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

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

     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 þ No o

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

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

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

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

     State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. The aggregate market value of the common equity of Neenah Foundry Company held by non-affiliates as of March 31, 2006 was zero. All of the common stock of Neenah Foundry Company is held by NFC Castings, Inc., a wholly owned subsidiary of ACP Holding Company.

     Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes þ No o

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. On December 15, 2006, Neenah Foundry Company had 1,000 shares of Common Stock, par value $100 per share, outstanding, all of which were owned by NFC Castings, Inc., a wholly owned subsidiary of ACP Holding Company.

Documents Incorporated by Reference

     None.

     Unless the context indicates otherwise, in this report, the terms “we,” “us,” “our,” “the Company,” and “Neenah” refer to Neenah Foundry Company and its wholly owned subsidiaries, Deeter Foundry, Inc. (“Deeter”), Mercer Forge Corporation (“Mercer”), Dalton Corporation (“Dalton”), Advanced Cast Products, Inc. (“Advanced Cast Products”), Gregg Industries, Inc. (“Gregg”), Neenah Transport, Inc. (“Neenah Transport”) and Cast Alloys, Inc. (“Cast Alloys”), which is inactive, and their respective subsidiaries. Neenah, a Wisconsin corporation, is a wholly owned subsidiary of NFC Castings, Inc. (“NFC”), a Delaware corporation, which is a wholly owned subsidiary of ACP Holding Company (“ACP”), a Delaware corporation. Neither ACP nor NFC have any material assets or liabilities other than their ownership of us.

     Unless the context indicates otherwise, in this report, the terms “year” or “years” refer to our fiscal year ending on September 30 of the referenced calendar year.

     In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Item 1A, “Risk Factors,” or elsewhere in this report. When used in this report, the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions are generally intended to identify forward-looking statements. These include, among other things, statements relating to the effects of general industry and economic conditions on our operating results, our ability to retain our significant customers and rely on our significant suppliers, our ability to compete with others in our industry, possible litigation and labor disputes, our significant indebtedness and debt service obligations, our future cash flow and earnings, and our ability to attract and retain qualified personnel. You should not place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this Annual Report. We undertake no obligation to publicly release any revisions to the forward-looking statements after the date of this document. You should carefully review the risk factors described in other documents we file from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q to be filed by us in our 2007 fiscal year, which runs from October 1, 2006 to September 30, 2007.

Overview

     We are one of the largest independent foundry companies in the United States, and we believe we are one of only two national suppliers of castings to the heavy municipal market. Our broad range of heavy municipal iron castings includes manhole covers and frames, storm sewer frames and grates, heavy-duty airport castings, specialized trench drain castings and ornamental tree grates. We sell these municipal castings throughout the United States to state and local government entities, utility companies, precast concrete manhole structure producers and contractors for both new construction and infrastructure replacement. We are also a leading manufacturer of a wide range of complex industrial iron castings and steel forgings, including specialized castings and forgings for the heavy-duty truck industry, a broad range of iron castings and steel forgings for the construction equipment and farm equipment industries, and iron castings used in heating, ventilation and air conditioning, or HVAC, systems.

     We have been able to achieve significant market shares in the major markets we serve. Each of our 10 manufacturing facilities has unique capabilities to effectively serve our market niches.

     We believe that the following factors have contributed to our success.

     Our business was founded in 1872 and operated for 125 years by the founding family. In 1997, Neenah Corporation (our parent holding company at that time) was acquired by NFC, which was a holding company and a wholly owned subsidiary of ACP. A short time later Neenah Foundry Company merged with and into Neenah Corporation and the surviving company changed its name to Neenah Foundry Company.

     In 1998, Neenah acquired all the capital stock of Deeter Foundry, Inc. (“Deeter”), Mercer Forge Corporation (“Mercer”) and Dalton Corporation (“Dalton”). Advanced Cast Products, Inc. (“Advanced Cast Products”) was owned by ACP prior to the time ACP acquired its interest in NFC. In 1999, Neenah acquired Gregg Industries, Inc. (“Gregg”).

     Since 1945, Deeter has been producing gray iron castings for the heavy municipal market. The municipal casting product line of Deeter includes manhole frames and covers, storm sewer inlet frames, grates and curbs, trench grating and tree grates. Deeter also produces a wide variety of special application construction castings. These products are utilized in waste treatment plants, airports, telephone and electrical construction projects.

     Founded in 1954, Mercer produces complex-shaped forged components for use in transportation, railroad, mining and heavy industrial applications. Mercer is also a producer of microalloy forgings.

     Dalton manufactures and sells gray iron castings for refrigeration systems, air conditioners, heavy equipment, engines, gear boxes, stationary transmissions, heavy-duty truck transmissions and other automotive parts.

     Advanced Cast Products manufactures ductile iron castings, primarily for companies in the heavy-duty truck, construction equipment and railroad industries. Advanced Cast Products’ production capabilities also include a range of finishing operations including austempering and machining.

     Gregg manufactures gray and ductile iron castings, primarily for engine turbo-chargers and heavy-duty truck applications.

     Prior to 2003, Neenah also purchased and either sold or discontinued several other operations, including Cast Alloys, a manufacturer of investment-cast titanium and stainless steel golf clubheads, Hartley Controls Corporation, a manufacturer of foundry sand control equipment, Peerless Corporation, which machined roller bearing adaptors for the railroad industry, and Belcher Corporation, a malleable iron green sand foundry.

     Beginning in 2000, several trends converged to create an extremely difficult operating environment for the Company. First, there were dramatic cyclical declines in some of our most important markets including trucks, railroad, construction and agriculture equipment. Second, there was a major inventory adjustment by manufacturers in the residential segment of the HVAC equipment industry, resulting in fewer orders for Dalton’s HVAC castings. Third, domestic foundries had been suffering from underutilized capacity, significantly increased foreign competition, continued price reduction pressure from customers and other competitors, and increased costs associated with heightened safety and environmental regulations. These factors caused and to some extent continue to cause a substantial number of foundries to cease operations or file for bankruptcy protection.

     Beginning in May 2000, we took aggressive steps to offset the impact of the decline in sales and earnings and improve cash flow in the difficult market environment, including an executive management change, sales of non-core assets, a reduction in our labor force, a slowdown in capital expenditures, and selected price increases. Despite these steps, the credit rating agencies began to downgrade our outstanding debt obligations in early 2000.On July 1, 2003, Neenah together with ACP, NFC and all of our wholly-owned domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code. By order dated September 26, 2003, the Bankruptcy Court confirmed our Plan of Reorganization and the Plan of Reorganization became effective on October 8, 2003. The Plan of Reorganization allowed us to emerge from bankruptcy with an improved capital structure and, because we had arranged to continue paying our trade debt on a timely basis during the pendency of the Chapter 11 case, at the time of emergence, we had sufficient trade credit to continue operations in the ordinary course of business.

     On July 29, 2005, Neenah and ACP announced that an investment banking firm had been engaged to assist in exploring the potential sale or merger of Neenah or ACP or a significant portion of their assets or capital stock. On November 29, 2005, we announced that our board of directors, which is also the board of directors of ACP, had unanimously voted to end the sale or merger process and turn our focus to successfully implementing our business plan.

     On May 25, 2006, we experienced a change of control when Tontine Capital Partners, L.P. (“Tontine”) became the beneficial owner of more than a majority of the outstanding shares, on a fully diluted basis, of our parent, ACP. As of December 15, 2006, Tontine beneficially owned, in the aggregate, 22,929,467 shares, and 21,139,220 warrants to purchase shares, representing 54.5% of all shares outstanding of ACP on a fully-diluted basis.

     There are approximately 2,200 independent foundries in the United States with 80% of those employing fewer than 100 employees. Only a small portion compete regularly with us, along with a number of foreign foundries. The iron foundry industry has gone through significant consolidation over the past 20 years, which has resulted in a significant reduction in the number of foundries and a rise in the share of production by the remaining foundries. We have gained business as a result of ongoing consolidation. Metal casting has historically been a cyclical industry with performance generally correlated with overall economic conditions and also directly affected by government (including environmental) regulation, foreign imports, and energy costs.

     Most manufactured goods either contain or are made on equipment containing one or more cast components. Metal castings are prevalent in most major market segments, including pipes and fittings, air conditioners, automobiles, trucks, construction equipment and agricultural equipment as well as within streets and highways. While general economic conditions have a directional effect on the foundry industry as a whole, the strength of a particular end-market has a significant effect on the performance of particular foundries serving those markets. The historic stability of the heavy municipal market has helped mitigate the effects of downturns in our more cyclical industrial end-markets, such as the heavy-duty truck market.

     We are focused on increasing stakeholder value through continued growth and refinement of our business, improvement of our profit margins and continually providing our customers with the highest levels of product quality and customer service. Key elements of our strategy are outlined below.

     We have two reportable segments, castings and forgings. The castings segment manufactures and sells various grades of gray and ductile iron castings for the heavy municipal and industrial markets, while the forgings segment manufactures and sells steel forged components for the industrial market. The segments were determined based upon the production process utilized and the type of product manufactured. Approximately 92% of our net sales for fiscal 2006 was derived from our castings segment, with approximately 8% from our forgings segment.

     Financial information about our reportable segments and geographic areas is contained in Note 9 in the Notes to Consolidated Financial Statements.

     We are a leading producer of iron castings for use in heavy municipal and industrial applications. We sell directly to state and local municipalities, contractors, precasters, supply houses, original equipment manufacturers (“OEMs”) and tier-one suppliers, as well as to other industrial end-users.

     The castings segment provides a variety of products to both the heavy municipal and industrial markets. Our broad range of heavy municipal iron castings include storm and sanitary sewer castings, manhole covers and frames, storm sewer frames and grates, heavy-duty airport castings, specialized trench drain castings, specialty flood control castings and ornamental tree grates. Customers for these products include state and local government entities, utility companies, precast concrete structure producers and contractors. Sales to the industrial market are comprised of differential carriers and differential cases, transmissions, gear and axle housings, yokes, planting and harvesting equipment parts, track drive and fifth wheel components, and compressor components. Markets for these products include medium and heavy-duty truck, construction and agricultural equipment and HVAC manufacturers.

     A few large customers generate a significant amount of our net sales. See “Risk Factors — A relatively small number of customers account for a substantial portion of our revenues. The loss of one or more of them could adversely affect our net sales.”

     Our broad line of heavy municipal products consists of “standard” and “specialty” castings. Standard castings principally consist of storm and sanitary sewer castings that are consistent with pre-existing dimensional and

strength specifications established by local authorities. Standard castings are generally higher volume items that are routinely used in new construction and infrastructure replacement. Specialty castings are generally lower volume products, such as heavy-duty airport castings, trench drain castings, flood control castings, special manhole and inlet castings and ornamental tree grates. These specialty items are frequently selected and/or specified from our municipal product catalog and tree grate catalog, which together encompass thousands of pattern combinations. For many of these products, we believe that we are the only manufacturer with existing patterns to produce such a particular casting.

     Our municipal customers generally make purchase decisions based on a number of criteria, including acceptability of the product per local specification, quality, availability, price and the customer’s relationship with the foundry. We supply our municipal customers with anywhere from one up to thousands of municipal castings in any given year.

     During the over 70 years that we have manufactured municipal products, we have emphasized servicing specific market needs and believe that we have built a strong reputation for customer service. We believe that we are one of the leaders in U.S. heavy municipal casting production and that we have strong name recognition. We have one of the largest sales and marketing forces of any foundry serving the heavy municipal market. Our dedicated sales force works out of regional sales offices and distribution yards to market municipal castings to contractors and state and local governmental entities throughout the United States. We operate 14 regional distribution and sales centers throughout the United States. We believe that this regional approach enhances our vast knowledge of local specifications and our leadership position in the heavy municipal market.

     Industrial castings are generally more complex and usually are produced in higher volumes than municipal castings. Complexity in the industrial market is determined by the intricacy of a casting’s shape, the thinness of its walls and the amount of processing by a customer required before a part is suitable for use. OEMs and their tier-one suppliers have been demanding more complex parts principally to reduce their own labor costs by using fewer parts to manufacture the same finished product or assembly and by using parts that require less subsequent processing before being considered a finished product.

     We primarily sell our industrial castings to OEMs and tier-one suppliers with whom we have established close working relationships. These customers base their purchasing decisions on, among other things, our technical ability, price, service, quality assurance systems, facility capabilities and reputation. Our assistance in product engineering plays an important role in winning bids for industrial castings. For the average industrial casting, 12 to 18 months typically elapse between the completed design phase and full production. The product life cycle of a typical industrial casting in the markets we serve is quite long, in many cases over 10 years. Although the patterns for industrial castings are owned by the customer and not the foundry, industrial patterns are not readily transferable to other foundries without, in most cases, significant additional investment. Foundries, including our company, generally do not design industrial castings. Nevertheless, a close working relationship between the foundry and the customer during a product launch is critical to reduce potential production problems and minimize the customer’s risk of incurring lost sales or damage to its reputation due to a delayed launch. Involvement by a foundry early in the design process generally increases the likelihood that the customer will design a casting within the manufacturing capabilities of that foundry and also improves the likelihood that the foundry will be awarded the casting for full production.

     We employ a dedicated industrial casting sales force organized by facility. Our sales forces support ongoing customer relationships and work with customers’ engineers and procurement representatives as well as our own engineers, manufacturing management and quality assurance representatives throughout all stages of the production process to ensure that the final product consistently meets or exceeds the specifications of our customers. This team approach, consisting of sales, marketing, manufacturing, engineering and quality assurance efforts, is an integral part of our marketing strategy.

     Our foundries manufacture gray and ductile iron and cast it into intricate shapes according to customer metallurgical and dimensional specifications. We continually invest in upgrading our manufacturing capacity and in the improvement of process controls and believe that these investments and our significant experience in the industry have made us one of the more efficient manufacturers of industrial and heavy municipal casting products.

     The sand casting process we employ involves using metal, wood or urethane patterns to make an impression of a desired shape in a mold made primarily of sand. Cores, also made primarily of sand, are used to make the internal cavities and openings in a casting. Once the casting impression is made in the mold, the cores are set into the mold and the mold is closed. Molten metal is then poured into the mold, which fills the mold cavity and takes on the shape of the desired casting. Once the iron has solidified and cooled, the mold sand is separated from the casting and the sand is recycled. The selection of the appropriate casting method, pattern, core-making equipment and sand, and other raw materials depends on the final product and its complexity, specifications and function as well as the intended production volumes. Because the casting process involves many critical variables, such as choice of raw materials, design and production of tooling, iron chemistry and metallurgy and core and molding sand properties, it is important to monitor the process parameters closely to ensure dimensional precision and metallurgical consistency. We continually seek out ways to expand the capabilities of existing technology to improve our manufacturing processes.

     Through incorporation of lean manufacturing concepts, we continuously focus on productivity gains by improving upon the individual steps of the casting process such as reducing the amount of time required to make a pattern change or to produce a different casting product. Such improvements enable us to produce castings in low and medium volume quantities on high volume, cost-effective molding equipment. Additionally, our extensive effort in real time process controls permits us to produce a consistent, dimensionally accurate casting, which saves time and effort in the final processing stages of production. This dimensional accuracy contributes significantly to our manufacturing efficiency.

     Continual testing and monitoring of the manufacturing process is important to maintain product quality. We, therefore, have adopted sophisticated quality assurance techniques and Six Sigma for our manufacturing operations. During and after the casting process, we perform numerous tests, including tensile, proof-load, radiography, ultrasonic, magnetic particle and chemical analysis. We utilize statistical process data to evaluate and control significant process variables and casting dimensions. We document the results of this testing in metallurgical certifications that are sometimes included with each shipment to our industrial customers. We strive to maintain systems that provide for continual improvement of operations and personnel, emphasizing defect prevention, safety and the reduction of variation and waste in all areas.

     The primary raw materials we use to manufacture ductile and gray iron castings are steel scrap, pig iron, metallurgical coke and sand (core sand and molding sand). While there are multiple suppliers for each of these commodities, we have generally elected to maintain single-source arrangements with our suppliers for most of these major raw materials. Due to long standing relationships with each of our suppliers, we believe that we will continue to be able to secure the proper amount and type of raw materials in the quantities required and at competitive prices, even when raw materials are in short supply. The owner of our major coke supplier recently announced that it is considering strategic alternatives relating to this supplier. Should there be a change in control of this supplier, the terms and conditions of our current supply arrangements with this supplier could be impacted, possibly causing us to consider other alternatives. See “Risk Factors — Increases in the price or interruptions in the availability of raw materials and energy could reduce our profits.”

     Although the prices of the raw materials used vary, fluctuations in the cost of steel scrap are the most significant to us. We generally have arrangements with our industrial customers that enable us to adjust prices to reflect steel scrap cost fluctuations. In periods of rapidly rising or falling steel scrap costs, these adjustments will lag behind the current cost of steel scrap reflected in our casting price because they are generally based on average market prices for prior periods. Such prior periods vary by customer, but are generally no longer than one month. We generally recover steel scrap cost increases for municipal products through periodic price increases. However, castings are sometimes sold to the heavy municipal market on a bid basis and after a bid is won the price for the municipal

casting generally is not adjusted for increases in the costs of raw materials. Rapidly fluctuating steel scrap costs may, however, have an adverse or positive effect on our business, financial condition and results of operations.

     We experience seasonality in our municipal business where sales tend to be higher during the construction season, which occurs during the warmer months, generally the third and fourth quarters of our fiscal year. We attempt to maintain level production throughout the year in anticipation of such seasonality and therefore do not experience significant production volume fluctuations. We build inventory in anticipation of the construction season. This inventory build-up has a negative impact on working capital and increases our liquidity needs during the second quarter. We have not historically experienced significant seasonality in industrial casting sales.

     We have historically experienced some cyclicality in the heavy municipal market as sales of municipal products are influenced by, among other things, public spending and the state of the new housing market. There is generally not a large backlog of business in the municipal market due to the nature of the market. In the industrial market, we experience cyclicality in sales resulting from fluctuations in our markets, including the medium and heavy-duty truck and the construction and farm equipment markets, which are subject to general economic trends.

     The markets for our products are highly competitive. Competition is based mainly on price, but also on quality of product, range of capability, level of service and reliability of delivery. We compete with numerous domestic foundries, as well as with some foreign iron foundries. We also compete with several large domestic manufacturers whose products are made with materials other than ductile and gray iron, such as steel or aluminum. Industry consolidation over the past 20 years has resulted in a significant reduction in the number of foundries and a rise in the share of production by the remaining foundries, some of which have significantly greater financial resources than do we. Competition from foreign foundries has had an ongoing presence in the industrial and heavy municipal market and continues to be a factor.

     Our forgings segment, operated by Mercer, produces complex-shaped forged steel and micro alloy components for use in transportation, railroad, mining and heavy industrial applications. Mercer sells directly to OEMs and tier-one suppliers, as well as to industrial end-users. Mercer’s subsidiary, A&M Specialties, Inc., machines forgings and castings for Mercer and various industrial customers.

      Mercer produces hundreds of individually forged components and has developed specialized expertise in forgings of micro alloy steel. Mercer currently operates mechanical press lines, from 1,300 tons to 4,000 tons. Mercer’s primary customers include manufacturers of components and assemblies for heavy-duty trucks, railroad equipment and construction equipment.

     Mercer’s in-house sales organization sells directly to end-users and OEMs. A key element of Mercer’s sales strategy is its ability to develop strong customer relationships through responsive engineering capability, dependable quality and reliable delivery performance.

     Demand for forged products closely follows the general business cycles of the various market segments and the demand level for capital goods. While there is a more consistent base level of demand for the replacement parts portion of the business, the strongest expansions in the forging industry coincide with the periods of industrial segment economic growth.

     In forging, metal is pressed, pounded or squeezed under great pressure, with or without the use of heat, into parts that retain the metal’s original grain flow, imparting high strength. Forging usually entails one of four principal

processes: impression die; open die; cold; and seamless rolled ring forging. Impression die forging, commonly referred to as “closed die” forging, is the principal process employed by Mercer, and involves bringing two or more dies containing “impressions” of the part shape together under extreme pressure, causing the bar stock to take the desired shape. Because the metal flow is restricted by the die, this process can yield more complex shapes and closer tolerances than the “open die” forging process. Impression die forging is used to produce products such as military and off-highway track and drive train parts; automotive and truck drive train and suspension parts; railroad engine, coupling and suspension parts; military ordinance parts and other items where close tolerances are required.

     Once a rough forging is shaped, regardless of the forging process, it must generally still be machined. This process, known as “finishing” or “conversion,” smoothes the component’s exterior and mating surfaces and adds any required specification, such as groves, threads and bolt holes. The finishing process can contribute significantly to the value of the end product, in particular in certain custom situations where high value specialized machining is required. Machining can be performed either in-house by the forger, by a machine shop which performs this process exclusively or by the end-user.

     Mercer’s internal staff of engineers designs impression dies to meet customer specifications incorporating computer assisted design workstations for the design. Management believes that Mercer is an industry leader in forging techniques using micro alloy steel which produces parts which are lighter and stronger than those forged from conventional carbon steel.

     The principal raw materials used in Mercer’s products are carbon and micro alloy steel. Mercer purchases substantially all of its carbon steel from four principal sources. While Mercer has never suffered any significant interruption of materials supply, management believes that, in the event of any disruption from any individual source, adequate alternative sources of supply are available within the immediate vicinity.

     Mercer experiences only minimal seasonality in its business. Mercer has experienced moderate cyclicality in sales resulting from fluctuations in the medium and heavy-duty truck market and the heavy industrial market, which are subject to general economic trends.

     Mercer competes primarily in a highly fragmented industry which includes several dozen other press forgers and hammer forge shops. Hammer shops cannot typically match press forgers for high volume, single component manufacturing or close tolerance production. Competition in the forging industry has also historically been determined both by product and geography, with a large number of relatively small forgers across the country carving out their own product and customer niches. In addition, most end-users manufacture some forgings internally, often maintaining a critical minimum level of production in-house and contracting out the balance. The primary basis of competition in the forging industry is price, but engineering, quality and dependability are also important, particularly with respect to building and maintaining customer relationships. Some of Mercer’s competitors have significantly greater resources than Mercer. There can be no assurance that Mercer will be able to maintain or improve its competitive position in the markets in which it competes.

     As of September 30, 2006, we had 2,950 full time employees, of whom 2,380 were hourly employees and 570 were salaried employees. Approximately 81% of our hourly employees are represented by unions. Nearly all of the hourly employees at Neenah, Dalton, Advanced Cast Products and Mercer are members of either the United Steelworkers of America or the Glass, Molders, Pottery, Plastics and Allied Workers International Union. A collective bargaining agreement is negotiated every two to five years. The material agreements expire as follows: Neenah, December 2006; Dalton-Warsaw, April 2008; Dalton-Kendallville, June 2007; Advanced Cast Products-Meadville, October 2010; and Mercer, June 2008. All employees at Deeter and Gregg are non-union. We believe that we have a good relationship with our employees.

     Our facilities are subject to federal, state and local laws and regulations relating to the protection of the environment and worker health and safety, including those relating to discharges to air, water and land, the generation, handling and disposal of solid and hazardous waste, the cleanup of properties affected by hazardous substances, and the health and safety of our employees. Such laws include the Federal Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, and the Occupational Health and Safety Act. Under certain environmental laws, we could be held responsible for all of the costs relating to any contamination at our past or present facilities and at third party waste disposal sites. We could also be held liable for any and all consequences arising out of human exposure to such substances or other environmental damage.

     We are presently operating our Gregg facility under the terms of an order of abatement with the California South Coast Air Quality Management District (SCAQMD). See “Legal Proceedings.”

     We believe we have no liabilities relating to environmental matters which would have a material adverse effect on our operations, financial condition or competitive position. However, the risk of environmental liability is inherent in the manufacture of castings and forgings. Any of our businesses might in the future incur significant costs to meet current or more stringent compliance, cleanup or other obligations pursuant to environmental requirements. Such costs may include expenditures related to remediation of historical releases of hazardous substances or clean-up of physical structures prior to decommissioning. We have incurred in the past, and expect to incur in the future, capital and other expenditures related to environmental compliance. Such expenditures are generally included in our overall capital and operating budgets and are not separately accounted for. However, we do not anticipate that compliance with existing environmental laws will have a material adverse effect on our capital expenditures, earnings or competitive position.

     Under the Federal Clean Air Act Amendments of 1990, the Environmental Protection Agency is directed to establish maximum achievable control technology (MACT) standards for certain industrial operations that are major sources of hazardous air pollutants. The iron foundry industry will be required to implement the MACT emission limits, control technologies or work practices by April 2007. Our Neenah foundry and both Dalton foundries are subject to this requirement (due to their size). Our Dalton facilities received one-year extensions, which requires them to be in compliance with the new standards by April 2008. A majority of the approximately $3.0 million of capital expenditures necessary to bring these three facilities into compliance with MACT requirements has already been made and we expect all three facilities to achieve MACT compliance by the applicable deadlines.

     The Clean Water Act requires point dischargers to obtain storm water discharge permits. In Wisconsin, Neenah is covered by the state’s General Permit to Discharge Storm Water Associated with Industrial Activity. The Wisconsin Department of Natural Resources, which is authorized to administer the storm water program, has adopted new benchmark values for various storm water contaminants. Neenah expects to spend $1.2 million in fiscal year 2007 on storm water treatment devices that will allow it to achieve compliance with the new benchmarks.

     We have registered, or are in the process of registering, various trademarks and service marks with the U.S. Patent and Trademark Office.

     Owning our securities and those of our parent, ACP, involves a high degree of risk. The risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition or results of operations. If any of the following risks materialize, our business, financial condition or results of operations could be materially and adversely affected. In that case, security holders may lose some or all of their investment.

     A few large customers generate a significant amount of our net sales.

     The loss of one or more of these large customers, therefore, could adversely affect our net sales. We do not generally have long-term contracts with our customers and we also do not own the patterns used to produce industrial castings. As a result, our customers could switch to other suppliers at any time. If our customers should move production of their products outside the United States, they would likely attempt to find local suppliers for the components they purchase from us.

     Certain of our largest industrial customers, particularly in the heavy-duty truck market, are experiencing financial challenges. For example, on March 3, 2006, Dana Corporation (“Dana”), our largest customer, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. As a result, we estimate that the Company will lose approximately $0.1 million of the $4.7 million that Dana owed us at the time of Dana’s bankruptcy filing. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Recent Developments.” Although we are an important supplier to many of our customers, there can be no assurance that we would be designated an “essential supplier” or “critical vendor” (as we were by Dana) if any of our other major customers becomes a debtor in bankruptcy, and the loss of any of our major customers could adversely affect our net sales.

     Our company has historically experienced industry cyclicality in most of our industrial markets, including the truck and farm equipment markets. These industries and markets fluctuate in response to factors that are beyond our control, such as general economic conditions, interest rates, federal and state regulations, consumer spending, fuel costs and our customers’ inventory levels and production rates. These major markets will likely continue to experience such fluctuations. A downturn in one or more of these markets could reduce demand for, and prices of, our products. Such a downturn in one or more of these major markets could have a significant negative impact on sales of our products, which could lower our profitability, cash flows, and ability to service our indebtedness. Historically, our heavy municipal business has been less cyclical than our industrial markets. We have historically experienced some cyclicality in the heavy municipal market as sales of municipal products are influenced by, among other things, public spending and the state of the new housing market.

     Due to new emissions standards set to take effect on January 1, 2007, heavy-duty truck production is expected to decline significantly beginning early in calendar 2007, as many customers have accelerated purchases to 2006, artificially increasing 2006 sales to this segment. Additional emissions regulations are scheduled to take effect in calendar 2010, which may have a similar effect of accelerating sales to 2009. In addition, housing starts are expected to decline further in calendar 2007, reflecting softness in the overall housing sector. As a result, we are now experiencing a decline in our sales into these end-markets, and we expect our sales to these end-markets to further deteriorate in fiscal 2007 from fiscal 2006 levels, which will lower our profitability and cash flows.

     The markets in which we compete are highly competitive and are expected to remain so. The foundry industry overall has excess capacity, which exerts downward pressure on prices of our products. We may be unable to maintain or improve our competitive position in the markets in which we compete. Although quality of product, range of capability, level of service and reliability of delivery are important factors in selecting foundry suppliers, we are also forced to compete on price. We compete with numerous domestic and some foreign foundries. Although our castings are manufactured from ductile and gray iron, we also compete in our industrial markets with several

manufacturers whose products are made with other materials, such as steel or aluminum. Industry consolidation over the past 20 years has significantly reduced the number of foundries operating in the United States. While such consolidation has translated into greater market share for the remaining foundries, some of these remaining foundries have significantly greater financial resources than we do and may be better able to sustain periods of decreased demand or increased pricing pressure. At the same time, the prices of products imported from foreign foundries, particularly from China, India, Mexico and South America, are generally lower than the prices we charge to our customers. Countervailing duties and/or anti-dumping orders on imports currently apply to China, Brazil, Mexico and Canada, and any reduction thereof could increase foreign competition. Furthermore, despite the reduction in the number of domestic operating foundries, total production capacity continues to exceed demand. Any of these factors could impede our ability to remain competitive in the markets in which we operate.

     Our operations may be affected by actions of foreign governments and global or regional economic developments. Global economic events, such as foreign countries’ import/export policies, the cost of complying with environmental regulations or currency fluctuations, could also affect the level of U.S. imports and exports, thereby affecting our sales. Foreign subsidies, foreign trade agreements and each country’s adherence to the terms of such agreements can raise or lower demand for castings produced by us and other U.S. foundries. National and international boycotts and embargoes of other countries’ or U.S. imports and/or exports together with the raising or lowering of tariff rates could affect the level of competition between us and our foreign competitors. If the value of the U.S. dollar strengthens against other currencies, imports to the United States may increase and put downward pressure on the prices of our products, which may adversely affect our sales, margins and profitability. Such actions or developments could have a material adverse effect on our business, financial condition and results of operations.

     The costs and availability of raw materials and energy represent significant factors in the operations of our business. As a result of domestic and international events, the prices and availability of our key raw materials and energy fluctuate. We have single-source, just-in-time arrangements with many of our suppliers for the major raw materials that we use. If a single-source supplier were to become unable or unwilling to furnish us with essential materials for any reason, that could impair our ability to manufacture some of our products. Potential causes of such interruptions could include, among others, any casualty, labor unrest, or regulatory problems of the supplier, or a change in ownership of a supplier leading to subsequent business decisions that do not align with our own business interests. The owner of our major coke supplier recently announced that it is considering strategic alternatives relating to this supplier. Should there be a change in control of this supplier, the terms and conditions of our current supply arrangements with this supplier could be impacted, possibly causing us to consider other alternatives. Also, the failure of these single-source arrangements to result in the most highly competitive prices for raw materials could increase our cost of sales and lower our profit. If our raw material or energy costs increase, we may not be able to pass these higher costs on to our customers in full or at all.

     Of all the varying costs of raw materials, fluctuations in the cost of steel scrap impact our business the most. The cost for steel scrap is subject to market forces that are unpredictable and largely beyond our control, including demand by U.S. and international foundries, freight costs and speculation. Although we have arrangements with our industrial customers that enable us to adjust industrial casting prices to reflect steel scrap cost fluctuations, these adjustments lag behind the current cost of steel scrap during periods of rapidly rising or falling steel scrap costs because these adjustments are generally based on average market costs for prior periods. Thus, our profitability could be negatively impacted if we are unable to pass along increases in the cost of steel scrap to our customers effectively.

     We are subject to the risk of exposure to product liability and product recall claims in the event any of our products results in property damage, personal injury or death, or does not conform to specifications. We may not be able to continue to maintain suitable and adequate insurance on acceptable terms that will provide adequate protection against potential liabilities. In addition, if any of our products proves to be defective, we may be required

to participate in a recall involving such products. A successful claim brought against us in excess of available insurance coverage, if any, or a requirement to participate in a major product recall, could have a material adverse effect on our business, results of operations or financial condition.

     We and our subsidiaries are regularly subject to legal proceedings and claims that arise in the ordinary course of business. We are presently disputing a claim from an investment bank for $3.34 million in fees allegedly arising from Tontine’s acquisition of control of the Company in May 2006. We are also subject to workers’ compensation claims (including those related to silicosis), employment disputes, unfair labor practice charges, customer and supplier disputes, product liability claims and contractual disputes related to warranties and guarantees arising out of the conduct of our business. Litigation may result in substantial costs and may divert management’s attention and resources, which could adversely affect our business, results of operations or financial condition.

     The success of our business depends upon our senior management closely supervising all aspects of our business. We believe our senior management has technological and manufacturing experience that is important to the metal casting and forging business. The loss of such key personnel could have a material adverse effect on our operations if we were unable to attract and retain qualified replacements.

     In addition, we have from time to time experienced difficulty hiring enough skilled employees with the necessary expertise to build the products ordered by our customers in the metal casting and forging business. An inability to hire and retain such employees could have a material adverse effect on our operations.

     Our business is seasonal. Therefore, our quarterly revenues and profits historically have been lower during the first and second fiscal quarters of the year (October through March) and higher during the third and fourth fiscal quarters (April through September). In addition, our working capital requirements fluctuate throughout the year. Adverse market or operating conditions during any seasonal part of the fiscal year could have a material adverse effect on our business, financial condition and results of operations.

     As of September 30, 2006, approximately 81% of our workforce consisted of hourly employees, and of those approximately 81% are represented by unions. Nearly all of the hourly employees at Neenah, Dalton, Advanced Cast Products and Mercer are members of either the United Steelworkers of America or the Glass, Molders, Pottery, Plastics and Allied Workers International Union. As a result, we could experience work stoppages or other labor disruptions. If this were to occur, we may not be able to satisfy our customers’ orders on a timely basis. Our principal collective bargaining agreement at our Neenah facility expires in December 2006 and no assurances can be made that we will be able to renegotiate this agreement on terms that are acceptable to us. Our operations could be adversely affected if we experience a work stoppage or other labor disruption.

     The risk of environmental liability is inherent in the manufacturing of casting and forging products. We are subject to numerous laws and regulations governing, among other things: discharges to air, water and land; the generation, handling and disposal of solid and hazardous waste; the cleanup of properties affected by hazardous substances; and the health and safety of our employees. Changes in environmental laws and regulations, or the discovery of previously unknown contamination or other liabilities relating to our properties and operations, could require us to sustain significant environmental liabilities. In addition, we might incur significant capital and other costs to comply with increasingly stringent emission control laws and enforcement policies which could decrease our cash flow. We are also required to obtain permits from governmental authorities for certain operations. We

cannot assure you that we have been or will be at all times in complete compliance with such laws, regulations and permits. If we violate or fail to comply with these laws, regulations or permits, we could be fined or otherwise sanctioned by regulators.

     Under certain environmental laws, we could be held responsible for all of the costs relating to any contamination at our past or present facilities and at third party waste disposal sites. We could also be held liable for any and all consequences arising out of human exposure to such substances or other environmental damage.

     Environmental laws are complex, change frequently and have tended to become increasingly stringent over time. We incur operating costs and capital expenditures on an ongoing basis to ensure our compliance with applicable environmental laws and regulations. We cannot assure you that our costs of complying with current and future environmental and health and safety laws and regulations, and our liabilities arising from past or future releases of, or exposure to, hazardous substances will not adversely affect our business, results of operations or financial condition. See “Business — Environmental Matters.”

     Our capital resources may be insufficient to enable us to maintain operating profitability. Failure to generate or raise sufficient funds may require us to delay or abandon some expansion plans or expenditures, which could harm our business and competitive position.

     We estimate that our aggregate expenditure requirements in fiscal 2007 will include projected costs of:

In addition, we will require funds for general corporate expenses, other expenses (including pension expenses discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations”), certain environmental capital expenditures and for working capital fluctuations.

     We may choose to meet any additional financial needs by borrowing additional funds under our credit facility or from other sources. As of September 30, 2006, subject to certain limitations, we had $54.1 million available to borrow under our credit facility. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.” Our ability to issue debt securities, borrow funds from additional lenders and participate in vendor financing programs are restricted under the terms of the credit facility and the indentures governing our outstanding notes.

     As part of our business strategy, we are beginning to invest in a $54 million capital project to replace an existing mold line at our Neenah facility. We expect the new mold line to become operational in early calendar 2008. We believe we will have access to sufficient funds to support this project. However, similar to other large capital expenditure projects, we are at risk to many factors beyond our control that may prevent or hinder our launch of the new mold line or lead to cost overruns, including new or more expensive obligations to comply with environmental regulations, technical or mechanical problems, construction delays, shortages of equipment, materials or skilled labor, lack of available capital and other factors. Even if we effectively complete this project, we may not be able to capitalize on the additional capacity the mold line will provide, which may result in sales or profitability at lower levels than anticipated. Failure to successfully implement this business strategy may adversely affect our business prospects and results of operations.

     Nearly half of the outstanding stock of our parent corporation, ACP Holding Company, and a majority of such stock on a fully-diluted basis, is owned by Tontine Capital Partners, L.P. (“Tontine”). As a result, Tontine controls ACP’s and our affairs, including the election of directors who in turn appoint management for both us and ACP. Tontine controls any action requiring the approval of the holders of stock of our parent corporation, including adoption of amendments to its corporate charter and approval of a merger or sale of all or substantially all assets. It also controls decisions affecting our capital structure, such as decisions regarding the issuance of additional capital stock, the implementation of stock repurchase programs and the declaration of dividends. The interests of Tontine may not in all cases be aligned with the interests of our other equity holders and with holders of our outstanding notes. For example, the equity holders may have an interest in pursuing acquisitions, divestitures, financings and other transactions that, in their judgment, could enhance their equity investments, even though those transactions might involve risks to the holders of outstanding notes. Additionally, Tontine is in the business of investing in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us. Tontine may also pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us.

     The impact that terrorist attacks, such as those carried out on September 11, 2001, and the war in Iraq, as well as events occurring in response to or in connection with them, may have on our industry in general, and on us in particular, is unknown at this time. Such attacks, and the uncertainty surrounding them, may impact our operations in unpredictable ways, including disruptions of rail lines, highways and fuel supplies and the possibility that our facilities could be direct targets of, or indirect casualties of, an act of terror. In addition, war or risk of war may also have an adverse effect on the economy. A decline in economic activity could adversely affect our revenues or restrict our future growth. Instability in the financial markets as a result of terrorism or war could also affect our ability to raise capital. Such attacks may lead to increased volatility in fuel costs and availability and could affect the results of operations. In addition, the insurance premiums charged for some or all of the coverages we currently maintain could increase dramatically, or the coverages could be unavailable in the future.

     We have a significant amount of indebtedness. At September 30, 2006, we and our subsidiaries had approximately $265.4 million of secured indebtedness outstanding, consisting of approximately $1.2 million of capital lease obligations, approximately $38.0 million of indebtedness under our credit facility and approximately $226.2 million of outstanding notes. In addition, we and our subsidiaries had approximately $54.1 million of undrawn borrowing capacity under our credit facility.

     Our substantial indebtedness could have important consequences to the holders of our and ACP’s securities. For example, it could:

     In addition, the indentures for our outstanding notes and our credit facility contain financial and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests. Our 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 our debts.

     We and our subsidiaries may be able to incur substantial additional indebtedness in the future because the terms of the indentures governing our outstanding notes and our credit facility do not fully prohibit us or our subsidiaries from doing so. If new indebtedness is added to our and our subsidiaries’ current debt levels, the related risks that we and they now face could intensify.

     Our ability to make payments on and to refinance our indebtedness and to fund planned capital expenditures, research and development efforts and other cash needs will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.

     We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under our credit facility or otherwise in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness on or before the maturity thereof. We cannot assure you that we will be able to refinance any of our indebtedness on commercially reasonable terms or at all. If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, investments and alliances. We cannot assure you that any such actions, if necessary, could be effected on commercially reasonable terms or at all.

     Our credit facility and the indentures governing our outstanding notes contain covenants that limit our actions. These covenants could materially and adversely affect our ability to finance our future operations or capital needs or to engage in other business activities that may be in our best interests. The covenants limit our ability to, among other things:

     Our credit facility also contains financial covenants. Our ability to comply with these covenants and requirements may be affected by events beyond our control, such as prevailing economic conditions and changes in regulations, and if such events occur, we cannot be sure that we will be able to comply. A breach of these covenants could result in a default under the indentures governing our outstanding notes and/or our credit facility. If there were an event of default under the indentures for the notes and/or the credit facility, holders of such defaulted debt could cause all amounts borrowed under these instruments to be due and payable immediately, they could foreclose on the collateral securing our debts and the lenders under the credit facility could terminate their commitments to lend. We cannot assure you that our assets or cash flow will be sufficient to repay borrowings under the outstanding debt instruments in the event of a default thereunder.

     There is no established public trading market for our outstanding notes or ACP’s outstanding stock or warrants. We cannot assure you that an active market for any of those securities will develop or, if developed, that it will continue.

     Not applicable.

     We maintain the following manufacturing, machining and office facilities. We own all of the facilities except Mercer’s machining facility, which we lease.

     The principal equipment at the facilities consists of foundry equipment used to make castings, such as melting furnaces, core making machines and mold lines, including ancillary equipment needed to support a foundry operation and presses used to make forgings. We regard our plant and equipment as appropriately maintained and adequate for our needs. We are proceeding with a major capital project to install a new mold line at our Neenah location. This project will result in a building expansion that will add approximately 75,000 square feet of

manufacturing area to the plant. In addition to the facilities described above, we operate 14 distribution and sales centers. We own six of those properties and lease eight of them.

     Substantially all of our tangible and intangible assets are pledged to secure our existing credit facility and our 11% Senior Secured Notes due 2010. See Note 5 in the Notes to Consolidated Financial Statements in this report.

     We are involved in various claims and litigation in the normal course of business. In the judgment of management, the ultimate resolution of these matters is not likely to materially affect our consolidated financial statements, except with respect to the matters described below.

     We are presently operating our Gregg facility under the terms of an order of abatement with the California South Coast Air Quality Management District (SCAQMD). The order requires us to comply with certain operating parameters in an effort to reduce odors. Failure to operate within such criteria could result in the SCAQMD terminating operations at the Gregg facility. The current order expires on March 31, 2007. We believe we are in compliance with the testing and operating requirements mandated by the order and that our actions have resulted in a substantial reduction in the intensity and frequency of observable downwind odors.

     We are presently disputing a claim from an investment bank for $3.34 million in fees allegedly arising from Tontine’s acquisition of control of the Company in May 2006. See “Certain Relationships and Related Transactions.”

     There were no matters submitted to a vote of security holders during the quarter ended September 30, 2006.

     There is no public market for our common stock. There was one holder of record of our common stock as of December 15, 2006, NFC Castings, Inc., a wholly owned subsidiary of ACP Holding Company.

     We have not paid any cash dividends on our common stock in the last two fiscal years nor have we repurchased any equity securities in the fourth quarter of fiscal 2006. Our credit facility and the indentures providing for our senior secured and senior subordinated notes severely restrict our ability to pay dividends or repurchase equity. See “Liquidity and Capital Resources” in Item 7 and Note 5 in the Notes to Consolidated Financial Statements for a description of those limitations.

     The following table sets forth our selected historical consolidated financial data as of and for the years ended September 30, 2006, 2005, 2004, 2003 and 2002, which have been derived from our audited consolidated financial statements. The historical results presented below are not necessarily indicative of financial results to be achieved in future periods.

     The information contained in the following table should also be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our historical consolidated financial statements and related notes included elsewhere in this document.

     Due to the Company’s emergence from its Chapter 11 proceedings on October 8, 2003, the Company has implemented the “fresh start” accounting provisions of AICPA Statement of Position 90-7, “Financial Reporting by Entities in Reorganization under the Bankruptcy Code,” (“SOP 90-7”) to its financial statements. Fresh start requires that, upon the Company’s emergence, the Company establish a “fair value” basis for the carrying value of the assets and liabilities for the reorganized Company. Although the effective date of the Plan of Reorganization was October 8, 2003, due to the immateriality of the results of operations for the period between October 1, 2003 and the effective date, the Company accounted for the consummation of the Plan of Reorganization as if it had occurred on October 1, 2003 and implemented fresh start accounting as of that date.

     We derive substantially all of our revenue from manufacturing and marketing a wide range of iron castings and steel forgings for the heavy municipal market and selected segments of the industrial market. We have two reportable segments, castings and forgings. Through our castings segment, we are a leading producer of iron castings for use in heavy municipal and industrial applications. For heavy municipal market applications, we sell to state and local municipalities, contractors, precasters and supply houses. We primarily sell our industrial castings directly to OEMs and tier-one suppliers with whom we have established close working relationships. Through our forgings segment, operated by Mercer, we produce complex-shaped forged steel and micro alloy components for use in transportation, railroad, mining and heavy industrial applications. Mercer sells directly to OEMs, as well as to industrial end-users. Mercer’s subsidiary, A&M Specialties, Inc., machines forgings and castings for Mercer and various industrial customers. Restructuring charges and certain other expenses, such as income taxes, general corporate expenses and financing costs, are not allocated between our two operating segments.

     New Mold Line. We are proceeding with a $54 million capital project to replace a 40-year-old mold line at our Neenah facility. Our new state-of-the-art mold line is expected to significantly enhance operating efficiencies, increase capacity and provide expanded molding capabilities for our heavy municipal products. Based on our current and projected level of operations, we anticipate that our operating cash flows and our current credit facility will be sufficient to fund this and other anticipated operational investments, including working capital and capital expenditure needs, over the two year construction timeframe. We expect the new mold line to become operational in early calendar 2008.

     Change of Control. We experienced a change of control on May 25, 2006, when Tontine became the beneficial owner of more than a majority of the outstanding shares, on a fully-diluted basis, of our parent, ACP. The change of control required us to make change of control tender offers to purchase our 11% Notes and 13% Notes, with Tontine, as the Company’s designee, purchasing notes tendered pursuant to the offers.

     Major Customer Declares Bankruptcy. On March 3, 2006, Dana Corporation (“Dana”), one of our major customers, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. The total accounts receivable owed to us by Dana on March 3, 2006 were approximately $4.7 million. Total payments received from Dana in the 90 days preceding the bankruptcy filing were approximately $7.4 million. Sales to Dana accounted for approximately 6%, 6% and 5% of our net sales for the fiscal years ended September 30, 2006, 2005, and 2004, respectively. These amounts reflect our transactions directly with Dana and exclude Dana products supplied to machine shops, which are not owned by Dana but whose business sourcing is controlled by Dana. We negotiated a settlement with Dana and received partial payment of $3.9 million of the $4.7 million outstanding accounts receivable owed to us on March 3, 2006, and the majority of the remaining receivables were sold to a third party in October 2006 for $0.7 million.

     Expected Decline in Heavy-Duty Truck Production and New Housing Starts. Due to new emissions standards set to take effect on January 1, 2007, heavy-duty truck production is expected to decline significantly beginning early in calendar 2007, as many customers have accelerated purchases into 2006, artificially increasing 2006 sales to this segment. Additional emissions regulations are scheduled to take effect in 2010, which may have a similar effect of accelerating sales to 2009. In addition, new housing starts are expected to decline further in calendar 2007, reflecting softness in the overall housing sector. As a result, we expect our sales to these end markets to decline significantly in fiscal 2007 from fiscal 2006 levels, while sales of municipal products castings are expected to be flat to down slightly for the same period.

     Order of Abatement at Gregg Facility. We are presently operating our Gregg facility under the terms of an order of abatement with the California South Coast Air Quality Management District (SCAQMD). The order requires us to comply with certain operating parameters in an effort to reduce odors. Failure to operate within such criteria could result in the SCAQMD terminating operations at the Gregg facility. The current order expires on March 31, 2007. We believe we are in compliance with the testing and operating requirements mandated by the order and that our actions have resulted in a substantial reduction in the intensity and frequency of observable downwind odors.

     On August 5, 2003, we, together with ACP and NFC filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code, as amended, with the United States Bankruptcy Court for the District of Delaware and submitted to the Bankruptcy Court for approval the Disclosure Statement for our Amended Prepackaged Joint Chapter 11 Plan of Reorganization, which we call the Plan of Reorganization.

     By order dated September 26, 2003, the Bankruptcy Court confirmed the Plan of Reorganization and the Plan of Reorganization became effective on October 8, 2003. October 8, 2003 is hereinafter referred to as the “Effective Date”. The Plan of Reorganization allowed us to emerge from bankruptcy with an improved capital structure. Because we had arranged to continue paying our trade debt on a timely basis, we had sufficient trade credit to continue operations in the ordinary course of business during the pendency of the Chapter 11 proceedings.

     As a result of the Plan of Reorganization, significant changes resulted to our capital structure. Although the Plan of Reorganization became effective on October 8, 2003, due to the immateriality of the results of operations for the period between October 1, 2003 and the Effective Date, for financial reporting purposes we recorded the fresh-start adjustments necessitated by SOP 90-7 on October 1, 2003.

     As a result of our emergence from Chapter 11 bankruptcy and the application of fresh-start reporting, our consolidated financial statements for the periods commencing on October 1, 2003 are referred to as the “Reorganized Company” and are not comparable with any periods prior to October 1, 2003, which are referred to as the “Predecessor Company” (see Note 1 in the Notes to Consolidated Financial Statements).

     All references to the periods subsequent to October 1, 2003 are to the Reorganized Company. All references to periods prior to that date are to the Predecessor Company.

FISCAL YEAR ENDED SEPTEMBER 30, 2006 COMPARED TO THE FISCAL YEAR ENDED SEPTEMBER 30, 2005

     Net Sales. Net sales for the year ended September 30, 2006 were $542.5 million, which was $0.7 million or 0.1% higher than the year ended September 30, 2005. The increase was due to increased shipments of heavy duty truck and municipal products, somewhat offset by reduced shipments of products to the HVAC (heating, ventilation and air conditioning) market and various normal mix changes within the remaining market segments of our business.

     Cost of Sales. Cost of sales was $442.6 million for the year ended September 30, 2006, which was $1.8 million or 0.4% higher than the year ended September 30, 2005. Cost of sales as a percentage of net sales increased to 81.6% during the year ended September 30, 2006 from 81.4% for the fiscal year ended September 30, 2005. The increase in cost of sales was due to a slightly less favorable mix of products sold throughout the Company and operating inefficiencies at two of our locations.

     Gross Profit. Gross profit was $99.9 million for the year ended September 30, 2006, which was $1.1 million or 1.1% lower than the year ended September 30, 2005. Gross profit as a percentage of net sales decreased to 18.4% during the year ended September 30, 2006 from 18.6% for the fiscal year ended September 30, 2005. The decrease in gross profit resulted from a slightly less favorable mix of products sold throughout the Company and operating inefficiencies at two of our locations.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended September 30, 2006 were $34.3 million, a decrease of $0.2 million from the $34.5 million for the year ended September 30, 2005. As a percentage of net sales, selling, general and administrative expenses decreased to 6.3% for the year ended September 30, 2006 from 6.4% for the fiscal year ended September 30, 2005.

     Amortization of Intangible Assets. Amortization of intangible assets was $7.1 million for each of the years ended September 30, 2006 and September 30, 2005.

     Other Expenses. Other expenses for the years ended September 30, 2006 and 2005 consist of losses of $0.1 million and $1.0 million, respectively, for the disposal of long-lived assets in the ordinary course of business.

     Operating Income. Operating income was $58.3 million for the year ended September 30, 2006, an increase of $6.4 million or 12.3% from the year ended September 30, 2005. The increase was due to the $6.5 million litigation settlement incurred in the year ended September 30, 2005. As a percentage of net sales, operating income increased from 9.6% for the year ended September 30, 2005 to 10.7% for the year ended September 30, 2006.

     Net Interest Expense. Net interest expense was $33.3 million and $33.4 million for the years ended September 30, 2006 and 2005, respectively.

     Provision for Income Taxes. The effective tax rate for years ended September 30, 2006 and 2005 was 35% and 18%, respectively. The provision for income taxes for the year ended September 30, 2005 is lower than the amount

computed by applying our statutory rate of 35% to the income before income taxes principally due to a change in the tax method of determining LIFO inventory and the recognition of permanent differences due to the reorganization. The change in tax method of determining LIFO inventory resulted in a tax benefit of $2.7 million, which increased fiscal 2005 net income by $2.7 million.

     Net Sales. Net sales for the year ended September 30, 2005 were $541.8 million, which was $90.9 million or 20.2% higher than the year ended September 30, 2004. The increase was due to increased demand for industrial castings used in the heavy duty truck market, increased shipments of municipal products, higher pricing (including steel scrap cost recovery) on both industrial and construction castings, and new business at all locations.

     Cost of Sales. Cost of sales was $440.8 million for the year ended September 30, 2005, which was $65.7 million or 17.5% higher than the year ended September 30, 2004. Cost of sales as a percentage of net sales decreased to 81.4% during the year ended September 30, 2005 from 83.2% for the fiscal year ended September 30, 2004. The decrease in cost of sales as a percentage of net sales was due to efficiencies achieved by operating the manufacturing plants at higher capacity.

     Gross Profit. Gross profit was $101.0 million for the year ended September 30, 2005, which was $25.2 million or 33.2% higher than the year ended September 30, 2004. Gross profit as a percentage of net sales increased to 18.6% during the year ended September 30, 2005 from 16.8% for the fiscal year ended September 30, 2004. The majority of the increase in gross profit resulted from sales volume increases and the efficiencies achieved by operating the manufacturing plants at higher capacity.

     Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended September 30, 2005 were $34.5 million, an increase of $7.1 million from the $27.4 million for the year ended September 30, 2004. As a percentage of net sales, selling, general and administrative expenses increased to 6.4% for the year ended September 30, 2005 from 6.1% for the fiscal year ended September 30, 2004. The increase was due to increased expense for incentive plans based on improved profitability, the writeoff of a large accounts receivable balance of a customer who filed for Chapter 11 bankruptcy protection, a decrease in the rebate received from countervailing duties assessed on imported products, and increases in fringe benefit costs, specifically health care. Also, legal and professional costs increased in comparison to the prior year; however, the prior year cost level was abnormally low due to the majority of the 2004 legal and professional fees related to the bankruptcy reorganization, which were recorded in fresh start accounting.

     Settlement of Litigation. On November 22, 2004, Neenah entered into a letter of intent (“LOI”) with respect to a proposed management buyout of all the outstanding stock of our wholly owned subsidiary Mercer Forge Corporation (“Mercer”). The parties to the LOI, however, were unable to agree on the terms of a definitive agreement by the extended termination date of the LOI, which had lapsed. On January 24, 2005, JD Holdings, LLC (“JDH”), one of the counterparties to the LOI, filed a complaint in the United States District Court for the Southern District of New York against Neenah alleging, among other things, that Neenah breached the terms of the LOI by not consummating the sale of the stock of Mercer to JDH.

     On August 5, 2005, the parties agreed to settle this matter. The settlement provided for a $6.5 million cash payment by the Company to JDH and the exchange of full and final releases by the parties on behalf of themselves and their respective members, officers, directors, affiliates and shareholders.

     Amortization of Intangible Assets. Amortization of intangible assets was $7.1 million for each of the years ended September 30, 2005 and September 30, 2004.

     Other Expenses. Other expenses for the years ended September 30, 2005 and 2004 consist of losses of $1.0 million and $0.5 million, respectively, for the disposal of long-lived assets in the ordinary course of business.

     Operating Income. Operating income was $51.9 million for the year ended September 30, 2005, an increase of $11.1 million or 27.1% from the year ended September 30, 2004. The increase was caused by the reasons discussed above under gross profit and was partially offset by the $6.5 million litigation settlement and increased selling, general and administrative expenses. As a percentage of net sales, operating income increased from 9.1% for the year ended September 30, 2004 to 9.6% for the year ended September 30, 2005.

     Net Interest Expense. Net interest expense was $33.4 million for each of the years ended September 30, 2005 and 2004.

     Provision for Income Taxes. The provision for income taxes for the year ended September 30, 2005 is lower than the amount computed by applying our statutory rate of 35% to the income before income taxes principally due to a change in the tax method of determining LIFO inventory and the recognition of permanent differences due to the reorganization. The change in tax method of determining LIFO inventory resulted in a tax benefit of $2.7 million, which increased fiscal 2005 net income by $2.7 million.

     Credit Facility. On July 28, 2005, the Company amended its bank Loan and Security Agreement (the “Credit Facility”), which was originally entered into as of October 8, 2003 upon our emergence from bankruptcy. The following principal changes were made to the Credit Facility: (i) the revolving loan commitment under the Credit Facility was increased from $70 million to $92.1 million (provided, however, that the outstanding aggregate amount of revolving loans, letters of credit and term loans provided under the Credit Facility may not exceed the revolving loan commitment at any time), (ii) the interest rates applicable to revolving loans and term loans were reduced, (iii) the maturity of the Credit Facility was extended by one year, to October 8, 2009 (iv) the Company was provided additional flexibility to pay deferrable interest on its outstanding 13% Senior Subordinated Notes due 2013 and to make repayments, prepayments, redemptions and repurchases of the Senior Subordinated Notes, (v) the Company was authorized to sell Mercer Forge Corporation and/or Gregg Industries, Inc., subject to certain conditions, and (vi) the principal financial covenant in the Credit Facility was revised in a manner that is more favorable to the Company than before.

     The Company’s Credit Facility, as amended on July 28, 2005, consists of a revolving credit facility of up to $92.1 million (with sublimits of $5 million available for letters of credit and term loans in the aggregate original principal amount of $22.1 million). The Credit Facility matures on October 8, 2009, and bears interest at rates based on the lenders’ Base Rate, as defined in the Credit Facility, or an adjusted rate based on LIBOR. Availability under the Credit Facility is based on various advance rates against the Company’s accounts receivable and inventory. Amounts under the revolving credit facility may be borrowed, repaid and reborrowed subject to the terms of the facility. At September 30, 2006, the Company had approximately $24.6 million outstanding under the revolving credit facility and approximately $13.4 million outstanding under the term loan facility. No portion of the term loan, once repaid, may be reborrowed. However, repayments of the term loan increase availability for borrowings under the revolving credit facility.

     Substantially all of the Company’s wholly owned subsidiaries are co-borrowers with the Company under the Credit Facility and are jointly and severally liable with the Company for all obligations under the Credit Facility, subject to customary exceptions for transactions of this type. In addition, NFC Castings, Inc. (“NFC”), the Company’s immediate parent, and the remaining wholly owned subsidiaries of the Company jointly and severally guarantee the Company’s obligations under the Credit Facility, subject to customary exceptions for transactions of this type. The borrowers’ and guarantors’ obligations under the Credit Facility are secured by a first priority perfected security interest, subject to customary restrictions, in substantially all of the tangible and intangible assets of the Company and its subsidiaries. The senior secured notes discussed below, and the guarantees in respect thereof, are equal in right of payment to the Credit Facility, and the guarantees in respect thereof. The liens in respect of the senior secured notes are junior to the liens securing the Credit Facility and guarantees thereof.

     Voluntary prepayments may be made at any time on the term loan borrowings or the revolving borrowings upon customary prior notice. Prepayments on the term loan borrowings may be made at any time without premium or penalty unless a simultaneous reduction of the revolving loan commitment amount is being made or if any such reduction of the revolving loan commitment amount has been made previously. Reductions of the revolving loan

commitment are subject to certain premiums specified in the Credit Facility. Mandatory repayments are required under certain circumstances, including a sale of assets or the issuance of debt or equity.

     The Credit Facility requires the Company to observe certain customary conditions, affirmative covenants and negative covenants including financial covenants. The Credit Facility also contains events of default customary for these types of facilities, including, without limitation, payment defaults, material misrepresentations, covenant defaults, bankruptcy and a change of ownership of the Company, NFC or ACP Holding Company, NFC’s immediate parent company. The Company is prohibited from paying dividends and is restricted to a maximum yearly stock repurchase of $250,000.

     Subsequent to the end of fiscal 2005, the Company further amended the Credit Facility to allow the $6.5 million settlement in connection with the Mercer litigation, discussed above, to be added back in the calculation of Adjusted EBITDA. The amendment was executed and became effective on December 9, 2005.

     At September 30, 2006, the Company is in compliance with existing bank covenants.

     11% Senior Secured Notes due 2010. The Company has outstanding Senior Secured Notes due 2010 in the principal amount of $133.1 million, with a coupon rate of 11%. These notes were issued at a price which included a discount of $11.7 million. The obligations under the Senior Secured Notes due 2010 are equal in right of payment to the Credit Facility and the associated guarantees. The liens securing the senior secured notes are junior to the liens securing the Credit Facility and guarantees thereof. Interest on the Senior Secured Notes due 2010 is payable on a semi-annual basis. The Company’s obligations under the notes are guaranteed on a secured basis by each of its wholly owned subsidiaries. Subject to the restrictions in the Credit Facility, the notes are redeemable at the Company’s option in whole or in part at any time on or after September 30, 2007, with not less than 30 days nor more than 60 days notice, at the redemption price specified in the indenture governing the notes (105.500% of the principal amount redeemed beginning September 30, 2007, 104.125% beginning September 30, 2008, and 102.750% beginning September 30, 2009 and thereafter), plus accrued and unpaid interest up to the redemption date. Upon the occurrence of a “change of control” as defined in the indenture governing the notes, the Company may be required to make an offer to purchase the secured notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The secured notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments (among other things, currently limiting most dividends and similar payments by Neenah and its subsidiaries to no more than approximately $14 million), (3) liens, (4) restrictions on distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The secured notes also contain customary events of default typical to this type of financing, such as (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee.

     13% Senior Subordinated Notes due 2013. The Company has outstanding Senior Subordinated Notes due 2013 in the principal amount of $100 million, with a coupon rate of 13%. The obligations under the senior subordinated notes are senior to the Company’s subordinated unsecured indebtedness, if any, and are subordinate to the Credit Facility and the senior secured notes. Interest on the senior subordinated notes is payable on a semi-annual basis. Not less than five percent of the interest on the senior subordinated notes must be paid in cash and up to 8% interest may be paid-in-kind. To date, all interest payments have been made in cash. The Company’s obligations under the notes are guaranteed on an unsecured basis by each of its wholly owned subsidiaries. Subject to the restrictions in the Credit Facility, the notes are redeemable at our option in whole or in part at any time, with not less than 30 days nor more than 60 days notice, at the redemption price specified in the indenture governing the notes (currently 100%), plus accrued and unpaid interest up to the redemption date. The indenture does not allow for redemption of the 13% Senior Subordinated Notes while the 11% Senior Secured Notes remain outstanding. Upon the occurrence of a “change of control” as defined in the indenture governing the notes, the Company may be required to make an offer to purchase the subordinated notes at 101% of the outstanding principal amount thereof, plus accrued and unpaid interest up to the purchase date. The subordinated notes contain customary covenants typical to this type of financing, such as limitations on (1) indebtedness, (2) restricted payments (among other things, currently limiting most dividends and similar payments by Neenah and its subsidiaries to no more than approximately $14 million), (3) liens, (4) restrictions on distributions from restricted subsidiaries, (5) sale of assets, (6) affiliate transactions, (7) mergers and consolidations and (8) lines of business. The subordinated notes also contain customary events of

default typical to this type of financing, such as, (1) failure to pay principal and/or interest when due, (2) failure to observe covenants, (3) certain events of bankruptcy, (4) the rendering of certain judgments or (5) the loss of any guarantee.

     For the fiscal years ended September 30, 2006, 2005 and 2004, capital expenditures were $17.8 million, $17.6 million, and $12.7 million, respectively. These amounts represent a level of capital expenditures necessary to maintain equipment and facilities. Certain foundries are required to comply with the “maximum achievable control technology” or “MACT” standards of the Environmental Protection Agency. Our Neenah foundry and both Dalton foundries are subject to this requirement (due to their size). A majority of the approximate $3.0 million of capital expenditures necessary to bring these facilities into compliance with MACT requirements has already been made and we expect all three facilities to achieve MACT compliance by the applicable deadlines, the earliest of which is April 2007. We estimate that our aggregate expenditure requirements in fiscal 2007 will include projected costs of:

In addition, we will require funds for general corporate expenses, other expenses (including pension expenses discussed in “— Contractual Obligations”) and for working capital fluctuations.

     The Company’s principal source of cash to fund its liquidity needs will be net cash from operating activities and borrowings under the revolving loan commitment under the Credit Facility. Net cash provided by operating activities for the fiscal year ended September 30, 2006 was $24.8 million, a decrease of $8.8 million from cash provided by operating activities for the fiscal year ended September 30, 2005 of $33.6 million. The decrease in net cash provided by operating activities during fiscal 2006 was primarily due to the decrease in accrued liabilities and an increase in income taxes paid. Net cash provided by operating activities for the fiscal year ended September 30, 2005 represented an increase of $30.9 million from cash provided by operating activities for the fiscal year ended September 30, 2004 of $2.7 million. The increase in net cash provided by operating activities during fiscal 2005 was primarily due to the increase in net income, as well as a decrease in working capital accounts (primarily from accounts receivable).

     Future Capital Needs. Despite the Company’s significant decrease in leverage as a result of the Plan of Reorganization, the Company is still significantly leveraged and the ability to meet its debt obligations will depend upon future operating performance which will be affected by many factors, some of which are beyond the Company’s control. Based on the Company’s current level of operations, it anticipates that operating cash flows and available credit facilities will be sufficient to fund the anticipated operational investments, including working capital and capital expenditure needs, for at least the next twelve months. As part of the Company’s ongoing review of both its short term and long term cash requirements, the Company continues to evaluate strategic alternatives relative to its current capital structure in order to provide for increased flexibility and liquidity. If, however, the Company is unable to service its debt requirements as they become due or is unable to maintain ongoing compliance with restrictive covenants, it may be forced to adopt alternative strategies that may include reducing or delaying capital expenditures, selling assets, restructuring or refinancing indebtedness or seeking additional equity capital. There can be no assurances that any of these strategies could be effected on satisfactory terms, if at all.

     Adjusted EBITDA. The Company’s borrowing arrangement contains certain financial covenants which are tied to ratios based on Adjusted EBITDA. Adjusted EBITDA is defined in the credit facility as “EBITDA” and is generally calculated as the sum of net income (excluding non-recurring non-cash charges and certain one-time cash charges), income taxes, interest expense, and depreciation and amortization. Adjusted EBITDA is presented herein because it is a material component of the covenants contained within our credit facility. Non-compliance with the covenants could result in the requirement to immediately repay all amounts outstanding under the credit facility which could have a material adverse effect on the Company’s results of operations, financial position and cash flow.

Management also believes that certain investors use information concerning Adjusted EBITDA as a measure of a company’s performance and ability to service its debt. Adjusted EBITDA should not be considered a substitute for, or more meaningful than, income from operations, net income, cash flows or other measures of financial performance prepared in accordance with accounting principles generally accepted in the United States. Adjusted EBITDA, as presented by the Company, may not be comparable to similarly titled measures reported by other companies.

     A reconciliation of Adjusted EBITDA for the fiscal years ended September 30, 2006, 2005 and 2004 is provided below (in thousands):

     None.

     The following table includes the Company’s significant contractual obligations at September 30, 2006 (in millions):

     As of September 30, 2006, other than the new mold line commitments listed above, the Company had no material purchase obligations other than those created in the ordinary course of business related to inventory and property, plant and equipment, which generally have terms of less than 90 days. The Company also has long-term obligations related to its pension and post-retirement plans which are discussed in detail in Note 8 of the Notes to Consolidated Financial Statements. As of the most recent actuarial measurement date, the Company anticipates making $2.5 million of contributions to pension plans in fiscal 2007. Post-retirement medical claims are paid as they are submitted and are anticipated to be $0.5 million in fiscal 2007.

     Critical accounting estimates are those that are, in management’s view, both very important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

     Future events and their effects cannot be determined with absolute certainty. The determination of estimates, therefore, requires the exercise of judgment. Actual results may differ from those estimates, and such differences may be material to the financial statements. Our accounting policies are more fully described in Note 2 in the Notes to Consolidated Financial Statements.

     We believe that the most significant accounting estimates inherent in the preparation of our financial statements include estimates associated with the evaluation of the recoverability of certain assets including goodwill, other intangible assets and property, plant and equipment as well as those estimates used in the determination of reserves related to the allowance for doubtful accounts, inventory obsolescence, workers compensation and pensions and other post-retirement benefits. Various assumptions and other factors underlie the determination of these significant estimates. In addition to assumptions regarding general economic conditions, the process of determining significant estimates is fact-specific and accounts for such factors as historical experience, product mix and, in some cases, actuarial techniques. We constantly reevaluate these significant factors and make adjustments where facts and circumstances necessitate. Historically, our actual results have not significantly deviated from those determined using the estimates described above.

     We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

     In November 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 151, “Inventory Costs, an Amendment of ARB No. 43, Chapter 4.” SFAS No. 151 clarifies that abnormal amounts of idle facility expense,

freight, handling costs, and wasted materials (spoilage) should be recognized as current-period charges and requires the allocation of fixed production overhead to inventory based on the normal capacity of the production facilities. SFAS No. 151 is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. Adoption of SFAS No. 151 did not have a material impact on the Company’s financial condition, results of operations or cash flows.

     In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109” (FIN 48), which clarifies the accounting for uncertainty in tax positions. This Interpretation requires that the Company recognize in its financial statements the impact of a tax position, if that position is more likely than not of being sustained on audit, based on the technical merits of the position. This interpretation is effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company is currently evaluating the impact FIN 48 will have on its financial statements.

     In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (SFAS No. 158). SFAS No. 158 amends SFAS No. 87, “Employers’ Accounting for Pensions,” SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,” SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other than Pensions,” and SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement Benefits.” The amendments retain most of the existing measurement and disclosure guidance and will not change the amounts recognized in the Company’s statement of operations. SFAS No. 158 requires companies to recognize a net asset or liability with an offset to equity, by which the defined benefit post-retirement obligation is over- or under-funded. SFAS No. 158 requires prospective application, and the recognition and disclosure requirements will be effective for the Company’s fiscal year ending September 30, 2007. The Company is currently evaluating the impact SFAS No. 158 will have on its consolidated balance sheets.

     We are exposed to market risk related to changes in interest rates. We do not use derivative financial instruments for speculative or trading purposes.

     Interest Rate Sensitivity. Our earnings are affected by changes in short-term interest rates as a result of our borrowings under the credit facility. If market interest rates for our borrowings increase or decrease by 100 basis points, the Company’s interest expense would increase or decrease by approximately $0.4 million. This analysis does not consider the effects of changes in the level of overall economic activity that could occur due to interest rate changes. Further, in the event of an upward change of such magnitude, management could take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our financial structure.

     The financial statements and schedules are listed in Part IV Item 15 of this Annual Report on Form 10-K and are incorporated by reference in this Item 8.

     None.

     Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based upon such evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that, as of the end of such period, the

Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act.

     Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

     On December 14, 2006, the Board of Directors of Neenah increased the size of the Board from six to seven members, effective as of January 1, 2007, and elected Gerald E. Morris as a new director to fill the newly created directorship, effective as of January 1, 2007. Mr. Morris was also elected to serve as a director, effective as of January 1, 2007, of ACP, NFC and Neenah's subsidiaries.

     On December 14, 2006, Albert E. Ferrara, Jr. was designated as a member of the audit committee.

     The following sets forth certain information with respect to the persons who are members of the board of directors and executive officers of the Company. All executive officers are appointed by the board of directors. Under our bylaws, each director holds office until the next annual meeting of shareholders and until the director’s successor has been elected and qualified. All of our directors are also directors of ACP.

     Mr. Barrett has served as our President and Chief Executive Officer since May 2000. Mr. Barrett joined us in 1992 serving as General Sales Manager — Industrial Castings until May 1, 1997. Mr. Barrett was Vice President and General Manager from May 1, 1997 to September 30, 1998 and President from October 1, 1998 to April 30, 2000. From 1985 to 1992, Mr. Barrett was the Vice President — Sales for Harvard Industries Cast Products Group. Mr. Barrett has also been one of our directors and Chairman of the Board since May 2000.

     Mr. LaChey has served as our Corporate Vice President — Finance and Chief Financial Officer since June 2000. Mr. LaChey joined us in 1971 and has served in a variety of positions of increasing responsibility in the finance department.

     Mr. Ackerman has served as the Division President of Mercer since 2000. Previously, Mr. Ackerman served as the Vice President/CFO of Mercer Forge since 1990. Prior to joining Mercer in 1990, Mr. Ackerman worked for Sheet Metal Coating & Litho as its Controller, Dunlop Industrial/Angus Fire Armour Corp. as its Controller and Ajax Magnethermic Corporation as its Vice President-Finance (CFO).

     Mr. Andrews has served as our Corporate Vice President — Manufacturing since August 2003 and as Chief Operating Officer of Manufacturing Operations since November 2005. Mr. Andrews joined us in 1988 and has served in a variety of manufacturing positions with increasing responsibility. Prior to joining Neenah Foundry, Mr. Andrews was Division Manager for Dayton Walther Corporation’s Camden Casting Center from 1986 to 1988 and served as Manufacturing Manager and then Plant Manager for Waupaca Foundry’s Marinette Plant from 1973 to 1986.

     Mr. DeRita has served as Division President of Dalton since 1999. He joined Newnam Manufacturing in 1989 and became the Vice President — Sales when Dalton acquired Newnam Manufacturing in 1992. Prior to joining our Company, Mr. DeRita was the Manager of Engineering and Maintenance at Erie Malleable, the same position he held previously at Zurn Industries.

     Mr. Headington has served as our Corporate Vice President — Technology since August 2003. Previously, Mr. Headington was our Manager of Technical Services and Director of Product Reliability since January 1989. Prior to joining the Company, Mr. Headington co-founded and operated Sintered Precision Components, a powdered metal company. Prior to his involvement with Precision Components, he was employed by Wagner Casting Company as Quality Manager.

     Mr. Koller has served as our Vice President — Municipal Products Sales and Engineering since May 1998. Mr. Koller has worked within our Municipal products area for the last 27 years serving with increasing responsibility as Sales Representative, Specifications Manager, and General Sales Manager.

     Mr. Varkoly has served as our Corporate Vice President — Industrial Products Sales since August 2003. Previously, Mr. Varkoly was our Vice President of Business Development since March 2000. Prior to joining our Company in 2000, he served as the Director — Finance of Betzdearborn, Inc. Previously, he was a Manager for Performance Improvement Management Consulting with Ernst & Young LLP and the Business Development Manager of FMC Corporation.

     Mr. Ferrara has served as a director since October 2006. Mr. Ferrara has been the Vice President, Finance and Chief Financial Officer of AK Steel Holding Corporation, a producer of flat-rolled carbon, stainless and electrical steels and tubular products, since November 2003. Mr. Ferrara joined AK Steel in June 2003 as Director, Strategic Planning and was named Acting Chief Financial Officer in September 2003. Prior to joining AK Steel, Mr. Ferrara was Vice President, Corporate Development for NS Group, Inc., a tubular products producer, and previously held positions as Senior Vice President and Treasurer with U.S. Steel Corporation and Vice President, Strategic Planning at USX Corporation

     Mr. Gendell has served as a director since May 2006. Mr. Gendell has been employed by an affiliate of Tontine, a Greenwich, Connecticut-based investment partnership, since January 2004. In this capacity, he assists in the oversight and management of the Tontine portfolio. Prior to that, Mr. Gendell held senior positions at several venture-backed startups. He was President and Chief Operating Officer of Homserv, LLC, a privately-held data aggregator focused on real estate transactions. Prior to that, he served as President and Chief Operating Officer of Cogent Design Inc., a privately-held practice management software system.

     Mr. Graham has served as a director since May 2006. Mr. Graham has been the Chief Financial Officer of Shiloh Industries, Inc., a publicly traded manufacturer of automotive components, since joining Shiloh in October 2001. Prior to that, Mr. Graham has held the position of Chief Financial Officer with several companies, the first in 1994 when he joined Truck Components Inc., a publicly traded company with foundry and machining operations serving the heavy truck, automotive, construction and agricultural industries. Following his tenure at Truck Components Inc., Mr. Graham served as the Chief Financial Officer of Dura Automotive Systems, Inc., also a publicly traded manufacturer of automotive components from May 1996 until February 2000. After Dura Automotive Systems, Inc., and immediately before joining Shiloh Industries, Inc., Mr. Graham joined Republic Technologies International, a fully integrated steel producer that filed for bankruptcy in April 2001.

     Mr. Lash has served as a director since May 2006. Mr. Lash has been employed by an affiliate of Tontine, a Greenwich, Connecticut-based investment partnership, since July 2005. In this capacity, he assists in the oversight and management of the Tontine portfolio. Prior to that, Mr. Lash was a Senior Managing Director of Conway, Del

Genio, Gries & Co. LLC, a financial advisory firm, from April 2002 to July 2005. From June 1998 to April 2001, Mr. Lash was a Managing Director of JP Morgan Chase & Co., a financial services firm. Mr. Lash also serves as a director of Integrated Electrical Services, Inc.

     Mr. Marshall has served as a director since October 2003. Mr. Marshall is currently the Chairman of Smith Marshall, a subsidiary of the NextMedia Company Limited. Previously, he was the President and Chief Executive Officer of Aluma Enterprises, Inc., a construction technology company, for six years. Prior to joining Aluma Enterprises, Inc., Mr. Marshall successively held the positions of President and Chief Executive Officer at Marshall Steel Limited, Marshall Drummond McCall Inc. and the Ontario Clean Water Agency. Mr. Marshall also serves as a director of Brand Energy & Infrastructure Services, Inc. and Toronto Hydro Corporation.

     The current members of the audit committee of the board of directors are Stephen E. K. Graham (Chairman) and Jeffrey G. Marshall. The board of directors has determined that all members of the audit committee are independent and financially literate in accordance with the audit committee requirements of the New York Stock Exchange. The board has determined that Mr. Graham is an audit committee financial expert within the meaning of SEC rules. Currently the full board handles compensation matters since the two directors who were members of the compensation committee resigned in connection with Tontine’s acquisition of control in May 2006. See “Certain Relationships and Related Transactions.”

     In December 2004, the Company adopted a Code of Ethics applicable to all of our officers as well as certain other key accounting staff. A copy of the Code of Ethics can be obtained free of charge by writing to us.

     The board of directors of ACP, our ultimate parent company, currently consists of the same six directors who serve as our board. ACP’s amended and restated bylaws permit the holders of a majority of the shares of common stock of ACP then entitled to vote at an election of directors, to remove any director or the entire board of directors at any time, with or without cause. Under ACP’s amended and restated bylaws, vacancies on the board of directors may be filled by the affirmative vote of a majority of the holders of ACP’s outstanding stock entitled to vote thereon, or may be filled by the vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Nearly half of the outstanding stock of ACP, and a majority of such stock on a fully-diluted basis, is owned by Tontine. As a result, Tontine controls ACP’s and our affairs, including the election of directors who in turn appoint management for both us and ACP. ACP intends to expand its board to seven members by adding one additional independent director.

     Summary Compensation Table. The following table summarizes compensation awarded to, earned by or paid to our chief executive officer and each of our other four most highly compensated executive officers (collectively, the “named executive officers”) for services rendered to ACP, NFC, and the Company during the 2006, 2005 and 2004 fiscal years.

     Under the 2003 Management Annual Incentive Plan, members of management and certain other specified employees will receive annual performance awards if the Company achieves certain Adjusted EBITDA targets set by the board of directors of the Company at the beginning of each fiscal year. The bonus paid will equal (i) 50% of the target bonus amount for each individual should the Company reach 85% of the Adjusted EBITDA target, (ii) 100% of the target bonus on reaching 100% of the target Adjusted EBITDA, and (iii) 200% of the target bonus on reaching 120% of the target Adjusted EBITDA. For 2005, the $6.5 million settlement in connection with the Mercer litigation was added back to calculate Adjusted EBITDA for purposes of the bonus calculation.

     Target bonuses range up to 30.0% of base salary depending upon job responsibility. In addition, the 2003 Management Annual Incentive Plan was amended to allow management the ability to earn additional cash compensation based on varying levels of debt reduction achieved during the year. Earned bonus is payable within 10 business days of the approval of the Company’s audited financial statements by the board of directors.

     In addition, a one-time aggregate incremental $450,000 emergence bonus was paid upon emergence from Chapter 11 bankruptcy in fiscal 2004 to certain members of management upon the Effective Date.

     For fiscal 2007, the executives and certain other specified employees will be entitled to receive annual performance awards upon achieving certain milestones, including Adjusted EBITDA targets and certain other criteria as determined by the compensation committee or the board of directors. Target bonus as a percentage of salary for each member of management will be consistent with historical levels. Target levels, timing of payments and other terms and conditions of the annual incentive plan will be approved by the compensation committee or the board.

     Under the 2003 Management Equity Incentive Plan, which was established on the Effective Date, certain members of management received restricted shares which represented 5% of the common stock of ACP on a fully-diluted basis as of the Effective Date. The 4,000,000 restricted shares issued pursuant to the 2003 Management Equity Incentive Plan were 25% vested upon grant and the balance vested on an annual straight-line basis over the ensuing three years subject to acceleration in the event of a Significant Transaction, as defined in the award agreement. The remaining unvested shares became vested as of May 25, 2006 as a result of Tontine’s acquisition of control of ACP. See “Certain Relationships and Related Transactions.” Under the 2003 Management Equity Incentive Plan, an additional 4,000,000 shares of common stock of ACP are reserved for future grants as determined by the compensation committee or the board of directors. Grants of incentive or non-qualified stock options and restricted stock awards may be made under the plan.

     We have entered into employment agreements with each of the named executive officers. The agreements establish a base salary as well as providing for a severance payment calculation in the event of termination (pursuant to the 2003 Severance and Change of Control Plan described below), health (subject to satisfying insurability requirements), 401(k) and other benefits that the named employees are entitled to receive. Non-competition and non-solicitation agreements have been signed as part of the employment agreements, which will apply during a period of three years for our chief executive officer and two years for the chief financial officer and other members of management of the Company, in each case, after termination.

     Under the 2003 Severance and Change of Control Plan, the executives with whom we have executed employment agreements are entitled to receive Severance Payments, as defined in the 2003 Severance and Change of Control Plan, health benefits and outplacement services if the Company terminates his or her employment without cause or if he or she terminates his or her employment for Good Reason and a Change of Control Payment, health benefits and outplacement services if a participating executive’s employment is terminated or the executive resigns from employment for Good Reason within 180 days of a Change of Control, as such terms are defined in the 2003 Severance and Change of Control Plan. The acquisition by Tontine in May 2006 of beneficial ownership of a

majority of ACP’s common stock was a Change of Control for this purpose. See “Certain Relationships and Related Transactions.”

     The Severance Payment is equal to (1) the severance multiple listed in each executive’s employment agreement multiplied by (2) the base salary of such executive. The Change of Control Payment is equal to (1) the change of control multiple listed in each executive’s employment agreement multiplied by (2) the base salary of such executive. The severance multiples for Messrs. Barrett, LaChey, Varkoly, Andrews, and DeRita, respectively are 2.70, 2.03, 2.03, 1.88, and 2.03. The change of control multiples for Messrs. Barrett, LaChey, Varkoly, Andrews, and DeRita, respectively are 3.38, 2.70, 2.03, 1.88, and 2.03. The plan also requires payments in certain circumstances to executives sufficient to make them whole for any excise tax imposed under Section 4999 of the Internal Revenue Code.

     For fiscal 2005 and the first quarter of fiscal 2006, each member of the board of directors of ACP who was not an officer of ACP was entitled to receive annual compensation for services as a director of ACP and its subsidiaries, including Neenah, in the amount of $40,000, payable in cash quarterly in four equal installments, and was also entitled to receive reimbursement for all reasonable out-of-pocket expenses, including, without limitation, travel expenses, incurred by the director in connection with the performance of the director’s duties. Effective July 1, 2005, members of the audit committee were entitled to receive an additional $10,000 per quarter for serving on that committee. In addition, each member of the board of directors who was not an officer was paid a fee of $1,000 for in person attendance at annual, regular, special and adjourned meetings of the board of directors or committee meetings of the board of directors. Meeting fees paid to the four outside directors for fiscal 2005 totaled $69,000. Members of the special litigation committee of the board of directors (Mr. Marshall and a former director) were also each granted a special one time payment of $20,000 to recognize their work in connection in arriving at a settlement of the Mercer litigation in 2005.

     Effective January 1, 2006, each member of the board of directors of ACP who is not an officer of ACP is entitled to receive annual compensation in the amount of $100,000 for services as a director, payable in cash quarterly in four equal installments. Members of the audit committee or other committees of the board are entitled to receive an additional $15,000 of annual cash compensation for serving on each such committee. Each director who is not an officer of ACP is also entitled to receive reimbursement by ACP for all reasonable out-of-pocket expenses, including, without limitation, travel expenses, incurred in connection with the performance of the director’s duties. Mr. Gendell and Mr. Lash have declined to accept directors’ fees and currently receive only reimbursement for expenses for serving on the board.

     Upon emerging from bankruptcy in October 2003, ACP issued 200,000 shares of ACP common stock, representing 0.25% of ACP’s common stock on a fully-diluted basis, to each person then serving as an outside director.

     The following table sets forth information known to us with respect to the beneficial ownership of the common stock of ACP, our ultimate parent company, as of December 14, 2006, or as otherwise indicated, by:

     The following table sets forth information about our 2003 Management Equity Incentive Plan as of September 30, 2006:

     ACP Holding Company is the parent company of NFC Castings, Inc., our immediate parent company, and thus ACP indirectly owns 100% of the common stock of the Company. William M. Barrett, who serves as the president and chief executive officer of the Company, currently serves as president and chief executive officer of ACP. Gary W. LaChey, who serves as corporate vice president-finance, treasurer and secretary of the Company, also serves in those capacities for ACP.

     Over a period of several months, the Company’s officers were apprised by representatives of Tontine, an existing stockholder of ACP, of Tontine’s interest in acquiring additional shares of common stock of ACP. On May 19, 2006, ACP received a Transfer Notice (the “Transfer Notice”) along with an executed Securities Purchase Agreement, dated as of May 19, 2006 (the “Securities Purchase Agreement”), by and among Tontine, MacKay Shields LLC (“MacKay Shields”), Citicorp Mezzanine III, L.P. and certain of its affiliates, collectively (“CM-III”) and certain affiliates of Trust Company of the West (“TCW” and with MacKay Shields and CM-III, the “Major Sellers”) and Metropolitan Life Insurance Company (“Met Life”). The Transfer Notice was required under the terms of the Stockholders Agreement dated as of October 8, 2003 (the “Stockholders Agreement”) among ACP, the Management Stockholders (as defined therein) and the Major Sellers, which provided ACP with a first option to purchase the ACP securities proposed to be sold to Tontine by MacKay Shields and CM-III, for the same consideration being offered by Tontine. ACP determined not to exercise its first option to purchase those securities, and on May 25, 2006, pursuant to the Securities Purchase Agreement, Tontine purchased all of the shares of common stock of ACP (the “Shares”) and warrants to purchase Shares for an exercise price of $.01 per Share (the “Warrants” and together with the Shares, the “ACP Securities”) held by the Major Sellers and Met Life for $1.80 per Share and $1.79 per Warrant, payable in cash.

     On May 26, 2006, Tontine also purchased 1,333,330 Shares for $1.80 per Share from certain officers and employees of Neenah and/or ACP (including Messrs. Barrett, LaChey, Varkoly, Andrews and DeRita) who collectively owned a total of 4,000,000 Shares (the “Sellers”) pursuant to the terms of a Stock Purchase Agreement, dated as of May 19, 2006 (the “Stock Purchase Agreement”). The Stock Purchase Agreement also grants each Seller

a right to “put” an additional one-third of his or her Shares, collectively 1,333,330 additional Shares, subject to specified terms and conditions, to Tontine one year after the initial closing for $1.80 per Share.

     The amount of ACP Securities purchased pursuant to the Securities Purchase Agreement and the Stock Purchase Agreement was 18,152,355 Shares and 20,992,053 Warrants, representing 48.4% of all Shares outstanding on a fully-diluted basis. The aggregate consideration paid for such securities was approximately $70.25 million. ACP Securities purchased by Tontine were purchased with working capital and on margin collateralized by other securities owned by Tontine. Tontine’s margin transactions are with UBS Securities LLC, on that firm’s usual terms and conditions.

     In connection with the purchase of the ACP Securities by Tontine pursuant to the Securities Purchase Agreement and the Stock Purchase Agreement, the provisions of the Stockholders Agreement terminated on May 25, 2006.

     As provided by the Stockholders Agreement, the board of directors of ACP then consisted of five directors. Under the Stockholders Agreement, MacKay Shields designated two members to the board of directors and CM-III and TCW each designated one member to the board of directors. Effective upon consummation of the transactions described above, all but one of those four directors resigned from the board of directors of ACP and its subsidiaries, including Neenah, and the board of directors unanimously elected Joseph V. Lash, David B. Gendell and Stephen E. K. Graham to the board of directors to fill the vacancies created by those resignations. William M. Barrett and Jeffrey G. Marshall continued to serve on the board of directors. Tontine purchased an aggregate of 400,000 Shares of ACP common stock, at a price of $1.80 per Share, from two of the former directors subsequent to their resignation from the board and purchased 200,000 Shares from a charity that acquired those Shares from a third director.

     As of December 14, 2006, Tontine beneficially owned, in the aggregate, 22,929,467 Shares, and 21,139,220 Warrants, representing 54.5% of all Shares outstanding on a fully-diluted basis, which includes the 4,177,112 Shares and 147,167 Warrants that Tontine beneficially owned prior to entering into the Securities Purchase Agreement and the Stock Purchase Agreement.

     The purchase of the ACP Securities by Tontine as described above constituted a Change of Control of Neenah, as defined in the indentures governing Neenah’s $133.1 million of outstanding 11% Notes and $100 million of outstanding 13% Notes. In accordance with those indentures, upon a Change of Control, Neenah was required to make tender offers to purchase all outstanding 11% Notes and all outstanding 13% Notes. Both tender offers were required to be made at a price of 101% of the principal amount of the Notes, plus accrued and unpaid interest to the date of purchase. Neenah entered into an agreement with Tontine whereby Tontine agreed that Tontine or an affiliate would acquire directly any 11% Notes and any 13% Notes that were tendered in the change of control tender offers. In accordance with that agreement, Tontine purchased all $115,000 of 11% Notes and all $76,292,000 of 13% Notes that were tendered in the change of control tender offers. As of December 14, 2006, Tontine continued to own, and to receive the interest payable on, those securities.

     We paid the following fees to Ernst & Young LLP in 2006 and 2005:

     Audit Fees. Fees for audit services totaled $475,600 and $410,900 for the years ended September 30, 2006 and 2005, respectively, which included fees associated with the annual audit, filings under the Securities Act of 1933, as amended, and other services performed related to regulatory filings.

     Audit-Related Fees. Fees for audit-related services totaled $15,000 and $116,500 for the years ended September 30, 2006 and 2005, respectively, for accounting consultations.

     Tax Fees. Fees for tax services totaled $311,175 and $509,300 for the years ended September 30, 2006 and 2005, respectively, and consisted primarily of tax consulting services.

     All Other Fees. There were no other fees incurred by the Company during the years ended September 30, 2006 and 2005.

     The Company’s Audit Committee appoints the independent registered public accounting firm and pre-approves the services in regularly scheduled audit committee meetings. The Audit Committee has considered whether the fees of Ernst & Young LLP for non-audit services are compatible with maintaining Ernst & Young LLP’s independence.

Schedules I, III, IV, and V are omitted since they are not applicable or not required under the rules of Regulation S-X.

     (3) Exhibits

          See (b) below

     See the Exhibit Index following the signature page of this report, which is incorporated herein by reference. Each management contract and compensatory plan or arrangement required to be filed as an exhibit to this report is identified in the Exhibit Index by an asterisk following its exhibit number.

     Not Applicable

The Board of Directors
Neenah Foundry Company

We have audited the accompanying consolidated balance sheets of Neenah Foundry Company and Subsidiaries (the Company) as of September 30, 2006 and 2005 (Reorganized Company), and the related consolidated statements of operations, changes in stockholder’s equity and cash flows for the years ended September 30, 2006 and 2005 and the period from October 1, 2003 to September 30, 2004 (Reorganized Company) and the portion of October 1, 2003 related to the Predecessor Company’s reorganization gain. 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 misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Reorganized Company at September 30, 2006 and 2005, and the consolidated results of operations and cash flows for the years ended September 30, 2006 and 2005 and the period from October 1, 2003 to September 30, 2004 (Reorganized Company) and the portion of October 1, 2003 related to the Predecessor Company’s reorganization gain, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the financial statements, effective October 8, 2003, the Company was reorganized under a plan of reorganization confirmed by the United States Bankruptcy Court, District of Delaware. The financial statements of the Reorganized Company reflect the impact of adjustments to reflect the fair value of assets and liabilities under fresh start accounting, which was applied effective October 1, 2003. As a result, the financial statements of the Reorganized Company are presented on a different basis than those of the Predecessor Company and, therefore, are not comparable in all respects.

/s/ Ernst & Young LLP
Milwaukee, Wisconsin
November 3, 2006

See accompanying notes.

See accompanying notes.