================================================================================
                             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 March 31, 2006.
                                           ---------------

                                       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
incorporation or organization)                            Identification No.)


                  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 May 5, 2006 was 1,458,189.

================================================================================

<PAGE>

                                   QUIPP, INC.
                                      INDEX


PART I - FINANCIAL INFORMATION                                              PAGE
                                                                            ----
    Item 1 - Unaudited Condensed Consolidated Financial Statements

             Unaudited Condensed Consolidated Balance Sheets -                 3
               March 31, 2006 and December 31, 2005

             Unaudited Condensed Consolidated Statements of Operations -       4
               Three months ended March 31, 2006 and 2005

             Unaudited Condensed Consolidated Statements of Cash Flows -       5
               Three months ended March 31, 2006 and 2005

             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        12

    Item 4 -  Controls and Procedures                                         13



PART II - OTHER INFORMATION

    Item 1A  - Risk Factors                                                  14

    Item 6   - Exhibits and Reports on Form 8-K                              14



<PAGE>

                         PART 1 - FINANCIAL INFORMATION


ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                          QUIPP, INC. AND SUBSIDIARIES
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                               MARCH 31,    December 31,
                                                                 2006          2005
                                                             ------------   ------------
<S>                                                          <C>            <C>
ASSETS

Current assets:
Cash and cash equivalents                                    $  1,175,586   $  2,829,246

Securities available for sale                                   3,795,049      3,035,395
Accounts receivable, net of allowances of $201,000
and $148,000                                                    3,923,414      4,086,891

Inventories                                                     6,330,953      4,803,013

Deferred tax asset-current                                        779,112        609,848

Prepaid expenses and other receivables                            744,967        520,634
                                                             ------------   ------------
TOTAL CURRENT ASSETS                                           16,749,081   $ 15,885,027

Property, plant and equipment, net of accumulated
depreciation of  $3,867,946 and $3,810,133                      2,114,259      1,603,041

Intangible assets, net of accumulated amortization of
$844,132 and $713,523                                           3,255,967      3,386,576

Goodwill                                                        2,190,847      2,190,847

Other assets                                                       38,768         33,738
                                                             ------------   ------------
TOTAL ASSETS                                                 $ 24,348,922   $ 23,099,229
                                                             ============   ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt                            $    109,333   $    109,088

Accounts payable                                                1,436,403      1,683,712

Accrued salaries and wages                                        392,530        663,471

Deferred revenues                                               8,247,974      6,713,384

Other accrued liabilities                                       2,046,954      1,504,849
                                                             ------------   ------------
TOTAL CURRENT LIABILITIES
                                                               12,233,194     10,674,504

Long-term debt                                                    261,502        264,008
                                                             ------------   ------------

TOTAL LIABILITIES                                              12,494,696     10,938,512

Shareholders' equity:
Common stock - par value $.01 per share, 8,000,000
   shares authorized, 1,423,775 outstanding in 2006
   and 2005                                                        14,238         14,238
Retained earnings                                              11,839,360     12,153,632
Other comprehensive income (loss)                                     628         (7,153)
                                                             ------------   ------------

                                                               11,854,226     12,160,717
                                                             ------------   ------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                   $ 24,348,922   $ 23,099,229
                                                             ------------   ------------
</TABLE>

               See accompanying notes to the unaudited condensed
                        consolidated financial statements

                                       3
<PAGE>

                           QUIPP INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                                     FOR THE THREE MONTHS ENDED
                                                      MARCH 31,      March 31,
                                                        2006           2005
                                                     -----------    -----------

Net sales                                            $ 5,260,458    $ 8,274,764
Cost of sales                                         (3,920,896)    (6,367,837)
                                                     -----------    -----------

   GROSS PROFIT                                        1,339,562      1,906,927

Operating expenses:
   Selling, general and
     administrative expenses                          (1,671,900)    (1,671,596)
   Research and development                             (142,879)       (59,099)
                                                     -----------    -----------

   OPERATING (LOSS) PROFIT                              (475,217)       176,232

--------------------------------------------------------------------------------
Other income (expense):

  Miscellaneous income                                    20,000             --

  Interest income                                         45,699         40,201

  Interest expense                                        (8,418)        (2,115)
                                                     -----------    -----------

                                                          57,281         38,086
--------------------------------------------------------------------------------


(LOSS) INCOME BEFORE INCOME TAXES                       (417,936)       214,318

Income tax benefit (expense)                             169,264        (85,728)
                                                     -----------    -----------

   NET  (LOSS) INCOME                                $  (248,672)   $   128,590
                                                     ===========    ===========


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

PER SHARE AMOUNTS:

   Basic and diluted (loss) income per common share  $     (0.17)   $      0.09

   Basic and diluted average number of common
      and common equivalent shares outstanding         1,448,189      1,423,775


               See accompanying notes to the unaudited condensed
                       consolidated financial statements.

                                       4

<PAGE>

                           QUIPP INC. AND SUBSIDIARIES
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                              FOR THE THREE MONTHS ENDED
                                                                                MARCH 31,     March 31,
                                                                                  2006           2005
                                                                              -----------    -----------
<S>                                                                           <C>            <C>
Cash (used in) provided by operations:
    Net (loss) income                                                         $  (248,672)   $   128,590

Reconciliation of net (loss) income to net cash (used in) provided by
operations:


    Depreciation                                                                   57,813         59,452
    Intangible amortization                                                       130,609         28,798
    Deferred income tax                                                          (169,264)            --
    Stock-based compensation                                                        7,308          7,419

Changes in operational assets and liabilities:

    Accounts receivable                                                           163,477      1,344,593
    Inventories                                                                (2,053,167)     1,863,902
    Prepaid and other assets                                                     (229,363)      (323,236)
    Accounts payable and other accrued liabilities                                (49,053)       500,142
    Deferred revenues                                                           1,534,590     (2,771,358)
                                                                              -----------    -----------
NET CASH (USED IN) PROVIDED BY OPERATIONS                                        (855,722)       838,302
                                                                              -----------    -----------
Cash flow from investing activities:
    Securities purchased                                                         (751,873)    (3,801,156)
    Capital expenditures                                                          (43,804)       (21,706)
                                                                              -----------    -----------

NET CASH USED IN INVESTING ACTIVITIES                                            (795,677)    (3,822,862)
                                                                              -----------    -----------
Cash flow from financing activities:
    Repayment of debt                                                              (2,261)            --
                                                                              -----------    -----------
NET CASH USED IN FINANCING ACTIVITIES                                              (2,261)            --
                                                                              -----------    -----------
Decrease in cash and cash equivalents                                          (1,653,660)    (2,984,560)
Cash and cash equivalents at beginning of year                                  2,829,246      5,762,511
                                                                              -----------    -----------
Cash and cash equivalents at end of quarter                                   $ 1,175,586    $ 2,777,951
                                                                              ===========    ===========
</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, 2005 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 March 31, 2006 and the results of its operations and cash
flows for the three months ended March 31, 2006. The results of operations for
the three months ended March 31, 2006 are not necessarily indicative of the
results to be expected for the full year ending December 31, 2006. 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, 2005 was derived from audited
financial statements, but, as permitted by Regulation S-X, is not accompanied by
all disclosures required by generally accepted accounting principles.

NOTE 2 - INVENTORIES
Inventories at March 31, 2006 include material, labor and factory overhead and
are stated at the lower of cost or market. Inventory also includes equipment
shipped to customers but not yet recognized as a sale because either risk of
loss has not transferred to the customer or the equipment requires complex
installation services. The Company will recognize the sale and corresponding
cost of sales when risk of loss has transferred to the customer or when
installation services are complete and collection of the resulting receivable is
reasonably assured. Cost is determined using the first-in, first-out (FIFO)
method. The composition of inventories at March 31, 2006 and December 31, 2005
is as follows:

                                    MARCH 31,               December 31,
                                      2006                     2005
                                   ----------               ----------
       Raw materials               $2,883,677               $2,792,334
       Work in process                836,295                  911,586
       Finished goods                 659,194                  121,377
                                   ----------               ----------
       Subtotal                     4,379,166                3,825,297
       Shipped, not recognized      1,951,787                  977,716
                                   ----------               ----------
                                   $6,330,953               $4,803,013
                                   ----------               ----------

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 if any on such contracts are recognized
immediately.

                                       6

<PAGE>

NOTE 4 - INCOME PER SHARE
Basic income (loss) per share is based on the weighted average number of common
shares outstanding during the periods presented. Diluted income (loss) 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
three months ended March 31, 2006 and 2005, the exercise of options was not
assumed since the effect is antidilutive.

NOTE 5 - STOCK-BASED COMPENSATION
The Quipp, Inc. Equity Compensation Plan (Equity Compensation Plan) provides for
grants of stock options and stock-based awards to employees, directors,
consultants and advisors of the Company. Stock options issued in connection with
the Equity Compensation Plan are granted with an exercise price per share equal
to the fair market value of a share of Company common stock at the date of
grant. All stock options have five to ten-year maximum terms and vest, either
immediately, or within four years of grant date. The total number of shares of
common stock issuable under the Equity Compensation Plan is 600,000. At March
31, 2006, there were 106,889 shares available for grant under the Equity
Compensation Plan.

As of January 1, 2006, the Company adopted Statement of Accounting Standards
("SFAS") 123R "Share Based Payments" using the modified prospective transition
method. Under the SFAS 123R modified prospective transition method, the Company
is required to expense the grant date fair value of stock options and other
stock compensation over the requisite service period for stock awards granted
after January 1, 2006, awards that are modified, repurchased or canceled after
January 1, 2006 and the portion of awards issued from December 15, 1994 to
December 31, 2006 that have not yet vested. Financial statements for prior
periods are not restated. The primary impact of the adoption of SFAS 123R was on
the financial statement disclosures and certain calculations involving
forfeitures. SFAS 123R requires that at the grant date the Company estimate
forfeitures for unvested awards. Since the Company estimated forfeitures on
stock option grants issued in previous periods the Company did not recognize a
cumulative effect of a change in accounting principle, upon the adoption of SFAS
123R.

The Company recognized stock-based compensation
totaling $7,308 and $7,416 for the three months ended March 31, 2006 and 2005,
respectively. Components of stock-based compensation expense follow:

                                                         THREE MONTHS ENDED
                                                              MARCH 31,
                                                           2006      2005
                                                         -------    -------
      Stock Options                                      $ 1,971    $ 5,585
      Restricted Stock Awards                              5,337      1,834
                                                         -------    -------
      Total stock based compensation costs
        included in selling, general and
        administrative expenses                            7,308      7,419
      Income tax benefit                                  (2,960)    (2,966)
                                                         -------    -------
      Total after-tax stock-based compensation expense   $ 4,348    $ 4,453
                                                         =======    =======

During the three month period ended March 31, 2006, no stock options were
granted, exercised or forfeited and no stock options expired. The following
information relates to stock options at March 31, 2006:

<TABLE>
<CAPTION>
                                                                         WEIGHTED         WEIGHTED
                                                                          AVERAGE         AVERAGE        AGGREGATE
                                                                         EXERCISE        REMAINING       INTRINSIC
                                                             SHARES        PRICE        TERM (YEARS)       VALUE
                                                            ---------- -------------- ----------------- ------------
<S>                                                             <C>       <C>               <C>            <C>
Stock options outstanding at March 31, 2006                     83500     $14.22            2.89           $294,614
Stock options exercisable at March 31, 2006                    78,500     $14.26            2.76           $274,634
</TABLE>

As of March 31, 2006, approximately $23,000 of unrecognized compensation costs
related to non-vested stock options is expected to be recognized over a weighted
average period of 2.9 years.

                                       7

<PAGE>


The following table summarizes restricted stock award activity for the three
months ended March 31, 2006:

                                                                      WEIGHTED
                                                                      AVERAGE
                                                       RESTRICTED    GRANT DATE
                                                         SHARES      FAIR PRICE
                                                        --------      ---------
      Non-vested stock awards as of December 31, 2005      5,000      $   12.80
      Granted                                                 --             --
      Vested                                                  --             --
      Forfeited                                               --             --
                                                        --------      ---------
      Non-vested stock awards as of March 31, 2006         5,000      $   12.80
                                                        ========

As of March 31, 2006, approximately $41,000 of unrecognized compensation costs
related to non-vested restricted stock awards is expected to be recognized over
a weighted average period of 1.9 years.

From January 1, 2003 until December 31, 2005, the Company used the fair value
recognition provisions of SFAS 123, "Accounting for Stock Based Compensation,"
prospectively to all employee awards granted, modified, or settled after
December 31, 2002.

Prior to 2003, the Company accounted for grants of equity compensation under the
recognition and measurement provisions of Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations. The Company's pro forma net income and earnings per share for
the three months ended March 31, 2005, determined as if the company adopted
SFAS 123R for the period, are as follows:

                                                                   MARCH 31,
                                                                     2005
                                                                   --------

  Net income as reported                                           $128,590
  Deduct total stock-based employee compensation expense
  determined under fair-value-based method for all awards,
  net of tax                                                        ($4,536)

  Pro forma net income                                             $124,054

  Income  Per Share:
  Basic and diluted income per share                               $   0.09


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. During April 2006, in accordance with the share purchase agreement,
the Company issued to the Sellers 24,414 shares of Quipp, Inc. stock with a fair
value of approximately $250,000 as additional consideration. The remaining
balance of additional consideration that the Sellers can receive is $150,000.
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. As of March 31, 2006, the total paid and accrued
acquisition costs for the stock purchase transaction amounted to $4,622,672
(inclusive of direct legal fees, consulting costs, accounting fees, investment
banking fees, employee severance costs and other acquisition expenses).

                                       8


<PAGE>

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 hired an independent
appraisal consultant to assist with the valuation of goodwill and other
intangible assets. The purchase price was allocated as follows:

               Cash Paid                            $4,558,789
               Accrued Acquisition Costs                63,883

               Liabilities Assumed:
                    Current                          4,361,091
                    Long Term                           26,786
                                                    ----------

                                                    $9,010,549
                                                    ----------

               Fair Value of Tangible Assets:
                    Current Assets                  $3,846,261
                    Fixed Assets                        40,602

               Intangible Assets:
                    Non-competition agreement        2,500,000
                    Customer lists                     248,000
                    Trade names                        253,000
                    Goodwill                         2,122,686
                                                    ----------

                                                    $9,010,549
                                                    ----------

Of the total purchase price, $3,001,000 was allocated to amortizable intangible
assets including tradenames, customer lists and non-competition agreements.
Tradenames represent the value associated with customer recognition of the
Newstec and NewsCom brand names. Customer lists represent Newstec's
relationships with its installed base of customers. The Company entered into an
agreement with the former principals of Newstec including non-competition
provisions that are applicable 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.

The following table shows details of the amortizable intangibles:

                                                                      Fair
          Intangible Asset                           Value            Life
          ------------------------------------    ----------       ----------
          Tradenames                                 253,000         10 Years
          Customer Relationship                      248,000         10 Years
          Non-competition Agreement                2,500,000          7 Years







                                       9

<PAGE>

The unaudited condensed consolidated statement of operations for the period
ended March 31, 2006 includes the operating results of Newstec. The following
unaudited pro forma results of operations of the Company for the period ended
March 31, 2005 assume the acquisition of Newstec occurred as of January 1, 2005.
The unaudited 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 of assets occurred on the dates indicated.


                               UNAUDITED PRO FORMA

                                                              THREE MONTHS ENDED
                                                                  MARCH 31,
                                                                    2005
                                                                ------------
             Net Sales                                          $15,091,510

             Net Income                                            $140,321


             Basic and diluted income per common share                $0.10

             Basic and diluted average number of
                     common shares outstanding                    1,448,189













                                       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
items expressed as a percentage of net sales for the periods indicated:

                                                         THREE MONTHS ENDED
                                                             MARCH 31,
                                                      2006              2005
                                                  (UNAUDITED)       (Unaudited)
        ------------------------------------------------------------------------

        NET SALES                                    100.0%            100.0%
        GROSS PROFIT                                 25.5%             23.0%
        SELLING, GENERAL AND ADMINISTRATIVE
        EXPENSES                                     31.8%             20.2%
        RESEARCH AND DEVELOPMENT                      2.7%              0.7%
        OTHER INCOME, NET                             1.1%              0.5%
        NET INCOME                                   (4.7%)             1.6%

NET SALES for the three months ended March 31, 2006 were $5,260,458, a decrease
of $3,014,306 (36.4%) compared to net sales of $8,274,764 for the corresponding
period in 2005. In 2005 we recognized the sale of a large, complex system
totaling approximately $2,700,000. During the first quarter 2006 we generated
sales of approximately $225,000 from our new inserter product line acquired with
the August 2005 purchase of Newstec, Inc. Due to the low volume of Newstec
activity in the fourth quarter 2005 and first quarter 2006, we accelerated the
closing of Newstec's Walpole Massachusetts facility and moved Newstec's
operations to our Miami facility.

GROSS PROFIT for the three months ended March 31, 2006 was $1,339,562, a
decrease of $567,365 (29.8%) as compared to $1,906,927 for the corresponding
period in 2005. Gross profit as a percentage of sales for the first three months
of 2006 improved to 25.5% compared to 23.0% for the same period in 2005. Gross
profit in 2005 was adversely affected because we recognized only a small profit
on the complex system order described above. Our first quarter 2006 cost of
sales was negatively affected by operating costs related to the closing of the
Newstec's Walpole, Massachusetts facility, including the movement of Newstec
inventory to Miami, Florida, and training of personnel in our Miami Florida
facility to build Newstec products. The Walpole facility was closed in February
2006.

SELLING, GENERAL AND ADMINISTRATIVE expenses for the three months ended March
31, 2006 were $1,671,900, an increase of $304 as compared to $1,671,596 for the
corresponding period in 2005. In the first quarter of 2006, we incurred
approximately $360,000 of selling, general and administrative costs related to
Newstec operations, including costs related to the transition of administrative
functions to the Miami facility. In the first quarter of 2005, we incurred costs
of approximately $355,000 for our annual NEXPO show and for activities related
to compliance requirements of the Sarbanes-Oxley Act of 2002 and related
regulations. Because the NEXPO show in 2006 occurred in April, related costs
will be recognized in the second quarter.

RESEARCH AND DEVELOPMENT expenses for the three months ended March 31, 2006 were
$142,879, an increase of $83,780 (141.8%) as compared to $59,099 for the same
period in 2005. During the three months ended March 31, 2006, we focused most of
research and development resources on hardware and software enhancements to our
newly acquired inserter product line. In 2005, we substantially completed the
testing of the Quipp Packman packaging system.

OTHER INCOME AND EXPENSE (NET) for the three months ended March 31, 2006 were
$57,281 as compared to $38,086 for the corresponding period in 2005. Royalty
income relating to our patented automatic cart loading system technology used by
another supplier of post-press material handling equipment was $20,000 for the
first quarter in 2006; we had no royalty revenues during the same period in
2005. Additionally, interest income increased by $5,498 due to increased
interest rates on securities available for sale, offset in part by lower cash,
cash equivalents, and securities available for sale. Interest expense was
greater for the three months ended March 31, 2006 primarily due to amortization
of loan costs associated with our line of credit.

                                       11


<PAGE>

GENERAL
Our backlog as of March 31, 2006 was $12,800,000 compared to $13,524,000 at
December 31, 2005 and $4,148,000 at March 31, 2005. We expect to ship all items
in our backlog during the next eighteen months. Orders for the three months
ended March 31, 2006 were $4,468,000 compared to orders of $3,690,000 during the
three months ending March 31, 2005.

LIQUIDITY
On March 31, 2006, cash and cash equivalents and securities available for sale
totaled $4,970,635 as compared to $5,864,641 at December 31, 2005, a decrease of
$894,006. Working capital on March 31, 2006 was $4,515,887, a decrease of
$694,636 from $5,210,523 at December 31, 2005. The reduction in cash and cash
equivalents and securities available for sale is principally due to the increase
in inventory to accommodate scheduled shipments in the second and third quarter
of 2006. The Company believes that the remaining cash, cash equivalents and
securities available for sale together with cash generated from operations will
be sufficient to fund operations at the current level.

Our $3,000,000 line of credit agreement (the "Agreement") with Merrill Lynch
Business Financial Services, Inc. (Merrill Lynch) expired on April 30, 2006.
During the term of the Agreement, we did not borrow any amount under the line of
credit. As of the date of this report, we are engaged in negotiations to renew
the line of credit. We cannot assure that the line of credit will be renewed.

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, 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, and engineering and production difficulties.


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 our disclosure controls and procedures as of the end of
the period covered by this report are 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

At the end of each interim period, the Company computes an estimated effective
income tax rate for the full year. The estimated rate is used to provide for
income taxes at each interim period. As previously disclosed, a material
weakness related to processes and procedures involved in the calculation of
current and deferred income tax liabilities related to state income taxes was
identified during the audit of the financial statements included in our annual
report on Form 10-K for the fiscal year ended December 31, 2005 (the "Form
10-K"). See Item 9 of the Form 10-K for additional information. In response,
during the first quarter of 2006, the Company expanded the scope of the existing
engagement with its tax accountants (who are not the Company's independent
registered public accounting firm) to include the review of these quarterly tax
calculations.

Except as noted above, 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.

ITEM 5  OTHER INFORMATION

On April 25, 2006, Quipp's Corporate Governance and Compensation Committee made
a restricted stock award to Michael S. Kady, Quipp's President and Chief
Executive Officer, of 5,000 shares of Quipp Common Stock. The shares vest on the
third anniversary of the date of grant.


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                          PART II - OTHER INFORMATION

ITEM 1A RISK FACTORS
In addition to the other information set forth in this report, you should
carefully consider the factors discussed in Part I, Item 1A, "Risk Factors" in
our Annual Report on Form 10-K for the year ended December 31, 2005, which could
materially affect our business, financial condition or future results. The risks
described in our Annual Report on Form 10-K are not the only risks facing our
Company. Additional risks and uncertainties not currently known to us or that we
currently deem to be immaterial also may materially adversely affect our
business, financial condition and/or operating results.

ITEM 6   EXHIBITS

The following exhibits are filed with this report:


3.1      Articles of Incorporation, as amended (incorporated by reference to
         Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for the
         quarter ended June 30, 2004.

3.2      By Laws, as amended (incorporated by reference to Exhibit 3.3 to
         Registrant's Quarterly Report on Form 10-Q for the quarter ended June
         30, 2004).

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:  May 12, 2006

                                    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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