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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 December 31, 2004 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
(Address of principal executive offices) (920) 336-0054 Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes x
    
    No o
 Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 126-2 of the Exchange Act). Yes o
    
    No x
 Indicate the number of shares outstanding of each or the issuers classes of common stock, as of the latest practicable date. Class
    
    Outstanding as of  February 14, 2005Common Stock, par value $0.01 per share
    
    4,582,344
   1




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES Index PageNumberPART I:
    
    FINANCIAL INFORMATIONItem 1.
    
    Condensed Consolidated Financial StatementsCondensed Consolidated Balance Sheets as of December 31, 2004 and September 30, 2004
    
    
    3Condensed Consolidated Statements of Income for the three months ended December 31, 2004 and 2003
    
    
    4Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2004 and 2003
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    6Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    10Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    13Item 4.
    
    Controls and Procedures
    
    
    13PART II:
    
    OTHER INFORMATION
    
    
    14Item 6.
    
    Exhibits
    
    
    14SIGNATURES
    
    
    15Certification Pursuant to Rule 13a-14(a)Certification Pursuant to Rule 13a-14(a)Certification 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
 December 31,2004
    
    
    September 30,(Unaudited)
    
    
    2004*AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    8,770
    
    
    $
    7,692Accounts receivable, net
    
    
    9,450,096
    
    
    
    12,639,389Inventories
    
    
    10,759,501
    
    
    
    9,624,963Prepaid expenses and other current assets
    
    
    440,617
    
    
    
    158,856Deferred income taxes
    
    
    618,588
    
    
    
    618,588Total current assets
    
    
    21,277,572
    
    
    
    23,049,488PROPERTY, PLANT AND EQUIPMENT-Net
    
    
    15,763,755
    
    
    
    16,329,335GOODWILL
    
    
    7,211,575
    
    
    
    7,211,575OTHER ASSETS-Net
    
    
    334,200
    
    
    
    392,154TOTAL
    
    $
    44,587,102
    
    
    $
    46,982,552Liabilities and Stockholders EquityCURRENT LIABILITIES:Accounts payable
    
    $
    5,662,965
    
    
    $
    5,917,351Accrued payroll, vacation and payroll taxes
    
    
    614,161
    
    
    
    863,368Other current liabilities
    
    
    531,311
    
    
    
    865,923Income taxes payable
    
    
    934,008
    
    
    
    981,077Total current liabilities
    
    
    7,742,445
    
    
    
    8,627,719LONG-TERM DEBT-Less current portion
    
    
    500,000
    
    
    
    2,500,000DEFERRED INCOME TAXES
    
    
    487,466
    
    
    
    405,640STOCKHOLDERS EQUITY:Common Stock: $.01 par value: 9,000,000 shares authorized;
4,706,341 shares issued
    
    
    47,063
    
    
    
    47,063Additional paid-in capital
    
    
    25,088,631
    
    
    
    25,088,631Retained earnings
    
    
    11,552,882
    
    
    
    11,144,884Treasury stock, 123,997 common shares at cost
    
    
    (831,385
    )
    
    
    (831,385
    )Total stockholders equity
    
    
    35,857,191
    
    
    
    35,449,193TOTAL
    
    $
    44,587,102
    
    
    $
    46,982,552
 See notes to condensed consolidated financial statements. *Condensed from audited financial statements 3




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 THREE MONTHS ENDEDDecember 31,2004
    
    
    2003NET SALES
    
    $
    20,003,989
    
    
    $
    13,045,610COST OF SALES
    
    
    18,552,885
    
    
    
    11,471,671GROSS PROFIT
    
    
    1,451,104
    
    
    
    1,573,939OPERATING EXPENSES:Selling, general & administrative
    
    
    1,177,984
    
    
    
    1,119,009(Gain) loss on sale of property, plant and equipment
    
    
    (415,781
    )
    
    
    3,029OPERATING INCOME
    
    
    688,901
    
    
    
    451,901OTHER INCOME (EXPENSE):Interest expense
    
    
    (13,520
    )
    
    
    (14,885
    )Interest income and other income (expense)
    
    
    14,184
    
    
    
    (378
    )INCOME BEFORE INCOME TAXES
    
    
    689,565
    
    
    
    436,638INCOME TAX EXPENSE
    
    
    281,567
    
    
    
    184,248NET INCOME
    
    $
    407,998
    
    
    $
    252,390BASIC EARNINGS PER SHARE:Net Income
    
    $
    0.09
    
    
    $
    0.05DILUTED EARNINGS PER SHARE:Net Income
    
    $
    0.09
    
    
    $
    0.05WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:Basic
    
    
    4,582,344
    
    
    
    4,582,344Diluted
    
    
    4,615,317
    
    
    
    4,589,852
 See notes to condensed consolidated financial statements. 4




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited) THREE MONTHS ENDED December 31,2004
    
    
    2003OPERATING ACTIVITIES:Net Income
    
    $
    407,998
    
    
    $
    252,390Noncash items in net income:Depreciation and amortization of property, plant and
equipment
    
    
    510,132
    
    
    
    556,786Amortization
    
    
    5,286
    
    
    
    23,369Deferred income taxes
    
    
    81,826
    
    
    
    (Gain) loss on sale of property, plant and equipment
    
    
    (415,781
    )
    
    
    3,029Changes in operating working capital:Accounts receivable
    
    
    3,189,293
    
    
    
    2,096,237Inventories
    
    
    (1,134,538
    )
    
    
    (1,597,362
    )Prepaid expenses and other assets
    
    
    (229,093
    )
    
    
    (192,789
    )Accounts payable
    
    
    (254,386
    )
    
    
    631,053Accrued and other current liabilities
    
    
    (488,819
    )
    
    
    (408,424
    )Income taxes payable/receivable
    
    
    (47,069
    )
    
    
    (12,425
    )Net cash provided by operating activities
    
    
    1,624,849
    
    
    
    1,351,864INVESTING ACTIVITIES:Additions to property, plant and equipment
    
    
    (85,813
    )
    
    
    (810,016
    )Proceeds from disposition of property, plant and equipment
    
    
    462,042
    
    
    
    18,020Net cash provided (used) by investing activities
    
    
    376,229
    
    
    
    (791,996
    )FINANCING ACTIVITIES:Repayment of long-term debt
    
    
    (2,500,000
    )
    
    
    Borrowings of long-term debt
    
    
    500,000
    
    
    
    Net cash used in financing activities
    
    
    (2,000,000
    )
    
    
    NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    1,078
    
    
    
    559,868CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    7,692
    
    
    
    2,930,416End of period
    
    $
    8,770
    
    
    $
    3,490,284NONCASH SUPPLEMENTAL INFORMATION:Deferred gain on sale of equipment
    
    $
    95,000
    
    
    
    
 See notes to condensed consolidated financial statements. 5




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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 For the three and months ended December 31, 2004 and 2003
 (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 period ended December 31, 2004 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 2004 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, 2004 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, 2004.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 32,973 and 7,508 shares
for the three months ended December 31, 2004 and 2003, respectively. During the three months
ended December 31, 2004 and 2003, options to purchase 156,750 shares and 364,967 shares,
respectively, were excluded from the diluted earnings per share computation as the effects of
including such options would have been anti-dilutive. 6




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Notes to condensed consolidated financial statements(continued)  Stock Based CompensationStock option grants to employees are accounted for by the intrinsic value method under
Accounting Principles Board (APB) Opinion No. 25 and related interpretations. Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation,
encourages (but does not require) the cost of stock options and other stock-based
compensation arrangements with employees to be measured based on the fair value of the equity
instrument awarded. The following table illustrates the effect on income from continuing
operations and related earnings per share if the Company had applied the fair value
recognition provisions of SFAS No. 123 to stock-based compensation, for the three months
ended December 31, 2004 and 2003. Three Months Ended
December 31,2004
    
    
    2003Net income as reported,
    
    $
    407,998
    
    
    $
    252,390less total stock-based employee compensation
expense determined under fair value based method of all awards, net of
related tax effects
    
    
    (19,086
    )
    
    
    (17,700
    )Pro forma net income
    
    $
    388,912
    
    
    $
    234,690Earnings per share:Basic  as reported
    
    $
    0.09
    
    
    $
    0.05Basic  pro forma
    
    $
    0.08
    
    
    $
    0.05Diluted  as reported
    
    $
    0.09
    
    
    $
    0.05Diluted  pro forma
    
    $
    0.08
    
    
    $
    0.05
  2.
    Recent Accounting Pronouncements In December 2004, the Financial Accounting Standards Board (FASB) issued the revised SFAS No. 123,
Share-Based Payment (SFAS (R)). FSAS (R) requires compensation costs related to share-based
payment transactions to be recognized in the financial statements. Generally, compensation cost
will be measured based on the grant-date fair value of the equity or liability instruments issued.
In addition, liability awards will be remeasured each reporting period. Compensation cost will be
recognized over the requisite service period, generally as the award vests. The Company is required
to adopt SFAS (R) in the fourth quarter of 2005. SFAS (R) applies to all awards granted after
June 30, 2005 and to previously-granted awards unvested as of the adoption date. The Company is
currently evaluating the effect of SFAS (R) on its financial statements and related disclosures. In November 2004, the FASB issued SFAS No. 151, Inventory Costs (SFAS 151). SFAS 151 requires that
abnormal amounts of idle facility expense, freight, handling costs and spoilage be recognized as
current-period charges. Further, SFAS 151 requires the allocation of fixed production overheads to
inventory based on the normal capacity of the production facilities. Unallocated overheads must be
recognized as an expense in the period in which they are incurred. SFAS 151 is effective for
inventory costs incurred beginning in the first quarter of 2006. The Company is currently
evaluating the effect of SFAS 151 on its financial statements and related disclosures. 7




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Notes to condensed consolidated financial statements(continued)  3.
    InventoriesInventories consist of the following: December 31,
    
    
    September 30,2004
    
    
    2004Raw materials
    
    $
    8,892,334
    
    
    $
    7,941,894Finished goods
    
    
    1,867,167
    
    
    
    1,683,069Total inventories
    
    $
    10,759,501
    
    
    $
    9,624,963
  4.
    Segment InformationThe Company manufactures and distributes business forms, custom paper-based non-woven
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
    
    
    CorporateDecember 31, 2004
    
    Manufacturing
    
    
    Imaging
    
    
    and Other
    
    
    ConsolidatedNet Sales
    
    $
    14,227,469
    
    
    $
    5,776,520
    
    
    $
    
    
    
    $
    20,003,989Gross Profit
    
    
    1,297,512
    
    
    
    532,189
    
    
    
    (378,597
    )
    
    
    1,451,104Operating Income
    
    
    236,203
    
    
    
    (97,882
    )
    
    
    550,580
    
    
    
    688,901Depreciation and
amortization expense
    
    
    350,885
    
    
    
    81,044
    
    
    
    78,204
    
    
    
    510,133Capital expenditures
    
    
    77,308
    
    
    
    8,505
    
    
    
    
    
    
    
    85,813Assets:Inventories
    
    
    8,636,441
    
    
    
    2,123,060
    
    
    
    
    
    
    
    10,759,755Property, plant and
equipment-net
    
    
    12,543,802
    
    
    
    2,826,317
    
    
    
    393,636
    
    
    
    15,763,755Accounts receivable
and other
(including goodwill)
    
    
    10,798,102
    
    
    
    5,605,313
    
    
    
    1,660,431
    
    
    
    18,063,846Total assets
    
    $
    31,978,345
    
    
    $
    10,554,690
    
    
    $
    2,054,067
    
    
    $
    44,587,102
 Three Months Ended
    
    Contract
    
    
    Business
    
    
    CorporateDecember 31, 2003
    
    Manufacturing
    
    
    Imaging
    
    
    and Other
    
    
    ConsolidatedNet Sales
    
    $
    6,982,195
    
    
    $
    6,063,415
    
    
    $
    
    
    
    $
    13,045,610Gross Profit
    
    
    1,103,449
    
    
    
    938,873
    
    
    
    (468,383
    )
    
    
    1,573,939Operating Income
    
    
    105,072
    
    
    
    237,076
    
    
    
    109,753
    
    
    
    451,901Depreciation and
amortization expense
    
    
    260,557
    
    
    
    129,527
    
    
    
    190,051
    
    
    
    580,155Capital expenditures
    
    
    741,412
    
    
    
    68,604
    
    
    
    
    
    
    
    810,016Assets:Inventories
    
    
    2,879,589
    
    
    
    2,608,856
    
    
    
    
    
    
    
    5,488,445Property, plant and
equipment-net
    
    
    10,491,582
    
    
    
    3,073,827
    
    
    
    985,679
    
    
    
    14,551,088Accounts receivable
and other
(including goodwill)
    
    
    7,250,149
    
    
    
    6,011,995
    
    
    
    5,186,676
    
    
    
    18,448,820Total assets
    
    $
    20,621,320
    
    
    $
    11,694,678
    
    
    $
    6,172,355
    
    
    $
    38,488,353
 9




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations General Information: The Company, which is ISO certified, has manufacturing operations in Green Bay, WI and Newton, NC.
The Companys corporate headquarters, including corporate support services, are located in Green
Bay, WI. Tufco performs contract manufacturing and specialty printing services and manufactures and
distributes business imaging paper products. The Companys strategy is to provide services and
manufacture and distribute products in niche markets, relying on close customer contact and high
levels of quality and service. The Company works closely with its contract manufacturing clients
to develop products or perform services which meet or exceed the customers quality standards, and
then uses the Companys operating efficiencies and technical expertise to supplement or replace its
customers own production and distribution functions. The Company provides integrated production services including wide web flexographic printing, wet
and dry wipe converting, hot melt adhesive laminating, folding, integrated downstream packaging and
on-site quality and microbiological process management and manufactures and distributes business
imaging paper products. 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-PeriodDecember 31,
    
    
    Change2004
    
    
    2003
    
    
    $
    
    
    %Net Sales
    
    $
    20,004
    
    
    $
    13,046
    
    
    $
    6,958
    
    
    
    53Gross Profit
    
    
    1,451
    
    
    
    1,574
    
    
    
    (123
    )
    
    
    (8
    )7.3
    %
    
    
    12.1
    %Operating Expenses
    
    
    762
    
    
    
    1,122
    
    
    
    (360
    )
    
    
    (32
    )3.8
    %
    
    
    8.6
    %Operating Income
    
    
    689
    
    
    
    452
    
    
    
    237
    
    
    
    523.4
    %
    
    
    3.5
    %Interest Expense
    
    
    14
    
    
    
    15
    
    
    
    (1
    )
    
    
    (7
    )0.1
    %
    
    
    0.1
    %Income Before Income Taxes
    
    
    690
    
    
    
    437
    
    
    
    253
    
    
    
    583.4
    %
    
    
    3.3
    %Income Tax Expense
    
    
    282
    
    
    
    184
    
    
    
    98
    
    
    
    531.4
    %
    
    
    1.4
    %Net Income
    
    $
    408
    
    
    $
    252
    
    
    
    156
    
    
    
    622.0
    %
    
    
    1.9
    %
 10




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Continued Three Months EndedDecember 31,2004
    
    
    2003% of
    
    
    
    
    
    
    % of
    
    
    Period-to-Period ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    $
    
    
    %Net
SalesContract manufacturing and printing
    
    $
    14,227
    
    
    
    71
    %
    
    $
    6,982
    
    
    
    54
    %
    
    $
    7,245
    
    
    
    104
    %Business Imaging paper products
    
    
    5,777
    
    
    
    29
    
    
    
    6,063
    
    
    
    46
    
    
    
    (286
    )
    
    
    (5
    )Net Sales
    
    $
    20,004
    
    
    
    100
    %
    
    $
    13,045
    
    
    
    100
    %
    
    $
    6,959
    
    
    
    53
    %
 2004
    
    
    2003Margin
    
    
    
    
    
    
    Margin
    
    
    Period-to-Period ChangeAmount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    $
    
    
    %Gross
ProfitContract manufacturing and printing
    
    $
    1,298
    
    
    
    9
    %
    
    $
    1,103
    
    
    
    16
    %
    
    $
    195
    
    
    
    18
    %Business Imaging paper products
    
    
    532
    
    
    
    9
    
    
    
    939
    
    
    
    15
    
    
    
    (407
    )
    
    
    (43
    )Gross Profit
    
    $
    1,830
    
    
    
    9
    %
    
    $
    2,042
    
    
    
    16
    %
    
    $
    (212
    )
    
    
    (10
    %)
 Net Sales: Consolidated net sales increased $6.9 million (53%) to $20.0 million in the first quarter of fiscal
2005, when compared to the same period last year. This is due to an increase of $7.2 million
(104%) in the Contract Manufacturing segment and a decrease of $0.3 million (5%) in the Business
Imaging segment. In Contract Manufacturing, some customers furnish raw materials and others request the Company to
purchase raw materials and pass the cost through the sales price. In the first quarter of fiscal
2005, more customers requested that the Company purchase raw materials and, in comparison
to the first quarter of fiscal 2004, this contributed $6.9 million of the $7.2 million increase in
revenue. The decrease in revenue in the Business Imaging segment was primarily due to the loss of
several significant national accounts, which represented approximately $0.7 million for fiscal 2004
revenues. Gross Profit: Consolidated gross profit decreased $0.1 million (8%) for the first quarter of fiscal 2005 when
compared to the first quarter of fiscal 2004. The Contract Manufacturing segment increased $0.2
million (18%) due to revenue generated by increased toll sales somewhat offset by increased labor
costs and depreciation. Toll sales are revenues which do not include a pass through of material
costs. Gross profit declined $0.4 million (43%) in Business Imaging primarily due to increased raw
material costs and competitive pricing pressures. Operating Expenses: Operating expenses increased $59,000 for the first quarter of fiscal 2005 when compared to the same
period of fiscal 2004. Increases in salaries and benefits of $73,000, outside MIS service of
$10,000, franchise tax expense of $34,000 and bad debt expense of $45,000, were offset by decreases
in depreciation of $88,000 and sales commissions of $16,000. 11




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of Operations-Continued Interest Expense and Other Income (Expense)-net: Interest expense decreased $1,000 to $14,000 compared to last year due to lower average debt
outstanding. Net Income: The Company reported net income of $0.4 million (per share: $0.09 basic and diluted) for first
quarter of fiscal 2005, versus net income of $0.3 million (per share: $0.05 basic and diluted) for
the same period one year ago. Liquidity and Capital Resources: The Company generated $1.6 million in cash from operations through the first three months of fiscal
2005, compared to cash provided by operations of $1.4 million for the same period last year.
Increases in inventories ($1.1 million) primarily represented materials purchased for new projects.
More customers are requesting the Company purchase materials rather than supplying them.
Increased cash resulted from a reduction of accounts receivable ($3.2 million). Accounts Payable
decreased ($0.3 million) in the first three months of fiscal 2005, compared to the same period last
year. During the third quarter of fiscal 2004, the Company announced it had entered into a definitive
agreement to sell its thermal bond laminator for $475,000. In connection with such agreement, the
Company received a $95,000 non-refundable deposit. The sale was completed in the first quarter of
fiscal 2005. Consistent with accounting principles for revenue recognition, the Company accounted
for and reported a gain of approximately $416,000 (which includes the non-refundable deposit) from
this sale when it was completed in the first quarter of fiscal 2005. Net cash provided by investing activities was $0.4 million for the first three months of fiscal
2005, resulting primarily from the sale of the thermal bond laminator mentioned above. On December
4, 2003 the Company announced it had signed significant contracts with new and existing customers
for both printing and contract manufacturing. To satisfy the manufacturing requirements of the new
contracts, in fiscal 2004 the Company completed a capital equipment expansion program aggregating
approximately $3.6 million. Net cash used in financing activities was ($2.0) million for the first three months of fiscal
2005, resulting primarily from repayments of outstanding indebtedness. The Companys prior credit facility expired June 1, 2004. The Company replaced this facility with
a new unsecured, $10.0 million facility (the Credit Facility). This transaction was completed in
May 2004 and is effective through May 2007. As of February 14, 2005, the Company had approximately $10.0 million available under the revolving
credit line pursuant to the Credit Facility. According to the terms of the Credit Facility, the
Company is required to maintain certain financial and operational covenants. As of December 31,
2004, the Company was in compliance with all of its debt covenants under the Credit Facility. The Company intends to retain earnings to finance future operations and expansion and does
not expect to pay any dividends within the foreseeable future. 12




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ITEM 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations-Continued Critical Accounting Policies: The condensed consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States of America which require the Company to make
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of
the condensed consolidated financial statements and revenues and expenses during the periods
reported. Actual results could differ from those estimates. Information with respect to the
Companys critical accounting policies which the Company believes could have the most significant
effect on the Companys reported results and require subjective or complex judgments by management
is contained on pages 17-18 in Item 7, Managements Discussion and Analysis of Financial Condition
and Results of Operations, of the Companys Annual Report on Form 10-K filed with the SEC for the
fiscal year ended September 30, 2004. The Company has not made any changes in estimates or
assumptions that have had a significant effect on the reported amounts. Off Balance Sheet Arrangements: The Company has no Off Balance Sheet Arrangements (as defined in Item 303(a)(4) of Regulation S-K). Forward Looking Statements: Managements discussion and analysis of financial condition and results of operations, including
managements discussion of the Companys 2005 quarterly periods in comparison to fiscal 2004
contains forward-looking statements regarding current expectations, risks and uncertainties for
fiscal 2005 and beyond. The actual results could differ materially from those discussed here. As
well as those factors discussed in this report, other factors that could cause or contribute to
such differences include, among other items, the general economic and business conditions affecting
the contract manufacturing, specialty printing services, imaging paper products, significant
changes in the cost of base paper stock, competition in the Companys product areas, or an
inability of management to successfully reduce operating expenses in relation to net sales without
damaging the long-term direction of the Company. Therefore, the selected financial data for the
periods presented may not be indicative of the Companys future financial condition or results of
operations. 
 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk Information with respect to the Companys exposure to interest rate risk, foreign currency risk,
commodity price risk and other relevant market risks is contained on page 19 in Item 7A, Quantative
and Qualitative Disclosure About Market Risk, of the Companys Annual Report on Form 10-K filed
with the Securities and Exchange Commission for the year ended September 30, 2004. Management
believes that as of December 31, 2004, there has been no material change to this information. 
 ITEM 4. Controls and Procedures The Company maintains disclosure controls and procedures that are designed to ensure that
information required to be disclosed in its reports filed pursuant to the Securities Exchange Act
of 1934, as amended, is recorded, processed, summarized, and reported within the time periods
specified in the SECs rules and forms, and that such information is accumulated and communicated
to the Companys management, including its Chief Executive Officer and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating
the disclosure controls and procedures, management recognized that any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of achieving the
desired control objectives, and management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. 13




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ITEM 4. Controls and ProceduresContinued The Company carried out an evaluation, under the supervision and with the participation of its
management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness
of the design and operation of the Companys disclosure controls and procedures. Based on the
foregoing, the Companys Chief Executive Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act) were effective as of the end of the Companys fiscal quarter ended
December 31, 2004. There have been no changes in the Companys internal control over financial reporting during the
first fiscal quarter ended December 31, 2004 that have materially affected, or are reasonably
likely to materially affect the Companys internal control over financial reporting. 
 PART II. 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 193431.2
    
    
    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
 14




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TUFCO TECHNOLOGIES, INC.Date: February 14, 2005
    /s/ Louis LeCalsey, IIILouis LeCalsey, IIIPresident and Chief Executive Officer Date: February 14, 2005
    /s/ Michael B. WheelerMichael B. WheelerVice President and Chief Financial Officer 15