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 March 31,
		2007

or

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



| | 1 Norden Lane, Huntington Station, NY(Address of Principal Executive
			 Offices) |  | 11746(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.

YesxNoo

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 fileroAccelerated filero    Non-accelerated filerx

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

YesoNox

As of May 4, 2007, the Company had
		outstanding 9,011,158 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)



March
				  31,2007
			 
			 June
				  30,2006ASSETS
			 
			 (unaudited)Current assetsCash (including cash
				  equivalents of $1 and $2, respectively)
			 
			 $
			 3,187
			 
			 $
			 6,230Investments
			 
			 
			 5,173
			 
			 
			 2,094Accounts receivable
				  (net of allowance for doubtful accounts and sales returns of $323 and $401,
				  respectively)
			 
			 
			 11,982
			 
			 
			 12,719Inventories
			 
			 
			 40,013
			 
			 
			 33,255Deferred income taxes,
				  net
			 
			 
			 3,549
			 
			 
			 3,472Prepaid and other
				  current assets
			 
			 
			 3,284
			 
			 
			 1,035Assets held for sale,
				  net
			 
			 
			 469
			 
			 
			 Total current
				  assets
			 
			 
			 67,657
			 
			 
			 58,805Property, plant and
				  equipment (net of accumulated depreciation and amortization of $54,226 and
				  $52,827, respectively)
			 
			 
			 29,825
			 
			 
			 31,375Other assets
			 
			 
			 305
			 
			 
			 363Total assets
			 
			 $
			 97,787
			 
			 $
			 90,543LIABILITIES AND
				  STOCKHOLDERS EQUITYCurrent
				  liabilitiesCurrent portion of
				  long-term debt (including related party debt of $524 and $485,
				  respectively)
			 
			 $
			 2,071
			 
			 $
			 1,957Accounts payable
			 
			 
			 2,784
			 
			 
			 3,005Accrued expenses
			 
			 
			 6,327
			 
			 
			 6,192Income tax
				  payable
			 
			 
			 
			 
			 
			 1,002Total current
				  liabilities
			 
			 
			 11,182
			 
			 
			 12,156Long-term debt, net of
				  current portion (including related party debt of $1,576 and $1,974,
				  respectively)
			 
			 
			 5,617
			 
			 
			 7,229Deferred income taxes,
				  net
			 
			 
			 3,451
			 
			 
			 3,091Total
				  liabilities
			 
			 
			 20,250
			 
			 
			 22,476COMMITMENTS AND
				  CONTINGENCIESStockholders
				  equityCommon Stock 
				  $0.01 par value; authorized 20,000 shares; issued 9,425 and 9,105 shares,
				  outstanding 9,011 and 8,690 shares, respectively
			 
			 
			 94
			 
			 
			 91Capital in excess of
				  par value
			 
			 
			 18,226
			 
			 
			 15,000Retained
				  earnings
			 
			 
			 60,299
			 
			 
			 54,102Accumulated other
				  comprehensive income:Unrealized loss on
				  investments available-for-sale, net
			 
			 
			 
			 
			 
			 (1
			 )Cumulative foreign
				  currency translation adjustment
			 
			 
			 314
			 
			 
			 271314
			 
			 
			 270Less: Treasury stock,
				  at cost (414 and 414 shares, respectively)
			 
			 
			 1,396
			 
			 
			 1,396Total
				  stockholders equity
			 
			 
			 77,537
			 
			 
			 68,067Total liabilities
				  and stockholders equity
			 
			 $
			 97,787
			 
			 $
			 90,543


See accompanying notes to
		unaudited consolidated financial statements.





2



---



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





For the Three Months
				  Ended March 31,
			 
			 For the Nine Months
				  Ended March 31,2007
			 
			 2006
			 
			 2007
			 
			 2006Net sales
			 
			 $
			 23,872
			 
			 $
			 22,690
			 
			 $
			 67,563
			 
			 $
			 59,870Cost of sales
			 
			 
			 15,912
			 
			 
			 14,120
			 
			 
			 42,623
			 
			 
			 39,460Gross profit
			 
			 
			 7,960
			 
			 
			 8,570
			 
			 
			 24,940
			 
			 
			 20,410Selling, general and
				  administrative expenses
			 
			 
			 4,509
			 
			 
			 4,586
			 
			 
			 13,670
			 
			 
			 13,252Research and
				  development expenses
			 
			 
			 622
			 
			 
			 427
			 
			 
			 1,682
			 
			 
			 1,488Other
			 
			 
			 57
			 
			 
			 20
			 
			 
			 84
			 
			 
			 26Operating
				  expenses
			 
			 
			 5,188
			 
			 
			 5,033
			 
			 
			 15,436
			 
			 
			 14,766Income from
				  operations
			 
			 
			 2,772
			 
			 
			 3,537
			 
			 
			 9,504
			 
			 
			 5,644Other (income)
				  expense:Interest expense
			 
			 
			 166
			 
			 
			 174
			 
			 
			 521
			 
			 
			 461Interest income
			 
			 
			 (83
			 )
			 
			 (19
			 )
			 
			 (139
			 )
			 
			 (63
			 )83
			 
			 
			 155
			 
			 
			 382
			 
			 
			 398Income before provision
				  for income taxes
			 
			 
			 2,689
			 
			 
			 3,382
			 
			 
			 9,122
			 
			 
			 5,244Provision for income
				  taxes
			 
			 
			 824
			 
			 
			 1,293
			 
			 
			 2,925
			 
			 
			 1,917Net income
			 
			 $
			 1,865
			 
			 $
			 2,089
			 
			 $
			 6,197
			 
			 $
			 3,327Basic net income per
				  common share
			 
			 $
			 0.21
			 
			 $
			 0.24
			 
			 $
			 0.70
			 
			 $
			 0.39Diluted net income per
				  common share
			 
			 $
			 0.20
			 
			 $
			 0.23
			 
			 $
			 0.68
			 
			 $
			 0.38Basic weighted average
				  common shares outstanding
			 
			 
			 8,968
			 
			 
			 8,583
			 
			 
			 8,808
			 
			 
			 8,545Diluted weighted
				  average common Shares outstanding
			 
			 
			 9,190
			 
			 
			 8,918
			 
			 
			 9,066
			 
			 
			 8,861




See accompanying notes to
		unaudited consolidated financial statements.





3



---



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





For the Nine Months
				  Ended March 31,2007
			 
			 2006CASH FLOWS FROM
				  OPERATING ACTIVITIES:Net income
			 
			 $
			 6,197
			 
			 $
			 3,327Adjustments to
				  reconcile net income to net cash provided by operating activities:Depreciation and
				  amortization
			 
			 
			 4,658
			 
			 
			 4,527Loss on disposal of
				  fixed assets
			 
			 
			 147
			 
			 
			 52Deferred income
				  taxes
			 
			 
			 282
			 
			 
			 (490
			 )Stock-based
				  compensation expense
			 
			 
			 227
			 
			 
			 292Excess tax benefits
				  from stock based compensation arrangements
			 
			 
			 (858
			 )
			 
			 (290
			 )Provision for doubtful
				  accounts and sales returns
			 
			 
			 (78
			 )
			 
			 90Investment interest
				  accretion, net
			 
			 
			 (76
			 )
			 
			 (28
			 )Changes in operating
				  assets and liabilities:Accounts
				  receivable
			 
			 
			 881
			 
			 
			 (1,144
			 )Inventories
			 
			 
			 (6,711
			 )
			 
			 (644
			 )Other assets
			 
			 
			 (2,238
			 )
			 
			 (95
			 )Accounts payable and
				  accrued expenses
			 
			 
			 (105
			 )
			 
			 144Income taxes
				  payable
			 
			 
			 (144
			 )
			 
			 1,736Net cash provided by
				  operating activities
			 
			 
			 2,182
			 
			 
			 7,477CASH FLOWS FROM
				  INVESTING ACTIVITIES:Capital
				  expenditures
			 
			 
			 (3,712
			 )
			 
			 (7,109
			 )Purchase of
				  investments
			 
			 
			 (5,130
			 )
			 
			 (1,045
			 )Proceeds from sale of
				  investments
			 
			 
			 2,129
			 
			 
			 1,034Proceeds from sale of
				  fixed assets
			 
			 
			 50
			 
			 
			 22Net cash used in
				  investing activities
			 
			 
			 (6,663
			 )
			 
			 (7,098
			 )CASH FLOWS FROM
				  FINANCING ACTIVITIES:Repayment of
				  debt
			 
			 
			 (1,536
			 )
			 
			 (884
			 )Proceeds from the
				  exercise of stock options
			 
			 
			 2,144
			 
			 
			 653Excess tax benefits
				  from stock based compensation arrangements
			 
			 
			 858
			 
			 
			 290Proceeds from the
				  issuance of long term debt
			 
			 
			 
			 
			 
			 3,956Net cash provided by
				  financing activities
			 
			 
			 1,466
			 
			 
			 4,015Effect of exchange rate
				  changes on cash
			 
			 
			 (28
			 )
			 
			 (2
			 )Net (decrease)/increase
				  in cash and cash equivalents
			 
			 
			 (3,043
			 )
			 
			 4,392CASH AND CASH
				  EQUIVALENTS, beginning of year
			 
			 
			 6,230
			 
			 
			 4,927CASH AND CASH
				  EQUIVALENTS, end of period
			 
			 $
			 3,187
			 
			 $
			 9,319Supplemental cash flow
				  information:Interest paid
			 
			 $
			 428
			 
			 $
			 469Taxes paid
			 
			 $
			 4,932
			 
			 $
			 670


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
		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
		March 31, 2007, and the results of its operations for the three and nine month
		periods ended March 31, 2007 and 2006. 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 and nine month periods ended March 31, 2007 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). The 1997 Option Plan expired on March 31,
		2007. Unless terminated earlier by the Board, the 2000 Plan will expire 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).





5



---



AMERICAN TECHNICAL CERAMICS
		CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED
		CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share
		and percentage data)

There were 10 stock options
		granted during the nine months ended March 31, 2007 and 40 granted during the
		nine months ended March 31, 2006. The weighted average grant-date fair value of
		stock options granted during the nine months ended March 31, 2007 and 2006 was
		$8.66 and $8.33 per share, respectively, as determined by the Black-Scholes
		option pricing model (assuming a risk-free interest rate of 4.80% and 3.98%,
		respectively, expected life of six years and five years, respectively, expected
		volatility of 65.3% and 73.7%, respectively, and no dividends). The total
		intrinsic value of options exercised during the periods ended March 31, 2007
		and 2006 was $2,934 and $921, respectively.

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
		nine months ended March 31, 2007 is as follows:



SharesSubject toOptions
			 
			 WeightedAverageExercisePrice
			 
			 WeightedAverageRemainingContractualTerm
			 
			 AggregateIntrinsic ValueOutstanding, beginning
				  of period
			 
			 863
			 
			 $
			 8.83Granted
			 
			 10
			 
			 
			 13.50Forfeited
			 
			 (13
			 )
			 
			 10.33Expired
			 
			 (9
			 )
			 
			 24.27Exercised
			 
			 (320
			 )
			 
			 6.70Outstanding, end of
				  period
			 
			 531
			 
			 $
			 9.90
			 
			 4.7
			 
			 $
			 2,477Exercisable, end of
				  period
			 
			 438
			 
			 $
			 9.54
			 
			 3.9
			 
			 $
			 2,268






6



---



AMERICAN TECHNICAL CERAMICS
		CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED
		CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share
		and percentage data)

A summary of the status of the
		Companys nonvested options at March 31, 2007, and changes during the nine
		months then ended, is presented below:



SharesSubject toOptions
			 
			 WeightedAverageGrant DateFair ValueNonvested, beginning of
				  period
			 
			 120
			 
			 $
			 6.88Granted
			 
			 10
			 
			 
			 8.66Vested
			 
			 (24
			 )
			 
			 5.60Forfeited
			 
			 (13
			 )
			 
			 6.66Nonvested, end of
				  period
			 
			 93
			 
			 $
			 6.50


As of March 31, 2007, there was
		$529 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 2.8 years. The total fair value of shares vested during the
		three and nine month periods ended March 31, 2007 was nil and $134,
		respectively. Compensation cost capitalized in inventory and fixed assets for
		the three and nine months ended March 31, 2007 was nil and $2, respectively.
		Compensation cost recognized in income for amounts previously capitalized in
		inventory and fixed assets for the three and nine months ended March 31, 2007
		was nil and $12, respectively.

Cash received from the exercise
		of options for the three months ended March 31, 2007 and 2006 was $1,238 and
		$487, respectively. The related tax benefit recognized for the three months
		ended March 31, 2007 and 2006 was $546 and $190, respectively. The total
		compensation cost related to options was $57 and $61 for the three months ended
		March 31, 2007 and 2006, respectively.

Cash received from the exercise
		of options for the nine months ended March 31, 2007 and 2006 was $2,144 and
		$653, respectively. The related tax benefit recognized for the nine months
		ended March 31, 2007 and 2006 was $858 and $290, respectively. The total
		compensation cost related to options for the nine months ended March 31, 2007
		and 2006 was $169 and $232, respectively.

At March 31, 2007, an aggregate
		of 71 shares were available for option grants or awards under the 2000 Plan. No
		further options may be granted under the 1997 Plan.

Other Stock-Based
		Compensation

During the nine months ended
		March 31, 2007 and 2006, the Company granted stock awards for an aggregate of 7
		and 7 shares, respectively. These awards resulted in compensation expense of
		$92 and $53, respectively (including $34 and $23, respectively, 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 nine months ended
		March 31, 2007, the Company (i) granted stock awards with an aggregate value of
		$93 with respect to which expense shall be recognized ratably throughout fiscal
		year 2007, (ii) granted stock options with respect to which compensation
		expense of $87 will be recognized evenly over the service period, and (iii)
		recognized a $858 reduction of income taxes payable related to disqualifying
		dispositions upon the exercise of incentive stock options.





7



---



AMERICAN TECHNICAL CERAMICS
		CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED
		CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share
		and percentage data)

During the nine months ended
		March 31, 2006, the Company (i) granted 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
		$290 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:



March 31,2007
			 
			 June 30,2006Raw materials
			 
			 $
			 20,794
			 
			 $
			 17,095Work-in-process
			 
			 
			 7,265
			 
			 
			 8,605Finished goods
			 
			 
			 11,954
			 
			 
			 7,555$
			 40,013
			 
			 $
			 33,255


(5)
			 ASSETS HELD FOR
				  SALE


In an effort to realize
		production efficiencies, the Company has consolidated two of its smaller
		production lines. As a result, a building has been vacated and made available
		for sale. The Company expects to be able to sell the building in the near term.
		The assets held for sale consist of the building and related improvements at an
		aggregate cost of $805 and a net book value of $469, representing the lower of
		their carrying value or estimated fair value, less costs to sell.

(6)
			 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 March 31,2007
			 
			 2006Net Income
				  (Numerator)
			 
			 Shares
				  (Denominator)
			 
			 Per Share Amount
			 
			 Net Income
				  (Numerator)
			 
			 Shares(Denominator)
			 
			 Per Share AmountBasic EPS
			 
			 $
			 1,865
			 
			 8,968
			 
			 $
			 0.21
			 
			 $
			 2,089
			 
			 8,583
			 
			 $
			 0.24Effect of dilutive
				  securities:Stock options
			 
			 
			 
			 
			 215
			 
			 
			 
			 
			 
			 
			 
			 328Deferred compensation
				  stock awards
			 
			 
			 
			 
			 7
			 
			 
			 
			 
			 
			 
			 
			 7Diluted EPS
			 
			 $
			 1,865
			 
			 9,190
			 
			 $
			 0.20
			 
			 $
			 2,089
			 
			 8,918
			 
			 $
			 0.23


Options covering 104 and 168
		shares have been omitted from the calculation of dilutive EPS for the three
		months ended March 31, 2007 and 2006, respectively, because their inclusion
		would have been antidilutive.





8



---



AMERICAN TECHNICAL CERAMICS
		CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED
		CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except per share
		and percentage data)



For the Nine Months
				  Ended March 31,2007
			 
			 
			 
			 
			 
			 2006Net Income(Numerator)
			 
			 Shares(Denominator)
			 
			 Per ShareAmount
			 
			 Net Income(Numerator)
			 
			 Shares(Denominator)
			 
			 Per ShareAmountBasic EPS
			 
			 $
			 6,197
			 
			 8,808
			 
			 $
			 0.70
			 
			 $
			 3,327
			 
			 8,545
			 
			 $
			 0.39Effect of dilutive
				  securities:Stock options
			 
			 
			 
			 
			 254
			 
			 
			 
			 
			 
			 
			 
			 309Deferred compensation
				  stock awards
			 
			 
			 
			 
			 4
			 
			 
			 
			 
			 
			 
			 
			 7Diluted EPS
			 
			 $
			 6,197
			 
			 9,066
			 
			 $
			 0.68
			 
			 $
			 3,327
			 
			 8,861
			 
			 $
			 0.38


Options covering 144 and 393
		shares have been omitted from the calculation of dilutive EPS for the nine
		months ended March 31, 2007 and 2006, respectively, because their inclusion
		would have been antidilutive.

(7)
			 COMPREHENSIVE
				  INCOME:


The Companys
		comprehensive income is as follows:



Three Months
				  Ended
			 
			 Nine Months
				  EndedMarch 31,2007
			 
			 March 31,2006
			 
			 March 31,2007
			 
			 March 31,2006Net income
			 
			 $
			 1,865
			 
			 $
			 2,089
			 
			 $
			 6,197
			 
			 $
			 3,327Other comprehensive
				  (loss)/income:Foreign currency
				  translation adjustments
			 
			 
			 (36
			 )
			 
			 17
			 
			 
			 44
			 
			 
			 19Unrealized gains on
				  investments, net of tax
			 
			 
			 
			 
			 
			 
			 
			 
			 1
			 
			 
			 Other comprehensive
				  (loss)/income
			 
			 
			 (36
			 )
			 
			 17
			 
			 
			 45
			 
			 
			 19Comprehensive
				  income
			 
			 $
			 1,829
			 
			 $
			 2,106
			 
			 $
			 6,242
			 
			 $
			 3,346


(8)
			 INDEBTEDNESS:


Long-term debt consists of the
		following:



March 31,2007
			 
			 June 30,2006Notes payable to
				  banks
			 
			 $
			 5,588
			 
			 $
			 6,727Obligations under
				  capital leases
			 
			 
			 2,100
			 
			 
			 2,4597,688
			 
			 
			 9,186Less: current portion
			 
			 
			 2,071
			 
			 
			 1,957Long-term debt
			 
			 $
			 5,617
			 
			 $
			 7,229






9



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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 is a fully amortizing term
		loan with a maturity of five years from the date the funds are drawn down. The
		line of credit has been extended several times and currently will expire on
		August 16, 2007, subject to an additional six month extension upon review by
		GECC. 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 March 31, 2007, the Company had $4,213 of borrowings outstanding
		under this facility at fixed interest rates ranging from 7.15% to 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. This facility has been extended several
		times and currently will expire on November 30, 2007. The facility is subject
		to certain financial covenants, including minimum tangible net worth and
		liability percentage ratios. As of March 31, 2007, 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 March 31, 2007, the Company had $1,375
		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 March 31, 2007, the
		Jacksonville Facility had an aggregate cost of $5,104 and a net book value of
		$1,301. 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 $812 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.





10



---





Item 2.
			 MANAGEMENTS
				  DISCUSSION AND ANALYSIS OF FINANCIALCONDITION 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

Sales improved compared to the
		prior fiscal year for both the three and nine month periods. Strength in sales
		is broad-based with improvements seen in all markets the Company serves.

Gross margins as a percentage
		of sales decreased compared to the comparable quarter of the prior fiscal year
		due to higher than normal scrapping of finished goods and work-in-process
		inventory. The Company periodically scraps inventory based upon the mix of
		inventory relative to near-term trends in bookings. In the most recent quarter,
		the Company scrapped an additional approximately $878 of inventory that likely
		would have been scrapped over the next several quarters. This had a negative
		impact on gross margins for the quarter.

For the nine months ended March
		31, 2007, the gross margin improved compared to the equivalent period in the
		prior fiscal year, due to higher sales volume and efficiencies associated with
		operating at higher production levels as well as to expenses incurred in the
		prior year period in connection with the attempted conversion of certain
		functions to a different computer system. The improvement was partially offset
		by the purge of inventory mentioned above.

Bookings were very strong for
		the quarter as the Company recorded the second highest level of quarterly
		bookings in its history. The strength in bookings was due to continued strong
		demand from new and existing customers in the wireless infrastructure, medical
		and fiber optic markets.





11



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF
		OPERATIONS

(In thousands, except per share
		and percentage data)

RESULTS OF
		OPERATIONS

Key comparative performance
		indicators



Three Months
				  Ended
			 
			 Nine Months
				  EndedMarch 31,2007
			 
			 March 31,2006
			 
			 March 31,2007
			 
			 March 31,2006Sales
			 
			 $
			 23,872
			 
			 $
			 22,690
			 
			 $
			 67,563
			 
			 $
			 59,870Bookings
			 
			 $
			 25,938
			 
			 $
			 24,643
			 
			 $
			 67,823
			 
			 $
			 64,244Gross Margin
			 
			 $
			 7,960
			 
			 $
			 8,570
			 
			 $
			 24,940
			 
			 $
			 20,410Gross Margin (% of
				  sales)
			 
			 
			 33.3
			 %
			 
			 37.8
			 %
			 
			 36.9
			 %
			 
			 34.1
			 %Operating Expenses
			 
			 $
			 5,188
			 
			 $
			 5,033
			 
			 $
			 15,436
			 
			 $
			 14,766Operating Expenses (%
				  of sales)
			 
			 
			 21.7
			 %
			 
			 22.2
			 %
			 
			 22.8
			 %
			 
			 24.7
			 %


Significant
		highlights

Sales for the three and nine
		months ended March 31, 2007 increased 5% and 13%, respectively, over the
		comparable periods in the prior fiscal year.

Bookings for both the three and
		nine months ended March 31, 2007 increased 5% over the comparable periods in
		the prior fiscal year.





12



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF
		OPERATIONS

(In thousands, except per share
		and percentage data)



Three Months Ended March 31,
		2007 Compared with Three Months Ended March 31, 2006

Net sales for the three months
		ended March 31, 2007 increased 5% from the comparable period in the prior
		fiscal year. The increase was due to higher volume of product shipped as a
		result of strong demand from all of the markets the Company serves. Demand was
		particularly strong in the wireless infrastructure, military and fiber optic
		markets.

Bookings for the three months
		ended March 31, 2007 were $25,938, compared to $24,643 for the three months
		ended March 31, 2006. The improvement in bookings was due primarily to
		increased orders from the wireless infrastructure, military, medical
		electronics and fiber optic markets. The backlog of unfilled orders at March
		31, 2007 was $19,187, compared to $18,290 at March 31, 2006 and $18,941 at June
		30, 2006. Typically, a majority of the Companys backlog will be shipped
		by the end of the next fiscal quarter.

Gross margin for the three
		months ended March 31, 2007 was 33% of net sales, compared to 38% of net sales
		for the comparable period in the prior fiscal year. Gross margins decreased due
		to higher than normal scrapping of finished goods and work-in-process
		inventory. The Company periodically scraps inventory based upon the mix of
		inventory relative to near-term trends in bookings. In the most recent quarter,
		the Company scrapped an additional approximately $878 of inventory that likely
		would have been scrapped over the next several quarters. This had a negative
		impact on gross margins for the quarter.

Selling, general and
		administrative expenses for the three months ended March 31, 2007 decreased 2%
		from the comparable period in the prior fiscal year. The decrease was primarily
		the result of lower depreciation expense and decreased bonuses, partially
		offset by increased commission expense and increased professional fees.

Research and development
		expenses for the three months ended March 31, 2007 increased 46% from the
		comparable period in the prior fiscal year, primarily as a result of increased
		product and process development activity.

Interest income for the three
		months ended March 31, 2007 increased $64 from the comparable period in the
		prior fiscal year as a result of higher earnings on excess cash invested.

The effective income tax rates
		for the three months ended March 31, 2007 and 2006 were approximately 31% and
		38%, respectively. The decrease in the effective tax rate was primarily the
		result of deductions permitted to manufacturers by Section 199 of the Internal
		Revenue Code and decreased state tax due to state tax law changes.

As a result of the foregoing,
		net income for the three months ended March 31, 2007 was $1,865, or $0.21 per
		common share and $0.20 per common share assuming dilution, compared to net
		income of $2,089, or $0.24 per common share and $0.23 per common share assuming
		dilution, for the comparable period in the prior fiscal year.





13



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS(In thousands, except per share and
		percentage data)



Nine Months Ended March 31,
		2007 Compared with Nine Months Ended March 31, 2006

Net sales for the nine months
		ended March 31, 2007 increased 13% from the comparable period in the prior
		fiscal year. The increase was due to higher volume of product shipped as a
		result of improving economic conditions in the markets the Company serves,
		increased market share and expanding acceptance of the Companys newer
		products in the market. The volume improvement was broad-based across all of
		the Companys markets and products.

Bookings for the nine months
		ended March 31, 2007 were $67,823, compared to $64,244 for the nine months
		ended March 31, 2006. The improvement in bookings was due primarily to
		increased orders from customers in the wireless infrastructure, medical
		equipment and fiber optic markets.

Gross margin for the nine
		months ended March 31, 2007 was 37% of net sales, compared to 34% of net sales
		for the comparable period in the prior fiscal year. The gross margin improved
		due to higher sales volume and efficiencies associated with operating at higher
		production levels and due to expenses incurred in the prior year associated
		with the attempted conversion of certain functions to a different computer
		system.

Selling, general and
		administrative expenses for the nine months ended March 31, 2007 increased 3%
		from the comparable period in the prior fiscal year. The increase was primarily
		the result of increased commission expense related to the increased sales
		levels, increased administrative staff costs, bonuses, increased severance
		expense and increased professional fees (relating to audit and tax services),
		partially offset by decreased depreciation and decreased training costs.

Research and development
		expenses for the nine months ended March 31, 2007 increased 13% from the
		comparable period in the prior fiscal year, primarily as a result of increased
		product and process development activity.

Interest expense for the nine
		months ended March 31, 2007 increased 13% from the comparable period in the
		prior fiscal year as a result of higher average borrowings outstanding during
		the period. Over the past 12 months, the Company has borrowed under its
		equipment line of credit to expand its capacity and upgrade capabilities.
		Additionally, in September of the prior fiscal year, the Companys Swedish
		subsidiary borrowed approximately $1.5 million in order to repatriate earnings.

Interest income for the nine
		months ended March 31, 2007 increased by $76 from the comparable period in the
		prior fiscal year as a result of higher earnings on cash invested during the
		period.

The effective income tax rates
		for the nine months ended March 31, 2007 and 2006 were approximately 32% and
		37%, respectively. The decrease in the effective tax rate was primarily the
		result of deductions permitted to manufacturers by Section 199 of the Internal
		Revenue Code and decreased state tax due to state tax law changes.





14



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS(In thousands, except per share and
		percentage data)



As a result of the foregoing,
		net income for the nine months ended March 31, 2007 was $6,197, or $0.70 per
		common share and $0.68 per common share assuming dilution, compared to net
		income of $3,327, or $0.39 per common share and $0.38 per common share assuming
		dilution, for the comparable period in the prior fiscal year.

LIQUIDITY AND CAPITAL
		RESOURCES



March 31, 2007
			 
			 June 30, 
				  2006Cash and
				  Investments
			 
			 $
			 8,360
			 
			 $
			 8,324Working Capital
			 
			 $
			 56,475
			 
			 $
			 46,649Year to Date:Net Cash Provided by
				  Operating Activities
			 
			 $
			 2,182
			 
			 $
			 5,668Capital
				  Expenditures
			 
			 $
			 3,712
			 
			 $
			 8,309Depreciation and
				  Amortization
			 
			 $
			 4,658
			 
			 $
			 6,207Current Ratio
			 
			 
			 6.1:1
			 
			 
			 4.8:1Quick Ratio
			 
			 
			 1.8:1
			 
			 
			 1.7:1


The Companys financial
		position at March 31, 2007 remains strong as evidenced by working capital of
		$56,475 and current and quick ratios of 6.1 to 1 and 1.8 to 1,
		respectively.

Cash, cash equivalents and
		investments increased by $36 from June 30, 2006, as a result of positive
		operating cash flows and proceeds from the exercise of stock options, partially
		offset by capital expenditures and repayments of long term debt. Accounts
		receivable decreased by $737 from June 30, 2006, primarily as a result of
		decreased sales in the quarter ended March 31, 2007 compared to the quarter
		ended June 30, 2006. Inventories increased by $6,758 from June 30, 2006,
		primarily as a result of increased precious metal purchases and higher
		production levels to support current and future demand. Deferred income tax
		assets increased $77 primarily due to timing differences between tax and book
		inventory. Other current assets increased by $2,249 from June 30, 2006,
		primarily due to estimated tax payments offsetting the provision for current
		year taxable income.





15



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS(In thousands, except per share and
		percentage data)



The current portion of
		long-term debt increased by $114 from June 30, 2006, due to additional debt
		coming due within one year. Accounts payable decreased by $221 from June 30,
		2006, due to the timing of purchases of precious metal and dielectric powders.
		Accrued expenses increased by $135 from June 30, 2006, due to the timing of
		payments of various accrued expenses. Deferred income tax liabilities increased
		$360 from June 30, 2006, primarily due to timing differences between tax and
		book depreciation.

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 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 is a fully amortizing term loan with a maturity of
		five years from the date the funds are drawn down. The line of credit has been
		extended several times and currently will expire on August 16, 2007, subject to
		an additional six month extension upon review by GECC. 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 March 31, 2007, the
		Company had $4,213 of borrowings outstanding under this facility at fixed
		interest rates ranging from 7.15% to 7.93%, and $6,000 of additional borrowing
		availability.

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. The facility has been extended several
		times and currently will expire on November 30, 2007. The facility is subject
		to certain financial covenants, including minimum tangible net worth and
		liability percentage ratios. As of March 31, 2007, 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.

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 March 31, 2007, the
		Jacksonville Facility had an aggregate cost of $5,104 and a net book value of
		$1,301. 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 $812 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.





16



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS(In thousands, except per share and
		percentage data)



Capital expenditures for the
		nine months ended March 31, 2007 totaled $3,712, 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 $1,600 for the
		remainder of fiscal year 2007, primarily for equipment acquisitions and
		building renovations.

Aggregate contractual
		obligations as of March 31, 2007 mature as follows:



Payments Due by
				  PeriodContractual
				  Obligations
			 
			 Total
			 
			 Less than 1Year
			 
			 1- 3years
			 
			 3- 5Years
			 
			 After 5yearsBank Debt
			 
			 $
			 6,465
			 
			 $
			 1,884
			 
			 $
			 3,528
			 
			 $
			 1,053
			 
			 $
			 Capital Lease
				  Obligations
			 
			 
			 2,843
			 
			 
			 812
			 
			 
			 1,625
			 
			 
			 406
			 
			 
			 Operating Leases
			 
			 
			 318
			 
			 
			 290
			 
			 
			 28
			 
			 
			 
			 
			 
			 Purchase
				  Obligations
			 
			 
			 3,579
			 
			 
			 3,579
			 
			 
			 
			 
			 
			 
			 
			 
			 Total Contractual
				  Obligations
			 
			 $
			 13,205
			 
			 $
			 6,565
			 
			 $
			 5,181
			 
			 $
			 1,459
			 
			 $
			 


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 (the SEC) 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.





17



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS(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 the Companys 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 the Companys financial position or results of operations for that
		period.





18



---



MANAGEMENTS DISCUSSION
		AND ANALYSIS OF FINANCIALCONDITION AND RESULTS OF OPERATIONS(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, Accounting for Income Taxes (SFAS
		No. 109) 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 will adopt FIN No. 48 effective
		July 1, 2007. 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 will adopt SAB No. 108 effective June 30,
		2007. The Company is in the process of assessing the effect of SAB No. 108 on
		its consolidated financial statements.

Item 3.
			 QUANTITATIVE AND
				  QUALITATIVE DISCLOSURES ABOUT MARKET RISK


The Companys market risk
		exposure at March 31, 2007 is consistent with the types of market risk and
		amount of exposures presented in its Annual Report on Form 10-K for the fiscal
		year ended June 30, 2006, including foreign currency exchange rate, commodity
		price, security price and interest rate risks.

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

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.





19



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PART II - OTHER
		INFORMATION

Items 1. through 5.
			 Not
				  Applicable


Item
				  6.
			 Exhibits




Exhibit
				  No.
			 
			 
			 Description10.15(i)
			 
			 
			 Letter extending the
				  Consulting Agreement with Northport System, Inc. until December 31,
				  2007.31.1
			 -
			 
			 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.






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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: May 11, 2007
			 
			 BY:
			 /S/ Victor
				  InsettaVictor Insetta
				President and
				  Director
				(Principal Executive
				  Officer)




DATE: May 11, 2007
			 
			 BY:
			 /S/ Andrew R.
				  PerzAndrew R. Perz
				Vice President,
				  Finance
				(Principal Accounting
				  Officer)






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