10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2006
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-11781

DAYTON SUPERIOR CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation) 31-0676346
(I.R.S. Employer Identification No.)

7777 Washington Village Dr.
Suite 130
Dayton, Ohio 45459
(Address of principal executive office)

Registrant’s telephone number, including area code:

(937) 428-6360

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $0.01 per share, registered on The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

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

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

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

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

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

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

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

As of March 26, 2007, there were 19,037,902 shares of common stock outstanding. As of June 30, 2006, which was prior to the Registrant’s initial public offering of common stock, the aggregate market value of common stock held by non-affiliates was $2,077,013 based on the estimated fair value of the common stock.

DOCUMENT INCORPORATED BY REFERENCE

Dayton Superior Corporation’s proxy statement for its Annual Meeting of Stockholders to be held on May 24, 2007; definitive copies of the proxy statement will be filed with the Commission within 120 days of the Company’s most recently completed fiscal year. Only such portions of the proxy statement as are specifically incorporated by reference into Part III of this Report shall be deemed filed as part of this Report.

In this Annual Report on Form 10-K, unless otherwise noted, the terms “Dayton Superior,” “we,” “us” and “our” refer to Dayton Superior Corporation, a Delaware corporation and successor (pursuant to a reincorporation merger effective December 15, 2006) to an Ohio corporation of the same name, and its subsidiary.

TABLE OF CONTENTS

Part I
	Item 1. Business.
	Item 1A. Risk Factors
	Item 1B. Unresolved Staff Comments.
	Item 2. Properties.
	Item 3. Legal Proceedings.
	Item 4. Submission of Matters to a Vote of Security Holders.
Part II
	Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.
	Item 6. Selected Financial Data.
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
	Item 8. Financial Statements and Supplementary Data.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Consolidated Balance Sheets
Consolidated Statements of Operations
	Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
	Item 9A. Controls and Procedures.
	Item 9A(T) Controls and Procedures.
	Item 9B. Other Information
Part III
	Item 10. Directors, Executive Officers, and Corporate Governance of the Registrant.
	Item 11. Executive Compensation
	Item 12. Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters
	Item 13. Certain Relationships and Related Transactions and Director Independence.
	Item 14. Principal Accounting Fees and Services
Part IV
	Item 15. Exhibits and Financial Statement Schedules
EX-3.1
EX-3.2
EX-23
EX-31.1
EX-31.2
EX-32.1
EX-32.2

Part I

Item 1.   Business.

Available Information

We file annual, quarterly, current reports, and other documents with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports and information statements, and other information regarding issuers, including the Company, that file electronically with the SEC. The public can obtain any documents that we file with the SEC at http://www.sec.gov.

General

We believe we are both the leading North American provider of specialized products consumed in non-residential, concrete construction and the largest concrete forming and shoring rental company serving the domestic, non-residential construction market. In many of our product lines, we believe we are the lowest-cost provider, competing primarily with smaller, regional suppliers that offer a more limited range of products and one other smaller national competitor. Our products can be found on construction sites nationwide and are used in non-residential construction projects, including:

•  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.

We sell most of our 20,000 products under well-established brand names. Our products are used to help form, strengthen, move, stabilize, cure or color concrete. Our products are generally imbedded in, or applied to, concrete and consumed during the construction process, thereby providing us with a source of recurring revenue. Our products include metal and plastic bar supports, anchor bolts, snap ties, wall forming products, rebar splicing devices, load transfer units, precast and tilt-up construction lifting hardware and construction chemicals. In addition, we sell a complete line of new and used forming and shoring systems, which may be combined to create solutions for a wide variety of customer-specific applications. We also rent a complete line of forming and shoring systems, and believe our rental fleet is the largest and most diverse in North America.

We manufacture and source our products through a balanced combination of North American manufacturing facilities and strategic outsourcing relationships. We use our network of 49 distribution, manufacturing, sales and service centers to establish a strong local presence in each of the markets we serve, which also allows us to deliver our broad product offering, technical expertise and customer service in a timely and efficient manner to our customers. We serve over 4,000 customers, consisting primarily of regional dealers and a broad array of general contractors and sub-contractors. We believe our distribution, manufacturing and service network is the largest in our industry.

In 2006, we generated $479.3 million in net sales, approximately 81% of which were from product sales (including sales of new forming and shoring systems). Approximately 84% of our 2006 product sales (or approximately 68% of our total net sales) were generated through the sale of consumable products. This mix of consumable versus reusable products, which is typical for our business, represents a significant source of recurring revenue for our company.

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Products

We offer more than 20,000 catalogued products, which we believe to be significantly more than our competitors who are mostly regional suppliers with limited product offerings. Most of our products are consumable, providing us with a source of recurring revenue. We continually attempt to increase the number of products we offer by using engineers and product development teams to introduce new products and refine existing products. Most of our products are sold under industry-recognized brand names including: Dayton/Richmond^®, Aztec^®, Symons^®, BarLock^®, Jahn^®, Swift Lift^®, Steel-Ply^®, Dayton Superior^®, Conspec^®, Edoco^®, Dur-O-Wal^® and American Highway Technology^®.

Product Sales Consist Of:

•  Wall-Forming Products.  Wall-forming products include shaped metal ties and accessories used to hold concrete forms in place while the concrete is curing.

•  Bridge Deck Products.  Bridge deck products are metal assemblies of varying designs used to support the formwork used by contractors in the construction and rehabilitation of bridges.

•  Bar Supports.  Bar supports are non-structural steel, plastic, or cementitious supports used to position rebar within a horizontal slab or concrete form.

•  Splicing Products.  Splicing products are used to join two pieces of rebar together at a construction site without the need for extensive preparation of the rebar ends.

•  Precast and Prestressed Concrete Construction Products.  Precast and prestressed concrete construction products are metal assemblies of varying designs used or consumed in the manufacture of precast concrete panels and prestressed concrete beams and structural members.

•  Formliner Products.  Formliner products include plastic and elastomeric products that adhere to the inside face of forms to provide shape or texture to the surface of the concrete.

•  Chemical Products.  Chemical products 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 and placement of concrete.

•  Masonry Products.  Masonry products are wire products that improve the performance and longevity of masonry walls by providing crack control, better water resistance, greater elasticity and higher strength to withstand seismic shocks.

•  Welded Dowel Assemblies.  Welded dowel assemblies are used to transfer dynamic loads between two adjacent slabs of concrete roadway.

•  Architectural Paving Products.  Architectural paving products are used to apply decorative texture and coloration to concrete surfaces.

•  Tilt-Up Construction Products.  Tilt-up construction products include a complete line of inserts, reusable lifting hardware and adjustable beams used in the tilt-up method of construction.

•  Forming Systems.  Forming systems are reusable, engineered modular forms which hold liquid concrete in place on concrete construction jobs while it cures.

•  Shoring Systems.  Shoring systems, including aluminum beams and joists, are reusable post shores and shoring frames used to support deck and other raised forms while concrete is being poured.

Rental Revenues and Sales of Used Rental Equipment Consist Of:

Our rental revenues and sales of used rental equipment consist of concrete forming systems, shoring systems and tilt-up construction products, each as described above.

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Manufacturing

We manufacture, in 19 facilities throughout North America, a majority of the products we sell and rent. These facilities incorporate semi-automated and automated production lines, heavy metal presses, forging equipment, stamping equipment, robotic welding machines, drills, punches and other heavy machinery typical for this type of manufacturing operation. Our production volumes enable us to design and build or custom modify much of the equipment we use to manufacture these products, using a team of experienced manufacturing engineers and tool and die makers.

By developing our own automatic high-speed manufacturing equipment, we believe we generally have achieved significantly greater productivity, lower capital equipment costs, lower scrap rates, higher product quality, faster changeover times, and lower inventory levels than most of our competitors. We also have a flexible manufacturing setup and can make the same products at several locations, which allows us to respond to local market requirements in a timely manner.

Given the high volume of certain of our products, we have recently been able to reduce our costs of sales by sourcing finished products and components through our manufacturing facility in Reynosa, Mexico and through foreign sourcing initiatives, including China.

Fleet Management

We believe our rental fleet is the largest in North America. We actively manage our fleet mix to ensure certain products are regionally focused to address geography-specific applications. We also monitor our fleet purchases to maintain appropriate inventory levels and to manage our deployment of capital resources.

Distribution

We distribute our products to customers through our network of 23 service/distribution centers located in the United States and Canada. We ship most of our products to our service/distribution centers from our manufacturing plants. We have an on-line inventory tracking system that enables us to identify, reserve and ship inventory quickly from our locations in response to customer orders.

Sales and Marketing

We employed approximately 300 sales and marketing personnel at December 31, 2006, of whom approximately two-thirds were field sales people and one-third were customer service representatives. Sales and marketing personnel are located in most of our service/distribution centers and are instrumental in driving the productivity of our regional operating model. We provide product documentation and consult on certain non-residential construction techniques in which our products can be used to solve typical construction problems. We promote our products through seminars and other customer education efforts and work directly with architects, engineers and contractors to secure the use of our products whenever possible.

Technical and Customer Service

Each of our six regions is supported by product specialists, engineers and customer service representatives who provide our customers with product application technical support, engineering consultation and product training. In addition, all of our regions are supported by one or more captive distribution facilities with make-to-order manufacturing capabilities. These capabilities allow us to deliver our products to any construction site in the United States in a timely manner and support our belief that our customer support infrastructure is a significant competitive strength in our industry. We employ approximately 80 individuals in our engineering department who combine region-specific product and application expertise with proprietary software applications to advise and consult on non-residential construction projects. We also make our library of product literature and training manuals readily available to our customers.

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Customers

We have over 4,000 customers, of which approximately 50% purchase our products for resale and 50% are end users. Our customer base is geographically diverse and consists of distributors, rebar fabricators, precast and prestressed concrete manufacturers, brick and concrete block manufacturers, general contractors and sub-contractors.

Raw Materials

Our principal raw materials are steel wire rod, steel hot rolled bar, metal stampings and flat steel, aluminum sheets and extrusions, plywood, cement and cementitious ingredients, liquid chemicals, zinc, plastic resins and injection-molded plastic parts. We currently purchase materials from over 800 vendors and are not dependent on any single vendor or small group of vendors for any significant portion of our raw material purchases. Steel, in its various forms, typically constitutes approximately 20% of our product cost of sales.

Competition

Our industry is highly competitive in most product categories and geographic regions. We compete with smaller, regional suppliers that offer a more limited range of products, and one smaller national competitor. We believe competition in our industry is largely based on, among other things, price, quality, breadth of product offering, distribution capabilities (including quick delivery times), customer service and expertise. Due primarily to factors such as freight rates, quick delivery times and customer preference for local suppliers, some local or regional manufacturers and suppliers may have a competitive advantage over us in a given region. We believe the size, breadth, and quality of our product offerings provide us with advantages of scale in both distribution and production relative to our competitors.

Trademarks and Patents

Our products are sold under our registered trademarks that are well known throughout the concrete construction industry and are therefore important to our business. Among our better-known trademarks are Dayton Superior^®, Dayton/Richmond^®, Symons^®, Aztec^®, Dur-O-Wal^®, American Highway Technology^®, Conspec^®, Edoco^®, Jahn^®, Swift Lift^®, Bar Lock^®, Steel-Ply^®, the Hexagon Logo^® and the S & Diamond^® design. Many of our products are protected by our patents, which we consider an important asset. As of December 31, 2006, we had approximately 100 patents and 40 pending patent applications, domestic and foreign, and about 170 registered trademarks and pending applications for registration.

Employees

We employ approximately 700 salaried and 900 hourly personnel, of whom approximately 550 of the hourly personnel and 4 of the salaried personnel are represented by labor unions. Employees at the Miamisburg, Ohio; Parsons, Kansas; Des Plaines, Illinois; New Braunfels, Texas; Tremont, Pennsylvania; Santa Fe Springs, California; City of Industry, California, and Aurora, Illinois facilities are covered by collective bargaining agreements. Of the union contracts, one expires in 2007, three expire in 2008, three expire in 2009, one expires in 2010, and one expires in 2011. We believe we have good employee and labor relations.

Seasonality

Due to weather, our operations are seasonal in nature, with approximately 55% of our sales historically occurring in the second and third quarters. Working capital and borrowings under the revolving credit facility fluctuate with sales volume such that our peak revolving credit facility borrowings are generally in the second quarter or third quarter.

Backlog

We typically ship most of our products, other than paving products and most specialty forming systems, within one week and often within 24 hours after we receive the order. Other product lines, including paving products and

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specialty forming systems, may be shipped up to two years after we receive the order, depending on our customers’ needs. Accordingly, we do not maintain significant backlog, and backlog as of any particular date has not been representative of our actual sales for any succeeding period.

Item 1A.   Risk Factors

The non-residential construction industry is cyclical, and we may experience prolonged depressed market conditions for our products and services.  The non-residential construction industry is cyclical, and a downturn in the non-residential construction industry could cause a decline in the demand for our products. Our products are primarily used in domestic, non-residential construction, therefore our sales and earnings are strongly influenced by non-residential construction activity, which historically has been cyclical. Most recently, during the period from 2001 to 2005, the commercial sector of the non-residential construction market experienced a downward trend, and as a result our sales and earnings were negatively affected. Non-residential construction activity can decline because of many other factors we cannot control, such as:

•  a decline in general economic activity;

•  a decrease in government spending on construction projects;

•  an increase in raw material and overall construction costs;

•  interest rate increases, which make borrowings used to finance construction projects more expensive; and

•  changes in banking and tax laws, which may reduce incentives to begin construction projects.

Demand for some of our products is seasonal, and we may experience significant variations in quarterly performance.  Due to weather, the non-residential construction industry is seasonal in most of North America. As a result, we typically experience seasonal fluctuations in sales and profitability, with generally lower sales and profit in the first and fourth quarters of our fiscal year. Demand for our products generally is higher in the spring and summer than in the winter and late fall. As a result, our first quarter net sales typically are the lowest of the year. Our net sales and operating income in the fourth quarter also generally are less than in the second and third quarters. Consequently, our working capital requirements tend to be higher in the second and third quarters and, accordingly, can adversely affect our liquidity and cash flow. Adverse weather, such as unusually prolonged periods of cold, rain, blizzards, hurricanes and other severe weather patterns, could delay or halt construction activity over wide regions of the country. For example, a severe winter, such as the winter of 2002-2003, could lead to reduced construction activity and thus magnify the seasonal decline in our revenues and earnings during the winter months. Sustained extreme adverse weather conditions could have a material adverse effect on our business, financial condition and results of operations.

Our substantial level of indebtedness could adversely affect our business, financial condition or results of operations and adversely affect the price of our common stock.  We currently have, and, after this offering will continue to have, substantial indebtedness. As of December 31, 2006, we had $322.5 million of total indebtedness outstanding. Our substantial indebtedness could have important consequences. In particular, it could make it difficult for us to satisfy our obligations under our outstanding indebtedness. As of December 31, 2006, our debt service costs for the years ending December 31, 2007, 2008, and 2009 were $41.8 million, $206.9 million, $165.1 million, respectively. In addition, our substantial indebtedness could:

•  increase our vulnerability to general adverse economic and industry conditions;

•  require us to dedicate a substantial portion of our cash flow from operations to payments of principal and interest on our indebtedness, thereby reducing the availability of our cash flow for operations and other general purposes;

•  limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•  place us at a disadvantage to our competitors that have less debt; and

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•  limit, along with other restrictive covenants in our indebtedness agreements, among other things, our ability to borrow additional funds.

Further, the terms of the indentures governing our senior notes and senior subordinated notes may permit us to incur substantial additional indebtedness in the future. If we incur any additional indebtedness, the related risks that we now face could intensify.

Our debt instruments governing our revolving credit facility and our outstanding senior notes and senior subordinated notes impose significant operating restrictions on us.  Our revolving credit facility and the indentures governing our senior notes and senior subordinated notes, among other things, restrict our ability to:

•  incur additional indebtedness;

•  create liens;

•  pay dividends and make distributions in respect of our capital stock;

•  enter into agreements that restrict our subsidiaries’ ability to pay dividends or make distributions;

•  redeem or repurchase our capital stock;

•  make investments or other restricted payments;

•  issue or sell preferred stock of our subsidiaries;

•  enter into transactions with affiliates; and

•  consolidate, merge or sell all or substantially all of our assets.

Our ability to comply with these covenants may be affected by events beyond our control, and an adverse development affecting our business could require us to seek waivers or amendments of covenants, alternative or additional sources of financing or reductions in expenditures. We may not be able to obtain such waivers, amendments or alternative or additional financings on terms acceptable to us or at all. A breach of any of the covenants or restrictions contained in any of our existing or future financing agreements could result in an event of default under those agreements. Such a default could allow the creditors under our financing agreements to discontinue lending, to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies, and to declare all borrowings outstanding thereunder to be due and payable. If our creditors require immediate repayments, we may not be able to repay them.

We have a history of losses and may experience substantial losses in the future. We cannot assure you that our net operating loss carryforwards will result in any significant tax savings in future periods.  Our business has experienced substantial net losses over the past several years and may continue to do so in the future. We reported net losses of $48.7 million in 2004, $114.7 million in 2005 and $18.0 million in 2006 and our stockholders’ deficit was $101.5 million as of December 31, 2006. Our results of operations will continue to be affected by events and conditions both within and beyond our control, including competition, economic, financial, business and other conditions. We cannot assure you that our operations will become or remain profitable in the future. As of December 31, 2006, we had deferred tax assets of $47.7 million related to net operating loss carryforwards. We had valuation allowances of $58.1 million for these net operating loss carryforwards and other deferred tax assets as of December 31, 2006, as estimated levels of taxable income are less than the amount needed to realize these assets. In addition, our use of net operating loss carryforwards may be limited under Section 382 of the Internal Revenue Code of 1986, as amended. Section 382 imposes limitations on a company’s ability to use net operating loss carryforwards if a company experiences a more-than-50-percent ownership change over a three-year testing period. As a result our ability to use our net operating loss carryforwards in future periods may be limited as provided in Section 382.

We expect to incur additional facility closing expenses in 2007 and 2008.  We anticipate that we will incur facility closing expenses in 2007 and 2008 in connection with the relocation of our manufacturing facility currently located in Des Plaines, Illinois to a newly leased facility in Elk Grove, Illinois. We will incur facility closing expenses aggregating approximately $2.0 million to $4.0 million in connection with the relocation. Although we do

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not currently anticipate incurring other material impairment charges or facility closing or severance expenses, we may incur similar charges in the future.

Our substantial stockholders’ deficit may require us to maintain additional working capital.  As of December 31, 2006, we had a stockholders’ deficit of $101.5 million, resulting primarily from our history of net losses. Our stockholders’ deficit may make it more difficult for us to obtain credit from suppliers and other parties in the future. In addition, some of our suppliers may impose less advantageous terms on timing of payment. As a result, we may require additional working capital, which may negatively affect our cash flow and liquidity.

Increased costs of raw materials and energy resources may result in increased operating expenses and adversely affect our results of operations and cash flow.  Significant variations in the costs, quality and availability of raw materials and energy may negatively affect our results of operations. Steel, in its various forms, is our principal raw material, constituting approximately 20% of our product cost of sales in 2006. Historically, steel prices have fluctuated, and in particular we faced rapidly rising steel prices in 2004 as a result of relatively low levels of supply and a relatively high level of demand. Any decrease in our volume of steel purchases could affect our ability to secure volume purchase discounts that we have obtained in the past. In addition, an overall increase in energy costs, including the cost of natural gas and petroleum products, could adversely impact our overall operating costs in the form of higher raw material, utilities, and freight costs. We typically do not enter into forward contracts to hedge commodity price risks that we face. Even though our costs may increase, our customers may not accept corresponding price increases for our products, or the prices for our products may decline. Our ability to achieve acceptable margins is principally dependent on managing our cost structure and managing changes in raw materials prices, which fluctuate based upon factors beyond our control. If the prices of our products decline, or if our raw material costs increase, it could have a material adverse effect on our operating margins and profitability.

Our rental fleet is subject to residual value risk upon disposition.  The market value of any piece of rental equipment could be less than its depreciated value at the time it is sold. In that event, we could recognize a loss on the sale of that equipment. Losses on sales of used equipment (or related impairment charges) could have a material adverse impact on our results of operations. The market value of used rental equipment depends on several factors, including:

•  the market price for new equipment of a like kind;

•  wear and tear on the equipment relative to its age;

•  the time of year that it is sold (generally prices are higher during the peak construction season);

•  demand for used equipment; and

•  general economic conditions.

Losing certain key customers could materially affect our revenues, and continuing consolidation of our customer base could reduce our profit margins.  Our top ten customers accounted for 25% of our net sales for the year ended December 31, 2006 and our largest customer accounted for approximately 7%, 5%, and 4% of our net sales for the years ended December 31, 2006, 2005 and 2004, respectively. The loss of any of these customers could have a material adverse effect on our revenue and could also adversely affect our liquidity and cash flow from operating activities. Further, increasing consolidation of our customers may negatively affect our earnings. We believe there is an increasing trend among our distributor customers to consolidate into larger entities. As our customers increase in size and gain market power, they may be able to exert pressure on us to reduce prices or increase price competition by dealing more readily with our competitors. If the consolidation of our customers does result in increased price competition, our sales and profit margins may be adversely affected.

Our business may be subject to significant environmental investigation, remediation and compliance costs.  Our business and our facilities are subject to a number of federal, state and local environmental laws and regulations that govern, among other things, the discharge of hazardous materials into the air and water as well as the use, generation, handling, storage, transport and disposal of these materials. Many of these laws and regulations provide for substantial fines and criminal sanctions for violations. Permits are required for operation of our businesses (particularly air emission permits), and these permits are subject to renewal, modification and, in certain circumstances, revocation. Pursuant to certain environmental laws, a current or previous owner or operator of

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land may be liable for the costs of investigation and remediation of hazardous materials at the property. These laws can often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of any hazardous materials. Persons who arrange (as defined under these statutes) for the disposal or treatment of hazardous materials also may be liable for the costs of investigation and remediation of these substances at the disposal or treatment site, regardless of whether the affected site is owned or operated by them. We may be liable for costs under certain environmental laws even if we did not cause the condition causing such liability. Changes in environmental laws or unexpected investigations could adversely affect our business. Since we own and operate a number of facilities where industrial activities have been historically conducted and because we arrange for the disposal of hazardous materials at many disposal sites, we may incur costs for investigation and remediation, as well as capital costs associated with compliance with these laws. More stringent environmental laws as well as more vigorous enforcement policies or discovery of previously unknown conditions requiring remediation could impose material costs and liabilities on us which could have a material adverse effect on our business, financial condition and results of operations.

Our Mexican operations and foreign sourcing relationships are subject to local business risks which could have a material adverse effect on our financial condition, results of operations and cash flows.  We operate a manufacturing facility in Reynosa, Mexico and have increased our purchasing of raw materials and finished goods from China and other foreign sources. The success of our operations in Mexico and our foreign sourcing initiatives, including in China, depend on numerous factors, many of which are beyond our control, including our inexperience with operating abroad, general economic conditions, restrictions on the repatriation of assets, compliance with foreign laws and standards and political risks. Our Mexican operations and foreign outsourcing relationships are affected directly and indirectly by global regulatory, economic and political conditions, including:

•  new and different legal and regulatory requirements in local jurisdictions;

•  export duties or import quotas;

•  domestic and foreign customs and tariffs or other trade barriers;

•  potential difficulties in staffing and labor disputes;

•  managing and obtaining support and distribution for local operations;

•  increased costs of, and availability of, transportation or shipping;

•  credit risk and financial conditions of local customers and distributors;

•  potential difficulties in protecting intellectual property;

•  risk of nationalization of private enterprises by foreign governments;

•  potential imposition of restrictions on investments;

•  potentially adverse tax consequences, including imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries;

•  capital controls;

•  foreign exchange restrictions and fluctuations; and

•  local political, economic and social conditions, including the possibility of hyperinflationary conditions and political instability in certain countries.

We cannot assure you that we will succeed in developing and implementing policies and strategies to counter the foregoing factors effectively in each location where we do business. Some or all of these factors may have a material adverse effect on our operations or upon our financial condition and results of operations in the future.

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Acquisitions that we may undertake involve a number of inherent risks, any of which could cause us not to realize the anticipated benefits.  We may complete acquisitions that disrupt our business. If we make acquisitions, we could do any of the following, which could adversely affect our business, financial condition and results of operations:

•  incur substantial additional debt, which may reduce funds available for operations and future opportunities and increase our vulnerability to adverse general economic and industry conditions and competition;

•  assume contingent liabilities; or

•  take substantial charges to write off goodwill and other intangible assets.

In addition, acquisitions can involve other risks, such as:

•  difficulty in integrating the acquired operations and products into our existing business;

•  costs that are greater than anticipated or cost savings that are less than anticipated;

•  diversion of management time and attention; and

•  adverse effects on existing business relationships with our suppliers and customers and the suppliers and customers of the acquired business.

The high level of competition in our industry could materially adversely affect our business.  The markets in which we compete are highly competitive. Many of the markets in which we operate are served by numerous competitors, ranging from multi-regional companies to small, independent businesses with a limited number of locations. We generally compete on the basis of, among other things: price, quality, breadth of product offering, distribution capabilities (including quick delivery times), customer service and expertise. However, the uniformity of products among our competitors results in substantial pressure on pricing and profit margins. As a result of these pricing pressures, we may experience reductions in the profit margins on our sales, or we may be unable to pass any cost increases on to our customers. We cannot assure you that we will be able to maintain or increase the current market share of our products or compete successfully in the future. If competitive pressures were to cause us to reduce our prices, our operating margins may be adversely impacted. If we were to maintain our prices in the face of price reductions by our competitors, our net sales could decline. We may encounter increased competition from existing competitors or new market entrants in the future, which could have a material adverse effect on our business, financial condition and results of operations.

We are effectively controlled by a major stockholder, whose interests may conflict with yours.  Pursuant to the terms of a voting agreement, Odyssey Investment Partners Fund, LP (“Odyssey”) and its affiliates control the voting of 53.5% of our common stock and, therefore, have the power to control or substantially affect the outcome of matters on which stockholders are entitled to vote. These include the election of directors, the adoption or amendment of our certificate of incorporation and by-laws, and possible mergers, corporate control contests and significant corporate transactions. Through their control of our board of directors, Odyssey and its affiliates also have the ability to appoint or replace our senior management, issue additional shares of our common stock or repurchase common stock, declare dividends or take other actions. Our controlling stockholder may make decisions regarding our company and business that are opposed to your interests or with which you disagree. To the extent the interests of our public stockholders are harmed by the actions of our controlling stockholder, the price of our common stock may be harmed.

We are a “controlled company” within the meaning of the listing requirements for the Nasdaq Global Market and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.  Pursuant to the terms of a voting agreement, certain members of our management have granted Odyssey the right to vote their shares of our common stock. As a result, affiliates of Odyssey control a majority of our common stock and we are a “controlled company” under Nasdaq Rule 4350(c). Accordingly, if we so elect, we are not required to comply with certain corporate governance requirements, including the requirements that (1) a majority of our board of directors consist of independent directors, (2) nominations for our board of directors, or recommendations to our board for such nominations, be made by our independent directors or a nominations committee that consists entirely of independent directors and (3) compensation of our executive officers be determined, or recommended to the

9

board for determination, by our independent directors or by a compensation committee that consists entirely of independent directors. We have availed ourselves of these exemptions. As a result, we do not have a majority of independent directors nor does our nominating and corporate governance committee or compensation committee consist entirely of independent directors. Accordingly, you do not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq Global Market’s corporate governance requirements.

Labor disputes with our employees could interrupt our operations and adversely affect our business.  We depend on our highly trained employees, and any work stoppage or difficulty hiring similar employees would adversely affect our business. We could be adversely affected by a shortage of skilled employees. As of December 31, 2006, approximately 35% of our employees were unionized. We are subject to several collective bargaining agreements with employees at our Miamisburg, Ohio; Parsons, Kansas; Des Plaines, Illinois; New Braunfels, Texas; Tremont, Pennsylvania; Santa Fe Springs, California; City of Industry, California; and Aurora, Illinois facilities. These collective bargaining agreements are scheduled to terminate beginning in April 2007 through May 2011, and we cannot offer assurances that we will be able to negotiate a satisfactory renewal of these collective bargaining agreements or that our employee relations will remain stable. Any shortage of labor could have a material adverse effect on our business, financial condition and results of operations.

We depend on our key personnel and the loss of the services provided by any of our executive officers or other key employees could harm our business and results of operations.  Our success depends to a significant degree upon the continued contributions of our senior management, many of whom would be difficult to replace. Generally, these employees may voluntarily terminate their employment with us at any time. In such event, we may not be able to successfully retain existing personnel or identify, hire and integrate new personnel. Accordingly, it is possible that our business would be materially adversely affected if one or more of these key individuals left. We do not maintain any key-man or similar insurance policies covering any of our senior management or key personnel.

The nature of our business involves product liability and construction-related risks that could adversely affect our operating results.  Our products are used in various construction projects, and defects in our products could result in claims for personal injury or death and property damage. While we maintain insurance to cover these claims, it is possible that existing or future claims will exceed our insurance coverage. In addition, it is possible that third-party insurance will not continue to be available to us on economically reasonable terms. Claims brought against us that are not covered by insurance could have a material adverse effect on our operating results and financial condition. Our operations are subject to hazards inherent in the construction industry that could result in personal injury or death, work stoppage or serious damage to our equipment or to the property of our customers. To protect ourselves against such casualty and liability risks, we maintain an insurance program. Our deductibles per incident are $500,000 for general liability, $350,000 workers’ compensation liability and $1,000 for automobile liability. In addition, we maintain a one-time annual deductible of $4.0 million for general liability and $5.7 million for workers’ compensation liability coverage. We maintain outside insurance for such liability in excess of these deductibles. Our deductibles may cause us to incur significant costs. If our insurance premiums or other costs rise significantly in the future, our profitability could be reduced.

The price of our common stock may fluctuate significantly.  Volatility in the market price of our common stock may prevent you from being able to sell your stock at prices equal to or greater than your purchase price. The market price of our common stock could fluctuate significantly for various reasons, including:

•  our operating and financial performance and prospects;

•  our quarterly or annual earnings or those of other companies in our industry;

•  the public’s reaction to our press releases, other public announcements and filings with the Securities and Exchange Commission, or SEC;

•  changes in earnings estimates or recommendations by research analysts who track our common stock or the stock of other companies in our industry;

•  strategic actions by us or our competitors;

•  new laws or regulations or new interpretations of existing laws or regulations applicable to our business;

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•  changes in accounting standards, policies, guidance, interpretations or principles;

•  changes in general economic conditions in the United States and global economies or financial markets,

•  including those resulting from war, incidents of terrorism or responses to such events; and

•  sales of common stock by us or our principal stockholders or by members of our management team.

In addition, in recent years, the stock market has experienced significant price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies, including companies in our industry. The changes frequently occur without regard to the operating performance of the affected companies. Hence, the price of our common stock could fluctuate based upon factors that have little or nothing to do with our business.

Our certificate of incorporation and by-laws contain provisions that could discourage a third party from acquiring us and consequently decrease the market value of an investment in our common stock.  Our certificate of incorporation and by-laws contain provisions that may make the acquisition of our company more difficult without the approval of our board of directors, including, but not limited to, the following:

•  our board of directors is classified into three classes, each of which serves for a staggered three-year term;

•  only our board of directors may call special meetings of our stockholders;

•  we have authorized undesignated preferred stock, the terms of which may be established and shares of which may be issued without stockholder approval;

•  our stockholders have only limited rights to amend our by-laws; and

•  we require advance notice for stockholder proposals.

These provisions could discourage proxy contests, make it more difficult for our stockholders to elect directors and take other corporate actions and may discourage, delay or prevent a change in control or changes in our management that a stockholder might consider favorable. Any delay or prevention of a change in control or change in management that stockholders might otherwise consider to be favorable could deprive holders of our common stock of the opportunity to sell their common stock at a price in excess of the prevailing trading price and cause the trading price of our common stock to decline.

Implementation of required public-company corporate governance and financial reporting practices and policies will increase our costs.  Our internal controls and procedures do not currently meet all of the standards applicable to public companies, including those contemplated by Section 404 of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley, as well as the rules and regulations enacted by the Securities and Exchange Commission and the Nasdaq Global Market. As we attempt to comply with these standards, we have incurred, and will continue to incur, significant increases in legal and accounting costs.

Item 1B.   Unresolved Staff Comments.

None

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Item 2.   Properties.

Our corporate headquarters is located in leased facilities in Dayton, Ohio. We believe our facilities provide adequate manufacturing and distribution capacity for our needs. We also believe all of the leases were entered into on market terms. Our other principal facilities as of December 31, 2006 are located throughout North America, as follows:

						Lease
		Leased/		Size		Expiration
Location	Use	Owned		(Sq. Ft.)		Date
Birmingham, Alabama	Manufacturing/Distribution		Leased		287,000	December 2021
Elk Grove, Illinois	Manufacturing/Distribution		Leased		230,768	May 2022
Kankakee, Illinois	Manufacturing/Distribution		Leased		172,954	December 2007
Des Plaines, Illinois	Manufacturing/Distribution		Leased		171,650	April 2008
Miamisburg, Ohio	Service/Distribution		Leased		156,600	September 2017
Allentown, Pennsylvania	Service/Distribution		Leased		114,000	May 2015
Reynosa, Mexico	Manufacturing/Distribution		Leased		110,000	July 2007
Aurora, Illinois	Manufacturing/Distribution		Leased		103,700	October 2016
Parsons, Kansas	Manufacturing/Distribution		Leased		120,000	October 2018
New Braunfels, Texas	Manufacturing/Distribution		Owned		89,600
Tremont, Pennsylvania	Manufacturing/Distribution		Owned		86,000
Fontana, California	Service/Distribution		Leased		70,000	April 2007
Parker, Arizona	Manufacturing/Distribution		Leased		60,000	Month to Month
Kansas City, Kansas	Manufacturing/Distribution		Leased		56,600	September 2015
Fontana, California	Manufacturing/Distribution		Leased		56,000	July 2007
Modesto, California	Manufacturing/Distribution		Leased		54,100	October 2007
Grand Prairie, Texas	Service/Distribution		Leased		51,000	June 2010
Toronto, Ontario	Manufacturing/Distribution		Leased		45,661	January 2010
Kent, Washington	Service/Distribution		Leased		40,640	June 2007
Oregon, Illinois	Service/Distribution		Owned		39,000
Brandywine, Maryland	Service/Distribution		Leased		36,800	October 2010

Item 3.   Legal Proceedings.

During the ordinary course of our business, we are from time to time threatened with, or may become a party to, legal actions and other proceedings. While we are currently involved in various legal proceedings, we believe the results of these proceedings will not have a material effect on our business, financial condition or results of operations. We believe that our potential exposure to these legal actions is adequately covered by product and general liability insurance, and, in some instances, by indemnification arrangements.

Item 4.   Submission of Matters to a Vote of Security Holders.

Not applicable.

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Executive Officers

Our executive officers and their ages as of March 30, 2007, are as follows:

Eric R. Zimmerman	56	President, Chief Executive Officer and Director
Peter J. Astrauskas	56	Vice President, Engineering
Jeffrey S. Dawley	43	Vice President, Manufacturing
Raymond E. Bartholomae	60	Executive Vice President and President, Symons
Edward J. Puisis	46	Executive Vice President and Chief Financial Officer
Thomas W. Roehrig	41	Vice President, Finance and Secretary
Keith M. Sholos	53	Vice President, Sales

Eric R. Zimmerman has been President, Chief Executive Officer and a director of our company since August 2005. He served as President of the Gilbarco International and Service Station Equipment units of Gilbarco Inc. from 1998 to 2003.

Peter J. Astrauskas has been Vice President, Engineering since September 2003. From 2001 to 2003, he was Vice President, Engineering for Alcoa Automotive. From 1994 to 2001, he was the Director, Global Manufacturing Engineering for TRW Safety Systems.

Raymond E. Bartholomae has been Executive Vice President and President, Symons since November 2005. He served as Vice President, Sales and Marketing from August 2003 to November 2005. He has been employed by Symons since January 1970 and was Vice President and General Manager, Symons, from February 1998 to August 2003.

Jeffrey S. Dawley has been Vice President, Manufacturing since January 2007. From February 2006 to January 2007, he served as Director, Manufacturing Operations. From December 2003 to February 2006, he served as Manager, Operations Analysis. From October 2002 to December 2003, he served as Manager, Special Projects. From October 2001 to October 2002, he served as Director of Operations, Dur-O-Wal.

Edward J. Puisis has been Executive Vice President and Chief Financial Officer since November 2005. He served as Vice President and Chief Financial Officer from August 2003 to November 2005. From March 1998 to August 2003, he was General Manager of Finance and Administration and Chief Financial Officer of Gallatin Steel Company, a partnership owned by Dofasco and Gerdau Ameristeel.

Thomas W. Roehrig has been Vice President, Finance and Secretary since January 2007. From November 2005 to January 2007, he served as Vice President of Corporate Accounting and Secretary. He served as Vice President of Corporate Accounting from February 2003 to November 2005 and was Treasurer from August 2003 to December 2003. From April 1998 to February 2003, Mr. Roehrig served as Corporate Controller.

Keith M. Sholos has been Vice President, Sales since January 2007. From September 2005 to January 2007, he served as Vice President, Sales. From August 2004 to September 2005, he served as Vice President, Dealer Sales. From January 2004 to August 2004, he served as Vice President, Sales & Marketing, Construction Products Group. From March 2002 to January 2003, he served as Vice President, Sales & Marketing, Dayton/Richmond.

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Part II

Item 5.   Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on The Nasdaq Stock Market’s Global Market under the symbol “DSUP.” The prices presented in the following table are the high and the low closing prices for the period presented as reported by The Nasdaq Stock Market’s Global Market. Prior to our initial public offering of common stock in December 2006, there was no established public trading market for our common stock.

	High		Low
2006 4th Quarter	$	11.74	$	10.58

As of March 28, 2007, we had approximately 100 holders of our common stock.

We have paid no dividends on our common stock. We intend to retain all future earnings, if any, for use in the operation and expansion of our business and to fund future growth. We do not anticipate paying any dividends for the foreseeable future. The decision whether to pay dividends will be made by our board of directors in light of conditions then existing, including factors such as our results of operations, financial condition and requirements, business condition and covenants under any applicable contractual arrangements. Our ability to pay dividends on our common stock is limited by the covenants of our revolving credit facility and the indentures governing our outstanding debt securities.

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Item 6.   Selected Financial Data.

The following table sets forth selected historical consolidated financial information as of and for each of the years in the five-year period ended December 31, 2006. The selected historical financial information as of December 31, 2002, 2003, 2004, 2005 and 2006 and for each of the years in the five-year period ended December 31, 2006 has been derived from our consolidated financial statements. Our audited consolidated financial statements for the three years ended December 31, 2006 are included elsewhere herein. You should read the following table together with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section below and our consolidated financial statements and their related notes included elsewhere herein.

	Year Ended December 31,
	2006			2005			2004			2003			2002
	($ in thousands)
Statement of Operations Data:
Net sales	$	479,310		$	418,983		$	418,639		$	379,457		$	400,046
Cost of sales		340,902			320,399			311,335			278,345			273,462
Gross profit		138,408			98,584			107,304			101,112			126,584
Selling, general and administrative expenses		103,644			93,956			89,735			84,543			88,929
Stock compensation expense		2,249			—			—			—			—
Facility closing and severance expenses(1)		423			1,712			2,036			2,294			5,399
Amortization of intangibles and impairment of goodwill		560			64,570	(2)		989			944			603
Loss (gain) on disposals of property, plant and equipment		(1,504	)		4,529			(248	)		(636	)		1,115
Income (loss) from operations		33,036			(66,183	)		14,792			13,967			30,538
Interest expense		49,983			48,133			47,207			40,186			34,039
Interest income		113			(163	)		(559	)		(53	)		(72	)
Loss on early extinguishment of long-term debt		—			—			842	(3)		2,480	(4)		—
Other (income) expense		555			(89	)		(134	)		20			80
Loss before provision (benefit) for income taxes and cumulative effect of change in accounting principle		(17,615	)		(114,064	)		(32,564	)		(28,666	)		(3,509	)
Provision (benefit) for income taxes		394			639			16,185	(5)		(11,030	)		(386	)
Loss before cumulative effect of change in accounting principle		(18,009	)		(114,703	)		(48,749	)		(17,636	)		(3,123	)
Cumulative effect of change in accounting principle, net of income tax benefit		—			—			—			—			(17,140	)(6)
Net loss	$	(18,009	)	$	(114,703	)	$	(48,749	)	$	(17,636	)	$	(20,263	)

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	Year Ended December 31,
	2006			2005			2004			2003			2002
	($ in thousands)
Net loss per share:
Basic	$	(1.76	)	$	(11.57	)	$	(4.91	)	$	(1.92	)	$	(2.34	)
Diluted	$	(1.76	)	$	(11.57	)	$	(4.91	)	$	(1.92	)	$	(2.34	)
Weighted average shares outstanding		10,224,765			9,916,425			9,932,872			9,194,577			8,670,414
Other Financial Data:
Depreciation and amortization	$	26,479		$	97,427	(2)	$	31,738		$	27,693		$	21,453
Property, plant and equipment additions, net		13,216			5,140			4,586			6,935			9,267
Rental equipment additions, net		(6,905	)		11,232			(7,739	)		(13,251	)		(17,230	)
Balance Sheet Data (at period end):
Working capital		81,355		$	63,584		$	93,623		$	70,029		$	65,751
Goodwill and intangibles		48,705			48,668			114,828			120,117			115,733
Total assets		321,635			281,520			394,763			396,195			373,971
Long-term debt (including current portion)		322,450			369,254			379,735			345,547			299,536
Stockholders’ deficit		(101,544	)		(171,337	)		(59,468	)		(10,416	)		(8,220	)

(1)	From 2000 through 2006, we approved and implemented several plans to exit manufacturing and distribution facilities and reduce overall headcount to keep our cost structure aligned with our net sales. We describe the facility closing and severance expenses relating to these consolidation efforts in Note 11 to the consolidated financial statements. During 2006, we initiated a plan to move our manufacturing and distribution operation from a leased facility in Des Plaines, Illinois to a newly leased facility in Elk Grove, Illinois. No expense was incurred during 2006 for this plan. The move is expected to begin in 2007 and be completed in the first quarter of 2008, following renovation of the new facility. We currently estimate that during 2007 and 2008, we will incur expenses and expend cash in the range of approximately $2.0 to $4.0 million in connection with the relocation, which will be expensed as incurred in accordance with SFAS No. 146.
(2)	In accordance with SFAS No. 142, we assess our goodwill recoverability annually. Prior to 2006, the Company’s financial performance has gradually deteriorated over several years due to a general decline in nonresidential construction activity and rising costs, such as steel and fuel. The Company had been unable to consistently sustain positive cash flow and its future ability to do so is uncertain. Accordingly, the Company recorded an impairment charge of $64 million in 2005 to reduce the carrying value of goodwill to its implied fair value.
(3)	In 2004, we established an $80.0 million senior secured revolving credit facility which was used to refinance our previous $50.0 million revolving credit facility. As a result of the transaction, we incurred a loss on the early extinguishment of long-term debt of $0.8 million, due to the expensing of deferred financing costs related to the previous revolving credit facility.
(4)	In 2003, we completed an offering of $165.0 million of senior second secured notes in a private placement. The proceeds of the offering were used to repay other long-term debt. As a result, we incurred a loss on the early extinguishment of long-term debt of $2.5 million, due to the expensing of deferred financing costs.
(5)	In the fourth quarter of 2004, we recorded a non-cash valuation allowance for our net deferred tax assets related to net operating loss carryforwards as a result of adherence to FAS 109, as our estimated levels of future taxable income are less than the amount needed to realize the deferred tax asset related to the carryforwards. Future changes in these estimates could result in a non-cash increase or decrease to net income.
(6)	We adopted SFAS No. 142 effective January 1, 2002. As a result of adopting SFAS No. 142, we recorded a non-cash charge in 2002 of $17.1 million ($19.9 million of goodwill, less an income tax benefit of $2.8 million), which is reflected as a cumulative effect of change in accounting principle. This amount did not affect our ongoing operations. The goodwill arose from the acquisitions of businesses that manufactured and sold metal accessories used in masonry construction. The masonry products market had experienced weaker markets and significant price competition that had a negative impact on the product line’s earnings and fair value.

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Item 7.   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 elsewhere in this document 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

We believe we are both the leading North American provider of specialized products consumed in non-residential, concrete construction and the largest concrete forming and shoring rental company serving the domestic, non-residential construction market. Demand for our products and rental equipment is driven primarily by the level of non-residential construction activity in the United States, which consists primarily of:

•  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.

Although certain of our products can be used in residential construction projects, we believe that less than 5% of our revenues are attributable to residential construction activity.

We use three segments to monitor gross profit by sales type: product sales, rental revenue, and used rental equipment sales. These sales are differentiated by their source and gross margin as a percentage of sales. Accordingly, this segmentation provides information for decision-making and resource allocation. Product sales represent sales of new products carried in inventories on the balance sheet. Cost of goods sold for product sales include material, manufacturing labor, overhead costs, and freight. Rental revenues represent the leasing of the rental equipment and are recognized ratably over the lease term. Cost of goods sold for rental revenues includes depreciation of the rental equipment, maintenance of the rental equipment, and freight. Sales of used rental equipment represent sales of the rental equipment after a period of generating rental revenue. Cost of goods sold for sales of used rental equipment consists of the net book value of the rental equipment.

Results of Operations

The following table summarizes our results of operations as a percentage of net sales for the periods indicated:

	Years Ended December 31,
	2006			2005			2004
Product sales		81.0	%		84.2	%		83.1	%
Rental revenue		13.1			11.8			10.1
Used rental equipment sales		5.9			4.0			6.8
Net sales		100.0			100.0			100.0
Product cost of sales		76.4			78.5			76.2
Rental cost of sales		58.7			76.9			84.6
Used rental equipment cost of sales		27.1			31.6			36.6
Cost of sales		71.1			76.5			74.4
Product gross profit		23.6			21.5			23.8
Rental gross profit		41.3			23.1			15.4
Used rental equipment gross profit		72.9			68.4			63.4
Gross profit		28.9			23.5			25.6

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	Years Ended December 31,
	2006			2005			2004
Selling, general and administrative expenses		21.6			22.4			21.4
Stock compensation expense		0.5			—			—
Facility closing and severance expenses		0.1			0.4			0.5
Amortization of intangibles and impairment of goodwill		0.1			15.4			0.2
Loss (gain) on disposals of property, plant and equipment		(0.3	)		1.1			—
Income (loss) from operations		6.9			(15.8	)		3.5
Interest expense		10.5			11.5			11.3
Interest income		—			(0.1	)		(0.2	)
Loss on early extinguishment of long-term debt		—			—			0.2
Other expense		0.1			—			—
Loss before provision for income taxes		(3.7	)		(27.2	)		(7.8	)
Provision for income taxes		0.1			0.2			3.8
Net loss		(3.8	)%		(27.4	)%		(11.6	)%

Comparison of Years Ended December 31, 2006 and 2005

Net Sales.  Our 2006 net sales were $479.3 million, a 14.4% increase from $419.0 million in 2005. The following table summarizes our net sales by product type for the periods indicated:

	Years Ended December 31,
	2006					2005
	Sales		%			Sales		%			% Change
	($ in thousands)
Product sales	$	388,100		81.0	%	$	352,888		84.2	%		10.0	%
Rental revenue		62,769		13.1			49,485		11.8			26.8
Used rental equipment sales		28,441		5.9			16,610		4.0			71.2
Net sales	$	479,310		100.0	%	$	418,983		100.0	%		14.4	%

Product sales increased $35.2 million, or 10.0%, to $388.1 million in 2006 from $352.9 million in 2005. The increase in product sales was due to an increase in unit volume of $27.3 million as a result of improvement in the nonresidential construction markets. The balance of the increase was due to price increases.

Rental revenue increased $13.3 million, or 26.8%, to $62.8 million in 2006, compared to $49.5 million in 2005. The increase was due to increased customer demand as a result of improvement in the nonresidential construction markets.

Used rental equipment sales increased to $28.4 million in 2006 from $16.6 million in 2005 due to higher customer demand. In addition, $1.0 million of the increase related to the acquisition of one customer by another customer that occurred in the first nine months of 2006. Used rental equipment sales may vary significantly from period to period.

Gross Profit.  Gross profit for 2006 was $138.4 million, a $39.8 million increase from the $98.6 million for 2005. Gross profit was 28.9% of sales in 2006, increasing from 23.5% in 2005. Each segment experienced increased gross profit as a percentage of sales, and those segments with higher gross profit as a percentage of sales experienced higher sales growth.

Product gross profit was $91.7 million, or 23.6% of product sales, in 2006, compared to $75.8 million, or 21.5% of product sales, in 2005. The $15.9 million increase in product gross profit was due to the higher product sales, which contributed $13.8 million of product gross profit, $4.1 million of lower costs due to outsourcing, and manufacturing efficiencies of $3.5 million, partially offset by material cost increases of $5.5 million.

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Rental gross profit increased $14.5 million to $25.9 million, or 41.3% of rental revenue in 2006, from $11.4 million, or 23.1% of rental revenue, in 2005. Depreciation on rental equipment in 2006 was $19.2 million, as compared to $24.5 million in 2005. The difference was primarily due to a change in the estimated useful lives of certain rental equipment effective January 1, 2006, which reduced depreciation expense on rental equipment in 2006 by approximately $3.0 million. Rental gross profit before depreciation increased to $45.1 million, or 71.9% of rental revenue, in 2006 from $35.9 million, or 72.5% of rental revenue in 2005. The increase in gross profit was due to increased rental revenue as discussed above.

Gross profit on used rental equipment sales was $20.7 million, or 72.9% of used rental equipment sales, compared to $11.4 million, or 68.4% of used rental equipment sales, in 2005. The increase in gross profit dollars was due to the increased sales discussed previously. Gross profit as a percentage of sales fluctuates based on the age and type of the specific equipment sold and remained within historical ranges.

Operating Expenses.  Selling, general, and administrative expenses increased to $103.6 million in 2006 from $94.0 million in 2005. The increase was primarily due to increases in consulting fees of $3.9 million for profit improvement initiatives, selling costs of $2.3 million, distribution costs of $1.9 million, discretionary retirement account costs of $1.1 million, and healthcare costs of $0.4 million, most of which were due to the higher revenues and gross profit discussed above. These increases exceeded the non-recurring severance cost of $1.0 million related to the termination of a former executive recorded in 2005.

Stock compensation expense, a non-cash expense, was $2.2 million in 2006 and primarily related to the partial vesting, as a result of our initial public offering, of restricted stock granted to certain executives in 2006.

Facility closing and severance expenses were approximately $0.4 million in 2006 and approximately $1.7 million in 2005. During 2006, we initiated a plan to move our manufacturing and distribution operation from a leased facility in Des Plaines, Illinois to a newly leased facility in Elk Grove, Illinois. No expense was incurred during 2006 for this plan. The move is expected to begin in 2007 and be completed in the first quarter of 2008, following renovation of the new facility. We estimate that during 2007 and 2008, we will incur expenses and expend cash in the range of approximately $2.0 to $4.0 million in connection with the relocation.

Amortization of intangibles and impairment of goodwill decreased $64.0 million to $0.6 million in 2006 from $64.6 million in 2005. Prior to 2006, our financial performance had gradually deteriorated over several years due to a general decline in nonresidential construction activity and rising costs, such as steel and fuel. We were unable to consistently sustain positive cash flow and, at that time, our future ability to do so was uncertain. Accordingly, we recorded a non-cash impairment charge of $64.0 million in 2005 to reduce the carrying value of goodwill to its estimated implied fair value.

The gain on disposals of property, plant and equipment was $1.5 million in 2006, as compared to a loss of $4.5 million in 2005. The gain in 2006 was due to the amortization of the gain on the sale/leaseback of the Des Plaines, IL facility. The loss in 2005 was due to the sale/leaseback of the Kansas City, KS facility and the closure of a portion of the facility in Long Beach, CA.

Other Expenses.  Interest expense increased to $50.0 million in 2006 from $48.1 million in 2005 due to higher weighted average interest rates and higher average borrowings on the revolving line of credit.

Loss Before Provision for Income Taxes.  The loss before income taxes in 2006 was $17.6 million, as compared to $114.1 million in 2005 due to the factors described above.

Provision for Income Taxes.  We have recorded a non-cash valuation allowance to reduce our deferred tax assets, primarily related to net operating loss carryforwards, to zero, as estimated levels of future taxable income are less than the amount needed to realize this asset. If such estimates change in the future, the valuation allowance will be decreased or increased appropriately, resulting in a non-cash increase or decrease to net income. The provision for income taxes is a result of foreign earnings.

Net Loss.  The net loss for 2006 was $18.0 million, compared to a loss of $114.7 million in 2005 due to the factors described above.

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Comparison of Years Ended December 31, 2005 and 2004

Net Sales.  Our 2005 net sales were $419.0 million, a 0.1% increase from $418.6 million in 2004. The following table summarizes our net sales by product type for the periods indicated:

	Years Ended December 31,
	2005					2004
	Sales		%			Sales		%			% Change
	($ in thousands)
Product sales	$	352,888		84.2	%	$	348,036		83.1	%		1.4	%
Rental revenue		49,485		11.8			42,231		10.1			17.2
Used rental equipment sales		16,610		4.0			28,372		6.8			(41.5	)
Net sales	$	418,983		100.0	%	$	418,639		100.0	%		0.1	%

Product sales increased $4.9 million, or 1.4%, to $352.9 million in 2005 from $348.0 million in 2004. The increase in sales was due to price increases throughout 2004 that had a $22.3 million carryover impact to 2005. The price increases more than offset a $17.4 million reduction in unit volume that was negatively impacted by Hurricanes Katrina, Rita and Wilma.

Rental revenue increased $7.3 million, or 17.2%, to $49.5 million in 2005, compared to $42.2 million in 2004. The increase was due to volume associated with a stronger rental market as well as additional investment in the rental fleet in geographic areas with higher demand.

Used rental equipment sales decreased to $16.6 million in 2005 from $28.4 million in 2004 as we emphasized renting equipment rather than selling it.

Gross Profit.  Gross profit for 2005 was $98.6 million, an $8.7 million decrease from $107.3 million for 2004. Gross profit was 23.5% of sales in 2005, decreasing from 25.6% in 2004.

Product gross profit was $75.8 million, or 21.5% of product sales, in 2005, compared to $82.8 million, or 23.8% of product sales, in 2004. The decrease in gross profit was due to material cost inflation, primarily steel, throughout 2004 that had a $17.4 million carryover impact to 2005, $4.0 million of increases in freight rates related to oil prices, and an unfavorable mix of product sales in 2005.

Rental gross profit increased $4.9 million to $11.4 million, or 23.1% of rental revenue in 2005, from $6.5 million, or 15.4% of rental revenue, in 2004. Rental gross profit before depreciation increased to $35.9 million, or 72.6% of rental revenue, from $29.2 million, or 69.1% of rental revenue. The increase in gross profit dollars was due to increased rental revenue as discussed above and the fixed nature of certain of our costs.

Gross profit on used rental equipment sales was $11.4 million, or 68.4% of used rental equipment sales, compared to $18.0 million, or 63.4% of used rental equipment sales, in 2004. The decrease in gross profit dollars was primarily due to the decreased sales discussed previously. Gross profit as a percentage of sales fluctuates based on the age and type of the specific equipment sold and remained within historical ranges.

Operating Expenses.  Our SG&A expenses increased $4.3 million to $94.0 million in 2005 from $89.7 million in 2004. The increase is primarily related to $3.0 million of higher distribution costs as we continued to refine our distribution strategy and to higher rental revenue activity, as well as a $1.0 million severance payment related to the termination of a former executive officer.

Facility closing and severance expenses were approximately $1.7 million in 2005 and approximately $2.0 million in 2004.

Amortization of intangibles and impairment of goodwill increased $63.6 million to $64.6 million in 2005 from $1.0 million in 2004. In accordance with SFAS No. 142, we conducted our annual assessment of goodwill recoverability and recorded an impairment charge of $64.0 million in 2005 to reduce the carrying value of goodwill to its estimated implied fair value.

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The loss on disposals of property, plant and equipment was $4.5 million in 2005, as compared to a gain of $0.3 million in 2004. The loss was due to the sale-leaseback of the Kansas City, KS facility and the closure of a portion of the manufacturing facility in Long Beach, CA.

Other Expenses.  Interest expense increased to $48.1 million in 2005 from $47.2 million in 2004 due to higher weighted average interest rates and higher average borrowings under the revolving credit facility.

Loss Before Income Taxes.  The loss before income taxes in 2005 was $114.1 million, as compared to $32.6 million in 2004 due to the factors described above.

Provision for Income Taxes.  In the fourth quarter of 2004, we recorded a non-cash valuation allowance for our net operating loss carryforwards as a result of adherence to FAS 109, as estimated levels of future taxable income are less than the amount needed to realize the deferred tax asset related to the carryforwards. Tax benefit from current year net operating losses have been offset by a valuation allowance resulting in no tax benefit being recorded. Future changes in these estimates could result in a non-cash increase or decrease to net income. In 2005, we continued to provide a non-cash valuation allowance for the increase to our net operating loss carryforward as well as other deferred tax assets as these tax future deductions would generate additional net operating losses.

Net Loss.  The net loss for 2005 was $114.7 million, compared to a loss of $48.7 million in 2004 due to the factors described above.

Liquidity and Capital Resources

Historically, working capital borrowings under our revolving credit facility fluctuate with sales volume, such that our peak revolving credit borrowings are generally in the late second or early third quarter. Our key measure of liquidity and capital resources is cash and cash equivalents and the amount available under our revolving credit facility. As of December 31, 2006, we had $26.8 million of cash and cash equivalents, with an additional $106.5 million available under our revolving credit facility.

Our capital uses relate primarily to capital expenditures and debt service. Our capital expenditures consist primarily of additions to our rental equipment fleet and additions to our PP&E. PP&E consists primarily of manufacturing and distribution equipment and management information systems. We finance these capital expenditures with cash on hand or borrowings under our revolving credit facility, and with proceeds of sales of our used rental equipment. The following table sets forth a summary of these capital events for the periods indicated.

	Years Ended December 31,
	2006			2005			2004
	($ in thousands)
Capital expenditures:
Additions to rental equipment fleet	$	21,535		$	27,842		$	20,633
Additions to PP&E		13,237			6,687			5,423
Proceeds from sales of used rental equipment		(28,440	)		(16,610	)		(28,372	)
Proceeds from sales of PP&E		(21	)		(1,547	)		(837	)
Net capital expenditures and fleet additions (proceeds)	$	6,311		$	16,372		$	(3,153	)

We believe we can manage the capital requirements of our rental fleet, and thus our cash flow, through the careful monitoring of our rental fleet additions. Sales of used equipment can be adjusted to increase cash available for fleet additions or other corporate purposes.

Our cash requirements relate primarily to capital expenditures, debt service and the cost of acquisitions. Historically, our primary sources of financing have been cash generated from operations, borrowings under our revolving credit facility and the issuance of long-term debt and equity. In December 2006, we completed an initial public offering of our common stock and received $85.0 million in proceeds, net of issuance costs.

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Net cash used in operating activities for 2006 was $(1.2) million compared to net cash provided by operating activities for 2005 of $2.5 million, comprised of the following:

	2006			2005
	($ in millions)
Net loss	$	(18.0	)	$	(114.7	)
Adjustments to reconcile net loss to net cash used in operating activities		10.8			95.8
Subtotal		(7.2	)		(18.9	)
Changes in assets and liabilities		6.0			21.4
Net cash provided by (used in) operating activities	$	(1.2	)	$	2.5

The subtotal of net loss and adjustments to reconcile net loss to net cash used in operating activities for 2006 was $7.2 million compared to $18.9 million in 2005. The improvement was due to the reduced net loss discussed above, partially offset by lower depreciation expense, lower amortization of intangibles and impairment of goodwill, and higher gain on sales of rental equipment. Changes in assets and liabilities resulted in a $6.0 million source of cash in 2006, as compared to a $21.4 million in 2005. The increase in accounts receivable was a $(9.2) million use of cash in 2006, compared to a $5.7 million source of cash in 2005, due to the $14.7 million increase in net sales in the fourth quarter of 2006 as compared to the fourth quarter of 2005. The increase in inventories was a $(1.0) million use of cash in 2006 compared to a $2.0 million source of cash in 2005, representing better inventory turnover when compared to the increased sales activity. Changes in prepaid expenses and other assets represented a $(0.8) million use of cash in 2006 as compared to a $5.7 million source of cash in 2005, due primarily to accelerated collections of notes receivable in 2005 that did not recur in 2006. Accounts payable were a $9.6 million source of cash in 2006 as compared to $6.2 million in 2005, due to increased sales and purchasing activity as well as more favorable payment terms. Accrued and other long-term liabilities were a $7.3 million source of cash in 2006 as compared to $1.9 million in 2005, due to higher expenses to support the higher net sales.

Net cash used in investing activities was $6.3 million in 2006 compared to $16.4 million in 2005. Net PP&E additions increased to $13.2 million in 2006 from $5.1 million in 2005 due to increased investments in manufacturing and distribution equipment and facilities. Net additions to rental equipment were a $6.9 million source of cash in 2006 as compared to an $11.2 million use of cash in 2005 due to the higher sales of used rental equipment and lower additions.

For the year ended December 31, 2006, our gross long-term debt borrowings, which represent the sum of individual days with borrowings on the revolving credit facility, were $139.0 million. This was more than offset by repayments on the revolving credit facility of $187.7 million and $2.9 million of repayments of other long-term debt. In December 2006, we completed an initial public offering of our common stock. We received $87.0 million in proceeds, net of issuance costs, in 2006, and $2.0 million of issuance costs were paid in the first quarter of 2007, resulting in net proceeds of $85.0 million.

We have a $130.0 million senior secured revolving credit facility, which has no financial maintenance covenants and matures on July 31, 2008. Availability of borrowings is limited to 85% of eligible accounts receivable and 60% of eligible inventories and rental equipment, less $15.0 million. Under the calculation, $114.4 million of the $130.0 million was available as of December 31, 2006. Letters of credit of $7.9 million were outstanding at December 31, 2006, resulting in available borrowings of $106.5 million under the revolving credit facility. The credit facility is secured by substantially all of our assets.

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As of December 31, 2006, our other long-term debt consisted of the following:

	($ in thousands)
Senior Second Secured Notes, interest rate of 10.75%	$	165,000
Debt discount on Senior Second Secured Notes		(3,208	)
Senior Subordinated Notes, interest rate of 13.0%		154,729
Debt discount on Senior Subordinated Notes		(4,746	)
Senior notes payable related to 2003 acquisition, non-interest bearing, accreted at 6.0% to 14.5%		7,286
Debentures previously held by Dayton Superior Capital Trust, interest rate of 9.1%, due on demand		1,063
Capital lease obligations		2,326
Total long-term debt		322,450
Less current maturities		(2,551	)
Long-term portion	$	319,899

At December 31, 2006, working capital was $81.4 million, compared to $63.6 million at December 31, 2005. The $17.8 million increase was comprised primarily of the following:

•  a $26.8 million increase in cash and cash equivalents reflecting the proceeds from our initial public offering after the repayment of all outstanding revolving credit facility borrowings;

•  a $9.2 million increase in accounts receivable due to the higher net sales in the fourth quarter of 2006 relative to fourth quarter of 2005;

•  a $1.9 million decrease in the current portion of deferred gain on sale-leaseback, due to normal amortization of the gain;

•  $1.8 million of changes in other items;

offset by

•  a $13.6 million increase in accounts payable due to higher purchasing activity, favorable payment terms, and $2.7 million of financing costs and common stock issuance costs;

•  an $8.4 million increase in accrued liabilities due to higher expenses needed to support the higher net sales.

We believe our liquidity, capital resources, and cash flows from operations are sufficient to fund the capital expenditures and rental fleet additions we have planned as well as our debt service requirements for at least the next 12 months. However, our ability to make scheduled payments of principal, or to pay the interest on, or to refinance, our indebtedness, or to fund planned capital expenditures and rental fleet additions will depend on our future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that operating improvements will be realized on schedule or that future borrowings will be available to us under our revolving credit facility in an amount sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. We may from time to time seek to retire our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, in privately negotiated transactions, or otherwise. Any such repurchases or exchanges will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. We may need to refinance all or a portion of our indebtedness on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including our revolving credit facility, the senior subordinated notes and the senior second secured notes, on commercially reasonable terms or at all.

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Commitments

Scheduled payments of long-term debt, future minimum lease payments under capital leases, future lease payments under non-cancelable operating leases, purchase obligations, and other long-term liabilities at December 31, 2006 were as follows:

									Other
	Long-term		Interest		Capital		Operating		Long-Term
Year	Debt		Payments		Leases		Leases		Liabilities		Total
	($ in thousands)
2007	$	1,809	$	38,846	$	1,162	$	7,107	$	200	$	49,124
2008		171,540		34,342		1,061		5,140		50		212,133
2009		154,729		10,057		298		4,521		—		169,605
2010		—		—		51		4,273		—		4,324
2011		—		—		—		3,915		—		3,915
Thereafter		—		—		—		29,800		—		29,800
	$	328,078	$	83,245	$	2,572	$	54,756	$	250	$	468,901

Seasonality

Our operations are seasonal in nature, with approximately 55% of our sales historically occurring in the second and third quarters. Working capital and borrowings under the revolving credit facility fluctuate with sales volume, such that our peak revolving credit facility borrowings are generally in the late second quarter or early in the third quarter.

Inflation

We may not be able to pass on the cost of commodity price increases to our customers. Steel, in its various forms, is our principal raw material, constituting approximately 20% of our product cost of sales in 2006. In 2005 and 2006, steel costs were less volatile than in 2004. We expect our overall steel costs to increase in the first half of 2007. Additionally, the overall increase in energy costs, including natural gas and petroleum products, has adversely impacted our overall operating costs in the form of higher raw material, utilities, and freight costs. We cannot assure you we will be able to pass these cost increases on to our customers.

Stock Collateral Valuation — Senior Second Secured Notes

Rule 3-16 of the SEC’s Regulation S-X requires the presentation of a subsidiary’s stand-alone, audited financial statements if the subsidiary’s capital stock secures an issuer’s notes and the par value, book value or market value (“Applicable Value”) of the stock equals or exceeds 20% of the aggregate principal amount of the secured class of securities (“Collateral Threshold”). The indenture governing our Senior Second Secured Notes and the security documents for the notes provide that the collateral will never include the capital stock of any subsidiary to the extent the Applicable Value of the stock is equal to or greater than the Collateral Threshold. As a result, we will not be required to present separate financial statements of our subsidiary under Rule 3-16. In addition, in the event that Rule 3-16 or Rule 3-10 of Regulation S-X is amended, modified or interpreted by the SEC to require (or is replaced with another rule or regulation, or any other law, rule or regulation is adopted which would require) the filing with the SEC (or any other governmental agency) of separate financial statements of subsidiary due to the fact that such subsidiary’s capital stock or other securities secure our Senior Second Secured Notes, then the capital stock or other securities of such subsidiary automatically will be deemed not to be part of the collateral for the notes but only to the extent necessary to not be subject to such requirement. In such event, the security documents for the Senior Second Secured Notes may be amended or modified, without the consent of any holder of notes, to the extent necessary to release the liens of the Senior Second Secured Notes on the shares of capital stock or other securities that are so deemed to no longer constitute part of the collateral; however, the excluded collateral will continue to secure our first priority lien obligations such as our senior secured revolving credit facility. As a result of the provisions in the indenture and security documents relating to subsidiary capital stock, holders of our Senior Second Secured Notes may at any time in the future lose all or a portion of their security interest in the capital stock of any of

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our other subsidiaries if the Applicable Value of that stock were to become equal to or greater than the Collateral Threshold. As of December 31, 2006, 65% of the voting capital stock and 100% of the non-voting capital stock of our subsidiary Dayton Superior Canada Ltd. constituted collateral for the notes. We have based our determination of whether 65% of the voting capital stock and 100% of the non-voting capital stock of our subsidiary Dayton Superior Canada Ltd. constituted collateral upon the book value, par value and estimated market value of the capital as of December 31, 2006. The Applicable Value for the capital stock is the greater of the book value and estimated market value, as the value of each subsidiary’s capital stock is nominal and therefore has not impacted our calculation of Applicable Value.

The Applicable Value of Dayton Superior Canada Ltd. as of December 31, 2006 was $22.1 million. Based upon the foregoing, as of December 31, 2006, the Applicable Value of the capital stock of Dayton Superior Canada Ltd. did not exceed the Collateral Threshold. The Applicable Value of the common stock of Dayton Superior Canada Ltd was based upon the estimated market value. We have calculated the estimated market value of our Dayton Superior Canada Ltd. capital stock by determining the earnings before interest, taxes, depreciation, and amortization, or adjusted EBITDA, for the year ended December 31, 2006, and multiplied this adjusted EBITDA by 9.3 times. We determined this multiple by multiplying our closing share price as of December 31, 2006 by the number of the common shares and equivalents outstanding, adding our long-term debt, and dividing by our adjusted EBITDA.

Set forth below is the adjusted EBITDA of Dayton Superior Canada Ltd. for the year ended December 31, 2006, together with a reconciliation to net income:

	Dayton Superior
	Canada Ltd.
	($ in thousands)
Net income	$	1,143
Provision for income taxes		394
Income before provision for income taxes		1,537
Interest income		(38	)
Income from operations		1,499
Depreciation expense		881
Adjusted valuation EBITDA		2,380
Multiple		9.3
Estimated fair value	$	22,134

As described above, we have used adjusted EBITDA of Dayton Superior Canada Ltd. solely for purposes of determining the estimated market value of the capital stock to determine whether that capital stock is included in the collateral. Adjusted EBITDA is not recognized financial measures under generally accepted accounting principles and do not purport to be alternatives to operating income as indicators of operating performance or to cash flows from operating activities as measures of liquidity. Additionally, EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our consolidated results as reported under generally accepted accounting principles. Because not all companies use identical calculations, the presentation of adjusted EBITDA also may not be comparable to other similarly titled measures of other companies. You are encouraged to evaluate the adjustments taken and the reasons we consider them appropriate for analysis for determining estimated market value of our subsidiaries’ capital stock.

A change in the Applicable Value of the capital stock of Dayton Superior Canada Ltd. could result in capital stock previously excluded from collateral becoming part of the collateral or capital stock that was previously included in collateral to become excluded. The Applicable Value of Dayton Superior Canada Ltd. as of December 31, 2006 and the adjusted EBITDA for the year ended December 31, 2006 would have to increase by $10.9 million and $1.2 million, respectively, in order for Dayton Superior Canada Ltd. capital stock to no longer constitute collateral.

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Forward-Looking Statements

This Form 10-K includes, and future filings by us on Form 10-K, Form 10-Q, and Form 8-K, and future oral and written statements by us and our management may include certain forward-looking statements, including (without limitation) statements with respect to anticipated future operating and financial performance, growth opportunities and growth rates, acquisition and divestitive opportunities and other similar forecasts and statements of expectation. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and “should,” and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements by our management and us are based on estimates, projections, beliefs and assumptions of management and are not guarantees of future performance. We disclaim any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information, or otherwise.

Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) the cyclical nature of nonresidential building and infrastructure construction activity, which can be affected by factors outside our control such as the general economy, governmental expenditures, interest rate increases, and changes in banking and tax laws; the amount of debt we must service; the effects of weather and the seasonality of the construction industry; our ability to implement cost savings programs successfully and on a timely basis; our ability to successfully integrate acquisitions on a timely basis; the mix of product sales, rental revenues, and sales of used rental equipment; cost increases in raw materials and operating costs; and favorable market response to sales price increases. This list of factors is not intended to be exhaustive, and additional information concerning relevant risk factors can be found under the heading Risk Factors above and in future Quarterly Reports on Form 10-Q, and current Reports on Form 8-K we file with the Securities and Exchange Commission.

Critical Accounting Policies

In preparing our consolidated financial statements, we follow accounting principles generally accepted in the United States. These principles require us to make certain estimates and apply judgments that affect our financial position and results of operations. We continually review our accounting policies and financial information disclosures. On an ongoing basis, we evaluate our estimates, including those related to allowance for doubtful accounts, inventories, long-lived assets, income taxes, self-insurance reserves, environmental contingencies, litigation, and the fair value of the Company and its business segments. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Effective January 1, 2006, we changed our estimate of depreciable lives on certain families of rental equipment from three years to fifteen years on a prospective basis. Effective January 1, 2006, we also adopted SFAS No. 123R and began recording compensation expense for our stock option plan. As of December 31, 2006, in accordance with SFAS no. 158, we recognized the funded status of its defined benefit pension and postretirement benefit plans and provided the required disclosures. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Inventories

We value our inventories at the lower of first-in, first-out, or FIFO, cost or market and include all costs associated with manufacturing products: materials, inbound freight, labor and manufacturing overhead. We provide net realizable value reserves that reflect our best estimate of the excess of the cost of potential obsolete and slow moving inventory over the expected net realizable value. Excluding newly introduced products, we reserve 100% of inventory items that have had no sales or usage in the trailing twelve-month period. We additionally reserve for items that have a quantity on hand in excess of the trailing twelve months’ sales and usage, ranging from 25% to 100% of the excess, depending on the number of years’ supply on hand. Based on this calculation, our reserve was approximately $3.7 million as of December 31, 2006. If the range were decreased by 10%, the reserve at December 31, 2006 would be reduced by $190,000. If the range were increased by 10%, the reserve at December 31, 2006 would be increased by $105,000.

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Rental Equipment

We manufacture and purchase rental equipment for resale and for rent to others on a short-term basis. We record rental equipment at the lower of FIFO cost or market and depreciate it over the estimated useful life of the equipment, three to fifteen years, on a straight-line method. Rental equipment that is sold is charged to cost of sales on a FIFO basis. Effective January 1, 2006, we changed our 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 reduced rental cost of sales by approximately $3 million for the year ended December 31, 2006.

Goodwill and Intangible Assets

As with tangible and other intangible assets, periodic impairment reviews of goodwill are required, at least annually, as well as when events or circumstances change. As with the Company’s review of impairment of tangible and intangible assets, the Company uses judgment in assessing goodwill for impairment. The Company reviews the recorded value of its goodwill annually on a segment by segment basis in the fourth quarter using data as of the third quarter, or sooner if events or changes in circumstances indicate that the carrying amount may exceed fair value. The review for impairment requires the Company to estimate the fair value of its long-lived assets and considerable judgment must be exercised in determining these values.

When exercising judgment, the Company carefully considers all of the relevant facts and circumstances available to it at the time. The critical factors affecting this analysis include:

•  the amount of adjusted EBITDA (which is income (loss) from operations adjusted for depreciation, amortization of intangibles and impairment of goodwill; loss on early extinguishment of long-term debt; gain (loss) from disposals of property, plant, and equipment; facility closing and severance expenses; and stock compensation expense) generated by each of the Company’s business segments;

•  the Company’s ability to meet operating results compared to budget;

•  the level of expected activity in the nonresidential construction industry; and

•  the Company’s future prospects.

Taking all of these factors into account, the Company determined the fair value of its business segments as of December 31, 2005 and 2006 by deriving enterprise value indications of its business segments using a range of adjusted EBITDA multiples. The Company used this approach on these dates because it determined that a discounted cash flow analysis was not a reliable methodology for testing goodwill impairment of its business segments because it had been unable to reliably project future cash flows over the prior several years. This inability had been due to the cyclical and seasonal nature of the Company’s business and the lack of near-term visibility with the respect to nonresidential construction activity.

Because impairment tests are based in part on management’s judgment as to the fair value of the Company’s business segments relative to their carrying value — which is necessarily subjective — management’s discretion impacts any decision to record an impairment charge and therefore affects the Company’s reported results of operation.

Prior to 2006, the Company’s financial performance had gradually deteriorated over several years due to a general decline in nonresidential construction activity and rising costs, such as steel and fuel. The Company had been unable to consistently sustain positive cash flow and, at that time, its future ability to do so was uncertain. Accordingly, for the year ended December 31, 2005, the Company recorded an impairment charge of $64 million to reduce the carrying value of goodwill to its implied fair value. The goodwill impairment has been included in the caption “amortization of intangibles and impairment of goodwill” in the consolidated statement of operations. There was no impairment to goodwill in the year ended December 31, 2006 or to the amortizing intangible assets in any year.

27

Income Taxes

Deferred tax assets and liabilities are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the enacted tax rates in effect for the years the differences are expected to reverse. The Company evaluates the need for a deferred tax asset valuation allowance by assessing whether it is more likely than not that it will realize deferred tax assets in the future and it records liabilities for uncertain tax matters based on assessment of the likelihood of sustaining certain tax positions. In estimating whether deferred tax assets are realizable, it estimates levels of future taxable income by considering historical results of operations in recent years and would, if necessary, consider the implementation of prudent and feasible tax planning strategies to generate taxable income.

Insurance Reserves

We are self-insured for certain of our group medical, workers’ compensation and product and general liability claims. We have stop loss insurance coverage at various per occurrence and per annum levels depending on type of claim. We consult with third party administrators to estimate the reserves required for these claims. Actual claims experience can impact these calculations and, to the extent that subsequent claim costs vary from estimates, future earnings could be impacted and the impact could be material.

Our group medical reserve is based on the dollar-weighted average historical lag between the date the service was incurred and the date the claim is paid, which was approximately 60 days at December 31, 2006. A 5-day increase or decrease in the lag would increase or decrease the reserve by approximately $50,000.

Our workers’ compensation reserve is estimated based on industry development factors of incurred losses. A 1-percentage point increase or decrease in the development factor would increase or decrease the reserve by $85,000 at December 31, 2006.

The product and general liability reserve is the sum of the loss estimate of known claims and the estimate of incurred but not reported (IBNR) claims. IBNR claims are estimated based on the historical annual number of claims times the historical cost per claim. A 10% increase or decrease in the average cost would increase or decrease the December 31, 2005 reserve by $70,000.

Pension Liabilities

Pension and other retirement benefits, including all relevant assumptions required by accounting principles generally accepted in the United States of America, are evaluated each year. Due to the technical nature of retirement accounting, outside actuaries are used to provide assistance in calculating the estimated future obligations. Since there are many assumptions used to estimate future retirement benefits, differences between actual future events and prior estimates and assumptions could result in adjustments to pension expense and obligations. Certain actuarial assumptions, such as the discount rate and expected long-term rate of return, have a significant effect on the amounts reported for net periodic pension cost and the related benefit obligations.

A one percentage point change in the discount rate would have the following effects:

	1 Percentage Point			1 Percentage Point
	Increase			Decrease
	($ in thousands)
Effect on 2006 net periodic pension cost	$	(240	)	$	296
Effect on December 31, 2006 pension benefit obligation		(1,918	)		2,415
Effect on 2006 postretirement cost		(3	)		1
Effect on December 31, 2006 postretirement benefit obligation		(29	)		34

In accordance with the guidelines of the most recent actuarial valuation of the pension plan, the Company’s expected return on plan assets is 8.0%, which represents a weighted average of 11% for equity securities, 5.5% for

28

debt securities, and 4% for cash and cash equivalents and insurance contract. A one percentage point change in the expected return on plan assets would have the following effects:

	1 Percentage Point			1 Percentage Point
	Increase			Decrease
	($ in thousands)
Effect on 2006 net periodic pension cost	$	(102	)	$	102

Common Stock Valuation

On December 20, 2006, we completed an initial public offering of our common stock and accordingly, any transactions impacted by the value of the our stock is based on the publicly traded share price on the date of the transaction. Effective with the initial public offering, the put rights of the Management Stockholders’ Agreement were terminated. No transactions involving our common stock valuation occurred from December 20 through December 31, 2006.

Prior to our initial public offering, we were required to value our common stock for purposes of (i) calculating compensation expense in connection with the award of unvested stock and stock option grants and (ii) calculating the redemption value of our common stock that was subject to put under our Management Stockholders’ Agreement. The value of our common stock was determined after careful consideration of all available facts and circumstances. The critical factors affecting this analysis include:

•  the independent appraisal obtained within 90 days of the end of each fiscal year that we were required to obtain pursuant to the Management Stockholders’ Agreement;

•  the amount of adjusted EBITDA (defined as income (loss) from operations adjusted for depreciation, amortization of intangibles and impairment of goodwill; loss on early extinguishment of long-term debt; gain (loss) from disposals of property, plant, and equipment; facility closing and severance expenses; and stock compensation expense) we generated;

•  the implied multiple of adjusted EBITDA derived from the independent appraisal required by the Management Stockholders’ Agreement;

•  the lack of liquidity of our capital stock as a private company;

•  our historical operating results compared to budget;

•  the amount of our outstanding indebtedness;

•  any recent impairment charges;

•  the level of activity in the nonresidential construction industry;

•  our future prospects; and

•  the likelihood of a future liquidity event.

Our estimation of the value of our common stock affected the amount of compensation expense reflected in our income statement in that it affected the amount of compensation that was deemed to have been paid in connection with any award of unvested shares of stock or grants of stock options. The valuation of our underlying common stock required us to exercise discretion and make judgments based on all available circumstances at the time of any particular award or grant. Determining the redemption value of the stock that was subject to put under the Management Stockholders’ Agreement also required management to exercise judgment. We were required under the terms of the Management Stockholders’ Agreement to obtain an independent appraisal of our common stock within 90 days of each of our fiscal year end. These appraisals were based upon the results of operations for the fiscal year then ended and all other relevant facts and circumstances and were used to determine the redemption price of the stock subject to put under the Management Stockholders’ Agreement. The redemption price contemplated by the Management Stockholders’ Agreement was determined based upon these appraisals and the date on which an employee’s employment ends. An employee whose employment ended during the first six months of any fiscal year was permitted to put his stock to the Company at a redemption price equal to the appraised value of the common stock as of the immediately preceding fiscal year end. An employee whose employment ended

29

during the last half of any fiscal year was permitted to put his stock to us at a redemption price equal to the weighted average of the appraised value of the common stock as of the immediately preceding fiscal year end and the appraised value as of the end of the fiscal year in progress. Because this subsequent appraised value was not available as of the date of termination, we used our best estimate of the fair market value as of the termination date as an estimate for what the future appraised value would be. The judgment was based on the same factors that are used to determine compensation expense in connection with unvested share awards and stock option grants.

In the first quarter of 2006, we obtained an independent appraisal from Valuation Research Corporation as of December 31, 2005 that valued our common stock at $0.69 per share, which implied an adjusted EBITDA multiple of 7.60x. We utilized this value in calculating the redemption value of stock subject to put on our December 31, 2005 balance sheet, as required by the Management Shareholders’ Agreement, after deducting the amount of stockholder loans owed to the Company by the stockholders who have put rights under the Management Stockholders’ Agreement.

On June 30, 2006, we awarded 1,005,967 unvested shares of stock to three of our executive officers. We valued the stock on June 30, 2006 at $5.85 per share. The compensation expense associated with the June 30, 2006 stock awards will be recognized as a non-cash charge in future periods as the stock vests through December 31, 2009. We expensed $1.5 million for these stock awards in the fourth quarter of 2006. Based on the current vesting schedule, this compensation expense is expected to be $2.6 million in 2007, $1.2 million in 2008, and $0.5 million in 2009. On September 29, 2006, we granted a former director and executive officer options to purchase 80,307 shares of our common stock at an exercise price of $12.46 per share. As of September 29, 2006, based on our improving operating results, the increased likelihood of achieving sustainable profitability in the near term, continued improvements in the non-residential construction industry, our increasing confidence in our prospects for the full year 2006 and beyond and the increasing likelihood that our initial public offering of common stock would be consummated in the near term, we determined that $11.30 per share of our common stock was an appropriate valuation as of September 29, 2006. As a result, we recorded compensation expense of $510,000 in the quarter ended September 29, 2006 for the options granted to our former director and executive officer.

Because the compensation expense reflected in our results of operations was based in part on management’s judgment as to the value of the Company’s common stock — which is necessarily subjective — subjective discretion impacts our reported results of operations. Similarly, the redemption value of stock subject to put reflected on its balance sheet was based on the judgment of an independent appraiser and, in the case of stock held by employees whose term of employment ends during the second half of any fiscal year, our own judgment as to fair market value. As a result, these accounting policies required management to make estimates and assumptions that impacted our financial statements.

Revenue Recognition

Revenue is recognized from product sales when the product is shipped from our facilities and risk of loss and title have passed to the customer. Additionally, revenue is recognized at the customer’s written request and when the customer has made a fixed commitment to purchase goods on a fixed schedule consistent with the customer’s business, where risk of ownership has passed to the buyer, the goods are physically segregated and we do not retain any specific performance obligations. For customer-requested bill and hold transactions in which a performance obligation exists on our part prior to the delivery date, we do not recognize revenue until the total performance obligation has been met and all of the above criteria related to bill and hold transactions have been met. In instances where the customer provides payment for these services prior to the delivery date, the revenue is deferred until all performance obligations have been met. Sales under bill and hold arrangements were $3.7 million, $1.0 million, and $2.9 million for the years ended December 31, 2006, 2005, and 2004, respectively.

Recently Issued Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and waste material (spoilage). This statement requires those items to be recognized

30

as current period charges. We complied with the provisions of SFAS No. 151 as of January 1, 2006, with no impact to the consolidated financial statements.

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-based employee compensation in their financial statements. We adopted SFAS No. 123R effective January 1, 2006 and recorded stock compensation expense of $2.25 million for the year ended December 31, 2006.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections — a Replacement of APB Opinion No. 20 and FASB Statement No. 3. This Statement applies to all voluntary changes in accounting principle. This Statement requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This Statement requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. This Statement also requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets, such as a change from straight-line to double-declining balance, be accounted for as a change in accounting estimate affected by a change in accounting principle. This Statement carries forward without changing the guidance contained in Opinion 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. This Statement also carries forward the guidance in Opinion 20 requiring justification of a change in accounting principle on the basis of preferability. We adopted the provisions of SFAS No. 154 as of January 1, 2006 and will apply SFAS No. 154 to any future accounting changes.

In June 2005, the FASB issued EITF 05-6, Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business Combination. EITF 05-6 requires that leasehold improvements acquired in a business combination should be amortized over the shorter of the useful life of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date of acquisition. EITF 05-6 also requires that leasehold improvements that are placed in service significantly after and not contemplated at or near the beginning of the lease term should be amortized over the shorter of the useful life of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. EITF 05-6 is effective for leasehold improvements that are purchased or acquired in reporting periods beginning January 1, 2006. EITF 05-6 had no impact to our consolidated financial statements.

In June 2006, the 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. We will be required to comply with the provisions of Interpretation No. 48 as of January 1, 2007. We assessed the impact of this Interpretation on our December 31, 2006 consolidated financial statements. Due to our net operating loss and related valuation allowance, the adoption of Interpretation No. 48 will not have a material impact on our balance sheet or statement of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements. This Statement does not require any new fair value measurements. We will be required to comply with Statement No. 157 as of the first annual period that begins after November 15, 2007. We have not determined the impact that Statement No. 157 will have on our consolidated financial statements.

In September 2006, the FASB issued SFAS No. 158, Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R). This Statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity. This Statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. We previously measured the funded status of its plan as of our year-end statement date, so this

31

portion of the Statement had no impact on our financial statements. We have recognized the funded status of our defined benefit pension and postretirement benefit plans and provided the required disclosures as of December 31, 2006.

In September 2006, the SEC issued Staff Accounting Bulletin 108 (SAB 108). The interpretations in this Staff Accounting Bulletin express the staff’s views regarding the process of quantifying financial statement misstatements. The staff is aware of diversity in practice. For example, certain registrants do not consider the effects of prior year errors on current year financial statements, thereby allowing improper assets or liabilities to remain unaudited. While these errors may not be material if considered only in relation to the balance sheet, correcting the errors could be material to the current year income statement. Certain registrants have proposed to the staff that allowing these errors to remain on the balance sheet as assets or liabilities in perpetuity is an appropriate application of generally accepted accounting principles. The staff believes that approach is not in the best interest of the users of financial statements. The interpretations in this Staff Accounting Bulletin are being issued to address diversity in practice in quantifying financial statement misstatements and the potential under current practice for the build up of improper amounts on the balance sheet. We determined that SAB 108 has no impact on our consolidated financial statements.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk.

As of December 31, 2006, the only financial instrument we had that is sensitive to changes in interest rates is our $130.0 million revolving credit facility. No balance was outstanding on the facility as of December 31, 2006. The facility has several interest rate options, which re-price on a short-term basis.

During the year ended December 31, 2006, our weighted average interest rate on the facility was 8.1%. A one percentage point increase or decrease in our weighted average interest rate on the facility would have increased or decreased our annual interest expense by approximately $0.7 million.

In the ordinary course of our business, we also are exposed to price changes in raw materials (particularly steel rod and steel bar), freight due to fuel costs, and products purchased for resale. The prices of these items can change significantly due to changes in the markets in which our suppliers operate. We do not use financial instruments to manage our exposure to changes in commodity prices.

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Item 8.   Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Dayton Superior Corporation

We have audited the accompanying consolidated balance sheets of Dayton Superior Corporation (a Delaware Corporation) and subsidiary (the “Company”) as of December 31, 2006 and 2005, and the related consolidated statements of operations, shareholders’ deficit, cash flows and comprehensive loss for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2). These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Dayton Superior Corporation and its subsidiary as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 2 to the consolidated financial statements, effective January 1, 2006, the Company adopted FASB Statement No. 123(R) (revised 2004), Share Based Payment. As discussed in Note 6 to the consolidated financial statements, the Company adopted the provisions of FASB Statement No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R), effective December 31, 2006.

DELOITTE & TOUCHE LLP

Dayton, OH

March 30, 2007

33

Dayton Superior Corporation and Subsidiary

Consolidated Balance Sheets

As of December 31

	2006			2005
	($ in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	26,813		$	—
Accounts receivable, net of reserves for doubtful accounts and sales returns and allowances of $5,430 and $5,435		71,548			62,326
Inventories		58,396			57,372
Prepaid expenses and other current assets		5,907			5,134
Prepaid income taxes		320			546
Total current assets		162,984			125,378
Rental equipment, net of accumulated depreciation of $63,469 and $56,591		63,766			68,400
Property, plant and equipment
Land and improvements		1,857			1,595
Building and improvements		16,330			14,394
Machinery and equipment		85,442			80,502
		103,629			96,491
Less accumulated depreciation		(57,932	)		(58,327	)
Net property, plant and equipment		45,697			38,164
Goodwill		43,643			43,643
Intangible assets, net of accumulated amortization		5,062			5,025
Other assets		483			910
Total assets	$	321,635		$	281,520
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current portion of long-term debt	$	2,551		$	2,864
Current portion of deferred gain on sale-leaseback		1,635			3,530
Accounts payable		40,883			27,267
Accrued compensation and benefits		18,001			12,266
Accrued interest		6,234			6,589
Accrued freight		4,849			4,031
Other accrued liabilities		7,476			5,247
Total current liabilities		81,629			61,794
Revolving credit facility		—			48,700
Other long-term debt, net of current portion		319,899			317,690
Deferred income taxes		11,354			11,406
Deferred gain on sale-leaseback, net of current portion		4,073			5,199
Other long-term liabilities		6,224			8,068
Total liabilities		423,179			452,857
Commitments and contingencies (Note 10)
Common stock subject to put option, 0 and 506,318 shares, net of related loans to stockholders of $0 and $350		—			—
Stockholders’ deficit
Common stock; $0.01 and no par value; 100,000,000 and 13,003,800 shares authorized; 18,773,283 (754,475 unvested) and 10,139,650 shares issued; and 18,773,283 and 9,522,165 shares outstanding and not subject to put option		188			115,248
Additional paid-in capital		201,602			—
Loans to stockholders		(2,268	)		(1,643	)
Treasury stock, at cost, 0 and 111,167 shares		—			(1,509	)
Accumulated other comprehensive loss		(981	)		(1,357	)
Accumulated deficit		(300,085	)		(282,076	)
Total stockholders’ deficit		(101,544	)		(171,337	)
Total liabilities and stockholders’ deficit	$	321,635		$	281,520

The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets.

34

Dayton Superior Corporation and Subsidiary

Consolidated Statements of Operations

Years Ended December 31

	2006			2005			2004
	($ and shares in thousands,
	except per share amounts)
Product sales	$	388,100		$	352,888		$	348,036
Rental revenue		62,769			49,485			42,231
Used rental equipment sales		28,441			16,610			28,372
Net sales		479,310			418,983			418,639
Product cost of sales		296,351			277,107			265,228
Rental cost of sales		36,845			38,038			35,719
Used rental equipment cost of sales		7,706			5,254			10,388
Cost of sales		340,902			320,399			311,335
Product gross profit		91,749			75,781			82,808
Rental gross profit		25,924			11,447			6,512
Used rental equipment gross profit		20,735			11,356			17,984
Gross profit		138,408			98,584			107,304
Selling, general and administrative expenses		103,644			93,956			89,735
Stock compensation expense		2,249			—			—
Facility closing and severance expenses		423			1,712			2,036
Amortization of intangibles and impairment of goodwill		560			64,570			989
Loss (gain) on disposals of property, plant and equipment		(1,504	)		4,529			(248	)
Income (loss) from operations		33,036			(66,183	)		14,792
Other expenses
Interest expense		49,983			48,133			47,207
Interest income		113			(163	)		(559	)
Loss on early extinguishment of long-term debt		—			—			842
Other (income) expense		555			(89	)		(134	)
Loss before provision for income taxes		(17,615	)		(114,064	)		(32,564	)
Provision for income taxes		394			639			16,185
Net loss	$	(18,009	)	$	(114,703	)	$	(48,749	)
Basic net loss per common share	$	(1.76	)	$	(11.57	)	$	(4.91	)
Average number of common shares outstanding		10,225			9,916			9,933
Diluted net loss per common share	$	(1.76	)	$	(11.57	)	$	(4.91	)
Average number of common shares and equivalents outstanding		10,225			9,916			9,933

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

35

Dayton Superior Corporation and Subsidiary

Consolidated Statements of Stockholders’ Deficit

Years Ended December 31, 2006, 2005, and 2004

																		Accumulated Other
																		Comprehensive Loss
																					Pension
																		Cumulative			and Other
							Additional											Foreign			Post-
	Common Stock						Paid-in		Loans to			Treasury Stock						Currency			Retirement			Accumulated
	Shares			Amount			Capital		Stockholders			Shares			Amount			Translation			Benefits			Deficit			Total
	($ in thousands)
Balance at January 1, 2004		9,436,158		$	110,637		$	—	$	(36	)		79,641		$	(1,184	)	$	116		$	(1,325	)	$	(118,624	)	$	(10,416	)
Net loss																									(48,749	)		(48,749	)
Foreign currency translation adjustment																			193									193
Change in minimum pension liability (net of benefit for income taxes of $73)																						(121	)					(121	)
Excess of redemption value of common stock subject to put over exercise price of stock options					(635	)																						(635	)
Expiration of put options and reclassification of related loans to stockholders		52,314			541					(295	)																	246
Change in redemption value of common stock subject to put					14																							14
Balances at December 31, 2004		9,488,472			110,557			—		(331	)		79,641			(1,184	)		309			(1,446	)		(167,373	)		(59,468	)
Net loss																									(114,703	)		(114,703	)
Foreign currency translation adjustment																			322									322
Change in minimum pension liability (net of benefit for income taxes of $332)																						(542	)					(542	)
Excess of redemption value of common stock subject to put over exercise price of stock options					(6	)																						(6	)
Expiration of put options		2,167			22																							22
Redemption of common stock		31,526			400								31,526			(325	)											75
Change in redemption value of common stock subject to put					4,275					(1,312	)																	2,963
Balances at December 31, 2005		9,522,165			115,248			—		(1,643	)		111,167			(1,509	)		631			(1,988	)		(282,076	)		(171,337	)
Net loss																									(18,009	)		(18,009	)
Foreign currency translation adjustment																			(55	)								(55	)
Change in minimum pension liability (net of provision for income taxes of $278)																						455						455
Adoption of SFAS 158, net of benefit for income taxes of $15																						(24	)					(24	)
Reincorporation as a Delaware corporation		(111,167	)		(115,154	)		113,645					(111,167	)		1,509												—
Expiration of put options		506,318			5			800		(805	)																	—
Grant of stock options and restricted stock		1,005,967			10			2,239																				2,249
Changes in loans to stockholders										180																		180
Issuance of common stock, net of issuance costs of $9,203		7,850,000			79			84,918																				84,997
Balances at December 31, 2006		18,773,283		$	188		$	201,602	$	(2,268	)		—		$	—		$	576		$	(1,557	)	$	(300,085	)	$	(101,544	)

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

36

Dayton Superior Corporation and Subsidiary

Consolidated Statements of Cash Flows

Years Ended December 31

	2006			2005			2004
	($ in thousands)
Cash Flows From Operating Activities:
Net loss	$	(18,009	)	$	(114,703	)	$	(48,749	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Loss on the early extinguishment of long-term debt		—			—			842
Depreciation		25,919			32,857			30,749
Amortization of intangibles and impairment of goodwill		560			64,570			989
Stock compensation expense		2,249			—			—
Deferred income taxes		(315	)		288			16,501
Amortization of deferred financing costs and debt discount		5,680			5,572			5,087
Amortization of deferred gain from sale-leaseback		(3,021	)		(2,462	)		—
Gain on sale of rental equipment		(20,735	)		(11,356	)		(17,984	)
Loss (gain) on sale of property, plant, and equipment		435			6,362			(248	)
Change in assets and liabilities:
Accounts receivable		(9,222	)		5,705			(3,182	)
Inventories		(1,024	)		2,017			(9,952	)
Prepaid expenses and other assets		(813	)		5,734			(1,588	)
Prepaid income taxes		226			(181	)		3,549
Accounts payable		9,576			6,181			560
Accrued liabilities and other long-term liabilities		7,336			1,877			(5,033	)
Net cash provided by (used in) operating activities		(1,158	)		2,461			(28,459	)
Cash Flows From Investing Activities:
Property, plant and equipment additions		(13,237	)		(6,687	)		(5,423	)
Proceeds from sale of property, plant, and equipment		21			1,547			837
Rental equipment additions		(21,535	)		(27,842	)		(20,633	)
Proceeds from sales of rental equipment		28,440			16,610			28,372
Acquisitions		—			—			(245	)
Net cash provided by (used in) investing activities		(6,311	)		(16,372	)		2,908
Cash Flows From Financing Activities:
Repayments of long-term debt, including revolving credit facility		(190,608	)		(148,490	)		(123,190	)
Issuance of long-term debt, including revolving credit facility		139,028			134,375			153,579
Financing costs incurred		(1,272	)		(3	)		(2,557	)
Proceeds from sale/leaseback transaction		—			23,180			—
Issuance of common stock subject to put option		—			29			73
Issuance of common stock, net of issuance costs		87,009			—			—
Changes in common stock subject to put option from activity in loans to stockholders		—			(6	)		(38	)
Net change in loans to stockholders		180			—			—
Net cash provided by financing activities		34,337			9,085			27,867
Effect of Exchange Rate Changes on Cash		(55	)		322			193
Net increase (decrease) in cash and cash equivalents		26,813			(4,504	)		2,509
Cash, beginning of year		—			4,504			1,995
Cash and cash equivalents, end of year	$	26,813		$	—		$	4,504
Supplemental Disclosures:
Cash paid (refunded) for income taxes	$	341		$	398		$	(4,341	)
Cash paid for interest		44,771			42,120			41,238
Purchase of equipment on capital lease		917			430			481
Property, plant and equipment and rental equipment additions in accounts payable		2,762			1,471			1,126
Financing cost additions in accounts payable		736			—			—
Common share issuance costs in accounts payable		2,012			—			—
Reclassification of common stock due to expiration of put options		—			22			246
Reclassification of common stock due to excess of redemption value of common stock subject to put over exercise price of stock options		—			6			635
Reclassification of common stock due to repayment of stockholder loans through redemption of common stock		—			75			—
Reclassification of common stock due to change in redemption value of common stock subject to put option		—			2,963			14

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

37

Dayton Superior Corporation and Subsidiary

Consolidated Statements of Comprehensive Loss

Years Ended December 31

	2006			2005			2004
	($ in thousands)
Net loss	$	(18,009	)	$	(114,703	)	$	(48,749	)
Other comprehensive income
Foreign currency translation adjustment		(55	)		322			193
Change in minimum pension liability, net of provision (benefit) for income taxes of $278, ($332), and ($73)		455			(542	)		(121	)
Comprehensive loss	$	(17,609	)	$	(114,923	)	$	(48,677	)

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

38

Notes to Consolidated Financial Statements
December 31, 2006, 2005 and 2004
($ in thousands, except per share amounts)

(1)  The Company

The accompanying consolidated financial statements include the accounts of Dayton Superior Corporation and its wholly-owned subsidiary (collectively referred to as the “Company”). All intercompany transactions have been eliminated.

Odyssey Investment Partners Fund, LP (“Odyssey”) is our principal stockholder. Along with certain of its affiliates, co-investors, and certain members of the Company’s management who are a party to a voting agreement, Odyssey controlled 54.2% of the Company as of December 31, 2006 and 53.5% as of March 26, 2007.

In December 2006, in connection with the Company’s initial public offering of its common stock, the Company amended its certificate of incorporation to effectuate a 2.1673-for-1 stock split and reincorporate from Ohio to Delaware under the same name, by means of a merger into a newly-formed Delaware corporation, effective December 15, 2006. All common share amounts in the consolidated financial statements have been retroactively adjusted for all periods presented to give effect to the stock split.

In its initial public offering, the Company issued 7,850,000 shares of common stock and received net proceeds of $84,997, net of issuance costs. In January 2007, the underwriters of the offering exercised a portion of their over-allotment option. The Company issued an additional 250,000 shares of common stock and received net proceeds of $2,790, net of issuance costs.

The Company believes it is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction and of metal accessories used in masonry construction. The Company has a distribution network consisting of 17 manufacturing/distribution plants and 23 service/distribution centers in the United States and Canada. The Company employs approximately 700 salaried and 900 hourly personnel, of whom approximately 550 of the hourly personnel and 4 of the salaried personnel are represented by labor unions. Employees at the Miamisburg, Ohio; Parsons, Kansas; Des Plaines, Illinois; New Braunfels, Texas; Tremont, Pennsylvania; Santa Fe Springs, California; City of Industry, California, and Aurora, Illinois facilities are covered by collective bargaining agreements.

(2)  Summary of Significant Accounting Policies

Accounts Receivable Reserves

The Company maintains reserves for sales discounts and allowances and for doubtful accounts for estimated losses resulting from customer disputes and/or the inability of our customers to make required payments. Receivables are charged to the allowance for doubtful accounts when an account is deemed to be uncollectible. Recoveries of receivables previously charged off as uncollectible are credited to the allowance.

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. Those reserves were $3,695

39

Notes to Consolidated Financial Statements — (Continued)

and $4,062 as of December 31, 2006 and 2005, respectively. Following is a summary of the components of inventories as of December 31, 2006 and 2005:

	December 31,		December 31,
	2006		2005
Raw materials	$	14,095	$	13,248
Work in progress		2,282		2,813
Finished goods		42,019		41,311
Total Inventory	$	58,396	$	57,372

Rental Equipment

Rental equipment is 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 families changed were acquired as part of an acquisition in 2003 and the Company used an estimated useful life of three years based primarily on the risk of realizable value and uncertain resale value of this equipment when sold as used rental equipment. Subsequent data showed demand for the equipment was strong and that resale values of the equipment were consistent with other rental equipment. The physical utilization of the rental equipment lasts approximately fifteen years. The impact of this change in estimate reduced rental cost of sales by approximately $3,000 for the year ended December 31, 2006.

Property, Plant and Equipment

Property, plant and equipment are valued at cost and depreciated using straight-line methods over their estimated useful lives of 10-30 years for buildings and improvements and 3-10 years for machinery and equipment.

Leasehold improvements are amortized over the lesser of the term of the lease or the estimated useful lives of the improvements. Improvements and replacements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred.

Included in the cost of property, plant and equipment and rental equipment are assets obtained through capital leases. As of December 31, 2006, the cost of assets under capital lease is $5,085 with accumulated amortization of $2,819. As of December 31, 2005, the cost of assets under capital lease was $5,071, with accumulated amortization of $2,397. Amortization expense related to assets under capital lease was $778, $843, and $819 for the periods ended December 31, 2006, 2005, and 2004, respectively.

Goodwill and Intangible Assets

As with tangible and other intangible assets, periodic impairment reviews of goodwill are required, at least annually, as well as when events or circumstances change. The Company reviews the recorded value of its goodwill annually on a segment by segment basis in the fourth quarter using data as of the third quarter, or sooner if events or changes in circumstances indicate that the carrying amount may exceed fair value. The review for impairment requires the Company to estimate the fair value of its long-lived assets and considerable judgment must be exercised in determining these values.

When exercising judgment, the Company carefully considers all of the relevant facts and circumstances available to it at the time. The critical factors affecting this analysis include:

•  the amount of adjusted EBITDA (which is income (loss) from operations adjusted for depreciation, amortization of intangibles and impairment of goodwill; loss on early extinguishment of long-term debt; gain (loss) from disposals of property, plant, and equipment; facility closing and severance expenses; and stock compensation expense) generated by each of the Company’s business segments;

40

Notes to Consolidated Financial Statements — (Continued)

•  the Company’s ability to meet operating results compared to budget;

•  the level of expected activity in the nonresidential construction industry; and

•  the Company’s future prospects.

Taking all of these factors into account, the Company determined the fair value of its business segments as of December 31, 2006 and 2005 by deriving enterprise value indications of its business segments using a range of adjusted EBITDA multiples. The Company used this approach on these dates because it determined that a discounted cash flow analysis was not a reliable methodology for testing goodwill impairment of its business segments because it had been unable to reliably project future cash flows over the prior several years. This inability had been due to the cyclical and seasonal nature of the Company’s business and the lack of near-term visibility with the respect to nonresidential construction activity.

Because impairment tests are based in part on management’s judgment as to the fair value of the Company’s business segments relative to their carrying value — which is necessarily subjective — management’s discretion impacts any decision to record an impairment charge and therefore affects the Company’s reported results of operation.

Prior to 2006, the Company’s financial performance had gradually deteriorated over several years due to a general decline in nonresidential construction activity and rising costs, such as steel and fuel. The Company had been unable to consistently sustain positive cash flow and, at that time, its future ability to do so was uncertain. Accordingly, for the year ended December 31, 2005, the Company recorded an impairment charge of $64,000 to reduce the carrying value of goodwill to its implied fair value. The goodwill impairment has been included in the caption “amortization of intangibles and impairment of goodwill” in the consolidated statement of operations. There was no impairment to goodwill in the year ended December 31, 2006 or to the amortizing intangible assets in any year.

The following is a reconciliation of goodwill by segment:

				Rental
				Revenues/
				Sales of
	Product			Used Rental
	Sales			Equipment			Total
Balance at January 1, 2005	$	96,292		$	11,351		$	107,643
Impairment		(52,649	)		(11,351	)		(64,000	)
Balances at December 31, 2005 and 2006	$	43,643		$	—		$	43,643

Business acquisitions often result in recording intangible assets, which are recognized at the time of an acquisition, based upon their fair value. Similar to long-lived tangible assets, intangible assets are subject to amortization and periodic impairment reviews whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Amortization is provided over the term of the credit arrangement (23 months to 9 years) for deferred financing costs, the term of the agreement (3 to 7.5 years) for non-compete agreements and license agreements, over the estimated useful life (1-15 years) for intellectual property and dealer network. Amortization of non-compete agreements, intellectual property, license agreements, and dealer network is reflected as “Amortization of intangibles” in the accompanying consolidated statements of operations. The estimated aggregate amortization expense for each of the next five years is as follows: $169 in 2007, $129 in 2008, $120 in each of 2009 and 2010, and $72 in 2011. Amortization of deferred financing costs is reflected as “Interest expense” in the accompanying consolidated statements of operations. The estimated aggregate expense for each of the next three years related to the amortization of deferred financing costs is as follows: $1,978 in 2007, $1,618 in 2008, and $419 in 2009.

41

Notes to Consolidated Financial Statements — (Continued)

Intangible assets consist of the following at December 31:

	2006							2005
			Accumulated							Accumulated
	Gross		Amortization			Net		Gross		Amortization			Net
Deferred financing costs	$	9,042	$	(5,027	)	$	4,015	$	7,034	$	(3,413	)	$	3,621
Non-compete agreements		198		(171	)		27		1,647		(1,209	)		438
License agreements		307		(84	)		223		80		(42	)		38
Intellectual property		1,047		(250	)		797		1,047		(178	)		869
Pension benefits		—		—			—		59		—			59
Dealer network		33		(33	)		—		33		(33	)		—
	$	10,627	$	(5,565	)	$	5,062	$	9,900	$	(4,875	)	$	5,025

Income Taxes

Deferred tax assets and liabilities are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the enacted tax rates in effect for the years the differences are expected to reverse. The Company evaluates the need for a deferred tax asset valuation allowance by assessing whether it is more likely than not that it will realize deferred tax assets in the future and it records liabilities for uncertain tax matters based on assessment of the likelihood of sustaining certain tax positions. In estimating whether deferred tax assets are realizable, it estimates levels of future taxable income by considering historical results of operations in recent years and would, if necessary, consider the implementation of prudent and feasible tax planning strategies to generate taxable income.

Environmental Remediation Liabilities

The Company accounts for environmental remediation liabilities in accordance with the American Institute of Certified Public Accountants issued Statement of Position 96-1, “Environmental Remediation Liabilities,”. The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Such accruals are adjusted as further information develops or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value.

Common Stock Valuation

On December 20, 2006, the Company completed an initial public offering of its common stock and accordingly, any transactions impacted by the value of the Company’s stock is based on the publicly traded share price on the date of the transaction. Effective with the initial public offering, the put rights of the Management Shareholders’ Agreement were terminated. No transactions involving the Company’s common stock valuation occurred from December 20 through December 31, 2006.

Prior to the Company’s initial public offering, the Company was required to value its common stock for purposes of (i) calculating compensation expense in connection with the award of unvested stock and stock option grants and (ii) calculating the redemption value of the stock of the Company’s common stock that were subject to put under the Company’s Management Stockholders’ Agreement. The value of the Company’s common stock was determined by the Company after careful consideration of all available facts and circumstances. The critical factors affecting this analysis include:

•  the independent appraisal obtained within 90 days of the end of each fiscal year that was required to be obtained pursuant to the Management Stockholders’ Agreement;

•  the amount of adjusted EBITDA (which is income (loss) from operations adjusted for depreciation, amortization of intangibles and impairment of goodwill; loss on early extinguishment of long-term debt;

42

Notes to Consolidated Financial Statements — (Continued)

gain (loss) from disposals of property, plant, and equipment; facility closing and severance expenses; and stock compensation expense) generated by the Company;

•  the implied multiple of adjusted EBITDA derived from the independent appraisal required by the Management Stockholders’ Agreement;

•  the lack of liquidity for the Company’s capital stock as a private company;

•  the Company’s historical operating results compared to budget;

•  the amount of the Company’s outstanding indebtedness;

•  any recent impairment charges;

•  the level of activity in the nonresidential construction industry;

•  the Company’s future prospects; and

•  the likelihood of a future liquidity event.

The Company’s estimation of the value of its common stock affected the amount of compensation expense reflected in its income statement in that it affects the amount of compensation that was deemed to have been paid in connection with any award of unvested shares of stock or grants of stock options. The valuation of the Company’s underlying common stock required the Company to exercise discretion and make judgments based on all available circumstances at the time of any particular award or grant. Determining the redemption value of the stock that were subject to put under the Management Stockholders’ Agreement also required management to exercise judgment. The Company was required under the terms of the Management Stockholders’ Agreement to obtain an independent appraisal of its common stock within 90 days of each of its fiscal year end. These appraisals were based upon the results of operations for the fiscal year then ended and all other relevant facts and circumstances and were used to determine the redemption price of the stock subject to put under the Management Stockholders’ Agreement. The redemption price contemplated by the Management Stockholders’ Agreement was determined based upon these appraisals and the date on which an employee’s employment ends. An employee whose employment ended during the first six months of any fiscal year was permitted to put his stock to the Company at a redemption price equal to the appraised value of the common stock as of the immediately preceding fiscal year end. An employee whose employment ended during the last half of any fiscal year was permitted to put his stock to the Company at a redemption price equal to the weighted average of the appraised value of the common stock as of the immediately preceding fiscal year end and the appraised value as of the end of the fiscal year in progress. Because this subsequent appraised value was not available as of the date of termination, the Company used its best estimate of the fair market value as of the termination date as an estimate for what the future appraised value would be. The judgment was based on the same factors that are used to determine compensation expense in connection with unvested share awards and stock option grants.

In the first quarter of 2006, the Company obtained an independent appraisal from Valuation Research Corporation as of December 31, 2005 that valued its common stock at $0.69 per share, which implied an adjusted EBITDA multiple of 7.60x. The Company utilized this value in calculating the redemption value of stock subject to put on its December 31, 2005 balance sheet, as required by the Management Stockholders’ Agreement, after deducting the amount of stockholder loans owed to the Company by the stockholders who have put rights under the Management Stockholders’ Agreement.

Because the compensation expense reflected in the Company’s results of operations was based in part on management’s judgment as to the value of the Company’s common stock — which is necessarily subjective — subjective discretion impacts the Company’s reported results of operations. Similarly, the redemption value of stock subject to put reflected on its balance sheet was based on the judgment of an independent appraiser and, in the case of stock held by employees whose term of employment ends during the second half of any fiscal year, the Company’s own judgment as to fair market value. As a result, these accounting policies required management to make estimates and assumptions that impacted the Company’s financial statements.

43

Notes to Consolidated Financial Statements — (Continued)

Foreign Currency Translation Adjustment

The financial statements of the Company’s foreign subsidiary are maintained in their functional currency (Canadian dollars) and are then translated into U.S. dollars. The balance sheets are translated at end of year rates while revenues, expenses and cash flows are translated at weighted average rates throughout the year. Translation adjustments, which result from changes in exchange rates from period to period, are accumulated in a separate component of stockholders’ deficit. Transactions in foreign currencies are translated into U.S. dollars at the rate in effect on the date of the transaction. Changes in foreign exchange rates from the date of the transaction to the date of the settlement of the asset or liability are recorded as income or expense.

Revenue Recognition

Revenue is recognized from product sales when the product is shipped from the Company’s facilities and risk of loss and title have passed to the customer. Additionally, revenue is recognized at the customer’s written request and when the customer has made a fixed commitment to purchase goods on a fixed schedule consistent with the customer’s business, where risk of ownership has passed to the buyer, the goods are physically segregated and the Company does not retain any specific performance obligations. For customer-requested bill and hold transactions in which a performance obligation exists on the part of the Company prior to the delivery date, the Company does not recognize revenue until the total performance obligation has been met and all of the above criteria related to bill and hold transactions have been met. In instances where the customer provides payment for these services prior to the delivery date, the revenue is deferred until all performance obligations have been met. Sales under bill and hold arrangements were $3,675, $979, and $2,863 for the years ended December 31, 2006, 2005, and 2004, respectively.

On rental equipment sales, revenue is recognized and recorded on the date of shipment. Rental revenues are recognized ratably over the terms of the rental agreements.

Customer Rebates

The Company offers rebates to certain customers that are redeemable only if the customer meets certain specified thresholds relating to an aggregate level of sales. The Company records such rebates as a reduction of sales in the period that the underlying transaction that results in progress by the customer in earning the rebate. The rebates accrued as of December 31, 2006 and 2005 were $3,459 and $2,046, respectively.

Stock Compensation Expense

Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standard (“SFAS”) No. 123R that amends SFAS No. 123, Accounting for Stock-Based Compensation, using a modified prospective application. Previously, the Company measured compensation cost for stock options issued using the intrinsic value-based method of accounting in accordance with Accounting Principles Board Opinion (APB) No. 25.

Loss Per Share of Common Stock

Basic loss per share of common stock is computed by dividing net loss by the weighted average number of vested shares of common stock outstanding during the period. Diluted EPS is computed by dividing net loss by the weighted average number of shares of common stock and potential shares of common stock outstanding, if dilutive, during each period. The Company’s potential undistributed common shares represent the effect of unvested shares, warrants and stock options. For the year ended December 31, 2006, the 754,475 unvested shares were not included as their effect would have been anti-dilutive. For the years ended December 31, 2006, 2005, and 2004, the potential undistributed shares, consisting of warrants for 254,172 shares in each year, and stock options for 859,445, 871,391, and 1,480,218 shares, respectively, were not included in the calculation of diluted loss per share as their effect would have been anti-dilutive.

44

Notes to Consolidated Financial Statements — (Continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Examples of accounts in which estimates are used include the allowance for doubtful accounts and sales returns and allowances, the reserve for excess and obsolete inventory, the fair value of the Company and its business segments, the accrual for self-insured employee medical claims, the self-insured product and general liability accrual, the self-insured workers’ compensation accrual, accruals for litigation losses, the valuation allowance for deferred tax assets, actuarial assumptions used in determining pension benefits, and actuarial assumptions used in determining other post-retirement benefits.

Fair Value of Financial Instruments

The carrying amount of cash and accounts receivable approximate fair value because of the relatively short maturity of these financial instruments. Fair values of debt are based on the last trade of the instrument prior to the balance sheet date.

Recent Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151, Inventory Costs, an amendment of ARB No. 43, Chapter 4, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and waste material (spoilage). This statement requires those items to be recognized as current period charges. The Company complied with the provisions of SFAS No. 151 as of January 1, 2006, with no impact to the consolidated financial statements.

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-based employee compensation in their financial statements. The Company has adopted SFAS No. 123R effective January 1, 2006 with the impacts described in Note 5 to the consolidated financial statements.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections — a Replacement of APB Opinion No. 20 and FASB Statement No. 3. This Statement applies to all voluntary changes in accounting principle. This Statement requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This Statement requires that retrospective application of a change in accounting principle be limited to the direct effects of the change. This Statement also requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets, such as a change from straight-line to double-declining balance, be accounted for as a change in accounting estimate affected by a change in accounting principle. This Statement carries forward without changing the guidance contained in Opinion 20 for reporting the correction of an error in previously issued financial statements and a change in accounting estimate. This Statement also carries forward the guidance in Opinion 20 requiring justification of a change in accounting principle on the basis of preferability. The Company adopted the provisions of SFAS No. 154 as of January 1, 2006 and will apply SFAS No. 154 to any future accounting changes.

In June 2005, the FASB issued EITF 05-6, Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business Combination. EITF 05-6 requires that leasehold improvements acquired in a business combination should be amortized over the shorter of the useful life of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date of acquisition. EITF 05-6 also requires that leasehold improvements that are placed in service significantly after and not contemplated at or near the beginning of the lease term should be amortized over the shorter of the useful life of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date the leasehold improvements are purchased. EITF 05-6 is effective for leasehold improvements

45

Notes to Consolidated Financial Statements — (Continued)

that are purchased or acquired in reporting periods beginning January 1, 2006 for the Company. EITF 05-6 had no impact to the Company’s consolidated financial statements.

In June 2006, the 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 will be required to comply with the provisions of Interpretation No. 48 as of January 1, 2007. The Company assessed the impact of this Interpretation on the December 31, 2006 consolidated financial statements. Due to net operating loss and related valuation allowance, the adoption of Interpretation No. 48 will not have a material impact on the balance sheet or statement of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. This Statement applies under other accounting pronouncements that require or permit fair value measurements. This Statement does not require any new fair value measurements. The Company will be required to comply with Statement No. 157 as of the first annual period that begins after November 15, 2007. The Company has not determined the impact that Statement No. 157 will have on its consolidated financial statements.

In September 2006, the FASB issued SFAS No. 158, Employer’s Accounting for Defined Benefit Pension and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R). This Statement requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income of a business entity. This Statement also requires an employer to measure the funded status of a plan as of the date of its year-end statement of financial position, with limited exceptions. The Company had previously measured the funded status of its plan as of its year-end statement date, so this portion of the Statement had no impact on the Company’s financial statements. The Company has recognized the funded status of its defined benefit pension and postretirement benefit plans and provided the required disclosures as of December 31, 2006. The impact of Statement No. 158 is disclosed in note 6 to the consolidated financial statements.

In September 2006, the SEC issued Staff Accounting Bulletin 108 (SAB 108). The interpretations in this Staff Accounting Bulletin express the staff’s views regarding the process of quantifying financial statement misstatements. The staff is aware of diversity in practice. For example, certain registrants do not consider the effects of prior year errors on current year financial statements, thereby allowing improper assets or liabilities to remain unaudited. While these errors may not be material if considered only in relation to the balance sheet, correcting the errors could be material to the current year income statement. Certain registrants have proposed to the staff that allowing these errors to remain on the balance sheet as assets or liabilities in perpetuity is an appropriate application of generally accepted accounting principles. The staff believes that approach is not in the best interest of the users of financial statements. The interpretations in this Staff Accounting Bulletin are being issued to address diversity in practice in quantifying financial statement misstatements and the potential under current practice for the build up of improper amounts on the balance sheet. The Company has determined that SAB 108 will have no impact on its consolidated financial statements.

46

Notes to Consolidated Financial Statements — (Continued)

(3)  Credit Arrangements

Following is a summary of the Company’s long-term debt as of December 31, 2006 and December 31, 2005:

	December 31,			December 31,
	2006			2005
Revolving credit facility, weighted average interest rate of 7.0% for 2005	$	—		$	48,700
Senior Second Secured Notes, interest rate of 10.75%		165,000			165,000
Debt discount on Senior Subordinated Notes		(3,208	)		(4,776	)
Senior Subordinated Notes, interest rate of 13.0.%		154,729			154,729
Debt discount on Senior Second Secured Notes		(4,746	)		(6,114	)
Senior notes payable to seller in 2003 acquisition, non-interest bearing, accreted at 6.0% to 14.5%		7,286			7,534
Debentures previously held by Dayton Superior Capital Trust, interest rate of 9.1%, due on demand		1,063			1,068
Capital lease obligations		2,326			2,930
Payable to vendor on extended terms, non-interest bearing, accreted at 6.0%		—			183
Total long-term debt		322,450			369,254
Less current maturities		(2,551	)		(2,864	)
Long-term portion	$	319,899		$	366,390

Scheduled maturities of long-term debt and future minimum lease payments under capital leases are:

	Long-term			Capital
Year	Debt			Leases			Total
2007	$	1,809		$	1,162		$	2,971
2008		171,540			1,061			172,601
2009		154,729			298			155,027
2010		—			51			51
Long-Term Debt and Lease Payments		328,078			2,572			330,650
Less: Debt Discount		(7,954	)		—			(7,954	)
Less: Amounts Representing Interest		—			(246	)		(246	)
	$	320,124		$	2,326		$	322,450

On January 30, 2004, the Company established an $80,000 senior secured revolving credit facility, which was used to refinance the previous $50,000 revolving credit facility. As a result of the transaction, the Company incurred a loss on the early extinguishment of long-term debt of $842, due to the expensing of deferred financing costs related to the previous revolving credit facility. On July 2, 2004, the Company increased the revolving credit facility to $95,000.

On December 1, 2006, the Company entered into an amendment to its revolving credit facility, which was scheduled to mature on January 30, 2007, that extended the maturity to July 31, 2008, increased the revolving credit facility to $130,000, and amended the definition of “change of control” in the events of default provisions of that facility. The revolving credit facility will define a change of control as (A) any event that results in a party other than Odyssey owning at least 35% of the outstanding shares of our voting stock unless Odyssey owns more than 35% of the outstanding shares of our voting stock or has the right to elect a majority of the board of directors or (B) the occurrence of a change of control as defined in the indentures governing the 103/4% Senior Second Secured Notes

47

Notes to Consolidated Financial Statements — (Continued)

due 2008 and the 13% Senior Subordinated Notes due 2009. The costs of the amendment were capitalized as deferred financing costs and are being amortized over the remaining term of the facility.

At December 31, 2006, no balance and $7,870 of letters of credit were outstanding under the facility. The facility has no financial covenants and is subject to availability under a borrowing base calculation. Availability of borrowings is limited to 85% of eligible accounts receivable and 60% of eligible inventories and rental equipment, less $15,000. Under the calculation, $114,364 of the $130,000 was available, resulting in available borrowings of $106,494 as of December 31, 2006. The estimated fair value of the credit facility approximates its book value as the facility re-prices on a short-term basis. The credit facility is secured by substantially all assets of the Company.

The average borrowings, maximum borrowings and weighted average interest rates on the revolving credit facility for the periods indicated were as follows:

	For the Year Ended
	December 31,			December 31,			December 31,
	2006			2005			2004
Average borrowing	$	69,784		$	63,564		$	54,539
Maximum borrowing		83,200			77,500			72,425
Weighted average interest rate		8.1	%		6.3	%		4.6	%

The Company has $165,000 of senior second secured notes (the “Senior Notes”) outstanding. The notes mature in June 2008 and were issued at a discount that is being accreted to the face value using the effective interest method and is reflected as interest expense. The estimated fair value of the notes was $172,013 as of December 31, 2006. The senior second secured notes are secured by substantially all assets of the Company.

As of December 31, 2006, the Senior Subordinated Notes (the “Notes”) had a principal amount of $154,729 and mature in June 2009. The Notes were issued at a discount that is being accreted to the face value using the effective interest method and is reflected as interest expense. The Notes were issued with warrants that allow the holders to purchase 254,172 shares of the Company’s common stock for $0.0046 per share. The estimated fair value of the notes was $154,729 as of December 31, 2006. On November 10, 2006, the Company launched a solicitation of consents from registered holders of the 13% Senior Subordinated Notes due 2009 to amend the indenture governing those notes to permit the Company to incur additional indebtedness under credit facilities, including the revolving credit facility. The consent solicitation closed on December 1, 2006 and the Company amended its indenture on December 4, 2006. The costs of the consent were capitalized as deferred financing costs and are being amortized over the remaining term of the Notes.

The Company has two non-interest bearing notes to the seller of an acquisition in 2003. As of December 31, 2006, the notes have a book value of $7,286 and remaining payments of $9,178. The difference is being accreted at 6.0% to 14.5% using the effective interest method and is reflected as interest expense. Minimum future payments on the notes are $1,715 in 2007 and $7,463 in 2008. Payments may be accelerated if certain revenue targets are met.

Our other long-term debt of $3,389 at December 31, 2006 consisted of $1,063 of 9.1% junior subordinated debentures and $2,326 of capital lease obligations. The debentures have an estimated fair value of $903 and are due on demand, but have an ultimate maturity of September 30, 2029. The capital lease obligations are due in monthly payments through September 2010.

The wholly-owned foreign subsidiary of the Company is not a guarantor of the Notes or the Senior Notes and does not have any credit arrangements senior to the Notes or the Senior Notes.

(4)  Common Stock Subject to Put Option

As of December 31, 2006, the Company has no common stock subject to a put option.

Prior to the Company’s initial public offering, the Company, Odyssey, and certain current and former employees who are stockholders, were parties to a Management Stockholders’ Agreement (the “Management Stockholders’ Agreement”) that provided that, upon death, disability, retirement, or termination without cause of

48

Notes to Consolidated Financial Statements — (Continued)

the employment of a management stockholder, the management stockholder had certain put rights with respect to his or her common stock. Additionally, the Company had a call option with respect to a management stockholder’s common stock upon a termination of his or her employment for any reason. As the put option under the Management Stockholders’ Agreement was not solely within the Company’s control, the management stockholders’ stock were classified outside of stockholders’ equity (deficit) in accordance with EITF D-98, “Classification and Measurement of Redeemable Securities.” The redemption value of the stock was recorded at the appraised fair value of the Company’s common stock as defined in the agreement. Changes in the redemption value are recorded to common stock.

The table below reconciles the redemption value to the amounts reflected on the December 31, 2005 consolidated balance sheet. The redemption value per share was calculated for each stockholder, based on the actual redemption value if currently redeemable and an estimated redemption amount using the formula in the Management Stockholders’ Agreement for stock not currently redeemable but that may in the future become entitled to redemption rights under the Management Stockholders’ Agreement.

	As of December 31, 2005
	Currently Redeemable						Not Redeemable			Total
Numbers of shares subject to put		47,286			85,090			373,942			506,318
Redemption value per share	$	3.09	(a)	$	4.70	(a)	$	0.69	(a)
Gross value of shares subject to put		146			400			259		$	805
Loans to stockholders(b)											(2,107	)
Net value of shares subject to put										$	(1,302	)

(a)

The stock categorized as “Currently Redeemable” were the only stock currently redeemable under the Management Stockholders’ Agreement. The redemption values of $3.09 and $4.70 represented stock held by parties subject to the Management Stockholders’ Agreement whose employment was terminated by the Company during the second half of the year ended December 31, 2005. Pursuant to the terms of the Management Stockholders’ Agreement, the redemption value of the stock had been valued on a weighted average basis (based on the applicable date of termination) between the appraised value of the Company’s stock at December 31, 2004 and the appraised value at December 31, 2005. The redemption value of $0.69 represents stock held by parties to the Management Stockholders’ Agreement who were not currently entitled to redemption rights under the Management Stockholders’ Agreement but who may have become entitled to such redemption rights in the future and was derived pursuant to the terms of the Management Stockholders’ Agreement in accordance with the an appraisal performed as of December 31, 2005.

(b)

The Company recorded the redemption value of outstanding stock subject to put option net of the outstanding amount of stockholder loans, as required by EITF D-98. A stockholder could not redeem stock subject to put option without repaying his corresponding loan (if any). Therefore, when the redemption value changed to an amount that resulted in the net value of the stock to be negative, the Company classified this net negative value as “Loans to Stockholders,” a reduction of Stockholders’ Deficit.

(5) Common Stock

Stock Option Plan —

The 2000 Dayton Superior Corporation Stock Option Plan, as amended, (“Stock Option Plan”), permits the grant of stock options to purchase 1,667,204 shares of common stock. Options that are cancelled may be reissued. As of December 31, 2006, options to purchase 705,402 shares of common stock were available to be granted. The options granted in the year ended December 31, 2006, have a term of five years. The terms of the previous option grants are ten years from the date of grant.

The options granted during the year ended December 31, 2006, vested on the grant date. For the previous option grants, between 10% and 25% of the options have a fixed vesting period of less than three years. The

49

Notes to Consolidated Financial Statements — (Continued)

remaining options are eligible to become exercisable in installments over one to five years from the date of grant based on the Company’s performance but, in any case, become exercisable no later than nine years after the grant date.

These options may be subject to accelerated vesting upon certain change in control events based on Odyssey’s return on investment. Under the Stock Option Plan, the option exercise price equals the stock’s market price on date of grant.

In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standard (“SFAS”) No. 123R that amends SFAS No. 123, Accounting for Stock-Based Compensation, to require entities to report stock-based employee compensation in their financial statements. The Company has adopted SFAS No. 123R effective January 1, 2006 using a modified prospective application and recorded compensation expense of $699 for the year ended December 31, 2006. There was no cash impact to the Company related to these options. Due to the Company’s net operating losses, no income tax benefit was recognized related to these options. The remaining expected future compensation expense for unvested stock options, based on estimated forfeitures of 4%, was approximately $600 as of December 31, 2006, and is expected to be expensed over a weighted average period of 2.0 years.

The fair value of each option grant is estimated on the date of grant using the Black Scholes options pricing model with the following assumptions used for grants during the years ended December 31, 2006 and 2004:

	2006	2004
Risk-free interest rates	4.80%	2.62% - 3.24%
Expected dividend yield	0.00%	0.00%
Expected life	1 year	6 years
Expected volatility	158.75%	7.04%

The expected life is based on the estimated future exercise patterns. The expected volatility was based on the continuously compounded rate of return of the Company’s annual appraisal of its stock price performed in accordance with the Company’s Management Stockholders’ Agreement.

Previously, the Company measured compensation cost for stock options issued using the intrinsic value-based method of accounting in accordance with Accounting Principles Board Opinion (APB) No. 25. If compensation cost for the Company’s stock options had been determined based on the fair value method of SFAS No. 123R, the Company’s net loss would have been increased to the following pro forma amounts:

	2005			2004
Net loss, as reported	$	(114,703	)	$	(48,749	)
Stock compensation expense, net of benefit for income taxes		(250	)		(247	)
Pro forma net loss	$	(114,953	)	$	(48,996	)
Pro forma net loss per basic and diluted share	$	(11.59	)	$	(4.93	)

50

Notes to Consolidated Financial Statements — (Continued)

A summary of the status of the Company’s stock option plans at December 31, 2006, 2005, and 2004, and changes during the years then ended is presented in the table and narrative below:

				Weighted
				Average		Unvested			Weighted		Aggregate
	Number of			Exercise Price		Number of			Average Grant-		Intrinsic
	Shares			per Share		Shares			Date Value		Value
Outstanding at January 1, 2004		1,395,392		$	11.55		1,046,348		$	2.96	$	915
Granted		172,084			11.93		172,084			2.03
Vested		—					(63,294	)		3.09
Exercised		(67,282	)		0.90		—					635
Expired		(2,982	)		12.58		—
Forfeited		(16,994	)		12.61		(16,994	)		2.97
Outstanding at December 31, 2004		1,480,218			12.06		1,138,144			2.81		278
Vested		—					(22,341	)		2.11
Exercised		(8,669	)		1.85		—					7
Expired		(156,256	)		11.69		—
Forfeited		(443,902	)		12.58		(443,902	)		2.67
Outstanding at December 31, 2005		871,391			11.96		671,901			2.93		—
Granted		80,307			12.46		80,307			2.93
Vested		—					(80,307	)		2.93
Expired		(13,142	)		12.28		—			—
Forfeited		(79,111	)		12.67		(79,111	)		2.22
Outstanding at December 31, 2006		859,445		$	11.93		592,790		$	3.02	$	293

Price ranges and other information for stock options outstanding at December 31, 2006 are as follows:

	Outstanding								Exercisable
			Weighted		Weighted						Weighted
			Average		Average		Aggregate				Average		Aggregate
			Exercise		Remaining		Intrinsic				Exercise		Intrinsic
Range of Exercise Prices	Shares		Price		Life		Value		Shares		Price		Value
$7.76 - $8.97		46,952	$	8.27		1.5	$	163		46,952	$	8.27	$	163
$11.07 - $12.69		812,493		12.14		5.1		130		219,703		12.23		25
		859,445	$	11.93		4.4 years	$	293		266,655	$	11.53	$	188

As of December 31, 2006, the number of shares expected to become exercisable was 568,487. The weighted average exercise price was $12.10, the weighted average remaining life was 4.6 years, and aggregate intrinsic value for these shares was $188.

On June 30, 2006, the Compensation Committee of the Board of Directors of the Company approved the issuance of 1,005,967 shares of restricted common stock to certain executives. Due to the completion of the Company’s initial public offering in December 2006, 25% of the stock vested on December 31, 2006 and 25% will vest on each of December 31, 2007, 2008, and 2009. The unvested portion of the stock is subject to forfeiture by the executive under certain circumstances and is subject to accelerated vesting upon a change of control, as defined.

In accordance with SFAS 123R, the per share grant-date fair value was the fair value of a share of common stock on June 30, 2006. The Company recorded $1,550 of compensation expense for the year ended December 31, 2006. The remaining compensation expense for unvested restricted stock will be $2,635 in 2007, $1,211 in 2008

51

Notes to Consolidated Financial Statements — (Continued)

and $485 in 2009. There was no cash impact to the Company for the restricted stock. Due to the Company’s net operating losses, no income tax benefit was recognized related to the stock.

A summary of the status of the Company’s outstanding restricted stock as of and for the year ended December 31, 2006, is presented in the table below:

						Weighted
	Total		Unvested			Average
	Number of		Number of			Grant-Date
	Shares		Shares			Fair Value
Outstanding at December 31, 2005		—		—		$	—
Granted		1,005,967		1,005,967			5.85
Vested		—		(251,492	)		5.85
Outstanding at December 31, 2006		1,005,967		754,475		$	5.85

As of December 31, 2006, the stock had an intrinsic value of $11,810 and had an indefinite remaining term.

Treasury Stock and Loans to Stockholders —

In December 2006, in connection with the Company’s stock split and reincorporation in Delaware, its treasury stock was retired.

During 2005, a former employee paid off a loan from the Company. In accordance with the pledge agreement securing the loan, the former employee surrendered to the Company his 31,526 shares of common stock in satisfaction of his obligations with respect to the loan. These 31,526 shares were reclassified from common stock subject to put option to common stock at their original redemption value of $400 and were recorded as treasury stock at the repayment value of $325.

(6)  Retirement Plans

Company-Sponsored Pension Plans —

The Company’s pension plans cover virtually all hourly employees not covered by multi-employer pension plans and provide benefits of stated amounts for each year of credited service. The Company funds such plans at a rate that meets or exceeds the minimum amounts required by applicable regulations. The plans’ assets are primarily invested in mutual funds comprised primarily of common stocks and corporate and U.S. government obligations.

The Company provides postretirement health care benefits on a contributory basis and life insurance benefits for approximately 35 Symons salaried and hourly employees who retired prior to May 1, 1995.

Effective December 31, 2006, the Company has adopted the provisions of SFAS 158. The adoption of SFAS 158 had the following impact on the Company’s consolidated balance sheet as of December 31, 2006:

							Effect of
				Effect of			Adopting SFAS
	Prior to			Adopting			158 - Symons
	Adoption of			SFAS 158 -			Postretirement
	SFAS 158			Pension			Benefits			Adjusted
Intangible assets	$	5,107		$	(45	)	$	—		$	5,062
Total assets		321,680			(45	)		—			321,635
Other long-term liabilities		6,230			28			(34	)		6,224
Deferred income taxes		11,369			(28	)		13			11,354
Total liabilities		423,200			—			(21	)		423,179
Accumulated other comprehensive loss		(957	)		(45	)		21			(981	)
Total stockholders’ deficit	$	(101,520	)	$	(45	)	$	21		$	(101,544	)

52

Notes to Consolidated Financial Statements — (Continued)

The following table sets forth the funded status of the Company’s plans and the amounts recognized in the Company’s consolidated balance sheets and consolidated statements of operations as of and for the years ended December 31, 2006 and 2005:

							Symons			Symons
	Pension			Pension			Postretirement			Postretirement
	Benefits			Benefits			Benefits			Benefits
	2006			2005			2006			2005
Change in benefit obligation
Benefit obligation at beginning of year	$	13,273		$	11,617		$	501		$	478
Service cost		682			663			—			—
Interest cost		760			697			28			26
Actuarial loss/(gain)		(407	)		705			1			(1	)
Participant contributions		—			—			115			130
Benefits paid		(388	)		(409	)		(106	)		(132	)
Benefit obligation at end of year	$	13,920		$	13,273		$	539		$	501
Change in plan assets
Fair value of plan assets at beginning of year	$	9,990		$	9,008		$	—		$	—
Actual return on plan assets		1,036			460			—			—
Participant contribution		—			—			115			130
Employer contribution		1,045			931			(9	)		2
Benefits paid		(388	)		(409	)		(106	)		(132	)
Fair value of plan assets at end of year	$	11,683		$	9,990		$	—		$	—
Funded status	$	(2,237	)	$	(3,283	)	$	(539	)	$	(501	)
Unrecognized prior service cost		45			59			96			120
Unrecognized net loss (gain)		2,497			3,269			(130	)		(141	)
Net amount recognized	$	305		$	45		$	(573	)	$	(522	)
Amounts recognized in the statement of financial position consist of:
Intangible asset	$	—		$	59		$	—		$	—
Current liability		—			—			(43	)		—
Long-term liability		(2,237	)		(3,215	)		(496	)		(522	)
Accumulated other comprehensive loss		2,542			3,201			(34	)		—
Net amount recognized	$	305		$	45		$	(573	)	$	(522	)
Components of accumulated other comprehensive loss:
Net actuarial loss (gain)	$	2,497		$	3,201		$	(130	)	$	—
Prior service cost		45			—			96			—
Accumulated other comprehensive loss	$	2,542		$	3,201		$	(34	)	$	—
Components of net periodic benefit cost
Service cost	$	682		$	663		$	—		$	—
Interest cost		760			697			27			26
Expected return on plan assets		(816	)		(729	)		—			—
Amortization of actuarial loss		145			129			(10	)		(10	)
Amortization of prior service cost		14			14			24			24
Net cost	$	785		$	774		$	41		$	40
Additional Information
Increase (decrease) in other comprehensive loss	$	(659	)	$	874		$	(34	)	$	—
Portion of accumulated other comprehensive loss expected to be recognized as a component of net cost in 2007		86						16

53

Notes to Consolidated Financial Statements — (Continued)

The weighted average assumptions used in the actuarial computation that derived the above funded status amounts were as follows:

							Symons			Symons
	Pension			Pension			Postretirement			Postretirement
	Benefits			Benefits			Benefits			Benefits
	2006			2005			2006			2005
Discount rate		6.00	%		5.75	%		5.75	%		5.75	%
Rate of compensation increase		N/A			N/A			N/A			N/A

The weighted average assumptions used in the actuarial computation that derived net periodic benefit cost were as follows:

										Symons			Symons			Symons
	Pension			Pension			Pension			Postretirement			Postretirement			Postretirement
	Benefits			Benefits			Benefits			Benefits			Benefits			Benefits
	2006			2005			2004			2006			2005			2004
Discount rate		5.75	%		5.75	%		6.00	%		5.75	%		6.00	%		6.00	%
Expected return on plan assets		8.00	%		8.00	%		8.00	%		N/A			N/A			N/A
Rate of compensation increase		N/A			N/A			N/A			N/A			N/A			N/A

A one percentage point change in the discount rate would have the following effects:

	1 Percentage Point			1 Percentage Point
	Increase			Decrease
Effect on 2006 net periodic pension cost	$	(240	)	$	296
Effect on December 31, 2006 pension benefit obligation		(1,918	)		2,415
Effect on 2006 postretirement cost		(3	)		1
Effect on December 31, 2006 postretirement benefit obligation		(29	)		34

One of the principal components of the net periodic pension cost calculation is the expected long-term rate of return on assets. The required use of an expected long-term rate of return on plan assets may result in recognized pension income that is greater or less than the actual returns of those plan assets in any given year. Over time, however, the expected long-term returns are designed to approximate the actual long-term returns and therefore result in a pattern of income and expense recognition that more closely matches the pattern of the services provided by the employees. The defined benefit pension plan’s assets are invested primarily in equity and fixed income mutual funds. The Company uses its long-term historical actual return experience and estimates of future long-term investment return with consideration to the expected investment mix of the plan’s assets to develop the expected rate of return assumption used in the net periodic pension cost calculation.

In accordance with the guidelines of the most recent actuarial valuation of the pension plan, the Company’s expected return on plan assets is 8.0%, which represents a weighted average of 11% for equity securities, 5.5% for debt securities, and 4% for cash and cash equivalents and insurance contract. A one percentage point change in the expected return on plan assets would have the following effects:

	1 Percentage Point			1 Percentage Point
	Increase			Decrease
Effect on 2006 net periodic pension cost	$	(102	)	$	102

The postretirement healthcare benefit plan is unfunded and has no plan assets. Therefore, the expected long-term rate of return on plan assets is not a factor in accounting for this benefit plan.

As of December 31, 2006 and 2005, the pension plan had accumulated benefit obligations of $13,892 and $13,205, respectively.

54

Notes to Consolidated Financial Statements — (Continued)

Assumed health care cost trend rates:

	December 31,
	2007			2006
Health care cost trend rate assumed for next year		12.0	%		12.5	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.0	%		5.0	%
Year that the rate reaches the ultimate trend rate		2015			2015

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects:

	1 Percentage		1 Percentage
	Point		Point
	Increase		Decrease
Effect on 2006 postretirement cost	$	1	$	(1	)
Effect on the postretirement benefit obligation		13		(12	)

The pension plan asset allocations at December 31, 2006 and 2005, by asset category were as follows:

	Plan Assets at December 31,
Asset Category	2006			2005
Equity Securities		52	%		52	%
Debt Securities		27			30
Cash and Cash Equivalents		16			12
Insurance Contract		5			6
Total		100	%		100	%

The Company’s pension plan asset investment strategy is to invest in a combination of equities and fixed income investments while maintaining a moderate risk posture. The targeted asset allocation within the investment portfolio is 55% equities and 45% fixed income. The Company evaluates the performance of the pension investment program in the context of a three to five-year horizon.

The Company expects to contribute $1,338 to the pension plan in 2007. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:

	Pension		Other
	Benefits		Benefits
2007	$	427	$	43
2008		467		44
2009		490		46
2010		535		47
2011		591		38
Years 2012-2016		4,157		183

Multi-Employer Pension Plan —

Approximately 10% of the Company’s employees are currently covered by collectively bargained, multi-employer pension plans. Contributions are determined in accordance with the provisions of negotiated union contracts and generally are based on the number of hours worked. The Company does not have the information available to determine its share of the accumulated plan benefits or net assets available for benefits under the multi-employer pension plans. The aggregate amount charged to expense under these plans was $336, $335, and $308 for the years ended December 31, 2006, 2005, and 2004, respectively.

55

Notes to Consolidated Financial Statements — (Continued)

401(k) Savings Plan —

Most employees are eligible to participate in Company sponsored 401(k) savings plans. Company matching contributions vary from 0% to 50% according to terms of the individual plans and collective bargaining agreements. The aggregate amount charged to expense under these plans was $659, $763, and $760 for the years ended December 31, 2006, 2005, and 2004, respectively.

Retirement Contribution Account —

The Company has a defined contribution plan for substantially all salaried employees. Employees are not permitted to contribute to the plan. The Company suspended contributions to this account for service rendered in 2004. The Company partially reinstated contributions to this plan for service rendered in the second half of 2005 and for all of 2006. Depending on the age of the employee, participants earned 0.75% to 3.0% of eligible compensation from July 1 to December 31, 2005 and 1.5% to 6.0% of eligible compensation for 2006. The amounts charged to expense for the years ended December 31, 2006 and 2005 were $1,862 and $430, respectively.

(8)  Income Taxes

The following is a summary of the components of the Company’s income tax provision for the years ended December 31, 2006, 2005, and 2004:

	2006			2005			2004
Currently payable (receivable):
Federal	$	—		$	—		$	(239	)
State and local		—			—			(19	)
Foreign		709			351			(58	)
Deferred (future tax benefit)		(5,777	)		(23,709	)		(12,154	)
Change in valuation allowance		5,462			23,997			28,655
Total provision	$	394		$	639		$	16,185

The effective income tax rate differs from the statutory federal income tax rate for the years ended December 31, 2006, 2005, and 2004 for the following reasons:

	2006			2005			2004
Statutory income tax rate		34.0	%		34.0	%		34.0	%
State income taxes, net of federal tax benefit and before valuation allowance		3.9			4.1			3.7
Nondeductible goodwill impairment and other permanent differences		(4.5	)		(17.8	)		(0.8	)
Foreign income taxes		(2.0	)		—			1.4
Valuation allowance		(31.0	)		(20.9	)		(88.0	)
Other		(2.6	)		—			—
Effective income tax rate		(2.2	)%		(0.6	)%		(49.7	)%

56

Notes to Consolidated Financial Statements — (Continued)

The components of the Company’s deferred taxes as of December 31, 2006 and 2005 are the result of book/tax basis differences related to the following items:

	2006			2005
Deferred tax assets:
Accounts receivable reserves	$	2,055		$	2,058
Inventory reserves		1,387			1,286
Goodwill and intangible assets		2,617			3,057
Deferred gain on sale-leaseback		2,161			3,348
Accrued liabilities		3,404			4,356
Other long-term liabilities		1,402			1,956
Net operating loss carryforwards		47,675			40,176
Other		259			143
Valuation allowance		(58,114	)		(52,652	)
Total		2,846			3,728
Deferred tax liabilities:
Accelerated depreciation		(13,641	)		(14,310	)
Note payable to seller of Safway		(559	)		(824	)
Total		(14,200	)		(15,134	)
Net deferred taxes	$	(11,354	)	$	(11,406	)

For federal income tax purposes, the Company has federal net operating loss carryforwards of approximately $123,000 that expire over an eight-year period beginning in 2019. The Company also has state net operating tax loss carryforwards of approximately $100,000 that expire over a period of five to twenty years beginning in 2007. The Company has recorded a non-cash valuation allowance to reduce its deferred tax asset related to these net operating loss carryforwards and other deferred tax assets, as estimated levels of future taxable income are less than the amount needed to realize these assets. If such estimates change in the future, the valuation allowance would be decreased or increased, resulting in a non-cash increase or decrease to net income.

A provision has not been made for domestic or additional foreign taxes on the undistributed portion of earnings of our foreign subsidiary as those earnings have been permanently reinvested. The undistributed earnings of the Company’s foreign subsidiary approximate $9,000. The amount of the deferred tax liability associated with these earnings has not been calculated, as it is impractical to determine.

(9)  Segment Reporting

The Company uses three segments to monitor gross profit by sales type: product sales, rental revenue, and used rental equipment sales. These types of sales are differentiated by their source and gross margin percents of sales. Accordingly, this segmentation provides information for decision-making and resource allocation. Product sales represent sales of new products carried in inventories on the balance sheet. Cost of goods sold for product sales include material, manufacturing labor, overhead costs, and freight. Rental revenues represent the leasing of the rental equipment and are recognized ratably over the lease term. Cost of goods sold for rental revenues includes depreciation of the rental equipment, maintenance of the rental equipment, and freight. Sales of used rental equipment represent sales of the rental equipment after a period of generating rental revenue. Cost of goods sold for sales of used rental equipment consists of the net book value of the rental equipment. All other expenses, as well as assets and liabilities, are not tracked by sales type and therefore it is not practicable to disclose this information by segment. Depreciation was reflected in determining segment gross profit; however, it is not practicable to allocate the depreciation expense between the rental and used rental equipment segments. Export sales and sales by non-U.S. affiliates is not significant.

57

Notes to Consolidated Financial Statements — (Continued)

Information about the income of each segment and the reconciliations to the consolidated amounts for the years ended December 31, 2006, 2005, and 2004 are as follows:

	2006		2005		2004
Product sales	$	388,100	$	352,888	$	348,036
Rental revenue		62,769		49,485		42,231
Used rental equipment sales		28,441		16,610		28,372
Net sales		479,310		418,983		418,639
Product cost of sales		296,351		277,107		265,228
Rental cost of sales		36,845		38,038		35,719
Used rental equipment cost of sales		7,706		5,254		10,388
Cost of sales		340,902		320,399		311,335
Product gross profit		91,749		75,781		82,808
Rental gross profit		25,924		11,447		6,512
Used rental equipment gross profit		20,735		11,356		17,984
Gross profit	$	138,408	$	98,584	$	107,304
Depreciation Expense:
Product sales (Property, plant, and equipment)	$	5,041	$	6,302	$	5,471
Rental Revenue (Rental equipment)		19,156		24,474		22,654
Corporate		1,722		2,081		2,624
Total depreciation	$	25,919	$	32,857	$	30,749

(10)  Commitments and Contingencies

Operating Leases —

Rental expense for property, plant and equipment (principally manufacturing/distribution, service/distribution, office facilities, forklifts, and office equipment) was $6,340, $6,589, and $5,879, for the years ended December 31, 2006, 2005 and 2004, respectively. Lease terms range from month-to-month to 20 years and some contain renewal options.

Aggregate minimum annual rental commitments under non-cancelable operating leases are as follows:

Year	Amount
2007	$	7,107
2008		5,140
2009		4,521
2010		4,273
2011		3,915
Thereafter		29,800
Total	$	54,756

Several of the Company’s operating leases contain predetermined fixed increases of the minimum rental rate during the initial lease term. For these leases, the Company recognizes the related rental expense on a straight-line basis and records the difference between the amount charged to expense, and the rent paid as accrued rent, and begins amortizing such deferred rent upon the possession of the leased location.

58

Notes to Consolidated Financial Statements — (Continued)

Litigation —

From time to time, the Company is involved in various legal proceedings arising out of the ordinary course of business. None of the matters in which the Company is currently involved, either individually, or in the aggregate, is expected to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

Self-Insurance —

The Company is self-insured for certain of its group medical, workers’ compensation and product and general liability claims. The Company consults with third party administrators to estimate the reserves required for these claims. No material revisions were made to the estimates for the years ended December 31, 2006, 2005 and 2004. The Company has reserved $6,985 and $6,254 as of December 31, 2006 and 2005, respectively. The Company has stop loss insurance coverage at various per occurrence and per annum levels depending on the type of claim. The stop loss amounts are as follows:

	Per Occurrence and		Aggregate
Insurance Type	per Annum Levels		per Annum Levels
Group Medical	$	150		N/A
Worker’s Compensation		Up to 350	Up to $	5,680
Product and General Liability		Up to 500		Up to 4,000

Severance Obligations —

The Company has employment agreements with certain of its executive management with annual base compensation ranging in value from $180 to $350. The agreements generally provide for salary continuation in the event of termination without cause for periods of one to three years. The agreements also contain certain non-competition clauses. As of December 31, 2006, the remaining aggregate commitment under these severance agreements if all individuals were terminated without cause was $1,915.

(11)  Facility Closing and Severance Expenses

During 2003, the Company approved and began implementing a plan to exit certain of our distribution facilities and to reduce overall headcount by approximately 120, in order to keep its cost structure in alignment with net sales. Activity for this plan for the year ended December 31, 2004 was as follows:

	Involuntary			Lease					Other Post-
	Termination			Termination			Relocation of		Closing
	Benefits			Costs			Operations		Costs			Total
Balance, January 1, 2004	$	—		$	—		$	—	$	—		$	—
Facility closing and severance expenses		63			1			—		61			125
Items charged against reserve		(63	)		(1	)		—		(61	)		(125	)
Balance, December 31, 2004	$	—		$	—		$	—	$	—		$	—

59

Notes to Consolidated Financial Statements — (Continued)

During 2004, the Company approved and began implementing a plan to exit certain of our distribution facilities and to reduce overall headcount by approximately 75, in order to keep its cost structure in alignment with net sales. Activity for this plan for the years ended December 31, 2004, 2005, and 2006 was as follows:

	Involuntary			Lease						Other Post-
	Termination			Termination			Relocation of			Closing
	Benefits			Costs			Operations			Costs			Total
Facility closing and severance expenses	$	611		$	307		$	595		$	398		$	1,911
Items charged against reserve		(611	)		(187	)		(595	)		(398	)		(1,791	)
Balance, December 31, 2004		—			120			—			—			120
Facility closing and severance expenses		105			264			5			157			531
Items charged against reserve		(105	)		(339	)		(5	)		(157	)		(606	)
Balance, December 31, 2005		—			45			—			—			45
Facility closing and severance expenses		—			78			—			44			122
Items charged against reserve		—			(123	)		—			(44	)		(167	)
Balance, December 31, 2006	$	—		$	—		$	—		$	—		$	—

During 2005, the Company approved and began implementing a plan to exit certain of our distribution facilities and to reduce overall headcount by approximately 50, in order to keep its cost structure in alignment with net sales. Activity for this plan for the years ended December 31, 2005 and 2006 was as follows:

	Involuntary			Lease						Other Post-
	Termination			Termination			Relocation of			Closing
	Benefits			Costs			Operations			Costs			Total
Facility closing and severance expenses	$	642		$	—		$	539		$	—		$	1,181
Items charged against reserve		(225	)		—			(101	)		—			(326	)
Balance, December 31, 2005		417			—			438			—			855
Facility closing and severance expenses		—			247			(186	)		23			84
Items charged against reserve		(417	)		(247	)		(252	)		(23	)		(939	)
Balance, December 31, 2006	$	—		$	—		$	—		$	—		$	—

During 2006, the Company initiated a plan to reduce overall headcount in order to realign its management structure. Activity for this plan for the year ended December 31, 2006 was as follows:

	Involuntary			Lease				Other Post-
	Termination			Termination		Relocation of		Closing
	Benefits			Costs		Operations		Costs		Total
Facility closing and severance expenses	$	217		$	—	$	—	$	—	$	217
Items charged against reserve		(211	)		—		—		—		(211	)
Balance, December 31, 2006	$	6		$	—	$	—	$	—	$	6

Also during 2006, the Company initiated a plan to move its manufacturing and distribution operation from a leased facility in Des Plaines, Illinois to a newly leased facility in Elk Grove, Illinois. No expense was incurred during 2006 for this plan. The move is expected to begin in 2007 and be completed in the first quarter of 2008, following renovation of the new facility. The Company currently estimates that during 2007 and 2008, it will incur

60

Notes to Consolidated Financial Statements — (Continued)

expenses and expend cash in the range of approximately $2,000 to $4,000 in connection with the relocation, which will be expensed as incurred in accordance with SFAS No. 146.

The Company paid the amounts accrued as of December 31, 2006 during the first quarter of 2007.

(12)  Sale-Leaseback Transactions

In April 2005, the Company sold its manufacturing facility in Des Plaines, Illinois to an unrelated party and immediately leased it back from the purchaser. The net proceeds after commissions and other normal closing costs were $11,636. The lease has an initial term of 24 months and was renewed for an additional 12 months. The Company realized a gain of $6,673 on the sale of the facility that was initially deferred and was being recognized ratably over the initial term of the lease. Upon the Company’s exercise of its renewal option during 2006, the recognition of the remaining deferred gain was extended over the new remaining lease term.

In October 2005, the Company completed a sale-leaseback transaction with a different unrelated party. The Company sold its manufacturing facilities in Aurora, Illinois; Kansas City, Kansas; and Parsons, Kansas and its distribution center in Miamisburg, Ohio. At the same time, the Company also entered into four separate leases, under which the Company immediately leased the four facilities back. The terms range from 10 to 13 years and permit the Company to renew each lease for up to two five-year renewal terms.

The net proceeds after commissions and other normal closing costs were $11,544. The Company realized an aggregate gain of $1,188 on the sale of these facilities, comprised of a.) gains of $4,518 that the Company initially deferred and is recognizing ratably over the terms of the applicable leases, and b.) a loss of $3,330 that was recognized immediately.

(13)  Related Party Transactions

For the years ended December 31, 2006, 2005, and 2004, the Company reimbursed Odyssey for travel, lodging, and meals of $45, $233, and $86, respectively.

(14)  Quarterly Financial Information (Unaudited)

	2006
	First			Second		Third			Fourth			Full
Quarterly Operating Data	Quarter			Quarter		Quarter			Quarter			Year
Net sales	$	101,331		$	130,215	$	131,641		$	116,123		$	479,310
Gross profit		26,493			38,728		39,209			33,978			138,408
Net income (loss)		(9,075	)		1,494		(342	)		(10,086	)		(18,009	)
Net income (loss) per basic and diluted share		(0.91	)		0.15		(0.03	)		(0.91	)		(1.76	)

	2005
	First			Second			Third			Fourth			Full
Quarterly Operating Data	Quarter			Quarter			Quarter			Quarter			Year
Net sales	$	85,782		$	117,704		$	114,071		$	101,426		$	418,983
Gross profit		20,909			28,852			28,189			20,634			98,584
Net loss		(14,689	)		(5,598	)		(6,657	)		(87,759	)		(114,703	)
Net loss per basic and diluted share		(1.48	)		(0.56	)		(0.67	)		(8.85	)		(11.57	)

The full year per share amounts do not equal the sum of the quarterly amounts due to rounding and to the timing of the issuance of common stock.

61

DAYTON SUPERIOR CORPORATION AND SUBSIDIARY

Schedule II — Valuation and Qualifying Accounts

Years Ended December 31, 2006, 2005 and 2004

	Additions						Deductions
							Charges for
			Charged to				Which
	Balance at		Costs				Reserves			Balance at
	Beginning of		and				Were			End of
	Year		Expenses		Other		Created			Year
	(Amounts in thousands)
Reserves for Doubtful Accounts and
Sales Returns and Allowances
For the year ended December 31, 2006	$	5,435	$	3,712	$	—	$	(3,717	)	$	5,430
For the year ended December 31, 2005		5,375		3,956		—		(3,896	)		5,435
For the year ended December 31, 2004		4,939		3,796		—		(3,360	)		5,375
Net Realizable Value Reserve for Inventory
For the year ended December 31, 2006	$	4,062	$	474	$		$	(841	)	$	3,695
For the year ended December 31, 2005		2,171		2,944		—		(1,053	)		4,062
For the year ended December 31, 2004		1,897		1,224		—		(950	)		2,171
Valuation Allowance for Deferred Tax Assets
For the year ended December 31, 2006	$	52,652	$	5,462	$	—	$	—		$	58,114
For the year ended December 31, 2005		28,655		23,997		—		—			52,652
For the year ended December 31, 2004		—		28,655		—		—			28,655

62

Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A.   Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

There has been no change in our internal controls over financial reporting during the most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

This Annual report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for newly public companies. We are currently undergoing a comprehensive effort to comply with Section 404 of the Sarbanes-Oxley Act of 2002, which is required as of December 31, 2007. This effort includes documenting, evaluating the design and testing the effectiveness of our internal controls. During this process, we expect to make improvements in the design of and operation of our internal controls including further formalization of policies and procedures and improving segregation of duties. Although we believe that our efforts will enable us to provide the required management report on internal controls and our independent registered public accountants to provide the required attestation as of fiscal year end 2007, we can give no assurance that these efforts will be successfully completed in a timely manner.

Item 9A(T)  Controls and Procedures.

Not applicable.

Item 9B.   Other Information

Not applicable.

Part III

Item 10.   Directors, Executive Officers, and Corporate Governance of the Registrant.

The information required by this Item 10 is incorporated herein by reference to the information under the headings “Directors and Nominees” and “Corporate Governance” in our proxy statement for the Annual Meeting of Stockholders scheduled to be held on May 24, 2007, except for certain information concerning our executive officers, which is set forth at the end of Part I of this Annual Report on Form 10-K.

Item 11.   Executive Compensation

The information required by this Item 11 is incorporated herein by reference to the information under the headings “Compensation Committee Interlocks and Insider Participation in Compensation Decisions” and

63

“Executive Compensation” in our proxy statement for the Annual Meeting of Stockholders scheduled to be held on May 24, 2007.

Item 12.   Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters

The information required by this Item 12 is incorporated herein by reference to the information under the heading “Beneficial Ownership of Common Stock” in our proxy statement for the Annual Meeting of Stockholders scheduled to be held on May 24, 2007.

Item 13.   Certain Relationships and Related Transactions and Director Independence.

The information required by this Item 13 is incorporated herein by reference to the information under the headings “Certain Relationships and Related Party Transactions” and “Corporate Governance” in our proxy statement for the Annual Meeting of Stockholders scheduled to be held on May 24, 2007.

Item 14.   Principal Accounting Fees and Services

The information required by this Item 14 is incorporated herein by reference to the information under the heading “Independent Auditors” in our proxy statement for the Annual Meeting of Stockholders scheduled to be held on May 24, 2007.

Part IV

Item 15.   Exhibits and Financial Statement Schedules

(a)(1) Financial Statements  The following consolidated financial statements of the Company and subsidiaries are incorporated by reference as part of this Report under Item 8.

Report of Independent Registered Public Accounting Firm.

Consolidated Balance Sheets as of December 31, 2006 and 2005.

Consolidated Statements of Operations for the years ended December 31, 2006, 2005, and 2004

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2006, 2005, and 2004

Consolidated Statements of Cash Flows for the years ended December 31, 2006, 2005, and 2004

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2006, 2005, and 2004

Notes to Consolidated Financial Statements.

(a)(2) Financial Statement Schedules

Schedule II — Valuation and Qualifying Accounts (at Item 8 of this Report)

All other schedules are omitted because they are not applicable, or not required, or because the required information is included in the consolidated financial statements or notes thereto.

(a)(3) Exhibits.  See Index to Exhibits following the signature pages to this Report for a list of exhibits.

64

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Dayton Superior Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DAYTON SUPERIOR CORPORATION

By  /s/  Eric R. Zimmerman

Eric R. Zimmerman

President and Chief Executive Officer

March 30, 2007

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of Dayton Superior Corporation and in the capacities and on the dates indicated.

Name	Title	Date
/s/  Eric R. Zimmerman Eric R. Zimmerman	President, Chief Executive Officer and Director	March 30, 2007
/s/  Edward J. Puisis Edward J. Puisis	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	March 30, 2007
/s/  Thomas W. Roehrig Thomas W. Roehrig	Vice President, Finance and Secretary (Principal Accounting Officer)	March 30, 2007
/s/  Stephen Berger Stephen Berger	Director	March 30, 2007
/s/  Steven M. Berzin Steven M. Berzin	Director	March 30, 2007
/s/  William F. Hopkins William F. Hopkins	Director	March 30, 2007
/s/  Sidney J. Nurkin Sidney J. Nurkin	Director	March 30, 2007
/s/  Douglas Rotatori Douglas Rotatori	Director	March 30, 2007

65

Index of Exhibits

Exhibit No.			Description
	(2)
		Plan of Acquisition, Reorganization, Arrangement, Liquidation, or Succession
		2.1	Agreement and Plan of Merger, dated December 11, 2006, between Dayton Superior Delaware Corporation and Dayton Superior Corporation [Incorporated by reference to Exhibit 2.0 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
	(3)
		Articles of Incorporation and By-Laws
		3.1	Amended and Restated Certificate of Incorporation of the Company	**
		3.2	Amended and Restated By-Laws of the Company	**
	(4)
		Instruments defining the Rights of Security Holders, Including Indentures
		4.1	Form of Junior Convertible Subordinated Indenture between the Company and Firstar Bank, N.A., as Indenture Trustee [Incorporated by reference to Exhibit 4.2.3 to the Company’s Registration Statement on Form S-3 (Reg. 333-84613)]	†
		4.1.1	First Supplemental Indenture dated January 17, 2000, between the Company and Firstar Bank, N.A., as Trustee [Incorporated by reference to Exhibit 4.1.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004]	†
		4.1.2	Form of Junior Convertible Subordinated Debenture [Incorporated by reference to Exhibit 4.2.3 to the Company’s Registration Statement on Form S-3 (Reg. 333-84613)]	†
		4.1.3	Second Supplemental Indenture dated December 14, 2006 between the Company and US Bank N.A., as trustee [Incorporated by reference to Exhibit 4.1.3 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
		4.2	Indenture dated June 16, 2000 among the Company, the Guarantors named therein, as guarantors, and United States Trust Company of New York, as trustee, relating to $170,000,000 in aggregate principal amount of 13% Senior Subordinated Notes due 2009 and registered 13% Senior Subordinated Notes due 2009 [Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-4 (Reg. 333-41392)]	†
		4.2.1	First Supplemental Indenture dated as of August 3, 2000. [Incorporated by reference to Exhibit 4.5.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001]	†
		4.2.2	Second Supplemental Indenture dated as of January 4, 2001. [Incorporated by reference to Exhibit 4.5.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001]	†
		4.2.3	Third Supplemental Indenture dated as of June 19, 2001. [Incorporated by reference to Exhibit 4.5.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001]	†
		4.2.4	Fourth Supplemental Indenture dated as of September 30, 2003. [Incorporated by reference to Exhibit 4.2.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003]	†
		4.2.5	Fifth Supplemental Indenture dated as of December 4, 2006. [Incorporated by reference to Exhibit 4.2.5 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
		4.2.6	Sixth Supplemental Indenture dated as of December 14, 2006. [Incorporated by reference to Exhibit 4.2.6 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
		4.3	Specimen Certificate of 13% Senior Subordinated Notes due 2009 [Incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-4 (Reg. 333-41392)]	†
		4.4	Specimen Certificate of the registered 13% Senior Subordinated Notes due 2009 [Incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-4 (Reg. 333-41392)]	†

66

Exhibit No.		Description
	4.5	Warrant Agreement dated as of June 16, 2000 between the Company and United States Trust Company of New York, as Warrant Agent [Incorporated by reference to Exhibit 4.5 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003]	†
	4.6	Warrant Shares Registration Rights Agreement dated as of June 16, 2000 among the Company and the Initial Purchasers [Incorporated by reference to Exhibit 4.6 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003]	†
	4.7	Senior Second Secured Notes Indenture with respect to the 103/4% Senior Second Secured Notes due 2008, among the Company, the Guarantors named therein and The Bank of New York, as Trustee, dated June 9, 2003 [Incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-4 (Reg. 333-107071)]	†
	4.7.1	First Supplemental Indenture dated as of December 14, 2006, between the Company and The Bank of New York, as trustee. [Incorporated by reference to Exhibit 4.8.1 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
	4.8	Form of 103/4% Senior Second Secured Note due 2008 (included in Exhibit 4.7)	†
	4.9	Second Amended and Restated Security Agreement, among the Company, certain former subsidiaries of the Company and The Bank of New York, as Collateral Agent and as Trustee, dated January 30, 2004 [Incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-4 (Reg. 333-107071)]	†
	4.10	Second Amended and Restated Pledge Agreement, among the Company, Trevecca Holdings, Inc. and The Bank of New York, as Collateral Agent and as Trustee, dated January 30, 2004 [Incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-4 (Reg. 333-107071)]	†
	4.11	Credit Agreement among the Company, the other persons designated as Credit Parties, General Electric Capital Corporation, as Agent, L/C Issuer and a Lender, the other Lenders and GECC Capital Markets Group, Inc., as Lead Arranger, dated January 30, 2004 [Incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-4 (Reg. 333-107071)]	†
	4.11.1	Amendment One dated as of June 30, 2004 among the Company, General Electric Capital Corporation, and GMAC Commercial Finance LLC [Incorporated by reference to Exhibit 4.12.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004]	†
	4.11.2	Amendment Two dated as of February 23, 2005 among the Company, General Electric Capital Corporation, and GMAC Commercial Finance LLC [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated February 25, 2005]	†
	4.11.3	Amendment Three dated as of September 29, 2006 among the Company, General Electric Capital Corporation, and GMAC Commercial Finance LLC [Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 29, 2006]	†
	4.11.4	Amendment Four dated as of December 1, 2006 among the Company, General Electric Capital Corporation, and GMAC Commercial Finance LLC [Incorporated by reference to Exhibit 4.12.4 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
	4.11.5	Joinder, Consent and Amendment No. Five dated as of December 14, 2006, among the Company, General Electric Capital Corporation, and GMAC Commercial Finance LLC. [Incorporated by reference to Exhibit 4.12.5 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
	4.12	Security Agreement among the Company, certain former subsidiaries of the Company and General Electric Capital Corporation, as Agent, dated January 30, 2004 [Incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-4 (Reg. 333-107071)]	†

67

Exhibit No.			Description
		4.13	Pledge Agreement among the Company, Trevecca Holdings, Inc. and General Electric Capital Corporation, as Agent, dated January 30, 2004 [Incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-4 (Reg. 333-107071)]	†
		4.14	Registration Rights Agreement among the Company, Odyssey Investment Partners Fund, LP, Odyssey Coinvestors, LLC, DS Coinvestment I, LLC and DS Coinvestment II, LLC [Incorporated by reference to Exhibit 4.15 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†
			Certain instruments defining the rights of holders of long-term debt of the Company have not been filed because the total amount does not exceed 10% of the total assets of the Company and its subsidiary on a consolidated basis. A copy of each such instrument will be furnished to the Commission upon request.
	(9)
		Voting Trust Agreement
		9.1	Voting Agreement and Irrevocable Proxy among the Company, Odyssey and certain management shareholders [Incorporated by reference to Exhibit 9.1 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]
	(10)
		Material Contracts
		10.1	2007 Executive Incentive Plan [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 13, 2007]	†*
		10.2	Employment Agreement between the Company and Edward J. Puisis [Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q dated November 10, 2003]	†*
		10.3	Letter Agreement dated August 13, 2003 between Raymond Bartholomae and the Company [Incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q dated November 10, 2003]	†*
		10.3.1	Letter Agreement dated as of December 15, 2005 between Raymond Bartholomae and the Company amending prior Letter Agreement. [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 21, 2005]	†*
		10.4	Employment Agreement effective as of August 1, 2005 between Eric R. Zimmerman and the Company. [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated August 2, 2005]	†*
		10.5	Management Stockholder’s Agreement dated June 16, 2000 by and among the Company, Odyssey Investment Partners Fund, LP and the Management Stockholders named therein [Incorporated by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-4 (Reg. 333-41392)]	†*
		10.6	Dayton Superior Corporation 2000 Stock Option Plan [Incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2001]	†*
		10.6.1	First Amendment to Dayton Superior Corporation 2000 Stock Option Plan [Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2001]	†*
		10.6.2	Second Amendment to Dayton Superior Corporation 2000 Stock Option Plan dated July 15, 2002 [Incorporated by reference to Exhibit 10.13.2 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002]	†*
		10.6.3	Third Amendment to Dayton Superior Corporation 2000 Stock Option Plan dated October 23, 2002 [Incorporated by reference to Exhibit 10.13.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2002]	†*
		10.6.4	Fourth Amendment to Dayton Superior Corporation 2000 Stock Option Plan dated February 10, 2004. [Incorporated by reference to Exhibit 10.10.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003]	†*

68

Exhibit No.		Description
	10.6.5	Form of Amended and Restated Stock Option Agreement entered into between the Company and certain of its executive officers [Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2002]	†*
	10.6.6	Form of First Amendment to Stock Option Agreement dated as of July 1, 2003 [Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended July 2, 2003]	†*
	10.7	Agreement of Sale dated April 21, 2005 between the Company and International Airport Centers LLC [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.7.1	Addendum to Agreement of Sale dated April 21, 2005 between the Company and International Airport Centers LLC [Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.7.2	Lease dated April 21, 2005 between IAC Chicago LLC and the Company [Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†*
	10.8	Real Estate Purchase and Sale Agreement dated as of August 2, 2005 between the Company and STAG Capital Partners, LLC [Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated October 18, 2005]	†*
	10.8.1	First Amendment to Real Estate Purchase and Sale Agreement dated as of August 31, 2005 between the Company and STAG Capital Partners, LLC [Incorporated by reference to Exhibit 10.1.1 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.8.2	Second Amendment to Real Estate Purchase and Sale Agreement dated as of September 30, 2005 between the Company and STAG Capital Partners, LLC [Incorporated by reference to Exhibit 10.1.2 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.8.3	Lease dated October 12, 2005 between STAG II Parsons, LLC and the Company [Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.8.4	Lease dated October 12, 2005 between STAG II Kansas City, LLC and the Company [Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.8.5	Lease dated October 12, 2005 between STAG II Aurora, LLC and the Company [Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.8.6	Lease dated October 12, 2005 between STAG II Miamisburg, LLC and the Company [Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K dated April 27, 2005]	†
	10.9	Restricted Stock Agreement dated as of June 30, 2006, between the Company and Eric R. Zimmerman. [Incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*
	10.10	Restricted Stock Agreement dated as of June 30, 2006, between the Company and Edward J. Puisis. [Incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*
	10.11	Restricted Stock Agreement dated as of June 30, 2006, between the Company and Raymond E. Bartholomae. [Incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*
	10.12	Repayment and Stock Pledge Agreement dated March 30, 2001, between the Company and John A. Ciccarelli. [Incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*
	10.13	Repayment and Stock Pledge Agreement dated June 16, 2000, between the Company and Mark K. Kaler. [Incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*

69

Exhibit No.			Description
		10.14	Repayment and Stock Pledge Agreement dated March 30, 2001, between the Company and Mark K. Kaler. [Incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*
		10.15	Repayment and Stock Pledge Agreement dated June 16, 2000, between the Company and Raymond E. Bartholomae. [Incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*
		10.16	Repayment and Stock Pledge Agreement dated March 30, 2001, between the Company and Raymond E. Bartholomae. [Incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1 (Reg. No. 333-137785)]	†*
	(14)
		Code of Ethics
		14	Code of Business Conduct and Ethics [Incorporated by reference to Exhibit 14 to the Company’s Current Report on Form 8-K filed December 22, 2006]	†
	(21)
		Subsidiaries of the Registrant
		21	Subsidiaries of the Company [Incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004]	†
	(23)
		Consents of Experts and Counsel
		23	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm	**
	(31)
		Rule 13a-14(a)/15d-14(a) Certifications
		31.1	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 Certifications
		32.1	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

70

EX-3.1

Exhibit 3.1

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
DAYTON SUPERIOR CORPORATION

     FIRST. The name of the corporation is Dayton Superior Corporation.

     SECOND. The address of the corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, 19808. The name of its registered agent at such address is The Corporation Service Company.

     THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

     FOURTH. The Corporation shall have authority to issue one class of Common Stock and one class of Preferred Stock. The Corporation may issue 100,000,000 shares of Common Stock, $0.01 par value per share (the “Common Stock”). The Corporation may issue 10,000,000 shares of Preferred Stock, $0.01 par value per share (the “Preferred Stock”).

     The Preferred Stock may be issued from time to time in one or more series. The board of directors of the Corporation (the “Board of Directors”) is hereby authorized to provide by resolution for the issuance of shares of Preferred Stock in one or more series and, by filing a certificate pursuant to the applicable law of the State of Delaware (hereinafter referred to as “Preferred Stock Designation”), setting forth such resolution, to establish by resolution from time to time the number of shares to be included in each such series, and to fix by resolution the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:

          (a) The designation of the series, which may be by distinguishing number, letter or title;

          (b) The number of shares of the series, which number the Board of Directors may thereafter (except where otherwise provided in the Preferred Stock Designation) increase or decrease (but not below the number of shares thereof then outstanding);

          (c) The amounts or rates at which dividends will be payable on, and the preferences, if any, of shares of the series in respect of dividends, and whether such dividends, if any, shall be cumulative or noncumulative;

          (d) Dates at which dividends, if any, shall be payable;

          (e) The redemption rights and price or prices, if any, for shares of the series;

          (f) The terms and amount of any sinking fund, if any, provided for the purchase or redemption of shares of the series;

          (g) The amounts payable on, and the preferences, if any, of shares of the series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation;

          (h) Whether the shares of the series shall be convertible into, or exchangeable, or redeemable for, shares of any other class or series, or any other security, of the Corporation or any other corporation, and, if so, the specification of such other class or series or such other security, the conversion or exchange price or prices or rate or rates, any adjustments thereof, the date or dates at which such shares shall be convertible or exchangeable and all other terms and conditions upon which such conversion or exchange may be made;

          (i) The voting rights, if any, of the holders of shares of the series generally or upon specified events; and

          (j) Any other rights, powers, preferences of such shares as are permitted by law.

     The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. Except as may otherwise be provided in this Amended and Restated Certificate of Incorporation, in a Preferred Stock Designation or by applicable law, the holders of shares of Common Stock shall be entitled to one vote for each such share upon all questions presented to the shareholders and shall not have cumulative voting rights, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of Preferred Stock shall not be entitled to vote at or receive notice of any meeting of shareholders.

     The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law.

     FIFTH. Unless and except to the extent that the By-laws of the Corporation shall so require, the election of directors of the Corporation need not be by written ballot.

     SIXTH. (1) The business and affairs of the Corporation shall be managed by, or under the direction of, the Board of Directors. The Board of Directors shall have that number of directors set out in the By-laws of the Corporation as adopted or as set from time to time by a duly adopted amendment thereto by the directors or shareholders of the Corporation.

     (2) The Board of Directors (other than those directors elected by the holders of any series of Preferred Stock provided for or fixed pursuant to the provisions of Article FOURTH hereof (the “Preferred Stock Directors”)) shall be divided into three classes, as nearly equal in number as possible, designated Class I, Class II and Class III. Class I directors shall initially serve until the 2007 meeting of shareholders; Class II directors shall initially serve until the 2008 meeting of shareholders; and Class III directors shall initially serve until the 2009

2

meeting of shareholders. Commencing with the annual meeting of shareholders in 2007, directors of each class the term of which shall then expire shall be elected to hold office for a three-year term and until the election and qualification of their respective successors in office. In case of any increase or decrease, from time to time, in the number of directors (other than Preferred Stock Directors), the number of directors in each class shall be apportioned as nearly equal as possible.

     (3) Subject to the rights of the holders of any one or more series of Preferred Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause shall be filled solely by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of the Board of Directors. Any director so chosen shall hold office until the next election of the class for which such director shall have been chosen and until his successor shall be elected and qualified. No decrease in the number of directors shall shorten the term of any incumbent director.

     (4) Except for Preferred Stock Directors, if any, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of at least 75% of the total voting power of the outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (the “Voting Stock”), voting together as a single class.

     (5) During any period when the holders of any series of Preferred Stock have the right to elect additional directors as provided for or fixed pursuant to the provisions of Article FOURTH hereof, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions and (ii) each such additional director shall serve until such director’s successor shall have been duly elected and qualified, or until such director’s right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his earlier death, disqualification, resignation or removal. Except as otherwise provided by the Board of Directors in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total and authorized number of directors of the Corporation shall be reduced accordingly.

     SEVENTH. In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors is expressly authorized to make, alter and repeal the By-laws of the Corporation.

     Notwithstanding any other provisions of the Certificate of Incorporation or the By-laws of the Corporation and in addition to any other vote required by law, the affirmative vote of the holders of not less than 75% of the Voting Stock, voting together as a single class,

3

shall be required in order for shareholders to alter, amend or repeal any provision of the By-laws of the Corporation.

     EIGHTH. A director of the Corporation shall not be liable to the Corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended. If the General Corporation Law of the State of Delaware is amended after the effective date of this Amended and Restated Certificate of Incorporation to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended.

     Any amendment, modification or repeal of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation hereunder with respect to any act or omission occurring prior to the time of such amendment, modification or repeal.

     NINTH. Except as otherwise provided for or fixed pursuant to the provisions of Article FOURTH of this Amended and Restated Certificate of Incorporation relating to the rights of holders of any series of Preferred Stock, no action that is required or permitted to be taken by the shareholders of the Corporation at any annual or special meeting of shareholders may be effected by written consent of shareholders in lieu of a meeting of shareholders, unless the action to be effected by written consent of shareholders and the taking of such action by such written consent have expressly been approved in advance by the Board of Directors.

     TENTH. The Corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now or hereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon shareholders, directors or any other persons whomsoever by and pursuant to this Amended and Restated Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in this article.

     ELEVENTH. The Corporation elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware.

     TWELFTH. Notwithstanding anything to the contrary elsewhere contained in this Amended and Restated Certificate of Incorporation of the Corporation, the affirmative vote of the holders of at least 75% of the Voting Stock, voting together as a single class, shall be required to alter, amend or repeal, or to adopt any provision inconsistent with, the following Articles of this Amended and Restated Certificate of Incorporation: Article FOURTH, Article SIXTH, Article SEVENTH, Article EIGHTH, Article NINTH and Article TWELFTH.

4

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED

BY-LAWS

OF

DAYTON SUPERIOR CORPORATION

TABLE OF CONTENTS

ARTICLE I. OFFICES AND RECORDS			1
	Section 1.1	Delaware Office	1
	Section 1.2	Other Offices	1
	Section 1.3	Books and Records	1
ARTICLE II. SHAREHOLDERS			1
	Section 2.1	Annual Meeting	1
	Section 2.2	Special Meeting	1
	Section 2.3	Place of Meeting	2
	Section 2.4	Notice of Meeting	2
	Section 2.5	Adjournments	2
	Section 2.6	Quorum	3
	Section 2.7	Voting and Proxies	3
	Section 2.8	Notice of Shareholder Business and Nominations	4
	Section 2.9	Organization	7
	Section 2.10	Inspectors of Elections, Conduct of Meetings	7
	Section 2.11	Fixing Date of Determination of Shareholders of Record	8
	Section 2.12	List of Shareholders Entitled to Vote	9
	Section 2.13	Postponement and Cancellation of Meeting	9
	Section 2.14	Action by Written Consent	9
ARTICLE III. BOARD OF DIRECTORS			9
	Section 3.1	General Powers	9
	Section 3.2	Number	10
	Section 3.3	Organization	10
	Section 3.4	Regular Meetings	10
	Section 3.5	Special Meetings	10
	Section 3.6	Notice	10
	Section 3.7	Quorum	11
	Section 3.8	Vacancies	11
	Section 3.9	Committees	11
	Section 3.10	Resignation and Removal	12
	Section 3.11	Telephonic Meetings	12
	Section 3.12	Action by Unanimous Consent of Directors	12
	Section 3.13	Reliance upon Records	12
	Section 3.14	Interested Directors	13
	Section 3.15	Compensation	13
ARTICLE IV. OFFICERS			13
	Section 4.1	Elected Officers	13
	Section 4.2	Other Officers	13

	Section 4.3	Resignation and Removal	13
	Section 4.4	Vacancies	14
	Section 4.5	Chief Executive Officer	14
	Section 4.6	President	14
	Section 4.7	Vice Presidents and Assistant Vice Presidents	14
	Section 4.8	Secretary	14
	Section 4.9	Treasurer	15
	Section 4.10	Assistant Officers	15
	Section 4.11	Compensation	15
ARTICLE V. CONTRACTS AND PROXIES			15
	Section 5.1	Contracts	15
	Section 5.2	Proxies	16
ARTICLE VI. INDEMNIFICATION AND INSURANCE			16
ARTICLE VII. STOCK			18
ARTICLE VIII. MISCELLANEOUS PROVISIONS			18
	Section 8.1	Fiscal Year	18
	Section 8.2	Dividends	18
	Section 8.3	Seal	18
	Section 8.4	Form of Records	18
	Section 8.5	Manner of Notice	19
	Section 8.6	Waiver of Notice of Meetings of Shareholders, Directors and Committees	19
ARTICLE IX. AMENDMENTS			19

ii

AMENDED AND RESTATED
BY-LAWS
OF
DAYTON SUPERIOR CORPORATION

(December ___, 2006)

Incorporated under the General Corporation Law of the State of Delaware

ARTICLE I.
OFFICES AND RECORDS

     Section 1.1 Delaware Office.

     The principal office of Dayton Superior Corporation (the “Corporation”) in the State of Delaware shall be located in the City of Wilmington, County of New Castle, and the name and address of its registered agent is The Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware.

     Section 1.2 Other Offices.

     The Corporation may have such other offices, either within or without the State of Delaware, as the Board of Directors may from time to time designate or as the business of the Corporation may from time to time require.

     Section 1.3 Books and Records.

     The books and records of the Corporation may be kept outside the State of Delaware at such place or places as may from time to time be designated by the Board of Directors.

ARTICLE II.
SHAREHOLDERS

     Section 2.1 Annual Meeting.

     If required by applicable law, an annual meeting of shareholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors from time to time. Other proper business may be transacted at the annual meeting.

     Section 2.2 Special Meeting.

     Special meetings of shareholders for any purpose or purposes may be called at any time by a majority of the total authorized members of the Board of Directors, but such special meetings may not be called by any other person or persons. Business transacted at any special meeting of shareholders shall be limited to the purposes stated in the notice.

     Section 2.3 Place of Meeting.

     The Board of Directors may designate the place of meeting for any meeting of the shareholders. If no designation is made by the Board of Directors, the place of meeting shall be the principal office of the Corporation. Notwithstanding the foregoing, the Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but shall be held solely by means of remote communication, subject to such guidelines and procedures as the Board of Directors may adopt, as permitted by applicable law.

     Section 2.4 Notice of Meeting.

     Written or printed notice, stating the place, if any, date and hour of a meeting, the means of remote communications, if any, by which shareholders and proxyholders may be deemed to be present in person and vote at such meeting and the purpose or purposes for which the meeting is called, shall be prepared and delivered by the Corporation not less than ten (10) days nor more than sixty (60) days before the date of the meeting, either personally or by mail, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with postage thereon prepaid, addressed to the shareholder at such shareholder’s address as it appears on the books of the Corporation.

     Without limiting the foregoing, any notice to shareholders given by the Corporation pursuant to this Section 2.4 shall be effective if given by a form of electronic transmission consented to by the shareholder to whom the notice is given. Any such consent shall be revocable by the shareholder by written notice to the Corporation and shall also be deemed revoked if (1) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent and (2) such inability becomes known to the Secretary or Assistant Secretary of the Corporation, the transfer agent or other person responsible for the giving of notice, provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Notice given by a form of electronic transmission in accordance with these By-laws shall be deemed given (i) if by facsimile telecommunication, when directed to a number at which the shareholder has consented to receive notice, (ii) if by electronic mail, when directed to an electronic mail address at which the shareholder has consented to receive notice; (iii) if by a posting on an electronic network, together with separate notice to the shareholder of such specific posting, upon the later of such posting and the giving of such separate notice, and (iv) if by another form of electronic transmission, when directed to the shareholder.

     For purposes of these By-laws, “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

     Section 2.5 Adjournments.

     Any meeting of shareholders, annual or special, may be adjourned solely by the chair of the meeting from time to time to reconvene at the same or some other time, date and place. The shareholders present at a meeting shall not have authority to adjourn the meeting. Notice need

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not be given of any such adjourned meeting if the time, date and place thereof are announced at the meeting at which the adjournment is taken. If the time, date and place of the adjourned meeting are not announced at the meeting at which the adjournment is taken, then the Secretary of the Corporation shall give written notice of the time, date and place of the adjourned meeting not less than ten (10) days prior to the date of the adjourned meeting.

     At an adjourned meeting at which a quorum is present, the shareholders may transact any business which might have been transacted at the original meeting. Once a share is represented for any purpose at a meeting, it shall be present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for the adjourned meeting. A new record date must be set if the meeting is adjourned in a single adjournment to a date more than 120 days after the original date fixed for the meeting. If after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the adjourned meeting consistent with the new record date.

     Section 2.6 Quorum.

     Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, at each meeting of shareholders the presence in person or by proxy of the holders of a majority in voting power of the outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. In the absence of a quorum, the shareholders so present may, by a majority in voting power thereof, adjourn the meeting from time to time in the manner provided in Section 2.5 of these By-laws until a quorum shall attend.

     Section 2.7 Voting and Proxies.

          (A) General. Except as otherwise provided by or pursuant to the provisions of the Certificate of Incorporation, each shareholder entitled to vote at any meeting of shareholders shall be entitled to one vote for each share of stock held by such shareholder which has voting power upon the matter in question. Each shareholder entitled to vote at a meeting of shareholders may authorize another person or persons to act for such shareholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A shareholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date. Voting at meetings of shareholders need not be by written ballot. At all meetings of shareholders for the election of directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by the Certificate of Incorporation, these By-laws, the rules or regulations of any stock exchange or quotation system applicable to the Corporation, or applicable law or pursuant to any regulation applicable to the Corporation or its securities, be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of the Corporation which are present in person or by proxy and entitled to vote thereon.

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          (B) Participation and Voting By Means of Remote Communication. If authorized by the Board of Directors in accordance with these By-laws and applicable law, shareholders and proxyholders not physically present at a meeting of shareholders may, by means of remote communication, (a) participate in a meeting of shareholders and (b) be deemed present in person and vote at a meeting of shareholders, whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a shareholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such shareholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any shareholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

     Section 2.8 Notice of Shareholder Business and Nominations.

          (A) Annual Meetings of Shareholders.

               (1) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders only (a) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (b) by or at the direction of the Board of Directors or (c) by any shareholder of the Corporation who was a shareholder of record of the Corporation on the record date of the meeting and at the time the notice provided for in this Section 2.8 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 2.8.

               (2) For nominations or other business to be properly brought before an annual meeting by a shareholder pursuant to clause (c) of paragraph (A)(l) of this Section 2.8 (or before a special meeting of shareholders pursuant to paragraph (B) of this Section 2.8, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business other than the nominations of persons for election to the Board of Directors must constitute a proper matter for shareholder action. To be timely, a shareholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the ninetieth day nor earlier than the close of business on the one hundred twentieth (120^th) day prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the shareholder must be so delivered not earlier than the close of business on the one hundred twentieth (120^th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such annual meeting or the tenth (10^th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). For purposes of the first annual meeting of shareholders of the Corporation held after the closing of an initial public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of common stock of the corporation to the public (the “Initial Public Offering”), the first anniversary of such annual meeting shall be

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deemed to be of the following year. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above. Such shareholder’s notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election as a director (i) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (ii) such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Certificate of Incorporation or the By-laws of the Corporation, the language of the proposed amendment), the reasons for conducting such business at the meeting and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of capital stock of the Corporation which are owned beneficially and of record by such shareholder and such beneficial owner, (iii) a representation that the shareholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination, and (iv) a representation whether the shareholder or the beneficial owner, if any, intends or is part of a group which intends (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (B) otherwise to solicit proxies from shareholders in support of such proposal or nomination. The foregoing notice requirements shall be deemed satisfied by a shareholder if the shareholder has notified the Corporation of his or her intention to present a proposal at an annual meeting in compliance with Rule l4a-8 (or any successor thereof) promulgated under the Exchange Act and such shareholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation.

               (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Section 2.8 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a shareholder’s notice required by this Section 2.8 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10^th) day following the day on which such public announcement is first made by the Corporation.

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          (B) Special Meetings of Shareholders. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any shareholder of the Corporation who is a shareholder of record at the time the notice provided for in this Section 2.8 is delivered to the Secretary of the Corporation, who is entitled to vote at the meeting and upon such election and who complies with the notice procedures set forth in this Section 2.8. In the event the Corporation calls a special meeting of shareholders for the purpose of electing one or more directors to the Board of Directors, any such shareholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the shareholder’s notice required by paragraph (A)(2) of this Section 2.8 shall be delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120^th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90^th) day prior to such special meeting or the tenth (10^th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a shareholder’s notice as described above.

          (C) General.

               (1) Only such persons who are nominated in accordance with the procedures set forth in this Section 2.8 shall be eligible to be elected at an annual or special meeting of shareholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.8. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (a) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.8 (including whether the shareholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such shareholder’s nominee or proposal in compliance with such shareholder’s representation as required by clause (A)(2)(c)(iv) of this Section 2.8) and (b) if any proposed nomination or business was not made or proposed in compliance with this Section 2.8, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted, notwithstanding the foregoing provisions of this Section 2.8, if the shareholder (or a qualified representative of the shareholder) does not appear at the annual or special meeting of shareholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

               (2) For purposes of this Section 2.8, “public announcement” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press

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or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

               (3) Notwithstanding the foregoing provisions of this Section 2.8, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.8. Nothing in this Section 2.8 shall be deemed to affect any rights (a) of shareholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act or (b) of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

     Section 2.9 Organization.

     Meetings of shareholders shall be presided over by the Chairman of the Board, if any, or in his absence by the Vice Chairman of the Board, if any, or in his absence by the Chief Executive Officer, or in his absence by the President, or in his absence by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

     Section 2.10 Inspectors of Elections, Conduct of Meetings.

          (A) Inspectors of Election. The Corporation may, and shall if required by law, in advance of any meeting of shareholders, appoint one or more inspectors of election, who may be employees of the Corporation, to act at the meeting or any adjournment thereof and to make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. In the event that no inspector so appointed or designated is able to act at a meeting of shareholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector with strict impartiality and according to the best of his or her ability.

          (B) Duties. The inspectors shall (1) ascertain the number of shares of stock outstanding and the voting power of each, (2) determine the number of shares of stock present in person or by proxy at such meeting and the validity of proxies and ballots, (3) count all votes and ballots, (4) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and (5) certify their determination of the number of such shares present in person or by proxy at such meeting and their count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of shareholders of the Corporation, the inspectors may consider such information as is permitted by applicable law. The inspectors may appoint or retain other persons or entities to assist them in the performance of their duties. No person who is a candidate for an office at an election may serve as an inspector at such election.

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          (C) Conduct of Meetings. The date and time of the opening and the closing of the polls for each matter upon which the shareholders will vote at a meeting shall be announced at the meeting by the person presiding over the meeting. The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of shareholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of shareholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (1) the establishment of an agenda or order of business for the meeting; (2) rules and procedures for maintaining order at the meeting and the safety of those present; (3) limitations on attendance at or participation in the meeting to shareholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (4) restrictions on entry to the meeting after the time fixed for the commencement thereof and (5) limitations on the time allotted to questions or comments by participants. The presiding officer at any meeting of shareholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding officer should so determine, such person shall so declare to the meeting, and any such matter or business not properly brought before the meeting shall not be transacted or considered. Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of shareholders shall not be required to be held in accordance with the rules of parliamentary procedure.

     Section 2.11 Fixing Date of Determination of Shareholders of Record.

          (A) Fixing the Record Date. In order that the Corporation may determine the shareholders entitled (1) to notice of or to vote at any meeting of shareholders or any adjournment thereof, (2) to receive payment of any dividend or other distribution or allotment of any rights, (3) to exercise any rights in respect of any change, conversion or exchange of stock or (4) to take, receive or participate in any other action, the Board of Directors may fix a record date, which shall not be earlier than the date upon which the resolution fixing the record date is adopted by the Board of Directors and which (a) in the case of a determination of shareholders entitled to notice of or to vote at any meeting of shareholders or adjournment thereof, shall, unless otherwise required by law, be not more than sixty (60) nor less than ten (10) days before the date of such meeting; and (b) in the case of any other action, shall be not more than sixty (60) days before such action.

          (B) If Record Date is Not Fixed. If no record date is fixed, (1) the record date for determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given, and (2) the record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

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          (C) Adjourned Meetings. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting, but the Board of Directors may fix a new record date for the adjourned meeting.

     Section 2.12 List of Shareholders Entitled to Vote.

     The Secretary shall prepare, at least ten (10) days before every meeting of shareholders, a complete list of the shareholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, for a period of at least ten days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, the list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any shareholder who is present. If the meeting is to be held solely by means of remote communication, the list shall also be open to the examination of any shareholder during the whole time thereof on a reasonably accessible electronic network and the information required to access such list shall be provided with the notice of the meeting. Except as otherwise provided by law, the stock ledger shall be the only evidence as to who are the shareholders entitled to examine the stock ledger, the list of shareholders or the books of the Corporation, or to vote in person or by proxy at any meeting of shareholders.

     Section 2.13 Postponement and Cancellation of Meeting.

     Any previously scheduled annual or special meeting of the shareholders may be postponed, and any previously scheduled annual or special meeting of the shareholders called by the Board of Directors may be canceled, by resolution of the Board of Directors upon public notice given prior to the time previously scheduled for such meeting of shareholders.

     Section 2.14 Action by Written Consent.

     Except as otherwise provided for or fixed pursuant to the provisions of Article FOURTH of the Certificate of Incorporation relating to the rights of holders of any series of Preferred Stock, no action that is required or permitted to be taken by the shareholders of the Corporation at any annual or special meeting of shareholders may be effected by written consent of shareholders in lieu of a meeting of shareholders, unless the action to be effected by written consent of shareholders and the taking of such action by such written consent have expressly been approved in advance by the Board of Directors of the Corporation.

ARTICLE III.
BOARD OF DIRECTORS

     Section 3.1 General Powers.

     The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. In addition to the powers and authorities expressly conferred upon them by these By-laws, the Board of Directors may exercise all such powers of the Corporation and do

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all such lawful acts and things as are not by law or by the Certificate of Incorporation or by these By-laws required to be exercised or done by the shareholders.

     Section 3.2 Number.

     Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specific circumstances, the number of directors that shall constitute the whole Board of Directors of the Corporation shall be between five (5) and nine (9), to be fixed exclusively pursuant to a resolution adopted by a majority of the Board Directors.

     Section 3.3 Organization.

     Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in his absence by the Vice Chairman of the Board, if any, or in his absence by the Chief Executive Officer, or in his absence by the President, or in their absence by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

     Section 3.4 Regular Meetings.

     A regular meeting of the Board of Directors may be held without other notice than this By-Law immediately after, and at the same place, if any, as, each annual meeting of shareholders. The Board of Directors may, by resolution, provide the time and place for the holding of additional regular meetings without other notice than such resolution.

     Section 3.5 Special Meetings.

     Special meetings of the Board of Directors may be called by the Chairman, the Chief Executive Officer, the President or by two or more directors. The person or persons authorized to call special meetings of the Board of Directors may fix the place and time of the meetings.

     Section 3.6 Notice.

     Notice of each special meeting of the Board of Directors shall be given by the Secretary. Notice of each such meeting shall state the date, time and place of the meeting, and shall be delivered to each director either personally or by telegram, telecopier, telephone, or other means of electronic transmission, at least 24 hours before the time at which such meeting is to be held or mailed by first-class mail, postage prepaid, addressed to the director at his residence or usual place of business, at least five (5) days before the day on which such meeting is to be held. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice of such meeting, except for amendments to these By-laws as provided under Article IX hereof. A meeting may be held at any time without notice if all of the directors are present or if those not present waive notice of the meeting in writing, either before or after such meeting.

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     Section 3.7 Quorum.

     A whole number of directors equal to at least a majority of the whole Board shall constitute a quorum for the transaction of business, but if at any meeting of the Board of Directors there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time without further notice. Except in cases in which the Certificate of Incorporation, these By-laws or applicable law otherwise provides, the vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. The directors present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.

     Section 3.8 Vacancies.

     Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specific circumstances, and unless otherwise provided by law or the Certificate of Incorporation, vacancies resulting from death, resignation, retirement, disqualification, removal from office or other cause, and newly created directorships resulting from any increase in the authorized number of directors, may be filled only by the affirmative vote of a majority of the remaining directors, though less than a quorum of the Board of Directors, and each director so chosen shall hold office for a term expiring at the annual meeting of shareholders at which the term of office of the class to which he or she has been elected expires and until his or her successor has been duly elected and qualified or until his or her earlier death, resignation or removal from office. No decrease in the number of authorized directors constituting the whole Board shall shorten the term of any incumbent director.

     Section 3.9 Committees.

     The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of the committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member. Any such committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it.

     Unless the Board of Directors otherwise provides, each committee designated by the Board of Directors may make, alter and repeal rules for the conduct of its business. In the absence of such rules each committee shall conduct its business in the same manner as the Board of Directors conducts its business pursuant to this Article III of these By-laws.

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     Section 3.10 Resignation and Removal.

     Any director of the Corporation may resign at any time upon notice given in writing or by electronic transmission to the Board of Directors, the Chairman or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specific circumstances, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 75% of the voting power of the outstanding capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

     Section 3.11 Telephonic Meetings.

     Members of the Board of Directors, or any committee of directors designated by the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 3.11 shall constitute presence in person at such meeting.

     Section 3.12 Action by Unanimous Consent of Directors.

     Unless otherwise provided in the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing (which may be in counterparts) or by electronic transmission, and the written consent or consents or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or such committee. Such filing shall be made in paper form if the minutes of the Corporation are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

     Section 3.13 Reliance upon Records.

     Every director, and every member of any committee of the Board of Directors, shall, in the performance of his or her duties, be fully protected in relying in good faith upon the records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors, or by any other person as to matters the director or member reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation, including, but not limited to, such records, information, opinions, reports or statements as to the value and amount of the assets, liabilities and/or net profits of the Corporation, or any other facts pertinent to the existence and amount of surplus or other funds from which dividends might properly be declared and paid, or with which the Corporation’s capital stock might properly be purchased or redeemed.

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     Section 3.14 Interested Directors.

     A director who is directly or indirectly a party to a contract or transaction with the Corporation, or is a director or officer of or has a financial interest in any other corporation, partnership, association or other organization which is a party to a contract or transaction with the Corporation, may be counted in determining whether a quorum is present at any meeting of the Board of Directors or a committee thereof at which such contract or transaction is considered or authorized, and such director may participate in such meeting and vote on such authorization if the material facts as to such director’s relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors are less than a quorum.

     Section 3.15 Compensation.

     The Board of Directors shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity, provided that no such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

ARTICLE IV.
OFFICERS

     Section 4.1 Elected Officers.

     Unless otherwise determined by the Board of Directors, the officers of the Corporation shall consist of the Chief Executive Officer, the President, one or more Vice Presidents, the Secretary and the Treasurer. Any two or more offices may be held by the same person. Such officers shall be elected from time to time by the Board of Directors to hold office until their respective successors shall have been duly elected and qualified, or until death, resignation or removal, as hereafter provided in these By-laws.

     Section 4.2 Other Officers.

     The Board of Directors may from time to time elect, or the Chief Executive Officer may appoint, such other officers (including one or more Assistant Vice Presidents, Assistant Secretaries and Assistant Treasurers) and such agents, as may be necessary or desirable for the conduct of the business of the Corporation. Such other officers and agents shall have such duties and shall hold their offices for such terms as shall be provided in these By-laws or as may be prescribed by the Board of Directors or by the Chief Executive Officer.

     Section 4.3 Resignation and Removal.

     Any officer or agent of the Corporation may resign at any time by giving a written notice of resignation to the Board of Directors, the Chief Executive Officer, the President or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt. Unless

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otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. Any officer or agent of the Corporation may be removed, either with or without cause, at any time, by a vote of the majority of the whole Board, or, except in the case of an officer or agent elected by the Board of Directors, by the Chief Executive Officer. Such removal shall be without prejudice to the contractual rights, if any, of the person so removed.

     Section 4.4 Vacancies.

     A vacancy in any office, whether arising from death, resignation, removal or any other cause, may be filled for the unexpired portion of the term of the office in the manner prescribed in these By-laws.

     Section 4.5 Chief Executive Officer.

     The Chief Executive Officer shall have the general control and management of the business and affairs of the Corporation, under the direction of the Board of Directors. He or she shall have power: (i) to select and appoint all necessary officers and employees of the Corporation except such officers as under these By-laws are to be elected by the Board of Directors, (ii) to remove all appointed officers or employees whenever he or she shall deem it necessary, and to make new appointments to fill the vacancies, and (iii) to suspend from office for cause any elected officer, which shall be forthwith declared in writing to the Board of Directors. The Chief Executive Officer shall have such other authority and shall perform such other duties as may be determined by the Board of Directors.

     Section 4.6 President.

     The President shall have such authority and perform such duties relative to the business and affairs of the Corporation as may be determined by the Board of Directors or the Chief Executive Officer. In the absence of both the Chairman and the Chief Executive Officer, the President shall preside at meetings of the shareholders and of the directors. If the Board of Directors shall not have elected a Chief Executive Officer, the President shall have such authority and shall perform such additional duties as in these By-laws is provided for the office of Chief Executive Officer.

     Section 4.7 Vice Presidents and Assistant Vice Presidents.

     Each Vice President and each Assistant Vice President shall have such powers and perform all such duties as from time to time may be determined by the Board of Directors, the Chief Executive Officer, the President or the senior officer to whom such officer reports.

     Section 4.8 Secretary.

     The Secretary shall record the proceedings of all meetings of the Board of Directors, the committees of the Board of Directors and the shareholders, shall see that all notices are duly given in accordance with the provisions of these By-laws and as required by law, shall be custodian of the records and the seal of the Corporation and, if necessary or appropriate, affix and attest the seal to all documents to be executed on behalf of the Corporation under its seal, shall see that the books, reports, statements, certificates and other documents and records

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required by law to be kept and filed are properly kept and filed, and in general, shall perform all the duties incident to the office of Secretary and such other duties as from time to time may be determined by the Board of Directors, the Chief Executive Officer or the President.

     Section 4.9 Treasurer.

     The Treasurer shall exercise general supervision over the receipt, custody and disbursement of corporate funds. The Treasurer shall have such further powers and duties as may be determined from time to time by the Board of Directors, the Chief Executive Officer or the President.

     Section 4.10 Assistant Officers.

     Any Assistant Secretary or Assistant Treasurer elected or appointed as heretofore provided shall perform the duties and exercise the powers of the Secretary and Treasurer, respectively, in their absence or inability to act, and shall perform such other duties and have such other powers as the Board of Directors, the Chief Executive Officer, the President, the Secretary or the Treasurer (as the case may be) may from time to time prescribe.

     Section 4.11 Compensation.

     The compensation of the officers of the Corporation for their services as such officers shall be fixed from time to time by the Board of Directors, provided, however, that the Board of Directors may by resolution delegate to the Chief Executive Officer the power to fix compensation of non-elected officers and agents appointed by the Chief Executive Officer. An officer of the Corporation shall not be prevented from receiving compensation by reason of the fact that such officer is also a director of the Corporation, but any such officer who shall also be a director shall not have any vote in the determination of such officer’s compensation.

ARTICLE V.
CONTRACTS AND PROXIES

     Section 5.1 Contracts.

     Except as otherwise required by law, the Certificate of Incorporation or these By-laws, any contracts or other instruments may be executed and delivered in the name and on behalf of the Corporation by such officer or officers (including any assistant officer) of the Corporation as the Board of Directors may from time to time direct. Such authority may be general or confined to specific instances as the Board of Directors may determine. The Chief Executive Officer, the President or any Vice President may execute bonds, contracts, deeds, leases and other instruments to be made or executed for or on behalf of the Corporation. Subject to any restrictions imposed by the Board of Directors, the Chief Executive Officer, the President or any Vice President of the Corporation may delegate contractual power to others under his jurisdiction, it being understood, however; that any such delegation of power shall not relieve such officer of responsibility with respect to the exercise of such delegated power.

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     Section 5.2 Proxies.

     Unless otherwise provided by resolution adopted by the Board of Directors, the Chief Executive Officer, the President or any Vice President may from time to time appoint an attorney or attorneys or agent or agents of the Corporation, in the name and on behalf of the Corporation, to cast the votes which the Corporation may be entitled to cast as the holder of stock or other securities or interests in any other corporation or entity, any of whose stock or other securities or interests may be held by the Corporation, at meetings of the holders of the stock or other securities or interests, of such other corporation or entity, or to consent in writing, in the name of the Corporation as such holder, to any action by such other corporation or entity, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed in the name and on behalf of the Corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he may deem necessary or proper in the premises.

ARTICLE VI.
INDEMNIFICATION AND INSURANCE

          (A) Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is involved in any action, suit, or proceeding, whether civil, criminal, administrative or investigative (hereinafter a “proceeding”), by reason of the fact that he or she or a person of whom he or she is the legal representative is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of any other corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended, against all expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred by such person in connection therewith, and such indemnification shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators, provided, however, that except as provided in paragraph (B) of this Article VI with respect to proceedings seeking to enforce rights to indemnification, the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person only if such proceeding (or part thereof) initiated by such person was authorized by the Board of Directors of the Corporation. The Corporation may, by action of its Board of Directors, provide indemnification and advancement to employees and agents of the Corporation with the same scope and effect as the indemnification and advancement of directors and officers provided for in this Article VI.

          (B) Recovery of Unpaid Indemnification. If a claim under paragraph (A) of this By-Law is not paid in full by the Corporation within 45 days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant also shall be entitled to be paid the expense of prosecuting such claim. It shall be a

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defense to any such action (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel or shareholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including the Board of Directors, independent legal counsel or shareholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.

          (C) Non-Exclusivity of Rights. The right to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred in this By-Law shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Certificate of Incorporation, By-laws, agreement, vote of shareholders or disinterested directors or otherwise.

          (D) Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of the State of Delaware.

          (E) Advancement. The Corporation shall pay the expenses (including attorneys’ fees) incurred by a person described in the first sentence of paragraph (A) of this Article VI (an “Article VI Person”) in defending any such proceeding in advance of its final disposition; provided, however, that if the General Corporation Law of the State of Delaware requires, the payment of such expenses incurred by an Article VI Person in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such Article VI Person while a director, officer, employee or agent, including, without limitation, service to an employee benefit plan), in advance of the final disposition of a proceeding, shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such Article VI Person to repay all amounts so advanced if it shall ultimately be determined that such Article VI Person is not entitled to be indemnified under this By-Law or otherwise.

          (F) Amendment or Repeal. Any amendment or repeal of this Article VI shall not adversely affect any right or protection existing hereunder in respect of any act or omission occurring prior to such amendment or repeal.

          (G) Other Sources. The Corporation’s obligation, if any, to indemnify or to advance expenses to any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or nonprofit entity shall be reduced by any amount such person may collect as indemnification or

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advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.

ARTICLE VII.
STOCK

          (A) Certificates. Unless the Board determines to issue uncertificated shares, every holder of stock shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation certifying the number of shares owned by him in the Corporation. Any of or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.

          (B) Lost, Stolen or Destroyed Stock Certificates, Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate.

ARTICLE VIII.
MISCELLANEOUS PROVISIONS

     Section 8.1 Fiscal Year.

     The fiscal year of the Corporation shall be the calendar year, unless otherwise determined by resolution of the Board of Directors.

     Section 8.2 Dividends.

     The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law and its Certificate of Incorporation.

     Section 8.3 Seal.

     The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.

     Section 8.4 Form of Records.

     Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or by means of,

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or be in the form of, any information storage device or method, provided that the records so kept can be converted into clearly legible paper form within a reasonable time.

     Section 8.5 Manner of Notice.

     Except as otherwise provided herein or permitted by applicable law, notices to directors and shareholders shall be in writing and delivered personally or mailed to the directors or shareholders at their addresses appearing on the books of the corporation. Notice to directors may be given by telegram, telecopier, telephone or other means of electronic transmission.

     Section 8.6 Waiver of Notice of Meetings of Shareholders, Directors and Committees.

     Any waiver of notice, given by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at nor the purpose of any regular or special meeting of the shareholders, directors, or members of a committee of directors need be specified in a waiver of notice.

ARTICLE IX.
AMENDMENTS

     In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware, the Board of Directors of the Corporation is expressly authorized to make, alter and repeal the By-laws of the Corporation, subject to the power of the shareholders of the Corporation to alter or repeal any By-Law whether adopted by them or otherwise. The By-laws may be amended, altered or repealed at any meeting of the Board of Directors or of the shareholders.

     Notwithstanding any other provisions of the Certificate of Incorporation or the By-laws of the Corporation and in addition to any other vote required by law, the affirmative vote of the holders of not less than 75% of the voting power of the outstanding capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required in order for shareholders to alter, amend or repeal any provision of the By-laws of the Corporation.

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EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-139970 on Form S-8 of our report dated March 30, 2007, relating to the financial statements and financial statement schedule of Dayton Superior Corporation, appearing in this Annual Report on Form 10-K of Dayton Superior Corporation for the year ended December 31, 2006.

/s/ DELOITTE & TOUCHE LLP

Dayton, OH
March 30, 2007

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Securities Exchange Act Rule 13a-14(a) or Rule 15d-14(a)

I, Eric R. Zimmerman, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Dayton Superior Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 30, 2007	/s/Eric R. Zimmerman
	Eric R. Zimmerman
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Securities Exchange Act Rule 13a-14(a) or Rule 15d-14(a)

I, Edward J. Puisis, certify that:

1.	I have reviewed this Annual Report on Form 10-K of Dayton Superior Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
c)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 30, 2007	/s/Edward J. Puisis
	Edward J. Puisis
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification pursuant to

Securities Exchange Act Rule 13a-14(b) or Rule 15d-14(b)

I, Eric R. Zimmerman, President, and Chief Executive Officer of Dayton Superior Corporation (the “Company”), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Annual Report on Form 10-K of the Company for the period ending December 31, 2006 (the “Periodic Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and

The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 30, 2007

/s/ Eric R. Zimmerman  

Eric R. Zimmerman 

President and Chief Executive Officer 

EX-32.2

Exhibit 32.2

Certification pursuant to

Securities Exchange Act Rule 13a-14(b) or Rule 15d-14(b)

I, Edward J. Puisis, Vice President and Chief Financial Officer of Dayton Superior Corporation (the “Company”), do hereby certify in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

The Annual Report on Form 10-K of the Company for the period ending December 31, 2006 (the “Periodic Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) and

The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 30, 2007

/s/ Edward J. Puisis  

Edward J. Puisis 

Executive Vice President and Chief Financial Officer