SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(MARK ONE)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarter ended September 30, 2005.

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from ____________ to ____________

Commission file number  0-14870

                                   QUIPP, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

               Florida                                  59-2306191
  -------------------------------         ------------------------------------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)

                  4800 N.W. 157th Street, Miami, Florida 33014
                  --------------------------------------------
                    (Address of principal executive offices)

Registrant's telephone number, including area code (305) 623-8700

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 [ ]

Indicate by check whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act).

Yes [ ]          No [X]

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

Yes [ ]          No [X]

The number of shares of the registrant's common stock, $.01 par value,
outstanding at November 8, 2005 was 1,423,775.

<PAGE>

                                   QUIPP, INC.
                                      INDEX

<TABLE>
<CAPTION>
                                                                                 PAGE
<S>                                                                               <C>
PART I - FINANCIAL INFORMATION

       Item 1 - Unaudited Condensed Consolidated Financial Statements

                Unaudited Condensed Consolidated Balance Sheets -
                  September 30, 2005 and December 31, 2004                         3

                Unaudited Condensed Consolidated Statements of Operations -
                  Three and Nine months ended September 30, 2005 and 2004          4

                Unaudited Condensed Consolidated Statements of Cash Flows -
                  Nine months ended September 30, 2005 and 2004                    5

                Notes to Unaudited Condensed Consolidated Financial Statements     6

       Item 2 - Management's Discussion and Analysis of
                  Financial Condition and Results of Operations                   11

       Item 3 - Quantitative and Qualitative Disclosure about Market Risk         13

       Item 4 - Controls and Procedures                                           14

PART II - OTHER INFORMATION

       Item 6 - Exhibits                                                          14
</TABLE>

                                        2

<PAGE>

PART 1 - FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                          QUIPP, INC. AND SUBSIDIARIES
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                             SEPTEMBER 30, 2005    December 31, 2004
-----------------------------------------------------------------------------------------------------
<S>                                                          <C>                   <C>
ASSETS

Current assets:
Cash and cash equivalents                                    $        2,176,367    $       5,762,511
Securities available for sale                                         2,989,607            2,976,696
Accounts receivable, net                                              2,914,997            4,092,548
Inventories                                                           4,638,326            4,876,677
Deferred tax asset-current                                              609,193              531,589
Prepaid expenses and other receivables                                  541,059              200,570
                                                             ------------------    -----------------

TOTAL CURRENT ASSETS                                         $       13,869,549    $      18,440,591

Property, plant and equipment, net                                    1,647,933            1,693,504
Intangible assets, net                                                3,625,631              658,412
Goodwill                                                              1,970,966               68,162
Other assets                                                             35,418               40,458
                                                             ------------------    -----------------

TOTAL ASSETS                                                 $       21,149,497    $      20,901,127
                                                             ==================    =================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Current portion of long-term debt                         $          109,088    $         100,000
   Accounts payable                                                   2,010,661            1,260,650
   Accrued salaries and wages                                           592,809              603,617
   Deferred revenues                                                  3,547,333            4,633,632
   Other accrued liabilities                                          1,837,692            2,024,889
                                                             ------------------    -----------------

TOTAL CURRENT LIABILITIES                                             8,097,583            8,622,788

Long-term debt, net of current portion                                  366,239              350,000
                                                             ------------------    -----------------

TOTAL LIABILITIES                                                     8,463,822            8,972,788

Shareholders' equity:
      Common stock - (par value $.01 per share, authorized
        8,000,000 shares, issued 1,433,025)                              14,330               14,330
   Additional paid-in capital                                           112,103               83,825
   Treasury stock, at cost (9,250 shares)                              (148,375)            (148,375)
   Retained earnings                                                 12,721,905           11,994,935
   Other comprehensive income                                           (14,288)             (16,376)
                                                             ------------------    -----------------
                                                                     12,685,675           11,928,339
                                                             ------------------    -----------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                   $       21,149,497    $      20,901,127
                                                             ==================    =================
</TABLE>

See accompanying notes to the unaudited condensed consolidated financial
statements

                                        3

<PAGE>

                           QUIPP INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                   FOR THE THREE MONTHS ENDED                 FOR THE NINE MONTHS ENDED
                                             SEPTEMBER 30, 2005   September 30, 2004   SEPTEMBER 30, 2005   September 30, 2004
-------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                  <C>                  <C>                  <C>
Net sales                                    $        7,068,730   $        5,308,488   $       20,784,069   $       18,394,350
Cost of sales                                        (5,450,238)          (4,153,392)         (15,629,792)         (13,806,216)
                                             ----------------------------------------------------------------------------------

GROSS PROFIT                                          1,618,492            1,155,096            5,154,277            4,588,134
                                             ----------------------------------------------------------------------------------

Operating expenses:                                           -
   Selling, general and administrative
     expenses                                        (1,271,342)          (1,164,100)          (4,254,969)          (4,068,414)
   Research and development                             (77,733)             (84,097)            (270,543)            (431,394)
                                             ----------------------------------------------------------------------------------

OPERATING PROFIT (LOSS)                                 269,417              (93,101)             628,765               88,326

-------------------------------------------------------------------------------------------------------------------------------
Other income (expense):
   Miscellaneous income                                       -               20,000               25,000              100,000
   Interest income                                       44,880               30,330              139,598              158,366
   Interest expense                                      (8,316)              (1,689)             (13,150)              (4,977)
                                              ---------------------------------------------------------------------------------
                                                         36,564               48,641              151,448              253,389

-------------------------------------------------------------------------------------------------------------------------------

 INCOME (LOSS) BEFORE INCOME TAXES                      305,981              (44,460)             780,213              341,715

Income tax (expense) benefit                            136,443               16,164              (53,243)            (129,197)
                                             ----------------------------------------------------------------------------------

NET INCOME (LOSS)                            $          442,424   $          (28,296)  $          726,970   $          212,518
                                             ==================================================================================

-------------------------------------------------------------------------------------------------------------------------------
PER SHARE AMOUNTS:

   Basic income (loss) per common share      $             0.31   $            (0.02)  $             0.51   $             0.15
   Diluted income (loss) per common share    $             0.31   $            (0.02)  $             0.51   $             0.15

   Basic average number of common and
     common equivalent shares outstanding             1,423,775            1,423,775            1,423,775            1,423,775
   Diluted average number of common and
     common equivalent shares outstanding             1,423,775            1,423,775            1,423,775            1,426,075

===============================================================================================================================
</TABLE>

See accompanying notes to the unaudited condensed consolidated financial
statements.

                                        4

<PAGE>

                           QUIPP INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         NINE MONTHS ENDED SEPTEMBER 30,

<TABLE>
<CAPTION>
                                                                            2005            2004
-----------------------------------------------------------------------------------------------------
<S>                                                                     <C>             <C>
Cash provided by operations:
   Net income                                                           $    726,970    $    212,518

Reconciliation of net income to net cash
  provided by operations:
   Deferred income taxes                                                     (77,604)              -
   Depreciation                                                              178,899         205,434
   Intangible amortization and goodwill impairment                           138,783         116,327
   Stock-based compensation                                                   28,278           5,227

Changes in operational assets and liabilities net of effect of
  acquisition:
   Accounts and notes receivable                                           1,800,902        (310,377)
   Inventories                                                             2,924,091      (1,705,320)
   Prepaid and other assets                                                  157,810         108,099
   Notes Receivable                                                                -         154,565
   Accounts payable and other accrued liabilities                           (620,252)        187,425
   Deferred revenues                                                      (4,261,558)       (874,644)
                                                                        -----------------------------
   NET CASH PROVIDED BY (USED IN) OPERATIONS                                 996,319      (1,900,746)
                                                                        -----------------------------

Cash flow from investing activities:
   Securities purchased                                                   (6,114,070)     (4,493,138)
   Securities sold                                                         6,103,247         890,577
   Acquisition of Newstec and related expenses                            (4,477,455)              -
   Repayment of long-term debt                                                (1,459)              -
   Capital expenditures                                                      (92,726)       (163,661)
                                                                        -----------------------------
NET CASH USED IN INVESTING ACTIVITIES                                     (4,582,463)     (3,766,222)
                                                                        -----------------------------

Decrease in cash and cash equivalents                                     (3,586,144)     (5,666,968)

Cash and cash equivalents at beginning of year                             5,762,511       7,490,814
-----------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of quarter                             $  2,176,367    $  1,823,846
=====================================================================================================

SUPPLEMENTAL DISCLOSURE OF NONCASH INFORMATION:
Cash acquired with the acquisition of Newstec                           $    145,217    $          -
Unrealized gain (loss) on securities available for sale, net of taxes   $      2,088    $    (10,285)
SUPPLEMENTAL DISCLOSURE OF CASH PAYMENTS:
   Interest                                                             $     13,150    $      4,977
=====================================================================================================
</TABLE>

See accompanying notes to the unaudited condensed consolidated financial
statements.

                                        5

<PAGE>

                          QUIPP, INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements include
the accounts of Quipp, Inc. and its wholly owned subsidiaries, Quipp Systems,
Inc. and Newstec, Inc. All significant intercompany transactions have been
eliminated in consolidation. The accompanying unaudited condensed consolidated
financial statements have been prepared on a basis consistent with that used as
of and for the year ended December 31, 2004 and, in the opinion of management,
reflect all adjustments (principally consisting of normal recurring accruals)
considered necessary to present fairly the financial position of Quipp, Inc. and
subsidiaries as of September 30, 2005 and the results of its operations and cash
flows for the nine months ended September 30, 2005. The results of operations
for the nine months ended September 30, 2005 are not necessarily indicative of
the results to be expected for the full year ending December 31, 2005. These
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the instructions of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles in the United
States of America for complete financial statements. The unaudited condensed
consolidated balance sheet at December 31, 2004 was derived from audited
financial statements, but, as permitted by S-X is not accompanied by all
disclosures required by generally accepted accounting principles.

NOTE 2 - INVENTORIES

Inventories include material, labor and factory overhead and are stated at the
lower of cost or market. Inventory also includes equipment requiring complex
installation services that has been shipped to customers but for which the sale
has not been recognized. Cost is determined using the first-in, first-out (FIFO)
method. The composition of inventories at September 30, 2005 and December 31,
2004 is as follows:

                                     SEPTEMBER 30, 2005     December 31, 2004
      -----------------------------------------------------------------------
      Raw materials                     $  2,964,244          $  1,844,297
      Work in process                        896,020             1,024,104
      Finished goods                         133,521               162,497
                                     ----------------------------------------
      Subtotal                             3,993,785             3,030,898
      Shipped, not recognized                644,541             1,845,779
                                     ----------------------------------------
                                        $  4,638,326          $  4,876,677
                                     ----------------------------------------

NOTE 3- REVENUE RECOGNITION

Revenue is recognized when all significant contractual obligations have been
satisfied and collection of the resulting accounts receivable is reasonably
assured. Revenue from the sale of standard stand-alone equipment without
installation service is recognized upon delivery according to contractual terms
and is recorded net of discounts. Revenue from multiple-element arrangements
such as the sale of standard equipment and basic installation services is
recognized in accordance with EITF 00-21 "Revenue Arrangements with Multiple
Deliverables." Revenue from the standard equipment is recognized upon delivery
according to contractual terms and is recorded net of discounts. The fair value
of the revenue related to the installation service is deferred until
installation services are provided. Fair value is determined by the price
charged to other customers when services are sold separately and is supported by
competitive market data. Revenue from long-term complex equipment or
installation arrangements is recognized using the unit of delivery method under
SOP 81-1 in accordance with contractual terms and is recorded net of discounts.
Cost and profitability estimates are revised periodically based on changes in
circumstances. Estimated losses on such contracts are recognized immediately.

                                        6

<PAGE>

NOTE 4 - INCOME PER SHARE

Basic income per share is based on the weighted average number of common shares
outstanding during the periods presented. Diluted income per share is computed
using the weighted average number of common and dilutive common equivalent
shares outstanding in the period presented. Dilutive common equivalent shares
assume the exercise of options, calculated under the treasury stock method,
using the average stock market prices during the periods. For the nine months
ending September 30, 2004, the dilutive income per share calculation includes
2,300 common share equivalents resulting from the Company's equity compensation
plan.

NOTE 5 - STOCK-BASED COMPENSATION

Prior to 2003, the company accounted for its equity compensation plan under the
recognition and measurement provisions of Accounting Principles Board (APB)
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. Effective January 1, 2003, the company adopted the fair value
recognition provisions of Financial Accounting Standards Board (FASB) Statement
of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation," prospectively to all employee awards granted, modified, or
settled after December 31, 2002. Awards under the company's plans vest over
periods ranging from three to five years. The following table illustrates the
effect on net income and income per share if the fair value based method had
been applied to all outstanding and unvested awards in each period.

<TABLE>
<CAPTION>
                                                                    FOR THE NINE MONTHS ENDED
                                                             SEPTEMBER 30, 2005   September 30, 2004
----------------------------------------------------------------------------------------------------
<S>                                                             <C>                  <C>
Net income as reported                                          $   726,970          $    212,518
Deduct total stock-based employee compensation expense
   determined under fair-value-based method for all awards
   (net of tax expense, $8,705 in 2005 and $12,125 in 2004)         (13,821)              (19,876)

Pro forma net income                                            $   713,149          $    192,642

Income Per Share:
Basic and diluted income  per share                             $      0.50          $       0.14
</TABLE>

The per share average fair value of stock options granted during 2002 ranged
from $14.60 to $14.98. The fair value of the options granted was estimated as of
the grant date using the Black-Scholes option-pricing model. The following
weighted-average assumptions were used in calculating fair value:

                                       2002
                                   ------------
      Expected Life                5 - 10 years
      Dividends                        None
      Risk-free interest rate         2.65%
      Expected volatility             30.68%

Options issued after December 31, 2002 resulted in stock-based compensation
expense totaling $15,825 and $5,227 for the nine months ended September 30, 2005
and 2004, respectively. Restricted shares issued under the plan resulted in a
stock-based compensation expense totaling $12,453 and $0 for the nine months
ended September 30, 2005 and 2004, respectively.

                                        7

<PAGE>

NOTE 6 - ACQUISITION

On August 10, 2005, the Company purchased the outstanding stock of Newstec, Inc.
(Newstec), a privately-held company located in Walpole, Massachusetts. Newstec
manufactures and sells high-speed inserting equipment and controls designed to
handle inserting requirements for the newspaper and commercial printing markets.
The Company acquired Newstec to enhance its product offering and expand new
product development capabilities.

The Company paid to the shareholders of Newstec (the "Sellers") $4,025,000 in
cash and provided the Sellers an opportunity to receive additional consideration
totaling $650,000 in Quipp, Inc. stock based upon criteria specified in the
agreement. The purchase price was determined by arms-length negotiations between
the parties. The cash portion of the purchase price was paid out of the
Company's cash and securities on hand. To date, the total paid and accrued
acquisition costs for the stock purchase amounted to $4,622,672 (inclusive of
direct legal fees, consulting costs, accounting fees, investment banking fees,
employee severance costs and other acquisition expenses).

The acquisition was treated as a purchase transaction and the purchase price was
allocated to the acquired assets and assumed liabilities based on the estimated
fair value on the acquisition date. The Company has hired an independent
appraisal organization to assist with the valuation of intangible assets, which
has not been finalized as of the date this report is filed. The preliminary
purchase price was allocated as follows:

      Cash Paid                           $  4,372,672
      Accrued acquisition costs                250,000

      Liabilities assumed:
         Current                             4,347,517
         Long term                              26,786
                                          ------------

                                          $  8,996,975
                                          ------------

      Fair Value of Tangible Assets:

      Current assets                      $  3,947,568
      Fixed assets                              40,602

      Intangible assets:
         Non-competition agreement           2,000,000
         Customer lists                        820,000
         Trade names                           286,000
         Goodwill                            1,902,805
                                          ------------

                                          $  8,996,975
                                          ------------

Of the total purchase price, $2,820,000 was allocated to amortizable intangible
assets including customer lists and non-competition agreements. Customer lists
represent Newstec's relationships with its installed base of customers. The
Company entered into a non-competition agreement with the former principals of
Newstec, Inc. for a minimum term ending two years after the date the former
principals of Newstec cease to be employed by the Company, subject to a minimum
five year term.

                                        8

<PAGE>

Details of the amortizable intangibles follow:

                                     FAIR
           INTANGIBLE ASSET          VALUE        LIFE
      -------------------------    ---------    --------
      Customer Relationship          820,000    10 Years
      Non-competition Agreement    2,000,000     7 Years

The unaudited condensed consolidated statement of operations for the period
ended September 30, 2005, include the operating results of Newstec from the date
of acquisition. The following unaudited pro forma results of operation of the
Company for the period ended September 30, 2005 assume the acquisition occurred
as of January 1, 2004. The pro forma results have been prepared for comparative
purposes only and do not purport to indicate the results of operations that
would have actually occurred had the acquisition been completed on the dates
indicated.

                                         SEPTEMBER 30, 2005   September 30, 2004
--------------------------------------------------------------------------------
      Net Sales                            $  27,307,071         $  23,945,221

      Net Income                                 781,682               360,990

      Basic income per common share        $        0.55         $        0.25

      Diluted income per common share      $        0.55         $        0.25

      Basic average number of common
              shares outstanding               1,423,775             1,423,775

      Diluted average number of common
              shares outstanding               1,423,775             1,426,075

NOTE 6 - RECLASSIFICATIONS

Certain reclassifications have been made to the 2004 financial statements to
conform to the 2005 financial statement presentation.

NOTE 7 - RECENT PRONOUNCEMENTS

In December 2004, the FASB issued Statement of Financial Accounting Standards
(SFAS) No. 123 (revised 2004), "Shared-based Payment" ("SFAS 123R"). This
statement replaces FASB Statement No. 123 and supersedes APB Opinion No. 25. The
Company is required to adopt SFAS 123R in the first quarter of 2006. SFAS 123R
requires that the fair value of all stock option awards issued to employees be
recorded as an expense over the related vesting period. The Statement also
requires the recognition of compensation expense for fair value of any unvested
stock option awards outstanding at the date of adoption. The Company is
evaluating this statement, but expects no material impact upon adoption.

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - An Amendment
of ARB No. 43, Chapter 4" (SFAS 151). SFAS 151 amends ARB No. 43, Chapter 4,
"Inventory Pricing," to clarify that abnormal amounts of idle facility expense,
freight, handling costs, and wasted material should be recognized as
current-period charges. Additionally, SFAS 151 requires that allocation of fixed
production overheads to the costs of conversion be based on the normal capacity
of the production facilities. The Company is required to adopt SFAS 151
effective January 1, 2006. The Company is evaluating this statement, but expects
no material impact upon adoption.

                                        9

<PAGE>

In March 2005, the FASB issued Interpretation No. 47, "Accounting for
Conditional Asset Retirement Obligations - an interpretation of FASB Statement
No. 143," (FIN 47) which clarifies the term "conditional asset retirement
obligation" used in SFAS No. 143, "Accounting for Asset Retirement Obligations,"
and addresses when an entity would have sufficient information to reasonably
estimate the fair value of an asset retirement obligation. The Company is
required to adopt FIN 47 no later than December 31, 2005. The Company is
evaluating this interpretation, but expects no material impact upon adoption.

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections" (SFAS 154), which replaces APB Opinion No. 20, "Accounting
Changes," and SFAS No. 3, "Reporting Accounting Changes in Interim Financial
Statements." SFAS 154 changes the requirements for the accounting for and
reporting of a change in accounting principle. The Company is required to adopt
SFAS 154 beginning January 1, 2006 and expects no material impact upon adoption.

                                       10

<PAGE>

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS: THE FOLLOWING TABLE PRESENTS STATEMENTS OF OPERATIONS
EXPRESSED AS A PERCENTAGE OF NET SALES FOR THE PERIODS INDICATED:

<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED        NINE MONTHS ENDED
                                               SEPTEMBER 30,            SEPTEMBER 30,
                                            2005         2004         2005         2004
                                         (UNAUDITED)  (Unaudited)  (UNAUDITED)  (Unaudited)
-------------------------------------------------------------------------------------------
<S>                                         <C>          <C>          <C>          <C>
NET SALES                                   100.0%       100.0%       100.0%       100.0%
GROSS PROFIT                                 22.9%        21.8%        24.8%        24.9%
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES                                   17.9%        21.9%        20.5%        22.1%
RESEARCH AND DEVELOPMENT                      1.1%         1.6%         1.3%         2.3%
OTHER INCOME, NET                             0.5%         0.9%         0.7%         1.4%
NET INCOME (LOSS)                             6.3%        (0.5%)        3.5%         1.2%
</TABLE>

THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
----------------------------------------------

NET SALES for the three months ended September 30, 2005 were $7,068,730, an
increase of $1,760,242 (33.2%) compared to net sales of $5,308,488 for the
corresponding period in 2004. The increase in net sales is entirely attributable
to $1,817,000 of revenue recognized by our newly acquired subsidiary, Newstec,
Inc. (Newstec) following our acquisition of Newstec on August 10, 2005. Newstec
manufactures and sells high-speed inserting equipment and controls designed to
handle inserting requirements for the newspaper and commercial printing markets.

GROSS PROFIT for the three months ended September 30, 2005 was $1,618,492, an
increase of $463,396 (40.1%), as compared to $1,155,096 for the corresponding
period in 2004. Gross profit as a percentage of net sales was reduced in the
quarter ending September 30, 2005 due to the purchase accounting write-up of
Newstec's inventory on the date of acquisition, resulting in higher
cost-of-sales of approximately $187,000.

SELLING, GENERAL AND ADMINISTRATIVE expenses for the three months ended
September 30, 2005 were $1,271,342 an increase of $107,242 (9.2%) as compared to
$1,164,100 for the corresponding period in 2004. The increase resulted primarily
from Newstec selling, general and administrative expenses incurred since the
date of acquisition offset in part by an adjustment to accrued liabilities.
During the quarter, we settled a matter with the Export-Import Bank of the
United States related to a dispute arising from the sale of equipment to a
foreign customer in 2000. The settlement with the Export-Import Bank of the
United States was less than the cost estimated and accrued, and, as a result, we
recorded a $235,000 credit to selling, general and administrative expenses.

RESEARCH AND DEVELOPMENT expenses for the three months ended September 30, 2005
were $77,733, a decrease of $6,364 (7.6%) as compared to $84,097 for the same
period in 2004. For the three months ended September 30, 2005, our research and
development costs consisted mostly of developing and testing the In-Line-C
inserting/collating system with poly-wrapping capabilities. During the
corresponding period in 2004, our research and development efforts related to
software development and testing of the Quipp Packman packaging system, redesign
of the gripper conveyor and product development for the In-Line-C.

                                       11

<PAGE>

OTHER INCOME AND EXPENSE (NET) for the three months ended September 30, 2005
were $36,564 as compared to $48,641 for the corresponding period in 2004.
Interest income increased by $14,550 to $44,880 for the three months ended
September 30, 2005 compared to $30,330 for the same period in 2004. Interest
income was higher primarily due to improved interest rates offset in part by
lower average balances of cash and cash equivalents and securities. Royalty
income relating to our patented automatic cart loading system technology used by
another supplier of post-press material handling equipment was $0 in the third
quarter of 2005 compared to $20,000 during the same period in 2004. Interest
expense was greater for the three months ended September 30, 2005 primarily due
to amortization of loan costs associated with our line of credit described below
under "Liquidity."

INCOME TAX EXPENSE for the three months ended September 30, 2005 was reduced by
$250,000 as we adjusted current and deferred state tax liabilities because we
settled tax obligations for amounts that were less than estimated and accrued.

NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
---------------------------------------------

SALES for the nine months ended September 30, 2005 were $20,784,069, an increase
of $2,389,719 (13.0%) compared to net sales of $18,394,350 in the same period in
2004. Net sales for the first nine months of 2005 include $1,817,000 of revenue
recognized by Newstec.

GROSS PROFIT for the nine months ended September 30, 2005 was $5,154,277, an
increase of $566,143 (12.3%) as compared to $4,588,134 for the corresponding
period in 2004. Gross profit as a percentage of sales for the nine months ended
September 30, 2005 decreased to 24.8% compared to 24.9% for the corresponding
period in 2004. Gross profit as a percentage of net sales was slightly lower
than the corresponding period last year mostly due to a low margin contract
completed in the first quarter of 2005 and the purchase accounting write-up of
Newstec inventory described above in the discussion of results of operations for
the three months ended September 30, 2005 and 2004.

We generated only a nominal profit margin on revenue of approximately $2,700,000
for a complex system during the quarter ending March 31, 2005. The order for the
system was negotiated in 2003 when our market was just beginning to show signs
of recovery. We expected lower margins on this order due to competitive pricing
pressures and because it included a high content of equipment manufactured by
others and involved installation services that historically produce lower gross
profit margins.

SELLING, GENERAL AND ADMINISTRATIVE expenses for the nine months ended September
30, 2005 were $4,254,969, an increase of $186,555 (4.6%) as compared to
$4,068,414 for the same period in 2004. The increase resulted primarily from
consulting and other expenses related to compliance requirements of the
Sarbanes-Oxley Act of 2002 and from Newstec's selling, general and
administrative expenses incurred since the date of acquisition offset in part by
an adjustment to accrued liabilities described above in the discussion of
results of operations for the three months ended September 30, 2005 and 2004.

RESEARCH AND DEVELOPMENT expenses for the nine months ended September 30, 2005
were $270,543, a decrease of $160,851 (37.3%) as compared to $431,394 for the
same period in 2004. For the nine months ended September 30, 2005, our research
and development costs pertained mostly to the continued development and testing
of our In-Line-C inserting/collating system with poly-wrapping capabilities.
During the corresponding period in 2004, our research and development efforts
related to software development and testing of the Quipp Packman packaging
system, redesign of the gripper conveyor and product development for the
In-Line-C.

OTHER INCOME AND EXPENSE (NET) for the nine months ended September 30, 2005 were
$151,448 as compared to $253,389 for the corresponding period in 2004. For the
nine months ended September 30, 2004, we recognized interest income related to
repayment of a note from an international customer who previously was delinquent
in making payment. Additionally, royalty income relating to our patented
automatic cart loading system technology used by another supplier of post-press
material handling equipment was $25,000 for the nine month period in 2005
compared to $100,000 during the same period in 2004. Interest expense was
greater for the nine months ended September 30, 2005 primarily due to
amortization of loan costs associated with our line of credit.

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INCOME TAX EXPENSE for the nine months ended September 30, 2005 was reduced by
$250,000 as we adjusted current and deferred state tax liabilities because we
settled tax obligations for amounts that were less than estimated and accrued.

GENERAL
Our backlog as of September 30, 2005 was $9,732,000 including Newstec backlog of
4,298,000, compared to $8,631,000 at December 31, 2004 and $7,119,000 at
September 30, 2004. We expect to ship all items in our backlog during the next
twelve months. Orders for the nine months ended September 30, 2005 were
$16,923,000 including Newstec orders of $1,486,000 since the acquisition date,
compared to orders of $12,291,000 during the nine months ending September 30,
2004.

LIQUIDITY
On September 30, 2005, cash and cash equivalents and securities available for
sale totaled $5,165,974 as compared to $8,739,207 at December 31, 2004, a
decrease of $3,573,233. Working capital on September 30, 2005 was $5,771,966, a
decrease of $4,045,837 from $9,817,803 at December 31, 2004. The reduction of
cash and cash equivalents and securities available for sale and the reduction in
working capital are due primarily to the cash paid for the acquisition of
Newstec and related expenses.

We anticipate that, during the next six months we will purchase new computer
hardware. We estimate that the cost of such equipment will be approximately
$500,000.

On March 25, 2005, we entered into a line of credit agreement with Merrill Lynch
Business Financial Services, Inc. Under the terms of the agreement, we can
borrow up to $3,000,000 subject to a limit based on eligible accounts receivable
and inventory. Borrowings are secured by all accounts receivable, inventory,
intangibles and contract rights as well as securities with value of no less than
$1,000,000. Interest is payable monthly at a rate equal to the one-month LIBOR
rate plus 2.4%. The Agreement expires on April 30, 2006 and is subject to
renewal in accordance with terms specified in the agreement. As of the date of
this report, we have not drawn on the line of credit.

The Company believes that its cash, cash equivalents and securities available
for sale together with cash generated from operations will be sufficient to fund
operations at the current level.

FORWARD LOOKING STATEMENTS
--------------------------
This quarterly report on Form 10-Q contains forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, including
statements relating to shipment of backlog orders, new computer hardware
purchases and adequacy of available resources. A number of important factors
could cause actual results to differ materially from those in the forward
looking statements including, but not limited to, economic conditions generally
and specifically in the newspaper industry, demand and market acceptance for new
and existing products, the impact of competitive products and pricing,
manufacturing capacity, delays in shipment, cancellation of customer orders,
unanticipated expenses and engineering and production difficulties and
unanticipated difficulties in replacing our computer hardware.

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

MARKET RISK
We are exposed to various types of market risk, including changes in interest
rates. Market risk is the potential loss arising from adverse changes in market
rates and prices such as interest rates. We do not enter into derivatives or
other financial instruments for trading or speculative purposes. Because our
cash and investments exceed short and long-term debt, the exposure to interest
rates relates primarily to our investment portfolio. Due to the short-term
maturities of our investments, we believe there is no significant risk arising
from interest rate fluctuations. To ensure safety and liquidity, we only invest
in instruments with credit quality and which are traded in a secondary market.
The counterparties are major financial institutions and government agencies.

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ITEM 4 CONTROLS AND PROCEDURES

(a)   Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and
principal financial officer, evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on that evaluation, the Chief Executive Officer and principal financial
officer concluded that, due to the material weakness described under "Change in
Internal Control over Financial Reporting" below, our disclosure controls and
procedures as of the end of the period covered by this report were not
functioning effectively to provide reasonable assurance that the information
required to be disclosed in reports filed under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms.

(b)   Change in Internal Control over Financial Reporting

Management  has  identified  a material  weakness in our  internal  control over
financial  reporting as of the end of the period covered by this report based on
its  determination  that we lacked  effective  controls  over the  processes and
procedures  involved  in the  calculation  of current  and  deferred  income tax
liabilities for interim quarterly financial reporting.  Specifically, we did not
correctly  compute  adjustments  to our current  and  deferred  income  taxes to
appropriately  address the effect of certain state income tax  settlements.  The
error was identified by our independent  auditors as part of their review of the
financial  statements  included  in  this  report.  As  a  result,  we  recorded
adjustments in the condensed consolidated financial statements for the three and
nine months ended  September  30, 2005 to current and deferred tax  liabilities.
The  adjustment  related to the third  quarter of 2005 and did not affect  prior
periods.  Effective  the 4th quarter of 2005,  we have  determined to expand the
scope  of our  existing  engagement  with our tax  accountants  (who are not our
independent  auditors) to include the preparation and conduct an in depth review
of quarterly tax calculations with the Company.

No change in our internal control over financial reporting occurred during our
most recent fiscal quarter that has materially affected, or is reasonably likely
to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 6 EXHIBITS

The following exhibits are filed with this report:

31.1  Certificate of the Chief Executive Officer of the Registrant required by
      Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2  Certificate of the principal financial officer of the Registrant required
      by Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1  Certificate of the Chief Executive Officer of the Registrant required by
      Rule 13a-14(b) under the Securities Exchange Act of 1934.

32.2  Certificate of the principal financial officer of the Registrant required
      by Rule 13a-14(b) under the Securities Exchange Act of 1934.

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SIGNATURE

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.

                                    QUIPP, INC.

      Date: November 18, 2005       By: /S/ Michael S. Kady
                                        -------------------------------------
                                        Michael S. Kady
                                        President and Chief Executive Officer

                                    By: /S/ Eric Bello
                                        -------------------------------------
                                        Eric Bello
                                        Treasurer (Principal financial and
                                        accounting officer)

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