UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D. C. 20549

                                 FORM 10-Q

     (Mark One)
(X)   Quarterly Report Under Section 13 or 15(D) of The Securities Exchange
      Act of 1934 For Quarter Ended September 30, 2004


                       OR

( )   Transition  Report  Pursuant to Section  13  or  15(d)  of  The
      Securities Exchange Act of 1934


                       Commission File Number 0-275


                              Allen Organ Company
          (Exact name of registrant as specified in its charter)



     Pennsylvania                       23-1263194
  (State of Incorporation)      (I.R.S. Employer Identification No.)


  150 Locust Street, P. O. Box 36, Macungie, Pennsylvania      18062-0036
  (Address of principal executive offices)                     (Zip Code)


Registrant's telephone number, including area code           610-966-2200

Indicate  by  check mark whether the registrant (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the Securities Exchange  Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject  to
such filing requirements for the past 90 days.

                              Yes   X   No

Indicate by check mark whether the registrant is an accelerated filer as
defined in Rule 12b-2 of the Exchange Act.
                              Yes       No X

Number of shares outstanding of each of the issuer's classes of common
stock, as of November 12, 2004:

                    Class A - Voting          83,864 shares
                    Class B - Non-voting   1,072,379 shares
<PAGE>
                            ALLEN ORGAN COMPANY

                                   INDEX

                                                                   Page No.
Part I  Financial Information

   Item 1.Financial Statements (Unaudited)
          Consolidated Condensed Statements of Income for the three and
          nine months ended September 30, 2004 and 2003                    3

          Consolidated Condensed Balance Sheets at September 30, 2004 and
          December 31, 2003                                                4

          Consolidated Condensed Statements of Cash Flows for the three
          and nine months ended September 30, 2004 and 2003                5

          Notes to Consolidated Condensed Financial Statements           6-8

   Item 2.Management's Discussion and Analysis of Financial Condition and
          Results of Operations                                          8-11

   Item 3.Quantitative and Qualitative Disclosures About Market Risk.      12

   Item 4.Controls and Procedures                                          12

Part II    Other Information

   Item 6.Exhibits                                                         12

Signatures                                                                 12
Exhibits                                                                13-15
<PAGE>

PART I  FINANCIAL INFORMATION
   ITEM 1.FINANCIAL STATEMENTS

                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                                (Unaudited)

                       For the 3 Months Ended:       For the 9 Months Ended:
                        9/30/2004     9/30/2003       9/30/2004      9/30/2003

Net Sales             $21,353,653   $14,932,091     $57,819,417    $41,532,435

Cost and Expenses
 Costs of sales        10,799,709     8,344,016      29,528,474     24,446,579
 Selling, general and
  administrative        4,629,369     4,031,534      13,670,904     11,141,161
 Research and
  development           3,850,250     2,306,428       9,642,736      6,157,005
 Other expense, net         9,885         3,079          32,935         25,760
 Impairment of goodwill
  and intangibles              --            --         362,611             --
   Total Costs
    and Expenses       19,289,213    14,685,057      53,237,660     41,770,505

Income (Loss) from
 Operations             2,064,440       247,034       4,581,757       (238,070)

Investment Income          93,992        84,889         264,521        290,287

Income Before Taxes     2,158,432       331,923       4,846,278         52,217

Income Tax Provision      551,000       131,000       1,357,000         21,000

Net Income            $ 1,607,432   $   200,923     $ 3,489,278    $    31,217

Earnings Per Share of
 Common Stock
  Basic                     $1.39         $0.17           $3.02          $0.03
  Diluted                   $1.39         $0.17           $3.01          $0.03


Weighted Average Shares
 Used in Computing
  Earnings Per Share
   Basic                1,156,243     1,161,269       1,156,243      1,161,269
   Diluted              1,159,086     1,161,269       1,158,295      1,161,269

Dividends Per Share -
 Cash                      $ 0.14        $ 0.14          $ 0.42         $ 0.42

Total Comprehensive
 Income               $ 1,627,275   $   195,671     $ 3,461,629    $    29,553


                             See accompanying notes.
                                   -3-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED BALANCE SHEETS
                                (Unaudited)
                  ASSETS                           Sept. 30,   Dec. 31,
                                                     2004        2003
Current Assets
  Cash                                           $ 7,395,843  $ 5,907,576
  Investments Including Accrued Interest          18,033,005   17,143,171
  Accounts Receivable, net of reserves of
   $685,364 and $605,496, respectively            12,321,416   11,652,365
  Inventories:
     Raw Materials                                 4,569,284    4,456,060
     Work in Process                               6,278,203    5,525,106
     Finished Goods                                4,166,562    3,945,007
      Total Inventories                           15,014,049   13,926,173
  Prepaid Expenses                                   818,898      491,444
  Deferred Income Taxes                            2,755,385    2,741,167
     Total Current Assets                         56,338,596   51,861,896
Property, Plant and Equipment                     29,916,552   28,283,282
  Less Accumulated Depreciation                  (19,480,990) (18,116,278)
     Net Property, Plant and Equipment            10,435,562   10,167,004
Other Assets
  Note Receivable from Related Party               2,397,291    2,397,291
  Cash Value of Life Insurance                     2,696,302    2,474,002
  Deferred Income Taxes                            3,493,238    3,493,238
  Intangible Assets, net                             808,310    1,347,822
  Goodwill, net                                       24,701      194,523
  Other Assets                                        15,987       14,500
     Total Other Assets                            9,435,829    9,921,376
     Total Assets                                $76,209,987  $71,950,276

       LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current Liabilities
  Accounts Payable                               $ 2,013,050  $ 1,278,535
  Accrued Expenses                                 5,178,908    3,811,025
  Accrued Income Taxes                               244,971      657,941
  Customer Deposits                                3,068,575    2,197,393
     Total Current Liabilities                    10,505,504    7,944,894

Noncurrent Liabilities
  Deferred and Other Noncurrent Liabilities        1,310,960    1,946,696
  Accrued Pension Costs                            5,052,773    5,693,853
     Total Noncurrent Liabilities                  6,363,733    7,640,549
     Total Liabilities                            16,869,237   15,585,443

STOCKHOLDERS' EQUITY
  Class A Voting Common stock, $1 par value,
   400,000 shares authorized,
   127,232 shares issued                             127,232      127,232
  Class B Non-Voting Common stock, $1 par value,
   3,600,000 shares authorized,
   1,410,761 shares issued                         1,410,761    1,410,761
  Capital in Excess of Par Value                  13,150,610   13,150,610
  Retained Earnings
     Balance, Beginning                           58,015,139   57,267,763
     Net Income                                    3,489,278    1,396,896
     Dividends - Cash 2004 and 2003                 (485,622)    (649,520)
     Balance, End                                 61,018,795   58,015,139
  Accumulated Other Comprehensive Loss            (3,860,343)  (3,832,694)
     Sub-total                                    71,847,055   68,871,048
  Treasury Stock, at cost, 43,368 Class A shares
   in 2004 and 2003, 338,382 Class B shares in
   2004  and 338,380 in 2003                     (12,506,305) (12,506,215)
     Total Stockholders' Equity                   59,340,750   56,364,833
     Total Liabilities and Stockholders' Equity  $76,209,987  $71,950,276

                          See accompanying notes.
                                   -4-
<PAGE>


                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
              CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                (Unaudited)


                              For the 3 Months Ended:   For the 9 Months Ended:
                               9/30/2004   9/30/2003     9/30/2004   9/30/2003
CASH FLOWS FROM OPERATING
ACTIVITIES
 Net income                   $1,607,432  $  200,923    $3,489,278  $   31,217
 Adjustments to reconcile net
  income to net cash
  (used in) provided by
  operating activities
  Depreciation and amortization  607,999     628,206     1,750,853   1,848,995
  Impairment of goodwill and
   intangibles                        --          --       362,611          --
  Deferred income taxes           10,240      (3,776)      (14,218)     (5,795)
 Change in assets and liabilities
  Accounts receivable         (1,497,297) (3,299,996)     (669,051)  2,931,672
  Inventories                   (120,105)    936,201    (1,087,876)  1,709,729
  Income taxes prepaid
   and receivable                     --      79,825           --      161,071
  Prepaid expenses                41,041     249,899      (327,454)     (3,437)
  Other assets                    (1,487)        --         (1,487)      1,092
  Accounts payable               800,763     111,016       734,515  (4,814,237)
  Accrued expenses               (33,988)    398,731     1,367,883     415,209
  Accrued income taxes          (368,655)     46,366      (412,970)     46,366
  Customer deposits              173,666      (5,956)      871,182    (209,761)
  Accrued pension costs           96,690     308,118      (641,080)   (163,765)
  Deferred and other noncurrent
   liabilities                  (358,226)     79,066      (635,736)    322,698
    Net Cash Provided by (Used
     In) Operating Activities    958,073    (271,377)    4,786,450   2,271,054

CASH FLOW FROM INVESTING
ACTIVITIES
  Net additions to plant and
   equipment                    (726,471)   (342,680)   (1,675,027)   (711,342)
  Additions to intangible assets      --     (85,991)          --     (273,761)
  Increase in cash value of life
   insurance                    (222,300)    (33,300)     (222,300)    (33,300)
  Net purchase of short term
   investments                  (328,556)    (45,703)     (917,483)   (172,481)
   Net Cash Used In Investing
    Activities                (1,277,327)   (507,674)   (2,814,810) (1,190,884)

CASH FLOWS FROM FINANCING
ACTIVITIES
  Proceeds from sales of
   subsidiary stock                  --        1,305        25,596     123,905
  Subsidiary company stock
   reacquired from minority
   stockholders                      --       (7,001)      (23,257)     (7,001)
  Reacquired Class B common
   shares                            --           --           (90)   (491,813)
  Dividends paid in cash        (161,874)   (161,918)     (485,622)   (487,645)
    Net Cash Used In Financing
     Activities                 (161,874)   (167,614)     (483,373)   (862,554)

NET (DECREASE) INCREASE IN CASH (481,128)   (946,665)    1,488,267     217,616

CASH, BEGINNING                7,876,971   5,679,470     5,907,576   4,515,189

CASH, ENDING                  $7,395,843  $4,732,805    $7,395,843  $4,732,805


            SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid (refunded) for:
  Income Taxes                  $919,655     $ 4,809    $1,769,970  $ (189,437)

                          See accompanying notes.
                                   -5-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
           NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Interim Financial Statements
   The  results  of  operations for the interim periods presented  in  this
   report are not necessarily indicative of results to be expected for  the
   fiscal  year.   In the opinion of management, the information  contained
   herein  reflects  all adjustments necessary for a fair  presentation  of
   the  Company's  financial position and results  of  operations  for  the
   interim  periods.   All  such  adjustments are  of  a  normal  recurring
   nature.
   Certain notes and other information have been condensed or omitted  from
   the  interim financial statements presented in the Quarterly  Report  on
   Form  10-Q.   Therefore, these financial statements should  be  read  in
   conjunction with the Company's 2003 Annual Report on Form 10-K.

2. Stock-Based Compensation
   The  Company accounts for its stock-based compensation plans  using  the
   accounting  prescribed by Accounting Principles Board  Opinion  No.  25,
   "Accounting  for Stock Issued to Employees".  Since the Company  is  not
   required   to   adopt  the  fair  value  based  recognition   provisions
   prescribed  under Statement of Financial Accounting Standards  No.  123,
   as  amended  by SFAS No. 148, "Accounting for Stock-Based Compensation",
   it  has  elected  only  to comply with the disclosure  requirements  set
   forth in the Statements.
   Had  compensation  cost  been determined on  the  basis  of  fair  value
   pursuant  to  SFAS No. 123, as amended by SFAS No. 148, net  income  and
   earnings per share would have been decreased as follows:

                                Three Months Ended         Nine Months Ended
                                   September 30,             September 30,
                                2004          2003        2004          2003

     Net income
      As Reported            $1,607,432   $ 200,923   $3,489,278     $ 31,217
     Stock-based employee
      compensation expense
      included in reported net
      income, net of tax         17,969      14,843       53,908       44,531
     Total stock-based
      employee compensation
      expense determined under
      fair value based method
      for all awards, net of
      related tax effects       (34,048)     (3,053)    (102,144)      (9,161)
        Pro forma            $1,591,353    $212,713   $3,441,042      $66,587

     Earnings per share
      As reported
        Basic                     $1.39       $0.17        $3.02        $0.03
        Diluted                   $1.39       $0.17        $3.01        $0.03

      Pro forma
        Basic                     $1.38       $0.18        $2.98        $0.06
        Diluted                   $1.37       $0.18        $2.97        $0.06

                                   -6-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
     NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
3. Warranty Costs
   The  Company provides warranties covering manufacturing defects  in  its
   products.   The Musical Instruments segment provides a 10 year  warranty
   on  its  organs,  the  Data Communications segment  provides  a  2  year
   warranty  on  all  of  its data communication products,  the  Electronic
   Assemblies   segment   provides  a  1  year   warranty   on   assemblies
   manufactured  for  outside  customers and the  Audio  Equipment  segment
   provides  a  5  year warranty of its line of home audio  speakers.   The
   Company's  policy  is to accrue the estimated cost of warranty  coverage
   at  the time the sale is recorded.  The activity in the warranty accrual
   during  the  nine  months  ended September 30,  2004  is  summarized  as
   follows:

       Accrual at January 1, 2004                           $1,210,000
       Additions charged to  warranty expense                  266,250
       Claims paid and charged against the accrual            (507,163)
       Accrual at September 30, 2004                        $  969,087

4. Earnings Per Share
   The  following  shows the amounts used in computing earnings  per  share
   and  the effect on weighted average number of shares for dilutive common
   stock.
                                 Three Months Ended        Nine Months Ended
                                   September  30,            September  30,
                                 2004          2003        2004         2003

     Weighted average number
     of common shares used in
     basic earnings per share  1,156,243     1,161,269   1,156,243    1,161,269

     Effect of stock options       2,843            --       2,052          --

     Weighted average number
     of common shares used
     in diluted earnings
     per share                 1,159,086     1,161,269   1,158,295    1,161,269

   Outstanding  stock  options to purchase 12,000 shares  of  common  stock
   were  not  included in computing earnings per share for  the  three  and
   nine   months   ended  September  30,  2003  because  the   effect   was
   antidilutive.

5. Retirement Plan
   The  net  periodic  pension benefit cost included in  the  statement  of
   income is as follows:
                                  Three Months Ended      Nine Months Ended
                                    September 30,           September 30,
                                   2004        2003        2004       2003

     Service Cost               $  --       $109,076    $  --       $327,228
     Interest Cost               254,020     272,381     762,059     817,144
     Expected return of plan
      assets                    (217,087)   (192,179)   (651,260)   (576,537)
     Amortization of net loss
      from prior periods          77,056     104,309     231,167     312,926
       Net Pension Cost         $113,989    $293,587    $341,966    $880,761

   The Company contributed $1,000,000 to its pension plan in March 2004.

6. Impairment of Goodwill and Intangibles
   During June 2004 the Company recorded a charge to operating expenses  of
   $362,611  related  to the impairment in the carrying value  of  goodwill
   and  intangibles  which  arose in connection  with  the  acquisition  of
   Legacy  Audio,  Inc.  This write down is attributable to  Legacy's  past
   and  continuing  operating  losses and its  inability  to  significantly
   expand  distribution of its products, all of which reduced  expectations
   of  future  cash flows from Legacy's operations and correspondingly  its
   estimated fair market value.
                                   -7-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
     NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
7. Industry Segment Information
   The  Company's  operations are classified into four  industry  segments:
   Musical  Instruments,  Data  Communications, Electronic  Assemblies  and
   Audio  Equipment.   The  Musical Instruments  segment  is  comprised  of
   operations  principally involved in the design,  manufacture,  sale  and
   distribution  of  electronic  keyboard  musical  instruments,  primarily
   digital  organs and related accessories.  The Data Communications  segme
   nt   is   involved  in  the  design,  sale  and  distribution  of   data
   communications   equipment.   The  Electronic  Assemblies   segment   is
   involved  in  the  manufacture,  sale  and  distribution  of  electronic
   assemblies  for outside customers used primarily as control devices  and
   other  circuitry in their products.  The Audio Equipment (Legacy  Audio,
   Inc.)  segment  is  involved  in  the  design,  manufacture,  sale   and
   distribution of high quality speaker cabinets and related equipment  for
   hi-fi stereo and home theater applications.

   Intersegment sales are generally priced at cost plus a percentage  mark-
   up,  and  are  generally  marginally less than  prices  which  would  be
   charged  for  the same product to unaffiliated customers.   Intersegment
   sales   are  excluded  from  net  sales  reported  in  the  accompanying
   consolidated condensed statements of income.

   Sales and Operating Income
                               For the 3 Months            For the 9 Months
                                    Ended:                      Ended:
                            9/30/2004    9/30/2003     9/30/2004     9/30/2003
 Net Sales to Unaffiliated
  Customers
   Musical Instruments    $ 5,683,158  $ 5,017,156   $14,807,612   $15,207,450
   Data Communications     14,781,760    9,024,930    39,858,844    23,066,883
   Electronic Assemblies      652,356      531,546     2,085,387     2,060,690
   Audio Equipment            236,379      358,459     1,067,574     1,197,412
    Total                 $21,353,653  $14,932,091   $57,819,417   $41,532,435

 Intersegment Sales
   Musical Instruments    $   151,340  $   190,941   $   640,582   $   604,650
   Data Communications             --           --            --            --
   Electronic Assemblies      220,936       64,818       820,113        64,818
   Audio Equipment              7,106       38,547        23,707        74,586
    Total                 $   379,382  $   294,306   $ 1,484,402   $   744,054

 Income (Loss) from
  Operations
   Musical Instruments    $   420,627  $  (102,954)  $   164,381   $  (628,067)
   Data Communications      1,856,993      546,379     5,340,197     1,086,332
   Electronic Assemblies          969     (115,688)      (29,245)     (525,144)
   Audio Equipment           (214,149)     (80,703)     (893,576)     (171,191)
    Total                 $ 2,064,440  $   247,034   $ 4,581,757   $  (238,070)

ITEM  2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS  AND
RESULTS OF OPERATIONS.

Business Overview:
    As  discussed  in  Note 7 above, Allen Organ Company  and  Subsidiaries
("Company")  operate in four industry segments: Musical  Instruments,  Data
Communications, Electronic Assemblies and Audio Equipment.

    Sales  for the three and nine months ended September 30, 2004 increased
$6,421,562 and $16,286,982, respectively, when compared to the same periods
in   2003,   primarily  due  to  increased  sales  in  the  Company's  Data
Communications  segment.   Net income increased $1,406,509  and  $3,458,061
during  the  three and nine months ended September 30, 2004,  respectively,
when compared to the same periods in 2003, primarily due to higher sales in
the  Data Communications segment and also improved operating results in the
Musical Instruments segment.

    Net  sales  consist  of revenues obtained for the  sale  of  electronic
keyboard  musical  instruments  in the Musical  Instruments  segment;  data
networking  products  and  support  services  in  the  Data  Communications
Segment; electronic assembly services in the Electronic Assemblies segment;
and  audio  speakers and components in the Audio Equipment segment.   Sales
credits and adjustments are also included in net sales.

    Cost  of  sales  consist primarily of material costs of products  sold,
salary  and  benefit costs related to production and manufacturing  support
personnel,   incoming  shipping  and  facility  related  costs,   such   as
depreciation and maintenance.
                                   -8-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS. (Continued)
Business Overview: (Continued)
    Consolidated selling, general and administrative expenses and  research
and  development expenses increased during both the three and  nine  months
ended  September  30, 2004, primarily related to the  growth  in  the  Data
Communications  segment.  Selling expenses consist  primarily  of  employee
salary and benefit costs, advertising and marketing expenses.  General  and
administrative  expenses consist primarily of employee salary  and  benefit
costs,  professional  services fees and other general  corporate  expenses.
Research and development expenses consist primarily of employee salary  and
benefit  costs  for  engineering staff, third party contracted  development
services, product prototyping and compliance costs.

Liquidity and Capital Resources:
     Cash  flows  from  operating  activities  increased  by  approximately
$2,515,000 during the nine months ended September 30, 2004 primarily due to
improved   operating   results  in  the  Musical  Instruments,   Electronic
Assemblies  and  Data  Communications segments.   Net  income  improved  by
approximately  $3,458,000 in the nine months ended September  30,  2004  as
compared  to  2003,  after  reflecting a non-cash charge  of  approximately
$363,000  in  2004  from the write-off of goodwill and intangibles  in  the
Audio  Equipment  segment.  Cash of $802,000 was used to  increase  working
capital  components  in 2004, versus changes in working  capital  providing
cash  of  $397,000 in 2003.  The increase in working capital components  in
2004 is primarily attributable to higher levels of accounts receivable  and
inventory  (total  of  $1,757,000) from the increased  sales  activity  and
payment  of pension contributions ($641,000, net of current year accruals),
offset  by  increases in payables and other accruals (total of $2,102,000).
Working  capital  decreased  in  the  2003  period  due  to  decreases   in
receivables ($2,932,000) primarily from collection of a receivables from  a
large sales transaction in late 2002, as well as decreased inventory levels
($1,710,000)  resulting from lower sales activity in the nine months  ended
September  30,  2003,  offset  by  a  decrease  in  payables  and  accruals
($4,399,000) primarily from payment of inventory purchases to  fulfill  the
large sales transaction in late 2002.

   Cash flows from investing activities for the nine months ended September
30,  2004 includes approximately $1,675,000 of property additions, of which
approximately $1,530,000 is primarily computer and test equipment purchased
for the Data Communications segment.

Results of Operations:

Musical Instruments Segment
    Sales increased $666,002 for the three months ended September 30,  2004
and  decreased $399,838 for the nine months ended September 30, 2004,  when
compared to the same periods in 2003.  The increase in sales for the  third
quarter  of  2004 reflects initial shipments of organs containing  QuantumT
technology  introduced in the second quarter of this year.  The 2004  order
rate  and  backlog  continue to be higher than the  same  period  of  2003,
reflecting  favorable customer reaction to the Quantum organs that  include
significant new features and product benefits.  The decrease in  sales  for
the  nine  months  ended September 30, 2004 is due  to  initial  delays  in
shipping the new QuantumT organs, caused by longer than expected production
changeover issues.  This segment is seeing increasing changes in  the  type
of  music used in Church's throughout North America, the primary market for
this  segment's  organs.  Some churches have changed their  music  programs
from  traditional  styles  that  include the  use  of  an  organ,  to  more
"contemporary" services where the organ plays a lesser or no  role.   These
changes  may  negatively impact future sales volume of  this  segment.   To
address the changing needs of church music, the Company recently introduced
products  including  the  Allen EnsembleT that combines  traditional  organ
sounds  and  more  contemporary General MIDI  (Musical  Instrument  Digital
Interface)  sounds.   The Company also introduced  a  product  called  EACT
(Expanded   Audio  Capabilities)  that  allows  churches  that  have   both
traditional  and  contemporary  programs  to  utilize  the  organ's   audio
capabilities  for playing back recorded music or amplifying  other  musical
instruments.   The introduction of the Allen Ensemble and EAC are  intended
to help maintain the organ as the cornerstone of church music programs.
                                   -9-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS. (Continued)
Musical Instruments Segment (Continued)
    The gross profit percentage increased to 30.0% and 27.9%, respectively,
in the three and nine months ended September 30, 2004, from 23.2% and 21.6%
in  the  same  periods in 2003.  These increases are due  to  higher  sales
volume  over which to absorb fixed operating costs in the third quarter  of
2004 and cost reduction efforts that were initiated to reduce material  and
other  operating costs.  This segment continues to experience double  digit
percentage increases in its medical insurance programs offered to  eligible
employees.  These increases will have a negative effect on operating income
in the future.
    Selling,  general  and  administrative, and  research  and  development
expenses  during the three and nine months ended September  30,  2004  were
approximately equal to the same periods in 2003.

Data Communications Segment
    Sales  increased $5,756,830 (64%) and $16,791,961 (73%),  respectively,
for  the  three and nine months ended September 30, 2004, when compared  to
the  same periods in 2003.  These increases are due to higher order  volume
which  management believes is attributable to an improvement in the overall
data  communications  market and the timing of completing  sales  with  the
Company's  larger customers.  Future sales visibility for this segment  has
improved,  but  remains  limited throughout  the  markets  served  by  this
segment.
    Gross  profit margins were 58.6% and 58.8%, during the three  and  nine
months ended September 30, 2004, respectively, compared to 58.6% and  58.5%
in  the  same  periods  of  2003.  The margin for  the  nine  months  ended
September  30,  2003 includes $1,400,000 of revenue recognized  on  product
software  development  for a customer during the second  quarter  of  2003.
Excluding  this item, gross margin for the nine months ended September  30,
2003 was 55.8%.  The increase in the 2004 gross margin is due to reductions
in product costs and changes in product mix.
    Sales and marketing expenditures increased approximately $498,000 (24%)
and  $1,932,000 (36%) during the three and nine months ended September  30,
2004,  respectively,  when compared to the same  periods  in  2003.   These
increases  are primarily due to increased efforts to promote this segment's
products,  obtain  additional  market share and  develop  new  channels  of
distribution.
    General and administrative expenditures increased approximately $14,000
(2%)  and  $252,000 (12%) during the three and nine months ended  September
30,  2004,  respectively,  when  compared to  the  same  periods  in  2003,
primarily  due  to  additional management and administrative  personnel  to
support this segment's growth.
    Research  and  development expenses increased approximately  $1,539,000
(80%)  and $3,485,000 (70%), respectively, during the three and nine months
ended September 30, 2004, when compared to the same periods in 2003.  These
increases are related to increased expenditures incurred in connection with
the  acquisition  of  Avail Networks and additional personnel  and  related
costs  associated  with  the development of the Company's  next  generation
products.
   The Data Communications segment experienced a significant improvement in
operating income during both the three and nine months ended September  30,
2004,  when  compared to the same periods in 2003, as a  result  of  higher
sales  and  improved operating margins.  This segment will increase  future
operating  costs,  primarily  research  and  development  to  develop  next
generation products, which is expected to reduce future operating results.

Electronic Assemblies Segment
   Sales increased $120,810 and $24,697 for the three and nine months ended
September 30, 2004, respectively, when compared to the same periods in 2003
due  to  higher  order  volume  from the Company's  contract  manufacturing
customers.  This segment is focused on diversifying its customer  base  and
has  been  successful  in  obtaining new customers.   The  potential  sales
significance of these new accounts cannot be determined at this time.
    Gross  profit margins were 9.1% and 7.3% for the three and nine  months
ended September 30, 2004, respectively, compared to a loss of approximately
$(33,000)  (6%) and $(267,000) (13%) during the same periods in 2003.   The
improved  gross profit margin is due to the Company's efforts initiated  to
reduce  operating  costs.   Selling, general  and  administrative  expenses
decreased  slightly  during the three and nine months ended  September  30,
2004, when compared to the same periods in 2003.  This segment continues to
experience  double  digit  percentage increases in  its  medical  insurance
programs  offered  to  eligible employees.  These  increases  will  have  a
negative effect on operating income in the future.
                                   -10-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS. (Continued)
Audio Equipment Segment
    Sales decreased $122,080 and $129,838, respectively, for the three  and
nine months ended September 30, 2004, when compared to the same periods  in
2003.   Legacy  Audio  remains focused on developing a quality  independent
dealer network of high end audio video stores and custom installers.
    Gross  profit margins were 29% and 31%, respectively, in the three  and
nine  months ended September 30, 2004, as compared to 31% and  35%  in  the
same  periods  in  2003, primarily due to reductions in  wholesale  selling
prices to comparable industry levels.
    Selling,  general  and  administrative  costs  increased  approximately
$79,000  and $266,000 during the three and nine months ended September  30,
2004  when  compared  to  the same periods in 2003,  primarily  related  to
increased  marketing and advertising costs associated with the introduction
of Legacy's new products.
    As  discussed in Note 6 above, operating expenses for the  nine  months
ended September 30, 2004 includes a charge of $362,611 related to the write
down of the carrying value of Legacy's goodwill and intangibles.

Investment Income
    Investment income increased during the three months ended September 30,
2004,  when compared to the same period in 2003 due to increasing  rate  of
return  and  higher  invested balances during the third  quarter  of  2004.
Investment  income  decreased during the nine months  ended  September  30,
2004,  when  compared to the same periods in 2003, due to  lower  rates  of
return available on invested funds during the first half of 2004.

Income Taxes
   The tax provision for the three and nine months ended September 30, 2004
of  25.5% and 28.4%, are based on the estimated effective tax rate for  the
year.   This rate is less than the statutory income tax rate and  is  lower
than  the 2003 effective tax rate primarily due to foreign income with  the
benefit  of lower tax rates, tax benefits and credit carryforwards  related
to  research  and development activities and non-taxable investment  income
derived from investment in municipal bond funds.

Contractual Obligations and Commercial Commitments
    During  the  nine months ended September 30, 2004, there have  been  no
items   that   significantly   impacted  the  Company's   commitments   and
contingencies as disclosed in the notes to the 2003 consolidated  financial
statements  as  filed  on  Form  10-K.  In addition,  the  Company  has  no
significant off balance sheet arrangements.

Factors that May Affect Operating Results
   The statements contained in this report on Form 10-Q that are not purely
historical are forward looking statements within the meaning of Section 27A
of  the  Securities Act of 1933 and Section 21E of the Securities  Exchange
Act  of  1934,  including statements regarding the Company's  expectations,
hopes,  intentions  or  strategies regarding the future.   Forward  looking
statements  include:  statements  regarding  future  products  or   product
development; statements regarding future research and development spending,
the  Company's  marketing and product development strategy  and  statements
regarding  future  production  capacity.  All  forward  looking  statements
included in this document are based on information available to the Company
on  the  date hereof, and the Company assumes no obligation to  update  any
such  forward looking statements.  Readers are cautioned not to place undue
reliance  on  these forward looking statements, which reflect  management's
opinions  only as of the date hereof.  Readers should carefully review  the
risk  factors described in other documents the Company files from  time  to
time  with  the  Securities and Exchange Commission, including  the  Annual
Report  on  Form  10-K.  It is important to note that the Company's  actual
results  could  differ  materially  from  those  in  such  forward  looking
statements.  Some of the factors that could cause actual results to  differ
materially are set forth below.
   The  Company  has  experienced and expects  to  continue  to  experience
fluctuations  in  its  results  of operations.   Factors  that  affect  the
Company's  results of operations include the volume and  timing  of  orders
received, changes in global economics and financial markets, changes in the
mix of products sold, market acceptance of the Company's and its customer's
products,  competitive pricing pressures, global currency  valuations,  the
availability  of  electronic  components that the  Company  purchases  from
suppliers,  the Company's ability to meet increasing demand, the  Company's
ability  to  introduce new products on a timely basis, the  timing  of  new
product  announcements and introductions by the Company or its competitors,
changing  customer requirements, delays in new product qualifications,  the
timing and extent of research and development expenses and fluctuations  in
manufacturing yields.  As a result of the foregoing or other factors, there
can  be  no  assurance  that  the  Company  will  not  experience  material
fluctuations  in future operating results on a quarterly or  annual  basis,
which  would  materially  and  adversely  affect  the  Company's  business,
financial condition and results of operations.
                                   -11-
<PAGE>
                   ALLEN ORGAN COMPANY AND SUBSIDIARIES
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
   No change from information disclosed in the Company's 2003 annual
   report on Form 10-K.

ITEM 4.  CONTROLS AND PROCEDURES.
   The Company's Chief Executive Officer and Chief Financial Officer have
   evaluated the effectiveness of the design and operation of the
   Company's disclosure controls and procedures, which are designed to
   insure that the Company records, processes, summarizes and reports in a
   timely and effective manner the information required to be disclosed in
   the reports filed with or submitted to the Securities and Exchange
   Commission.  Based upon this evaluation, they concluded that the
   Company's disclosure controls are effective as of September 30, 2004.
   There has been no change in the Company's internal control over
   financial reporting that occurred during the quarter ended September
   30, 2004 that has materially affected, or is reasonably likely to
   materially affect, the Company's internal control over financial
   reporting.

PART II    OTHER INFORMATION
   Item 6.     Exhibits
   (a)  Exhibits
        Exhibit No.            Description
         31.1      Rule 13a-14(a)/15d-14(a) Certification - Chief Executive
                    Officer
         31.2      Rule 13a-14(a)/15d-14(a) Certification - Chief Financial
                    Officer
         32        Section 1350 Certifications

SIGNATURES
Pursuant  to the requirements of the Securities Exchange Act of  1934,  the
registrant  has duly caused this report to be signed on its behalf  by  the
undersigned thereunto duly authorized.
                                       Allen Organ Company
                                           (Registrant)

Date:November 12, 2004      /s/STEVEN MARKOWITZ
                            Steven Markowitz, President and Chief Executive
                            Officer

Date:November 12, 2004      /s/NATHAN S. ECKHART
                            Nathan S. Eckhart, Vice President-Finance,
                            Chief Financial and Principal Accounting
                            Officer
                                   -12-
<PAGE>