FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.20549

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended February 28, 2006

Commission File Number 1-31643

CCA INDUSTRIES, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware 04-2795439

(State or other jurisdiction of (I.R.S. Employer

Incorporation or organization) Identification Number)

200 Murray Hill Parkway

East Rutherford,NJ 07073

(Address of principal executive offices) (Zip Code)

(201) 330-1400

Registrant's telephone number, including area code

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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes______ No X

Common Stock, $.01 Par Value – 6,045,543 shares of as February 28, 2006

Class A Common Stock, $.01 Par Value – 967,702 shares as of

February 28, 2006

CCA INDUSTRIES, INC. AND SUBSIDIARIES

INDEX

Page

Number

PART I FINANCIAL INFORMATION:

Item1. Financial Statements:

Consolidated Balance Sheets as of

February 28, 2006 and November 30, 2005 1-2

Consolidated Statements of Income

for the three months ended February 28, 2006 and 2005 3

Consolidated Statements of Comprehensive Income

for the three months ended February 28, 2006 and 2005 4

Consolidated Statements of Cash Flows for

the three months ended February 28, 2006 and 2005 5

Notes to Consolidated Financial Statements 6-16

Item 2. Management Discussion and Analysis of

Results of Operations and Financial

Condition 17-18

Item 3. Quantitative and Qualitative Disclosures about

Market Risk 18

Item 4. Controls and Procedures 18

PART II OTHER INFORMATION 19

Item 1. Legal Proceedings

Item 4. Submission of Matters to a Vote of Security

Holders

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

SIGNATURES 20

CCA INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

A S S E T S

February 28, November 30,

2006 2005

(Unaudited)

Current Assets

Cash and cash equivalents $ 1,738,177 $ 3,536,542

Short-term investments and marketable

securities 7,804,833 7,050,026

Accounts receivable, net of allowances of

$936,936 and $938,712, respectively 9,290,161 9,260,399

Inventories 5,525,273 6,554,150

Prepaid expenses and sundry receivables 684,397 526,134

Deferred income taxes 896,094 818,948

Prepaid income taxes and refunds due 322,350 165,560

Total Current Assets 26,261,285 27,911,759

Property and Equipment, net of accumulated

depreciation and amortization 478,984 467,238

Intangible Assets, net of accumulated

amortization 589,058 583,177

Other Assets

Marketable securities 6,798,613 6,275,390

Deferred taxes - - 23,419

Other 47,850 48,325

Total Other Assets 6,846,463 6,347,134

Total Assets $34,175,790 $35,309,308

See Notes Consolidated to Financial Statements.

- -1-

CCA INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDERS' EQUITY

February 28, November 30,

2006 2005

(Unaudited)

Current Liabilities

Accounts payable and accrued liabilities $ 9,467,819 $ 8,734,092

Dividends payable 362,317 575,560

Total Current Liabilities 9,830,136 9,309,652

Shareholders' Equity

Preferred stock, $1.00 par; authorized

20,000,000 shares; none issued

Common stock, $.01 par; authorized

15,000,000 shares; 6,053,643 and

6,210,051 shares issued, respectively 60,536 62,121

Class A common stock, $.01 par; authorized

5,000,000 shares; 967,702 shares issued

and outstanding 9,677 9,677

Additional paid-in capital 2,744,815 5,105,732

Retained earnings 21,908,926 21,200,465

Unrealized (losses) on marketable

securities ( 313,865) ( 378,339)

24,410,090 25,999,656

Less: Treasury Stock, 8,100shares, at cost 64,436 -

Total Shareholders' Equity 24,345,654 25,999,656

Total Liabilities and Shareholders' Equity $34,175,790 $35,309,308

See Notes to Consolidated Financial Statements.

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

Three Months Ended

February 28, February 28,

2006 2005

Revenues

Sales of health and beauty aid

products - Net $15,306,871 $14,688,237

Other income 169,960 125,951

15,476,831 14,814,188

Costs and Expenses

Costs of sales 5,837,970 5,445,359

Selling, general and administrative

expenses 4,874,892 4,393,496

Advertising, cooperative and promotions 2,831,087 3,098,440

Research and development 107,303 231,528

Provision for doubtful accounts 66,173 113,981

Interest expense - - 7,471

13,717,425 13,290,275

Income before Provision for Income

Taxes 1,759,406 1,523,913

Provision for Income Taxes 688,628 579,083

Net Income $ 1,070,778 $ 944,830

Earnings per Share:

Basic $.15 $.13

Diluted $.15 $.13

See Notes to Consolidated Financial Statements.

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months Ended

February 28, February 28,

2006 2005

Net Income $1,070,778 $944,830

Other Comprehensive Income

Unrealized holding (losses) gains

on investments 64,474 ( 25,507)

Provision (Benefit) for Income Taxes 31,463 ( 3,683)

Other Comprehensive (Loss) Income - Net 33,011 ( 21,824)

Comprehensive Income $1,103,789 $923,006

Earnings Per Share:

Basic $.15 $.13

Diluted $.15 $.12

See Notes to Consolidated Financial Statements.

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended

February 28, February 28,

2006 2005

Cash Flows from Operating Activities:

Net income $1,070,778 $ 944,830

Adjustments to reconcile net income

to net cash provided by (used in)

operating activities:

Depreciation and amortization 70,516 96,743

(Increase) decrease in deferred income taxes ( 53,727) 5,751

(Increase) in accounts receivable ( 29,762) ( 951,763)

Decrease (increase) in inventory 1,028,877 ( 2,142,851)

(Increase) decrease in prepaid expenses

and miscellaneous receivables ( 158,263) 126,396

(Increase) decrease in prepaid income

taxes and refunds due ( 156,790) 120,188

(Increase) in deferred advertising - - ( 2,224,952)

Decrease in other assets 475 450

Increase in accounts payable

and accrued liabilities 733,727 4,162,606

(Decrease) in taxes payable _ ___-__ ( 59,888)

Net Cash Provided by Operating Activities 2,505,831 77,510

Cash Flows from Investing Activities:

Acquisition of property, plant and equipment ( 67,742) ( 92,041)

Acquisition of intangible assets ( 20,401) ( 55,525)

Purchase of marketable securities ( 3,101,595) ( 59,932)

Proceeds from sale and maturity of

investments 1,888,038 ____-___

Net Cash (Used in) Investing Activities ( 1,301,700) ( 207,498)

Cash Flows from Financing Activities:

Purchase and retirement of common shares ( 2,397,751) - -

Proceeds from exercise of stock options 35,250 - -

Purchase of treasury stock ( 64,436) - -

Dividends Paid ( 575,560) ( 483,426)

Net Cash (Used In) Financing Activities ( 3,002,497) ( 483,426)

Net Increase (Decrease) in Cash ( 1,798,365) ( 613,414)

Cash and Cash Equivalents at Beginning

of Period 3,536,542 3,142,230

Cash and Cash Equivalents at End

of Period $1,738,177 $2,528,816

Supplemental Disclosures of Cash Flow

Information:

Cash paid during the period for:

Interest $ - $ 14,936

Income taxes 899,145 512,835

Schedule of Non Cash Financing Activities:

Cancellation of Treasury Stock

Common Stock $ - $ 867

Retained Earnings - 148,804

$ $ 149,671

See Notes to Consolidated Financial Statements.

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounts Receivable:

Accounts receivable consist of trade receivables recorded at original invoice amount, less an estimated allowance for uncollectible accounts. Trade credit is generally extended on a short-term basis; thus trade receivables do not bear interest, although a finance charge may be applied to receivables that are past due. Trade receivables are periodically evaluated for collectibility based on past credit history with customers and their current financial condition. Changes in the estimated collectibility of trade receivables are recorded in the results of operations for the period in which the estimate is revised. Trade receivables that are deemed uncollectible are offset against the allowance for uncollectible accounts. The Company generally does not require collateral for trade receivables.

Inventories:

Inventories are stated at the lower of cost (first-in, first-out) or market.

Product returns that are resaleable are recorded in inventory when they are received at the lower of their original cost or market, as appropriate. Obsolete inventory is written off and its value is removed from inventory at the time its obsolescence is determined.

Property and Equipment and Depreciation and Amortization

Property and equipment are stated at cost. The Company charges to expense repairs and maintenance items, while major improvements and betterments are capitalized. When the Company sells or otherwise disposes of property and equipment items, the cost and related accumulated depreciation are removed from the respective accounts and any gain or loss is included in earnings.

Depreciation and amortization are provided on the straight-line method over the following estimated useful lives or lease terms of the assets:

Machinery and equipment 5-7 Years

Furniture and fixtures 3-10 Years

Tools, dies and masters 3 Years

Transportation equipment 5 Years

Leasehold improvements Remaining life of the lease

(ranging from 1-9 years)

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Intangible Assets:

Intangible assets are stated at cost. Patents are amortized on the straight-line method over a period of 17 years. Such intangible assets are reviewed for potential impairment whenever events or circumstances indicate that carrying amounts may not be recoverable.

Financial Instruments:

The carrying value of assets and liabilities considered financial instruments approximate their respective fair value.

Income Taxes:

Income tax expense includes federal and state taxes currently payable and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes.

Tax Credits:

Tax credits, when present, are accounted for using the flow-through method as a reduction of income taxes in the years utilized.

Earnings Per Common Share:

Basic earnings per share is calculated using the average number of shares of common stock outstanding during the quarter. Diluted earnings per share is computed on the basis of the average number of common shares outstanding plus the effect of outstanding stock options using the “treasury stock method” and convertible debentures using the “if-converted” method. Common stock equivalents consist of stock options.

Revenue Recognition:

The Company recognizes sales upon shipment of merchandise. Net sales comprise gross revenues less expected returns, trade discounts, customer allowances and various sales incentives. Although no legal right of return exists between the customer and the Company, it is an industry-wide practice to accept returns from customers. The Company, therefore, records a reserve for returns equal to its gross profit on its historical percentage of returns on its last five months sales.

-9-

CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Sales Incentives:

The Company has accounted for certain sales incentives offered to customers by charging them directly to sales as opposed to “advertising and promotional” expense. Has EITF 00-14 not been adopted, net sales for the three months ended February 28, 2006 and 2005 would have been $15,921,789 and $15,290,020, respectively.

Advertising Costs:

The Company’s policy for fiscal financial reporting is to charge advertising cost to operations as incurred. During fiscal year 2005, the Company changed its estimate of future benefits it derives from its advertising expenditures and the affect it has on its allocation of advertising expense among the interim quarters. Effective June 1, 2005, the Company expensed its advertising based on when the advertising ran. The Change in estimate affects interim reporting and had no effect on the Company’s earnings for the year ending November 30, 2005.

Shipping and Handling Costs:

The Company’s policy for fiscal financial reporting is to charge shipping costs as part of selling, general and administrative expense as incurred. Freight costs included were $573,667 and $811,421 for the three months ended February 28, 2006 and 2005, respectively.

Stock Options:

The Company accounts for its stock-based employee compensation under the recognition and measurement principles of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Under APB No. 25, when the exercise price of stock options equal the market price in the underlying stock on the date of the grant, no compensation expense is recognized in the consolidated statement of operations. In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123R”), which is a revision of SFAS No. 123, “Accounting for Stock-Based Compensation”. SFAS 123R supercedes APB Opinion No. 25, “Accounting for Stock Issued to Employees” and amends SFAS No. 95, “Statement of Cash Flows”. SFAS No. 123 will require future grants of stock options to employee to be recognized in the income statement based on their fair values, and is effective with reporting periods beginning after December 15, 2005 (the Company’s first quarter ending February 28, 2007). The impact of adoption is not anticipated to be material to the Company’s financial position, results of operation or cash flow.

- -10-

CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements:

In November 2004, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 151, “Inventory Costs” (“SFAS 151”). SFAS 151 amends the guidance in Accounting Research Bulletin No. 43, Chapter 4, “Inventory Pricing”, to clarify that abnormal amounts of idle facility expense, freight, handling costs and wasted materials (spoilage) should be recognized as current-period charges and required the allocation of fixed production overheads to inventory based on normal capacity of the production facilities. This statement is effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS 151 is not expected to have an impact on our financial position, results of operations or cash flows.

In November 2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No. 03-13, “Applying the Conditions in Paragraph 42 of FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” in Determining Whether to Report Discontinued Operations” (EITF 03-13”). Under the consensus, the approach for assessing whether cash flows of the component have been eliminated from the ongoing operations of the entity focuses on whether continuing cash flows are direct or indirect cash flows. Cash flows of the component would not be eliminated if the continuing cash flows to the entity are considered direct cash flows. The consensus should be applied to a component of an enterprise that is either disposed of or classified as held for sale in fiscal period beginning after December 15, 2004. The adoption of EITF 03-13 is not expected to have an impact on our financial position, results of operations or cash flows.

In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment” which replaces SFAS No. 123 and supersedes APB Opinion No. 25. Under the new standard, companies will no longer be allowed to account for stock-based compensation transactions using the intrinsic value method in accordance with APB No. 25. Instead, companies will be required to account for such transactions using a fair value method and to recognize the expense in the statement of operations. The adoption of SFAS 123R will require additional accounting related to the income tax effects of share-based payment arrangements and additional disclosure of their cash flow impacts. SFAS 123R also allows, but does not require companies to restate prior periods. In April 2005, the SEC issued a final rule that amended the effective date to the first annual reporting period that begins after December 15, 2005 (the Company’s first quarter ending February 28, 2007). The impact of adoption is not anticipated to be material to our financial position, results of operation or cash flow.

- -11-

CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Pronouncements (Continued):

In December 2004, the FASB issued SFAS 153, “Exchanges of Nonmonetary Assets” (“SFAS 153”). SFAS 153 amends the guidance in APB Opinion No. 29, “Accounting for Nonmonetary Transactions” to eliminate certain exceptions to the principle that exchanges of nonmonetary assets be measured based on the fair value of the assets exchanged. SFAS 153 eliminates the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. This statement is effective for nonmonetary asset exchanges in fiscal years beginning after June 15, 2005. The adoption of SFAS 153 is not expected to have an impact on our financial position, results of operations or cash flows.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (SFAS 154). SFAS No. 154 replaced APB No. 20, “Accounting Changes”, and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statement” and establishes retrospective application as the required method for reporting a change in accounting.

NOTE 4 - INVENTORIES

The components of inventory consist of the following:

February 28 November 30,

2006 2005

Raw materials $3,520,704 $3,946,164

Finished goods 2,004,569 2,607,986

$5,525,273 $6,554,150

At February 28, 2006 and November 30, 2005 the Company had a reserve for obsolescence of $ 849,882 and $854,764, respectively.

NOTE 5 - PROPERTY AND EQUIPMENT

The components of property and equipment consisted of the following:

February 28, November 30,

2006 2005

Machinery and equipment $ 125,788 $ 125,788

Furniture and equipment 796,183 793,937

Transportation equipment 10,918 10,918

Tools, dies, and masters 614,343 548,846

Leasehold improvements 294,067 294,067

1,841,299 1,773,556

Less: Accumulated depreciation

and amortization 1,362,315 1,306,318

Property and Equipment - - Net $ 478,984 $ 467,238

Depreciation expense for the three months ended February 28, 2006 and 2005 amounted to $ 55,996 and $ 83,628, respectively.

- -12-

CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 6 - INTANGIBLE ASSETS

Intangible assets consist of owned trademarks and patents for ten product lines covering thirty countries. The cost and accumulated depreciation is as follows:

February 28, November 30,

2006 2005

Patents and trademarks $761,827 $741,427

Less: Accumulated amortization 172,769 158,250

Intangible Assets - Net $589,058 $583,177

Patents are amortized on a straight-line basis over their legal life of 17 years and trademarks are adjusted to realizable value for each quarterly reporting period. Amortization expense for the three months ended February 28, 2006 and 2005 amounted to $14,520 and $13,115, respectively. Estimated amortization expense for each quarter of the ensuing five years through February 28, 2009 is $12,000.

NOTE 7 - - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES

Short-term investments and marketable securities, which consist of stock and various corporate and government obligations, are stated at market value. The Company has classified its investments as Available-for-Sale securities and considers as current assets those investments which will mature or are likely to be sold in the next fiscal year. The remaining investments are considered non-current assets. The cost and market values of the investments at February 28, 2006 and November 30, 2005 were as follows:

February 28, 2006 November 30, 2005

Current: COST MARKET COST MARKET

Corporate

Obligations $ 4,789,355 $ 4,732,924 $ 4,169,918 $ 4,080,882

Government

obligations

(including mortgage

backed securities) 2,826,040 2,821,568 2,732,192 2,726,444

Common stock 51,649 51,960 51,649 52,368

Mutual funds 200,942 140,162 198,305 136,191

Other equity

investments 61,453 58,219 60,335 54,141

Total 7,929,439 7,804,833 7,212,399 7,050,026

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 - SHORT-TERM INVESTMENTS AND MARKETABLE SECURITIES (CONTINUED)

February 28, 2006 November 30, 2005

COST MARKET COST MARKET

Non-Current:

Corporate obligations 3,287,450 3,178,785 3,040,192 2,926,098

Government obli-

gations 2,775,577 2,710,640 2,526,319 2,456,724

Preferred stock 824,845 809,188 824,845 792,568

Other equity invest-

ments 100,000 100,000 100,000 100,000

Total 6,987,872 6,798,613 6,491,356 6,275,390

Total $14,917,311 $14,603,446 $13,703,755 $13,325,416

NOTE 8 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

The following items which exceeded 5% of total current liabilities are included in accounts payable and accrued liabilities as of:

February 28, November 30,

2006 2005

(In Thousands) (In Thousands)

a) Media advertising $1,123 $ *

b) Coop advertising 1,587 1,372

c) Accrued returns 1,317 1,489

d) Accrued bonuses * 784

$4,027 $3,645

* under 5%

All other liabilities were for trade payables or individually did not exceed 5% of total current liabilities.

NOTE 9 - OTHER INCOME

Other income consists of the following:

February 28,

2006 2005

Interest and dividend income $141,699 $102,020

Royalty income 14,000 23,766

Miscellaneous 14,261 165

$169,960 $125,951

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 10 - - NOTES PAYABLE AND SUBORDINATED DEBENTURES

The Company has an available line of credit of $10,000,000 which was increased from $7,000,000 on May 27, 2004. Interest is calculated at the Company’s option, either on the outstanding balance at the prime rate minus 1% or Libor plus 150 basis points. The line of credit is unsecured and the Company must adhere to certain financial covenants pertaining to net worth and debt coverage. The Company was not utilizing their available credit line at February 28, 2006 and November 30, 2005. The Company has extended the line of credit through May 31, 2006.

NOTE 11 - - COMMITMENTS AND CONTINGENCIES

Litigation

The only material legal proceedings sets forth the fact that there were originally 13 cases filed in which the Company was named along with other defendants as a result of their purchasing and ingesting our diet suppressant containing phenylpropanolamine (PPA), which the Company utilized as its active ingredient in its products prior to November 2000. Eleven cases have been dismissed with prejudice. These cases cannot be legally reinstated. The one case in Philadelphia in which one of the defendants filed for bankruptcy has been delayed. The court is rendering a decision on our motion to dismiss. We agree with independent counsel that, as concluded under the decision in Seattle,unless a plaintiff ingested a product with PPA within three days of a stroke, there can be no causation to prove that a product caused the stroke. We feel that the case should be dismissed inasmuch as plaintiff at the deposition deposed that she took our product months before the stroke.

The remaining case in Louisiana is fully insured to the extent of $5,000,000. After reviewing the plaintiff’s medical records, it does not appear that there is ongoing significant medical problems that would cause a jury to render a substantial judgment. Counsel evidently in discussing the matter with Phoenix Insurance Company, has not made any substantial efforts to settle the case which we have been led to believe could be settled for under $250,000.

We do not believe that any further litigations would be ensuing because the Statute of Limitations throughout the country provided that the case must be instituted within three to four years within the time frame in which a plaintiff had constructive notice of the product that proximately caused a stroke. The FDA put out a news release nationally in October 2000. However, there can be no assurance that the current PPA litigation will not have a material adverse effect upon the Company’s operations.

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CCA INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 11 - - COMMITMENTS AND CONTINGENCIES (CONTINUED)

Dividends

On November 15, 2005, the board of directors declared a $0.05 per share dividend for the first quarter ending February 28, 2006. The dividend is payable to all shareholders of record on February 1, 2006 payable on March 1, 2006. On February 10, 2006, the board of directors declared another $0.05 per share dividend for the second quarter ending May 31, 2006. The dividend is payable to all shareholders of record on May 1, 2006 payable on June 1, 2006.

NOTE 12 - - 401 (k) PLAN

The Company has adopted a 401(K) Profit Sharing Plan that all employees with over one year of service and attained age 21. Employees may make salary reduction contributions up to twenty-five percent of compensation not to exceed the federal government limits. The Plan allows for the Company to make discretionary contributions. For all fiscal periods to date, the Company did not make any contributions.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS

OF OPERATIONS AND FINANCIAL CONDITION (UNAUDITED)

Except for historical information contained herein, this “Management's Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements. These statements involve known and unknown risks and uncertainties that may cause actual results or outcomes to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements, and statements which explicitly describe such issues. Investors are urged to consider any statement labeled with the terms “believes,” “expects,” “intends’” or “anticipates” to be uncertain and forward-looking.

For the three-month period ended February 28, 2006, the company had revenues of $15,476,831 and net income of $1,070,778 after provision for taxes of $688,628. For the same quarter in 2004, revenues were $14,814,188 and net income was $944,830 after a provision for taxes of $579,083. Earnings per share were $.15 (diluted) for the first quarter 2006 as compared to earnings $.13 (diluted) for the first quarter 2005. In accordance with EITF 00-14, the Company has accounted for certain sales incentives offered to customers by charging them directly to sales as opposed to advertising and promotional expenses. Net sales for the first quarter of 2006 were reduced by $614,918 and offset by an equal reduction of trade promotional expenses, which were included in the Company’s advertising expense budget. In the same period of the prior year, gross sales were reduced by $601,783 and trade promotion was credited by that amount. These accounting adjustments under EIFT 00-14 do not affect net income.

The Company’s net sales increased from $14,688,237 for the three-month period ended February 28, 2005 to $15,306,871 for the three-month period ended February 28, 2006. Sales returns and allowances were 4.9% of gross sales for the three-month period ended February 28, 2006 from 6.1% for the same period last year. Gross profit margins remained relatively flat at 61.86% and 62.93% for the three months ended February 28, 2006 and 2005 respectively.

The Company’s gross sales net of returns by category were: Skin Care $5,477,862, 33.8%; Dietary Supplement $4,708,121, 29.1%; Oral Care $3,499,929, 21.6%; Nail Care $1,233,375, 7.6%; Hair Care $709,570, 4.4%; Fragrance $491,570, 3%; and Miscellaneous $72,566, .5%; for a total of $16,192,992. The Company makes every effort to control the cost of manufacturing and has had no substantial cost increases. Income before taxes is $1,759,406 as compared to $1,523,913 for the same quarter in 2005. Returns and reserves accounted for $1,430,863 that was expensed against earnings for this quarter. In accordance with GAAP, the Company reclassified certain advertising expenditures as a reduction of sales rather than report them as advertising expenses. The reclassification is the adoption by the Company of the EITF 00-14 GAAP standard. The reclassification reflects a reduction in sales for the three months ended February 28, 2006, and 2005 by $614,918 and $601,783. The reclassification reduces the gross profit margin but does not affect the net income.

Advertising expenditures were 18.5% of sales for the three months ended February 28, 2006 vs. 21.1% for first quarter 2005. The advertising expenditures in Fiscal 2006 reflect the change in the Company's estimate (effective with the third quarter of 2005) as to when the Company realizes a benefit from its advertising expenditures. Fiscal 2006 reflects the actual dollars spent on advertising during the quarter while Fiscal 2005 reflects only an allocated portion of the annual advertising budget and a deferral of the balance of the actual dollars spent. The selling, general and administrative expenses increased $481,936 to $4,874,892 from $4,393,496 in the first quarter 2005.

- -17-

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS

OF OPERATIONS AND FINANCIAL CONDITION (UNAUDITED) (CONTINUED)

The Company’s financial position as of February 28, 2006 consists of current assets of $26,261,285 and current liabilities of $9,830,136, or a current ratio of 2.67 to 1. Shareholders’ equity decreased from $25,999,656 as of November 30, 2005 to $24,345,654 as of February 28, 2006. The decrease was due to the purchase and retirement of 225,000 shares, as authorized by the Board of Directors, from three officer/directors, David Edell – 100,000, Ira Berman – 100,000 and Drew Edell – 25,000. The purchase price was $10.50 discounted from $10.82, the closing price at the close of business on the transaction date. An additional decrease was the purchase of 8,100 shares of Treasury Stock at a cost of $64,436 during the first quarter of 2006.

The company’s long term investments as of February 28, 2006 were $6,798,613. Assuming these long-term investments can be sold and turned into liquid assets at any time, it would result in a current ratio of 3.36 to 1.

Accounts receivable, net of reserves, were $9,290,161 as compared to $9,260,399 as of February 28, 2006 and November 30, 2005, respectively. Inventories, net of reserves, were $5,525,273 as of February 28, 2006 as compared to $6,554,150 as of November 30, 2005. Accounts payable and accrued expenses increased to $9,467,819 as of February 28, 2006 from $8,734,092 as of November 30, 2005. The Company was not utilizing any of the funds available under its $10,000,000 unsecured credit line as of February 28, 2006.

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURE ABOUT MARKET RISK

The Company’s financial statements record the Company’s investments under the “mark to market” method (i.e., at date-of-statement market value). The investments are, categorically listed, in “Common Stock”, “Mutual Funds”, “Other Equity”, “Preferred Stock”, “Government Obligations” and “Corporate Obligations.” $350,341 of the Company’s $14,603,446 portfolio of investments (approximate, as at February 28, 2006) is invested in the “Common Stock” and “Other Equity” categories, and approximately $809,188 in that category are Preferred Stock holdings. The Company does not take positions or engage in transactions in risk-sensitive market instruments in any substantial degree, nor as defined by SEC rules and instructions; therefore, the Company does not believe that its investment-market risk is material.

ITEM 4. CONTROLS AND PROCEDURES

With the participation of our Chief Executive Officer and Chief Financial Officer, management has carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of February 28, 2006.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) subsequent to the date the controls were evaluated that materially affect, or are reasonably likely to materially affect, our internal control over financial reporting.

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CCA INDUSTRIES, INC.

PART II OTHER INFORMATION

Item 1.Legal Proceedings:

See Part I - Note 11 of the Financial Statements regarding litigation.

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

None.

Item 5.Other Information:

Owners of Common Stock and owners of Class A Common Stock are entitled to one vote for each share of stock held, and the voting and other rights of each class are equivalent except in respect to the election of directors.

In respect to the election of directors, the Class A Common Stock shareholders have the right to elect four directors and the Common Stock shareholders have the right to elect three. (In consequence, no proposal to alter or change the right of Class A Common Stock shareholders to elect a majority of directors could be effectively voted unless a separate majority of Class A Common Stock shares were voted therefor.)

Item 6.Exhibits and Reports on Form 8-K:

(a) Exhibits

The following reports were filed with the Securities and Exchange Commission during the three months ended November 30, 2005:

(1) Form 10K, filed on February 28, 2006 for the year ended November 30, 2005.

(2) Form 8K, filed on February 15, 2006 as a Regulation FD Disclosure regarding The Company buying back 225,000 shares of the Company’s common stock from three officers/diirectors.

(11) Computation of Earnings Per Share*

(31.1) Certification of Chief Executive Officer pursuant to Rule 13a-14(a)*

(31.2) Certification of Chief Financial Officer pursuant to Rule 13a-14(a)*

(32.1) Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350*

(32.2) Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350*

* Filed herewith.

(b) Reports on Form 8-K.

None.

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SIGNATURES

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

Date: April 14, 2006

CCA INDUSTRIES, INC.

By:

David Edell, Chief Executive Officer

By:

Ira W. Berman, Chairman of the Board

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