`UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

              [X] Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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 1-9125

                        AMERICAN TECHNICAL CERAMICS CORP.
               (Exact Name of Company as Specified in Its Charter)

                DELAWARE                                 11-2113382
    (State or Other Jurisdiction of         (I.R.S. Employer Identification No.)
     Incorporation or Organization)

 1 NORDEN LANE, HUNTINGTON STATION, NY                      11746
(Address of Principal Executive Offices)                 (Zip Code)

                                 (631) 622-4700
                     (Telephone Number, Including Area Code)

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

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

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

                                 Yes [_] No [X]

As of November 6, 2006, the Company had outstanding 8,726,023 shares of Common
Stock, par value $0.01 per share.



                         PART 1 - FINANCIAL INFORMATION

ITEM 1. Financial Statements

               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (In thousands, except per share data)



                                                                             SEPTEMBER 30,   JUNE 30,
                                                                                 2006          2006
                                                                             -------------   --------
                                                                              (unaudited)

ASSETS
Current assets
   Cash (including cash equivalents of $2 and
      $2, respectively)                                                         $ 6,591       $ 6,230
   Investments                                                                    2,121         2,094
   Accounts receivable (net of allowance for doubtful accounts of $332
      and $401, respectively)                                                    12,401        12,719
   Inventories                                                                   36,342        33,255
   Deferred income taxes, net                                                     3,457         3,472
   Prepaid and other current assets                                                 979         1,035
                                                                                -------       -------
                            TOTAL CURRENT ASSETS                                 61,891        58,805
                                                                                -------       -------
Property, plant and equipment (net of accumulated depreciation
   and amortization of $54,402 and $52,827, respectively)                        31,573        31,375
Other assets                                                                        343           363
                                                                                -------       -------
                            TOTAL ASSETS                                        $93,807       $90,543
                                                                                =======       =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Current portion of long-term debt (including related party debt of
      $498 and $485, respectively)                                              $ 1,985       $ 1,957
   Accounts payable                                                               3,363         3,005
   Accrued expenses                                                               5,949         6,192
   Income taxes payable                                                           1,607         1,002
                                                                                -------       -------
                            TOTAL CURRENT LIABILITIES                            12,904        12,156
                                                                                -------       -------
Long-term debt, net of current portion (including related party debt of
   $1,845 and $1,974, respectively)                                               6,450         7,229
Deferred income taxes                                                             3,092         3,091
                                                                                -------       -------
                            TOTAL LIABILITIES                                    22,446        22,476
                                                                                -------       -------
Commitments and contingencies
Stockholders' equity
   Common Stock -- $0.01 par value; authorized 20,000 shares; issued 9,124
      and 9,105 shares, outstanding 8,710 and 8,690 shares, respectively             91            91
   Capital in excess of par value                                                15,187        15,000
   Retained earnings                                                             57,242        54,102
   Accumulated other comprehensive income:
      Unrealized loss on investments available-for-sale, net                         --            (1)
                                                                                -------       -------
      Cumulative foreign currency translation adjustment                            237           271
                                                                                -------       -------
                                                                                    237           270
                                                                                -------       -------
   Less: Treasury stock, at cost (414 and 414 shares, respectively)               1,396         1,396
                                                                                -------       -------
                            TOTAL STOCKHOLDERS' EQUITY                           71,361        68,067
                                                                                -------       -------
                            TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          $93,807       $90,543
                                                                                =======       =======


See accompanying notes to unaudited consolidated financial statements.


                                       2



               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)

                                                  For the Three Months Ended
                                                         September 30,
                                                  --------------------------
                                                         2006      2005
                                                       -------   -------
Net sales                                              $23,057   $17,502
Cost of sales                                           13,162    13,627
                                                       -------   -------
   Gross profit                                          9,895     3,875
                                                       -------   -------
Selling, general and administrative expenses             4,528     4,170
Research and development expenses                          524       602
Other                                                      (18)      (10)
                                                       -------   -------
   Operating expenses                                    5,034     4,762
                                                       -------   -------
   Income/(loss) from operations                         4,861      (887)
                                                       -------   -------
Other (income) expense:
   Interest expense                                        187       140
   Interest income                                         (25)      (13)
                                                       -------   -------
                                                           162       127
                                                       -------   -------
Income/(loss) before provision for income taxes          4,699    (1,014)
Provision/(benefit from) for income taxes                1,559      (323)
                                                       -------   -------
Net income/(loss)                                      $ 3,140   $  (691)
                                                       =======   =======
Basic net income/(loss) per common share               $  0.36   $ (0.08)
                                                       =======   =======
Diluted net income/(loss) per common share             $  0.35   $ (0.08)
                                                       =======   =======
Basic weighted average common
   shares outstanding                                    8,697     8,516
                                                       =======   =======
Diluted weighted average common
   shares outstanding                                    8,975     8,516
                                                       =======   =======

See accompanying notes to unaudited consolidated financial statements.


                                       3




               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)



                                                                          For the Three Months Ended September 30,
                                                                          ----------------------------------------
                                                                                       2006       2005
                                                                                     --------   --------

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income/(loss)                                                                 $ 3,140    $  (691)
   Adjustments to reconcile net  income/(loss) to net cash
      provided by operating activities:
      Depreciation and amortization                                                    1,721      1,544
      (Loss)/gain on disposal of fixed assets                                             40        (14)
      Deferred income taxes                                                               16       (136)
      Stock-based compensation expense                                                    64        114
      Excess tax benefits from stock based compensation arrangements                     (38)       (72)
      Provision for doubtful accounts and sales returns                                  (69)        90
      Investment interest accretion, net                                                 (24)        (8)
      Changes in operating assets and liabilities:
      Accounts receivable                                                                345      1,630
      Inventories                                                                     (3,115)       361
      Other assets                                                                        48       (314)
      Accounts payable and accrued expenses                                              116       (911)
      Income taxes payable                                                               645         72
                                                                                     --------   --------
   Net cash provided by operating activities                                           2,889      1,665
                                                                                     --------   --------
CASH FLOWS FROM INVESTING ACTIVITIES:
      Capital expenditures                                                            (1,942)    (3,196)
      Proceeds from sale of fixed assets                                                   2         18
                                                                                     --------   --------
   Net cash used in investing activities                                              (1,940)    (3,178)
                                                                                     --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
      Repayment of debt                                                                 (725)      (268)
      Proceeds from the exercise of stock options                                         85        116
      Excess tax benefits from stock based compensation arrangements                      38         72
      Proceeds from the issuance of long term debt                                        --      1,548
                                                                                     --------   --------
   Net cash (used in)/provided by financing activities                                  (602)     1,468
                                                                                     --------   --------
      Effect of exchange rate changes on cash                                             14        (25)
                                                                                     --------   --------
      Net increase/(decrease) in cash and cash equivalents                               361        (70)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                           6,230      4,927
                                                                                     --------   --------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                             $ 6,591    $ 4,857
                                                                                     ========   ========
Supplemental cash flow information:
      Interest paid                                                                  $   110    $   148
      Taxes paid                                                                     $   838    $    33


     See accompanying notes to unaudited consolidated financial statements.


                                        4



               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
              (In thousands, except per share and percentage data)

(1) BASIS OF PRESENTATION:

          The accompanying unaudited interim consolidated financial statements
of American Technical Ceramics Corp. and subsidiaries (the "Company") reflect
all adjustments (consisting of normal recurring accruals) which are, in the
opinion of management, necessary for a fair presentation of its consolidated
financial position as of September 30, 2006, and the results of its operations
for the three month periods ended September 30, 2006 and 2005. These
consolidated financial statements should be read in conjunction with the summary
of significant accounting policies and notes to the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 2006. Results for the three month period ended September 30,
2006 are not necessarily indicative of results which could be expected for the
entire year.

          Certain reclassifications have been made to prior year amounts to
conform to the current year presentation.

(2) STOCK-BASED COMPENSATION:

          On April 1, 1997, the Board of Directors approved the American
Technical Ceramics Corp. 1997 Stock Option Plan (the "1997 Option Plan")
pursuant to which the Company may grant options to purchase up to 800 shares of
the Company's common stock. On April 11, 2000, the Board of Directors approved
the American Technical Ceramics Corp. 2000 Incentive Stock Plan (the "2000
Plan", and collectively with the 1997 Option Plan, the "Plans") pursuant to
which the Company may grant options or stock awards covering up to 1,200 shares
of the Company's common stock. Options granted under the Plans may be either
incentive or non-qualified stock options. The term of each incentive stock
option shall not exceed ten years from the date of grant (five years for grants
to employees who own 10% or more of the voting power of the Company's common
stock), and options may vest in accordance with a vesting schedule established
by the plan administrator (traditionally 25% per year during the first four
years of their term). Unless terminated earlier by the Board, the 1997 Option
Plan will terminate on March 31, 2007. Unless terminated earlier by the Board,
the 2000 Plan will terminate on April 10, 2010. Shares issued upon the exercise
of options are generally issued from the Company's authorized and unissued
shares.

          Disposition of shares acquired pursuant to the exercise of incentive
stock options under both Plans may not be made by the optionees within two years
following the date that the option is granted, nor within one year after the
exercise of the option, without the written consent of the Company.

          The Company records its stock-based compensation at fair value in
accordance with Financial Accounting Standards No. 123 (revised 2004).

          There were no stock options granted during the three months ended
September 30, 2006. The weighted average grant-date fair value per share of
stock options granted during the three months ended September 30, 2005 was $8.33
as determined by the Black-Scholes option pricing model (assuming a risk-free
interest rate of 3.98%, expected life of five years, expected volatility of
73.7%, and no dividends). The total intrinsic value of options exercised during
the periods ended September 30, 2006 and 2005 was $161 and $213, respectively.


                                        5



               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
              (In thousands, except per share and percentage data)

          Expected volatility is calculated using historical volatility. The
expected term (life) of options granted represents the period of time that
options granted are expected to be outstanding. In determining expected life,
the Company uses historical data to estimate option exercise and employee
departure behavior. Groups of employees that have similar historical behavior
are considered separately for valuation purposes. The risk free interest rate is
based on the US Treasury Yield curve in effect at the time of grant for the
expected life of the option.

          Stock option activity for the three months ended September 30, 2006 is
as follows:



                                                  Weighted          Weighted
                                                  Average            Average
                             Shares Subject       Exercise          Remaining         Aggregate
                               to Options     Price Per Share   Contractual Term   Intrinsic Value
                             --------------   ---------------   ----------------   ---------------

Outstanding, beginning
   of period                       863             $8.83
Granted                             --                --
Canceled                            --                --
Expired                             --                --
Exercised                          (20)             4.38
Outstanding, end of period         843             $8.93              4.6               $3,501
                                   ---                                ---
Exercisable, end of period         747             $8.63              4.0               $3,352
                                   ===                                ===


          A summary of the status of the Company's nonvested shares at September
30, 2006 and changes during the three months then ended is presented below:

                                                         Weighted
                                                         Average
                                 Shares Subject        Grant-date
                                   to Options     Fair Value Per Share
                                 --------------   ---------------------
Nonvested, beginning of period        120                 $6.88
Granted                                --                    --
Vested                                (24)                 5.60
Forfeited                              --                    --
                                      ---
Nonvested, end of period               96                 $7.20
                                      ===

          As of September 30, 2006, there was $635 of total unrecognized
compensation costs related to nonvested options granted under the Plans. That
cost is expected to be recognized over a weighted-average period of 3.0 years.
The total fair value of shares vested during the period ended September 30, 2006
was $134. Compensation cost recognized for amounts previously capitalized in
inventory and fixed assets for the three months ended September 30, 2006 was
$11.

          Cash received from the exercise of options for the three months ended
September 30, 2006 and 2005 was $85 and $116, respectively. The related tax
benefit recognized was $38 and $72 for the three months ended September 30, 2006
and 2005, respectively. The total compensation cost related to options was $64
and $93 for the three months ended September 30, 2006 and 2005, respectively.


                                        6



               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
              (In thousands, except per share and percentage data)

          At September 30, 2006, an aggregate of 168 shares were available for
option grants or stock awards under the Plans.

     Other Stock-Based Compensation

          During the three months ended September 30, 2006 and 2005, the Company
awarded an aggregate of nil and 7 shares of stock awards, respectively. These
awards resulted in compensation cost of nil and $30, respectively (including nil
and $9 of payments made to offset tax liabilities associated with these awards),
measured by the market value of the shares on their respective grant dates.

(3)  SUPPLEMENTAL CASH FLOW INFORMATION:

          During the three months ended September 30, 2006, the Company
recognized a $38 reduction of income taxes payable related to disqualifying
dispositions upon the exercise of incentive stock options.

          During the three months ended September 30, 2005, the Company (i)
granted deferred compensation stock awards with an aggregate value of $85 with
respect to which expense was recognized ratably throughout fiscal year 2006,
(ii) granted stock options with respect to which compensation expense of $333
will be recognized evenly over the service period, and (iii) recognized a $72
reduction of income taxes payable related to disqualifying dispositions upon the
exercise of incentive stock options.

(4)  INVENTORIES:

          Inventories included in the accompanying consolidated financial
statements consist of the following:

                  September   June 30,
                   30, 2006     2006
                  ---------   --------
Raw materials      $17,407     $17,095
Work-in-process      9,222       8,605
Finished goods       9,713       7,555
                   -------     -------
                   $36,342     $33,255
                   =======     =======


                                       7



               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
              (In thousands, except per share and percentage data)

(5)  EARNINGS PER SHARE:

          The following represents a reconciliation of the numerators and
denominators of the basic and diluted earnings per share ("EPS") computation:



                                                       For the Three Months Ended September 30,
                                 ---------------------------------------------------------------------------------
                                                   2006                                          2005
                                 ---------------------------------------   ---------------------------------------
                                  Net Income      Shares       Per-Share    Net Income       Shares      Per-Share
                                 (Numerator)   (Denominator)     Amount    (Numerator)   (Denominator)     Amount

Basic EPS                           $3,140         8,697        $ 0.36        $(691)         8,516        $(0.08)
                                                                ======                                    ======
Effect of dilutive securities:
   Stock options                        --           278         (0.01)          --           --
                                    ------         -----        ------        -----          -----        ------
Diluted EPS                         $3,140         8,975        $ 0.35        $(691)         8,516        $(0.08)
                                    ======         =====        ======        =====          =====        ======


          Options covering 143 shares have been omitted from the calculation of
dilutive EPS for the three months ended September 30, 2006 because their
inclusion would have been antidilutive.

(6)  COMPREHENSIVE INCOME:

     The Company's comprehensive income is as follows:

                                                  For the Three Months
                                                   Ended September 30,
                                                  --------------------
                                                     2006        2005
                                                    ------      -----
Net income/(loss)                                   $3,140      $(691)
                                                    ------      -----
Other comprehensive income:
   Foreign currency translation
      adjustments                                      (34)         6
   Unrealized gains on investments, net of tax           1         --
                                                    ------      -----
Other comprehensive income                             (33)         6
                                                    ------      -----
Comprehensive income/(loss)                         $3,107      $(685)
                                                    ======      =====

(7)  INDEBTEDNESS:

     Long-term debt consists of the following:

                                                September 30, June 30,
                                                     2006        2006
                                                ------------  --------
Notes payable to banks                              $6,092     $6,727
Obligations under capital leases                     2,343      2,459
                                                    ------     ------
                                                     8,435      9,186
Less: current portion                                1,985      1,957
                                                    ------     ------
Long-term debt                                      $6,450     $7,229
                                                    ======     ======


                                       8



               AMERICAN TECHNICAL CERAMICS CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
              (In thousands, except per share and percentage data)

          In April 2004, the Company entered into a $4,000 credit facility with
General Electric Capital Corporation ("GECC") for the purchase of equipment. In
May 2005, the credit facility was increased to $6,000. Borrowings under the line
bear interest, at the Company's option, at either a fixed rate of 3.47% above
the five year Treasury Bond yield at the time of election or a floating rate of
3.65% above LIBOR. Borrowings under the line are secured by the equipment
purchased thereunder. Each separate borrowing under the line will be a fully
amortizing term loan with a maturity of five years from the date the funds are
drawn down. The line of credit will expire on March 24, 2007. GECC has the
option to securitize these loans with a third party. Loans securitized with a
third party increase the available line of credit to the Company. As of
September 30, 2006, the Company had $4,782 of borrowings outstanding under this
facility at fixed interest rates ranging from 7.15% and 7.93%.

          In December 2004, the Company entered into a credit facility with
Commerce Bank, N.A. Under the terms of this facility, the Company may request
advances from time to time up to an aggregate of $5,000. Any advance made bears
interest at the Prime Rate as reported in the Wall Street Journal. Borrowings
under the facility are secured by a lien on the Company's accounts receivable
and inventory. Borrowings under the line expire on November 30, 2006. The
facility is subject to certain financial covenants, including minimum tangible
net worth and liability percentage ratios. As of September 30, 2006, the Company
had no outstanding borrowings under this credit facility.

          In September 2005, the Company's wholly-owned subsidiary in Sweden
obtained a series of five term loans aggregating 12,000 Swedish Krona ("SEK")
(approximately $1,500) from Svenska Handelsbanken, AB ("Handelsbanken"). The
loans are unsecured and bear interest at fixed rates ranging from 3.56% to
4.59%. The five loans are each for a principal amount of 2,400 SEK and are fully
amortizing. The loans mature in one to five years with the first having matured
on September 30, 2006 and one maturing on each succeeding September 30th through
2010. In connection with, and as an inducement to Handelsbanken to make the
loans, the Company entered into a Guaranty and Agreement with Handelsbanken
whereby the Company has agreed to guarantee the payment of all its Swedish
subsidiary's obligations under the loans. At September 30, 2006, the Company had
$1,310 of borrowings outstanding under these loans.

          The Company leases an administrative office, manufacturing and
research and development complex located in Jacksonville, Florida (the
"Jacksonville Facility") from a partnership controlled by the Company's
President, Chief Executive Officer and principal stockholder under a capital
lease. At September 30, 2006, the Jacksonville Facility had an aggregate cost of
$5,104 and a net book value of $1,492. The lease is for a period of 30 years,
was capitalized using an interest rate of 10.5% and expires on September 30,
2010. The lease currently provides for base rent of approximately $780 per
annum. The lease further provides for annual increases in base rent for years
beginning after May 1, 1999, based on the increase in the Consumer Price Index
since May 1, 1998 applied to base rent. The lease also provides for increases to
the base rent in connection with any new construction at the Jacksonville
Facility. Under the lease, upon any new construction being placed into use, the
base rent is subject to increase to the fair market rental of the Jacksonville
Facility, including the new construction.


                                       9



ITEM 2.         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS
              (In thousands, except per share and percentage data)

          The following discussion and analysis should be read in conjunction
with the consolidated financial statements, related notes and other information
included in this Quarterly Report on Form 10-Q.

          Statements in this Quarterly Report on Form 10-Q that are not
historical fact may constitute "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. All such
forward-looking statements are subject to risks and uncertainties, including,
but not limited to, market and economic conditions, the impact of competitive
products, product demand and market acceptance risks, changes in product mix,
costs and availability of raw materials, fluctuations in operating results,
delays in development of highly complex products, risks associated with
international sales and sales to the U.S. military, risk of customer contract or
sales order cancellations and other risks detailed from time to time in the
Company's filings with the Securities and Exchange Commission, including,
without limitation, those contained under the caption "Item 1 BUSINESS -
CAUTIONARY STATEMENTS REGARDING FORWARD - LOOKING STATEMENTS" in the Company's
Annual Report on Form 10-K. These risks could cause the Company's actual results
for future periods to differ materially from those expressed in any
forward-looking statements made by, or on behalf of, the Company. Any
forward-looking statement represents the Company's expectations or forecasts
only as of the date it was made and should not be relied upon as representing
its expectations or forecasts as of any subsequent date. The Company undertakes
no obligation to correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise, even if its expectations
or forecasts change.

Overview

          The trend of year-to-year comparative sales and bookings increases
continued during the quarter ended September 30, 2006. Sales and bookings for
the three months ended September 30, 2006 increased approximately 32% and 9%,
respectively, over the comparable period of fiscal year 2006. Sales improvements
were experienced across all major product lines, primarily as a result of growth
in the wireless communication and medical markets.

          Net income for the three months ended September 30, 2006 increased
significantly over the comparable period in the prior fiscal year due to
increased sales volume and higher than normal precious metal recovery. During
the first quarter of the prior year, the Company incurred a loss primarily due
to expenses incurred and difficulties encountered in converting its component
manufacturing and sales functions to its Enterprise Resource Planning ("ERP")
system. The Company encountered difficulty processing and shipping orders during
this conversion. In order to maintain excellent customer service, the Company
decided to revert back to its legacy computer system for these functions.


                                       10



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
              (In thousands, except per share and percentage data)

RESULTS OF OPERATIONS

KEY COMPARATIVE PERFORMANCE INDICATORS

                                             Three Months Ended
                                  ---------------------------------------
                                  September 30, 2006   September 30, 2005
                                  ------------------   ------------------
Net Sales                              $23,057              $17,502
Bookings                               $19,285              $17,626

Gross Margin                           $ 9,895              $ 3,875
Gross Margin (% of sales)                 42.9%                22.1%

Operating Expenses                     $ 5,034              $ 4,762
Operating Expenses (% of sales)           21.8%                27.2%

SIGNIFICANT HIGHLIGHTS

          Sales for the three months ended September 30, 2006 increased 31.7%
over the comparable period in the prior fiscal year.

          Bookings for the three months ended September 30, 2006 increased 9.4%
over the comparable period in the prior fiscal year.

          Gross margin as a percentage of sales increased to 42.9% during the
three months ended September 30, 2006, compared to 22.1% during the comparable
period in the prior fiscal year.

          Operating expenses as a percentage of sales decreased to 21.8% during
the three months ended September 30, 2006, compared to 27.2% during the
comparable period in the prior fiscal year.

Three Months Ended September 30, 2006 Compared with Three Months Ended September
30, 2005

          Net sales for the three months ended September 30, 2006 were $23,057,
an increase of 31.7% from the $17,502 recorded for the three months ended
September 30, 2005. The increase in sales is due to improved bookings from the
wireless communications and medical markets, as well as market penetration and
growth in sales of the Company's newer product lines. Revenues were impacted
during the first quarter of fiscal year 2006 as a result of the attempted
conversion by the Company of its component manufacturing and sales functions to
its ERP system discussed above. During this time, the Company was not able to
ship product at normal levels.

          Bookings have improved from the levels experienced in the comparable
period of last fiscal year but below those levels attained in recent quarters.
Total bookings for the three months ended September 30, 2006 were $19,285
compared to $17,626 in the comparable period of the prior fiscal year,
representing an increase of approximately 9%. Growth has come primarily from the
wireless communications and medical markets. Bookings grew at a slower rate than
sales due to the typical seasonality the Company experiences during the summer
vacation months.


                                       11



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
              (In thousands, except per share and percentage data)

          Gross margins were 43% of net sales for the three months ended
September 30, 2006, compared to 22% in the comparable period of the prior fiscal
year. Gross margins were favorably impacted by the increased sales volume and
increased levels of precious metal recovery during the three months ended
September 30, 2006. The increase in precious metal recovery was primarily due to
an increased quantity of material processed during the quarter as a result of
higher production levels, scrap from product and process development and
qualification work. In addition, gross margin in the comparable period of the
prior fiscal year was negatively impacted by the attempted conversion of certain
functions to a different computer system and increases in fixed costs that the
Company undertook during the year.

          Selling, general and administrative expenses totaled $4,528, or 20% of
net sales, for the three months ended September 30, 2006, compared to $4,170, or
24% of net sales, in the comparable period of the prior fiscal year. The
increase in selling, general and administrative expenses in absolute terms
compared to the prior fiscal year is attributable to increased commission
expense due to higher sales levels and increased bonus expense due to profitable
operations, partially offset by decreased training costs related to the
implementation of the ERP system and decreased bad debt expense. The Company
incurred approximately $150 of selling, general and administrative expenses
related to the ERP system implementation in the three months ended September 30,
2005.

          Research and development expenses were $524 for the three months ended
September 30, 2006, a decrease of 13% from the comparable period in the prior
fiscal year. The decrease was due to decreased supply expense due to the timing
of various projects' stage of completion. The Company continues to focus on the
development of new products and processes related to its core product lines.

          Interest expense was $187 for the three months ended September 30,
2006, an increase of 34% from the comparable period in the prior fiscal year.
The increase was primarily due to an increase in the Company's average
outstanding bank debt during the last twelve months.

          The Company recognized income tax expense for the three months ended
September 30, 2006 as compared to an income tax benefit for the comparable
period in the prior fiscal year due to the income incurred in the current fiscal
year compared to losses in the prior fiscal year.

          As a result of the foregoing, net income for the three months ended
September 30, 2006 was $3,140, or diluted net income per common share of $0.35,
compared with a net loss of $691, or diluted net loss per common share of $0.08,
for the comparable period in the prior fiscal year.


                                       12



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
              (In thousands, except per share and percentage data)

LIQUIDITY AND CAPITAL RESOURCES

                                   September 30,   June 30,
                                       2006          2006
                                   -------------   --------
Cash and Investments                  $ 8,712       $ 8,324
Working Capital                       $48,987       $46,649

Quarter Ended:
   Operating Cash Flow                $ 2,889       $(1,809)
   Capital Expenditures               $ 1,942       $ 1,200
   Depreciation and Amortization      $ 1,721       $ 1,680

Current Ratio                           4.8:1         4.8:1
Quick Ratio                             1.6:1         1.7:1

          The Company's financial position at September 30, 2006 remains strong
as evidenced by working capital of $48,987. The Company's current and quick
ratios at September 30, 2006 also remain strong.

          Cash, cash equivalents and investments increased by $388 from June 30,
2006 as a result of positive operating cash flows, partially offset by capital
expenditures and repayments of long-term debt. Accounts receivable decreased
$318 from June 30, 2006 due to a decrease in sales volume in the three months
ended September 30, 2006 compared to the three months ended June 30, 2006.
Inventories increased by $3,087 from June 30, 2006 primarily to support
forecasted increases in demand. Other current assets decreased $56 from June 30,
2006.

          Accounts Payable increased $358 as a result of raw material and
equipment purchases late in the quarter ended September 30, 2006. Accrued
expenses decreased by $243 from June 30, 2006 due to the payments of various
accrued expenses at June 30, 2006 during the quarter ended September 30, 2006.
Income Tax Payable increased $605 due to year-to-date taxable income, partly
offset by estimated tax payments.

          In April 2004, the Company entered into a $4,000 credit facility with
General Electric Capital Corporation ("GECC") for the purchase of equipment. In
May 2005, the credit facility was increased to $6,000. Borrowings under the line
bear interest, at the Company's option, at either a fixed rate of 3.47% above
the five year Treasury Bond yield at the time of election or a floating rate of
3.65% above LIBOR. Borrowings under the line are secured by the equipment
purchased thereunder. Each separate borrowing under the line will be a fully
amortizing term loan with a maturity of five years from the date the funds are
drawn down. The line of credit will expire on March 24, 2007. GECC has the
option to securitize these loans with a third party. Loans securitized with a
third party increase the available line of credit to the Company. As of
September 30, 2006, the Company had $4,782 of borrowings outstanding under this
facility at fixed interest rates ranging from 7.15% and 7.93%. At September 30,
2006, the Company had $6,000 available to borrow under this credit facility.


                                       13



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
              (In thousands, except per share and percentage data)

          In December 2004, the Company entered into a credit facility with
Commerce Bank, N.A. Under the terms of this facility, the Company may request
advances from time to time up to an aggregate of $5,000. Any advance made bears
interest at the Prime Rate as reported in the Wall Street Journal. Borrowings
under the facility are secured by a lien on the Company's accounts receivable
and inventory. Borrowings under the line expire on November 30, 2006. The
facility is subject to certain financial covenants, including minimum tangible
net worth and liability percentage ratios. As of September 30, 2006, the Company
had no outstanding borrowings under this credit facility.

          In September 2005, the Company's wholly-owned subsidiary in Sweden
obtained a series of five term loans aggregating 12,000 Swedish Krona ("SEK")
(approximately $1,500) from Svenska Handelsbanken, AB ("Handelsbanken"). The
loans are unsecured and bear interest at fixed rates ranging from 3.56% to
4.59%. The five loans are each for a principal amount of 2,400 SEK and are fully
amortizing. The loans mature in one to five years with the first having matured
on September 30, 2006 and one other maturing on each succeeding September 30th
through 2010. In connection with, and as an inducement to Handelsbanken to make
the loans, the Company entered into a Guaranty and Agreement with Handelsbanken
whereby the Company has agreed to guarantee the payment of all its Swedish
subsidiary's obligations under the loans. At September 30, 2006, the Company had
$1,310 of borrowings outstanding under these loans.

          The Company leases an administrative office, manufacturing and
research and development complex located in Jacksonville, Florida (the
"Jacksonville Facility") from a partnership controlled by the Company's
President, Chief Executive Officer and principal stockholder under a capital
lease. At September 30, 2006, the Jacksonville Facility had an aggregate cost of
$5,104 and a net book value of $1,492. The lease is for a period of 30 years,
was capitalized using an interest rate of 10.5% and expires on September 30,
2010. The lease currently provides for base rent of approximately $780 per
annum. The lease further provides for annual increases in base rent for years
beginning after May 1, 1999, based on the increase in the Consumer Price Index
since May 1, 1998 applied to base rent. The lease also provides for increases to
the base rent in connection with any new construction at the Jacksonville
Facility. Under the lease, upon any new construction being placed into use, the
base rent is subject to increase to the fair market rental of the Jacksonville
Facility, including the new construction.

          Capital expenditures for the three months ended September 30, 2006
totaled $1,942, including expenditures for machinery and equipment and leasehold
improvements. The Company intends to use cash on hand, cash generated through
operations and the line of credit with GECC to finance budgeted capital
expenditures of approximately $5,000 for the remainder of fiscal year 2007,
primarily for equipment acquisitions.


                                       14



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
              (In thousands, except per share and percentage data)

          Aggregate contractual obligations, including interest, as of September
30, 2006, mature as follows:

                                             Payments Due by Period
                                -----------------------------------------------
                                          Less than
                                              1        1- 3     3- 5    After 5
Contractual Obligations          Total       Year      Years    years    years
-----------------------------   -------   ---------   ------   ------   -------
Bank Debt                       $ 6,974     $1,865    $3,669   $1,440     $--
Capital Lease Obligations         3,120        780     1,560      780      --
Operating Leases                    557        505        52       --      --
Purchase Obligations              5,475      5,475        --       --      --
                                -------     ------    ------   ------     ---
Total Contractual Obligations   $16,126     $8,625    $5,281   $2,220     $--
                                =======     ======    ======   ======     ===

          The Company routinely enters into binding and non-binding purchase
obligations in the ordinary course of business, primarily covering anticipated
purchases of inventory and equipment. The terms of these commitments generally
do not extend beyond one year.

CRITICAL ACCOUNTING POLICIES

          The Securities and Exchange Commission issued disclosure guidance for
"critical accounting policies." The SEC defines "critical accounting policies"
as those that require the application of management's most difficult, subjective
or complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain and may change in subsequent
periods. The Company's significant accounting policies are described in Note 1
to its consolidated financial statements contained in its Annual Report on Form
10-K for the fiscal year ended June 30, 2006. The Company believes that the
following accounting policies require the application of management's most
difficult, subjective or complex judgments:

Allowances for Doubtful Accounts Receivable

          The Company performs ongoing credit evaluations of its customers and
adjusts credit limits based upon payment history and a customer's current
creditworthiness, as determined by its review of the customer's current credit
information. The Company continuously monitors collections and payments from its
customers and maintains an allowance for estimated credit losses based upon its
historical experience and any specific customer collection issues that the
Company has identified. While such credit losses have historically been within
the Company's expectations and the allowances established, the Company cannot
guarantee that it will continue to experience the same credit loss rates that it
has in the past. Should the financial position of its customers deteriorate
resulting in an impairment of their ability to pay amounts due, the Company's
revised estimate of such losses and any actual losses in excess of previous
estimates may negatively impact its operating results.


                                       15



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
              (In thousands, except per share and percentage data)

Sales Returns and Allowances

          In the ordinary course of business, the Company accepts returns of
products sold for various reasons and grants sales allowances to customers.
While the Company engages in extensive product quality control programs and
processes, its level of sales returns is affected by, among other things, the
quality of its manufacturing processes. The Company maintains an allowance for
sales returns and allowances based upon historical returns and allowances
granted. While such returns and allowances have historically been within the
Company's expectations, actual return and allowance rates in the future may
differ from current estimates, which could negatively impact its operating
results.

Inventory Valuation

          The Company values inventory at the lower of aggregate cost (first-in,
first-out) or market. When the cost of inventory is determined by management to
be in excess of its market value, such inventory is written down to its
estimated net realizable value. This requires the Company to make estimates and
assumptions about several factors (e.g., future sales quantities and selling
prices, and percentage complete and failure rates for work in process) based
upon historical experience and its projections for future periods. Changes in
factors such as the level of order bookings, the product mix of order bookings
and the Company's manufacturing processes could have a material impact on the
Company's assessment of the net realizable value of inventory in the future.

Valuation of Deferred Tax Assets

          The Company regularly evaluates its ability to recover the reported
amount of its deferred income taxes considering several factors, including its
estimate of the likelihood of the Company generating sufficient taxable income
in future years during the period over which temporary differences reverse.
Presently, the Company believes that it is more likely than not that it will
realize the benefits of its deferred tax assets based primarily on its history
of and projections for taxable income in the future. In the event that actual
results differ from its estimates or the Company adjusts these estimates in
future periods, the Company may need to establish a valuation allowance against
a portion or all of its deferred tax assets which could materially impact its
financial position or results of operations in future periods.

Valuation of Long-lived Assets

          The Company assesses the recoverability of long-lived assets whenever
the Company determines that events or changes in circumstances indicate that the
carrying amount may not be recoverable. Its assessment is primarily based upon
its estimate of future cash flows associated with these assets. The Company
believes that the carrying amount of its long-lived assets is recoverable.
However, should its operating results deteriorate, or anticipated new product
launches not occur or not attain the commercial acceptance that the Company
anticipates, the Company may determine that some portion of its long-lived
assets are impaired. Such determination could result in non-cash charges to
income that could materially affect its financial position or results of
operations for that period.


                                       16



                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
              (In thousands, except per share and percentage data)

Accounting Standards Issued Not Yet Adopted

          In July 2006, the Financial Accounting Standard Board ("FASB") issued
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
Interpretation of FASB Statement No. 109" ("FIN 48"). to address the
noncomparability in reporting tax assets and liabilities resulting from a lack
of specific guidance in FASB Statement of Financial Accounting Standards
("SFAS") No. 109 ("SFAS No. 109"), "Accounting for Income Taxes," on the
uncertainty in income taxes recognized in an enterprise's financial statements.
Specifically, FIN No. 48 prescribes (a) a consistent recognition threshold, and
(b) a measurement attribute for the financial statement recognition and
measurement of a tax position taken or expected to be taken in a tax return, and
provides related guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. FIN No. 48
will apply to fiscal years beginning after December 15, 2006. The Company is
currently assessing the impact of the adoption of FIN No. 48 on its financial
position and consolidated results of operations.

          In September 2006, the Securities and Exchange Commission Staff issued
Staff Accounting Bulletin No. 108, "Considering the Effects of Prior Year
Misstatements when Quantifying Misstatements in Current Year Financial
Statements" ("SAB No. 108"), which addresses how the effects of prior-year
uncorrected misstatements should be considered when quantifying misstatements in
current-year financial statements. SAB No. 108 will require registrants to
quantify misstatements using both the balance sheet and income-statement
approaches and to evaluate whether either approach results in quantifying an
error that is material in light of relevant quantitative and qualitative
factors. When the effect of initial adoption is determined to be material, SAB
No. 108 allows registrants to record that effect as a cumulative effect
adjustment to beginning-of-year retained earnings. The requirements are
effective for annual financial statements covering the first fiscal year ending
after November 15, 2006. The Company is in the process of assessing the effect
of SAB No. 108 on its consolidated financial statements.


                                       17



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

          The Company's market risk exposure at September 30, 2006 is consistent
with the types of market risk and amount of exposures, including foreign
currency exchange rate, commodity price, security price and interest rate risks,
presented in its Annual Report on Form 10-K for the fiscal year ended June 30,
2006.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

          In response to the requirements of the Sarbanes-Oxley Act of 2002, as
of the end of the period covered by this Quarterly Report on Form 10-Q (the
"Evaluation Date"), the Company's President and Chief Executive Officer and Vice
President - Finance carried out an evaluation of the effectiveness of the
Company's "disclosure controls and procedures" (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)). Based on that evaluation,
these officers concluded that, as of the Evaluation Date, the Company's
disclosure controls and procedures were adequate and effective to ensure that
material information relating to the Company and the Company's consolidated
subsidiaries was made known to them by others within those entities,
particularly during the period in which this report was being prepared.

Changes in Internal Controls

          Except as noted below, there were no changes in the Company's internal
controls over financial reporting identified in connection with the evaluation
of such internal controls that occurred during the Company's last fiscal quarter
that have materially affected, or are reasonably likely to materially affect,
the Company's internal controls over financial reporting.

          During the last quarter of the prior fiscal year, management
discovered a significant deficiency in the Company's internal control over
financial reporting in that the Company has not adequately documented and
implemented certain controls over certain change management and customer
management procedures. In addition, certain financial computer program
application controls and access controls relating to information security were
not adequately implemented. Specifically, back-up and recovery processes were
not adequately documented, and testing of recovery procedures was not
implemented. The Company has drafted, and is in the process of implementing,
remedial procedures to address these matters.


                                       18



                           PART II - OTHER INFORMATION

ITEMS 1. THROUGH 5. Not Applicable

ITEM 6. Exhibits

EXHIBIT NO.  DESCRIPTION
-----------  -----------
10.11(i) -   Letter Agreement, dated September 25, 2006, between the Company and
             Richard Monsorno.

31.1     -   Section 302 Certification of Principal Executive Officer.

31.2     -   Section 302 Certification of Principal Accounting Officer.

32.1     -   Section 906 Certification of Principal Executive Officer.

32.2     -   Section 906 Certification of Principal Accounting Officer.


                                       19



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company in the
capacities and on the dates indicated.

                        AMERICAN TECHNICAL CERAMICS CORP.
                                    (Company)


DATE: November 10, 2006   BY: /S/ VICTOR INSETTA
                              -------------------------------
                              Victor Insetta
                              President and Director
                              (Principal Executive Officer)


DATE: November 10, 2006   BY: /S/ ANDREW R. PERZ
                              ------------------------------
                              Andrew R. Perz
                              Vice President, Finance
                              (Principal Accounting Officer)


                                       20`