UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


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

For the quarterly period ended ~~July~~April 21, ~~2005~~2006


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

For the transition period from to

Commission file number 0-27818

Doane Pet Care Company

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation) 43-1350515 (IRS Employer Identification No.)


Delaware		43-1350515
(State or other jurisdiction of		(IRS employer
incorporation or organization)		identification no.)

210 Westwood Place South, Suite 400 Brentwood, TN 37027 (Address of principal executive office, including zip code)

(~~Address~~615) 373-7774 (Registrant’s oftelephone ~~principal executive office~~number, including ~~zip~~area code)

(615) 373-7774

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Large Accelerated ~~Yes~~ Filer o No Accelerated Filer o Non-Accelerated Filer þ

~~As of~~Indicate ~~August 22,~~by ~~2005,~~check mark whether the registrant ~~had~~is ~~outstanding~~a ~~1,000~~shell ~~shares~~company of(as ~~common~~defined ~~stock,~~in ~~all~~Rule 12b-2 of ~~which~~the ~~were~~Exchange ~~held~~Act). byYes ~~its~~o ~~parent,~~No ~~Doane Pet Care Enterprises, Inc.~~þ

As of May 16, 2006, the registrant had outstanding 1,001 shares of Class A common stock and 71.32 shares of Class B common stock.

TABLE OF CONTENTS

PART I. Financial Information


		Page
	PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements

	Unaudited Condensed Consolidated Balance Sheets as of the end of the first quarter of 2006 (Successor) and the end of 2005 (Successor)		1

	Unaudited Condensed Consolidated Statements of Operations for the first quarters of 2006 (Successor Period) and 2005 (Predecessor Period)		2

	Unaudited Condensed Consolidated Statement of Stockholders’ Equity and Comprehensive Loss for the first quarter of 2006 (Successor Period)		3

	Unaudited Condensed Consolidated Statements of Cash Flows for the first quarters of 2006 (Successor Period) and 2005 (Predecessor Period)		4

	Notes to Unaudited Condensed Consolidated Financial Statements		5

	Report of Independent Registered Public Accounting Firm		17

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		26

Item 4.	Controls and Procedures		27

	PART II — OTHER INFORMATION

Item 1.	Legal Proceedings		28

Item 1A.	Risk Factors		28

Item 4.	Submission of Matters to a Vote of Security Holders		28

Item 6.	Exhibits		28

Signatures			29
Letter from KPMG LLP
Certification of CEO pursuant to Section 302
Certification of CFO pursuant to Section 302
Certification of CEO pursuant to Section 906
Certification of CFO pursuant to Section 906

	Page
Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets as of the end of the second quarter of fiscal 2005 and the end of fiscal 2004		1
Unaudited Condensed Consolidated Statements of Operations for the second quarter and first six months of fiscal 2005 and 2004		2
Unaudited Condensed Consolidated Statement of Stockholder’s (Deficit) Equity and Comprehensive Loss as of the end of and for the first six months of fiscal 2005		3
Unaudited Condensed Consolidated Statements of Cash Flows for the first six months of fiscal 2005 and 2004		4
Notes to Unaudited Condensed Consolidated Financial Statements		5
Report of Independent Registered Public Accounting Firm		17
Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations		18
Item 3. Quantitative and Qualitative Disclosures about Market Risk		25
Item 4. Controls and Procedures		26

PART II. Other Information

Item 1. Legal Proceedings			28
Item 6. Exhibits			28
Signatures			29
Letter from KPMG LLP
Certification of CEO Pursuant to Section 302
Certification of CFO Pursuant to Section 302
Certification of CEO Pursuant to Section 906
Certification of CFO Pursuant to Section 906

PART I. ~~Financial~~— ~~Information~~FINANCIAL INFORMATION

ITEM 1. — Financial Statements

DOANE PET CARE COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS ~~(In thousands, except share and par value amounts)~~

	End of
	Second quarter			Fiscal
	2005			2004
ASSETS
Current assets:
Cash and cash equivalents	$	37,031		$	28,847
Accounts receivable, net		91,491			112,445
Inventories, net		67,657			68,321
Deferred tax assets		1,935			2,414
Prepaid expenses and other current assets		11,080			7,038
Total current assets		209,194			219,065
Property, plant and equipment, net		236,837			258,070
Goodwill and other intangible assets		376,373			390,471
Other assets		29,388			34,300
Total assets	$	851,792		$	901,906
LIABILITIES AND STOCKHOLDER’S (DEFICIT) EQUITY
Current liabilities:
Current maturities of long-term debt	$	3,516		$	3,673
Accounts payable		84,058			102,149
Accrued liabilities		50,698			59,239
Total current liabilities		138,272			165,061
Long-term debt:
Long-term debt, excluding current maturities		577,260			580,090
Senior Preferred Stock (Redeemable), 3,000,000 shares authorized, 1,200,000 shares issued and outstanding, $118,987 current redemption value		114,874			106,421
Total long-term debt		692,134			686,511
Deferred tax liabilities		34,868			33,641
Other long-term liabilities		9,842			9,567
Total liabilities		875,116			894,780
Commitments and contingencies
Stockholder’s (deficit) equity:
Common stock, $0.01 par value; 1,000 shares authorized, issued and outstanding		—			—
Additional paid-in-capital		115,674			115,674
Accumulated other comprehensive income		32,571			62,650
Accumulated deficit		(171,569	)		(171,198	)
Total stockholder’s (deficit) equity		(23,324	)		7,126
Total liabilities and stockholder’s (deficit) equity	$	851,792		$	901,906

(In thousands, except share amounts)


	Successor end of
	First quarter
	2006			2005
ASSETS
Current assets:
Cash and cash equivalents	$	11,274		$	8,221
Accounts receivable, net		93,580			105,069
Inventories		73,420			65,169
Deferred tax assets		5,394			5,394
Prepaid expenses and other current assets		10,141			8,774

Total current assets		193,809			192,627
Property, plant and equipment, net of accumulated depreciation of $17,783 and $7,530, respectively		280,219			284,988
Intangible assets, net of accumulated amortization of $5,488 and $2,345, respectively		286,282			287,373
Goodwill		324,950			321,115
Other assets		21,562			23,235

Total assets	$	1,106,822		$	1,109,338


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	3,224		$	3,158
Accounts payable		77,224			79,984
Accrued liabilities		54,106			56,771

Total current liabilities		134,554			139,913
Long-term debt, excluding current maturities		560,547			561,118
Deferred tax liabilities		99,996			98,760
Other long-term liabilities		10,544			8,264

Total liabilities		805,641			808,055

Commitments and contingencies

Stockholders’ equity:
Class A common stock, $0.01 par value; 2,000 shares authorized; 1,001 shares issued and outstanding		—			—
Class B common stock, $0.01 par value; 100 shares authorized; 71.32 shares issued and outstanding		—			—
Additional paid-in-capital		303,514			303,059
Accumulated other comprehensive income (loss)		3,857			(992	)
Accumulated deficit		(6,190	)		(784	)

Total stockholders’ equity		301,181			301,283

Total liabilities and stockholders’ equity	$	1,106,822		$	1,109,338

See accompanying notes to the unaudited condensed consolidated financial statements and accompanying
report of independent registered public accounting firm.

DOANE PET CARE COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ~~(In thousands)~~

	Second quarter						First six months
	2005			2004			2005			2004
Net sales	$	243,872		$	258,338		$	511,008		$	529,218
Cost of goods sold		201,151			225,201			416,184			455,263
Gross profit		42,721			33,137			94,824			73,955
Operating expenses:
Promotion and distribution		14,729			13,767			29,159			27,994
Selling, general and administrative		12,811			12,803			25,930			25,986
Amortization		1,024			1,134			2,190			2,363
Other operating expense (income), net		1,805			3,938			(1,711	)		5,161
Income from operations		12,352			1,495			39,256			12,451
Interest expense, net		19,031			18,186			37,677			36,163
Other income, net		(448	)		(331	)		(693	)		(738	)
(Loss) income before income taxes		(6,231	)		(16,360	)		2,272			(22,974	)
Income tax expense		1,316			1,377			2,643			2,570
Net loss	$	(7,547	)	$	(17,737	)	$	(371	)	$	(25,544	)

(In thousands)


	Successor			Predecessor
	first quarter			first quarter
	2006			2005
Net sales	$	237,724		$	267,136
Cost of goods sold		201,015			215,033

Gross profit		36,709			52,103

Operating expenses:
Promotion and distribution		13,277			14,430
Selling, general and administrative		12,979			13,119
Amortization		3,098			1,166
Other operating expense (income), net		555			(3,516	)

Income from operations		6,800			26,904
Interest expense, net		11,952			18,646
Other expense (income), net		49			(245	)

Income (loss) before income taxes		(5,201	)		8,503
Income tax expense		205			1,327

Net income (loss)	$	(5,406	)	$	7,176

See accompanying notes to the unaudited condensed consolidated financial statements and accompanying
report of independent registered public accounting firm.

DOANE PET CARE COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF ~~STOCKHOLDER’S (DEFICIT) EQUITY AND COMPREHENSIVE LOSS (In thousands, except share amounts)~~

							Accumulated
					Additional		other
	Common stock				paid-in		comprehensive			Accumulated
	Shares		Amount		capital		income (loss)			deficit			Total
Balances at end of fiscal 2004		1,000	$	—	$	115,674	$	62,650		$	(171,198	)	$	7,126
Comprehensive loss:
Net loss		—		—		—		—			(371	)		(371	)
Foreign currency translation		—		—		—		(30,079	)		—			(30,079	)
Total comprehensive loss														(30,450	)
Balances at end of second quarter 2005		1,000	$	—	$	115,674	$	32,571		$	(171,569	)	$	(23,324	)

STOCKHOLDERS’ EQUITY AND COMPREHENSIVE LOSS

(In thousands, except share amounts)


											Accumulated
	Class A				Class B				Additional		other
	common stock				common stock				paid-in		comprehensive			Accumulated
	Shares		Amount		Shares		Amount		capital		income (loss)			deficit			Total
Successor balances at the end of 2005		1,001	$	—		71.32	$	—	$	303,059	$	(992	)	$	(784	)	$	301,283

Comprehensive loss:
Net loss		—		—		—		—		—		—			(5,406	)		(5,406	)
Foreign currency translation		—		—		—		—		—		4,849			—			4,849

Total comprehensive loss																		(557	)
Non-cash stock-based compensation expense		—		—		—		—		455		—			—			455

Successor balances at the end of the first quarter 2006		1,001	$	—		71.32	$	—	$	303,514	$	3,857		$	(6,190	)	$	301,181

See accompanying notes to the unaudited condensed consolidated financial statements and accompanying
report of independent registered public accounting firm.

DOANE PET CARE COMPANY AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ~~(In thousands)~~

	First six months
	2005			2004
Cash flows from operating activities:
Net loss	$	(371	)	$	(25,544	)
Items not requiring (providing) cash:
Depreciation		17,825			17,303
Amortization		2,258			2,860
Deferred income tax expense		2,042			2,065
Non-cash interest expense		11,099			9,713
Equity in joint ventures		(151	)		(457	)
Asset impairments		1,129			420
Changes in current assets and liabilities		(12,557	)		(12,674	)
Net cash provided by (used in) operating activities		21,274			(6,314	)
Cash flows from investing activities:
Capital expenditures		(10,132	)		(5,126	)
Other, net		(743	)		(404	)
Net cash used in investing activities		(10,875	)		(5,530	)
Cash flows from financing activities:
Proceeds from issuance of long-term debt		—			13,078
Principal payments on long-term debt		(1,768	)		(17,276	)
Payments for debt issuance costs		(22	)		(3,002	)
Net cash used in financing activities		(1,790	)		(7,200	)
Effect of exchange rate changes on cash and cash equivalents		(425	)		(187	)
Increase (decrease) in cash and cash equivalents		8,184			(19,231	)
Cash and cash equivalents, beginning of period		28,847			29,293
Cash and cash equivalents, end of period	$	37,031		$	10,062

(In thousands)


	Successor			Predecessor
	first quarter			first quarter
	2006			2005
Cash flows from operating activities:
Net income (loss)	$	(5,406	)	$	7,176
Items not requiring (providing) cash:
Depreciation		10,137			8,823
Amortization		3,098			1,217
Non-cash interest expense (income), net		(817	)		5,479
Deferred tax expense		1,070			1,016
Equity in joint ventures		(153	)		(302	)
Non-cash stock-based compensation expense		455			—
Changes in current assets and liabilities		(8,238	)		(18,804	)

Net cash provided by operating activities		146			4,605

Cash flows from investing activities:
Capital expenditures		(3,324	)		(4,531	)
Acquisition of business, including cash acquired		3,738			—
Other, net		(512	)		(538	)

Net cash used in investing activities		(98	)		(5,069	)


Cash flows from financing activities:
Change in book overdraft		4,228			—
Repayments on long-term debt		(790	)		(898	)
Payments for debt issuance costs		(149	)		(22	)
Payments for transaction costs		(292	)		—
Payment to minority interest holder		(92	)		—

Net cash provided by (used in) financing activities		2,905			(920	)

Effect of exchange rate changes on cash and cash equivalents		100			117

Increase (decrease) in cash and cash equivalents		3,053			(1,267	)
Cash and cash equivalents, beginning of period		8,221			28,847

Cash and cash equivalents, end of period	$	11,274		$	27,580

See accompanying notes to the unaudited condensed consolidated financial statements and accompanying
report of independent registered public accounting firm.

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Doane Pet Care Company and its consolidated subsidiaries, or the Company, do not include all the information and ~~footnotes~~notes required by U.S. generally accepted accounting principles for complete financial statements. The fiscal 2005 year-end condensed consolidated balance sheet data was derived from audited ~~financial~~ financial statements. In the opinion of management, all material adjustments, consisting of normal ~~and~~ and recurring adjustments, have been made which were considered necessary to present fairly the financial position, ~~and the~~ results of operations and cash flows at the dates and for the periods presented. ~~Certain reclassifications have been made to previously reported consolidated financial~~ ~~statements and notes to conform with the current presentation.~~

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes contained in the Company’s ~~2004~~2005 annual report on Form 10-K for the fiscal year ended ~~January~~December 131, 2005, or the ~~2004~~2005 10-K, including ~~related~~the related Report of Independent Registered Public Accounting Firm and exhibits. The accounting policies used in preparing these financial statements are the same as those summarized in the ~~2004~~ 2005 10-K.

In conformity with U.S. generally accepted accounting principles, preparation of the Company’s ~~consolidated~~ financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the ~~consolidated~~ financial statements; therefore, actual results could ultimately differ from those estimates.

The Company’s fiscal ~~year~~years ~~ends~~end on the Saturday nearest to the end of December. ~~Each~~and ~~quarter~~its quarters ~~ends~~end on the Saturday nearest to the end of the respective calendar month with the ~~second~~first quarters of fiscal ~~2005~~2006 and ~~2004~~2005 ending on ~~July~~April 21, ~~2005~~2006 and ~~July~~ April 32, ~~2004~~2005, respectively.

(2) ~~Recent Accounting Pronouncements~~ Acquisitions

In December 2004, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment, or SFAS 123 — Revised. SFAS 123 — Revised eliminates the alternative to use the intrinsic value method of accounting and requires entities to recognize the cost of services received in exchange for awards of equity instruments, or compensation cost, based on the fair value of those awards at the grant date. SFAS 123 — Revised is effective as of the beginning of the CompanyTeachers’s ~~next fiscal year, or January 1,~~Acquisition 2006, for all awards granted after the effective date and for all awards modified, repurchased or cancelled after that date. In the opinion of management, the Company meets the nonpublic entity criteria under SFAS 123 — Revised. Accordingly, upon adoption, the grant-date fair value of awards of equity share options and similar instruments is to be calculated using the historical volatility of an appropriate industry sector index rather than expected volatility of the Company’s share price. The Company will evaluate the impact on its results of operations and financial position upon the adoption of SFAS 123 — Revised.

InOn ~~May~~October 24, 2005, ~~the~~Ontario ~~FASB~~Teachers’ ~~issued~~Pension ~~SFAS~~Plan ~~No. 154~~Board, ~~Accounting~~or ~~Changes~~OTPP, ~~and~~acquired ~~Error~~beneficial ownership ~~Corrections,~~of orsubstantially ~~SFAS 154.~~all ~~This~~of ~~new~~the ~~standard~~outstanding ~~replaces~~capital ~~APB~~stock ~~Opinion~~of ~~No. 20,~~the ~~Accounting~~Company’s ~~Changes~~parent corporation, ~~and~~Doane ~~SFAS~~Pet NoCare Enterprises, Inc. 3, ~~Reporting~~or Doane Enterprises. In connection with the ~~Accounting~~acquisition, ~~Changes~~the inCompany ~~Interim~~effected ~~Financial~~a ~~Statements~~series ~~and~~of isrecapitalization ~~effective~~transactions. ~~for~~The ~~accounting~~Company ~~changes~~refers ~~and~~to ~~correction~~these oftransactions ~~errors~~as ~~made~~the inTeachers’ ~~fiscal~~Acquisition, ~~years~~the ~~beginning~~Financing ~~after~~Transactions, ~~December 15~~and collectively, ~~2005~~the Teachers’ Transactions. The Company’s ~~does~~consolidated ~~not anticipate~~financial ~~that~~statements ~~the~~report ~~adoption~~periods ofup ~~SFAS~~to ~~154~~and including ~~will~~October 23, ~~have~~2005 aas ~~material~~the ~~impact~~predecessor onperiods, and the ~~Company’s~~periods ~~results~~subsequent ofto October 23, ~~operations~~2005 oras ~~financial~~the ~~position~~successor periods.

DIPP Acquisition

On January 19, 2006, the Company purchased an additional 25% of Doane International Pet Products, LLC, or DIPP, for $0.3 million, increasing its ownership percentage to 75%. The Company began consolidating DIPP as of the purchase date. DIPP’s financial position and results of operations subsequent to the purchase date are not material to the Company’s consolidated financial statements.

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(3) Inventories

A summary of inventories follows (in thousands):

	End of
	Successor end of
	Second quarter			Fiscal
	First quarter
	2005			2004
	2006			2005
Raw materials	$	16,~~107~~421		$	16,~~041~~098
Packaging materials		21,~~441~~428			20,~~564~~172
Finished goods		3238,~~385~~146			3431,~~573~~280
		69,933			71,178
		75,995			67,550
Less: Allowances		(2,~~276~~575	)		(2,~~857~~381	)
Total	$	6773,~~657~~420		$	6865,~~321~~169

(4) Long-Term ~~Property, Plant and Equipment~~Debt

A summary of property, plant and equipment follows (in thousands):

	End of
	Second quarter			Fiscal
	2005			2004
Land	$	11,210		$	11,601
Buildings and improvements		99,331			104,778
Machinery and equipment		309,644			320,097
Construction-in-progress		9,679			6,727
		429,864			443,203
Less: Accumulated depreciation		(193,027	)		(185,133	)
Total	$	236,837		$	258,070

(5) Long-Term Debt and Liquidity

A summary of long-term debt follows (in thousands):

	End of
	Successor end of
	Second quarter			Fiscal
	First quarter
	2005			2004
	2006			2005
Revolving credit facility	$	—		$	—
Term loan facility		193,538			194,513
U.S. dollar term loan facility		104,475			104,737
Senior notes		211,323			211,144
Euro term loan facility		55,533			54,481
Senior subordinated notes		149,326			149,147
Senior notes		230,307			231,493
Industrial development revenue bonds		14,499			14,493
Senior subordinated notes		150,873			150,843
Debt of foreign subsidiaries		12,090			14,466
Industrial development revenue bonds		11,757			11,754
		580,776			583,763
Debt of foreign subsidiaries		10,826			10,968
Less: Current maturities		(3,516	)		(3,673	)
		563,771			564,276
		577,260			580,090
Less: Current maturities		(3,224	)		(3,158	)
Senior preferred stock		114,874			106,421
Total	$	560,547		$	561,118
Total	$	692,134		$	686,511

The Company entered into its senior credit facility on October 24, 2005 which provided for a $55.0 million U.S. dollar equivalent term loan facility denominated in Euros (the Euro term loan facility), a $105.0 million U.S. dollar term loan facility and a $50.0 million multi-currency revolving credit facility with a $15.0 million sub-limit for Euro-denominated revolving credit loans. The Company had no borrowings outstanding under its revolving credit facility as of the end of the first quarter of fiscal 2006, and $3.6 million of letters of credit issued and undrawn, resulting in $46.4 million of availability under its revolving credit facility. As of the end of the first quarter of fiscal 2006, the U.S. dollar term loan facility bore interest of 6.8% and the Euro term loan facility bore interest of 4.6%.

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

AsA ofsummary ~~the end~~ of the ~~second~~maturities ~~quarter~~ of fiscal 2005, the Company’s senior credit facility provided for total commitments of $230.0 million, consisting of a $195.0 million Term Loan Facility and a $35.0 million Revolving Credit Facility, with a $20.0 million sublong-~~limit~~term ~~for~~debt ~~issuance of stand-by letters of credit. The Term Loan Facility bears interest, at the option of the Company, of adjusted LIBOR plus 4.00%, or ABR,~~ as ~~defined in the senior credit facility agreement, plus 3.00%. The Revolving Credit Facility bears interest, at the option~~ of the ~~Company, of adjusted LIBOR plus 4.50%, or ABR plus 3.50%. As of the~~ end of the ~~second~~first quarter of fiscal ~~2005, the Term~~ ~~Loan~~2006 ~~Facility~~follows ~~bore~~(in ~~interest at 7.41%.~~thousands):

As of the end of the second quarter of fiscal 2005, the Company had no borrowings outstanding under its Revolving Credit Facility and $4.8 million of stand-by letters of credit outstanding, resulting in $30.2 million of availability under its Revolving Credit Facility. Availability of funds under the senior credit facility is subject to certain customary terms and conditions.


Maturities by year
2006	$	2,386
2007		3,442
2008		3,553
2009		3,674
2010		234,076
2011 and thereafter		316,640

Total	$	563,771

AsThe ofCompany ~~the~~is ~~end~~highly ofleveraged ~~the~~and ~~second~~has ~~quarter~~significant ofcash ~~fiscal~~requirements ~~2005~~for debt service relating to its senior credit facility, senior notes, senior subordinated notes, industrial development revenue bonds and foreign debt. The Company’s ability to incur additional indebtedness is limited by the ~~principal~~senior ~~amounts~~credit ~~due~~facility, ~~under~~including compliance with the financial covenants therein, and by the indentures governing the senior notes and senior subordinated notes. The Company’s ~~long-term~~principal ~~debt~~sources of liquidity are cash flows from its business and future borrowings under its revolving credit facility. The Company was in compliance with the ~~respective~~financial ~~final~~covenants ~~maturity~~of its ~~dates~~debt ~~were~~agreements as ~~follows~~of ~~(in~~the ~~thousands):~~end of the first quarter of fiscal 2006.

		Maturities by fiscal year
												2010 and
	Final maturity	2005		2006		2007		2008		2009		thereafter		Total
Term loan facility	February 13, 20071	$	975	$	1,950	$	190,613	$	—	$	—	$	—	$	193,538
Senior notes	March 1, 2010		—		—		—		—		—		211,323		211,323
Senior subordinated notes	May 15, 2007		—		—		149,326		—		—		—		149,326
Other	Various		756		1,572		2,005		2,141		2,282		17,833		26,589
			1,731		3,522		341,944		2,141		2,282		229,156		580,776
Senior preferred stock	September 30, 2007		—		—		114,874		—		—		—		114,874
Total		$	1,731	$	3,522	$	456,818	$	2,141	$	2,282	$	229,156	$	695,650

(5) Accrued Restructuring Costs

1 A ~~The~~rollforward of the Company’s ~~senior~~accrued ~~credit~~restructuring ~~facility~~costs ~~matures~~for on the ~~earlier~~first ofquarter ~~November 5, 2009 or 91 days prior to the maturity~~ of fiscal ~~the~~2006 ~~senior~~follows ~~subordinated notes due May 15, 2007~~ (asin ~~may be refinanced, extended, or renewed~~thousands)~~, unless terminated sooner upon an event of default.~~:

The Company is highly leveraged and has significant cash requirements for debt service relating to its senior credit facility, senior notes, senior subordinated notes, industrial development revenue bonds and foreign debt. The Company’s ability to borrow is limited by its senior credit facility, including compliance with the financial covenants therein, and the limitations on the incurrence of additional indebtedness in the indentures governing the Company’s senior notes and senior subordinated notes. The Company was in compliance with the financial covenants in its senior credit facility as of the end of the second quarter of fiscal 2005.


	First quarter
	2006
Successor balance at the end of 2005	$	1,707
Severance		203
Plant costs		394
Cash payments		(993	)

Successor balance at the end of the first quarter 2006	$	1,311

( During the first quarter of fiscal 2006, the Company made payments of $0.6) million ~~Restructuring~~for severance ~~Activities~~costs and $0.4 million for costs primarily associated with plant closures in connection with its fiscal 2005 cost savings initiatives.

InAs anof ~~effort to reduce manufacturing costs and increase operating efficiencies,~~ the ~~Company~~ ~~closed its Cartersville, Georgia manufacturing facility at the~~ end of the ~~second~~ first quarter of fiscal ~~2005.~~2006, Inthe ~~connection~~future ~~with~~expected ~~the~~payout ~~plant~~of ~~closure,~~ the Company ~~recorded non-cash~~’s ~~asset~~accrued ~~impairments~~restructuring ofcosts, ~~$1.1 million~~which inconsist ~~other~~primarily ~~operating~~of ~~expense~~severance ~~(income),~~associated ~~net.~~with Inits ~~addition,~~fiscal ~~the~~2005 ~~Company~~cost ~~expects~~savings toinitiatives, ~~incur~~follows ~~total~~(in ~~cash charges of approximately $0.2 million related to severance and~~thousands): ~~carrying costs.~~


Years ending	Payout
2006	$	871
2007		440

Total	$	1,311

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~A rollforward of the Company’s accrued restructuring costs for the first six months of fiscal 2005 follows~~ (~~in thousands~~6): Income Taxes

	First six months
	2005
Balance at end of fiscal 2004	$	722
Severance		36
Revisions to estimates		(15	)
Cash payments		(415	)
Balance at end of second quarter 2005	$	328

Income tax expense recognized in each of the first quarters of fiscal 2006 and 2005 differs from that computed using the statutory U.S. federal income tax rate of 35% primarily due to U.S. state and local income taxes, foreign income taxes, the non-tax deductibility of dividends on the Company’s senior preferred stock prior to its redemption in fiscal 2005, and changes in the valuation allowances against the Company’s deferred tax assets that are not considered recoverable through known reversals of deferred tax liabilities.

~~During~~(7) Stock ~~the~~Option ~~first~~Plan ~~six months~~ of ~~fiscal~~Doane ~~2005, the Company made payments of $0.4 million for~~Enterprises ~~severance costs related to the European restructuring plan which was completed in fiscal 2004.~~

AsIn connection with the Teachers’ Acquisition, Doane Enterprises terminated its previous stock option plans and adopted a new stock option plan on October 24, 2005, the Doane Pet Care Enterprises, Inc. Stock Incentive Plan (the 2005 Stock Incentive Plan), which covers certain employees of the ~~end~~Company. Under the 2005 Stock Incentive Plan, a total of 9.5%, or 326,175 shares, of the ~~second~~fully-diluted ~~quarter~~Class A common stock of Doane Enterprises are available for option grants. In fiscal 2005, the ~~future~~Company ~~expected~~granted ~~payout~~options for 272,688 of the total authorized shares to management and other key employees of the Company’s ~~accrued~~with ~~restructuring~~an ~~costs~~exercise price of $100 per share, which ~~consist~~was ~~primarily~~equal to the fair value of ~~severance~~the ~~associated~~common ~~with~~stock on the date of the respective grants. These options have a ~~European~~10-year ~~restructuring,~~life ~~follows~~and (vest ratably in ~~thousands):~~five equal installments on each of the first five anniversaries of the effective date of such grants with the potential for accelerated vesting upon a change of control of Doane Enterprises.

Fiscal years ending	Payout
2005	$	269
2006		59
Total	$	328

The Company adopted Statement of Financial Accounting Standards, No. 123 (revised 2004), Share Based Payment, or SFAS 123R, as of the beginning of the first quarter of fiscal 2006. The Company meets the nonpublic entity criteria under SFAS 123R and adopted SFAS 123R using the modified prospective method. The grant-date fair value of awards of the Company’s stock options were calculated based on the effective date of such grants using the Black Scholes option-pricing model and assumptions of a weighted-average risk-free rate of return of 4.7%, which is based on the U.S. Treasury yield curve in effect at the grant date, an expected life for options outstanding of six years, no payments of dividends, and expected volatility of 28%, which is based on an historical volatility index of comparable public companies in the Company’s industry sector. The expected term of stock options granted represents the period of time that stock options granted are expected to be outstanding.

~~(7) Comprehensive~~ A ~~Loss~~summary of options outstanding under the 2005 Stock Incentive Plan follows:

The components of comprehensive loss were as follows (in thousands):


					Weighted-average
			Weighted-average		remaining
	Number of		exercise		contractual
	options		price		life
Options outstanding at the end of 2005		272,668	$	100		9.8
Options outstanding at the end of the first quarter 2006		272,668		100		9.6
Options exerciseable at the end of the first quarter 2006		—		—		—

	Second quarter						First six months
	2005			2004			2005			2004
Net loss	$	(7,547	)	$	(17,737	)	$	(371	)	$	(25,544	)
Foreign currency translation		(17,625	)		(873	)		(30,079	)		(4,907	)
Total	$	(25,172	)	$	(18,610	)	$	(30,450	)	$	(30,451	)

In the first quarter of fiscal 2006, the Company had non-cash stock-based compensation expense of $0.5 million in accordance with SFAS 123R, which was recognized in selling, general and administrative expenses in the Company’s consolidated statement of operations with an offsetting increase in additional paid-in-capital on the Company’s consolidated balance sheet. No options were granted, exercised or forfeited under the 2005 Stock Incentive Plan during the first quarter of fiscal 2006. Total compensation cost that has not yet been recognized as of the end of the first quarter of fiscal 2006 related to these outstanding options is $8.7 million and the weighted-average period over which it will be recognized is 4.6 years.

~~(8)~~ Prior to the adoption of SFAS 123R on January 1, 2006, the Company and Doane Enterprises followed Accounting Principles Board Opinion No. 25, Accounting for Stock ~~Option~~Issued ~~Plan~~to ofEmployees, ~~Parent~~as permitted by SFAS No. 123, Accounting for Stock-Based Compensation, or SFAS 123, to account for fixed stock awards granted to employees. Using the intrinsic value method, the Company did not recognize any compensation expense in the first

The Company and its Parent, Doane Pet Care Enterprises, Inc., have elected to continue to follow APB 25 to account for fixed stock awards granted to employees. However, if the Company and its Parent adopted SFAS 123 to account for fixed stock awards granted to employees, the Company’s net loss for the second quarter and first six months of fiscal 2005 and 2004 would have been adjusted as follows (in thousands):

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Second quarter						First six months
	2005			2004			2005			2004
Net loss, as reported	$	(7,547	)	$	(17,737	)	$	(371	)	$	(25,544	)
Less: Stock-based employee compensation expense determined based on the fair value method for all awards		—			(1	)		(1	)		(2	)
Pro forma net loss	$	(7,547	)	$	(17,738	)	$	(372	)	$	(25,546	)

quarter of 2005. The following table shows pro forma net income for the first quarter of fiscal 2005 as if the Company had adopted SFAS 123 to account for stock options granted to employees (in thousands):

At the end of the second quarter of fiscal 2005 and 2004, Parent had total options outstanding of 3,685,960 and 4,048,850, respectively, under its stock option plans. There were no new stock options granted during the first six months of fiscal 2005.


	Predecessor
	first quarter
	2005
Net income as reported	$	7,176
Less: Non-cash stock-based compensation expense determined based on the fair value method for all awards		(1	)

Pro forma net income	$	7,175

(98) ~~Pension~~Benefit ~~and Postretirement~~ Plans

~~The~~As ~~Company~~of ~~has~~the aend ~~defined~~of ~~benefit,~~the ~~non-contributory~~first ~~inactive~~quarter ~~pension~~of ~~plan~~fiscal ~~which~~2006, ~~was frozen~~the onCompany’s ~~May 28,~~pension ~~1998.~~plans Asconsist of (1) a ~~result~~defined benefit, ~~future~~non-contributory ~~benefits~~inactive nopension ~~longer~~plan, ~~accumulate~~(2) an ~~and~~active ~~the~~pension ~~Company~~plan ~~no longer~~covering ~~incurs~~approximately ~~service~~40 ~~cost~~union ~~related~~employees toat ~~the~~one ~~plan.~~facility, ~~The~~(3) salary ~~Company’s~~continuation ~~funding~~agreements ~~policy~~with ~~for this inactive plan is to~~14 ~~make~~persons, ~~the~~(4) a ~~minimum~~deferred ~~annual~~compensation ~~contribution~~agreement ~~required~~with bya ~~applicable~~former ~~regulations.~~employee, ~~The~~and ~~Company’s~~(5) a ~~only~~new ~~active~~supplemental ~~pension~~executive retirement plan ~~covers~~covering 42five ~~union~~ employees atpreviously ~~one~~covered ofby ~~its~~salary ~~facilities~~continuation agreements. The Company also has a postretirement healthcare plan that provides medical coverage for eligible retirees and their dependents. ~~The Company pays benefits under this plan when due and does not fund its plan~~ ~~obligations as they accrue; therefore, there are no plan assets. The information below has been determined based on the six months ending June 30, 2005 and 2004, respectively.~~

AOn ~~summary~~March 27, 2006, the Company modified its supplemental retirement benefits for certain members of ~~net~~senior ~~periodic~~management ~~cost~~with ~~follows~~salary (continuation agreements by adopting a Supplemental Executive Retirement Plan, or the SERP. Pursuant to the terms of the SERP, a participant becomes 100% vested in ~~thousands):~~his or her SERP benefits upon the earlier of his or her completion of five years of service with the Company or its affiliates or attainment of age 65. If a vested participant terminates employment prior to attaining age 65, the participant’s SERP benefit will commence on the later of his or her separation from service with the Company or its affiliates or attainment of age 55. The SERP also includes a pre-retirement death benefit such that, in the event of the participant’s death after completing five years of service and prior to the commencement of retirement benefits under the SERP, the participant’s beneficiary will receive a monthly benefit for life.

	Pension benefits
	Second quarter						First six months
	2005			2004			2005			2004
Service cost	$	9		$	9		$	18		$	18
Interest cost		254			270			507			540
Expected return on plan assets		(344	)		(347	)		(689	)		(693	)
Recognition of actuarial loss		168			169			336			338
Amortization of prior service cost		2			3			5			5
Amortization of transition obligation		1			1			2			2
Net periodic pension cost	$	90		$	105		$	179		$	210

The Company uses a calendar-year basis for measurement of its benefit plans. A summary of net periodic costs for the Company’s pension and other postretirement plans for the first quarters ended March 31, 2006 and 2005 follows (in thousands):

	Postretirement benefits
	Pension benefits								Other postretirement benefits
	Second quarter							First six months
	Successor				Predecessor				Successor				Predecessor
	2005			2004				2005			2004
	first quarter				first quarter				first quarter				first quarter
Service cost	$	5		$	3			$	8		$	7
	2006				2005				2006				2005
Interest cost		45			75				103			150
Service cost	$	37			$	9			$	11			$	3
Recognition of actuarial loss		28			27				63			54
Interest cost		304				253				50				58
Amortization of prior service benefit		(61	)		(13	)			(122	)		(26	)
Expected return on plan assets		(330	)			(345	)			—				—
Net periodic postretirement cost	$	17		$	92			$	52		$	185
Recognition of actuarial loss		—				168				—				35
Amortization		—				4				—				(61	)
Net periodic cost	$	11			$	89			$	61			$	35

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(109) Major Customer

~~For~~In ~~both~~ the first ~~six~~quarters ~~months~~ of fiscal ~~2005~~2006 and ~~2004~~2005, the same customer, based in the United States, accounted for 42% and 44%, respectively, of the Company’s net sales in ~~the~~its ~~accompanying~~consolidated statements ~~unaudited~~of ~~condensed~~operations. The Company’s customer relationship intangible asset with an indefinite useful life in its consolidated ~~statements~~balance ofsheet is based on its relationship with this customer’s ~~operations~~primary operating division in the United States. The Company does not have a long-term contract with this customer. Trade accounts receivable with this customer were 3430% and 3533% of ~~consolidated~~ accounts receivable, net, in the ~~accompanying~~ ~~unaudited condensed~~ consolidated balance sheets as of the end of the ~~second~~first quarter of fiscal 2006 ~~2005~~ and the end of fiscal ~~2004~~2005, respectively. The loss of this customer, or a significant decrease or change in business with this customer, would have a material adverse impact on the Company’s financial position, results of operations and liquidity.

(1110) Commitments and Contingencies

The Company is a party, in the ordinary course of business, to claims and litigation. In management’s opinion, the resolution of such matters is not expected to have a material impact on the future financial condition, results of operations or cash flows of the Company.

The employees at the Company’s Joplin, Missouri facility went on strike on February 18, 2006, following the expiration of the collective bargaining agreement covering such employees. Certain permanent replacement workers hired by the Company during the strike filed a petition with the National Labor Relations Board to decertify the union as the bargaining representative of the Joplin employees on May 4, 2006. The union accepted the collective bargaining agreement last proposed by the Company, and such agreement was ratified by the employees who were on strike on May 5, 2006. Nevertheless, the petition to decertify the union will proceed, with the vote to include both the formerly striking employees and the permanent replacement workers. No election date has been set.

The Joplin employees are entitled to certain pension benefits under a multiemployer pension plan. If the employees vote to decertify the union at the Joplin facility, the Company may incur a withdrawal liability to the union’s multiemployer pension plan. The amount of such withdrawal liability and the schedule of the annual payments required to satisfy such liability would be calculated by the union pension plan if there is a successful decertification election and the Company no longer has any obligation to contribute to such plan. While the exact amount of any such withdrawal liability depends on the financial status of the union pension plan at the time of the Company’s withdrawal, in December 2005, such liability was estimated to be approximately $3.4 million.

(11) Subsequent Event

On April 25, 2006, Doane Pet Care Company and Doane Enterprises entered into an Agreement and Plan of Merger, or the Merger Agreement, with Mars, Incorporated, or Mars, pursuant to which a newly-formed subsidiary of Mars, MVA I Corp., a Delaware corporation, or MVA I, will acquire Doane Enterprises from OTPP. Upon completion of the transaction, Mars intends to integrate the Company’s United States-based operations into its existing pet food business and sell the Company’s European-based operations to a third party. The acquisition of Doane Enterprises’ outstanding stock by Mars will be effected through the merger of MVA I with and into Doane Enterprises. In accordance with the Merger Agreement, consummation of the transaction is subject to customary terms and conditions, including, but not limited to, regulatory approvals.

Completion of the transaction will constitute a change of control of the Company, triggering repayment or redemption obligations under the Company’s senior credit facility and governing documents of certain of its securities. In connection with, and subject to consummation of, the transaction, the Company commenced tender offers for all of its senior notes and its senior subordinated notes on May 12, 2006. The Company also solicited consents to certain amendments to the indentures for those notes. Subject to the terms and conditions of the tender offers and consent solicitations, the total consideration to be paid for each validly tendered senior note and senior subordinated note will be paid in cash and calculated based in part on the present value of the required payments to, and the redemption premium payable as of March 1, 2007 (in the case of the senior notes) and November 15, 2010 (in the case of the senior subordinated notes) and a discount rate equal to the yield of the 3.375% U.S. Treasury Security due February 28, 2007 (in the case of the senior notes) and the 4.5% U.S. Treasury Security due November 15, 2010 (in the case of the senior subordinated notes), plus in each case 50 basis points.

(12) Financial Information Related to Guarantor Subsidiaries

The Company’s guarantor subsidiaries are wholly-owned domestic subsidiaries who have jointly and severally guaranteed on a full and unconditional basis all of the Company’s senior notes and senior subordinated notes. The guarantor subsidiaries are minor subsidiaries of the Company’s domestic operations that have no material operations of their own; therefore, no separate information for these subsidiaries is presented. The financial information presented below in the guarantor columns is substantially that of the Company, excluding its European operations. ~~The~~and DIPP (upon consolidation). The financial information presented below in the non-guarantor columns consist of the Company’s non-guarantor subsidiaries, which are its wholly-owned European subsidiaries. ~~See~~and ~~Note~~its 8,domestic ~~Long~~majority-~~Term~~owned ~~Debt and Liquidity~~subsidiary, inDIPP ~~the~~(upon ~~Company’s 2004 10-K~~consolidation).

Unaudited condensed consolidated financial information for the guarantor and non-guarantor subsidiaries follows (in thousands, except share and par value amounts):

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

~~Unaudited~~ In ~~Condensed~~the ~~Consolidated~~first ~~Balance~~quarter ~~Sheets~~of fiscal 2006, the Company reallocated goodwill recorded in connection ~~For~~with ~~The~~the ~~Guarantor~~Teachers’ Acquisition between its guarantor and ~~Non~~non-~~Guarantor~~guarantor ~~Subsidiaries~~subsidiaries. As a result, goodwill allocated to the Company’s guarantor subsidiaries increased by $34.1 million and goodwill allocated to its non-guarantor subsidiaries decreased by the same amount from the reported amounts in the Company’s 2005 consolidated financial statements and related notes.

	End of second quarter 2005
				Non-			Intercompany
	Guarantor			guarantor			eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	33,177		$	3,854		$	—		$	37,031
Accounts receivable, net		40,781			50,710			—			91,491
Inventories, net		40,004			27,653			—			67,657
Deferred tax assets		1,935			—			—			1,935
Prepaid expenses and other current assets		9,880			1,200			—			11,080
Total current assets		125,777			83,417			—			209,194
Property, plant and equipment, net		142,346			94,491			—			236,837
Goodwill and other intangible assets		267,780			108,593			—			376,373
Other assets		273,378			12,565			(256,555	)		29,388
Total assets	$	809,281		$	299,066		$	(256,555	)	$	851,792
LIABILITIES AND STOCKHOLDER’S (DEFICIT) EQUITY
Current liabilities:
Current maturities of long-term debt	$	1,950		$	1,566		$	—		$	3,516
Accounts payable		48,848			35,210			—			84,058
Accrued liabilities		36,950			13,748			—			50,698
Total current liabilities		87,748			50,524			—			138,272
Long-term debt:
Long-term debt, excluding current maturities		566,736			154,495			(143,971	)		577,260
Senior Preferred Stock (Redeemable), 3,000,000 shares authorized, 1,200,000 shares issued and outstanding, $118,987 current redemption value		114,874			—			—			114,874
Total long-term debt		681,610			154,495			(143,971	)		692,134
Deferred tax liabilities		32,333			2,535			—			34,868
Other long-term liabilities		9,842			—			—			9,842
Total liabilities		811,533			207,554			(143,971	)		875,116
Commitments and contingencies
Stockholder’s (deficit) equity:
Common stock, $0.01 par value; 1,000 shares authorized, issued and outstanding		—			—			—			—
Additional paid-in-capital		115,674			95,861			(95,861	)		115,674
Accumulated other comprehensive (loss) income		(24,555	)		73,849			(16,723	)		32,571
Accumulated deficit		(93,371	)		(78,198	)		—			(171,569	)
Total stockholder’s (deficit) equity		(2,252	)		91,512			(112,584	)		(23,324	)
Total liabilities and stockholder’s (deficit) equity	$	809,281		$	299,066		$	(256,555	)	$	851,792

Unaudited condensed consolidated financial information follows (in thousands, except share amounts):

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited Condensed Consolidated Balance Sheets ~~For The Guarantor and Non-Guarantor Subsidiaries~~

	End of fiscal 2004
				Non-			Intercompany
	Guarantor			guarantor			eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	24,963		$	3,884		$	—		$	28,847
Accounts receivable, net		48,660			63,785			—			112,445
Inventories, net		39,406			28,915			—			68,321
Deferred tax assets		2,414			—			—			2,414
Prepaid expenses and other current assets		6,128			910			—			7,038
Total current assets		121,571			97,494			—			219,065
Property, plant and equipment, net		147,293			110,777			—			258,070
Goodwill and other intangible assets		267,780			122,691			—			390,471
Other assets		267,224			14,436			(247,360	)		34,300
Total assets	$	803,868		$	345,398		$	(247,360	)	$	901,906
LIABILITIES AND STOCKHOLDER’S (DEFICIT) EQUITY
Current liabilities:
Current maturities of long-term debt	$	1,950		$	1,723		$	—		$	3,673
Accounts payable		52,131			50,018			—			102,149
Accrued liabilities		46,623			12,616			—			59,239
Total current liabilities		100,704			64,357			—			165,061
Long-term debt, excluding current maturities		567,347			165,574			(152,831	)		580,090
Senior Preferred Stock (Redeemable), 3,000,000 shares authorized, 1,200,000 shares issued and outstanding, $110,942 current redemption value		106,421			—			—			106,421
Total long-term debt		673,768			165,574			(152,831	)		686,511
Deferred tax liabilities		30,714			2,927			—			33,641
Other long-term liabilities		9,567			—			—			9,567
Total liabilities		814,753			232,858			(152,831	)		894,780
Commitments and contingencies
Stockholder’s (deficit) equity:
Common stock, $0.01 par value; 1,000 shares authorized, issued and outstanding		—			—			—			—
Additional paid-in-capital		115,674			95,861			(95,861	)		115,674
Accumulated other comprehensive (loss) income		(24,555	)		85,873			1,332			62,650
Accumulated deficit		(102,004	)		(69,194	)		—			(171,198	)
Total stockholder’s (deficit) equity		(10,885	)		112,540			(94,529	)		7,126
Total liabilities and stockholder’s (deficit) equity	$	803,868		$	345,398		$	(247,360	)	$	901,906

For The Guarantor and Non-Guarantor Subsidiaries


	Successor end of first quarter 2006
							Intercompany
	Guarantor			Non-guarantor			eliminations			Consolidated
ASSETS

Current assets:
Cash and cash equivalents	$	59		$	11,215		$	—		$	11,274
Accounts receivable, net		40,326			53,597			(343	)		93,580
Inventories		42,906			30,514			—			73,420
Deferred tax assets		5,394			—			—			5,394
Prepaid expenses and other current assets		7,549			2,592			—			10,141

Total current assets		96,234			97,918			(343	)		193,809

Property, plant and equipment, net		182,913			97,306			—			280,219
Intangible assets, net		220,364			65,918			—			286,282
Goodwill		224,234			100,716			—			324,950
Other assets		311,438			5,979			(295,855	)		21,562

Total assets	$	1,035,183		$	367,837		$	(296,198	)	$	1,106,822


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Current maturities of long-term debt	$	1,608		$	1,616		$	—		$	3,224
Accounts payable		43,052			34,515			(343	)		77,224
Accrued liabilities		38,933			15,173			—			54,106

Total current liabilities		83,593			51,304			(343	)		134,554

Long-term debt, excluding current maturities		551,337			209,613			(200,403	)		560,547
Deferred tax liabilities		92,234			7,762			—			99,996
Other long-term liabilities		9,481			1,063			—			10,544

Total liabilities		736,645			269,742			(200,746	)		805,641

Commitments and contingencies

Stockholders’ equity:
Class A common stock, $0.01 par value; 2,000 shares authorized; 1,001 shares issued and outstanding		—			—			—			—
Class B common stock, $0.01 par value; 100 shares authorized; 71.32 shares issued and outstanding		—			—			—			—
Additional paid-in-capital		303,514			95,712			(95,712	)		303,514
Accumulated other comprehensive income (loss)		(809	)		4,666			—			3,857
Accumulated deficit		(4,167	)		(2,283	)		260			(6,190	)

Total stockholders’ equity		298,538			98,095			(95,452	)		301,181

Total liabilities and stockholders’ equity	$	1,035,183		$	367,837		$	(296,198	)	$	1,106,822

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited Condensed Consolidated ~~Statements~~Balance ~~of Operations For The Guarantor and Non-Guarantor Subsidiaries~~ Sheets

	Second quarter 2005
				Non-
	Guarantor			guarantor			Consolidated
Net sales	$	172,506		$	71,366		$	243,872
Cost of goods sold		144,383			56,768			201,151
Gross profit		28,123			14,598			42,721
Operating expenses:
Promotion and distribution		6,177			8,552			14,729
Selling, general and administrative		8,723			4,088			12,811
Amortization		816			208			1,024
Other operating expense (income), net		1,816			(11	)		1,805
Income from operations		10,591			1,761			12,352
Interest expense, net		12,617			6,414			19,031
Other (income) expense, net		(791	)		343			(448	)
Loss before income taxes		(1,235	)		(4,996	)		(6,231	)
Income tax expense		1,049			267			1,316
Net loss	$	(2,284	)	$	(5,263	)	$	(7,547	)

For The Guarantor and Non-Guarantor Subsidiaries

	Second quarter 2004
	Successor end of 2005
				Non-
							Intercompany
	Guarantor			Non-guarantor			~~Consolidated~~eliminations			Consolidated
Net sales	$	192,502		$	65,836		$	258,338
ASSETS
Cost of goods sold		173,380			51,821			225,201
Current assets:
Gross profit		19,122			14,015			33,137
Cash and cash equivalents	$	479		$	7,742		$	—		$	8,221
Operating expenses:
Accounts receivable, net		48,238			56,831			—			105,069
Promotion and distribution		6,580			7,187			13,767
Inventories		36,913			28,256			—			65,169
Selling, general and administrative		8,673			4,130			12,803
Deferred tax assets		5,394			—			—			5,394
Amortization		935			199			1,134
Prepaid expenses and other current assets		7,586			1,188			—			8,774
Other operating expenses		—			3,938			3,938
Total current assets		98,610			94,017			—			192,627
Income from operations		2,934			(1,439	)		1,495
Property, plant and equipment, net		187,048			97,940			—			284,988
Interest expense, net		12,205			5,981			18,186
Intangible assets, net		221,812			65,561			—			287,373
Other (income) expense, net		(521	)		190			(331	)
Goodwill		222,872			98,243			—			321,115
Loss before income taxes		(8,750	)		(7,610	)		(16,360	)
Other assets		311,009			7,941			(295,715	)		23,235
Income tax expense		1,070			307			1,377
Total assets	$	1,041,351		$	363,702		$	(295,715	)	$	1,109,338
Net loss	$	(9,820	)	$	(7,917	)	$	(17,737	)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt	$	1,596		$	1,562		$	—		$	3,158
Accounts payable		41,139			38,845			—			79,984
Accrued liabilities		44,844			11,927			—			56,771
Total current liabilities		87,579			52,334			—			139,913
Long-term debt, excluding current maturities		551,712			209,409			(200,003	)		561,118
Deferred tax liabilities		90,956			7,804			—			98,760
Other long-term liabilities		8,264			—			—			8,264
Total liabilities		738,511			269,547			(200,003	)		808,055
Commitments and contingencies
Stockholders’ equity:
Class A common stock, $0.01 par value; 2,000 shares authorized; 1,001 shares issued and outstanding		—			—			—			—
Class B common stock, $0.01 par value; 100 shares authorized; 71.32 shares issued and outstanding		—			—			—			—
Additional paid-in-capital		303,059			95,712			(95,712	)		303,059
Accumulated other comprehensive income (loss)		382			(1,374	)		—			(992	)
Accumulated deficit		(601	)		(183	)		—			(784	)
Total stockholders’ equity		302,840			94,155			(95,712	)		301,283
Total liabilities and stockholders’ equity	$	1,041,351		$	363,702		$	(295,715	)	$	1,109,338

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited Condensed Consolidated Statements of Operations ~~For The Guarantor and Non-Guarantor Subsidiaries~~

	First six months 2005
				Non-
	Guarantor			guarantor			Consolidated
Net sales	$	367,127		$	143,881		$	511,008
Cost of goods sold		302,270			113,914			416,184
Gross profit		64,857			29,967			94,824
Operating expenses:
Promotion and distribution		12,734			16,425			29,159
Selling, general and administrative		17,590			8,340			25,930
Amortization		1,765			425			2,190
Other operating income, net		(1,439	)		(272	)		(1,711	)
Income from operations		34,207			5,049			39,256
Interest expense, net		24,605			13,072			37,677
Other (income) expense, net		(1,129	)		436			(693	)
Income (loss) before income taxes		10,731			(8,459	)		2,272
Income tax expense		2,098			545			2,643
Net income (loss)	$	8,633		$	(9,004	)	$	(371	)

For The Guarantor and Non-Guarantor Subsidiaries

	First six months 2004
	Successor first quarter 2006
				Non-
							Intercompany
	Guarantor			Non-guarantor			~~Consolidated~~eliminations			Consolidated
Net sales	$	~~391~~167,~~940~~381		$	~~137~~70,~~278~~730		$	~~529,218~~(387	)	$	237,724
Cost of goods sold		~~346~~143,~~716~~220			~~108~~58,~~547~~182			~~455,263~~(387	)		201,015
Gross profit		4524,~~224~~161			2812,~~731~~548			~~73,955~~—			36,709
Operating expenses:
Promotion and distribution		136,~~355~~540			146,~~639~~737			~~27,994~~—			13,277
Selling, general and administrative		178,~~106~~564			84,~~880~~415			~~25,986~~—			12,979
Amortization		1,~~956~~969			~~407~~1,129			~~2,363~~—			3,098
Other operating (income) expense, net		(415	)		5,576			5,161
Other operating expense, net		269			286			—			555
Income (loss) from operations		136,~~222~~819			(~~771~~19	)		~~12,451~~—			6,800
Interest expense, net		239,~~956~~520			122,~~207~~432			~~36,163~~—			11,952
Other (income) expense, net		(1,134	)		396			(738	)
Other expense (income), net		(185	)		234			—			49
Loss before income taxes		(92,~~600~~516	)		(132,~~374~~685	)		~~(22,974~~—	)		(5,201	)
Income tax expense		2,001			569			2,570
Income tax expense (income)		1,050			(845	)		—			205
Net loss	$	(113,~~601~~566	)	$	(131,~~943~~840	)	$	~~(25,544~~—	)	$	(5,406	)


	Predecessor first quarter 2005
	Guarantor			Non-guarantor			Consolidated
Net sales	$	194,621		$	72,515		$	267,136
Cost of goods sold		157,887			57,146			215,033

Gross profit		36,734			15,369			52,103
Operating expenses:
Promotion and distribution		6,557			7,873			14,430
Selling, general and administrative		8,867			4,252			13,119
Amortization		949			217			1,166
Other operating income, net		(3,255	)		(261	)		(3,516	)

Income from operations		23,616			3,288			26,904
Interest expense, net		11,988			6,658			18,646
Other expense (income), net		(338	)		93			(245	)

Income (loss) before income taxes		11,966			(3,463	)		8,503
Income tax expense		1,049			278			1,327

Net income (loss)	$	10,917		$	(3,741	)	$	7,176

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited Condensed Consolidated Statements of Cash Flows ~~For The Guarantor and Non-Guarantor Subsidiaries~~

	First six months 2005
				Non-
	Guarantor			guarantor			Consolidated
Cash flows from operating activities:
Net income (loss)	$	8,633		$	(9,004	)	$	(371	)
Items not requiring (providing) cash:
Depreciation and amortization		11,395			8,688			20,083
Deferred income tax expense (benefit)		2,098			(56	)		2,042
Asset impairments		1,129			—			1,129
Other non-cash expense (income), net		11,120			(172	)		10,948
Changes in current assets and liabilities		(18,339	)		5,782			(12,557	)
Net cash provided by operating activities		16,036			5,238			21,274
Cash flows from investing activities:
Capital expenditures		(6,044	)		(4,088	)		(10,132	)
Other, net		(781	)		38			(743	)
Net cash used in investing activities		(6,825	)		(4,050	)		(10,875	)
Cash flows from financing activities:
Principal payments on long-term debt		(975	)		(793	)		(1,768	)
Payments for debt issuance costs		(22	)		—			(22	)
Net cash used in financing activities		(997	)		(793	)		(1,790	)
Effect of exchange rate changes on cash and cash equivalents		—			(425	)		(425	)
Increase (decrease) in cash and cash equivalents		8,214			(30	)		8,184
Cash and cash equivalents, beginning of period		24,963			3,884			28,847
Cash and cash equivalents, end of period	$	33,177		$	3,854		$	37,031

For The Guarantor and Non-Guarantor Subsidiaries


	Successor first quarter 2006
	Guarantor			Non-guarantor			Consolidated
Cash flows from operating activities:
Net loss	$	(3,566	)	$	(1,840	)	$	(5,406	)
Items not requiring (providing) cash:
Depreciation and amortization		8,361			4,874			13,235
Deferred tax expense		1,050			20			1,070
Other non-cash charges (income), net		(3,081	)		2,566			(515	)
Changes in current assets and liabilities		(6,244	)		(1,994	)		(8,238	)

Net cash provided by (used in) operating activities		(3,480	)		3,626			146

Cash flows from investing activities:
Capital expenditures		(2,277	)		(1,047	)		(3,324	)
Acquisition of business, including cash acquired		(276	)		4,014			3,738
Other, net		1,951			(2,463	)		(512	)

Net cash provided by (used in) investing activities		(602	)		504			(98	)

Cash flows from financing activities:
Change in book overdraft		4,228			—			4,228
Repayments on long-term debt		(401	)		(389	)		(790	)
Other		(165	)		(368	)		(533	)

Net cash provided by (used in) financing activities		3,662			(757	)		2,905

Effect of exchange rate changes on cash and cash equivalents		—			100			100

Increase (decrease) in cash and cash equivalents		(420	)		3,473			3,053
Cash and cash equivalents, beginning of period		479			7,742			8,221

Cash and cash equivalents, end of period	$	59		$	11,215		$	11,274

DOANE PET CARE COMPANY AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Unaudited Condensed Consolidated Statements of Cash Flows ~~For The Guarantor and Non-Guarantor Subsidiaries~~

	First six months 2004
				Non-
	Guarantor			guarantor			Consolidated
Cash flows from operating activities:
Net loss	$	(11,601	)	$	(13,943	)	$	(25,544	)
Items not requiring (providing) cash:
Depreciation and amortization		11,640			8,523			20,163
Deferred income tax expense		2,001			64			2,065
Asset impairments		420			—			420
Other non-cash expense (income), net		9,359			(103	)		9,256
Changes in current assets and liabilities		(21,185	)		8,511			(12,674	)
Net cash (used in) provided by operating activities		(9,366	)		3,052			(6,314	)
Cash flows from investing activities:
Capital expenditures		(2,990	)		(2,136	)		(5,126	)
Other, net		(802	)		398			(404	)
Net cash used in investing activities		(3,792	)		(1,738	)		(5,530	)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt		—			13,078			13,078
Principal payments on long-term debt		(3,220	)		(14,056	)		(17,276	)
Payments for debt issuance costs		(3,002	)		—			(3,002	)
Net cash used in financing activities		(6,222	)		(978	)		(7,200	)
Effect of exchange rate changes on cash and cash equivalents		—			(187	)		(187	)
(Decrease) increase in cash and cash equivalents		(19,380	)		149			(19,231	)
Cash and cash equivalents, beginning of period		25,939			3,354			29,293
Cash and cash equivalents, end of period	$	6,559		$	3,503		$	10,062

For The Guarantor and Non-Guarantor Subsidiaries


	Predecessor first quarter 2005
	Guarantor			Non-guarantor			Consolidated
Cash flows from operating activities:
Net income (loss)	$	10,917		$	(3,741	)	$	7,176
Items not requiring (providing) cash:
Depreciation and amortization		5,730			4,310			10,040
Deferred tax expense (benefit)		1,049			(33	)		1,016
Other non-cash charges, net		2,633			2,544			5,177
Changes in current assets and liabilities		(17,309	)		(1,495	)		(18,804	)

Net cash provided by operating activities		3,020			1,585			4,605

Cash flows from investing activities:
Capital expenditures		(2,511	)		(2,020	)		(4,531	)
Other, net		(538	)		—			(538	)

Net cash used in investing activities		(3,049	)		(2,020	)		(5,069	)

Cash flows from financing activities:
Repayments on long-term debt		(488	)		(410	)		(898	)
Payments for debt issuance costs		(22	)		—			(22	)

Net cash used in financing activities		(510	)		(410	)		(920	)

Effect of exchange rate changes on cash and cash equivalents		—			117			117

Decrease in cash and cash equivalents		(539	)		(728	)		(1,267	)
Cash and cash equivalents, beginning of period		24,963			3,884			28,847

Cash and cash equivalents, end of period	$	24,424		$	3,156		$	27,580

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors
Doane Pet Care Company:

We have reviewed the accompanying condensed consolidated balance sheet of Doane Pet Care Company and subsidiaries (successor) as of ~~July~~April 21, ~~2005~~2006, the related condensed consolidated statements of ~~operations~~ operations for the three-month ~~and six-month~~ periods ended ~~July~~April 21, ~~2005~~2006 (successor period) and ~~July~~April 32, ~~2004~~2005 (predecessor period), the ~~related~~ condensed consolidated statement of ~~stockholder~~stockholders’s ~~(deficit)~~ equity and comprehensive loss ~~as of and~~ for the ~~six~~three-month period ended ~~July~~April 21, ~~2005~~2006 ~~and~~(successor ~~the~~period) ~~related~~and the condensed consolidated statements of cash flows for the ~~six~~three-month periods ended ~~July~~April 21, ~~2005~~2006 (successor period) and ~~July~~April 32, ~~2004~~2005 (predecessor period). These condensed consolidated financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

WeAs ~~have~~discussed ~~previously audited,~~ in ~~accordance~~Note ~~with~~2 ~~standards~~to of the ~~Public~~condensed ~~Company~~consolidated ~~Accounting~~financial ~~Oversight Board~~statements, ~~(United~~effective ~~States)~~October 24, 2005, ~~the~~Ontario ~~consolidated~~Teachers’ ~~balance~~Pension ~~sheet~~Plan ofBoard ~~Doane~~acquired ~~Pet~~beneficial ~~Care~~ownership ~~Company and subsidiaries as~~ of ~~January 1,~~substantially ~~2005,~~all ~~and~~ of the ~~related~~outstanding ~~consolidated~~capital ~~statements~~stock of ~~operations,~~the ~~stockholder~~Company’s ~~equity~~parent, ~~and comprehensive~~Doane ~~income~~Pet ~~(loss) and~~Care ~~cash~~Enterprises, ~~flows~~Inc., ~~for~~in ~~the~~a business ~~year~~combination ~~then~~accounted ~~ended~~for ~~(not~~as ~~presented~~a ~~herein);~~purchase. ~~and~~As ~~in our~~a ~~report~~result ~~dated~~of ~~March 30,~~the ~~2005~~acquisition, wethe ~~expressed an unqualified opinion on those~~ consolidated financial ~~statements.~~information ~~Our~~for ~~report~~the ~~refers~~periods toafter the ~~restatement~~acquisition of(referred ~~previously~~to ~~issued~~as ~~fiscal~~the ~~2003~~successor period) ~~consolidated~~is ~~financial~~presented ~~statements~~on ~~and~~ a ~~change~~different incost ~~accounting~~basis ~~for~~than ~~senior~~that ~~preferred~~for ~~stock. In our opinion,~~ the ~~information~~periods ~~set~~before ~~forth in~~ the ~~accompanying~~acquisition ~~condensed~~(referred to ~~consolidated balance sheet~~ as ~~of January 1,~~the ~~2005~~predecessor isperiod) ~~fairly stated~~and, ~~in all material respects~~therefore, inis ~~relation~~not ~~to the consolidated balance sheet from which it has been derived~~comparable.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Doane Pet Care Company and subsidiaries (successor) as of December 31, 2005, and the related consolidated statements of operations, stockholders’ equity and comprehensive income (loss) and cash flows for the period from October 24, 2005 to December 31, 2005 (successor period), and from January 2, 2005 to October 23, 2005 (predecessor period) (not presented herein); and in our report dated March 23, 2006, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2005 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

As discussed in Note 7 to the consolidated financial statements, effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004), Share Based Payment.

/s/ KPMG LLP

Nashville, Tennessee ~~August~~May 205, ~~2005~~2006

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

The reader is encouraged to refer to the accompanying unaudited condensed consolidated financial statements and related notes included elsewhere in this quarterly report on Form 10-Q and our audited consolidated financial statements and related notes in our ~~2004~~annual report on Form 10-K for the fiscal year ended December 31, 2005, or the 2005 10-K.

On October 24, 2005, Ontario Teachers’ Pension Plan Board, or OTPP, acquired beneficial ownership of substantially all of the outstanding capital stock of our parent corporation, Doane Pet Care Enterprises, Inc., or Doane Enterprises. In connection with the acquisition, we effected a series of recapitalization transactions. We refer to these transactions as the Teachers’ Acquisition, the Financing Transactions, and collectively, the Teachers’ Transactions. Our consolidated financial statements report periods up to and including October 23, 2005 as the predecessor periods, and the periods subsequent to October 23, 2005 as the successor periods. Accordingly, the discussion and analysis of historical periods prior to October 24, 2005 do not give effect to the Teachers’ Transactions.

Our fiscal year ends on the Saturday nearest to the end of December and our quarters end on the Saturday nearest to the end of the respective calendar month with the first quarters of fiscal 2006 and 2005 ending on April 1, 2006 and April 2, 2005, respectively.

Recent Developments

On April 25, 2006, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Mars, Incorporated, or Mars, pursuant to which a newly-formed subsidiary of Mars, MVA I Corp., a Delaware Corporation, or MVA I, will acquire Doane Enterprises from OTPP. Upon completion of the transaction, Mars intends to integrate our United States-based operations into its existing pet food business and sell our European-based operations to a third party. The acquisition of Doane Enterprises’ outstanding stock by Mars will be effected through the merger of MVA I with and into Doane Enterprises. In accordance with the Merger Agreement, consummation of the transaction is subject to customary terms and conditions, including, but not limited to, regulatory approvals.

Completion of the transaction will constitute a change of control of our company, triggering repayment or redemption obligations under our senior credit facility and governing documents of certain of our securities. In connection with, and subject to consummation of, the transaction, we commenced tender offers for all of our senior notes and senior subordinated notes on May 12, 2006. We also solicited consents to certain amendments to the indentures for those notes. Subject to the terms and conditions of the tender offer and consent solicitation, the total consideration to be paid for each validly tendered senior note and senior subordinated note will be paid in cash and calculated based in part on the present value of the required payments to, and the redemption premium payable as of March 1, 2007 (in the case of the senior notes) and November 15, 2010 (in the case of the senior subordinated notes) and a discount rate equal to the yield of the 3.375% U.S. Treasury Security due February 28, 2007 (in the case of the senior notes) and the 4.5% U.S. Treasury Security due November 15, 2010 (in the case of the senior subordinated notes), plus in each case 50 basis points.

Forward-Looking Statements

Certain of the statements in this quarterly report on Form 10-Q are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Some of these statements can be identified by terms and phrases such as “anticipate,” “believe,” “assume,” “intend,” “estimate,” “expect,” “continue,” “could,” “may,” “plan,” “project,” “predict,” “will” and similar expressions. These forward-looking statements appear in a number of places and ~~include~~reflect ~~statements~~management’s ~~regarding our plans,~~ beliefs and orassumptions ~~current~~and ~~expectations,~~are ~~including~~based ~~those~~on ~~plans,~~information ~~beliefs~~currently ~~and~~available ~~expectations~~to ofmanagement. ~~our officers and~~Forward-looking ~~directors,~~statements ~~with~~involve ~~respect~~known ~~to,~~and ~~among other things:~~unknown

• reliance on a few customers for a large portion of our sales and our ability to maintain our relationships with these customers; • our exposure to, and our ability to manage, market risk relating to commodity, oil and natural gas prices, interest rates and foreign currency exchange rates; • future capital expenditures and our ability to finance these capital expenditures; • our ability to finance our debt service requirements under our senior credit facility and other indebtedness and to comply with the financial covenants under our debt agreements; • our future results of operations or financial condition; • our business strategies and other plans and objectives for future operations; • general economic and business conditions; • business opportunities that may be presented to and pursued by us from time to time; • risks related to our international operations; • the impact of existing or new accounting pronouncements; and • the outcome of any legal proceedings to which we or any of our subsidiaries may be a party.

These forward-looking statements are based on our assumptions and analyses and are not guarantees of our future performance. These statements are subject to risks, many of which are beyond our control, that could cause our actual results to differ materially from those contained in our forward-looking statements. Factors that could cause results to differ materially include without limitation: decreases or changes in demand for our products, changes in market trends, general competitive pressures from existing and new competitors, price volatility of commodities, oil, natural gas, other raw materials and packaging, foreign currency exchange rate fluctuations, future investment returns on our pension plans, changes in laws and regulations, adverse changes in operating performance, adverse economic conditions and other factors described under “Risk Factors” in our 2004 10-K.

Werisks, ~~undertake~~uncertainties noand ~~obligation~~other tofactors ~~revise~~that ~~these~~may ~~forward-looking~~cause ~~statements~~our actual results or performance to ~~reflect~~be materially different from any future ~~events~~ results or ~~circumstances.~~performance ~~All~~expressed ~~forward-looking~~or ~~statements~~implied ~~attributable~~by to us ~~are~~in ~~expressly qualified~~those instatements. ~~their~~These ~~entirety~~risks, byuncertainties ~~this~~and ~~cautionary~~other ~~statement.~~factors include among others:

~~Second~~• ~~Quarter~~reliance ~~Fiscal~~on ~~2005~~a few customers for a large portion of our sales and our ability to maintain our relationships with these customers; • our exposure to, and our ability to manage, our market risk relating to commodity, oil and natural gas prices, interest rates and foreign currency exchange rates; • changes in ~~Review~~ demand for our products; • future capital expenditures and our ability to finance these capital expenditures; • our ability to make required interest or principal payments on our senior credit facility and our other indebtedness and to comply with the financial covenants under our debt agreements; • our business strategies and other plans and objectives for future operations; • general economic and business conditions and changes in market trends; • business opportunities that may be presented to and pursued by us from time to time; • risks related to our international operations; • risks related to product liability claims and product recalls; • the outcome of any legal proceedings to which we or any of our subsidiaries may be a party; • consummation of the acquisition of Doane Enterprises by Mars, and related transactions, in accordance with the terms of the Merger Agreement and any other relevant agreements; and • the impact of existing or new accounting pronouncements.

InThese ~~the~~forward-looking ~~second~~statements ~~quarter~~are ofbased ~~fiscal~~on ~~2005,~~our ~~net~~assumptions ~~sales~~and ~~decreased~~analyses ~~5.6%~~and toare ~~$243.9 million from~~not ~~$258.3 million~~guarantees ~~in the second quarter~~ of ~~fiscal 2004. The decrease in~~ our ~~net~~future ~~sales~~performance. ~~was~~These ~~primarily~~statements ~~due~~are subject to ~~our~~risks, ~~cost-sharing~~many ~~arrangements~~of ~~and~~which ~~the related impact~~are ofbeyond ~~passing~~our ~~through~~control, athat ~~portion~~could ofcause our ~~lower~~actual ~~commodity~~results ~~costs and,~~ to adiffer ~~lesser~~materially ~~extent,~~from ~~lower~~those ~~domestic~~contained ~~sales~~in ~~volume,~~our ~~partially~~forward-looking ~~offset~~statements. byWe ~~favorable~~undertake ~~foreign~~no ~~currency~~obligation ~~exchange rate~~to ~~fluctuations.~~update ~~Our~~or ~~gross~~revise ~~profit~~any forward-looking ~~increased~~statements ~~$9.6 million~~for ~~from the~~any ~~second~~new ~~quarter~~information, offuture ~~fiscal~~events ~~2004~~or ~~primarily~~otherwise. asAll aforward-looking ~~result~~statements ofattributable ~~lower~~to ~~global~~us ~~commodity~~are ~~costs,~~expressly ~~partially~~qualified ~~offset~~in bytheir ~~the~~entirety ~~above factors~~by ~~affecting~~this ~~net sales~~cautionary statement.

~~In an~~First ~~effort~~Quarter toFiscal ~~reduce~~2006 manufacturing costs and increase operating efficiencies, we closed our Cartersville, Georgia manufacturing facility at the end of the second quarter of fiscal 2005. In connection with the plant closure, we recorded non-cash asset impairments of $1.1 million in ~~other operating expense (income), net. In addition, we expect to incur total cash~~Review ~~charges of approximately $0.2 million related to severance and carrying costs.~~

~~Results~~ In the first quarter of ~~Operations~~fiscal 2006, our net sales decreased 11.0% to $237.7 million from $267.1 million in the first quarter of fiscal 2005. The decrease in our net sales was primarily due to lower domestic sales volumes, partially offset by the impact of our domestic cost-sharing arrangements and domestic price increase implemented late in the first quarter of fiscal 2006. Our gross profit decreased 29.5%, or $15.4 million, in the first quarter of fiscal 2006 primarily due to the above factors affecting net sales, and higher commodity and natural gas prices. We had a net loss of $5.4 million in the first quarter of fiscal 2006, a decrease of $12.6 million compared to the first quarter of fiscal 2005. The decrease was primarily due to the above factors affecting gross profit and other operating income in the first quarter of fiscal 2005 from favorable lawsuit settlements, partially offset by lower interest expense as a result of the Teachers’ Transactions.

WeOn ~~manufacture pet food~~January 19, ~~primarily private label~~2006, inwe ~~the~~purchased ~~United~~an ~~States~~additional ~~and~~25% ~~Europe~~of ~~using 27~~Doane ~~combined~~International ~~manufacturing~~Pet ~~and distribution facilities. We manufacture pet food products primarily for dogs and cats~~Products, ~~including dry~~LLC, or ~~wet~~DIPP, ~~semi-moist,~~for ~~soft dry~~$0.3 million, ~~soft~~increasing ~~treats~~our ~~and~~ownership ~~dog~~percentage ~~biscuits~~to 75%. We ~~sell our~~began ~~products~~consolidating toDIPP as ~~various types~~ of ~~retailers.~~

Historically, approximately 75% of our cost of goods sold has been comprised of raw material and packaging costs with the remainder primarily comprised of salaries, wages and related fringe benefits, utilities and depreciation. Our operating expenses generally consist of promotion and distribution expenses, selling, general and administrative expenses, amortization and other operating (income) expense. Promotion and distribution expenses are primarily comprised of promotions, freight, brokerage fees and warehousing expenses. Selling, general and administrative expenses primarily include salaries and related fringe benefits, depreciation and other corporate overhead costs, which typically do not increase proportionately with increases in net sales and sales volumes.

We have foreign currency exposure relating to our business transactions in currencies other than the U.S. dollar. In addition, the timing and extent of foreign currency exchange rate fluctuations may have a material impact on our operations due to the translations of the financial statements of our foreign subsidiaries into U.S. dollars. Although our functional currencies other than the U.S. dollar include the Euro, Danish Krona and British Pound Sterling, the Euro to U.S. dollar exchange rate approximates the impact of movements in our individual functional foreign currency exchange rates. For the purpose of analyzing our results of operations, the average Euro to U.S. dollar exchange rates for the three months ending in the second quarter of fiscal 2005 and 2004 were approximately 1.26 and 1.20, respectively, and for the six months ending in the second quarter of fiscal 2005 and 2004 were approximately 1.28 and 1.23, respectively. For the purpose of analyzing our financial position, the Euro to U.S. dollar exchange rates as of the end of the second quarter of fiscal 2005 and the end of fiscal 2004 were approximately 1.21 and 1.36, respectively.

Our fiscal year ends on the Saturday nearest to the end of December; therefore, fiscal 2004 ended on January 1, 2005. Each quarter ends on the Saturday nearest to the end of the calendar month with the second quarters of fiscal 2005 and 2004 ending on July 2, 2005 and July 3, 2004, respectively.

~~Statement~~the ofpurchase ~~operations data~~date. ~~The~~DIPP’s ~~following~~financial ~~table~~position ~~sets~~and ~~forth~~results ~~our statement~~ of operations ~~derived~~ ~~from~~subsequent ~~the~~to ~~accompanying unaudited condensed consolidated financial statements expressed as a~~the ~~percentage~~purchase ofdate ~~net~~are ~~sales~~not ~~for~~material ~~the~~to ~~second~~our ~~quarter~~consolidated ~~and~~financial ~~first six months of fiscal 2005 and 2004 as~~statements. ~~indicated (in thousands, except percentages):~~

	Second quarter										First six months
	2005					2004					2005					2004
Net sales	$	243,872		100.0	%	$	258,338		100.0	%	$	511,008		100.0	%	$	529,218		100.0	%
Cost of goods sold:
Commodity costs		116,495		47.8			134,152		51.9			240,307		47.0			270,476		51.1
Other		84,656		34.7			91,049		35.3			175,877		34.4			184,787		34.9
Total cost of goods sold		201,151		82.5			225,201		87.2			416,184		81.4			455,263		86.0
Gross profit		42,721		17.5			33,137		12.8			94,824		18.6			73,955		14.0
Operating expenses:
Promotion and distribution		14,729		6.0			13,767		5.3			29,159		5.7			27,994		5.3
Selling, general and administrative		12,811		5.3			12,803		5.0			25,930		5.1			25,986		4.9
Amortization		1,024		0.4			1,134		0.4			2,190		0.4			2,363		0.4
Other operating expense (income), net		1,805		0.7			3,938		1.5			(1,711	)	(0.3	)		5,161		1.0
Income from operations		12,352		5.1			1,495		0.6			39,256		7.7			12,451		2.4
Interest expense, net		19,031		7.8			18,186		7.0			37,677		7.4			36,163		6.8
Other income, net		(448	)	(0.2	)		(331	)	—			(693	)	(0.1	)		(738	)	(0.1	)
(Loss) income before income taxes		(6,231	)	(2.5	)		(16,360	)	(6.4	)		2,272		0.4			(22,974	)	(4.3	)
Income tax expense		1,316		0.6			1,377		0.5			2,643		0.5			2,570		0.5
Net loss	$	(7,547	)	(3.1	)%	$	(17,737	)	(6.9	)%	$	(371	)	(0.1	)%	$	(25,544	)	(4.8	)%

Results of Operations

~~Second~~ We ~~Quarter~~manufacture pet food, primarily store brands, in the United States and Europe using 25 combined manufacturing and distribution facilities. We manufacture pet food products predominately for dogs and cats, including dry, wet, soft-dry, treats and dog biscuits. We sell to approximately 650 customers around the world and serve many of ~~Fiscal~~the ~~2005~~top ~~Compared~~pet food retailers in North America and Europe. Our net sales to ~~Second~~Wal-Mart ~~Quarter~~Stores, Inc. and its Sam’s Club division were 42% and 44% of ~~Fiscal~~our total ~~2004~~net sales in the first quarters of fiscal 2006 and 2005, respectively.

~~Net~~Historically, ~~sales.~~approximately ~~Net~~75% ~~sales~~of inour ~~the~~cost ~~second~~of ~~quarter~~goods sold has been comprised of ~~fiscal~~raw ~~2005~~material and ~~decreased~~packaging ~~5.6%~~costs with the remainder primarily comprised of salaries, orwages ~~$14.4~~and related fringe ~~million~~benefits, toutilities ~~$243.9 million~~and ~~from $258~~depreciation.~~3 million~~ inOur ~~the~~operating ~~second~~expenses ~~quarter~~generally consist of ~~fiscal~~promotion ~~2004.~~and distribution ~~The~~expenses, ~~decrease~~selling, ingeneral ~~our~~and ~~net sales~~administrative ~~was~~expenses, ~~primarily~~amortization ~~due~~and toother operating ~~our~~expenses. ~~cost-sharing~~Promotion ~~arrangements~~ and ~~the~~distribution ~~related~~expenses ~~impact~~are ofprimarily ~~passing~~comprised ~~through~~of promotions, afreight, ~~portion~~brokerage offees ~~our~~and ~~lower~~warehousing Uexpenses.S. ~~commodity~~Selling, ~~costs~~general and, toadministrative aexpenses primarily ~~lesser~~include ~~extent, lower~~salaries ~~domestic~~and ~~sales~~related ~~volume~~fringe benefits, ~~partially~~depreciation ~~offset~~and byother ~~favorable~~corporate ~~foreign~~overhead ~~currency~~costs, ~~exchange~~which ~~rate~~typically ~~fluctuations~~do not change proportionately with changes in net sales and sales volumes.

~~Gross~~We ~~profit.~~have ~~Gross~~foreign ~~profit~~currency inexposure ~~the~~relating ~~second~~to ~~quarter~~our ofbusiness ~~fiscal~~transactions ~~2005~~in ~~increased~~currencies ~~28.9%, or $9.6~~other ~~million,~~than tothe ~~$42~~U.~~7 million~~S. ~~from $33~~dollar.~~1 million~~ inIn addition, the ~~second~~timing ~~quarter~~and extent of ~~fiscal~~foreign ~~2004.~~currency ~~This~~exchange ~~increase was~~rate ~~primarily~~fluctuations ~~due~~may tohave ~~lower~~a ~~global~~material ~~commodity~~impact ~~costs,~~on ~~which~~our ~~decreased~~operations asdue ato ~~percentage~~the translations of ~~net~~the ~~sales to~~financial ~~47.8%~~statements inof ~~the~~our ~~second~~foreign ~~quarter~~subsidiaries. ofAlthough ~~fiscal~~our ~~2005~~functional ~~from~~currencies ~~51.9%~~other inthan the ~~second~~U.S. dollar ~~quarter~~include ofthe ~~fiscal 2004~~Euro, ~~partially~~ ~~offset~~Danish byKrona ~~the~~and ~~above~~British ~~factors~~Pound ~~affecting~~Sterling, ~~net~~the ~~sales~~Euro to U.S. Indollar ~~addition,~~exchange rate ~~other~~approximates ~~cost~~the impact of ~~goods~~movements ~~sold included~~in aour ~~$3.2 million~~individual ~~favorable~~functional ~~period-over-period~~foreign ~~change~~currency ~~related~~exchange rates. toFor the ~~volatility~~purpose of ~~commodity prices~~analyzing ~~combined~~our ~~with~~results ~~the~~of ~~fair~~operations, ~~value~~the ~~accounting~~average ~~for~~Euro ~~our~~to ~~commodity~~U.S. ~~derivative~~dollar exchange ~~instruments~~rates ~~under~~for ~~SFAS No. 133,~~the ~~Accounting~~first ~~for~~quarters ~~Derivative~~of ~~Instruments~~fiscal 2006 and ~~Hedging~~2005 ~~Activities,~~were approximately or1.20 ~~SFAS~~and ~~133~~1.30, respectively. ~~Other~~For ~~cost~~the purpose of ~~goods~~ ~~sold~~analyzing inour financial position, the ~~second~~Euro ~~quarter~~to ofU.S. ~~fiscal~~dollar exchange ~~2005~~rates ~~also~~as ~~included~~of ~~increased~~the ~~manufacturing~~end ~~efficiencies primarily~~of ~~related~~the tofirst ~~our~~quarter ~~European~~of ~~restructuring,~~fiscal ~~partially~~2006 ~~offset~~and ~~by increased~~the ~~packaging~~end ~~costs~~of ~~due~~fiscal to2005 ~~higher~~were approximately ~~oil~~1.21 and ~~steel~~1.18, ~~prices~~respectively.

~~Promotion~~In ~~and~~the ~~distribution.~~event ~~Promotion~~of ~~and~~any ~~distribution~~increases ~~expenses~~in ~~for~~raw ~~the~~materials, ~~second~~packaging, ~~quarter~~oil ofor natural gas costs, we may be ~~fiscal~~required ~~2005~~to seek increased ~~7.0%,~~selling orprices ~~$0.9 million,~~for our products to ~~$14.7 million~~ ~~from~~avoid ~~$13~~margin deterioration.~~8 million~~ inWe ~~the second~~cannot ~~quarter~~provide ofassurances ~~fiscal~~regarding ~~2004.~~the ~~This~~timing ~~increase~~or ~~was~~extent ~~primarily~~of ~~due~~our ability to ~~higher~~implement ~~global~~such ~~freight~~price increases ~~costs~~or ~~resulting~~whether ~~from~~any ~~both~~price ~~rising~~increases ~~gas~~implemented ~~prices~~by ~~and~~us ~~resumed~~may ~~shipments~~affect tofuture ~~Mexico~~sales volumes with our customers.

Our sales are moderately seasonal. We normally experience an increase in sales volumes during the first and fourth quarters of each year, which is typical in the pet food industry. Generally, cooler weather results in increased dog food consumption.

Statement of operations data. The following table sets forth our statement of operations derived from the accompanying unaudited condensed consolidated financial statements included herein and expressed as a percentage of net sales for the first quarters of fiscal 2006 and 2005 (in thousands, except percentages):

Other operating expense (income), net. Other operating expense of $1.8 million in the second quarter of fiscal 2005 consisted primarily of $1.1 million of asset impairments and $0.6 million in transaction costs. Other operating expense of $3.9 million in the second quarter of fiscal 2004 related to our European restructuring plan and consisted of installation costs of $2.0 million, severance costs of $1.3 million and manufacturing inefficiencies of $0.6 million.


	Successor first quarter 2006					Predecessor first quarter 2005
Net sales	$	237,724		100.0	%	$	267,136		100.0	%


Cost of goods sold:
Commodities		110,613		46.5			123,812		46.4
Other		90,402		38.0			91,221		34.1

Total cost of goods sold		201,015		84.5			215,033		80.5

Gross profit		36,709		15.5			52,103		19.5

Operating expenses:
Promotion and distribution		13,277		5.6			14,430		5.4
Selling, general and administrative		12,979		5.5			13,119		4.9
Amortization		3,098		1.3			1,166		0.4
Other operating expense (income), net		555		0.2			(3,516	)	(1.3	)

Income from operations		6,800		2.9			26,904		10.1

Interest expense, net		11,952		5.1			18,646		7.0
Other expense (income), net		49		—			(245	)	(0.1	)

Income (loss) before income taxes		(5,201	)	(2.2	)		8,503		3.2
Income tax expense		205		0.1			1,327		0.5

Net income (loss)	$	(5,406	)	(2.3	)%	$	7,176		2.7	%

~~Interest~~First ~~expense,~~Quarter ~~net. Interest expense, net~~ of ~~interest~~Fiscal ~~income,~~2006 in(Successor ~~the~~Period) ~~second~~Compared ~~quarter of fiscal 2005 increased 4.6%, or $0.8 million,~~ to ~~$19.0 million~~First ~~from~~Quarter ~~$18.2 million in the second quarter~~ of ~~fiscal~~Fiscal ~~2004 primarily due to the increase of our senior preferred~~2005 ~~stock~~(Predecessor ~~dividends.~~Period)

~~Income~~Net ~~tax expense~~sales. WeNet ~~recognized~~sales ~~income~~in ~~tax~~the ~~expense~~first quarter of ~~$1.3 million~~fiscal in2006 ~~the~~decreased ~~second~~11.0%, ~~quarter~~or of$29.4 ~~fiscal~~million, ~~2005~~to ~~compared~~$237.7 million tofrom $1267.41 million ~~for~~in the ~~second~~first quarter of fiscal ~~2004~~2005. The ~~overall~~decrease ~~effective~~in ~~tax~~our ~~rate~~net ~~for~~sales ~~both~~was ~~periods~~primarily ~~differs~~due ~~from~~to lower domestic sales volumes, including lower promotional activity, the ~~expected~~discontinuation ~~combined~~of ~~federal~~our domestic non-manufactured product distribution services, and unfavorable ~~state~~foreign ~~rate~~currency ofexchange 38rate fluctuations.9% ~~due~~These to items were partially offset by the ~~valuation~~impact ~~allowances~~of passing ~~against~~through a portion of our ~~deferred~~higher ~~tax~~domestic ~~assets~~commodity ~~that~~costs ~~are~~under ~~not~~our ~~recoverable~~cost-sharing arrangements ~~through~~with ~~known~~certain customers as well as our domestic price increase implemented late in the ~~reversals~~first quarter of ~~deferred~~fiscal ~~tax liabilities~~2006.

~~First~~ Gross ~~Six~~profit. ~~Months~~Gross profit in the first quarter of ~~Fiscal~~fiscal 2006 decreased 29.5%, or $15.4 million, to $36.7 million from $52.1 million in the first quarter of fiscal 2005. ~~Compared~~The decrease in our gross profit was primarily due to ~~First~~the ~~Six~~above ~~Months~~factors affecting net sales, the impact of ~~Fiscal~~higher ~~2004~~commodity and natural gas prices on our manufactured products, and increased depreciation expense resulting from the fair value adjustment to our property, plant and equipment in connection with the Teachers’ Acquisition. In addition, gross profit related to our European operations was negatively impacted by lower wet pet food sales volumes, and resulting under-absorption of the high fixed costs associated with wet pet food manufacturing, partially offset by an increase in dry pet food sales volumes. Our European gross profit was also impacted by unfavorable foreign currency exchange rate fluctuations. In addition, we had a $3.5 million unfavorable period-over-period change related to the volatility of commodity prices combined with the fair value accounting for our commodity derivative instruments under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, or SFAS 133.

~~Net~~Promotion ~~sales~~and distribution. ~~Net~~Promotion ~~sales~~and ~~for~~distribution expenses in the first ~~six~~quarter ~~months~~ of fiscal ~~2005~~2006 decreased 38.40%, or $181.2 1 million, to $~~511~~13.03 million from $~~529~~14.24 million ~~for~~in the first quarter ~~six months~~ of fiscal ~~2004~~2005. ~~The~~As ~~decrease~~a inpercentage ~~our~~of net sales, ~~was~~promotion ~~primarily~~and ~~due~~distribution ~~to our~~expenses ~~cost-sharing~~increased ~~arrangements~~to ~~and~~5.6% in the ~~related~~first ~~impact~~quarter of ~~passing~~fiscal ~~through~~2006 afrom ~~portion of our lower U~~5.~~S. commodity~~4% ~~costs~~in ~~and,~~the tofirst aquarter ~~lesser~~of ~~extent,~~fiscal ~~lower~~2005 resulting ~~domestic~~from ~~sales~~the ~~volume, partially~~impact ~~offset~~of byrising ~~favorable~~gasoline ~~foreign~~prices ~~currency~~on ~~exchange~~our ~~rate fluctuations~~freight costs.

~~Gross~~Selling, ~~profit~~general and administrative expenses. ~~Gross~~Selling, ~~profit~~general and administrative expenses for the first ~~six~~quarter ~~months~~ of fiscal ~~2005~~2006 ~~increased~~of ~~28.2%, or~~ $2013.8 0 million, towere ~~$94.8 million~~comparable ~~from~~with $7413.01 million ~~for~~in the first ~~six~~quarter ~~months~~ of fiscal ~~2004~~2005. ~~This~~The ~~increase~~non-cash ~~was~~stock-based ~~primarily~~compensation ~~due~~expense torecognized ~~lower global commodity costs, which decreased as a percentage of net sales to 47.0%~~ in the first ~~six~~quarter ~~months~~ of fiscal ~~2005~~2006 ~~from~~that ~~51.1%~~resulted infrom the ~~first~~adoption ~~six months~~ of ~~fiscal~~SFAS ~~2004,~~123R ~~partially~~was offset by ~~the above factors affecting net sales. In addition, other~~ cost ~~of goods sold included a $7.4 million~~ ~~favorable~~reductions ~~period-over-period~~achieved ~~change~~from ~~related to the volatility of commodity prices combined with the fair value accounting for~~ our ~~commodity derivative instruments under SFAS 133. Other cost of goods sold in the first six months of~~ fiscal 2005 ~~also~~cost ~~included~~savings ~~increased manufacturing efficiencies primarily related to our European restructuring, partially offset by increased packaging costs due to higher oil and steel prices~~initiatives.

Promotion and distribution. Promotion and distribution expenses for the first six months of fiscal 2005 increased 4.2%, or $1.2 million, to $29.2 million from $28.0 million for the first six months of fiscal 2004. This increase was primarily due to higher global freight costs resulting from both rising gas prices and resumed shipments to Mexico.

Other operating expense (income), net. Other operating income, net, of $1.7 million in the first six months of fiscal 2005 included $3.2 million of favorable litigation settlements, partially offset by $1.1 million of asset impairments and $0.6 million in transaction costs. Other operating expense, net, of $5.2 million in the first six months of fiscal 2004 consisted of: European restructuring costs of $5.6 million including severance costs of $3.0 million, installation costs of $2.0 million and manufacturing inefficiencies of $0.6 million; asset impairments of $0.4 million related to the closure of our distribution center in Alexandria, Louisiana; and $0.8 million of income related to an arbitration award.

Interest expense, net. Interest expense, net of interest income, for the first six months of fiscal 2005 increased 4.2%, or $1.5 million, to $37.7 million from $36.2 million for the first six months of fiscal 2004 primarily due to the increase of our senior preferred stock dividends.

Income tax expense. We recognized income tax expense of $2.6 million for the first six months of both fiscal 2005 and fiscal 2004. The overall effective tax rate for both periods differs from the expected

~~combined~~ Amortization. ~~federal~~Amortization ~~and~~expense ~~state~~in ~~rate~~the first quarter of 38fiscal 2006 increased $1.9% million ~~due~~ to ~~the~~$3.1 million ~~valuation~~from ~~allowances~~$1.2 million ~~against~~in ~~our~~the ~~deferred~~first ~~tax~~quarter ~~assets~~of ~~that~~fiscal ~~are~~2005. ~~not~~This ~~recoverable~~increase ~~through~~was primarily ~~known~~due ~~reversals~~to the amortization of ~~deferred~~customer ~~tax~~relationship ~~liabilities~~intangibles with estimable useful lives recorded in connection with the Teachers’ Acquisition.

Other operating expenses, net. Other operating expenses, net, of $0.6 million in the first quarter of fiscal 2006 primarily consist of $0.4 million of plant closure costs and $0.2 million of severance costs associated with cost savings initiatives. Other operating income in the first quarter of fiscal 2005 consists of proceeds from favorable lawsuit settlements.

Interest expense, net. Interest expense, net, in the first quarter of fiscal 2006 decreased $6.6 million, or 35.9%, to $12.0 million from $18.6 million in the first quarter of fiscal 2005. This decrease was primarily due to the impact of the Teachers’ Transactions, including, the redemption of our outstanding 14.25% senior preferred stock and the amortization of the premium on the 10 ³/4% senior notes.

Income tax expense. We recognized income tax expense of $0.2 million in the first quarter of fiscal 2006 and $1.3 million in the first quarter of fiscal 2005. The overall effective tax rate for both periods differs from the expected U.S. federal income tax rate of 35% primarily due to U.S. state and local income taxes, foreign income taxes and changes in the valuation allowances against our deferred tax assets that are not considered recoverable through known reversals of deferred tax liabilities.

Liquidity and Capital Resources

General

We have historically funded our operations, capital expenditures and working capital requirements with cash flows from operations, bank borrowings and the issuance of other indebtedness.

Cash ~~and Cash~~ Flows

Net cash provided by our operating activities was $210.31 million ~~for~~in the first ~~six~~quarter ~~months~~ of fiscal 2006 ~~2005~~ compared to ~~net cash used in operating activities of~~ $64.36 million ~~for~~in the first ~~six months~~quarter of fiscal ~~2004.~~2005 ~~The~~as ~~improvement~~a ~~was~~result ~~primarily~~of ~~due~~lower toearnings, partially ~~higher~~offset ~~earnings~~by favorable changes in working capital.

Net cash used in our investing activities ~~was~~in ~~$10.9 million for~~ the first ~~six~~quarter ~~months~~ of fiscal ~~2005~~ 2006 was $0.1 million compared to $5.51 million ~~for~~in the first ~~six~~quarter ~~months~~ of fiscal ~~2004~~2005. ~~The~~Capital ~~change resulted from increased capital~~ expenditures, ~~which~~ were $103.13 million ~~for~~and $4.5 million in the first ~~six~~quarters ~~months~~ of fiscal 2006 and 2005, respectively. In the first quarter of ~~compared~~fiscal to2006, we recognized $53.17 million ~~for~~of ~~the~~net ~~first~~cash ~~six~~acquired ~~months~~in ofconnection ~~fiscal~~with ~~2004~~the consolidation of DIPP.

Net cash ~~used~~provided inby ~~our~~ financing activities ~~was~~in ~~$1.8 million for~~ the first ~~six~~quarter ~~months~~ of fiscal ~~2005~~ 2006 was $2.9 million compared to $70.29 million ~~for~~of ~~the~~net ~~first~~cash ~~six~~used ~~months~~in offinancing activities ~~fiscal~~in ~~2004. In~~ the first ~~six~~quarter ~~months~~ of fiscal 2005,. we We made ~~scheduled~~repayments ~~payments~~ on ~~our~~long-term ~~current~~debt ~~senior~~in ~~credit~~each ~~facility and debt~~ of ~~our foreign subsidiaries. In~~ the first ~~six~~quarters ~~months~~ of fiscal ~~2004,~~2006 weand ~~made~~2005 ~~scheduled principal payments on our previous senior credit facility, paid transaction fees~~ and ~~expenses~~had ~~associated with~~ a ~~first~~ ~~quarter~~change ~~amendment~~in tobook ~~our~~overdraft ~~previous~~in ~~senior~~the ~~credit~~first ~~facility~~quarter ~~and~~of ~~refinanced~~fiscal ~~certain~~2006 of ~~our European loans~~$4.2 million.

Debt

We are highly leveraged and have significant cash requirements for debt service relating to our senior credit facility, senior notes, senior subordinated notes, industrial development revenue bonds and foreign debt. Our ability to borrow is limited by our senior credit facility, including compliance with the financial covenants therein, and the limitations on the incurrence of additional indebtedness in the indentures governing our senior notes and senior subordinated notes.

Our senior credit facility provides for total commitments of $230.0 million, consisting of a $195.0 million term loan facility, of which $1.5 million has been repaid as of the end of the second quarter of fiscal 2005, and a $35.0 million revolving credit facility, with a $20.0 million sub-limit for issuance of stand-by letters of credit. The term loan facility bears interest, at the option of the Company, of adjusted LIBOR plus 4.00%, or ABR, as defined in the senior credit facility agreement, plus 3.00%. The revolving credit facility bears interest, at the option of the Company, of adjusted LIBOR plus 4.50%, or ABR plus 3.50%. As of the end of the second quarter of fiscal 2005, the term loan facility bore interest at 7.41%. We are required to make annual principal payments on the senior credit facility calculated as 1% of $195.0 million, payable in equal quarterly installments of each year. The loans under our senior credit facility may be prepaid and commitments may be reduced; however, payments on the term loan facility may not be reborrowed.

Liquidity

AsWe ofare ~~the~~highly ~~end~~leveraged ofand ~~the~~have ~~second~~significant ~~quarter~~cash ofrequirements ~~fiscal~~for ~~2005,~~debt service relating to our ~~principal~~senior ~~sources~~credit offacility, ~~liquidity consisted~~senior ofnotes, ~~working~~senior ~~capital~~subordinated ofnotes, ~~$70~~industrial development revenue bonds and foreign debt.~~9 million,~~ ~~including~~We ~~cash~~were in compliance with the financial covenants of ~~$37.0 million,~~our ~~and~~debt ~~$30.2 million~~agreements as of ~~availability~~the ~~under~~end ~~our~~of ~~revolving~~the ~~credit~~first ~~facility~~quarter of fiscal 2006.

WeAs ~~believe~~of ~~that~~the ~~cash~~end ~~flows~~of ~~generated~~the ~~from~~first ~~our~~quarter ~~business~~of fiscal 2006, ~~together~~our ~~with~~principal ~~available~~sources ~~cash~~of ~~balances~~liquidity ~~and~~consisted ~~future~~of ~~borrowings,~~working ~~will~~capital beof ~~sufficient~~$51.2 million, inexcluding ~~the~~cash ~~near~~and ~~term~~cash toequivalents ~~enable~~of ~~us to make interest and~~$11.3 million ~~required~~and ~~principal~~current ~~payments~~maturities onof ~~our~~long-term debt ~~and~~of to$3.2 million. ~~provide~~We usalso ~~with~~had ~~the~~$46.4 million ~~necessary~~of availability ~~liquidity~~out ~~for operational~~of ~~and~~total ~~capital~~availability ~~requirements~~of in$50.0 million under our ~~current~~revolving ~~operating~~credit ~~environment. However~~facility, asand $3.6 million ~~shown~~of ~~below in~~issued ~~the~~and ~~annual~~undrawn ~~maturities~~letters of credit.

~~long-term~~ Our ~~debt~~ability ~~summary,~~to weincur ~~have~~additional ~~significant~~indebtedness ~~debt~~is ~~and~~limited ~~redemption~~by ~~obligations~~our ~~that~~senior ~~mature~~credit infacility, ~~2007.~~including Wecompliance ~~may~~with bethe ~~required~~financial tocovenants ~~refinance~~therein, ~~all~~and orby ~~a portion of~~ the ~~principal~~indentures ~~amount~~governing of our ~~outstanding~~ ~~obligations,~~senior ~~including~~notes ~~those~~and ~~that~~senior ~~mature~~subordinated innotes. ~~2007,~~Our onprincipal orsources ~~prior~~of toliquidity ~~maturity~~are orcash aflows ~~mandatory redemption~~from ~~date.~~our Inbusiness ~~addition,~~and wefuture ~~may~~borrowings ~~not~~under ~~have~~our ~~sufficient~~$50.0 million ~~capital~~multi-currency ~~available~~revolving tocredit facility. usWe ~~for~~believe ~~any~~that ~~future~~these ~~acquisitions, joint~~sources ~~ventures~~of orliquidity ~~similar~~will ~~transactions.~~be Wesufficient ~~believe~~in ~~that~~the ~~offerings~~near ofterm ~~additional~~to ~~debt securities~~enable ~~are~~us ~~possible,~~to ormake ~~other~~required ~~sources~~interest ofand ~~capital~~principal ~~are~~payments ~~available,~~on ifour ~~the~~debt ~~need~~and ~~arises,~~to ~~although~~provide ~~any~~us ~~such~~with the ~~capital~~necessary ~~may~~liquidity ~~not~~for beoperational ~~available~~and oncapital ~~terms~~requirements ~~acceptable~~in toour uscurrent oroperating ~~at all~~environment.

~~Although~~We we believe ~~that~~the ~~future~~capital ~~borrowings~~expenditures permitted under our ~~revolving~~senior credit facility ~~will~~are besufficient ~~available~~ to ~~fund~~provide ~~our~~us ~~liquidity~~with ~~needs,~~the ~~availability~~necessary offlexibility ~~these funds is subject~~ to ~~our~~meet ~~satisfaction of certain customary terms and conditions, including~~ our ~~ability~~maintenance tocapital ~~satisfy the financial covenants~~expenditure inrequirements ~~our~~and ~~senior~~at ~~credit facility. Refer to our 2004 10-K for a summary of these financial covenants. We were in compliance with~~ the ~~financial~~same ~~covenants~~time infund ~~our~~any ~~senior credit~~ facility ~~as of the end of the second quarter of fiscal 2005; however~~expansions, wecost ~~have~~savings ~~experienced~~initiatives ~~difficulty in the past satisfying financial covenants in our previous senior credit facility,~~ and ~~negotiated amendments and obtained~~ ~~waivers~~customer requirements for fiscal ~~2000, 2001 and 2003 due to covenant non-compliance~~2006. ~~Our~~We ~~ability~~anticipate tothat ~~satisfy the covenants contained in~~ our ~~senior credit facility is determined based on our cash flows, outstanding senior secured debt and~~ capital expenditures. Wefor ~~may~~fiscal ~~experience difficulty satisfying~~2006 ~~these~~will ~~covenants~~approximate in$27 million ~~the future. If we are unable~~ to ~~negotiate an amendment or secure a waiver from our lenders for any potential default~~$30 million, itwith ~~could~~approximately ~~result~~$10 million into an$12 million ~~event of default under the senior~~required ~~credit facility and permit a majority of the lenders~~ to ~~accelerate~~maintain ~~outstanding debt under the senior credit facility, terminate~~ our ~~revolving~~current ~~credit~~business ~~commitment~~ and ~~seize~~ the ~~cash~~remainder inavailable ~~our operating~~for ~~accounts.~~any ~~Such~~facility ~~acceleration would result in cross-defaults under our senior notes and senior subordinated notes. In that event~~expansions, ~~we may not have sufficient liquidity to make interest~~cost ~~and~~reduction ~~required~~initiatives ~~principal payments on our debt~~ and tocustomer ~~fund operational and capital~~ requirements.

WeAny ~~believe~~future ~~the~~acquisitions, joint ventures or similar transactions will likely require additional capital ~~expenditures~~and ~~permitted~~we ~~under~~may ~~our~~not ~~senior~~have ~~credit~~such ~~facility~~capital ~~are~~available ~~sufficient~~ to ~~provide~~us on commercially reasonable terms, on terms acceptable to us, ~~with~~or ~~the~~at ~~necessary~~all. ~~flexibility~~Our business may not generate sufficient cash flows or future borrowings may not be available in an amount sufficient to ~~spend~~enable ~~required~~us ~~maintenance~~to ~~capital~~make required interest and principal atpayments ~~the~~on ~~same~~our indebtedness, including our senior credit facility, senior notes, and ~~time~~senior subordinated notes or to fund ~~any~~our ~~planned~~other ~~expansion~~liquidity needs. In addition, ~~cost~~our ~~reduction~~business ~~projects~~may not generate sufficient operating results and ~~customer~~cash ~~requirements~~flows ~~for~~to ~~fiscal~~allow ~~2005.~~us to comply with the financial Wecovenants ~~anticipate~~in ~~that~~our senior credit facility. In the event of default under our ~~capital~~senior ~~expenditures~~credit ~~for~~facility, absent ~~fiscal~~an ~~2005~~amendment ~~will~~or ~~approximate~~a ~~$25 million~~waiver tofrom ~~$30~~the lenders, a majority of our lenders could accelerate ~~million~~outstanding indebtedness under the senior credit facility, ~~with~~terminate ~~approximately~~our ~~$10 million~~revolving tocredit ~~$12 million~~facility and ~~required~~seize tothe ~~maintain~~cash in our ~~current~~operating ~~business~~accounts. In that event, we may not have sufficient liquidity ~~Our~~to ~~capital~~make ~~expenditures~~required ~~were~~interest ~~$10.1 million~~and inprincipal ~~the~~payments ~~first~~on ~~six~~our ~~months~~debt ofor ~~fiscal~~to ~~2005~~fund operational and capital requirements.

~~Annual~~Senior ~~Maturities~~Credit ~~of Long-Term Debt~~Facility

AWe ~~summary~~entered ofinto our senior credit facility on October 24, 2005 which provided for a $55.0 million U.S. dollar equivalent term loan facility denominated in Euros (the ~~maturities~~Euro byterm ~~fiscal~~loan facility), ~~year~~a of$105.0 million ~~our~~U.S. ~~long-~~dollar term ~~debt~~loan asfacility and a $50.0 million multi-currency revolving credit facility with a $15.0 million sub-limit for Euro-denominated revolving credit loans. As of the end of the ~~second~~ first quarter of fiscal ~~2005~~2006, ~~follows~~the ~~(in~~U.S. ~~thousands):~~dollar term loan facility bore interest of 6.8% and the Euro term loan facility bore interest of 4.6%.

Fiscal	Maturities
2005	$	1,731
2006		3,522
2007		456,818
2008		2,141
2009		2,282
2010 and thereafter		229,156
	$	695,650

We are required to repay amounts borrowed under the term loan facilities in quarterly installments of 0.25% of the aggregate principal amount borrowed on October 24, 2005 for the first six years and nine months after the closing date with the remainder payable at maturity. The loans under our senior credit facility may be prepaid and commitments may be reduced. Optional prepayments of the term loan facilities may not be reborrowed. Subject to certain exceptions, the senior credit facility requires that 100% of the net proceeds from certain asset sales, casualty insurance, condemnations and debt issuances, 50% of the net proceeds from equity offerings and 75% of excess cash flow for each fiscal year (reducing to 50% based on performance levels agreed upon) must be used to pay down outstanding borrowings. The obligations under the senior credit facility are guaranteed by Doane Enterprises and by our domestic restricted subsidiaries.

~~Commitments~~ The senior credit facility contains customary covenants, including maximum consolidated senior secured leverage and ~~Contingencies~~maximum capital expenditure requirements, and certain other limitations on our and certain of our subsidiaries’ ability to engage in certain activities.

We believe our operations are in compliance in all material respects with environmental, safety and other regulatory requirements; however, these requirements may change in the future, which may cause us to incur material costs to comply with these requirements or in connection with the effect of these matters on our business.

Long-Term Debt Maturities

A summary of the maturities of our long-term debt as of the end of the first quarter of fiscal 2006 follows (in thousands):


Maturities by year
2006	$	2,386
2007		3,442
2008		3,553
2009		3,674
2010		234,076
2011 and thereafter		316,640

Total	$	563,771

Commitments and Contingencies

The employees at our Joplin, Missouri facility went on strike on February 18, 2006, following the expiration of the collective bargaining agreement covering such employees. Certain permanent replacement workers that we hired during the strike filed a petition with the National Labor Relations Board to decertify the union as the bargaining representative of the Joplin employees on May 4, 2006. The union accepted the collective bargaining agreement that we last proposed, and such agreement was ratified by the employees who were on strike on May 5, 2006. Nevertheless, the petition to decertify the union will proceed, with the vote to include both the formerly striking employees and the permanent replacement workers. No election date has been set.

The Joplin employees are entitled to certain pension benefits under a multiemployer pension plan. If the employees vote to decertify the union at the Joplin facility, we may incur a withdrawal liability to the union’s multiemployer pension plan. The amount of such withdrawal liability and the schedule of the annual payments required to satisfy such liability would be calculated by the union pension plan if there is a successful decertification election and we no longer have any obligation to contribute to such plan. While the exact amount of any such withdrawal liability depends on the financial status of the union pension plan at the time of our withdrawal, in December 2005, such liability was estimated to be approximately $3.4 million.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Inflation and Changes in Prices

Our financial results depend to a large extent on the costs of raw materials, ~~and~~ packaging, oil and natural gas, and our ability to pass through ~~increased~~increases in these costs to our customers using price increases or our cost-sharing arrangements. Historically, market prices for commodity grains and food stocks have fluctuated in response to a number of factors, including changes in U.S. government farm support programs, changes in international agricultural trading policies, impacts of disease outbreaks on protein sources and the potential effect on supply and demand, changes in international demand, trading activity in the commodity markets, as well as weather conditions during the growing and harvesting seasons. Our costs for packaging materials are affected by fluctuations in paper, steel and oil prices, resulting from changes in supply and demand, general economic conditions and other factors. In addition, our manufacturing costs are affected ~~impacted~~ by changes in natural gas prices and our freight costs are affected by changes in ~~gas~~ gasoline prices. Our results of operations have been exposed to volatility in the commodity and natural gas markets in the past. We have cost-sharing arrangements with certain of our domestic customers to reduce the impact of volatile commodity costs; however, these arrangements only reduce our exposure to such volatility ~~in the future~~ and are subject to change.

In the event of any increases in raw materials, packaging, natural gas and freight costs, we may be required to seek increased selling prices for our products to avoid margin deterioration. We ~~cannot~~ cannot provide any assurances as to the timing or extent of our ability to implement future selling ~~price~~ price increases in the event of increased raw materials, packaging, natural gas or freight costs or of whether any selling price increases implemented by us may affect future sales volumes to our customers.

Seasonality

Our sales are moderately seasonal. We normally experience an increase in net sales during the first and fourth quarters of each year, which is typical in the pet food industry. Generally, cooler weather results in increased dog food consumption.

Recently Issued Accounting Pronouncements

See Note 2, Recent Accounting Pronouncements, in the accompanying unaudited condensed consolidated financial statements.

Critical Accounting Policies

Accounts receivable allowances. As of the end of the ~~second~~first quarter of fiscal ~~2005~~2006 and the end of fiscal ~~2004~~2005, our gross accounts receivable were $9496.47 million and $~~116~~107.3 9 million, respectively. We had allowances ~~of $2.9 million and $3.9 million as of the end of the second quarter of fiscal 2005 and the end of fiscal 2004, respectively, consisting of reserves~~ for doubtful accounts, and outstanding deductions with customers ~~and~~of ~~cash discounts~~$2.0 million ~~We estimate the~~and ~~allowances by applying a recovery percentage based on historical collection experience~~$1. ~~We accrue~~8 additional allowances based on a specific identification review for amounts deemed to be at risk. Receivables are written off against the allowances at the point in which an amount is deemed uncollectible by us. We may revise our allowances against accounts receivable as we receive more information or as we assess other factors impacting the realizability of our accounts receivable.

Inventories allowances. As of the end of the second quarter of fiscal 2005 and the end of fiscal 2004, our gross inventories were $69.9 million and $71.2 million, respectively. We had allowances, primarily for obsolescence of packaging inventories, of $2.3 million and $2.9 million as of the end of the second quarter of fiscal 2005 and the end of fiscal 2004, respectively. We estimate our allowances against inventories based on a specific identification review of obsolete stock keeping units, or SKUs, or probable SKUs to be rationalized. We may revise our allowance against inventories as we receive more information on this matter or as we assess other factors impacting the realizability of our inventories.

~~Deferred~~million ~~tax~~as ~~assets. As~~ of the end of the ~~second~~first quarter of fiscal ~~2005~~2006 and the end of fiscal ~~2004~~ 2005, respectively. ~~our~~We ~~federal~~estimate ~~net~~our ~~operating~~allowances ~~loss,~~by orapplying ~~NOL,~~a ~~carryforwards~~recovery ~~were~~percentage ~~$163.2 million~~based ~~and~~on ~~$142.2 million,~~historical ~~respectively,~~collection ~~and~~experience. ~~our~~We ~~foreign~~accrue ~~NOL~~additional ~~carryforwards~~allowances ~~were~~based ~~$0.5 million~~on ~~and~~a ~~$0.9 million,~~specific ~~respectively.~~identification review ~~Our~~for ~~gross~~amounts ~~deferred~~deemed ~~tax~~to ~~assets,~~be ~~including~~at ~~federal,~~risk. ~~foreign,~~Receivables ~~state~~are ~~and~~written ~~local~~off ~~NOL~~against ~~carryforwards,~~the ~~were $87.7 million~~allowances ~~and~~at ~~$79.0 million~~the aspoint in ofwhich ~~the~~an ~~end~~amount ofis ~~the~~deemed ~~second~~uncollectible ~~quarter~~by ofus. ~~fiscal~~We ~~2005~~may ~~and~~revise ~~the~~our ~~end~~allowances ofagainst accounts ~~fiscal~~receivable ~~2004,~~as ~~respectively,~~we ~~and~~receive ~~our~~more ~~gross~~information ~~deferred~~or ~~tax~~as ~~liabilities~~we ~~were~~assess ~~$56.5 million~~other ~~and~~factors ~~$54.8~~impacting the realizability ~~million,~~of ~~respectively~~our accounts receivable.

WeInventories ~~have~~allowances. ~~concluded~~As ~~that~~of itthe isend ~~more~~of ~~likely~~the ~~than~~first ~~not~~quarter ~~that~~of wefiscal ~~will~~2006 ~~not~~and ~~generate~~the ~~sufficient~~end ~~future~~of ~~taxable~~fiscal ~~income~~2005, ~~to realize~~ our ~~deferred~~gross ~~tax~~inventories ~~assets~~were $76.0 million and ~~that~~$67.6 million, ~~a valuation allowance is necessary~~respectively. ~~Our~~We had ~~consolidated~~allowances ~~valuation~~of ~~allowance was~~ $642.16 million and $552.4 million, primarily for obsolete and slow-moving packaging inventories, as of the end of the ~~second~~ first quarter of fiscal ~~2005~~2006 and the end of fiscal ~~2004~~2005, respectively. ~~During~~We ~~the~~estimate ~~first~~our ~~six~~allowances ~~months~~against ofinventories based on a specific identification ~~fiscal~~review ~~2005,~~of weobsolete ~~increased~~stock ~~the~~keeping ~~valuation~~units, ~~allowance~~or ~~against~~SKUs, ~~our~~or ~~U.S.~~probable ~~federal~~SKUs ~~and~~to ~~state~~be ~~deferred~~rationalized. ~~tax~~In addition, ~~assets~~we ~~and~~estimate ~~foreign~~our ~~deferred~~slow-moving ~~tax~~inventory ~~assets~~allowance by ~~$6.9 million~~applying ~~and~~a ~~$1.8 million,~~historical ~~respectively.~~write ~~We currently~~off ~~expect~~percentage ~~that~~to aged ~~future~~inventory ~~years’~~balances. ~~deferred~~We ~~income~~may ~~tax~~revise ~~expense~~our ~~(benefit) will~~allowances ~~include~~against ~~deferred~~inventories ~~tax expense~~as ~~approximating~~we ~~the~~receive ~~growth~~more information inor ~~our~~as ~~deferred~~we ~~tax~~assess ~~liabilities~~other ~~related~~factors toimpacting the ~~amortization~~realizability of ~~goodwill~~ ~~for~~our ~~tax purposes~~inventories.

~~Goodwill~~Deferred ~~and~~tax ~~other intangible~~ assets. As of the end of the ~~second~~first quarter of fiscal ~~2005~~2006 and the end of fiscal ~~2004~~ 2005, our ~~goodwill~~U.S. ~~and~~federal ~~other~~net ~~intangible~~operating ~~assets~~loss, or NOL, carryforwards were $~~376~~182.43 million and $~~390~~181.58 million, respectively., ~~The~~and ~~$14.1 million~~our ~~decrease~~foreign isNOL ~~due~~carryforwards towere ~~the~~$61.6 million ~~impact~~and ~~of foreign currency~~$59.6 million, ~~exchange rate fluctuations~~respectively. WeOur ~~test~~gross ~~the~~deferred ~~carrying~~tax ~~value~~assets, ofincluding ~~our~~U.S. ~~goodwill~~federal and ~~other~~state ~~intangible assets for impairment annually in the fourth quarter of each fiscal year~~ and ~~upon~~foreign ~~the occurrence of~~NOL ~~certain events. Our impairment test includes quantitative analyses of discounted future cash flows~~carryforwards, ~~market~~were ~~multiples~~$108.4 million ~~of earnings~~ and ~~comparable transactions, if available~~$110.5 million Ifas of the ~~estimated fair~~end ~~value~~ of ~~goodwill~~the ~~and~~first ~~other~~quarter ~~intangible assets~~ of ~~either our domestic or European reporting~~fiscal ~~unit~~2006 isand ~~less than~~ the ~~carrying~~end ~~value, an impairment loss will be recognized. In the fourth quarter~~ of fiscal ~~2004~~2005, werespectively, ~~performed~~and our ~~annual~~gross ~~assessment~~deferred oftax ~~impairment~~liabilities ~~and~~were ~~determined no impairment was~~$184.0 ~~evident~~million atand ~~that~~$187.1 million, ~~date~~respectively.

~~ITEM~~ We 3have concluded that it is more likely than not that we will not generate sufficient future taxable income to realize our deferred tax assets and that a valuation allowance is necessary. ~~Quantitative~~Our consolidated valuation allowance was $18.8 million and ~~Qualitative~~$16.8 million ~~Disclosures~~as ~~About~~of ~~Market~~the ~~Risk~~end of the first quarter of fiscal 2006 and the end of fiscal 2005, respectively. In the first quarter of fiscal 2006, we increased the valuation allowance against our U.S. federal and state deferred tax assets and foreign deferred tax assets by $2.0 million and decreased it by $4.5 million in the first quarter of fiscal 2005. We currently expect that future years’ deferred income tax expense (benefit) will include deferred tax expense approximating the growth in our deferred tax liabilities related to the amortization of goodwill for income tax purposes.

WeGoodwill ~~are~~and ~~exposed~~intangible toassets. ~~market~~As ~~risks,~~of ~~which~~the ~~may~~end ~~give~~of ~~rise~~the tofirst ~~losses~~quarter ~~from~~of ~~adverse~~fiscal ~~changes~~2006 inand the end ~~market~~of ~~prices~~fiscal 2005, our goodwill and ~~rates~~intangible assets were $611.2 million and $608.5 million, respectively. Our ~~market~~other ~~risks~~identifiable ~~could~~intangible ~~arise~~assets ~~from~~primarily ~~changes~~consist inof ~~commodity~~customer relationships. ~~prices,~~We ~~interest~~have segregated ~~rates~~these ~~and~~customer ~~foreign~~relationships ~~currency~~into ~~exchange~~two ~~rates~~classifications based upon an assessment of the expected useful lives of these assets.

~~Commodity~~We test ~~price~~the ~~risk.~~carrying Wevalue ~~are~~of ~~exposed~~our togoodwill ~~market~~and ~~risk~~the ~~related~~customer torelationship ~~changes~~with inan ~~commodity~~indefinite ~~prices.~~useful Welife ~~may~~for ~~seek~~impairment toannually ~~manage~~in ~~our~~the ~~commodity~~fourth ~~price~~quarter ~~risk~~of ~~associated~~each ~~with~~fiscal ~~market~~year ~~fluctuations~~and byupon ~~using~~the occurrence of ~~derivative~~certain ~~instruments~~events. ~~for~~Our ~~portions~~impairment test includes quantitative analyses of ~~our~~discounted ~~corn~~future cash flows, ~~soybean~~market ~~meal,~~multiples ~~alternative~~of ~~proteins~~earnings and ~~natural~~comparable ~~gas purchases~~transactions, ~~principally~~if ~~through~~available. ~~exchange~~If ~~traded~~the ~~futures~~estimated fair value of goodwill and ~~options~~the ~~contracts.~~customer ~~The~~relationship ~~terms~~intangible asset of ~~such~~either our domestic or ~~contracts~~European ~~are~~reporting ~~generally~~unit is less than ~~one~~the ~~year.~~carrying ~~During~~value, ~~the~~an ~~term~~impairment ofloss awill ~~contract,~~be werecognized. We ~~balance~~did ~~positions daily~~not ~~with~~perform ~~cash~~an ~~payments~~annual toimpairment ortest ~~from~~in the ~~exchanges.~~fourth Atquarter ~~the~~of ~~termination~~fiscal of2005, ausing the ~~contract~~methodology described above, because we ~~have~~met the criteria under ~~ability~~SFAS to141, ~~settle~~Business ~~financially~~Combinations, orwhich bypermits ~~exchange~~us ~~for~~to carryforward ~~the~~our ~~physical~~most ~~commodity,~~recent infair ~~which~~value ~~case~~determination, wewhich ~~would deliver~~was ~~the~~completed ~~contract~~in ~~against~~connection with the Teachers’ ~~acquisition~~Acquisition. ofAs ~~the~~a ~~physical~~result, ~~commodity.~~we ~~Our~~concluded ~~policy~~that ~~does~~no ~~not~~impairment ~~permit speculative~~was ~~commodity~~evident ~~trading~~in fiscal 2005.

~~Although~~We wealso ~~may~~review ~~seek~~other tolong-lived ~~manage~~assets, including the ~~price~~intangible ~~risk~~asset offor ~~market~~the ~~fluctuations~~remainder ~~by hedging portions~~ of our ~~primary~~customer ~~commodity~~relationships ~~product~~with ~~purchases~~estimable useful lives, ~~our~~for ~~results~~impairment ofwhenever ~~operations~~events ~~have~~or ~~been~~changes in ~~adversely~~circumstances ~~affected~~indicate in the ~~past~~carrying byvalue ~~these~~of ~~fluctuations~~an ~~and~~asset may innot ~~the~~be ~~future~~recoverable. ~~Moreover,~~These ~~the~~assets ~~use of hedging instruments~~are ~~also~~measured ~~reduces~~at ~~our~~the ~~ability~~lower ~~to take advantage~~ of ~~short-term~~the ~~reductions~~carrying inamount ~~raw material prices. If one~~ or ~~more~~fair ofvalue ~~our~~less ~~competitors~~cost ~~is able~~ to ~~reduce their manufacturing costs by taking advantage of any reductions in raw material prices~~sell, wewhether ~~may~~reported ~~face pricing pressures from these competitors and may be~~in ~~forced~~continuing tooperations ~~reduce our selling prices~~ or ~~face~~in adiscontinued ~~decline~~operations. inAn ~~net~~impairment ~~sales,~~loss ~~either~~would ofbe ~~which~~recognized ~~could~~to ~~have a~~the ~~material~~extent ~~adverse~~that ~~effect~~the oncarrying ~~our business, results of operations and financial condition.~~amount

Our commodity derivative instruments are measured at fair value under SFAS 133 in our accompanying unaudited condensed consolidated financial statements. Our results of operations for particular periods have been adversely affected in the past under SFAS 133 fair value accounting of our commodity derivative instruments due to the volatility in commodity prices and, similarly, our results of operations may be adversely affected in the future by SFAS 133 accounting.

As of ~~the~~an ~~end~~asset ofexceeds ~~the~~its ~~second~~fair ~~quarter~~value. ofWe ~~fiscal~~have ~~2005,~~concluded wethat ~~had~~no ~~open~~known ~~commodity~~events ~~contracts~~or ~~with a~~circumstances ~~fair~~exist ~~value~~as ~~gain~~ of ~~$3.6 million. Based upon an analysis we completed at~~ the end of the ~~second~~ first quarter of fiscal ~~2005~~2006 inthat ~~which~~would weindicate ~~utilized~~an ~~our~~impairment ~~actual~~test ~~derivative contractual volumes and assumed a~~is ~~5% adverse movement in commodity prices, we determined the potential decrease in the fair value of our commodity derivative instruments would be approximately $1~~necessary.~~0 million.~~

~~Interest~~ITEM ~~rate~~3 ~~risk.~~— WeQuantitative ~~are exposed to market risk related to changes in interest rates. We have in the past~~ and ~~may~~Qualitative inDisclosures ~~the~~About ~~future~~Market ~~enter into interest rate swap and cap contracts to limit our~~Risk exposure to the interest rate risk associated with our floating rate debt, which totaled $193.5 million at the end of the second quarter of fiscal 2005. Changes in market values of these financial instruments are highly correlated with changes in market values of the hedged item both at inception and over the life of the contract. At the end of the second quarter of fiscal 2005, we had no outstanding interest rate swap or cap contracts.

~~Our~~We ~~results~~are ofexposed ~~operations~~to ~~may~~market berisks, ~~adversely~~which ~~affected~~may bygive ~~changes~~rise into ~~interest~~losses ~~rates.~~from ~~Assuming~~adverse ~~a 100~~changes ~~basis point increase~~ in ~~the interest rates on our floating rate debt as of the end of the~~ ~~second~~market ~~quarter~~prices ~~of fiscal 2005, interest expense would have increased by approximately $0.5 million~~ and $1rates.~~0 million~~ ~~for~~Our ~~the~~market ~~second~~risks ~~quarter~~could ~~and~~arise ~~first~~from ~~six~~changes ~~months~~in ofcommodity ~~fiscal 2005. In addition~~prices, such a change would have resulted in a decrease of approximately $12.3 million in the fair value of our fixed rate debt at the end of the second quarter of fiscal 2005. In the event of an adverse change in interest rates, ~~we could take action to mitigate our exposure; however, due to the uncertainty of these potential actions~~ and ~~the~~foreign ~~possible~~currency ~~adverse~~exchange ~~effects, our analysis assumes no such actions~~rates. ~~Furthermore, our analysis does not consider the effect of any changes in the level of overall economic activity that may exist in such an environment.~~

~~Foreign~~Commodity ~~currency~~price ~~exchange~~ risk. We ~~have~~are ~~foreign~~exposed ~~currency~~to ~~exposure~~market ~~relating~~risk related to ~~the~~changes ~~translation~~in commodity prices. ofWe ~~the~~may ~~financial~~seek ~~statements~~to ofmanage our ~~foreign~~commodity ~~operations~~price ~~into~~risk ~~U.S.~~associated ~~dollars.~~with ~~Our~~market ~~functional~~fluctuations by using ~~currencies,~~derivative ~~other~~instruments ~~than~~for ~~the~~portions ~~U.S.~~of ~~dollar~~our corn, ~~include~~soybean ~~the Euro~~meal, ~~Danish~~alternative ~~Krona~~proteins, oil and natural ~~British~~gas ~~Pound~~purchases, ~~Sterling. The~~principally ~~cumulative~~through ~~translation~~exchange ~~adjustment~~traded ~~for~~futures ~~the~~and ~~net~~options ~~investment~~contracts. inThe terms ~~our~~of ~~European~~such ~~operations~~contracts ~~is recognized~~are ingenerally ~~accumulated~~less ~~other~~than ~~comprehensive~~one ~~income~~year. inDuring the ~~accompanying~~term ~~unaudited~~of ~~condensed~~a contract, we ~~consolidated~~balance ~~financial~~positions ~~statements~~daily ~~included~~with ~~herein.~~cash Atpayments ~~the~~to ~~end~~or offrom the ~~second~~exchanges. ~~quarter~~At the termination of ~~fiscal~~a ~~2005~~contract, we ~~had~~have athe ~~cumulative~~ability ~~translation~~to ~~gain~~settle offinancially ~~$37.7 million,~~or ~~which~~by ~~included~~exchange afor ~~$19.2 million~~the physical commodity, in ~~cumulative~~which ~~loss~~case, ~~for~~we ~~the~~would ~~translation~~deliver ofthe ~~our~~contract ~~previously~~against ~~extinguished~~the ~~Euro-denominated~~acquisition ~~debt~~of tothe Uphysical commodity.S. Our ~~dollars~~policy ~~through~~does ~~the~~not ~~final~~permit ~~repayment~~speculative ~~date~~commodity trading.

WeAlthough ~~also~~we ~~have~~may ~~foreign~~seek ~~currency~~to ~~exposure,~~manage tothe aprice ~~lesser~~risk ~~extent,~~of ~~relating~~market tofluctuations ~~transacting~~by ~~business~~hedging portions of our primary commodity product purchases, our results of operations have been adversely affected in the ~~countries~~past ~~with~~by ~~foreign~~these ~~currencies~~fluctuations ~~other~~and ~~than~~may ~~our~~in ~~functional~~the ~~currencies.~~future ~~From~~be ~~time~~adversely toaffected. ~~time~~Moreover, wethe use of ~~may~~certain ~~enter~~hedging ~~into~~instruments ~~foreign~~also ~~currency~~reduces ~~options~~our orability ~~forward~~to ~~contracts~~take ~~for~~advantage ~~the~~of ~~purchase~~short-term reductions in raw material prices. If one or ~~sale~~more of aour ~~foreign currency~~competitors is able to ~~mitigate~~reduce ~~the~~their ~~risk~~manufacturing ~~from~~costs by ~~foreign~~taking ~~currency~~advantage ~~exchange~~of ~~rate~~any ~~fluctuations~~reductions in ~~those~~raw material prices, we may face pricing pressures from ~~transactions~~these competitors and ~~translations.~~may Asbe offorced ~~the~~to ~~end~~reduce ofour ~~the~~selling ~~second~~prices ~~quarter~~or offace ~~fiscal~~a ~~2005,~~decline wein ~~had~~sales ~~open~~volume, ~~foreign~~either ~~currency~~of ~~contracts~~which ~~with~~could have a ~~fair~~material ~~value~~adverse ~~gain~~effect on our business, results of $0operations and financial condition.~~8 million.~~

~~ITEM~~ Our 4commodity derivative instruments are measured at fair value under SFAS 133 in our financial statements. ~~Controls~~Our results of operations for certain periods have been adversely affected in the past under SFAS 133 fair value accounting of our commodity derivative instruments due to the volatility in commodity prices and, ~~Procedures~~similarly, our results of operations may be adversely affected in the future by SFAS 133 accounting.

~~Evaluation~~As of ~~disclosure~~the ~~controls~~end ~~and~~of ~~procedures.~~the ~~Our~~first ~~disclosure~~quarter ~~controls~~of ~~and~~fiscal ~~procedures are~~2006, ~~designed~~we tohad ~~ensure~~open ~~that~~commodity ~~information~~contracts ~~required~~with toa befair value ~~disclosed~~gain inof ~~the~~$1.1 million. ~~reports~~Based ~~that~~upon an analysis we ~~file~~completed ~~or furnish~~as ~~under~~of the ~~Securities~~end ~~Exchange Act~~ of ~~1934,~~the asfirst ~~amended, is recorded, processed, summarized~~quarter ~~and~~of ~~reported~~fiscal ~~within~~2006 ~~the time periods specified~~ in ~~the~~which ~~Securities~~we ~~and~~utilized ~~Exchange~~our ~~Commission’s~~actual ~~rules and~~derivative ~~forms.~~contractual ~~Disclosure~~volumes ~~controls~~ and ~~procedures~~assumed ~~include,~~a ~~without limitation, controls and procedures~~5% ~~designed~~adverse tomovement ~~ensure that information required to be disclosed by us~~ in ~~the~~commodity ~~reports~~prices, ~~that~~ we ~~file under~~determined the ~~Exchange~~potential ~~Act~~decrease isin ~~accumulated~~the ~~and~~fair ~~communicated~~value toof our ~~management, including our Chief~~ ~~Executive~~commodity ~~Officer~~derivative ~~and~~instruments ~~Chief~~would ~~Financial~~be ~~Officer,~~approximately ~~as appropriate to allow timely decisions regarding required disclosure~~$0.5 million.

~~Under~~Interest ~~the~~rate ~~supervision~~risk. ~~and~~We ~~with~~are ~~the~~exposed ~~participation~~to ofmarket ~~management,~~risk ~~including~~related ~~our~~to ~~Chief~~changes ~~Executive Officer~~in ~~and~~interest ~~Chief~~rates. ~~Financial~~We have ~~Officer,~~in wethe ~~performed~~past anand ~~evaluation~~may ofin the ~~design~~future enter into interest rate swap and ~~operation~~cap ofcontracts to limit our ~~disclosure~~exposure ~~controls~~to ~~and~~the ~~procedures~~interest rate risk associated with our floating rate debt, which was $160.0 million as of the end of the ~~quarterly~~first ~~period~~quarter ~~ending~~of ~~July 2,~~fiscal ~~2005,~~2006. Changes in market values of these financial ~~pursuant~~instruments toare ~~Exchange~~highly ~~Act~~correlated ~~Rule 13a-15.~~with ~~Based~~changes ~~upon~~in ~~that~~market ~~evaluation,~~values ~~our~~of ~~Chief~~the ~~Executive~~hedged ~~Officer~~item ~~and~~both at ~~Chief~~inception ~~Financial~~and ~~Officer~~over ~~concluded~~the ~~that~~life ~~our~~of ~~disclosure~~the ~~controls~~contract. ~~and~~At ~~procedures~~the ~~are~~end ~~effective~~of the first quarter of fiscal 2006, we had no outstanding interest rate swap or cap contracts.

Our results of operations may be adversely affected by changes in interest rates. Assuming a 100 basis point increase in the interest rates on our floating rate debt as of the end of the first quarter of fiscal 2006, interest expense would have increased by approximately $0.4 million for the first quarter of fiscal 2006. Such a change would have also resulted in a decrease of approximately $16.7 million in the fair value of our fixed rate debt as of the end of the first quarter of fiscal 2006. In the event of an adverse change in interest rates, we could take action to mitigate our exposure; however, due to the uncertainty of these potential actions and the possible adverse effects, our analysis assumes no such actions. Furthermore, our analysis does not consider the effect of any changes in the level of overall economic activity that may exist in such an environment.

~~Changes~~Foreign incurrency ~~internal~~exchange ~~control~~risk. ~~over~~We have foreign currency exposure relating to the translation of the financial ~~reporting~~statements of our foreign operations into U.S. ~~There~~dollars. ~~were~~Our nofunctional currencies, ~~changes~~other than the U.S. dollar, include the Euro, Danish Krona and British Pound Sterling. The cumulative translation adjustment for the net investment in our ~~internal~~European operations is ~~controls~~recognized ~~over~~in accumulated other comprehensive income in our financial ~~reporting~~statements. (In addition, we have designated our Euro term loan facility as ~~defined~~a hedge against a portion of our foreign currency exposure related to the net investment in ~~Rule~~our foreign operations. As of the end of the first quarter of fiscal 2006, we had a cumulative translation net gain of $3.9 ~~13a-15(f)~~million, ~~under~~which consists of a cumulative gain of $4.7 million for the ~~Exchange~~translation ~~Act)~~of ~~that~~the financial statements of our foreign ~~occurred~~operations ~~during~~into U.S. dollars, partially offset by a cumulative translation loss of $0.8 million for the translation of our ~~last~~outstanding ~~fiscal~~Euro term loan facility and payments thereon to U.S. dollars through the end of the first quarter ~~that~~of ~~have~~fiscal ~~materially~~2006. ~~affected~~We oralso ~~are~~periodically ~~reasonably~~enter ~~likely~~into toforeign ~~materially~~currency ~~affect~~options and forward contracts to seek to manage our ~~internal~~exposure ~~controls~~to ~~over~~exchange ~~financial~~rate ~~reporting~~fluctuations on foreign currency translations. As of the end of the first quarter of fiscal 2006, we had open foreign currency contracts related to foreign currency translations with a fair value of $0.3 million.

We also have foreign currency exposure, to a lesser extent, relating to transacting business in countries with foreign currencies other than our functional currencies. From time to time, we may enter into foreign currency options or forward contracts for the purchase or sale of a foreign currency to mitigate the risk from foreign currency exchange rate fluctuations in those transactions and translations. We had no open foreign currency contracts related to foreign currency transactions at the end of the first quarter of fiscal 2006.

ITEM 4 — Controls and Procedures

Evaluation of disclosure controls and procedures. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we performed an evaluation of the design and operation of our disclosure controls and procedures in effect as of the end of the first quarter of fiscal 2006. Based on that evaluation, our chief executive officer and chief financial officer concluded that, as of the end of the first quarter of fiscal 2006, such disclosure controls and procedures were effective to ensure that material information relating to the company, including our consolidated subsidiaries, was accumulated and communicated to our management and made known to our chief executive officer and chief financial officer.

Changes in internal controls over financial reporting. There were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

PART II. ~~Other~~— ~~Information~~OTHER INFORMATION

ITEM 1. — Legal Proceedings

See Note 1110, Commitments and Contingencies, in the accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this quarterly report on Form 10-Q, which is incorporated by reference in this Part II, Item 1.

ITEM 6.1A ~~Exhibits~~— Risk Factors

Exhibit
Number		Description
15.1*		Letter from KPMG LLP dated August 20, 2005 regarding unaudited interim financial information.
31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / 15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / 15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1†		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†		Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

We have commenced tender offers and consent solicitations for our senior notes and senior subordinated notes, and, if the proposed amendments to the indentures governing our senior notes and senior subordinated notes become operative, holders of our senior notes and senior subordinated notes who do not tender their notes will no longer be entitled to the benefits of the provisions contained in the applicable indenture as currently in effect.

* Pursuant to ~~Filed~~the ~~herewith~~terms of the Merger Agreement with Mars, we have commenced tender offers for all of our senior notes and senior subordinated notes and are soliciting consents to amend the indentures governing these notes. †These ~~Furnished~~amendments ~~herewith~~would, among other things, permanently eliminate from the indentures most of the restrictive covenants and certain of the events of default contained in the indentures. If the proposed amendments to the indentures become operative, holders of our senior notes and senior subordinated notes that are not purchased pursuant to the applicable tender offer for any reason will no longer be entitled to the benefits of the provisions contained in the applicable indenture as currently in effect that will be modified or eliminated by the applicable proposed amendments. The elimination or modification of these provisions would also permit us to take other actions, including, for example, the sale of our European business to a third party following the acquisition by Mars of Doane Enterprises, and such actions could materially increase our credit risk or could otherwise be materially adverse to the holders of our senior notes and senior subordinated notes and could negatively impact the price at which the outstanding notes may trade.

ITEM 4 — Submission of Matters to a Vote of Security Holders

By unanimous written consent dated February 10, 2006, holders of our Class B common stock elected Terry R. Peets to serve as a member of our board of directors.

ITEM 6 — Exhibits


Exhibit
Number		Description
15.1*		Letter from KPMG LLP dated May 11, 2006, regarding unaudited interim financial information.

31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / 15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / 15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


*		Filed herewith.

**		Not considered to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

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.

DOANE PET CARE COMPANY By: /s/ PHILIP K. WOODLIEF Philip K. Woodlief Vice President, Finance and Chief Financial Officer By: /s/ STEPHEN P. HAVALA Stephen P. Havala Corporate Controller and Principal Accounting Officer

ByDate: May 16, ~~/s/ STEPHEN P. HAVALA Stephen P. Havala Corporate Controller and Principal Accounting Officer~~2006

Date: August 22, 2005

EXHIBIT INDEX

Exhibit
Number		Description
15.1*		Letter from KPMG LLP dated ~~August~~May 2011, ~~2005~~2006, regarding unaudited interim financial information.
31.1*		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) / 15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes -Oxley Act of 2002.
31.2*		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) / 15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes -Oxley Act of 2002.
32.1†		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2†		Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Filed herewith. † Furnished herewith.


*		Filed herewith.

**		Not considered to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

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