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[PENHALL
INTERNATIONAL LETTERHEAD]

June 16, 2005

By EDGAR and
Facsimile

Securities and
Exchange Commission

Judiciary Plaza

450 Fifth Street, N.W.

Washington, D.C.  20549-0510

Attention: Rufus Decker, Accounting Branch Chief

Re:                               Penhall
International Corp. (the “Company”)

Form 10-K/A for the fiscal year ended June 30, 2004

Form 10-Q for the period ended December 31, 2004

File No. 333-64745

Dear Mr. Decker:

Set forth below are the
Company’s responses to the comments contained in the letter of the staff of the
Division of Corporation Finance of the Securities and Exchange Commission (the “Commission”)
dated March 22, 2005 (the “Comment Letter”) with respect to the Form 10-K/A
filed by the Company on December 20, 2004 and the Form 10-Q filed by the
Company on February 14, 2005. The headings and numbered responses in this
response letter correspond to the headings and numbered comments contained in
the Comment Letter.  For your
convenience, we have repeated the staff’s comments below in bold face type
before each of our responses.

FORM 10-K/A FOR THE FISCAL YEAR ENDED JUNE 30, 2004

General

1.                                       Where a comment
below requests additional disclosures or other revisions to be made, please
provide to us your intended disclosure.
These revisions should be included in your future filings.

Response to Comment 1.

The Company’s
acknowledges the staff’s comment.

Selected Financial Data, pages 11 - 12

2.                                       We note your
presentation of the non-GAAP measure Adjusted EBITDA and Adjusted EBITDA
Margin.  Your current disclosures do not
comply with Item 10(e) of Regulation S-K.
In this regard, please expand your statement explaining you believe
these non-GAAP measures provide useful information regarding your

ability to incur
and/or service debt.  Also, since your presentation
of Adjusted EBITDA appears related to your loan covenants, please expand your
discussion with respect to those loan covenants.  See Question 10 of the FAQ and expand your
disclosures to encompass the disclosures required by the 1st and 3rd bullet
points.

Response to Comment 2.

Below is the modified
Footnote (1) to Selected Financial Data which expands the discussion related to
our use of the non-GAAP measure Adjusted EBITDA.  We will modify in future filings the
calculation of Adjusted EBITDA which previously excluded certain charges.  We have also modified our discussion related
to covenants in our New Credit Agreement and limitations of the Indenture
agreement.  These will be included in
Management’s Discussion and Analysis under Liquidity and Capital Resources.

In our Annual Report of Form 10-K
for the year ended June 30, 2005, and in future filings we will include
disclosure in substantially the form below:

Footnote (1) to Selected
Financial Data

(1)   Adjusted
EBITDA is a supplemental non generally accepted accounting principle (“GAAP”)
financial measure.  Adjusted EBITDA represents
earnings before interest expense, income taxes, depreciation and amortization,
adjusted to exclude goodwill impairment because we believe this to be a non-recurring
charge in 2004.  Management has presented
Adjusted EBITDA because it is used as a measure in the terms of The Credit
agreement and in the Indenture agreement (see Management’s Discussion and
Analysis).  Management has also presented
Adjusted EBITDA because we believe it is a meaningful measure and represents an
alternate view of our operating performance and allows our management and our
investors to readily view operating trends and analyze the Company’s ability to
incur and/or service debt. Since Adjusted EBITDA is not a measure of
performance calculated in accordance with GAAP, it should not be considered in
isolation of, or as a substitute for, net loss or cash flows from operations as
an indicator of operating performance or as a measure of profitability or
liquidity.  Adjusted EBITDA, as the
Company calculates it, may not be comparable to similarly titled measures
employed by other companies.  In
addition, this measure does not necessarily represent funds available for
discretionary use, and is not necessarily a measure of the Company’s ability to
fund its cash needs.

In our Quarterly Report of Form
10-Q for the period ended March 31, 2005 we included, and in future filings
we will include disclosure in substantially the form below:

The provisions of The New Credit include a lock-box agreement that
allows the lender, in its reasonable credit judgment, to assess additional
reserves against the borrowing base calculation.  Accordingly,

2

borrowings under the agreement are classified as current.  Borrowings under The New Credit are also
subject to certain key financial covenants:

•                  Maintain a
minimum interest coverage ratio (EBITDA (as defined) divided by interest
expense) of at least 1.25.  At March 31,
2005, the actual ratio was 1.70.

•                  Maintain a
maximum leverage ratio (debt senior to the senior notes divided by EBITDA (as
defined)) of less than 2.30.  At March 31,
2005, the actual ratio was 1.01.

•                  The Company is
limited to $1.75 million of capital expenditures annually for parts and
property.  This includes any fixed assets
(other than equipment), parts, tools, supplies or improvements that have a
useful life greater than one year.  At March 31,
2005, the Company had spent $244,000 for parts and property.

•                  The Company is
required to maintain a dollar utilization rate above 48% over the prior 4
quarters.  Dollar utilization is total
revenue for equipment divided by total standard available revenue during the
period.   At March 31, 2005, the
Company’s dollar utilization was 64.2%.

At March 31, 2005, the Company was in compliance with all
covenants.  There are no anticipated
trends that we are aware of that would indicate non-compliance with such
covenants, however, significant deterioration in our financial performance
could impact our ability to comply with such covenants.

In our Annual Report of Form 10-K for the period
ended June 30, 2005, and in future filings we will include disclosure in
substantially the form below:

Senior Notes

On August 4, 1998 the Company issued $100,000,000
of Senior Notes guaranteed by the wholly-owned subsidiaries of Penhall
International Corp. Interest at 12% is payable semiannually in arrears
beginning February 1, 1999; all unpaid principal and interest is due August 1,
2006. In addition, the Senior Notes are redeemable at the Company’s option, in
whole at any time or in part from time to time, on or after August 1,
2003, at certain redemption rates ranging from 106% to 102%. The Company’s
Indenture dated as of August 1, 1998 (the “Indenture”) with United States
Trust Company, as Trustee (the “Trustee”), contains certain financial and
non-financial limitations.  Some of these
limitations are based upon the Company’s EBITDA (as defined), including the
calculation of the Consolidated Fixed Charge Coverage Ratio (as defined).

3

From August 1, 2002 through October 25,
2002, the Company repurchased capital stock of the Company from four former
employees for aggregate consideration of $35,000.  The Indenture permits
repurchases of capital stock from former employees in annual amounts up to
$1,000,000 and up to $5,000,000 in aggregate over the life of the Indenture;
provided that, at the time of any such repurchase, the Company must be able to
incur additional indebtedness under the Indenture’s Consolidated Fixed Charge
Coverage Ratio.  At the time of the repurchases described above, the
Company was not able to incur additional indebtedness under the Indenture’s Consolidated
Fixed Charge Coverage Ratio, and accordingly such repurchases were not
permitted by the Indenture.  The Company has informed the Trustee of such
repurchases.  In the event that the Company receives, in accordance with
the Indenture, written notice of such default from either the Trustee or
Holders of at least 25% of the outstanding principal amount of the Notes, the
Company has thirty days to remedy the matter and will seek either to cure such
default or to obtain a waiver of such default in accordance with the
Indenture.  Neither the Trustee nor any of the Note Holders have
indicated their intent to notify the Company of default and the Company
does not believe that written notice of such default will be
forthcoming.

The Company anticipates extending or refinancing this
obligation.  No assurance can be given that such financing will be
available to the Company or, if available, that it may be obtained on terms and
conditions that are satisfactory to the Company.

Management’s Discussion and Analysis

Goodwill, page 15

3.                                       Expand your
discussion of your reporting units and give more specific information with
respect to the reporting unit relating to the remaining goodwill such as
profitability trends and whether impairment is likely in the near term.

Response to Comment 3.

In our Annual Report of Form 10-K
for the year ended June 30, 2005, and in future filings we will modify our
critical accounting policy in substantially the form below:

Goodwill

We use
estimates in order to determine if goodwill has been impaired. An impairment
loss may be recognized if the carrying amount of a reporting unit’s net book
value exceeds the estimated fair value of the reporting unit.   As of June 30, 2005, goodwill is
assigned to five reporting units derived from individual acquisitions.  We arrive at the estimated fair value of a
reporting unit using a discounted cash flow approach.  We will perform our valuation analysis at
least annually or sooner if an event occurs or

4

circumstances
change that would indicate the carrying amount of goodwill may be impaired. If
our estimates or assumptions change from those used in our current valuation,
we may be required to recognize an impairment loss in future periods. The Company
evaluates goodwill for impairment at June 30 of each year.

Factors we consider important which could trigger an
impairment review include:

•                  Significant underperformance relative
to expected historical or projected future operating results;

•                  Significant changes in the manner of
our use of the acquired assets or the strategy for our overall business;

•                  Significant negative industry or
economic trends;

•                  Unanticipated competition; and

•                  EBITDA relative to net book value

We allocated goodwill to the reporting units that
benefited from the related acquisitions.
As of June 30, 2005, $6.0 million of the remaining goodwill of $6.4
million resides in one reporting unit in which profit levels have been sustained
over time since the acquisition. We expect such profit levels to continue
prospectively, however, if profit levels were to deteriorate the reporting
units’ goodwill could become impaired.

Contractual Obligations, page 17

4.                                       Please consider
revising your table of contractual cash obligations to include the following:

•                                          Estimated
interest payments on your debt; and

•                                          Planned
funding of pension and other postretirement benefit obligations.

Because the table
is aimed at increasing transparency of cash flow, we believe these payments
should be included in the table.  Please
also disclose any assumptions you made to derive these amounts.  If you choose not to include these payments,
a footnote to the table should clearly identify the excluded items and provide
any additional information that is material to an understanding of your cash
requirements.  See Regulation S-K, Item
303(a)(5) for guidance.

Response to Comment 4.

The Company does not have
pension or post retirement obligations and accordingly, has no planned funding
of pension or other postretirement benefit obligations.  Below, we have modified the contractual
obligations table as presented in our Annual Report, Form 10-K/A for the year
ended June 30, 2004 to include interest expense.

5

In future filings we will include
disclosure in substantially the form below:

Contractual Obligations

The following is a summary of the Company’s
contractual obligations as of June 30, 2004:

  Fiscal Year Ending June 30,

  2005

  2006

  2007

  2008

  2009

  Thereafter

  Total

  Operating lease obligations

  $

  2,752,000

  $

  2,559,000

  $

  2,215,000

  $

  1,985,000

  $

  1,883,000

  $

  21,321,000

  $

  32,715,000

  Long-term debt, including interest

  887,000

  113,000

  1,000,000

  Senior notes, including interest

  12,000,000

  12,000,000

  101,000,000

  —

  —

  —

  125,000,000

  Senior exchangeable preferred stock

  —

  —

  24,420,000

  —

  —

  —

  24,420,000

  Series A Preferred stock

  —

  —

  —

  33,587,000

  —

  —

  33,587,000

Liquidity and Capital Resources, page 17 - 19

5.                                       Liquidity
generally should be discussed on both a long-term and short-term basis.  Accordingly, the discussion of the
sufficiency of your resources to satisfy ongoing cash requirements for the next
twelve months should be expanded to discuss liquidity on a long-term
basis.  See Regulation S-K, Item
303(a)(1).

Response to Comment 5.

In our Quarterly Report of Form
10-Q for the period ended March 31, 2005 we included, and in future
filings we will include disclosure in substantially the form below:

Regarding short term liquidity:

We believe that our current
cash and cash equivalents, cash generated from operations, and the amount
available under our existing credit facility will be sufficient to meet our
expected working capital needs, capital expenditures, financial commitments and
other liquidity requirements associated with our existing operations through
the next 12 months.

Regarding long-term liquidity:

As of March 31, 2005,
the Company has the following obligations subject to redemption or maturity in
fiscal 2007 and 2008:

  Due date

  Balance at

  March 31,

  2005

  Senior Notes

  08/01/06

  $

  100,000,000

  Senior Exchangeable Preferred Stock

  02/01/07

  $

  20,126,000

  Preferred Series A

  08/01/07

  $

  24,787,000

6

The accretion of preferred
stock will increase the total obligation through the dates of redemption.    The Company is exploring various
strategies to extend the maturity of its existing senior notes.  Such strategies could take the form of a bank
financing or capital markets transaction. No assurance can be given that such financing will be available to the
Company or, if available that it may be obtained on terms and conditions that
are satisfactory to the Company.

As long as the uncertainty associated with the
resolution of these obligations remains, the Company could be subject to
adverse consequences including:

•                  Making it more difficult to obtain
surety support;

•                  Increasing our vulnerability to
general adverse economic and industry conditions;

•                  Limiting our ability to extend or
replace the Company’s existing credit facility;

•                  Limiting our ability to extend or
replace the Company’s existing Senior Notes:

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

6.                                       We note you
received $11.3 million from the sale and leaseback of 11 sites in 2003.  If you own other properties that you could
sell and lease back, please disclose these as possible sources of
liquidity.  If not, include disclosure
regarding the lack of additional properties that could be used to generate
additional liquidity through sale/leaseback transactions.  See Regulation S-K, Item 30