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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 June 30, 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
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  o þ
  Class
    
    Outstanding as of August 14, 2008Common Stock, par value $0.01 per share
    
    4,458,644




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##### 



TUFCO TECHNOLOGIES, INC.
 Index
 PageNumberPART I: FINANCIAL INFORMATIONItem 1. Condensed Consolidated Financial StatementsCondensed Consolidated Balance Sheets as of
June 30, 2008 and September 30, 2007
    
    
    3Condensed Consolidated Statements of Income for the three months and
nine months ended June 30, 2008 and 2007
    
    
    4Condensed Consolidated Statements of Cash Flows for the
nine months ended June 30, 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
    
    
    19Item 6. Exhibits
    
    
    19SIGNATURES
    
    
    20Certification pursuant to Rule 13a-14(a)Certification pursuant to Rule 13a-14(a)Certification pursuant to Section 1350Certification pursuant to 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
 June 30,2008
    
    
    September 30,(Unaudited)
    
    
    2007AssetsCURRENT ASSETS:Cash and cash equivalents
    
    $
    5,680
    
    
    $
    6,663Accounts receivable-net
    
    
    13,918,827
    
    
    
    15,301,870Inventories
    
    
    15,704,104
    
    
    
    16,354,816Prepaid expenses and other current assets
    
    
    863,905
    
    
    
    833,896Income tax receivable
    
    
    46,747
    
    
    
    Deferred income taxes
    
    
    534,990
    
    
    
    534,990Total current assets
    
    
    31,074,253
    
    
    
    33,032,235PROPERTY, PLANT AND EQUIPMENT-Net
    
    
    18,206,134
    
    
    
    19,002,401GOODWILL
    
    
    7,211,575
    
    
    
    7,211,575OTHER ASSETS-Net
    
    
    122,103
    
    
    
    126,729TOTAL
    
    $
    56,614,065
    
    
    $
    59,372,940Liabilities and Stockholders EquityCURRENT LIABILITIES:Accounts payable
    
    $
    10,845,506
    
    
    $
    11,706,586Accrued payroll, vacation and payroll taxes
    
    
    717,714
    
    
    
    513,331Income taxes payable
    
    
    325,136
    
    
    
    107,182Other current liabilities
    
    
    914,677
    
    
    
    716,620Total current liabilities
    
    
    12,803,033
    
    
    
    13,043,719LONG-TERM DEBT
    
    
    3,500,000
    
    
    
    6,191,666DEFERRED INCOME TAXES
    
    
    2,524,062
    
    
    
    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
    
    
    25,337,822
    
    
    
    25,304,421Retained earnings
    
    
    13,952,967
    
    
    
    13,390,699Treasury
stock, 240,097 and 173,097 common shares at cost,
respectively
    
    
    (1,550,906
    )
    
    
    (1,141,806
    )Total stockholders equity
    
    
    37,786,970
    
    
    
    37,600,401TOTAL
    
    $
    56,614,065
    
    
    $
    59,372,940
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TUFCO TECHNOLOGIEES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 THREE MONTHS ENDED
    
    
    NINE MONTHS ENDEDJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007NET SALES
    
    $
    30,674,237
    
    
    $
    29,814,897
    
    
    $
    85,095,809
    
    
    $
    84,419,637COST OF SALES
    
    
    29,006,838
    
    
    
    28,164,798
    
    
    
    80,881,457
    
    
    
    80,291,470GROSS PROFIT
    
    
    1,667,399
    
    
    
    1,650,099
    
    
    
    4,214,352
    
    
    
    4,128,167OPERATING EXPENSES:Selling, general & administrative
    
    
    1,073,445
    
    
    
    1,075,256
    
    
    
    3,089,106
    
    
    
    3,027,642OPERATING INCOME
    
    
    593,954
    
    
    
    574,843
    
    
    
    1,125,246
    
    
    
    1,100,525OTHER INCOME (EXPENSE):Interest expense
    
    
    (49,961
    )
    
    
    (132,862
    )
    
    
    (218,812
    )
    
    
    (382,311
    )Interest income and other income
(expense)
    
    
    345
    
    
    
    1,494
    
    
    
    18,350
    
    
    
    18,310INCOME BEFORE INCOME TAXES
    
    
    544,338
    
    
    
    443,475
    
    
    
    924,784
    
    
    
    736,524INCOME TAX EXPENSE
    
    
    213,381
    
    
    
    156,342
    
    
    
    362,516
    
    
    
    271,217NET INCOME
    
    $
    330,957
    
    
    $
    287,133
    
    
    $
    562,268
    
    
    $
    465,307BASIC EARNINGS PER SHARE:Net Income
    
    $
    0.07
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.10DILUTED EARNINGS PER SHARE:Net Income
    
    $
    0.07
    
    
    $
    0.06
    
    
    $
    0.12
    
    
    $
    0.10WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:Basic
    
    
    4,479,743
    
    
    
    4,535,640
    
    
    
    4,513,831
    
    
    
    4,535,376Diluted
    
    
    4,488,560
    
    
    
    4,572,142
    
    
    
    4,525,631
    
    
    
    4,562,988
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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 NINE MONTHS ENDEDJune 30,2008
    
    
    2007OPERATING ACTIVITIESNet income
    
    $
    562,268
    
    
    $
    465,307Noncash items in net income:Depreciation and amortization of property, plant and
equipment
    
    
    1,628,179
    
    
    
    1,624,604Amortization
    
    
    
    
    
    
    15,858Non-monetary reimbursement of cost
    
    
    (100,000
    )
    
    
    (515,000
    )Deferred income taxes
    
    
    (13,092
    )
    
    
    (26,094
    )Gain on sale of property, plant and equipment
    
    
    
    
    
    
    (145
    )Stock-based compensation expense
    
    
    33,401
    
    
    
    66,564Changes in operating working capital:Accounts receivable
    
    
    1,383,043
    
    
    
    1,400,421Inventories
    
    
    650,712
    
    
    
    (3,944,810
    )Prepaid expenses and other assets
    
    
    (25,383
    )
    
    
    (328,262
    )Accounts payable
    
    
    (835,257
    )
    
    
    4,019,024Accrued and other current liabilities
    
    
    402,440
    
    
    
    356,965Income taxes payable/receivable
    
    
    171,207
    
    
    
    292,602Net cash provided by operating activities
    
    
    3,857,518
    
    
    
    3,427,034INVESTING ACTIVITIESAdditions to property, plant and equipment
    
    
    (731,912
    )
    
    
    (1,588,121
    )Proceeds from disposals of property, plant and equipment
    
    
    
    
    
    
    500Payment of construction payable
    
    
    (25,823
    )
    
    
    (400,918
    )Net cash used by investing activities
    
    
    (757,735
    )
    
    
    (1,988,539
    )FINANCING ACTIVITIESNet repayments
    
    
    (2,691,666
    )
    
    
    (1,439,678
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    2,284Purchase of treasury stock
    
    
    (409,100
    )
    
    
    Net cash used by financing activities
    
    
    (3,100,766
    )
    
    
    (1,437,394
    )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (983
    )
    
    
    1,101CASH AND CASH EQUIVALENTS:Beginning of period
    
    
    6,663
    
    
    
    5,267End of period
    
    $
    5,680
    
    
    $
    6,368NONCASH SUPPLEMENTAL INFORMATION:Construction payable
    
    $
    
    
    
    $
    14,230
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TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three months and nine months ended June 30, 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 nine month periods ended June 30, 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 that EITF No. 07-3
will have on its consolidated financial statements.In March 2008, the 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 consolidated financial statements.In May 2008, the FASB issued SFAS No. 162, Hierarchy of Generally Accepted Accounting
Principles (SFAS No. 162), which identifies the sources of accounting principles and the
framework for selecting principles used in financial statements. The FASB does not expect
that this statement will result in a change in current practice. SFAS No. 162 is effective
for all pronouncement and applications of accounting principles issued after March 15, 1992.
The Company has determined that the adoption of SFAS No. 162 did not have a material effect
on its consolidated
financial statements.
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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 June 30, 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, 2006 and 2007.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 nine months ended June 30, 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 8,817 and 36,502 shares
for the three months ended June 30, 2008 and 2007, respectively. For the nine months ended
June 30, 2008 and 2007, the common stock equivalents from dilutive stock options outstanding
were 11,800 and 27,612 shares, respectively. During the three months ended June 30, 2008 and
2007, options to purchase 200,350 and 40,500 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 nine months ended June 30, 2008 and 2007, options to purchase
166,350 and 67,500 shares, respectively, were excluded from the diluted earnings per share
computation.5.
    
    ReclassificationsCertain prior period amounts have been reclassified to conform to the current year
presentation.6.
    
    InventoriesInventories consist of the following:
 June 30,
    
    
    September 30,2008
    
    
    2007Raw materials
    
    $
    12,220,272
    
    
    $
    11,448,432Finished goods
    
    
    3,483,832
    
    
    
    4,906,384Total inventories
    
    $
    15,704,104
    
    
    $
    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 282,000 shares are
available for future grants as of June 30, 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 December 31, 2007, employees of Tufco Technologies, Inc.,
received a discretionary grant on October 1, 2007 to acquire 16,850 shares of common stock
under Tufcos 2003 Non-Qualified Stock Option Plan at an exercise price of $7.60 per share,
the closing price of the Companys common stock on the NASDAQ market as of that date. The
grant date fair value of these options was estimated at $2.85 using the Black-Scholes
option-pricing model with the following assumptions: risk-free interest rate of 4.05%,
expected volatility of 49.9%, no dividend yield and an expected life of three years.During the three months ended March 31, 2008, Richard M. 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 of the
Companys common stock on the NASDAQ market as of that date. The grant date fair value of
these options 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.During the three months ended June 30, 2008, Messrs. Robert J. Simon, Samuel J. Bero, C.
Hamilton Davison, Jr., Brian Kelly, Richard M. Segel and William R. Ziemendorf, in
conjunction with their election or reelection to serve on the Tufco Technologies, Inc. Board
of Directors, each received a discretionary grant on May 15, 2008 to acquire 3,000 shares of
common stock under Tufcos 2004 Non-Employee Director Stock Option Plan at an exercise price
of $7.00 per share, the closing price of the Companys common stock on the NASDAQ market as
of that date. The grant date fair value of these options was estimated at $2.17 using the
Black-Scholes option-pricing model with the following assumptions: risk-free interest rate of
2.45%, expected volatility of 53.2%, no dividend yield and an expected life of two years.In addition, Mr. George Hare, upon formal offer and acceptance of the position of General
Manager  Newton Division, received a discretionary grant on June 30, 2008 to acquire 2,000
shares of common stock under Tufcos 2003 Non-Qualified Stock Option Plan at an exercise
price of $6.35 per share, the closing price of the Companys common stock on the NASDAQ
market as of that date. The grant date fair value of these options was estimated at $2.54
using the Black-Sholes option-pricing model with the following assumptions: risk-free
interest rate of 2.91%, expected volatility of 55.9%, no dividend yield and an expected life
of three years.
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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, 2008 is presented below:
 WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AverageExercise
    
    
    Contractual
    
    
    IntrinsicShares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at September 30, 2007
    
    
    296,300
    
    
    $
    6.74New grants
    
    
    38,850
    
    
    $
    7.20Exercised
    
    
    
    
    
    
    Forfeited or expired
    
    
    (8,000
    )
    
    $
    9.25Outstanding at June 30, 2008
    
    
    327,150
    
    
    $
    6.73
    
    
    
    5.4
    
    
    $
    97,702Exercisable at June 30, 2008
    
    
    308,300
    
    
    $
    6.69
    
    
    
    5.1
    
    
    $
    97,702
 The following table summarizes the Companys share-based compensation awards during the nine
months ended June 30, 2008 and 2007:
 Nine Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007Total pre-tax share-based compensation
    
    $
    33,401
    
    
    $
    66,564Weighted-average grant date fair value
    
    $
    1.86
    
    
    $
    2.05Total unrecognized compensation cost
    
    $
    38,715
    
    
    $
    9,051Remaining weighted-average period cost
will be recognized over
    
    35 months
    
    
    3 Months
 There were no options exercised during the three month and nine month periods ended June 30,
2008 and 2007.8.
    
    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 67,000 shares were purchased under
the plan through June 30, 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
    
    CorporateJune 30, 2008
    
    Manufacturing
    
    Imaging
    
    and Other
    
    ConsolidatedNet sales
    
    $
    24,314,330
    
    
    $
    6,359,907
    
    
    $
    
    
    
    $
    30,674,237Gross profit
    
    
    1,390,035
    
    
    
    277,364
    
    
    
    
    
    
    
    1,667,399Operating income (loss)
    
    
    729,377
    
    
    
    67,071
    
    
    
    (202,494
    )
    
    
    593,954Depreciation and
amortization expense
    
    
    481,314
    
    
    
    52,899
    
    
    
    1,192
    
    
    
    535,405Capital expenditures
    
    
    360,260
    
    
    
    23,924
    
    
    
    
    
    
    
    384,184
 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
 Nine Months Ended
    
    Contract
    
    Business
    
    CorporateJune 30, 2008
    
    Manufacturing
    
    Imaging
    
    And Other
    
    ConsolidatedNet sales
    
    $
    67,140,630
    
    
    $
    17,955,179
    
    
    $
    
    
    
    $
    85,095,809Gross profit
    
    
    3,223,732
    
    
    
    990,620
    
    
    
    
    
    
    
    4,214,352Operating income (loss)
    
    
    1,278,333
    
    
    
    394,022
    
    
    
    (547,109
    )
    
    
    1,125,246Depreciation and
amortization expense
    
    
    1,464,095
    
    
    
    159,828
    
    
    
    4,256
    
    
    
    1,628,179Capital expenditures
    
    
    681,406
    
    
    
    50,506
    
    
    
    
    
    
    
    731,912
 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
 10




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##### Table of Contents



Notes to condensed consolidated financial statements(continued)
 Contract
    
    
    Business
    
    
    CorporateJune 30, 2008
    
    Manufacturing
    
    
    Imaging
    
    
    and Other
    
    
    ConsolidatedAssets:Inventories
    
    $
    12,760,410
    
    
    $
    2,943,694
    
    
    $
    
    
    
    $
    15,704,104Property, plant and
equipment-net
    
    
    16,140,098
    
    
    
    2,058,192
    
    
    
    7,844
    
    
    
    18,206,134Accounts receivable
and other (including
goodwill)
    
    
    16,233,238
    
    
    
    5,862,269
    
    
    
    608,320
    
    
    
    22,703,827Total assets
    
    $
    45,133,746
    
    
    $
    10,864,155
    
    
    $
    616,164
    
    
    $
    56,614,065
 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
 11




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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:
    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
    
    Nine Months Ended
    
    Period-to-PeriodJune 30,
    
    Change
    
    June 30,
    
    Change2008
    
    2007
    
    $
    
    %
    
    2008
    
    2007
    
    $
    
    %Net Sales
    
    $
    30,674
    
    
    $
    29,815
    
    
    $
    859
    
    
    
    3
    
    
    $
    85,096
    
    
    $
    84,420
    
    
    $
    676
    
    
    
    1Gross Profit
    
    
    1,667
    
    
    
    1,650
    
    
    
    17
    
    
    
    1
    
    
    
    4,214
    
    
    
    4,128
    
    
    
    86
    
    
    
    25.4
    %
    
    
    5.5
    %
    
    
    
    
    
    
    
    
    
    
    5.0
    %
    
    
    4.9
    %Operating Expenses
    
    
    1,073
    
    
    
    1,075
    
    
    
    (2
    )
    
    
    (0.2
    )
    
    
    3,089
    
    
    
    3,028
    
    
    
    61
    
    
    
    23.5
    %
    
    
    3.6
    %
    
    
    
    
    
    
    
    
    
    
    3.6
    %
    
    
    3.6
    %Operating Income
    
    
    594
    
    
    
    575
    
    
    
    19
    
    
    
    3
    
    
    
    1,125
    
    
    
    1,100
    
    
    
    25
    
    
    
    21.9
    %
    
    
    1.9
    %
    
    
    
    
    
    
    
    
    
    
    1.3
    %
    
    
    1.3
    %Interest Expense
    
    
    50
    
    
    
    133
    
    
    
    (83
    )
    
    
    (62
    )
    
    
    219
    
    
    
    382
    
    
    
    (163
    )
    
    
    (43
    )0.2
    %
    
    
    0.4
    %
    
    
    
    
    
    
    
    
    
    
    0.3
    %
    
    
    0.5
    %Income Before Income Taxes
    
    
    544
    
    
    
    443
    
    
    
    101
    
    
    
    23
    
    
    
    925
    
    
    
    737
    
    
    
    188
    
    
    
    261.8
    %
    
    
    1.5
    %
    
    
    
    
    
    
    
    
    
    
    1.1
    %
    
    
    0.9
    %Income Tax Expense
    
    
    213
    
    
    
    156
    
    
    
    57
    
    
    
    37
    
    
    
    363
    
    
    
    271
    
    
    
    92
    
    
    
    340.7
    %
    
    
    0.5
    %
    
    
    
    
    
    
    
    
    
    
    0.4
    %
    
    
    0.3
    %Net Income
    
    $
    331
    
    
    $
    287
    
    
    
    44
    
    
    
    15
    
    
    $
    562
    
    
    $
    465
    
    
    
    97
    
    
    
    211.1
    %
    
    
    1.0
    %
    
    
    
    
    
    
    
    
    
    
    0.7
    %
    
    
    0.6
    %Basic and Diluted EarningsPer Share
    
    $
    0.07
    
    
    $
    0.06
    
    
    
    
    
    
    
    
    
    
    $
    0.12
    
    
    $
    0.10
 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 EndedJune 30,2008
    
    
    2007% of
    
    
    
    
    
    
    % of
    
    
Period-to-Period ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    $
    
    
    %Net
SalesContract Manufacturing and printing
    
    $
    24,314
    
    
    
    79
    %
    
    $
    24,228
    
    
    
    81
    %
    
    $
    86
    
    
    
    0.4
    %Business Imaging paper products
    
    
    6,360
    
    
    
    21
    %
    
    
    5,587
    
    
    
    19
    %
    
    
    773
    
    
    
    14
    %Net Sales
    
    $
    30,674
    
    
    
    100
    %
    
    $
    29,815
    
    
    
    100
    %
    
    $
    859
    
    
    
    3
    %
 2008
    
    
    2007Margin
    
    
    
    
    
    
    Margin
    
    
Period-to-Period ChangeAmount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    $
    
    
    %Gross
ProfitContract Manufacturing and printing
    
    $
    1,390
    
    
    
    6
    %
    
    $
    1,204
    
    
    
    5
    %
    
    $
    186
    
    
    
    15
    %Business Imaging paper products
    
    
    277
    
    
    
    4
    %
    
    
    446
    
    
    
    8
    %
    
    
    (169
    )
    
    
    (38
    %)Gross Profit
    
    $
    1,667
    
    
    
    5
    %
    
    $
    1,650
    
    
    
    6
    %
    
    $
    17
    
    
    
    1
    %
 Nine Months EndedJune 30,2008
    
    
    2007% of
    
    
    
    
    
    
    % of
    
    
Period-to-Period ChangeAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    $
    
    
    %Net
SalesContract Manufacturing and printing
    
    $
    67,141
    
    
    
    79
    %
    
    $
    66,539
    
    
    
    79
    %
    
    $
    602
    
    
    
    1
    %Business Imaging paper products
    
    
    17,955
    
    
    
    21
    %
    
    
    17,881
    
    
    
    21
    %
    
    
    74
    
    
    
    0.4
    %Net Sales
    
    $
    85,096
    
    
    
    100
    %
    
    $
    84,420
    
    
    
    100
    %
    
    $
    676
    
    
    
    1
    %
 2008
    
    
    2007Margin
    
    
    
    
    
    
    Margin
    
    
Period-to-Period ChangeAmount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    $
    
    
    %Gross
ProfitContract Manufacturing and printing
    
    $
    3,224
    
    
    
    5
    %
    
    $
    2,763
    
    
    
    4
    %
    
    $
    461
    
    
    
    17
    %Business Imaging paper products
    
    
    990
    
    
    
    6
    %
    
    
    1,365
    
    
    
    8
    %
    
    
    (375
    )
    
    
    27
    %Gross Profit
    
    $
    4,214
    
    
    
    5
    %
    
    $
    4,128
    
    
    
    5
    %
    
    $
    86
    
    
    
    2
    %
 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
    
    
    
    63,000April(4/1/08 - 4/30/08)
    
    
    10,000
    
    
    $
    6.25
    
    
    
    10,000
    
    
    
    53,000May(5/1/08 - 5/31/08)
    
    
    10,000
    
    
    $
    6.05
    
    
    
    10,000
    
    
    
    43,000June(6/1/08 - 6/30/08)
    
    
    10,000
    
    
    $
    6.05
    
    
    
    10,000
    
    
    
    33,000Total
    
    
    67,000
    
    
    $
    6.10
    
    
    
    67,000
    
    
    
    33,000
  
 ITEM 3. Defaults Upon Senior Securities
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
 (a)
    
    The Annual Meeting of Shareholders of the Company was held on May
15, 2008.(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
    
    
    4,055,585
    
    
    
    148,683Samuel J. Bero
    
    
    4,059,423
    
    
    
    144,845C. Hamilton Davison, Jr.
    
    
    4,167,000
    
    
    
    37,268Brian Kelly
    
    
    4,165,445
    
    
    
    38,823Louis LeCalsey, III
    
    
    4,067,813
    
    
    
    136,455Richard M. Segel
    
    
    4,166,238
    
    
    
    38,030William R. Ziemendorf
    
    
    4,166,638
    
    
    
    37,630
 (d)
    
    Not applicable
 18




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##### Table of Contents



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
 19




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##### Table of Contents



SIGNATURES
  TUFCO TECHNOLOGIES, INC.Date: August 14, 2008
    /s/ Louis LeCalsey, IIILouis LeCalsey, IIIPresident and Chief Executive OfficerDate: August 14, 2008
    /s/ Michael B. WheelerMichael B. WheelerExecutive Vice President, Chief Financial Officer and
Chief Operating Officer 20