----

----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

----

**FORM      10-Q**

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| x | **QUARTERLY                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE                  ACT                  OF 1934** |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------|

**For      the quarterly period ended September 30, 2005**

**or**

| o | **TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE                ACT                OF 1934** |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------|

**For      the transition period from **
**                    **
**      to **
**                    **

**Commission      File No. 000-13059**

----

**CERADYNE,      INC. **

**(Exact      name of Registrant as specified in its charter) **

----

| **Delaware**                                                                                        | **33-0055414**                                                            |
|-----------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|
| **(State                or other jurisdiction of****incorporation                or organization)** | **(I.R.S.                Employer****Identification                No.)** |
|                                                                                                     |                                                                           |
|                                                                                                |                                                                      |
| **3169                Red Hill Avenue, Costa Mesa, CA**                                             | **92626**                                                                 |
| **(Address                of principal executive)**                                                 | **(Zip                Code)**                                             |

**Registrant’s      telephone number, including area code (714) 549-0421**

**N/A**

**(Former      name, former address and former fiscal year, if changed since last      report)**

| **Class**                                       |   | **Outstanding                as of October 21, 2005** |
|-------------------------------------------------|--------|-------------------------------------------------------|
| **Common                Stock, $.01 par value** |   | **24,652,650** **Shares**                        |
|                                            |   |                                                  |

----

----

Table        of Contents

**INDEX**

|                   |                                                                                                                                               | **PAGE NO.** |
|------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|-------------------|
|                   |                                                                                                                                               |              |
| PART                I. | FINANCIAL                INFORMATION                                                                                                               |              |
|                   |                                                                                                                                               |              |
| Item                1. | Unaudited                Condensed Consolidated Financial                Statements                                                                |              |
|                   |                                                                                                                                               |              |
|                   | Condensed                Consolidated Balance Sheets - September 30,                2005 and December 31, 2004                                     | 3-4               |
|                   |                                                                                                                                               |              |
|                   | Condensed                Consolidated Statements of Income -                Three and Nine months Ended September 30, 2005 and                2004 | 5                 |
|                   |                                                                                                                                               |              |
|                   | Condensed                Consolidated Statements of Cash Flows - Nine                months Ended September 30, 2005 and 2004                      | 6                 |
|                   |                                                                                                                                               |              |
|                   | Condensed                Notes to Consolidated Financial                Statements                                                                 | 7-15              |
|                   |                                                                                                                                               |              |
| Item                2. | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations                          | 16-21             |
|                   |                                                                                                                                               |              |
| Item                3. | Quantitative                and Qualitative Disclosures About Market                Risk                                                           | 22                |
|                   |                                                                                                                                               |              |
| Item                4. | Controls                and Procedures                                                                                                             | 22                |
|                   |                                                                                                                                               |              |
| PART II.          | OTHER                INFORMATION                                                                                                                   |              |
|                   |                                                                                                                                               |              |
| Item                1. | Legal                Proceedings                                                                                                                   | 23                |
|                   |                                                                                                                                               |              |
| Item                2. | N/A                                                                                                                                                | 23                |
|                   |                                                                                                                                               |              |
| Item                3. | N/A                                                                                                                                                | 23                |
|                   |                                                                                                                                               |              |
| Item                4. | N/A                                                                                                                                                | 23                |
|                   |                                                                                                                                               |              |
| Item                5. | N/A                                                                                                                                                | 23                |
|                   |                                                                                                                                               |              |
| Item                6. | Exhibits                                                                                                                                           | 23                |
|                   |                                                                                                                                               |
| SIGNATURE              | 24                                                                                                                                                 |

----

Table          of Contents

| **PART              I.** | **FINANCIAL                INFORMATION** |
|--------------------------|------------------------------------------|

| **Item              1.** | **Unaudited                Condensed Consolidated Financial Statements**** ** |
|--------------------------|------------------------------------------------------------------------------------|

**CERADYNE,      INC.**

**CONSOLIDATED      BALANCE SHEETS**

**ASSETS**

**(Amounts      in thousands)**

|                                                                                                                                                                                                              |   | **September                30,****2005** |    | **December 31,****2004** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|-------------------------------|--------|
|                                                                                                                                                                                                              |   | **(Unaudited)**                          |    |
| **CURRENT                ASSETS**                                                                                                                                                                                 |   |                                     |    |                          |   |
| Cash                and cash equivalents                                                                                                                                                                          |   | $                                        | 4,108   |                          | $      | 4,521 |   |
| Short-term                investments                                                                                                                                                                             |   |                                     | 7,830   |                          |   | 10,041 |   |
| Accounts                receivable, net of allowances for doubtful accounts of approximately                $415                and $456 at September 30, 2005 and December 31, 2004,                respectively |   |                                     | 45,356  |                          |   | 48,649 |   |
| Other                receivables                                                                                                                                                                                  |   |                                     | 2,663   |                          |   | 3,175 |   |
| Inventories,                net                                                                                                                                                                                   |   |                                     | 68,659  |                          |   | 47,673 |   |
| Production                tooling, net                                                                                                                                                                            |   |                                     | 12,294  |                          |   | 7,868 |   |
| Prepaid                expenses and other                                                                                                                                                                         |   |                                     | 8,302   |                          |   | 8,510 |   |
| Deferred                tax asset                                                                                                                                                                                 |   |                                     | 3,676   |                          |   | 4,210 |   |
| **TOTAL                CURRENT ASSETS**                                                                                                                                                                           |   |                                     | 152,888 |                          |   | 134,647 |   |
|                                                                                                                                                                                                              |   |                                     |         |                          |   |  |   |
| **PROPERTY,                PLANT & EQUIPMENT, at cost**                                                                                                                                                       |   |                                     |         |                          |   |  |   |
| Land                                                                                                                                                                                                              |   |                                     | 9,204   |                          |   | 10,017 |   |
| Buildings                and improvements                                                                                                                                                                         |   |                                     | 49,914  |                          |   | 54,483 |   |
| Machinery                and equipment                                                                                                                                                                            |   |                                     | 112,669 |                          |   | 112,130 |   |
| Leasehold                improvements                                                                                                                                                                             |   |                                     | 12,535  |                          |   | 11,134 |   |
| Office                equipment                                                                                                                                                                                   |   |                                     | 10,454  |                          |   | 9,302 |   |
| Construction                in progress                                                                                                                                                                           |   |                                     | 6,190   |                          |   | 1,763 |   |
|                                                                                                                                                                                                              |   |                                     | 200,966 |                          |   | 198,829 |   |
| Less                accumulated depreciation and amortization                                                                                                                                                     |   |                                     | (46,900 | )                             |   | (36,551 | ) |
|                                                                                                                                                                                                              |   |                                     | 154,066 |                          |   | 162,278 |   |
|                                                                                                                                                                                                              |   |                                     |         |                          |   |  |   |
| **INTANGIBLE                ASSETS, net**                                                                                                                                                                         |   |                                     | 6,219   |                          |   | 7,235 |   |
| **GOODWILL**                                                                                                                                                                                                      |   |                                     | 7,240   |                          |   | 6,079 |   |
| **OTHER                ASSETS**                                                                                                                                                                                   |   |                                     | 5,625   |                          |   | 6,115 |   |
| **TOTAL                ASSETS**                                                                                                                                                                                   |   | $                                        | 326,038 |                          | $      | 316,354 |   |
|                                                                                                                                                                                                              |   |                                     |         |                          |   |  |   |
|                                                                                                                                                                                                              |   |                                     |    |                          |   |   |   |

**See      accompanying condensed notes to Consolidated Financial      Statements**

----

Table          of Contents

**CERADYNE,      INC.**

**CONSOLIDATED      BALANCE SHEETS**

**LIABILITIES      AND SHAREHOLDERS’ EQUITY**

**(Amounts      in thousands, except share data)**

|                                                                                                                                                                                                                                                     |   | **September                30,****2005** |    | **December 31,****2004** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------|---------|-------------------------------|--------|
|                                                                                                                                                                                                                                                     |   | **(Unaudited)**                          |    |
| **CURRENT                LIABILITIES**                                                                                                                                                                                                                   |   |                                     |    |                          |   |
| Bank                line of credit                                                                                                                                                                                                                       |   | $                                        | 2,000   |                          | $      | 9,708 |   |
| Current                portion of long-term debt                                                                                                                                                                                                         |   |                                     | 1,100   |                          |   | 1,100 |   |
| Accounts                payable                                                                                                                                                                                                                          |   |                                     | 35,065  |                          |   | 32,830 |   |
| Accrued                expenses                                                                                                                                                                                                                          |   |                                     | 10,359  |                          |   | 7,981 |   |
| Income                taxes payable                                                                                                                                                                                                                      |   |                                     | 1,032   |                          |   | 4,639 |   |
| **TOTAL                CURRENT LIABILITIES**                                                                                                                                                                                                             |   |                                     | 49,556  |                          |   | 56,258 |   |
| **LONG-TERM                DEBT, NET OF CURRENT PORTION**                                                                                                                                                                                                |   |                                     | 107,800 |                          |   | 108,625 |   |
| **EMPLOYEE                BENEFITS**                                                                                                                                                                                                                     |   |                                     | 10,236  |                          |   | 10,735 |   |
| **DEFERRED                TAX LIABILITY**                                                                                                                                                                                                                |   |                                     | 7,031   |                          |   | 5,695 |   |
| **TOTAL                LIABILITIES**                                                                                                                                                                                                                     |   |                                     | 174,623 |                          |   | 181,313 |   |
| **COMMITMENTS                AND CONTINGENCIES**                                                                                                                                                                                                         |   |                                     |         |                          |   |  |   |
| **SHAREHOLDERS’                EQUITY**                                                                                                                                                                                                            |   |                                     |         |                          |   |  |   |
| Common                stock, $.01 par value, Authorized - 40,000,000 shares, Outstanding                -                24,649,950 shares                and 24,479,813 shares at September 30, 2005 and December 31, 2004,                respectively |   |                                     | 246     |                          |   | 244 |   |
| Additional                paid in capital                                                                                                                                                                                                                |   |                                     | 84,173  |                          |   | 79,720 |   |
| Retained                earnings                                                                                                                                                                                                                         |   |                                     | 72,578  |                          |   | 41,854 |   |
| Deferred                compensation                                                                                                                                                                                                                     |   |                                     | (1,599  | )                             |   | — |   |
| Accumulated                other comprehensive (loss) income                                                                                                                                                                                             |   |                                     | (3,983  | )                             |   | 13,223 |   |
| TOTAL                SHAREHOLDERS’ EQUITY                                                                                                                                                                                                          |   |                                     | 151,415 |                          |   | 135,041 |   |
| **TOTAL                LIABILITIES AND SHAREHOLDERS’ EQUITY**                                                                                                                                                                                      |   | $                                        | 326,038 |                          | $      | 316,354 |   |
|                                                                                                                                                                                                                                                |        |                                          |         |                               |        |   |  |

**See      accompanying condensed notes to Consolidated Financial Statements**

----

Table          of Contents

**CERADYNE,      INC.**

**CONSOLIDATED      STATEMENTS OF      INCOME**

**(Amounts      in thousands, except per share data)**

|                                                    |   | **THREE                MONTHS****ENDED****September                30,** |   | **NINE                MONTHS****ENDED****September                30,** |   |
|---------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
|                                                    |   | **2005**                                                                 |   | **2004**                                                                |   | **2005** |   | **2004** |   |
|                                                    |   | **(Unaudited)**                                                          |   | **(Unaudited)**                                                         |   |
| **NET                SALES**                            |   | $                                                                        | 94,406 |                                                                    | $      | 56,329 |   | $ | 254,100 |   | $ | 132,240 |   |
| **COST                OF PRODUCT SALES**                |   |                                                                     | 59,576 |                                                                    |   | 38,373 |   |   | 164,823 |   |   | 89,238 |   |
| Gross                profit                             |   |                                                                     | 34,830 |                                                                    |   | 17,956 |   |   | 89,277 |   |   | 43,002 |   |
|                                                    |   |                                                                     |        |                                                                    |   |  |   |   |  |   |   |  |   |
| **OPERATING                EXPENSES**                   |   |                                                                     |        |                                                                    |   |  |   |   |  |   |   |  |   |
| Selling                                                 |   |                                                                     | 5,015  |                                                                    |   | 2,064 |   |   | 15,309 |   |   | 3,572 |   |
| General                and administrative               |   |                                                                     | 5,442  |                                                                    |   | 3,698 |   |   | 15,179 |   |   | 9,028 |   |
| Research                and development                 |   |                                                                     | 2,037  |                                                                    |   | 858 |   |   | 5,641 |   |   | 1,881 |   |
|                                                    |   |                                                                     | 12,494 |                                                                    |   | 6,620 |   |   | 36,129 |   |   | 14,481 |   |
| Income                from operations                   |   |                                                                     | 22,336 |                                                                    |   | 11,336 |   |   | 53,148 |   |   | 28,521 |   |
|                                                    |   |                                                                     |        |                                                                    |   |  |   |   |  |   |   |  |   |
| **OTHER                INCOME (EXPENSE):**              |   |                                                                     |        |                                                                    |   |  |   |   |  |   |   |  |   |
| Royalty                income                           |   |                                                                     | 32     |                                                                    |   | 30 |   |   | 92 |   |   | 90 |   |
| Interest                income                          |   |                                                                     | 93     |                                                                    |   | 88 |   |   | 265 |   |   | 423 |   |
| Interest                expense                         |   |                                                                     | (1,872 | )                                                                       |   | (382 | ) |   | (4,987 | ) |   | (382 | ) |
| Miscellaneous                                           |   |                                                                     | 4      |                                                                    |   | 830 |   |   | 171 |   |   | 1,878 |   |
|                                                    |   |                                                                     | (1,743 | )                                                                       |   | 566 |   |   | (4,459 | ) |   | 2,009 |   |
| Income                before provision for income taxes |   |                                                                     | 20,593 |                                                                    |   | 11,902 |   |   | 48,689 |   |   | 30,530 |   |
| **PROVISION                FOR INCOME TAXES**           |   |                                                                     | 7,254  |                                                                    |   | 4,608 |   |   | 17,965 |   |   | 11,742 |   |
| **NET                INCOME**                           |   | $                                                                        | 13,339 |                                                                    | $      | 7,294 |   | $ | 30,724 |   | $ | 18,788 |   |
| **BASIC                INCOME PER SHARE**               |   | $                                                                        | 0.54   |                                                                    | $      | 0.30 |   | $ | 1.25 |   | $ | 0.78 |   |
| **DILUTED                INCOME PER SHARE**             |   | $                                                                        | 0.53   |                                                                    | $      | 0.30 |   | $ | 1.23 |   | $ | 0.77 |   |
|                                                    |   |                                                                     |        |                                                                    |   |  |   |   |  |   |   |  |   |
| **WEIGHTED                AVERAGE SHARES OUTSTANDING:** |   |                                                                     |        |                                                                    |   |  |   |   |  |   |   |  |   |
| **BASIC**                                               |   |                                                                     | 24,586 |                                                                    |   | 24,303 |   |   | 24,530 |   |   | 24,095 |   |
| **DILUTED**                                             |   |                                                                     | 25,092 |                                                                    |   | 24,699 |   |   | 25,006 |   |   | 24,491 |   |
|                                                    |   |                                                                     |   |                                                                    |   |   |   |   |   |   |   |   |   |

**See      accompanying condensed notes to Consolidated Financial Statements**

----

Table          of Contents

**CERADYNE,      INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(Amounts      in thousands)**

|                                                                                                                              |   | **NINE                  MONTHS ENDED****September                  30,** |    |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|---------|
|                                                                                                                              |   | **2005****(Unaudited)**                                                  |    | **2004****(Unaudited)** |   |
| **CASH                  FLOWS FROM OPERATING ACTIVITIES:**                                                                        |   |                                                                     |    |   |   |
| Net                  income                                                                                                       |   | $                                                                        | 30,724  |   | $ | 18,788 |   |
| **ADJUSTMENTS                  TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING                  ACTIVITIES:** |   |                                                                     |         |   |   |  |   |
| Depreciation                  and amortization                                                                                    |   |                                                                     | 11,143  |   |   | 3,529 |   |
| Deferred                  income taxes                                                                                            |   |                                                                     | 2,328   |   |   | 661 |   |
| Stock                  compensation                                                                                               |   |                                                                     | 92      |   |   | — |   |
| Payments                  of loan fees                                                                                            |   |                                                                     | — |   |   | (3,227 | ) |
| Change                  in operating assets and liabilities, net of acquisitions:                                                 |   |                                                                     |    |   |   |   |   |
| Accounts                  receivable, net                                                                                         |   |                                                                     | 1,564   |   |   | (5,685 | ) |
| Other                  receivables                                                                                                |   |                                                                     | 454     |   |   | 421 |   |
| Inventories                                                                                                                       |   |                                                                     | (24,291 | ) |   | (7,977 | ) |
| Production                  tooling                                                                                               |   |                                                                     | (3,974  | ) |   | (794 | ) |
| Prepaid                  expenses                                                                                                 |   |                                                                     | (167    | ) |   | (2,130 | ) |
| Other                  assets                                                                                                     |   |                                                                     | (130    | ) |   | 56 |   |
| Accounts                  payable                                                                                                 |   |                                                                     | 5,027   |   |   | 12,384 |   |
| Accrued                  expenses                                                                                                 |   |                                                                     | 795     |   |   | 3,994 |   |
| Income                  taxes payable                                                                                             |   |                                                                     | (3,839  | ) |   | 4,199 |   |
| Tax                  benefit due to exercise of stock options                                                                     |   |                                                                     | 668     |   |   | 1,951 |   |
| Employee                  benefits                                                                                                |   |                                                                     | 804     |   |   | 69 |   |
| **NET                  CASH PROVIDED BY OPERATING ACTIVITIES**                                                                    |   |                                                                     | 21,198  |   |   | 26,239 |   |
|                                                                                                                              |   |                                                                     |         |   |   |  |   |
| **CASH                  FLOWS FROM INVESTING ACTIVITIES:**                                                                        |   |                                                                     |         |   |   |  |   |
| Purchases                  of property, plant and equipment                                                                       |   |                                                                     | (15,203 | ) |   | (20,206 | ) |
| Redemptions                  of short-term investments                                                                            |   |                                                                     | 2,197   |   |   | 9,044 |   |
| Additional                  costs of acquisition                                                                                  |   |                                                                     | (1,505  | ) |   | (141,251 | ) |
| **NET                  CASH USED IN INVESTING ACTIVITIES**                                                                        |   |                                                                     | (14,511 | ) |   | (152,413 | ) |
|                                                                                                                              |   |                                                                     |         |   |   |  |   |
| **CASH                  FLOWS FROM FINANCING ACTIVITIES:**                                                                        |   |                                                                     |         |   |   |  |   |
| Proceeds                  from issuance of stock due to exercise of options                                                       |   |                                                                     | 852     |   |   | 716 |   |
| Proceeds                  from issuance of stock for stock plans                                                                  |   |                                                                     | 1,208   |   |   | 831 |   |
| Payments                  on long-term debt                                                                                       |   |                                                                     | (825    | ) |   | — |   |
| Proceeds                  from issuance of long term debt                                                                         |   |                                                                     | — |   |   | 110,000 |   |
| Reduction                  in bank line of credit                                                                                 |   |                                                                     | (7,533  | ) |   | 5,497 |   |
| Other                                                                                                                             |   |                                                                     | (36     | ) |   | — |   |
| **NET                  CASH PROVIDED (USED) BY FINANCING ACTIVITIES**                                                             |   |                                                                     | (6,334  | ) |   | 117,044 |   |
| **EFFECT                  OF EXCHANGE RATES ON CASH AND EQUIVALENTS**                                                             |   |                                                                     | (766    | ) |   | 768 |   |
| **(DECREASE)                  IN CASH AND CASH EQUIVALENTS**                                                                      |   |                                                                     | (413    | ) |   | (8,362 | ) |
| **CASH                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**                                                               |   |                                                                     | 4,521   |   |   | 11,462 |   |
| **CASH                  AND CASH EQUIVALENTS, END OF PERIOD**                                                                     |   | $                                                                        | 4,108   |   | $ | 3,100 |   |
| **SUPPLEMENTAL                  DISCLOSURES OF CASH FLOW ACTIVITIES:**                                                            |   |                                                                     |         |   |   |  |   |
| Interest                  paid                                                                                                    |   | $                                                                        | 5,059   |   | $ | 52 |   |
| Income                  taxes paid                                                                                                |   | $                                                                        | 19,640  |   | $ | 5,495 |   |
|                                                                                                                              |   |                                                                     |         |   |   |  |   |

**See      accompanying condensed notes to Consolidated Financial Statements**

----

Table          of Contents

CONDENSED      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 1. | Basis                of Presentation |
|----|--------------------------------------|

| 2. | Stock-Based                Compensation  |
|----|-----------------------------------------------|

|                                                                                                                                                                                                        |   | **Three Months Ended****September                30,** |   | **Nine                months Ended****September                30,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
|                                                                                                                                                                                                        |   | **2005**                                                         |   | **2004**                                                             |   | **2005** |   | **2004** |   |
| Net                income, as reported                                                                                                                                                                      |   | $                                                                | 13,339 |                                                                 | $      | 7,294 |   | $ | 30,724 |   | $ | 18,788 |   |
| Deduct:                Total stock-based employee compensation expense determined under                the fair                value based method for all awards, net of related tax                effects |   |                                                             | 99     |                                                                 |   | 223 |   |   | 602 |   |   | 473 |   |
| Pro                forma net income                                                                                                                                                                         |   | $                                                                | 13,240 |                                                                 | $      | 7,071 |   | $ | 30,122 |   | $ | 18,315 |   |
| Net                income per share:                                                                                                                                                                        |   |                                                             |        |                                                                 |   |  |   |   |  |   |   |  |   |
| Basic                - as reported                                                                                                                                                                          |   | $                                                                | 0.54   |                                                                 | $      | 0.30 |   | $ | 1.25 |   | $ | 0.78 |   |
| Basic                - pro forma                                                                                                                                                                            |   | $                                                                | 0.54   |                                                                 | $      | 0.29 |   | $ | 1.23 |   | $ | 0.76 |   |
| Diluted                - as reported                                                                                                                                                                        |   | $                                                                | 0.53   |                                                                 | $      | 0.30 |   | $ | 1.23 |   | $ | 0.77 |   |
| Diluted                - pro forma                                                                                                                                                                          |   | $                                                                | 0.53   |                                                                 | $      | 0.29 |   | $ | 1.20 |   | $ | 0.75 |   |
|                                                                                                                                                                                                        |   |                                                             |   |                                                                 |   |   |   |   |   |   |   |   |   |

|                                                          |   | **Nine                months Ending****September                30, 2005** |   |
|---------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|
| Expected                term (years)                          |   |                                                                            | 7.0    |   |
| Volatility                                                    |   |                                                                            | 56.64  | % |
| Annual                dividend per share                      |   | $                                                                               | 00.00  |   |
| Risk-free                interest rate                        |   |                                                                            | 3.98   | % |
| Weighted-average                fair value of options granted |   | $                                                                               | 14.58  |   |

----

Table          of Contents

| 3. | Composition                of Certain Financial Statement Captions  |
|----|--------------------------------------------------------------------------|

|                             |   | **September                30,****2005** |   | **December 31,****2004** |   |
|----------------------------------|--------|------------------------------------------|--------|-------------------------------|--------|
| Raw                materials     |   | $                                        | 20,882 |                          | $      | 11,697 |   |
| Work-in-process                  |   |                                     | 28,726 |                          |   | 22,344 |   |
| Finished                goods    |   |                                     | 19,051 |                          |   | 13,632 |   |
| Total                inventories |   | $                                        | 68,659 |                          | $      | 47,673 |   |
|                             |   |                                     |   |                          |   |   |   |

|                                    |   | **September                30, 2005** |   |
|-----------------------------------------|--------|---------------------------------------|--------|
|                                    |   | **Gross****Amount**                   |   | **Accumulated****Amortization** |   | **Net****Amount** |   |
| Intangible                assets:       |   |                                  |   |   |   |   |   |
| Backlog                                 |   | $                                     | 525    |   | $ | 525 |   | $ | — |   |
| Developed                technology     |   |                                  | 4,453  |   |   | 288 |   |   | 4,165 |   |
|                                    |   |                                  | 4,978  |   |   | 813 |   |   | 4,165 |   |
| Non-amortizing                tradename |   |                                  | 2,054  |   |   | — |   |   | 2,054 |   |
| Total                                   |   | $                                     | 7,032  |   | $ | 813 |   | $ | 6,219 |   |
|                                    |   |                                  |        |   |   |  |   |   |  |   |

|                              |   | **September                30,****2005** |   | **Translation** |   | **ESK** |   | **Quest** |    | **December 31,****2004** |   |
|-----------------------------------|--------|------------------------------------------|--------|-----------------|--------|---------|--------|-----------|---------|-------------------------------|--------|
| Goodwill:                         |   |                                     |   |            |   |    |   |      |    |                          |   |
| ACO                               |   | $                                        | 2,608  |            | $      | — |   | $         | — |                          | $      | 33 |   | $ | 2,575 |   |
| Semicon                Associates |   |                                     | 603    |            |   | — |   |      | — |                          |   | — |   |   | 603 |   |
| Thermo                Materials   |   |                                     | 279    |            |   | — |   |      | — |                          |   | — |   |   | 279 |   |
| ESK                Ceramics       |   |                                     | 3,750  |            |   | (344    | )      |      | 1,472   |                          |   | — |   |   | 2,622 |   |
| Total                             |   | $                                        | 7,240  |            | $      | (344    | )      | $         | 1,472   |                          | $      | 33 |   | $ | 6,079 |   |
|                              |   |                                     |        |            |   |         |   |      |         |                          |   |  |   |   |  |   |

| 4. | Acquisitions  |
|----|--------------------|

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| Cash                and debt incurred                                 |   | $      | 137,488 |   |
|-----------------------------------------------------------------------|--------|--------|---------|--------|
| Transaction                costs                                      |   |   | 4,677   |   |
| Total                purchase price                                   |   | $      | 142,165 |   |
|                                                                  |   |   |         |   |
| Fair                value of assets acquired and liabilities assumed: |   |   |         |   |
| Cash                                                                  |   |   | 610     |   |
| Accounts                receivable                                    |   |   | 14,263  |   |
| Inventory                                                             |   |   | 24,916  |   |
| Property,                plant and equipment                          |   |   | 104,234 |   |
| Other                assets                                           |   |   | 9,295   |   |
| Backlog                                                               |   |   | 500     |   |
| Developed                technology                                   |   |   | 4,600   |   |
| Tradename                                                             |   |   | 2,100   |   |
| Goodwill                                                              |   |   | 3,060   |   |
| Assumed                liabilities                                    |   |   | (21,413 | )      |
|                                                                  |   | $      | 142,165 |   |
|                                                                  |   |   |         |   |

|                               |   | **Three Months Ended****September                30,****2004** |   | **Nine Months Ended****September                30,****2004** |   |
|------------------------------------|--------|--------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|
|                               |   | **(unaudited)**                                                          |   | **(unaudited)**                                                         |   |
| Net                sales           |   | $                                                                        | 73,087 |                                                                    | $      | 198,246 |   |
| Net                income          |   |                                                                     | 7,792  |                                                                    |   | 20,086 |   |
| Earnings                per share: |   |                                                                     |        |                                                                    |   |  |   |
| Basic                              |   |                                                                     | 0.32   |                                                                    |   | 0.83 |   |
| Diluted                            |   |                                                                     | 0.31   |                                                                    |   | 0.82 |   |

| 5. | Recent                Accounting Pronouncements  |
|----|-------------------------------------------------------|

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|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 1.     |   | Modified                Prospective Method under which compensation cost is recognized beginning                with the effective date (a) based on the requirements of SFAS                123(R)                for all share-based payments granted after the effective date and                (b) based on the requirements of SFAS 123 for all awards granted                to                employees prior to the effective date of SFAS 123(R) that remain                unvested                on the effective date. |
|   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | 2.     |   | Modified                Retrospective Method which includes the requirements of the modified                prospective method described above, but also permits entities to                restate                based on the amounts previously recognized under SFAS 123 for purposes                of                pro forma disclosures either (a) all prior periods presented                or                (b) prior interim periods of the year of                adoption.                                           |

| 6. | Net                Income Per Share  |
|----|-------------------------------------------|

|                                                         |   | **Three Months Ended****September** |   | **Nine                months Ended****September** |   |
|--------------------------------------------------------------|--------|-----------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                         |   | **2005**                                      |   | **2004**                                               |   | **2005** |   | **2004** |   |
| Weighted                average number of shares outstanding |   |                                          | 24,586 |                                                   |   | 24,302 |   |   | 24,530 |   |   | 24,095 |   |
| Dilutive                stock options and restricted stock   |   |                                          | 506    |                                                   |   | 397 |   |   | 476 |   |   | 397 |   |
| Number                of shares used in diluted computations |   |                                          | 25,092 |                                                   |   | 24,699 |   |   | 25,006 |   |   | 24,492 |   |

| 7. | Credit                Facility  |
|----|--------------------------------------|

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| 8. | Disclosure                About Segments of an Enterprise and Related Information  |
|----|-----------------------------------------------------------------------------------------|

| **FACILITY                  LOCATION**                        |   | **PRODUCTS**                                                                                                                                                                              |
|---------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                          |   |                                                                                                                                                                                      |
| *Ceradyne                  Advanced Ceramic Operations*       |   | *Defense                  Applications:*                                                                                                                                                  |
|                                                          |   |                                                                                                                                                                                      |
| Costa                  Mesa, Irvine and San Diego, California |   | •                    Lightweight                  ceramic armor                                                                                                           |
|                                                          |   |                                                                                                                                                                                      |
|                                                          |   | *Industrial                  Applications:*                                                                                                                                               |
| Approximately                  166,000 square feet            |   |                                                                                                                                                                                      |
|                                                          |   | •                    Ceralloy®                  147 SRBSN wear parts                                                                                                 |
| Lexington,                  Kentucky                          |   |                                                                                                                                                                                      |
|                                                          |   | •                    Semiconductor                  equipment components                                                                                                  |
| Approximately                  115,000 square feet            |   |                                                                                                                                                                                      |
|                                                          |   | •                    Precision                  ceramics                                                                                                                  |
| Wixom,                  Michigan                              |   |                                                                                                                                                                                      |
|                                                          |   | *Automotive/Diesel                  Applications:*                                                                                                                                        |
| Approximately                  29,000 square feet             |   |                                                                                                                                                                                      |
|                                                          |   | •                    Ceralloy®                  147 SRBSN automotive/diesel engine parts                                                                             |
|                                                          |   | •                    Ceramic                  armor system components for civilian vehicles                                                                               |
|                                                          |   |                                                                                                                                                                                      |
|                                                          |   | *Commercial                  Applications:*                                                                                                                                               |
|                                                          |   |                                                                                                                                                                                      |
|                                                          |   | •                    Orthodontic                  ceramic brackets                                                                                                        |
|                                                          |   | •                    Components                  for medical devices                                                                                                      |
|                                                          |   |                                                                                                                                                                                      |
| *ESK                  Ceramics*                               |   | *Defense                  Applications:*                                                                                                                                                  |
|                                                          |   |                                                                                                                                                                                      |
| Kempten,                  Germany                             |   | •                    Boron                  carbide powders for body armor                                                                                                |
|                                                          |   |                                                                                                                                                                                      |
| Approximately                  532,000 square feet            |   | *Industrial                  Applications:*                                                                                                                                               |
|                                                          |   |                                                                                                                                                                                      |
| Bazet,                  France                                |   | •                    Ceramic                  powders: boron carbide, boron nitride, silicon nitride, silicon                  carbide                                    |
| Approximately                    90,000 square feet           |   | •                    Silicon                  carbide parts                                                                                                               |
|                                                          |   | •                    Evaporation                  Boats for the packaging industry                                                                                        |
|                                                          |   | •                    High                  performance pump seals                                                                                                         |
|                                                          |   |                                                                                                                                                                                      |
|                                                          |   | *Automotive/Diesel                  Applications:*                                                                                                                                        |
|                                                          |   |                                                                                                                                                                                      |
|                                                          |   | •                    EKagrip®                  functional and frictional coatings; electroless nickel layer/hard                  particle                  coatings |
|                                                          |   |                                                                                                                                                                                      |

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| **FACILITY                  LOCATION**             |   | **PRODUCTS**                                                                                                                                                    |
|----------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                               |   |                                                                                                                                                            |
| *Ceradyne                  Semicon Associates*     |   | *Industrial                  Applications:*                                                                                                                     |
|                                               |   |                                                                                                                                                            |
| Lexington,                  Kentucky               |   | •                    Ceramic-impregnated                  dispenser cathodes for microwave tubes, lasers and cathode ray                  tubes |
| Approximately                  35,000 square feet  |   | •                    Samarium                  cobalt magnets                                                                                   |
|                                               |   |                                                                                                                                                            |
| *Ceradyne                  Thermo Materials*       |   | *Defense                  Applications:*                                                                                                                        |
|                                               |   |                                                                                                                                                            |
| Scottdale                  and Clarkson, Georgia   |   | •                    Missile                  radomes (nose cones)                                                                              |
|                                               |   |                                                                                                                                                            |
| Approximately                  132,000 square feet |   | *Industrial                  Applications:*                                                                                                                     |
|                                               |   |                                                                                                                                                            |
|                                               |   | •                    Glass                  tempering rolls                                                                                     |
|                                               |   | •                    Metallurgical                  tooling                                                                                     |
|                                               |   | •                    Castable                  and other fused silica products                                                                  |
|                                               |   | •                    Crucibles                  for photovoltaic solar cell applications                                                        |
|                                               |   |                                                                                                                                                            |

|                                                            |   | **Three                Months Ended****September                30** |   | **Nine                Months Ended****September                30** |   |
|-----------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
|                                                            |   | **2005**                                                             |   | **2004**                                                            |   | **2005** |   | **2004** |   |
| Revenue                from External Customers                  |   |                                                                 |   |                                                                |   |   |   |   |   |
| ACO                                                             |   | $                                                                    | 63,558 |                                                                | $      | 42,698 |   | $ | 158,766 |   | $ | 107,728 |   |
| ESK                Ceramics                                     |   |                                                                 | 26,204 |                                                                |   | 8,679 |   |   | 80,744 |   |   | 8,679 |   |
| Semicon                Associates                               |   |                                                                 | 1,676  |                                                                |   | 1,951 |   |   | 5,418 |   |   | 5,868 |   |
| Thermo                Materials                                 |   |                                                                 | 2,968  |                                                                |   | 3,001 |   |   | 9,172 |   |   | 9,965 |   |
| Total                                                           |   | $                                                                    | 94,406 |                                                                | $      | 56,329 |   | $ | 254,100 |   | $ | 132,240 |   |
|                                                            |   |                                                                 |        |                                                                |   |  |   |   |  |   |   |  |   |
| Depreciation                and Amortization                    |   |                                                                 |        |                                                                |   |  |   |   |  |   |   |  |   |
| ACO                                                             |   | $                                                                    | 1,458  |                                                                | $      | 895 |   | $ | 4,108 |   | $ | 2,382 |   |
| ESK                Ceramics                                     |   |                                                                 | 1,948  |                                                                |   | 398 |   |   | 6,042 |   |   | 398 |   |
| Semicon                Associates                               |   |                                                                 | 85     |                                                                |   | 105 |   |   | 280 |   |   | 301 |   |
| Thermo                Materials                                 |   |                                                                 | 247    |                                                                |   | 185 |   |   | 713 |   |   | 448 |   |
| Total                                                           |   | $                                                                    | 3,738  |                                                                | $      | 1,583 |   | $ | 11,143 |   | $ | 3,529 |   |
|                                                            |   |                                                                 |        |                                                                |   |  |   |   |  |   |   |  |   |
| Segment                Income before Provision for Income Taxes |   |                                                                 |        |                                                                |   |  |   |   |  |   |   |  |   |
| ACO                                                             |   | $                                                                    | 18,086 |                                                                | $      | 12,080 |   | $ | 41,563 |   | $ | 30,076 |   |
| ESK                Ceramics                                     |   |                                                                 | 2,310  |                                                                |   | (161 | ) |   | 6,840 |   |   | (161 | ) |
| Semicon                Associates                               |   |                                                                 | 130    |                                                                |   | 140 |   |   | 525 |   |   | 456 |   |
| Thermo                Materials                                 |   |                                                                 | 67     |                                                                |   | (157 | ) |   | (239 | ) |   | 159 |   |
| Total                                                           |   | $                                                                    | 20,593 |                                                                | $      | 11,902 |   | $ | 48,689 |   | $ | 30,530 |   |

| Segment                Assets            |   |   |    |   |   |    |   |   |    |
|------------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|
| ACO                                      |   | $      | 144,089 |   | $      | 106,497 |   | $      | 144,089 |   | $ | 106,497 |   |
| ESK                Ceramics              |   |   | 163,133 |   |   | 163,569 |   |   | 163,133 |   |   | 163,569 |   |
| Semicon                Associates        |   |   | 5,914   |   |   | 5,778   |   |   | 5,914   |   |   | 5,778 |   |
| Thermo                Materials          |   |   | 12,902  |   |   | 11,940  |   |   | 12,902  |   |   | 11,940 |   |
| Total                                    |   | $      | 326,038 |   | $      | 287,784 |   | $      | 326,038 |   | $ | 287,784 |   |
|                                     |   |   |         |   |   |         |   |   |         |   |   |  |   |
| Expenditures                for PP&E |   |   |         |   |   |         |   |   |         |   |   |  |   |
| ACO                                      |   | $      | 3,835   |   | $      | 6,000   |   | $      | 9,070   |   | $ | 16,642 |   |
| ESK                Ceramics              |   |   | 1,368   |   |   | 560     |   |   | 4,312   |   |   | 560 |   |
| Semicon                Associates        |   |   | 23      |   |   | 144     |   |   | 185     |   |   | 429 |   |
| Thermo                Materials          |   |   | 293     |   |   | 835     |   |   | 1,636   |   |   | 2,575 |   |
| Total                                    |   | $      | 5,519   |   | $      | 7,539   |   | $      | 15,203  |   | $ | 20,206 |   |
|                                     |   |   |         |   |   |         |   |   |         |   |   |  |   |

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|         |   | **Three                Months Ended****September                30** |   | **Nine                Months Ended****September                30** |   |
|--------------|--------|----------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
|         |   | **2005**                                                             |   | **2004**                                                            |   | **2005** |   | **2004** |   |
| Armor        |   | $                                                                    | 54,939 |                                                                | $      | 34,218 |   | $ | 131,830 |   | $ | 83,519 |   |
| Automotive   |   |                                                                 | 4,101  |                                                                |   | 3,417 |   |   | 12,087 |   |   | 8,304 |   |
| Orthodontics |   |                                                                 | 2,315  |                                                                |   | 2,444 |   |   | 7,462 |   |   | 7,725 |   |
| Industrial   |   |                                                                 | 2,203  |                                                                |   | 2,619 |   |   | 7,387 |   |   | 8,180 |   |
|         |   | $                                                                    | 63,558 |                                                                | $      | 42,698 |   | $ | 158,766 |   | $ | 107,728 |   |

|                              |   | **Three Months Ended****September                30** |   | **Nine                months Ended****September                30** |   |
|-----------------------------------|--------|-----------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
|                              |   | **2005**                                                        |   | **2004**                                                                 |   | **2005** |   | **2004** |   |
| U.S.                Net Sales     |   |                                                            |   |                                                                     |   |   |   |   |   |
| ACO                               |   |                                                            | 61     | %                                                                        |   | 71 | % |   | 57 | % |   | 76 | % |
| ESK                Ceramics       |   |                                                            | 12     | %                                                                        |   | 5 | % |   | 11 | % |   | 2 | % |
| Semicon                Associates |   |                                                            | 1      | %                                                                        |   | 2 | % |   | 2 | % |   | 4 | % |
| Thermo                Materials   |   |                                                            | 2      | %                                                                        |   | 4 | % |   | 2 | % |   | 5 | % |
| Total                             |   |                                                            | 76     | %                                                                        |   | 82 | % |   | 72 | % |   | 87 | % |
|                              |   |                                                            |        |                                                                     |   |  |   |   |  |   |   |  |   |
| Foreign                Net Sales  |   |                                                            |        |                                                                     |   |  |   |   |  |   |   |  |   |
| ACO                               |   |                                                            | 3      | %                                                                        |   | 5 | % |   | 3 | % |   | 5 | % |
| ESK                Ceramics       |   |                                                            | 20     | %                                                                        |   | 10 | % |   | 24 | % |   | 4 | % |
| Semicon                Associates |   |                                                            | 0      | %                                                                        |   | 1 | % |   | 0 | % |   | 1 | % |
| Thermo                Materials   |   |                                                            | 1      | %                                                                        |   | 2 | % |   | 1 | % |   | 3 | % |
| Total                             |   |                                                            | 24     | %                                                                        |   | 18 | % |   | 28 | % |   | 13 | % |
|                              |   |                                                            |        |                                                                     |   |  |   |   |  |   |   |  |   |
| Total                Net Sales    |   |                                                            |        |                                                                     |   |  |   |   |  |   |   |  |   |
| ACO                               |   |                                                            | 64     | %                                                                        |   | 76 | % |   | 60 | % |   | 81 | % |
| ESK                Ceramics       |   |                                                            | 32     | %                                                                        |   | 15 | % |   | 35 | % |   | 6 | % |
| Semicon                Associates |   |                                                            | 1      | %                                                                        |   | 3 | % |   | 2 | % |   | 5 | % |
| Thermo                Materials   |   |                                                            | 3      | %                                                                        |   | 6 | % |   | 3 | % |   | 8 | % |
| Total                             |   |                                                            | 100    | %                                                                        |   | 100 | % |   | 100 | % |   | 100 | % |
|                              |   |                                                            |        |                                                                     |   |  |   |   |  |   |   |  |   |

*Note:      Foreign sales for ESK Ceramics are sales to non-U.S. countries including the      principal countries of Germany, France, Denmark and Italy.*

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| 9. | Pension                Plans  |
|----|------------------------------------|

|                                             |   | **Three Months****Ended****September                30****2005** |   | **Nine                Months****Ended****September                30****2005** |   |
|--------------------------------------------------|--------|-----------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|--------|
| Service                cost                      |   | $                                                                     | 365    |                                                                           | $      | 1,058 |   |
| Interest                cost                     |   |                                                                  | 415    |                                                                           |   | 1,224 |   |
| Expected                return on plan assets    |   |                                                                  | (385   | )                                                                              |   | (1,197 | ) |
| Amortization                of unrecognized gain |   |                                                                  | 4      |                                                                           |   | 11 |   |
| Net                periodic benefit cost         |   | $                                                                     | 399    |                                                                           | $      | 1,096 |   |
|                                             |   |                                                                  |        |                                                                           |   |  |   |

| 10. | Commitments                and Contingencies  |
|-----|----------------------------------------------------|

|       |   |   |   |   |
|------------|--------|--------|--------|--------|
| 2005       |   | $      | 423    |   |
| 2006       |   |   | 1,510  |   |
| 2007       |   |   | 1,546  |   |
| 2008       |   |   | 1,548  |   |
| 2009       |   |   | 1,470  |   |
| Thereafter |   |   | 2,540  |   |
|       |   | $      | 9,037  |   |
|       |   |   |        |   |

| 11. | Comprehensive                Income  |
|-----|-------------------------------------------|

|                                                   |   | **Three Months****Ended****September                30****2005** |   | **Nine                Months****Ended****September                30****2005** |   |
|---------------------------------------------------|--------|-----------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|--------|
| Net                income                         |   | $                                                                     | 13,339 |                                                                           | $      | 30,724 |   |
| Foreign                currency translation       |   |                                                                  | (265   | )                                                                              |   | (17,134 | ) |
| Unrealized                (losses) on investments |   |                                                                  | (44    | )                                                                              |   | (72 | ) |
| Comprehensive                income               |   | $                                                                     | 13,030 |                                                                           | $      | 13,518 |   |

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| **Item              2.** | **Management’s                Discussion and Analysis of Financial Condition and Results of                Operations**** ** |
|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------------|

|              |   | **Nine                Months Ended****September                30** |   |
|-------------------|--------|--------------------------------------------------------------------------|--------|
|              |   | **2005**                                                                 |   | **2004** |   |
| Defense           |   |                                                                     | 56.8   | % |   | 66.3 | % |
| Industrial        |   |                                                                     | 31.4   |   |   | 19.7 |   |
| Automotive/Diesel |   |                                                                     | 8.9    |   |   | 7.4 |   |
| Commercial        |   |                                                                     | 2.9    |   |   | 6.6 |   |
| Total             |   |                                                                     | 100.0  | % |   | 100.0 | % |

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| **Item              3.** | **Quantitative                and Qualitative Disclosures About Market Risk**** ** |
|--------------------------|-----------------------------------------------------------------------------------------|

| **Item              4.** | **Controls                and Procedures**** ** |
|--------------------------|------------------------------------------------------|

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| **PART              II.** | **OTHER                INFORMATION** |
|---------------------------|--------------------------------------|

| **Item              1.** | **Legal                Proceedings** |
|--------------------------|--------------------------------------|

| **Item              2.** | **N/A** |
|--------------------------|---------|

| **Item              3.** | **N/A** |
|--------------------------|---------|

| **Item              4.** | **N/A** |
|--------------------------|---------|

| **Item              5.** | **N/A** |
|--------------------------|---------|

| **Item              6.** | **Exhibits**** ** |
|--------------------------|------------------------|

|  | (a) | Exhibits:  |
|--|-----|-----------------|

|  | 31.1   | Certification                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|  |   |                                                                                                                              |
|  | 31.2   | Certification                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. |
|  |   |                                                                                                                              |
|  | 32.1   | Certification                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002. |
|  |   |                                                                                                                              |
|  | 32.2   | Certification                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002. |

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SIGNATURE 

|                                     |                                                                                                                                                |                                       |
|------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|
|                                     | **CERADYNE,              INC.**                                                                                                                     |
|                                |                                                                                                                                           |                                  |
| Date: October              31, 2005 | By:                                                                                                                                       | /s/ JERROLD              J. PELLIZZON |
|                                     |                                                                                                                                                     |
|                                     | **Jerrold                J. Pellizzon****Vice President****Chief Financial Officer****(Principal Financial and Accounting                Officer)** |

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**Index      to Exhibits**
** **

| **Exhibit** |   | **Description**                                                                                                                   |
|-------------|--------|-----------------------------------------------------------------------------------------------------------------------------------|
|        |   |                                                                                                                              |
| 31.1        |   | Certification                of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. |
|        |   |                                                                                                                              |
| 31.2        |   | Certification                of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley                Act of 2002. |
|        |   |                                                                                                                              |
| 32.1        |   | Certification                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002. |
|        |   |                                                                                                                              |
| 32.2        |   | Certification                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002. |

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