UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED	COMMISSION FILE NUMBER
September 28, 2007	1-11781

DAYTON SUPERIOR CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	31-0676346
(State or other jurisdiction of	(I.R.S. Employer
Incorporation or organization)	Identification No.)
7777 Washington Village Dr., Suite 130
Dayton, Ohio	45459
(Address of principal	(Zip Code)
executive offices)

Registrant’s telephone number, including area code: 937-428-6360

NOT APPLICABLE

(Former name, former address and former fiscal year,
if changed from last report)

Indicate by mark whether the registrant (1) has filed all reports required 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 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 Act). YES o     NO þ

19,066,212 Shares of Common Stock were outstanding as of November 9, 2007

TABLE OF CONTENTS

Part I. – Financial Information
	Item 1 – Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
Part II. – Other Information
	Item 1A. Risk Factors
	Item 6. Exhibits
SIGNATURES
INDEX OF EXHIBITS
EX-10.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

Part I. – Financial Information

Item 1 – Financial Statements

Dayton Superior Corporation and Subsidiary
Condensed Consolidated Balance Sheets
As of September 28, 2007 and December 31, 2006
(Amounts in thousands, except share and per share amounts)
(Unaudited)

	September 28,			December 31,
	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	62		$	26,813
Accounts receivable, net of allowances for doubtful accounts and sales returns and allowances of $5,228 and $5,430		79,579			71,548
Inventories		72,612			58,396
Prepaid expenses and other current assets		6,686			5,907
Prepaid income taxes		479			320
Total current assets		159,418			162,984
Rental equipment, net of accumulated depreciation of $69,749 and $63,469		68,286			63,766
Property, plant and equipment, net of accumulated depreciation of $60,732 and $57,932		51,918			45,697
Goodwill		43,643			43,643
Intangible assets, net of accumulated amortization		3,131			5,062
Other assets		1,951			483
Total assets	$	328,347		$	321,635
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Revolving credit facility	$	17,900		$	—
Current maturities of long-term debt		167,053			2,551
Accounts payable		30,113			40,883
Accrued compensation and benefits		13,853			18,001
Accrued interest		6,531			6,234
Accrued freight		4,747			4,849
Other accrued liabilities		8,999			9,111
Total current liabilities		249,196			81,629
Other long-term debt, net of current portion		157,585			319,899
Deferred income taxes		11,318			11,354
Other long-term liabilities		8,360			10,297
Total liabilities		426,459			423,179
Stockholders’ deficit:
Common stock, $0.01 par value, 100,000,000 shares authorized, 19,066,212 and 18,773,283 shares issued and outstanding, 754,476 shares unvested		191			188
Additional paid-in capital		206,464			201,602
Loans to stockholders		(1,077	)		(2,268	)
Accumulated other comprehensive loss		(215	)		(981	)
Accumulated deficit		(303,475	)		(300,085	)
Total stockholders’ deficit		(98,112	)		(101,544	)
Total liabilities and stockholders’ deficit	$	328,347		$	321,635

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

2

Dayton Superior Corporation and Subsidiary
Condensed Consolidated Statements of Operations
For The Three and Nine Fiscal Months Ended September 28, 2007 and September 29, 2006
(Amounts in thousands, except share and per share amounts)
(Unaudited)

	Three Fiscal Months Ended						Nine Fiscal Months Ended
	September 28,			September 29,			September 28,			September 29,
	2007			2006			2007			2006
Product sales	$	112,327		$	107,852		$	309,677		$	300,535
Rental revenue		14,707			16,275			44,211			44,428
Used rental equipment sales		3,789			7,514			13,473			18,224
Net sales		130,823			131,641			367,361			363,187
Product cost of sales		82,394			80,589			226,160			226,992
Rental cost of sales		8,784			9,600			25,129			26,330
Used rental equipment cost of sales		581			2,243			3,214			5,435
Cost of sales		91,759			92,432			254,503			258,757
Product gross profit		29,933			27,263			83,517			73,543
Rental gross profit		5,923			6,675			19,082			18,098
Used rental equipment gross profit		3,208			5,271			10,259			12,789
Gross profit		39,064			39,209			112,858			104,430
Selling, general and administrative expenses		26,677			26,750			79,837			75,648
Facility closing and severance expenses		140			96			591			373
(Gain) loss on disposals of property, plant, and equipment		217			(439	)		478			(1,775	)
Income from operations		12,030			12,802			31,952			30,184
Other expenses:
Interest expense		11,682			12,743			34,996			37,364
Interest income		(47	)		203			(227	)		176
Other expense (income)		(214	)		(46	)		119			108
Income (loss) before provision for income taxes		609			(98	)		(2,936	)		(7,464	)
Provision for income taxes		223			244			454			459
Net income (loss)	$	386		$	(342	)	$	(3,390	)	$	(7,923	)
Basic net income (loss) per common share	$	0.02		$	(0.03	)	$	(0.19	)	$	(0.80	)
Average number of shares of common stock outstanding		18,311,736			9,917,316			18,273,146			9,917,316
Diluted net income (loss) per common share	$	0.02		$	(0.03	)	$	(0.19	)	$	(0.80	)
Average number of shares of common stock and equivalents outstanding		19,302,123			9,917,316			18,273,146			9,917,316

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

3

Dayton Superior Corporation and Subsidiary
Condensed Consolidated Statements of Cash Flows
For The Nine Fiscal Months Ended September 28, 2007 and September 29, 2006
(Amounts in thousands)
(Unaudited)

	Nine Fiscal Months Ended
	September 28,			September 29,
	2007			2006
Cash Flows From Operating Activities:
Net loss	$	(3,390	)	$	(7,923	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		18,482			18,974
Amortization of intangibles		133			485
Stock compensation expense		2,062			653
Deferred income taxes		(36	)		—
Amortization of deferred financing costs and debt discount		5,229			4,280
Amortization of deferred gain on sale-leaseback transactions		(1,217	)		(2,618	)
Gain on sales of rental equipment		(10,259	)		(12,789	)
Loss on sales of property, plant and equipment		837			32
Changes in assets and liabilities:
Accounts receivable		(7,589	)		(19,172	)
Inventories		(14,013	)		(8,451	)
Prepaid expenses and other assets		(2,324	)		(867	)
Prepaid income taxes		(156	)		116
Accounts payable		(8,025	)		257
Accrued liabilities and other long-term liabilities		(4,859	)		2,978
Net cash used in operating activities		(25,125	)		(24,045	)
Cash Flows From Investing Activities:
Property, plant and equipment additions		(13,944	)		(7,282	)
Proceeds from sales of property, plant and equipment		37			21
Rental equipment additions		(19,483	)		(15,988	)
Proceeds from sales of rental equipment		13,473			18,224
Net cash used in investing activities		(19,917	)		(5,025	)
Cash Flows From Financing Activities:
Borrowings under revolving credit facility		83,324			113,175
Repayments of revolving credit facility		(65,424	)		(82,625	)
Repayments of other long-term debt		(1,118	)		(1,616	)
Financing costs incurred		(659	)		—
Changes in loans to stockholders		1,191			186
Issuance of shares of common stock		808			—
Net cash provided by financing activities		18,122			29,120
Effect of Exchange Rate Changes on Cash and Cash Equivalents		169			263
Net increase (decrease) in cash and cash equivalents		(26,751	)		313
Cash and cash equivalents, beginning of period		26,813			—
Cash, end of period	$	62		$	313
Supplemental Disclosures:
Cash paid for income taxes	$	413		$	208
Cash paid for interest		29,243			32,358
Property, plant and equipment and rental equipment additions in accounts payable		2,560			1,630
Rental equipment acquired under capital lease		—			1,200
Reclassification of common shares due to expiration of put option		—			1,754

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

4

Dayton Superior Corporation and Subsidiary
Condensed Consolidated Statements of Comprehensive Income (Loss)
For The Three and Nine Fiscal Months Ended September 28, 2007 and September 29, 2006
(Amounts in thousands)
(Unaudited)

	Three Fiscal Months Ended					Nine Fiscal Months Ended
	September 28,		September 29,			September 28,			September 29,
	2007		2006			2007			2006
Net income (loss)	$	386	$	(342	)	$	(3,390	)	$	(7,923	)
Other comprehensive gain:
Foreign currency translation adjustment		98		(7	)		766			263
Comprehensive income (loss)	$	484	$	(349	)	$	(2,624	)	$	(7,660	)

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

5

Dayton Superior Corporation and Subsidiary
Notes to Condensed Consolidated Financial Statements
(Amounts in thousands, except share and per share amounts)
(Unaudited)

(1)	Condensed Consolidated Financial Statements
	The interim condensed consolidated financial statements included herein have been prepared by Dayton Superior Corporation and its wholly-owned subsidiary (collectively, “the Company”), without audit, and include, in the opinion of management, all adjustments necessary to state fairly the information set forth therein. Any such adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these unaudited consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s annual financial statements for the year ended December 31, 2006. The interim results may not be indicative of future periods.
	As discussed in Note 8, the Company obtained a commitment from a lender to provide new credit facilities consisting of a $150,000 revolving credit facility and $100,000 term loan facility to refinance the existing revolving credit facility and the Senior Second Secured Notes. The commitment expires January 25, 2008. This commitment is subject to customary conditions, including an absence of certain material adverse changes in the business and a minimum Adjusted EBITDA, as defined.
	The Company currently expects to consummate the financing described in the commitment and to refinance the existing revolving credit facility and the Senior Second Secured Notes before the expiration of the commitment. In the event the Company does not consummate this financing commitment, the Company’s financial resources may be insufficient to satisfy its current debt obligations. Such circumstances may have a material adverse effect on the Company’s business, financial condition and results of operations. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts or amounts and reclassification of liabilities that might be necessary should the Company be deemed to be unable to continue as a going concern.
(2)	Accounting Policies
	The interim condensed consolidated financial statements have been prepared in accordance with the accounting policies described in the notes to the Company’s consolidated financial statements for the year ended December 31, 2006. While the Company believes that the procedures followed in the preparation of interim financial information are reasonable, the accuracy of some estimated amounts is dependent upon facts that will exist or calculations that will be made at year end. Examples of such estimates include changes in the deferred tax accounts and management bonuses, among others. Any adjustments pursuant to such estimates during the fiscal quarter were of a normal recurring nature.

(a)	Fiscal Quarter — The Company’s fiscal year end is December 31. The Company’s fiscal quarters are defined as the 13-week periods ending on a Friday near the end of March, June and September.
(b)	Inventories — The Company values all inventories at the lower of first-in, first-out (“FIFO”) cost or market. The Company provides net realizable value reserves which reflect the Company’s best estimate of the excess of the cost of potential obsolete and slow moving inventory over the expected net realizable value.
	Following is a summary of the components of inventories as of September 28, 2007 and December 31, 2006:

	September 28,		December 31,
	2007		2006
Raw materials	$	17,319	$	14,095
Work in progress		3,503		2,282
Finished goods		51,790		42,019
Total Inventory	$	72,612	$	58,396

(c) Income (Loss) Per Share of Common Stock – Basic income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of vested shares of common stock outstanding during the period. Diluted income (loss) per share is computed by

6

dividing net income (loss) by the weighted average number of shares of common stock and common stock equivalents outstanding, if dilutive, during each period. The Company’s common stock equivalents consist of unvested shares, warrants, and stock options, and their effect is calculated using the treasury stock method. The reconciliation of average number of shares of common stock outstanding to average number of shares of common stock and equivalents outstanding for the three months ended September 28, 2007 is as follows:

Average number of common shares outstanding	18,311,736
Shares of unvested common stock	754,476
Assumed exercise of dilutive warrants	231,770
Assumed exercise of dilutive stock options	4,141
Average number of common shares and equivalents	19,302,123

	For the three months ended September 29, 2006, the nine months ended September 28, 2007, and the nine months ended September 29, 2006, common stock equivalents of 1,262,595, 997,958, and 765,297, respectively, were not included as their effect would have been anti-dilutive.
(d)	New Accounting Pronouncements — In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This Interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company complied with the provisions of Interpretation No. 48 as of January 1, 2007. The Company files income tax returns in the United States, Canada, and various state, local, and provincial jurisdictions. The Company is subject to U.S. Federal income tax examination for 2003 through 2005, and in other jurisdictions for 1999 through 2006. Use of net operating losses from years prior to these may re-open the examination period for those prior years. The Company recognizes interest and penalties as a component of provision for income taxes. Due to the Company’s net operating loss and related valuation allowance, the adoption of Interpretation No. 48 did not have a material impact on the condensed consolidated financial statements. The amount of unrecognized tax benefit from uncertain tax positions as of January 1, 2007, was not material and no material changes occurred related to the unrecognized tax benefit for the three and nine months ended September 28, 2007. The Company does not expect any material changes in its uncertain tax positions for the next 12 months.
	In September 2006, the FASB issued Statement of Financial Accounting Standard (“SFAS”) No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in accordance with 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. Statement No. 157 is not expected to have an impact on the Company’s consolidated financial statements.
	In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. The Company will be required to comply with Statement No. 159 as of the first annual period that begins after November 15, 2007. Statement No. 159 is not expected to have an impact on the Company’s consolidated financial statements.

7

(3) Credit Arrangements

The Company has a $130,000 senior secured revolving credit facility, which has no financial maintenance covenants and matures in July 2008. The maximum amount of borrowings is limited to 85% of eligible accounts receivable and 60% of eligible inventories and rental equipment, less $15,000. At September 28, 2007, $125,461 was available for borrowing, of which $17,900 was outstanding at a weighted average interest rate of 7.8%. Outstanding letters of credit were $10,309, resulting in available borrowings of $97,252. 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:

	Three fiscal months ended						Nine fiscal months ended
	September 28,			September 29,			September 28,			September 29,
	2007			2006			2007			2006
Revolving Credit Facility:
Average borrowings	$	20,591		$	76,140		$	12,233		$	70,033
Maximum borrowing		27,050			81,700			27,050			81,700
Weighted average interest rate		10.4	%		8.2	%		13.3	%		7.9	%

The weighted average interest rate is calculated by dividing interest expense (which is the sum of interest on borrowings, letter of credit fees, and commitment fees on unused credit and borrowing availability) by average borrowings. The high weighted average interest rate during the three and nine month periods ended September 28, 2007 is a reflection of the limited average borrowings during those periods. Interest expense on the facility for the three months ended September 28, 2007 was $534, consisting of $383 of interest on borrowings (7.5%), $57 of letter of credit fees (1.1%), and $94 for commitment fees on unused availability (1.8%). Interest expense on the facility for the nine months ended September 28, 2007 was $1,207, consisting of $718 of interest on borrowings (7.9%), $186 of letter of credit fees (2.1%), and $303 for commitment fees on unused availability (3.3%).

Following is a summary of the Company’s other long-term debt as of September 28, 2007 and December 31, 2006:

	September 28,			December 31,
	2007			2006
Senior Second Secured Notes, interest rate of 10.75%	$	165,000		$	165,000
Debt discount on Senior Second Secured Notes		(1,865	)		(3,208	)
Senior Subordinated Notes, interest rate of 13.0%		154,729			154,729
Debt discount on Senior Subordinated Notes		(3,481	)		(4,746	)
Senior notes payable to seller of Safway, non-interest bearing, accreted at 6.0% (secured) to 14.5% (unsecured)		7,662			7,286
Debentures previously held by Dayton Superior Capital Trust, interest rate of 9.1%, due on demand		1,035			1,063
Capital lease obligations		1,558			2,326
Total long-term debt		324,638			322,450
Less current maturities		(167,053	)		(2,551	)
Long-term portion	$	157,585		$	319,899

As of September 28, 2007, the Senior Second Secured Notes (the “Senior Notes”) have a principal amount of $165,000 and mature in September 2008. The Senior Notes were issued at a discount, which is being accreted to the face value using the effective interest method and is reflected as interest

8

expense. The estimated fair value of the Senior Notes was $167,062 as of September 28, 2007. The Senior Notes are secured by substantially all assets of the Company.

As of September 28, 2007, the Senior Subordinated Notes (the “Subordinated Notes”) have a principal amount of $154,729 and mature in June 2009. The Subordinated Notes were issued at a discount, which is being accreted to the face value using the effective interest method and is reflected as interest expense. The Subordinated Notes were issued with warrants that allow the holders to purchase shares of the Company’s common stock for $0.0046 per share. As of September 28, 2007, warrants to purchase 231,880 shares of common stock were outstanding. The estimated fair value of the Subordinated Notes was $150,861 as of September 28, 2007.

(4) Stock Option Plans

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. The following table sets forth the status of the authorized options as of September 28, 2007:

Granted and outstanding	726,543
Granted and exercised	122,998
Available for granting	817,663
Total	1,667,204

The terms of the option grants are five or ten years from the date of grant. The weighted average remaining life of the outstanding options was 4.5 years as of September 28, 2007. The options granted in 2007 vested upon stockholder approval, which was approximately a month after the grant date. The options granted during 2006 vested on the grant date. For the options granted prior to 2006, between 10% and 25% of each option has a fixed vesting period of less than three years, with the remaining 75% to 90% of the option becoming exercisable nine years after the grant date. These options may be subject to accelerated vesting over one to five years from the date grant based on Company performance or upon certain change in control events based on the rate of return on investment achieved by the Company’s largest stockholder. Under the Stock Option Plan, the option exercise price must not be less than the stock’s market price on date of grant.

The Company accounts for stock options in accordance with SFAS No. 123R, which amends SFAS No. 123, Accounting for Stock-Based Compensation, and recorded non-cash compensation expense of $38 and $86 for the three and nine months ended September 28, 2007, respectively, and $591 and $653 for the three and nine months ended September 29, 2006, respectively. 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 $398 as of September 28, 2007, and is expected to be expensed over a weighted average period of 1.8 years.

A summary of the status of the Company’s stock option plan as of and for the nine months ended September 28, 2007 is presented in the table and narrative below:

									Weighted
				Weighted		Unvested			Average Grant-		Aggregate
	Number of			Average Exercise		Number of			Date Value Per		Intrinsic
	Shares			Price Per Share		Shares			Share		Value
Outstanding at December 31, 2006		859,445		$	11.93		592,790		$	3.02	$	293
Granted		17,872			12.00		17,872			0.70		(30	)
Vested		—					(17,872	)		0.70
Exercised		(20,641	)		8.74		—					(65	)
Expired		(20,592	)		12.49		—
Forfeited		(109,541	)		12.51		(109,541	)		3.30
Outstanding at September 28, 2007		726,543		$	11.92		483,249		$	2.96	$	8

9

As of September 28, 2007, the number of common shares exercisable and expected to become exercisable was 705,626. The weighted average exercise price was $11.91, the weighted average remaining life was 4.6 years, and the aggregate intrinsic value was $8.

The fair value of each option grant was estimated on the date of grant using the Black Scholes options pricing model. For the grants during the nine months ended September 28, 2007, the risk-free interest rate was 4.6%, the expected dividend yield was 0.0%, the expected life was 2 years, and the volatility was 16.3%.

On June 30, 2006, the Company issued 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, 251,492 shares of the stock vested on December 31, 2006 and 251,493, 251,490, and 251,492 shares will vest on December 31, 2007, 2008, and 2009, respectively. 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 No. 123R, the per share grant-date fair value was the fair value of a share of common stock on the grant date of June 30, 2006. The Company recorded $658 and $1,976 of compensation expense for the three and nine months ended September 28, 2007, respectively. The remaining compensation expense for unvested restricted stock will be $659 for the balance of 2007, $1,211 in 2008, and $485 in 2009. There was no cash impact to the Company from the granting or vesting of the restricted stock. Due to the Company’s net operating losses, no income tax benefit was recognized related to the stock.

There was no change in the Company’s outstanding restricted stock for the three and nine months ended September 28, 2007. As of September 28, 2007, the unvested stock had an aggregate intrinsic value of $6,262 and had an indefinite remaining term.

(5) Retirement 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 Symons salaried and hourly employees who retired prior to May 1, 1995.

The following are the components of net periodic benefit cost for the three and nine months ended September 28, 2007 and September 29, 2006:

	Pension Benefits
	For the three			For the three			For the nine			For the nine
	fiscal months			fiscal months			fiscal months			fiscal months
	ended			ended			ended			ended
	September 28,			September 29,			September 28,			September 29,
	2007			2006			2007			2006
Service cost	$	171		$	175		$	515		$	526
Interest cost		205			188			616			563
Expected return on plan assets		(243	)		(207	)		(729	)		(621	)
Amortization of prior service cost		3			3			7			10
Amortization of net loss		20			33			58			99
Net periodic benefit cost	$	156		$	192		$	467		$	577

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	Symons Postretirement Benefits
	For the three			For the three			For the nine			For the nine
	fiscal months			fiscal months			fiscal months			fiscal months
	ended			ended			ended			ended
	September 28,			September 29,			September 28,			September 29,
	2007			2006			2007			2006
Service cost	$	—		$	—		$	—		$	—
Interest cost		7			7			22			21
Expected return on plan assets		—			—			—			—
Amortization of prior service cost		6			6			18			18
Amortization of net loss		(2	)		(3	)		(6	)		(8	)
Net periodic benefit cost	$	11		$	10		$	34		$	31

The Company’s contributions meet the minimum funding requirements of the Internal Revenue Service. For the nine months ended September 28, 2007, contributions totaling $1,038 have been made, comprised of $247 for the fourth quarterly installment for the 2006 plan year, $191 for the final contribution for the 2006 plan year, and two quarterly installments of $300 each for the 2007 plan year. Additional quarterly installments of $300 for the 2007 plan year are expected to be made in the fourth quarter of 2007 and the first quarter of 2008. The final contribution, if any, for the 2007 plan year to be made in the third quarter of 2008 has not yet been determined.

(6) Segment Reporting

The Company has three reporting 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 percentage of sales. There are no inter-segment sales.

Product sales represent sales of new products carried in inventories on the balance sheet. Cost of goods sold for product sales include material, labor, overhead, and freight.

Rental revenues are derived from leasing the rental equipment, and are recognized ratably over the term of the lease. Cost of goods sold for rental revenues include depreciation of the rental equipment, maintenance of the rental equipment, and freight.

Sales of used rental equipment are sales of rental equipment after a period of generating rental revenue. Cost of goods sold for sales of used rental equipment is the net book value of the 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. Export sales and sales by non-U.S. affiliates are not significant.

Information about the gross profit of each sales type and the reconciliations to the consolidated amounts for the three fiscal months ended September 28, 2007 and September 29, 2006 are as follows:

	Three Fiscal Months Ended				Nine Fiscal Months Ended
	September 28,		September 29,		September 28,		September 29,
	2007		2006		2007		2006
Product sales	$	112,327	$	107,852	$	309,677	$	300,535
Rental revenue		14,707		16,275		44,211		44,428
Used rental equipment sales		3,789		7,514		13,473		18,224
Net sales		130,823		131,641		367,361		363,187
Product cost of sales		82,394		80,589		226,160		226,992
Rental cost of sales		8,784		9,600		25,129		26,330
Used rental equipment cost of sales		581		2,243		3,214		5,435
Cost of sales		91,759		92,432		254,503		258,757

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	Three Fiscal Months Ended				Nine Fiscal Months Ended
	September 28,		September 29,		September 28,		September 29,
	2007		2006		2007		2006
Product gross profit		29,933		27,263		83,517		73,543
Rental gross profit		5,923		6,675		19,082		18,098
Used rental equipment gross profit		3,208		5,271		10,259		12,789
Gross profit	$	39,064	$	39,209	$	112,858	$	104,430
Depreciation Expense:
Product sales (property, plant, and equipment)	$	1,654	$	1,239	$	4,228	$	3,784
Rental Revenue (rental equipment)		4,207		5,534		12,145		14,227
Corporate		788		314		2,109		963
Total depreciation	$	6,649	$	7,087	$	18,482	$	18,974

(7) Provision for Income Taxes

The Company has recorded a non-cash valuation allowance to reduce its deferred tax asset related to its domestic 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.

(8) Subsequent Events

The Company obtained a commitment from a lender to provide new credit facilities consisting of a $150,000 revolving credit facility, expected to be issued at the rate of LIBOR plus 2.25%, and a $100,000 term loan facility, expected to be issued at the rate of LIBOR plus 3.75%, to refinance the existing revolving credit facility and the Senior Second Secured Notes. The commitment expires January 25, 2008. If the financing is consummated, the new credit facilities will mature six years from the date of closing, unless the Senior Subordinated Notes due June 2009 are not redeemed or refinanced prior to March 14, 2009, in which case the new credit facilities will mature on that date. This commitment is subject to customary conditions, including an absence of material adverse changes in the business and a minimum Adjusted EBITDA, as defined. The Company currently expects to consummate the financing described in the commitment and to refinance the existing revolving credit facility and the Senior Second Secured Notes before the expiration of the commitment.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this document. This discussion contains forward-looking statements that involve risks and uncertainties. See ‘‘Risk Factors’’ included in our Form 10-K for the year ended December 31, 2006 for a discussion of important factors that could cause actual results to differ materially from those described or implied by the forward-looking statements contained in this discussion. Please refer to ‘‘Cautionary Note Concerning Forward-Looking Statements’’ included elsewhere in this document.

Overview

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.

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Results of Operations

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

	Three fiscal months ended						Nine fiscal months ended
	September 28,			September 29,			September 28,			September 29,
	2007			2006			2007			2006
Product sales		85.9	%		81.9	%		84.3	%		82.8	%
Rental revenue		11.2			12.4			12.0			12.2
Used rental equipment sales		2.9			5.7			3.7			5.0
Net sales		100.0			100.0			100.0			100.0
Product cost of sales		73.4			74.7			73.0			75.5
Rental cost of sales		59.7			59.0			56.8			59.3
Used rental equipment cost of sales		15.3			29.9			23.9			29.8
Cost of sales		70.1			70.2			69.3			71.2
Product gross profit		26.6			25.3			27.0			24.5
Rental gross profit		40.3			41.0			43.2			40.7
Used rental equipment gross profit		84.7			70.1			76.1			70.2
Gross profit		29.9			29.8			30.7			28.8
Selling, general and administrative expenses		20.4			20.3			21.7			20.9
Facility closing and severance expenses		0.1			0.1			0.2			0.1
(Gain) loss on disposals of property, plant, and equipment		0.2			(0.3	)		0.1			(0.5	)
Income from operations		9.2			9.7			8.7			8.3
Interest expense		8.9			9.7			9.5			10.3
Interest income		—			0.1			—			0.1
Other expense (income)		(0.2	)		—			—			—
Income (loss) before provision for income taxes		0.5			(0.1	)		(0.8	)		(2.1	)
Provision for income taxes		0.2			0.2			0.1			0.1
Net income (loss)		0.3	%		(0.3	)%		(0.9	)%		(2.2	)%

Comparison of Three Fiscal Months Ended September 28, 2007 and September 29, 2006

Net Sales

Net sales decreased $0.8 million, or (0.6)%, to $130.8 million in the third quarter of 2007 from $131.6 million in the third quarter of 2006. The following table summarizes our net sales by product segment:

	Three fiscal months ended
	September 28, 2007					September 29, 2006
($ in thousands)	Net Sales		%			Net Sales		%			% Change
Product sales	$	112,327		85.9	%	$	107,852		81.9	%		4.1	%
Rental revenue		14,707		11.2			16,275		12.4			(9.6	)
Used rental equipment sales		3,789		2.9			7,514		5.7			(49.5	)
Net sales	$	130,823		100.0	%	$	131,641		100.0	%		0.6	%

Product sales increased $4.5 million, or 4.1%, to $112.3 million in the third quarter of 2007 from $107.8

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million in the third quarter of 2006. Improved sales prices and higher unit volume contributed to the increase.

Rental revenue decreased to $14.7 million for the third quarter of 2007 from $16.3 million in the third quarter of 2006 due to lower demand in the non-residential construction market, particularly in Florida and in the Baltimore/Washington and Philadelphia metropolitan areas, and the timing of the completion of rental jobs and the subsequent redeployment of the rental equipment.

Used rental equipment sales decreased to $3.8 million in the third quarter of 2007 from $7.5 million in the third quarter of 2006 due to the timing of customer demand.

Gross Profit

Gross profit of $39.0 million, or 29.9% of sales, in the third quarter of 2007 was virtually flat with the $39.2 million, or 29.8% of sales, in the third quarter of 2006.

Product gross profit contributed $29.9 million, or 26.6% of product sales, an increase from the $27.2 million, or 25.3% of product sales, in the third quarter of 2006. The $2.7 million increase in product gross profit was due to $2.6 million of higher sales prices and $0.5 million of volume, partially offset by $0.4 million of higher net material costs. Improvements in operating costs were offset by increases in rent, labor, and utilities.

Rental gross profit for the third quarter of 2007 was $5.9 million, as compared to $6.7 million in the third quarter of 2006 due to lower rental revenues. Depreciation on rental equipment for the third quarter of 2007 was $4.2 million, as compared to $5.5 million in the same period of 2006. Rental gross profit before depreciation was $10.1 million in the quarter, or 68.9% of rental revenue, as compared to $12.2 million, or 75.0% of revenue reported in the third quarter of 2006. Rental equipment renovation was higher in anticipation of stronger demand for rental equipment that did not materialize.

Gross profit on sales of used rental equipment for the third quarter of 2007 was $3.2 million, or 84.7% of sales, as compared to $5.3 million, or 70.1% of sales, in the third quarter of 2006. Gross margin percentages fluctuate based on the mix and age of rental equipment sold with the increase in the third quarter of 2007 due to more fully depreciated equipment being sold.

Operating Expenses

Selling, general, and administrative expenses decreased to $26.7 million in the third quarter of 2007 from $26.8 million for the third quarter of 2006. Personnel related costs, primarily incentives, decreased by $1.1 million and were mostly offset by increased lease expense at distribution centers of $0.5 million and depreciation expense of $0.5 million.

The loss on disposals of property, plant, and equipment was $0.2 million in the third quarter of 2007 as compared to a gain of $0.4 million in the third quarter of 2006. The gain in 2006 related to the amortization of the deferred gain on the sale-leaseback of our Des Plaines facility that occurred in 2005. During the second half of 2006, we extended the term of the lease, which resulted in $0.6 million less amortization of deferred gain in the third quarter of 2007.

Other Expenses

Interest expense decreased to $11.7 million in the third quarter of 2007, compared to $12.7 million for the third quarter of 2006. The $1.0 million decrease was primarily due to the repayment of the revolving credit facility from the proceeds of our initial public offering in December 2006.

Income (Loss) Before Income Taxes

Income before income taxes in the third quarter of 2007 was $0.6 million compared to a loss of $0.1 million in the third quarter of 2006, due to the factors described above.

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Provision for Income Taxes

The provision for income taxes in the third quarters of 2007 and 2006 related to foreign and certain state income taxes. Since we have net losses for the nine months ended September 28, 2007 and September 29, 2006, we recorded a non-cash valuation allowance to reduce our deferred tax asset related to U.S. 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.

Net Income (Loss)

The net income for the third quarter of 2007 was $0.4 million, compared to a net loss of $0.3 million in the third quarter of 2006, due to the factors described above.

Comparison of Nine Fiscal Months Ended September 28, 2007 and September 29, 2006

Net Sales

Net sales increased $4.2 million, or 1.1%, to $367.4 million in the first nine months of 2007 from $363.2 million in the first nine months of 2006. The following table summarizes our net sales by product segment:

	Nine fiscal months ended
	September 28, 2007					September 29, 2006
($ in thousands)	Net Sales		%			Net Sales		%			% Change
Product sales	$	309,677		84.3	%	$	300,535		82.8	%		3.0	%
Rental revenue		44,211		12.0			44,428		12.2			(0.5	)
Used rental equipment sales		13,473		3.7			18,224		5.0			(26.0	)
Net sales	$	367,361		100.0	%	$	363,187		100.0	%		1.1	%

Product sales increased $9.2 million, or 3.0%, to $309.7 million in the first nine months of 2007 from $300.5 million in the first nine months of 2006. The increase in sales was due to higher sales prices, offset by lower unit volume from soft non-residential construction activity.

Rental revenue was virtually flat at $44.2 million for the first nine months of 2007, compared to $44.4 million in the first nine months of 2006.

Used rental equipment sales decreased to $13.5 million in the first nine months of 2007 from $18.2 million in the first nine months of 2006 due to reduced customer demand. Used rental equipment sales may vary significantly from quarter to quarter.

Gross Profit

Gross profit of $112.9 million, or 30.7% of net sales, in the first nine months of 2007 increased 8.1% from $104.4 million, or 28.8% of net sales, in the first nine months of 2006. All three segments showed improved gross margins as a percent of net sales.

Product gross profit contributed $83.5 million, or 27.0% of product sales, a 13.6% increase from the $73.5 million, or 24.5% of product sales, in the first nine months of 2006. The $10.0 million increase in product gross profit was due to $11.4 million of higher sales prices and $1.2 million of operating efficiencies, mostly freight, in excess of increases in rent, labor and utilities, partially offset by $2.1 million of higher net material costs and $0.5 million of lower unit volume.

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Rental gross profit for the first nine months of 2007 was $19.1 million, as compared to $18.1 million in the first nine months of 2006, due to lower depreciation expense. Depreciation expense on rental equipment for the first nine months of 2007 was $12.1 million, as compared to $14.2 million in the same period of 2006. Rental gross profit before depreciation was $31.2 million in the first nine months of 2007, or 70.6% of rental revenue, a decrease from the $32.3 million, or 72.8% of rental revenue, reported in the first nine months of 2006. Rental equipment renovation was higher in anticipation of stronger demand for rental equipment that did not materialize.

Gross profit on sales of used rental equipment for the first nine months of 2007 was $10.3 million, or 76.1% of used rental equipment sales, a decrease from $12.8 million, or 70.2% of sales, in the first nine months of 2006. Gross margin percentages fluctuate based on the mix and age of rental equipment sold and remained within historical ranges.

Operating Expenses

Selling, general, and administrative expenses increased to $79.8 million in the first nine months of 2007 from $75.6 million for the first nine months of 2006. The increase was due to increased lease expense at distribution centers of $1.5 million, stock compensation expense, a non-cash expense, of $1.4 million, depreciation and amortization expense of $0.8 million, personnel related expenses of $0.3 million, and other net expenses of $0.2 million.

The loss on disposals of property, plant, and equipment was $0.5 million in the first nine months of 2007 as compared to a gain of $1.8 million in the first nine months of 2006. The gain in 2006 related to the amortization of the deferred gain on the sale-leaseback of the Des Plaines facility that occurred in 2005. During the second half of 2006, we extended the term of the lease, which resulted in $1.7 million less amortization of deferred gain in the first nine months of 2007.

Other Expenses

Interest expense decreased $2.4 million to $35.0 million in the first nine months of 2007, compared to $37.4 million for the first nine months of 2006. The cash portion of interest expense decreased by $3.3 million to $29.8 million in the first nine months of 2007, due to the repayment of the revolving credit facility from the proceeds of our initial public offering in December 2006. Amortization of deferred financing costs and debt discount increased by $0.9 million to $5.2 million in the first nine months of 2007 due to the incremental amortization from financing costs incurred in 2006 related to the amendment of certain debt instruments, of which $0.4 million was non-recurring.

Loss Before Income Taxes

Loss before income taxes in the first nine months of 2007 was $2.9 million compared to $7.5 million in the first nine months of 2006, due to the factors described above.

Provision for Income Taxes

The provision for income taxes in the first nine months of 2007 and 2006 relates to foreign and certain state income taxes. We have recorded a non-cash valuation allowance to reduce our deferred tax asset related to U.S. 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.

Net Loss

The net loss for the first nine months of 2007 was $3.4 million, compared to $7.9 million in the first nine months of 2006, due to the factors described above.

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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 the amount available under our revolving credit facility. As of September 28, 2007, we had $97.3 million available for borrowing 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 property, plant, and equipment. Additions to rental equipment are based on expected demand for the equipment in certain geographies or product families. Additions to property, plant, and equipment consist of manufacturing and distribution equipment and management information systems. We finance these capital expenditures with cash on hand, 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.

	Nine fiscal months ended
	September 28,			September
($ in thousands)	2007			29, 2006
Capital expenditures:
Additions to rental equipment	$	19,483		$	15,988
Additions to property, plant and equipment		13,944			7,282
Proceeds from sales of used rental equipment		(13,473	)		(18,224	)
Proceeds from sales of property, plant and equipment		(37	)		(21	)
Net additions to rental equipment and property, plant, and equipment	$	19,917		$	5,025

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 rental equipment additions or other corporate purposes.

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. In January 2007, the underwriters of the offering exercised a portion of their over-allotment option.

Net cash used in operating activities in the first nine months of 2007 was $(25.1) million, compared to $(24.0) million in the first nine months of 2006. This activity is comprised of the following:

	September 28,			September 29,
($ in millions)	2007			2006
Net loss	$	(3.4	)	$	(7.9	)
Non-cash adjustments		15.2			9.0
Subtotal of net loss and non-cash adjustments		11.8			1.1
Changes in assets and liabilities		(36.9	)		(25.1	)
Net cash used in operating activities	$	(25.1	)	$	(24.0	)

The subtotal of net loss and non-cash adjustments was $11.8 million for the first nine months of 2007, a $10.7 million improvement from $1.1 million in the first nine months of 2006. The improvement was due to the reduced net loss, higher stock compensation expense, lower amortization of deferred gain on sale-leaseback, and higher amortization of financing costs and debt discount, which are discussed in the “Net Loss,” “Operating Expenses,” and Other Expenses” sections above.

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Changes in assets and liabilities resulted in a $36.9 million use of cash in the first nine months of 2007, as compared to $25.1 million in the first nine months of 2006. Changes in inventories, accounts payable, and accrued and other long-term liabilities reflected a larger use of cash and were partially offset by a reduced use of cash in accounts receivable. The increase in inventories was $14.0 million in the first nine months of 2007 compared to $8.5 million in the first nine months of 2006 due to higher finished goods levels to improve customer service and due to inflation. Accounts payable was an $8.0 million use of cash in the first nine months of 2007 as compared to $0.3 million source of cash in the first nine months of 2006 due to the timing of vendor purchases and payments. The decrease in accrued and other long-term liabilities was $4.9 million in the first nine months of 2007 as compared to a $3.0 million increase in the first nine months of 2006 due to higher payments of sales rebates, incentives, and discretionary retirement contributions as a result of the favorable operating results for the year ended December 31, 2006. Accounts receivable improved to a $7.6 million use of cash from a $19.2 million use of cash due to improved days’ sales outstanding.

For the nine months ended September 28, 2007, our gross long-term debt borrowings, which represent the sum of individual days with borrowings on the revolving credit facility, were $83.3 million. This was mostly offset by individual days of repayments on the revolving credit facility of $65.4 million. For the nine months ended September 28, 2007, we paid $0.6 million of financing costs incurred in 2006 related to the amendment of certain credit agreements and $0.1 million related to refinancing activities in 2007. In December 2006, we completed an initial public offering of our common stock and in January 2007, the underwriters of the offering exercised a portion of their over-allotment option. We received a net $0.6 million in the nine months ended September 28, 2007, which consisted of $2.8 million of proceeds from the partial exercise of the over-allotment option and the payment of $2.2 million of issuance costs incurred in 2006. For the nine months ended September 28, 2007, we received $0.2 million and $1.2 million from the exercise of stock options and the repayment of loans to shareholders, respectively.

We have a $130.0 million senior secured revolving credit facility. The facility 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, all of the $125.5 million was available as of September 28, 2007, of which $17.9 was outstanding. Letters of credit of $10.3 million were outstanding at December 31, 2006, resulting in available borrowings of $97.3 million under the revolving credit facility. The credit facility is secured by substantially all of our assets.

As of September 28, 2007, our other long-term debt consisted of the following:

($ in thousands)	Amount
Senior Second Secured Notes, interest rate of 10.75%	$	165,000
Debt discount on Senior Second Secured Notes		(1,865	)
Senior Subordinated Notes, interest rate of 13.0%		154,729
Debt discount on Senior Subordinated Notes		(3,481	)
Senior notes payable to seller of Safway, non-interest bearing, accreted at 6.0% (secured) to 14.5% (unsecured)		7,662
Debentures previously held by Dayton Superior Capital Trust, interest rate of 9.1%, due on demand		1,035
Capital lease obligations		1,558
Total long-term debt		324,638
Less current maturities		167,053
Long-term portion	$	157,585

At September 28, 2007, working capital was $(89.8) million, compared to $81.4 million at December 31, 2006. The $171.2 million decrease was comprised of the following:

• $164.5 million increase in the current portion of long-term debt and $17.9 million increase in the revolving credit facility, due to maturities of the Senior Secured Notes and the revolving

19

	credit facility being within twelve months,
•	$26.8 million decrease in cash and cash equivalents from the normal seasonal cash outflow from operating and investing activities, offset by
•	$8.0 million increase in accounts receivable due to the higher net sales in the third quarter of 2007 relative to the fourth quarter of 2006,
•	$14.2 million increase in inventories due to higher finished goods levels to improve customer service, and material cost inflation,
•	$10.8 million decrease in accounts payable primarily due to non-recurring payables at December 31, 2006, for initial public offering issuance costs, financing costs, and consultant fees, and
•	$4.1 million decrease in accrued compensation and benefits due to the payment of incentives and discretionary retirement contributions, and
•	$1.0 million of other changes.

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.

The revolving credit facility expires in July 2008 and the Senior Second Secured Notes mature in September 2008. We obtained a commitment from a lender to provide new credit facilities consisting of a $150 million revolving credit facility and $100 million term loan facility to refinance the existing revolving credit facility and the Senior Second Secured Notes. The commitment expires on January 25, 2008. This commitment is subject to customary conditions, including an absence of certain material adverse changes in our business and a minimum Adjusted EBITDA, as defined.

We currently expect to consummate the financing described in the commitment and to refinance the existing revolving credit facility and the Senior Second Secured Notes before the expiration of the commitment. In the event we do not consummate this financing commitment, our financial resources may be insufficient to satisfy our current debt obligations. Such circumstances may have a material adverse effect on the Company’s business, financial condition, and results of operations. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and reclassification of recorded asset amounts or amounts and reclassification of liabilities that might be necessary should we be deemed to be unable to continue as a going concern.

Although we regularly consider acquisition opportunities as a means of expanding our product offerings and geographic reach, our current capital structure restricts our ability to pursue acquisitions financed with additional borrowings. Nevertheless, we may consider debt financed acquisitions where the agreements governing our outstanding debt permit them, or acquisitions financed with our common stock. Any such acquisition may have a material impact on our business and results of operations in future periods. Any such acquisition financed through the issuance of additional equity securities could result in dilution to our current stockholders.

Commitments

The material changes to minimum future payments from December 31, 2006 relate to new real estate leases and the extension of existing leases. The remaining future minimum lease payments under non-cancelable operating leases at September 28, 2007 were $2.4 million for the balance of 2007, and $8.5 million, $6.9 million, $6.4 million, $6.0 million, and $38.1 million for the years ended December 31, 2008, 2009, 2010, 2011, and thereafter, respectively.

Seasonality

Our operations are seasonal in nature with approximately 55% of sales historically occurring in the second and third quarters. Working capital and borrowings fluctuate with the volume of our sales.

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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 2006 and the first nine months of 2007, our steel costs increased moderately. We expect overall steel costs to decrease in the fourth quarter of 2007 and to increase, perhaps significantly, in the first half of 2008. Additionally, we expect increases in energy costs, including natural gas and petroleum products, which will impact 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 a 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 our subsidiary if the Applicable Value of that stock were to become equal to or greater than the Collateral Threshold. As of September 28, 2007, 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 September 28, 2007. 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 September 28, 2007 was $9.5 million. Based upon the foregoing, as of September 28, 2007, 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 September 28, 2007, and multiplied this adjusted EBITDA by 7.4 times. We determined this multiple by multiplying our closing share price as of September 28, 2007 by the number of the common shares and equivalents outstanding, adding our long-term debt, and dividing by our adjusted EBITDA.

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Set forth below is the adjusted EBITDA of Dayton Superior Canada Ltd. for the year ended September 28, 2007, together with a reconciliation to net income:

	Dayton
	Superior
	Canada, Ltd.
Net Income	$	278
Provision for Income Taxes		205
Income before Provision for Income Taxes		483
Interest Income		(78	)
Income from Operations		405
Depreciation Expense		880
Adjusted EBITDA		1,285
Multiple		7.6
Estimated Fair Value	$	9,766

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 a recognized financial measure under generally accepted accounting principles and does not purport to be an alternative to operating income as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. Additionally, adjusted 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 subsidiary’s 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 September 28, 2007 and the adjusted EBITDA for the twelve months ended September 28, 2007 would have to increase by $23.2 million and $3.1 million, respectively, in order for Dayton Superior Canada Ltd. capital stock to no longer constitute collateral.

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, and litigation. 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.

Forward-Looking Statements

This Form 10-Q includes forward-looking statements that are not statements of historical fact and may include a number of risks and uncertainties with respect to our financial condition, results of operations and business. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. Many of these statements appear, in particular, under the headings ‘‘Management’s Discussion and Analysis of Financial Condition and Results of

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Operations.’’’ Forward-looking statements can be identified by the use of terminology such as ‘‘subject to,’’ ‘‘believes,’’ ‘‘anticipates,’’ ‘‘plans,’’ ‘‘expects,’’ ‘‘intends,’’ ‘‘estimates,’’ ‘‘projects,’’ ‘‘may,’’ ‘‘should,’’ ‘‘can,’’ the negatives thereof, variations thereon and similar expressions, or by discussions of strategy. All forward-looking statements are based upon our current expectations and various assumptions. We believe there is a reasonable basis for our expectations and beliefs, but they are inherently uncertain, we may not realize our expectations and our beliefs may not prove correct. Actual results could differ materially from those described or implied by such forward-looking statements. Factors that may materially affect such forward-looking statements include:

• depressed or fluctuating market conditions for our products and services;

• operating restrictions imposed by our existing debt;

• increased raw material costs and operating expenses;

• our ability to comply with environmental regulations and to absorb environmental investigation, remediation and compliance costs;

• the loss of certain key customers;

• the loss of key personnel;

• exposure to the local business risks of our Mexican operations and foreign sourcing partners;

• conflicts of interest with our major shareholder;

• our ability to increase manufacturing efficiency, leverage our purchasing power and broaden our distribution network;

• our ability to successfully identify, complete and integrate acquisitions;

• our ability to develop new products;

• the competitive nature of our industry in general, as well as our specific market areas;

• changes in prevailing interest rates and the availability of and terms of financing to fund the anticipated growth of our business; and

• labor disturbances.

Consequently, such forward-looking statements should be regarded solely as our current plans, estimates and beliefs. You are cautioned not to place undue reliance on forward-looking statements. We cannot guarantee future results, events, levels of activity, performance or achievements. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As of September 28, 2007, the only financial instrument we had that was sensitive to changes in interest rates was our $130.0 million revolving credit facility. The outstanding balance under the facility as of September 28, 2007 was $17.9 million, and the average borrowings for the nine months ended September 28, 2007 were $12.2 million. The facility has several interest rate options, which re-price on a short-term basis.

During the nine months ended September 28, 2007, our weighted average interest rate on the facility was 13.3%. The weighted average interest rate is calculated by dividing interest expense (which is the sum of interest on borrowings, letter of credit fees, and commitment fees on unused credit and borrowing availability) by average borrowings. The high weighted average interest rate during the nine month period ended September 28, 2007 was a reflection of the limited average borrowings during this period. Interest expense on the facility for the nine months ended September 28, 2007 was $1.2 million. The components consisted of $0.7 million of interest on borrowings (7.9%), $0.2 million of letter of credit fees (2.1%), and $0.3 million for commitment fees on unused availability (3.3%). 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 $122,000.

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

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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.

Item 4. 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.

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 the end of 2007, we can give no assurance that these efforts will be successfully completed in a timely manner.

Part II. – Other Information

Item 1A. Risk Factors

The following risk factor is added to the Risk Factors contained in our Annual Report on Form 10-K:

Our revolving credit facility expires in July 2008 and our Senior Second Secured Notes mature in September 2008. We have a $130 million revolving credit facility which matures in July 2008. As of September 28, 2007, $125.5 million was available for borrowing under this credit facility, of which $17.9 million was outstanding. In addition, as of September 28, 2007, we have Senior Second Secured Notes which have a principal amount of $165 million and mature in September 2008. We obtained a commitment from a lender to provide new credit facilities consisting of a $150 million revolving credit facility and a $100 million term loan facility to refinance the existing revolving credit facility and the Senior Second Secured Notes. The commitment expires January 25, 2008. This commitment is subject to customary conditions, including an absence of material adverse changes in the business, and a minimum Adjusted EBITDA, as defined. Our ability to comply with these conditions may be affected by events beyond our control and we may not be able to obtain additional financing on terms acceptable to us or at all. If we are unable to secure additional financing, we may be unable to satisfy our current debt obligations. In addition, our inability to meet these debt service requirements 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;

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

• Have a material adverse effect on our business, financial condition and results of operations.

Item 6. Exhibits

See Index to Exhibits following the signature page to this report for a list of Exhibits.

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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 thereunto duly authorized.

	DAYTON SUPERIOR CORPORATION
DATE: November 13, 2007	BY:	/s/ Edward J. Puisis
		Edward J. Puisis
		Executive Vice President and Chief Financial Officer

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INDEX OF EXHIBITS

Description

		Exhibit No.	Description
(10	)	Material Contracts
		10.1	Commitment Letter between General Electric Capital Corporation and Dayton Superior Corporation	**
(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	**

** Filed herewith

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