U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

    X     Quarterly report under Section 13 or 15(d) of the Securities
---------   Exchange Act of 1934


            For the quarterly period ended   September 30, 2004
                                             ------------------

_______ Transition report under Section 13 or 15(d) of the Exchange Act

            For the transition period from __________  to  ___________

Commission File Number    1-10526
                        -----------

                            UNITED-GUARDIAN, INC.
-------------------------------------------------------------------------
     (Exact Name of Small Business Issuer as Specified in Its Charter)

          Delaware                                11-1719724
-------------------------------      ------------------------------------
(State or Other Jurisdiction of      (I.R.S. Employer Identification No.)
  Incorporation or Organization)

              230 Marcus Boulevard., Hauppauge, New York 11788
-------------------------------------------------------------------------
                  (Address of Principal Executive Offices)

                              (631) 273-0900
-------------------------------------------------------------------------
                (Issuer's Telephone Number, Including Area Code)

-------------------------------------------------------------------------
       (Former Name, Former Address and Former Fiscal Year, if Changed
          Since Last Report)

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

Yes      X                No
    ----------               -----------










                             Cover Page 1 of 2 Pages
<PAGE>
         APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PRECEDING FIVE YEARS

     Check whether the Company  filed all  documents and reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court.

Yes _________             No ____________

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     State the number of shares  outstanding of each of the issuer's  classes of
common equity, as of the latest practicable date:

                                    4,929,539
                                  -------------











































                             Cover Page 2 of 2 Pages
<PAGE>
                              UNITED-GUARDIAN, INC.

                                      INDEX


                                                                       Page No.
                                                                      ----------
Part I.  FINANCIAL INFORMATION

   Item 1 - Financial Statements

              Consolidated Statements of Income - Three and
                Nine Months Ended September 30, 2004 and 2003.........     2

              Consolidated Balance Sheets -
                September 30, 2004 and December 31, 2003..............   3-4

              Consolidated Statements of Cash Flows -
                Nine Months Ended September 30, 2004 and 2003.........     5

              Consolidated Notes to Financial Statements..............  6-10

   Item 2 - Management's Discussion and Analysis of
             Financial Condition and Results of Operations............ 11-14

   Item 3 - Controls and Procedures...................................    14

Part II. OTHER INFORMATION

   Item 1 - Legal Proceedings..........................................   15

   Item 2 - Changes in Securities and Use of Proceeds..................   15

   Item 3 - Defaults Upon Senior Securities............................   15

   Item 4 - Submission of Matters to a Vote of Security Holders........   15

   Item 5 - Other Information..........................................   15

   Item 6 - Exhibits and Reports On Form 8-K...........................   15

Signatures.............................................................   15

















                                        1
<PAGE>
                          Part I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

                              UNITED-GUARDIAN, INC.
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)

                             NINE MONTHS ENDED           THREE MONTHS ENDED
                                SEPTEMBER 30,                SEPTEMBER 30,
                             2004          2003           2004          2003
                            ------        ------         ------        ------
Revenue:
  Net sales              $ 8,977,454   $ 8,632,494    $ 2,987,383   $ 2,315,417
                          ----------    ----------     ----------    ----------
Costs and expenses:
  Cost of sales            4,001,219     4,018,227      1,402,404       964,711
  Operating expenses       1,898,225     1,829,687        550,738       566,879
                          ----------    ----------     ----------    ----------
                           5,899,444     5,847,914      1,953,142     1,531,590
      Income from         ----------    ----------     ----------    ----------
         operations        3,078,010     2,784,580      1,034,241       783,827


Other income (expense):
  Investment income          160,267       118,291         53,855        39,127
  Gain on sale of assets        -              500           -             -
  Other                          (17)          (25)          -             -
        Income before      ----------    ----------     ----------    ----------
           income taxes    3,238,260     2,903,346      1,088,096       822,954

Provision for income
    taxes                  1,157,000     1,032,000        389,000       290,000
                           ---------     ---------      ---------     ---------
      Net income         $ 2,081,260   $ 1,871,346    $   699,096   $   532,954
                           =========     =========      =========     =========
Earnings per common share
   (basic and diluted)   $      0.42   $      0.38    $      0.14   $      0.11
                           =========     =========      =========     =========
Weighted average shares
  - basic                  4,927,688     4,892,737      4,929,539     4,910,022
                           =========     =========      =========     =========
Weighted average shares
  - diluted                4,937,223     4,910,370      4,937,237     4,930,761
                           =========     =========      =========     =========












                        See notes to financial statements

                                        2
<PAGE>
                              UNITED-GUARDIAN, INC.
                           CONSOLIDATED BALANCE SHEETS

                                            SEPTEMBER 30,      DECEMBER 31,
                                                2004               2003
                                            ------------       -------------
              ASSETS                         (UNAUDITED)  (DERIVED FROM AUDITED
                                                           FINANCIAL STATEMENTS)
Current assets:
     Cash and cash equivalents           $   4,048,077      $    2,710,029
     Temporary investments                   1,000,625           1,615,751
     Marketable securities                   6,124,386           6,098,986
     Accounts receivable, net of
       allowance for doubtful accounts
       of $27,000 at September 30,
       2004 and December 31, 2003
       respectively                          1,326,249           1,007,055
     Inventories (net)                       1,377,860           1,093,312
     Prepaid expenses and other
        current assets                         213,310             264,978
     Deferred income taxes                     234,217             207,817
                                           -----------         -----------
              Total current assets          14,324,724          12,997,928
                                           -----------         -----------

Property, plant and equipment:
     Land                                       69,000              69,000
     Factory equipment and fixtures          2,934,171           2,825,125
     Building and improvements               2,081,497           2,068,752
     Waste disposal plant                      133,532             133,532
                                           -----------         -----------
                                             5,218,200           5,096,409
       Less: Accumulated depreciation        4,220,718           4,070,158
                                           -----------         -----------
                                               997,482           1,026,251
                                           -----------         -----------
Other assets:
     Processes and patents, net of
        accumulated amortization of
        $981,797 and $981,732 at
        September 30, 2004 and December
        31, 2003, respectively                    -                     65
     Other                                         700                 700
                                           -----------         -----------
                                                   700                 765
                                           -----------         -----------
                                        $   15,322,906      $   14,024,944
                                           ===========         ===========









                        See notes to financial statements

                                        3
<PAGE>
                              UNITED-GUARDIAN, INC.
                           CONSOLIDATED BALANCE SHEETS



                                           SEPETMBER 30,        DECEMBER 31,
                                               2004                2003
                                          ---------------      ------------
LIABILITIES AND                             (UNAUDITED)   (DERIVED FROM AUDITED
STOCKHOLDERS' EQUITY                                       FINANCIAL STATEMENTS)

Current liabilities:
   Dividends payable                       $1,232,385          $  737,736
   Accounts payable                           198,521             309,921
   Accrued expenses                           322,433             350,769
   Taxes payable                              114,456                -
                                            ---------           ---------
         Total current liabilities          1,867,795           1,398,426
                                            ---------           ---------
 Deferred income taxes                         10,000              10,000
                                            ---------           ---------

Stockholders' equity:
   Common stock $.10 par value,
      authorized, 10,000,000 shares;
      4,991,739 and 4,984,439 shares
      issued, respectively; 4,929,539
      and 4,922,239 shares outstanding,
      respectively                            499,174             498,444
   Capital in excess of par value           3,740,613           3,717,160
   Accumulated other comprehensive loss       (75,079)            (30,614)
   Retained earnings                        9,640,033           8,791,158
   Treasury stock, at cost; 62,200 shares    (359,630)           (359,630)
                                            ---------           ---------
         Total stockholders' equity        13,445,111          12,616,518
                                            ---------           ---------
                                         $ 15,322,906        $ 14,024,944
                                           ==========          ==========



















                        See notes to financial statements

                                        4
<PAGE>
                              UNITED-GUARDIAN, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                           NINE MONTHS ENDED
                                                              SEPTEMBER 30,
                                                              ------------
                                                         2004             2003
                                                       -------          -------
Cash flows provided by operating activities:
  Net income                                       $ 2,081,260      $ 1,871,346
  Adjustments to reconcile net earnings
    to net cash flows from operations:
      Depreciation and amortization                    150,625          149,349
      Amortization of bond premium                        -               5,548
      Net gain on sale of equipment                       -                (500)
      Provision for doubtful accounts                     -              11,406
      Provision for inventory obsolescence             (91,000)         125,800
      (Increase) decrease in assets:
         Accounts receivable                          (319,194)        (344,831)
         Inventories                                  (193,548)          65,567
         Prepaid expenses and other current
           and non-current assets                       51,668          168,576
      Increase (decrease) in liabilities:
         Accounts payable                             (111,400)          31,539
         Accrued expenses and taxes payable             86,120           71,623
                                                    ----------       ----------
      Net cash provided by operating activities      1,654,531        2,155,423
                                                    ----------       ----------
Cash flows from investing activities:
   Acquisition of property, plant and equipment       (121,791)         (90,068)
   Proceeds from sale of equipment                        -                 500
   Net change in temporary investments                 615,126        1,871,751
   Proceeds from sale of marketable securities       2,032,274          480,000
   Purchase of marketable securities                (2,128,539)      (5,561,073)
                                                    ----------       ----------
      Net cash provided by (used in)
       investing activities                            397,070       (3,298,890)
                                                    ----------       ----------
Cash flows from financing activities:
   Proceeds from exercise of stock options              24,183          113,835
   Dividends paid                                     (737,736)        (488,114)
                                                    ----------       ----------
     Net cash used in financing activities            (713,553)        (374,279)
                                                    ----------       ----------

Net increase (decrease) in cash and
   cash equivalents                                  1,338,048       (1,517,746)

Cash and cash equivalents at beginning of period     2,710,029        3,184,599
                                                    ----------       ----------
Cash and cash equivalents at end of period         $ 4,048,077      $ 1,666,853
                                                    ==========       ==========





                        See notes to financial statements

                                        5
<PAGE>
                              UNITED-GUARDIAN, INC.
                   CONSOLIDATED NOTES TO FINANCIAL STATEMENTS

      1. In the opinion of the Company,  the  accompanying  unaudited  financial
statements  contain  all  adjustments   (consisting  of  only  normal  recurring
accruals) necessary to present fairly the financial position as of September 30,
2004 and the results of operations  and cash flows for the three and nine months
ended  September  30, 2004 and 2003.  The  accounting  policies  followed by the
Company  are set forth in the  Company's  financial  statements  included in its
December 31, 2003 Annual Report to Shareholders.

     2. The results of operations for the three and nine months ended  September
30, 2004 and 2003 are not  necessarily  indicative of the results to be expected
for the full year.

     3. Stock-Based Compensation:  At its meeting on March 19, 2004 the Board of
Directors of the Company  approved the  adoption of a new  stock-based  employee
compensation plan to replace the previous two stock-based employee  compensation
plans that expired in 2003.  The new plan covers both  employees and  Directors.
The adoption and  implementation of new plan was ratified by the shareholders of
the Company at the Company's  annual meeting of shareholders on May 19, 2004. As
permitted    under    FAS   NO.    148,    (Accounting    for    Stock-    Based
Compensation-Transition and Disclosure), which amended SFAS NO. 123, (Accounting
for Stock-Based Compensation), United-Guardian has elected to continue to follow
the  intrinsic  value  method  in  accounting  for  its   stock-based   employee
compensation  arrangements  as defined by  Accounting  Principle  Board  Opinion
("APB")  No.  25,  (Accounting  for Stock  Issued  to  Employees),  and  related
interpretations  including Financial  Accounting  Standards Board Interpretation
No. 44, (Accounting for Certain Transactions  involving Stock Compensation),  an
interpretation  of APB No. 25. The following table illustrates the effect on net
income  and  earnings  per  share if the  company  had  applied  the fair  value
recognition provisions of SFAS No.123 to stock-based employee compensation.


<table>
<caption>
                                                    Nine months ended              Three months ended
                                                        September 30,                 September 30,
                                                    2004            2003           2004            2003
                                                  --------        --------       --------        --------
<S>                                             <C>             <C>              <C>             <C>
Reported net income                             $2,081,260      $1,871,346       $699,096        $532,954

 Stock-based employee compensation
   expense included in reported net
   income, net of related tax effects                    0               0              0               0

 Stock-based employee compensation
   determined under the fair value based
   method, net of related tax effect                     0         (15,957)             0          (2,762)
                                                 ---------       ---------       --------        --------
     Pro forma net income                       $2,081,260      $1,855,389       $699,096        $530,192
                                                ==========      ==========       ========        ========
 Earnings per share (basic and diluted)
   As reported                                  $      .42      $      .38       $    .14        $    .11
   Pro forma                                    $      .42      $      .38       $    .14        $    .11

</table>

                                        6
<page>
     4. Inventories - Net

     Inventories consist of the following:     September 30,    December 31,
                                                    2004            2003
                                                ----------      ----------
     Raw materials and work in process          $  491,590      $  225,443
     Finished products and fine chemicals          886,270         867,869
                                                ----------      ----------
                                                $1,377,860      $1,093,312
                                                ==========      ==========

      At September  30, 2004 and  December  31,  2003,  the Company has reserved
$128,000 and $219,000 respectively for slow moving and obsolete inventory.

      5. For purposes of the Statement of Cash Flows, the Company  considers all
highly liquid  investments  purchased with a maturity of three months or less to
be cash equivalents.

     Cash  payments for taxes were  $1,005,977  and $801,295 for the nine months
ended September 30, 2004 and 2003, respectively.

     6. Comprehensive Income (Loss)

            The components of comprehensive income (loss) are as follows:

<table>
<caption>
                                          Nine months ended September 30,    Three months ended September 30,
                                                2004            2003              2004            2003
                                               ------          ------            ------          ------
<S>                                        <C>             <C>                 <C>             <C>
Net income                                 $2,081,260      $1,871,346          $699,096        $532,954
                                            ---------       ---------           -------         -------
Other comprehensive income (loss)
   Unrealized gain (loss) on
   marketable securities                      (70,866)         47,795             7,270          25,552
                                              -------         -------           -------         -------
Income tax benefit on
   comprehensive gain (loss)                  (26,400)         17,827             2,800           9,547
                                              -------         -------           -------         -------
Other comprehensive income (loss)             (44,466)         29,968             4,470          16,021
                                              -------         -------           -------         -------
Comprehensive income                       $2,036,794      $1,901,314          $703,566        $548,975
                                            =========       =========           =======         =======
</table>
     Accumulated  other  comprehensive  income (loss) is comprised of unrealized
gains and losses on marketable securities, net of the related tax effect.












                                        7
<page>
         7. Earnings Per Share

         The  following  table sets forth the  computation  of basic and diluted
earnings per share at September 30, 2004 and 2003.
<table>
<caption>
                                                    Nine months ended            Three months ended
                                                       September 30,                September 30,
                                                     2004           2003          2004           2003
                                                    ------         ------        ------         ------
<S>                                              <C>            <C>           <C>            <C>
Numerator:
   Net income                                    $2,081,260     $1,871,346    $  669,096     $  532,954
                                                  =========      =========       =======        =======
Denominator:
   Denominator for basic earnings
   per share (weighted average
   shares)                                        4,927,688      4,892,737     4,929,539      4,910,022

Effect of dilutive securities:
   Employee stock options                             9,535         17,633         7,698         20,739
                                                  ---------      ---------     ---------      ---------
Denominator for diluted earnings
   per share (adjusted weighted-average
   shares) and assumed conversions                4,937,223      4,910,370     4,937,237      4,930,761
                                                  =========      =========     =========      =========
Basic and diluted earnings per share             $     0.42     $     0.38    $     0.14     $     0.11
                                                  =========      =========     =========      =========
</table>



     8. The Company has the following two reportable business segments: Guardian
Laboratories  and Eastern  Chemical.  The Guardian  segment  conducts  research,
development and manufacturing of cosmetic ingredients,  personal and health care
products, pharmaceuticals and specialty industrial products. The Eastern segment
distributes fine chemicals, solutions, dyes and reagents.


     The accounting policies used to develop segment  information  correspond to
those described in the summary of significant  accounting  policies as set forth
in the Annual Report for the year ended December 31, 2003.  Segment  earnings or
loss is based on earnings  or loss from  operations  before  income  taxes.  The
reportable   segments  are  distinct   business  units  operating  in  different
industries.   They  are  separately   managed,   with  separate   marketing  and
distribution  systems.  The following  information about the two segments is for
the nine and three month periods ended September 30, 2004 and 2003.












                                        8
<page>
<TABLE>
<CAPTION>
                                                               Nine months ended September 30,
                                                     2004                                            2003
                                     ------------------------------------            ------------------------------------
                                     GUARDIAN       EASTERN         TOTAL            GUARDIAN       EASTERN         TOTAL
                                   ------------   ------------   -----------       ------------   ------------   -----------
<S>                                <C>            <C>            <C>               <C>            <C>            <C>
Revenues from external customers   $ 8,119,929    $   857,525    $ 8,977,454       $ 7,824,875    $   807,619    $ 8,632,494
Depreciation and amortization           70,196           -            70,196            64,852           -            64,852
Segment income (loss) before
  income taxes                       3,251,553        (52,620)     3,198,933         2,894,764         14,191      2,908,955

Segment assets                       3,018,158        362,946      3,381,104         2,076,219        303,359      2,379,578

Capital expenditure                    106,556           -           106,556            62,808            -           62,808

Reconciliation to Consolidated Amounts

Income before income taxes
----------------------------
Total earnings for reportable segments                           $ 3,198,933                                     $ 2,908,955
Other income, net                                                    160,250                                         118,766
Corporate headquarters expense                                      (120,923)                                       (124,375)
                                                                  ----------                                      ----------
Consolidated earnings before income taxes                        $ 3,238,260                                     $ 2,903,346
                                                                  ==========                                      ==========
Assets
------
Total assets for reportable segments                             $ 3,381,104                                     $ 2,379,578
Corporate headquarters                                            11,941,802                                      10,958,098
                                                                  ----------                                      ----------
      Total consolidated assets                                  $15,322,906                                     $13,337,676
                                                                  ==========                                      ==========
</TABLE>
<TABLE>
<CAPTION>
                                                                  Three months ended September 30,
                                                     2004                                            2003
                                     ------------------------------------            ------------------------------------
                                     GUARDIAN       EASTERN         TOTAL            GUARDIAN       EASTERN         TOTAL
                                   ------------   ------------   -----------       ------------   ------------   -----------
<S>                                <C>            <C>            <C>               <C>            <C>            <C>
Revenues from external customers   $ 2,697,595    $   289,788    $ 2,987,383       $ 2,086,738    $   228,679    $ 2,315,417
Depreciation and amortization           20,429           -            20,439            19,045           -            19,045
Segment income (loss) before
   income taxes                      1,085,557         (6,566)     1,078,991           767,923         54,179        822,102












                                        9
<page>
Earnings before income taxes
----------------------------
Total income for reportable segments                             $ 1,078,991                                     $   822,102
Other income, net                                                     53,855                                          39,127
Corporate headquarters expense                                       (44,750)                                        (38,275)
                                                                  ----------                                      ----------
Consolidated earnings before income taxes                        $ 1,088,096                                     $   822,954
                                                                  ==========                                      ==========
Other significant items
-----------------------

<CAPTION>
                                                                 Nine Months ended September 30,
                                                     2004                                           2003
                                   ------------------------------------------       -------------------------------------------
                                     Segment                     Consolidated          Segment                     Consolidated
                                      Totals       Corporate        Totals              Totals        Corporate       Totals
                                   ------------   ------------   -------------      -------------   ------------   -------------
<S>                                  <C>            <C>             <C>               <C>            <C>            <C>
Expenditures for assets              $106,556       $ 15,235        $121,791          $ 62,808       $ 27,260        $ 90,068
Depreciation and amortization          70,196         80,429         150,625            64,852         84,497         149,349
</table>

Geographic Information
----------------------
<table>
<CAPTION>
                                                       2004                                2003
                                           ---------------------------         ---------------------------
                                             Revenues      Long-Lived            Revenues      Long-Lived
                                                             Assets                              Assets
                                           -----------    -------------        -----------    -------------
<S>                                        <C>           <C>                   <C>           <C>
United States                              $ 4,979,126   $      997,482        $ 4,384,781   $    1,046,745
France                                       1,117,867                           1,069,869
Other countries                              2,880,461                           3,177,844
                                           -----------    -------------        -----------    -------------
                                           $ 8,977,454   $      997,482        $ 8,632,494   $    1,046,745
                                           ===========    =============        ===========    =============

Major Customers
---------------
Customer A (Guardian)*                     $ 3,654,792                         $ 3,523,475
Customer B (Guardian)                          959,980                             876,078
All other customers                          4,362,682                           4,232,941
                                           -----------                         -----------
                                           $ 8,977,454                         $ 8,632,494
                                           ===========                         ===========
</table>
* At September 30, 2004 Customer A had a balance approximating 32% of accounts
    receivable.
  At September 30, 2003 Customer A had a balance approximating 28% of accounts
    receivable.






                                       10
<page>

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

FORWARD LOOKING STATEMENTS

        Statements made in this Form 10-QSB which are not purely  historical are
forward-looking  statements  with  respect  to  the  goals,  plans,  objectives,
intentions,  expectations,  financial condition,  results of operations,  future
performance  and  business of the  Company.  Forward-looking  statements  may be
identified  by the use of such words as  "believes,"  "may,"  "will,"  "should,"
"intends," "plans," "estimates," or "anticipates" or other similar expressions.

        Forward-looking statements involve inherent risks and uncertainties, and
important  factors  (many of which are beyond our  control)  could cause  actual
results  to  differ  materially  from  those  set  forth in the  forward-looking
statements.  In addition to those specific risks and  uncertainties set forth in
the  Company's  reports  currently on file with the SEC, some other factors that
may affect the future results of operations of the Company are: the  development
of products  that may be superior  to the those of the  Company;  changes in the
quality or composition of the Company's  products;  lack of market acceptance of
the Company's products;  the Company's ability to develop new products;  general
economic  or  industry  conditions;  intellectual  property  rights;  changes in
interest rates;  new legislation or regulatory  requirements;  conditions of the
securities  markets;  the  Company's  ability  to  raise  capital;   changes  in
accounting   principals,   policies  or   guidelines;   financial  or  political
instability;  acts  of  war  or  terrorism;  and  other  economic,  competitive,
governmental,  regulatory  and  technical  factors that may affect the Company's
operations, products, services and prices.

        Accordingly,  results actually achieved may differ materially from those
anticipated as a result of such forward-looking statements, and those statements
speak only as of the date they are made.  The Company  does not  undertake,  and
specifically disclaims, any obligation to update any forward-looking  statements
to reflect events or circumstances occurring after the date of such statements.

OVERVIEW

     The  Company  is a  Delaware  corporation  that  operates  in two  business
segments.  Its Guardian  Laboratories  Division  ("Guardian") conducts research,
product  development,  manufacturing  and  marketing  of  cosmetic  ingredients,
personal and health care  products,  pharmaceuticals,  and specialty  industrial
products.  The products  manufactured by Guardian are marketed through marketing
partners, distributors, direct advertising, mailings, and trade exhibitions. Its
most important personal care product line is its LUBRAJEL(R) line of water based
moisturizing and lubricating  gels. It also sells two  pharmaceutical  products,
which are  distributed  primarily  through drug  wholesalers and surgical supply
houses. There are also indirect sales to the Veteran's  Administration and other
government agencies, and to some hospitals and physicians.

     While the Company does have  competition in the marketplace for some of its
products,  many of its products or processes are either unique in their field or
have some unique  characteristics,  and therefore are not in direct  competition
with the products or processes of other pharmaceutical, chemical, or health care
companies. Guardian's research and development department is actively working on
the development of new products to expand the Company's personal care line.



                                       11
<page>
     The  Company  has been issued  many  patents  and  trademarks,  and intends
whenever  possible  to make  efforts to obtain  patents in  connection  with its
product development program.

     The Company's Eastern Chemical subsidiary  distributes an extensive line of
fine organic chemicals, research chemicals, test solutions, indicators, dyes and
reagents.   Eastern's  products  are  marketed  through   advertising  in  trade
publications  and  direct  mailings  and are  sold to both to  distributors  and
directly  to end  users for use in a wide  variety  of  applications.  Since the
Company's business  activities and marketing efforts over the past several years
have focused  increasingly on the Guardian division,  which the Company believes
has greater growth potential, the Company has reduced Eastern's inventory levels
in order to make the subsidiary more marketable in the event the Company decided
to sell the Eastern operation.  This has resulted in some reduction in sales for
this  division.  Sales of this  division  have  also  declined  as a  result  of
increased  competition  from  new  and  existing  competitors  that  are  making
increased  use of the Internet as a selling tool.  Recently the Company  entered
into  discussions with several  companies that expressed  interest in purchasing
the  Eastern  operation,  and is  continuing  discussions  with one  Company  in
particular that could be a likely candidate to purchase the operation.  Although
there is not yet any firm agreement between the parties,  the Company is hopeful
that an agreement can be reached shortly.

     Products  manufactured  by the Company are marketed  worldwide  through its
extensive  marketing and distribution  arrangements.  Approximately  half of the
Company's sales are to foreign customers.

      The  following  discussion  and analysis  covers  material  changes in the
financial  condition of the Company  since year end  December  31,  2003,  and a
comparison  of the  results of  operations for the three and nine month  periods
ended  September 30, 2004 and September 30, 2003.  This  discussion and analysis
should be read in conjunction with "Management's Discussion and Analysis or Plan
of Operation"  included in the Company's Form 10-KSB for the year ended December
31, 2003.

RESULTS OF OPERATIONS

      Gross revenue from operations
      -----------------------------

     For the nine month  period  ended  September  30, 2004 net sales  increased
$344,960 (4.0%) versus the comparable period in 2003. The Guardian  Laboratories
division  ("Guardian") had a sales increase of $295,054 (3.8%) while the Eastern
Chemical subsidiary ("Eastern") had a sales increase of $49,906 (6.2%).

     For the three month period  ended  September  30, 2004 net sales  increased
$671,966  (29.0%) over the comparable  period in 2003.  Guardian sales increased
$610,857 (29.3%), while Eastern sales increased $61,109 (26.7%).

     The increase in Guardian's and Eastern's sales for the three and nine month
periods  is  believed  to be due  mainly to normal  fluctuations  in  purchasing
patterns of its customers.







                                       12
<page>
     Cost of sales
     -------------

     Cost of sales as a  percentage  of sales  decreased  to 44.6%  for the nine
months  ended  September  30, 2004 from 46.5% for the  comparable  period  ended
September  30,  2003.  This  decrease  is mainly due to a  favorable  production
variance. Excluding realized savings from disposal costs and obsolete inventory,
cost of sales,  as a  percentage  of sales,  would  have been 50.0% for the nine
month period ended  September  30, 2003 as compared to 44.6% for the  comparable
period in the current year.

     For the three month period ended  September  30, 2004 compared to the three
month period ended September 30, 2003 the cost of sales as a percentage of sales
increased to 46.5% from 41.7%.  For the three months ended  September  30, 2003,
cost of sales as a  percentage  of sales  would have been 54.7% as  compared  to
46.9% for the comparable period in the current year. This decrease for the three
month period ended  September  30, 2004 is mainly due to a favorable  production
variance.

     For the three months ended September 30, 2003, the Company realized savings
in disposal costs and obsolete  inventory of approximately  $50,000 and $126,000
respectively. The Company had recorded such reserves in prior years.

     Operating Expenses
     ------------------

     Operating  expenses  increased  $68,538  (3.7%) for the nine  months  ended
September  30, 2004  compared to the  comparable  period in 2003.  For the three
month period ended  September  30, 2004  operating  expenses  decreased  $16,141
(2.8%)  over the  comparable  period in 2003.  The  increase  for the nine month
period was  primarily due to the net effect of increased  insurance  costs and a
one time  reserve  for the  payment  of a civil fine in  September  of 2003 (see
"Legal  Proceedings"  section of the Company's  Form 10-QSB for the period ended
September  30,  2003).  For the three month period  decreases  in expenses  were
mainly due to the  aforementioned  civil  penalty  that was accrued in September
2003.

     Investment income
     ---------------

     Investment  income  increased  $41,976  (35.5%) for the nine  months  ended
September  30, 2004 as compared to the  comparable  period in 2003,  and $14,728
(37.6%) for the three  months  ended  September  30,  2004 when  compared to the
comparable  period in 2003.  These  increases  were  mainly  attributable  to an
increase in interest rates. Investment income is recorded net of brokerage fees.

     Provision for income taxes
     --------------------------

     The  provision  for income taxes  increased  $125,000  (12.1%) for the nine
months ended September 30, 2004 when compared to the comparable  period in 2003,
and $99,000  (34.1%) for the three months ended September 30, 2004 when compared
to the comparable period in 2003. These increases are due to increased  earnings
before  taxes of  $334,914  for the nine  months  ended  September  30, 2004 and
$265,142 for the three months ended September 30, 2004.




                                       13
<page>
LIQUIDITY AND CAPITAL RESOURCES

     Working  capital  increased  from  $11,599,502  at  December  31,  2003  to
$12,465,929 at September 30, 2004. The current ratio  decreased from 9.3 to 1 at
December  31, 2003 to 7.7 to 1 at September  30,  2004.  The decrease in current
ratio was due to a $.25 per share  dividend  declared  in  September  2004.  The
Company has no  commitments  for any further  significant  capital  expenditures
during the remainder of 2004, and believes that its working  capital is and will
continue to be sufficient to support its operating requirements.

     The company generated cash from operations of $1,654,531 and $2,155,423 for
the nine months ended  September 30, 2004 and  September 30, 2003  respectively.
The  decrease was  primarily  due to the  increase in  inventories  and accounts
payable.

     During the nine month period ended September 30, 2004 $397,070 was provided
by  investment  activities,  as compared to the nine months ended  September 30,
2003  when  $3,298,890  was  used  in  investing  activities.  The  change  from
$3,298,890  used  in  investing  activities  in  2003 to  $397,070  provided  by
investing  activities  in 2004 was due to an decrease in purchases of marketable
securities (primarily bonds) and redemption of some money market accounts.

     Cash used in  financing  activities  was $713,553 and $374,279 for the nine
months  ended  September  30,  2004 and  September  30, 2003  respectively.  The
increase  is due  primarily  to an increase  in  dividends  paid during the nine
months ended September 30, 2004.

Item 3.  Controls and Procedures

  (a) Evaluation of Disclosure Controls and Procedures

     Within 90 days prior to the filing of this Quarterly  Report on Form 10-QSB
the  Company's  principal  executive  officer and  principal  financial  officer
evaluated the effectiveness of the design and operation of Company's  disclosure
controls and procedures (as defined in Rules  13a-14(c) and 15d-14(c)  under the
Securities  Exchange Act of 1934 (the  "Exchange  Act")) and concluded  that the
Company's  disclosure  controls  and  procedures  are  effective  to ensure that
information  required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is accumulated  and communicated to the Company's
management,  including its officers,  as appropriate  to allow timely  decisions
regarding required disclosure, and are effective to ensure that such information
is  recorded,  processed,  summarized  and  reported  within  the  time  periods
specified in the Securities and Exchange Commission's rules and forms.

   (b Changes in Internal Controls

     The Company's  principal  executive officer and principal financial officer
have also concluded there were no significant  changes in the Company's internal
controls or in other  factors that could  significantly  affect  these  controls
subsequent to the date of their  evaluation,  including any  corrective  actions
with regard to significant deficiencies and material weaknesses.








                                       14
<page>
                       PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS: NONE
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS: NONE
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES: NONE
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: NONE
ITEM 5 - OTHER INFORMATION: NONE
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     a. Exhibits

        31.1  Certification of Alfred  R.  Globus,  Chairman  and Chief
              Executive  Officer of the  Company, pursuant to Section 302 of the
              Sarbanes-Oxley Act of 2002

        31.2  Certification of Kenneth H.  Globus, President  and Chief
              Financial of the  Company, pursuant to Section 302 of the
              Sarbanes-Oxley Act of 2002

        32.1  Certification  of  Alfred  R.  Globus,  Chairman  and Chief
              Executive  Officer of the  Company, pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002.

        32.2  Certification  of Kenneth H.  Globus,  President  and Chief
              Financial  Officer of the  Company, pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002.

     b. Reports on Form 8-K

     There were two reports on Form 8-K filed  during the fiscal  quarter  ended
September  30,  2004:  one on August 5, 2004  pertaining  to the  issuance of an
earnings  release by the Company on August 5, 2004;  the other on September  13,
2004  pertaining  to the issuance of a press  release  announcing  the Company's
declaration of a special cash dividend.

                                   SIGNATURES

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

                                      UNITED-GUARDIAN, INC.
                                       (Registrant)

                                      By:  /s/ Alfred R. Globus
                                           --------------------
                                           Alfred R. Globus
                                           Chief Executive Officer


                                       By: /s/ Kenneth H. Globus
                                           ---------------------
                                           Kenneth H. Globus
                                           Chief Financial Officer

Date:  November 5, 2004



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