##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, DC
 Form 10-Q
 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For
the quarterly period ended March 31, 2006
 Commission
file number 0-21018
 TUFCO TECHNOLOGIES, INC.
 Delaware
    
    39-1723477(State of other jurisdiction
of incorporation of organization)
    
    (IRS Employer ID No.)
 PO BOX 23500 Green Bay, WI 54305
 (920) 336-0054
  þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
  o þ
  Class
    
    Outstanding as of May 15, 2006Common Stock, par value $0.01 per share
    
    4,535,244




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##### 



TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 Index
 PageNumberPART I:
    
    FINANCIAL INFORMATIONItem 1.
    
    Condensed Consolidated Financial StatementsCondensed Consolidated Balance Sheets as of March 31, 2006 and September 30, 2005
    
    
    3Condensed Consolidated Statements of Income for the three months and six months ended March 31, 2006 and 2005
    
    
    4Condensed Consolidated Statements of Cash Flows for the six months ended March 31, 2006 and 2005
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    16Item 4.
    
    Controls and Procedures
    
    
    17PART II:
    
    OTHER INFORMATIONItem 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    17Item 6.
    
    Exhibits
    
    
    18SIGNATURES
    
    
    19Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification Pursuant to Rule 13a-14(a) or Rule 15d-14(a)Certification Pursuant to Section 906Certification Pursuant to Section 906
  2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. Condensed Consolidated Financial Statements
 TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,2006
    
    
    September 30,(Unaudited)
    
    

2005*AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    6,398
    
    
    $
    5,672Accounts receivable-net
    
    
    11,389,293
    
    
    
    9,728,418Inventories
    
    
    13,279,458
    
    
    
    10,137,771Prepaid expenses and other current assets
    
    
    391,221
    
    
    
    170,555Income tax receivable
    
    
    88,996
    
    
    
    585,390Deferred income taxes
    
    
    499,947
    
    
    
    499,947Total current assets
    
    
    25,655,313
    
    
    
    21,127,753PROPERTY, PLANT AND EQUIPMENT-Net
    
    
    17,945,536
    
    
    
    15,657,028GOODWILL
        
    7,211,575
        
    
    7,211,575OTHER ASSETS-Net
    
    
    332,338
    
    
    
    489,662TOTAL
    
    $
    51,144,762
    
    
    $
    44,486,018Liabilities and Stockholders EquityCURRENT LIABILITIES:Accounts payable
    
    $
    7,243,520
    
    
    $
    4,688,887Accrued payroll, vacation and payroll taxes
    
    
    480,916
    
    
    
    367,336Other current liabilities
    
    
    443,785
    
    
    
    662,963Income taxes payable
    
    
    120,547
    
    
    
    Total current liabilities
    
    
    8,288,768
    
    
    
    5,719,186LONG-TERM DEBT
    
    
    5,025,448
    
    
    
    1,112,636DEFERRED INCOME TAXES
    
    
    1,721,917
    
    
    
    1,737,317STOCKHOLDERS EQUITY:Common Stock: $.01 par value: 9,000,000 shares authorized:4,708,341 shares issued
    
    
    47,083
    
    
    
    47,083Additional paid-in capital
    
    
    25,137,199
    
    
    
    25,097,911Retained earnings
    
    
    12,066,153
    
    
    
    11,845,152Treasury stock, 173,097 and 161,197 common shares at cost,respectively
    
    
    (1,141,806
    )
    
    
    (1,073,267
    )Total stockholders equity
    
    
    36,108,629
    
    
    
    35,916,879TOTAL
    
    $
    51,144,762
    
    
    $
    44,486,018
   3




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 THREE MONTHS ENDED
    
    
    SIX MONTHS ENDEDMarch 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2006
    
    
    2005NET SALES
    
    $
    23,089,194
    
    
    $
    21,215,449
    
    
    $
    44,402,088
    
    
    $
    41,219,438COST OF SALES
    
    
    21,729,053
    
    
    
    19,823,989
    
    
    
    42,041,535
    
    
    
    38,376,874GROSS PROFIT
    
    
    1,360,141
    
    
    
    1,391,460
    
    
    
    2,360,553
    
    
    
    2,842,564OPERATING EXPENSES:Selling, general & administrative
    
    
    1,044,116
    
    
    
    1,157,932
    
    
    
    2,011,587
    
    
    
    2,335,916Gain on sale of property, plant and
equipment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (415,781
    )OPERATING INCOME
    
    
    316,025
    
    
    
    233,528
    
    
    
    348,966
    
    
    
    922,429OTHER INCOME (EXPENSE):Interest expense
    
    
    (64,773
    )
    
    
    (8,058
    )
    
    
    (84,801
    )
    
    
    (21,578
    )Interest income and other income
    
    
    41,034
    
    
    
    5,324
    
    
    
    66,336
    
    
    
    19,508INCOME BEFORE INCOME TAXES
    
    
    292,286
    
    
    
    230,794
    
    
    
    330,501
    
    
    
    920,359INCOME TAX EXPENSE
    
    
    94,520
    
    
    
    91,293
    
    
    
    109,500
    
    
    
    372,860NET INCOME
    
    $
    197,766
    
    
    $
    139,501
    
    
    $
    221,001
    
    
    $
    547,499BASIC EARNINGS PER SHARE:Net Income
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.05
    
    
    $
    0.12DILUTED EARNINGS PER SHARE:Net Income
    
    $
    0.04
    
    
    $
    0.03
    
    
    $
    0.05
    
    
    $
    0.12WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:BasicDiluted
    
    
    4,535,353
    
    
    
    4,573,277
    
    
    
    4,541,036
    
    
    
    4,577,8114,543,219
    
    
    
    4,598,096
    
    
    
    4,547,865
    
    
    
    4,606,707
  4




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 SIX MONTHS ENDEDMarch 31,2006
    
    
    2005OPERATING ACTIVITIESNet Income
    
    $
    221,001
    
    
    $
    547,499Noncash items in net income:Depreciation and amortization of property, plant and
equipment
    
    
    917,732
    
    
    
    1,018,122Amortization
    
    
    10,572
    
    
    
    10,572Deferred income taxes
    
    
    (15,400
    )
    
    
    81,826Gain on sale of property, plant and equipment
    
    
    
    
    
    
    (415,781
    )Stock compensation expense
    
    
    39,288
    
    
    
    Changes in operating working capital:Accounts receivable
    
    
    (1,660,875
    )
    
    
    2,910,621Inventories
    
    
    (3,141,687
    )
    
    
    (1,345,124
    )Prepaid expenses and other assets
    
    
    (73,915
    )
    
    
    (72,271
    )Accounts payable
    
    
    2,714,796
    
    
    
    (41,612
    )Accrued and other current liabilities
    
    
    (105,598
    )
    
    
    (530,216
    )Income taxes payable/receivable
    
    
    616,941
    
    
    
    33,529Net cash (used) provided by operating activities
    
    
    (477,145
    )
    
    
    2,197,165INVESTING ACTIVITIESAdditions to property, plant and equipment
    
    
    (3,206,240
    )
    
    
    (479,450
    )Change in construction payables
    
    
    (160,163
    )
    
    
    Proceeds from disposals of property, plant and equipment
    
    
    
    
    
    
    462,042Net cash (used) by investing activities
    
    
    (3,366,403
    )
    
    
    (17,408
    )FINANCING ACTIVITIESRepayment of long-term debt
    
    
    
    
    
    
    (2,500,000
    )Borrowings of long-term debt
    
    
    3,912,812
    
    
    
    500,000Purchase of treasury stock
    
    
    (68,538
    )
    
    
    (181,552
    )Net cash provided (used) by financing activities
    
    
    3,844,274
    
    
    
    (2,181,552
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    726
    
    
    
    (1,795
    )CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    5,672
    
    
    
    7,692End of period
    
    $
    6,398
    
    
    $
    5,897NONCASH SUPPLEMENTAL INFORMATION:Deferred gain on sale of equipment
    
    $
    
    
    
    $
    95,000
  5




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 For the three months and six months ended March 31, 2006 and 2005
 (Unaudited)
 1.
    
    Basis of PresentationThe accompanying condensed consolidated financial statements have been prepared by Tufco
Technologies, Inc. (the Company) pursuant to the rules and regulations of the Securities
and Exchange Commission (SEC) and, in the opinion of the Company, include all adjustments
necessary for a fair statement of results for each period shown (unless otherwise noted
herein, all adjustments are of a normal recurring nature). Operating results for the
three-month and six-month periods ended March 31, 2006 are not necessarily indicative of
results expected for the remainder of the year. Certain information and note disclosures
normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States of America have been condensed or omitted pursuant to
such SEC rules and regulations. The Company believes that the disclosures made are adequate
to prevent the financial information given from being misleading. The Companys fiscal 2005
Annual Report on Form 10-K contains a summary of significant accounting policies and includes
the consolidated financial statements and the notes to the consolidated financial statements.
The same accounting policies are followed in the preparation of interim reports except for
the adoption of Statement of Financial Accounting Standard (SFAS) 123 Revised Share Based
Payments. The Companys condensed consolidated balance sheet at September 30, 2005 was
derived from the audited consolidated balance sheet. It is suggested that these condensed
consolidated financial statements be read in conjunction with the audited consolidated
financial statements and notes thereto for the fiscal year ended September 30, 2005.Earnings Per ShareBasic earnings per share is computed using the weighted average number of common shares
outstanding. Diluted earnings per share includes common stock equivalents from dilutive
stock options outstanding during the year, the effect of which was 7,866 and 24,819 shares
for the three months ended March 31, 2006 and 2005, respectively. For the six months ended
March 31, 2006 and 2005, the common stock equivalents from dilutive stock options outstanding
were 12,472 and 28,896, respectively. During the three months ended March 31, 2006 and 2005,
options to purchase 331,950 and 257,200 shares, respectively, were excluded from the diluted
earnings per share computation as the effects of including such options would have been
anti-dilutive. For the six months ended March 31,2006 and 2005, options to purchase 295,750
and 206,975 shares, respectively, were excluded from the diluted earnings per share
computation.2.
    
    InventoriesInventories consist of the following:
 March 31,
    
    
    September 30,2006
    
    
    2005Raw materials
    
    $
    10,957,406
    
    
    $
    7,470,774Finished goods
    
    
    2,322,052
    
    
    
    2,666,997Total inventories
    
    $
    13,279,458
    
    
    $
    10,137,771
 3.
    
    Stock Based CompensationThe Company has an incentive stock plan under which the Board of Directors may grant
non-qualified stock options to employees. Additionally, the Company has a Non-Qualified
Stock Option Plan for Non-Employee Directors, under which shares are available for grant.
The options have an exercise price equal to the fair market value of the underlying stock at
the date of grant. Employee stock options vest ratably over a three-year period and
non-employee director stock options vest immediately. Options issued under these plans
generally expire ten years from the date of grant. Approximately 0.4 million shares are
available for future grants.
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Notes to condensed consolidated financial statements(continued)
     Three Months Ended
    
    
    Six Months EndedMarch 31,
    
    
    March 31,2005
    
    
    2005Net income as reported
    
    $
    139,501
    
    
    $
    547,499Less total stock-based employee compensation expense
determined under fair value based method of all
awards, net of related tax effects
    
    
    (77,268
    )
    
    
    (96,354
    )Pro forma net income
    
    $
    62,233
    
    
    $
    451,145Earnings per share:Basic  as reported
    
    $
    0.03
    
    
    $
    0.12Basic  pro forma
    
    $
    0.01
    
    
    $
    0.10Diluted  as reported
    
    $
    0.03
    
    
    $
    0.12Diluted  pro forma
    
    $
    0.01
    
    
    $
    0.10
   7




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Notes to condensed consolidated financial statements(continued)
   WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at September 30, 2005
    
    
    541,800
    
    
    $
    7.40New grants
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    95,850
    
    
    $
    6.90Outstanding at March 31, 2006
    
    
    445,950
    
    
    $
    7.50
    
    
    
    3.7
    
    
    $
    3,346,346Exercisable at March 31, 2006
    
    
    414,217
    
    
    $
    7.54
    
    
    
    3.3
    
    
    $
    3,122,668
  4.
    
    Stock Repurchase PlanIn March 2005, the Companys Board of Directors approved the purchase by the Company of up
to 300,000 of its shares of common stock given that the Companys cash and debt position
would enable these purchases without impairment to the Companys capital. On December 16,
2005, the Companys Board of Directors extended the plan through June 30, 2006. A total of
2,800 shares were purchased under the plan during the quarter ended March 31, 2006. Since
the plan was approved, a total of 49,100 shares were purchased under the plan as of March 31,
2006.5.
    
    Segment InformationThe Company operates in a single industry since it manufactures and distributes business
forms, custom paper-based and nonwoven products, and provides contract manufacturing,
specialty printing and related services on these types of products. The Company does,
however, separate its operations and prepares information for management use by the market
segment aligned with the Companys products and services. Such market segment information
is summarized below. The Contract Manufacturing segment provides services to large national
consumer products companies while the Business Imaging segment manufactures and
distributes printed and unprinted business imaging paper products for a variety of business
needs.
 8




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Notes to condensed consolidated financial statements(continued)
 Three Months Ended
    
    Contract
    
    
    Business
    
    
    CorporateMarch 31, 2006
    
    Manufacturing
    
    
    Imaging
    
    
    and Other
    
    
    ConsolidatedNet sales
    
    $
    16,528,068
    
    
    $
    6,561,126
    
    
    $
    
    
    
    $
    23,089,194Gross profit
    
    
    751,349
    
    
    
    608,792
    
    
    
    
    
    
    
    1,360,141Operating (loss) income
    
    
    164,955
    
    
    
    380,427
    
    
    
    (229,357
    )
    
    
    316,025Depreciation and
amortization expense
    
    
    364,271
    
    
    
    59,306
    
    
    
    48,190
    
    
    
    471,767Capital expenditures
    
    
    1,924,189
    
    
    
    29,989
    
    
    
    
    
    
    
    1,954,178Assets:Inventories
    
    
    10,367,325
    
    
    
    2,912,133
    
    
    
    
    
    
    
    13,279,458Property, plant and
equipment-net
    
    
    15,398,447
    
    
    
    2,433,287
    
    
    
    113,802
    
    
    
    17,945,536Accounts receivable
and other (including
goodwill)
    
    
    12,322,905
    
    
    
    6,081,661
    
    
    
    1,515,202
    
    
    
    19,919,768Total assets
    
    $
    38,088,677
    
    
    $
    11,427,081
    
    
    $
    1,629,004
    
    
    $
    51,144,762
 Three Months Ended
    
    Contract
    
    
    Business
    
    
    CorporateMarch 31, 2005
    
    Manufacturing
    
    
    Imaging
    
    
    and Other
    
    
    ConsolidatedNet sales
    
    $
    15,328,405
    
    
    $
    5,887,044
    
    
    $
    
    
    
    $
    21,215,449Gross profit
    
    
    890,690
    
    
    
    500,770
    
    
    
    
    
    
    
    1,391,460Operating income (loss)
    
    
    723,168
    
    
    
    421,890
    
    
    
    (911,530
    )
    
    
    233,528Depreciation and
amortization expense
    
    
    358,035
    
    
    
    81,816
    
    
    
    73,425
    
    
    
    513,276Capital expenditures
    
    
    317,610
    
    
    
    76,027
    
    
    
    
    
    
    
    393,637Assets:Inventories
    
    
    8,922,483
    
    
    
    2,047,604
    
    
    
    
    
    
    
    10,970,087Property, plant and
equipment-net
    
    
    12,503,477
    
    
    
    2,820,528
    
    
    
    325,397
    
    
    
    15,649,402Accounts receivable
and other (including
goodwill)
    
    
    11,183,038
    
    
    
    5,734,047
    
    
    
    1,260,452
    
    
    
    18,177,537Total assets
    
    $
    32,608,998
    
    
    $
    10,602,179
    
    
    $
    1,585,849
    
    
    $
    44,797,026
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Notes to condensed consolidated financial statements(continued)
 Six Months Ended
    
    Contract
    
    Business
    
    CorporateMarch 31, 2006
    
    Manufacturing
    
    Imaging
    
    And Other
    
    ConsolidatedNet sales
    
    $
    31,065,323
    
    
    $
    13,336,765
    
    
    $
    
    
    
    $
    44,402,088Gross profit
    
    
    1,179,759
    
    
    
    1,180,794
    
    
    
    
    
    
    
    2,360,553Operating income (loss)
    
    
    112,088
    
    
    
    731,184
    
    
    
    (494,306
    )
    
    
    348,966Depreciation and
amortization expense
    
    
    705,415
    
    
    
    120,125
    
    
    
    102,764
    
    
    
    928,304Capital expenditures
    
    
    3,171,133
    
    
    
    35,107
    
    
    
    
    
    
    
    3,206,240
 Six Months Ended
    
    Contract
    
    Business
    
    CorporateMarch 31, 2005
    
    Manufacturing
    
    Imaging
    
    And Other
    
    ConsolidatedNet sales
    
    $
    29,555,874
    
    
    $
    11,663,564
    
    
    $
    
    
    
    $
    41,219,438Gross profit
    
    
    1,964,830
    
    
    
    877,734
    
    
    
    
    
    
    
    2,842,564Operating income (loss)
    
    
    1,182,742
    
    
    
    479,233
    
    
    
    (739,546
    )
    
    
    922,429Depreciation and
amortization expense
    
    
    708,920
    
    
    
    162,860
    
    
    
    156,914
    
    
    
    1,028,694Capital expenditures
    
    
    394,918
    
    
    
    84,532
    
    
    
    
    
    
    
    479,450
 10




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward Looking Statements:
  General Information:
    11




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
OperationsContinued
 Results of Operations:
 Condensed operating data, percentages of net sales and period-to-period changes in these items are
as follows (dollars in thousands):
 Three Months Ended
    
    
    Period-to-Period
    
    Six Months Ended
    
    
    Period-to-PeriodMarch 31,
    
    
    Change
    
    
    March 31,
    
    
    Change2006
        
    2005
        
    $
        
    %
        
    2006
        
    2005
        
    $
        
    %Net Sales
    
    $
    23,089
    
    
    $
    21,215
    
    
    $
    1,874
    
    
    
    9
    
    
    $
    44,402
    
    
    $
    41,219
    
    
    $
    3,183
    
    
    
    8Gross Profit
    
    
    1,360
    
    
    
    1,391
    
    
    
    (31
    )
    
    
    (2
    )
    
    
    2,361
    
    
    
    2,843
    
    
    
    (482
    )
    
    
    (17
    )5.9
    %
    
    
    6.6
    %
    
    
    
    
    
    
    
    
    
    
    5.3
    %
    
    
    6.9
    %Operating Expenses
    
    
    1,044
    
    
    
    1,158
    
    
    
    (114
    )
    
    
    (10
    )
    
    
    2,012
    
    
    
    1,920
    
    
    
    92
    
    
    
    54.5
    %
    
    
    5.5
    %
    
    
    
    
    
    
    
    
    
    
    4.5
    %
    
    
    4.7
    %Operating Income
    
    
    316
    
    
    
    234
    
    
    
    82
    
    
    
    35
    
    
    
    349
    
    
    
    922
    
    
    
    (573
    )
    
    
    (62
    )1.4
    %
    
    
    1.1
    %
    
    
    
    
    
    
    
    
    
    
    0.8
    %
    
    
    2.2
    %Interest Expense
    
    
    65
    
    
    
    8
    
    
    
    57
    
    
    
    713
    
    
    
    85
    
    
    
    22
    
    
    
    63
    
    
    
    2860.3
    %
    
    
    0.04
    %
    
    
    
    
    
    
    
    
    
    
    0.2
    %
    
    
    0.1
    %Income Before Income Taxes
    
    
    292
    
    
    
    231
    
    
    
    61
    
    
    
    26
    
    
    
    331
    
    
    
    920
    
    
    
    (589
    )
    
    
    (64
    )1.3
    %
    
    
    1.1
    %
    
    
    
    
    
    
    
    
    
    
    0.7
    %
    
    
    2.2
    %Income Tax Expense
    
    
    95
    
    
    
    91
    
    
    
    4
    
    
    
    4
    
    
    
    110
    
    
    
    373
    
    
    
    (263
    )
    
    
    (71
    )0.4
    %
    
    
    0.4
    %
    
    
    
    
    
    
    
    
    
    
    0.2
    %
    
    
    0.9
    %Net Income
    
    $
    198
    
    
    $
    140
    
    
    
    58
    
    
    
    41
    
    
    $
    221
    
    
    $
    547
    
    
    
    (326
    )
    
    
    (60
    )0.9
    %
    
    
    0.7
    %
    
    
    
    
    
    
    
    
    
    
    0.5
    %
    
    
    1.3
    %
 12




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
OperationsContinued
 Three Months EndedMarch 31,2006
    
    
    2005
    
    
    Period-to-PeriodChange% of
    
    
    
    
    
    
    % ofAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    $
    
    

%Net SalesContract Manufacturing and printing
    
    $
    16,528
    
    
    
    72
    %
    
    $
    15,328
    
    
    
    72
    %
    
    $
    1,200
    
    
    
    8
    %Business Imaging paper products
    
    
    6,561
    
    
    
    28
    
    
    
    5,887
    
    
    
    28
    
    
    
    674
    
    
    
    11
    %Net Sales
    
    $
    23,089
    
    
    
    100
    %
    
    $
    21,215
    
    
    
    100
    %
    
    $
    1,874
    
    
    
    9
    %
 2006
    
    
    2005
    
    
    Period-to-PeriodMargin
    
    
    
    
    
    
    Margin
    
    
    ChangeAmount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    $
    
    
    %Gross
ProfitContract Manufacturing and printing
    
    $
    751
    
    
    
    5
    %
    
    $
    891
    
    
    
    6
    %
    
    $
    (140
    )
    
    
    (16
    %)Business Imaging paper products
    
    
    609
    
    
    
    9
    %
    
    
    500
    
    
    
    9
    %
    
    
    109
    
    
    
    22
    %Gross Profit
    
    $
    1,360
    
    
    
    6
    %
    
    $
    1,391
    
    
    
    7
    %
    
    $
    (31
    )
    
    
    (2
    %)
 Six Months EndedMarch 31,2006
    
    
    2005
    
    
    Period-to-Period% of
    
    
    
    
    
    
    % of
    
    
    ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    $
    
    
    %Net SalesContract Manufacturing and printing
    
    $
    31,065
    
    
    
    70
    %
    
    $
    29,556
    
    
    
    72
    %
    
    $
    1,509
    
    
    
    5
    %Business Imaging paper products
    
    
    13,337
    
    
    
    30
    
    
    
    11,663
    
    
    
    28
    
    
    
    1,674
    
    
    
    14
    %Net Sales
    
    $
    44,402
    
    
    
    100
    %
    
    $
    41,219
    
    
    
    100
    %
    
    $
    3,183
    
    
    
    8
    %
 2006
    
    
    2005
    
    
    Period-to-PeriodMargin
    
    
    
    
    
    
    Margin
    
    
    ChangeAmount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    $
    
    
    %Gross
ProfitContract Manufacturing and printing
    
    $
    1,180
    
    
    
    4
    %
    
    $
    1,965
    
    
    
    7
    %
    
    $
    (785
    )
    
    
    (40
    %)Business Imaging paper products
    
    
    1,181
    
    
    
    9
    %
    
    
    878
    
    
    
    8
    %
    
    
    303
    
    
    
    35
    %Gross Profit
    
    $
    2,361
    
    
    
    5
    %
    
    $
    2,843
    
    
    
    7
    %
    
    $
    (482
    )
    
    
    (17
    %)
 13




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
OperationsContinued
 Net Sales :
    Gross Profit :
   Operating Expenses :
   Interest Expense and Other Income (Expense) net :
  14




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
OperationsContinued
 Net Income
    Liquidity and Capital Resources:
          15




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##### Table of Contents



ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
OperationsContinued
 Stock Repurchase Plan :
  Critical Accounting Policies:
  Off Balance Sheet Arrangements:
  
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  16




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##### Table of Contents



ITEM 4. Controls and Procedures
    
 PART II. OTHER INFORMATION
 
 ITEM 2. Unregistered Sales Of Equity Securities And Use Of Proceeds
 Issuer Purchases of Equity Securities
  Maximum NumberTotal Number of
    
    Of Shares ThatTotal Number
    
    
    
    
    
    Shares Purchased as
    
    May Yet BeOf Shares
    
    Average Price
    
    Part of Publicly
    
    Purchased UnderPeriod
    
    Purchased
    
    Paid per Share
    
    Announced Plan
    
    The PlanJanuary(1/1/06-1/31/06)
    
    
    2,800
    
    
    $
    5.66
    
    
    
    49,100
    
    
    
    250,900
  17




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##### Table of Contents



ITEM 6. Exhibits
 31.1
    
    Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the
Securities Exchange Act of 1934.31.2
    
    Certification pursuant to Rule 13a-14(a) or Rule
15d-14(a) of the Securities Exchange Act of 1934.32.1
    
    Certification furnished pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification furnished Pursuant to 18 U.S.C. Section
1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 18




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##### Table of Contents



SIGNATURES
  TUFCO TECHNOLOGIES, INC.Date:
    
    May 15, 2006
    
    /s/ Louis LeCalsey, III

Louis LeCalsey, IIIPresident and Chief Executive OfficerDate:
    
    May 15, 2006
    
    /s/ Michael B. Wheeler

Michael B. WheelerVice President and Chief Financial Officer
 19