##### 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 June 30, 2007
 Commission file number 0-21018
 TUFCO TECHNOLOGIES, INC.
 Delaware
    
    39-1723477(State of other jurisdiction
    
    (IRS Employer ID No.)of incorporation of organization)
 PO BOX 23500 Green Bay, WI 54305
 (920) 336-0054
  þ o
  o o þ
  o þ
  Class
    

Outstanding as of August 14, 2007Common Stock, par value $0.01 per share
    
    4,535,644




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##### 



TUFCO TECHNOLOGIES, INC.
 Index
 PageNumberPART I:
    
    FINANCIAL INFORMATIONItem 1.
    
    Condensed Consolidated Financial StatementsCondensed Consolidated Balance Sheets as of
June 30, 2007 and September 30, 2006
    
    
    3Condensed Consolidated Statements of Income for the three months
and nine months ended June 30, 2007 and 2006
    
    
    4Condensed Consolidated Statements of Cash Flows for the
nine months ended June 30, 2007 and 2006
    
    
    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
    
    
    15Item 4.
    
    Controls and Procedures
    
    
    16PART II:
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    16Item 1A.
    
    Risk Factors
    
    
    16Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    16Item 3.
    
    Defaults Upon Senior Securities
    
    
    16Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    17Item 5.
    
    Other Information
    
    
    17Item 6.
    
    Exhibits
    
    
    17SIGNATURES
    
    
    18Third Amendment to the Credit AgreementCertification 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
 June 30,2007
    
    
    September 30,(Unaudited)
    
    
    2006*AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    6,368
    
    
    $
    5,267Accounts receivable-net
    
    
    13,678,286
    
    
    
    15,078,707Inventories
    
    
    18,070,227
    
    
    
    14,125,417Prepaid expenses and other current assets
    
    
    969,187
    
    
    
    635,243Income tax receivable
    
    
    
    
    
    
    46,893Deferred income taxes
    
    
    490,637
    
    
    
    490,637Total current assets
    
    
    33,214,705
    
    
    
    30,382,164PROPERTY, PLANT AND EQUIPMENT-Net
    
    
    19,432,905
    
    
    
    18,940,513GOODWILL
    
    
    7,211,575
    
    
    
    7,211,575OTHER ASSETS-Net
    
    
    132,926
    
    
    
    154,466TOTAL
    
    $
    59,992,111
    
    
    $
    56,688,718Liabilities and Stockholders EquityCURRENT LIABILITIES:Accounts payable
    
    $
    13,555,078
    
    
    $
    9,922,742Accrued payroll, vacation and payroll taxes
    
    
    760,485
    
    
    
    507,923Other current liabilities
    
    
    646,769
    
    
    
    542,366Income taxes payable
    
    
    245,709
    
    
    
    Total current liabilities
    
    
    15,208,041
    
    
    
    10,973,031LONG-TERM DEBT
    
    
    5,633,333
    
    
    
    7,073,011DEFERRED INCOME TAXES
    
    
    2,076,856
    
    
    
    2,102,950STOCKHOLDERS EQUITY:Common Stock: $.01 par value: 9,000,000 shares authorized; 4,708,741 and
4,708,341 shares issued
    
    
    47,087
    
    
    
    47,083Additional paid-in capital
    
    
    25,295,370
    
    
    
    25,226,526Retained earnings
    
    
    12,873,230
    
    
    
    12,407,923Treasury stock, 173,097 common shares at cost
    
    
    (1,141,806
    )
    
    
    (1,141,806
    )Total stockholders equity
    
    
    37,073,881
    
    
    
    36,539,726TOTAL
    
    $
    59,992,111
    
    
    $
    56,688,718
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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 THREE MONTHS ENDED
    
    
    NINE MONTHS ENDEDJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006NET SALES
    
    $
    29,814,897
    
    
    $
    27,428,347
    
    
    $
    84,419,637
    
    
    $
    71,830,435COST OF SALES
    
    
    28,164,798
    
    
    
    25,777,027
    
    
    
    80,291,470
    
    
    
    67,818,562GROSS PROFIT
    
    
    1,650,099
    
    
    
    1,651,320
    
    
    
    4,128,167
    
    
    
    4,011,873OPERATING EXPENSES:Selling, general & administrative
    
    
    1,075,256
    
    
    
    1,100,623
    
    
    
    3,027,787
    
    
    
    3,112,209Gain on sale of property, plant and
equipment
    
    
    
    
    
    
    
    
    
    
    (145
    )
    
    
    OPERATING INCOME
    
    
    574,843
    
    
    
    550,697
    
    
    
    1,100,525
    
    
    
    899,664OTHER INCOME (EXPENSE):Interest expense
    
    
    (132,862
    )
    
    
    (106,213
    )
    
    
    (382,311
    )
    
    
    (191,014
    )Interest income and other income
(expense)
    
    
    1,494
    
    
    
    (4,476
    )
    
    
    18,310
    
    
    
    61,859INCOME BEFORE INCOME TAXES
    
    
    443,475
    
    
    
    440,008
    
    
    
    736,524
    
    
    
    770,509INCOME TAX EXPENSE
    
    
    156,342
    
    
    
    126,483
    
    
    
    271,217
    
    
    
    235,983NET INCOME
    
    $
    287,133
    
    
    $
    313,525
    
    
    $
    465,307
    
    
    $
    534,526BASIC EARNINGS PER SHARE:Net Income
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.12DILUTED EARNINGS PER SHARE:Net Income
    
    $
    0.06
    
    
    $
    0.07
    
    
    $
    0.10
    
    
    $
    0.12WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:Basic
    
    
    4,535,640
    
    
    
    4,535,244
    
    
    
    4,535,376
    
    
    
    4,539,105Diluted
    
    
    4,572,142
    
    
    
    4,553,085
    
    
    
    4,562,988
    
    
    
    4,549,605
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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 NINE MONTHS ENDEDJune 30,2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    465,307
    
    
    $
    534,526Noncash items in net income:Depreciation and amortization of property, plant and
equipment
    
    
    1,624,604
    
    
    
    1,441,170Amortization
    
    
    15,858
    
    
    
    15,858Non-monetary reimbursement of cost
    
    
    (515,000
    )
    
    
    Deferred income taxes
    
    
    (26,094
    )
    
    
    (44,309
    )Gain on sale of property, plant and equipment
    
    
    (145
    )
    
    
    Stock-based compensation expense
    
    
    66,564
    
    
    
    113,037Changes in operating working capital:Accounts receivable
    
    
    1,400,421
    
    
    
    (5,372,582
    )Inventories
    
    
    (3,944,810
    )
    
    
    (6,100,077
    )Prepaid expenses and other assets
    
    
    (328,262
    )
    
    
    (287,453
    )Accounts payable
    
    
    4,019,024
    
    
    
    7,514,451Accrued and other current liabilities
    
    
    356,965
    
    
    
    183,378Income taxes payable/receivable
    
    
    292,602
    
    
    
    986,333Net cash provided (used) by operating activities
    
    
    3,427,034
    
    
    
    (1,015,668
    )INVESTING ACTIVITIESAdditions to property, plant and equipment
    
    
    (1,588,121
    )
    
    
    (4,493,140
    )Proceeds from disposals of property, plant and equipment
    
    
    500
    
    
    
    Payment of construction payable
    
    
    (400,918
    )
    
    
    (309,249
    )Net cash used by investing activities
    
    
    (1,988,539
    )
    
    
    (4,802,389
    )FINANCING ACTIVITIESNet (repayments) borrowings of debt
    
    
    (1,439,678
    )
    
    
    6,037,364Proceeds from exercise of stock options
    
    
    2,284
    
    
    
    Purchase of treasury stock
    
    
    
    
    
    
    (68,539
    )Net cash (used) provided by financing activities
    
    
    (1,437,394
    )
    
    
    5,968,825NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    1,101
    
    
    
    150,768CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    5,267
    
    
    
    5,672End of period
    
    $
    6,368
    
    
    $
    156,440NONCASH SUPPLEMENTAL INFORMATION:Construction payable
    
    $
    14,230
    
    
    $
    267,594
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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARY
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months and nine months ended June 30, 2007 and 2006
(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 nine-month periods ended June 30, 2007 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 2006
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. The
Companys condensed consolidated balance sheet at September 30, 2006 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, 2006.2.
    
    Recently Issued Accounting StandardsIn February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial Assets and
Financial Liabilities (SFAS No. 159). SFAS No. 159 permits entities to choose to measure
many financial instruments and certain other items at fair value at specified election dates.
Under SFAS No. 159, a business entity shall report unrealized gains and losses on items for
which the fair value option has been elected in earnings (or another performance indicator if
the business entity does not report earnings) at each subsequent reporting date. SFAS No. 159
also establishes presentation and disclosure requirements designed to facilitate comparisons
between entities that choose different measurement attributes for similar types of assets and
liabilities. This Statement is effective for fiscal years beginning after November 15, 2007.
The Company is in the process of determining the effect, if any, the adoption of SFAS No. 159
will have on its consolidated financial statements.In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin
No. 108 (SAB No. 108), Considering the Effects of Prior Year Misstatements in the Current
Year Financial Statements. SAB No. 108 addresses how the effects of prior year uncorrected
misstatements should be considered when quantifying misstatements in current year financial
statements. SAB No. 108 requires an entity to evaluate misstatements using a balance sheet
and income statement approach and evaluate whether either approach results in quantifying an error that is
material in light of relevant quantitative and qualitative factors. The requirements of SAB
No. 108 are effective for fiscal years ending after November 15, 2006. The Company is in the
process of determining the effect, if any, the adoption of SAB No. 108 will have on its
consolidated financial statements.In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
No. 48, Accounting For Uncertainty in Income Taxes-an interpretation of FASB Statement No.
109(FIN 48), which clarifies the accounting for uncertainty in tax positions. This
Interpretation requires that the Company recognize in its financial statements the impact of
a tax position if that position is more likely than not of being sustained on audit based on
the technical merits of the position. The accounting provisions of FIN 48 will be effective
for the Company beginning October 1, 2007, with the cumulative effect of the change in accounting principle recorded as an
adjustment to opening retained earnings. The Company is in the process of determining the
effect, if any, the adoption of FIN 48 will have on its consolidated financial statements.
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Notes to condensed consolidated financial statements(continued)
 In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS No. 157). SFAS No. 157 clarifies the principle that fair value
should be based on the assumptions market participants would use when pricing an asset or
liability and establishes a fair value hierarchy that prioritizes the information used to
develop those assumptions. Under the standard, fair value measurements would be separately
disclosed by level within the fair value hierarchy. SFAS No. 157 is effective for the
Company beginning October 1, 2008, with early adoption permitted. The Company is in the
process of evaluating SFAS No. 157.3.
    
    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 36,502 and 17,841 shares
for the three months ended June 30, 2007 and 2006, respectively. For the nine months ended
June 30, 2007 and 2006, the common stock equivalents from dilutive stock options outstanding
were 27,612 and 10,500, respectively. During the three months ended June 30, 2007 and 2006,
options to purchase 40,500 and 255,750 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 nine months ended June 30, 2007 and 2006, options to purchase 67,500
and 295,750 shares, respectively, were excluded from the diluted earnings per share
computation.4.
    
    ReclassificationsCertain prior year amounts have been reclassified to conform to the current year
presentation.5.
    
    InventoriesInventories consist of the following:
 June 30,
    
    
    September 30,2007
    
    
    2006Raw materials
    
    $
    12,432,094
    
    
    $
    11,021,598Finished goods
    
    
    5,638,133
    
    
    
    3,103,819Total inventories
    
    $
    18,070,227
    
    
    $
    14,125,417
 6.
    
    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 321,000 shares are
available for future grants as of June 30, 2007.The Company adopted the fair value recognition provisions of SFAS No. 123(R) using the
modified-prospective-transition method as of October 1, 2005. Compensation expense is
recognized only for share-based payments expected to vest. The Company estimates forfeitures
at the date of grant based on the Companys historical experience and future expectations.
The Company recognizes compensation expense on a straight-line basis.
 7




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Notes to condensed consolidated financial statements(continued)
 A summary of stock option activity under the Companys share-based compensation plan for the
nine months ended June 30, 2007 is presented below:
 WeightedAverageExerciseShares
    
    PriceOutstanding at September 30, 2006
    
    
    460,950
    
    
    $
    7.47New grants
    
    
    17,000
    
    
    $
    7.90Exercised
    
    
    (400
    )
    
    $
    5.71Forfeited or expired
    
    
    (181,250
    )Outstanding at June 30, 2007
    
    
    296,300
    
    
    $
    6.74Exercisable at June 30, 2007
    
    
    286,467
    
    
    $
    6.70
 The following table summarizes the Companys share-based compensation awards during the three
and nine months ended June 30, 2007 and 2006:
 Three Months Ended
    
    Nine Months EndedJune 30
    
    June 30,
    
    June 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Total pre-tax share-based compensation
    
    $
    36,189
    
    
    $
    73,749
    
    
    $
    66,564
    
    
    $
    113,037Weighted-average grant date fair value
    
    $
    8.05
    
    
    $
    6.60
    
    
    $
    2.05
    
    
    $
    3.86Total unrecognized compensation cost
    
    $
    9,051
    
    
    $
    15,332
    
    
    $
    9,051
    
    
    $
    50,055Remaining weighted-average period cost
will be recognized over
    
    3 Months

    
3 Months
    
    3 Months
 
    15 MonthsProceeds from options exercise
    
    $
    2,284
    
    
    
    
    
    
    $
    2,284
    
    
    
    Intrinsic value of options exercise
    
    $
    968
    
    
    
    
    
    
    $
    968
    
    
    
    
 7.
    
    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, at which time it
expired. A total of 49,100 shares were purchased under the plan through June 30, 2006.8.
    
    Segment InformationThe Company operates in a single industry since it manufactures and distributes 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. Corporate costs, such as interest income, interest expense
and income tax expense are recorded under the Corporate and Other segment. Such market
segment information is summarized below. The Contract Manufacturing segment provides services
to large multinational 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
    
    CorporateJune 30, 2007
    
    Manufacturing
    
    Imaging
    
    and Other
    
    ConsolidatedNet sales
    
    $
    24,228,368
    
    
    $
    5,586,529
    
    
    $
    
    
    
    $
    29,814,897Gross profit
    
    
    1,204,136
    
    
    
    445,963
    
    
    
    
    
    
    
    1,650,099Operating income (loss)
    
    
    457,456
    
    
    
    223,761
    
    
    
    (106,374
    )
    
    
    574,843Depreciation and
amortization expense
    
    
    488,748
    
    
    
    54,766
    
    
    
    15,164
    
    
    
    558,678Capital expenditures
    
    
    369,691
    
    
    
    
    
    
    
    
    
    
    
    369,691
 Three Months Ended
    
    Contract
    
    Business
    
    CorporateJune 30, 2006
    
    Manufacturing
    
    Imaging
    
    and Other
    
    ConsolidatedNet sales
    
    $
    21,050,865
    
    
    $
    6,377,482
    
    
    $
    
    
    
    $
    27,428,347Gross profit
    
    
    1,014,881
    
    
    
    636,439
    
    
    
    
    
    
    
    1,651,320Operating income (loss)
    
    
    385,825
    
    
    
    390,751
    
    
    
    (225,879
    )
    
    
    550,697Depreciation and
amortization expense
    
    
    428,741
    
    
    
    58,458
    
    
    
    41,525
    
    
    
    528,724Capital expenditures
    
    
    1,509,066
    
    
    
    45,428
    
    
    
    
    
    
    
    1,554,494
 Nine Months Ended
    
    Contract
    
    Business
    
    CorporateJune 30, 2007
    
    Manufacturing
    
    Imaging
    
    And Other
    
    ConsolidatedNet sales
    
    $
    66,539,178
    
    
    $
    17,880,459
    
    
    $
    
    
    
    $
    84,419,637Gross profit
    
    
    2,762,869
    
    
    
    1,365,298
    
    
    
    
    
    
    
    4,128,167Operating income (loss)
    
    
    760,576
    
    
    
    638,170
    
    
    
    (298,221
    )
    
    
    1,100,525Depreciation and
amortization expense
    
    
    1,430,443
    
    
    
    164,526
    
    
    
    45,493
    
    
    
    1,640,462Capital expenditures
    
    
    1,554,242
    
    
    
    33,879
    
    
    
    
    
    
    
    1,588,121
 Nine Months Ended
    
    Contract
    
    Business
    
    CorporateJune 30, 2006
    
    Manufacturing
    
    Imaging
    
    And Other
    
    ConsolidatedNet sales
    
    $
    52,116,188
    
    
    $
    19,714,247
    
    
    $
    
    
    
    $
    71,830,435Gross profit
    
    
    2,194,640
    
    
    
    1,817,233
    
    
    
    
    
    
    
    4,011,873Operating income (loss)
    
    
    497,913
    
    
    
    1,121,935
    
    
    
    (720,184
    )
    
    
    899,664Depreciation and
amortization expense
    
    
    1,134,156
    
    
    
    178,583
    
    
    
    144,289
    
    
    
    1,457,028Capital expenditures
    
    
    4,412,605
    
    
    
    80,535
    
    
    
    
    
    
    
    4,493,140
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Notes to condensed consolidated financial statements(continued)
 Contract
    
    
    Business
    
    
    CorporateJune 30, 2007
    
    Manufacturing
    
    
    Imaging
    
    
    and Other
    
    
    ConsolidatedAssets:Inventories
    
    $
    15,443,028
    
    
    $
    2,627,199
    
    
    $
    
    
    
    $
    18,070,227Property, plant and
equipment-net
    
    
    17,208,156
    
    
    
    2,211,152
    
    
    
    13,597
    
    
    
    19,432,905Accounts receivable
and other (including
goodwill)
    
    
    15,418,542
    
    
    
    5,471,319
    
    
    
    1,599,118
    
    
    
    22,488,979Total assets
    
    $
    48,069,726
    
    
    $
    10,309,670
    
    
    $
    1,612,715
    
    
    $
    59,992,111
 Contract
    
    
    Business
    
    
    CorporateSeptember 30, 2006
    
    Manufacturing
    
    
    Imaging
    
    
    and Other
    
    
    ConsolidatedAssets:Inventories
    
    $
    12,162,242
    
    
    $
    1,963,175
    
    
    $
    
    
    
    $
    14,125,417Property, plant and
equipment-net
    
    
    16,556,278
    
    
    
    2,341,799
    
    
    
    42,436
    
    
    
    18,940,513Accounts receivable
and other (including
goodwill)
    
    
    16,519,894
    
    
    
    5,770,388
    
    
    
    1,332,506
    
    
    
    23,622,788Total assets
    
    $
    45,238,414
    
    
    $
    10,075,362
    
    
    $
    1,374,942
    
    
    $
    56,688,718
 10




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##### Table of Contents



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




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##### Table of Contents



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
    
    
    Nine Months Ended
    
    
    Period-to-PeriodJune 30,
    
    
    Change
    
    
    June 30,
    
    
    Change2007
    
    
    2006
    
    
    $
    
    
    %
    
    
    2007
    
    
    2006
    
    
    $
    
    
    %Net Sales
    
    $
    29,815
    
    
    $
    27,428
    
    
    $
    2,387
    
    
    
    9
    
    
    $
    84,420
    
    
    $
    71,830
    
    
    $
    12,590
    
    
    
    18Gross Profit
    
    
    1,650
    
    
    
    1,651
    
    
    
    (1
    )
    
    
    (0.1
    )
    
    
    4,128
    
    
    
    4,012
    
    
    
    116
    
    
    
    35.5
    %
    
    
    6.0
    %
    
    
    
    
    
    
    
    
    
    
    4.9
    %
    
    
    5.6
    %Operating Expenses
    
    
    1,075
    
    
    
    1,101
    
    
    
    (26
    )
    
    
    (2
    )
    
    
    3,028
    
    
    
    3,112
    
    
    
    (84
    )
    
    
    (3
    )3.6
    %
    
    
    4.0
    %
    
    
    
    
    
    
    
    
    
    
    3.6
    %
    
    
    4.3
    %Operating Income
    
    
    575
    
    
    
    551
    
    
    
    24
    
    
    
    4
    
    
    
    1,100
    
    
    
    900
    
    
    
    200
    
    
    
    221.9
    %
    
    
    2.0
    %
    
    
    
    
    
    
    
    
    
    
    1.3
    %
    
    
    1.3
    %Interest Expense
    
    
    133
    
    
    
    106
    
    
    
    27
    
    
    
    25
    
    
    
    382
    
    
    
    191
    
    
    
    191
    
    
    
    1000.4
    %
    
    
    0.4
    %
    
    
    
    
    
    
    
    
    
    
    0.5
    %
    
    
    0.3
    %Income Before Income Taxes
    
    443
    
    
    
    440
    
    
    
    3
    
    
    
    1
    
    
    
    737
    
    
    
    771
    
    
    
    (34
    )
    
    
    (4
    )1.5
    %
    
    
    1.6
    %
    
    
    
    
    
    
    
    
    
    
    0.9
    %
    
    
    1.1
    %Income Tax Expense
    
    
    156
    
    
    
    126
    
    
    
    30
    
    
    
    24
    
    
    
    271
    
    
    
    236
    
    
    
    35
    
    
    
    150.5
    %
    
    
    0.5
    %
    
    
    
    
    
    
    
    
    
    
    0.3
    %
    
    
    0.3
    %Net Income
    
    $
    287
    
    
    $
    314
    
    
    
    (27
    )
    
    
    (9
    )
    
    $
    465
    
    
    $
    535
    
    
    
    (70
    )
    
    
    (13
    )1.0
    %
    
    
    1.1
    %
    
    
    
    
    
    
    
    
    
    
    0.6
    %
    
    
    0.7
    %
 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 EndedJune 30,2007
    
    
    2006
    
    
    Period-to-Period% of
    
    
    
    
    
    
    % of
    
    
    ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    $
    
    
    %Net SalesContract Manufacturing and printing
    
    $
    24,228
    
    
    
    81
    %
    
    $
    21,051
    
    
    
    77
    %
    
    $
    3,177
    
    
    
    15
    %Business Imaging paper products
    
    
    5,587
    
    
    
    19
    %
    
    
    6,377
    
    
    
    23
    %
    
    
    (790
    )
    
    
    (12
    %)Net Sales
    
    $
    29,815
    
    
    
    100
    %
    
    $
    27,428
    
    
    
    100
    %
    
    $
    2,387
    
    
    
    9
    %
 2007
    
    
    2006
    
    
    Period-to-Period% of
    
    
    
    
    
    
    Margin
    
    
    ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    %
    
    
    $
    
    
    %Gross ProfitContract Manufacturing and printing
    
    $
    1,204
    
    
    
    5
    %
    
    $
    1,015
    
    
    
    5
    %
    
    $
    189
    
    
    
    19
    %Business Imaging paper products
    
    
    446
    
    
    
    8
    %
    
    
    636
    
    
    
    10
    %
    
    
    (190
    )
    
    
    (30
    %)Gross Profit
    
    $
    1,650
    
    
    
    6
    %
    
    $
    1,651
    
    
    
    6
    %
    
    $
    (1
    )
    
    
    (0.1
    %)
 Nine Months EndedJune 30,2007
    
    
    2006
    
    
    Period-to-Period% of
    
    
    
    
    
    
    % of
    
    
    ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    $
    
    
    %Net SalesContract Manufacturing and printing
    
    $
    66,539
    
    
    
    79
    %
    
    $
    52,116
    
    
    
    73
    %
    
    $
    14,423
    
    
    
    28
    %Business Imaging paper products
    
    
    17,881
    
    
    
    21
    %
    
    
    19,714
    
    
    
    27
    %
    
    
    (1,833
    )
    
    
    (9
    %)Net Sales
    
    $
    84,420
    
    
    
    100
    %
    
    $
    71,830
    
    
    
    100
    %
    
    $
    12,590
    
    
    
    18
    %
 2007
    
    
    2006
    
    
    


    Period-to-Period% of
    
    
    
    
    
    
    Margin
    
    
    ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    %
    
    
    $
    
    
    %Gross ProfitContract Manufacturing and printing
    
    $
    2,763
    
    
    
    4
    %
    
    $
    2,195
    
    
    
    4
    %
    
    $
    568
    
    
    
    26
    %Business Imaging paper products
    
    
    1,365
    
    
    
    8
    %
    
    
    1,817
    
    
    
    9
    %
    
    
    (452
    )
    
    
    (25
    %)Gross Profit
    
    $
    4,128
    
    
    
    5
    %
    
    $
    4,012
    
    
    
    6
    %
    
    $
    116
    
    
    
    3
    %
 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:
         
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  15




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##### Table of Contents



ITEM 4. Controls and Procedures
    
 PART II. OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 1A. Risk Factors
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 ITEM 3. Defaults Upon Senior Securities
  16




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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 (a)
    
    The Annual Meeting of Shareholders of the Company was held on May 16, 2007.(b)
    
    See the response to Item 4(c) below.(c)
    
    At the Annual Meeting, shareholders elected the following individuals to the Board of Directors for one-year terms:
 Director
    
    For
    
    WithheldRobert J. Simon
    
    
    4,529,560
    
    
    
    103,911Samuel J. Bero
    
    
    4,536,132
    
    
    
    97,339C. Hamilton Davison, Jr.
    
    
    4,614,480
    
    
    
    18,991Louis LeCalsey, III
    
    
    4,548,227
    
    
    
    85,244Brian Kelly
    
    
    4,613,818
    
    
    
    19,653Seymour S. Preston, III
    
    
    4,615,480
    
    
    
    17,991
 (d)
    
    Not applicable
 
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. Exhibits
 10.1
    
    Third Amendment to the Credit Agreement dated May 22,
2006.31.1
    
    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
 17




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##### Table of Contents



SIGNATURES
  TUFCO TECHNOLOGIES, INC.Date: August 14, 2007
    /s/ Louis LeCalsey, IIILouis LeCalsey, IIIPresident and Chief Executive Officer Date: August 14, 2007
    /s/ Michael B. WheelerMichael B. WheelerExecutive Vice President, Chief Financial Officer and
Chief Operating Officer 18