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:           October 31, 2006

QUIXOTE CORPORATION
(Exact name of registrant as specified in its charter)

Commission file number     001-08123

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:

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

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

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

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

Item 1.02.  Termination of Material Definitive Agreement.

Effective October 31, 2006, our Mexican subsidiary, Quixote Transportation Safety-Mexico S. de R. C. de C. V., and Intersection Development Corporation, S. A. de C. V. terminated the Lease Contract dated May 16, 2003 for our facility in Tecate, Mexico.  In addition, our Guaranty of that Lease Contract dated May 16, 2003 was terminated effective October 31, 2006.  The Lease Contract and the Guaranty were terminated in connection with the closure of that facility as part of the restructuring plan for our Intersection Control segment.  To terminate the Lease Contract and the Guaranty, we paid the lessor a termination settlement fee of $85,000.

Item 2.02.  Results of Operations and Financial Condition.

On October 31, 2006, we issued a press release announcing its financial results for its first quarter of fiscal year 2007.   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.

The loss per share reported for the first quarter of 2007 of $0.66 included a gain on the sale of assets, restructuring costs and inventory write-offs related to discontinuation of several product lines within the Intersection Control segment.  The earnings per share reported for the first quarter of last year of $0.03 included a gain on the legal settlement with the sellers of Peek Traffic. The tables to the press release include a reconciliation of these items from the GAAP operating loss to a non-GAAP operating profit.  Excluding these items from the GAAP income before income taxes and applying our historical effective income tax rate of 38%, the loss per share for the first quarter of 2007 is $0.06 compared to a loss per share of $0.01 for the first quarter of 2006.  If we exclude the $3.6 million in inventory write-offs recorded in Cost of Sales, our consolidated gross margin increased to 34.1% for the first quarter this year compared to 27.8% for the first quarter last year.

Sales for the Protect and Direct segment for the first quarter of fiscal 2007 increased 5% to $18.7 million from $17.8 million for the first quarter of fiscal 2006.   Sales for the Inform segment for the first quarter decreased approximately $300,000, or 5%, to $6.1 million from $6.4 million last year.  Of the $300,000 decrease in Inform segment revenue, approximately $200,000 relates to the sale of the weather forecasting business sold at the end of fiscal 2006.  Sales for the Intersection Control segment for the first quarter of fiscal 2007 decreased 38% to $34.2 million from $39.4 million due to the sale and discontinuation of several product lines related to our restructuring plan.

Backlog as of September 30, 2006 was $24.1 million, compared to $29.5 million last year, due principally to a $6 million decrease in backlog for the Intersection Control segment due to the product line restructuring.  For the Inform segment, backlog increased $2.4 million, or 36%, from last year to a record $9.2 million dollars which

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includes $1.5 million related to a long-term contract.  The backlog for Protect and Direct decreased $1.8 million, or 19%, from last year.

We are beginning to see bids for large contracts within the Intersection Control segment after a decline in bid activity over the past couple years.  Recently, we were awarded an $850,000 contract from the County of Los Angeles for traffic controllers.  Given current trends and with the shut down of the West Coast manufacturing operations in the Intersection Control segment, we believe that we may reach profitability in the second quarter of fiscal 2007 excluding restructuring costs expected to be less than $800,000 and gains on the sale of assets.

A conference call discussing the press release was recorded and is available for replay through Tuesday, November 7, 2006 at 12AM.  To access the replay, please call (888) 286-8010 and enter passcode 34539259; the recorded web cast will also be available at “www.quixotecorp.com”.

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, 2006 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 response to Item 2.02 of 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 response to Item 2.02 of 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.

Item 8.01  Other Events.

Due to the death of William G. Fowler in March 2006, there is currently a vacancy on the Board of Directors.   The Board is in the process of completing its interviews of potential candidates and expects to fill the Board vacancy within the next thirty days.  The Board has determined that it is preferable to, and therefore anticipates that it will, fill the vacancy with an individual who not only satisfies the independence requirements under the Nasdaq Marketplace Rules, but will have no material connection to the Company (that is, no

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material, financial, personal, business or other relationship that a reasonable person could conclude could potentially influence boardroom objectivity) prior to being elected to the Board.

Item 9.01               Financial Statements and Exhibits.

The following Exhibits are included herein:

(d)           Exhibits

99            Press Release issued by Quixote Corporation, dated October 31, 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: October 31, 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	Investor Relations:
		Chief Financial Officer	Christine Mohrmann/Jim Olecki
		Joan R. Riley	Financial Dynamics
		Director of Investor Relations	(212) 850-5600
		(312) 467-6755

QUIXOTE CORPORATION REPORTS FISCAL 2007 FIRST QUARTER RESULTS

·Restructuring of Intersection Control segment substantially complete

·Profitability increases for Protect and Direct and Inform segments

CHICAGO, IL, October 31, 2006 — Quixote Corporation (Nasdaq: QUIX) today reported results for its fiscal 2007 first quarter ended September 30, 2006.

For the fiscal 2007 first quarter, net sales were $34,161,000, compared to net sales of $39,391,000 in the first quarter of fiscal 2006.  Including special items primarily relating to the Company’s previously announced restructuring efforts, the Company reported an operating loss for the current period of $8,425,000.  Operating profit in the first quarter of fiscal 2006 was $1,627,000.  For the first quarter of fiscal 2007, the Company reported a net loss of $5,895,000, or $0.66 per diluted share.  Net income in the first quarter of fiscal 2006 was $276,000, or $0.03 per diluted share.

The Company’s results for the fiscal 2007 first quarter include a gain on the sale of assets of $497,000 as well as special charges totaling $9,215,000 related to the Company’s restructuring initiatives within its Intersection Control business.  The special charges consisted of restructuring charges of $5,595,000 and inventory write-offs of $3,620,000 related to the discontinuation of certain product lines.  The Company’s fiscal 2006 results included a gain of $633,000 resulting from the settlement of claims with the seller of Peek Traffic.  Excluding the abovementioned items, the Company would have reported operating profit for the fiscal 2007 first quarter of $293,000 compared to operating profit of $994,000 in the first quarter of fiscal 2006.  Please refer to the attached tables for a reconciliation of operating profit on a GAAP to non-GAAP basis.

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Leslie J. Jezuit, Chairman and Chief Executive Officer, commented, “While our efforts to position the Intersection Control business for future success impacted our results for the period as expected, the first quarter of fiscal 2007 saw continued solid performance within our Protect and Direct and Inform segments.  Protect and Direct sales increased 5% during the quarter, driven by spending related to the passage of the federal highway bill and improved state and municipal budgets.  This resulted in improved profitability for this segment in the quarter.  The same market drivers also affected our Inform segment, and while the timing of certain shipments led to somewhat lower sales in the segment during the quarter, we saw a significant increase in new orders resulting in record backlog levels for the segment.  In addition, we saw strong expansion in operating margin with a 35% increase in operating profit for the Inform segment as a result of favorable sales mix.  International sales also continued to grow during the quarter, increasing 3% from year-ago levels, driven primarily by sales of our Inform Group products.”

Mr. Jezuit continued, “Our primary focus during the quarter was to successfully execute on our initiative to restructure the Intersection Control business.  We made significant progress towards our goal during the period.  This included the closure of our Santa Fe Springs, California and Tecate, Mexico manufacturing operations, resulting in a headcount reduction of approximately 350 employees.  While the restructuring had a negative impact on our quarterly results, these charges were in line with our previous expectations, and we continue to believe that the annualized savings from this program will be between $5 million to $6 million once completed.  Beginning in the second half of fiscal 2007, we believe the Intersection Control business will be well positioned to take advantage of the opportunities in the marketplace.”

Mr. Jezuit concluded, “We believe fiscal 2007 will be a transformational year for Quixote Corporation.  We expect to see continued growth in sales and profit within the Protect and Direct and Inform segments, and we firmly believe that we are positioning our Intersection Control segment for success in the future, and that it will be a contributor to our financial results for the second half of the fiscal year.  In addition, our international sales should continue to grow, and we will continue to invest in a number of opportunities overseas. “

Quixote Corporation will be hosting a telephone conference call at 10 a.m., Eastern Time, today, October 31, 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

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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 intersection control 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, 2006, under the caption “Forward-Looking Statements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations, 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.

(4 Tables to Follow)

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Quixote Corporation
Earnings Summary
(Unaudited)

	Three Months Ended			Three Months Ended
	September 30,			September 30,
	2006			2005
Net sales	$	34,161,000		$	39,391,000
Cost of sales	26,132,000			28,445,000
Gross profit	8,029,000			10,946,000
Operating expenses:
Selling & administrative	9,990,000			8,522,000
Research & development	1,366,000			1,430,000
Gain on sale of assets	(497,000		)	—
Gain on legal settlement	—			(633,000		)
Restructuring costs	5,595,000			—
	16,454,000			9,319,000
Operating profit (loss)	(8,425,000		)	1,627,000
Other income (expense)
Interest income	15,000			1,000
Interest expense	(1,098,000		)	(1,183,000		)
	(1,083,000		)	(1,182,000		)
Earnings (loss) before income taxes	(9,508,000		)	445,000
Income tax provision (benefit)	(3,613,000		)	169,000
Net earnings (loss)	$	(5,895,000	)	$	276,000
Per share data - basic:
Net earnings (loss)	($0.66		)	$	0.03
Average common shares outstanding	8,902,310			8,909,581
Per share data - diluted:
Net earnings (loss)	($0.66		)	$	0.03
Average common shares outstanding	8,902,310			9,061,500

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Quixote Corporation
Balance Sheet
(Unaudited)

	As of September 30,		As of June 30,
	2006		2006
Assets
Current assets
Cash and cash equivalents	$	920,000	$	869,000
Accounts receivable, net	29,121,000		36,481,000
Inventories	23,628,000		25,465,000
Other current assets	9,427,000		5,014,000
	63,096,000		67,829,000
Net property, plant and equipment	18,138,000		19,535,000
Intangible assets and other, net	37,384,000		37,839,000
Total assets	$	118,618,000	$	125,203,000
Liabilities and Shareholders’ Equity
Current liabilities	$	20,860,000	$	24,048,000
Long-term debt, net	53,359,000		51,122,000
Other long-term liabilities	1,081,000		1,087,000
Shareholders’ equity	43,318,000		48,946,000
Total liabilities and shareholders’ equity	$	118,618,000	$	125,203,000

Quixote Corporation
Other Information
(Unaudited)

	Three Months Ended September 30,
	2006		2005
Depreciation and amortization expense	$	1,451,000	$	1,595,000
Capital expenditures	$	808,000	$	253,000

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Quixote Corporation
Reconciliation of GAAP to Non-GAAP Measurements
(Unaudited)

	Three Months Ended September 30,
	2006			2005
Operating profit (loss)	$	(8,425,000	)	$	1,627,000
Subtract:      Gain on sale of assets	(497,000		)
Gain on legal settlement				(633,000		)
Add:            Restructuring costs	5,595,000
Inventory write-offs in Cost of Sales	3,620,000
Operating profit excluding gains, restructuring costs and asset impairment charge (a)	$	293,000		$	994,000

(a)  The company believes that the gain on sale of assets, the gain on legal settlement, restructuring costs and inventory write-offs related to the restructuring plan included in Cost of Sales affect the comparability of the results of operations of the 2007 first quarter to the results of operations for the 2006 first quarter.  The company also believes that disclosing operating income excluding those items will allow investors to more easily compare the 2007 first quarter to the 2006 first quarter results.

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