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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



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FORM 10Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED MARCH 30, 2007

OR



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

FOR THE TRANSITION PERIOD FROM  TO

COMMISSION FILE NUMBER 333-108853



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JOHNSONDIVERSEY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|Delaware                                                       |  | 80-0010497                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

8310 16thStreet

Sturtevant,
Wisconsin 53177-0902

(Address of Principal Executive Offices, Including Zip Code)

(262) 631-4001

(Registrants
Telephone Number, Including Area Code)



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

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

Large accelerated
filer ̈Accelerated filer ̈Non-accelerated filer  x

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

There is no public trading market for the
registrants common stock. As of May 4, 2007, there were 3,920 outstanding shares of the registrants class A common stock, $0.01 par value, and there were 1,960 outstanding shares of the registrants class B common stock, $0.01
par value, which is subject to put and call options.



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INDEX



|                               |  |                                                                                                    |  |     
|------------------------------ |  | -------------------------------------------------------------------------------------------------- |  | ----
|Section                        |  | Topic                                                                                              |  | Page
|                               |  | Forward-Looking Statements                                                                         |  | i   
|                               | 
|PART I  FINANCIAL INFORMATION |  |                                                                                                   
|                               |  |                                                                                                   
|Item 1                         |  | Financial Statements (unaudited)                                                                   |  |     
|                               |  |                                                                                                   
|                               |  | Consolidated Balance Sheets as of March 30, 2007 and December 29, 2006                             |  | 1   
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Operations for the three months ended March 30, 2007 and March 31, 2006 |  | 2   
|                               |  |                                                                                                   
|                               |  | Consolidated Statements of Cash Flows for the three months ended March 30, 2007 and March 31, 2006 |  | 3   
|                               |  |                                                                                                   
|                               |  | Notes to Consolidated Financial Statements  March 30, 2007                                        |  | 4   
|                               |  |                                                                                                   
|Item 2                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations              |  | 15  
|                               |  |                                                                                                   
|Item 3                         |  | Quantitative and Qualitative Disclosure about Market Risk                                          |  | 28  
|                               |  |                                                                                                   
|Item 4                         |  | Controls and Procedures                                                                            |  | 28  
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                   
|                               |  |                                                                                                   
|Item 1                         |  | Legal Proceedings                                                                                  |  | 31  
|                               |  |                                                                                                   
|Item 6                         |  | Exhibits                                                                                           |  | 31  
|                               |  |                                                                                                   
|Signatures                     |  |                                                                                                    |  | 32  



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Unless otherwise indicated, references to Holdings, the Company, we,
our and us in this quarterly report refer to JohnsonDiversey Holdings, Inc. and its consolidated subsidiaries, and references to JDI refer to JohnsonDiversey, Inc., a wholly owned subsidiary of Holdings.

FORWARD-LOOKING STATEMENTS

We make statements in this Form 10Q that are not historical facts. These
forward-looking statements can be identified by the use of terms such as may, intend, might, will, should, could, would, expect,
believe, estimate, anticipate, predict, project, potential, or the negative of these terms, and similar expressions. You should be aware that these forward-looking statements
are subject to risks and uncertainties that are beyond our control. Further, any forward-looking statement speaks only as of the date on which it is made, and except as required by law, we undertake no obligation to update any forward-looking
statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. New factors emerge from time to time that may cause our business not to develop as
we expect, and it is not possible for us to predict all of them. Factors that may cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following:



| |  |  | our ability to execute our business strategies;
| | - |  | -----------------------------------------------



| |  |  | our ability to successfully execute and complete our restructuring program (November 2005 Plan), including outsourcing the majority of IT support
worldwide, outsourcing of financial services in Western Europe, workforce reduction, achievement of cost savings, as well as plant closures and disposition of assets;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in general economic and political conditions, interest rates and currency movements, including, in particular, exposure to foreign currency risks;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the vitality of the institutional and industrial cleaning and sanitation market;
| | - |  | --------------------------------------------------------------------------------



| |  |  | restraints on pricing flexibility due to competitive conditions in the professional market;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | the loss or insolvency of a significant supplier or customer;
| | - |  | -------------------------------------------------------------



| |  |  | effectiveness in managing our manufacturing processes, including our inventory, fixed assets and system of internal control;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | changes in energy costs, the costs of raw materials and other operating expenses;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | our ability and the ability of our competitors to introduce new products and technical innovations;
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | the costs and effects of complying with laws and regulations relating to the environment and to the manufacture, storage, distribution and labeling of our products;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the occurrence of litigation or claims;
| | - |  | ---------------------------------------



| |  |  | changes in tax, fiscal, governmental and other regulatory policies;
| | - |  | -------------------------------------------------------------------



| |  |  | the effect of future acquisitions or divestitures or other corporate transactions;
| | - |  | ----------------------------------------------------------------------------------



| |  |  | adverse or unfavorable publicity regarding us or our services;
| | - |  | --------------------------------------------------------------



| |  |  | the loss of, or changes in, executive management or other key personnel;
| | - |  | ------------------------------------------------------------------------



| |  |  | natural and manmade disasters, including acts of terrorism, hostilities, war, and other such events that cause business interruptions or impact our markets;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | conditions affecting the food and lodging industry, including health-related, political and weather-related; and
| | - |  | ----------------------------------------------------------------------------------------------------------------



| |  |  | other factors listed from time to time in reports that we file with the Securities and Exchange Commission (SEC).
| | - |  | -------------------------------------------------------------------------------------------------------------------



i



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PART I. FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)



|                                                                                                                                     |  |               |           |   |                  |   |           |  
|------------------------------------------------------------------------------------------------------------------------------------ |  | ------------- | --------- | - | ---------------- | - | --------- | -
|                                                                                                                                     |  | March 30,2007 |           |   | December 29,2006 |  
|                                                                                                                                     |  | (unaudited)   |           |   |                  |  
|ASSETS                                                                                                                               |  |               |           |   |                  |   |           |  
|Current assets:                                                                                                                      |  |               |           |   |                  |   |           |  
|Cash and cash equivalents                                                                                                            |  | $             | 149,226   |   |                  | $ | 208,418   |  
|Accounts receivable, less allowance of $29,163 and $30,711, respectively                                                             |  |               | 518,776   |   |                  |   | 523,512   |  
|Accounts receivable  related parties                                                                                                |  |               | 29,879    |   |                  |   | 27,478    |  
|Inventories                                                                                                                          |  |               | 288,392   |   |                  |   | 261,015   |  
|Deferred income taxes                                                                                                                |  |               | 20,554    |   |                  |   | 35,256    |  
|Other current assets                                                                                                                 |  |               | 128,487   |   |                  |   | 121,189   |  
|Current assets of discontinued operations                                                                                            |  |               | 4,100     |   |                  |   | 4,100     |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  
|Total current assets                                                                                                                 |  |               | 1,139,414 |   |                  |   | 1,180,968 |  
|Property, plant and equipment, net                                                                                                   |  |               | 421,142   |   |                  |   | 421,712   |  
|Capitalized software, net                                                                                                            |  |               | 52,134    |   |                  |   | 61,040    |  
|Goodwill, net                                                                                                                        |  |               | 1,207,231 |   |                  |   | 1,196,104 |  
|Other intangibles, net                                                                                                               |  |               | 305,834   |   |                  |   | 310,413   |  
|Long-term receivables  related parties                                                                                              |  |               | 72,606    |   |                  |   | 71,392    |  
|Other assets                                                                                                                         |  |               | 69,021    |   |                  |   | 65,312    |  
|Non current assets of discontinued operations                                                                                        |  |               | 11,617    |   |                  |   | 14,369    |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  
|Total assets                                                                                                                         |  | $             | 3,278,999 |   |                  | $ | 3,321,310 |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  
|LIABILITIES, CLASS B COMMON STOCK AND STOCKHOLDERS EQUITY                                                                           |  |               |           |   |                  |   |           |  
|Current liabilities:                                                                                                                 |  |               |           |   |                  |   |           |  
|Short-term borrowings                                                                                                                |  | $             | 33,207    |   |                  | $ | 35,649    |  
|Current portion of long-term debt                                                                                                    |  |               | 12,985    |   |                  |   | 12,954    |  
|Accounts payable                                                                                                                     |  |               | 343,271   |   |                  |   | 350,170   |  
|Accounts payable  related parties                                                                                                   |  |               | 51,448    |   |                  |   | 55,454    |  
|Accrued expenses                                                                                                                     |  |               | 446,837   |   |                  |   | 465,452   |  
|Non current liabilities of discontinued operations                                                                                   |  |               | 3,606     |   |                  |   | 2,943     |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  
|Total current liabilities                                                                                                            |  |               | 891,354   |   |                  |   | 922,622   |  
|                                                                                                                                     |  |              
|Pension and other post-retirement benefits                                                                                           |  |               | 238,291   |   |                  |   | 234,659   |  
|Long-term borrowings                                                                                                                 |  |               | 1,412,598 |   |                  |   | 1,407,470 |  
|Long-term payables  related parties                                                                                                 |  |               | 29,551    |   |                  |   | 29,480    |  
|Deferred income taxes                                                                                                                |  |               | 49,704    |   |                  |   | 56,132    |  
|Other liabilities                                                                                                                    |  |               | 67,628    |   |                  |   | 47,167    |  
|Non current liabilities of discontinued operations                                                                                   |  |               | 3,119     |   |                  |   | 4,423     |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  
|Total liabilities                                                                                                                    |  |               | 2,692,245 |   |                  |   | 2,701,953 |  
|                                                                                                                                     |  |              
|Commitments and contingencies                                                                                                        |  |               |           |   |                  |   |           |  
|                                                                                                                                     |  |              
|Class B common stock subject to put and call options  $0.01 par value; 3,000 shares authorized; 1,960 shares issued and
outstanding |  |               | 570,638   |   |                  |   | 570,475   |  
|                                                                                                                                     |  |              
|Stockholders equity:                                                                                                                |  |               |           |   |                  |   |           |  
|Class A common stock  $0.01 par value; 7,000 shares authorized; 3,920 shares issued and outstanding                                 |  |               |          |   |                  |   |          |  
|Capital in excess of par value                                                                                                       |  |               |          |   |                  |   |          |  
|Retained deficit                                                                                                                     |  |               | (177,156  | ) |                  |   | (129,443  | )
|Accumulated other comprehensive income                                                                                               |  |               | 193,272   |   |                  |   | 178,325   |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  
|Total stockholders equity (deficit)                                                                                                 |  |               | 16,116    |   |                  |   | 48,882    |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  
|Total liabilities, class B common stock and stockholders equity                                                                     |  | $             | 3,278,999 |   |                  | $ | 3,321,310 |  
|                                                                                                                                     |  |               |           |   |                  |   |           |  

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



1



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JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(dollars in thousands)



|                                                                            |  |                    |         |   |                |   |          |  
|--------------------------------------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | -------- | -
|                                                                            |  | Three Months Ended |        
|                                                                            |  | March 30, 2007     |         |   | March 31, 2006 |  
|                                                                            |  | (unaudited)        |        
|Net sales:                                                                  |  |                    |         |   |                |   |          |  
|Net product and service sales                                               |  | $                  | 686,841 |   |                | $ | 670,086  |  
|Sales agency fee income                                                     |  |                    | 22,387  |   |                |   | 21,285   |  
|                                                                            |  |                    |         |   |                |   |          |  
|                                                                            |  |                    | 709,228 |   |                |   | 691,371  |  
|Cost of sales                                                               |  |                    | 413,440 |   |                |   | 406,784  |  
|                                                                            |  |                    |         |   |                |   |          |  
|Gross profit                                                                |  |                    | 295,788 |   |                |   | 284,587  |  
|Selling, general and administrative expenses                                |  |                    | 278,298 |   |                |   | 311,273  |  
|Research and development expenses                                           |  |                    | 15,843  |   |                |   | 14,375   |  
|Restructuring expenses                                                      |  |                    | 2,121   |   |                |   | 42,830   |  
|                                                                            |  |                    |         |   |                |   |          |  
|Operating loss                                                              |  |                    | (474    | ) |                |   | (83,891  | )
|Other (income) expense:                                                     |  |                    |         |   |                |   |          |  
|Interest expense                                                            |  |                    | 38,651  |   |                |   | 43,151   |  
|Interest income                                                             |  |                    | (3,435  | ) |                |   | (3,422   | )
|Other expense, net                                                          |  |                    | (307    | ) |                |   | 1,526    |  
|                                                                            |  |                    |         |   |                |   |          |  
|Loss from continuing operations before income taxes and minority interests  |  |                    | (35,383 | ) |                |   | (125,146 | )
|Provision for income taxes                                                  |  |                    | 12,790  |   |                |   | 2,504    |  
|                                                                            |  |                    |         |   |                |   |          |  
|Loss from continuing operations before minority interests                   |  |                    | (48,173 | ) |                |   | (127,650 | )
|Minority interests in net income of subsidiaries                            |  |                    |        |   |                |   | 2        |  
|                                                                            |  |                    |         |   |                |   |          |  
|Loss from continuing operations                                             |  |                    | (48,173 | ) |                |   | (127,652 | )
|Income from discontinued operations, net of income taxes of $226 and $5,458 |  |                    | 336     |   |                |   | 5,450    |  
|                                                                            |  |                    |         |   |                |   |          |  
|Net loss                                                                    |  | $                  | (47,837 | ) |                | $ | (122,202 | )
|                                                                            |  |                    |         |   |                |   |          |  

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



2



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JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)



|                                                                                                              |  |                    |         |   |                |   |          |  
|------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | -------- | -
|                                                                                                              |  | Three Months Ended |        
|                                                                                                              |  | March 30, 2007     |         |   | March 31, 2006 |  
|                                                                                                              |  | (unaudited)        |        
|Cash flows from operating activities:                                                                         |  |                    |         |   |                |   |          |  
|Net loss                                                                                                      |  | $                  | (47,837 | ) |                | $ | (122,202 | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities:                     |  |                    |         |   |                |   |          |  
|Depreciation and amortization                                                                                 |  |                    | 29,584  |   |                |   | 54,929   |  
|Amortization of intangibles                                                                                   |  |                    | 7,409   |   |                |   | 27,380   |  
|Amortization and write-off of debt issuance costs                                                             |  |                    | 1,202   |   |                |   | 1,735    |  
|Interest accreted on notes payable                                                                            |  |                    | 11,229  |   |                |   | 10,233   |  
|Interest accrued on long-term receivables- related parties                                                    |  |                    | (634    | ) |                |   | (605     | )
|Deferred income taxes                                                                                         |  |                    | 4,657   |   |                |   | 3,083    |  
|(Gain) loss on disposal of discontinued operations                                                            |  |                    | 402     |   |                |   | (124     | )
|(Gain) loss from divestitures                                                                                 |  |                    | 180     |   |                |   | (1,187   | )
|(Gain) loss on property, plant and equipment disposals                                                        |  |                    | 563     |   |                |   | (118     | )
|Other                                                                                                         |  |                    | 5,978   |   |                |   | 4,141    |  
|Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses: |  |                    |         |   |                |   |          |  
|Accounts receivable securitization                                                                            |  |                    | (16,400 | ) |                |   | (7,500   | )
|Accounts receivable                                                                                           |  |                    | 16,673  |   |                |   | 19,038   |  
|Inventories                                                                                                   |  |                    | (28,023 | ) |                |   | (6,087   | )
|Other current assets                                                                                          |  |                    | (7,244  | ) |                |   | (2,559   | )
|Other assets                                                                                                  |  |                    | (1,148  | ) |                |   | 526      |  
|Accounts payable and accrued expenses                                                                         |  |                    | (17,867 | ) |                |   | 34,487   |  
|Other liabilities                                                                                             |  |                    | (1,289  | ) |                |   | (1,658   | )
|                                                                                                              |  |                    |         |   |                |   |          |  
|Net cash provided by (used in) operating activities                                                           |  |                    | (42,565 | ) |                |   | 13,512   |  
|Cash flows from investing activities:                                                                         |  |                    |         |   |                |   |          |  
|Capital expenditures                                                                                          |  |                    | (17,625 | ) |                |   | (16,410  | )
|Expenditures for capitalized computer software                                                                |  |                    | (1,403  | ) |                |   | (2,170   | )
|Proceeds from property, plant and equipment disposals                                                         |  |                    | 1,614   |   |                |   | 230      |  
|Acquisitions of businesses                                                                                    |  |                    | (2,696  | ) |                |   | (6,145   | )
|Proceeds from divestitures, net of transaction costs                                                          |  |                    | 421     |   |                |   | 124      |  
|                                                                                                              |  |                    |         |   |                |   |          |  
|Net cash used in investing activities                                                                         |  |                    | (19,689 | ) |                |   | (24,371  | )
|Cash flows from financing activities:                                                                         |  |                    |         |   |                |   |          |  
|Repayments of short-term borrowings                                                                           |  |                    | (2,813  | ) |                |   | (6,579   | )
|                                                                                                              |  |                    |         |   |                |   |          |  
|Net cash used in financing activities                                                                         |  |                    | (2,813  | ) |                |   | (6,579   | )
|Effect of exchange rate changes on cash and cash equivalents                                                  |  |                    | 5,875   |   |                |   | 1,876    |  
|                                                                                                              |  |                    |         |   |                |   |          |  
|Change in cash and cash equivalents                                                                           |  |                    | (59,192 | ) |                |   | (15,562  | )
|Beginning balance1                                                                                            |  |                    | 208,418 |   |                |   | 162,119  |  
|                                                                                                              |  |                    |         |   |                |   |          |  
|Ending balance2                                                                                               |  | $                  | 149,226 |   |                | $ | 146,557  |  
|                                                                                                              |  |                    |         |   |                |   |          |  
|Supplemental cash flows information                                                                           |  |                    |         |   |                |   |          |  
|Cash paid during the period:                                                                                  |  |                    |         |   |                |   |          |  
|Interest                                                                                                      |  | $                  | 10,006  |   |                | $ | 15,066   |  
|Income taxes                                                                                                  |  |                    | 5,709   |   |                |   | 12,387   |  

---

|1 | Includes cash and cash equivalents for discontinued operations of $3,828 at March 31, 2006.
|- | -------------------------------------------------------------------------------------------

|2 | Includes cash and cash equivalents for discontinued operations of $5,822 at March 31, 2006.
|- | -------------------------------------------------------------------------------------------

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



3



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



1. Description of the Company

JohnsonDiversey Holdings, Inc. (Holdings or the Company) directly owns all of the shares of JohnsonDiversey, Inc.
(JDI), except for one share which is owned by S.C. Johnson & Son, Inc. (SCJ). The Company is a holding company and its sole business interest is the ownership and control of JDI and its subsidiaries. JDI is a global
marketer and manufacturer of commercial, industrial and institutional building maintenance and sanitation products.

Except where noted,
the consolidated financial statements and related notes, excluding the consolidated statements of cash flows, reflect the results of continuing operations excluding the divestiture of Chemical Methods Associates (CMA), the Polymer
Business segment (Polymer Business), and Whitmire Micro-Gen Research Laboratories, Inc. (Whitmire) (see Note 6).

2. Basis of
Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally
accepted accounting principles (U.S. GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes
required for complete financial statements. In the opinion of management, all normal recurring adjustments considered necessary to present fairly the financial position of the Company as of March 30, 2007 and its results of operations and cash
flows for the three month period ended March 30, 2007 have been included. The results of operations for the three month period ended March 30, 2007 are not necessarily indicative of the results to be expected for the full fiscal year. It
is recommended that the accompanying consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys annual report on Form 10-K for the fiscal year ended
December 29, 2006.

The Company has accounted for the divestiture of CMA, Polymer and Whitmire as discontinued operations (see Note
6), resulting in the reclassification of prior period amounts in the Companys consolidated statements of operations and consolidated balance sheets.

Certain other prior period amounts have been reclassified to conform with current period presentation. None of these reclassifications are considered material to the Companys consolidated balance sheet, results
of operations or cash flows.

Unless otherwise indicated, all monetary amounts, excluding share data, are stated in thousands.

3. New Accounting Standards

In January
2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 is
intended to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting
provisions. It also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. The statement does not affect any
existing accounting literature that requires certain assets and liabilities to be carried at fair value, and it does not establish requirements for recognizing dividend income, interest income or interest expense. It also does not eliminate
disclosure requirements included in other accounting standards. The provisions of SFAS 159 are effective for the fiscal year beginning after November 15, 2007, which for the Company is its fiscal year 2008. The Company is currently evaluating
the impact of the provisions of SFAS No. 159.

In September 2006, the FASB issued SFAS No. 158, Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS No. 158), an amendment of FASB Statements No. 87, 88, 106, and 132(R).



4



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



SFAS No. 158 requires an employer to recognize the over-funded or under-funded status of a defined benefit postretirement plan as an asset or liability
in its consolidated balance sheets and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS No. 158 also requires the measurement of defined benefit plan assets and obligations as
of the date of the employers fiscal year-end consolidated balance sheets (with limited exceptions). Under SFAS No. 158, the Company will also recognize the funded status of its defined benefit postretirement plans and provide required
disclosures as of December 28, 2007, at the end of its fiscal year 2007. The requirement to measure plan assets and benefit obligations as of the date of the employers fiscal year-end consolidated balance sheets will be effective in
fiscal year 2008. If the Company had adopted SFAS No. 158 at December 29, 2006, it would have recorded an increase in pension and post-retirement benefit liabilities of approximately $67,280, substantially all of which would be offset to
accumulated other comprehensive income. However, this impact could change materially as of December 28, 2007, due to changes in the discount rates used to measure plan obligations, the actual returns on plan assets, and other factors.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS
No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS 157 are effective for the
fiscal year beginning after November 15, 2007, which for the Company is its fiscal year 2008. The Company is currently evaluating the impact of the provisions of SFAS No. 157.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB
Statement No. 109(FIN No. 48) which clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with SFAS No. 109, Accounting for
Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company
adopted FIN No. 48 beginning in fiscal year 2007 (see Note 8).

4. Master Sales Agency Terminations

In connection with the May 2002 acquisition of the DiverseyLever business, JDI entered into a master sales agency agreement (the Sales Agency
Agreement) with Unilever, whereby JDI acts as an exclusive sales agent in the sale of Unilevers consumer brand products to various institutional and industrial end-users. At acquisition, JDI assigned an intangible value to the Sales
Agency Agreement of $13,000.

An agency fee is paid by Unilever to JDI in exchange for its sales agency services. An additional fee is
payable by Unilever to JDI in the event that conditions for full or partial termination of the Sales Agency Agreement are met. JDI elected, and Unilever agreed, to partially terminate the Sales Agency Agreement in several territories resulting in
payment by Unilever to JDI of additional fees. In association with the partial terminations, JDI recognized sales agency fee income of $91 and $37 during the three months ended March 30, 2007 and March 31, 2006, respectively.

5. Acquisitions

In March 2007, JDI
purchased an additional 6% interest in a North American business that provides purchasing and category management tools to certain of the Companys end-users for $2,550. JDI previously held 9% of the outstanding shares. The transaction is not
considered material to the Companys consolidated financial position, results of operations or cash flows.

In February 2006, JDI
purchased the remaining 15% of the outstanding shares of Shanghai JohnsonDiversey, Ltd., JDIs Chinese operating entity, for $3,516. JDI previously held 85% of the outstanding shares and included the holding in its consolidated financial
results. Goodwill recorded with respect to the transaction was $2,572. The acquisition was accounted for under the purchase method of accounting in accordance with step acquisition rules.



5



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



6. Discontinued Operations

Chemical Methods Associates

On September 30, 2006, in connection with its November 2005 Plan
(see Note 10), JDI sold its equity interest in CMA to Ali SpA, an Italian-based manufacturer of equipment for the food service industry, for $17,000. The purchase price was subject to various post-closing adjustments, principally with regard to
changes in working capital. In December 2006, the Company recorded additional purchase price of approximately $300 based on its preliminary assessment of closing working capital. The sale resulted in a gain of $2,322 ($497 after tax), net of related
costs. CMA was a non-core asset of the Company.

During the first quarter of 2007, the Company finalized and collected the closing working
capital adjustment and recorded additional closing costs, resulting in an additional gain of $15 ($9 after tax). Further adjustments are not expected to be significant.

Income, net of tax, and net sales from discontinued operations relating to CMA were $292 and $5,038, respectively, for the three month period ended March 31, 2006.

Polymer Business

On June 30, 2006, Johnson
Polymer, LLC (JP) and JohnsonDiversey Holdings II B.V. (Holdings II), an indirectly owned subsidiary of JDI, completed the sale of substantially all of the assets of JP, certain of the equity interests in, or assets of
certain JP subsidiaries and all of the equity interests owned by Holdings II in Johnson Polymer B.V. (collectively, the Polymer Business) to BASF Aktiengesellschaft (BASF) for approximately $470,000 plus an additional $8,119
in connection with the parties estimate of purchase price adjustments that are based upon the closing net asset value of the Polymer Business. Further, BASF paid the Company $1,500 for the option to extend the tolling agreement by up to six
months. In December 2006, the Company and BASF finalized purchase price adjustments related to the net asset value and the Company received an additional $4,062.

The Polymer Business developed, manufactured and sold specialty polymers for use in the industrial print and packaging industry, industrial paint and coatings industry and industrial plastics industry. The Polymer
Business was a non-core asset of the Company and had been reported as a separate business segment. The sale resulted in a gain of approximately $352,907 ($256,693 after tax), net of related costs.

During the first quarter of 2007, the Company finalized and paid certain pension related adjustments, adjusted net assets disposed and recorded
additional closing costs, reducing the gain by $684 ($411 after tax). Further adjustments are not expected to be significant.

In
association with the tolling agreement with BASF, the Company recorded income from discontinued operations, net of tax, of $738 during the three months ended March 30, 2007.

Income, net of tax, and net sales from discontinued operations relating to the Polymer Business were $5,034 and $89,606, respectively, for the three
month period ended March 31, 2006.

Whitmire Micro-Gen Business

In June 2004, JDI completed the sale of Whitmire to Sorex Holdings, Ltd., a European pest-control manufacturer headquartered in the United Kingdom, for $46,000 in cash and the assumption of certain liabilities.

The purchase agreement provided for additional earn-out provisions based on future Whitmire net sales, for which the Company recorded $124
during the three month periods ended March 31, 2006. The income is included as a component of income from discontinued operations in the consolidated statements of operations.



6



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



7. Accounts Receivable Securitization

JDI and certain of its subsidiaries entered into an agreement (the Receivables Facility) whereby they sell, on a continuous basis, certain
trade receivables to JWPR Corporation (JWPRC), a wholly-owned, consolidated, special purpose, bankruptcy-remote subsidiary of JDI. JWPRC was formed for the sole purpose of buying and selling receivables generated by JDI and certain of
its subsidiaries party to the Receivables Facility. JWPRC, in turn, sells an undivided interest in the accounts receivable to a nonconsolidated financial institution (the Conduit) for an amount equal to the value of all eligible
receivables (as defined under the receivables sale agreement between JWPRC and the Conduit) less the applicable reserve. The total potential for securitization of trade receivables under this program at March 30, 2007 and December 29, 2006
was $75,000.

As of March 30, 2007 and December 29, 2006, the Conduit held $47,900 and $64,300, respectively, of accounts
receivable that are not included in the accounts receivable balance reflected in the Companys consolidated balance sheet.

As of
March 30, 2007 and December 29, 2006, JDI had a retained interest of $87,495 and $78,055, respectively, in the receivables of JWPRC. The retained interest is included in the accounts receivable balance and is reflected in the consolidated
balance sheet at estimated fair value.

8. Income Taxes

The Company adopted the provisions of FIN No. 48, at the beginning of the 2007 fiscal year. FIN No. 48 clarifies the accounting for uncertainty in income taxes by prescribing a minimum recognition threshold
a tax position is required to meet before being recognized in the financial statements. As a result of adoption of FIN No. 48, an adjustment of approximately $200 was recognized as an increase to beginning retained earnings. As of the adoption
date, the Company had gross unrecognized tax benefits for uncertain tax positions of $83,300, including positions impacting only the timing of tax benefits, of which $32,700, if recognized, would favorably affect the effective income tax rate in
future periods (after considering the impact of valuation allowances). Additionally, $4,800 of unrecognized tax benefits would, if recognized, reduce goodwill. The Company recognizes interest and penalties related to the underpayment of income taxes
as a component of income tax expense. As of the beginning of the 2007 fiscal year, the Company had accrued interest and penalties of $7,100 related to unrecognized tax benefits. There have been no significant changes to these amounts during the
quarter ended March 30, 2007.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of
multiple state and international jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The Company has substantially completed tax audits for all U.S. federal income tax
matters for years through 2003 and generally concluded all other income tax matters globally for years through 2001.

The Company is
currently under audit by various state and international tax authorities and it is reasonably possible all or a portion of these audits may conclude during 2007, and it is reasonably possible a reduction in the unrecognized tax benefits may occur;
however, quantification of an estimated range cannot be made at this time.

The Company reported an effective income tax rate of (36.1)% on
pre-tax loss from continuing operations for the three month period ended March 30, 2007. The negative effective income tax rate on pre-tax loss is unfavorable, and is primarily the result of increased valuation allowances against U.S. and
international tax loss carryforwards and net deferred tax assets.



7



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



9. Inventories

The components of inventories are summarized as follows:



|                             |  |                |         |                   |   |        
|---------------------------- |  | -------------- | ------- | ----------------- | - | -------
|                             |  | March 30, 2007 |         | December 29, 2006
|Raw materials and containers |  | $              | 64,874  |                   | $ | 59,530 
|Finished goods               |  |                | 223,518 |                   |   | 201,485
|                             |  |                |         |                   |   |        
|Total inventories            |  | $              | 288,392 |                   | $ | 261,015
|                             |  |                |         |                   |   |        

Inventories are stated in the consolidated balance sheets net of allowance for excess and obsolete
inventory of $29,904 and $29,865 on March 30, 2007 and December 29, 2006, respectively.

10. Restructuring Liabilities

November 2005 Restructuring Program

On
November 7, 2005, the Companys Board of Directors approved a restructuring program (November 2005 Plan), which is expected to take two to three years to implement, and includes a redesign of the Companys organization
structure, the closure of a number of manufacturing and other facilities and a workforce reduction of approximately 10%, in addition to previously planned divestitures. In addition to the divestiture of the Polymer Business and CMA, the Company is
considering the potential divestiture of, or exit from, certain other non-core or underperforming businesses.

In connection with the
November 2005 Plan, the Company recognized liabilities of $2,177 for the three months ended March 30, 2007, for the involuntary termination of 21 employees, most of which is associated with the European business segment.

In connection with the November 2005 Plan, the Company recognized liabilities of $42,337 for the three months ended March 31, 2006, for the
involuntary termination of 746 employees, most of which are associated with the exit from the service-oriented laundry and ware wash business in the United States, and an additional $493 for other restructuring costs.

The activities associated with the November 2005 Plan for three months ended March 30, 2007 were as follows:



|                                                                                            |  |                  |         |   |       |   |       |       |  |   |         |  
|------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ----- | - | ----- | ----- |  | - | ------- | -
|                                                                                            |  | Employee-Related |         |   | Other |   |       | Total | 
|Liability balances as of December 29, 2006 . . . . . . . . .                                |  | $                | 68,973  |   |       | $ | 1,252 |       |  | $ | 70,225  |  
|Liability recorded as restructuring expense . . . . .                                       |  |                  | 1,562   |   |       |   | 615   |       |  |   | 2,177   |  
|Liability adjustments1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . |  |                  |        |   |       |   | (52   | )     |  |   | (52     | )
|Cash paid2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   |  |                  | (13,643 | ) |       |   |      |       |  |   | (13,643 | )
|                                                                                            |  |                  |         |   |       |   |       |       |  |   |         |  
|Liability balances as of March 30, 2007 . . . . . . . . . .                                 |  | $                | 56,892  |   |       | $ | 1,815 |       |  | $ | 58,707  |  
|                                                                                            |  |                  |         |   |       |   |       |       |  |   |         |  

---

|1 | Liability adjustments include
reductions based on clarification of original assumptions, of which $56 resulted in reduction of restructuring expense and $4 was reclassified to other liabilities.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|2 | Cash paid is reduced by $4 due
to the effects of foreign exchange .
|- | -------------------------------------------------------------------

In connection with the November 2005 Plan, the Company recorded long-lived asset
impairment charges of $1,102 for the three months ended March 30, 2007. In addition, and in connection with the November 2005 Plan, the Company recorded long-lived asset impairment charges of $21,066 and intangible asset impairment charges of



8



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



$19,763 for the three months ended March 31, 2006. The impairment charges are included in selling, general and administrative costs.

Exit and Acquisition-Related Restructuring Programs

In connection with the acquisition of the DiverseyLever business, the Company recorded liabilities for the involuntary termination of former DiverseyLever employees and other exit costs associated with former DiverseyLever facilities. The
Company paid cash of $238 and $1,375 representing contractual obligations associated with involuntary terminations and lease payments on closed facilities during the three months ended March 30, 2007 and March 31, 2006, respectively. As of
March 30, 2007, the Company had remaining exit and acquisition-related restructuring reserves of $2,425.

11. Other (Income) Expense, Net

The components of other (income) expense, net in the consolidated statements of operations are as follows:



|                                         |  |                    |        |   |                |   |       |  
|---------------------------------------- |  | ------------------ | ------ | - | -------------- | - | ----- | -
|                                         |  | Three Months Ended |       
|                                         |  | March 30, 2007     |        |   | March 31, 2006 |  
|Foreign currency translation (gain) loss |  | $                  | (1,005 | ) |                | $ | 1,922 |  
|Forward contracts (gain) loss            |  |                    | 510    |   |                |   | (612  | )
|Other, net                               |  |                    | 188    |   |                |   | 216   |  
|                                         |  |                    |        |   |                |   |       |  
|                                         |  | $                  | (307   | ) |                | $ | 1,526 |  
|                                         |  |                    |        |   |                |   |       |  

12. Defined Benefit Plans and Other Post-Employment Benefit Plans

The components of net periodic benefit costs for the Companys defined benefit pension plans and other post-employment benefit plans for the three
months ended March 30, 2007 and March 31, 2006 are as follows:



9



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



|                                       |  |                                |         |   |                |   |        |  
|-------------------------------------- |  | ------------------------------ | ------- | - | -------------- | - | ------ | -
|                                       |  | Defined Pension Benefits       |        
|                                       |  | Three Months Ended             |        
|                                       |  | March 30, 2007                 |         |   | March 31, 2006 |  
|Service cost                           |  | $                              | 7,666   |   |                | $ | 8,595  |  
|Interest cost                          |  |                                | 9,218   |   |                |   | 9,028  |  
|Expected return on plan assets         |  |                                | (10,075 | ) |                |   | (9,056 | )
|Amortization of net loss               |  |                                | 1,704   |   |                |   | 2,093  |  
|Amortization of transition obligation  |  |                                | 100     |   |                |   | 59     |  
|Amortization of prior service credit   |  |                                | (169    | ) |                |   | (132   | )
|Effect of curtailments and settlements |  |                                | 551     |   |                |   |       |  
|                                       |  |                                |         |   |                |   |        |  
|Net periodic pension cost              |  | $                              | 8,995   |   |                | $ | 10,587 |  
|                                       |  |                                |         |   |                |   |        |  
|                                       | 
|                                       |  | Other Post-Employment Benefits |        
|                                       |  | Three Months Ended             |        
|                                       |  | March 30, 2007                 |         |   | March 31, 2006 |  
|Service cost                           |  | $                              | 596     |   |                | $ | 749    |  
|Interest cost                          |  |                                | 1,412   |   |                |   | 1,337  |  
|Amortization of net loss               |  |                                | 351     |   |                |   | 338    |  
|Amortization of prior service credit   |  |                                | (46     | ) |                |   | (47    | )
|Effect of curtailments and settlements |  |                                | (129    | ) |                |   | (4,361 | )
|                                       |  |                                |         |   |                |   |        |  
|Net periodic benefit cost (credit)     |  | $                              | 2,184   |   |                | $ | (1,984 | )
|                                       |  |                                |         |   |                |   |        |  

The Company made contributions to its defined benefit pension plans of $8,060 and $8,252 during
the three months ended March 30, 2007 and March 31, 2006, respectively.

Effective January 1, 2006, a new healthcare system
was introduced in the Netherlands. The new system requires that all residents and non-residents working in the Netherlands subscribe to private health insurance with an insurer of their choice, regardless of income level. In association with the new
system, the Company and affected employees have negotiated a new collective bargaining agreement that discontinues the Company sponsored postretirement medical subsidy, resulting in a curtailment gain of $4,361 during the three month period ended
March 31, 2006.

13. Stock-Based Compensation

The Company has a long-term incentive plan (the Plan) that provides for the right to purchase stock of Commercial Markets Holdco, Inc. (Holdco), the parent of the Company, for certain members
of senior management of the Company. In December 2005, the Company and Holdco approved the cancellation of the Plan. In connection with this decision, Holdco commenced an offer to purchase all of its outstanding unrestricted class C common stock and
options to purchase its class C common stock and class B common stock. Those participants who chose not to accept the tender offer will continue to participate under existing Plan terms; however, the Company will not grant further awards under the
Plan.

Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R),
Share-Based Payment (SFAS 123(R)) using the modified-prospective-transition method. Under this transition method, compensation cost recognized includes compensation costs for all share-based payments granted prior to,
but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123(R). The Company recorded compensation expense of $129 during the three months ended March 30,
2007.



10



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



The Company also recorded compensation expense of $66 and $77 related to restricted stock during the
three months ended March 30, 2007 and March 31, 2006, respectively.

14. Comprehensive Loss

Comprehensive loss for the three month periods ended March 30, 2007 and March 31, 2006 was as follows:



|                                            |  |                    |         |   |                |   |          |  
|------------------------------------------- |  | ------------------ | ------- | - | -------------- | - | -------- | -
|                                            |  | Three Months Ended |        
|                                            |  | March 30, 2007     |         |   | March 31, 2006 |  
|Net loss                                    |  | $                  | (47,837 | ) |                | $ | (122,202 | )
|Foreign currency translation adjustments    |  |                    | 14,539  |   |                |   | 15,507   |  
|Unrealized gains on derivatives, net of tax |  |                    | 408     |   |                |   | 1,118    |  
|                                            |  |                    |         |   |                |   |          |  
|Total comprehensive loss                    |  | $                  | (32,890 | ) |                | $ | (105,577 | )
|                                            |  |                    |         |   |                |   |          |  

15. Stockholders Agreement and Class B Common Stock Subject to Put and Call Options

In connection with the acquisition of the DiverseyLever business, the Company entered into a Stockholders Agreement with its
stockholders, Holdco and Marga B.V., as amended and restated in May 2006. The Stockholders Agreement relates to, among other things:



| |  |  | restrictions on the transfer of the Companys shares held by the stockholders;
| | - |  | ------------------------------------------------------------------------------



| |  |  | the Companys corporate governance, including board and committee representation and stockholder approval provisions;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | the put and call options and rights of first offer and refusal with respect to shares held by Marga B.V.;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | certain payments to Marga B.V. as described below; and
| | - |  | ------------------------------------------------------



| |  |  | various other rights and obligations of the Company and its stockholders, such as provisions relating to delivery of and access to financial and other information,
payment of dividends and indemnification of directors, officers and stockholders.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Marga B.V.s obligations under
the Stockholders Agreement are guaranteed by Unilever N.V

Put and Call Options. Under the Stockholders Agreement, at
any time after May 3, 2008, Unilever has the right to require the Company to purchase the shares then beneficially owned by Unilever. The Company has the option to purchase the shares beneficially owned by Unilever at any time after May 3,
2010. Any exercise by the Company of its call option must be for at least 50% of the shares beneficially owned by Unilever. Any exercise by Unilever of its put option must be for all of its shares.

Before May 3, 2010, the Companys obligations in connection with a put by Unilever are conditioned on a refinancing of JDIs and the
Companys indebtedness, including indebtedness under JDIs senior subordinated notes and JDIs senior secured credit facilities. In connection with the put, the Company must use its reasonable best efforts prior to May 3, 2009,
and its best efforts after that date, to consummate a refinancing and may be required to purchase less than all of the shares subject to the put under some circumstances. If the Company purchases less than all of the shares subject to a put,
Unilever may again put its remaining shares after a specified suspension period.

Following the exercise by Unilever of its put rights, if
the Company fails to purchase all of Unilevers shares for cash by May 3, 2010, it must issue a promissory note to Unilever in exchange for the remaining shares. The



11



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



maturity date of the promissory note will be either 90 days or one year after its issuance, depending on the level of Unilevers ownership interest in
the Company at that time. The terms of the promissory note will provide Unilever with rights similar to its rights as a stockholder under the Stockholders Agreement, including board representation, veto and access and informational rights. The
promissory note will contain various subordination provisions in relation to JDIs and the Companys indebtedness.

If, after
May 3, 2010, Unilever has not been paid cash with respect to its put option, Unilever may also:



| |  |  | require the Company to privately sell Unilevers shares or other shares of Holdings capital stock to a third party; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | require the Company to sell its Japan businesses or any other business or businesses that may be identified for sale by a special committee of the Companys
board of directors. The special committee is required to identify such other business or businesses after May 3, 2009 and prior to May 3, 2010 and to engage an investment banking firm to assist it with such identification and evaluation.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The exercise of these remedies, other than sales of Unilevers shares, is subject to compliance with the agreements
relating to JDIs and the Companys indebtedness.

The price for the Companys shares subject to a put or call option will
be based on the Companys enterprise value at the time the relevant option is exercised, plus its cash and minus its indebtedness. The Company enterprise value cannot be less than eight times the EBITDA of the Company and its subsidiaries, on a
consolidated basis, for the preceding four fiscal quarters, as calculated in accordance with the terms of the Stockholders Agreement. If the Company, Unilever and their respective financial advisors cannot agree on an enterprise value, the
issue will be submitted to an independent third-party for determination.

If the Company purchases less than all of the shares beneficially
owned by Unilever in connection with the exercise of the put or call option, Unilever may elect to fix the price for its remaining shares not purchased. If Unilever does not elect to fix the price, the price will float and a new price will be
determined based on the enterprise value the next time a put or call option is exercised.

Contingent Payments. Under the
Stockholders Agreement, the Company may be required to make payments to Unilever in each year from 2007 through 2010 so long as Unilever continues to beneficially own 5% or more of the Companys outstanding shares. The amount of each
payment will be equal to 25% of the amount by which the cumulative cash flows of the Company and its subsidiaries, on a consolidated basis, for the period from May 3, 2002, through the end of the fiscal year preceding the payment (not including
any cash flow with respect to which Unilever received a payment in a prior year), exceeds:



| |  |  | $975,000 in 2007;
| | - |  | -----------------



| |  |  | $1,200,000 in 2008; and
| | - |  | -----------------------



| |  |  | $1,425,000 in 2009.
| | - |  | -------------------

The aggregate
amount of all these payments cannot exceed $100,000. Payment of these amounts is subject to compliance with the agreements relating to the Company and JDIs senior indebtedness including, without limitation, the senior discount notes of the
Company, JDIs senior subordinated notes and JDIs senior secured credit facilities.

Transfer of Shares. Under the
Stockholders Agreement, a stockholder controlled by Unilever may transfer its shares of the Company to another entity of which Unilever owns at least an 80% interest, and a stockholder controlled by Holdco may transfer its shares of the
Company to another entity of which Holdco owns at least an 80% interest.



12



---

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



In addition, at any time after May 3, 2007, Unilever may sell all, but not less than all, of its
shares of the Company to no more than one person (an Early Sale), subject to certain restrictions, including, but not limited to, the requirement that all consents and approvals are obtained, the sale not violating or resulting in the
termination of JDIs license agreement with SCJ and the sale not constituting a change of control under the JDIs senior secured credit facilities. Further, the purchaser of the Companys shares from Unilever cannot be a competitor of
SCJ and must be approved by Holdco, which approval cannot be unreasonably withheld or delayed. If Unilever sells its shares of the Company to a third party, that third party would be entitled to the same rights and be subject to the same obligations
applicable to Unilever under the Stockholders Agreement.

From May 3, 2007 through May 3, 2008, prior to commencing an
Early Sale, Unilever must notify the Company of its intention to sell its shares and the Company has the right of first offer to purchase the shares beneficially owned by Unilever at the price and on the terms specified by Unilever. If the Company
does not elect to purchase the shares, Unilever may commence an Early Sale. Prior to completing that sale, however, Unilever must again offer the shares to the Company, and the Company has a right of first refusal to purchase the shares. The price
for the shares under the Companys right of first refusal would be the price at which the shares are offered to the third-party purchaser plus a premium equal to 3% of that third-party price, with a maximum aggregate premium of $15 million and
a minimum aggregate premium of $10 million. The maximum and minimum limitations applicable to the premium are prorated to the extent that the Company had previously purchased shares held by Unilever. The premium would be paid by Holdco.
Notwithstanding the foregoing, if Unilever has not notified the Company of its intention to sell its shares pursuant to an Early Sale prior to May 3, 2008, Unilever would be required to first exercise its put option prior to selling its shares
to a third party as described in this paragraph.

Purchase of Additional Shares from Holdco. Under the Stockholders Agreement,
on the earlier of May 3, 2010 and the date on which Unilever sells all of its shares of the Company to the Company or a third party in accordance with the terms of the Stockholders Agreement, Unilever will have the right to buy from
Holdco that number of class A common shares of the Company (the Additional Shares) equal to the lesser of (i) 1.5% of the total outstanding shares of the Company and (ii) the largest whole number of class A common shares, the
aggregate value (as determined pursuant to the Stockholders Agreement) of which does not exceed $40 million. The purchase price to be paid by Unilever to Holdco for such Additional Shares would be $.01 per share. Unilever may then require the
immediate repurchase by Holdco of the Additional Shares at a price determined in accordance with the Stockholders Agreement. The obligations to transfer the Additional Shares and repurchase those shares are obligations solely of Holdco.

16. Commitments and Contingencies

The Company is subject to various legal actions and proceedings in the normal course of business. Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, the
Company does not believe the final outcome of any current litigation will have a material effect on the Companys consolidated financial position, results of operations or cash flows.

The Company has purchase commitments for materials, supplies and property, plant and equipment entered into in the ordinary course of business. In the
aggregate, such commitments are not in excess of current market prices. Additionally, the Company normally commits to some level of marketing related expenditures that extend beyond the fiscal period. These marketing expenses are necessary in order
to maintain a normal course of business and the risk associated with them is limited. It is not expected that these commitments will have a material effect on the Companys consolidated financial position, results of operations or cash flows.

The Company maintains environmental reserves for remediation; monitoring and related expenses at one of its domestic facilities. While the
ultimate exposure to further remediation expense at this site continues to be evaluated, the Company does not anticipate a material effect on its consolidated financial position or results of operations.

In connection with the acquisition of the DiverseyLever business, the Company conducted environmental assessments and investigations at DiverseyLever
facilities in various countries. These investigations disclosed the likelihood of soil and/or groundwater contamination or potential environmental regulatory matters. An estimate of



13



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 30, 2007

(unaudited)



costs has been made and maintained based on the expected extent of contamination and the expected likelihood of recovery for some of these costs from
Unilever under the purchase agreement for the acquisition.

17. Segment Information

Business segment information is summarized as follows:



|                                                              |  |                                   |           |   |        |   |           |  |               |         |              |   |                         |  |   |               |  |   |          |   |  |   |           |  
|------------------------------------------------------------- |  | --------------------------------- | --------- | - | ------ | - | --------- |  | ------------- | ------- | ------------ | - | ----------------------- |  | - | ------------- |  | - | -------- | - |  | - | --------- | -
|                                                              |  | Three Months Ended March 30, 2007 |          
|                                                              |  | North America                     |           |   | Europe |   | Japan     |  | Latin America |         | Asia Pacific |   | Eliminations /Corporate |  |   | Total Company | 
|Net sales                                                     |  | $                                 | 180,607   |   |        | $ | 366,930   |  | $             | 63,729  |              | $ | 50,753                  |  | $ | 52,448        |  | $ | (5,239   | ) |  | $ | 709,228   |  
|Operating profit                                              |  |                                   | (3,936    | ) |        |   | 14,626    |  |               | 851     |              |   | 4,217                   |  |   | 2,658         |  |   | (18,890  | ) |  |   | (474      | )
|Depreciation and amortization                                 |  |                                   | 7,570     |   |        |   | 13,215    |  |               | 1,529   |              |   | 2,050                   |  |   | 1,995         |  |   | 10,634   |   |  |   | 36,993    |  
|Interest expense                                              |  |                                   | 2,938     |   |        |   | 18,479    |  |               | 199     |              |   | 738                     |  |   | 963           |  |   | 15,334   |   |  |   | 38,651    |  
|Interest income                                               |  |                                   | 7,208     |   |        |   | 3,133     |  |               |        |              |   | 10                      |  |   | 144           |  |   | (7,060   | ) |  |   | 3,435     |  
|Total assets                                                  |  |                                   | 1,179,970 |   |        |   | 1,939,089 |  |               | 271,731 |              |   | 188,256                 |  |   | 183,422       |  |   | (483,469 | ) |  |   | 3,278,999 |  
|Goodwill, net                                                 |  |                                   | 173,070   |   |        |   | 755,769   |  |               | 111,214 |              |   | 77,418                  |  |   | 61,146        |  |   | 28,614   |   |  |   | 1,207,231 |  
|Capital expenditures, including capitalized computer software |  |                                   | 3,739     |   |        |   | 7,904     |  |               | 627     |              |   | 1,986                   |  |   | 1,877         |  |   | 2,895    |   |  |   | 19,028    |  
|Long Lived Assets                                             |  |                                   | 288,006   |   |        |   | 1,062,711 |  |               | 150,996 |              |   | 110,188                 |  |   | 88,767        |  |   | 302,992  |   |  |   | 2,003,660 |  



|                                                              |               |                                   |           |        |  |   |           |   |               |   |              |  |                         |         |  |               |         |  |   |          |   |  |   |           |  
|------------------------------------------------------------- | ------------- | --------------------------------- | --------- | ------ |  | - | --------- | - | ------------- | - | ------------ |  | ----------------------- | ------- |  | ------------- | ------- |  | - | -------- | - |  | - | --------- | -
|                                                              |               | Three Months Ended March 31, 2006 |          
|                                                              | North America |                                   |           | Europe |  |   | Japan     |   | Latin America |   | Asia Pacific |  | Eliminations/ Corporate |         |  | Total Company |        
|Net sales                                                     |               | $                                 | 207,663   |        |  | $ | 330,075   |   |               | $ | 65,639       |  | $                       | 47,036  |  | $             | 47,063  |  | $ | (6,105   | ) |  | $ | 691,371   |  
|Operating profit                                              |               |                                   | (63,457   | )      |  |   | (238      | ) |               |   | 1,069        |  |                         | 4,631   |  |               | 2,395   |  |   | (28,291  | ) |  |   | (83,891   | )
|Depreciation and amortization                                 |               |                                   | 47,533    |        |  |   | 17,701    |   |               |   | 1,833        |  |                         | 1,894   |  |               | 1,823   |  |   | 11,525   |   |  |   | 82,309    |  
|Interest expense                                              |               |                                   | 2,535     |        |  |   | 16,554    |   |               |   | 199          |  |                         | 1,335   |  |               | 918     |  |   | 21,610   |   |  |   | 43,151    |  
|Interest income                                               |               |                                   | 3,277     |        |  |   | 3,139     |   |               |   |             |  |                         | 102     |  |               | 93      |  |   | (3,189   | ) |  |   | 3,422     |  
|Total assets                                                  |               |                                   | 1,123,155 |        |  |   | 1,688,700 |   |               |   | 273,391      |  |                         | 179,091 |  |               | 163,724 |  |   | (156,136 | ) |  |   | 3,271,925 |  
|Goodwill, net                                                 |               |                                   | 174,931   |        |  |   | 694,957   |   |               |   | 112,610      |  |                         | 75,579  |  |               | 53,401  |  |   | 43,064   |   |  |   | 1,154,542 |  
|Capital expenditures, including capitalized computer software |               |                                   | 3,337     |        |  |   | 8,388     |   |               |   | 608          |  |                         | 1,233   |  |               | 1,762   |  |   | 3,252    |   |  |   | 18,580    |  
|Long Lived Assets                                             |               |                                   | 318,117   |        |  |   | 992,788   |   |               |   | 156,216      |  |                         | 106,988 |  |               | 79,728  |  |   | 300,737  |   |  |   | 1,954,574 |  



14



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

Executive Overview

We operate our business through Holdings sole subsidiary, JDI, and its
subsidiaries. We are a leading global marketer and manufacturer of cleaning, hygiene and appearance enhancing products, equipment and related services for the institutional and industrial cleaning and sanitation market. We sell our products in more
than 160 countries through our direct sales force, wholesalers and third-party distributors. Our sales are balanced geographically, with our principal markets being Europe, North America and Japan.

Except where noted, and except for, discussion on the consolidated statements of cash flows, the management discussion and analysis below reflect the
results of continuing operations, specifically excluding the results from operations and the divestitures of the Chemical Methods Associates subsidiary (CMA), the former Polymer business segment (Polymer Business), and
Whitmire Micro-Gen Research Laboratories, Inc. (Whitmire) as discussed in Note 6 to the consolidated financial statements.

In
the three months ended March 30, 2007, net sales increased by $17.9 million from the same period in the prior year. As indicated in the following table, excluding the impact of foreign currency exchange rates and acquisitions and divestitures,
our net sales were relatively flat for the three months ended March 30, 2007, compared to the same period in the prior year.



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                    |                |                |   |         |   |  |     |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------- | ------------------ | -------------- | -------------- | - | ------- | - |  | --- | -
|(dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                | Three Months Ended |                |                |   |        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | March 30, 2007 |                    | March 31, 2006 |                |   | Change  |  
|Net sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                | $                  | 709,228        |                | $ | 691,371 |   |  | 2.6 | %
|Variance due to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                    |                |                |   |         |   |  |     |  
|Foreign currency exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                |                    |                |                |   | 25,935  |   |  |     |  
|Acquisitions and divestitures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                |                    |                |                |   | (11,718 | ) |  |     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                    |                |                |   |         |   |  |     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                    |                |                |   | 14,217  |   |  |     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                    |                |                |   |         |   |  |     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                | $                  | 709,228        |                | $ | 705,588 |   |  | 0.5 | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Net sales in the three months ended March 30, 2007 was impacted by our decision to withdraw from a majority of the service-oriented laundry and
ware washing business in the United States, which we announced in March 2006. Excluding this impact, as well as the impact of foreign currency exchange rates, and acquisitions and divestitures, the growth rate was 3.8%. Outside North America and
Japan we continue to show net sales growth in Europe, Latin America, and Asia Pacific driven primarily by increased sales volume, selective price increases in certain business sectors and global geographic areas, and the continued expansion of
developing markets in Asia Pacific, Latin America, Central and Eastern Europe, Africa and the Middle East. |               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Our gross profit percentage improved by 50 basis points for the first quarter of 2007 compared to the first quarter of 2006, due to stabilization of
raw materials prices, in part reflecting early success from our Global Strategic Sourcing Initiative, and the favorable impact of our cost reduction programs. In combination with further, selective price increases, these favorable factors more than
offset a slight negative mix impact. Our gross profit percentages for three months ended March 30, 2007 and March 31, 2006 were as follows:                                                                                                                                                                                                            |               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                | Three Months Ended |                |                |   |        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                | March 30, 2007     |                | March 31, 2006 |   |         |   | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                    | 41.7%          |                |   | 41.2    | % |  |     |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                |                    |                |                |   |         |   |  |     |  

In November 2005, in response to structural changes in raw material markets that gave rise to
significant increases in our input costs, we announced a program (November 2005 Plan) to implement an operational



15



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restructuring of our Company. The program also considers the potential divestiture of, or exit from, certain non-core or underperforming businesses.

During the first fiscal quarter of 2007, we continue to make significant progress with the operational restructuring of our Company in
accordance with the November 2005 Plan. In particular, activity of significance during the quarter was:



| |  |  | completion of the outsourcing of all IT support work in North America, Latin America and Asia Pacific with significant progress also made in Europe;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | completion of the closure of our manufacturing plant located in Bobigny, France and significant progress made towards the closure of our manufacturing plant in
Polinya (Barcelona), Spain;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | commencement of activity to transition certain finance activities in Western Europe to a third party provider and, globally, the transition of payroll and human
resource information systems to new providers;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | commencement of planning to combine our Global and North American Headquarters into one facility in Racine, Wisconsin; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------



| |  |  | progress made on various supply chain optimization projects to improve capacity utilization and efficiency.
| | - |  | -----------------------------------------------------------------------------------------------------------

In connection with the aforementioned and other activities under the November 2005 Plan, we recorded restructuring charges of approximately $2.2 million,
which consisted primarily of severance costs, for the fiscal quarter ended March 30, 2007. In addition, we recorded $27.0 million of period costs related to the November 2005 Plan for the fiscal quarter ended March 30, 2007. These costs
consist of $1.1 million related to long-lived asset impairments, $1.9 million, primarily related to accounts receivable and inventory write-offs and pension adjustments for our North American and European Regions, and $24.0 million related to other
period costs associated with restructuring activities primarily at the Corporate Center, including information technology project costs of $7.7 million, consulting services of $5.2 million, and human resource and pension-related costs of $5.6
million.

Critical Accounting Policies

The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities
as of the date of the financial statements and the reported amounts of revenues and expenses during the reported periods. Actual results may differ from these estimates under different assumptions or conditions. We believe the accounting policies
that are most critical to our financial condition and results of operations and that involve managements judgment and/or evaluation of inherent uncertain factors are as follows:

Revenue Recognition. We recognize revenue on product sales when risk of loss and title to the product is transferred to the customer. We record an
estimated reduction to revenue for customer discount programs and incentive offerings, including allowances and other volume-based incentives. If market conditions were to decline, we may take actions to increase customer incentive offerings,
possibly resulting in a reduction of gross profit margins in the period during which the incentive is offered. Revenues are reflected in the consolidated statement of operations net of taxes collected from customers and remitted to governmental
authorities.

In arriving at net sales, we estimate the amounts of sales deductions likely to be earned by customers in conjunction with
incentive programs such as volume rebates and other discounts. Such estimates are based on written agreements and historical trends and are reviewed periodically for possible revision based on changes in facts and circumstances.

Estimating Reserves and Allowances. We estimate inventory reserves based on periodic reviews of our inventory balances to identify slow-moving or
obsolete items. This determination is based on a number of factors, including new product introductions, changes in customer demand patterns and historic usage trends.

We estimate the allowance for doubtful accounts by analyzing accounts receivable balances by age, applying historical trend rates, analyzing market conditions and specifically reserving for identified customer
balances, based



16



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on known facts, which are deemed probable as uncollectible. For larger accounts greater than 90 days past due, an allowance for doubtful accounts is recorded
based on the customers ability and likelihood to pay and based on managements review of the facts and circumstances. For other customers, we recognize an allowance based on the length of time the receivable is past due based on
historical experience.

We accrue for losses associated with litigation and environmental claims based on managements best estimate
of future costs when such losses are probable and reasonably able to be estimated. We record those costs based on what management believes is the most probable amount of the liability within the ranges or, where no amount within the range is a
better estimate of the potential liability, at the minimum amount within the range. The accruals are adjusted as further information becomes available or circumstances change.

Pension and Post-Retirement Benefits. We sponsor pension and post-retirement plans in various countries, including the United States, which are
separately funded. Several statistical and judgmental factors, which attempt to anticipate future events, are used in calculating the expense and liability related to the plans. These factors include assumptions about the discount rate, expected
return on plan assets, rate of future compensation increases and healthcare cost trends, as determined by us and our actuaries. In addition, our actuarial consultants also use subjective factors, such as withdrawal and mortality rates, to estimate
these factors. The actuarial assumptions used by us may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, longer or shorter life spans of participants and changes in actual costs
of healthcare. Actual results may significantly affect the amount of pension and other post-retirement benefit expenses recorded by us.

Goodwill and Long-Lived Assets. We periodically review long-lived assets, including non-amortizing intangible assets and goodwill, for impairment and assess whether significant events or changes in business circumstances indicate
that the carrying value of the assets may not be recoverable. An impairment loss is recognized when the carrying amount of an asset exceeds the anticipated future undiscounted cash flows expected to result from the use of the asset and its eventual
disposition. The amount of the impairment loss to be recorded, if any, is calculated by the excess of the assets carrying value over its estimated fair value. We also periodically reassess the estimated remaining useful lives of our amortizing
intangible assets and our other long-lived assets. Changes to estimated useful lives would impact the amount of depreciation and amortization expense recorded in our consolidated financial statements. We annually complete an impairment analysis of
goodwill and non-amortizing intangible assets. Moreover, where indicators of impairment are identified for long-lived assets, we prepare a future undiscounted cash flow analysis, determine any impairment impact and record, if necessary, a reduction
in the affected asset(s). We recorded impairment charges on certain intangible assets and long-lived assets of $1.1 million and $40.8 million, during the three-month period ended March 30, 2007, and March 31, 2006, respectively, in
connection with the November 2005 Plan.

New Accounting Pronouncements

In January 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115 (SFAS
No. 159). SFAS No. 159 is intended to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to
apply complex hedge accounting provisions. It also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. The
statement does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value, and it does not establish requirements for recognizing dividend income, interest income or interest expense. It
also does not eliminate disclosure requirements included in other accounting standards. The provisions of SFAS 159 are effective for the fiscal year beginning after November 15, 2007, which for us is our fiscal year 2008. We are currently
evaluating the impact of the provisions of SFAS No. 159.

In September 2006, the FASB issued SFAS No. 158, Employers Accounting
for Defined Benefit Pension and Other Postretirement Plans (SFAS No. 158), an amendment of FASB Statements No. 87, 88, 106, and 132 (R). SFAS No. 158 requires an employer to recognize the over-funded or
under-funded status of a defined benefit postretirement plan as an asset or liability in its consolidated balance sheets and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. SFAS
No. 158 also requires the measurement of defined benefit plan assets and obligations as of the date of the employers fiscal year-end



17



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consolidated balance sheets (with limited exceptions). Under SFAS No. 158, we will also recognize the funded status of its defined benefit
postretirement plans and provide required disclosures as of December 28, 2007, at the end of its fiscal year 2007. The requirement to measure plan assets and benefit obligations as of the date of the employers fiscal year-end consolidated
balance sheets will be effective in fiscal year 2008. If we had adopted SFAS No. 158 at December 29, 2006, it would have recorded an increase in pension and post-retirement benefit liabilities of approximately $67.3 million, substantially
all of which would be offset to accumulated other comprehensive income. However, this impact could change materially as of December 28, 2007, due to changes in the discount rates used to measure plan obligations, the actual returns on plan
assets, and other factors.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS
No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. The provisions of SFAS
157 are effective for the fiscal year beginning after November 15, 2007, which for us is our fiscal year 2008. We are currently evaluating the impact of the provisions of SFAS No. 157.

In June 2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes  an Interpretation of FASB
Statement No. 109 (FIN No. 48), which clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with SFAS No. 109, Accounting for
Income Taxes. The interpretation prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We adopted FIN
No. 48 beginning in fiscal year 2007. See Note 8 (Income Taxes) to our consolidated financial statements, included elsewhere in this report, for further discussion.

Three Months Ended March 30, 2007 Compared to Three Months Ended March 31, 2006

Net Sales:



|                              |                |                    |                |        |        |         |            |   |        |  |     |  
|----------------------------- | -------------- | ------------------ | -------------- | ------ | ------ | ------- | ---------- | - | ------ |  | --- | -
|(dollars in thousands)        |                | Three Months Ended |                | Change |       
|                              | March 30, 2007 |                    | March 31, 2006 |        | Amount |         | Percentage |  
|Net product and service sales |                | $                  | 686,841        |        | $      | 670,086 |            | $ | 16,755 |  | 2.5 | %
|Sales agency fee income       |                |                    | 22,387         |        |        | 21,285  |            |   | 1,102  |  | 5.2 | %
|                              |                |                    |                |        |        |         |            |   |        |  |     |  
|                              |                | $                  | 709,228        |        | $      | 691,371 |            | $ | 17,857 |  | 2.6 | %
|                              |                |                    |                |        |        |         |            |   |        |  |     |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies contributed $24.5 million to the increase in net product and service sales.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, acquisitions and divestitures, and sales agency fee income, net sales were relatively flat for the three
months ended March 30, 2007 compared to the same period in the prior year, primarily due to declining sales in North America, which were impacted by the withdrawal from a majority of the service-oriented laundry and ware washing business in the
United States in March 2006. Outside North America, we continue to show net sales growth in Europe, Latin America, and Asia Pacific driven primarily by increased sales volume, selective price increases in certain business sectors and global
geographic areas, and the continued expansion of developing markets in Asia Pacific, Latin America, Central and Eastern Europe, Africa and the Middle East.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In North America, net sales decreased 11.0% in the first quarter of 2007 compared to the same period in the prior year. This sales decline reflects the impact of
our withdrawal from a majority of the service-oriented laundry and ware washing business in the United States. Excluding the impact of the withdrawal from the service-oriented laundry and ware washing business and divestitures of other non-core
businesses, our North American sales were relatively flat impacted, in part, by the high volume sales to distributors in December 2006.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18



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| |  |  | In our Europe, Africa and Middle East markets, net sales in the first quarter increased 5.7% compared to the same period in the prior year. This growth was
primarily due to higher sales volumes throughout most of the countries in our European Region.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Asia Pacific, net sales increased 7.8% in the first quarter of 2007 compared to the same period in the prior year, led by strong sales volume growth in China and
India in the food and beverage, lodging, retail, and quick-service restaurant sectors.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Latin America, net sales increased 7.6% in the first quarter of 2007 compared to the same period in the prior year, driven by a combination of higher sales
volume and price increases in most geographic areas, with growth from the food and beverage business and indirect channels as well as the retail and food service sectors.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Japan, net sales decreased by 0.9% in the first quarter of 2007 compared to the same period in the prior year, primarily as a result of a change from direct
selling to a joint venture for sales and distribution to select food service customers in the Tokyo and Osaka metropolitan markets.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding a $1.5 million increase from the weakening of the U.S. dollar against the euro and certain other foreign currencies, net sales under our sales agency
agreement with Unilever decreased by $0.4 million, or 1.6%, for the three month period ended March 30, 2007 compared to the same period in the prior year. The sales agency agreement with Unilever expires in May 2007; however, we are currently
in discussions with Unilever to replace this arrangement, which has been extended to provide adequate time to finalize the new arrangement.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit:



|                                           |                |                    |         |                |        |   |         |   |            |   |        |  |     |  
|------------------------------------------ | -------------- | ------------------ | ------- | -------------- | ------ | - | ------- | - | ---------- | - | ------ |  | --- | -
|(dollars in thousands)                     |                | Three Months Ended |         |                | Change |  
|                                           | March 30, 2007 |                    |         | March 31, 2006 |        |   | Amount  |   | Percentage |  
|Gross Profit                               |                | $                  | 295,788 |                |        | $ | 284,587 |   |            | $ | 11,201 |  | 3.9 | %
|Gross profit as a percentage of net sales: |                |                    | 41.7    | %              |        |   | 41.2    | % |            |   |        |  |     |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies increased gross profit by $11.4 million for the three months ended
March 31, 2006 compared to the same period in the prior year.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, gross profit in the first quarter of fiscal year 2007 compared to the first quarter of fiscal year 2005 was
relatively flat as the impact of volume growth in the Europe, Latin America, and Asia Pacific Regions helped offset the decline in sales in our North America Region as mentioned above, keeping gross profit largely unchanged.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Our gross profit percentage improved by 50 basis points for the first quarter of 2007 compared to the first quarter of 2006, due to stabilization of raw materials
prices, in part reflecting early success from our Global Strategic Sourcing Initiative, and the favorable impact of our cost reduction programs. In combination with further, selective price increases, these favorable factors more than offset a
slight negative mix impact.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



19



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Operating Expenses:



|                                             |                |                    |         |                |        |   |         |   |  |            |         |   |  |       |  
|-------------------------------------------- | -------------- | ------------------ | ------- | -------------- | ------ | - | ------- | - |  | ---------- | ------- | - |  | ----- | -
|(dollars in thousands)                       |                | Three Months Ended |         |                | Change |  
|                                             | March 30, 2007 |                    |         | March 31, 2006 |        |   | Amount  |   |  | Percentage |        
|Selling, general and administrative expenses |                | $                  | 278,298 |                |        | $ | 311,273 |   |  | $          | (32,975 | ) |  | -10.6 | %
|Research and development expenses            |                |                    | 15,843  |                |        |   | 14,375  |   |  |            | 1,468   |   |  | 10.2  | %
|Restructuring expenses                       |                |                    | 2,121   |                |        |   | 42,830  |   |  |            | (40,709 | ) |  | -95.0 | %
|                                             |                |                    |         |                |        |   |         |   |  |            |         |   |  |       |  
|                                             |                | $                  | 296,262 |                |        | $ | 368,478 |   |  | $          | (72,216 | ) |  | -19.6 | %
|                                             |                |                    |         |                |        |   |         |   |  |            |         |   |  |       |  
|As a percentage of net sales:                |                |                    |         |                |        |   |         |   |  |            |         |   |  |       |  
|Selling, general and administrative expenses |                |                    | 39.2    | %              |        |   | 45.0    | % |  |            |         |   |  |       |  
|Research and development expenses            |                |                    | 2.2     | %              |        |   | 2.1     | % |  |            |         |   |  |       |  
|Restructuring expenses                       |                |                    | 0.3     | %              |        |   | 6.2     | % |  |            |         |   |  |       |  
|                                             |                |                    |         |                |        |   |         |   |  |            |         |   |  |       |  
|                                             |                |                    | 41.7    | %              |        |   | 53.3    | % |  |            |         |   |  |       |  
|                                             |                |                    |         |                |        |   |         |   |  |            |         |   |  |       |  



| |  |  | The weakening of the U.S. dollar against the euro and certain other foreign currencies increased operating expenses by $11.0 million in the three months ended
March 30, 2007 compared to the same period in the prior year.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency and costs associated with our restructuring programs under the November 2005 Plan, selling, general and administrative
costs declined $10.7 million during the first quarter of 2007 compared to the prior year period. This reflects the impact of our progress from our November 2005 Plan, primarily in our North American and European business segments.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency, research and development expenses increased $1.1 million during the first quarter of 2007 compared to the prior year
period.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency, restructuring expenses declined $41.7 million during the first quarter of 2007 compared to the prior year period,
primarily due to decreased employee severance and other expenses related to the November 2005 Plan.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Restructuring and Integration:

A summary of all costs associated with the November 2005 Plan for the three months ended March 30, 2007, and since the
consummation of the program in November 2005, is outlined below:



|                                                                        |  |                                  |         |   |                                  |   |        |                                     |  |   |         |  
|----------------------------------------------------------------------- |  | -------------------------------- | ------- | - | -------------------------------- | - | ------ | ----------------------------------- |  | - | ------- | -
|(dollars in thousands)                                                  |  | Three Months EndedMarch 30, 2007 |         |   | Three Months EndedMarch 31, 2006 |   |        | Total Project to DateMarch 30, 2007 | 
|Reserve balance at beginning of period                                  |  | $                                | 70,225  |   |                                  | $ | 2,347  |                                     |  | $ |        |  
|Restructuring costs charged to income                                   |  |                                  | 2,177   |   |                                  |   | 42,830 |                                     |  |   | 121,473 |  
|Liability adjustments                                                   |  |                                  | (52     | ) |                                  |   |       |                                     |  |   | 331     |  
|Payments of accrued costs                                               |  |                                  | (13,643 | ) |                                  |   | (2,950 | )                                   |  |   | (63,097 | )
|                                                                        |  |                                  |         |   |                                  |   |        |                                     |  |   |         |  
|Reserve balance at end of period                                        |  | $                                | 58,707  |   |                                  | $ | 42,227 |                                     |  | $ | 58,707  |  
|                                                                        |  |                                  |         |   |                                  |   |        |                                     |  |   |         |  
|Period costs classified as selling, general and administrative expenses |  | $                                | 26,602  |   |                                  | $ | 57,637 |                                     |  | $ | 164,130 |  
|Period costs classified as cost of sales                                |  |                                  | 379     |   |                                  |   |       |                                     |  |   | 4,693   |  
|Capital expenditures                                                    |  |                                  | 3,678   |   |                                  |   | 2,131  |                                     |  |   | 22,592  |  



| |  |  | During the first quarter of 2007, we recorded $2.2 million of restructuring costs related to our November 2005 Plan in our consolidated statements of operations.
These costs consisted primarily of involuntary termination costs associated with our European business segment and Corporate Center. In addition, we recorded $26.6 million of selling, general and administrative expenses and $0.4 million for cost of
sales in the first quarter of 2007. Collectively, these costs consist of $1.1 million related to long-lived asset impairments, $1.9 million, primarily related to accounts receivable and inventory write-offs and pension adjustments for our North
American and European Regions, and $24.0 million related to other period costs associated with restructuring activities primarily at the Corporate Center, including information technology
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20



---

| | project costs of $7.7 million, consulting services of $5.2 million, and human resource and pension-related costs of $5.6 million.
| | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | In connection with the acquisition of the DiverseyLever business, we also recorded liabilities for the involuntary termination of former DiverseyLever employees and
other exit costs associated with former DiverseyLever facilities. During the first quarter of 2007, we paid cash of $0.2 million representing contractual obligations associated with involuntary terminations and lease payments on closed facilities.
The restructuring reserve balance associated with the exit plans and our acquisition-related restructuring plans was $2.4 million as of March 30, 2007.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-Operating Results:



|                            |                |                    |        |                |        |   |        |   |  |            |        |   |  |        |  
|--------------------------- | -------------- | ------------------ | ------ | -------------- | ------ | - | ------ | - |  | ---------- | ------ | - |  | ------ | -
|(dollars in thousands)      |                | Three Months Ended |        |                | Change |  
|                            | March 30, 2007 |                    |        | March 31, 2006 |        |   | Amount |   |  | Percentage |       
|Interest expense            |                | $                  | 38,651 |                |        | $ | 43,151 |   |  | $          | (4,500 | ) |  | -10.4  | %
|Interest income             |                |                    | (3,435 | )              |        |   | (3,422 | ) |  |            | (13    | ) |  | 0.4    | %
|                            |                |                    |        |                |        |   |        |   |  |            |        |   |  |        |  
|Net interest expense        |                | $                  | 35,216 |                |        | $ | 39,729 |   |  | $          | (4,513 | ) |  | -11.4  | %
|Other expense (income), net |                |                    | (307   | )              |        |   | 1,526  |   |  |            | (1,833 | ) |  | -120.1 | %



| |  |  | Net interest expense decreased in the first quarter of 2007 compared to the prior year period primarily due to lower average debt balances during the quarter. The
lower debt balances resulted from the June 2006 repayment of $420.0 million of term debt using the proceeds from the sale of the Polymer Business, partially offset by the drawing of the $100.0 million delayed draw term loan in July of 2006.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Income Taxes:



|                                                                              |                |                    |         |                |        |   |          |   |            |   |        |  |       |  
|----------------------------------------------------------------------------- | -------------- | ------------------ | ------- | -------------- | ------ | - | -------- | - | ---------- | - | ------ |  | ----- | -
|(dollars in thousands)                                                        |                | Three Months Ended |         |                | Change |  
|                                                                              | March 30, 2007 |                    |         | March 31, 2006 |        |   | Amount   |   | Percentage |  
|Loss from continuing operations,                                              |                | $                  | (35,383 | )              |        | $ | (125,148 | ) |            | $ | 89,765 |  | -71.7 | %
|including minority interests, before income taxes and discontinued operations |                |                    |         |                |        |   |          |   |            |   |        |  |       |  
|Provision for income taxes                                                    |                |                    | 12,790  |                |        |   | 2,504    |   |            |   | 10,286 |  | 410.8 | %
|Effective income tax rate                                                     |                |                    | -36.1   | %              |        |   | -2.0     | % |            |   |        |  |       |  



| |  |  | We reported an effective income tax rate of -36.1% on the pre-tax loss from continuing operations for the three month period ended March 30, 2007. The negative
effective income tax rate on the pre-tax loss is unfavorable, and is primarily the result of increased valuation allowances against U.S. and international tax loss carryforwards and net deferred tax assets.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We reported an effective income tax rate of -2.0% on the pre-tax loss from continuing operations for the three month period ended March 31, 2006. The negative
effective income tax rate was primarily due to increases in valuation allowances against U.S. net deferred tax assets.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Income:

Our net income increased by $74.4 million, to a net loss of $47.8 million for the first quarter of 2007 compared to net loss of $122.2
million for the first quarter of 2006, primarily due to a decrease of $71.4 million in restructuring costs and other period costs associated with the November 2005 Plan, controlled selling, general and administrative spending (excluding
restructuring costs), increased gross profit of $11.2 million, and a decrease of net interest expense of $4.5 million.



21



---

EBITDA:

EBITDA is a non-U.S. GAAP financial measure, and you should not consider EBITDA as an alternative to U.S. GAAP financial measures such as (a) operating profit or net profit as a measure of our operating performance or (b) cash
flows provided by operating, investing and financing activities (as determined in accordance with U.S. GAAP) as a measure of our ability to meet cash needs.

We believe that, in addition to cash flows from operating activities, EBITDA is a useful financial measurement for assessing liquidity as it provides management, investors, lenders and financial analysts with an
additional basis to evaluate our ability to incur and service debt and to fund capital expenditures. In addition, various covenants under our senior secured credit facilities are based on EBITDA, as adjusted pursuant to the provisions of those
facilities.

In evaluating EBITDA, management considers, among other things, the amount by which EBITDA exceeds interest costs for the
period, how EBITDA compares to principal repayments on outstanding debt for the period and how EBITDA compares to capital expenditures for the period. Management believes many investors, lenders and financial analysts evaluate EBITDA for similar
purposes. To evaluate EBITDA, the components of EBITDA, such as net sales and operating expenses and the variability of such components over time, should also be considered.

Accordingly, we believe that the inclusion of EBITDA in this report permits a more comprehensive analysis of our liquidity relative to other companies
and our ability to service debt requirements. Because all companies do not calculate EBITDA identically, the presentation of EBITDA in this report may not be comparable to similarly titled measures of other companies.

EBITDA should not be construed as a substitute for, and should be considered together with, net cash flows provided by operating activities as determined
in accordance with U.S. GAAP. The following table reconciles EBITDA to net cash flows provided by operating activities, which is the U.S. GAAP measure most comparable to EBITDA for the three months ended March 30, 2007 and March 31, 2006.



|                                                                                                             |  |                    |         |   |                |   |          |  
|------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------- | - | -------------- | - | -------- | -
|                                                                                                             |  | Three Months Ended |        
|(dollars in thousands)                                                                                       |  | March 30, 2007     |         |   | March 31, 2006 |  
|Net cash flows provided by (used in) operating activities                                                    |  | $                  | (42,565 | ) |                | $ | 13,512   |  
|Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses |  |                    | 55,298  |   |                |   | (36,247  | )
|Changes in deferred income taxes                                                                             |  |                    | (4,657  | ) |                |   | (3,083   | )
|Gain (loss) from divestitures                                                                                |  |                    | (582    | ) |                |   | 1,311    |  
|Gain (loss) on property disposals                                                                            |  |                    | (563    | ) |                |   | 118      |  
|Depreciation and amortization expense                                                                        |  |                    | (36,993 | ) |                |   | (82,309  | )
|Amortization of debt issuance costs                                                                          |  |                    | (1,202  | ) |                |   | (1,735   | )
|Interest accreted on notes payable                                                                           |  |                    | (11,229 | ) |                |   | (10,233  | )
|Interest accrued on long-term receivables-related parties                                                    |  |                    | 634     |   |                |   | 605      |  
|Other, net                                                                                                   |  |                    | (5,978  | ) |                |   | (4,141   | )
|                                                                                                             |  |                    |         |   |                |   |          |  
|Net income                                                                                                   |  |                    | (47,837 | ) |                |   | (122,202 | )
|                                                                                                             |  |                   
|Minority interests in net income of subsidiaries                                                             |  |                    |        |   |                |   | 2        |  
|Provision for income taxes                                                                                   |  |                    | 13,016  |   |                |   | 7,962    |  
|Interest expense, net                                                                                        |  |                    | 35,216  |   |                |   | 39,728   |  
|Depreciation and amortization expense                                                                        |  |                    | 36,993  |   |                |   | 82,309   |  
|                                                                                                             |  |                    |         |   |                |   |          |  
|EBITDA                                                                                                       |  | $                  | 37,388  |   |                | $ | 7,799    |  
|                                                                                                             |  |                    |         |   |                |   |          |  

EBITDA increased by $29.6 million for the quarter ended March 30, 2007 as compared to the
prior year first quarter, primarily due to the $31.6 million decrease in restructuring costs and period costs included in selling, general and administrative costs related to our November 2005 Plan.



22



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Liquidity and Capital Resources



|                                                    |                |                    |           |                |                   |            |           |        |  |            |         |   |  |        |  
|--------------------------------------------------- | -------------- | ------------------ | --------- | -------------- | ----------------- | ---------- | --------- | ------ |  | ---------- | ------- | - |  | ------ | -
|(dollars in thousands)                              |                | Three Months Ended |           |                | Change            |           
|                                                    | March 30, 2007 |                    |           | March 31, 2006 |                   |            | Amount    |        |  | Percentage |        
|Net cash provided by (used in) operating activities |                | $                  | (42,565   | )              |                   | $          | 13,512    |        |  | $          | (56,077 | ) |  | -415.0 | %
|Net cash used in investing activities               |                |                    | (19,689   | )              |                   |            | (24,371   | )      |  |            | 4,682   |   |  | -19.2  | %
|Net cash used in financing activities               |                |                    | (2,813    | )              |                   |            | (6,579    | )      |  |            | 3,766   |   |  | -57.2  | %
|Capital expenditures                                |                |                    | (19,028   | )              |                   |            | (18,580   | )      |  |            | (448    | ) |  | 2.4    | %
|                                                    |                |                    |          
|                                                    |                | March 30, 2007     |           |                | December 29, 2006 |            |           | Change | 
|                                                    |                |                    | Amount    |                |                   | Percentage |          
|Cash and cash equivalents                           |                | $                  | 149,226   |                |                   | $          | 208,418   |        |  | $          | (59,192 | ) |  | -28.4  | %
|Working capital (1)                                 |                |                    | 442,328   |                |                   |            | 406,381   |        |  |            | 35,947  |   |  | 8.8    | %
|Total debt                                          |                |                    | 1,458,790 |                |                   |            | 1,456,073 |        |  |            | 2,717   |   |  | 0.2    | %

---

|(1) | Working capital is defined as net accounts receivable, plus inventories less accounts payable.
|--- | ----------------------------------------------------------------------------------------------



| |  |  | The decrease in cash and cash equivalents at March 30, 2007 compared to December 30, 2006 resulted primarily from cash used during the quarter to fund
activities related to the November 2005 Plan and capital expenditures, and a reduction in the utilization of the Asset Securitization program.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The decrease in net cash provided by (used in) operating activities during the three months ended March 30, 2007 compared to the prior year period was
primarily due to cash payments during the quarter related to our November 2005 Plan, a greater increase in inventory levels during the quarter, and a larger reduction in the utilization of the Asset Securitization program.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The decrease in net cash used in investing activities during the three months ended March 30, 2007 compared to the prior year period was primarily due to a
decrease in funds used for acquisitions. Other than our investment in dosing and feeder equipment with new and existing customer accounts, the characteristics of our business do not generally require us to make significant ongoing capital
expenditures.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The decrease in cash flow used in financing activities during the three months ended March 30, 2007 compared to the prior year period was due to slightly lower
repayments on short-term debt in the current year.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in working capital during the three months ended March 30, 2007 was due to a $27.4 million increase in inventories resulting from a seasonal build
in inventory levels and build from factory closures and a $10.9 million decrease in accounts payable, partially offset by a $2.3 million decrease in accounts receivable.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Debt and Contractual Obligations. As a result of the DiverseyLever acquisition, we and JDI have a significant amount of indebtedness. On
May 3, 2002, in connection with the acquisition, we issued senior discount notes with a principal amount at maturity of $406.3 million to Unilever. Under the indenture for the senior discount notes, the principal amount of the senior discount
notes accretes at a rate of 10.67% per annum through May 15, 2007. After May 15, 2007, interest will accrue on the accreted value of the senior discount notes at this rate, but will be payable in cash semiannually in arrears to the
extent that JDI can distribute to Holdings the cash necessary to make the payments in accordance with the restrictions contained in the indentures for the JDI senior subordinated notes and the JDI senior secured credit facilities. The failure by
Holdings to make all or any portion of a semiannual interest payment on the senior discount notes will not constitute an event of default under the indenture for the senior discount notes if that failure results from JDIs inability to
distribute the cash necessary to make that payment in accordance with these restrictions. Instead, interest will continue to accrue on any unpaid interest at a rate of 10.67% per annum, and the unpaid interest will be payable on the next
interest payment date on which JDI is able to distribute to Holdings the cash necessary to make the payment in accordance with the provisions contained in the indentures for the JDI senior subordinated notes and the JDI senior secured credit
facilities. Holdings has no income from operations and no meaningful assets. Holdings receives all of its income from JDI and substantially all of its assets consist of its investment in JDI. The senior discount notes mature on May 15, 2013.

In addition, on May 3, 2002, in connection with the acquisition, JDI issued its senior subordinated notes and entered into a $1.2
billion senior secured credit facility. JDI used the proceeds of the sale of the JDI senior



23



---

subordinated notes and initial borrowings under the JDI senior secured credit facilities, together with other available funds, to finance the cash portion of
the purchase price for the DiverseyLever business and the related fees and expenses and to refinance then-existing indebtedness.

The JDI
senior secured credit facilities were amended and restated in December 2005. The amended facilities, among other things, permit the global restructuring under the November 2005 Plan and modify the financial covenants contained in our previous credit
facilities. The amended facilities consist of a revolving loan facility in an aggregate principal amount not to exceed $175 million, including a letter of credit sub-limit of $50 million and a swingline loan sub-limit of $30 million, that matures on
December 16, 2010, as well as a term loan facility that matures on December 10, 2011. In addition, the amended facilities include a committed delayed draw term facility of up to $100 million, which was fully drawn on July 14, 2006.
The amended facilities also provide for an increase in the revolving credit facility of up to $25 million under specified circumstances. As of March 30, 2007, we had $8.3 million in letters of credit outstanding under the revolving portion of
the senior secured credit facilities and therefore had the ability to borrow $166.7 million under those revolving facilities.

As of
March 30, 2007, excluding indebtedness held by JDI, our only indebtedness consisted of the senior discount notes with an accreted value of $361.5 million. As of March 31, 2006, our subsidiaries had total indebtedness of $1.1 billion,
consisting of $599.9 million of senior subordinated notes, $447.3 million of borrowings under the senior secured credit facilities, $16.9 million of other long-term borrowings and $33.2 million in short-term credit lines. In addition, we had $106.3
million in operating lease commitments, $1.8 million in capital lease commitments and $8.3 million committed under letters of credit.

We
believe that the cash flows from continuing operations, including the effects of divestures made as part of the November 2005 Plan, together with available cash, borrowings available under the JDI senior secured credit facilities, and the proceeds
from the JDI receivables securitization facility will generate sufficient cash flow to meet our liquidity needs for the foreseeable future, including those related to the November 2005 Plan. We do not expect the divestitures of the Polymer Business
and other businesses, made as part of the November 2005 Plan and included as part of continuing and discontinuing operations, to significantly impact our future liquidity or our ability to meet our debt service obligations. With regards to the
divestiture of the Polymer Business, we anticipate that the interest savings from the repayment of the JDI term B loan with $420.0 million of proceeds from the sale will largely offset the operating cash flows that would have been generated by this
business.

We have obligations related to our pension and post-retirement plans that are discussed in detail in Note 12 of the Notes to
Consolidated Financial Statements. As of the most recent actuarial estimation, we anticipate making $50.7 million of contributions to pension plans in fiscal year 2007. Post-retirement medical claims are paid as they are submitted and are
anticipated to be $4.3 million in fiscal year 2007.

Off-Balance Sheet Arrangements. JDI and certain of its subsidiaries entered
into an agreement (the Receivables Facility) in March 2001, as amended, whereby JDI and each participating subsidiary sell, on a continuous basis, certain trade receivables to JWPR Corporation (JWPRC), JDIs wholly
owned, consolidated, special purpose, bankruptcy-remote subsidiary. JWPRC was formed for the sole purpose of buying and selling receivables generated by JDI and certain of its subsidiaries party to the Receivables Facility. JWPRC, in turn, sells an
undivided interest in the accounts receivable to nonconsolidated financial institutions (the Conduits) for an amount equal to the value of all eligible receivables (as defined under the receivables sale agreement between JWPRC and the
Conduits) less the applicable reserve. The accounts receivable securitization arrangement is accounted for as a sale under the provisions of SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of
LiabilitiesA replacement of FASB Statement No. 125.As March 30, 2007 and December 29, 2006, our total potential for securitization of trade receivables was $75.0 million.

As of March 30, 2007 and December 29, 2006, the Conduits held $47.9 million and $64.3 million, respectively, of accounts receivable that are
not included in the accounts receivable balance reflected in our consolidated balance sheets.

As of March 30, 2007 and
December 29, 2006, JDI had a retained interest of $87.5 million and $78.1 million, respectively, in the receivables of JWPRC. The retained interest is included in the accounts receivable balance and is reflected in the consolidated balance
sheets at estimated fair value.



24



---

For the three months ended March 30, 2007, JWPRCs cost of borrowing under the Receivables
Facility was at a weighted average rate of 6.38% per annum.

Under the terms of the JDI senior secured credit facilities, JDI must use
any net proceeds from the Receivables Facility first to prepay loans outstanding under the JDI senior secured credit facilities. In addition, the net amount of trade receivables at any time outstanding under this and any other securitization
facility that JDI may enter into may not exceed $200 million in the aggregate.

Contractual Obligations

As a result of the adoption of FIN No. 48 and changes during the three month period ended March 30, 2007, we increased gross unrecognized tax
benefits by $55.0 million, resulting in total unrecognized tax benefits of $86.1 million at March 30, 2007. Total unrecognized tax benefits for which payments are expected in less than one year are $5.0 million. We are not able to provide a
reasonably reliable estimate of the timing of future payments relating to non-current unrecognized tax benefits.

Financial Covenants under the JDI
Senior Secured Credit Facilities

Under the amended terms of our senior secured credit facilities, we are subject to certain financial
covenants. The financial covenants under our senior secured credit facilities require JDI to meet the following targets and ratios.

Maximum Leverage Ratio. JDI is required to maintain a leverage ratio for each financial covenant period of no more than the maximum ratio specified in the senior secured credit facilities for that financial covenant period. The
maximum leverage ratio is the ratio of (1) JDIs consolidated indebtedness (excluding up to $55 million of indebtedness incurred under the Receivables Facility and indebtedness relating to specified interest rate hedge agreements) as of
the last day of a financial covenant period using a weighted-average exchange rate for the relevant fiscal three-month period to (2) JDIs consolidated EBITDA, as defined in the JDI senior secured credit facilities, for that same financial
covenant period.

The JDI senior secured credit facilities require that JDI maintain a leverage ratio of no more than the ratio set forth
below for each of the financial covenant periods ending nearest the corresponding date set forth below:



|                                  |  |                        |  | 
|--------------------------------- |  | ---------------------- |  | 
|                                  |  | Maximum Leverage Ratio |  | 
|March 31, 2007                    |  | 5.00 to 1              |  | 
|June 30, 2007                     |  | 5.00 to 1              |  | 
|September 30, 2007                |  | 4.75 to 1              |  | 
|December 31, 2007                 |  | 4.75 to 1              |  | 
|March 31, 2008                    |  | 4.75 to 1              |  | 
|June 30, 2008                     |  | 4.75 to 1              |  | 
|September 30, 2008                |  | 4.25 to 1              |  | 
|December 31, 2008                 |  | 4.25 to 1              |  | 
|March 31, 2009                    |  | 4.25 to 1              |  | 
|June 30, 2009                     |  | 3.25 to 1              |  | 
|September 30, 2009                |  | 3.25 to 1              |  | 
|December 31, 2009                 |  | 3.25 to 1              |  | 
|March 31, 2010                    |  | 3.25 to 1              |  | 
|June 30, 2010                     |  | 3.25 to 1              |  | 
|September 30, 2010 and thereafter |  | 3.50 to 1              |  | 

Minimum Interest Coverage Ratio. JDI is required to maintain an interest coverage ratio for
each financial covenant period of no less than the minimum ratio specified in the JDI senior secured credit facilities for that financial covenant period. The minimum interest coverage ratio is the ratio of (1) JDIs consolidated EBITDA,
as



25



---

defined in the JDI senior secured credit facilities, for a financial covenant period to (2) JDIs cash interest expense for the same financial
covenant period.

The JDI senior secured credit facilities require that JDI maintain an interest coverage ratio of no less than the ratio
set forth below for each of the financial covenant periods ending nearest the corresponding date set for the below:



|                                  |  |                                 |  | 
|--------------------------------- |  | ------------------------------- |  | 
|                                  |  | Minimum Interest Coverage Ratio |  | 
|                                  |  |                                
|March 31, 2007                    |  | 2.00 to 1                       |  | 
|June 30, 2007                     |  | 2.00 to 1                       |  | 
|September 30, 2007                |  | 2.25 to 1                       |  | 
|December 31, 2007                 |  | 2.25 to 1                       |  | 
|March 31, 2008                    |  | 2.25 to 1                       |  | 
|June 30, 2008                     |  | 2.25 to 1                       |  | 
|September 30, 2008                |  | 2.50 to 1                       |  | 
|December 31, 2008                 |  | 2.50 to 1                       |  | 
|March 31, 2009                    |  | 2.50 to 1                       |  | 
|June 30, 2009                     |  | 2.75 to 1                       |  | 
|September 30, 2009                |  | 2.75 to 1                       |  | 
|December 31, 2009                 |  | 2.75 to 1                       |  | 
|March 31, 2010                    |  | 2.75 to 1                       |  | 
|June 30, 2010                     |  | 2.75 to 1                       |  | 
|September 30, 2010 and thereafter |  | 3.00 to 1                       |  | 

Compliance with Maximum Leverage Ratio and Minimum Interest Coverage Ratio. For JDIs
financial covenant period ended on March 30, 2007, JDI was in compliance with the maximum leverage ratio and minimum interest coverage ratio covenants contained in the JDI senior secured credit facilities.

Capital Expenditures. Capital expenditures are limited under the JDI senior secured credit facilities to $150 million in fiscal year 2006 and to
$130 million for subsequent fiscal years. To the extent that JDI makes capital expenditures of less than the limit in any fiscal year, however, JDI may carry forward into the subsequent year the difference between the limit and the actual amount we
expended, provided that the amounts JDI carries forward from the previous year will be allocated to capital expenditures in the current fiscal year only after the amount allocated to the current fiscal year is exhausted. As of March 30, 2007,
JDI was in compliance with the limitation on capital expenditures for fiscal year 2007.

Restructuring Charges. The JDI senior
secured credit facilities limit the amount of cash payments (i) arising in connection with the November 2005 Plan at any time from fiscal year 2006 through the end of fiscal year 2009 to $355 million in the aggregate and (ii) arising in
connection with permitted divestitures at any time from fiscal year 2006 through the end of fiscal year 2008 to $45 million. As of March 30, 2007, JDI was in compliance with the limitation on spending for restructuring and permitted
divestiture-related activities.

In addition, the JDI senior secured credit facilities contain covenants that restrict JDIs ability
to declare dividends and to redeem and repurchase capital stock. The JDI senior secured credit facilities also limit JDIs ability to incur additional liens, engage in sale-leaseback transactions and incur additional indebtedness and make
investments.

Discontinued Operations

Chemical
Methods Associates

On September 30, 2006, in connection with its November 2005 Plan, we sold our equity interest in CMA to Ali
SpA, an Italian-based manufacturer of equipment for the food service industry, for $17.0 million. The purchase



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price was subject to various post-closing adjustments, principally with regard to changes in working capital. In December 2006, we recorded additional
purchase price of approximately $0.3 million based on the preliminary assessment of closing working capital. The sale resulted in a gain of $2.3 million ($0.5 million after tax), net of related costs. CMA was a non-core asset.

During the first quarter of 2007, we finalized and collected the closing working capital adjustment and recorded additional closing costs, resulting in
an immaterial additional gain. Further adjustments are not expected to be significant.

Income, net of tax, and net sales from CMA included
in discontinued operations were $0.3 million and $5.0 million, respectively, for the three month period ended March 31, 2006.

Polymer Business

On June 30, 2006, Johnson Polymer, LLC (JP) and JohnsonDiversey Holdings II B.V. (Holdings II), our
indirectly owned subsidiary, completed the sale of substantially all of the assets of JP, certain of the equity interests in, or assets of certain JP subsidiaries and all of the equity interests owned by Holdings II in Johnson Polymer B.V.
(collectively, the Polymer Business) to BASF Aktiengesellschaft (BASF) for approximately $470.0 million plus an additional $8.1 million in connection with the parties estimate of purchase price adjustments that are
based upon the closing net asset value of the Polymer Business. Further, BASF paid us $1.5 million for the option to extend the tolling agreement by up to six months. In December 2006, we and BASF finalized purchase price adjustments related to the
net asset value, and we received an additional $4.1 million.

The Polymer Business developed, manufactured, and sold specialty polymers for
use in the industrial print and packaging industry, industrial paint and coatings industry, and industrial plastics industry. The Polymer Business was a non-core asset and had been reported as a separate business segment. The sale resulted in a gain
of approximately $352.9 million ($256.7 million after tax), net of related costs.

During the first quarter of 2007, we finalized and paid
certain pension related adjustments, adjusted net assets disposed, and recorded additional closing costs, reducing the gain by $0.7 million ($0.4 million after tax). Further adjustments are not expected to be significant.

In association with the tolling agreement with BASF, we recorded income from discontinued operations, net of tax, of $0.7 million during the three months
ended March 30, 2007.

Income, net of tax, and net sales from the Polymer Business included in discontinued operations were $5.0
million and $89.6 million, respectively, for the three month period ended March 31, 2006.

Whitmire Micro-Gen Business

In June 2004, we completed the sale of Whitmire to Sorex Holdings, Ltd., a European pest-control manufacturer headquartered in the United Kingdom, for
$46.0 million in cash and the assumption of certain liabilities.

The purchase agreement provided for additional earn-out provisions based
on future Whitmire net sales, for which we recorded $0.1 million during the three month periods ended March 31, 2006. The income is included as a component of income from discontinued operations in the consolidated statements of operations.

Acquisitions

In March 2007, we
purchased an additional 6% interest in a North American business that provides purchasing and category management tools to certain of our end-users for $2.6 million. We previously held 9% of the outstanding shares. The transaction is not considered
material to our consolidated financial position, results of operations or cash flows.



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In February 2006, we purchased the remaining 15% of the outstanding shares of Shanghai JohnsonDiversey,
Ltd., our Chinese operating entity, for $3.5 million. We previously held 85% of the outstanding shares and included the holding in its consolidated financial results. Goodwill recorded with respect to the transaction was $2.6 million. The
acquisition was accounted for under the purchase method of accounting in accordance with step acquisition rules.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|------- | ---------------------------------------------------------

Interest Rate Risk

As of March 30, 2007, JDI had $447.3 million of debt outstanding under the JDI senior secured credit facilities.
After giving effect to the interest rate swap transactions that JDI has entered into with respect to some of the borrowings under our credit facilities, $255.8 million of the debt outstanding remained subject to variable rates. JDI also has entered
into interest rate swap agreements with a notional value of 127.4 million that were related to the euro portion of the term loan B that was fully repaid in April 2005. As a result of the debt repayment, these interest rate swaps have been
deemed ineffective and, therefore, must be marked-to-market at the end of each accounting period through the statements of operations. Because of certain intercompany funding arrangements, we believe that these swaps provide an economic hedge to the
incremental debt used to finance the repayment. In addition, as of March 30, 2007, JDI had $50.1 million of debt outstanding under foreign lines of credit, all of which were subject to variable rates. Accordingly, our earnings and cash flows
are affected by changes in interest rates. At the above level of variable rate borrowings, we do not anticipate a significant impact on earnings in the event of a reasonable change in interest rates. In the event of an adverse change in interest
rates, management would likely take actions that would mitigate our exposure to interest rate risk; however, due to the uncertainty of the actions and their possible effects, this analysis assumes no such action. Further, this analysis does not
consider the effects of the change in the level of the overall economic activity that could exist in such an environment.

Foreign Currency Risk

Through JDI and its subsidiaries, we conduct our business in various regions of the world and export and import products to and from
many countries. Our operations may, therefore, be subject to volatility because of currency fluctuations, inflation changes and changes in political and economic conditions in these countries. Sales and expenses are frequently denominated in local
currencies, and results of operations may be affected adversely as currency fluctuations affect product prices and operating costs. We engage in hedging operations, including forward foreign exchange contracts, to reduce the exposure of our cash
flows to fluctuations in foreign currency rates. All hedging instruments are designated and effective as hedges, in accordance with U.S. GAAP. Other instruments that do not qualify for hedge accounting are marked to market with changes recognized in
current earnings. We do not engage in hedging for speculative investment reasons. There can be no assurance that our hedging operations will eliminate or substantially reduce risks associated with fluctuating currencies.

Based on our overall foreign exchange exposure, we estimate that a 10% change in the exchange rates would not materially affect our financial position
and liquidity. The effect on our results of operations would be substantially offset by the impact of the hedged items.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

Evaluation of
JohnsonDiversey Holdings Disclosure Controls and Internal Controls. As of the end of the period covered by this quarterly report, we evaluated the effectiveness of the design and operation of our disclosure controls and
procedures (Disclosure Controls). The controls evaluation was done under the supervision and with the participation of management, including our Chief Executive Officer (CEO) and Chief Financial Officer
(CFO).

CEO & CFO Certifications. Attached as exhibits 31.1 and 31.2 to this quarterly report are
certifications of the CEO and the CFO required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934, as amended (the Exchange Act). This portion of our quarterly report includes the information concerning the controls
evaluation referred to in the certifications and should be read in conjunction with the certifications for a more complete understanding of the topics presented.



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Disclosure Controls. Disclosure Controls are procedures that are designed with the objective of
ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this quarterly report, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms.
Disclosure Controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Our
Disclosure Controls include those components of our internal control over financial reporting that are designed to provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in
accordance with U.S. GAAP. To the extent that components of our internal control over financial reporting are included in our Disclosure Controls, they are included in the scope of our quarterly evaluation of Disclosure Controls.

Limitations on the Effectiveness of Controls. Our Disclosure Controls were designed to provide reasonable assurance that the controls and
procedures would meet their objectives. Our management, including the CEO and CFO, does not expect that our Disclosure Controls will prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only
reasonable assurance of achieving the designed control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design
of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because
of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Controls Evaluation. The evaluation of our Disclosure Controls included a review of the controls objectives and design, our implementation of the controls and the effect of the controls on the information generated
for use in this quarterly report. In the course of the controls evaluation, we sought to identify data errors, control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were undertaken. This
evaluation is done on a quarterly basis so that the conclusions of management, including the CEO and the CFO, concerning the effectiveness of the controls can be reported in our quarterly reports on Form 10-Q and our annual report on Form 10-K. Many
of the components of our Disclosure Controls are also evaluated on an ongoing basis by our internal audit department and by other personnel in our finance organization, as well as our independent registered public accounting firm in connection with
their audit and review activities. The overall goals of these various evaluation activities are to monitor our Disclosure Controls and to make modifications as necessary; our intent in this regard is that the Disclosure Controls will be maintained
as dynamic systems that change (including with improvements and corrections) as conditions warrant.

Among other matters, we sought in our
evaluation to determine whether there were any significant deficiencies or material weaknesses in our internal control over financial reporting, or whether we had identified any acts of fraud involving personnel who have a
significant role in our internal control over financial reporting. This information was important both for our controls evaluation and for Rule 13a-14 of the Exchange Act, which requires that the CEO and CFO disclose that information to our Audit
Committee and to our independent registered public accounting firm, and report on that information and related matters in this section of the quarterly report. A significant deficiency is defined in professional accounting literature as
a control issue that could have a significant adverse effect on our ability to record, process, summarize and report financial data in the consolidated financial statements. A material weakness is defined in professional accounting
literature as a particularly serious reportable condition whereby the internal control does not reduce to a relatively low level the risk that misstatements caused by error or fraud may occur in amounts that would be material in relation to the
financial statements and not be detected within a timely period by employees in the normal course of performing their assigned functions. We also sought to deal with other control matters in the controls evaluation, and in each case, if an issue was
identified, we considered what revision, improvement and/or correction to make in accordance with our on-going procedures.

Conclusions. Based upon the controls evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this quarterly report, our Disclosure Controls are effective to ensure that material information relating to
JohnsonDiversey Holdings, Inc. and its consolidated subsidiaries is made known to management,



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including the CEO and CFO, particularly during the period when our periodic reports are being prepared, and that our internal controls are effective in
providing reasonable assurance that our financial statements are fairly presented in conformity with U.S. GAAP. In addition, no change in our internal control over financial reporting has occurred during the most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



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PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

We and JDI are party to various
legal proceedings in the ordinary course of our business which may, from time to time, include product liability, intellectual property, contract, environmental and tax claims as well as government or regulatory agency inquiries or investigations.
We believe that, taking into account our insurance and reserves and the valid defenses with respect to legal matters currently pending against us and JDI, the ultimate resolution of these proceedings will not, individually or in the aggregate, have
a material adverse effect on our business, financial condition, results of operations or cash flows.



|ITEM 6. | EXHIBITS
|------- | --------



|     |  |                                                                                                                        
|---- |  | -----------------------------------------------------------------------------------------------------------------------
|31.1 |  | Principal Executive Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                
|     | 
|31.2 |  | Principal Financial Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                
|     | 
|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.



|                   |  |                                                                         |  | 
|------------------ |  | ----------------------------------------------------------------------- |  | 
|                   |  | JOHNSONDIVERSEY HOLDINGS, INC.                                          |  | 
|                   |  |                                                                        
|Date: May 10, 2007 |  | /s/ Joseph F. Smorada                                                   |  | 
|                   |  | Joseph F. Smorada, Executive Vice President and Chief Financial Officer |  | 



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JOHNSONDIVERSEY HOLDINGS, INC.

EXHIBIT INDEX



|     |  |                                                                                                                        
|---- |  | -----------------------------------------------------------------------------------------------------------------------
|31.1 |  | Principal Executive Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                
|     | 
|31.2 |  | Principal Financial Officers Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                
|     | 
|32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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