                                 9
Purchase accounting
 differences                                (1,035)
State income taxes                             150
Other                                         (640)
                           ------------------------

Total                      $                  (796)
                           ========================
</TABLE>







                                       57
<PAGE>



















<TABLE>
<CAPTION>


                                                     PREDECESSOR
                January 1,  - May 16, 2005          Twelve months ended          Twelve months ended
                --------------------------
                                         December 31, 2004          December 31, 2003

                       Income/(Loss)    Income Tax   Income/(Loss)    Income Tax   Income/(Loss)    Income Tax
                       --------------                                ------------
                           Before        Expense/        Before        Expense/        Before        Expense/
                        Income Taxes    (Benefit)     Income Taxes    (Benefit)     Income Taxes    (Benefit)
<S>                    <C>             <C>           <C>             <C>           <C>             <C>
U.S.                   $        (564)  $       495   $         429   $      (374)  $      (6,476)  $      (694)
Brazil                         1,051           336           1,879           569             858          (537)
Malaysia                        (317)          (10)            532           102             388            54
Mexico                           432           256             136           (41)            998           179
China                            242            --             (78)           --            (708)            3
Poland                            (2)           --             690            --            (784)           --
South Africa                     209            38             878           243             309            --
                       --------------  ------------  --------------  ------------  --------------  ------------

Total                  $       1,051   $     1,115   $       4,466   $       499   $      (5,415)  $      (995)
                       ==============  ============  ==============  ============  ==============  ============


Current income taxes                   $     1,184                   $       101                   $       478
Deferred income taxes                          (69)                          398                        (1,473)
                                       ------------                  ------------                  ------------

Total                                  $     1,115                   $       499                   $      (995)
                                       ============                  ============                  ============

</TABLE>



<TABLE>
<CAPTION>
                                            Predecessor

                      January 1, - May 16, 2005    Twelve months ended    Twelve months ended
                      --------------------------
                                                    December 31, 2004      December 31, 2003
<S>                   <C>                         <C>                    <C>
Income taxes at U.S.
 statutory rate       $                      368  $              1,563   $             (1,845)
State income taxes                            77                   326                   (385)
Other                                        670                (1,390)                 1,235
                      --------------------------  ---------------------  ---------------------

Total                 $                    1,115  $                499   $               (995)
                      ==========================  =====================  =====================
</TABLE>





                                       58
<PAGE>

     The  components of deferred tax assets and liabilities at December 31, 2005
and  2004  are  as  follows  (in  thousands):
<TABLE>
<CAPTION>


                                                2005     2004
<S>                                           <C>       <C>
Deferred tax assets:
       Tax loss carryforwards - Brazil        $ 1,220   $1,161
 Tax loss carryforwards - Mexico                  239      118
       Tax loss carryforwards - South Africa      627       41
       Tax loss carryforwards - Malaysia           45       --
 Accrued payroll                                1,086       --
 Accrued self-insurance                           255       --
 Contingency reserve                               20       --
 Accrued warranty                                 934       --
 UNICAP                                           120       --
 Litigation reserve                               265       --
 Intangibles                                      841       --
 Accrued workers compensation                   1,816       --
                                              $ 7,468   $1,320
                                                        -------

Deferred tax liabilities:
 Malaysia Inventory                                --      (11)
 Property and equipment                        (2,500)      --
                                               (2,500)     (11)
                                              --------  -------

Net deferred tax asset                        $ 4,968   $1,309
</TABLE>


     Brazil has tax loss carryforwards of approximately $1.2 million that do not
expire.  Mexico  has tax loss carryforwards of $0.2 million that begin to expire
in  2008.  South  Africa  has tax loss carryforwards of $0.6 million that do not
expire.  Malaysia  has  minimal  tax  loss  carry  forwards  that do not expire.

     Remaining  realizable  assets  are  supported  by anticipated turnaround of
deferred  tax  liabilities  and  future  projected  taxable  income.

12.     COMMITMENTS  AND  CONTINGENCIES

     The  Company  is  involved  in  various legal matters arising in the normal
course of business which, in the opinion of management, will not have a material
effect  on  the  Company's  financial  position  or  results  of  operations.

     Under  the  Company's  insurance  programs,  coverage  is  obtained  for
catastrophic  exposures  as well as those risks required to be insured by law or
contract.  The  Company retains a significant portion of certain expected losses
related  primarily  to  workers'  compensation,  physical  loss  to property and
comprehensive  general,  product  and  vehicle liability.  Provisions for losses
expected under these programs are recorded based upon the Company's estimates of
the  aggregate  liability  for  claims  incurred  and totaled approximately $5.6
million  for  the  year  ended  December  31, 2005.  The amount of actual losses
incurred could differ materially from the estimates reflected in these financial
statements. The Company has provided letters of credit aggregating approximately
$4.3  million  in  connection  with  these  insurance  programs.

     The  Company  has  month-to-month  leases  for  several  buildings and paid
rentals  in  2005, 2004 and 2003 of $0.5 million, $0.6 million and $0.9 million,
respectively.  The  Company  also  leases equipment and vehicles under operating
lease  arrangements.  Total  lease  expense related to the equipment and vehicle
leases  for  the  years ended December 31, 2005, 2004 and 2003 was $1.5 million,
$1.4  million  and  $1.3  million,  respectively.  These  amounts  are  for U.S.
operations  only.  Foreign  lease obligations are not material and therefore not
included.

                                       59
<PAGE>
     Operating  lease  commitments  are  as  follows  (in  thousands):
<TABLE>
<CAPTION>



<S>    <C>
2006   $1,445
2007    1,143
2008      777
2009      401
2010       92
Total  $3,858
       ------
</TABLE>



13.     REGIONAL  INFORMATION

     The  Company  is  engaged  in the manufacture and sale of equipment for the
agricultural  industry.  The Company's product lines include: grain storage bins
and  related  drying  and  handling equipment systems and swine and poultry feed
storage and delivery, ventilation, and watering systems.  The Company's products
are  sold  primarily  to  independent  dealers and distributors and are marketed
through the Company's sales personnel and network of independent dealers.  Users
of  the  Company's  products include farmers, feed mills, grain elevators, grain
processing  plants and poultry/swine integrators. Sales by each major geographic
region  are  as  follows  (in  millions):

<TABLE>
<CAPTION>


                     2005    2004    2003
                    ======
<S>                 <C>     <C>     <C>
United States       $231.7  $187.5  $156.1
Asia                  15.1    15.8    20.6
Canada                19.5    16.7    15.0
Latin America         51.1    46.2    27.1
Mideast and Africa     8.0    10.6     8.9
Europe                12.6     7.2     6.0
All other              6.1     4.1     3.2
                    $344.1  $288.1  $236.9
                    ------  ------  ------

</TABLE>


14.     DISCONTINUED  OPERATIONS

     On  November  2,  2004, the Company entered an agreement to discontinue and
sell  the  assets  of  its Canadian subsidiary to an unrelated third party.  The
gain  of  $118  thousand  has  been  reported  in  2004's  gain from the sale of
discontinued  operations.  2004  and  2003  operations have been reclassified to
include  all  revenues  and  expenses  of  the  subsidiary  under  discontinued
operations.

15.     BUSINESS  COMBINATIONS

     On  December  22,  2004,  the  Company  participated  in  two  simultaneous
transactions  where  the  Company acquired 100 percent of the outstanding common
shares  of FarmPro, Inc. (FarmPRO) and then sold substantially all of the assets
of  FarmPRO  to  an  unrelated  third  party.

     The  following  table  summarizes  the  estimated fair values of the assets
retained  and  liabilities  assumed  at  the  date  of  acquisition.
<TABLE>
<CAPTION>



<S>                  <C>
Current assets       $243,000
Current liabilities   (40,000)
                     ---------
Net assets acquired  $203,000
</TABLE>


     As  a  result  of these transactions, the Company recognized a loss of $7.2
million  related to $2.6 million of accounts receivable write-offs and acting on
a $4.5 million guarantee for FarmPro, as well as other expenses of $0.6 million,
which  were  offset  by  $0.5  million cash received.  The Company had a $93,000
reserve  related  to  the  guarantee  recorded  on  the  books  throughout 2004.
                                       60
<PAGE>


16.     RELATED  PARTY  TRANSACTIONS

     The Company has an agreement with Charlesbank Capital Partners(Charlesbank)
where  Charlesbank  provides management advisory services in the ordinary course
of  business  to  the  Company.  Charlesbank  is the majority shareholder of GSI
Holdings,  Corp.  the parent company of the Company.  Such transactions amounted
to  $451,653  for  2005.

     The  Company  conducts transactions in the ordinary course of business with
companies  owned  by  the  Segatt  family,  a  member  of  which  is  a minority
shareholder of a subsidiary of the Company.  Such transactions generally consist
of  purchases  of  materials, freight payments, and commissions that amounted to
$979,499, $925,786 and $564,362 for 2005, 2004 and 2003, respectively, and sales
of  poultry  equipment that amounted to $288,351, $296,681 and $99,815 for 2005,
2004  and  2003,  respectively.

     The  Company  conducts transactions in the ordinary course of business with
Reliance,  a supplier of poultry equipment, which is owned by an employee of the
Company.  Such  transactions  generally  consist  of  purchases of materials for
poultry  equipment  that  amounted to $108,896, $958,040 and $238,095 from 2005,
2004  and  2003,  respectively,  and sales of poultry equipment that amounted to
$410,464,  $150,127  and  $239,005  from  2005,  2004  and  2003,  respectively.

     The  Company  makes  sales  in  the  ordinary course of business to Mayland
Enterprises,  a  distributor  of grain equipment that is owned by an employee of
the  Company.  Such  transactions  generally consist of sales of grain equipment
and  amounted  to  $11,274,  $41,178  and  $89,348  for  2005,  2004  and  2003,
respectively.

     The  following  were  related  parties from January 1 - May 16, 2005.  They
ceased  being  related  parties  at  the  date  of  the  Acquisition.

     The  Company  made  sales  in  the  ordinary  course  of  business to Sloan
Implement  Company,  Inc., a supplier of agricultural equipment that is owned by
family  members  of  a  former  stockholder  of  the  Company. Such transactions
generally  consisted  of  sales  of  grain  equipment  and amounted to $155,052,
$487,439  and  $125,920  for  2005,  2004  and  2003,  respectively.

     The  Company  made sales in the ordinary course of business to Larry Sloan,
who is a family member of a former stockholder of the Company. Such transactions
generally  consisted of sales of grain equipment and amounted to $3,922, $24,193
and  $72,619  for  2005,  2004  and  2003,  respectively.

     The  Company  had  a  contract  with  BMA  Consulting, Inc. (BMA) where BMA
provided  consulting services in the ordinary course of business to the Company.
BMA  is owned by a former shareholder of the Company. Such transactions amounted
to  $16,352  and  $699,210  for  2005  and  2004,  respectively.

     The  Company conducted transactions in the ordinary course of business with
RAD  Properties,  a  corporation owned by Craig Sloan, former shareholder of the
Company.  Such  transactions generally consisted of rent and lease payments that
amounted  to  $0,  $216,200  and  $302,900 in 2005, 2004 and 2003, respectively.

                                       61
<PAGE>

17.     UNAUDITED  QUARTERLY  INFORMATION

<TABLE>
<CAPTION>

                                   FIRST          SECOND          THIRD          FOURTH

                                                             QUARTER                   QUARTER   QUARTER    QUARTER
                                              ======================================  ---------  --------  ---------
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                              --------------------------------------
<S>                                           <C>                                     <C>        <C>       <C>
2005:
 Sales                                        $                              72,674   $ 90,139   $107,723  $ 73,608
 Gross profit                                                                17,528     21,447     29,049    12,672
 Net income (loss)                                                            3,973     (4,359)     5,372    (2,197)
 Basic and diluted earnings(loss) per share                                    4.80      (5.27)      6.50     (2.66)

Restated 2004:
 Sales                                        $                              58,444   $ 79,623   $ 89,692  $ 60,372
 Gross profit                                                                12,301     14,451     22,552    14,800
 Net income (loss)                                                              105        632      6,820    (3,565)
 Basic and diluted earnings(loss) per share                                    0.06       0.36       4.67     (2.73)

Restated 2003:
 Sales                                        $                              44,224   $ 65,289   $ 77,062  $ 50,293
 Gross profit                                                                 9,653     13,390     18,236     7,392
 Net income (loss)                                                           (2,367)      (135)     4,536    (6,312)
 Basic and diluted earnings(loss) per share                                   (1.33)      0.08       2.56     (3.56)
</TABLE>


     Quarterly  information is included above, which includes revised numbers in
the  second  quarter.  Due  to  the  complexity  of  the  Section 338(h)(10) tax
election  and  the  conversion  from an "S" corporation to a "C" corporation the
computed deferred tax asset and the related income tax benefit was assumed to be
$3.5  million  more  than  it should have been on May 17, 2005.  Previously, the
Company estimated in the second quarter a deferred tax asset of $4.5 million and
a  related  tax  benefit  of $4.5 million, and reported in the Form 10-Q for the
quarter  ended July 1, 2005 a net loss of $0.8 million and earnings per share of
($0.95).  This  compares  with  a final determination in the fourth quarter that
the  deferred  tax  asset should have been $1.0 million and a related income tax
benefit  of  $1.0  million, resulting in a net loss of $4.4 million and earnings
per  share  of  ($5.27),  as  shown  in  the  information  above.
18.  RESTATEMENT

FIRST  RESTATEMENT

     During  the  Company's  year-end  review  of 2004, it discovered accounting
errors  in prior years' financial statements.  The errors have been corrected in
the  2003,  2002 and 2001 financial statements.  A description of the errors and
related  impact of each on the financial statements follows.  Amounts are stated
in  whole  dollars.

     At  the  end  of  2001,  the Company began the process of shutting down its
Mason City, Iowa plant, which served as the headquarters for its DMC subsidiary.
As  the  Company  began the revenue cycle process at its corporate headquarters,
cost  of  sales  estimates  were  understated during 2002, while cost accounting
records  were  being  developed for the products previously handled by the Mason
City  employees,  which  caused  the  remaining  inherited inventory costs to be
overstated  by  approximately  $6,470,000.  The  Company  became  aware  of  the
overstatement  in  early  2003, but erroneously assigned the overstated value to
inventory  that  would  flow  through the cost of sales over the next few years.
This  erroneous  correction  reduced  the  stated  value  of  the  inventory  by
approximately  $2,206,000  in  2003  and  $4,264,000  in  2004.  During the 2004
year-end closing process, this issue was re-examined, and the Company determined
that  it  would  be  appropriate  to restate the 2002 cost of sales and year-end
inventory,  the  period  when  the  overstatement  occurred.

     In 1997, the Company's majority stockholder began selling non-voting shares
to  certain  employees.  The  Company's majority stockholder helped finance each
employee's  purchase  with  a non-recourse loan (in the form of interest-bearing
notes)  to  each  employee with the shares as the only collateral for the notes.
APB  Opinion  25  and  its  interpretations  require  that these transactions be
imputed  to  the Company's financial statements and be accounted for as variable
stock awards, which practice the Company had not previously followed.  Treatment
of  the  transaction as a variable stock award requires the Company to recognize
                                       62
<PAGE>
as  compensation  expense  the  extent  to  which  the  fair market value of the
underlying  shares exceeds the original purchase price for such shares. The fair
value  of  the underlying shares first exceeded the price paid for the shares in
2002.  The  effect  of  recording  the  resulting  compensation  expense reduced
previously  reported  net  income  for  2003  by $484,097 and reduced previously
reported  net  income for 2002 by $89,511.  The dividends paid to the non-voting
shareholders  are  classified  as  compensation  expense  and reduced previously
reported  net  income  for 2003, 2002 and 2001 by $62,584, $113,647 and $84,810,
respectively.

     In  2002,  the  Company  entered  into an agreement with the manager of its
Brazilian  subsidiary  whereby  the  Company  agreed  to issue him shares of the
Brazilian subsidiary's stock primarily based on the financial performance of the
Brazilian  subsidiary.  This  agreement  constitutes  a  stock  compensation
arrangement  for  which  the  Company  did not previously recognize compensation
expense.  The  effect  of  recording  compensation  expense  related  to  this
arrangement  reduced  previously  reported  net  income for 2003 by $340,000 and
reduced  previously  reported  net  income  for  2002  by  $401,000.

     Prior to the 2004 closing process, the Company had been using Mexican Pesos
as  the  functional currency of its Mexican subsidiary.  During the 2004 closing
process,  the  Company  determined  that  the correct functional currency of its
Mexican subsidiary should be U.S. Dollars rather than Mexican Pesos.  The effect
of  this  change reduced previously reported 2003 and 2002 net income by $98,644
and $315,917, respectively, and increased previously reported 2001 net income by
$69,692.

     In  2001, 2002 and 2003, the Company's CEO and majority stockholder elected
not  to  accept  salary and board fees that were subsequently paid in 2004.  The
Company  did  not  accrue these amounts in those years.  The effects of accruing
compensation  for  the  Company's CEO reduced previously reported 2003, 2002 and
2001  net  income  by  $100,000,  $507,515  and  $257,000,  respectively.

     The Company changed from a stop-loss workers' compensation insurance policy
to a high-deductible self-insured policy in 2000 and did not subsequently accrue
a  liability  for  claims incurred but not reported.  The effect of accruing for
such  claims  in  2003,  2002 and 2001 reduced previously reported net income by
$289,506,  $698,246  and  $603,090,  respectively.

     The  Company  also  made  adjustments  in  2003,  2002  and 2001 to correct
previous  reporting  of overhead adjustments in overseas inventories and gain on
inter-company  sales.

SECOND  RESTATEMENT

     Subsequent  to the sale of all of the stock of the Company on May 16, 2005,
the  new  management  appointed  by  the  new  owner  of  the Company discovered
additional  accounting  errors  in prior years' financial statements. The errors
have  been  corrected  in  the  accompanying  2004,  2003  and  2002  financial
statements.  A  description  of  the  errors  and  related impact on each of the
financial  statements  follows.  Amounts  are  stated  in  whole  dollars.

     The  Company  made  adjustments  in  2004,  2003  and  2002  to correct its
allowance  for obsolete inventory to conform to the Company's historical policy.
The  effect  of  these  changes  reduced  net  income  by  $559,000  in 2004 and
$1,307,000  in  2002,  and  increased  net  income  by  $283,000  in  2003.

     The Company made adjustments in 2004, 2003 and 2002 to expense warranty and
research  and  development  costs, which were erroneously included in inventory.
The effect of these changes increased net income by $654,000 and $51,000 in 2004
and  2002,  respectively,  and  decreased  net  income  by  $558,000  in  2003.

     The  Company  made adjustments in 2004, 2003 and 2002 to correct the amount
of  overhead  that  was  included  in  inventory. The previous inventory balance
included  an excessive amount of overhead. The effect of these changes increased
net  income  by  $2,188,000  and  $1,777,000 in 2004 and 2003, respectively, and
decreased  net  income  by  $2,951,000  in  2002.

     The combined effect of these changes increased net income by $2,283,000 and
$1,502,000  in  2004  and 2003, respectively. With respect to prior fiscal years
summarized  in  Item  6  -  Selected  Financial Data, the combined effect of the
changes effected by the these restatements decreased net income by $4,207,000 in
2002  and  $1,836,000  in  2001.

The  impact of the above noted adjustments on the Company's financial statements
for  the  twelve  months  of  2004  and  2003 are summarized in the table below.
Amounts  are  stated  in  thousands  of dollars except for per share line items.
                                       63
<PAGE>

<TABLE>
<CAPTION>


          FIRST     AS     SECOND     AS

                                            AS PREVIOUSLY REPORTED   RESTATEMENT  RESTATED   RESTATEMENT    RESTATED
<S>                                         <C>                      <C>          <C>       <C>            <C>
FISCAL YEAR 2004 (Note *)
Consolidated Balance Sheet:
     Inventory                              $                53,588            -         -  $     (4,935)  $  48,653
     Retained earnings                                        3,944            -         -        (4,935)       (991)

Consolidated Statement of Income:
     Cost of sales                                          222,780            -         -        (2,283)    220,497
     Operating income                                        16,469            -         -         2,283      18,752
     Net income                                               1,709            -         -         2,283       3,992
     Basic and diluted earnings per share   $                  1.31            -         -  $       1.75   $    3.06
</TABLE>


<TABLE>
<CAPTION>

          FIRST     AS     SECOND     AS

                                                      AS PREVIOUSLY REPORTED    RESTATEMENT    RESTATED    RESTATEMENT
<S>                                                  <C>                       <C>            <C>         <C>
FISCAL YEAR 2003 (Note *)
Consolidated Balance Sheet:
     Inventory                                       $                54,165   $     (4,562)  $  49,603   $     (7,218)
     Payroll and payroll related expenses                              3,071            565       3,636              -
     Other accrued expenses                                            4,057          1,891       5,948              -
     Paid in capital                                                   3,006            574       3,580              -
     Accumulated other comprehensive loss                            (11,929)           345     (11,584)             -
     Retained earnings                                                12,531         (8,678)      3,853         (7,218)


Consolidated Statement of Income:
     Cost of sales                                                   187,650           (481)    187,169         (1,502)
     Selling, general and administrative expenses                     36,354          3,602      39,956              -
     Operating income                                                  9,240         (3,121)      6,119          1,502
     Foreign currency transaction loss                                  (215)           (99)       (314)             -
     Other, net                                                       (3,544)         3,749         205              -
     Minority interest in net income of subsidiary                        --            (77)        (77)             -
     Net income (loss)                                                (6,232)           452      (5,780)         1,502
     Basic and diluted earnings per share            $                 (3.51)  $       0.25   $   (3.26)  $       0.85

                                                      RESTATED
<S>                                                  <C>
FISCAL YEAR 2003 (Note *)
Consolidated Balance Sheet:
     Inventory                                       $  42,385
     Payroll and payroll related expenses                3,636
     Other accrued expenses                              5,948
     Paid in capital                                     3,580
     Accumulated other comprehensive loss              (11,584)
     Retained earnings                                  (3,365)


Consolidated Statement of Income:
     Cost of sales                                     185,667
     Selling, general and administrative expenses       39,956
     Operating income                                    7,621
     Foreign currency transaction loss                    (314)
     Other, net                                            205
     Minority interest in net income of subsidiary         (77)
     Net income (loss)                                  (4,278)
     Basic and diluted earnings per share            $   (2.41)
</TABLE>


Note  *  The  reported  figures  in  these  tables  may differ from Consolidated
Statement  of  Operations  that  have  been  previously  reported  due  to  the
reclassification  of certain amounts for discontinued operations now being shown
in  the  "As  Previously  Reported"  column.



                                       64
<PAGE>

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

      Not  applicable.


ITEM  9A.   CONTROLS  AND  PROCEDURES.

OVERVIEW

     In  connection with the preparation of this Annual Report on Form 10-K, the
Company's  management  has  identified  material  weaknesses  in  the  Company's
internal  controls  over  financial  reporting. As defined by the Public Company
Accounting  Oversight  Board  ("PCAOB")  in  Auditing Standard No. 2, a material
weakness  is  a  significant  deficiency,  or  combination  of  significant
deficiencies,  that  results  in  more  than a remote likelihood that a material
misstatement of the annual or interim financial statements will not be prevented
or  detected.

     The  identified material weaknesses in the Company's internal controls over
financial reporting have resulted in insufficient controls relating to financial
statement  preparation  and  SEC  reporting,  inventory  accounting,  income tax
accounting,  accounts  payable  cut-off,  accrued  expenses  and  segregation of
duties.  In  addition,  the  Company  has  determined that the Company's control
environment  at  December  31,  2004  lacked  certain  controls  related  to the
prevention of improper accounting entries. These material weaknesses resulted in
restatements being recorded in the Company's financial statements for the fiscal
years  ended  December  31,  2004,  2003  and 2002. The Company's management has
discussed  the  material  weaknesses  with  its  independent  registered  public
accounting  firm,  BKD,  LLP,  and  the  Company's  Board of Directors, and more
recently  the  Audit  Committee  of  the  Board of Directors, which was recently
created.  BKD,  LLP  issued  a "material weakness" letter in connection with its
audit  of  the Company's financial statements for the fiscal year ended December
31,  2005.

DISCLOSURE  CONTROLS  AND  PROCEDURES

     The  Company maintains disclosure controls and procedures that are designed
to  ensure  that information required to be disclosed in the reports it files or
submits  under  the  Securities  Exchange  Act  of 1934, as amended is recorded,
processed,  summarized  and  reported,  within the time periods specified in the
SEC's rules and forms, and that such information is accumulated and communicated
to  our  management,  including  our Chief Executive Officer and Chief Financial
Officer,  as  appropriate,  to  allow timely decisions regarding disclosure. Our
management,  with  the  participation  of  our Chief Executive Officer and Chief
Financial  Officer,  has  performed an evaluation of our disclosure controls and
procedures as of December 31, 2005, the end of the period covered by this Annual
Report  on  Form  10-K. Based on that evaluation, which included a review of the
matters  discussed  above,  the  Company's  Chief  Executive  Officer  and Chief
Financial  Officer  concluded  that  the  Company's  disclosure  controls  and
procedures were not effective as of the end of the period covered by this Annual
Report  on  Form 10-K.  Each of the Chief Executive and Chief Financial Officers
has  provided  the certifications required by Exchange Act Rule 13a-14(a), which
are attached to this annual report as Exhibits Nos. 31.1 and 31.2.  Management's
assessment  pursuant  to  Section  404  of  Sarbanes-Oxley  of  the registrant's
internal  controls  over  financial  reporting  is  not  yet  required  for  the
registrant,  and  is  therefore  not  included.

CHANGES  IN  INTERNAL  CONTROLS

     There  were no changes to the Company's internal controls made during 2005.
The  Company's  management  believes,  however,  that  substantial  remediation
measures  are  required in order to improve the Company's internal controls. The
Company  believes that the material weaknesses identified above resulted in part
from  inadequate  staffing  and  training  within  the  Company's  finance  and
accounting  group,  and  the Company believes that the process of preparing this
Annual  Report  on  Form  10-K and the related review of the Company's financial
statements  for the years ended December 31, 2005, 2004 and 2003 has resulted in
a significant improvement in the finance and accounting staff's familiarity with
the  accounting  and  financial  treatment  of  the issues identified above. The
Company's  management  is  in  the  process  of  reviewing  whether  additional
accounting  and  financial  management  staff should be retained, and intends to
review  the  question  of  whether  it  should utilize additional, or different,
outside  resources. Although the Company believes that progress has been made in
addressing the material weaknesses in its internal controls discussed above, the
Company's  management  intends  to  continue  to  work  to  improve its internal
controls.

                                       65
<PAGE>


ITEM  9B.  OTHER  INFORMATION.

      Not  applicable.

                                       66
<PAGE>

                                    PART III


ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT.

     The following table sets forth certain information concerning the executive
officers  and  directors  of  the  Company:
<TABLE>
<CAPTION>



NAME                     AGE                   OFFICE
-----------------------  ---  ----------------------------------------
<S>                      <C>  <C>
William Branch(1)         60  Chairman and Director
Richard M. Christman(2)   55  Chief Executive Officer and Director
John Henderson            43  Chief Financial Officer
Randall Paulfus (3)       59  Interim Chief Financial Officer
Michael Brotherton        44  Chief Operating Officer
Ann Montgomery            39  Vice President of Finance, Treasurer
Allen A. Deutsch          55  President of AP Division
David L. Vettel           47  President of GSI International Division
Charles Jordan            49  President of Cumberland Division
Dennis E Schwieger        64  President of Grain Division
William A. Watson II      44  Vice President of World Wide Engineering
Michael W. Choe(1)        34  Director, Secretary
Andrew S. Janower(1)      37  Director
Kim Davis(1)              52  Director
Paul Farris(4)            59  Director
</TABLE>


(1)     Directors  since  May  16,  2005.
(2)     Director  since  August  2005.
(3)     Effective  January  30,  2006, Randall Paulfus resigned as Interim Chief
Financial Officer.  The Company appointed Robert E. Girardin to serve as Interim
Chief  Financial Officer, effective January 30, 2006.  Effective on February 13,
2006,  the  registrant  appointed  John  Henderson as Chief Financial Officer to
replace  Mr.  Girardin.
(4)     Director  since  February  15,  2006.

     WILLIAM  BRANCH  became  our  Chairman  and Interim Chief Executive Officer
promptly  following  the closing of the Acquisition.  In August 2005, Mr. Branch
resigned as President and Chief Executive Officer, but remains as Chairman.  Mr.
Branch is the former Chairman and Chief Executive Officer of Masland Industries,
a  global designer and manufacturer of interior trim and acoustic components for
the  automotive  industry,  and  served  in that capacity from 1986 to 1996.  In
1990,  Mr.  Branch  teamed  with  Bain  Capital  and Kelso & Company to purchase
Masland  Industries  in a leveraged buyout, eventually taking the company public
in  a  1993  initial  public offering and then selling it to Lear Corp. in 1996.
From  1997  to 1999, Mr. Branch was Chief Executive Officer of Precision Fabrics
Group,  Inc.,  a  privately  held  specialty  textile  company,  where  he led a
restructuring  of  the  business  that included a lean manufacturing initiative.
Since  1999,  Mr.  Branch  has  consulted  in a variety of industries, including
textiles,  automotive  components  and building materials, while also serving as
the  director  of  Precision Fabrics and Sto Corp., a multinational construction
materials company.  Mr. Branch received his B.A. from the University of Maryland
and  is  a  veteran  of  the  U.S.  Air  Force.

     RICHARD  M. CHRISTMAN became our Chief Executive Officer in September 2005.
Prior  to  joining  the  Company, Mr. Christman spent more than 30 years at Case
Corporation  and  its successor company CNH, a global leader in construction and
agricultural  equipment.  His  recent leadership positions there include serving
as  president of multi-billion dollar operating units.  Since February 2005, Mr.
Christman  served as Chief Commercial Governance and Supply Chain Officer of CNH
Global.  From  January  2003  through  February  2005,  Mr.  Christman served as
President  of  CNH Global's Agricultural North America and Australia New Zealand
Region.  From  July  2000  through January 2003 he was President of CNH Global's
Case  IH Agricultural Business.  He also served on the Board of Directors of the
Association of Equipment Manufacturers.  Mr. Christman holds a bachelor's degree
in  mechanical  engineering  from Rose Hulman Institute of Technology and an MBA
from  the  University  of  Michigan.

     JOHN  HENDERSON  became  our Chief Financial Officer in February 2006.  Mr.
Henderson has more than twenty years of experience with Case Corporation and its
successor  company  CNH Global, a global leader in construction and agricultural
                                       67
<PAGE>
equipment,  and  its  affiliates,  including  the  past  eight  years  as a Vice
President.  He  was  most recently Vice President and Controller, North American
Agricultural  Business.  Mr.  Henderson  holds a Bachelor of Science Degree from
the  University  of  Wisconsin  and  a  Masters  of Business Administration from
Marquette  University.

     RANDALL  PAULFUS  joined  the Company in May 2005, became our Interim Chief
Financial  Officer  in  July  2005,  and  resigned  effective  January 30, 2006.
Concurrently,  Mr.  Paulfus  will  remain  a partner of Tatum CFO Partners, LLP,
which  he joined in 1998. From November 2003 to June 2005, Mr. Paulfus served as
Chief  Financial  Officer  for  Enerl,  Inc., a battery research and development
company. Prior to joining Enerl, Inc., Mr. Paulfus served as Chief Restructuring
Officer for Nitram, Inc., a fertilizer manufacturer. Previously, Mr. Paulfus had
held  Chief Financial Officer positions with Aviation Systems, Inc., an airplane
parts  provider,  and  Mosler  Inc.,  a  security  systems.

     MICHAEL  BROTHERTON joined the Company in October 2002.  Mr. Brotherton has
been  the  Chief  Operating  Officer since July 2004.  From October 2002 to July
2004,  he  served  as  Senior  Vice-President  of Operations.  From June 1988 to
September  2002,  he  held  various  management positions culminating with Chief
Operating  Officer  with  Zexel Valeo Compressor U.S.A., Inc., a manufacturer of
compressors  for  the  automotive  industry.

     ANN MONTGOMERY joined the Company in January 2001.  Ms. Montgomery has been
the  Vice-President  of  Finance  since  April 2004.  From January 2001 to April
2004,  she  served as the Corporate Controller.  From June 1998 to January 2001,
she  held  various  management  and finance positions with American General Life
Insurance  Company.  Ms.  Montgomery  is  a CPA, CMA, holds a B.S. in Accounting
from  Culver-Stockton  College  and  an  MBA  from  Sangamon  State  University.

     ALLEN  A. DEUTSCH joined the Company in January 1993.  Mr. Deutsch has been
President of the AP/Cumberland Division since September 2001.  From June 1996 to
September  2001,  he  served as President of the AP Division. From April 1995 to
June 1996, he served as Vice President of the AP Division.  From January 1993 to
April 1995, he served as National Sales Manager of the AP Division.  From August
1983  to  January  1993,  he  served  as  Sales  Manager  of  AAA  Associates,
Incorporated,  a  manufacturer  and  marketer  of livestock ventilation systems,
which  business  was  acquired  by  the  Company  in  January  1993.

     DAVID  L.  VETTEL joined the Company in November 1993.  Mr. Vettel has been
President  of the GSI International Division since December 1995.  From November
1993  to  December  1995,  he  served as Vice President of the GSI International
Division.  From November 1991 to November 1993, he served as International Sales
Manager  of  Chief Industries, Inc., a manufacturer of steel buildings and grain
storage  bins.

     CHARLES  JORDAN  joined  the  Company  in  May  1975.  Mr.  Jordan has been
President  of the Cumberland Poultry Division since October 2003.  From May 1975
to  March  1989,  he  held various management positions with the Grain and Swine
divisions  of GSI.  From March 1989 to February 1999, he held various management
positions  within  the  Cumberland  Division including President.  From February
1999 to February 2002, he left the company to pursue other opportunities.   From
February  2002  to  October  2003,  he  served  as the Director of Distribution.

          DENNIS  E.  SCHWIEGER  became our Grain Division President in December
2005.  Prior  to joining the Company, Mr. Schwieger was Executive Vice President
of  Sales, Marketing, Service, Parts, Overseas Operations, and Strategy/Business
Development  at the Jacobsen Division of Textron Corporation, a global leader in
golf  turf  and commercial turf machinery. In that capacity, Mr. Schwieger drove
various  initiatives to focus on key marketing and operational issues and served
as  a  member  of the Textron Corporate Strategy Council. From 1995 to 2002, Mr.
Schwieger  was  Vice  President  and General Manager of International Supply and
Distribution  at  Valmont  Industries,  Inc.,  the  world's  largest supplier of
irrigation  systems  for  agriculture.  Mr.  Schwieger  has also held leadership
positions at Case Corporation, Massey-Ferguson, Ltd and Deere & Company, and has
served  as  President of the Board of Directors of the North American Irrigation
Association and on the Boards of Directors of Ag Electronics Association-EMI and
Hay  and Forage Industries. Mr. Schwieger holds a B.S. in Mechanical Engineering
from  the  University  of Missouri and an M.B.A. from the University of Northern
Iowa.

          WILLIAM  A.  WATSON,  II  became  our  Vice  President  of  World Wide
Engineering  in  December  2005. From November 1990 to December 2005, Mr. Watson
held  various  leadership  positions  at  Lear  Corporation,  one of the world's
leading  automotive interior systems suppliers. From July 2001 to December 2005,
Mr.  Watson  served  as  Director of Global Business Practices-Product Lifecycle
Management.  In  this  capacity,  Mr.  Watson led the management team to develop
cross-functional  business  process  improvements  and  standardization.  From
December  2002  to  July  2001,  Mr.  Watson  served  as  Director  of  Product
Engineering.  Mr. Watson has also held leadership positions at McDonnell Douglas
                                       68
<PAGE>
and  Noranda Aluminum Incorporated. Mr. Watson serves as a member of the Society
of  Automotive  Engineers,  the American Society of Mechanical Engineers and the
National  Society  of  Professional  Engineers.  Mr.  Watson  holds  a  B.S.  in
Mechanical  Engineering  from  University  of  Missouri,  Rolla.

     MICHAEL  W.  CHOE  joined Harvard Private Capital Group, the predecessor to
Charlesbank,  in  1997.  He  was appointed a managing director of Charlesbank in
2006.  Previously,  Mr.  Choe  worked at McKinsey & Company, where he focused on
corporate  strategy work in healthcare media and industrial products, and at the
Korea Development Institute in Seoul, South Korea.  Mr. Choe serves on the board
of  GSI.  He  is  a  graduate  of  Harvard  University,  with  a  BA in Biology.

     ANDREW  S. JANOWER joined Harvard Private Capital Group, the predecessor to
Charlesbank,  in  1996.  He  was appointed a managing director of Charlesbank in
2002.  Mr.  Janower's  previous  experience  includes  working  as  a  research
associate  in  entrepreneurial  finance  at the Harvard Business School and as a
consultant  at  Bain  &  Company,  where  he  focused on industrial and consumer
products,  business services and distribution.  Mr. Janower serves on the boards
of various private companies. He earned a BS in economics, magna cum laude, from
the  Wharton  School  at the University of Pennsylvania, and an MBA from Harvard
University  with  Baker  Scholar  honors.  He  is  also  a  CPA.

     KIM DAVIS.  Prior to co-founding Charlesbank Capital Partners in July 1998,
Mr.  Davis  was a Managing Director of Harvard Private Capital Group.  He joined
Harvard Private Capital in 1997, having worked with the Principals since a joint
investment  in  1992.  Previously,  Mr.  Davis  was at Kohlberg & Co. as General
Partner,  at  Weiss,  Peck  &  Greer  as  Partner  and  at  General  Motors  and
Dyson-Kissner-Moran  in  various  positions.  Mr.  Davis serves on the boards of
various  private  companies.  He  was  appointed  by  President  Clinton  to the
Baltic-America  Enterprise  Fund  in 1994 and is also a member of the Council on
Foreign  Relations  and  the  Economic  Council  of  Common  Good. A former vice
chairman  of  the  Harvard  College  Fund, he currently is a member of Harvard's
Committee  on University Resources.  Mr. Davis graduated from Harvard University
with  a  BA  in  history  and  also  holds  an  MBA  from  Harvard.

     PAUL  FARRIS.  Mr.  Farris  is  the  Landmark  Communications  Professor of
Business  Administration  at  the Darden School of Business of the University of
Virginia, where he teaches marketing and e-business courses in the school's MBA,
doctoral and executive programs.  Prior to his appointment to the Darden faculty
in  1980,  he  taught  at  the Harvard Business School, and previously worked in
marketing  management  for  Unilever  in  Germany and for the Lintas advertising
agency.  He  currently serves on the Board of Directors of Sto, Inc.  Mr. Farris
holds  a  Bachelor's  Degree  in Science from the University of Missouri, an MBA
from  the  University  of  Washington  and  a  DBA  from  Harvard.

     The  Company's  bylaws  provide  that the number of directors shall be two,
however,  the Board of Directors by resolution have increased the number to six.
Each director is elected to serve until the next annual meeting and until his or
her  successor  has  been  elected  and  qualified  or  until his or her earlier
resignation  or  removal.  Executive  officers  are  elected  by  the  Board  of
Directors  and  serve  until their successors have been elected and qualified or
until  their  earlier  resignation  or  removal.

     The  registrant  has  a  separately-designated  standing  audit  committee
established  in  accordance  with  Section 3(a)(58)(A) of the Exchange Act.  The
audit  committee  consists  of Michael W. Choe, Andrew S. Janower, Kim Davis and
Paul  Farris.  Mr.  Choe  serves  as  the  financial  expert.

     The registrant has adopted a code of ethics and corporate conduct, which is
filed  as Exhibit 14.1 to this annual report, and the registrant has also posted
the  full  text  of  this  Corporate Code of Conduct and Compliance Policy dated
April  6,  2006,  on  its  internet  website,  which  can  be  accessed  at
www.grainsystems.com.  This  code  applies  to  all  of  the  employees  of  the
               -----
registrant,  including  its chief executive officer, chief financial officer and
principal  accounting  officer.  A copy of such code of ethics will be supplied,
free  of  charge, upon written request made to Ann Montgomery, Vice President of
Finance,  at  the  registrant's  principal  place  of  business  in  Assumption,
Illinois.  No  amendments  to,  nor  waivers from any of the provisions of, this
code  of  ethics  were  made  in  fiscal  year  2005.

                                       69
<PAGE>
ITEM  11.  EXECUTIVE  COMPENSATION.

     The  following  table  sets  forth in summary form all compensation for all
services  rendered  in all capacities to the Company for the year ended December
31,  2005  of  the  Company's  Chairman of the Board and the other five most the
highly  compensated  executive officers of the Company (the "Named Executives").
<TABLE>
<CAPTION>

                                       SUMMARY COMPENSATION TABLE

                                                                                                   L-T
                                                                       COMPENSATION
                                                                          AWARDS
                                                                        SECURITIES
                                                                       -------------
                                                          ALL OTHER     UNDERLYING
NAME & PRINCIPAL POSITION   YEAR  ANNUAL COMPENSATION   COMPENSATION    OPTIONS(1)
--------------------------
                                         SALARY             BONUS
                                  --------------------  -------------
<S>                         <C>   <C>                   <C>            <C>            <C>         <C>
Richard Christman (2)       2005  $             87,365  $          --                 $32,252(3)  20,000
                            2004  $                 --  $          --                 $      --       --
                            2003  $                 --  $          --                 $      --       --

William Branch(4)           2005  $             59,615  $          --                 $      --   12,500
                            2004  $                 --  $          --                 $      --       --
                            2003  $                 --  $          --                 $      --       --

Russell C. Mello(5)         2005  $            208,594  $     150,000                 $50,346(6)      --
                            2004  $            193,281  $          --                 $      --       --
                            2003  $            113,102  $      30,000                 $      --       --

Randall Paulfus(7)          2005  $            153,785  $          --                 $      --       --
                            2004  $                 --  $          --                 $      --       --
                            2003  $                 --  $          --                 $      --       --

Ann Montgomery(8)           2005  $             84,423  $      35,000                 $   844(9)   1,250
                            2004  $             72,808  $          --                 $   728(9)      --
                            2003  $             64,615  $          --                 $   646(9)      --

</TABLE>


(1)     Consists  of  options granted at fair market value to purchase shares of
common  stock  of  GSI  Holdings.
(2)     Hired  on  September  1,  2005  as  Chief  Executive  Officer.
(3)     Includes  $3,047  auto  allowance  and  $29,205  moving  allowance.
(4)     Acted  as Interim Chief Executive Officer from May 16, 2005 to September
1,  2005.
(5)     Acted  as  Chief Executive Officer from July 8, 2004 to May 16, 2005 and
as  Chief  Financial  Officer  from  May  16,  2005  to  July  5,  2005.
(6)     Includes  $46,154  severance;  $2,384  auto  allowance;  and $1,808 401K
matching.
(7)     Hired  on  July  5,  2005  as  Interim Chief Financial Officer; resigned
effective  January  30,  2006.
(8)     Vice  President  of  Finance.
(9)     401K  matching  funds.

                                       70
<PAGE>

<TABLE>
<CAPTION>

                            OPTION GRANTS IN LAST FISCAL YEAR

                                      % of
                                     Total
                       Number of    Options
                      Securities    Granted
                      Underlying       To       Exercise                        Grant
                        Options    Employees    Or Base                          Date
                        Granted    In Fiscal     Price        Expiration       Present
Name                      (#)         Year       ($/Sh)         Date(1)        Value $
<S>                   <C>          <C>         <C>         <C>                <C>

Richard Christman          20,000      24.72%  $      100  Time/Performance   $2,000,000
William Branch             12,500      15.45%  $      100  Time/Performance   $1,250,000
Ann Montgomery              1,250       1.55%  $      100  Time               $  125,000
All other employees        47,150      58.28%  $      100  Time/Performance   $4,715,000

Total (2)                  80,900     100.00%  $      100                     $8,090,000

</TABLE>


(1)Options  are  vested over a 5 year time period or are vested on a performance
based  schedule.
(2)None  of  these  options  were  exercised.

COMPENSATION  COMMITTEE  INTERLOCKS  AND  INSIDER  PARTICIPATION

     The  Company formed a Compensation Committee in August 2005 and consists of
Michael  Choe,  Andrew  Janower,  Kim  Davis and Paul Farris. All members of the
Company's  Board  of Directors participated in deliberations regarding executive
officer  compensation during 2005. During 2005, no member of the Company's Board
of  Directors  served as a director or a member of the compensation committee of
any  other  company  of  which  any  executive officer served as a member of the
Company's  Board  of  Directors  during  2005.

DIRECTOR  COMPENSATION

     There  is  $25,000  annual  compensation  for  Director  Paul  Farris.

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

The  following  table  sets  forth  certain  information  giving  effect  to the
Acquisition  with  respect  to  shares of our voting common stock and non-voting
common  stock.
<TABLE>
<CAPTION>


                                                                                       Non-Voting
                                       Voting Common Stock               Common Stock
                                            Number of       Percentage                 Number of   Percentage
                                       -------------------
Name and Address of Beneficial Owner         Shares          Of Voting                   Shares     Of Voting
<S>                                    <C>                  <C>          <C>           <C>         <C>

GSI Holdings Corp.(1) (2)                          626,948      100.00%                   200,000      100.00%


</TABLE>



(1)     GSI  Holdings  is  primarily owned by Charlesbank Equity Fund V, Limited
Partnership,  and by related coinvestment funds. Approximately 12% of the common
stock  of  GSI  Holdings  is  owned  by  unrelated  investment funds and certain
individual  management  and  non-management  investors.
(2)     GSI  Holdings  shares  of  the  registrant have been pledged to Wachovia
Capital  Finance  under  the  Credit  Facility  which means that if there were a
default  under such credit facility and Wachovia Capital Finance were to acquire
beneficial  ownership  to  these  shares  there could potentially be a change in
control  of  the  registrant.

                                       71
<PAGE>


SECURITY  OWNERSHIP  OF  MANAGEMENT IN REGISTRANT'S PARENT COMPANY, GSI HOLDINGS
CORP.
<TABLE>
<CAPTION>



                                                                    VOTING COMMON STOCK
<S>                                                                 <C>                  <C>
                                                                    NUMBER OF            PERCENTAGE OF
NAME AND ADDRESS OF BENEFICIAL OWNER                                SHARES               VOTING
------------------------------------------------------------------  -------------------  --------------
Directors and executive officers as a group ( 11 persons in group)               31,850           5.64%
Other management as a group (20 persons in group)                                20,450           3.62%

Total Director and Management ownership*                                         52,300           9.26%

</TABLE>


*An  employee  of  the  Company's Brazilian subsidiary owns 15% of the Brazilian
subsidiary.  The  employee  ownership  is  capped  at  15%.



                                       72
<PAGE>

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS.

MANAGEMENT  EQUITY  INVESTMENTS

     In  October 2005, certain members of our senior management team and certain
other individual investors purchased approximately 10% of the outstanding shares
of  GSI  Holdings'  common stock for $100.00 per share, the same price per share
paid  by GSI Holdings in the Acquisition. The following table sets forth certain
information  with  respect  to  stock  purchases  by  our  directors,  our Chief
Executive  Officer  and  by the other executive officers identified herein under
"Executive  Compensation."  Each  of  the  stockholders listed below, except for
Richard  M.  Christman, currently owns less than 1% of the outstanding shares of
common  stock  of  GSI  Holdings.  Mr.  Christman  currently  owns  1.77% of the
outstanding  shares  of  common  stock  of  GSI  Holdings.
<TABLE>
<CAPTION>


                                 Relationship to             Nature of Interest in the   Amount of Individual's
Name of Owner                    The Registrant                    Transaction(s)              Transaction
<S>                   <C>                                    <C>                         <C>

Richard M. Christman  Chief Executive Officer and Director   Stockholder                 $             1,000,000
                      (The GSI Group and GSI Holdings)

William Branch        Chairman(The GSI Group and             Stockholder                 $               500,000
                      GSI Holdings)

Paul Farris           Director (The GSI Group and            Stockholder                 $               100,000
                      GSI Holdings)

Ann Montgomery        Vice President of Finance              Stockholder                 $               100,000
</TABLE>




     In  connection  with  these  purchases,  GSI  Holdings  entered  into Stock
Purchase  and  Management  Equity  Agreements  with  each  of Richard Christman,
William  Branch,  Paul  Farris  and  Ann Montgomery in October 2005. Because Mr.
Christman  purchased his shares of common stock of GSI Holdings in two tranches,
GSI  Holdings  entered  into  a  second  Stock  Purchase  and  Management Equity
Agreement  with Mr. Christman in December 2005. Such agreements set forth, among
other  things,  the  terms  of  the  stock  purchases,  transfer  restrictions,
repurchase  rights  and  certain  sale/purchase  rights  and  certain  piggyback
registration  rights.  A  form of such agreements is filed as an exhibit to this
registration  statement.

     The  Stock  Purchase and Management Equity Agreements generally (i) provide
that the investors acknowledge that they are "accredited investors" and that the
shares  purchased  are  not freely transferable in the absence of a registration
statement  or an appropriate exemption therefrom; (ii) that the purchased shares
shall  not  be  transferable  prior  to  the expiration of 180 days following an
initial  public  offering  of  GSI  Holdings, with certain specified exceptions;
(iii)  in  the  event  the  investor  ceases  to be employed by or to serve as a
director  or consultant to the Company for any reason prior to an initial public
offering  of  GSI  Holdings, then GSI Holdings shall have the right, but not the
obligation,  within  certain  specified  periods  of  time,  to  repurchase such
investor's  shares  at  their  fair market value, unless such termination is for
cause  or by reason of failure to comply with the investor's Executive Severance
and  Restrictive  Covenant  Agreement, in which case the purchase price shall be
the  lower  of  fair market value or the investor's cost for the shares; (iv) if
underwriters  for  an  underwritten  public  offering of the GSI Holdings common
stock  so  request,  then the investor agrees not to sell or transfer any shares
other than those being offered in such offering for a period of either 90 or 180
days  (the  longer  period  if  this  is  an  initial public offering) following
effectiveness  of the registration statement in such public offering; (v) if any
principal  stockholder of GSI Holdings (as defined in the agreement) proposes to
enter  into  a transaction in which he, she or they shall transfer a controlling
interest  in GSI Holdings, then they may require the investor to be obligated to
sell  his  or  her  shares in the same transaction for the same price and on the
same  terms;  (vi) in the event that any principal stockholder proposes to enter
into a transaction in which they shall transfer more than 50% of the outstanding
shares  held by all principal stockholders, the investor shall have the right to
participate  in  such  transfer  at  the same price and on the same terms to the
extent  of  his or her proportionate percentage of the shares to be transferred;
(vii) in the event GSI Holdings proposes to issue any securities other than debt
securities,  and  subject  to  certain  other specified exceptions, the investor
shall be entitled to participate in such issuance pro rata; (viii) provides that
                                       73
<PAGE>
the  investor  shall be entitled to certain information concerning GSI Holdings;
and  (ix)  requires  the  investor to enter into a registration rights agreement
with GSI Holdings containing provisions for when securityholders of GSI Holdings
may  cause it to register shares in an underwritten public offering and granting
certain  registration  rights  to  the  investor in the event of an underwritten
public  offering.

CORPORATE  DEVELOPMENT  AND  ADMINISTRATIVE  SERVICES  AGREEMENT

     In  connection  with  the  closing  of the Acquisition, we and GSI Holdings
entered  into  a  10-year  Corporate  Development  and  Administrative  Services
Agreement  with  Charlesbank,  pursuant to which Charlesbank will assist us with
certain  corporate  development  activities  and  will  provide  us with certain
administrative  services.  Pursuant  to  that  agreement,  Charlesbank  will  be
entitled  to  receive  a $600,000 per year monitoring fee, payable quarterly, in
addition  to  a  1%  transaction  fee  on  future acquisitions, dispositions and
financings,  together with reimbursement of reasonable out-of-pocket expenses in
connection  with  the  provision  of  such services to us and indemnification of
Charlesbank  and  its  affiliates,  officers  and  directors  against  claims or
liabilities  relating  to  that agreement. Payment of monitoring and transaction
fees  will  be  subordinated  to  payments on our refinanced credit facility and
these  notes.

EXECUTIVE  SEVERANCE  AND  RESTRICTIVE  COVENANT  AGREEMENTS  WITH DIRECTORS AND
SENIOR  MANAGEMENT

     Immediately  following the Acquisition, we entered into Executive Severance
and  Restrictive  Covenant  Agreements with each of our executive officers. Such
agreements include provisions that prohibit the executive from competing with or
soliciting  clients of the Company during his employment period and for a period
of  18  months thereafter if the executive has more than ten years of service at
the  Company or 12 months thereafter if the executive has less than ten years of
service  at  the  Company,  soliciting  employees  of  the  Company  during  his
employment  period  and  for  a  period  of three years thereafter or disclosing
confidential  information  of  the Company or its subsidiaries or affiliates. In
addition,  such agreements impose certain obligations on us upon the termination
of  the  executive's  employment,  including,  under  certain circumstances, the
payment of severance, the continuation of benefits and the continued vesting and
exercisability  of certain equity based compensation. In the event of the breach
by  the  executive  of  any  of  the  restrictive covenants described above, the
executive will forfeit certain severance payments, equity based compensation and
amounts  received  in  connection with such equity based compensation. A form of
such agreements is filed as an exhibit to this registration statement. A similar
agreement  was entered into by the Company with Richard M. Christman in November
2005.

STOCK  OPTION  AGREEMENTS  WITH  DIRECTORS  AND  SENIOR  MANAGEMENT

     In October 2005, GSI Holdings entered into Stock Option Agreements with its
chairman,  each of its executive officers, Paul Farris and certain non-executive
officers. Under such agreements, GSI Holdings granted to each of the above-named
directors  and  officers  non-qualified options to purchase additional shares of
GSI  Holdings'  common  stock under the GSI Holdings Corp. 2005 Management Stock
Incentive  Plan.  Such  granted  options shall vest 20% annually for a period of
five  years  and have an exercise price of $100.00 per share, the same price per
share paid by GSI Holdings in the Acquisition. Upon a change in control in which
there  is  a  change  in  ownership of GSI Holdings of more than 50%, unless the
acquiring company assumes or provides substitute options for the options of each
of  the  above-named directors and officers, all such holder's options will vest
and  become  exercisable  immediately  preceding  the  change in control. If the
acquiring  company assumes or provides substitute options for the options of any
of  the  above-named  directors and officers, GSI Holdings will take all actions
reasonably  necessary  to  ensure  that  the acquiring or succeeding corporation
provides that any such assumed or substituted options granted to the above-named
officers  become  fully vested and exercisable for 30 days after the termination
of such officer's employment in the event of termination other than for cause or
good  reason  within  12 months after the occurrence of the change in control. A
form  of  such agreements is filed as an exhibit to this registration statement.
At  the  same time, GSI Holdings entered into additional Stock Option Agreements
with  each  of  Mr.  Christman  and  Mr.  Branch  providing  for  the  grant  of
non-qualified  options  to  purchase  additional  shares of GSI Holdings' common
stock  under  the  GSI Holdings Corp. 2005 Management Stock Incentive Plan. Such
granted  options  shall  have  an  exercise price of $100.00 per share, the same
price  per  share  paid by GSI Holdings in the Acquisition. Such granted options
shall  vest  on a pro rata basis, based on the level of return on investment for
certain stockholders, upon the satisfaction of certain conditions, including the
occurrence  of  a  sale of the Company or other liquidity event, provided that a
minimum  internal  rate of return and multiple of investment is obtained. A form
of  such  agreements  is  filed  as  an  exhibit to this registration statement.

OTHER  RELATED  PARTY  TRANSACTIONS

     The  Company  conducts transactions in the ordinary course of business with
companies  owned  by  the  Segatt  family,  a  member  of  which  is  a minority
shareholder of a subsidiary of the Company.  Such transactions generally consist
                                       74
<PAGE>
of  purchases  of  materials, freight payments, and commissions that amounted to
$979,499, $925,786 and $564,362 for 2005, 2004 and 2003, respectively, and sales
of  poultry  equipment that amounted to $288,351, $296,681 and $99,815 for 2005,
2004  and  2003,  respectively.

     The  Company  conducts transactions in the ordinary course of business with
Reliance,  a supplier of poultry equipment, which is owned by an employee of the
Company.  Such  transactions  generally  consist  of  purchases of materials for
poultry  equipment  that  amounted to $108,896, $958,040 and $238,095 from 2005,
2004  and  2003,  respectively,  and sales of poultry equipment that amounted to
$410,464,  $150,127  and  $239,005  from  2005,  2004  and  2003,  respectively.

     The  Company  makes  sales  in  the  ordinary course of business to Mayland
Enterprises,  a  distributor  of grain equipment that is owned by an employee of
the  Company.  Such  transactions  generally consist of sales of grain equipment
and  amounted  to  $11,274,  $41,178  and  $89,348  for  2005,  2004  and  2003,
respectively.

     The  Company believes that these transactions were, and future transactions
with  Charlesbank  Capital  Partners,  the  Segatt family, Reliance, and Mayland
Enterprises  will  be, on terms no less favorable to the Company than could have
been  obtained  from  an  independent third party in 'arm's length transactions.

     Charlesbank  Capital Partners holds $8.0 million of the senior notes of the
Company,  which  accounts  for  approximately  7.3%  of  the total senior notes.

     The  following  were  related  parties from January 1 - May 16, 2005.  They
ceased  being  related  parties  at  the  date  of  the  Acquisition.

     The  Company  made  sales  in  the  ordinary  course  of  business to Sloan
Implement  Company,  Inc., a supplier of agricultural equipment that is owned by
family  members  of  a  former  stockholder  of  the  Company. Such transactions
generally  consisted  of  sales  of  grain  equipment  and amounted to $155,052,
$487,439  and  $125,920  for  2005,  2004  and  2003,  respectively.

     The  Company  made sales in the ordinary course of business to Larry Sloan,
who is a family member of a former stockholder of the Company. Such transactions
generally  consisted of sales of grain equipment and amounted to $3,922, $24,193
and  $72,619  for  2005,  2004  and  2003,  respectively.

     The  Company  had  a  contract  with  BMA  Consulting, Inc. (BMA) where BMA
provided  consulting services in the ordinary course of business to the Company.
BMA  is owned by a former shareholder of the Company. Such transactions amounted
to  $16,352  and  $699,210  for  2004  and  2005,  respectively.

     The  Company conducted transactions in the ordinary course of business with
RAD  Properties,  a  corporation owned by Craig Sloan, former shareholder of the
Company.  Such  transactions generally consisted of rent and lease payments that
amounted  to  $0,  $216,200  and  $302,900 in 2005, 2004 and 2003, respectively.

ITEM  14.   PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES.

AUDIT  FEES

     The  aggregate  fees  billed  by  BKD  LLP,  the Company's principal public
accountants,  for  the  fiscal  years  ended  December  31,  2005  and  2004 for
professional  services  rendered for the audit of the Company's annual financial
statements  and  review  of  financial  statements  included  in  the  Company's
Quarterly  Reports  on  Form  10-Q  for  those  fiscal  years were approximately
$444,146  and  $116,750,  respectively.

AUDIT-RELATED  FEES

     The  aggregate  fees  billed by BKD LLP for the fiscal years ended December
31,  2005  and  2004 for audit-related services, which included an annual profit
sharing  audit,  an  S-4  filing  and  various  SEC  response  letters,  were
approximately  $179,257  and  $4,850,  respectively.

TAX  FEES

     The  aggregate  fees  billed by BKD LLP for the fiscal years ended December
31,  2005  and  2004  for tax-related services, which included international tax
issues  and  Form  5500,  were  approximately  $900  and  $600,  respectively.

                                       75
<PAGE>


ALL  OTHER  FEES

     The  Company did not engage its principal public accountants to provide any
other  services  for  the  fiscal  years  ended  December  31,  2005  and  2004.

AUDIT  COMMITTEE

     Pursuant  to  its  objectives  and  discussions  of  its  charter,  not yet
finalized,  the  Audit  Committee  which  was  recently  appointed,  has  the
responsibility  to  select,  evaluate,  and  where  appropriate,  recommend  the
replacement  of  its  independent  auditors.  The  Audit  Committee  is directly
responsible  for  determining the compensation and for overseeing the work to be
performed by its independent auditors.  The independent auditors report directly
to  the  Audit  Committee.  The  Audit  Committee's policy is to pre-approve all
auditing  and permitted non-auditing services to be performed for the registrant
by  its independent auditors.  In the event that pre-approvals for such auditing
services  and  non-auditing  services  cannot  be obtained from the entire Audit
Committee  as  a result of inherent time constraints in the matter for which the
services  are  required,  the designated financial expert of the Audit Committee
has been granted authority to pre-approve such services, and he will then report
for  ratification  such  pre-approval  to  the  full Audit Committee at its next
scheduled  meeting.  The  Audit  Committee  has complied with the procedures set
forth  above  since  its  formation.

                                       76
<PAGE>

                                     PART IV


ITEM  15.  EXHIBITS  AND  FINANCIAL  STATEMENT  SCHEDULES.

     (a)(1)  FINANCIAL  STATEMENTS:

          See  "Index  to  Consolidated  Financial  Statements of The GSI Group,
Inc."  set  forth  in  Item  8  hereof.

     (a)(2)  FINANCIAL  STATEMENT  SCHEDULES:

          Schedules  not  listed  above  have  been  omitted  because  they  are
inapplicable  or the information required to be set forth therein is provided in
the  Consolidated  Financial  Statements  or  the  notes  thereto.

     (a)(3)  EXHIBITS:

           A  list  of  the  exhibits  included as part of this Form 10-K is set
forth in the Index to Exhibits that immediately precedes such exhibits, which is
incorporated  herein  by  reference.

                                       77
<PAGE>


                                   SIGNATURES

     PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) THE SECURITIES EXCHANGE
ACT OF 1934, THE GSI GROUP, INC. HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN ASSUMPTION, ILLINOIS ON
APRIL  14,  2006.

                                   The  GSI  Group,  Inc.

                          By:              /s/     Richard  Christman
                                  ------------     ------------------
                                                   Richard  Christman
                                                      Chief  Executive  Officer

     PURSUANT  TO  THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF REGISTRANT IN
THE  CAPACITIES  INDICATED  ON  APRIL  14,  2006.
<TABLE>
<CAPTION>



SIGNATURE                         TITLE
-----------------------  -----------------------
<S>                      <C>
/s/   Richard Christman  Chief Executive Officer
Richard Christman
-----------------------

/s/  John Henderson      Chief Financial Officer
John Henderson
-----------------------

</TABLE>




                                       78
<PAGE>

EXHIBIT  31.1
                                 CERTIFICATIONS
I,  Richard  Christman,  certify  that:

1.  I  have  reviewed  this  Annual  Report on Form 10-K of The GSI Group, Inc.;

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  officers  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)     [Paragraph  omitted  pursuant  to SEC Release nos. 33-8392 and 34-49313.]

c)     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

d)     Disclosed  in this report any change in the registrant's internal control
over  financial  reporting  that  occurred during the registrant's fourth 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 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 reasonable
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:  April  14,  2006


/s/  Richard  Christman
-----------------------
 Chief  Executive  Officer





                                       79
<PAGE>
EXHIBIT  31.2
                                 CERTIFICATIONS

I,  John  Henderson,  certify  that:

1.  I  have  reviewed  this  Annual  Report on Form 10-K of The GSI Group, Inc.;

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)  [Paragraph  omitted  pursuant  to  SEC  Release  nos. 33-8392 and 34-49313.]

c)  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

d) Disclosed in this report any change in the registrant's internal control over
financial  reporting that occurred during the registrant's fourth 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 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:  April  14,  2006


/s/  John  Henderson
--------------------
Chief  Financial  Officer


                                       80
<PAGE>




EXHIBIT  32.1

                                  CERTIFICATION
                       PURSUANT TO 18 U.S.C. SECTION 1350,
                       AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Annual Report on Form 10-K of The GSI Group,
Inc.,  a  Delaware  corporation (the "Company"), for the year ended December 31,
2005,  as  filed  with the Securities and Exchange Commission on the date hereof
(the  "Report"),  and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section  906  of  the  Sarbanes-Oxley  Act  of 2002, Richard Christman, as Chief
Executive  Officer of the Company, and John Henderson as Chief Financial Officer
of  the  Company,  hereby  certify  that  the  Report  fully  complies  with the
requirements  of  Section 13(a) or 15(d) of the Securities Exchange Act of 1934;
and

 The  information  contained  in  the  Report  fairly  presents, in all material
respects,  the  financial  condition  and  results of operations of the Company.

Dated:  April  14,  2006
/s/  RICHARD  CHRISTMAN
-----------------------
     Richard  Christman
                         Chief  Executive  Officer


/s/  JOHN  HENDERSON
--------------------
John  Henderson
Chief  Financial  Officer




     This  certification shall not be deemed "filed" by the Company for purposes
of  Section  18  of  the  Securities  Exchange  Act  of 1934.  In addition, this
certification  shall  not  be  deemed  to  be incorporated by reference into any
filing  under the Securities Act of 1933 or the Securities Exchange Act of 1934.

A  signed  original  of  this  written  statement required by Section 906 of the
Sarbanes-Oxley Act of 2002 has been provided to the Company and will be retained
by  the  Company  and furnished to the Securities and Exchange Commission or its
staff  upon  request.


                                       81
<PAGE>
<TABLE>
<CAPTION>

                                                INDEX TO EXHIBITS



EXHIBIT
  NO.    DOCUMENT DESCRIPTION
         -------------------------------------------------------------------------------------------------------
<C>      <S>


    2.1  Asset Purchase Agreement, dated October 31, 2004, by and between The GSI Group, Inc., The GSI
         Group (Canada) Co. and UHI Canada, Corporation. (7)
    2.2  Stock Purchase Agreement, dated December 22, 2004, by and between The GSI Group, Inc.,
         And Kenneth Stonecipher. (7)
    2.3  Asset Purchase Agreement, dated December 22, 2004, by and between The GSI Group, Inc.,
         And Hog Slat, Inc. (7)
    3.1  Amended and Restated Articles of Incorporation of The GSI Group, Inc., as amended as of
         October 23, 1997 (1)
    3.2  By-Laws of The GSI Group, Inc, as amended. (8)
    4.1  Indenture, dated November 1, 1997, between The GSI Group, Inc. and LaSalle National Bank, as
         Trustee, including forms of the Old Notes and the New Notes issued pursuant to such Indenture. (1)
    4.2  First Supplemental Indenture, dated December 19, 1997, between The GSI Group, Inc. and LaSalle
         National Bank, as Trustee, amending Indenture dated November 1, 1997, between The GSI Group, Inc.
         Group, Inc. and LaSalle National Bank, as Trustee, to qualify such Indenture under the Trust Indenture
         Act of 1939. (1)
    4.3  Second Supplemental Indenture, dated December 19, 1997, executed by David Manufacturing Co.,
         Amending Indenture dated November 1, 1997, between The GSI Group, Inc. and LaSalle National Bank,
         as Trustee, to add David Manufacturing Co. as a Guarantor under such Indenture. (1)
    4.4  Agreement of The GSI Group, Inc. to furnish the Securities and Exchange Commission with a
         Copy of certain instruments relating to long-term debt of The GSI Group, Inc. upon request. (1)
    4.5  Indenture, dated as of May 16, 2005, between The GSI Group, Inc., its Guarantors, and U.S. Bank
         National Association, as Trustee, including forms of the Notes issued pursuant to such Indenture. (9)
   10.1  Loan and Security Agreement dated October 31, 2003 between The GSI Group, Inc., as borrower
         And Congress Financial Corporation (Central), as lender. (4)
   10.2  Amendment No. 1 to the October 31, 2003 Loan and Security Agreement, dated July 9, 2004, between
         The GSI Group, Inc., as borrower, and Congress Financial Corporation (Central), as lender. (5)
   10.3  Amendment  No. 2 to the October 31, 2003 Loan and Security Agreement, dated October 19, 2004,
         Between The GSI Group, Inc., as borrower, and Congress Financial Corporation (Central), as lender. (6)
   10.4  Amendment No. 3 to the October 31, 2003 Loan and Security Agreement, dated February 2, 2005,
         Between The GSI Group, Inc., as borrower, and Congress Financial Corporation (Central), as lender. (7)
   10.5  Indemnification Agreement, dated July 1, 2001, by and among The GSI Group, Inc. and John C. Sloan,
         Howard Buffett, Jorge Andrade, and Russell C. Mello. (2)
   10.6  Indemnification Agreement, dated July 7, 2004, between The GSI Group, Inc. and Ann Montgomery. (5)
   10.7  Affirmative Pledge of Assignment of Quotas and Other Provisions Agreement, dated January 1, 2002,
         Between The GSI Group, Inc. and Leonardo Segatt. (7)
   10.8  Severance, Non-Compete and Consulting Agreement between The GSI Group, Inc., and John C. Sloan
         Dated July 8, 2004. (3)
   10.9  Executive Severance and Restrictive Covenant Agreement between The GSI Group, Inc. and Richard
         Christman. (10)
  10.10  Form of Stock Purchase and Management Equity Agreement between GSI Holdings Corp. and certain
         Directors, employees or consultants, dated as of October 6, 2005. (11)
  10.11  Form of Executive Severance and Restrictive Covenant Agreement, dated as of May 16, 2005, between
         The GSI Group, Inc. and its executives. (11)
  10.12  Form of Stock Option Agreement between GSI Holdings Corp. and certain optionees, dated as of
         October 6, 2005. (11)
  10.13  Alternative Form of Stock Option Agreement between GSI Holdings Corp. and certain optionees, dated
         As of October 6, 2005.  (11)
  10.14  Loan and Security Agreement dated May 16, 2005 with Wachovia Capital Finance Corporation (Central),
          as Agent, and other Lenders.
   12.1  Computation of Ratio of Earnings to Fixed Charges.
   14.1  Corporate Code of Conduct
   21.1  List of Subsidiaries of The GSI Group, Inc.
   31.1  Certification of Chief Executive Officer.
   31.2  Certification of Chief Financial Officer
   32.1  Section 906 Certification.



____________


(1)     Incorporated  by  reference from the Company's Registration Statement of
Form  S-4  (Reg.  No.  333-43089) filed with the Commission on December 23, 1997
pursuant  to  the  Securities  Act  of  1933,  as  amended.

(2)     Incorporated  by  reference  from the Company's Form 10-Q filed with the
Commission  on  August  3,  2001  pursuant  to  the  Securities  Act  of  1934.

(3)     Incorporated  by  reference  from  the Company's Form 8-K filed with the
Commission  on  July  16,  2004  pursuant  to  the  Securities  Act  of  1934.

(4)     Incorporated  by  reference  from the Company's Form 10-Q filed with the
Commission  on  November  7,  2003  pursuant  to  the  Securities  Act  of 1934.

(5)     Incorporated  by  reference  from the Company's Form 10-Q filed with the
Commission  on  August  12,  2004  pursuant  to  the  Securities  Act  of  1934.

(6)     Incorporated  by  reference  from the Company's Form 10-Q filed with the
Commission  on  November  10,  2004  pursuant  to  the  Securities  Act of 1934.
                                       83
<PAGE>

(7)     Incorporated  by  reference  from the Company's Form 10-K filed with the
Commission  on  April  15,  2005  pursuant  to  the  Securities  Act  of  1934.

(8)     Incorporated  by  reference  from the Company's Form 10-Q filed with the
Commission  on  May  17,  2005  pursuant  to  the  Securities  Act  of  1934.

(9)     Incorporated  by  reference  from  the Company's Form S-4 filed with the
Commission  on  August  15,  2005  pursuant  to  the  Securities  Act  of  1933.

(10)     Incorporated  by  reference  from the Company's Form 8-K filed with the
Commission  on  November  10,  2005  pursuant  to  the  Securities  Act of 1934.

(11)     Incorporated  by reference from the Company's Form S-4/A filed with the
Commission  on  January  30,  2006  pursuant  to  the  Securities  Act  of 1933.



     SUPPLEMENTAL  INFORMATION  TO  BE  FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION  15(D)  OF  THE  ACT  BY REGISTRANT WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT  TO  SECTION  12  OF  THE  ACT.

The  Company did not send an annual report covering the registrant's last fiscal
year  or  proxy  statement  to  security  holders.

                                       84
<PAGE>



                                                                                                             Exhibit 12.1





TABLE>
<CAPTION>



THE GSI GROUP, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
(Dollars in Thousands)
<S>                                                 <C>                        <C>         <C>         <C>        <C>
                                                    Year ended December 31,

                                                                        2001        2002        2003        2004
                                                    Restated                   Restated    Restated    Restated      2005
Income (loss) from continuing
 Operations before tax                              $                 (2,504)  $ (10,574)  $  (5,338)  $   4,558  $ 3,286
Add fixed charges:
Interest expense on borrowings and
 Amortization of deferred
 Financing costs                                                      14,397      13,010      13,215      14,104   15,074
Interest portion of rent expense                                         656         386         326         278      245
                                                                      15,053      13,396      13,541      14,382   15,319

Adjusted earnings                                                     12,549       2,822       8,203      18,940   18,605

Ratio of earnings to fixed
 Charges                                                               0.83x       0.21x       0.61x       1.32x    1.21x

</TABLE>





                                       85
<PAGE>
<TABLE>
<CAPTION>

                                                                    Exhibit 21.1


                               THE GSI GROUP, INC.
                              LIST OF SUBSIDIARIES
                              --------------------




COMPANY NAME                                            LOCATION
----------------------------------------------------  ------------
<S>                                                   <C>
The GSI Asia Group Sdn. Bhd.                          Malaysia
GSI Cumberland C.A.A.                                 Malaysia
The GSI Group Africa (Proprietary) Limited            South Africa
GSI Cumberland de Mexico, S. de R.L. De C.V.          Mexico
Agromarau Industia E Comercio Ltda.                   Brazil
The GSI Group (Shanghai) C., Ltd.                     China
The GSI Agricultural Equipments (Shanghai) Co., Ltd.  China
Assumption Leasing Company, Inc.                      Illinois
The GSI Group (Canada) Co.                            Canada
The GSI Group (Poland) Sp. Z.o.o.                     Poland
</TABLE>



                                       86
<PAGE>


