##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTER ENDED 
June 29, 2007
    
    COMMISSION FILE NUMBER
1-11781
 DAYTON SUPERIOR CORPORATION
  DELAWARE
    
    31-0676346(State or other jurisdiction of 
Incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 7777 Washington Village Dr., Suite 130
Dayton, Ohio
    
    45459(Address of principal 
executive offices)
    
    (Zip Code)
 937-428-6360
 
  þ o
  o o þ
 o þ




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TABLE OF CONTENTS  Part I.  Financial InformationItem 1  Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market Risk.Item 4. Controls and Procedures.Part II.  Other InformationItem 2. Unregistered Sales of Equity Securities and Use of Proceeds.Item 4. Submission of Items to a Vote of Security Holders.Item 6. ExhibitsSIGNATURESINDEX OF EXHIBITSEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 Part I.  Financial Information
 
 Item 1  Financial Statements
 
 June 29,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    26,813Accounts receivable, net of allowances for doubtful accounts and
sales returns and allowances of $5,083 and $5,430
    
    
    86,570
    
    
    
    71,548Inventories
    
    
    73,472
    
    
    
    58,396Prepaid expenses and other current assets
    
    
    8,751
    
    
    
    5,907Prepaid income taxes
    
    
    738
    
    
    
    320Total current assets
    
    
    169,531
    
    
    
    162,984Rental equipment, net of accumulated depreciation of $68,356 and $63,469
    
    
    68,010
    
    
    
    63,766Property, plant and equipment, net of accumulated depreciation of
$56,273 and $57,932
    
    
    50,362
    
    
    
    45,697Goodwill
    
    
    43,643
    
    
    
    43,643Intangible assets, net of accumulated amortization
    
    
    3,534
    
    
    
    5,062Other assets
    
    
    1,435
    
    
    
    483Total assets
    
    $
    336,515
    
    
    $
    321,635LIABILITIES AND STOCKHOLDERS DEFICITCurrent liabilities:Current maturities of long-term debt
    
    $
    3,258
    
    
    $
    2,551Accounts payable
    
    
    37,891
    
    
    
    40,883Accrued compensation and benefits
    
    
    13,361
    
    
    
    18,001Accrued interest
    
    
    6,133
    
    
    
    6,234Accrued freight
    
    
    5,090
    
    
    
    4,849Other accrued liabilities
    
    
    8,650
    
    
    
    9,111Total current liabilities
    
    
    74,383
    
    
    
    81,629Revolving credit facility
    
    
    20,000
    
    
    
    Other long-term debt, net of current portion
    
    
    320,897
    
    
    
    319,899Deferred income taxes
    
    
    11,357
    
    
    
    11,354Other long-term liabilities
    
    
    9,228
    
    
    
    10,297Total liabilities
    
    
    435,865
    
    
    
    423,179Stockholders deficit:Common stock, $0.01 par value, 100,000,000 shares authorized,
19,066,212 and 18,773,283 shares issued and outstanding, 754,476
shares unvested
    
    
    191
    
    
    
    188Additional paid-in capital
    
    
    205,768
    
    
    
    201,602Loans to stockholders
    
    
    (1,135
    )
    
    
    (2,268
    )Accumulated other comprehensive loss
    
    
    (313
    )
    
    
    (981
    )Accumulated deficit
    
    
    (303,861
    )
    
    
    (300,085
    )Total stockholders deficit
    
    
    (99,350
    )
    
    
    (101,544
    )Total liabilities and stockholders deficit
    
    $
    336,515
    
    
    $
    321,635
 
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##### Table of Contents



Three Fiscal Months Ended
    
    
    Six Fiscal Months EndedJune 29,
    
    
    June 30,
    
    
    June 29,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Product sales
    
    $
    117,174
    
    
    $
    109,459
    
    
    $
    197,350
    
    
    $
    192,683Rental revenue
    
    
    14,931
    
    
    
    14,890
    
    
    
    29,504
    
    
    
    28,153Used rental equipment sales
    
    
    5,411
    
    
    
    5,866
    
    
    
    9,684
    
    
    
    10,710Net sales
    
    
    137,516
    
    
    
    130,215
    
    
    
    236,538
    
    
    
    231,546Product cost of sales
    
    
    83,334
    
    
    
    80,921
    
    
    
    143,766
    
    
    
    146,403Rental cost of sales
    
    
    8,252
    
    
    
    8,791
    
    
    
    16,345
    
    
    
    16,730Used rental equipment cost of sales
    
    
    1,507
    
    
    
    1,775
    
    
    
    2,633
    
    
    
    3,192Cost of sales
    
    
    93,093
    
    
    
    91,487
    
    
    
    162,744
    
    
    
    166,325Product gross profit
    
    
    33,840
    
    
    
    28,538
    
    
    
    53,584
    
    
    
    46,280Rental gross profit
    
    
    6,679
    
    
    
    6,099
    
    
    
    13,159
    
    
    
    11,423Used rental equipment gross profit
    
    
    3,904
    
    
    
    4,091
    
    
    
    7,051
    
    
    
    7,518Gross profit
    
    
    44,423
    
    
    
    38,728
    
    
    
    73,794
    
    
    
    65,221Selling, general and administrative
expenses
    
    
    26,550
    
    
    
    24,909
    
    
    
    51,703
    
    
    
    48,509Facility closing and severance expenses
    
    
    83
    
    
    
    26
    
    
    
    451
    
    
    
    277Stock compensation expense
    
    
    707
    
    
    
    36
    
    
    
    1,366
    
    
    
    62(Gain) loss on disposals of property,
plant, and equipment
    
    
    178
    
    
    
    (667
    )
    
    
    261
    
    
    
    (1,336
    )Amortization of intangibles
    
    
    45
    
    
    
    176
    
    
    
    91
    
    
    
    327Income from operations
    
    
    16,860
    
    
    
    14,248
    
    
    
    19,922
    
    
    
    17,382Other expenses:Interest expense
    
    
    12,126
    
    
    
    12,465
    
    
    
    23,311
    
    
    
    24,621Interest income
    
    
    (42
    )
    
    
    (8
    )
    
    
    (177
    )
    
    
    (27
    )Other expense (income)
    
    
    221
    
    
    
    206
    
    
    
    333
    
    
    
    154Income (loss) before provision for
income taxes
    
    
    4,555
    
    
    
    1,585
    
    
    
    (3,545
    )
    
    
    (7,366
    )Provision for income taxes
    
    
    172
    
    
    
    91
    
    
    
    231
    
    
    
    215Net income (loss)
    
    $
    4,383
    
    
    $
    1,494
    
    
    $
    (3,776
    )
    
    $
    (7,581
    )Basic net income (loss) per common
share
    
    $
    0.24
    
    
    $
    0.15
    
    
    $
    (0.21
    )
    
    $
    (0.76
    )Average number of shares of common
stock outstanding
    
    
    18,297,728
    
    
    
    9,917,316
    
    
    
    18,253,636
    
    
    
    9,917,316Diluted net income (loss) per common
share
    
    $
    0.23
    
    
    $
    0.15
    
    
    $
    (0.21
    )
    
    $
    (0.76
    )Average number of shares of common
stock and equivalents outstanding
    
    
    19,319,773
    
    
    
    10,169,794
    
    
    
    18,253,636
    
    
    
    9,917,316
 
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Six Fiscal Months EndedJune 29, 2007
    
    
    June 30, 2006Cash Flows From Operating Activities:Net loss
    
    $
    (3,776
    )
    
    $
    (7,581
    )Adjustments to reconcile net income to net cash used in operating activities:Depreciation
    
    
    11,833
    
    
    
    11,887Amortization of intangibles
    
    
    91
    
    
    
    327Stock compensation expense
    
    
    1,366
    
    
    
    62Deferred income taxes
    
    
    2
    
    
    
    Amortization of deferred financing costs and debt discount
    
    
    3,569
    
    
    
    2,799Amortization of deferred gain on sale-leaseback transactions
    
    
    (811
    )
    
    
    (1,862
    )Gain on sales of rental equipment
    
    
    (7,056
    )
    
    
    (7,517
    )(Gain) loss on sales of property, plant and equipment
    
    
    525
    
    
    
    (13
    )Changes in assets and liabilities:Accounts receivable
    
    
    (15,022
    )
    
    
    (13,062
    )Inventories
    
    
    (15,076
    )
    
    
    (4,001
    )Prepaid expenses and other assets
    
    
    (3,753
    )
    
    
    (1,520
    )Prepaid income taxes
    
    
    (417
    )
    
    
    (219
    )Accounts payable
    
    
    978
    
    
    
    3,687Accrued liabilities and other long-term liabilities
    
    
    (5,219
    )
    
    
    572Net cash used in operating activities
    
    
    (32,766
    )
    
    
    (16,441
    )Cash Flows From Investing Activities:Property, plant and equipment additions
    
    
    (10,018
    )
    
    
    (4,103
    )Proceeds from sales of property, plant and equipment
    
    
    5
    
    
    
    21Rental equipment additions
    
    
    (15,259
    )
    
    
    (10,531
    )Proceeds from sales of rental equipment
    
    
    9,684
    
    
    
    10,710Net cash used in investing activities
    
    
    (15,588
    )
    
    
    (3,903
    )Cash Flows From Financing Activities:Borrowings under revolving credit facility
    
    
    49,500
    
    
    
    77,950Repayments of revolving credit facility
    
    
    (29,500
    )
    
    
    (56,700
    )Repayments of other long-term debt
    
    
    (453
    )
    
    
    (1,159
    )Financing costs incurred
    
    
    (633
    )
    
    
    Changes in loans to stockholders
    
    
    1,133
    
    
    
    (17
    )Issuance of shares of common stock
    
    
    826
    
    
    
    Net cash provided by financing activities
    
    
    20,873
    
    
    
    20,074Effect of Exchange Rate Changes on Cash and Cash Equivalents
    
    
    668
    
    
    
    270Net decrease in cash and cash equivalents
    
    
    (26,813
    )
    
    
    Cash and cash equivalents, beginning of period
    
    
    26,813
    
    
    
    Cash, end of period
    
    $
    
    
    
    $
    Supplemental Disclosures:Cash paid for income taxes
    
    $
    268
    
    
    $
    284Cash paid for interest
    
    
    19,843
    
    
    
    21,699Property, plant and equipment and rental equipment additions in accounts payable
    
    
    2,760
    
    
    
    1,563Rental equipment acquired under capital lease
    
    
    
    
    
    
    1,200Reclassification of common shares due to expiration of put option
    
    
    
    
    
    
    6
 
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Three Fiscal Months Ended
    
    
    Six Fiscal Months EndedJune 29, 2007
    
    
    June 30, 2006
    
    
    June 29, 2007
    
    
    June 30, 2006Net income (loss)
    
    $
    4,383
    
    
    $
    1,494
    
    
    $
    (3,776
    )
    
    $
    (7,581
    )Other comprehensive gain:Foreign currency
translation adjustment
    
    
    592
    
    
    
    287
    
    
    
    668
    
    
    
    270Comprehensive income (loss)
    
    $
    4,975
    
    
    $
    1,781
    
    
    $
    (3,108
    )
    
    $
    (7,311
    )
 
 5




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##### Table of Contents



Dayton Superior Corporation and Subsidiary
Notes to Condensed Consolidated Financial Statements
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 (1) Condensed Consolidated Financial Statements
  (2) Accounting Policies
  (a)
    
    Fiscal Quarter  The Companys fiscal year end is December 31. The Companys
fiscal quarters are defined as the 13-week periods ending on a Friday near the end of
March, June and September.(b)
    
    Inventories  The Company values all inventories at the lower of first-in,
first-out (FIFO) cost or market. The Company provides net realizable value reserves which
reflect the Companys best estimate of the excess of the cost of potential obsolete and
slow moving inventory over the expected net realizable value.
  June 29, 2007
    
    December 31, 2006Raw materials
    
    $
    20,119
    
    
    $
    14,095Work in progress
    
    
    3,675
    
    
    
    2,282Finished goods
    
    
    49,678
    
    
    
    42,019Total Inventory
    
    $
    73,472
    
    
    $
    58,396
 (c)
    
    Income (Loss) Per Share of Common Stock  Basic income (loss) per share of
common stock is computed by dividing net income (loss) by the weighted average number of
vested shares of common stock outstanding during the period. Diluted income (loss) per
share is computed by
 6




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dividing net income (loss) by the weighted average number of shares of common stock and
common stock equivalents outstanding, if dilutive, during each period. The Companys common
stock equivalents consist of unvested shares, warrants, and stock options, and their effect
is calculated using the treasury stock method. For the six months ended June 29, 2007 and
June 30, 2006, common stock equivalents of 1,018,644 and 252,478 respectively, were not
included as their effect would have been anti-dilutive.
 (d)
    
    New Accounting Pronouncements  In June 2006, the Financial Accounting
Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, which prescribes a recognition threshold and measurement attribute for the financial
statement recognition and measurement of a tax position taken or expected to be taken in a
tax return. This Interpretation also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure, and transition. The
Company complied with the provisions of Interpretation No. 48 as of January 1, 2007. The
Company files income tax returns in the United States, Canada, and various state, local,
and provincial jurisdictions. The Company is subject to U.S. Federal income tax examination
for 2003 through 2005, and in other jurisdictions for 1999 through 2006. Use of net
operating losses from years prior to these may re-open the examination period for those
prior years. The Company recognizes interest and penalties as a component of provision for
income taxes. Due to the Companys net operating loss and related valuation allowance, the
adoption of Interpretation No. 48 did not have a material impact on the condensed
consolidated financial statements. The amount of unrecognized tax benefit from uncertain
tax positions as of January 1, 2007, was not material and no material changes occurred
related to the unrecognized tax benefit for the three and six months ended June 29, 2007.
The Company does not expect any material changes in its uncertain tax positions for the
remainder of 2007.
 Fair Value Measurements
 The Fair Value Option for Financial Assets
and Financial Liabilities
 (3) Credit Arrangements
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Three fiscal months ended
    
    Six fiscal months endedJune 29, 2007
    
    June 30, 2006
    
    June 29, 2007
    
    June 30, 2006Revolving Credit Facility:Average borrowings
    
    $
    14,427
    
    
    $
    74,560
    
    
    $
    8,008
    
    
    $
    66,963Maximum borrowing
    
    
    25,750
    
    
    
    77,950
    
    
    
    25,750
    
    
    
    77,950Weighted averageinterest rate
    
    
    13.0%
    
    
    
    7.9%
    
    
    
    17.0%
    
    
    
    7.8%
   June 29,
    
    
    December 31,2007
    
    
    2006Senior Second Secured Notes, interest rate of 10.75%
    
    $
    165,000
    
    
    $
    165,000Debt discount on Senior Second Secured Notes
    
    
    (2,328
    )
    
    
    (3,208
    )Senior Subordinated Notes, interest rate of 13.0%
    
    
    154,729
    
    
    
    154,729Debt discount on Senior Subordinated Notes
    
    
    (3,925
    )
    
    
    (4,746
    )Senior notes payable to seller of Safway,
non-interest bearing, accreted at 6.0% (secured) to
14.5% (unsecured)
    
    
    7,743
    
    
    
    7,286Debentures previously held by Dayton Superior
Capital Trust, interest rate of 9.1%, due on demand
    
    
    1,057
    
    
    
    1,063Capital lease obligations
    
    
    1,879
    
    
    
    2,326Total long-term debt
    
    
    324,155
    
    
    
    322,450Less current maturities
    
    
    (3,258
    )
    
    
    (2,551
    )Long-term portion
    
    $
    320,897
    
    
    $
    319,899
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(4) Stock Option Plans
  Granted and outstanding
    
    
    726,453Granted and exercised
    
    
    122,998Available for granting
    
    
    817,753Total
    
    
    1,667,204
  Accounting for Stock-Based Compensation
  Weighted Average
    
    
    
    
    
    Weighted AverageNumber of
    
    Exercise Price Per
    
    Unvested Number of
    
    Grant-Date Value
    
    Aggregate IntrinsicShares
    
    Share
    
    Shares
    
    Per Share
    
    ValueOutstanding at
December 31, 2006
    
    
    859,445
    
    
    $
    11.93
    
    
    
    592,790
    
    
    $
    3.02
    
    
    $
    293Granted
    
    
    17,872
    
    
    
    12.00
    
    
    
    17,872
    
    
    
    0.70
    
    
    
    (30
    )Vested
    
    
    
    
    
    
    
    
    
    
    (17,872
    )
    
    
    0.70Exercised
    
    
    (20,641
    )
    
    
    8.74
    
    
    
    
    
    
    
    
    
    
    
    (65
    )Expired
    
    
    (20,592
    )
    
    
    12.49
    
    
    
    Forfeited
    
    
    (109,541
    )
    
    
    12.51
    
    
    
    (109,541
    )
    
    
    3.30Outstanding at June
29, 2007
    
    
    726,543
    
    
    $
    11.92
    
    
    
    483,249
    
    
    $
    2.96
    
    
    $
    406
   9




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(5) Retirement Plans
    Pension BenefitsFor the three
    
    
    For the three
    
    
    For the six
    
    
    For the sixfiscal months ended
    
    
    fiscal months ended
    
    
    fiscal months ended
    
    
    fiscal months endedJune 29, 2007
    
    
    June 30, 2006
    
    

June 29, 2007
    
    

June 30, 2006Service cost
    
    $
    172
    
    
    $
    176
    
    
    $
    344
    
    
    $
    351Interest cost
    
    
    206
    
    
    
    187
    
    
    
    411
    
    
    
    375Expected return on plan assets
    
    
    (243
    )
    
    
    (207
    )
    
    
    (486
    )
    
    
    (414
    )Amortization of prior service cost
    
    
    2
    
    
    
    3
    
    
    
    4
    
    
    
    7Amortization of net loss
    
    
    19
    
    
    
    33
    
    
    
    38
    
    
    
    66Net periodic benefit cost
    
    $
    156
    
    
    $
    192
    
    
    $
    311
    
    
    $
    385Symons Postretirement BenefitsFor the three
    
    
    For the three
    
    
    For the six
    
    
    For the sixfiscal months ended
    
    
    fiscal months ended
    
    
    fiscal months ended
    
    
    fiscal months endedJune 29, 2007
    
    
    June 30, 2006
    
    

June 29, 2007
    
    

June 30, 2006Service cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest cost
    
    
    8
    
    
    
    7
    
    
    
    15
    
    
    
    14Expected return on plan assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    6
    
    
    
    6
    
    
    
    12
    
    
    
    12Amortization of net loss
    
    
    (2
    )
    
    
    (2
    )
    
    
    (4
    )
    
    
    (5
    )Net periodic benefit cost
    
    $
    12
    
    
    $
    11
    
    
    $
    23
    
    
    $
    21
 10




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##### Table of Contents



(6) Segment Reporting
       Three Fiscal Months Ended
    
    
    Six Fiscal Months EndedJune 29, 2007
    
    
    June 30, 2006
    
    
    June 29, 2007
    
    
    June 30, 2006Product sales
    
    $
    117,174
    
    
    $
    109,459
    
    
    $
    197,350
    
    
    $
    192,683Rental revenue
    
    
    14,931
    
    
    
    14,890
    
    
    
    29,504
    
    
    
    28,153Used rental equipment sales
    
    
    5,411
    
    
    
    5,866
    
    
    
    9,684
    
    
    
    10,710Net sales
    
    
    137,516
    
    
    
    130,215
    
    
    
    236,538
    
    
    
    231,546Product cost of sales
    
    
    83,334
    
    
    
    80,921
    
    
    
    143,766
    
    
    
    146,403Rental cost of sales
    
    
    8,252
    
    
    
    8,791
    
    
    
    16,345
    
    
    
    16,730Used rental equipment cost of sales
    
    
    1,507
    
    
    
    1,775
    
    
    
    2,633
    
    
    
    3,192Cost of sales
    
    
    93,093
    
    
    
    91,487
    
    
    
    162,744
    
    
    
    166,325Product gross profit
    
    
    33,840
    
    
    
    28,538
    
    
    
    53,584
    
    
    
    46,280Rental gross profit
    
    
    6,679
    
    
    
    6,099
    
    
    
    13,159
    
    
    
    11,423Used rental equipment gross profit
    
    
    3,904
    
    
    
    4,091
    
    
    
    7,051
    
    
    
    7,518Gross profit
    
    $
    44,423
    
    
    $
    38,728
    
    
    $
    73,794
    
    
    $
    65,221Depreciation Expense:Product sales (property, plant,and equipment)
    
    $
    1,290
    
    
    $
    1,393
    
    
    $
    2,574
    
    
    $
    2,545Rental Revenue (rental equipment)
    
    
    3,954
    
    
    
    4,604
    
    
    
    7,938
    
    
    
    8,693Corporate
    
    
    742
    
    
    
    346
    
    
    
    1,321
    
    
    
    649Total depreciation
    
    $
    5,986
    
    
    $
    6,343
    
    
    $
    11,833
    
    
    $
    11,887
 11




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##### Table of Contents



(7) Provision for Income Taxes
  12




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read in conjunction with our consolidated financial
statements and the related notes included elsewhere in this document. This discussion contains
forward-looking statements that involve risks and uncertainties. See Risk Factors included in
our Form 10-K for the year ended December 31, 2006 for a discussion of important factors that could
cause actual results to differ materially from those described or implied by the forward-looking
statements contained in this discussion. Please refer to Cautionary Note Concerning
Forward-Looking Statements included elsewhere in this document.
 Overview
  
    
    infrastructure projects, such as highways, bridges, airports, power plants and water
management projects;
    
    institutional projects, such as schools, stadiums, hospitals and government buildings;
and
    
    commercial projects, such as retail stores, offices, and recreational, distribution and
manufacturing facilities.
   13




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##### Table of Contents



Results of Operations
  Three fiscal months ended
    
    Six fiscal months endedJune 29, 2007
    
    June 30, 2006
    
    June 29, 2007
    
    June 30, 2006Product sales
    
    
    85.2
    %
    
    
    84.1
    %
    
    
    83.4
    %
    
    
    83.2
    %Rental revenue
    
    
    10.9
    
    
    
    11.4
    
    
    
    12.5
    
    
    
    12.2Used rental equipment sales
    
    
    3.9
    
    
    
    4.5
    
    
    
    4.1
    
    
    
    4.6Net sales
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0
    
    
    
    100.0Product cost of sales
    
    
    71.1
    
    
    
    73.9
    
    
    
    72.8
    
    
    
    76.0Rental cost of sales
    
    
    55.3
    
    
    
    59.0
    
    
    
    55.4
    
    
    
    59.4Used rental equipment cost of sales
    
    
    27.9
    
    
    
    30.3
    
    
    
    27.2
    
    
    
    29.8Cost of sales
    
    
    67.7
    
    
    
    70.3
    
    
    
    68.8
    
    
    
    71.8Product gross profit
    
    
    28.9
    
    
    
    26.1
    
    
    
    27.2
    
    
    
    24.0Rental gross profit
    
    
    44.7
    
    
    
    41.0
    
    
    
    44.6
    
    
    
    40.6Used rental equipment gross profit
    
    
    72.1
    
    
    
    69.7
    
    
    
    72.8
    
    
    
    70.2Gross profit
    
    
    32.3
    
    
    
    29.7
    
    
    
    31.2
    
    
    
    28.2Selling, general and administrativeexpenses
    
    
    19.3
    
    
    
    19.2
    
    
    
    21.9
    
    
    
    21.0Facility closing and severance expenses
    
    
    0.1
    
    
    
    
    
    
    
    0.2
    
    
    
    0.1Stock compensation expense
    
    
    0.5
    
    
    
    
    
    
    
    0.6
    
    
    
    (Gain) loss on disposals of property,plant, and equipment
    
    
    0.1
    
    
    
    (0.5
    )
    
    
    0.1
    
    
    
    (0.6
    )Amortization of intangibles
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.2Income from operations
    
    
    12.3
    
    
    
    10.9
    
    
    
    8.4
    
    
    
    7.5Interest expense
    
    
    8.8
    
    
    
    9.6
    
    
    
    9.9
    
    
    
    10.6Interest income
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    Other expense
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Income (loss) before provision forincome taxes
    
    
    3.3
    
    
    
    1.2
    
    
    
    (1.5
    )
    
    
    (3.2
    )Provision for income taxes
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.1Net income (loss)
    
    
    3.2
    %
    
    
    1.1
    %
    
    
    (1.6
    )%
    
    
    (3.3
    )%
 Comparison of Three Fiscal Months Ended June 29, 2007 and June 30, 2006
 Net Sales
  Three fiscal months endedJune 29, 2007
    
    
    June 30, 2006($ in thousands)
    
    Net Sales
    
    
    %
    
    
    Net Sales
    
    
    %
    
    
    % ChangeProduct sales
    
    $
    117,174
    
    
    
    85.2
    %
    
    $
    109,459
    
    
    
    84.1
    %
    
    
    7.0
    %Rental revenue
    
    
    14,931
    
    
    
    10.9
    
    
    
    14,890
    
    
    
    11.4
    
    
    
    0.3Used rental equipment sales
    
    
    5,411
    
    
    
    3.9
    
    
    
    5,866
    
    
    
    4.5
    
    
    
    (7.8
    )Net sales
    
    $
    137,516
    
    
    
    100.0
    %
    
    $
    130,215
    
    
    
    100.0
    %
    
    
    5.6
    %
 14




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Gross Profit
     Operating Expenses
    Other Expenses
  15




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##### Table of Contents



Income Before Income Taxes
  Provision for Income Taxes
  Net Income
  Comparison of Six Fiscal Months Ended June 29, 2007 and June 30, 2006
 Net Sales
  ($ in thousands)
    
    Six fiscal months endedJune 29, 2007
    
    
    June 30, 2006Net Sales
    
    
    %
    
    
    Net Sales
    
    
    %
    
    
    % ChangeProduct sales
    
    $
    197,350
    
    
    
    83.4
    %
    
    $
    192,683
    
    
    
    83.2
    %
    
    
    2.4
    %Rental revenue
    
    
    29,504
    
    
    
    12.5
    
    
    
    28,153
    
    
    
    12.2
    
    
    
    4.8Used rental equipment sales
    
    
    9,684
    
    
    
    4.1
    
    
    
    10,710
    
    
    
    4.6
    
    
    
    (9.6
    )Net sales
    
    $
    236,538
    
    
    
    100.0
    %
    
    $
    231,546
    
    
    
    100.0
    %
    
    
    2.2
    %
    16




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##### Table of Contents



Gross Profit
     Operating Expenses
    Other Expenses
  17




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##### Table of Contents



Loss Before Income Taxes
  Provision for Income Taxes
  Net Loss
  Liquidity and Capital Resources
   ($ in thousands)
    
    Six fiscal months endedJune 29, 2007
    
    
    June 30, 2006Capital expenditures:Additions to rental equipment
    
    $
    15,259
    
    
    $
    10,531Additions to property, plant and equipment
    
    
    10,018
    
    
    
    4,103Proceeds from sales of used rental equipment
    
    
    (9,684
    )
    
    
    (10,710
    )Proceeds from sales of PP&E
    
    
    (5
    )
    
    
    (21
    )Net additions to rental equipment and property, plant, and equipment
    
    $
    15,588
    
    
    $
    3,903
   18




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##### Table of Contents



($ in millions)
    
    2007
    
    
    2006Net loss
    
    $
    (3.8
    )
    
    $
    (7.6
    )Non-cash adjustments
    
    
    9.5
    
    
    
    5.7Subtotal of net loss and non-cash adjustments
    
    
    5.7
    
    
    
    (1.9
    )Changes in assets and liabilities
    
    
    (38.5
    )
    
    
    (14.5
    )Net cash used in operating activities
    
    $
    (32.8
    )
    
    $
    (16.4
    )
     19




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##### Table of Contents



($ in thousands)
    
    AmountSenior Second Secured Notes, interest rate of 10.75%
    
    $
    165,000Debt discount on Senior Second Secured Notes
    
    
    (2,328
    )Senior Subordinated Notes, interest rate of 13.0%
    
    
    154,729Debt discount on Senior Subordinated Notes
    
    
    (3,925
    )Senior notes payable to seller of Safway, non-interest bearing,
accreted at 6.0% (secured) to 14.5% (unsecured)
    
    
    7,743Debentures previously held by Dayton Superior Capital Trust,
interest rate of 9.1%, due on demand
    
    
    1,057Capital lease obligations
    
    
    1,879Total long-term debt
    
    
    324,155Less current maturities
    
    
    (3,258
    )Long-term portion
    
    $
    320,897
  
    
    $15.0 million increase in accounts receivable due to the higher net sales
in the second quarter of 2007 relative to the fourth quarter of 2006,
    
    $15.1 million increase in inventories due to the normal seasonal build for
the high volume third quarter, higher finished goods levels to improve customer
service, the timing of raw material purchases, and material cost inflation,
    
    $2.8 million increase in prepaid expenses and other current assets due to
the timing of insurance premium payments and an increase in the current portion of
notes receivable,
    
    $3.0 million decrease in accounts payable primarily due to non-recurring
payables at December 31, 2006, for initial public offering issuance costs, financing
costs, and consultant fees, and
    
    $4.6 million decrease in accrued compensation and benefits due to the
payment of incentives and discretionary retirement contributions, offset by
    
    $26.8 million decrease in cash and cash equivalents from the normal
seasonal cash outflow from operating and investing activities.
  20




---



##### Table of Contents



Commitments
  Seasonality
  Inflation
  Stock Collateral Valuation  Senior Second Secured Notes
  21




---



##### Table of Contents



DaytonSuperiorCanada, Ltd.Net Income
    
    $
    501Provision for Income Taxes
    
    
    278Income before Provision for Income Taxes
    
    
    779Interest Income
    
    
    (65
    )Income from Operations
    
    
    714Depreciation Expense
    
    
    883Adjusted EBITDA
    
    
    1,597Multiple
    
    
    9.2Estimated Fair Value
    
    $
    14,692
   22




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##### Table of Contents



Critical Accounting Policies
 Forward-Looking Statements
  
    
    depressed or fluctuating market conditions for our products and services;
    
    operating restrictions imposed by our existing debt;
    
    increased raw material costs and operating expenses;
    
    our ability to comply with environmental regulations and to absorb environmental
investigation, remediation and compliance costs;
    
    the loss of certain key customers;
    
    the loss of key personnel;
    
    exposure to the local business risks of our Mexican operations and foreign sourcing partners;
    
    conflicts of interest with our major shareholder;
    
    our ability to increase manufacturing efficiency, leverage our purchasing power and
broaden our distribution network;
    
    our ability to successfully identify, complete and integrate acquisitions;
    
    our ability to develop new products;
    
    the competitive nature of our industry in general, as well as our specific market areas;
    
    changes in prevailing interest rates and the availability of and terms of financing to
fund the anticipated growth of our business; and
    
    labor disturbances.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 23




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##### Table of Contents



Item 4. Controls and Procedures.
     24




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##### Table of Contents



Part II.  Other Information
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 4. Submission of Items to a Vote of Security Holders.
  Name
    
    Votes For
    
    Votes WithheldStephen Berger
    
    
    14,904,143
    
    
    
    2,538,958William F. Hopkins
    
    
    14,901,643
    
    
    
    2,541,458
   Matter
    
    Votes For
    
    Votes Against
    
    Votes Abstained
    
    Broker Non-VotesApproval of Fifth Amendment
    
    
    15,949,040
    
    
    
    124,725
    
    
    
    3,478
    
    
    
    1,365,858
 
 Item 6. Exhibits
  25




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##### Table of Contents



SIGNATURES
  DAYTON SUPERIOR CORPORATIONDATE:  August 10, 2007
    BY:
    /s/ Edward J. PuisisEdward J. Puisis
Executive Vice President and
Chief Financial Officer 26




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##### Table of Contents



INDEX OF EXHIBITS
 Description
 Exhibit No.
    
    Description(10)
    
    Material Contracts10.1
    
    
    
    Fifth Amendment to Dayton
Superior Corporation 2000
Stock Option Plan
[Incorporated by
reference to Exhibit 10.1
to the Companys Current
Report on Form 8-K filed
May 30, 2007]
    
    *(31)
    
    Rule 13a-14(a)/15d-14(a) Certifications31.1
    
    
    
    Rule 13a-14(a)/15d-14(a)
Certification of
President and Chief
Executive Officer
    
    **31.2
    
    
    
    Rule 13a-14(a)/15d-14(a)
Certification of Vice
President and Chief
Financial Officer
    
    **(32)
    
    Section 1350 Certifications32.1
    

    
    
    Sarbanes-Oxley Section
1350 Certification of
President and Chief
Executive Officer
    
    **32.2
    
    
    
    Sarbanes-Oxley Section
1350 Certification of
Vice President and Chief
Financial Officer
    
    **
 
 *
    
    Compensatory plan, contract or arrangement in which one or more directors or named executive
officers participate.**
    
    Filed herewith
    
    Previously filed 27