Form 10-Q

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ¨ No x

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities of securities under a plan confirmed by a court. Yes x No ¨

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

5,020,000 shares of common stock issued and outstanding as of November 13, 2006.

The accompanying notes are an integral part of these consolidated financial statements

NOTE A – DESCRIPTION OF BUSINESS, SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

Reptron Electronics, Inc. (“Reptron”) is an electronics manufacturing services company providing engineering services, electronics manufacturing services and display integration services. Reptron Manufacturing Services offers full electronics manufacturing services including complex circuit board assembly, complete supply chain services and manufacturing engineering services to original equipment manufacturers (“OEMs”) in a wide variety of industries including medical, industrial/instrumentation, banking, telecommunications, and semiconductor equipment. Reptron Outsource Manufacturing and Design provides value-added display design engineering and system integration services to OEMs.

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and disclosures normally required by accounting principles generally accepted in the United States of America for complete financial statements. The financial information included herein is unaudited and reflects all adjustments (consisting of normal recurring adjustments for all periods presented) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. The significant accounting policies of the Company are consistent with those disclosed in the Company’s Form 10-K filed in March 2006. The results of interim periods are not necessarily indicative of results to be expected for a full year. The consolidated financial statements should be read in conjunction with the financial statements and notes thereto, together with management’s discussion and analysis of financial condition and results of operations, included in the 2005 Form 10-K which was filed in March 2006.

The following table sets forth the computation of basic and diluted net loss per common share (in thousands):

For the three and nine month periods ended September 30, 2006 and 2005, all options have been excluded from the computation of diluted earnings per share because their effect on loss per share would be anti-dilutive.

The Company provides a stock option plan whereby up to 500,000 shares of the Company’s common stock may be issued in connection with options granted under the plan. As of September 30, 2006, 451,666 options are granted and outstanding under the plan and 20,000 options had been exercised under the plan. See also Note F.

The Company has a revolving credit facility with Wachovia Capital Finance Corporation that provides up to $25 million (the “Credit Agreement”) with a maturity date of February 3, 2007 to fund the Company’s operations. The Credit Agreement contains certain covenants including a minimum quarterly measure of earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a percentage of fixed charges, as defined by the Credit Agreement, which is only tested if the Company fails to maintain at least $3 million of excess collateral availability as defined by the Credit Agreement. The Company was in compliance with the minimum $3 million excess collateral availability restriction during the three and nine month periods ended September 30, 2006. However, if the Company had failed to be in compliance with the $3 million excess collateral availability, the Company would not have been in compliance with the minimum EBITDA covenant, which would constitute an event of default under the Credit Agreement. There can be no assurance that future levels of business will generate sufficient levels of cash to satisfy the minimum $3.0 million excess collateral restriction and avoid violating the minimum EBITDA as a percentage of fixed charges covenant. The Credit Agreement limits the amount of capital expenditures and prohibits the payment of dividends without the lender’s consent. The interest rate on the credit facility is based on the lender’s prime rate plus one percent. The Credit Agreement is collateralized by substantially all of the Company’s assets. Under the advance rates contained in the Credit Agreement, there was approximately $4.6 million of unused available credit on September 30, 2006. The amount of unused available credit under the Credit Agreement fluctuates day to day and is typically highest at the end of the month. However, during the course of a typical month, excess availability approaches $3.0 million, at which time payment to our vendors is delayed beyond their stated terms.

During the three and nine month periods ended September 30, 2006, the Company incurred losses before income taxes of $1.4 million and $3.7 million, respectively. As a result, Reptron recognized a deferred tax asset and an offsetting valuation allowance of approximately $0.6 million and $1.5 million, respectively, resulting in no income tax benefit. Realization of the tax loss carryforwards are contingent upon future taxable earnings in the appropriate jurisdiction. Each carryforward item is reviewed for expected utilization, using a “more likely than not” approach, based on the character of the carryforward item (credit, loss, etc.), the associated taxing jurisdiction (federal or state), the relevant history for the particular item, the applicable expiration dates, and identified actions under the Company’s control in realizing the associated carryforward benefits. The Company assesses the available positive and negative evidence surrounding the recoverability of the deferred tax assets and applies judgment in estimating the amount of valuation allowance necessary under the circumstances. The Company will consider its actual results during the remainder of 2006 compared to its forecasted results as part of this determination. Management continues to assess and evaluate strategies that will enable the carryforward, or a greater portion thereof, to be utilized, and will reduce the valuation allowance appropriately for each item at such time when it is determined that the “more likely than not” criterion is satisfied. The Company will reduce the goodwill balance to the extent that the tax assets are consumed in excess of the net deferred tax asset recorded and increase additional paid in capital upon the exhaustion of the goodwill balance. The amount of net operating losses (“NOL”) that can be utilized in any given year is limited based on Section 382 of the Internal Revenue Code. In this regard, the amount of NOL generated prior to February 2004 that can be utilized in future periods is limited to approximately $3.0 million per year.

On January 1, 2006, the Company adopted Financial Accounting Standards Board Statement 123 (revised 2004), Share-Based Payment (Statement 123(R)). This Statement requires that the costs of employee share-based payments be measured at fair value on the award’s grant date using an option-pricing model and recognized in the financial statements over the requisite service period. This Statement does not change the accounting for stock ownership plans, which are subject to American Institute of Certified Public Accountants SOP 93-6, “Employer’s Accounting for Employee Stock Ownership Plans.” Statement 123(R) supersedes Opinion 25, Accounting for Stock Issued to Employees and its related interpretations, and eliminates the alternative to use Opinion 25’s intrinsic value method of accounting, which the Company had previously used.

All options granted pursuant to the Company’s stock option plan were fully vested as of the effective date of Statement 123(R). Accordingly, no compensation expense was recognized related to these option grants during the three and nine months ended September 30, 2006.

Statement 123(R) requires the Company to present pro forma information for periods prior to the adoption as if the Company had accounted for employee share-based compensation under the fair value method of that Statement. For purposes of pro forma disclosure, the estimated fair value at the date of grant is amortized to expense over the requisite service period. The following table illustrates the effect on net loss and loss per common share if the Company had applied the fair value method for recognizing employee share-based compensation in the prior year periods:

The Company continues to use the Black-Scholes option pricing model for option grants after adoption of Statement 123(R). In applying this model, the Company uses both historical data and current market data to estimate the fair value of its options. The Black-Scholes model requires several assumptions including expected term of the options, risk-free rate, volatility, and dividend yield. The expected term represents the expected amount of time that options granted are expected to be outstanding, based on historical and forecasted exercise behavior. The risk-free rate is based on the rate at grant date of zero-coupon U.S. Treasury Notes with a term equal to the expected term of the option. Expected volatility is estimated using a blend of historical and forecasted volatility.

The following table summarizes stock option activity during the nine months ending September 30, 2006:

The following table summarizes information about Common Stock options outstanding at September 30, 2006:

Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This document contains certain forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Act of 1934, as amended. Factors that could cause actual results to differ materially include the following: business conditions and growth in Reptron’s industry and in the general economy; competitive factors; risks due to shifts in market demand; the ability of Reptron to reduce its operating costs against declining sales which would result in continued operating losses; and the risk factors listed from time to time in Reptron’s reports filed with the Securities and Exchange Commission including Form 10-K for the year ended December 31, 2005, as well as assumptions regarding the foregoing and the factors described below. Forward-looking statements are those that do not relate solely to historical fact. The words “will”, “may” “believe”, “estimate”, “expect”, “intend”, “anticipate”, “plan”, “should” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. Reptron undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.

In the first three quarters of 2006, we incurred a net loss of approximately $3.7 million. Net sales for the first three quarters were $108.7 million, gross profit was $10.5 million and selling, general and administrative expenses were $11.4 million. As a result, we had an operating loss of approximately $0.9 million during the first nine months of 2006. Additionally, we incurred interest expense of approximately $2.8 million related primarily to our Senior Secured Notes due February 2009 and our working capital credit facility. As previously disclosed, two of our largest customers at our Hibbing facility were recently acquired, in March and April 2006, respectively. One of those customers subsequently reduced their long term revenue projection by approximately $3 million per quarter, although the customer has forecasted traditional demand in the fourth quarter of 2006 relating primarily to final build-out of the product line. The other customer has not indicated any significant change in revenue projection for 2006 or 2007. As a result of the reduced demand from the first customer, our Hibbing facility will likely operate at substantial under capacity upon final build-out of this product line. In response to this anticipated revenue reduction, we continue to study the Hibbing facility operating cost structure in relation to the lower customer demand and plan to implement feasible reductions based on such reviews. Additionally, in our Tampa, Florida manufacturing facility we continued to experience labor and materials costs that were both higher than we expected and higher than our historical norms. Our gross margins were negatively impacted due to higher labor and materials costs. These efficiency variances are attributable in large part to slower than expected processing of certain circuit card assemblies from one customer resulting from their overly complex design. We are reviewing our manufacturing process as well as working with our customer in order to rectify these inefficiencies. Additionally, these negative variances were in part attributable to the learning curve associated with our hiring approximately 50 new production personnel during the first half of 2006 in order to meet increased customer demand from the Tampa facility.

Net Sales. Total third quarter net sales increased $3.8 million, or 11.8% from $32.6 million in the third quarter of 2005 to $36.4 million in the third quarter of 2006. Total net sales for the first nine months of 2006 increased $6.8 million, or 6.7% from $101.9 million in the first nine months of 2005 to $108.7 million in the first nine months of 2006. These increases are primarily attributable to increased demand from our established customer base. We transacted business with approximately 50 customers in the first three quarters of 2006 and 2005. The largest three customers in the third quarter of 2006 represented approximately 15%, 12% and 10%, respectively, of net sales as compared to 15%, 13%, and 10%, respectively, of third quarter 2005 net sales. The largest three customers in the first nine months of 2006 represented approximately 14%, 13%, and 11%, respectively, of net sales as compared to 15%, 13%, and 9%, respectively, of net sales in the first nine months of 2005.

Gross Profit. Total 2006 third quarter gross profit decreased $.9 million, or 23.1%, from $4.1 million in the third quarter of 2005 to $3.2 million in the third quarter of 2006. Total gross profit was approximately $10.5 million in the first nine months of 2006 and $11.5 million in 2005. The gross profit percentage was 8.7% in the third quarter of 2006 as compared to 12.7% in the third quarter of 2005. The gross profit percentage was 9.7% in the first nine months of 2006 as compared to 11.3% in the first nine months of 2005. During the third quarter, our gross margins were negatively impacted due to higher labor and materials costs. These efficiency variances are attributable in large part to slower than expected processing of certain circuit card assemblies resulting from their overly complex design. We are reviewing our manufacturing process as well as working with our customer in order to rectify these inefficiencies. Additionally, these negative variances were in part attributable to the learning curve associated with our hiring approximately 50 new production personnel during the first half of 2006 in order to meet increased customer demand in our Tampa facility.

Selling, General, and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses decreased $1.0 million, or 21.0%, from $4.6 million in the third quarter of 2005 to $3.6 million in the third quarter of 2006. These expenses, as a percentage of net sales, decreased from 14.2% in the third quarter of 2005 to 10.0% in the third quarter of 2006. SG&A expenses decreased $1.8 million, or 13.3%, from $13.2 million in the first nine months of 2005 to $11.4 million in the first nine months of 2006. These expenses, as a percentage of net sales, decreased from 12.9% in the first nine months of 2005 to 10.5% in the first nine months of 2006. These decreases in SG&A expenses and SG&A expenses as a percentage of net sales are primarily the result of our cost reduction plan that was implemented in the second and third quarters of 2005.

Interest Expense. Net interest expense was approximately $1.0 million in the third quarter of 2006 which represents an increase of $0.1 million from the same period in 2005. Net interest expense increased $0.2 million, or 10.5%, from $2.6 million in the first nine months of 2005 to $2.8 million in the first nine months of 2006. This increase is primarily the result of increases in the average outstanding debt of $3.3 million from $43.6 million in the first nine months of 2005 to $46.9 million in the first nine months of 2006 and an increase in the average interest rate from 7.8% in the first nine months of 2005 to 8.0% in the first nine months of 2006. The increase in average outstanding debt is primarily from higher outstanding balances on our working capital credit facility.

Income Taxes. During the three and nine month periods ended September 30, 2006, we incurred losses before income taxes of $1.4 million and $3.7 million, respectively. As a result, we recognized a deferred tax asset and an offsetting valuation allowance of approximately $0.6 million and $1.5 million, respectively, resulting in no income tax benefit. Realization of the tax loss carryforwards are contingent upon future taxable earnings in the appropriate jurisdiction. Each carryforward item is reviewed for expected utilization, using a “more likely than not” approach, based on the character of the carryforward item (credit, loss, etc.), the associated taxing jurisdiction (federal or state), the relevant history for the particular item, the applicable expiration dates, and identified actions under the Company’s control in realizing the associated carryforward benefits. The Company assesses the available positive and negative evidence surrounding the recoverability of the deferred tax assets and applies judgment in estimating the amount of valuation allowance necessary under the circumstances. The Company will consider its actual results during the remainder of 2006 compared to its forecasted results as part of this determination. Management continues to assess and evaluate strategies that will enable the carryforward, or a greater portion thereof, to be utilized, and will reduce the valuation allowance appropriately for each item at such time when it is determined that the “more likely than not” criterion is satisfied. The Company will reduce the goodwill balance to the extent that the tax assets are consumed in excess of the net deferred tax asset recorded and increase additional paid in capital upon the exhaustion of the goodwill balance. The amount of net operating losses (“NOL”) that can be utilized in any given year is limited based on Section 382 of the Internal Revenue Code. In this regard, the amount of NOL generated prior to February 2004 that can be utilized in future periods is limited to approximately $3.0 million per year.

As of September 30, 2006, we had cash and cash equivalents of $0.1 million, restricted cash of $0.5 million and working capital of $5.2 million. We sustained a net loss of approximately $3.7 million in the first nine months of 2006, contributing to a decrease in net working capital of $1.6 million for the nine month period. We primarily finance our operations through our Senior Secured Notes due in 2009, bank credit lines, operating cash flows, and short-term financing through supplier credit lines. Net cash provided by or used in operating activities has historically been provided by net income (loss) levels combined with fluctuations in inventory, accounts receivable and accounts payable. Operating activities from continuing operations for the first nine months of 2006 generated cash of approximately $1.3 million. This consisted primarily of $3.7 million of net loss from continuing operations, adjusted for $3.2 million of non-cash depreciation and amortization charges, $1.8 million decrease in accounts receivable, $0.6 million decrease in prepaid expenses and other current assets, $4.8 million increase in accounts payable, offset by $4.0 million increase in inventory, and $1.6 million decrease in accrued expenses.

Capital expenditures totaled approximately $0.9 million in the first nine months of 2006. These capital expenditures were primarily for the acquisition of various production equipment. These purchases were funded by the working capital credit facility, described below.

Credit Agreement. The Company has a revolving credit facility with Wachovia Capital Finance Corporation that provides up to $25 million (the “Credit Agreement”) with a maturity date of February 3, 2007 to fund the Company’s operations. The Credit Agreement contains certain covenants including a minimum quarterly measure of earnings before interest, taxes, depreciation and amortization (“EBITDA”) as a percentage of fixed charges, as defined by the Credit Agreement, which is only tested if we fail to maintain at least $3.0 million of excess collateral availability as defined by the Credit Agreement. The Company was in compliance with the minimum $3.0 million excess collateral availability restriction during the three and nine month periods ended September 30, 2006. However, if the Company had failed to be in compliance with the $3.0 million excess collateral availability, the Company would not have been in compliance with the minimum EBITDA covenant, which would constitute an event of default under the Credit Agreement. There can be no assurance that our future levels of business will generate sufficient levels of cash to satisfy the minimum $3.0 million excess collateral restriction and avoid violating the minimum EBITDA as a percentage of fixed charges covenant. The Credit Agreement limits the amount of capital expenditures and prohibits the payment of dividends without the lender’s consent. The interest rate on the credit facility is based on the lender’s prime rate plus one percent. The Credit Agreement is collateralized by substantially all of the Company’s assets. Under the advance rates contained in the Credit Agreement, there was approximately $4.6 million of unused available credit on September 30, 2006, of which $1.6 million was available to be utilized by the Company due to the $3.0 million excess collateral availability restriction described above. The amount of unused available credit under the Credit Agreement fluctuates day to day and is typically highest at the end of the month. However, during the course of a typical month, our excess availability approaches $3.0 million, at which time we delay payment to our vendors beyond their stated terms. We are in the process of discussing the terms of possible renewal and extension of our credit facility. There can be no assurance of renewal or if renewed, that the terms will be favorable to the Company.

Senior Secured Notes due in 2009. As of September 30, 2006, there were outstanding approximately $30 million of Senior Secured Notes (“Notes”). These Senior Secured Notes will become due in five years from the date of issuance, February 3, 2004. These Notes carry a seven percent annual interest rate in the first two years and an eight percent annual interest rate in the remaining three years. On February 3, 2006 we began paying interest at eight percent per annum. Interest expense associated with these Notes is currently recorded based on the effective interest rate method over the entire term of the notes. The Notes are secured by a second security position, behind the security position on the Credit Agreement, in substantially all of the assets of the Company. The Notes become due February 2009 and at that time we will either have to pay the balance due or refinance the Notes.

Management believes that available credit facilities in addition to our current cash and cash flows expected to be generated from operations will be sufficient to meet our known capital requirements and working capital needs of our operations through at least February 2007. Our continued viability depends on our ability to generate cash from operations and receive adequate short-term financing through vendor credit lines, or obtain additional sources of funds for working capital, including renewal of our line of credit or obtaining alternative financing. The future expected reduction in revenue at our Hibbing facility due to the loss of a significant product line from a significant customer will negatively impact our liquidity position in the future periods. Our future liquidity and cash requirements will depend on a wide range of factors including the level of business in existing operations, credit lines extended by lenders and trade suppliers, capital expenditure requirements and the success of our cost reduction plan. There can be no assurance that financing or credit facilities will be available in amounts and on terms acceptable to management. If our operating goals are not met, we may need to secure waivers of any resulting covenant violations under existing lending facilities, secure additional financing from lenders or sell additional securities.

The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires the Company to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses during the reporting period and related disclosure of contingent assets and liabilities. These estimates and assumptions are based upon management’s evaluation of historical results, anticipated future events and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Securities and Exchange Commission (the “SEC”) defines critical accounting polices as those that are, in management’s view, most important to the portrayal of the Company’s financial condition and results of operations and those that require significant judgments and estimates. The Company believes the following critical accounting policies involve the more significant judgments and estimates used in the preparation of its consolidated financial statements:

Fresh Start Accounting. In accordance with AICPA Statement of Position 90-7 Financial Reporting by Entities in Reorganization Under the Bankruptcy Code (“SOP 90-7”), the Company adopted “fresh start” accounting as of January 31, 2004 and the Company’s emergence from chapter 11 resulted in a new reporting entity. Under “fresh start” accounting, the reorganization value of the entity is allocated to the entity’s assets based on fair values, and liabilities are stated at the present value of amounts to be paid determined at appropriate current interest rates. The effective date is considered to be the close of business on January 31, 2004 for financial reporting purposes. As a result of the implementation of fresh start accounting, the financial statements of the Company after the effective date are not comparable to the Company’s financial statements for prior periods.

Valuation of Receivables. The Company maintains an allowance for doubtful accounts for estimated losses resulting from customer defaults. The Company performs ongoing credit evaluations of its customers considering among other things, the customers’ payment history and current ability to pay. A provision for uncollectible amounts is adjusted based on these evaluations and historical experience. If the financial condition of a customer were to deteriorate, resulting in an impairment of that customer’s ability to make payments to the Company, additional reserves may be required. Generally, accounts are written-off upon the exhaustion of all reasonable collection efforts.

Valuation of Inventories. Inventories are recorded at the lower of cost or estimated market value. Cost is determined using the first-in, first-out and average cost methods. The Company’s inventories are comprised, in part, of high technology components used in assemblies produced under contract with our customers. Inventories in excess of demand may be subject to technological obsolescence.

The Company evaluates inventories for excess quantities, obsolescence or other factors that may render inventories unmarketable at normal margins. Write-downs are recorded so that inventories reflect the approximate net realizable value and take into consideration the Company’s contractual provisions with its customers and suppliers. If assumptions about future demand change or the financial strength of customers diminish significantly or actual market conditions are less favorable than those projected by management, additional write-downs of inventories may be required. In any case, actual amounts could be different from those estimated.

Impairment of Assets. Reptron’s policy is to periodically review and evaluate whether there has been a permanent impairment in the value of long-lived assets. Factors considered in the evaluation include current operating results, trends and anticipated undiscounted future cash flows. An impairment loss is recognized to the extent that fair value of the assets measured as the sum of discounted estimated future cash flows (using the Company’s incremental borrowing rate over a period of less than 30 years) that is expected to result from the use of the asset or other measure of fair value, is less than the carrying value.

Goodwill. In assessing the Company’s goodwill for impairment in accordance with the Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards No. 142 (“SFAS 142”), “Goodwill and Other Intangible Assets,” the Company is required to assess the valuation of its reporting units, which involves making significant assumptions about the future cash flows and overall performance of its reporting units. Should these assumptions or the structure of the reporting units change in the future based upon market conditions or changes in business strategy, the Company may be required to record impairment charges to its goodwill.

Deferred Income Taxes. The carrying value of the Company’s deferred income tax assets is dependent upon the Company’s ability to generate sufficient future taxable income in certain tax jurisdictions. Should the Company determine that it would not be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets would be expensed in the period such determination was made. The Company presently records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not expected to be realized. While the Company has considered future taxable income expected to be earned over the next one to two years and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance, in the event that the Company were not able to achieve these objectives, additional valuation allowances and corresponding costs would be recorded. The Company will reduce the goodwill balance to the extent that the tax assets are consumed in excess of the net deferred tax asset recorded and increase additional paid in capital upon the exhaustion of the goodwill balance. The amount of net operating losses (“NOL”) that can be utilized in any given year is limited based on Section 382 of the Internal Revenue Code. In this regard, the amount of NOL generated prior to February 2004 that can be utilized in future periods is limited to approximately $3.0 million per year.

Contingencies. The Company is the subject of various threatened or pending legal actions and contingencies in the normal course of conducting its business. The Company provides for costs related to these matters when a loss is probable and the amount can be reasonably estimated. The Company assesses the likelihood of adverse judgments or outcomes to these matters, as well as the range of potential losses. A determination of the reserves required, if any, is made after careful analysis. The required reserves may change in the future due to new developments.

An investment in our common stock or our Senior Secured Notes is extremely risky. The following risks identify some of the factors we believe could cause our actual results to differ materially from expected and historical results. The trading price of our common stock or Senior Secured Notes could decline due to any of these risks and you may lose all or any part of your investment.

No Assurance of Success of Cost Reduction Plan. Due to the significant and continuing operating losses we have experienced since emerging from bankruptcy, we have initiated a cost reduction plan in an effort to better align our operating cost structure with our reduced level of sales. As part of this plan, we expect to reduce our labor costs through minimizing overtime and the use of temporary employees, natural employee attrition, and reductions in our work force. We are also reviewing other potential areas of cost reduction including medical benefits, workers compensation risk management and consolidation of administrative functions. There can be no assurance that we will be successful in implementing this plan or reducing our operation costs.

No Assurance We Will Be Able to Achieve Profitability. Since our emergence from bankruptcy we have experienced significant operating losses and significant unused excess capacity in our facilities. We must increase our revenues and gross profit and/or reduce operating costs and more effectively utilize our excess capacity in our plants in order to achieve profitability. We cannot be certain that we can achieve profitability in the future or, if we do, that we can sustain or increase profitability on a quarterly or annual basis.

Volatility in the Market Price of Our Common Stock. Our second quarter and year ending December 31, 2005 operating results were negatively impacted by the impairment charges on our goodwill and deferred tax asset. In addition, we continued to experience significant operating losses during 2005 and the first three quarters of 2006. These factors and others listed below may cause the price of our common stock to fluctuate:

Our operating expenses and inventory levels are based on our expectations of future revenues and our operating expenses are relatively fixed in the short term. Additionally, our sales have historically been significantly concentrated towards the end of the quarter. Consequently, if anticipated sales and shipments in any quarter do not occur in any quarter when expected, operating expenses and inventory levels could be disproportionately high, and our operating results for that quarter and, potentially, future quarters may be negatively impacted. Because our operating results have been volatile, you should not rely on the results of one quarter as an indication of our future performance. Our stock price has and may continue to fluctuate substantially.

Customer Effect from Bankruptcy Filing and Lack of Profitability. During 2001 through 2004, we incurred significant financial losses. These losses combined with defaults incurred on our senior secured revolving credit facility (“Credit Agreement”) and Convertible Notes culminated in us filing a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code on October 28, 2003. Our customers engage us to produce complex electronic products. These manufacturing engagements require significant investment and planning by both our customers and us. Our inability to perform for our customers for whatever reason would have a significant impact on their business operations. Although we have subsequently completed our bankruptcy proceedings, we have not succeeded in achieving profitability since emerging from bankruptcy. It is possible that our major customers could suspend or terminate business activity with us due to their concerns about our long term financial stability. These factors could have a material adverse effect on our financial position, cash flows, and operating results.

Supplier Effect from Bankruptcy Filing. We rely on a supply chain comprised of approximately 900 different suppliers. Many of the materials delivered by this supply chain are custom or built to order requiring advanced planning, tooling and significant disengagement costs. Our Plan confirmed by the bankruptcy court provided for the vast majority of the Company’s suppliers to be paid in full for both pre-petition and post-petition shipments. Although our suppliers have been paid in full, it is possible that our bankruptcy filing and subsequent financial condition could result in several adverse actions including restricting our credit limit and the time allowed to pay outstanding obligations, elimination of all credit lines requiring cash in advance or cash on delivery terms, price increases to compensate for perceived risks and choosing not to supply us altogether thereby requiring additional time and investment to source materials. These actions could have a material adverse effect on our Company.

Need to Add New Customers. Our future success is greatly dependent upon our ability to increase sales. Our growth strategy includes maintaining and growing sales from current customers as well as adding new customers. Our ability to attract new customers could be negatively impacted due to their concerns about our long term financial stability and the fact that we have not achieved profitability since emerging from bankruptcy. Our inability to add new customers could have a material adverse effect on our business.

Customer Concentration and Related Factors Affecting Operating Results. We have certain customers that account for a significant part of total net sales. The loss of one or more of these major customers, or a reduction in their level of purchasing, could have a material adverse effect on our business, results of operations and financial condition. Some of our customers have expressed concern over the continuing losses we have incurred since emerging from bankruptcy and the previous bankruptcy filing. It is possible that our major customers could suspend or terminate business activity with us due to these concerns. This action would have a material adverse effect on our business.

Our operating results are affected by a number of factors, including fixed plant utilization, price competition, ability to keep pace with technological developments, the degree of automation that can be used in an assembly process, efficiencies that can be achieved by managing inventories and fixed assets, the timing of orders from major customers, the timing of capital expenditures in anticipation of increased sales, the substantial start-up costs routinely incurred on new assemblies, customer product delivery requirements and costs and shortages of components and labor. In addition, because of the limited number of our customers and the corresponding concentration of their accounts receivable, the insolvency or other inability or unwillingness of our customers to pay for manufacturing services could have a material adverse effect on our operating results.

The Volume and Timing of Customer Sales May Vary. The volume and timing of purchase orders placed by our customers are affected by a number of factors, including variation in demand for customers’ products, customer attempts to manage inventory, changes in product design or specifications and changes in the customers’ manufacturing strategies. We typically do not obtain long-term purchase orders or commitments but instead work with our customers to develop nonbinding forecasts of future requirements. Based on such nonbinding forecasts, we make commitments regarding the level of business that we will seek and accept, the timing of production schedules and the levels and utilization of personnel and other resources. A variety of conditions, both specific to each individual customer and generally affecting each customer’s industry, may cause our customers to cancel, reduce or delay orders that were either previously made or anticipated. Generally, our customers may cancel, reduce or delay purchase orders and commitments without penalty, except for payment for services rendered or products completed and, in certain circumstances, payment for materials purchased and charges associated with such cancellation, reduction or delay. Significant or numerous cancellations, reductions or delays in orders by our customers, or any inability by our customers to pay for services provided by us or to pay for components and materials purchased by us on our customers’ behalf, could have a material adverse effect on our operating results.

Competition. We face substantial competition. We believe that many of our competitors have international operations and significantly greater manufacturing, financial, marketing, research and development resources, and broader name recognition than we do. We compete in a highly fragmented market composed of a diverse group of EMS providers. We believe that the key competitive factors in our markets are manufacturing flexibility, price, manufacturing quality, advanced manufacturing technology, reliable delivery and financial stability. Additionally, we face the potential risk that our customers may elect to produce their products internally, thereby eliminating our manufacturing opportunities. There can be no assurance that we will be able to continue to compete effectively with existing or potential competitors.

Availability of Components and Inventory Management. We rely on third-party suppliers for electronic components. We believe that component shortages would have a material adverse effect on our ability to service our customers. At various times, there have been shortages of components in the electronics industry and from time to time the supply of certain electronic components is subject to limited allocations. If shortages of components occur, we expect that we may be forced to delay shipment or to purchase components at higher prices (that we may not be able to be pass on to our customers), which may have a material adverse effect on customer demand, our ability to service customer needs or our gross margins. We believe that any of these events could have a material adverse effect on our operating results. If we fail to manage our inventory effectively, we may bear the risk of fluctuations in materials costs, scrap, and excess inventory, all of which could have a material adverse effect on our business, financial condition and results of operations. We are required to forecast our future inventory requirements based upon the anticipated demands of our customers. Inaccuracies in making these forecasts could result in a shortage or excess of materials. In addition, delays, cancellations, or reduction of orders by our customers could result in an excess of materials. A shortage of materials could lengthen production schedules and increase costs. An excess of materials may increase the costs of maintaining inventory and may increase the risk of inventory obsolescence, both of which may increase expenses and decrease profit margins and operating income.

Dependence Upon Key Personnel. Reptron is largely dependent on the efforts and abilities of its key managerial and technical employees. We have not offered consistent increases in compensation for the last five years. Additionally, we have reduced medical and other benefits during this time frame in an effort to reduce operating expenses. The loss of the services of certain key employees or an inability to attract or retain qualified employees could have a material adverse effect on our operating results.

Migration of Electronic Manufacturing to Asia and Other Low-Cost Regions. A growing number of electronic manufacturing service providers have relocated a portion or all of their manufacturing operations to Asia and other low cost regions. In particular, the growth rate in China has been very strong in recent years to the detriment of other regions of the world. This trend is driven primarily by high availability of low cost labor. In order for us to remain competitive in the markets we serve and have targeted, we may need to expand a portion of our manufacturing capability to low cost regions. If we are unable to develop a low-cost manufacturing presence, our ability to effectively compete may be materially and adversely affected. There can be no assurance that we will develop a manufacturing presence in low cost regions.

Implementation of European RoHS Requirements and Other Environmental Regulations. The European Union and the United Kingdom have developed additional manufacturing requirements aimed at the elimination of lead and other substances from most products sold in this region. These regulations become effective in 2006 and will require the industry to significantly change its manufacturing process and materials used in producing electronic products. These regulations will require us to make substantial additional capital investments in manufacturing equipment and introduce additional costs to the manufacturing and materials procurement process. There can be no assurance that we will be able to comply with these new requirements in a timely fashion or that the additional costs associated with compliance will not have a material adverse effect on our operating results.

Start-up Costs and Inefficiencies Related To New or Transferred Programs Can Adversely Affect Our Operating Results. Start-up costs, the management of labor and equipment resources in connection with the establishment of new programs and new customer relationships, and the need to estimate required resources in advance can adversely affect our gross margins and operating results. These factors are particularly prominent in the early stages of the life cycle of new products and new programs. The effects of these start-up costs and inefficiencies can also occur when, and if, we open new facilities. These factors also affect our ability to efficiently use labor and equipment. Due to the improved economy and more successful marketing efforts, we routinely manage a number of new programs and new customer relationships. Consequently, our exposure to these factors has increased. In addition, if any of these new programs or new customer relationships were to be terminated, our operating results could be harmed, particularly in the near term.

Governmental Regulation Could Adversely Affect Our Business. Our operations are subject to various federal, state and local regulatory requirements on environmental, waste management and health and safety measures relating to the use, release, storage, treatment, transportation, discharge, disposal and clean-up of hazardous substances and wastes, as well as practices and procedures applicable to the construction and operation of our plants. In addition, we have registered with the United States Food and Drug Administration as a medical device manufacturer. The FDA and various state agencies inspect our facilities from time to time to determine whether we are in compliance with the FDA’s Quality Systems Regulation relating to medical device manufacturing companies, including regulations concerning manufacturing, testing and quality control. Our failure to comply with any of these applicable laws or regulations could result in regulatory penalties, fines and legal liabilities, suspension of production or curtailment of our operations or sales.

Excess Manufacturing Capacity may Adversely Effect Our Operations. Our facilities in Hibbing, Gaylord and Tampa have significant underutilized capacity. The excess capacity means we incur increased fixed costs in our products relative to the revenue we generate which could have an adverse effect on our results of operation. If we are unable to improve utilization levels and correctly manage capacity, the increased expense levels will have an adverse effect on our business, financial condition and results of operations.

Natural Disasters and Acts of Terrorism Could Adversely Affect Our Business. We have a facility located in Tampa, Florida. Hurricanes, tropical storms, flooding and other natural disasters are common events for Florida which could affect our operations in this geographic region. Any disruption from these or other natural disasters could have a material adverse impact on our operations and financial results. Acts of terrorism or war against the United States of America could reduce consumer confidence and create general economic weakness which could also adversely affect our business.

We Have Substantial Indebtedness. We have $30 million of indebtedness in the form of senior secured notes due in 2009. The level of our indebtedness, among other things, could:

There can be no assurance that we will be able to meet our debt service obligations, including our obligation under the Senior Secured Notes.

We May Not Be Able to Pay Our Debt and Other Obligations. If our cash balance and cash flows from operations are inadequate to meet our obligations, we could face substantial liquidity problems. If we are unable to generate sufficient cash flow or otherwise obtain funds necessary to make required payments on our Senior Secured Notes or our other obligations, we would be in default under the terms thereof. Default under the indenture would permit the holder of the notes to accelerate the maturity of the notes and could cause cross defaults under our other indebtedness. Any such default could have a material adverse effect on our business, prospects, financial condition and operating results. In addition, we can not assure you that we would be able to repay amounts due in respect of the notes if payment of the notes were to be accelerated following the occurrence of an event of default as defined in the indenture.

There have been no material changes in our market risk during the three or nine months ended September 30, 2006. Market risk information is contained under the caption “Quantitative and Qualitative Disclosures about Market Risk” of our 2005 Annual Report on Form 10-K for the fiscal year ended December 31, 2005 and is incorporated herein by reference.

Evaluation of disclosure controls and procedures. Our management evaluated, under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act of 1934, as amended) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective.

Disclosure controls and procedures are defined by Rule 13a – 15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”) as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with or submitted to the Securities and Exchange Commission (“SEC”) under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting. There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we become involved in ordinary, routine or regulatory legal proceedings incidental to our business. When a loss is deemed probable and can be reasonably estimated, an amount is recorded on our financial statements. While the ultimate result of any such matters cannot be presently determined, management does not expect that they will have a material adverse effect on our results of operation or financial position.

In addition to the other information set forth in this report, you should carefully consider the risk factors associated with our business was previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2005. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations. If any of these risks occur, our business, results of operations or financial condition could suffer, the market price of our common stock could decline and you could lose all or part of your investment in our securities. In addition, to these risk factors, the following risk factor should be considered.

As disclosed in previous SEC filings and as discussed elsewhere in this Form 10-Q, we have not succeeded in achieving profitability since emerging from bankruptcy on February 3, 2004 and our working capital credit facility matures on February 3, 2007. Management is in the preliminary process of discussing the terms of possible renewal of the credit facility with its current lenders. However, there can be no assurance that the working capital credit facility will be renewed by our current lenders or other lenders, or renewed on favorable terms to the Company. If the credit facility is not renewed, the Company will have to obtain alternative financing to repay the indebtedness under the credit facility. There can be no assurance that such alternative financing can be obtained on favorable terms to the Company or at all. Failure to repay the indebtedness under the credit facility would be a default under the Indenture pertaining to our Senior Secured Notes due in 2009. Additionally, continued lack of profitability will impair our ability to finance capital equipment.

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


REPTRON ELECTRONICS, INC.
(Registrant)

By:		/s/ Paul J. Plante
		Paul J. Plante, President and Chief Executive Officer
		(Principal Executive Officer)

By:		/s/ Charles L. Pope
		Charles L. Pope, Chief Financial Officer
		(Principal Financial and Accounting Officer)


Florida		38-2081116
State or other jurisdiction of incorporation or organization		(I.R.S. Employer Identification No.)

13700 Reptron Boulevard, Tampa, Florida		33626
(Address of principal executive offices)		(Zip Code)


			Page Number

PART I.	FINANCIAL INFORMATION

	Item 1.	Financial Statements (unaudited)

		Consolidated Statements of Operations — Three and nine months ended September 30, 2006 and 2005	3

		Consolidated Balance Sheets — September 30, 2006 and December 31, 2005	4

		Consolidated Statements of Cash Flows — Nine months ended September 30, 2006 and 2005	5

		Notes to Consolidated Financial Statements — September 30, 2006	6

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	19

	Item 4.	Controls and Procedures	19

PART II.	OTHER INFORMATION

	Item 1	Legal Procedings	20

	Item 1A.	Risk Factors	20

	Item 6.	Exhibits	21

Signatures			22


	Three Months Ended						Nine Months Ended
	September 30, 2006			September 30, 2005			September 30, 2006			September 30, 2005
Net Sales	$	36,434		$	32,579		$	108,691		$	101,861
Cost of goods sold		33,263			28,457			98,144			90,324

Gross profit		3,171			4,122			10,547			11,537

Selling, general and administrative expenses		3,646			4,615			11,399			13,152
Impairment charges		—			—			—			10,072

Operating loss		(475	)		(493	)		(852	)		(11,687	)

Other income (expense):
Interest expense, net		(971	)		(856	)		(2,829	)		(2,560	)
Reorganization costs		—			—			10			(6	)

Total other expense, net		(971	)		(856	)		(2,819	)		(2,566	)

Loss before income taxes		(1,446	)		(1,349	)		(3,671	)		(14,253	)
Income tax provision		—			—			—			383

Loss from continuing operations		(1,446	)		(1,349	)		(3,671	)		(14,636	)

Discontinued operations
Earnings from discontinued operations		4			171			4			171
Income tax benefit		—			—			—			—

Earnings on discontinued operations		4			171			4			171

Net loss	$	(1,442	)	$	(1,178	)	$	(3,667	)	$	(14,465	)

Net loss from continuing operations per common share – basic and diluted	$	(0.29	)	$	(0.27	)	$	(0.73	)	$	(2.92	)

Net loss from discontinued operations per common share – basic and diluted	$	—		$	0.03		$	—		$	0.03

Net loss per common share – basic and diluted	$	(0.29	)	$	(0.24	)	$	(0.73	)	$	(2.89	)

Weighted average Common Stock equivalent shares outstanding – basic and diluted		5,020,000			5,000,000			5,010,037			5,000,000


	September 30, 2006			December 31, 2005
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	52		$	230
Restricted cash		500			740
Account receivable - trade, net		16,185			17,990
Inventories, net		25,402			21,378
Prepaid expenses and other		614			1,266

Total current assets		42,753			41,604

PROPERTY, PLANT & EQUIPMENT, NET		17,056			18,937
GOODWILL, NET		2,100			2,100
OTHER INTANGIBLE ASSETS, NET		2,761			3,230
DEFERRED INCOME TAX, NET		1,543			1,543
OTHER ASSETS		26			83

TOTAL ASSETS	$	66,239		$	67,497

LIABILITIES AND SHAREHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable – trade	$	19,789		$	15,008
Accrued expenses		4,040			5,613
Note payable to bank		13,346			13,900
Current portion of long-term obligations		428			315

Total current liabilities		37,603			34,836

SENIOR SECURED NOTES		30,000			30,000
LONG-TERM OBLIGATIONS, less current portion		2,681			3,046

SHAREHOLDERS’ DEFICIT
Preferred Stock - authorized 15,000,000 shares of $.10 par value; no shares issued		—			—
Common Stock - authorized 50,000,000 shares of $.01 par value; issued and outstanding, 5,020,000 and 5,000,000 shares, respectively		50			50
Additional paid-in capital		15,732			15,725
Accumulated deficit		(19,827	)		(16,160	)

TOTAL SHAREHOLDERS’ DEFICIT		(4,045	)		(385	)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	66,239		$	67,497


	Nine Months Ended September 30, 2006			Nine Months Ended September 30, 2005
Increase in cash and cash equivalents:
Cash flows from operating activities of continuing operations:
Net loss	$	(3,667	)	$	(14,465	)
Adjustments to reconcile net loss to net cash provided by operating activities of continuing operations:
Net income from discontinued operations		—			(171	)
Depreciation		2,778			3,023
Amortization		469			10,541
Deferred tax asset		—			359
Change in assets and liabilities:
Accounts receivable		1,805			811
Inventories		(4,024	)		(1,921	)
Prepaid expenses and other current assets		652			(17	)
Other assets		57			(48	)
Accounts payable		4,781			3,372
Accrued expenses		(1,573	)		(74	)

Net cash provided by operating activities of continuing operations		1,278			1,410

Cash flows from investing activities of continuing operations:
Decrease in restricted cash		240			268
Purchases of property, plant & equipment		(897	)		(858	)

Net cash used in investing activities of continuing operations		(657	)		(590	)

Cash flows from financing activities of continuing operations:
Net payments on notes payable to banks		(554	)		(802	)
Payments on long-term obligations		(252	)		(284	)
Proceeds from exercise of stock options		7			—

Net cash used in financing activities of continuing operations		(799	)		(1,086	)

Net decrease in cash and cash equivalents		(178	)		(266	)

Net increase in cash and cash equivalents from discontinued operations		—			171

Cash and cash equivalents at the beginning of the period		230			227

Cash and cash equivalents at the end of the period	$	52		$	132

Cash paid for interest	$	3,370		$	2,951


	September 30, 2006			December 31, 2005
Raw materials	$	17,774		$	14,533
Work in process		7,387			5,700
Finished goods		1,300			2,027

		26,461			22,260

Less reserve for excess and obsolete inventory		(1,059	)		(882	)

	$	25,402		$	21,378


	Three months Ended September 30,						Nine months Ended September 30,
	2006			2005			2006			2005
Numerator:
Net loss	$	(1,442	)	$	(1,178	)	$	(3,667	)	$	(14,465	)
Denominator:
For basic loss per share - Weighted average shares		5,020,000			5,000,000			5,010,037			5,000,000
Effect of dilutive securities:
Employee stock options		—			—			—			—

For diluted loss per share		5,020,000			5,000,000			5,010,037			5,000,000

Net loss per common share - basic	$	(0.29	)	$	(0.24	)	$	(0.73	)	$	(2.89	)

Net loss per common share - diluted	$	(0.29	)	$	(0.24	)	$	(0.73	)	$	(2.89	)


	Three months Ended September 30, 2005			Nine months Ended September 30, 2005
Net loss, as reported	$	(1,178	)	$	(14,465	)
Compensation expense, net of tax:
Reported		—			—
Fair value method		—			353

Pro forma net loss	$	(1,178	)	$	(14,818	)

Loss per common share – basic:
As reported	$	(0.24	)	$	(2.89	)
Pro forma	$	(0.24	)	$	(2.96	)

Loss per common share – diluted:
As reported	$	(0.24	)	$	(2.89	)
Pro forma	$	(0.24	)	$	(2.96	)


	Shares		Range of Exercise Price		Weighted Average Exercise Price
Outstanding at December 31, 2005	471,666		$	0.36 – 10.38	$	6.10
Granted	—		$	0.00 – 0.00	$	0.00
Exercised	(20,000	)	$	0.36 – 0.36	$	0.36
Forfeited	—		$	0.00 – 0.00	$	0.00

Outstanding at September 30, 2006	451,666		$	0.36 – 10.38	$	6.36


Options Outstanding						Options Exercisable
Range of Exercise Prices		Number Outstanding at 09/30/06	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable at 09/30/06	Weighted Average Exercise Price
			(In Years)
$	0.36	165,000	9.3	$	0.36	165,000	$	0.36
$	6.10	25,000	8.7	$	6.10	25,000	$	6.10
$	7.50	20,000	8.5	$	7.50	20,000	$	7.50
$	10.38	241,666	7.7	$	10.38	241,666	$	10.38

		451,666	8.5	$	6.36	451,666	$	6.36


	Three Months Ending				Nine Months Ending
	September 30, 2006		September 30, 2005		September 30, 2006		September 30, 2005
Medical	38	%	41	%	39	%	42	%
Industrial/Instrumentation	35	%	31	%	33	%	34	%
Telecommunications	14	%	20	%	14	%	17	%
Semiconductor Equipment	9	%	5	%	11	%	5	%
Other	4	%	3	%	3	%	2	%


10.1		Severance Agreement, dated July 3, 2006, by and between the Company and Paul J. Plante – incorporated by reference to Exhibit 10.1 to Form 8-K dated July 3, 2006, as filed with the Securities and Exchange Commission on July 7, 2006.

10.2		Non-Competition Agreement, dated July 3, 2006, by and between the Company and Paul J. Plante – incorporated by reference to Exhibit 10.2 to Form 8-K dated July 3, 2006, as filed with the Securities and Exchange Commission on July 7, 2006.

10.3		Severance Agreement, dated July 21, 2006, by and between the Company and Charles L. Pope – incorporated by reference to Exhibit 10.1 to Form 8-K dated July 21, 2006, as filed with the Securities and Exchange Commission on July 26, 2006.

10.4		Non-Competition Agreement, dated July 21, 2006, by and between the Company and Charles L. Pope – incorporated by reference to Exhibit 10.2 to Form 8-K dated July 21, 2006, as filed with the Securities and Exchange Commission on July 26, 2006.

10.5		Agreement, dated September 22, 2006, by and between the Company and the International Brotherhood of Electrical Workers, Local Union 294 – incorporated by reference to Exhibit 10.1 to Form 8-K dated August 11, 2006, as filed with the Securities and Exchange Commission on August 17, 2006.

10.6		Amendment No. 1 To Reptron Electronics, Inc. 2006 Incentive Compensation Plan, dated September 19, 2006 – incorporated by reference to Exhibit 10.1 to Form 8-K dated September 19, 2006, as filed with the Securities and Exchange Commission on September 22, 2006.

31.1		Certification of the Chief Executive Officer as required by Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Chief Financial Officer as required by Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.