UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, DC 20549

                                 FORM 10-QSB


                Quarterly Report Under Section 13 or 15(d)
                  of the Securities Exchange Act of 1934


              For the Quarterly Period Ended: March 31, 2007


                        Commission File No. 1-4436


                              THE STEPHAN CO.
     (Exact Name of Small Business Issuer as Specified in its Charter)


               Florida                               59-0676812
   (State or Other Jurisdiction of               (I.R.S. Employer
   Incorporation or Organization)               Identification No.)


   1850 West McNab Road, Fort Lauderdale, Florida      33309
      (Address of Principal Executive Offices)       (Zip Code)


Registrant's Telephone Number, including Area Code: (954) 971-0600


Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
YES       NO X



         Approximate number of shares of Common Stock outstanding
                          as of April 30, 2007:



                                 4,389,805






                       THE STEPHAN CO. AND SUBSIDIARIES
                    QUARTERLY REPORT PURSUANT TO SECTION 13
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                                MARCH 31, 2007


                                    INDEX

                                                               PAGE NO.
PART I.    FINANCIAL INFORMATION

           ITEM 1.  Financial Statements

           Unaudited Condensed Consolidated Balance Sheets
           as of March 31, 2007 and December 31, 2006            5-6

           Unaudited Condensed Consolidated Statements
           of Operations for the three months ended
           March 31, 2007 and 2006                                7

           Unaudited Condensed Consolidated Statements
           of Cash Flows for the three months ended
           March 31, 2007 and 2006                               8-9

           Notes to Unaudited Condensed Consolidated
           Financial Statements                                 10-15

           ITEM 2.    Management's Discussion and Analysis      16-17

           ITEM 3.    Controls and Procedures                   17-18


PART II.   OTHER INFORMATION

           ITEM 1.  Legal Proceedings                             19

           ITEM 6.  Exhibits                                      19


SIGNATURES                                                        20













                                     2


                        THE STEPHAN CO. AND SUBSIDIARIES
                    QUARTERLY REPORT PURSUANT TO SECTION 13
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                                MARCH 31, 2007


         CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR
    PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995


          This quarterly report contains certain "forward-looking"
statements. The Stephan Co. ("Stephan" or the "Company") desires to take
advantage of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 and is including this statement for the
express purpose of availing itself of the protections of such safe harbor
with respect to all such forward-looking statements.  Such forward-looking
statements involve risks, uncertainties and other factors which may cause
the actual results, condition (financial or otherwise), performance, trends
or achievements of the Company and its subsidiaries to be materially
different from any results, condition, performance, trends or achievements
projected, anticipated or implied by such forward-looking statements.

Words such as "projects," "believe," "anticipates," "estimate,"
"plans," "expect," "intends," and similar words and expressions are
intended to identify forward-looking statements and are based on our
current expectations, assumptions, and estimates about us and our industry.
In addition, any statements that refer to expectations, projections or
other characterizations of future events or circumstances are forward-
looking statements. Although we believe that such forward-looking
statements are reasonable, we cannot assure you that such expectations will
prove to be correct.

     Our actual results could differ materially from those anticipated in
such forward-looking statements as a result of several factors, risks and
uncertainties. These factors, risks and uncertainties include, without
limitation, our ability to satisfactorily address any material weaknesses
in our financial controls; general economic and business conditions;
competition; the relative success of our operating initiatives; our
development and operating costs; our advertising and promotional efforts;
brand awareness for our product offerings; the existence or absence of
adverse publicity; acceptance of any new product offerings; changing trends
in customer tastes; the success of any multi-branding efforts; changes in
our business strategy or development plans; the quality of our management
team; costs and expenses incurred by us in pursuing strategic alternatives;
the availability, terms and deployment of capital; the business abilities
and judgment of our personnel; the availability of qualified personnel; our
labor and employee benefit costs; the availability and cost of raw
materials and supplies; changes in or newly-adopted accounting principles;
changes in, or our failure to comply with, applicable laws and regulations;
changes in our product mix and associated gross profit margins; as well as
management's response to these factors, and other factors that may be more
fully described in the Company's literature, press releases and publicly-

                                     3


                        THE STEPHAN CO. AND SUBSIDIARIES
                    QUARTERLY REPORT PURSUANT TO SECTION 13
                    OF THE SECURITIES EXCHANGE ACT OF 1934
                                MARCH 31, 2007


filed documents with the Securities and Exchange Commission. You are urged
to carefully review and consider these disclosures, which describe certain
factors that affect our business.

     We do not undertake, subject to applicable law, any obligation to
publicly release the results of any revisions, which may be made to any
forward-looking statements to reflect events or circumstances occurring
after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.  Therefore, we caution each reader of
this report to carefully consider the specific factors and qualifications
discussed herein with respect to such forward-looking statements, as such
factors and qualifications could affect our ability to achieve our
objectives and may cause actual results to differ materially from those
projected, anticipated or implied herein.

































                                     4


                        PART I.  FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


                       THE STEPHAN CO. AND SUBSIDIARIES
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                                   ASSETS

                                               March 31,     December 31,
                                                 2007            2006
                                             ____________    ____________

CURRENT ASSETS

 Cash and cash equivalents                    $ 7,666,815    $  7,064,332

 Restricted cash                                1,110,000       1,110,000

 Accounts receivable, net                       1,940,800       1,716,733

 Inventories                                    4,978,912       4,792,357

 Prepaid expenses and
  other current assets                            159,162         335,429
                                             ____________    ____________

   TOTAL CURRENT ASSETS                        15,855,689      15,018,851

RESTRICTED CASH                                   836,071       1,206,392

PROPERTY, PLANT AND EQUIPMENT, net              1,540,905       1,573,560

DEFERRED INCOME TAXES                             813,588         864,471

GOODWILL, net                                   2,602,802       2,602,802

TRADEMARKS, net                                 3,069,507       3,069,507

DEFERRED ACQUISITION COSTS, net                    59,655          76,161

OTHER ASSETS, net                               2,391,959       2,354,295
                                             ____________    ____________

   TOTAL ASSETS                              $ 27,170,176    $ 26,766,039
                                             ============    ============


    See notes to unaudited condensed consolidated financial statements


                                     5


                      THE STEPHAN CO. AND SUBSIDIARIES
              UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



                   LIABILITIES AND STOCKHOLDERS' EQUITY


                                              March 31,      December 31,
                                                2007             2006
                                            ____________     ____________
CURRENT LIABILITIES

 Accounts payable and
  accrued expenses                         $  2,859,053      $  2,215,449

 Current portion of
  long-term debt                              1,110,000         1,110,000
                                           ____________      ____________

   TOTAL CURRENT LIABILITIES                  3,969,053         3,325,449

LONG-TERM DEBT                                  832,500         1,110,000
                                           ____________      ____________

   TOTAL LIABILITIES                          4,801,553         4,435,449
                                           ____________      ____________

COMMITMENTS AND CONTINGENCIES (NOTE 3)

STOCKHOLDERS' EQUITY

  Common stock, $.01 par value                   43,898            43,898
  Additional paid-in capital                 17,668,352        17,646,069
  Retained earnings                           4,656,373         4,640,623
                                           ____________      ____________
  TOTAL STOCKHOLDERS' EQUITY                 22,368,623        22,330,590
                                           ____________      ____________
TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                     $ 27,170,176      $ 26,766,039
                                           ============      ============








    See notes to unaudited condensed consolidated financial statements



                                     6


                    THE STEPHAN CO. AND SUBSIDIARIES
         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



                                             Three Months Ended March 31,
                                            ______________________________

                                                 2007             2006
                                            _____________      ___________
NET SALES                                     $ 5,196,864      $ 5,596,397

COST OF GOODS SOLD                              3,042,920        3,378,582
                                              ___________      ___________
GROSS PROFIT                                    2,153,944        2,217,815

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                       2,048,022        2,078,332
                                              ___________      ___________

OPERATING INCOME                                  105,922          139,483

OTHER INCOME(EXPENSE)
  Interest income                                  90,554           43,463
  Interest expense                                (34,634)         (31,798)
  Royalty income                                   12,500           12,500
                                              ___________      ___________

INCOME BEFORE INCOME TAXES                        174,342          163,648

INCOME TAX EXPENSE                                 70,796           66,592
                                              ___________      ___________
NET INCOME                                    $   103,546      $    97,056
                                              ===========      ===========


BASIC AND DILUTED
  EARNINGS PER SHARE:                         $       .02      $       .02
                                              ===========      ===========
WEIGHTED AVERAGE NUMBER
  OF SHARES OUTSTANDING                         4,399,758        4,391,747
                                              ===========      ===========








    See notes to unaudited condensed consolidated financial statements


                                     7


                      THE STEPHAN CO. AND SUBSIDIARIES
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



                                             Three Months Ended March 31,
                                           _______________________________

                                                 2007            2006
                                             ___________     ___________
CASH FLOWS FROM OPERATING ACTIVITIES:

 Net income                                  $   103,546     $    97,056
                                             ___________     ___________


 Adjustments to reconcile net income
  to net cash flows provided
  by operating activities:

   Depreciation                                   34,045          37,454
   Stock option compensation                      22,283            -
   Amortization of intangible assets              16,506          16,506
   Deferred income taxes                          50,883          30,448
   Provision for doubtful accounts                 5,827          27,177

   Changes in operating assets and
   liabilities:

     Accounts receivable                        (229,894)       (446,479)
     Inventories                                (186,555)         37,137
     Income taxes payable/receivable                -             22,893
     Prepaid expenses
      and other current assets                   176,267         110,996
     Other assets                                (37,664)         27,747
     Accounts payable and accrued expenses       643,604         559,385
                                             ___________     ___________

     Total adjustments                           495,302         423,264
                                             ___________     ___________
Net cash flows provided by
 operating activities                            598,848         520,320
                                             ___________     ___________






     See notes to unaudited condensed consolidated financial statements



                                     8


                       THE STEPHAN CO. AND SUBSIDIARIES
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                             Three Months Ended March 31,
                                            ______________________________

                                                 2007             2006
                                             ____________     ___________
CASH FLOWS FROM INVESTING ACTIVITIES:

 Change in restricted cash                       370,321          185,470

 Purchase of property, plant
  and equipment                                   (1,390)          (8,716)
                                             ___________      ___________
Net cash flows provided by
 investing activities                            368,931          176,754
                                             ___________      ___________
CASH FLOWS FROM FINANCING ACTIVITIES:

 Repayments of long-term debt                   (277,500)        (277,500)

 Dividends paid                                  (87,796)         (87,796)
                                             ___________      ___________
Net cash flows used in
 financing activities                           (365,296)        (365,296)
                                             ___________      ___________

INCREASE IN CASH AND CASH EQUIVALENTS            602,483          331,778

CASH AND CASH EQUIVALENTS,
 BEGINNING OF PERIOD                           7,064,332        5,602,762
                                             ___________      ___________
CASH AND CASH EQUIVALENTS,
 END OF PERIOD                               $ 7,666,815      $ 5,934,540
                                             ===========      ===========


Supplemental Disclosures of Cash Flow Information:


          Interest paid                      $     7,990      $    11,798
                                             ===========      ===========

          Income taxes paid                  $    21,515      $      -
                                             ===========      ===========


    See notes to unaudited condensed consolidated financial statements


                                     9




                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2007 AND 2006


NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES


         NATURE OF OPERATIONS:  The Stephan Co. (the "Company") is engaged
principally in the manufacture, sale, and distribution of hair and personal
care grooming products throughout the United States.  The Company has
allocated substantially all of its business into three segments, which
include professional hair care products and distribution, retail personal
care products and manufacturing.

         BASIS OF PRESENTATION:  In the opinion of management, all
adjustments (consisting only of normal accruals) necessary for a fair
presentation of the Company's financial position and results of operations
are reflected in these unaudited interim financial statements.

     The results of operations for the three-month period ended March 31,
2007 is not necessarily indicative of the results to be achieved for the
year ending December 31, 2007.  The December 31, 2006 condensed
consolidated balance sheet was derived from the audited consolidated
financial statements, but does not include all disclosures required by
accounting principles generally accepted in the United States of America
("generally accepted accounting principles").  These interim financial
statements should be read in conjunction with the audited consolidated
financial statements and accompanying notes appearing in the Company's
Annual Report on Form 10-K for the year ended December 31, 2006, previously
filed with the Securities and Exchange Commission.

         USE OF ESTIMATES:  The preparation of consolidated financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.

         CASH AND CASH EQUIVALENTS:    Cash and cash equivalents include
cash, money market investment accounts and short-term municipal bonds
having maturities of 90 days or less when acquired.  The Company maintains
cash deposits at certain financial institutions in amounts in excess of the
federally insured limit.  Cash and cash equivalents held in interest-
bearing accounts as of March 31, 2007 and December 31, 2006 were
approximately $ 6,964,000 and $6,242,000, respectively.  At March 31, 2007
and December 31, 2006, the Company excluded restricted cash in the amount
of approximately $1,946,000 and $2,316,000, respectively, from the above as
they are pledged as collateral for a bank loan.


                                     10


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2007 AND 2006


NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES (continued)

         INVENTORIES:  Inventories are stated at the lower of cost (deter-
mined on a first-in, first-out basis) or market, and are as follows:

                                        March 31,          December 31,
                                          2007                 2006
                                      ____________         ____________
Raw materials                         $  1,423,855         $  1,457,575
Packaging and components                 2,196,541            2,138,017
Work in progress                           503,919              605,848
Finished goods                           3,176,311            2,872,305
                                      ____________         ____________
                                         7,300,626            7,073,745
Less: Amount included in
      other assets                      (2,321,714)          (2,281,388)
                                      ____________         ____________

                                      $  4,978,912         $  4,792,357
                                      ============         ============

     Raw materials include surfactants, chemicals and fragrances used in
the production process.  Packaging materials include cartons, inner sleeves
and boxes used in the actual product, as well as outer boxes and cartons
used for shipping purposes.  Components are the actual bottles or
containers (plastic or glass), jars, caps, pumps and similar materials that
become part of the finished product.  Finished goods also include hair
dryers, electric clippers, lather machines, scissors and salon furniture.

     Included in other assets is inventory not anticipated to be utilized
within one year and is comprised primarily of packaging, components and
finished goods.  The Company reduces the carrying value of inventory to
provide for these slow moving goods including the estimated costs of
disposal of inventory that may ultimately become unusable or obsolete.

         BASIC AND DILUTED EARNINGS PER SHARE:  Basic and diluted earnings
per share are computed by dividing net income by the weighted average
number of shares of common stock outstanding.  The weighted average number
of shares outstanding was 4,399,758 for the three months ended March 31,
2007 and 4,391,747 for the three months ended March 31, 2006.  For the
three months ended March 31, 2007 and 2006, the Company had 396,178 and
391,116 outstanding stock options, respectively, a significant portion of
which were anti-dilutive. The inclusion of dilutive stock options in the
calculation of earnings per share did not have a material impact on
earnings per share for the three months ended March 31, 2007 and 2006.


                                     11


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2007 AND 2006


NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES (continued)

         STOCK-BASED COMPENSATION:  Effective January 1, 2006, the Company
adopted Statement of Financial Accounting Standards No. 123 (revised),
"Share-Based Payment" ("FAS 123R"), and chose to utilize the modified
prospective transition method. Under this method, compensation costs
recognized at March 31, 2007 relate to the estimated fair value at the
grant date of 50,000 stock options granted subsequent to January 1, 2007 in
accordance with FAS 123R.  Prior to the adoption of FAS 123R the Company
accounted for stock options in accordance with APB Opinion No. 25,
"Accounting for Stock Issued to Employees," and recognized no compensation
expense in net income for stock options granted and has elected the
disclosure only provisions of FAS 123.  In accordance with the provisions
of FAS 123R, options granted prior to January 1, 2006, have not been
restated to reflect the adoption of FAS 123R.  The required services for
awards prior to January 1, 2006 had been rendered prior to December 31,
2005.

     As a result of adopting FAS 123R on January 1, 2006, the Company's net
income for the period ended March 31, 2007 was lower because the Company
recognized approximately $22,000 of compensation expense (included in
Selling, General and Administrative Expenses) in the period for the stock
options granted.  The impact on basic and diluted earnings per share for
the quarter ended March 31, 2007 was not material.  For the quarter ended
March 31, 2006,  compensation expense of approximately $21,000 was recorded
for options granted in the period, as indicated above.  The Company has
used the Black-Scholes option pricing model to estimate the fair value of
stock options using the following assumptions as at March 31, 2007:


              Life expectancy                      10 years
              Risk-free interest rate                 4.48%
              Expected volatility                    62.00%
              Dividends per share                     2.21%
              Weighted average fair
               value at grant date                   $2.06


     The above assumptions are based on a number of factors as follows:
(i) expected volatility was determined using the historical volatility of
the Company's stock price, (ii) the expected term of the options is based
on the period of time that the options granted are expected to be
outstanding, and (iii) the risk free rate is the U.S. Treasury rate
effective at the time of grant for the duration of the options granted.
Compensation cost is recognized on a straight-line basis over the vesting
period.

                                   12


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2007 AND 2006


NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES (continued)

          NEW FINANCIAL ACCOUNTING STANDARDS:  In February 2007, the FASB
issued SFAS No. 159, "The Fair Value Option for Financial Assets and
Financial Liabilities" (SFAS 159), which establishes a fair value option
under which entities can elect to report certain financial assets and
liabilities at fair value, with changes in fair value recognized in
earnings. SFAS 159 is effective for fiscal years beginning after November
15, 2007. Management is currently evaluating the impact SFAS 159 will have
on the Company's financial statements.

      In September 2006, the Securities and Exchange Commission staff
published Staff Accounting Bulletin ("SAB") No. 108, "Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in
Current Year Financial Statements." SAB No. 108 addresses quantifying the
financial statement effects of misstatements, specifically, how the effects
of prior year uncorrected errors must be considered in quantifying
misstatements in the current year financial statements. SAB No. 108 is
effective for fiscal years ending after November 15, 2006. The adoption of
SAB No. 108 by our Company in the fourth quarter of 2006 did not have a
material impact on our consolidated financial statements

     In July 2006 the FASB issued FASB Interpretation No. 48, ("FIN 48")
"Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109".  FIN 48 requires that we recognize in our financial
statements the impact of a tax position taken or expected to be taken in a
tax return, provided that such position is more likely than not of being
sustained on audit.  FIN 48 is effective for fiscal years beginning after
December 15, 2006.  We do not anticipate that FIN 48 will have any adverse
effect on our financial statements.

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and
Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement
No. 3", effective for accounting changes and corrections of errors made in
fiscal year 2006 and beyond.  In February 2006, the FASB issued SFAS No.
155, "Accounting for Certain Hybrid Financial Instruments, an amendment of
FASB Statements No. 133 and 140", effective for events occurring after the
first fiscal year that begins after September 15, 2006.  In March 2006, the
FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets, an
amendment of FASB Statement No. 140", also effective for the first fiscal
year that begins after September 15, 2006.  In September 2006, the FASB
issued SFAS No. 157, "Fair Value Measurements", effective for financial
statements issued for fiscal years beginning after November 15, 2007.  SFAS
No. 157 defines fair value, establishes a framework for measuring fair
value and expands required disclosures in connection therewith.  Also in
September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for

                                     13


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2007 AND 2006

NOTE 1:  NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT
         ACCOUNTING POLICIES (continued)

Defined Benefit Pension and Other Retirement Plans", an amendment of FASB
Statements No. 87, 88, 106, and 132(R).  The effect of these statements on
the Company's consolidated financial statements will be determined based
upon the nature and significance of future events, if any, that would be
subject to these statements.

NOTE 2: SEGMENT INFORMATION

     The Company has identified three reportable operating segments based
upon how its management evaluates its business.  These segments are
Professional Hair Care Products and Distribution ("Professional"), Retail
Personal Care Products ("Retail") and "Manufacturing".  The Professional
segment has a customer base consisting generally of distributors that
purchase the Company's hair products and beauty and barber supplies for
sale to salons and barbershops.  The customer base for the Retail segment
consists of mass merchandisers, chain drug stores and supermarkets that
sell products to end-users. The Manufacturing segment manufactures products
for different subsidiaries of the Company and manufactures private label
brands for customers.

     The Company conducts operations principally in the United States and
sales to international customers are not material to its consolidated net
sales. Income Before Income Taxes as shown below reflects a reasonable
allocation of corporate overhead expenses to all segments.  The following
tables, in thousands, summarize Net Sales and Income Before Income Taxes by
reportable segment:

                                                  INCOME BEFORE
                                 NET SALES         INCOME TAXES
                              _______________    _______________

                               Three Months       Three Months
                              Ended March 31,    Ended March 31,
                                2007    2006       2007    2006
                              _______________    _______________
Professional                  $ 3,833 $ 4,252    $  340    $ 345
Retail                          1,008   1,009       312       47
Manufacturing                   1,119   1,241      (328)    (185)
                              _______ _______    ______  _______
   Total                        5,960   6,502       324      207
Intercompany
  Manufacturing                  (763)   (906)     (150)     (43)
                              _______ _______    ______  _______
   Consolidated               $ 5,197 $ 5,596    $  174  $   164
                              ======= =======    ======  =======

                                     14


                       THE STEPHAN CO. AND SUBSIDIARIES
       NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    QUARTERS ENDED MARCH 31, 2007 AND 2006


NOTE 3: COMMITMENTS AND CONTINGENCIES

     The Company is involved in litigation matters arising in the ordinary
course of business.  It is the opinion of management that none of these
matters, at March 31, 2007, would likely, if adversely determined, have a
material adverse effect on the Company's financial position, results of
operations or cash flows. Additionally, there has been no material change
in the status of any other pending litigation since the Company's last
filing of Form 10-K with the Securities and Exchange Commission for the
year ended December 31, 2006.






































                                     15




                    THE STEPHAN CO. AND SUBSIDIARIES
                 QUARTERLY REPORT PURSUANT TO SECTION 13
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                          MARCH 31, 2007 AND 2006


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

RESULTS OF OPERATIONS

     For the three months ended March 31, 2007, net sales were $5,197,000
compared to $5,596,000 for the three months ended March 31, 2006, a
decrease of $399,000.  Gross profit for the three months ended March 31,
2007 was $2,154,000, compared to gross profit of $2,218,000 achieved for
the corresponding three-month period in 2006.  The decrease in net sales
was primarily due to a decline in Professional Hard goods sales, which
accounted for approximately 70% of the decline, as well as a decrease in
net sales of retail goods.  The gross profit margin increased, from 39.6%
for the quarter ended March 31, 2006 to 41.4% for the corresponding period
in 2007, due largely to a change in the sales mix.

     Net income was $104,000 for the three months ended March 31, 2007
compared to net income of $97,000 for the comparable three months ended
March 31, 2006.  Basic and diluted earnings per share were $.02 for each of
the three month period ended March 31, 2007 and 2006.

     Selling, general and administrative ("SG&A") expenses for the three
months ended March 31, 2007 decreased $30,000 when compared to the
corresponding three-month period of 2006.  The Company experienced declines
in payroll and related expenses but these were offset by increases in
professional fees, insurance and office expenses when compared to the
quarter ended March 31, 2006.

     Interest expense for the three months ended March 31, 2007 increased
slightly when compared to the corresponding three-month period in 2006 as a
result of increased interest accruals on the Trevor Sorbie debt arising
from an adverse arbitration decision in 2004.  The Company is vigorously
defending this legal action and while management believes we may ultimately
prevail and/or settle for an amount substantially below the amount already
accrued, management continues to accrue interest on the entire obligation
because, due to the limited discovery taken and the complexities of the
issues involved, the Company cannot predict the outcome of the litigation.

     Interest income for the three months ended March 31, 2007 increased
approximately $47,000, when compared to the corresponding three-month
period in 2006, as a result of having more cash on hand for investment
purposes and an overall increase in the interest rates on invested funds.

LIQUIDITY & CAPITAL RESOURCES

     Cash and cash equivalents increased $603,000 to $7,667,000 as of March

                                     16


                    THE STEPHAN CO. AND SUBSIDIARIES
                 QUARTERLY REPORT PURSUANT TO SECTION 13
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                          MARCH 31, 2007 AND 2006


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS (continued)

31, 2007 from $7,064,000 as of December 31, 2006.  Total cash of $9,613,000
includes $1,946,000 of cash invested in a restricted money market account
pledged as collateral for a bank loan.  The Company has continued to secure
its outstanding long-term debt with Wachovia Bank with restricted cash.
Total current assets at March 31, 2007 were $15,856,000 compared to
$15,019,000 at December 31, 2006.  Working capital increased $193,000 from
December 31, 2006, and was approximately $11,887,000 at March 31, 2007.

     The Company does not have any off-balance sheet financing or similar
arrangements.

NEW FINANCIAL ACCOUNTING STANDARDS

     See Note 1 to the Financial Statements included in Part I, Item 1 for
a discussion of new financial accounting standards.

DISCUSSION OF CRITICAL ACCOUNTING POLICIES

     The preparation of consolidated financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated financial statements and the reported amounts of
revenues and expenses during the reporting period.  Actual results would
differ significantly from those estimates if different assumptions were
used or unexpected events transpire.  Please see Item 7 in the Company's
Annual Report on Form 10-K for the year ended December 31, 2006 filed with
the Securities and Exchange Commission.

ITEM 3.  CONTROLS AND PROCEDURES

     (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES:  As of the end
of the period covered by this quarterly report, an evaluation of the
effectiveness of the design and operation of the Company's disclosure
controls and procedures was performed under the supervision and with the
participation of our management, including our principal executive officer
and principal financial officer.  Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that a material
weakness existed in our internal controls over financial reporting and
consequently our disclosure controls and procedures were not effective, as
of the end of the period covered by this quarterly report in timely
alerting them as to material information relating to our Company (including
our consolidated subsidiaries) required to be included in this quarterly

                                     17


                    THE STEPHAN CO. AND SUBSIDIARIES
                 QUARTERLY REPORT PURSUANT TO SECTION 13
                  OF THE SECURITIES EXCHANGE ACT OF 1934
                          MARCH 31, 2007 AND 2006


ITEM 3.  CONTROLS AND PROCEDURES (continued)

report.

    The material weakness in our internal controls over financial reporting
as of March 31, 2007 related to the fact that as a small public company, we
have an insufficient number of personnel with clearly delineated and fully
documented responsibilities and with the appropriate level of accounting
expertise and we have insufficient documented procedures to identify and
prepare a conclusion on matters involving material accounting issues and to
independently review conclusions as to the application of generally
accepted accounting principles. The lack of a sufficient number of
accounting personnel is not considered appropriate for an internal control
structure designed for external reporting purposes.  The principal factors
management considered in determining whether a material weakness existed in
this regard was based upon management's evaluation discussed above and
advice from our independent registered public accounting firm.  As a
result, management has determined that a material weakness in the
effectiveness of the Company's internal controls over financial reporting
existed as of March 31, 2007.

     (b) CHANGES IN INTERNAL CONTROLS:  No change in the Company's internal
control over financial reporting occurred during the Company's first fiscal
quarter that has materially affected, or is reasonably likely to materially
affect, the Company's internal control over financial reporting.  However,
management of the Company, as well as the Audit Committee, recognizes that
current staffing levels will have to be enhanced and/or institute
arrangements with other accounting firms to act in a consulting capacity in
an effort to satisfy our reporting obligations and over-all standards of
disclosure controls and procedures.


















                                     18



                     THE STEPHAN CO. AND SUBSIDIARIES
                   QUARTERLY REPORT PURSUANT TO SECTION 13
                   OF THE SECURITIES EXCHANGE ACT OF 1934
                            MARCH 31, 2007 AND 2006


                      PART II.  OTHER INFORMATION


 ITEM 1.  LEGAL PROCEEDINGS

     See Note 3 to the Financial Statements included in Part I, Item 1 for
a discussion of legal proceedings.  There has been no significant change in
the status of litigation since the issuance of the Annual Report on Form
10-K for the year ended December 31, 2006.


ITEM 6.  EXHIBITS

          31.1    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive
Officer.

          31.2    Rule 13a-14(a)/15d-14(a) Certification of Chief Financial
Officer.

          32.1  Certification by the Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.

          32.2  Certification by the Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.






















                                     19



                                 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.



THE STEPHAN CO.




   /s/ Frank F. Ferola
_____________________________________
Frank F. Ferola
President and Chief Executive Officer
May 21, 2007




  /s/ David A. Spiegel
____________________________________
David A. Spiegel
Principal Financial and
Accounting Officer
May 21, 2007






















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