UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

[ X ]    Quarterly Report Pursuant To Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the Quarterly Period Ended June 30, 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 0-10763

                               Atrion Corporation
             (Exact Name of Registrant as Specified in its Charter)

             Delaware                                   63-0821819
------------------------------------        ----------------------------------
  (State or Other Jurisdiction of                   (I.R.S. Employer
   Incorporation or Organization)                  Identification No.)


                    One Allentown Parkway, Allen, Texas 75002
                    -----------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


                                 (972) 390-9800
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

Indicate by check 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. [X] Yes    [ ] No

Indicate by check whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act (Check
one):

Large accelerated filer [ ]  Accelerated filer [X]  Non-accelerated filer [ ]

Indicate by check whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). [ ] Yes    [X] No

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

                                               Number of Shares Outstanding at
         Title of Each Class                           July 26, 2006
---------------------------------------    -------------------------------------
Common stock, Par Value $0.10 per share                  1,857,156



<PAGE>


                       ATRION CORPORATION AND SUBSIDIARIES
                       -----------------------------------


                                TABLE OF CONTENTS
                                -----------------




PART I.  Financial Information                                                 2

   Item 1.   Financial Statements

               Consolidated Statements of Income (Unaudited)
                For the Three and Six Months Ended
                June 30, 2006 and 2005                                         3


               Consolidated Balance Sheets
                June 30, 2006 (Unaudited) and December 31, 2005                4


               Consolidated Statements of Cash Flows (Unaudited)
                For the Six Months Ended
                June 30, 2006 and 2005                                         5


               Notes to Consolidated Financial Statements (Unaudited)          6

   Item 2.   Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                       10

   Item 3.   Quantitative and Qualitative Disclosures About Market Risk       15

   Item 4.   Controls and Procedures                                          15

PART II. Other Information                                                    16

   Item 4.   Submission of Matters to a Vote of Security Holders              16

   Item 6.   Exhibits and Reports on 8-K                                      16

SIGNATURES                                                                    17

Exhibits                                                                      18


                                       1
<PAGE>



                                     PART I


                              FINANCIAL INFORMATION





                                       2
<PAGE>

Item 1.  Financial Statements
<TABLE>
<CAPTION>
                       ATRION CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

                                                     Three Months Ended         Six Months Ended
                                                          June 30,                  June 30,
                                                  ------------------------  ------------------------
                                                      2006         2005         2006         2005

                                                       (in thousands, except per share amounts)

<S>                                               <C>          <C>          <C>          <C>
Revenues                                          $   20,849   $   18,102   $   40,351   $   36,747
Cost of goods sold                                    12,076       10,896       24,230       21,920
                                                  -----------  -----------  -----------  -----------
Gross profit                                           8,773        7,206       16,121       14,827
                                                  -----------  -----------  -----------  -----------

Operating expenses:
  Selling                                              1,600        1,448        3,215        2,853
  General and administrative                           2,348        2,002        4,352        4,220
  Research and development                               700          625        1,376        1,205
                                                  -----------  -----------  -----------  -----------
                                                       4,648        4,075        8,943        8,278
                                                  -----------  -----------  -----------  -----------
Operating income                                       4,125        3,131        7,178        6,549
                                                  -----------  -----------  -----------  -----------

Other income:
  Interest income                                         11            9           20           25
  Interest expense                                        --          (21)          --          (42)
  Other income (expense), net                            (21)          --          (21)           8
                                                  -----------  -----------  -----------  -----------
                                                         (10)         (12)          (1)          (9)
                                                  -----------  -----------  -----------  -----------
Income from continuing operations before provision
 for income taxes                                      4,115        3,119        7,177        6,540

Provision for income taxes                            (1,295)      (1,012)      (2,251)      (2,138)
                                                  -----------  -----------  -----------  -----------

Income from continuing operations                      2,820        2,107        4,926        4,402
Gain on disposal of discontinued operations, net
 of income taxes                                         165          165          165          165
                                                  -----------  -----------  -----------  -----------
Net income                                        $    2,985   $    2,272   $    5,091   $    4,567
                                                  ===========  ===========  ===========  ===========

Income per basic share:
  Income from continuing operations               $     1.53   $     1.18   $     2.68   $     2.51
  Gain on disposal of discontinued operations           0.09         0.09         0.09         0.09
                                                  -----------  -----------  -----------  -----------
                                                  $     1.62   $     1.27   $     2.77   $     2.60
                                                  ===========  ===========  ===========  ===========

Weighted average basic shares outstanding              1,845        1,789        1,840        1,756
                                                  ===========  ===========  ===========  ===========

Income per diluted share:
  Income from continuing operations               $     1.45   $     1.09   $     2.53   $     2.32
  Gain on disposal of discontinued operations           0.08         0.09         0.08         0.09
                                                  -----------  -----------  -----------  -----------
                                                  $     1.53   $     1.18   $     2.61   $     2.41
                                                  ===========  ===========  ===========  ===========

Weighted average diluted shares outstanding            1,949        1,925        1,947        1,895
                                                  ===========  ===========  ===========  ===========

Dividends per common share                        $     0.17   $     0.14   $     0.34   $     0.28
                                                  ===========  ===========  ===========  ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       3
<PAGE>


<TABLE>
<CAPTION>
                       ATRION CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)

                                                                June 30,          December 31,
                                                                  2006               2005
Assets                                                         (unaudited)
------                                                      ----------------    ----------------
<S>                                                            <C>                 <C>
Current assets:
  Cash and cash equivalents                                    $        185        $        525
  Accounts receivable                                                 9,911               8,291
  Inventories                                                        17,694              17,705
  Prepaid expenses                                                    1,441                 832
  Other                                                                 620                 620
                                                               -------------       -------------
                                                                     29,851              27,973
                                                               -------------       -------------


Property, plant and equipment                                        76,726              63,041
Less accumulated depreciation and amortization                       29,739              27,787
                                                               -------------       -------------
                                                                     46,987              35,254
                                                               -------------       -------------

Other assets and deferred charges:
  Patents                                                             2,418               2,331
  Goodwill                                                            9,730               9,730
  Other                                                               3,005               3,182
                                                               -------------       -------------
                                                                     15,153              15,243
                                                               -------------       -------------

                                                               $     91,991        $     78,470
                                                               =============       =============


Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
  Accounts payable and accrued liabilities                     $      7,156        $      7,128
  Accrued income and other taxes                                      1,538               1,098
                                                               -------------       -------------
                                                                      8,694               8,226
                                                               -------------       -------------

Line of credit                                                       11,001               2,529

Other non-current liabilities                                         5,909               5,820

Stockholders' equity:
  Common shares, par value $0.10 per share; authorized
   10,000 shares, issued 3,420 shares                                   342                 342
  Paid-in capital                                                    13,764              12,508
  Retained earnings                                                  86,782              82,318
  Treasury shares,1,563 at June 30, 2006 and 1,586
   at December 31, 2005, at cost                                    (34,501)            (33,273)
                                                               -------------       -------------
       Total stockholders' equity                                    66,387              61,895
                                                               -------------       -------------


                                                               $     91,991        $     78,470
                                                               =============       =============
</TABLE>

The accompanying notes are an integral part of these statements.


                                       4
<PAGE>


<TABLE>
<CAPTION>
                       ATRION CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                      Six Months Ended
                                                                          June 30,
                                                            ------------------------------------
                                                                  2006                2005
                                                            ----------------    ----------------
                                                                       (In thousands)
<S>                                                            <C>                 <C>
Cash flows from operating activities:
  Net income                                                   $      5,091        $      4,567
  Adjustments to reconcile net income to
   net cash provided by operating activities:
     Gain on disposal of discontinued operations                       (165)               (165)
     Depreciation and amortization                                    2,341               2,149
     Deferred income taxes                                              105                 273
     Tax benefit related to stock options                                --               1,051
     Other                                                               52                  11
                                                               -------------       -------------
                                                                      7,424               7,886

  Changes in operating assets and liabilities:
      Accounts receivable                                            (1,620)               (534)
      Inventories                                                        11              (3,442)
      Prepaid expenses                                                 (608)               (316)
      Other non-current assets                                          (73)               (762)
      Accounts payable and current liabilities                           28                   3
      Accrued income and other taxes                                    440                (914)
      Other non-current liabilities                                     (16)                 (9)
                                                               -------------       -------------
  Net cash provided by continuing operations                          5,586               1,912
  Net cash provided by discontinued operations                          165                 165
                                                               -------------       -------------
                                                                      5,751               2,077
                                                               -------------       -------------

Cash flows from investing activities:
 Property, plant and equipment additions                            (13,939)             (7,522)
 Deposit on land purchase                                                --               3,750
 Property, plant and equipment sales                                     --                   6
                                                               -------------       -------------
                                                                    (13,939)             (3,766)
                                                               -------------       -------------

Cash flows from financing activities:
 Net change in line of credit                                         8,472                 357
 Exercise of stock options                                              948               1,938
 Purchase of treasury stock                                          (1,594)                 --
 Tax benefit related to stock options                                   649                  --
 Dividends paid                                                        (627)               (496)
                                                               -------------       -------------
                                                                      7,848               1,799
                                                               -------------       -------------

Net change in cash and cash equivalents                                (340)                110
Cash and cash equivalents at beginning of period                        525                 255
                                                               -------------       -------------
Cash and cash equivalents at end of period                     $        185        $        365
                                                               =============       =============



Cash paid for:
 Interest (net of capitalization)                              $         --        $         43
 Income taxes                                                  $      1,195        $      1,754
</TABLE>

The accompanying notes are an integral part of these statements.


                                       5
<PAGE>

                       ATRION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


(1)  Basis of Presentation
     In the opinion of management, all adjustments necessary for a fair
     presentation of results of operations for the periods presented have been
     included in the accompanying unaudited consolidated financial statements of
     Atrion Corporation and its subsidiaries (the "Company"). Such adjustments
     consist of normal recurring items. The accompanying financial statements
     have been prepared in accordance with the instructions to Form 10-Q and
     include the information and notes required by such instructions.
     Accordingly, the consolidated financial statements and notes thereto should
     be read in conjunction with the financial statements and notes included in
     the Company's 2005 Annual Report on Form 10-K.


(2)  Inventories
     Inventories are stated at the lower of cost or market. Cost is determined
     by using the first-in, first-out method. The following table details the
     major components of inventories (in thousands):

                                                   June 30,       December 31,
                                                     2006            2005
     ---------------------------------------------------------------------------
     Raw materials                               $    6,919      $    6,898
     Work in process                                  4,599           4,291
     Finished goods                                   6,176           6,516
     ---------------------------------------------------------------------------
     Total inventories                           $   17,694      $   17,705
     ===========================================================================

(3)  Income per share
     The following is the computation for basic and diluted income per share:

<TABLE>
<CAPTION>
                                                           Three months ended             Six months ended
                                                                June 30,                      June 30,
                                                          2006           2005            2006           2005
                                                     -------------- --------------  -------------- --------------
                                                                (in thousands, except per share amounts)

<S>                                                  <C>            <C>             <C>            <C>
     Income from continuing operations               $     2,820    $     2,107     $     4,926    $     4,402
                                                     =============================  =============================

     Weighted average basic shares outstanding             1,845          1,789           1,840          1,756
     Add: Effect of dilutive securities (options)            104            136             107            139
                                                     -----------------------------  -----------------------------
     Weighted average diluted shares outstanding           1,949          1,925           1,947          1,895
                                                     =============================  =============================

     Earnings per share from continuing operations:

        Basic                                        $      1.53    $      1.18     $      2.68    $      2.51
                                                     =============================  =============================

        Diluted                                      $      1.45    $      1.09     $      2.53    $      2.32
                                                     =============================  =============================
</TABLE>

     There were no outstanding options to purchase shares of common stock that
     were not included in the diluted income per share calculations because
     their effect would be anti-dilutive for the three-month and six-month
     periods ended June 30, 2006 and 2005.


                                       6
<PAGE>

                       ATRION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

(4)  Stock-Based Compensation
     At June 30, 2006, the Company had three stock-based employee compensation
     plans. Prior to January 1, 2006, the Company accounted for those plans
     under the recognition and measurement provisions of Accounting Principles
     Board Opinion No. 25, "Accounting for Stock Issued to Employees," and
     related interpretations. No stock-based employee compensation cost was
     reflected in net income, as all options granted under those plans had an
     exercise price equal to the market value of the underlying common stock on
     the date of grant.

     Effective January 1, 2006, the Company adopted the provisions of SFAS No.
     123R, "Accounting for Stock-based Compensation" ("SFAS No. 123R") using the
     modified-prospective transition method and the disclosures that follow are
     based on applying SFAS No. 123R. Under this transition method, compensation
     expense recognized during the three and six months ended June 30, 2006,
     included compensation expense for all share-based awards granted prior to,
     but not yet vested as of January 1, 2006, based on the grant date fair
     value estimated in accordance with the original provisions of SFAS No. 123,
     "Accounting for Stock-Based Compensation". In accordance with the
     modified-prospective transition method, results for the prior periods have
     not been restated. The Company recorded compensation expense in the amount
     of approximately $10,000 for the three-month period and $24,000 for the
     six-month period ended June 30, 2006.

     The Company's 1997 Stock Incentive Plan provides for the grant to key
     employees of incentive and nonqualified stock options, stock appreciation
     rights, restricted stock and performance shares. In addition, under the
     1997 Stock Incentive Plan, outside directors (directors who are not
     employees of the Company or any subsidiary) received automatic annual
     grants of nonqualified stock options to purchase 2,000 shares of common
     stock. The 1997 Stock Incentive Plan was amended in 2005 to provide that no
     additional stock options may be granted to outside directors thereunder.
     Under the 1997 Stock Incentive Plan, 624,425 shares, in the aggregate, of
     common stock were reserved for grants. The purchase price of shares issued
     on the exercise of incentive options must be at least equal to the fair
     market value of such shares on the date of grant. The purchase price for
     shares issued on the exercise of nonqualified options and restricted and
     performance shares is fixed by the Compensation Committee of the Board of
     Directors. The options granted become exercisable as determined by the
     Compensation Committee and expire no later than 10 years after the date of
     grant.

     During 1998, the Company's stockholders approved the adoption of the
     Company's 1998 Outside Directors Stock Option Plan which, as amended,
     provided for the automatic grant on February 1, 1998 and February 1, 1999
     of nonqualified stock options to the Company's outside directors. Although
     no additional options may be granted under the 1998 Outside Directors Stock
     Option Plan, all outstanding options under this plan continue to be
     governed by the terms and conditions of the plan and the existing option
     agreements for those grants.

     During 2006, the Company's stockholders approved the adoption of the
     Company's 2006 Equity Incentive Plan which provides for the grant to key
     employees and consultants of incentive and nonqualified stock options,
     restricted stock, restricted stock units, deferred stock units, stock
     appreciation rights and performance shares. Under the 2006 Equity Incentive
     Plan, 100,000 shares, in the aggregate, of common stock were reserved for
     awards. The purchase price of shares issued on the exercise of options must
     be at least equal to the fair market value of such shares on the date of
     grant. The purchase price for restricted and performance shares is fixed by
     the Compensation Committee of the Board of Directors. The options granted
     become exercisable and expire as determined by the Compensation Committee
     except that incentive options expire no later than 10 years after the date
     of grant.


                                       7
<PAGE>

                       ATRION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     Option transactions for the three and six months ended June 30, 2006 are as
     follows:

<TABLE>
<CAPTION>
                                                       Three months ended              Six months ended
                                                          June 30, 2006                  June 30, 2006
                                                                     Weighted                       Weighted
                                                      Shares         Average         Shares         Average
                                                                  Exercise Price                 Exercise Price
                                                   -----------------------------  -----------------------------
<S>                                                   <C>           <C>              <C>           <C>
     Options outstanding at the beginning of          191,301       $   26.14        225,100       $   24.86
      the period
            Granted                                         -       $    -                 -       $    -
            Expired                                         -       $    -                 -       $    -
            Exercised                                 (15,250)      $   31.92        (49,049)      $   22.04
                                                   ------------                   ------------
     Options outstanding at the end of the
      period                                          176,051       $   25.64        176,051       $   25.64
                                                   ============                   ============

     Exercisable options at June 30, 2006                                            176,051       $   25.64
</TABLE>


     The Company estimates the fair value of stock options granted using the
     Black-Scholes option-pricing formula and a single option award approach.
     This fair value is then amortized on a straight-line basis over the
     requisite service periods of the awards, which is generally the vesting
     period. The Company's expected life represents the period that the
     Company's stock-based awards are expected to be outstanding and was
     determined based on historical experience of similar awards, giving
     consideration to the contractual terms of the stock-based awards, vesting
     schedules and expectations of future employee behavior. Stock-based
     payments made prior to January 1, 2006 were accounted for using the
     intrinsic value method under APB 25. The fair value of stock-based payments
     made subsequent to January 1, 2006 would be valued using the Black-Scholes
     valuation method with a volatility factor based on the Company's historical
     stock trading history. The Company bases the risk-free interest rate using
     the Black-Scholes valuation method on the implied yield currently available
     on U. S. Treasury securities with an equivalent term. The Company bases the
     dividend yield used in the Black-Scholes valuation method on the Company's
     stock dividend history.

     The total intrinsic value of options exercised during the three and six
     months ended June 30, 2006 was $0. The total intrinsic values of options
     outstanding and options currently exercisable at June 30, 2006 were $0 and
     $0, respectively. The weighted-average remaining contractual life for
     options outstanding and options currently exercisable at June 30, 2006 was
     2.82 and 2.82 years, respectively.

     As of June 30, 2006 there was no unrecognized compensation cost related to
     nonvested share-based compensation arrangements granted under the plans.
     The total fair value of options vested during the three months ended June
     30, 2006 was $0. At June 30, 2006 there were no nonvested stock options.


                                       8
<PAGE>

                       ATRION CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

     The Company has a policy of utilizing existing treasury shares to satisfy
     stock option exercises.

     The following table illustrates the effect on net income and income per
     share if the Company had applied the fair value recognition provisions of
     SFAS No. 123R to stock-based employee compensation in the 2005 periods (in
     thousands, except per share amounts):

<TABLE>
<CAPTION>
                                                              Three Months         Six Months
                                                             ended June 30,       ended June 30,
                                                                  2005                 2005
                                                           -----------------    -----------------

<S>                                                        <C>                  <C>
     Net income, as reported                                $         2,272      $         4,567
     Deduct: Total stock-based employee compensation
      expense determined under fair value-based methods
      for all awards, net of tax effects                                 10                  111
                                                           -----------------    -----------------
     Pro forma net income                                   $         2,262      $         4,456
                                                           =================    =================
     Income per share:
        Basic - as reported                                 $          1.27      $          2.60
                                                           =================    =================
        Basic - pro forma                                   $          1.26      $          2.54
                                                           =================    =================

        Diluted - as reported                               $          1.18      $          2.41
                                                           =================    =================
        Diluted - pro forma                                 $          1.18      $          2.35
                                                           =================    =================
</TABLE>

(5)  Pension Benefits
     The components of net periodic pension cost are as follows for the three
     and six months ended June 30, 2006 and June 30, 2005 (in thousands):

<TABLE>
<CAPTION>
                                                           Three Months ended             Six Months ended
                                                                June 30,                      June 30,
                                                     -----------------------------  -----------------------------
                                                          2006           2005            2006           2005
                                                     -------------- --------------  -------------- --------------
<S>                                                   <C>            <C>             <C>            <C>
     Service cost                                     $       69     $       67      $      138     $      134
     Interest cost                                            83             80             166            160
     Expected return on assets                              (111)          (114)           (222)          (228)
     Prior service cost amortization                          (9)            (9)            (18)           (18)
     Actuarial loss                                           29             27              58             54
     Transition amount amortization                            -            (11)              -            (22)
                                                     -------------- --------------  -------------- --------------

     Net periodic pension cost                        $       61     $       40      $      122     $       80
                                                     ============== ==============  ============== ==============
</TABLE>

     In 2006, the Company expects to contribute approximately $250,000 to its
     pension plan to satisfy minimum funding requirements for the year. As of
     June 30, 2006, contributions of $250,000 have been made to this plan.


                                       9
<PAGE>


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

     Overview

     The Company designs, develops, manufactures, sells and distributes products
     and components, primarily for the medical and healthcare industry. The
     Company markets components to other equipment manufacturers for
     incorporation in their products and sells finished devices to physicians,
     hospitals, clinics and other treatment centers. The Company's medical
     products primarily serve the fluid delivery, cardiovascular, and
     ophthalmology markets. The Company's other medical and non-medical products
     include obstetrics products, instrumentation and disposables used in
     dialysis, contract manufacturing and valves and inflation devices used in
     marine and aviation safety products.

     The Company's products are used in a wide variety of applications by
     numerous customers. The Company encounters competition in all of its
     markets and competes primarily on the basis of product quality, price,
     engineering, customer service and delivery time.

     The Company's strategy is to provide a broad selection of products in the
     areas of its expertise. Research and development efforts are focused on
     improving current products and developing highly-engineered products that
     meet customer needs and have the potential for broad market applications
     and significant sales. Proposed new products may be subject to regulatory
     clearance or approval prior to commercialization and the time period for
     introducing a new product to the marketplace can be unpredictable. The
     Company also focuses on controlling costs by investing in modern
     manufacturing technologies and controlling purchasing processes. The
     Company has been successful in consistently generating cash from operations
     and has used that cash to reduce indebtedness, to fund capital
     expenditures, to repurchase stock and, starting in 2003, to pay dividends.

     The Company's strategic objective is to further enhance its position in its
     served markets by:

          o    Focusing on customer needs;
          o    Expanding existing product lines and developing new products;
          o    Maintaining a culture of controlling cost; and
          o    Preserving and fostering a collaborative, entrepreneurial
               management structure.

     For the three months ended June 30, 2006, the Company reported revenues of
     $20.8 million, operating income of $4.1 million and net income of $3.0
     million, up 15 percent, 32 percent and 31 percent, respectively, from the
     three months ended June 30, 2005. For the six months ended June 30, 2006,
     the Company reported revenues of $40.4 million, operating income of $7.2
     million and net income of $5.1 million, up 10 percent, 10 percent and 11
     percent, respectively, from the six months ended June 30, 2005.


                                       10
<PAGE>

     Results for the three months ended June 30, 2006
     Consolidated net income totaled $3.0 million, or $1.62 per basic and $1.53
     per diluted share, in the second quarter of 2006. This is compared with
     consolidated net income of $2.3 million, or $1.27 per basic and $1.18 per
     diluted share, in the second quarter of 2005. The income per basic share
     computations are based on weighted average basic shares outstanding of
     1,844,857 in the 2006 period and 1,789,220 in the 2005 period. The income
     per diluted share computations are based on weighted average diluted shares
     outstanding of 1,949,319 in the 2006 period and 1,925,320 in the 2005
     period.

     Consolidated revenues of $20.8 million for the second quarter of 2006 were
     15 percent higher than revenues of $18.1 million for the second quarter of
     2005. This 15 percent increase in revenues was primarily attributable to an
     approximate 36 percent increase in the revenues from the Company's fluid
     delivery products, an approximate 29 percent increase in the revenues from
     the Company's cardiovascular products and an approximate 5 percent increase
     in the revenues from the Company's other products. These increases, which
     were generally attributable to higher sales volumes, were partially offset
     by an approximate 12 percent decrease in the revenues from the Company's
     ophthalmic products.

     Revenues by product line are as follows (in thousands):

                                             Three Months ended
                                                   June 30,
                                       ------------------------------
                                           2006              2005
                                       ------------      ------------

         Fluid Delivery                  $   6,623         $   4,887
         Cardiovascular                      5,716             4,439
         Ophthalmology                       3,572             4,079
         Other                               4,938             4,697
                                       ------------      ------------
                 Total                   $  20,849         $  18,102
                                       ============      ============

     Cost of goods sold of $12.1 million for the second quarter of 2006 was 11
     percent higher than in the comparable 2005 period. Increased sales volume
     was the primary contributor to the increase in cost of goods sold for the
     second quarter of 2006.

     Gross profit of $8.8 million in the second quarter of 2006 was $1.6
     million, or 22 percent, higher than in the comparable 2005 period. The
     Company's gross profit percentage in the second quarter of 2006 was 42.1
     percent of revenues compared with 39.8 percent of revenues in the second
     quarter of 2005. The increase in gross profit percentage in the 2006 period
     compared to the 2005 period was primarily related to improved manufacturing
     efficiencies.

     The Company's second quarter 2006 operating expenses of $4.6 million were
     $573,000 higher than the operating expenses for the second quarter of 2005,
     resulting primarily from a $346,000 increase in General and Administrative
     (G&A) expenses, a $152,000 increase in selling (Selling) expenses, and a
     $75,000 increase in Research and Development (R&D) expenses. The increase
     in G&A for the second quarter of 2006 was primarily related to increased
     compensation costs and increased outside services. The increase in Selling
     expenses for the second quarter of 2006 was principally attributable to
     increased compensation costs and advertising and promotion costs. The
     increase in R&D costs was primarily related to prototype expenses, new
     product testing costs, and process enhancements. Operating income in the
     second quarter of 2006 increased $994,000, or 32 percent, to $4.1 million
     from $3.1 million in the second quarter of 2005. Operating income was 19.8
     percent of revenues in the second quarter of 2006 compared to 17.3 percent
     of revenues in the second quarter of 2005. The change in operating income
     for the second quarter of 2006 as compared with the second quarter of 2005
     was primarily attributable to the previously mentioned increased gross
     profit offset by the increased operating expenses.


                                       11
<PAGE>

     Interest charges of $174,000 for the second quarter of 2006 were
     capitalized as part of the construction costs for a new facility for a
     subsidiary, Halkey-Roberts Corporation ("Halkey-Roberts") because all of
     the debt was obtained in conjunction with the construction. Income tax
     expense for the second quarter of 2006 was $1.3 million compared to income
     tax expense of $1.0 million for the same period in the prior year. The
     effective tax rate for the second quarter of 2006 was 31.5 percent compared
     with 32.4 percent for the second quarter of 2005.

     The Company recorded a gain on the disposal of discontinued operations
     relating to the 1997 sale of its natural gas operations of $165,000 after
     tax, or $0.09 per basic and $0.08 per diluted share, for the second quarter
     of 2006 and $165,000 after tax, or $0.09 per basic and $0.09 per diluted
     share, for the second quarter of 2005, resulting from the receipt of
     contingent deferred payments in each year. No additional payments are due
     in future periods under the terms of the 1997 agreement pursuant to which
     the Company sold its natural gas operations.


     Results for the six months ended June 30, 2006
     Consolidated net income totaled $5.1 million, or $2.77 per basic and $2.61
     per diluted share, for the six months ended June 30, 2006. This is compared
     with consolidated net income of $4.6 million, or $2.60 per basic and $2.41
     per diluted share, for the six months ended June 30, 2005. The income per
     basic share computations are based on weighted average basic shares
     outstanding of 1,840,119 in the 2006 period and 1,756,392 in the 2005
     period. The income per diluted share computations are based on weighted
     average diluted shares outstanding of 1,946,983 in the 2006 period and
     1,895,008 in the 2005 period.

     Consolidated revenues of $40.4 million for the six months ended June 30,
     2006 were 10 percent higher than revenues of $36.7 million for the six
     months ended June 30, 2005. This 10 percent increase in revenues was
     primarily attributable to an approximate 30 percent increase in the
     revenues from the Company's fluid delivery products and an approximate 26
     percent increase in the revenues from the Company's cardiovascular
     products. These increases, which were generally attributable to higher
     sales volumes, were partially offset by an approximate 18 percent decrease
     in the revenues from the Company's ophthalmic products and an approximate 3
     percent decrease in the revenues from the Company's other products.

     Revenues by product line are as follows (in thousands):

                                              Six Months ended
                                                   June 30,
                                       ------------------------------
                                           2006              2005
                                       ------------      ------------

         Fluid Delivery                  $  13,059         $  10,050
         Cardiovascular                     11,440             9,101
         Ophthalmology                       6,384             7,807
         Other                               9,468             9,789
                                       ------------      ------------
                 Total                   $  40,351        $   36,747
                                       ============      ============


                                       12
<PAGE>

     Cost of goods sold of $24.2 million for the six months ended June 30, 2006
     was 11 percent higher than in the comparable 2005 period. Increased sales
     volume, increased manufacturing overhead costs, and a temporary production
     curtailment due to reduced orders from certain ophthalmic and related
     kitting business customers were the primary contributors to the increase in
     cost of goods sold for the six months ended June 30, 2006.

     Gross profit of $16.1 million for the six months ended June 30, 2006 was
     $1.3 million, or 9 percent, higher than in the comparable 2005 period. The
     Company's gross profit percentage for the six months ended June 30, 2006
     was 40.0 percent of revenues compared with 40.3 percent of revenues for the
     six months ended June 30, 2005. The decrease in gross profit percentage in
     the 2006 period compared to the 2005 period was primarily related to the
     previously mentioned manufacturing cost increases and temporary production
     curtailment.

     The Company's second quarter 2006 operating expenses of $8.9 million were
     $665,000 higher than the operating expenses for the six months ended June
     30, 2005, resulting primarily from a $362,000 increase in Selling expenses,
     a $171,000 increase in R&D expenses and a $132,000 increase in G&A
     expenses. The increase in Selling expenses for the six months ended June
     30, 2006 was principally attributable to increased compensation costs,
     advertising and promotion costs and travel-related expenses. The increase
     in R&D costs was primarily related to prototype expenses, new product
     testing costs, and process enhancements. The increase in G&A for the six
     months ended June 30, 2006 was primarily related to increased compensation
     costs and increased outside services partially offset by a decrease in
     insurance costs. Operating income for the six months ended June 30, 2006
     increased $629,000, or 10 percent, to $7.2 million from $6.5 million in the
     six months ended June 30, 2005. Operating income was 17.8 percent of
     revenues for the six months ended June 30, 2006 compared to 17.8 percent of
     revenues for the six months ended June 30, 2005.

     Interest charges of $214,000 for the six months ended June 30, 2006 were
     capitalized as part of the construction costs for the new Halkey-Roberts
     facility because all of the debt was obtained in conjunction with the
     construction. Income tax expense for the six months ended June 30, 2006
     was $2.3 million compared to income tax expense of $2.1 million for the
     same period in the prior year. The effective tax rate for the six months
     ended June 30, 2006 was 31.4 percent compared with 32.7 percent for the six
     months ended June 30, 2005.

     The Company recorded a gain on the disposal of discontinued operations
     relating to the 1997 sale of its natural gas operations of $165,000 after
     tax, or $0.09 per basic and $0.08 per diluted share, for the first six
     months of 2006 and $165,000 after tax, or $0.09 per basic and $0.09 per
     diluted share, for the first six months of 2005, resulting from the receipt
     of contingent deferred payments in each year. No additional payments are
     due in future periods under the terms of the 1997 agreement pursuant to
     which the Company sold its natural gas operations.


                                       13
<PAGE>

     Liquidity and Capital Resources
     At June 30, 2006, the Company had cash and cash equivalents of $185,000
     compared with $525,000 at December 31, 2005. The Company had outstanding
     borrowings of $11.0 million under its $25.0 million revolving credit
     facility ("Credit Facility") at June 30, 2006 and $2.5 million at December
     31, 2005. The increase in the outstanding balance under the Credit Facility
     in the first six months of 2006 was primarily attributable to borrowings to
     fund the construction of the new Halkey-Roberts facility. The Credit
     Facility, which expires November 12, 2009, and may be extended under
     certain circumstances, contains various restrictive covenants, none of
     which is expected to impact the Company's liquidity or capital resources.
     At June 30, 2006, the Company was in compliance with all financial
     covenants.

     As of June 30, 2006, the Company had working capital of $21.2 million,
     including $185,000 in cash and cash equivalents. The $1.4 million increase
     in working capital during the first six months of 2006 was primarily
     related to an increase in accounts receivable partially offset by an
     increase in accrued income and other taxes. The increase in accounts
     receivable during the first six months of 2006 was primarily related to the
     increase in revenues for the second quarter of 2006 as compared to the
     fourth quarter of 2005. Cash flows from continuing operations generated
     $5.6 million for the six months ended June 30, 2006 as compared to $1.9
     million for the six months ended June 30, 2005. The 2005 period was heavily
     impacted by a $3.4 million increase in inventories. During the first six
     months of 2006, the Company expended $13.9 million for the purchase of
     property and equipment. Of this amount, $11.5 million was expended for the
     construction of the new Halkey-Roberts facility. The Company received net
     proceeds of $948,000 from the exercise of employee stock options during the
     first six months of 2006. During the first six months of 2006, the Company
     repurchased 24,000 shares of its common stock for approximately $1.6
     million and paid dividends totaling $627,000 to its stockholders.

     The Company believes that its existing cash and cash equivalents, cash
     flows from operations, borrowings available under the Company's credit
     facility, supplemented, if necessary, with equity or debt financing, which
     the Company believes would be available, will be sufficient to fund the
     Company's cash requirements for the foreseeable future.

     Forward-Looking Statements
     The statements in this Management's Discussion and Analysis that are
     forward-looking are based upon current expectations, and actual results may
     differ materially. Therefore, the inclusion of such forward-looking
     information should not be regarded as a representation by the Company that
     the objectives or plans of the Company would be achieved. Such statements
     include, but are not limited to, the Company's expectations regarding
     future liquidity and capital resources. Words such as "anticipates,"
     "believes," "expects," "estimated" and variations of such words and similar
     expressions are intended to identify such forward-looking statements.
     Forward-looking statements contained herein involve numerous risks and
     uncertainties, and there are a number of factors that could cause actual
     results or future events to differ materially, including, but not limited
     to, the following: changing economic, market and business conditions; acts
     of war or terrorism; the effects of governmental regulation; the impact of
     competition and new technologies; slower-than-anticipated introduction of
     new products or implementation of marketing strategies; implementation of
     new manufacturing processes or implementation of new information systems;
     the Company's ability to protect its intellectual property; changes in the
     prices of raw materials; changes in product mix; intellectual property and
     product liability claims and product recalls; the ability to attract and
     retain qualified personnel; the loss of, or any material reduction in sales
     to, any significant customers; and problems in the relocation of the
     Halkey-Roberts operations. In addition, assumptions relating to budgeting,
     marketing, product development and other management decisions are
     subjective in many respects and thus susceptible to interpretations and
     periodic review which may cause the Company to alter its marketing, capital
     expenditures or other budgets, which in turn may affect the Company's
     results of operations and financial condition.


                                       14
<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     For the quarter ended June 30, 2006, the Company did not experience any
     material changes in market risk exposures that affect the quantitative and
     qualitative disclosures presented in the Company's 2005 Annual Report on
     Form 10-K.

Item 4.  Controls and Procedures

     The Company's management, with the participation of the Company's Chief
     Executive Officer and its Chief Financial Officer, evaluated the Company's
     disclosure controls and procedures (as defined in Exchange Act Rules
     13a-15(e) and 15d-15(e)) as of June 30, 2006. Based upon this evaluation,
     the Chief Executive Officer and Chief Financial Officer have concluded that
     the Company's disclosure controls and procedures are effective. There were
     no changes in our internal control over financial reporting for the quarter
     ended June 30, 2006 that have materially affected or are reasonably likely
     to materially affect our internal control over financial reporting.




                                       15
<PAGE>


                                     PART II

                                OTHER INFORMATION

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           The Company held its 2006 Annual Meeting of Stockholders on May 22,
           2006 at its offices in Allen, Texas. At such meeting, the Company's
           stockholders ratified the appointment of Grant Thornton LLP as
           independent accountants with 1,445,843 shares voted for ratification,
           3,145 voted against, 400 abstentions and 981 broker non-votes and
           approved the Atrion Corporation 2006 Equity Incentive Plan with
           1,037,385 shares voted for approval, 126,278 against, 6,800
           abstentions and 279,906 broker non-votes. The voting with respect to
           the nominee for election as director was as follows:

                    Nominee              Votes For          Votes Withheld
                    -------              ---------          --------------
              Hugh J. Morgan, Jr.        1,381,119              68,269

           The terms of the following directors continued after the meeting:
           Emile A. Battat, Ronald N. Spaulding, Roger F. Stebbing, and John P.
           Stupp, Jr.

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

           (a)   Exhibits
                 10.1    Atrion Corporation 2006 Equity Incentive Plan (1)

                 31.1    Sarbanes-Oxley Act Section 302 Certification of Chief
                         Executive Officer

                 31.2    Sarbanes-Oxley Act Section 302 Certification of Chief
                         Financial Officer

                 32.1    Certification Pursuant To 18 U.S.C. Section 1350, As
                         Adopted Pursuant To Section 906 of The Sarbanes - Oxley
                         Act Of 2002

                 32.2    Certification Pursuant To 18 U.S.C. Section 1350, As
                         Adopted Pursuant To Section 906 of The Sarbanes - Oxley
                         Act Of 2002

           (b)   Reports on Form 8-K
                 On May 8, 2006, the Company filed a report on Form 8-K with the
                 SEC regarding the public dissemination of a press release
                 announcing its financial results for the first quarter ended
                 March 31, 2006 (Item 12).

Notes:

(1)  Incorporated by reference to Schedule 14A filed April 6, 2006.


                                       16
<PAGE>


                                   SIGNATURES


     Pursuant to the requirements of the Securities Exchange Act of 1934, the
     registrant has duly caused this report to be signed on its behalf by the
     undersigned thereunto duly authorized.




                                           Atrion Corporation
                                           ------------------
                                              (Registrant)


     Date: August 8, 2006                          /s/ Emile A. Battat
                                                   -----------------------------
                                                   Emile A. Battat
                                                   Chairman, President and
                                                   Chief Executive Officer



     Date: August 8, 2006                          /s/ Jeffery Strickland
                                                   -----------------------------
                                                   Jeffery Strickland
                                                   Vice President and
                                                   Chief Financial Officer


                                       17