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     June 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)

-------------------------------------------------------------------------
              (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 Registrant 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 Earnings -
                Six Months Ended June 30, 2004 and 2003.................. 2

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

              Consolidated Statements of Cash Flows -
                Six Months Ended June 30, 2004 and 2003.................. 5

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

   Item 2 - Management's Discussion and Analysis or Plan of
              Operations ............................................. 10-14

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

Part II. OTHER INFORMATION

   Item 1 - Legal Proceedings.........................................    14

   Item 2 - Changes in Securities and Use of Proceeds.................    14

   Item 3 - Defaults Upon Senior Securities...........................    14

   Item 4 - Submission of Matters to a Vote of Security Holders.......    14

   Item 5 - Other Information.........................................    14

   Item 6 - Exhibits and Reports On Form 8-K.......................... 14-15

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

















                                        1
<PAGE>
                          Part I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

                              UNITED-GUARDIAN, INC.
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)
<table>
<caption>
                                          SIX MONTHS ENDED              THREE MONTHS ENDED
                                              June 30,                        June 30,
                                         2004          2003              2004          2003
<S>                                  <C>           <C>               <C>           <C>
Revenue:
  Net sales                          $ 5,990,071   $ 6,317,077       $ 3,022,968   $ 3,099,544
                                      ----------    ----------        ----------    ----------
Costs and expenses:
  Cost of sales                        2,598,815     3,053,516         1,325,555     1,523,369
  Operating expenses                   1,347,487     1,262,808           701,636       631,110
                                      ----------    ----------        ----------    ----------
                                       3,946,302     4,316,324         2,027,191     2,154,479
                                      ----------    ----------        ----------    ----------
      Income from operations           2,043,769     2,000,753           995,777       945,065


Other income (expense):
  Investment income                      106,412        79,164            49,320        39,923
  Gain on sale of assets                    -              500              -             -
  Other                                      (17)          (25)             -              (25)
                                       ----------    ---------         ----------    ---------
        Income before income taxes     2,150,164     2,080,392         1,045,097       984,963

Provision for income taxes               768,000       742,000           372,800       350,000
                                       ---------     ---------         ---------     ---------
      Net income                     $ 1,382,164   $ 1,338,392       $   672,297   $   634,963
                                       =========     =========         =========     =========
Earnings per common share
   (basic and diluted)               $      0.28   $      0.27       $      0.14   $      0.13
                                       =========     =========         =========     =========
Weighted average shares
  - basic                              4,926,753     4,883,951         4,929,539     4,886,733
                                       =========     =========         =========     =========
Weighted average shares
  - diluted                            4,937,206     4,900,032         4,937,759     4,905,740
                                       =========     =========         =========     =========
</table>











                        See notes to financial statements

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

                                                    June 30,      December  31,
                                                      2004              2003
                                                 ------------     -------------
              ASSETS                              (UNAUDITED)    (DERIVED FROM
                                                               AUDITED FINANCIAL
                                                                   STATEMENTS)
Current assets:
     Cash and cash equivalents                $   3,038,098      $    2,710,029
     Temporary investments                        1,517,008           1,615,751
     Marketable securities                        6,092,186           6,098,986
     Accounts receivable, net of
       allowance for doubtful accounts
       of 27,000  at June 30, 2004
       and December 31, 2003                      1,315,482           1,007,055
     Inventories (net)                            1,478,979           1,093,312
     Prepaid expenses and other
        current assets                              257,533             264,978
     Deferred income taxes                          237,017             207,817
                                                -----------         -----------
              Total current assets               13,936,303          12,997,928
                                                -----------         -----------

Property, plant and equipment:
     Land                                            69,000              69,000
     Factory equipment and fixtures               2,919,710           2,825,125
     Building and improvements                    2,073,191           2,068,752
     Waste disposal plant                           133,532             133,532
                                                -----------         -----------
                                                  5,195,433           5,096,409
       Less: Accumulated depreciation             4,173,273           4,070,158
                                                -----------         -----------
                                                  1,022,160           1,026,251
                                                -----------         -----------
Other assets:
     Processes and patents, net of
        accumulated amortization of
        $981,797 and $981,732 at
        June 30, 2004 and December 31,
        2003, respectively                             -                     65
     Other                                              700                 700
                                                -----------         -----------
                                                        700                 765
                                                -----------         -----------
                                             $   14,959,163      $   14,024,944
                                                ===========         ===========









                        See notes to financial statements

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



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

Current liabilities:
   Dividends payable                       $     -             $  737,736
   Accounts payable                           475,893             309,921
   Accrued expenses                           480,340             350,769
   Taxes payable                               19,001                -
                                            ---------           ---------
         Total current liabilities            975,234           1,398,426
                                            ---------           ---------
 Deferred income taxes                         10,000              10,000
                                            ---------           ---------

Stockholders' equity:
   Common stock, $.10 par value;
      10,0000,000 shares authorized;
      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       (79,550)            (30,614)
   Retained earnings                       10,173,322           8,791,158
   Treasury stock, at cost; 62,200 shares    (359,630)           (359,630)
                                            ---------           ---------
         Total stockholders' equity        13,973,929          12,616,518
                                            ---------           ---------
                                         $ 14,959,163        $ 14,024,944
                                           ==========          ==========


















                        See notes to financial statements

                                        4
<PAGE>
                              UNITED-GUARDIAN, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                            SIX MONTHS ENDED
                                                                June 30,
                                                              ------------
                                                         2004            2003
                                                       -------         -------
Cash flows provided by operating activities:
  Net income                                       $ 1,382,164     $ 1,338,392
  Adjustments to reconcile net income to net
      cash provided by operating activities
      Depreciation and amortization                    103,180         102,539
      Amortization of bond premium                        -              4,589
      Net gain on sale of equipment                       -               (500)
      Provision for doubtful accounts                     -             11,406
      Provision for inventory obsolescence             (91,000)         34,000
    Increase (decrease) in cash resulting
       from changes in operating assets and
       liabilities
         Accounts receivable                          (308,427)       (564,454)
         Inventories                                  (294,667)        349,175
         Prepaid expenses and other assets               7,445         109,911
         Accounts payable                              165,972             993
         Accrued expenses and taxes payable            148,572          60,368
                                                    ----------        --------
      Net cash provided by operating activities      1,113,239       1,446,419
                                                    ----------        --------
Cash flows from investing activities:
   Acquisition of plant and equipment                  (99,024)        (83,584)
   Proceeds from sale of equipment                        -                500
   Net change in temporary investments                  98,743       1,377,512
   Purchase of marketable securities                (1,247,013)         (1,900)
   Proceeds from sale of marketable securities       1,175,677         430,000
                                                    ----------        --------
      Net cash (used in) provided by
       investing activities                            (71,617)      1,722,528
                                                    ----------        --------
Cash flows from financing activities:
   Proceeds from exercise of stock options              24 183         101,050
   Dividends paid                                     (737,736)       (488,114)
                                                    ----------        --------
     Net cash used in financing activities            (713,553)       (387,064)
                                                    ----------        --------

Net increase in cash and cash
        equivalents                                    328,069       2,781,883

Cash and cash equivalents at beginning of period     2,710,029       3,184,599
                                                    ----------       ---------
Cash and cash equivalents at end of period         $ 3,038,098     $ 5,966,482
                                                    ==========       =========




                        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 June 30, 2004
and the results of operations  and cash flows for the three and six months ended
June 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 six months  ended June 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>
                                             Six months ended              Three months ended
                                                   June 30,                      June30,
                                              2004            2003           2004            2003
                                           --------         --------      --------         --------
<S>                                      <C>             <C>            <C>             <C>
Reported net income                      $1,382,164      $1,338,392     $  672,297      $  634,963

 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         (13,195)             0          (5,979)
                                          ---------        --------      ---------        --------
     Pro forma net income                $1,382,164      $1,325,197     $  672,297        $628,984
                                         ==========        ========     ==========        ========
 Earnings per share (basic and diluted)
   As reported                           $      .28        $    .27     $      .14        $    .13
   Pro forma                             $      .28        $    .27     $      .14        $    .13



</table>
                                        6
<page>
     4. Inventories - Net

     Inventories consist of the following:        June 30,     December 31,
                                                    2004            2003
                                                ----------      ----------
     Raw materials and work in process          $  520,452      $  225,443
     Finished products and fine chemicals          958,527         867,869
                                                ----------      ----------
                                                $1,478,979      $1,093,312
                                                ==========      ==========

     At June 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 $712,432 and $617,645 for the six months ended
June 30, 2004 and 2003, respectively.

     6. Comprehensive Income (Loss)

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

<table>
<caption>
                                      Six months ended June 30,    Three months ended June 30,
                                         2004          2003            2004          2003
                                        ------        -----           ------        ------
<S>                                  <C>           <C>             <C>           <C>
Net income                           $1,382,164    $1,338,392      $  672,297    $  634,963
                                      ---------     ---------       ---------     ---------
Other comprehensive income (loss)
   Unrealized gain (loss) on
   marketable securities                 (78,136)       22,243         (93,311)      27,369
                                       ---------     ---------       ---------    ---------
Income tax (benefit) on
   comprehensive (loss) gain             (29,200)        8,280         (34,930)       10,193
                                       ---------     ---------       ---------     ---------
Other comprehensive (loss) income        (48,936)       13,963         (58,381)       17,176
                                       ---------     ---------       ---------     ---------
Comprehensive income                  $1,333,228    $1,352,355      $  613,916    $  652,139
                                       =========     =========       =========     =========
</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 June 30, 2004 and 2003.
<table>
<caption>
                                             Six months ended              Three months ended
                                                  June 30,                       June 30,
                                             2004           2003            2004           2003
                                            ------         ------          ------         ------
<S>                                      <C>            <C>             <C>            <C>
Numerator:
   Net income                            $1,382,164     $1,338,392      $  672,297     $  634,963
                                          =========      =========         =======        =======
Denominator:
   Denominator for basic earnings
   per share (weighted average
   shares)                                4,926,753      4,883,951       4,929,539      4,886,733

Effect of dilutive securities:
   Employee stock options                    10,453         16,081           8,220         19,007
                                          ---------      ---------       ---------      ---------
Denominator for diluted earnings
   per share (adjusted weighted-average
   shares) and assumed conversions        4,937,206      4,900,032       4,937,759      4,905,740
                                          =========      =========       =========      =========
Basic and diluted earnings per share     $     0.28     $     0.27      $     0.14     $     0.13
                                          =========      =========       =========      =========
</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 six and three month periods ended June 30, 2004 and 2003.













                                        8
<page>
<table>
<CAPTION>
                                                                   Six months ended June 30,

                                                     2004                                            2003
                                     ------------------------------------            ------------------------------------
                                     GUARDIAN       EASTERN         TOTAL            GUARDIAN       EASTERN         TOTAL
                                   ------------   ------------   -----------       ------------   ------------   -----------
<S>                                <C>            <C>            <C>               <C>            <C>            <C>
Revenues from external customers   $ 5,422,334    $   567,737    $ 5,990,071       $ 5,738,137    $   578,940   $  6,317,077
Depreciation and amortization           49,767           -            49,767            45,807           -            45,807
Segment income (loss) before
   income taxes                      2,165,996        (46,054)     2,119,942         2,126,841        (39,988)     2,086,853


Segment Assets                       3,134,561        551,755      3,686,316         2,406,962        275,078      2,682,040

Capital Expenditure                     92,221           -            92,221            58,845           -            58,845


Reconciliation to Consolidated Amounts

Income before income taxes
----------------------------
Total income for reportable segments                             $ 2,119,942                                    $  2,086,853
Other income, net                                                    106,395                                          79,639
Corporate headquarters expense                                       (76,173)                                        (86,100)
                                                                  ----------                                       ---------
Consolidated earnings before income taxes                        $ 2,150,164                                    $  2,080,392
                                                                  ==========                                       =========

ASSETS
------
Total Assets for reportable segments                             $ 3,686,316                                    $  2,682,040
Corporate headquarters                                            11,272,847                                      10,052,092
                                                                 -----------                                      ----------
     Total consolidated assets                                   $14,959,163                                    $ 12,734,132
                                                                 ===========                                      ==========
</table>
<table>
<CAPTION>
                                                                  Three months ended June 30,
                                                     2004                                            2003
                                     ------------------------------------            ------------------------------------
                                     GUARDIAN       EASTERN         TOTAL            GUARDIAN       EASTERN         TOTAL
                                   ------------   ------------   -----------       ------------   ------------   -----------
<S>                                <C>            <C>            <C>               <C>            <C>           <C>
Revenues from external customers   $ 2,727,102    $   295,866    $ 3,022,968       $ 2,842,162    $   257,382   $  3,099,544
Depreciation and amortization           23,921           -            23,921            25,611           -            25,611
Segment income (loss) before
   income taxes                      1,062,065        (28,654)     1,033,411         1,013,127        (29,212)       983,915






</table>
                                       9
<page>
<table>
<caption>
Income before income taxes
----------------------------
<S>                                                              <C>                                            <C>
Total income for reportable segments                             $ 1,033,411                                    $    983,915
Other income, net                                                     49,320                                          39,898
Corporate headquarters expense                                       (37,634)                                        (38,850)
                                                                  ----------                                       ---------
Consolidated earnings before income taxes                        $ 1,045,097                                    $    984,963
                                                                  ==========                                       =========

</table>
Other significant items
-----------------------
<table>
<CAPTION>
                                                                  Six Months ended June 30,
                                                     2004                                           2003
                                   ------------------------------------------       -------------------------------------------
                                     Segment                     Consolidated          Segment                     Consolidated
                                      Totals       Corporate        Totals              Totals        Corporate       Totals
                                   ------------   ------------   -------------      -------------   ------------   ------------
<S>                                  <C>             <C>            <C>               <C>            <C>              <C>
Capital Expenditures                 $ 92,221        $ 6,803        $ 99,024          $ 58,845       $ 24,739         $ 83,584
Depreciation and amortization          49,767         53,413         103,180            45,807         56,732          102,539
</table>
Geographic Information
----------------------
<table>
<caption>
                                                       2004                                2003
                                           ---------------------------         ---------------------------
                                             Revenues       Long-Lived           Revenues      Long-Lived
                                                              Assets                              Assets
                                           -----------    -------------        -----------    -------------
<S>                                        <C>           <C>                   <C>           <C>
United States                              $ 2,936,424   $    1,022,160        $ 2,323,878   $    1,087,071
France                                         753,847                             714,879
Other countries                              2,299,800                           3,278,320
                                           -----------    -------------        -----------    -------------
                                           $ 5,990,071   $    1,022,160        $ 6,137,077   $    1,087,071
                                           ===========    =============        ===========    =============

Major Customers
---------------
Customer A (Guardian)*                     $ 2,527,401                         $ 2,230,979
Customer B (Guardian)                          627,476                             621,640
All other customers                          2,835,194                           3,464,458
                                           -----------                         -----------
                                           $ 5,990,071                         $ 6,317,077
                                           ===========                         ===========
</table>
     * At June 30, 2004 Customer A and B had balances  approximating 40% and 14%
respectively  of  accounts  receivable.  At June 30,  2003  Customer A and B had
balances approximating 25% and 9% respectively of accounts receivable.





                                       10
<page>
Item 2. Management's Discussion and Analysis or Plan of Operation

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 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 decides to
sell the  Eastern  operation  at some  future  date.  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 the Internet as a selling tool.

     Products  manufactured  by the Company are marketed  worldwide  through its
extensive marketing and distribution arrangements.  Currently 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 December 31, 2003, and a comparison of
the results of  operations  for the three and six month  periods  ended June 30,
2004  and  June  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 six month period ended June 30, 2004 net sales  decreased  $327,006
(5.2%) versus the comparable period in 2003. The Guardian  Laboratories division
("Guardian")  had a sales decrease of $315,803 (5.5%) while the Eastern Chemical
subsidiary ("Eastern") had a sales decrease of $11,203 (1.9%).

     For the three month period ended June 30, 2004 net sales decreased  $76,576
(2.5%) versus the comparable period in 2003.  Guardian sales decreased  $115,060
(4.0%) while Eastern sales increased $38,484 (15%).

     The  decreases in  Guardian's  sales is believed to be due mainly to normal
fluctuations in purchasing patterns of its customers. The six month decrease and
three month increase in Eastern's sales is believed to be partially attributable
to normal fluctuations in purchasing patterns of its customers, but the decrease
may  also  be  partially  due to  some  loss  of  business  due  to the  Company
maintaining lower inventory levels as compared to the prior year.








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

     Cost of  sales as a  percentage  of sales  decreased  to 43.4%  for the six
months ended June 30, 2004 from 48.3% for the  comparable  period ended June 30,
2003.  For the three month period ended June 30 2004 compared to the three month
period ended June 30, 2003 cost of sales as a percentage  of sales  decreased to
43.8%  from  49.1%.  These  decreases  are  mainly  due  to a  reduction  in the
capitalization  of  overhead  for the six and  three  month  periods  in 2004 as
compared to the comparable periods in the prior year.

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

     Operating  expenses  increased $84,679 (6.7%) for the six months ended June
30, 2004 compared to the  comparable  period in 2003. For the three month period
ended June 30,  2004  operating  expenses  increased  $70,526  (11.2%)  over the
comparable  period in 2003.  Increases  in expenses  for the six month and three
month  periods  were  mainly due to  increases  in  insurance  costs and payroll
related costs, including a bonus accrual.

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

     Investment  income increased  $27,248 (34.4%) for the six months ended June
30, 2004 when  compared to the  comparable  period in 2003 and $9,397 (23.5) for
the three months ended June 30, 2004 when compared to the  comparable  period in
2003.  This increase is  attributable to an increase in investment in bonds with
higher yields as opposed to  lower-yielding  money market funds and certificates
of deposit. Investment income is recorded net of brokerage fees.

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

     The provision for income taxes increased  $26,000 (3.5%) for the six months
ended June 30,  2004 as compared  to the  comparable  period in 2003 and $22,800
(6.5%) for the three months ended June 30, 2004 when compared to the  comparable
period in 2003.  The  increases for the six and three months ended June 30, 2004
when compared to the comparable period in 2003 are mainly due to an increases in
operating income and investment income.

LIQUIDITY AND CAPITAL RESOURCES

     Working  capital  increased  from  $11,599,502  at  December  31,  2003  to
$12,961,069  at June 30,  2004.  The current  ratio  increased  from 9.3 to 1 at
December 31, 2003 to 14.3 to 1 at June 30, 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 $1,113,239 and $1,446,419 for
the six months ended June 30, 2004 and June 30, 2003 respectively.  The decrease
was  primarily  due to the net effect of  increases  in  inventory  and accounts
receivable partially offset by an increase in accounts payable.





                                       13
<page>
     During  the six  month  period  ended  June 30,  2004  $71,617  was used in
investment  activities,  as compared to the six months  ended June 30, 2003 when
$1,722,528 was provided by investing activities. The change was primarily due to
the redemption of  certificates of deposit in 2003 and the purchase of temporary
investments in 2004 (primarily money market funds).

     Cash used in  financing  activities  was  $713,553 and $387,064 for the six
months ended June 30, 2004 and June 30, 2003  respectively.  The increase is due
primarily to an increase in dividends  paid during the six months ended June 30,
2004 as compared to the three months ended June 30, 2003.

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.

                       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




                                       14
<page>
        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

              On May 27, 2004 the Company filed a  report on Form 8-K pertaining
              to an earnings release that the Company had issued on May 7, 2004.


                                   SIGNATURES

     In accordance  with the  requirements  of the Exchange Act, the  registrant
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:  August 9, 2004





















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