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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, 2008
 Commission file number 0-21018
 TUFCO TECHNOLOGIES, INC.
 Delaware
    
    39-1723477(State of other jurisdiction
    
    (IRS Employer ID No.)of incorporation of organization)
 (Address of principal executive offices)(Zip code)
 (Registrants telephone number, including area code)
  þ o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer  
o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company þ
  o þ
  Class
    
    Outstanding as of May 15, 2008Common Stock, par value $0.01 per share
    
    4,478,644




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##### 



TUFCO TECHNOLOGIES, INC.
 Index
  
 PageNumberPART I: FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial StatementsCondensed Consolidated Balance Sheets as of
March 31, 2008 and September 30, 2007
    
    
    3Condensed Consolidated Statements of Income for the three months and
six months ended March 31, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the
six months ended March 31, 2008 and 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    12Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    17Item 4T. Controls and Procedures
    
    
    17PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    17Item 1A. Risk Factors
    
    
    17Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    18Item 3. Defaults Upon Senior Securities
    
    
    18Item 4. Submission of Matters to Vote for Security Holders
    
    
    18Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    18SIGNATURES
    
    
    19Rule 13a-14(a)/15d-14(a) CertificationRule 13a-14(a)/15d-14(a) CertificationCertification Pursuant to 18 U.S.C. Section 1350Certification Pursuant to 18 U.S.C. Section 1350
  2




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PART I. FINANCIAL INFORMATION
 
 ITEM 1. Condensed Consolidated Financial Statements
 TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,2008
    
    
    September 30,(Unaudited)
    
    
    2007AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    5,616
    
    
    $
    6,663Accounts receivable-net
    
    
    14,879,673
    
    
    
    15,301,870Inventories
    
    
    15,285,310
    
    
    
    16,354,816Prepaid expenses and other current assets
    
    
    966,204
    
    
    
    833,896Income tax receivable
    
    
    46,747
    
    
    
    Deferred income taxes
    
    
    534,990
    
    
    
    534,990Total current assets
    
    
    31,718,540
    
    
    
    33,032,235PROPERTY, PLANT AND EQUIPMENT-Net
    
    
    18,357,355
    
    
    
    19,002,401GOODWILL
    
    
    7,211,575
    
    
    
    7,211,575OTHER ASSETS-Net
    
    
    121,910
    
    
    
    126,729TOTAL
    
    $
    57,409,380
    
    
    $
    59,372,940Liabilities and Stockholders EquityCURRENT LIABILITIES:Accounts payable
    
    $
    9,940,275
    
    
    $
    11,706,586Accrued payroll, vacation and payroll taxes
    
    
    734,962
    
    
    
    513,331Income taxes payable
    
    
    126,352
    
    
    
    107,182Other current liabilities
    
    
    760,930
    
    
    
    716,620Total current liabilities
    
    
    11,562,519
    
    
    
    13,043,719LONG-TERM DEBT
    
    
    5,691,666
    
    
    
    6,191,666DEFERRED INCOME TAXES
    
    
    2,529,465
    
    
    
    2,537,154COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS EQUITY:Common
Stock: $.01 par value: 9,000,000 shares authorized; 4,708,741 shares
issued
    
    
    47,087
    
    
    
    47,087Additional paid-in capital
    
    
    25,324,039
    
    
    
    25,304,421Retained earnings
    
    
    13,622,010
    
    
    
    13,390,699Treasury
stock, 210,097 and 173,097 common shares at cost, respectively
    
    
    (1,367,406
    )
    
    
    (1,141,806
    )Total stockholders equity
    
    
    37,625,730
    
    
    
    37,600,401TOTAL
    
    $
    57,409,380
    
    
    $
    59,372,940
 3




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 THREE MONTHS ENDED
    
    
    SIX MONTHS ENDEDMarch 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007NET SALES
    
    $
    29,603,619
    
    
    $
    27,587,328
    
    
    $
    54,421,572
    
    
    $
    54,604,740COST OF SALES
    
    
    28,161,184
    
    
    
    26,401,398
    
    
    
    51,874,619
    
    
    
    52,126,672GROSS PROFIT
    
    
    1,442,435
    
    
    
    1,185,930
    
    
    
    2,546,953
    
    
    
    2,478,068OPERATING EXPENSES:Selling, general & administrative
    
    
    1,046,046
    
    
    
    951,397
    
    
    
    2,015,661
    
    
    
    1,952,386OPERATING INCOME
    
    
    396,389
    
    
    
    234,533
    
    
    
    531,292
    
    
    
    525,682OTHER INCOME (EXPENSE):Interest expense
    
    
    (81,740
    )
    
    
    (158,408
    )
    
    
    (168,851
    )
    
    
    (249,449
    )Interest income and other income
    
    
    261
    
    
    
    428
    
    
    
    18,005
    
    
    
    16,815INCOME BEFORE INCOME TAXES
    
    
    314,910
    
    
    
    76,553
    
    
    
    380,446
    
    
    
    293,048INCOME TAX EXPENSE
    
    
    123,444
    
    
    
    30,010
    
    
    
    149,135
    
    
    
    114,875NET INCOME
    
    $
    191,466
    
    
    $
    46,543
    
    
    $
    231,311
    
    
    $
    178,173BASIC EARNINGS PER SHARE:Net Income
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.05
    
    
    $
    0.04DILUTED EARNINGS PER SHARE:Net Income
    
    $
    0.04
    
    
    $
    0.01
    
    
    $
    0.05
    
    
    $
    0.04WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:Basic
    
    
    4,526,106
    
    
    
    4,535,244
    
    
    
    4,530,875
    
    
    
    4,535,244Diluted
    
    
    4,535,726
    
    
    
    4,563,171
    
    
    
    4,544,167
    
    
    
    4,558,411
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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 SIX MONTHS ENDEDMarch 31,2008
    
    
    2007OPERATING ACTIVITIESNet Income
    
    $
    231,311
    
    
    $
    178,173Noncash items in net income:Depreciation and amortization of property, plant and
equipment
    
    
    1,092,774
    
    
    
    1,071,212Amortization
    
    
    
    
    
    
    10,572Non-monetary reimbursement of cost
    
    
    (100,000
    )
    
    
    (515,000
    )Deferred income taxes
    
    
    (7,689
    )
    
    
    (11,908
    )Gain on sale of property, plant and equipment
    
    
    
    
    
    
    (145
    )Stock-based compensation expense
    
    
    19,618
    
    
    
    30,378Changes in operating working capital:Accounts receivable
    
    
    422,197
    
    
    
    1,449,240Inventories
    
    
    1,069,506
    
    
    
    (1,734,314
    )Prepaid expenses and other assets
    
    
    (127,489
    )
    
    
    (487,260
    )Accounts payable
    
    
    (1,740,488
    )
    
    
    594,901Accrued and other current liabilities
    
    
    265,941
    
    
    
    82,122Income taxes payable/receivable
    
    
    (27,577
    )
    
    
    126,782Net cash provided by operating activities
    
    
    1,098,104
    
    
    
    794,753INVESTING ACTIVITIESAdditions to property, plant and equipment
    
    
    (347,728
    )
    
    
    (1,218,430
    )Proceeds from disposals of property, plant and equipment
    
    
    
    
    
    
    500Payment of construction payable
    
    
    (25,823
    )
    
    
    (400,918
    )Net cash (used) in investing activities
    
    
    (373,551
    )
    
    
    (1,618,848
    )FINANCING ACTIVITIESNet (repayments) borrowings of debt
    
    
    (500,000
    )
    
    
    826,989Purchase of treasury stock
    
    
    (225,600
    )
    
    
    Net cash (used) provided by financing activities
    
    
    (725,600
    )
    
    
    826,989NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (1,047
    )
    
    
    2,894CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    6,663
    
    
    
    5,267End of period
    
    $
    5,616
    
    
    $
    8,161
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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 For the three months and six months ended March 31, 2008 and 2007
 (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, 2008 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 2007 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, 2007 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, 2007.2.
    
    Recent Accounting PronouncementsIn June 2007, the Financial Accounting Standards Board (FASB) ratified EITF No. 07-3,
Accounting for Nonrefundable Advance Payments for Goods or Services Received for Use in
Future Research and Development Activities (EITF No. 07-3). EITF No. 07-3 requires that
nonrefundable advance payments for goods or services that will be used or rendered for future
research and development activities be deferred and capitalized and recognized as an expense
as the goods are delivered or the related services are performed. EITF No. 07-3 is effective,
on a prospective basis, for financial statements issued for fiscal years beginning after
December 15, 2007. The Company is currently evaluating the potential effect of EITF No. 07-3
will have on its financial position, results of operations and cash flows.In March 2008, the Financial Accounting Standards Board (FASB) issued SFAS No. 161,
Disclosures about Derivative Instruments and Hedging Activities (SFAS No. 161). SFAS
No. 161 amends and expands SFAS 133, Accounting for Derivative Instruments and Hedging
Activities, to provide users of financial statements with an enhanced understanding of the
use of derivative instruments, accounting for derivative instruments and related hedged
items, and the effect on an entitys financial position, financial performance, and cash
flows. This Statement requires qualitative and quantitative disclosures, as well as
disclosures about credit-risk related to contingent features in derivative agreements. SFAS
No. 161 is effective for financial statements issued for the Companys first fiscal year
beginning after November 15, 2008. The adoption of SFAS No. 161 is not expected to have a
material impact on the Companys financial position, results of operations, or cash flows.
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Notes to condensed consolidated financial statements(continued)
 3.
    
    Income TaxesThe Company adopted the provisions of FASB Interpretation No. 48, Accounting For Uncertainty
in Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48), on October 1, 2007.
At the adoption date and as of March 31, 2008, the Company had no material unrecognized tax
benefits and no adjustment to liabilities, retained earnings, loss from continued operations,
or net loss was required. The adoption of FIN 48 had no effect on the Companys basic and
diluted earnings per share. The Company files tax returns in all appropriate jurisdictions,
which include a federal tax return and all
required state jurisdictions. Open tax years for all jurisdictions are fiscal years ending
September 30, 2005 and September 30, 2006. The Company has not yet filed its September 30,
2007 corporate tax returns.The Company recognizes interest and penalties related to uncertain tax positions as income
tax expense as incurred. No expense for interest and penalties was recognized for the three
months and six months ended March 31, 2008.4.
    
    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 9,620 and 27,927 shares
for the three months ended March 31, 2008 and 2007, respectively. For the six months ended
March 31, 2008 and 2007, the common stock equivalents from dilutive stock options outstanding
were 13,292 and 23,167 shares, respectively. During the three months ended March 31, 2008
and 2007, options to purchase 180,350 and 52,500 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, 2008 and 2007, options to
purchase 146,350 and 67,500 shares, respectively, were excluded from the diluted earnings per
share computation.5.
    
    ReclassificationsCertain prior year amounts have been reclassified to conform to the current year
presentation.6.
    
    InventoriesInventories consist of the following:
 March 31,
    
    
    September 30,2008
    
    
    2007Raw materials
    
    $
    11,223,243
    
    
    $
    11,448,432Finished goods
    
    
    4,062,067
    
    
    
    4,906,384Total inventories
    
    $
    15,285,310
    
    
    $
    16,354,816
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Notes to condensed consolidated financial statements(continued)
 7.
    
    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 302,000 shares are
available for future grants as of March 31, 2008.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.During the three months ended March 31, 2008, Mr. Segel in conjunction with his election to
serve on the Tufco Technologies, Inc. Board of Directors, received a discretionary grant on
February 19, 2008 to acquire 2,000 shares of common stock under Tufcos 2004 Non-Employee
Director Stock Option Plan at an exercise price of $6.50 per share,
the closing price on the NASDAQ market as of that date. The grant date fair
value of these options granted was estimated at $1.94 using the
Black-Scholes option-pricing model with the following assumptions: risk-free
interest rate of 2.06%, expected volatility of 51.5%, no dividend yield and an expected life
of two years. There were no options granted during the three months ended March 31, 2007.A summary of stock option activity under the Companys share-based compensation plan for the
six months ended March 31, 2008 is presented below:
 WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AverageExercise
    
    Contractual
    
    IntrinsicShares
    
    Price
    
    Term
    
    ValueOutstanding at September 30, 2007
    
    
    296,300
    
    
    $
    6.74New grants
    
    
    18,850
    
    
    $
    7.48Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    (8,000
    )
    
    $
    9.25Outstanding at March 31, 2008
    
    
    307,150
    
    
    $
    6.72
    
    
    
    5.3
    
    
    $
    85,022Exercisable at March 31, 2008
    
    
    290,300
    
    
    $
    6.67
    
    
    
    5.1
    
    
    $
    85,022
  Six Months EndedMarch 31,
    
    March 31,2008
    
    2007Total pre-tax share-based compensation
    
    $
    19,618
    
    
    $
    30,375Weighted-average grant date fair value
    
    $
    2.07
    
    
    $
    3.88Total unrecognized compensation cost
    
    $
    19,340
    
    
    $
    18,102Remaining weighted-average period cost
will be recognized over
    
    30 months
    
    6 Months
  8




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Notes to condensed consolidated financial statements(continued)
 8.
    
    Stock Repurchase PlanIn February 2008, the Companys Board of Directors approved a program for open market stock
repurchases through December 31, 2008 for up to 100,000 shares of its stock at prevailing
market prices after concluding that the cash and debt position would enable these purchases
without impairment to the Companys capital. A total of 37,000 shares were purchased under
the plan during the quarter ended March 31, 2008.9.
    
    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 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.Substantially all of the Companys revenues are attributed to domestic external customers.
There are no long-lived assets located outside of the United States.
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Notes to condensed consolidated financial statements(continued)
 Three Months Ended
    
    Contract
    
    Business
    
    CorporateMarch 31, 2008
    
    Manufacturing
    
    Imaging
    
    and Other
    
    ConsolidatedNet sales
    
    $
    23,727,487
    
    
    $
    5,876,132
    
    
    $
    
    
    
    $
    29,603,619Gross profit
    
    
    1,104,440
    
    
    
    337,995
    
    
    
    
    
    
    
    1,442,435Operating income (loss)
    
    
    424,733
    
    
    
    127,282
    
    
    
    (155,626
    )
    
    
    396,389Depreciation and
amortization expense
    
    
    490,646
    
    
    
    51,885
    
    
    
    1,491
    
    
    
    544,022Capital expenditures
    
    
    155,302
    
    
    
    1,950
    
    
    
    
    
    
    
    157,252
 Three Months Ended
    
    Contract
    
    Business
    
    CorporateMarch 31, 2007
    
    Manufacturing
    
    Imaging
    
    and Other
    
    ConsolidatedNet sales
    
    $
    21,730,623
    
    
    $
    5,856,705
    
    
    $
    
    
    
    $
    27,587,328Gross profit
    
    
    706,441
    
    
    
    479,489
    
    
    
    
    
    
    
    1,185,930Operating income (loss)
    
    
    36,624
    
    
    
    224,354
    
    
    
    (26,445
    )
    
    
    234,533Depreciation and
amortization expense
    
    
    481,145
    
    
    
    54,988
    
    
    
    15,165
    
    
    
    551,298Capital expenditures
    
    
    752,700
    
    
    
    14,527
    
    
    
    
    
    
    
    767,227
 Six Months Ended
    
    Contract
    
    Business
    
    CorporateMarch 31, 2008
    
    Manufacturing
    
    Imaging
    
    And Other
    
    ConsolidatedNet sales
    
    $
    42,826,300
    
    
    $
    11,595,272
    
    
    $
    
    
    
    $
    54,421,572Gross profit
    
    
    1,833,697
    
    
    
    713,256
    
    
    
    
    
    
    
    2,546,953Operating income (loss)
    
    
    548,956
    
    
    
    326,950
    
    
    
    (344,614
    )
    
    
    531,292Depreciation and
amortization expense
    
    
    982,781
    
    
    
    106,929
    
    
    
    3,064
    
    
    
    1,092,774Capital expenditures
    
    
    321,146
    
    
    
    26,582
    
    
    
    
    
    
    
    347,728
 Six Months Ended
    
    Contract
    
    Business
    
    CorporateMarch 31, 2007
    
    Manufacturing
    
    Imaging
    
    And Other
    
    ConsolidatedNet sales
    
    $
    42,310,810
    
    
    $
    12,293,930
    
    
    $
    
    
    
    $
    54,604,740Gross profit
    
    
    1,558,733
    
    
    
    919,335
    
    
    
    
    
    
    
    2,478,068Operating income (loss)
    
    
    303,119
    
    
    
    414,409
    
    
    
    (191,846
    )
    
    
    525,682Depreciation and
amortization expense
    
    
    941,695
    
    
    
    109,760
    
    
    
    30,329
    
    
    
    1,081,784Capital expenditures
    
    
    1,184,551
    
    
    
    33,879
    
    
    
    
    
    
    
    1,218,430
 10




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Notes to condensed consolidated financial statements(continued)
 Contract
    
    Business
    
    CorporateMarch 31, 2008
    
    Manufacturing
    
    Imaging
    
    and Other
    
    ConsolidatedAssets:Inventories
    
    
    $12,777,959
    
    
    $
    2,507,351
    
    
    
    $         
    
    
    
    $15,285,310Property, plant and
equipment-net
    
    
    16,261,152
    
    
    
    2,087,167
    
    
    
    9,036
    
    
    
    18,357,355Accounts receivable
and other (including
goodwill)
    
    
    17,553,366
    
    
    
    5,504,086
    
    
    
    709,263
    
    
    
    23,766,715Total assets
    
    
    $46,592,477
    
    
    $
    10,098,604
    
    
    
    $718,299
    
    
    
    $57,409,380
 Contract
    
    Business
    
    CorporateSeptember 30, 2007
    
    Manufacturing
    
    Imaging
    
    and Other
    
    ConsolidatedAssets:Inventories
    
    
    $14,023,642
    
    
    $
    2,331,174
    
    
    
    $         
    
    
    
    $16,354,816Property, plant and
equipment-net
    
    
    16,822,787
    
    
    
    2,167,514
    
    
    
    12,100
    
    
    
    19,002,401Accounts receivable
and other
(including
goodwill)
    
    
    17,687,370
    
    
    
    5,659,972
    
    
    
    668,381
    
    
    
    24,015,723Total assets
    
    
    $48,533,799
    
    
    $
    10,158,660
    
    
    
    $680,481
    
    
    
    $59,372,940
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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward Looking Statements
  General Information:
    12




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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
    
    Six Months Ended
    
    Period-to-PeriodMarch 31,
    
    Change
    
    March 31,
    
    Change2008
    
    2007
    
    $
    
    %
    
    2008
    
    2007
    
    $
    
    %Net Sales
    
    $
    29,604
    
    
    $
    27,587
    
    
    $
    2,017
    
    
    
    7
    
    
    $
    54,422
    
    
    $
    54,605
    
    
    $
    (183
    )
    
    
    (0.3
    )Gross Profit
    
    
    1,442
    
    
    
    1,186
    
    
    
    256
    
    
    
    22
    
    
    
    2,547
    
    
    
    2,478
    
    
    
    69
    
    
    
    34.9
    %
    
    
    4.3
    %
    
    
    
    
    
    
    
    
    
    
    4.7
    %
    
    
    4.5
    %Operating Expenses
    
    
    1,046
    
    
    
    951
    
    
    
    95
    
    
    
    10
    
    
    
    2,016
    
    
    
    1,952
    
    
    
    64
    
    
    
    33.5
    %
    
    
    3.4
    %
    
    
    
    
    
    
    
    
    
    
    3.7
    %
    
    
    3.6
    %Operating Income
    
    
    396
    
    
    
    235
    
    
    
    161
    
    
    
    69
    
    
    
    531
    
    
    
    526
    
    
    
    5
    
    
    
    11.3
    %
    
    
    0.9
    %
    
    
    
    
    
    
    
    
    
    
    1.0
    %
    
    
    1.0
    %Interest Expense
    
    
    82
    
    
    
    158
    
    
    
    (76
    )
    
    
    (48
    )
    
    
    169
    
    
    
    250
    
    
    
    (81
    )
    
    
    (32
    )0.3
    %
    
    
    0.6
    %
    
    
    
    
    
    
    
    
    
    
    0.3
    %
    
    
    0.5
    %Income Before Income Taxes
    
    
    315
    
    
    
    77
    
    
    
    238
    
    
    
    309
    
    
    
    380
    
    
    
    293
    
    
    
    87
    
    
    
    301.1
    %
    
    
    0.3
    %
    
    
    
    
    
    
    
    
    
    
    0.7
    %
    
    
    0.5
    %Income Tax Expense
    
    
    123
    
    
    
    30
    
    
    
    93
    
    
    
    310
    
    
    
    149
    
    
    
    115
    
    
    
    34
    
    
    
    300.4
    %
    
    
    0.1
    %
    
    
    
    
    
    
    
    
    
    
    0.3
    %
    
    
    0.2
    %Net Income
    
    $
    192
    
    
    $
    47
    
    
    
    145
    
    
    
    309
    
    
    $
    231
    
    
    $
    178
    
    
    
    53
    
    
    
    300.6
    %
    
    
    0.2
    %
    
    
    
    
    
    
    
    
    
    
    0.4
    %
    
    
    0.3
    %Basic and
Diluted Earnings Per Share
    
    $
    0.04
    
    
    $
    0.01
    
    
    
    
    
    
    
    
    
    
    $
    0.05
    
    
    $
    0.04
 13




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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 31,2008
    
    2007
    
    Period-to-Period% of
    
    
    
    
    
    % of
    
    ChangeAmount
    
    Total
    
    Amount
    
    Total
    
    $
    
    %Net
SalesContract Manufacturing and printing
    
    
    $23,728
    
    
    
    80
    %
    
    
    $21,730
    
    
    
    79
    %
    
    
    $1,998
    
    
    
    9
    %Business Imaging paper products
    
    
    5,876
    
    
    
    20
    %
    
    
    5,857
    
    
    
    21
    
    
    
    19
    
    
    
    0.3
    %Net Sales
    
    
    $29,604
    
    
    
    100
    %
    
    
    $27,587
    
    
    
    100
    %
    
    
    $2,017
    
    
    
    7
    %
 2008
    
    2007
    
    Period-to-PeriodMargin
    
    
    
    
    
    Margin
    
    ChangeAmount
    
    %
    
    Amount
    
    %
    
    $
    
    %Gross ProfitContract Manufacturing and printing
    
    
    $1,104
    
    
    
    5
    %
    
    
    $   706
    
    
    
    3
    %
    
    
    $  398
    
    
    
    56
    %Business Imaging paper products
    
    
    338
    
    
    
    6
    %
    
    
    480
    
    
    
    8
    %
    
    
    (142
    )
    
    
    (29
    %)Gross Profit
    
    
    $1,442
    
    
    
    5
    %
    
    
    $1,186
    
    
    
    4
    %
    
    
    $  256
    
    
    
    22
    %
 Six Months EndedMarch 31,2008
    
    2007
    
    Period-to-Period% of
    
    
    
    
    
    % of
    
    ChangeAmount
    
    Total
    
    Amount
    
    Total
    
    $
    
    %Net SalesContract Manufacturing and printing
    
    
    $42,827
    
    
    
    79
    %
    
    
    $42,311
    
    
    
    77
    %
    
    
    $  516
    
    
    
    1
    %Business Imaging paper products
    
    
    11,595
    
    
    
    21
    
    
    
    12,294
    
    
    
    23
    
    
    
    (699
    )
    
    
    (6
    %)Net Sales
    
    
    $54,422
    
    
    
    100
    %
    
    
    $54,605
    
    
    
    100
    %
    
    
    $ (183
    )
    
    
    (0.3
    %)
 2008
    
    2007
    
    Period-to-PeriodMargin
    
    
    
    
    
    Margin
    
    ChangeAmount
    
    %
    
    Amount
    
    %
    
    $
    
    %Gross ProfitContract Manufacturing and printing
    
    
    $1,834
    
    
    
    4
    %
    
    
    $1,559
    
    
    
    4
    %
    
    
    $  275
    
    
    
    18
    %Business Imaging paper products
    
    
    713
    
    
    
    6
    %
    
    
    919
    
    
    
    7
    %
    
    
    (206
    )
    
    
    (22
    %)Gross Profit
    
    
    $2,547
    
    
    
    5
    %
    
    
    $2,478
    
    
    
    5
    %
    
    
    $    69
    
    
    
    3
    %
 14




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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 :
  15




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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:
         16




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##### Table of Contents



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk
  
 ITEM 4T. Controls and Procedures
    
 PART II. OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  
 ITEM 1A. Risk Factors
  17




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##### Table of Contents



ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity Securities
  Total Number of
    
    Maximum NumberShares Purchased
    
    Of Shares ThatTotal Number
    
    
    
    
    
    as Part of
    
    May Yet BeOf Shares
    
    Average Price
    
    Publicly
    
    Purchased UnderPeriod
    
    Purchased
    
    Paid per Share
    
    Announced Plan
    
    The PlanFebruary
(2/1/08  2/29/08)
    
    
    19,000
    
    
    $
    6.26
    
    
    
    19,000
    
    
    
    81,000March
(3/1/08  3/31/08)
    
    
    18,000
    
    
    $
    5.93
    
    
    
    18,000
    
    
    
    63,000Total
    
    
    37,000
    
    
    $
    6.09
    
    
    
    37,000
    
    
    
    63,000
  
 ITEM 3. Defaults Upon Senior Securities
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
  
 ITEM 5. Other Information
  
 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, 2008
    /s/ Louis LeCalsey, IIILouis LeCalsey, IIIPresident and Chief Executive Officer Date: May 15, 2008
    /s/ Michael B. WheelerMichael B. WheelerExecutive Vice President, Chief Financial Officer and
Chief Operating Officer 19