8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8 – K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of

the Securities Exchange Act of 1934

Date of Report:   April 25, 2006

QUIXOTE CORPORATION

(Exact name of registrant as specified in its charter)

Commission file number  0-7903

DELAWARE	36-2675371
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
35 EAST WACKER DRIVE, CHICAGO, ILLINOIS	60601
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number including area code: (312) 467-6755

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 230.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR   240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition.

On April 26, 2006, the Registrant issued a press release announcing its financial results for its third quarter of fiscal 2006 ended March 31, 2006 and a restructuring plan as described in Item 2.05 below. The full text of the press release is furnished with this Current Report on Form 8-K as Exhibit 99.

In a conference call discussing the press release, management disclosed certain information which may be considered important to certain shareholders.  Sales for the Inform segment for the third quarter increased 10% to $18.2 million from $16.5 million.  Sales for the Protect and Direct segment for the third quarter of fiscal 2006 increased 4% to $19.2 million from $18.4 million.  The Company’s gross margin for the current third quarter was 29.5% compared to 34.4%, primarily due to lower gross margins in the Protect and Direct segment due to unfavorable sales mix and increased freight costs.  Sales for the Inform segment for the first nine months of fiscal 2006 increased 12% to $60.6 million from $54.3 million last year.  Sales for the Company’s Protect and Direct segment increased 6% to $55.4 million from $52.1 million last year.  Backlog as of March 31, 2006 increased $5.4 million to $30 million, compared to $24.6 million as of March 31, 2005.  Backlog for the Protect and Direct segment increased $3.3 million, or 37%.  For the Inform segment, backlog increased $2 million, or 13%.  Within the Inform segment, the Intersection Control backlog decreased $1 million, or 8%.  In addition, outstanding debt as of December 31, 2005 includes $13.5 million in revolving bank borrowings and there was approximately $8 million in additional borrowing capacity under the revolving credit facility.

A conference call discussing the press release was recorded and is available for replay through Thursday, May 4, 2006 at 12AM. To access the replay, please call (706) 645-9291 and enter passcode 8222211; the recorded web cast will also be available at “www.quixotecorp.com”.

Item 2.05  Costs Associated with Exit or Disposal Activities.

On April 25, 2006, our Board of Directors approved a restructuring plan for our Intersection Control business, comprised of U.S. Traffic Corporation and Peek Traffic Corporation. The plan was proposed by management and developed with the assistance of an outside consultant in order to improve the profitability of that business.

Under the restructuring plan, we will discontinue certain low-margin and non-core product lines manufactured in our U.S. Traffic Corporation (USTC) leased facilities located in Tecate, Mexico and Santa Fe Springs, California. These product lines include portable and permanent variable message signs, tunnel lighting, illuminated street signs and in-ground loop detectors. We will attempt to sell the assets associated with these discontinued product lines.

Additionally, we plan to adopt an outsourcing strategy for metal enclosures and electronic boards for the remaining intersection control family of products, including traffic controllers, traffic signals and pedestrian signals. Once substantial outsourcing is accomplished, the Tecate, Mexico and Santa Fe Springs, California facilities will be closed and the remaining core products will be relocated to our Palmetto, Florida and Bedford, Pennsylvania (Peek Traffic Corporation) facilities. The Company will continue the activities of assembly, software installation, and system testing of intersection control products following the model used by Peek Traffic. We expect the plan will result in annualized cost savings of approximately $6 to $7 million. We expect the plan will result in profitability for the Intersection Control business with annualized cost savings of approximately $6 to $7 million.  After the sale and discontinuation of product lines, annualized revenues for the Intersection Control business are estimated to be approximately $38 million from $52 million for the year ended June 30, 2005.

In connection with the restructuring plan, we expect to record cash and non-cash charges. The cash portion of the plan is currently estimated to be between $7 to $9 million consisting principally of $3 million in severance costs and $3 million in lease obligations over the next two years. Implementation of the plan is expected to take between 6 to 9 months to complete, and we expect most of the restructuring charges to be incurred before the end of our fiscal 2007 second quarter. We are currently analyzing the non-cash charges and cannot reasonably estimate the amount of those charges at this time. We will disclose the estimates after we make a determination of such estimates.

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Item 2.06.  Material Impairments

In connection with the restructuring plan, we may record certain non-cash charges to adjust the book value of the assets to be discontinued or sold. We may also record a goodwill impairment charge in connection with our impairment review conducted during the fourth quarter. We are currently analyzing the non-cash charges and cannot reasonably estimate the amount at this time. We will disclose the estimates after we make a determination of such estimates.

This Current Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include statements regarding the Registrant’s expectations, beliefs, intentions, plans, projections, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are not historical facts. Actual results may differ materially from those expressed or implied by the forward-looking statements contained in this report. Forward-looking statements are subject to numerous risks, uncertainties and assumptions about the Registrant and its business. These risks and uncertainties are discussed in the Registrant’s annual report on Form 10-K for the year ended June 30, 2005 and subsequent quarterly reports on Form 10-Q. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Registrant does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For those statements, the Registrant claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.

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Item 9.01   Financial Statements and Exhibits.

The following Exhibits are included herein:

(d)Exhibits

99Press Release issued by Quixote Corporation, dated April 26, 2006

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SIGNATURES

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

		QUIXOTE CORPORATION
DATE:	April 27, 2006	/s/ Daniel P. Gorey
		DANIEL P. GOREY
		Vice President, Chief Financial
		Officer and Treasurer
		(Chief Financial & Accounting
		Officer)

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EX-99

Exhibit 99

For Immediate Release

FOR:    QUIXOTE CORPORATION
CONTACT:	Daniel P. Gorey Chief Financial Officer Joan R. Riley Director of Investor Relations (312) 467-6755	Investor Relations: Christine Mohrmann/Jim Olecki Financial Dynamics (212) 850-5600

QUIXOTE CORPORATION REPORTS FISCAL 2006 THIRD QUARTER RESULTS
AND ANNOUNCES RESTRUCTURING PLAN

CHICAGO, IL, April 26, 2006 — Quixote Corporation (Nasdaq: QUIX) today reported results for its fiscal third quarter ended March 31, 2006.

For the fiscal 2006 third quarter, net sales increased 7% to $37,470,000, compared to net sales of $34,952,000 in the third quarter of fiscal 2005.  The operating loss was $178,000 in the fiscal 2006 third quarter, compared to an operating loss of $231,000 in the third quarter last year.  For the third quarter of fiscal 2006, the Company recorded a net loss of $878,000, or $0.10 per diluted share, compared with a net loss of $741,000, or $0.08 per diluted share, in the third quarter of fiscal 2005.  Included in the Company’s fiscal 2006 third quarter results is a loss of $0.03 per diluted share relating to the expensing of stock options.

For the fiscal 2006 nine-month period, net sales totaled $116,047,000, compared to $106,386,000 in the first nine months of fiscal 2005.  The Company reported an operating profit for the fiscal 2006 nine-month period of $1,937,000, compared to an operating loss of $967,000 in the same period a year ago.  The net loss for the first nine months of fiscal 2006 was $985,000, or $0.11 per diluted share, compared to a net loss of $2,041,000, or $0.23 per diluted share, in the fiscal 2005 nine-month period, which had included an after-tax gain of $347,000, or $0.04 per diluted share, related to the sale of land.  The net loss for the first nine months of fiscal 2006 included a loss of approximately $0.07 per diluted share related to the expensing of stock options and an after-tax gain of $392,000, or $0.04 per diluted share, resulting from a settlement of claims with the seller of Peek Traffic.

Leslie J. Jezuit, Chairman and Chief Executive Officer, commented, “We are disappointed with our results for the fiscal 2006 third quarter, as lower than expected sales volumes and the higher cost structure within our Intersection Control business continued to depress overall profitability.  However, revenue from our entire Inform Group increased 10% with strong sales of our highway advisory radio products.  Sales in our Protect and Direct

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Group grew modestly during the third quarter, increasing 4% as strong order flow received late in the quarter was not able to be converted to sales.  We remain encouraged with this Group, as early benefits of the federal highway spending bill are leading to strong backlog growth.  In addition, the third quarter saw continued strong performance in international sales which increased 25% compared to the third quarter last year.”

Mr. Jezuit continued, “At the end of the 2006 second quarter, we indicated that we would be closely monitoring our Intersection Control business and would take additional actions, if necessary, to further improve the overall profitability of that business.  As a result of the continued under-performance of this business during the third quarter, management and the Board of Directors made the decision yesterday to undertake a number of steps designed to return the Intersection Control business to profitability.  Included in these actions will be the consolidation of several facilities and the elimination of low-margin and non-core products.  These steps will result in restructuring charges over the next 6-9 months, as our plans are executed.  We expect the cash portion of these charges to be between $7 million and $9 million, and that our actions will be substantially completed by the end of the fiscal 2007 second quarter.  The plan reflects our commitment to concentrate on the emerging technology trend in this market and on areas where we have a stronger competitive position.  When completed, we will have a more streamlined, profitable Intersection Control business to support our customers and meet our growth objectives.”

Mr. Jezuit concluded, “We continue to have a great deal of confidence in Quixote’s strategy and are optimistic about our future.  Aside from the difficulties we are facing within the Intersection Control business, our other businesses within the Inform Group, as well as our Protect and Direct Group are showing good growth prospects in these early stages of the new highway bill.  In addition, we have seen strong backlog growth across many of these businesses. Our focus will be to successfully address the issues within our Intersection Control business while taking advantage of opportunities in the rest of our markets as they continue to develop.  For the fiscal 2006 fourth quarter, we anticipate earnings to be between $0.10 and $0.15 per diluted share.  Please note that our earnings per share guidance includes an expense of $0.02 per diluted share relating to the expensing of stock options.  This guidance excludes any restructuring costs that may be incurred during the period.”

Quixote Corporation will be hosting a telephone conference call at 10 a.m., Eastern Time, tomorrow, April 27, 2006, to further discuss its quarterly results and corporate developments.  This conference call will be broadcast simultaneously over the Internet at www.quixotecorp.com and may be accessed and listened to by clicking the icon on the Company’s homepage.

Quixote Corporation, (www.quixotecorp.com), through its wholly-owned subsidiaries, Quixote Transportation Safety, Inc., Quixote Traffic Corporation and Quixote Transportation Technologies, Inc., is the world’s leading manufacturer of energy-absorbing highway crash cushions, electronic wireless measuring and sensing devices, weather forecasting stations, computerized highway advisory radio transmitting systems, intelligent

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intersection control systems, automated red light enforcement systems, flexible post delineators and other transportation safety products.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the matters set forth in this news release are forward-looking statements.  The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, including the risks and uncertainties discussed in the Company’s Form 10-K for its fiscal year ended June 30, 2005, under the caption “Forward-Looking Statements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, and quarterly reports on Form 10-Q, which discussion is incorporated herein by this reference. Other factors may be described from time to time in the Company’s public filings with the Securities and Exchange Commission, news releases and other communications.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

(2 Tables to Follow)

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Quixote Corporation
Earnings Summary

	Three Months Ended						Nine months ended
	March 31,						March 31,
	2006			2005			2006			2005
Net sales	$	37,470,000		$	34,952,000		$	116,047,000		$	106,386,000
Cost of sales	26,420,000			22,939,000			82,837,000			74,394,000
Gross profit	11,050,000			12,013,000			33,210,000			31,992,000
Operating expenses:
Selling & administrative	9,605,000			10,746,000			27,479,000			29,515,000
Gain on legal settlement							(633,000		)
Gain on sale of fixed assets										(560,000		)
Research & development	1,623,000			1,498,000			4,427,000			4,004,000
	11,228,000			12,244,000			31,273,000			32,959,000
Operating profit (loss)	(178,000		)	(231,000		)	1,937,000			(967,000		)
Other income (expense):
Interest income							1,000			34,000
Interest expense	(1,238,000		)	(964,000		)	(3,527,000		)	(2,359,000		)
	(1,238,000		)	(964,000		)	(3,526,000		)	(2,325,000		)
Loss before income taxes	(1,416,000		)	(1,195,000		)	(1,589,000		)	(3,292,000		)
Income tax benefit	(538,000		)	(454,000		)	(604,000		)	(1,251,000		)
Net loss	$	(878,000	)	$	(741,000	)	$	(985,000	)	$	(2,041,000	)
Per share data — basic:
Net loss	$	(0.10	)	$	(0.08	)	$	(0.11	)	$	(0.23	)
Average common shares outstanding	8,839,721			8,806,333			8,856,525			8,782,566
Per share data — diluted:
Net loss	$	(0.10	)	$	(0.08	)	$	(0.11	)	$	(0.23	)
Average common shares outstanding	8,839,721			8,806,333			8,856,525			8,782,566

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Quixote Corporation
Balance Sheet

	As of March 31,		As of June 30,
	2006		2005
Assets
Current assets
Cash and cash equivalents	$	2,047,000	$	156,000
Accounts receivable, net	30,617,000		32,745,000
Inventories, net	30,288,000		27,411,000
Other current assets	9,971,000		6,925,000
	72,923,000		67,237,000
Property, plant and equipment, net	23,536,000		25,008,000
Intangible assets and other, net	43,463,000		44,545,000
	$	139,922,000	$	136,790,000
Liabilities and Shareholders’ Equity
Current liabilities	$	21,424,000	$	24,304,000
Long-term debt, net	58,770,000		49,587,000
Other long-term liabilities	1,053,000		1,053,000
Shareholders’ equity	58,675,000		61,846,000
	$	139,922,000	$	136,790,000

Other Information

	Nine months ended March 31,
	2006		2005
Cash flow from operations	$	800,000	$	(300,000	)
Depreciation and amortization expense	4,800,000		4,300,000
Capital expenditures	2,100,000		2,800,000

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