SECURITIES AND EXCHANGE
COMMISSION Washington, D.C. 20549

# FORM 10-Q

# QUARTERLY REPORT UNDER
SECTION 13 OR 15 (d) OF THE  SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended
   September 30, 2006

Commission File Number
   0-23539

|LADISH CO., INC.                                      
|------------------------------------------------------
|(Exact name of registrant as specified in its charter)

|Wisconsin                                    | 31-1145953         
|-------------------------------------------- | -------------------
|(State or other Jurisdiction of              | (I.R.S. Employer   
|incorporation or organization)               | Identification No.)
|5481 South Packard Avenue, Cudahy, Wisconsin | 53110              
|(Address of principal executive offices)     | (Zip Code)         

|(414) 747-2611                                      
|----------------------------------------------------
|(Registrants telephone number, including area code)

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, and (2) has been subject to such filing requirements for the past 90 days.

Yes  X    No

Indicate
by check mark whether the Registrant is a large accelerated filer, an accelerated filer or
a non-accelerated filer. See definition of accelerated filer and large accelerated filer
in Rule 12b-2 of the Exchange Act.

Large accelerated filer   
    Accelerated filer  X    Non-accelerated filer

Indicate
by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

Yes      No  X

Indicate
the number of shares outstanding of each of the issuers classes of common stock, as
of the latest practicable date.

|Class                         | Outstanding at September 30, 2006
|----------------------------- | ---------------------------------
|Common Stock, $0.01 Par Value | 14,200,967                       

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# PART I 
FINANCIAL INFORMATION

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Page 3 of 14

# LADISH CO., INC.CONSOLIDATED
STATEMENTS OF OPERATIONS

(Dollars in Thousands,
Except Per Share Data)

|                                               
|-----------------------------------------------
|2006                                           
|Net sales                                      
|Cost of sales                                  
|                                               
|Gross profit                                   
|Selling, general and administrative expenses   
|                                               
|Income from operations                         
|Other income (expense):                        
|Interest expense                               
|Other, net                                     
|                                               
|Income before income tax provision             
|and minority interest                          
|Income tax provision                           
|Minority interest in net earnings of subsidiary
|                                               
|Net income                                     
|                                               
|Basic earnings per share                       
|Diluted earnings per share                     
|Basic weighted average shares outstanding      
|Diluted weighted average shares outstanding    

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# LADISH CO., INC.CONSOLIDATED
BALANCE SHEETS

(Dollars in Thousands,
Except Share Data)

|Assets                                                                          | September 30,
2006 | December 31,
2005
|------------------------------------------------------------------------------- | ------------------ | -----------------
|Current assets:                                                                 |                    |                  
|Cash and cash equivalents                                                       |                    |                  
|Accounts receivable, less allowance of $126 at each date                        |                    |                  
|Inventories                                                                     |                    |                  
|Deferred income taxes                                                           |                    |                  
|Prepaid expenses and other current assets                                       |                    |                  
|                                                                                |                    |                  
|Total current assets                                                            |                    |                  
|                                                                                |                    |                  
|Property, plant and equipment:                                                  |                    |                  
|Land and improvements                                                           |                    |                  
|Buildings and improvements                                                      |                    |                  
|Machinery and equipment                                                         |                    |                  
|Construction in progress                                                        |                    |                  
|                                                                                |                    |                  
|                                                                                |                    |                  
|Less - accumulated depreciation                                                 |                    |                  
|                                                                                |                    |                  
|Net property, plant and equipment                                               |                    |                  
|Deferred income taxes                                                           |                    |                  
|Other assets                                                                    |                    |                  
|                                                                                |                    |                  
|Total assets                                                                    |                    |                  
|                                                                                |                    |                  
|Liabilities and Stockholders' Equity                                            |                    |                  
|Current liabilities:                                                            |                    |                  
|Accounts payable                                                                |                    |                  
|Senior bank debt                                                                |                    |                  
|Senior notes                                                                    |                    |                  
|Accrued liabilities:                                                            |                    |                  
|Pensions                                                                        |                    |                  
|Postretirement benefits                                                         |                    |                  
|Wages and salaries                                                              |                    |                  
|Taxes, other than income taxes                                                  |                    |                  
|Interest                                                                        |                    |                  
|Profit sharing                                                                  |                    |                  
|Paid progress billings                                                          |                    |                  
|Other                                                                           |                    |                  
|                                                                                |                    |                  
|Total current liabilities                                                       |                    |                  
|Long term liabilities:                                                          |                    |                  
|Senior bank debt                                                                |                    |                  
|Senior notes                                                                    |                    |                  
|Postretirement benefits                                                         |                    |                  
|Pensions                                                                        |                    |                  
|Officers' deferred compensation                                                 |                    |                  
|Minority interest in equity of subsidiary                                       |                    |                  
|Deferred income taxes                                                           |                    |                  
|Other noncurrent liabilities                                                    |                    |                  
|                                                                                |                    |                  
|Total liabilities                                                               |                    |                  
|                                                                                |                    |                  
|Stockholders' equity:                                                           |                    |                  
|Common stock - authorized 100,000,000, issued 14,605,591                        |                    |                  
|shares at each date of $.01 par value                                           |                    |                  
|Additional paid-in capital                                                      |                    |                  
|Retained earnings                                                               |                    |                  
|Treasury stock, 404,624 and 592,538 shares of common stock at each date at cost |                    |                  
|Accumulated other comprehensive loss                                            |                    |                  
|                                                                                |                    |                  
|Total stockholders' equity                                                      |                    |                  
|                                                                                |                    |                  
|Total liabilities and stockholders' equity                                      |                    |                  
|                                                                                |                    |                  

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# LADISH CO., INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

|                                                            
|------------------------------------------------------------
|2006                                                        
|CASH FLOWS FROM OPERATING ACTIVITIES:                       
|Net income                                                  
|Adjustments to reconcile net income to net cash             
|provided by (used for) operating activities:                
|Depreciation                                                
|Charge in lieu of taxes related to goodwill                 
|Non-cash compensation related to stock options              
|Deferred income taxes                                       
|Minority interest in net earnings of subsidiary             
|Loss (gain) on disposal of property, plant and equipment    
|Changes in assets and liabilities:                          
|Accounts receivable                                         
|Inventories                                                 
|Other assets                                                
|Accounts payable and accrued liabilities                    
|Other long-term liabilities                                 
|                                                            
|Net cash used in operating activities                       
|                                                            
|CASH FLOWS FROM INVESTING ACTIVITIES:                       
|Additions to property, plant and equipment                  
|Proceeds from sale of property, plant and equipment         
|Purchase of ZKM stock - minority interest                   
|Acquisition of business net of cash acquired                
|                                                            
|Net cash used in investing activities                       
|                                                            
|CASH FLOWS FROM FINANCING ACTIVITIES:                       
|Proceeds from (repayment of) senior bank debt               
|Repayment of senior notes                                   
|Proceeds from senior notes                                  
|Repayment of notes payable                                  
|Deferred financing costs                                    
|Issuance of common stock                                    
|                                                            
|Net cash provided by financing activities                   
|                                                            
|Effect of exchange rate changes on cash and cash equivalents
|                                                            
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS            
|CASH AND CASH EQUIVALENTS, beginning of period              
|                                                            
|CASH AND CASH EQUIVALENTS, end of period                    
|                                                            

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# LADISH CO., INC.NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands,
Except Share Data)

|(1) | Basis
of Presentation
|--- | ---------------------

In the opinion of the Company, the
accompanying unaudited consolidated condensed financial statements contain all adjustments
necessary to present fairly its financial position at September 30, 2006 and its
results of operations and cash flows for the interim periods presented. All adjustments
are of a normal recurring nature.

The accompanying unaudited condensed
consolidated financial statements have been prepared in accordance with Article 10 of
Regulation S-X and therefore do not include all disclosures required for annual financial
statements presented in conformity with accounting principles generally accepted in the
United States of America. The Company has filed a report on Form 10-K which contains
audited consolidated financial statements that include all information and footnotes
necessary for a fair presentation of its financial position at December 31, 2005 and
2004, and the related consolidated statements of operations, stockholders equity,
and cash flows for the years ended December 31, 2005, 2004 and 2003.

The preparation of financial
statements in conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of financial statements and the reported amounts of revenues and
expenses during the reporting periods. Actual results will likely differ from those
estimates, but management believes such differences will not be material.

The results of operations for any
interim period are not necessarily indicative of the results to be expected for a full
year.

|(2) | Inventories
|--- | -----------

|                                  
|----------------------------------
|Raw material and supplies         
|Work-in-process and finished goods
|Less progress payments            
|                                  
|Total inventories                 
|                                  

|(3) | Interest
and Income Tax Payments
|--- | --------------------------------

|                 
|-----------------
|2006             
|Interest paid    
|Income taxes paid

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|(4) | Cash
and Cash Equivalents
|--- | -------------------------

Cash in excess of daily requirements
is invested in marketable securities consisting of commercial paper and money market
instruments which mature in three months or less. Such investments are deemed to be cash
equivalents. Outstanding payroll and accounts payable checks related to certain bank
accounts are recorded as accounts payable on the balance sheets. These checks amounted to
$8,228 and $10,011 as of September 30, 2006 and December 31, 2005, respectively.

|(5) | Revenue
Recognition
|--- | -------------------

Sales revenue is recognized when the
title and risk of loss have passed to the customer, there is pervasive evidence of an
arrangement, delivery has occurred or the services have been provided, the sales price is
determinable and collectibility is reasonably assured. This generally occurs at the time
of shipment. Net sales include freight out as well as reductions for returns and
allowances, and sales discounts. Progress payments on contracts are generally recognized
as reductions of the related inventory costs. Progress payments in excess of inventory
costs are reflected as a liability.

|(6) | Income
Taxes
|--- | ------------

The year-to-date tax provisions for
2006 and 2005 are based on annualized combined federal, state and foreign effective tax
rates of 35% and 38%, respectively. The principal difference, if any, from the expected
federal tax rate of 35% is due primarily to state income taxes, offset by the impact of
lower income tax rates in Poland and the benefit of the Extra-Territorial Income
(ETI) exclusion related to export sales.

|(7) | Pension
and Postretirement Benefits
|--- | -----------------------------------

The components of net periodic
benefit costs recognized for the nine-month periods ending September 30, 2006 and
2005 are presented in the table below.

|                                   
|-----------------------------------
|2006                               
|Service cost                       
|Interest cost                      
|Expected return on plan assets     
|Amortization of prior service cost 
|Amortization of the net (gain) loss
|                                   
|Net periodic benefit cost (income) 
|                                   

Contributions:

The Company previously disclosed in
its financial statements for the year ended December 31, 2005, that it expected to
contribute $7,905 to its pension plans in 2006. As of September 30, 2006, the Company
has made $5,474 of cash contributions to the pension plans versus $3,037 during the same
period in 2005. The Company currently estimates its total contributions to its pension
plans in 2006 will be $5,515.

In December 2003, the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 was enacted. In May 2004, the
FASB issued FASB Staff Position No. 106-2, Accounting and Disclosure Requirements
Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003
in response to the new law which may provide a federal subsidy to sponsors of retiree
healthcare benefit plans. The Company has concluded that certain benefits provided by its
postretirement benefit plan are actuarially equivalent to Medicare Part D under the Act
and has filed a refund request with the Claims Management Services, a division of the
Health and Human Services Department. To date, the Company has not received the refund and
has not recognized the effect of the estimated refund in its financial statements.

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|(8) | Debt
|--- | ----

The Company sold $30,000 of Series A
senior notes (the Series A Notes) in a private placement to certain
institutional investors on July 20, 2001. The Series A Notes are unsecured and bear
interest at a rate of 7.19% per annum with the interest being paid semiannually. The
Series A Notes have a seven-year duration with the principal amortizing equally over the
duration after the third year. Amortization payments of $6,000 annually were made on
July 20, 2004, 2005 and 2006.

On May 16, 2006, the Company
sold $40,000 of Series B senior notes (the Series B Notes) in a private
placement to certain institutional investors. The Series B Notes are unsecured and bear
interest at a rate of 6.14% per annum with interest being paid semiannually. The Series B
Notes have a ten-year duration with the principal amortizing equally over the duration
after the third year.

The Company and a syndicate of
Lenders have entered into a revolving credit facility (the Facility) which was
most recently renewed on April 28, 2006. The Facility consists of a $35,000 unsecured
revolving line of credit which bears interest at a rate of LIBOR plus 1.25%. At
September 30, 2006, there were $12,600 of borrowings under the Facility and $22,400
was available pursuant to the terms of the Facility.

|(9) | Earnings
Per Share
|--- | ------------------

The incremental difference between
basic weighted average shares outstanding and diluted weighted average shares outstanding
is due to the dilutive impact of outstanding options and warrants.

|(10) | StockholdersEquity
|---- | -------------------

The Company has a Long-Term Incentive
Plan (the Plan) that covers certain employees. Under the Plan, incentive stock
options for up to 983,333 shares may be granted to employees of the Company, of which
943,833 options have been granted. These options expire ten years from the grant date.
Options granted vest over two years. There were no options granted in the nine months
ended September 30, 2006. As of September 30, 2006, 65,836 options granted under
the Plan remain outstanding and exercisable. During the first nine months of 2006, 187,914
options were exercised (for cash of $1,707) and shares were issued from Treasury Stock.

|(11) | Legal
Proceedings
|---- | -----------------

From time to time the Company is
involved in legal proceedings relating to claims arising out of its operations in the
normal course of business. Although the Company believes that there are no material legal
proceedings pending or threatened against the Company or any of its properties, the
Company has been named as a defendant in a number of asbestos cases in Mississippi and six
asbestos cases in Illinois. As of the date of this filing, the Company has been dismissed
from a majority of the cases in Mississippi and four of the cases in Illinois. The Company
has never manufactured or processed asbestos. The Companys only exposure to asbestos
involves products the Company purchased from third parties. The Company has notified its
insurance carriers of these claims and is vigorously defending these actions.

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|(12) | New
Accounting Pronouncements
|---- | -----------------------------

Financial Accounting Standards Board
(FASB) Interpretation No. 47, Accounting for Conditional Asset
Retirement Obligations, an interpretation of FASB Statement No. 143, Accounting
for Asset Retirement Obligations requires that an entity recognize the fair value of a
liability for a conditional asset retirement obligation in the period in which it is
incurred if a reasonable estimate of fair value can be made. An asset retirement
obligation would be reasonably estimable if (a) it is evident that the fair value of the
obligation is embodied in the acquisition price of the asset, (b) an active market exists
for the transfer of the obligation, or (c) sufficient information exists to apply an
expected present value technique. FASB Interpretation No. 47 became effective for calendar
year enterprises as of December 31, 2005. In applying this Statement to the Company,
it was necessary to determine if the Company will undertake any major renovation, sell,
dispose or abandon its factory and factory related assets; what liability would be
associated with such action; and the date such action would be taken. The Company has four
factories in the United States which may be subject to certain conditional retirement
obligations. The Company believes it does not have sufficient information to estimate the
fair value of any asset retirement obligation because the settlement date or range of
potential settlement dates has not been specified by others and information is not
available to apply an expected present value technique. There are no plans to demolish or
undertake any major renovation to the factories that would result in any retirement
obligations. The factories have been and are expected to be maintained by repairs and
maintenance activities that would not involve activities resulting in a retirement
obligation. Furthermore, there has not been any need identified for major renovations
caused by technology changes, operational changes, or other factors.

The Company adopted FASB Statement
No. 123 (revised), Share-Based Payment, on October 1, 2005. Because the
Company has no unvested options, adoption had no material effect on its financial position
or results of operations for the first nine months of 2006.

FASB Statement 151, Inventory
Costs, an amendment of ARB No. 43, Chapter 4,amends the guidance in ARB No.
43, Chapter 4 Inventory Pricing to clarify the accounting for abnormal amounts
of idle facility expense, freight, handling costs and wasted material. This Statement
requires that those items be reflected as current period charges to expense and that
allocation of fixed production overheads to the cost of conversion be based on the normal
capacity of the production facilities. The provisions of this Statement became effective
for inventory costs incurred by the Company beginning January 1, 2006. As the Company
already applies this approach to inventory pricing, there was no effect on its financial
position and results of operations for the first nine months of 2006.

FASB Statement 158,
Employers Accounting for Defined Benefit Pension and Other Postretirement
Plans, requires public companies to recognize on their balance sheet the funded
status of their defined benefit, pension and postretirement plans, as of December 31,
2006. As of that date, the Company will recognize actuarial gains and losses, prior
service cost, and any remaining transition amounts from the initial application of FASB
Statement 87, Employers Accounting for Pensions, and FASB Statement 106,
Employers Accounting for Postretirement Benefits Other Than Pensions, as
they relate to the plans funded status. The offset to this liability will be to
accumulated other comprehensive income (loss) in equity. At this time, management does not
anticipate a significant adjustment to the balance sheet relative to the liability and
funded status of these defined benefits. The reduction in equity will not affect the
Companys ability to comply with debt covenant provisions.

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Page 10 of 14

MANAGEMENTS
DISCUSSIONAND ANALYSIS OF RESULTS OF OPERATIONS ANDCHANGES IN FINANCIAL
POSITION(Dollars in Thousands)

RESULTS OF OPERATIONS

Third Quarter 2006
Compared to Third Quarter 2005

Net sales for the three months ended
September 30, 2006 were $90,664 compared to $64,832 for the same period in 2005. The
40% increase in sales for the third quarter of 2006 versus 2005 was due to the overall
improvement in the jet engine and general aerospace industries along with a stronger
demand for industrial forgings and a full quarter of ZKM sales. Gross profit for the third
quarter of 2006 increased to 16.8% of sales in contrast to 15.8% of sales in the third
quarter of 2005 primarily as a result of increased sales, which resulted in better
absorption of fixed costs, along with improved pricing of by-product sales in 2006,
partially offset by a more profitable mix of products in 2005.

Selling, general and administrative
expenses, as a percentage of sales, were 5.1% for the third quarter of 2006 compared to
6.8% for the same period in 2005. The third quarter of 2005 SG&A was increased by a
$2,032 charge in accordance with FASB Interpretation No. 44 (FIN 44) on the
variable pricing portion of the Companys stock option program. The 2005 SG&A
rate would have been 3.7% without the foregoing charge. The increase in SG&A expenses
between the periods, excluding the FIN 44 charge in 2005, was attributable to the
Companys growing international sales which carry a higher SG&A rate due to
travel and sales representation expenses in addition to an increased provision for
incentive compensation.

Interest expense for the third
quarter of 2006 was $980 in contrast to $504 for the same period in 2005. The higher
interest expense in 2006 reflects higher loan balances under the Companys credit
facility along with the issuance of the $40,000 of Series B notes in the second quarter of
2006. During the third quarter of 2006, the Companys revolving line of credit had an
interest rate equal to the LIBOR rate plus 1.25% per annum. The two series of senior notes
bore interest at the rate of 7.19% and 6.14%, respectively, per annum. The Company had
$12,600 borrowings under the revolving line of credit facility and had $52,000 of senior
notes outstanding at the end of the third quarter of 2006.

The 2006 and 2005 third quarter
income tax provisions are based on annualized effective tax rates of 33% and 38%,
respectively. The Company has significant net operating loss (NOL)
carryforwards which largely offset current income taxes payable. For financial statement
purposes, the Company previously recorded a deferred tax asset for the tax benefits
attributable to the NOL carryforwards. Therefore, the Company uses an effective tax rate
which reflects federal and state taxes without a reduction for actual NOL usage. See Note
6 to the consolidated financial statements and Liquidity and Capital Resources.

The Companys net income for the
third quarter of 2006 was $6,413, a $3,137 increase from the same period in 2005. The
increase in profitability was due to the above described sales increase in 2006 which
resulted in the improved absorption of fixed costs along with favorable by-product sales.
The Companys contract backlog at September 30, 2006 was $558,702 as the Company
received $123,666 of new orders in the third quarter of 2006, in comparison to a backlog
of $394,913 at September 30, 2005 and $83,493 of new orders in the third quarter of
2005.

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Page 11 of 14

First Nine Months of 2006
Compared to First Nine Months of 2005

In the first nine months of 2006, the
net sales of the Company were $275,843, a 40% increase from the $196,459 of net sales in
the same period of 2005. The 2006 growth in sales is attributable to continued strength in
the jet engine and general aerospace industries and nine months of sales from the
Companys Polish subsidiary ZKM. The high sales level in the first nine months of
2006 resulted in improved absorption of fixed costs which contributed to the gross profit
of $51,809, or 18.8% of sales, in comparison to $27,459 of gross profit, or 14.0% of
sales, in the same period of 2005.

SG&A expense for the first nine
months of 2006 was $13,721, or 5.0% of sales, compared to $8,981, or 4.6% of sales, for
the same period in 2005. The variation between the two periods is due to increased selling
expenses associated with the higher level of foreign sales in 2006 in addition to an
increased provision for incentive compensation. SG&A expense in the first nine months
of 2005 was also impacted by a $1,589 charge from the application of FIN 44 and would have
been $7,392, or 3.8% of sales, excluding the FIN 44 charge.

Interest expense for the nine months
ended September 30, 2006 was $2,639, an increase of $1,259 over interest expense for
the first nine months of 2005. The increase in interest expense in 2006 was a reflection
of higher loan balances under the senior credit facility along with the issuance of the
$40,000 of Series B notes in the second quarter of 2006.

The tax provision for the nine months
ended September 30, 2006 was $12,402 reflecting an effective tax rate of 35% in
comparison to $6,507 and an effective tax rate of 38% for the same period in 2005. The
Company has significant NOL carryforwards which largely offset current income taxes
payable. For financial statement purposes, the Company previously recorded a deferred tax
asset for the tax benefits attributable to the NOL carryforwards. Therefore, the Company
uses an effective tax rate which reflects the impact of federal, state and foreign income
taxes without a reduction for actual NOL usage. See Note 6 to the consolidated financial
statements and Liquidity and Capital Resources.

Net income for the first nine months
of 2006 was $22,547, or $1.59 per share on a diluted basis, in contrast to $10,564, or
$0.76 per share, for the first nine months of 2005. The improvement in net income is due
to higher sales with improved absorption of fixed costs, strong by-product sales,
operating efficiencies at all of the Companys operating units and a favorable
product mix.

The Company received $379,566 of new
orders in the first nine months of 2006 which brought the contract backlog to $558,702 as
of September 30, 2006. During the comparable period of 2005, the Company received
$318,613 of new orders and ended the month of September 2005 with a contract backlog of
$394,913.

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Page 12 of 14

Liquidity and Capital
Resources

The Companys cash position as
of September 30, 2006 is $11,135 less than its position at December 31, 2005.
The year-to-date decrease in cash is a result of $61,162 of increases in accounts
receivable and inventory partially offset by a $1,466 increase in trade payables. In
addition, cash was reduced in the first nine months of 2006 by $9,389 for capital
expenditures.

On July 20, 2001, the Company
sold $30,000 of Series A Notes in a private placement to certain institutional investors.
The Series A Notes are unsecured and bear interest at a rate of 7.19% per annum with the
interest being paid semiannually. The Series A Notes have a seven-year duration with the
principal amortizing equally over the duration after the third year. Amortization payments
of $6,000 annually were made on July 20, 2004, 2005 and 2006.

On May 16, 2006, the Company
sold $40,000 of Series B Notes in a private placement to certain institutional investors.
The Series B Notes are unsecured and bear interest at a rate of 6.14% per annum with
interest being paid semiannually. The Series B Notes have a ten-year duration with the
principal amortizing equally over the duration after the third year.

In addition, the Company and a
syndicate of Lenders have entered into the Facility which was most recently renewed on
April 28, 2006. The Facility consists of a $35,000 unsecured revolving line of credit
which bears interest at a rate of LIBOR plus 1.25%. At September 30, 2006, there were
$12,600 of borrowings under the Facility and $22,400 of credit was available pursuant to
the terms of the Facility.

The Company has NOL carryforwards
that were generated prior to its 1993 reorganization, as well as NOL carryforwards that
were generated in subsequent years. The total remaining NOL carryforwards were $29,981 as
of December 31, 2005. The NOL carryforwards expire gradually in the years 2008
through 2024.

The Companys initial public
offering in March 1998 created an ownership change as defined by the IRS. This ownership
change generated an IRS imposed limitation on the utilization of NOL carryforwards on
future tax returns. The annual use of the NOL carryforwards is limited to the lesser of
the Companys taxable income or the amount of the IRS imposed limitation. The NOL
carryforwards available for use annually is $11,865. Of the $11,865 annual limitation,
$2,142 relates to a previous restriction on NOL carryforwards generated prior to the 1993
reorganization.

Realization of the net deferred tax
assets, including those attributable to the NOL carryforwards, over time is dependent upon
the Company generating sufficient taxable income in future periods. In determining that
realization of the net deferred tax assets was more likely than not, the Company has given
consideration to a number of factors including its recent earnings history, expectations
for earnings in the future, the timing of reversal of temporary differences, tax planning
strategies available to the Company and the expiration dates associated with NOL
carryforwards. If, in the future, the Company determines that it is no longer more likely
than not that the net deferred tax assets will be realized, a valuation allowance will be
established against all or part of the net deferred tax assets with an offsetting charge
to the income tax provision.

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Page 13 of 14

Item 3.    Quantitative and
Qualitative Disclosures about Market Risk

The Company believes that its exposure
to market risk related to changes in foreign currency exchange rates and trade accounts
receivable is immaterial as the vast majority of the Companys sales are made in U.S.
dollars. The Company does not consider itself subject to the market risks addressed by
Item 305 of Regulation S-K.

_________________

Any statements contained herein that
are not historical facts are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, and involve risks and uncertainties. These
forward-looking statements include expectations, beliefs, plans, objectives, future
financial performance, estimates, projections, goals and forecasts. Potential factors
which could cause the Companys actual results of operations to differ materially
from those in the forward-looking statements include:

|  |                                                                    |   |                 
|- | ------------------------------------------------------------------ | - | ----------------
| | Market conditions and demand for the Company's products            |  | Competition     
| | Interest rates and capital costs                                   |  | Technologies    
| | Unstable governments and business conditions in emerging economies |  | Raw material and
| | Legal, regulatory and environmental issues                         |   | energy prices   
| | Health care costs                                                  |  | Taxes           

Any forward-looking statement speaks
only as of the date on which such statement is made. The Company undertakes no obligation
to update any forward-looking statement to reflect events or circumstances after the date
on which such statement is made.

Item 4.    Controls and
Procedures

Under the direction of the principal
executive officer and principal financial officer, the Company has evaluated the
effectiveness of its disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of September 30, 2006. Based on that evaluation, the
Company has concluded that its disclosure controls and procedures were effective in
providing reasonable assurance that material information required to be disclosed is
included on a timely basis in the reports filed with the Securities and Exchange
Commission.

There were no significant changes in
the Companys internal controls over financial reporting or in other factors that
could significantly affect these controls during the quarter ended September 30,
2006, including any corrective actions with regard to significant deficiencies and
material weaknesses.

# PART II  OTHER
INFORMATION

Item 4.    Submission of
Matters to a Vote of Security Holders

No matters were submitted to the
Stockholders of the Company during the period covered by this report.

Item 6.    Exhibits

Exhibit 31.1 is the written statement
of the chief executive officer of the Company certifying this Form 10-Q complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934.

Exhibit 31.2 is the written statement
of the chief financial officer of the Company certifying this Form 10-Q complies with the
requirements of Section 13(a) of the Securities Exchange Act of 1934.

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Page 14 of 14

Exhibit 32.1 is the written statement
of the chief executive officer and chief financial officer of the Company pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

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.

|                       |                           
|---------------------- | --------------------------
|                       | LADISH CO., INC.          
|Date: October 27, 2006 | By: /s/ WAYNE E. LARSEN   
|                       | Wayne E. Larsen           
|                       | Vice President Law/Finance
|                       | & Secretary