UNITED STATES SECURITIES AND EXCHANGE COMMISSION ~~WASHINGTON, D.C. 20549 ________________________~~

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the Quarterly Period ended June 30, ~~2004~~ 2005

Commission File No. 33-93644

DAY INTERNATIONAL GROUP, INC. ~~130 West Second Street Dayton, Ohio 45402 (937) 224-4000~~

~~State~~130 ofWest ~~Incorporation:~~Second ~~Delaware~~Street Dayton, Ohio 45402 (937) 224-4000

IRS Employer Identification No. :31-1436349


State of Incorporation:		Delaware

IRS Employer Identification No.:		31-1436349

Securities Registered Pursuant to Section 12 (b) of the Act: None

Securities Registered Pursuant to Section 12 (g) of the Act: None

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 x No o~~Yesþ Noo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). ~~Yes o No x~~Yeso Noþ

There were 23,323 Common Shares of the Company, $0.01 per share par value, outstanding as of August 1, ~~2004~~2005.

DAY INTERNATIONAL GROUP, INC. ~~INDEX~~

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of June 30, 2004 and December 31, 2003		3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2004 and 2003		4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2004 and 2003		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		24
Item 4.	Controls and Procedures		25
PART II	OTHER INFORMATION
Item 6.	Exhibits and Reports on Form 8-K		26
Signature			26
EX-31.1 CERTIFICATION CEO
EX-31.2 CERTIFICATION CFO
EX-32.1 SECTION 1350 CERTIFICATION CEO
EX-32.2 SECTION 1350 CERTIFICATION CFO

INDEX


	Page
PART I FINANCIAL INFORMATION

Item 1. Financial Statements:

Condensed Consolidated Balance Sheets as of June 30, 2005 and December 31, 2004		3

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2005 and 2004		4

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2005 and 2004		5

Notes to Condensed Consolidated Financial Statements		6

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations		19

Item 3.Quantitative and Qualitative Disclosures About Market Risk		23

Item 4.Controls and Procedures		25

PART II OTHER INFORMATION

Item 6. Exhibits		25

Signature		25
EX-31.1 302 Certification for CEO
EX-31.2 302 Certification for CFO
EX-32.1 906 Certification for CEO
EX-32.2 906 Certification for CFO

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DAY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES ~~CONDENSED CONSOLIDATED BALANCE SHEETS JUNE 30, 2004 AND DECEMBER 31, 2003 (In thousands)~~

	2004			2003
ASSETS
Cash and cash equivalents	$	1,331		$	726
Accounts receivable (less allowance for doubtful accounts of $3,431 and $3,407)		48,075			44,687
Inventories (Note B)		51,806			48,652
Other current assets		13,087			12,881
Total current assets		114,299			106,946
Property, plant and equipment, net of accumulated depreciation of $54,858 and $49,529		70,699			74,167
Goodwill		142,470			142,580
Intangible assets (net of accumulated amortization of $37,696 and $35,306)		21,339			23,223
Other assets		20,460			24,624
TOTAL ASSETS	$	369,267		$	371,540
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable	$	10,046		$	7,563
Current maturities of long-term debt		4,016			3,489
Other current liabilities		30,778			29,421
Total current liabilities		44,840			40,473
Long-term and subordinated long-term debt		265,777			276,331
Other long-term liabilities		34,580			35,811
Redeemable preferred stock (Note D)		157,839			146,649
STOCKHOLDERS’ EQUITY (DEFICIT):
Common shares		1			1
Contra-equity associated with the assumption of majority shareholder’s bridge loan		(68,673	)		(68,772	)
Retained earnings (deficit)		(69,581	)		(65,180	)
Accumulated other comprehensive loss		4,484			6,227
Total stockholders’ equity (deficit)		(133,769	)		(127,724	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	369,267		$	371,540

CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2005 AND DECEMBER 31, 2004
(In thousands)

See notes to condensed consolidated financial statements.


	2005			2004
	(Unaudited)
ASSETS
Cash and cash equivalents	$	1,823		$	843
Accounts receivable (less allowance for doubtful accounts of $3,319 and $3,815)		49,380			51,967
Inventories (Note B)		51,529			50,334
Other current assets		18,798			17,812

Total current assets		121,530			120,956

Property, plant and equipment, net of accumulated depreciation of $65,236 and $61,592		70,377			74,735
Goodwill		142,472			143,444
Intangible assets, net of accumulated amortization of $42,570 and $40,203		16,472			18,842
Other assets		11,306			12,258

TOTAL ASSETS	$	362,157		$	370,235


LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable	$	6,254		$	11,020
Current maturities of long-term debt		4,545			4,576
Other current liabilities		27,648			33,466

Total current liabilities		38,447			49,062

Long-term and subordinated long-term debt		243,156			247,814
Other long-term liabilities		41,591			39,572
Redeemable preferred stock (Note D)		182,765			169,805

STOCKHOLDERS’ EQUITY (DEFICIT):
Common shares		1			1
Contra-equity associated with the assumption of majority shareholder’s bridge loan		(68,673	)		(68,673	)
Retained earnings (deficit)		(78,318	)		(75,201	)
Accumulated other comprehensive gain/(loss)		3,188			7,855

Total stockholders’ equity (deficit)		(143,803	)		(136,018	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	362,157		$	370,235

3See notes to condensed consolidated financial statements.

~~Table of Contents~~3

DAYTable INTERNATIONALof GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (In thousands) Contents

	Three Months						Six Months
	2004			2003			2004			2003
NET SALES	$	88,807		$	70,139		$	178,520		$	138,958
COST OF GOODS SOLD		56,692			45,356			113,074			89,493
GROSS PROFIT		32,115			24,783			65,446			49,465
SELLING, GENERAL AND ADMINISTRATIVE		19,853			15,419			39,953			29,968
AMORTIZATION OF INTANGIBLES		8			206			17			407
MANAGEMENT FEES		250			250			500			500
OPERATING PROFIT		12,004			8,908			24,976			18,590
OTHER EXPENSES:
Interest expense:
Long-term debt (including amortization of deferred financing costs and discount of $436, $587, $863 and $1,174)		5,646			6,629			11,282			13,154
Redeemable preferred stock dividends (including amortization of discount and issuance costs of $47 and $94)		5,628						11,190
Other (income) expense		(663	)		465			(1,541	)		(312	)
INCOME BEFORE INCOME TAXES		1,393			1,814			4,045			5,748
INCOME TAX EXPENSE		3,779			742			8,446			2,227
NET INCOME (LOSS)		(2,386	)		1,072			(4,401	)		3,521
ACCUMULATING PREFERRED STOCK DIVIDENDS (Note D)					(4,816	)					(9,574	)
AMORTIZATION OF PREFERRED STOCK ISSUANCE COSTS					(47	)					(94	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(2,386	)	$	(3,791	)	$	(4,401	)	$	(6,147	)

DAY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

~~See~~CONDENSED ~~notes~~CONSOLIDATED toSTATEMENTS ~~condensed~~OF ~~consolidated~~OPERATIONS THREE ~~financial~~AND ~~statements.~~SIX MONTHS ENDED JUNE 30, 2005 AND 2004 (In thousands) (Unaudited)


	Three Months						Six Months
	2005			2004			2005			2004
NET SALES	$	91,390		$	88,807		$	181,309		$	178,520

COST OF GOODS SOLD		56,762			56,692			113,635			113,074


GROSS PROFIT		34,628			32,115			67,674			65,446

SELLING, GENERAL AND ADMINISTRATIVE EXPENSE		20,087			19,853			40,609			39,953
AMORTIZATION OF INTANGIBLES		8			8			17			17
MANAGEMENT FEES		250			250			500			500


OPERATING PROFIT		14,283			12,004			26,548			24,976

OTHER EXPENSES:
Interest expense:
Long-term debt (including amortization of deferred financing costs and discount of $456, $436, $913, and $863)		5,650			5,646			11,117			11,282
Redeemable preferred stock dividends (including amortization of discount and issuance costs of $47, $47, $94, and $94)		6,518			5,628			12,946			11,190
Other (income) expense		(1,137	)		(663	)		(827	)		(1,541	)


INCOME BEFORE INCOME TAXES		3,252			1,393			3,312			4,045

INCOME TAX EXPENSE		3,800			3,779			6,429			8,446


NET INCOME (LOSS)	$	(548	)	$	(2,386	)	$	(3,117	)	$	(4,401	)

~~Table~~See ofnotes ~~Contents~~to condensed consolidated financial statements.

~~DAY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES~~4 ~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2004 AND 2003~~

	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(4,401	)	$	3,521
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		7,402			7,938
Interest expense—redeemable preferred stock dividends		11,190
Deferred income taxes		3,619			(2,031	)
Equity in earnings of investees		(148	)
Foreign currency (gain) loss		(907	)		(1,119	)
(Gain) loss on disposal of fixed assets		(128	)		774
Change in operating assets and liabilities		(3,413	)		(1,656	)
Net cash provided by operating activities		13,214			7,427
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions		(1,346	)		(1,000	)
Capital expenditures		(3,126	)		(4,312	)
Proceeds from sale of property		1,410			939
Net cash used in investing activities		(3,062	)		(4,373	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		25
Payment of deferred financing costs		(633	)
Payments on term loans		(8,927	)		(6,347	)
Net (payments on) proceeds from revolving credit facility		50			3,650
Net cash provided by (used in) financing activities		(9,485	)		(2,697	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(62	)		82
Net increase (decrease) in cash and cash equivalents		605			439
Cash and cash equivalents at beginning of period		726			996
Cash and cash equivalents at end of period	$	1,331		$	1,435
NON-CASH TRANSACTIONS:
Preferred stock dividend				$	1,901
Amortization of preferred stock discount				$	94
Short-term note payable for acquisition				$	952

~~See~~DAY ~~notes~~INTERNATIONAL toGROUP, ~~condensed~~INC. ~~consolidated~~AND ~~financial statements.~~SUBSIDIARIES

5CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2005 AND 2004 (In thousands) (Unaudited)


	2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(3,117	)	$	(4,401	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		7,976			7,402
Interest expense—redeemable preferred stock dividends		12,946			11,190
Deferred income taxes		3,510			3,619
Equity in earnings of investees		(59	)		(148	)
Foreign currency (gain) loss		(1,684	)		(907	)
(Gain) loss on disposal of fixed assets		(8	)		(128	)
Change in operating assets and liabilities		(12,777	)		(3,413	)

Net cash provided by operating activities		6,787			13,214

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions		(426	)		(1,346	)
Capital expenditures		(3,643	)		(3,126	)
Proceeds from sale of property					1,410

Net cash (used in) investing activities		(4,069	)		(3,062	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options					25
Payment of deferred financing costs					(633	)
Payments on term loans		(1,979	)		(8,927	)
Net (payments on) proceeds from revolving credit facility		175			50

Net cash provided by (used in) financing activities		(1,804	)		(9,485	)

EFFECT OF EXCHANGE RATE CHANGES ON CASH		66			(62	)


Net increase (decrease) in cash and cash equivalents		980			605
Cash and cash equivalents at beginning of period		843			726


Cash and cash equivalents at end of period	$	1,823		$	1,331

~~DAY~~See ~~INTERNATIONAL~~notes ~~GROUP,~~to ~~INC. NOTES~~condensed TOconsolidated ~~CONDENSED~~financial ~~CONSOLIDATED FINANCIAL STATEMENTS~~statements. ~~(In thousands)~~

~~A. BASIS OF PRESENTATION~~5

TheTable balance sheet as of December 31, 2003, is condensed financial information derived from the audited balance sheet. The interim financial statements are unaudited. The consolidated financial statements of Day International Group, Inc. have been prepared in accordance with accounting principles generally accepted in the United States and, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation in accordance with accounting principles generally accepted in the United States for the periods presented. The consolidated results of operations and cash flows for the interim periods presented are not necessarily indicative of the results for the full year. Contents

B.DAY ~~INVENTORIES~~INTERNATIONAL GROUP, INC.

~~Inventories~~NOTES asTO ofCONDENSED ~~June 30,~~CONSOLIDATED ~~2004~~FINANCIAL ~~and~~STATEMENTS (In ~~December 31, 2003, consist of:~~thousands) (Unaudited)

	2004		2003
Finished goods	$	25,688	$	24,917
Work in process		5,182		5,453
Raw materials		20,936		18,282
	$	51,806	$	48,652

A. BASIS OF PRESENTATION

CThe balance sheet as of December 31, 2004, is condensed financial information derived from the audited balance sheet. ~~LONG-TERM~~The ~~DEBT~~interim financial statements are unaudited. The consolidated financial statements of Day International Group, Inc. have been prepared in accordance with accounting principles generally accepted in the United States and, in the opinion of management, reflect all adjustments (consisting of normal recurring accruals) necessary for a fair presentation in accordance with accounting principles generally accepted in the United States for the periods presented. The consolidated results of operations and cash flows for the interim periods presented are not necessarily indicative of the results for the full year.

~~On June 2, 2004, the Company issued $126,473 of Tranche D Term Loans under the $185,000 Senior Secured Credit Facility to refinance the previously outstanding Tranche~~ B ~~and Tranche C Term Loans~~. ~~The Tranche D Term Loans have terms~~INVENTORIES identical to the refinanced Tranche B and Tranche C Term Loans, except that interest rates have been lowered 100 basis points and are now based on the banks’ base rate plus 2.50% or the LIBOR rate plus 3.50%. No change in the final maturity date was made. In accordance with EITF 96-19, Debtor’s Accounting for a Modification or Exchange of Debt Instruments, there was not a substantial difference between the debt instruments, thus no extinguishment of debt is recognized. Remaining unamortized deferred financing fees and debt discount from the Tranche B and C Term Loans will be added to the financing fees paid to the debtors and amortized over the term of the Tranche D Term Loan.

6Inventories as of June 30, 2005 and December 31, 2004, consist of:


	2005		2004
Finished goods	$	25,514	$	24,384
Work in process		4,717		5,193
Raw materials		21,298		20,757

	$	51,529	$	50,334

DC. ~~REDEEMABLE~~LONG-TERM ~~PREFERRED STOCK~~DEBT

~~The~~On June 2, 2004, the Company’s ~~121/4%~~issued ~~Senior~~$126,473 ~~Exchangeable~~of ~~Preferred~~Tranche ~~Stock~~D ~~require~~Term ~~that~~Loans under the $185,000 Senior ~~dividends~~Secured ~~must~~Credit beFacility ~~paid~~to inrefinance ~~cash~~the ~~after~~previously ~~March 15,~~outstanding ~~2003.~~Tranche ~~The~~B ~~Company~~and ~~has~~Tranche ~~not~~C ~~paid~~Term Loans. ~~cash~~The ~~dividends~~Tranche ~~after~~D ~~March 15,~~Term ~~2003,~~Loans ~~because~~have ofterms ~~certain~~identical ~~restrictions~~to in the ~~Company’s~~ ~~Senior~~refinanced ~~Secured~~Tranche ~~Credit~~B ~~Agreement~~ and ~~Notes~~Tranche ~~Indentures~~C ~~limiting~~Term ~~the~~Loans, ~~ability~~except tothat ~~pay~~interest ~~cash~~rates ~~dividends.~~have Ifbeen ~~not~~lowered ~~paid~~100 ~~for~~basis ~~four~~points ~~consecutive~~and ~~quarters,~~are now based on the banks’ base ~~holders~~rate ofplus 2.50% or the ~~Exchangeable~~LIBOR ~~Preferred~~rate ~~Stock~~plus ~~have~~3.50%. No change in the ~~right~~final tomaturity ~~elect~~date ~~two~~was made. In ~~directors~~accordance towith ~~the~~EITF ~~Board~~96-19, ofDebtor’s ~~Directors~~Accounting ~~until~~for ~~the~~a ~~dividends~~Modification inor ~~arrears~~Exchange ~~have~~of ~~been~~Debt Instruments, ~~paid.~~there ~~All~~was ~~dividends~~not ~~through~~a ~~March 15,~~substantial ~~2003,~~difference ~~have~~between ~~been~~the indebt ~~the~~instruments, ~~form~~thus no extinguishment of ~~additional~~debt ~~fully-paid~~was recognized. Remaining unamortized deferred financing fees and ~~non-assessable~~debt ~~shares~~discount offrom ~~Exchangeable~~the ~~Preferred~~Tranche ~~Stock.~~B ~~Dividends-in-arrears~~and ~~are~~C ~~$10,417~~Term asLoans ofwere ~~June 30,~~added ~~2004,~~to ~~which~~the ~~are~~financing ~~included~~fees inpaid to the debtors and amortized over the term ~~redeemable~~of ~~preferred~~the ~~stock~~Tranche ~~balance~~D Term Loan.

~~In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial~~6 Instruments with Characteristics of both Liabilities and Equity. This statement established standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This statement requires that the Company’s redeemable preferred stock be recorded in the same manner as long-term debt. The Company adopted the statement as of July 1, 2003. Therefore, since the third quarter of 2003, the Company has reflected the redeemable preferred stock as a liability and accrued dividends as interest expense. The adoption of this statement has no effect on the cash flows of the Company, net loss available to common shareholders or the Company’s compliance with its debt covenants.

E.Table INCOMEof TAXES Contents

~~The Company’s effective income tax rate for 2004 is significantly different from the statutory rates in effect as a result of the adoption of SFAS No~~D. ~~150 and~~ ~~the~~REDEEMABLE ~~inclusion~~PREFERRED ~~of the dividends on the redeemable preferred stock in income~~STOCK (loss) before income taxes. The non-deductible preferred stock dividends cause a significant difference between book income and taxable income subsequent to the adoption of SFAS No. 150. In addition, the effective rate is affected by dividends from non-U.S. subsidiaries taxable in the United States.

FThe Company’s 121/4% Senior Exchangeable Preferred Stock require that dividends must be paid in cash after March 15, 2003. ~~BUSINESS~~The ~~SEGMENTS~~Company has not paid cash dividends after March 15, 2003, because of certain restrictions in the Company’s Senior Secured Credit Agreement and Notes Indentures limiting the ability to pay cash dividends. During the fourth quarter of 2004, the Exchangeable Preferred Stockholders elected two directors to the Board of Directors in accordance with their rights when dividends in arrears have not been paid. All dividends through March 15, 2003, have been in the form of additional fully-paid and non-assessable shares of Exchangeable Preferred Stock. Dividends-in-arrears were $19,958 as of June 30, 2005 and $15,043 as of December 31, 2004 which are included in the redeemable preferred stock balance.

The Company produces precision-engineered products, specializing in the design and customization of consumable image-transfer products for the graphic arts (printing) industry and consumable fiber handling products for the textile industryE. ~~The~~INCOME ~~Image Transfer segment designs, manufactures and markets~~TAXES high-quality printing blankets and sleeves, pressroom chemicals and automatic dampening systems used primarily in the offset, flexographic and digital printing industries. The Textile Products segment manufactures and markets precision engineered rubber cots and aprons sold to textile yarn spinners and other engineered rubber products sold to diverse markets.

~~Segment~~The ~~performance~~Company’s iseffective ~~evaluated~~income ~~based~~tax onrate ~~operating~~for ~~profit~~2005 ~~results~~and ~~compared~~2004 tois different from the statutory rates in effect as a result of the ~~annual~~inclusion ~~operating~~of ~~plan~~the dividends on the redeemable preferred stock in income before income taxes. ~~Intersegment~~The ~~sales~~non-deductible preferred stock dividends cause a significant difference between book income and ~~transfers~~taxable ~~are~~income. ~~not~~In ~~material~~addition, the effective tax rates for 2004 were affected by dividends from non-U.S. subsidiaries taxable in the United States.

7F. BUSINESS SEGMENTS

~~Table~~The Company produces precision-engineered products, specializing in the design and customization of consumable ~~Contents~~image-transfer products for the graphic arts (printing) industry and consumable fiber handling products for the textile industry. The Image Transfer segment designs, manufactures and markets high-quality printing blankets and sleeves, pressroom chemicals and automatic dampening systems used primarily in the offset, flexographic and digital printing industries. The Textile Products segment manufactures and markets precision engineered rubber cots and aprons sold to textile yarn spinners and other engineered rubber products sold to diverse markets.

~~The~~Segment ~~Company~~performance ~~manages~~is ~~the~~evaluated ~~two~~based ~~segments~~on asoperating ~~separate~~profit ~~strategic~~results ~~business~~compared ~~units.~~to ~~They are~~the ~~managed~~annual ~~separately because each business unit requires different~~operating ~~manufacturing~~plan. ~~processes,~~Intersegment ~~technology~~sales and ~~marketing~~transfers ~~strategies~~are not material.

	Three Months				Six Months
	2004		2003		2004		2003
Third party sales:
Image Transfer	$	75,963	$	57,523	$	152,966	$	113,122
Textile Products		12,844		12,616		25,554		25,836
Total	$	88,807	$	70,139	$	178,520	$	138,958
Segment operating profit:
Image Transfer	$	11,808	$	9,082	$	24,366	$	18,647
Textile Products		1,601		1,427		3,403		2,981
Total	$	13,409	$	10,509	$	27,769	$	21,628

The Company manages the two segments as separate strategic business units. They are managed separately because each business unit requires different manufacturing processes, technology, and marketing strategies. Segment detail for the three and six months ended June 30, 2005 follow.

~~The following is a reconciliation of the segment operating profit reported~~7 ~~above to the amount reported in the consolidated financial statements:~~

	Three Months						Six Months
	2004			2003			2004			2003
Segment operating profit	$	13,409		$	10,509		$	27,769		$	21,628
APB No. 16 depreciation and amortization		(999	)		(1,007	)		(1,998	)		(1,849	)
Non-allocated corporate expenses		(148	)		(138	)		(278	)		(282	)
Amortization of intangibles		(8	)		(206	)		(17	)		(407	)
Management fees		(250	)		(250	)		(500	)		(500	)
Total operating profit	$	12,004		$	8,908		$	24,976		$	18,590

G. COMPREHENSIVE INCOME (LOSS)


	Three Months				Six Months
	2005		2004		2005		2004
Third party sales:
Image Transfer	$	79,702	$	75,963	$	157,515	$	152,966
Textile Products		11,688		12,844		23,794		25,554

Total	$	91,390	$	88,807	$	181,309	$	178,520


Segment operating profit:
Image Transfer	$	14,318	$	11,808	$	26,818	$	24,366
Textile Products		1,516		1,601		2,824		3,403

Total	$	15,834	$	13,409	$	29,642	$	27,769

~~Total~~The ~~comprehensive~~following ~~income (loss)~~ is ~~comprised~~a reconciliation of ~~net~~the ~~income~~segment ~~(loss),~~operating ~~net currency~~profit ~~translation~~reported ~~gains~~above ~~and~~to ~~losses and net unrealized gains and losses on cash flow hedges. Total comprehensive income (loss) for~~ the ~~three months ended~~amount ~~June 30,~~reported ~~2004~~in ~~and 2003 was $(3,865) and $3,325. Total comprehensive income (loss) for~~ the ~~six~~consolidated ~~months~~financial ~~ended June 30, 2004 and 2003 was $(6,144) and $6,071.~~statements:

H. CONTINGENCIES


	Three Months						Six Months
	2005			2004			2005			2004
Segment operating profit	$	15,834		$	13,409		$	29,642		$	27,769
APB No. 16 depreciation and amortization		(1,038	)		(999	)		(2,157	)		(1,998	)
Non-allocated corporate expenses		(254	)		(148	)		(420	)		(278	)
Amortization of intangibles		(9	)		(8	)		(17	)		(17	)
Management fees		(250	)		(250	)		(500	)		(500	)

Total operating profit	$	14,283		$	12,004		$	26,548		$	24,976

~~Claims have been made against the Company for the costs of environmental remedial measures taken or to be taken~~G. ~~Reserves~~COMPREHENSIVE ~~for~~INCOME ~~such liabilities have been~~(LOSS) established and no insurance recoveries have been anticipated in the determination of the reserves. In management’s opinion, the aforementioned claims will be resolved without material adverse effect on the consolidated results of operations, financial position or cash flows of the Company.

8Total comprehensive income/(loss) is comprised of net income/(loss), net currency translation gains and losses and net unrealized gains and losses on cash flow hedges. Total comprehensive income/(loss) for the three months ended June 30, 2005 and 2004 was $(3,587) and $(3,865). Total comprehensive income/(loss) for the six months ended June 30, 2005 and 2004 was $(7,784) and $(6,144).

~~Table~~H. ~~of Contents~~CONTINGENCIES

IClaims have been made against the Company for the costs of environmental remedial measures taken or to be taken. ~~STOCK-BASED~~Reserves ~~COMPENSATION~~for such liabilities have been established and no insurance recoveries have been anticipated in the determination of the reserves. In management’s opinion, the aforementioned claims will be resolved without material adverse effect on the consolidated results of operations, financial position or cash flows of the Company.

~~As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the~~8 Company applies the intrinsic value method of recognition and measurement under Accounting Principles Board Opinion No. 25 to its stock options and warrants. No compensation expense related to employee stock options or warrants issued to directors is reflected in net income (loss). The following table illustrates the effect on net income (loss) if compensation cost for all outstanding and unvested stock option and warrants had been determined based on their fair values at the grant date, consistent with the method prescribed by SFAS No. 123:

	Three Months						Six Months
	2004			2003			2004			2003
Net income (loss)–as reported	$	(2,386	)	$	1,072		$	(4,401	)	$	3,521
Less–stock-based compensation expense determined using fair value based method in SFAS No. 123		(195	)		(208	)		(390	)		(416	)
Pro forma net income (loss)	$	(2,581	)	$	864		$	(4,791	)	$	3,105

JI. ~~RETIREMENT~~STOCK-BASED ~~AND OTHER POSTRETIREMENT BENEFITS~~COMPENSATION

AAs ~~summary~~permitted by Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, the ~~components~~Company applies the intrinsic value method of recognition and measurement under Accounting Principles Board Opinion No. 25 to its stock options and warrants. No compensation expense related to employee stock options or warrants issued to directors is reflected in net ~~periodic~~income ~~pension~~(loss). The following table illustrates the effect on net income (loss) if compensation cost for ~~the~~all ~~defined~~outstanding and unvested stock options and warrants had been determined ~~benefit~~based ~~retirement~~on ~~plans~~their isfair asvalues ~~follows~~at the grant date, consistent with the method prescribed by SFAS No. 123:

	Three Months						Six Months
	2004			2003			2004			2003
	2005			2004			2005			2004
Service cost	$	92		$	82		$	187		$	159
Net income (loss)–as reported	$	(548	)	$	(2,386	)	$	(3,117	)	$	(4,401	)
Interest cost		192			173			389			341
Less–stock-based compensation expense determined using fair value based method in SFAS No. 123		(184	)		(195	)		(370	)		(390	)
Expected return on plan assets		(84	)		(81	)		(170	)		(162	)
Pro forma net income (loss)	$	(732	)	$	(2,581	)	$	(3,487	)	$	(4,791	)
Actuarial loss recognized		9			168			19			334
Net periodic pension costs	$	209		$	342		$	425		$	672

AJ. ~~summary~~RETIREMENT ofAND ~~the~~OTHER ~~components~~POSTRETIREMENT ~~of net periodic postretirement benefit cost for the~~BENEFITS ~~postretirement health care and life insurance benefits plans is as follows:~~

	Three Months					Six Months
	2004			2003		2004			2003
Service cost	$	275		$	207	$	550		$	414
Interest cost		212			221		424			442
Amortization of prior service cost		(160	)				(320	)
Actuarial loss recognized		59			66		118			132
Net periodic postretirement benefit costs	$	386		$	494	$	772		$	988

A summary of the components of net periodic pension cost for the defined benefit retirement plans is as follows:

On December 8, 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the “Act”) was enacted. The Act expands Medicare primarily by adding a prescription drug benefit for Medicare-eligible individuals beginning in 2006, as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to the Medicare


	Three Months					Six Months
	2005		2004			2005		2004
Service cost	$	104	$	92		$	212	$	187
Interest cost		101		192			206		389
Expected return on plan assets		—		(84	)		—		(170	)
Actuarial loss recognized		13		9			26		19

Net periodic pension costs	$	218	$	209		$	444	$	425

9A summary of the components of net periodic postretirement benefit cost for the postretirement health care and life insurance benefits plans is as follows:


	Three Months						Six Months
	2005			2004			2005			2004
Service cost	$	330		$	275		$	660		$	550
Interest cost		253			212			506			424
Amortization of prior service cost		(208	)		(160	)		(417	)		(320	)
Actuarial loss recognized		112			59			224			118

Net periodic postretirement benefit costs	$	487		$	386		$	973		$	772

~~benefit. Pursuant to guidance provided~~9 in FASB Staff Position SFAS No. 106-2, the Company has chosen to defer recognition of the Act, and, accordingly, postretirement benefit obligations and net periodic postretirement benefit cost do not reflect any potential effect of the legislation associated with the subsidy because the employer is unable to conclude whether the benefits provided by the plan are actuarially equivalent to Medicare Part D under the Act. In addition, specific authoritative guidance on the accounting for certain aspects of the Act has not yet been determined and that guidance, when issued, could require the Company to change previously reported information. The Company believes that the impact of the legislation will not be material to the results of operations or financial position of the Company.

K.Table SUPPLEMENTALof CONSOLIDATING INFORMATION Contents

~~The Company has outstanding $115,000, 91/2% Senior Subordinated Notes (the “Notes”)~~K. ~~The~~SUPPLEMENTAL ~~Company~~CONSOLIDATING ~~has no assets or operations other than its wholly-owned~~INFORMATION investment in Day International, Inc. (“Day International” or “Guarantor”). Day International and the wholly-owned United States subsidiaries have provided full and unconditional guarantees of the Notes. The wholly-owned international subsidiaries of Day International are not guarantors with respect to the Notes and do not have any credit arrangements senior to the Notes. The only intercompany eliminations are the normal intercompany eliminations with regard to intercompany sales and the Company’s investment in the wholly-owned non-guarantor subsidiaries. Intercompany notes are in place, which effectively transfers the interest expense from the Company to Day International. The following are the supplemental combining condensed balance sheets as of June 30, 2004 and December 31, 2003, and the supplemental combining condensed statements of operations and cash flows for the three and six months ended June 30, 2004 and 2003, with the investments in the subsidiaries accounted for using the equity method. Separate complete financial statements of the Guarantor are not presented because management has determined that they are not material to the investors.

10The Company has outstanding $115,000, 91/2% Senior Subordinated Notes (the “Notes”). The Company has no assets or operations other than its wholly-owned investment in Day International, Inc. (“Day International” or “Guarantor”). Day International and the wholly-owned United States subsidiaries have provided full and unconditional guarantees of the Notes. The wholly-owned international subsidiaries of Day International are not guarantors with respect to the Notes and do not have any credit arrangements senior to the Notes. The only intercompany eliminations are the normal intercompany eliminations with regard to intercompany sales and the Company’s investment in the wholly-owned non-guarantor subsidiaries. Intercompany notes are in place, which effectively transfers the interest expense from the Company to Day International. The following are the supplemental combining condensed balance sheets as of June 30, 2005 and December 31, 2004, and the supplemental combining condensed statements of operations and cash flows for the three and six months ended June 30, 2005 and 2004, with the investments in the subsidiaries accounted for using the equity method. Separate complete financial statements of the Guarantor are not presented because management has determined that they are not material to the investors.

~~Table of Contents~~10

DAYTable INTERNATIONALof GROUP, INC. SUPPLEMENTAL COMBINING CONDENSED BALANCE SHEET JUNE 30, 2004 Contents

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	500		$	(337	)	$	1,168		$			$	1,331
Accounts receivable—net					23,137			24,938						48,075
Inventories					30,553			21,253						51,806
Other current assets					6,981			6,106						13,087
TOTAL CURRENT ASSETS		500			60,334			53,465						114,299
Intercompany		268,411			(580	)		781			(268,612	)
Property, plant and equipment, net					42,804			27,895						70,699
Investment in subsidiaries		(28,551	)		59,401			(12,535	)		(18,315	)
Intangible and other assets					164,658			19,611						184,269
TOTAL ASSETS	$	240,360		$	326,617		$	89,217		$	(286,927	)	$	369,267
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable	$			$	4,078		$	5,968		$			$	10,046
Current maturities of long-term debt		3,912			4			100						4,016
Other current liabilities		3,234			11,260			16,284						30,778
TOTAL CURRENT LIABILITIES		7,146			15,342			22,352						44,840
Intercompany		(55,355	)		311,673			(4,213	)		(252,105	)
Long-term and subordinated long-term debt		264,499			14			1,264						265,777
Other long-term liabilities					24,528			10,052						34,580
Redeemable preferred stock		157,839												157,839
Total stockholders’ equity (deficit)		(133,769	)		(24,940	)		59,762			(34,822	)		(133,769	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	240,360		$	326,617		$	89,217		$	(286,927	)	$	369,267

DAY INTERNATIONAL GROUP, INC.

11SUPPLEMENTAL COMBINING CONDENSED BALANCE SHEET JUNE 30, 2005


	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	378		$	—		$	1,445		$	—		$	1,823
Accounts receivable—net		—			21,926			27,454			—			49,380
Inventories		—			28,580			22,949			—			51,529
Other current assets		—			12,669			6,129			—			18,798

TOTAL CURRENT ASSETS		378			63,175			57,977			—			121,530
Intercompany		246,506			6,582			7,715			(260,803	)		—
Property, plant and equipment, net		—			40,845			29,532			—			70,377
Investment in subsidiaries		(12,350	)		71,386			(12,549	)		(46,487	)		—
Intangible and other assets		—			151,896			18,354			—			170,250

TOTAL ASSETS	$	234,534		$	333,884		$	101,029		$	(307,290	)	$	362,157


LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable	$	—		$	5,173		$	10,542		$	(9,461	)	$	6,254
Current maturities of long-term debt		4,434			—			111			—			4,545
Other current liabilities		3,296			9,901			14,451			—			27,648


TOTAL CURRENT LIABILITIES		7,730			15,074			25,104			(9,461	)		38,447
Intercompany		(54,229	)		296,808			(7,264	)		(235,315	)		—
Long-term and subordinated long-term debt		242,071			—			1,085			—			243,156
Other long-term liabilities		—			31,322			10,269			—			41,591
Redeemable preferred stock		182,765			—			—			—			182,765
Total stockholders’ equity (deficit)		(143,803	)		(9,320	)		71,835			(62,515	)		(143,803	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	234,534		$	333,884		$	101,029		$	(307,209	)	$	362,157

~~DAY INTERNATIONAL GROUP, INC.~~11 ~~SUPPLEMENTAL CONSOLIDATING CONDENSED BALANCE SHEET DECEMBER 31, 2003~~

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	742		$	(742	)	$	726		$			$	726
Accounts receivable — net					22,280			22,407						44,687
Inventories					28,104			20,548						48,652
Other assets					7,186			5,695						12,881
TOTAL CURRENT ASSETS		742			56,828			49,376						106,946
Intercompany		278,389			(811	)		1,012			(278,590	)
Property, plant and equipment — net					44,329			29,838						74,167
Investment in subsidiaries		(35,348	)		44,173			(3,682	)		(5,143	)
Intangible and other assets					169,969			20,458						190,427
TOTAL ASSETS	$	243,783		$	314,488		$	97,002		$	(283,733	)	$	371,540
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable	$			$	3,415		$	4,148		$			$	7,563
Current maturities of long-term debt		3,376			4			109						3,489
Accrued associate related costs and other expenses		3,229			13,171			13,021						29,421
TOTAL CURRENT LIABILITIES		6,605			16,590			17,278						40,473
Intercompany		(56,760	)		330,798			(16,552	)		(257,486	)
Long-term and subordinated long-term debt		275,013			16			1,302						276,331
Other long-term liabilities					24,111			11,700						35,811
Redeemable preferred stock		146,649												146,649
Total stockholders’ equity (deficit)		(127,724	)		(57,027	)		83,274			(26,247	)		(127,724	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	243,783		$	314,488		$	97,002		$	(283,733	)	$	371,540

12DAY INTERNATIONAL GROUP, INC.

~~Table~~SUPPLEMENTAL ofCONSOLIDATING ~~Contents~~CONDENSED BALANCE SHEET DECEMBER 31, 2004

DAY INTERNATIONAL GROUP, INC. SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, 2004


	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	(130	)	$	130		$	843		$	—		$	843
Accounts receivable—net		—			22,771			29,196			—			51,967
Inventories		—			29,264			21,070			—			50,334
Other assets		—			11,815			5,997			—			17,812


TOTAL CURRENT ASSETS		(130	)		63,980			57,106			—			120,956
Intercompany		250,993			3,997			555			(255,545	)		—
Property, plant and equipment—net		—			42,674			32,061			—			74,735
Investment in subsidiaries		(22,174	)		66,005			(12,535	)		(31,296	)		—
Intangible and other assets		—			154,984			19,560			—			174,544


TOTAL ASSETS	$	228,689		$	331,640		$	96,747		$	(286,841	)	$	370,235


LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable	$	—		$	3,814		$	7,206		$	—		$	11,020
Current maturities of long-term debt		4,452			—			124			—			4,576
Other current liabilities		3,209			13,096			17,161			—			33,466


TOTAL CURRENT LIABILITIES		7,661			16,910			24,491			—			49,062
Intercompany		(59,301	)		300,853			(10,119	)		(231,433	)		—
Long-term and subordinated long-term debt		246,542			—			1,272			—			247,814
Other long-term liabilities		—			28,354			11,218			—			39,572
Redeemable preferred stock		169,805			—			—			—			169,805
Total stockholders’ equity (deficit)		(136,018	)		(14,477	)		69,885			(55,408	)		(136,018	)


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	228,689		$	331,640		$	96,747		$	(286,841	)	$	370,235

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net sales	$			$	53,194		$	35,613	$			$	88,807
Cost of goods sold					33,978			22,714					56,692
Gross profit					19,216			12,899					32,115
Selling, general and administrative		16			12,514			7,323					19,853
Amortization of intangibles					8								8
Management fees					250								250
Operating profit (loss)		(16	)		6,444			5,576					12,004
Other expenses (income):
Equity in (earnings) loss of subsidiaries		(3,251	)		(3,018	)				6,269
Interest expense		5,628			5,635			11					11,274
Other (income) expense		(1	)		(1,208	)		546					(663	)
Income (loss) before income taxes		(2,392	)		5,035			5,019		(6,269	)		1,393
Income tax expense (benefit)		(6	)		1,784			2,001					3,779
Net income (loss)	$	(2,386	)	$	3,251		$	3,018	$	(6,269	)	$	(2,386	)

13 Table of Contents

~~Table~~DAY ofINTERNATIONAL ~~Contents~~GROUP, INC.

~~DAY INTERNATIONAL GROUP, INC.~~ SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF OPERATIONS THREE MONTHS ENDED JUNE 30, ~~2003~~2005

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries		Eliminations			~~Consolidated~~	Consolidated
Net sales	$	—		$	3675,~~095~~955		$	3463,~~044~~480	$	(48,045	)		$	7091,~~139~~390
Cost of goods sold		—			2355,~~249~~629			2249,~~107~~178		(48,045	)			4556,~~356~~762
Gross profit		—			1220,~~846~~326			1114,~~937~~302		—				2434,~~783~~628
Selling, general and administrative		14—			811,~~671~~913			68,~~734~~174		—				1520,~~419~~087
Amortization of intangibles		—			~~206~~8			—		—				~~206~~8
Management fees		—			250			—		—				250
Operating profit (loss)		~~(14~~—	)		38,~~719~~155			56,~~203~~128		—				814,~~908~~283
Other expenses (income):
Equity in (earnings) of subsidiaries		(1,080	)		(2,652	)				3,732
Equity in (earnings) loss of subsidiaries		(5,967	)		(3,374	)		—		9,341				—
Interest expense		6,520			65,~~587~~590			4258		—				612,~~629~~168
Other (income) expense		(16	)		(~~326~~1,666	)		~~792~~535		—				~~465~~(1,137	)
Income before income taxes		1,067			110			4,369		(3,732	)			1,814
Income (loss) before income taxes		(547	)		7,605			5,535		(9,341	)			3,252
Income tax expense (benefit)		(51	)		~~(970~~1,638	)		12,~~717~~161		—				~~742~~3,800
Net income	$	1,072		$	1,080		$	2,652	$	(3,732	)		$	1,072
Net income (loss)	$	(548	)	$	5,967		$	3,374	$	(9,341	)		$	(548	)

1413

DAY INTERNATIONAL GROUP, INC. ~~SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2004~~

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net sales	$			$	106,143		$	72,377	$			$	178,520
Cost of goods sold					67,454			45,620					113,074
Gross profit					38,689			26,757					65,446
Selling, general and administrative		17			25,243			14,693					39,953
Amortization of intangibles					17								17
Management fees					500								500
Operating profit (loss)		(17	)		12,929			12,064					24,976
Other expenses (income):
Equity in (earnings) of subsidiaries		(6,797	)		(6,362	)				13,159
Interest expense		11,190			11,266			16					22,472
Other (income) expense		(4	)		(3,339	)		1,802					(1,541	)
Income (loss) before income taxes		(4,406	)		11,364			10,246		(13,159	)		4,045
Income tax expense (benefit)		(5	)		4,567			3,884					8,446
Net income (loss)	$	(4,401	)	$	6,797		$	6,362	$	(13,159	)	$	(4,401	)

SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2004


	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	53,194		$	35,613	$	—		$	88,807
Cost of goods sold		—			33,978			22,714		—			56,692


Gross profit		—			19,216			12,899		—			32,115
Selling, general and administrative		16			12,514			7,323		—			19,853
Amortization of intangibles		—			8			—		—			8
Management fees		—			250			—		—			250


Operating profit (loss)		(16	)		6,444			5,576		—			12,004
Other expenses (income):
Equity in (earnings) loss of subsidiaries		(3,251	)		(3,018	)		—		6,269			—
Interest expense		5,628			5,635			11		—			11,274
Other (income) expense		(1	)		(1,208	)		546		—			(663	)


Income (loss) before income taxes		(2,392	)		5,035			5,019		(6,269	)		1,393
Income tax expense (benefit)		(6	)		1,784			2,001					3,779


Net income (loss)	$	(2,386	)	$	3,251		$	3,018	$	(6,269	)	$	(2,386	)

~~Table of Contents~~14

DAYTable INTERNATIONALof GROUP, INC. SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2003 Contents

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net sales	$			$	71,808		$	67,150	$			$	138,958
Cost of goods sold					46,652			42,841					89,493
Gross profit					25,156			24,309					49,465
Selling, general and administrative		59			17,157			12,752					29,968
Amortization of intangibles					407								407
Management fees					500								500
Operating profit (loss)		(59	)		7,092			11,557					18,590
Other expenses (income):
Equity in (earnings) of subsidiaries		(3,556	)		(5,991	)				9,547
Interest expense					13,078			76					13,154
Other (income) expense		(1	)		(1,993	)		1,682					(312	)
Income before income taxes		3,498			1,998			9,799		(9,547	)		5,748
Income tax expense (benefit)		(23	)		(1,558	)		3,808					2,227
Net income	$	3,521		$	3,556		$	5,991	$	(9,547	)	$	3,521

DAY INTERNATIONAL GROUP, INC.

16SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2005


	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	126,752		$	102,602	$	(48,045	)	$	181,309
Cost of goods sold		—			87,799			73,881		(48,045	)		113,635


Gross profit		—			38,953			28,721		—			67,674
Selling, general and administrative		—			23,902			16,707		—			40,609
Amortization of intangibles		—			17			—		—			17
Management fees		—			500			—		—			500


Operating profit (loss)		—			14,534			12,014		—			26,548
Other expenses (income):
Equity in (earnings) loss of subsidiaries		(9,824	)		(6,488	)		—		16,312			—
Interest expense		12,945			11,015			103		—			24,063
Other (income) expense		(6	)		(2,342	)		1,521		—			(827	)


Income (loss) before income taxes		(3,115	)		12,349			10,390		(16,312	)		3,312
Income tax expense (benefit)		2			2,525			3,902		—			6,429


Net income (loss)	$	(3,117	)	$	9,824		$	6,488	$	(16,312	)	$	(3,117	)

~~DAY INTERNATIONAL GROUP, INC.~~15 ~~SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2004~~

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net income (loss)	$	(4,401	)	$	6,797		$	6,362		$	(13,159	)	$	(4,401	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization					5,275			2,127						7,402
Interest expense—redeemable preferred stock		11,190												11,190
Equity in earnings of subsidiaries		(6,797	)		(6,362	)					13,159
Deferred income taxes and other					4,912			(1,293	)					3,619
Equity in earnings of investees					(148	)								(148	)
Foreign currency (gain) loss					(1,602	)		695						(907	)
(Gain) loss on disposal of fixed assets					300			(428	)					(128	)
Changes in operating assets and liabilities		4			(1,192	)		(2,225	)					(3,413	)
Net cash provided by (used in) operating activities		(4	)		7,980			5,238						13,214
Cash Flows From Investing Activities:
Cash paid for acquisitions					(1,346	)								(1,346	)
Capital expenditures					(1,602	)		(1,524	)					(3,126	)
Proceeds from sale of property								1,410						1,410
Net cash used in investing activities					(2,948	)		(114	)					(3,062	)
Cash Flows From Financing Activities:
Proceeds from exercise of stock options		25												25
Payment of deferred financing fees					(633	)								(633	)
Payments on term loans		(8,925	)		(2	)								(8,927	)
Net proceeds from credit facilities		50												50
Net cash provided by (used in) financing activities		(8,850	)		(635	)								(9,485	)
Intercompany transfers and dividends		8,612			(3,992	)		(4,620	)
Effects of exchange rates on cash								(62	)					(62	)
Net increase (decrease) in cash and cash equivalents		(242	)		405			442						605
Cash and cash equivalents at beginning of period		742			(742	)		726						726
Cash and cash equivalents at end of period	$	500		$	(337	)	$	1,168		$			$	1,331

17DAY INTERNATIONAL GROUP, INC.

~~Table~~SUPPLEMENTAL ofCOMBINING ~~Contents~~CONDENSED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 2004

DAY INTERNATIONAL GROUP, INC. SUPPLEMENTAL COMBINING CONDENSED STATEMENT OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2003


	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Net sales	$	—		$	106,143		$	72,377	$	—		$	178,520
Cost of goods sold		—			67,454			45,620		—			113,074


Gross profit		—			38,689			26,757		—			65,446
Selling, general and administrative		17			25,243			14,693		—			39,953
Amortization of intangibles		—			17			—		—			17
Management fees		—			500			—		—			500


Operating profit (loss)		(17	)		12,929			12,064		—			24,976
Other expenses (income):
Equity in (earnings) of subsidiaries		(6,797	)		(6,362	)		—		13,159			—
Interest expense		11,190			11,266			16		—			22,472
Other (income) expense		(4	)		(3,339	)		1,802		—			(1,541	)

Income (loss) before income taxes		(4,406	)		11,364			10,246		(13,159	)		4,045
Income tax expense (benefit)		(5	)		4,567			3,884		—			8,446


Net income (loss)	$	(4,401	)	$	6,797		$	6,362	$	(13,159	)	$	(4,401	)

	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net income	$	3,521		$	3,556		$	5,991		$	(9,547	)	$	3,521
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization					6,284			1,654						7,938
Equity in earnings of subsidiaries		(3,556	)		(5,991	)					9,547
Deferred income taxes and other					(1,779	)		(252	)					(2,031	)
Foreign currency (gain) loss					(1,927	)		808						(1,119	)
Net (gain) loss on disposal of assets					114			660						774
Changes in operating assets and liabilities		96			3,232			(4,984	)					(1,656	)
Net cash provided by operating activities		61			3,489			3,877						7,427
Cash Flows From Investing Activities:
Cash paid for acquisition					(1,000	)								(1,000	)
Capital expenditures					(2,025	)		(2,287	)					(4,312	)
Proceeds from sale of property					939									939
Net cash used in investing activities					(2,086	)		(2,287	)					(4,373	)
Cash Flows From Financing Activities:
Payments on term loan		(6,300	)					(47	)					(6,347	)
Net proceeds from revolving credit facility		3,650												3,650
Net cash provided by (used in) financing activities		(2,650	)					(47	)					(2,697	)
Intercompany transfers and dividends		2,342			(1,156	)		(1,186	)
Effects of exchange rates on cash								82						82
Net increase (decrease) in cash and cash equivalents		(247	)		247			439						439
Cash and cash equivalents at beginning of period		496			(496	)		996						996
Cash and cash equivalents at end of period	$	249		$	(249	)	$	1,435		$			$	1,435

18 Table of Contents

~~Table~~DAY ofINTERNATIONAL ~~Contents~~GROUP, INC.

~~ITEM~~SUPPLEMENTAL 2.COMBINING ~~MANAGEMENT’S~~CONDENSED ~~DISCUSSION~~STATEMENT ~~AND ANALYSIS~~ OF ~~FINANCIAL~~CASH ~~CONDITION~~FLOWS SIX ~~AND~~MONTHS ~~RESULTS~~ENDED OFJUNE ~~OPERATIONS~~30, 2005

Safe Harbor Statement


	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net income (loss)	$	(3,117	)	$	9,824		$	6,488		$	(16,312	)	$	(3,117	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		—			5,771			2,205			—			7,976
Interest expense—redeemable preferred stock dividends		12,946			—			—			—			12,946
Equity in earnings of subsidiaries		(9,824	)		(6,488	)		—			16,312			—
Deferred income taxes and other		—			3,640			(130	)		—			3,510
Equity in earnings of investees		—			(59	)		—			—			(59	)
Foreign currency (gain) loss		—			(29	)		(1,655	)		—			(1,684	)
(Gain) loss on disposal of fixed assets		—			—			(8	)		—			(8	)
Changes in operating assets and liabilities		86			1,223			(14,086	)		—			(12,777	)

Net cash provided by (used in) operating activities		91			13,882			(7,186	)		—			6,787

Cash Flows From Investing Activities:
Cash paid for acquisitions		—			(426	)		—			—			(426	)
Capital expenditures		—			(1,533	)		(2,110	)		—			(3,643	)
Proceeds from sale of property		—			—			—			—			—

Net cash (used in) investing activities		—			(1,959	)		(2,110	)		—			(4,069	)

Cash Flows From Financing Activities:
Proceeds from exercise of stock options
Payment of deferred financing fees
Payments on term loans		(1,919	)		—			(60	)		—			(1,979	)
Net proceeds from credit facilities		175			—			—			—			175

Net cash provided by (used in) financing activities		(1,744	)		—			(60	)		—			(1,804	)

Intercompany transfers and dividends		2,161			(12,053	)		9,892			—			—
Effects of exchange rates on cash		—			—			66			—			66

Net increase (decrease) in cash and cash equivalents		508			(130	)		602		—			980
Cash and cash equivalents at beginning of period		(130	)		130			843			—			843

Cash and cash equivalents at end of period	$	378		$	—		$	1,445		$	—		$	1,823

~~This Quarterly Report contains forward-looking statements within the meaning of~~17 the Securities Act of 1933. These are subject to certain risks and uncertainties, including those identified below, which could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. The words “believe,” “anticipate,” “expect,” “intend,” “will likely result,” “will continue,” and similar expressions identify forward-looking statements.

FactorsTable that could cause actual results to differ materially from the forward-looking statements include but are not limited to (i) the effect of leverage, including the limitations imposed by the Company’s various debt instruments; (ii) risks related to significant operations in foreign countries, including the translation of operating results to the U.S. dollar; (iii) the timely development and market acceptance of new products; (iv) the impact of competitive products and pricing; (v) the effect of changing general and industry specific economic conditions; (vi) the impact of environmental regulations; and (vii) the potential for technology obsolescence. Contents

~~While~~DAY ~~made~~INTERNATIONAL ~~in good faith and with a reasonable basis based on information currently available to the Company’s management~~GROUP, ~~there is no assurance that any such forward-looking statements will be achieved or accomplished~~INC. ~~The Company~~ ~~is under no obligation to update any forward-looking statements to the extent it becomes aware that they are not achieved or likely to be achieved for any reason.~~

~~Basis~~SUPPLEMENTAL ofCOMBINING ~~Presentation~~CONDENSED STATEMENT OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 2004

On November 24, 2003, Network Distribution International (“NDI”) was acquired. Its results of operations are included in the Company’s consolidated results of operations for the period subsequent to the acquisition. Accordingly, the results of operations for historical as well as future periods may not be comparable to prior periods.


	DAY
	Inter-						Non-
	national			Guarantor			Guarantor
	Group, Inc.			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Cash Flows From Operating Activities:
Net income (loss)	$	(4,401	)	$	6,797		$	6,362		$	(13,159	)	$	(4,401	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		—			5,275			2,127			—			7,402
Interest expense—redeemable preferred stock dividends		11,190			—			—			—			11,190
Equity in earnings of subsidiaries		(6,797	)		(6,362	)		—			13,159			—
Deferred income taxes and other		—			4,912			(1,293	)		—			3,619
Equity in earnings of investees		—			(148	)		—			—			(148	)
Foreign currency (gain) loss		—			(1,602	)		695			—			(907	)
(Gain) loss on disposal of fixed assets		—			300			(428	)		—			(128	)
Changes in operating assets and liabilities		4			(1,192	)		(2,225	)		—			(3,413	)

Net cash provided by (used in) operating activities		(4	)		7,980			5,238			—			13,214

Cash Flows From Investing Activities:
Cash paid for acquisitions		—			(1,346	)		—			—			(1,346	)
Capital expenditures		—			(1,602	)		(1,524	)		—			(3,126	)
Proceeds from sale of property		—			—			1,410			—			1,410

Net cash (used in) investing activities		—			(2,948	)		(114	)		—			(3,062	)

Cash Flows From Financing Activities:
Proceeds from exercise of stock options		25			—			—			—			25
Payment of deferred financing fees		—			(633	)		—			—			(633	)
Payments on term loans		(8,925	)		(2	)		—			—			(8,927	)
Net proceeds from credit facilities		50			—			—			—			50

Net cash provided by (used in) financing activities		(8,850	)		(635	)		—			—			(9,485	)

Intercompany transfers and dividends		8,612			(3,992	)		(4,620	)		—			—
Effects of exchange rates on cash		—			—			(62	)		—			(62	)

Net increase (decrease) in cash and cash equivalents		(242	)		405			442			—			605
Cash and cash equivalents at beginning of period		742			(742	)		726			—			726

Cash and cash equivalents at end of period	$	500		$	(337	)	$	1,168		$	—		$	1,331

~~The following table sets forth selected financial information in millions of~~18 ~~dollars and as a percentage of net sales:~~

	Three Months								Six Months
	2004				2003				2004				2003
	$		%		$		%		$		%		$		%
Net sales		88.8		100.0		70.1		100.0		178.5		100.0		139.0		100.0
Costs of goods sold		56.7		63.8		45.3		64.7		113.1		63.3		89.5		64.4
Gross profit		32.1		36.2		24.8		35.3		65.4		36.7		49.5		35.6
Selling, general and administrative expense		19.8		22.4		15.4		22.0		39.9		22.4		30.0		21.5
Amortization of intangibles		0.0		0.0		0.2		0.3		0.0		0.0		0.4		0.3
Management fees		0.3		0.3		0.3		0.3		0.5		0.3		0.5		0.4
Operating profit		12.0		13.5		8.9		12.7		25.0		14.0		18.6		13.4

19ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Table~~Safe ofHarbor ~~Contents~~Statement

~~Comparison~~This Quarterly Report contains forward-looking statements within the meaning of ~~Results~~the Securities Act of ~~Operations~~1933. These are subject to certain risks and uncertainties, including those identified below, which could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. The words “believe,” “anticipate,” “expect,” “intend,” “will likely result,” “will continue,” and similar expressions identify forward-looking statements.

~~Three~~Factors ~~Months~~that ~~Ended~~could ~~June~~cause actual results to differ materially from the forward-looking statements include but are not limited to (i) 30the effect of leverage, ~~2004~~including the limitations imposed by the Company’s various debt instruments; (ii) risks related to significant operations in foreign countries, ~~Compared~~including the translation of operating results to ~~Three~~the ~~Months~~U.S. ~~Ended~~dollar; ~~June~~(iii) ~~30,~~the ~~2003~~timely development and market acceptance of new products; (iv) the impact of competitive products and pricing; (v) the effect of changing general and industry specific economic conditions; (vi) the impact of environmental regulations; and (vii) the potential for technology obsolescence.

~~Net~~While ~~sales~~made ~~increased $18.7 million (26.6%) to $88.8 million, primarily as a result of sales from businesses acquired~~ in ~~2003,~~good ~~higher~~faith ~~sales volumes in the United States~~ and ~~Europe~~with ~~and~~a ~~favorable~~reasonable ~~changes~~basis inbased ~~foreign~~on ~~currency~~information ~~rates.~~currently ~~Sales in~~available ~~2004 include $12.4 million of sales from businesses acquired in 2003. Sales~~to ~~in 2004 were positively affected by increased sales volumes of $2.8 million in~~ the ~~United States, increased sales volume of $0.1 million in Europe and $2.4 million of favorable changes in foreign currency rates used to translate international sales into U.S. dollars. Image Transfer~~Company’s ~~sales~~management, ~~increased~~there ~~$18.5 million~~is ~~(32.1%)~~no toassurance ~~$76.0 million.~~that ~~Image~~any ~~Transfer’s~~such ~~sales~~forward-looking ~~were~~statements ~~positively affected~~will ~~by increased sales volumes of $15.1 million in the United States and~~be ~~$0.5 million~~achieved inor ~~Europe and $2~~accomplished.~~0 million~~ ~~as a result of the effect of changes in foreign currency rates.~~ The ~~higher~~Company ~~U.S.~~is ~~Image~~under ~~Transfer~~no ~~sales~~obligation ~~volume~~to ~~was primarily~~update asany ~~a result of sales from business acquisitions in 2003 of $12.4~~forward-looking ~~million~~statements and from higher sales volumes across substantially all product lines. European sales volume increased primarily from growth in the chemical products business in the United Kingdom and Germany. Textile Products’ sales increased $0.2 million (1.8%) to ~~$12.8 million, primarily as a result of slightly higher sales volume in~~ the ~~United~~extent ~~States~~it ofbecomes ~~$0.1 million~~aware ~~and~~that bythey ~~favorable~~are ~~foreign currency~~not ~~rate~~achieved ~~changes~~or oflikely ~~$0.4 million and offset by lower sales volume in Europe of $0.3 million. European Textile Products’ sales volumes were lower in 2004 compared~~ to ~~2003,~~be ~~primarily~~achieved ~~as a result of lower demand from original~~for ~~equipment~~any ~~manufacturers (“OEMs”) and lower sales to Middle East markets~~reason.

~~Gross~~Basis ~~profit increased $7.3 million (29.6%) to $32.1 million. Foreign currency rate changes increased gross profit by $0.9 million. As a percentage~~ of ~~net~~Presentation sales, gross profit increased to 36.2% for the three months ended June 30, 2004, compared to 35.3% for the three months ended June 30, 2003. The improvement in gross profit as a percentage of sales is a result of improved manufacturing performances offset by the effect of the acquisitions in 2003, as those businesses have historically had lower gross margin percentages than Day’s businesses.

~~Selling,~~The ~~general~~following ~~and~~table ~~administrative~~sets ~~expense~~forth ~~(“SG&A”)~~selected ~~increased~~financial ~~$4.4 million (28.8%)~~information toin ~~$19.8 million,~~millions ~~primarily as a result~~ of ~~SG&A~~dollars ~~associated with NDI of $2.6 million~~ and ~~changes~~as ~~in foreign currency rates. As~~ a percentage of net ~~sales,~~ SG&A increased to 22.4% from 22.0%. Changes in foreign currency rates increased SG&A costs by $0.5 million compared to 2003. SG&A costs also increased as a result of higher insurance costs and higher selling and distribution costs from higher sales ~~levels.~~:

Operating profit increased $3.1 million (34.8%) to $12.0 million. As a percentage of net sales, operating profit increased to 13.5% for the three months ended June 30, 2004, from 12.7% for the comparable period in 2003. Image Transfer’s operating profit increased $2.7 million (30.0%) to $11.8 million, primarily as a result of higher sales volumes. As a percentage of net sales, Image Transfer’s operating profit decreased to 15.5% for the three months ended June 30, 2004, from 15.8% in 2003. Operating margins on NDI’s distribution business are substantially lower than Day’s historical margins on manufactured products. Textile Products’ operating profit increased $0.2 million (12.2%) to $1.6 million. As a percentage of net sales, Textile Products’ operating profit increased to 12.5% for the three months


	Three Months								Six Months
	2005				2004				2005				2004
	$		%		$		%		$		%		$		%
Net sales		91.4		100.0		88.8		100.0		181.3		100.0		178.5		100.0
Costs of goods sold		56.8		62.1		56.7		63.9		113.6		62.7		113.1		63.3

Gross profit		34.6		37.9		32.1		36.1		67.7		37.3		65.4		36.7
Selling, general and administrative expense		20.1		22.0		19.9		22.4		40.6		22.4		39.9		22.4
Amortization of intangibles		0.0		0.0		0.0		0.0		0.0		0.0		0.0		0.0
Management fees		0.2		0.2		0.2		0.2		0.5		0.3		0.5		0.3

Operating profit		14.3		15.7		12.0		13.5		26.6		14.6		25.0		14.0

2019

~~ended~~Comparison ~~June 30,~~of ~~2004,~~Results ~~from~~of ~~11.3% in 2003. Lower selling and administrative costs~~Operations ~~in the United States favorably affected Textile Products’ operating profit in 2004 compared to 2003.~~

~~Other~~Three ~~(income) expense~~Months ~~was~~Ended ~~$(0.7) million and $0.5 million for the three months ended~~ June 30, ~~2004~~2005, ~~and~~Compared ~~2003.~~with ~~The~~Three ~~other~~Months ~~(income) expense~~Ended ~~is primarily due to foreign currency transaction (gains)~~June ~~losses~~30, incurred in the normal course of international subsidiaries doing business in other than their functional currency as well as a result of intercompany financing arrangements. Other (income) expense in 2004 ~~includes a gain of $0.4 million on the mark-to-market~~ ~~of the euro-denominated Tranche A Term Loan.~~

~~The~~Net ~~effective~~sales ~~tax~~increased ~~rate~~$2.6 million, ~~was~~or ~~271~~2.39%, ~~and~~to 40$91.9%4 million primarily due to increased sales volume, the impact of price increases in ~~2004~~selected product lines, and ~~2003.~~favorable ~~The~~changes ~~effective~~in ~~tax~~foreign currency rates. Foreign currency rate ~~for~~changes ~~2004~~used isto translate international sales into U.S. dollars contributed $1.7 million to sales. Image Transfer sales increased $3.7 million, or 4.9%, to $79.7 million. Image Transfer sales were positively affected by $1.4 million from the ~~adoption~~effect of changes ~~SFAS~~in ~~No. 150~~foreign currency rates, price increases in selected product lines, and ~~the~~increased sales ~~non-deductible~~volume ~~preferred~~outside ~~stock~~the ~~dividends~~United ~~now~~States. ~~reflected~~Partially asoffsetting ~~interest~~these ~~expense.~~increases were lower flat-blanket ~~Adjusted~~sales ~~for~~volume in the ~~preferred~~United ~~stock dividends~~States, primarily of competitors’ brands that are sold through the Company’s ~~effective~~NDI ~~tax~~distribution ~~rate~~channel. ~~would~~Textile beProducts segment sales decreased $1.2 million, or 539.80%, into ~~2004~~$11.7 million, ~~The~~primarily ~~effective~~as ~~tax~~a ~~rate~~result isof ~~further~~lower ~~affected~~sales byvolume ~~foreign-sourced~~in the United States of $0.3 ~~dividends~~million and ~~income~~by ~~taxable~~lower sales volume in ~~the~~Europe ~~United~~of ~~States~~$1.1 million, ~~and~~partially ~~non-deductible~~offset ~~expenses~~by favorable foreign currency rate changes of $0.3 million.

InGross ~~May 2003,~~profit ~~the~~increased ~~FASB issued SFAS No~~$2.5 ~~150~~million, ~~Accounting~~or ~~for~~7.8% ~~Certain~~to ~~Financial Instruments with Characteristics of both Liabilities and Equity~~$34.6 million. ~~This~~Foreign ~~statement established~~currency ~~standards~~rate ~~for how an issuer classifies and measures certain~~changes ~~financial~~increased ~~instruments~~gross ~~with~~profit ~~characteristics~~by ~~of both liabilities and equity~~$0.6 million. ~~This statement~~As ~~requires~~a ~~that~~percentage ~~the~~of ~~Company’s~~net ~~redeemable~~sales, ~~preferred~~gross ~~stock~~profit beincreased ~~recorded in~~to ~~the same manner as long-term debt~~37.9% ~~The~~for ~~Company adopted~~ the ~~statement~~three asmonths ofended ~~July 1~~June 30, ~~2003. Therefore~~2005, ~~since~~compared ~~the~~with ~~third quarter of 2003, the Company has reflected the redeemable preferred stock as long-term debt and accrued dividends are shown as interest expense~~36.1% ~~The~~for ~~adoption of this statement has no effect on~~ the ~~net~~ ~~loss~~three ~~available~~months toended ~~common shareholders~~June 30, ~~cash flows of the Company or the Company’s compliance with its debt covenants~~2004.

~~Six~~Selling, ~~Months~~general ~~Ended~~and ~~June~~administrative expense (“SG&A”) increased $0.2 30million, ~~2003~~or 1.0%, ~~Compared~~ to ~~Six~~$20.1 million, ~~Months~~primarily ~~Ended~~as ~~June 30~~a result of changes in foreign currency rates. As a percentage of net sales, SG&A ~~2002~~decreased to 22.0% from 22.4%. Changes in foreign currency rates increased SG&A costs by $0.4 million compared with 2004.

~~Net~~Operating ~~sales~~profit increased $392.63 million, ~~(28~~or 19.52%), to $~~178~~14.53 million,. ~~primarily~~As as a ~~result~~ percentage of ~~sales~~net ~~from businesses acquired in 2003~~sales, ~~favorable changes in foreign~~ ~~currency~~operating ~~rates~~profit ~~and~~increased ~~higher~~to ~~sales~~15.7% ~~volumes~~for in the ~~United~~three ~~States.~~months ~~Sales~~ended ~~in 2004 include $25.6~~June ~~million~~30, of2005, ~~sales~~versus ~~from businesses acquired in 2003~~13. ~~Sales in 2004 were positively affected by increased sales volumes of $~~5~~.3 million~~% infor the ~~United~~comparable ~~States~~period ~~and $7.3 million of favorable changes~~ in ~~foreign currency rates used to translate international sales into U~~2004.S. ~~dollars.~~ Image Transfer’s ~~sales~~ operating profit increased $392.85 million, ~~(35~~or 21.2%), to ~~$153.0 million. Image Transfer’s sales were~~ ~~positively affected by increased sales volumes of~~ $3114.23 million, inprimarily ~~the United States and $1.5 million in Europe and $5.9 million~~ as a result of ~~the effect of changes in foreign currency rates. The~~ higher ~~U.S. Image Transfer~~ sales volume ~~was~~, ~~primarily~~the asimpact ~~a result~~ of ~~sales~~selected ~~from~~price increases, ~~business~~and ~~acquisitions~~continued infocus ~~2003~~on ofoperational ~~$25~~improvements.~~6 million~~ ~~and~~As ~~from~~a ~~higher~~percentage ~~sales~~of ~~volumes~~net ~~across~~sales, ~~substantially all product lines.~~Image ~~European~~Transfer’s ~~sales~~operating ~~volume~~profit increased ~~primarily~~to ~~from~~18.0% ~~growth~~for in the ~~chemical~~three ~~products business~~months inended ~~the~~June 30, ~~United~~2005, ~~Kingdom~~from ~~and~~15.5% in ~~Germany~~2004. Textile Products’ ~~sales~~operating profit decreased $0.31 million, (1or 5.13%), to $251.65 million,. ~~primarily~~As as a percentage ~~result~~ of ~~lower~~net sales ~~volume~~, ~~in the United States of $0.4 million and in Europe of $1.4 million offset by favorable foreign currency rate changes of $1.5 million. The lower U.S.~~ Textile Products’ ~~sales~~operating ~~volume~~profit isincreased ~~due~~ to ~~reduced~~13.0% ~~demand~~for in the ~~U.S.~~three ~~textile~~months ~~industry~~ended June 30, ~~mostly~~2005, ~~a result of increased imports of low cost goods~~ from ~~Asia and South America~~12.5% ~~The~~in ~~ongoing restructuring of the U~~2004.~~S. textile manufacturing~~

21Other (income)/expense was ($1.6) million and ($0.7) million for the three months ended June 30, 2005 and 2004. The other (income)/expense is primarily due to foreign currency transaction (gains)/losses incurred in the normal course of international subsidiaries doing business in currencies other than their functional currency as well as a result of intercompany financing arrangements. Other (income)/expense includes gains of $1.7 million, in 2005, and $0.4 million, in 2004, on the mark-to-market of the euro-denominated Tranche A Term Loan.

~~Table of Contents~~20

industryTable has resulted in further consolidation and closure of yarn spinning mills as well as weaving facilities. Weak sales have forced textile manufacturers to cut expenses and reduce inventories, which have had a direct effect on reducing Textile Products’ sales. European Textile Products’ sales volumes were lower in 2004 compared to 2003, primarily as a result of lower sales to original equipment manufacturers (“OEMs”), in line with the OEMs own reduced level of business activity. OEM sales in 2004 continued at a relatively strong level, but were not at the unusually high level of 2003. Contents

~~Gross~~The ~~profit~~effective ~~increased~~tax ~~$16~~rate was 102.~~0 million~~7% ~~(32~~and 271.3%) toin ~~$65~~2005 and 2004.~~4 million.~~ ~~Foreign~~The ~~currency rate~~high ~~changes~~effective ~~increased~~tax ~~gross~~rates ~~profit~~are bydue to $2the adoption of SFAS No.8 ~~million.~~150 Asthat arequires ~~percentage~~non-deductible ofpreferred ~~net sales,~~stock ~~gross~~dividends ~~profit~~to ~~increased~~be reflected toas 36interest expense.7% ~~for~~Excluding the ~~six~~preferred ~~months~~stock ~~ended June 30~~dividends, ~~2004,~~the effective tax rate ~~compared~~would tohave 35been 37.62% ~~for~~in ~~the~~2005. ~~six~~The ~~months~~effective ~~ended~~tax ~~June 30,~~rate ~~2003~~in 2004 was further impacted by foreign-sourced dividends.

~~Selling~~In December, ~~general~~2004, ~~and~~the ~~administrative~~Financial ~~expense~~Accounting ~~(“SG&A”)~~Standards ~~increased~~Board ~~$10.0 million (33.3%)~~issued toSFAS ~~$39~~No.9 ~~million,~~123 ~~primarily as a result of SG&A associated with NDI of~~(Revised), ~~$5.0 million~~“Share-based ~~and changes in foreign currency rates~~Payment”. AsIn aApril, ~~percentage of net sales~~2005, ~~SG&A~~the ~~increased~~Financial toAccounting ~~22.4%~~Standards ~~from~~Board ~~21.6%.~~deferred ~~Changes in foreign currency rates~~the ~~increased~~effective ~~SG&A~~date ~~costs~~of bythis $1standard.~~5 million~~ inPreviously, the ~~first~~Company ~~half~~had ofannounced ~~2004~~its ~~compared~~intention to ~~the first~~adopt ~~half of 2003~~SFAS No. 123 ~~SG&A~~(Revised) ~~costs~~effective ~~also~~January 1, ~~increased~~2005. asAs a result of ~~higher~~the ~~insurance~~deferred effective date, the ~~costs~~Company ~~and~~elected ~~higher~~to ~~selling~~continue ~~and~~accounting ~~distribution~~for ~~costs~~its ~~from~~share-based ~~higher~~payments ~~sales~~under ~~levels~~SFAS No. 123.

~~Operating~~Six ~~profit~~Months ~~increased~~Ended ~~$6.4 million (34.4%) to $25.0 million. As a percentage of net sales, operating profit increased to 14.0% for the six months ended~~ June 30, ~~2004~~2005, ~~from~~Compared ~~13.4%~~with ~~for~~Six ~~the~~Months ~~comparable~~Ended period in 2003. Image Transfer’s operating profit increased $5.7 million (30.7%) to $24.4 million, primarily as a result of higher sales volumes. As a percentage of net sales, Image Transfer’s operating profit decreased to 15.9% for the six months ended June 30, 2004~~, from 16.5% in 2003. Operating margins on NDI’s distribution~~ business are substantially lower than Day’s historical margins on manufactured products. Textile Products’ operating profit increased $0.4 million (14.2%) to $3.4 million. As a percentage of net sales, Textile Products’ operating profit increased to 13.3% for the six months ended June 30, 2004, from 11.5% in 2003. Lower selling and administrative costs in the United States favorably affected textile Products’ operating profit in 2004 compared to 2003.

~~Other~~Net ~~(income) expense~~sales ~~was~~increased $(12.5) 8 million, ~~and~~or 1.6%, to $(0181.3) million, ~~for~~primarily ~~the~~as ~~six~~a ~~months ended~~result ~~June 30,~~of ~~2004~~favorable changes ~~and~~in ~~2003.~~foreign ~~The~~currency ~~other~~rates, ~~(income) expense~~higher issales ~~primarily~~volume ~~due~~in ~~to foreign~~Europe ~~currency~~and ~~transaction~~the ~~(gains) losses~~United ~~incurred~~States, inand the impact ~~normal~~of ~~course~~price ~~of international~~increases ~~subsidiaries~~in ~~doing~~selected ~~business~~product inlines. ~~other~~Favorable ~~than~~changes ~~their~~in ~~functional~~ foreign currency asrates used ~~well~~to astranslate ainternational ~~result~~sales ofinto ~~intercompany~~U.S. ~~financing~~dollars ~~arrangements.~~contributed ~~Other (income)~~$3.3 ~~expense~~million. inImage ~~2004~~Transfer’s sales ~~includes~~increased a$4.5 million, ~~gain~~or of3.0%, to $1157.15 million. onImage ~~the~~Transfer’s ~~mark-to-market~~sales were positively ofaffected by increased sales volumes in Europe and the ~~euro-denominated~~United ~~Tranche~~States, Athe ~~Term~~impact ~~Loan~~of price increases on selected product lines, and $02.47 million ~~gain~~as ona ~~the~~result ~~sale~~ of ~~fixed~~the ~~assets.~~effect ~~Other~~of ~~income~~changes in ~~2003~~foreign currency ~~includes~~rates. aPartially ~~loss~~offsetting ofthese ~~$1.1 million~~increases ~~from~~were ~~the sale~~lower offlat-blanket ~~the~~sales ~~South~~volume ~~African~~in ~~business~~the United States, aprimarily ~~gain~~ of ~~$0.9 million~~competitors’ ~~from~~brands ~~the~~that ~~sale~~are ~~of excess~~sold ~~land~~through inthe ~~Mauldin,~~Company’s ~~South~~NDI distribution ~~Carolina~~channel. ~~and~~Textile aProducts’ ~~loss~~sales ofdecreased $01.58 million, onor ~~the~~6.9%, ~~sale~~to $23.8 million, ~~and~~partly ~~disposal~~offset ofby ~~equipment~~favorable ~~from~~foreign ~~the~~currency ~~Longwood,~~rate ~~Florida,~~changes ~~facility~~of $0.6 million.

~~The~~Gross ~~effective~~profit ~~tax~~increased ~~rate~~$2.3 million, ~~was~~or ~~208~~3.85%, ~~and~~to 38$67.7~~% in 2004 and 2003~~ million. ~~The~~Foreign ~~effective~~currency ~~tax~~ rate ~~for~~changes increased ~~2004~~gross isprofit ~~affected~~ by ~~the adoption of SFAS No~~$1.2 ~~150~~million. ~~and~~As ~~the non-deductible~~a ~~preferred~~percentage ~~stock~~of ~~dividends~~net ~~now~~sales, ~~reflected~~gross asprofit ~~interest~~increased ~~expense.~~to ~~Adjusted~~37.3% for the ~~preferred~~six ~~stock~~months ~~dividends~~ended June 30, ~~the~~2005, ~~effective~~compared ~~tax~~with ~~rate~~36.7% ~~would~~for bethe six months ended June 30, 2004.

Selling, general and administrative expense (“SG&A”) increased $0.7 million, or 1.8%, to $40.6 million, primarily as a result of changes in foreign currency rates. As a percentage of net sales, SG&A did not change from the 22.4% reported in 2004. Changes in foreign currency rates increased SG&A costs by $0.7 million in the first half of 2005 compared with the first half of 2004.

~~Table~~Operating profit increased $1.6 million, or 6.4%, to $26.6 million. As a percentage of ~~Contents~~net sales, operating profit increased to 14.6% for the six months ended June 30, 2005, from 14.0% for the comparable period in 2004. Image Transfer’s operating profit increased $2.5 million, or 10.1%, to $26.8 million, primarily as a result of higher sales volume, the impact of selected price increases, and continued focus on operational improvements. As a percentage of net sales, Image Transfer’s operating profit increased to 17.0% for the six months ended June 30, 2005, from 15.9% in 2004. Textile Products’ operating profit decreased $0.6 million, or 17.0%, to $2.8 million. As a percentage of net sales, Textile Products’ operating profit decreased to 11.9% for the six months ended June 30, 2005, from 13.3% in 2004.

~~55.4% in 2004. The effective tax rate is further affected by foreign-sourced~~21 ~~dividends and income taxable in the United States and non-deductible expenses.~~

InTable May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This statement established standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This statement requires that the Company’s redeemable preferred stock be recorded in the same manner as long-term debt. The Company adopted the statement as of July 1, 2003. Therefore, since the third quarter of 2003, the Company has reflected the redeemable preferred stock as long-term debt and accrued dividends are shown as interest expense. The adoption of this statement has no effect on the net loss available to common shareholders, cash flows of the Company or the Company’s compliance with its debt covenants. Contents

~~Liquidity~~Other (income)/expense was ($1.3) million and ~~Capital~~($1.5) ~~Resources~~million expense for the six months ended June 30, 2005 and 2004. The other (income)/expense is primarily due to foreign currency transaction (gains)/losses incurred in the normal course of international subsidiaries doing business in currencies other than their functional currency as well as a result of intercompany financing arrangements. Other (income)/expense in 2005 includes a gain of $2.8 million on the mark-to-market of the euro-denominated Tranche A Term Loan and $1.0 million of expenses from a discontinued acquisition. Other (income)/expense in 2004 includes a gain of $1.1 million on the mark-to-market of the euro-denominated Tranche A Term Loan.

The ~~Company~~effective ~~has~~tax ~~historically~~rate ~~generated~~was ~~sufficient~~171.0% ~~funds~~and ~~from~~208.8% ~~its~~in ~~operations~~2005 and 2004. The high effective tax rates are affected by SFAS No. 150 that requires non-deductible preferred stock dividends to be reflected as ~~fund~~interest ~~its~~expense. ~~working~~Adjusted ~~capital~~for ~~and~~the ~~capital~~preferred ~~expenditure~~stock ~~requirements~~dividends, the effective tax rate would be 38.5% in 2005. The effective tax rate in 2004 is further affected by foreign-sourced dividends.

~~Capital~~Liquidity ~~expenditures were $3.1 million~~ and ~~$4.3 million~~Capital ~~for the six months~~Resources ~~ended June 30, 2004 and 2003.~~

OnThe ~~June 2, 2004, the~~ Company ~~issued~~has ~~$126.5 million~~historically ofgenerated ~~Tranche~~sufficient Dfunds ~~Term~~from ~~Loans under~~its ~~the~~operations ~~$185.0 million Senior Secured Credit Facility~~ to ~~refinance~~fund ~~the outstanding~~its ~~Tranche B and Tranche C Term Loans. The Tranche D Term Loans have~~working ~~terms~~capital ~~identical to the outstanding Tranche B~~ and ~~Tranche~~capital Cexpenditure ~~Term Loans, except that interest rates have been lowered 100 basis points and are now based on the banks’ base rate plus 2~~requirements.~~50% or the LIBOR rate plus 3.50%. No changes in~~ ~~maturity dates were made.~~

AsCapital ofexpenditures ~~June 30,~~were ~~2004, there was~~ $04.52 million ~~outstanding under the Revolving Credit Facility~~ and ~~the Company had~~ $183.61 million ~~available~~for ~~under~~ the ~~Revolving Credit~~six ~~Facility.~~months ~~The~~ended ~~Company’s aggregate indebtedness at~~ June 30, ~~2004,~~2005 ~~is $269.8 million~~ and ~~the aggregate liquidation preferences of the Exchangeable~~ ~~Preferred Stock is $74~~2004.~~8 million and the Convertible Preferred Stock is $84.2~~ million. The Company is highly leveraged. The Company’s ability to operate its business, service its debt requirements and reduce its total debt will depend upon its future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, certain of which are beyond its control, as well as the availability of revolving credit borrowings. See the Company’s Annual Report on Form 10-K for a more extensive discussion of liquidity and capital resources.

23As of June 30, 2005, there was $1.2 million outstanding under the Revolving Credit Facility and the Company had $18.8 million available under the Revolving Credit Facility. The Company’s aggregate indebtedness at June 30, 2005 is $247.7 million and the aggregate liquidation preferences of the Exchangeable Preferred Stock is $84.4 million and the Convertible Preferred Stock is $99.3 million. The Company is highly leveraged. The Company’s ability to operate its business, service its debt requirements and reduce its total debt will depend upon its future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, certain of which are beyond its control, as well as the availability of revolving credit borrowings. See the Company’s Annual Report on Form 10-K for a more extensive discussion of liquidity and capital resources.

~~Table~~The Company’s debt agreements contain certain financial covenants regarding a consolidated leverage ratio, a consolidated senior debt ratio, a consolidated interest coverage ratio, a consolidated fixed charge coverage ratio, and a limitation on capital expenditures. As of ~~Contents~~June 30, 2005, the Company remained in compliance with all debt covenants and none of the covenants were materially restrictive.

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~22

RisksTable Associatedof with International Operations Contents

~~The~~ITEM ~~Company conducts a significant amount of business and has operating and sales facilities in countries outside the United States~~3. AsQUANTITATIVE aAND ~~result,~~QUALITATIVE ~~the Company~~DISCLOSURES isABOUT ~~subject~~MARKET ~~to business risks inherent in non-U.S. activities, including~~RISK political uncertainty, import and export limitations, exchange controls and currency fluctuations. The Company believes risks related to its international operations are mitigated due to the political and economic stability of the countries in which its largest international operations are located, the stand-alone nature of the operations, the Company’s limited net asset exposure, forward foreign exchange contract practices and pricing flexibility. Thus, while changes in foreign currency values do affect earnings, the longer-term economic effect of these changes should not have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

~~Certain~~Risks ofAssociated the Company’s international subsidiaries make purchases and sales in designated currencies other than their functional currency. As a result, they are subject to transaction exposures that arise from foreign exchange movements between the date that the foreign currency transaction is recorded and the date it is consummated. In addition, the Company has intercompany loans outstanding with ~~certain~~International ~~international subsidiaries in their local currencies, exposing it~~Operations to the effect of changes in exchange rates at loan issue and loan repayment dates. The Company periodically enters into forward foreign exchange contracts to protect it against such foreign exchange movements. The contract value of these foreign exchange contracts was $8.1 million at June 30, 2004 and $15.9 million at December 31, 2003. The fair value of these contracts is a payable of $0.2 million at June 30, 2004 and $0.7 million at December 31, 2003. These contracts generally expire within three to twelve months. At June 30, 2004, the Company has outstanding €24.0 million of term loans issued under the Senior Secured Credit Facility. The Company has issued euro-denominated debt in order to protect the Company’s investments in Europe from fluctuations in the euro compared to the U.S. dollar. Foreign currency transaction (gains) losses, included in other (income) expense, were $(0.5) million and $(0.6) million for the three months ended June 30, 2004 and 2003 and $(0.9) million and $(1.4) million for the six months ended June 30, 2004 and 2003.

~~Interest~~The ~~Rate~~Company ~~Risks~~conducts a significant amount of business and has operating and sales facilities in countries outside the United States. As a result, the Company is subject to business risks inherent in non-U.S. activities, including political uncertainty, import and export limitations, exchange controls and currency fluctuations. The Company believes risks related to its international operations are mitigated due to the political and economic stability of the countries in which its largest international operations are located, the stand-alone nature of the operations, the Company’s limited net asset exposure, forward foreign exchange contract practices and pricing flexibility. Thus, while changes in foreign currency values do affect earnings, the longer-term economic effect of these changes should not have a material adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

~~The~~Certain ~~Company~~of isthe ~~subject~~Company’s tointernational ~~market~~subsidiaries ~~risk~~make ~~from~~purchases ~~exposure~~and tosales ~~changes~~ in ~~the interest~~designated ~~rates~~currencies ~~based~~other onthan ~~its~~their ~~financing~~functional ~~activities~~currency. ~~The~~As ~~Company~~a ~~utilizes~~result, athey ~~mix~~are ofsubject ~~debt~~to transaction ~~maturities~~exposures ~~along~~that ~~with~~arise ~~both~~from ~~fixed-~~foreign ~~and~~exchange ~~variable-rate~~movements ~~debt~~between tothe ~~manage~~date ~~its~~that ~~exposure to~~the ~~changes~~foreign incurrency transaction ~~interest~~is ~~rates~~recorded and tothe ~~minimize~~date ~~interest~~it ~~expense~~is consummated. ~~During~~In ~~2003~~addition, the Company ~~entered~~has ~~into~~intercompany loans aoutstanding ~~$25 million~~with ~~interest~~certain ~~rate~~international ~~swap~~subsidiaries toin ~~swap~~their alocal ~~portion~~currencies, ofexposing ~~the~~it to ~~Company’s~~the ~~variable~~effect ~~rate~~of ~~debt~~changes toin ~~fixed~~exchange rates at loan issue and loan repayment dates. The ~~swap~~Company periodically ~~expires~~enters ininto ~~September~~forward foreign exchange contracts to protect it against such foreign ~~2006~~exchange movements. The ~~fair~~contract value of ~~the~~these ~~interest~~foreign ~~rate~~exchange ~~swap~~contracts was a$8.6 million ~~receivable~~at ofJune 30, 2005 and $09.15 million at ~~June~~December 3031, 2004. ~~and~~These acontracts ~~payable~~generally ofexpire $0within three to twelve months.3 At June ~~million~~30, at2005 and December 31, ~~2003~~2004, the Company had outstanding €19.3 million and €20.4 million of term loans issued under the Senior Secured Credit Facility. The Company has issued euro-denominated debt in order to protect the Company’s ~~does~~investments ~~not~~in ~~expect~~Europe ~~changes~~from fluctuations in ~~interest~~the ~~rates~~euro tocompared ~~have~~with athe ~~material~~U.S. ~~effect~~dollar. onForeign currency transaction (gains)/losses included in other (income)/expense orwere ~~cash~~$1.4 million ~~flows~~income inand ~~2004~~$0.5 million income for the three months ended June 30, ~~although~~2005 ~~there~~and ~~can~~2004 beand no$2.1 million ~~assurance~~income ~~that~~and ~~interest~~$0.9 million income for the six ~~rates~~months ~~will~~ended ~~not~~June 30, ~~materially~~2005 ~~change~~and 2004.

24Interest Rate Risks

~~Table~~The Company is subject to market risk from exposure to changes in the interest rates based on its financing activities. The Company utilizes a mix of ~~Contents~~debt maturities along with both fixed- and variable-rate debt to manage its exposure to changes in interest rates and to minimize interest expense. During 2004, the Company entered into a $25 million interest rate swap to swap a portion of the Company’s variable rate debt to fixed rates. The swap expires in September, 2006. The fair value of the interest rate swap was a receivable of $0.3 million at June 30, 2005 and a receivable of $0.2 million at December 31, 2004. The Company does not expect changes in interest rates to have a material effect on income or cash flows in 2005, although there can be no assurance that interest rates will not materially change.

~~Commodity Risks~~23

RubberTable polymers and fabrics are key components in most of the Image Transfer and Textile products. The Company is exposed to changes in the costs of these components. Pressroom Chemicals is exposed to changes in the cost of certain petroleum-based components. The largest raw material component in Pressroom Chemicals’ products is petroleum distillates, such as aliphatics and aromatics. When commodity prices increase, the Company has historically passed on increases to its customers to maintain its profit margins. Conversely, when commodity prices decline, the Company generally lowers its sales prices to meet competitive pressures. Because the Company has historically been able to raise sales prices to offset significantly higher costs, management believes that a 10% change in the cost of its components could have a short-term impact until sales price increases take effect, but overall would not have a material effect on income or cash flows for a longer term. Contents

~~ITEM~~Commodity ~~4. CONTROLS AND PROCEDURES~~Risks

Rubber polymers and fabrics are key components in most of the Image Transfer and Textile products. The Company ~~maintains~~is aexposed ~~system~~to changes in the costs of ~~internal~~these ~~accounting~~components. ~~controls~~Pressroom ~~designed~~Chemicals is exposed to changes in the cost of certain petroleum-based components. The largest raw material component in ~~provide~~Pressroom ~~reasonable~~Chemicals’ ~~assurance~~products ~~that~~is ~~transactions~~petroleum ~~are~~distillates, ~~properly~~such ~~recorded~~as aliphatics and aromatics. When ~~summarized~~commodity soprices ~~that~~increase, ~~reliable~~the ~~financial~~Company ~~records~~has ~~and~~historically ~~reports~~passed ~~can~~on beincreases ~~prepared~~to ~~and~~its customers to ~~assets~~maintain ~~safeguarded.~~its Inprofit ~~addition~~margins. Conversely, awhen ~~system~~commodity ofprices ~~disclosure~~decline, ~~controls~~the isCompany ~~maintained~~generally lowers its sales prices to ~~ensure~~meet ~~that~~competitive ~~information~~pressures. ~~required~~Because the Company has historically been able to beraise ~~disclosed~~sales isprices ~~recorded,~~to ~~processed~~offset significantly higher costs, ~~summarized~~ ~~and~~management ~~reported~~believes inthat a ~~timely~~10% change ~~manner~~in tothe ~~management~~cost ~~responsible~~of ~~for~~its ~~the~~components could have a short-term impact until sales price increases ~~preparation~~take ~~and~~effect, ~~reporting~~but ofoverall ~~the~~would ~~Company’s~~not ~~financial~~have ~~information~~a material effect on income or cash flows for a longer term.

~~Management,~~ITEM with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assesses the internal control and disclosure control systems as being effective as they encompass material matters for the three months ended June 30, 20044. ToCONTROLS ~~the~~AND ~~best of management’s knowledge, there were~~PROCEDURES ~~no changes in the internal control and disclosure control systems during the quarter ended June 30, 2004, that would materially affect the control systems.~~

The Company has established disclosure controls and procedures to ensure that material information relating to the Company is made known to the officers who certify the Company’s financial reports and to other members of senior management and the Board of Directors. As a result of changes in the Company’s corporate controller position, the Company was unable to complete its timely review of the Company’s financial reports for the quarter ended June 30, 2005 and as a result filed a Form 12b-25 Notification of Late Filing on August 16, 2005. Management has now completed its review of the Company’s financial reports and, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, management concluded that as of June 30, 2005 the Company’s disclosure controls and procedures were not effective solely for the reason noted above. Management has taken actions to prevent a delay from occurring in future periods and believes that the Company’s disclosure controls and procedures are now effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities Exchange Commissions rules and forms.

~~Table~~Except ofas noted ~~Contents~~above, there were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended June 30, 2005 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

~~PART II OTHER INFORMATION~~24

ITEMTable 6.of EXHIBITS AND REPORTS ON FORM 8-KContents

a.		Exhibits
(31)		Rule 13a-14(a)/15d-14(a) Certifications
		31.1 Chief Executive Officer Certification
		31.2 Chief Financial Officer Certification
(32)		Section 1350 Certifications
		32.1 Chief Executive Officer Certification
		32.2 Chief Financial Officer Certification
b.		Reports on Form 8-K
		On June 7, 2004, the Company filed a Form 8-K reporting under Item 5 that it had refinanced a portion of its outstanding long-term debt.

PART II OTHER INFORMATION

~~Signature~~ITEM 6. EXHIBITS

~~Pursuant~~a. ~~to the requirements of the Securities Exchange Act of 1934, the~~Exhibits ~~Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.~~

				Day International Group, Inc.
				(Registrant)
		Date: August 6, 2004		/s/ Thomas J. Koenig
				Thomas J. Koenig
				Vice President and
				Chief Financial Officer
				(Principal Financial Officer)

(31) Rule 13a-14(a)/15d-14(a) Certifications


31.1		Chief Executive Officer Certification

31.2		Chief Financial Officer Certification

(32) Section 1350 Certifications


32.1		Chief Executive Officer Certification

32.2		Chief Financial Officer Certification

Signature

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.


	Day International Group, Inc. (Registrant)
Date: August 19, 2005	/s/ Thomas J. Koenig
	Thomas J. Koenig
	Vice President and Chief Financial Officer (Principal Financial Officer)

Filing Compare · DAY INTERNATIONAL GROUP INC