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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM
10Q



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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2006

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

JOHNSONDIVERSEY HOLDINGS, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|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)

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 flier, 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 5, 2006, 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 31, 2006 and December 30, 2005                            |  | 1   
|                               |  |                                                                                                  
|                               |  | Consolidated Statements of Operations for the three months ended March 31, 2006 and April 1, 2005 |  | 2   
|                               |  |                                                                                                  
|                               |  | Consolidated Statements of Cash Flows for the three months ended March 31, 2006 and April 1, 2005 |  | 3   
|                               |  |                                                                                                  
|                               |  | Notes to Consolidated Financial Statements  March 31, 2006                                       |  | 4   
|                               |  |                                                                                                  
|Item 2                         |  | Managements Discussion and Analysis of Financial Condition and Results of Operations             |  | 12  
|                               |  |                                                                                                  
|Item 3                         |  | Quantitative and Qualitative Disclosure about Market Risk                                         |  | 24  
|                               |  |                                                                                                  
|Item 4                         |  | Controls and Procedures                                                                           |  | 25  
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                  
|                               |  |                                                                                                  
|Item 1                         |  | Legal Proceedings                                                                                 |  | 27  
|                               |  |                                                                                                  
|Item 6                         |  | Exhibits                                                                                          |  | 27  
|                               |  |                                                                                                  
|Signatures                     |  |                                                                                                   |  | 28  



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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 complete our restructuring program, including the achievement of cost savings and potential 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, and the printing and packaging, coatings and plastics markets;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | restraints on pricing flexibility due to competitive conditions in the professional and polymer markets;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | 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 man made disasters, including acts of terrorism, hostilities or war that 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.
| | - |  | -----------------------------------------------------------------------------------------------------------



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 31, 2006 |           |   | December 30, 2005 |  
|                                                                                                                                    |  | (unaudited)    |           |   |                   |  
|ASSETS                                                                                                                              |  |                |           |   |                   |   |           |  
|Current assets:                                                                                                                     |  |                |           |   |                   |   |           |  
|Cash and cash equivalents                                                                                                           |  | $              | 146,557   |   |                   | $ | 162,119   |  
|Accounts receivable, less allowance of $33,001 and $27,406 respectively                                                             |  |                | 501,592   |   |                   |   | 506,015   |  
|Accounts receivable  related parties                                                                                               |  |                | 27,486    |   |                   |   | 28,622    |  
|Inventories                                                                                                                         |  |                | 288,071   |   |                   |   | 283,673   |  
|Deferred income taxes                                                                                                               |  |                | 14,080    |   |                   |   | 14,410    |  
|Other current assets                                                                                                                |  |                | 127,117   |   |                   |   | 120,125   |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total current assets                                                                                                                |  |                | 1,104,903 |   |                   |   | 1,114,964 |  
|Property, plant and equipment, net                                                                                                  |  |                | 455,489   |   |                   |   | 481,208   |  
|Capitalized software, net                                                                                                           |  |                | 83,556    |   |                   |   | 90,996    |  
|Goodwill, net                                                                                                                       |  |                | 1,157,430 |   |                   |   | 1,141,598 |  
|Other intangibles, net                                                                                                              |  |                | 319,896   |   |                   |   | 342,570   |  
|Long-term receivables  related parties                                                                                             |  |                | 66,473    |   |                   |   | 65,194    |  
|Other assets                                                                                                                        |  |                | 84,178    |   |                   |   | 87,440    |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total assets                                                                                                                        |  | $              | 3,271,925 |   |                   | $ | 3,323,970 |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|LIABILITIES, CLASS B COMMON STOCK AND STOCKHOLDERS EQUITY                                                                          |  |                |           |   |                   |   |           |  
|Current liabilities:                                                                                                                |  |                |           |   |                   |   |           |  
|Short-term borrowings                                                                                                               |  | $              | 38,228    |   |                   | $ | 44,775    |  
|Current portion of long-term debt                                                                                                   |  |                | 12,550    |   |                   |   | 12,550    |  
|Accounts payable                                                                                                                    |  |                | 329,121   |   |                   |   | 345,619   |  
|Accounts payable  related parties                                                                                                  |  |                | 57,062    |   |                   |   | 53,038    |  
|Accrued expenses                                                                                                                    |  |                | 440,523   |   |                   |   | 377,604   |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total current liabilities                                                                                                           |  |                | 877,484   |   |                   |   | 833,586   |  
|                                                                                                                                    |  |               
|Pension and other post-retirement benefits                                                                                          |  |                | 271,579   |   |                   |   | 269,787   |  
|Long-term borrowings                                                                                                                |  |                | 1,676,998 |   |                   |   | 1,670,631 |  
|Long-term payables  related parties                                                                                                |  |                | 28,231    |   |                   |   | 28,242    |  
|Deferred income taxes                                                                                                               |  |                | 46,655    |   |                   |   | 43,620    |  
|Other liabilities                                                                                                                   |  |                | 56,654    |   |                   |   | 58,407    |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total liabilities                                                                                                                   |  |                | 2,957,601 |   |                   |   | 2,904,273 |  
|                                                                                                                                    |  |               
|Commitments and contingencies (Note 17)                                                                                             |  |                |          |   |                   |   |          |  
|                                                                                                                                    |  |               
|Class B common stock subject to put and call options $0.01 par value; 3,000 shares authorized; 1,960 shares issued and
outstanding |  |                | 476,473   |   |                   |   | 476,473   |  
|                                                                                                                                    |  |               
|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                                                                                                      |  |                | 64,528    |   |                   |   | 64,438    |  
|Accumulated deficit                                                                                                                 |  |                | (320,331  | ) |                   |   | (198,129  | )
|Accumulated other comprehensive income                                                                                              |  |                | 94,400    |   |                   |   | 77,775    |  
|Notes receivable from officers                                                                                                      |  |                | (746      | ) |                   |   | (860      | )
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total stockholders equity                                                                                                          |  |                | (162,149  | ) |                   |   | (56,776   | )
|                                                                                                                                    |  |                |           |   |                   |   |           |  
|Total liabilities, class B common stock and stockholders equity                                                                    |  | $              | 3,271,925 |   |                   | $ | 3,323,970 |  
|                                                                                                                                    |  |                |           |   |                   |   |           |  

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 31, 2006     |          |   | April 1, 2005 |  
|                                                                           |  | (unaudited)        |         
|Net sales:                                                                 |  |                    |          |   |               |   |         |  
|Net product and service sales                                              |  | $                  | 764,730  |   |               | $ | 782,677 |  
|Sales agency fee income                                                    |  |                    | 21,285   |   |               |   | 21,683  |  
|                                                                           |  |                    |          |   |               |   |         |  
|                                                                           |  |                    | 786,015  |   |               |   | 804,360 |  
|Cost of sales                                                              |  |                    | 476,947  |   |               |   | 476,350 |  
|                                                                           |  |                    |          |   |               |   |         |  
|Gross profit                                                               |  |                    | 309,068  |   |               |   | 328,010 |  
|Selling, general and administrative expenses                               |  |                    | 321,870  |   |               |   | 285,766 |  
|Research and development expenses                                          |  |                    | 17,801   |   |               |   | 17,459  |  
|Restructuring expenses                                                     |  |                    | 42,621   |   |               |   | 3,396   |  
|                                                                           |  |                    |          |   |               |   |         |  
|Operating profit                                                           |  |                    | (73,224  | ) |               |   | 21,389  |  
|Other (income) expense:                                                    |  |                    |          |   |               |   |         |  
|Interest expense                                                           |  |                    | 43,212   |   |               |   | 40,546  |  
|Interest income                                                            |  |                    | (3,484   | ) |               |   | (1,574  | )
|Other expense, net                                                         |  |                    | 1,410    |   |               |   | 161     |  
|                                                                           |  |                    |          |   |               |   |         |  
|Loss from continuing operations before income taxes and minority interests |  |                    | (114,362 | ) |               |   | (17,744 | )
|Provision for income taxes                                                 |  |                    | 7,962    |   |               |   | 33      |  
|                                                                           |  |                    |          |   |               |   |         |  
|Loss from continuing operations before minority interests                  |  |                    | (122,324 | ) |               |   | (17,777 | )
|Minority interests in net loss of subsidiaries                             |  |                    | 2        |   |               |   | 100     |  
|                                                                           |  |                    |          |   |               |   |         |  
|Loss from continuing operations                                            |  |                    | (122,326 | ) |               |   | (17,877 | )
|Income from discontinued operations, net of income taxes                   |  |                    | 124      |   |               |   | 4,000   |  
|                                                                           |  |                    |          |   |               |   |         |  
|Net loss                                                                   |  | $                  | (122,202 | ) |               | $ | (13,877 | )
|                                                                           |  |                    |          |   |               |   |         |  

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



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JOHNSONDIVERSEY HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)



|                                                                                                              |  |                    |          |   |              |   |         |  
|------------------------------------------------------------------------------------------------------------- |  | ------------------ | -------- | - | ------------ | - | ------- | -
|                                                                                                              |  | Three Months Ended |         
|                                                                                                              |  | March 31,2006      |          |   | April 1,2005 |  
|                                                                                                              |  | (unaudited)        |         
|Cash flows from operating activities:                                                                         |  |                    |          |   |              |   |         |  
|Net loss                                                                                                      |  | $                  | (122,202 | ) |              | $ | (13,877 | )
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities                     |  |                    |          |   |              |   |         |  
|Depreciation and amortization                                                                                 |  |                    | 54,929   |   |              |   | 38,678  |  
|Amortization of intangibles                                                                                   |  |                    | 27,380   |   |              |   | 8,417   |  
|Amortization of debt issuance costs                                                                           |  |                    | 1,735    |   |              |   | 2,257   |  
|Interest accreted on notes payable                                                                            |  |                    | 9,628    |   |              |   | 9,222   |  
|Interest accrued on long-term receivables- related parties                                                    |  |                    |         |   |              |   | (908    | )
|Deferred income taxes                                                                                         |  |                    | 3,083    |   |              |   | (4,601  | )
|Gain on disposal of discontinued operations                                                                   |  |                    | (124     | ) |              |   | (4,000  | )
|Gain from divestitures                                                                                        |  |                    | (1,187   | ) |              |   | (604    | )
|Gain (loss) on property disposals                                                                             |  |                    | (118     | ) |              |   | 2,648   |  
|Other                                                                                                         |  |                    | 4,141    |   |              |   | 5,320   |  
|Changes in operating assets and liabilities, net of effects from acquisitions and divestitures of businesses |  |                    |          |   |              |   |         |  
|Accounts receivable securitization                                                                            |  |                    | (7,500   | ) |              |   | (22,700 | )
|Accounts receivable                                                                                           |  |                    | 19,038   |   |              |   | 32,888  |  
|Inventories                                                                                                   |  |                    | (6,087   | ) |              |   | (25,258 | )
|Other current assets                                                                                          |  |                    | (2,559   | ) |              |   | (19,536 | )
|Other assets                                                                                                  |  |                    | 526      |   |              |   | (5,420  | )
|Accounts payable and accrued expenses                                                                         |  |                    | 34,487   |   |              |   | (13,575 | )
|Other liabilities                                                                                             |  |                    | (1,658   | ) |              |   | 9,018   |  
|                                                                                                              |  |                    |          |   |              |   |         |  
|Net cash provided by (used in) operating activities                                                           |  |                    | 13,512   |   |              |   | (2,031  | )
|Cash flows from investing activities:                                                                         |  |                    |          |   |              |   |         |  
|Capital expenditures                                                                                          |  |                    | (16,410  | ) |              |   | (14,380 | )
|Expenditures for capitalized computer software                                                                |  |                    | (2,170   | ) |              |   | (5,417  | )
|Proceeds from property disposals                                                                              |  |                    | 230      |   |              |   | 2,618   |  
|Acquisitions of businesses                                                                                    |  |                    | (6,145   | ) |              |   | (1,457  | )
|Proceeds from divestitures                                                                                    |  |                    | 124      |   |              |   | 4,789   |  
|                                                                                                              |  |                    |          |   |              |   |         |  
|Net cash used in investing activities                                                                         |  |                    | (24,371  | ) |              |   | (13,847 | )
|Cash flows from financing activities:                                                                         |  |                    |          |   |              |   |         |  
|Proceeds from (repayments of) short-term borrowings                                                           |  |                    | (6,579   | ) |              |   | 22,789  |  
|Repayments of long-term borrowings                                                                            |  |                    |         |   |              |   | (160    | )
|Dividends paid                                                                                                |  |                    |         |   |              |   | (2,617  | )
|                                                                                                              |  |                    |          |   |              |   |         |  
|Net cash provided by (used in) financing activities                                                           |  |                    | (6,579   | ) |              |   | 20,012  |  
|                                                                                                              |  |                    |          |   |              |   |         |  
|Effect of exchange rate changes on cash and cash equivalents                                                  |  |                    | 1,876    |   |              |   | (7,955  | )
|                                                                                                              |  |                    |          |   |              |   |         |  
|Change in cash and cash equivalents                                                                           |  |                    | (15,562  | ) |              |   | (3,821  | )
|Beginning balance                                                                                             |  |                    | 162,119  |   |              |   | 28,413  |  
|                                                                                                              |  |                    |          |   |              |   |         |  
|Ending balance                                                                                                |  | $                  | 146,557  |   |              | $ | 24,592  |  
|                                                                                                              |  |                    |          |   |              |   |         |  
|Supplemental cash flows information                                                                           |  |                    |          |   |              |   |         |  
|Cash paid during the period:                                                                                  |  |                    |          |   |              |   |         |  
|Interest                                                                                                      |  | $                  | 15,066   |   |              | $ | 13,506  |  
|Income taxes                                                                                                  |  |                    | 12,387   |   |              |   | 8,310   |  

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



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(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 comprised of a Professional Business and a Polymer Business. The Professional Business is a global marketer and manufacturer of
commercial, industrial and institutional building maintenance and sanitation products. The Polymer Business is a global marketer and manufacturer of polymer intermediates marketed to the printing and packaging, coatings, adhesives and related
industries.



|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 31, 2006 and its results of operations and cash flows for the three month period ended March 31, 2006 have been included. The results of operations for the three month period ended
March 31, 2006 is 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 30, 2005.

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 financial position, results of operations or
cash flows.

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



|3. | New Accounting Standards
|-- | ------------------------

In
December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payments (SFAS No. 123R). SFAS No. 123R replaces SFAS No. 123, Accounting for Stock-Based
Compensation, supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Generally, the approach in SFAS
No. 123R, which is effective for the Company beginning in fiscal year 2006, is similar to the approach described in SFAS No. 123. However, SFAS No. 123R requires all share-based payments to employees, including grants of employee
stock options, to be recognized in the statements of operations based on their fair values. Pro forma disclosure is no longer an alternative. The Company adopted the provisions of SFAS No. 123R using the modified prospective transition method
and recorded additional compensation expense of $90 during the three month period ended March 31, 2006.



|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 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 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 Agreement are met. JDI elected, and
Unilever agreed, to partially terminate the Agreement in several territories resulting in payment by



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JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(unaudited)

Unilever to JDI of additional fees. In
association with the partial terminations, JDI recognized sales agency fee income of $37 and $810 during the three months ended March 31, 2006 and April 1, 2005, respectively.



|5. | Lease Accounting Adjustment
|-- | ---------------------------

In the first
quarter of 2005, the Company identified inconsistencies in its accounting treatment for equipment leased to a European-based customer. Further analysis concluded that such leases should primarily be accounted for as sales-type capital leases rather
than as operating leases. The cumulative impact of the correction was recorded by the Company in the three months ended April 1, 2005. The Company concluded that the impact of the accounting error was not significant to its current year, prior
year and prior quarter consolidated financial position, results of operations or cash flows and, as such, does not require restatement of prior year amounts. Below is a summary of the adjustment with increases to key measures in the consolidated
statements of operations for the three months ended April 1, 2005:



|                 |  |   |       
|---------------- |  | - | ------
|Net sales        |  | $ | 15,333
|Gross profit     |  |   | 5,764 
|Operating profit |  |   | 5,764 
|Net income       |  |   | 3,770 



|6. | Acquisitions
|-- | ------------

In February 2006, JDI
purchased the remaining 15% of the outstanding shares of Shanghai JohnsonDiversey, Ltd., the Company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.

In February 2006, Johnson Polymer, LLC (JP),
a subsidiary of JDI, purchased the remaining 30% of the outstanding shares of Johnson Polymer Corporation, the Japanese operations of its Polymer segment, for $2,342. JP previously held 70% of the outstanding shares and included the holding in its
consolidated financial results. JDI recorded goodwill of $1,238 and unamortizable intangibles of $258 in respect of the acquisition.

Each
of the above acquisitions was accounted for under the purchase method of accounting in accordance with the step acquisition rules. Operations from the acquisitions are included in the Companys financial statements from the respective dates of
acquisition.



|7. | Divestiture of the Whitmire Micro-Gen Business
|-- | ----------------------------------------------

In June 2004, the Company completed the sale of Whitmire Micro-Gen Research Laboratories, Inc. (Whitmire) to Sorex Holdings, Ltd., a European pest-control manufacturer headquartered in the United Kingdom, for $46,000 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 and $4,000 during the three month periods ended March 31, 2006 and April 1, 2005, respectively. The income is included as a component of income from discontinued operations in the consolidated
statements of operations.



|8. | 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



5



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(unaudited)

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. As of both March 31, 2006 and December 30, 2005, JDIs total potential for securitization of trade receivables was $150,000.

In March 2006, the Receivables Facility was amended and restated to add a second conduit purchaser to the program and to allow the repurchase of the receivables generated by JP.

As of March 31, 2006 and December 30, 2005, the Conduits held $103,800 and $111,300 respectively, of accounts receivable that are not included
in the accounts receivable balance reflected in the Companys consolidated balance sheets.

As of March 31, 2006 and
December 30, 2005, JDI had a retained interest of $127,102 and $149,197 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.



|9. | Income Taxes
|-- | ------------

During the three months ended
March 31, 2006, the Company reported a negative effective tax rate, resulting primarily from increases in valuation allowances against U.S. and international deferred tax assets. In 2005 and prior periods, the Company determined that it was no
longer more likely than not that U.S. and certain other international deferred tax assets would be fully realized and recorded charges for increases in valuation allowance. The increase in valuation allowance during the three months ended
March 31, 2006 relates to certain deferred tax assets created in this period. If the November 2005 restructuring program, described in Note 11, Restructuring Liabilities, produces the results anticipated by management, the Company anticipates
that all or a portion of the valuation allowance would reverse in future periods.



|10. | Inventories
|--- | -----------

The components of inventories
are summarized as follows:



|                             |  |                |         |                   |   |        
|---------------------------- |  | -------------- | ------- | ----------------- | - | -------
|                             |  | March 31, 2006 |         | December 30, 2005
|Raw materials and containers |  | $              | 73,091  |                   | $ | 73,066 
|Finished goods               |  |                | 214,980 |                   |   | 210,607
|                             |  |                |         |                   |   |        
|Total inventories            |  | $              | 288,071 |                   | $ | 283,673
|                             |  |                |         |                   |   |        

Inventories are stated in the consolidated balance sheets net of allowance for excess and obsolete
inventory of $30,395 and $26,936 on of March 31, 2006 and December 30, 2005, respectively.



|11. | 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. The Company is also considering the potential divestiture of or exit from certain non-core or underperforming businesses.

In connection with the November 2005 Plan, the Company recognized liabilities of $42,337 in the first quarter of 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.



6



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(unaudited)

The activities associated
with the November 2005 Plan for three months ended March 31, 2006 were as follows:



|                                            |  |                  |        |   |       |   |      |       |  |   |        |  
|------------------------------------------- |  | ---------------- | ------ | - | ----- | - | ---- | ----- |  | - | ------ | -
|                                            |  | Employee-Related |        |   | Other |   |      | Total | 
|Liability balances as of December 30, 2005  |  | $                | 2,300  |   |       | $ | 47   |       |  | $ | 2,347  |  
|Liability recorded as restructuring expense |  |                  | 42,337 |   |       |   | 493  |       |  |   | 42,830 |  
|Cash paid1                                  |  |                  | (2,816 | ) |       |   | (134 | )     |  |   | (2,950 | )
|                                            |  |                  |        |   |       |   |      |       |  |   |        |  
|Liability balances as of March 31, 2006     |  | $                | 41,821 |   |       | $ | 406  |       |  | $ | 42,227 |  
|                                            |  |                  |        |   |       |   |      |       |  |   |        |  



|1 | Cash paid includes the effects of foreign exchange.
|- | ---------------------------------------------------

In addition, and in connection with the November 2005 Plan, the Company recorded additional selling, general, and administrative costs of approximately $57.6 million in the first quarter of 2006, of which $21.0
million related to long-lived asset impairment, $19.8 million related to intangible asset impairment and $16.8 million related to period costs associated with restructuring activities.

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. During the first quarter of 2006, the Company paid cash
of $1,375 representing contractual obligations associated with involuntary terminations and lease payments on closed facilities. In addition, the Company reversed $209 of reserves in association with revised assumptions, resulting in remaining
restructuring reserves of $4,127 as of March 31, 2006.



|12. | Other (Income) Expense, Net
|--- | ---------------------------

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



|                                  |  |                    |       |   |               |   |        |  
|--------------------------------- |  | ------------------ | ----- | - | ------------- | - | ------ | -
|                                  |  | Three Months Ended |      
|                                  |  | March 31, 2006     |       |   | April 1, 2005 |  
|Foreign currency translation loss |  | $                  | 1,712 |   |               | $ | 4,631  |  
|Forward contracts gain            |  |                    | (524  | ) |               |   | (4,546 | )
|Other, net                        |  |                    | 222   |   |               |   | 76     |  
|                                  |  |                    |       |   |               |   |        |  
|                                  |  | $                  | 1,410 |   |               | $ | 161    |  
|                                  |  |                    |       |   |               |   |        |  



7



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(unaudited)



|13. | 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 31, 2006 and April 1, 2005 are as
follows:



|                                      |  |                                |        |   |               |   |        |  
|------------------------------------- |  | ------------------------------ | ------ | - | ------------- | - | ------ | -
|                                      |  | Defined Pension Benefits       |       
|                                      |  | Three Months Ended             |       
|                                      |  | March 31, 2006                 |        |   | April 1, 2005 |  
|Service cost                          |  | $                              | 8,595  |   |               | $ | 8,458  |  
|Interest cost                         |  |                                | 9,028  |   |               |   | 8,507  |  
|Expected return on plan assets        |  |                                | (9,056 | ) |               |   | (7,897 | )
|Amortization of net loss              |  |                                | 2,093  |   |               |   | 2,102  |  
|Amortization of transition obligation |  |                                | 59     |   |               |   | 66     |  
|Amortization of prior service credit  |  |                                | (132   | ) |               |   | (76    | )
|                                      |  |                                |        |   |               |   |        |  
|Net periodic pension cost             |  | $                              | 10,587 |   |               | $ | 11,160 |  
|                                      |  |                                |        |   |               |   |        |  
|                                      | 
|                                      |  | Other Post-Employment Benefits |       
|                                      |  | Three Months Ended             |       
|                                      |  | March 31, 2006                 |        |   | April 1, 2005 |  
|Service cost                          |  | $                              | 749    |   |               | $ | 844    |  
|Interest cost                         |  |                                | 1,337  |   |               |   | 1,229  |  
|Amortization of net loss              |  |                                | 338    |   |               |   | 189    |  
|Amortization of transition obligation |  |                                |       |   |               |   | 72     |  
|Amortization of prior service cost    |  |                                | (47    | ) |               |   | 13     |  
|Effect of curtailments                |  |                                | (4,361 | ) |               |   |       |  
|                                      |  |                                |        |   |               |   |        |  
|Net periodic benefit cost             |  | $                              | (1,984 | ) |               | $ | 2,347  |  
|                                      |  |                                |        |   |               |   |        |  

The Company made contributions to its defined benefit pension plans of $8,252 and $7,081 during
the three months ended March 31, 2006 and April 1, 2005, 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.



|14. | 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, options to purchase its class C common stock and class B common stock. Pursuant to the offer, holders of Holdcos class C common stock who tendered shares in the offer received $139.25
in cash, without interest, for each share of class C



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(unaudited)

common stock tendered. Holders of options
received a cash payment as follows: (a) for options with an exercise price less than $139.25 per share, an amount equal to the difference between $139.25 and the exercise price for each share of class C common stock issuable upon exercise of
the options and (b) for options with an exercise price equal to or greater than $139.25 per share, $8.00 for each share of class C common stock issuable upon exercise of the options. Holders of class B common stock received $83.30 for each
share of class B common stock tendered. 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.

The Company recorded compensation expense of $77 and $309 related to restricted stock during the three months ended March 31, 2006 and April 1,
2005, respectively.

Prior to January 1, 2006, the Company accounted for stock compensation plans under the recognition and
measurement provisions of Accounting Principles Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees, and related Interpretations, as permitted by Financial Accounting Standards Board (FASB) Statement
No. 123 (SFAS 123), Accounting for Stock-Based Compensation. No stock-based employee compensation cost was recognized for stock option awards in the Consolidated Statements of Operations for the periods prior to
January 1, 2006 as all options granted under those plans had an exercise price equal to the market value of the underlying Common Stock on the date of grant. The pro forma impact of compensation expense if the Company had used the fair-value
method of accounting to measure compensation expense would have increased net loss by approximately $4,197 for the three months ended April 1, 2005.

Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123R using the modified-prospective-transition method. Under this transition method, compensation cost
recognized in the first quarter of 2006 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. There were no stock option grants made in the first quarter of 2006. Results for prior periods have not been restated.



|15. | Comprehensive Income (Loss)
|--- | ---------------------------

Comprehensive
income (loss) for the three month periods ended March 31, 2006 and April 1, 2005 was as follows:



|                                                     |  |                    |          |   |               |   |         |  
|---------------------------------------------------- |  | ------------------ | -------- | - | ------------- | - | ------- | -
|                                                     |  | Three Months Ended |         
|                                                     |  | March 31, 2006     |          |   | April 1, 2005 |  
|Net loss                                             |  | $                  | (122,202 | ) |               | $ | (13,877 | )
|Foreign currency translation adjustments             |  |                    | 15,507   |   |               |   | (41,176 | )
|Adjustments to minimum pension liability, net of tax |  |                    |         |   |               |   | (3,009  | )
|Unrealized gains (losses) on derivatives, net of tax |  |                    | 1,118    |   |               |   | 3,357   |  
|                                                     |  |                    |          |   |               |   |         |  
|Total comprehensive loss                             |  | $                  | (105,577 | ) |               | $ | (54,705 | )
|                                                     |  |                    |          |   |               |   |         |  



|16. | 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., a subsidiary of Unilever. Under the stockholders agreement, at any time after May 3, 2007, the Company has the option to purchase, and Unilever has the right, under certain conditions, to require the Company to purchase
the shares of the Company then beneficially owned by Unilever. If, after May 3, 2010, the Company is unable to fulfill its obligations in connection with the put option, Unilever may require the Company to take certain actions, including
selling certain assets of the Company. The Company revalues its Class B common stock subject to put and call options on an annual basis, based on the fair value of the business, plus an adjustment associated with the December 2005 amendment to the
stockholders agreement.



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(unaudited)

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 payment in a prior year), exceeds $727,500 in 2006, $975,000 in 2007, $1,200,000 in 2008 or $1,425,000 in 2009. The aggregate amount of these payments cannot exceed $100,000. Payment of these
amounts, which may be funded with cash flows generated by the Company, is subject to compliance with the agreements relating to the Companys and JDIs senior indebtedness including, without limitation, the JDI senior secured credit
facilities, the JDI senior subordinated notes and the Companys senior discount notes.



|17. | 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 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.



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##### Table of Contents

JOHNSONDIVERSEY HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2006

(unaudited)



|18. | Segment Information
|--- | -------------------

Business segment
information is summarized as follows:



|                                                              |  |                                   |           |   |         |   |                    |  |   |               |   |  |   |           |  
|------------------------------------------------------------- |  | --------------------------------- | --------- | - | ------- | - | ------------------ |  | - | ------------- | - |  | - | --------- | -
|                                                              |  | Three Months Ended March 31, 2006 |          
|                                                              |  | Professional                      |           |   | Polymer |   | Eliminations/Other |  |   | Total Company |  
|Net sales                                                     |  | $                                 | 696,410   |   |         | $ | 94,571             |  | $ | (4,966        | ) |  | $ | 786,015   |  
|Operating profit (loss)                                       |  |                                   | (83,141   | ) |         |   | 9,917              |  |   |              |   |  |   | (73,224   | )
|Depreciation and amortization                                 |  |                                   | 80,548    |   |         |   | 1,761              |  |   |              |   |  |   | 82,309    |  
|Interest expense                                              |  |                                   | 34,700    |   |         |   | 61                 |  |   | 8,451         |   |  |   | 43,212    |  
|Interest income                                               |  |                                   | 3,422     |   |         |   | 1,900              |  |   | (1,838        | ) |  |   | 3,484     |  
|Total assets                                                  |  |                                   | 3,130,021 |   |         |   | 266,727            |  |   | (124,823      | ) |  |   | 3,271,925 |  
|Goodwill, net                                                 |  |                                   | 1,140,930 |   |         |   | 2,888              |  |   | 13,612        |   |  |   | 1,157,430 |  
|Capital expenditures, including capitalized computer software |  |                                   | 17,923    |   |         |   | 657                |  |   |              |   |  |   | 18,580    |  
|                                                              | 
|                                                              |  | Three Months Ended April 1, 2005  |          
|                                                              |  | Professional                      |           |   | Polymer |   | Eliminations/Other |  |   | Total Company |  
|Net sales                                                     |  | $                                 | 720,443   |   |         | $ | 89,587             |  | $ | (5,670        | ) |  | $ | 804,360   |  
|Operating profit                                              |  |                                   | 12,062    |   |         |   | 9,327              |  |   |              |   |  |   | 21,389    |  
|Depreciation and amortization                                 |  |                                   | 44,549    |   |         |   | 2,546              |  |   |              |   |  |   | 47,095    |  
|Interest expense                                              |  |                                   | 31,788    |   |         |   | 77                 |  |   | 8,681         |   |  |   | 40,546    |  
|Interest income                                               |  |                                   | 1,555     |   |         |   | 620                |  |   | (601          | ) |  |   | 1,574     |  
|Total assets                                                  |  |                                   | 3,432,787 |   |         |   | 240,452            |  |   | (118,367      | ) |  |   | 3,554,872 |  
|Goodwill, net                                                 |  |                                   | 1,210,732 |   |         |   | 2,087              |  |   | 13,612        |   |  |   | 1,226,431 |  
|Capital expenditures, including capitalized computer software |  |                                   | 18,919    |   |         |   | 878                |  |   |              |   |  |   | 19,797    |  



|19. | Subsequent Event
|--- | ----------------

On May 1, 2006, JP
and JohnsonDiversey Holdings II B.V. (Holdings II), an indirectly owned subsidiary of JDI, entered into an asset and equity interest purchase agreement (the Purchase Agreement) with BASF Aktiengesellschaft (BASF).
Pursuant to the terms and conditions of the Purchase Agreement and in return for the payment of $470 million, BASF has agreed to purchase substantially all of the assets of JP, all of the equity interests in certain of JPs subsidiaries and all
of the equity interests owned by Holdings II in Johnson Polymer B.V., which assets and equity interests were previously employed in the Polymer business. BASF is required to pay the purchase price in cash at closing, which is expected to occur
June 30, 2006. The purchase price is subject to a post-closing adjustment based upon the closing net asset value of the Polymer business. Pursuant to the terms of the Purchase Agreement, BASF will not assume any liabilities of JP except those
specifically identified by the parties in conjunction with determining the closing net asset value for the Polymer business. The closing of the transactions contemplated by the Purchase Agreement is subject to a number of closing conditions,
including obtaining all necessary merger control approvals from the merger control authorities of applicable jurisdictions.

In addition,
on May 1, 2006, Holdco, Marga B.V. and the Company amended and restated the Stockholders Agreement (the Agreement) dated as of May 3, 2002. The Agreement amends certain of the terms and conditions relating to, among other
things, share transfer restrictions, corporate governance, put and call options and certain payments to Marga B.V.



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##### Table of Contents

|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 products, equipment and related services for the institutional and industrial cleaning and sanitation market. We are also a leading global supplier
of environmentally compliant, water-based acrylic polymer resins for the industrial printing and packaging, coatings and plastics markets. We sell our products in more than 140 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. For financial statement reporting purposes, our business is comprised of two operating segments: professional and polymer.

In the three months ended March 31, 2006, net sales decreased by $18.3 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 increased by 3.7%, for the three months ended March 31, 2006 as compared to the same period in the prior year.



|                              |  |                    |         |               |   |         |        |  |      |  
|----------------------------- |  | ------------------ | ------- | ------------- | - | ------- | ------ |  | ---- | -
|                              |  | Three Months Ended |         |               |   |        
|(dollars in thousands)        |  | March 31, 2006     |         | April 1, 2005 |   |         | Change | 
|Net sales                     |  | $                  | 786,015 |               | $ | 804,360 |        |  | -2.3 | %
|Variance due to:              |  |                    |         |               |   |         |        |  |      |  
|Foreign currency exchange     |  |                    |        |               |   | (34,982 | )      |  |      |  
|Acquisitions and divestitures |  |                    |        |               |   | (11,077 | )      |  |      |  
|                              |  |                    |         |               |   |         |        |  |      |  
|                              |  |                    |        |               |   | (46,059 | )      |  |      |  
|                              |  |                    |         |               |   |         |        |  |      |  
|                              |  | $                  | 786,015 |               | $ | 758,301 |        |  | 3.7  | %
|                              |  |                    |         |               |   |         |        |  |      |  

Excluding the impact of foreign currency exchange rates and acquisitions and divestitures, we
continued to show net sales growth, primarily due to price increases taking hold in all business sectors and global geographic areas, a strong performance from our core North American business and the expansion of developing markets in Asia Pacific,
Latin America, Central and Eastern Europe, Africa and the Middle East:



| |  |  | In North America, one of our largest markets, net sales increased 8.0% in the first quarter of 2006, compared to the same period in the prior year. This sales growth reflects strong
growth in all core business units and the impact of price increases in 2005 and in the first quarter of 2006. These impacts more than offset the impact of our withdraw from the service-oriented laundry and ware washing business in the United States,
which we announced on March 7, 2006.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In our Europe, Africa and Middle East region, net sales in the first quarter were flat compared to the same period in the prior year, primarily due to the impact of a correction in
the accounting treatment for certain equipment leases that increased net sales by $15.3 million in the first quarter of 2005, compared to the first quarter of 2006. Excluding the impact of this adjustment, net sales in the region grew by 5.3% during
the first quarter of 2006 compared to the first quarter of 2005. This growth was primarily due to increased sales in our Central European area and in developing countries in Eastern Europe, Africa and the Middle East.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Asia Pacific, net sales increased 6.9% in the first quarter of 2006 compared to the same period in the prior year, primarily due to growth in the food and beverage business and
the lodging and quick-service restaurant sectors.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Latin America, net sales increased 7.8% in the first quarter of 2006 compared to the same period in the prior year, driven by increased sales in the Southern Cone and Brazil,
with growth from the food and beverage business and distribution which was partially offset by lower health and hospitality sales in Mexico, where tourism is still adversely affected by hurricane damage.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

| |  |  | In Japan, net sales decreased by 7.0% in the first quarter of 2006 compared to the same period in the prior year, primarily as a result of the restructuring of the service
relationship at a core Japanese retail customer, the planned withdrawal from low margin filter sales in the food and beverage business and a change from direct selling to a joint venture for sales and distribution of select food service customers to
the Tokyo metropolitan market.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Polymer segment net sales increased by $8.4 million, or 10.3%, compared to the prior year period, due to price increases in response to the significant rise in raw material costs
experienced over the past 18 months and volume growth in Europe and North America.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Net sales under our Master Sales Agency Agreement with Unilever increased by $1.5 million, or 7.5%, compared to the prior year period and was partially offset by a decrease in
partial termination fees of $0.7 million.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Our gross profit percentages were flat in the first quarter of 2006 compared to
the fourth quarter of 2005. Our gross profit percentage decreased by 150 basis points in the first quarter of 2006 compared to the same period in 2005, as pricing actions taken in 2005 and in the first quarter of 2006 have not been able to fully
recover the unprecedented increases in key raw material costs and transportation costs. Our gross profit percentages for the five most recent fiscal quarters are set forth below:



|             |  |                    |   |  |                   |   |  |                    |   |  |              |   |  |               |  
|------------ |  | ------------------ | - |  | ----------------- | - |  | ------------------ | - |  | ------------ | - |  | ------------- | -
|             |  | Three Months Ended |  
|             |  | March 31, 2006     |   |  | December 30, 2005 |   |  | September 30, 2005 |   |  | July 1, 2005 |   |  | April 1, 2005 |  
|Consolidated |  | 39.3               | % |  | 39.1              | % |  | 41.6               | % |  | 41.9         | % |  | 40.8          | %
|             |  |                    |   |  |                   |   |  |                    |   |  |              |   |  |               |  
|Professional |  | 41.1               | % |  | 40.8              | % |  | 43.4               | % |  | 43.8         | % |  | 42.5          | %
|Polymer      |  | 25.4               | % |  | 25.2              | % |  | 26.2               | % |  | 24.9         | % |  | 26.3          | %

In November 2005, in response to the structural changes in the raw material markets that have led
to the significant increases in our input costs, we announced a program (November 2005 Plan) to implement an operational restructuring of our Company. The program also considers the potential divestiture of, or exit from, certain
non-core or underperforming businesses.

On March 7, 2006, as part of our November 2005 Plan, we announced our intention to withdraw
from a majority of the underperforming, service-oriented laundry and ware washing business in the United States. As a result of this decision, the Company severed approximately 300 employees in the first quarter of 2006 with further severances
expected throughout the course of 2006. In connection with this decision, we also announced the closure of our manufacturing facilities in East Stroudsburg, Pennsylvania and Cambridge, Maryland.

Furthermore, during the first quarter of 2006 we completed a significant amount of the detailed planning related to the November 2005 Plan and began the
transition from planning to execution. A number of key elements of this restructuring program commenced in the quarter including the reorganization of our European region around four sub-regions and the reorganization of our global and regional
marketing structures.

In connection with the aforementioned and other activities under the November 2005 Plan, we recorded charges of
approximately $42.3 million for severance costs and approximately $0.5 million for non-employee related costs. In addition, the Company recorded additional selling, general and administrative costs of approximately $57.6 million in the quarter, of
which $21.0 million were related to tangible asset impairment and $19.8 million were related to intangible asset impairment.

On
May 1, 2006, Johnson Polymer LLC (JP) and JohnsonDiversey Holdings II B.V. (Holdings II), an indirectly owned subsidiary of JDI, entered into an asset and equity interest purchase agreement (the Purchase
Agreement) with BASF Aktiengesellschaft (BASF). Pursuant to the terms and conditions of the Purchase Agreement and in return for the payment of $470 million, BASF has agreed to purchase substantially all of the assets of JP, all of
the equity interests in certain of JPs subsidiaries and all of the equity interests owned by



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Holdings II in Johnson Polymer B.V., which assets and equity interests were previously employed in the Polymer business.
BASF is required to pay the purchase price in cash at closing, which is expected to occur June 30, 2006. The purchase price is subject to a post-closing adjustment based upon the closing net asset value of the Polymer business. Pursuant to the
terms of the Purchase Agreement, BASF will not assume any liabilities of JP except those specifically identified by the parties in conjunction with determining the closing net asset value for the Polymer business. The closing of the transactions
contemplated by the Purchase Agreement is subject to a number of closing conditions, including obtaining all necessary merger control approvals from the merger control authorities of applicable jurisdictions.

In addition, on May 1, 2006, Holdco, Marga B.V. and the Company amended and restated the Stockholders Agreement (the Agreement)
dated as of May 3, 2002. The Agreement amends certain of the terms and conditions relating to, among other things, share transfer restrictions, corporate governance, put and call options and certain payments to Marga B.V.

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, substantially all of which occurs at the time shipment is made. 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.

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 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



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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 would prepare a future undiscounted cash flows analysis, determine any impairment impact and record, if necessary, a reduction in the affected asset(s). In association with the
November 2005 Plan, the Company recorded impairment charges on certain intangible assets and long-lived assets of $19.8 million and $21.0 million, respectively, for the three-month period ended March 31, 2006. There were no known impairments
recognized in the three-month period ended April 1, 2005.

Three Months Ended March 31, 2006 Compared to Three Months Ended April 1, 2005

Net Sales:



|                               |  |                    |         |               |   |         |  |   |            |   |  |      |  
|------------------------------ |  | ------------------ | ------- | ------------- | - | ------- |  | - | ---------- | - |  | ---- | -
|                               |  | Three Months Ended |         | Change        |  
|(dollars in thousands)         |  | March 31, 2006     |         | April 1, 2005 |   | Amount  |  |   | Percentage |  
|Net product and service sales: |  |                    |         |               |   |         |  |   |            |   |  |      |  
|Professional                   |  | $                  | 675,124 |               | $ | 698,760 |  | $ | (23,636    | ) |  | -3.4 | %
|Polymer (1)                    |  |                    | 89,606  |               |   | 83,917  |  |   | 5,689      |   |  | 6.8  | %
|                               |  |                    |         |               |   |         |  |   |            |   |  |      |  
|                               |  |                    | 764,730 |               |   | 782,677 |  |   | (17,947    | ) |  | -2.3 | %
|                               |  |                    |         |              
|Sales agency fee income        |  |                    | 21,285  |               |   | 21,683  |  |   | (398       | ) |  | -1.8 | %
|                               |  |                    |         |               |   |         |  |   |            |   |  |      |  
|                               |  | $                  | 786,015 |               | $ | 804,360 |  | $ | (18,345    | ) |  | -2.3 | %
|                               |  |                    |         |               |   |         |  |   |            |   |  |      |  



|(1) | Excludes inter-segment sales to the professional segment
|--- | --------------------------------------------------------



| |  |  | The strengthening of the U.S. dollar against the euro and certain other foreign currencies contributed $33.9 million to the decrease in net product and service sales, primarily
attributed to the professional segment.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates and acquisitions and divestitures, consolidated net sales in the first quarter of 2006 increased 3.7% compared to the same
period in the prior year.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency exchange rates, acquisitions and divestitures, and sales agency fee income, professional segment net sales increased 2.8% in the first
quarter of 2006 compared to the same period in the prior year, primarily due to price increases taking hold globally, a strong quarter in North America and the expansion of developing markets in Asia Pacific, Latin America, Central and Eastern
Europe, Africa and the Middle East.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In North America, one of our largest markets, net sales increased 8.0% in the first quarter of 2006, compared to the same period in the prior year. This sales growth reflects strong
growth in all core business units and the impact of price increases in 2005 and in the first quarter of 2006. These impacts more than offset the impact of our withdraw from the service-oriented laundry and ware washing business in the United States,
which we announced on March 7, 2006.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | In our Europe, Africa and Middle East region, net sales in the first quarter were flat compared to the same period in the prior year, primarily due to the impact of a correction in
the accounting treatment for certain equipment leases that increased net sales by $15.3 million in the first quarter of 2005, compared to the first quarter of 2006. Excluding the impact of this adjustment, net sales in the region grew by 5.3% during
the first quarter of 2006 compared to the first quarter of 2005. This growth was primarily due to increased sales in our Central European area and in developing countries in Eastern Europe, Africa and the Middle East.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Asia Pacific, net sales increased 6.9% in the first quarter of 2006 compared to the same period in the prior year, primarily due to growth in the food and beverage business and
the lodging and quick-service restaurant sectors.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Latin America, net sales increased 7.8% in the first quarter of 2006 compared to the same period in the prior year, driven by increased sales in the Southern Cone and Brazil,
with growth from the food and beverage business and distribution which was partially offset by lower health and hospitality sales in Mexico, where tourism is still adversely affected by hurricane damage.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | In Japan, net sales decreased by 7.0% in the first quarter of 2006 compared to the same period in the prior year, primarily as a result of the restructuring of the service
relationship at a core Japanese retail customer, the planned withdrawal from low margin filter sales in the food and beverage business and a change from direct selling to a joint venture for sales and distribution of select food service customers to
the Tokyo metropolitan market.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the foreign currency impact, polymer segment net sales increased by $8.4 million, or 10.3%, compared to the prior year period, due to price increases in response to the
significant rise in raw material costs experienced over the past 18 months and volume growth in Europe and North America.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding a $1.1 million decrease from the strengthening of the U.S. dollar against the euro and certain other foreign currencies, net sales under our Master Sales Agency Agreement
with Unilever increased by $1.5 million, or 7.5%, compared to the prior year period and was partially offset by a decrease in partial termination fees of $0.7 million.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Gross Profit:



|                                           |  |                    |         |   |               |   |         |        |  |   |            |   |  |      |  
|------------------------------------------ |  | ------------------ | ------- | - | ------------- | - | ------- | ------ |  | - | ---------- | - |  | ---- | -
|                                           |  | Three Months Ended |         |   | Change        |  
|                                           |  | March 31, 2006     |         |   | April 1, 2005 |   |         | Amount |  |   | Percentage |  
|Professional                               |  | $                  | 286,268 |   |               | $ | 305,921 |        |  | $ | (19,653    | ) |  | -6.4 | %
|Polymer                                    |  |                    | 22,800  |   |               |   | 22,089  |        |  |   | 711        |   |  | 3.2  | %
|                                           |  |                    |         |   |               |   |         |        |  |   |            |   |  |      |  
|                                           |  | $                  | 309,068 |   |               | $ | 328,010 |        |  | $ | (18,942    | ) |  | -5.8 | %
|                                           |  |                    |         |   |               |   |         |        |  |   |            |   |  |      |  
|Gross profit as a percentage of net sales: |  |                    |         |   |               |   |         |        |  |   |            |   |  |      |  
|Professional                               |  |                    | 41.1    | % |               |   | 42.5    | %      |  |   |            |   |  |      |  
|Polymer                                    |  |                    | 25.4    | % |               |   | 26.3    | %      |  |   |            |   |  |      |  
|                                           |  |                    |         |   |               |   |         |        |  |   |            |   |  |      |  
|                                           |  |                    | 39.3    | % |               |   | 40.8    | %      |  |   |            |   |  |      |  
|                                           |  |                    |         |   |               |   |         |        |  |   |            |   |  |      |  



| |  |  | The strengthening of the U.S. dollar against the euro and certain other foreign currencies decreased gross profit by $11.3 million for the three months ended March 31, 2006
compared to the same period in the prior year, primarily attributable to the professional segment.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The reduction in professional segment gross profit in the first quarter of fiscal year 2006 compared to the first quarter of fiscal year 2005 was primarily due to the impact of
increased crude oil and natural gas costs on raw materials, which had a particularly strong impact on our floorcare business, where acrylic-based polymers are common in product formulations. The segment was also adversely impacted by higher freight
and transportation costs, primarily attributable to the rise in crude oil prices and changes in U.S. transportation legislation that has affected driver hours and carrier availability. In addition, gross profit in the first quarter of 2005 included
a correction in accounting treatment for certain equipment leases which increased our European gross profit by $5.8 million compared to the current period.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | The polymer segment gross profit was up slightly for the first quarter of 2006 as compared to the first quarter of the prior year as higher crude oil and natural gas costs on key
feedstocks were offset by sales price increases and higher volumes.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We continue to be confronted with rising raw material costs and, in response, we continue to implement a mix of general and selective price increases to recover these costs, to the
extent possible, and pursue further cost reduction initiatives under our November 2005 Plan.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Operating Expenses:



|                                             |  |                    |         |   |               |   |         |        |  |            |        |  |        |  
|-------------------------------------------- |  | ------------------ | ------- | - | ------------- | - | ------- | ------ |  | ---------- | ------ |  | ------ | -
|                                             |  | Three Months Ended |         |   | Change        |  
|(dollars in thousands)                       |  | March 31, 2006     |         |   | April 1, 2005 |   |         | Amount |  | Percentage |       
|Selling, general and administrative expenses |  | $                  | 321,870 |   |               | $ | 285,766 |        |  | $          | 36,104 |  | 12.6   | %
|Research and development expenses            |  |                    | 17,801  |   |               |   | 17,459  |        |  |            | 342    |  | 2.0    | %
|Restructuring expenses                       |  |                    | 42,621  |   |               |   | 3,396   |        |  |            | 39,225 |  | 1155.0 | %
|                                             |  |                    |         |   |               |   |         |        |  |            |        |  |        |  
|                                             |  | $                  | 382,292 |   |               | $ | 306,621 |        |  | $          | 75,671 |  | 24.7   | %
|                                             |  |                    |         |   |               |   |         |        |  |            |        |  |        |  
|As a percentage of net sales:                |  |                    |         |   |               |   |         |        |  |            |        |  |        |  
|Selling, general and administrative expenses |  |                    | 40.9    | % |               |   | 35.5    | %      |  |            |        |  |        |  
|Research and development expenses            |  |                    | 2.3     | % |               |   | 2.2     | %      |  |            |        |  |        |  
|Restructuring expenses                       |  |                    | 5.4     | % |               |   | 0.4     | %      |  |            |        |  |        |  
|                                             |  |                    |         |   |               |   |         |        |  |            |        |  |        |  
|                                             |  |                    | 48.6    | % |               |   | 38.1    | %      |  |            |        |  |        |  
|                                             |  |                    |         |   |               |   |         |        |  |            |        |  |        |  



| |  |  | The strengthening of the U.S. dollar against the euro and certain other foreign currencies decreased operating expenses by $11.6 million compared to the prior year period.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency and costs associated with our restructuring programs, selling, general and administrative costs declined $3.6 million during the first
quarter of 2006 compared to the prior year period. Included within selling, general and administrative expenses in the three-month period ended March 31, 2006 was a gain of $1.2 million on the sale of our U.S. commercial laundry business and
income of $4.4 million related to the curtailment of a post-retirement medical plan in the Netherlands.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency, research and development expenses increased $0.8 million compared to the prior year period.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Excluding the impact of foreign currency, restructuring expenses increased $39.3 million compared to the prior year period, primarily due to 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 31, 2006, and since the consummation of the program in
November 2005 is outlined below.



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|                                                                        |  |                                  |        |   |                                     |   |        |  
|----------------------------------------------------------------------- |  | -------------------------------- | ------ | - | ----------------------------------- | - | ------ | -
|(dollars in thousands)                                                  |  | Three Months EndedMarch 31, 2006 |        |   | Total Project to DateMarch 31, 2006 |  
|Reserve balance at beginning of period                                  |  | $                                | 2,347  |   |                                     | $ |       |  
|Exit costs recorded as purchase accounting adjustments                  |  |                                  |       |   |                                     |   |       |  
|Restructuring costs charged to income                                   |  |                                  | 42,830 |   |                                     |   | 47,339 |  
|Liability adjustments                                                   |  |                                  |       |   |                                     |   | 383    |  
|Payments of accrued costs                                               |  |                                  | (2,950 | ) |                                     |   | (5,495 | )
|                                                                        |  |                                  |        |   |                                     |   |        |  
|Reserve balance at end of period                                        |  | $                                | 42,227 |   |                                     | $ | 42,227 |  
|                                                                        |  |                                  |        |   |                                     |   |        |  
|Period costs classified as selling, general and administrative expenses |  | $                                | 57,637 |   |                                     | $ | 73,285 |  
|Capital expenditures                                                    |  |                                  | 2,131  |   |                                     |   | 2,131  |  



| |  |  | During the first quarter of 2006, we recorded $42.8 million of restructuring costs related to our November 2005 Plan in our consolidated statements of operations. These costs
consisted primarily of involuntary termination and other costs incurred throughout North America and Europe. In addition, the Company recorded $57.6 million of selling, general and administrative expenses, of which $21.0 million related to
long-lived impairments, $19.8 million related to intangible asset impairment and $16.8 million related to period costs associated with restructuring activities.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | 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. During the first quarter of 2006, the Company paid cash of $1.4 million representing contractual obligations associated with involuntary terminations and lease payments on closed facilities. The
restructuring reserve balance associated with the exit plans and the Companys acquisition-related restructuring plans were $4.1 million as of March 31, 2006.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Non-Operating Results:



|                       |  |                    |        |   |               |   |        |        |  |   |            |   |  |       |  
|---------------------- |  | ------------------ | ------ | - | ------------- | - | ------ | ------ |  | - | ---------- | - |  | ----- | -
|                       |  | Three Months Ended |        |   | Change        |  
|(dollars in thousands) |  | March 31, 2006     |        |   | April 1, 2005 |   |        | Amount |  |   | Percentage |  
|Interest expense       |  | $                  | 43,212 |   |               | $ | 40,546 |        |  | $ | 2,666      |   |  | 6.6   | %
|Interest income        |  |                    | (3,484 | ) |               |   | (1,574 | )      |  |   | (1,910     | ) |  | 121.3 | %
|                       |  |                    |        |   |               |   |        |        |  |   |            |   |  |       |  
|Net interest expense   |  |                    | 39,728 |   |               |   | 38,972 |        |  |   | 756        |   |  | 1.9   | %
|Other expense, net     |  |                    | 1,410  |   |               |   | 161    |        |  |   | 1,249      |   |  | 775.8 | %



| |  |  | Net interest expense in the first quarter of 2006 was flat compared to the prior year period. Increased interest expenses associated with higher debt levels resulting from
additional borrowings on the Term B loan in conjunction with the December 2005 amendment to our senior secured credit facility and higher short-term interest rates were offset by higher interest income on short-term investments and the impact of
foreign exchange rates.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Other expense, net, increased compared to the prior year period, primarily due to higher net losses from foreign currency translation and transactions.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



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Income Taxes:



|                                                                                                               |  |                    |          |   |               |   |         |        |  |   |            |   |  |         |  
|-------------------------------------------------------------------------------------------------------------- |  | ------------------ | -------- | - | ------------- | - | ------- | ------ |  | - | ---------- | - |  | ------- | -
|                                                                                                               |  | Three Months Ended |          |   | Change        |  
|(dollars in thousands)                                                                                         |  | March 31, 2006     |          |   | April 1, 2005 |   |         | Amount |  |   | Percentage |  
|Loss from continuing operations, including minority interests, before income taxes and discontinued operations |  | $                  | (114,364 | ) |               | $ | (17,844 | )      |  | $ | (96,520    | ) |  | 540.9   | %
|Provision for income taxes                                                                                     |  |                    | 7,962    |   |               |   | 33      |        |  |   | 7,929      |   |  | 24027.3 | %
|Effective income tax rate                                                                                      |  |                    | -7.0     | % |               |   | -0.2    | %      |  |   |            |   |  |         |  



| |  |  | For both the three months ended March 31, 2006 and April 1, 2005, the Company reported a negative effective tax rate from continuing operations. As a result of increases
in valuation allowances, U.S. and other certain international tax reporting entities with losses have not claimed tax benefit while other profitable tax reporting entities reported income tax expense at or near their statutory tax rate. The negative
effective tax rate for the three months ended March 31, 2006 occurred on a larger base of pre-tax loss primarily due to increases in valuation allowances against U.S. deferred tax assets which were not recorded in the three months ended
April 1, 2005.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Net Loss:

Our net loss increased by $108.3 million, to $122.2 million for the first quarter of 2006 compared to $13.9 million for the first quarter of 2005, primarily due to an increase of $90.1 million in restructuring costs and other period costs
associated with the November 2005 Plan, raw material cost increases not fully offset by pricing actions and an increase in income tax expense.

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



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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 31, 2006 and April 1, 2005.



|                                                                                                            |  |                    |          |   |               |   |         |  
|----------------------------------------------------------------------------------------------------------- |  | ------------------ | -------- | - | ------------- | - | ------- | -
|                                                                                                            |  | Three Months Ended |         
|(dollars in thousands)                                                                                      |  | March 31, 2006     |          |   | April 1, 2005 |  
|Net cash flows provided by (used in) operating activities                                                   |  | $                  | 13,512   |   |               | $ | (2,031  | )
|Changes in operating assets and liabilities, net of effectsfrom acquisitions and divestitures of businesses |  |                    | (36,247  | ) |               |   | 44,583  |  
|Changes in deferred income taxes                                                                            |  |                    | (3,083   | ) |               |   | 4,601   |  
|Gain from divestitures                                                                                      |  |                    | 1,311    |   |               |   | 4,604   |  
|Gain (loss) on property disposals                                                                           |  |                    | 118      |   |               |   | (2,648  | )
|Depreciation and amortization expense                                                                       |  |                    | (82,309  | ) |               |   | (47,095 | )
|Amortization of debt issuance costs                                                                         |  |                    | (1,735   | ) |               |   | (2,257  | )
|Interest accreted on notes payable                                                                          |  |                    | (9,628   | ) |               |   | (9,222  | )
|Interest accrued on long-term receivables-related parties                                                   |  |                    |         |   |               |   | 908     |  
|Other                                                                                                       |  |                    | (4,141   | ) |               |   | (5,320  | )
|                                                                                                            |  |                    |          |   |               |   |         |  
|Net loss                                                                                                    |  |                    | (122,202 | ) |               |   | (13,877 | )
|                                                                                                            |  |                   
|Minority interests in net income of subsidiaries                                                            |  |                    | 2        |   |               |   | 100     |  
|Provision for income taxes                                                                                  |  |                    | 7,962    |   |               |   | 33      |  
|Interest expense, net                                                                                       |  |                    | 39,728   |   |               |   | 38,972  |  
|Depreciation and amortization expense                                                                       |  |                    | 82,309   |   |               |   | 47,095  |  
|                                                                                                            |  |                    |          |   |               |   |         |  
|EBITDA                                                                                                      |  | $                  | 7,799    |   |               | $ | 72,323  |  
|                                                                                                            |  |                    |          |   |               |   |         |  

EBITDA decreased by $64.5 million in the first quarter of 2006 as compared to the first quarter of
2005, primarily due to a $49.3 million increase in restructuring costs and severance-related selling, general and administrative costs related to our November 2005 Plan and raw material cost increases not fully offset by pricing actions. In
addition, EBITDA in the first quarter of 2005 included a correction in accounting treatment for certain equipment leases which increased our EBITDA by $5.8 million compared to the current period.

Liquidity and Capital Resources



|                                                    |  |                    |           |   |                   |   |           |        |  |   |            |   |  |        |  
|--------------------------------------------------- |  | ------------------ | --------- | - | ----------------- | - | --------- | ------ |  | - | ---------- | - |  | ------ | -
|                                                    |  | Three Months Ended |           |   | Change            |  
|(dollars in thousands)                              |  | March 31, 2006     |           |   | April 1, 2005     |   |           | Amount |  |   | Percentage |  
|Net cash provided by (used in) operating activities |  | $                  | 13,512    |   |                   | $ | (2,031    | )      |  | $ | 15,543     |   |  | -765.3 | %
|Net cash used in investing activities               |  |                    | (24,371   | ) |                   |   | (13,847   | )      |  |   | (10,524    | ) |  | 76.0   | %
|Net cash provided by (used in) financing activities |  |                    | (6,579    | ) |                   |   | 20,012    |        |  |   | (26,591    | ) |  | -132.9 | %
|Capital expenditures                                |  |                    | 18,580    |   |                   |   | 19,797    |        |  |   | (1,217     | ) |  | -6.1   | %
|                                                    |  |                    |          
|                                                    |  |                    |           |   |                   |   |           | Change | 
|                                                    |  | March 31, 2006     |           |   | December 30, 2005 |   |           | Amount |  |   | Percentage |  
|Cash and cash equivalents                           |  | $                  | 146,557   |   |                   | $ | 162,119   |        |  | $ | (15,562    | ) |  | -9.6   | %
|Working capital (1)                                 |  |                    | 430,966   |   |                   |   | 419,653   |        |  |   | 11,313     |   |  | 2.7    | %
|Total debt                                          |  |                    | 1,727,776 |   |                   |   | 1,727,956 |        |  |   | (180       | ) |  | 0.0    | %



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



| |  |  | The decrease in cash and cash equivalents at March 31, 2006 compared to December 30, 2005 resulted primarily from cash used during the quarter to fund activities related
to the November 2005 Plan and capital expenditures.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in net cash provided by operating activities during the three months ended March 31, 2006 compared to the prior year period was primarily due to changes in
inventory levels.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in net cash used in investing activities during the three months ended March 31, 2006 compared to the prior year period was primarily due to a $4.7 million
decrease in proceeds received from
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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divestitures, and a $4.7 million increase in cash used for acquiring businesses. 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 net cash provided by financing activities during the three months ended March 31, 2006 compared to the prior year period was primarily due to the Company having
adequate cash on-hand.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The increase in working capital during the three months ended March 31, 2006 was due to a $12.5 million decrease in accounts payable, resulting from a five-day reduction in
average days in trade accounts payable, and a $4.4 million increase in inventories, resulting from increased raw material costs and a seasonal build in inventory levels, partially offset by a $5.6 million reduction 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 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 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 of up to $775 million that matures on December 10, 2011. In addition,
the amended facilities include a committed delayed draw term facility of up to $100 million, which is available to be drawn until December 16, 2006 and would mature on December 16, 2010. The amended facilities also provide for an increase
in the revolving credit facility of up to $25 million under specified circumstances. As of March 31, 2006, we had $7 million in letters of credit outstanding under the revolving portion of the senior secured credit facilities and therefore had
the ability to borrow $168 million under those revolving facilities.

As of March 31, 2006, excluding indebtedness held by JDI,
Holdings only indebtedness consisted of $319.8 million in senior discount notes. As of March 31, 2006, Holdings subsidiaries had total indebtedness of $1.4 billion, consisting of $572.1 million of JDI senior subordinated notes, $775.0
million of borrowings under the JDI senior secured credit facilities, $22.7 million of other long-term borrowings and $38.2 million in short-term credit lines. In addition, we had $216.8 million in operating lease commitments, $2.4 million in
capital lease commitments and $7.3 million committed under letters of credit that expire in 2006.

We believe that the cash flows from
operations, together with available cash, borrowings under JDIs amended and restated senior secured credit facilities and the proceeds from JDIs receivables securitization facility



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will generate sufficient cash flow to meet our liquidity needs for the foreseeable future, including our restructuring programs. Please refer to our
forward-looking statements for potential risks associated with our restructuring programs.

We have obligations related to our pension and
post-retirement plans that are discussed in detail in Note 13 of the Notes to Consolidated Financial Statements. As of the most recent actuarial measurement date, we anticipate making $33.8 million of contributions to pension plans in fiscal year
2006. Post-retirement medical claims are paid as they are submitted and are anticipated to be $3.6 million in fiscal year 2006

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 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 31, 2006 and December 30, 2005, our total potential for securitization
of trade receivables was $150 million.

As of March 31, 2006 and December 30, 2005, the Conduits held $104 million and $111
million, respectively, of accounts receivable that are not included in the accounts receivable balance reflected in our consolidated balance sheets.

As March 31, 2006 and December 30, 2005, JDI had a retained interest of $127 million and $149 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.

For the three months ended March 31, 2006,
JWPRCs cost of borrowing under the Receivables Facility was at a weighted average rate of 6.37% 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.

Financial Covenants
under Our Senior Secured Credit Facilities

Under the amended terms of the JDI senior secured credit facilities, we are subject to
certain financial covenants. The most restrictive covenants under the JDI 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 six-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:



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|                   |  |                       
|------------------ |  | ----------------------
|                   |  | Maximum Leverage Ratio
|March 31, 2006     |  | 5.00 to 1             
|June 30, 2006      |  | 5.00 to 1             
|September 30, 2006 |  | 5.00 to 1             
|December 31, 2006  |  | 5.00 to 1             
|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             

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 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, 2006                    |  | 2.00 to 1                      
|June 30, 2006                     |  | 2.00 to 1                      
|September 30, 2006                |  | 2.00 to 1                      
|December 31, 2006                 |  | 2.00 to 1                      
|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 31, 2006, JDI was in compliance with the maximum leverage ratio and minimum interest coverage ratio covenants contained in the JDI senior secured credit facilities.



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Capital Expenditures. Capital expenditures are generally limited under the JDI senior secured
credit facilities to $150 million in each fiscal year and to $130 million for fiscal years following the fiscal year in which any sale of our polymer business occurs. 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 31, 2006, JDI was in compliance with the limitation on capital expenditures for fiscal year 2006.

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 31, 2006, 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



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

Interest Rate Risk

As of March 31, 2006, JDI had $775.0 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 its credit facilities, $556.3 million of the debt outstanding remained subject to variable rates.
JDI also has entered into interest rate swap agreements with a notional value of 146 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 31, 2006, JDI had $60.9 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.



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ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of JohnsonDiversey Holdings
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.

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.



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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. In the professional
accounting literature, significant deficiencies are referred to as reportable conditions, which are control issues 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, 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



|     |  |                                                                                                                                                                   
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1  |  | Asset and Equity Interest Purchase Agreement, dated May 1, 2006, by and among Johnson Polymer, LLC, JohnsonDiversey Holdings II B.V. and BASF Aktiengesellschaft  
|     | 
|10.1 |  | Amended and Restated Stockholders Agreement, dated as of May 1, 2006 by and among JohnsonDiversey Holdings, Inc., Commercial Markets Holdco, Inc., and Marga B.V.
|     | 
|10.2 |  | Lease Amendment, Assignment and Assumption Agreement dated as of May 1, 2006 by and among S.C. Johnson & Son, Inc., JohnsonDiversey, Inc. and Johnson Polymer, LLC
|     | 
|10.3 |  | Lease Assignment and Assumption Agreement dated as of May 1, 2006 by and among S.C. Johnson & Son, Inc., JohnsonDiversey, Inc. and Johnson Polymer, LLC           
|     | 
|10.4 |  | Termination Agreement dated as of May 1, 2006 by and between S.C. Johnson & Son, Inc. and Johnson Polymer, LLC                                                    
|     | 
|10.5 |  | Assignment and Assumption Agreement dated as of May 1, 2006 by and among S.C. Johnson & Son, Inc., JohnsonDiversey, Inc. and Johnson Polymer, LLC                 
|     | 
|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 11, 2006 |  | /s/    Joseph F. Smorada                                     
|                   |  | Joseph F. Smorada, Vice President and Chief Financial Officer



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JOHNSONDIVERSEY HOLDINGS, INC.

EXHIBIT INDEX



|              |  |                                                                                                                                                                   
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Exhibit                                                                                                                                            
|4.1           |  | Asset and Equity Interest Purchase Agreement, dated May 1, 2006, by and among Johnson Polymer, LLC, JohnsonDiversey Holdings II B.V. and BASF Aktiengesellschaft  
|              | 
|10.1          |  | Amended and Restated Stockholders Agreement, dated as of May 1, 2006 by and among JohnsonDiversey Holdings, Inc., Commercial Markets Holdco, Inc., and Marga B.V.
|              | 
|10.2          |  | Lease Amendment, Assignment and Assumption Agreement dated as of May 1, 2006 by and among S.C. Johnson & Son, Inc., JohnsonDiversey, Inc. and Johnson Polymer, LLC
|              | 
|10.3          |  | Lease Assignment and Assumption Agreement dated as of May 1, 2006 by and among S.C. Johnson & Son, Inc., JohnsonDiversey, Inc. and Johnson Polymer, LLC           
|              | 
|10.4          |  | Termination Agreement dated as of May 1, 2006 by and between S.C. Johnson & Son, Inc. and Johnson Polymer, LLC                                                    
|              | 
|10.5          |  | Assignment and Assumption Agreement dated as of May 1, 2006 by and among S.C. Johnson & Son, Inc., JohnsonDiversey, Inc. and Johnson Polymer, LLC                 
|              | 
|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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