##### 



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
March 31, 2006
    
    COMMISSION FILE NUMBER
1-11781
 DAYTON SUPERIOR CORPORATION
  OHIO
    
    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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##### 



Part I.  Financial Information
 Item 1  Financial Statements
 
 March 31,
    
    
    December 31,2006
    
    
    2005ASSETSCurrent assets:Cash
    
    $
    
    
    
    $
    Accounts receivable, net of allowances for doubtful accounts and
sales returns and allowances of $5,059 and $5,435
    
    
    67,177
    
    
    
    62,326Inventories
    
    
    60,470
    
    
    
    57,372Prepaid expenses and other current assets
    
    
    5,866
    
    
    
    5,134Prepaid income taxes
    
    
    663
    
    
    
    546Total current assets
    
    
    134,176
    
    
    
    125,378Rental equipment, net of accumulated depreciation of $58,609 and $56,591
    
    
    68,802
    
    
    
    68,400Property, plant and equipment
    
    
    98,321
    
    
    
    96,491Less accumulated depreciation
    
    
    (59,766
    )
    
    
    (58,327
    )Net property, plant and equipment
    
    
    38,555
    
    
    
    38,164Goodwill
    
    
    43,643
    
    
    
    43,643Intangible assets, net of accumulated amortization
    
    
    4,669
    
    
    
    5,025Other assets
    
    
    960
    
    
    
    910Total assets
    
    $
    290,805
    
    
    $
    281,520LIABILITIES AND SHAREHOLDERS DEFICITCurrent liabilities:Current maturities of long-term debt
    
    $
    2,409
    
    
    $
    2,864Revolving credit facility
    
    
    72,200
    
    
    
    Current portion of deferred gain on sale-leaseback
    
    
    3,716
    
    
    
    3,530Accounts payable
    
    
    24,438
    
    
    
    27,267Accrued compensation and benefits
    
    
    11,454
    
    
    
    12,266Accrued interest
    
    
    6,931
    
    
    
    6,589Accrued freight
    
    
    4,996
    
    
    
    4,031Other accrued liabilities
    
    
    3,994
    
    
    
    5,247Total current liabilities
    
    
    130,138
    
    
    
    61,794Revolving credit facility
    
    
    
    
    
    
    48,700Other long-term debt, net of current portion
    
    
    318,340
    
    
    
    317,690Deferred income taxes
    
    
    11,397
    
    
    
    11,406Deferred gain on sale-leaseback, net of current portion
    
    
    4,084
    
    
    
    5,199Other long-term liabilities
    
    
    7,258
    
    
    
    8,068Total liabilities
    
    
    471,217
    
    
    
    452,857Class A common shares subject to put option, 233,617 shares, net of
related loans to shareholders
    
    
    
    
    
    
    Shareholders deficit:Class A common shares; no par value; 6,000,000 shares authorized,
4,678,471 shares issued, 4,393,561 not subject to put option
    
    
    115,729
    
    
    
    115,703Loans to shareholders
    
    
    (2,107
    )
    
    
    (2,098
    )Class A treasury shares, at cost, 51,293 shares
    
    
    (1,509
    )
    
    
    (1,509
    )Accumulated other comprehensive loss
    
    
    (1,374
    )
    
    
    (1,357
    )Accumulated deficit
    
    
    (291,151
    )
    
    
    (282,076
    )Total shareholders deficit
    
    
    (180,412
    )
    
    
    (171,337
    )Total liabilities and shareholders deficit
    
    $
    290,805
    
    
    $
    281,520
 
 2




---



##### 



Three Fiscal Months EndedMarch 31,
    
    
    April 1,2006
    
    
    2005Product sales
    
    $
    83,224
    
    
    $
    71,089Rental revenue
    
    
    13,263
    
    
    
    10,130Used rental equipment sales
    
    
    4,844
    
    
    
    4,563Net sales
    
    
    101,331
    
    
    
    85,782Product cost of sales
    
    
    65,482
    
    
    
    55,149Rental cost of sales
    
    
    7,939
    
    
    
    8,501Used rental equipment cost of sales
    
    
    1,417
    
    
    
    1,223Cost of sales
    
    
    74,838
    
    
    
    64,873Product gross profit
    
    
    17,742
    
    
    
    15,940Rental gross profit
    
    
    5,324
    
    
    
    1,629Used rental equipment gross profit
    
    
    3,427
    
    
    
    3,340Gross profit
    
    
    26,493
    
    
    
    20,909Selling, general and administrative expenses
    
    
    23,626
    
    
    
    23,014Facility closing and severance expenses
    
    
    251
    
    
    
    250(Gain) loss on disposals of property,
plant, and equipment
    
    
    (669
    )
    
    
    61Amortization of intangibles
    
    
    151
    
    
    
    142Income (loss) from operations
    
    
    3,134
    
    
    
    (2,558
    )Other expensesInterest expense
    
    
    12,156
    
    
    
    12,220Interest income
    
    
    (19
    )
    
    
    (79
    )Other income
    
    
    (52
    )
    
    
    (10
    )Loss before provision for income taxes
    
    
    (8,951
    )
    
    
    (14,689
    )Provision for income taxes
    
    
    124
    
    
    
    Net loss
    
    $
    (9,075
    )
    
    $
    (14,689
    )
 
 3




---



##### 



Three Fiscal Months EndedMarch 31,
    
    
    April 1,2006
    
    
    2005Cash Flows From Operating Activities:Net loss
    
    $
    (9,075
    )
    
    $
    (14,689
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation
    
    
    5,544
    
    
    
    7,309Amortization of intangibles
    
    
    151
    
    
    
    142Stock option expense
    
    
    26
    
    
    
    Deferred income taxes
    
    
    (9
    )
    
    
    (74
    )Amortization of deferred financing costs and debt discount
    
    
    1,457
    
    
    
    1,352Amortization of deferred gain on sale-leaseback transactions
    
    
    (871
    )
    
    
    Gain on sales of rental equipment
    
    
    (3,427
    )
    
    
    (3,340
    )(Gain) loss on sales of property, plant and equipment
    
    
    (8
    )
    
    
    61Changes in assets and liabilities, net of effects of acquisition:Accounts receivable
    
    
    (4,851
    )
    
    
    (1,537
    )Inventories
    
    
    (3,098
    )
    
    
    (6,082
    )Prepaid expenses and other assets
    
    
    (1,025
    )
    
    
    2,081Prepaid income taxes
    
    
    (117
    )
    
    
    (191
    )Accounts payable
    
    
    (3,041
    )
    
    
    (271
    )Accrued liabilities and other long-term liabilities
    
    
    (1,641
    )
    
    
    (1,749
    )Net cash used in operating activities
    
    
    (19,985
    )
    
    
    (16,988
    )Cash Flows From Investing Activities:Property, plant and equipment additions
    
    
    (1,744
    )
    
    
    (1,623
    )Proceeds from sales of property, plant and equipment
    
    
    
    
    
    
    4Rental equipment additions
    
    
    (5,790
    )
    
    
    (5,175
    )Proceeds from sales of rental equipment
    
    
    4,844
    
    
    
    4,563Net cash used in investing activities
    
    
    (2,690
    )
    
    
    (2,231
    )Cash Flows From Financing Activities:Borrowings under revolving credit facility
    
    
    43,000
    
    
    
    34,650Repayments of revolving credit facility
    
    
    (19,500
    )
    
    
    (19,475
    )Repayments of other long-term debt
    
    
    (799
    )
    
    
    (413
    )Financing costs incurred
    
    
    
    
    
    
    (3
    )Changes in loans to shareholders
    
    
    (9
    )
    
    
    55Issuance of common shares subject to put option
    
    
    
    
    
    
    13Net cash provided by financing activities
    
    
    22,692
    
    
    
    14,827Effect of Exchange Rate Changes on Cash
    
    
    (17
    )
    
    
    (112
    )Net increase (decrease) in cash
    
    
    
    
    
    
    (4,504
    )Cash, beginning of period
    
    
    
    
    
    
    4,504Cash, end of period
    
    $
    
    
    
    $
    Supplemental Disclosures:Cash paid for income taxes
    
    $
    89
    
    
    $
    54Cash paid for interest
    
    
    10,357
    
    
    
    9,800Property, plant and equipment and rental equipment additions in accounts
payable
    
    
    1,683
    
    
    
    1,471
 
 4




---



##### 



Three Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Net loss
    
    $
    (9,075
    )
    
    $
    (14,689
    )Other comprehensive loss:Foreign currency translation
adjustment
    
    
    (17
    )
    
    
    (112
    )Comprehensive loss
    
    $
    (9,092
    )
    
    $
    (14,801
    )
 The accompanying notes to consolidated financial statements are
an integral part of these consolidated statements.
 5




---



##### 



Dayton Superior Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(Amounts in thousands, except share and per share amounts)
(Unaudited)
 (1)
    
    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.Following is a summary of the components of inventories as of March 31, 2006 and
December 31, 2005:
 March 31, 2006
    
    
    December 31, 2005Raw materials
    
    $
    12,319
    
    
    $
    13,248Work in progress
    
    
    3,071
    
    
    
    2,813Finished goods
    
    
    45,080
    
    
    
    41,311Total Inventory
    
    $
    60,470
    
    
    $
    57,372
 (c)
    
    Rental Equipment  Rental equipment is purchased and manufactured by the
Company for resale and for rent to others on a short-term basis. Rental equipment is
recorded at the lower of FIFO cost or market and is depreciated over the estimated useful
lives of the equipment, three to fifteen years, on a straight-line method. Effective
January 1, 2006, the Company changed its estimate of depreciable lives on certain families
of rental equipment from three years to fifteen years on a prospective basis. The impact of
this change in estimate was to reduce rental cost of sales by $750 for the three months
ended March 31, 2006.(d)
    
    Goodwill  The Company is in the process of
finalizing its assessment of the fair value of goodwill as of
December 31, 2005. Any adjustment to the estimated impairment
loss recorded during the year ended December 31, 2005 will be
recognized in a subsequent reporting period.(e)
    
    New Accounting Pronouncements  In December 2004, the FASB issued SFAS No.
123R that amends SFAS No. 123, Accounting for Stock-Based Compensation, to require entities
to report stock-
 6




---



##### 



For the three fiscalmonths ended April1, 2005Net loss      As Reported
    
    $
    (14,689
    )Deduct: Total stock-based employee
compensation expense determined under fair value-based method for all awards,
net of related tax effect
    
    
    (72
    )Pro Forma
    
    $
    (14,761
    )
 (3)
    
    Credit Arrangements
  7




---



##### 



Three fiscal months endedMarch 31, 2006
    
    
    April 1, 2005Revolving Credit Facility:Average borrowings
    
    $
    59,282
    
    
    $
    62,780Peak borrowing
    
    $
    72,950
    
    
    $
    75,775Weighted average interest rate
    
    
    7.6
    %
    
    
    5.7
    %
  March 31,
    
    
    December 31,2006
    
    
    2005Senior Subordinated Notes, interest rate of 13.0%
    
    $
    154,729
    
    
    $
    154,729Debt discount on Senior Subordinated Notes
    
    
    (5,777
    )
    
    
    (6,114
    )Senior Second Secured Notes, interest rate of 10.75%
    
    
    165,000
    
    
    
    165,000Debt discount on Senior Second Secured Notes
    
    
    (4,346
    )
    
    
    (4,776
    )Senior unsecured notes payable to seller of Safway,
non-interest bearing, accreted at 6.0% to 14.5%
    
    
    7,771
    
    
    
    7,534Debentures previously held by Dayton Superior
Capital Trust, interest rate of 9.1%, due on demand
    
    
    1,068
    
    
    
    1,068Capital lease obligations
    
    
    2,304
    
    
    
    2,930Payable to vendor on extended terms, non-interest
bearing, accreted at 6.0%
    
    
    
    
    
    
    183Total long-term debt
    
    
    320,749
    
    
    
    320,554Less current maturities
    
    
    (2,409
    )
    
    
    (2,864
    )Long-term portion
    
    $
    318,340
    
    
    $
    317,690
   (4) Stock Option Plans
   8




---



##### 



WeightedTotal Number
    
    Weighted
    
    Unvested
    
    Averageof
    
    Average Exercise
    
    Number of
    
    Grant-DateShares
    
    Price Per Share
    

Shares
    
    Fair ValueOutstanding at December 31, 2005
    
    
    402,063
    
    
    $ 25.92
    
    
    310,018
    
    
    $
    6.66Expired
    
    
    (1,000
    )
    
    27.00
    
    
    
    
    
    
    Forfeited
    
    
    (33,063
    )
    
    27.48
    
    
    (33,063
    )
    
    
    7.65Outstanding at March 31, 2006
    
    
     368,000
    
    
    $ 25.77
    
    
    276,955
    
    
    $
    6.54
  (5) Retirement Plans
    Symons
    
    
    SymonsPension
    
    
    Pension
    
    
    Postretirement
    
    
    PostretirementBenefits 2006
    
    
    Benefits 2005
    
    
    Benefits 2006
    
    
    Benefits 2005Service cost
    
    $
    175
    
    
    $
    173
    
    
    $
    
    
    
    $
    Interest cost
    
    
    188
    
    
    
    163
    
    
    
    7
    
    
    
    7Expected return on plan assets
    
    
    (207
    )
    
    
    (185
    )
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    3
    
    
    
    4
    
    
    
    6
    
    
    
    6Amortization of net loss
    
    
    33
    
    
    
    23
    
    
    
    (3
    )
    
    
    (3
    )Net periodic benefit cost
    
    $
    192
    
    
    $
    178
    
    
    $
    10
    
    
    $
    10
  (6) Segment Reporting
     9




---



##### 



Three Fiscal Months EndedMarch 31, 2006
    
    
    April 1, 2005Product sales
    
    $
    83,224
    
    
    $
    71,089Rental revenue
    
    
    13,263
    
    
    
    10,130Used rental equipment sales
    
    
    4,844
    
    
    
    4,563Net sales
    
    
    101,331
    
    
    
    85,782Product cost of sales
    
    
    65,482
    
    
    
    55,149Rental cost of sales
    
    
    7,939
    
    
    
    8,501Used rental equipment cost of sales
    
    
    1,417
    
    
    
    1,223Cost of sales
    
    
    74,838
    
    
    
    64,873Product gross profit
    
    
    17,742
    
    
    
    15,940Rental gross profit
    
    
    5,324
    
    
    
    1,629Used rental equipment gross profit
    
    
    3,427
    
    
    
    3,340Gross profit
    
    $
    26,493
    
    
    $
    20,909Depreciation Expense:Product sales (property, plant, and
equipment)
    
    $
    1,152
    
    
    $
    1,691Rental Revenue (rental equipment)
    
    
    4,089
    
    
    
    5,146Corporate
    
    
    303
    
    
    
    472Total depreciation
    
    $
    5,544
    
    
    $
    7,309
 (7) Facility Closing and Severance Expenses
  Involuntary
    
    
    Lease
    
    
    Relocation
    
    
    Other Post-Termination
    
    
    Termination
    
    
    of
    
    
    ClosingBenefits
    
    
    Costs
    
    
    Operations
    
    
    Costs
    
    
    TotalBalance, January 1, 2005
    
    $
    
    
    
    $
    120
    
    
    $
    
    
    
    $
    
    
    
    $
    120Facility closing and severance expenses
    
    
    105
    
    
    
    264
    
    
    
    5
    
    
    
    157
    
    
    
    531Items charged against reserve
    
    
    (105
    )
    
    
    (339
    )
    
    
    (5
    )
    
    
    (157
    )
    
    
    (606
    )Balance, December 31, 2005
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    45Facility closing and severance expenses
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    22
    
    
    
    67Items charged against reserve
    
    
    
    
    
    
    (62
    )
    
    
    
    
    
    
    (22
    )
    
    
    (84
    )Balance, March 31, 2006
    
    $
    
    
    
    $
    28
    
    
    $
    
    
    
    $
    
    
    
    $
    28
  10




---



##### 



Involuntary
    
    
    Lease
    
    
    Relocation
    
    
    Other Post-Termination
    
    
    Termination
    
    
    of
    
    
    ClosingBenefits
    
    
    Costs
    
    
    Operations
    
    
    Costs
    
    
    TotalFacility closing and severance expenses
    
    $
    642
    
    
    $
    
    
    
    $
    539
    
    
    $
    
    
    
    $
    1,181Items charged against reserve
    
    
    (225
    )
    
    
    
    
    
    
    (101
    )
    
    
    
    
    
    
    (326
    )Balance, December 31, 2005
    
    
    417
    
    
    
    
    
    
    
    438
    
    
    
    
    
    
    
    855Facility closing and severance expenses
    
    
    
    
    
    
    45
    
    
    
    17
    
    
    
    4
    
    
    
    66Items charged against reserve
    
    
    (238
    )
    
    
    (45
    )
    
    
    (254
    )
    
    
    (4
    )
    
    
    (541
    )Balance, March 31, 2006
    
    $
    179
    
    
    $
    
    
    
    $
    201
    
    
    $
    
    
    
    $
    380
  Involuntary
    
    
    Lease
    
    
    Relocation
    
    
    Other Post-Termination
    
    
    Termination
    
    
    of
    
    
    ClosingBenefits
    
    
    Costs
    
    
    Operations
    
    
    Costs
    
    
    TotalFacility closing and severance expenses
    
    $
    118
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    118Items charged against reserve
    
    
    (17
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )Balance, March 31, 2006
    
    $
    101
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    101
  (8) Benefit for Income Taxes
  11




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
   
    
    Product sales consist of:
 
    
    Concrete accessories,which are used for connecting forms for
poured-in-place concrete walls, anchoring or bracing for walls and floors,
supporting bridge framework and positioning steel reinforcing bars, and include
products which remain in place at the convenience of the contractors.
    
    Masonry products,which are placed between layers of brick and concrete
blocks and covered with mortar to provide additional strength to walls.
    
    Paving products,which are used in the construction and rehabilitation
of concrete roads, highways and airport runways to extend the life of the pavement,
and include products that remain in place at the convenience of the contractors.
Welded dowel assemblies are a paving product used to transfer dynamic loads between
two adjacent slabs of concrete roadway. Metal dowels are part of a dowel basket
design that is imbedded in two adjacent slabs to transfer the weight of vehicles as
they move over a road.
    
    Chemicals,which include a broad spectrum of chemicals for use in
concrete construction, including form release agents, bond breakers, curing
compounds, liquid hardeners, sealers, water repellents, bonding agents, grouts and
epoxies, and other chemicals used in the pouring, placement, and stamping of
concrete as well as curing compounds used in concrete road construction.
 
    
    Rental equipment consists primarily of:
 
    
    Forming Systems,which are reusable engineered modular forms, hold
liquid concrete in place on concrete construction jobs while it hardens. Standard
forming systems are made of steel and plywood and are used in the creation of
concrete walls and columns. Specialty forming systems consist primarily of steel
forms that are designed to meet architects specific needs for concrete placements.
Both standard and specialty forming systems and related accessories are sold as
used rental equipment and rented.
    
    Shoring Systems,including aluminum beams and joists, are reusable post
shores and shoring frames which are used to support deck and other raised forms
while concrete is being poured.
 12




---



##### 



Facility Closing and Severance Expenses
  Involuntary
    
    
    Lease
    
    
    Relocation
    
    
    Other Post-Termination
    
    
    Termination
    
    
    of
    
    
    ClosingBenefits
    
    
    Costs
    
    
    Operations
    
    
    Costs
    
    
    TotalBalance, January 1, 2005
    
    $
    
    
    
    $
    120
    
    
    $
    
    
    
    $
    
    
    
    $
    120Facility closing and severance expenses
    
    
    105
    
    
    
    264
    
    
    
    5
    
    
    
    157
    
    
    
    531Items charged against reserve
    
    
    (105
    )
    
    
    (339
    )
    
    
    (5
    )
    
    
    (157
    )
    
    
    (606
    )Balance, December 31, 2005
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    45Facility closing and severance expenses
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    22
    
    
    
    67Items charged against reserve
    
    
    
    
    
    
    (62
    )
    
    
    
    
    
    
    (22
    )
    
    
    (84
    )Balance, March 31, 2006
    
    $
    
    
    
    $
    28
    
    
    $
    
    
    
    $
    
    
    
    $
    28
  Involuntary
    
    
    Lease
    
    
    Relocation
    
    
    Other Post-Termination
    
    
    Termination
    
    
    of
    
    
    ClosingBenefits
    
    
    Costs
    
    
    Operations
    
    
    Costs
    
    
    TotalFacility closing and severance expenses
    
    $
    642
    
    
    $
    
    
    
    $
    539
    
    
    $
    
    
    
    $
    1,181Items charged against reserve
    
    
    (225
    )
    
    
    
    
    
    
    (101
    )
    
    
    
    
    
    
    (326
    )Balance, December 31, 2005
    
    
    417
    
    
    
    
    
    
    
    438
    
    
    
    
    
    
    
    855Facility closing and severance expenses
    
    
    
    
    
    
    45
    
    
    
    17
    
    
    
    4
    
    
    
    66Items charged against reserve
    
    
    (238
    )
    
    
    (45
    )
    
    
    (254
    )
    
    
    (4
    )
    
    
    (541
    )Balance, March 31, 2006
    
    $
    179
    
    
    $
    
    
    
    $
    201
    
    
    $
    
    
    
    $
    380
  Involuntary
    
    
    Lease
    
    
    Relocation
    
    
    Other Post-Termination
    
    
    Termination
    
    
    of
    
    
    ClosingBenefits
    
    
    Costs
    
    
    Operations
    
    
    Costs
    
    
    TotalFacility closing and severance expenses
    
    $
    118
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    118Items charged against reserve
    
    
    (17
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )Balance, March 31, 2006
    
    $
    101
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    101
  13




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##### 



Results of Operations
  Three fiscal months endedMarch 31, 2006
    
    
    April 1, 2005Product sales
    
    
    82.1
    %
    
    
    82.9
    %Rental revenue
    
    
    13.1
    
    
    
    11.8Used rental equipment sales
    
    
    4.8
    
    
    
    5.3Net sales
    
    
    100.0
    
    
    
    100.0Product cost of sales
    
    
    78.7
    
    
    
    77.6Rental cost of sales
    
    
    59.9
    
    
    
    83.9Used rental equipment cost of sales
    
    
    29.3
    
    
    
    26.8Cost of sales
    
    
    73.9
    
    
    
    75.6Product gross profit
    
    
    21.3
    
    
    
    22.4Rental gross profit
    
    
    40.1
    
    
    
    16.1Used rental equipment gross profit
    
    
    70.7
    
    
    
    73.2Gross profit
    
    
    26.1
    
    
    
    24.4Selling, general and administrative expenses
    
    
    23.3
    
    
    
    26.8Facility closing and severance expenses
    
    
    0.2
    
    
    
    0.3(Gain) loss on disposals of property,
plant, and equipment
    
    
    (0.7
    )
    
    
    0.1Amortization of intangibles
    
    
    0.2
    
    
    
    0.2Income (loss) from operations
    
    
    3.1
    
    
    
    (3.0
    )Interest expense
    
    
    12.0
    
    
    
    14.2Interest income
    
    
    
    
    
    
    (0.1
    )Other income
    
    
    (0.1
    )
    
    
    Loss before provision for income taxes
    
    
    (8.8
    )
    
    
    (17.1
    )Provision for income taxes
    
    
    0.2
    
    
    
    Net loss
    
    
    (9.0
    %)
    
    
    (17.1
    %)
 Comparison of Three Fiscal Months Ended March 31, 2006 and April 1, 2005
 Net Sales
  Three fiscal months endedMarch 31, 2006
    
    
    April 1, 2005(In thousands)Net Sales
    
    
    %
    
    
    Net Sales
    
    
    %
    
    
    % ChangeProduct sales
    
    $
    83,224
    
    
    
    82.1
    %
    
    $
    71,089
    
    
    
    82.9
    %
    
    
    17.1
    %Rental revenue
    
    
    13,263
    
    
    
    13.1
    
    
    
    10,130
    
    
    
    11.8
    
    
    
    30.9Used rental equipment sales
    
    
    4,844
    
    
    
    4.8
    
    
    
    4,563
    
    
    
    5.3
    
    
    
    6.2Net sales
    
    $
    101,331
    
    
    
    100.0
    %
    
    $
    85,782
    
    
    
    100.0
    %
    
    
    18.1
    %
 14




---



##### 



Gross Profit
     Operating Expenses
   Other Expenses
  Loss Before Income Taxes
  Benefit for Income Taxes
 15




---



##### 



Net Loss
  Liquidity and Capital Resources
    2006
    
    
    2005(in millions)Net loss
    
    $
    (9.1
    )
    
    $
    (14.7
    )Non-cash adjustments
    
    
    2.9
    
    
    
    5.5Net loss after non-cash adjustments
    
    
    (6.2
    )
    
    
    (9.2
    )Changes in assets and liabilities
    
    
    (13.8
    )
    
    
    (7.8
    )Net cash used in operating activities
    
    $
    (20.0
    )
    
    $
    (17.0
    )
    16




---



##### 



March 31, 2006Senior Subordinated Notes, interest rate of 13.0%
    
    $
    154,729Debt discount on Senior Subordinated Notes
    
    
    (5,777
    )Senior Second Secured Notes, interest rate of 10.75%
    
    
    165,000Debt discount on Senior Second Secured Notes
    
    
    (4,346
    )Senior unsecured notes payable to seller of Safway,
non-interest bearing, accreted at 6.0% to 14.5%
    
    
    7,771Debentures previously held by Dayton Superior Capital
Trust, interest rate of 9.1%, due on demand
    
    
    1,068Capital lease obligations
    
    
    2,304Total long-term debt
    
    
    320,749Less current maturities
    
    
    (2,409
    )Long-term portion
    
    $
    318,340
   
    
    $72.2 million of reclassification of the revolving credit facility to
current liabilities, as the facility expires within a year, on January 30, 2007, offset
by
    
    $4.9 million increase in accounts receivable due to the seasonally higher
net sales in March relative to December,
    
    $3.1 million increase in inventories due to the anticipated seasonal higher
sales in the second quarter,
    
    $2.8 million decrease in accounts payable due to the timing of vendor
payments,
    
    $1.3 million decrease in other accrued liabilities due to the timing of
non-income tax and customer incentive payments, and
    
    $0.5 million of changes in other items.
   17




---



##### 







Commitments




Seasonality




Inflation




Stock Collateral Valuation  Senior Second Secured Notes




18




---



##### 



DaytonSuperiorCanada Ltd.Net Income
    
    $
    1,279Provision for Income Taxes
    
    
    689Income from Operations
    
    
    1,968Depreciation Expense
    
    
    75Adjusted valuation EBITDA
    
    
    2,043Multiple
    
    
    5.5Estimated Fair Value
    
    $
    11,237
   Change in Applicable
    
    
    Change in AdjustedSubsidiary
    
Value
    
    
Valuation EBITDADayton Superior Canada Ltd.
    
    $
    21,763
    
    
    $
    3,957
 Critical Accounting Policies
  19




---



##### 



Forward-Looking Statements
   20




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  
    
    $95.0 million revolving credit facility, $72.2 million of which was outstanding at March 31, 2006;
    
    $165.0 million of Senior Second Secured Notes with a net book value of $160.7 million;
    
    $154.7 million of Senior Subordinated Notes with a net book value of $149.0 million;
    
    $7.8 million of Notes payable to the seller of Safway;
    
    $2.3 million in capital lease obligations;
    
    $1.1 million in other fixed-rate, long-term debt.
       21




---



##### 



Item 4. Controls and Procedures.
    
    
    We modified our review and approval procedures related to contractual agreements
relating to our accounting for equity transactions to ensure the proper accounting for
redeemable shares in accordance with EITF D-98, Classification and Measurement of
Redeemable Securities.
    
    We modified our review and approval procedures related to existing long-term purchase
agreements to ensure that such agreements are appropriately accounted in accordance with
SFAS 13 Accounting for Leases.
    
    We modified our procedures regarding the identification of unrecorded disposals of fixed
assets to ensure that all disposals of property and equipment are recorded in accordance
with FASB Concepts Statement No. 5 Recognition and Measurement in Financial Statements of
Business Enterprises.
  Part II.  Other Information
 Item 5.
Other Information
  Item 6. Exhibits
  22




---



##### 



SIGNATURES
  DAYTON SUPERIOR CORPORATIONDATE:
May 15, 2006
    


    BY:
    
    /s/ Edward J. PuisisEdward J. Puisis
Executive Vice President and Chief Financial Officer
 23




---



##### 



INDEX TO EXHIBITS
 Exhibit No.
    
    Description(31)
    
    Rule 13a-14(a)/15d-14(a) Certifications

31.1
    
    
    Rule 13a-14(a)/15d-14(a) Certification of
President and Chief Executive Officer31.2
    
    
    Rule 13a-14(a)/15d-14(a)
Certification of Executive Vice
President and Chief Financial Officer(32)
    
    Section 1350 Certifications32.1
    
    
    Section 1350 Certification of President and
Chief Executive Officer32.2
    
    
    Section 1350 Certification of
Executive Vice President and
Chief Financial Officer
 24