**SECURITIES
AND EXCHANGE COMMISSION**


**WASHINGTON,
D.C. 20549**








**FORM
10-Q**








**[X]** **QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)**


**OF
THE SECURITIES EXCHANGE ACT OF 1934******


****


or


**[ 
 ]** **TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d)**


**OF
THE SECURITIES EXCHANGE ACT OF 1934**








For
      the quarter ended: April 30, 2005
    
    Commission
      file number: 001-07763





**MET-PRO
CORPORATION**


(Exact
name of registrant as specified in its charter)





**Pennsylvania**
    
    **23-1683282**(State
      or other jurisdiction of
    
    (I.R.S.
      Employerincorporation
      or organization)
    
    Identification
      No.)**160
      Cassell Road, P.O. Box 144****Harleysville,
      Pennsylvania**
    
    **19438**(Address
      of principal executive offices)
    
    (Zip
      Code)





Registrant’s
telephone number, including area code: (215) 723-6751





Indicate
      by check mark whether the Registrant (1) has filed all reports required to
      be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
      during the preceding 12 months and (2) has been subject to such filing
      requirements for the past 90 days. Yes X 
      NoIndicate
      by check mark whether the Registrant is an accelerated filer (as defined
      in Rule 12b-2 of the Exchange Act).  Yes X 
      NoAs of April 30, 2005 the Registrant had 8,388,575 Common Shares,
      par value of $.10 per share, issued and
outstanding.










**MET-PRO
CORPORATION**


**INDEX**
 
 **PART I - FINANCIAL INFORMATION****Item 1.**
    Financial Statements
 Consolidated Balance Sheet as of
      April 30, 2005 and January 31,
    2005
    2Consolidated Statement of Operations for the
      three-month
      periods ended April 30, 2005 and
      2004
    3Consolidated Statement of Shareholders’ Equity for the
      three-month periods ended April 30, 2005
      and 2004
    4Consolidated Statement of Cash Flows for the
      three-month
      periods ended April 30, 2005
      and 2004
    5Notes to Consolidated Financial
    Statements
    6Report of Independent Registered Public Accounting
      Firm
    10
 **Item 2.**
    Management’s Discussion and Analysis of Financial
      Conditionand Results of Operations
    11******Item 3.**
    Qualitative and Quantitative Disclosures about Market
      Risk
    15******Item 4.**
    Controls and Procedures
    15**PART II - OTHER INFORMATION********Item 1.**
    Legal Proceedings
    15**Item 2.**
    Unregistered Sales of Equity Securities and Use of
      Proceeds
    16******Item 3.**
    Defaults Upon Senior Securities
    16******Item 4.**
    Submission of Matters to a Vote of Security
      Holders
    16******Item 5.**
    Other Information
    16**Item 6.**
    Exhibits
    17**SIGNATURES**
    18


Index
 1
 **MET-PRO
CORPORATION**




**CONSOLIDATED BALANCE SHEET**


**(unaudited)**





**PART
      I - FINANCIAL INFORMATION****Item
      1.*****Financial Statements*****April
      30,**
    
    January
      31,**ASSETS**
    **2005**
    
    2005Current
      assetsCash and cash equivalents
    **$19,807,864**
    
    $20,889,476Accounts receivable, net of allowance for doubtfulaccounts of approximately $236,000 and$213,000, respectively
    **13,366,843**
    
    13,637,599Inventories
    **16,224,188**
    
    13,843,171Prepaid expenses, deposits and other current assets
    **1,189,342**
    
    1,250,098Deferred income taxes
    **650,151**
    
    650,151Total current assets
    **51,238,388**
    
    50,270,495Property,
      plant and equipment, net
    **11,141,929**
    
    11,287,253Costs
      in excess of net assets of businesses acquired, net
    **20,798,913**
    
    20,798,913Other
      assets
    **561,619**
    
    567,405**Total
      assets**
    **$83,740,849**
    
    $82,924,066**LIABILITIES
      AND SHAREHOLDERS' EQUITY**Current
      liabilitiesCurrent portion of long-term debt
    **$1,500,000**
    
    $1,500,910Accounts payable
    **4,664,685**
    
    5,028,074Accrued salaries, wages and expenses
    **5,482,855**
    
    5,397,195Dividend payable
    **650,115**
    
    648,381Customers' advances
    **1,914,386**
    
    1,293,332Total current liabilities
    **14,212,041**
    
    13,867,892Long-term
      debt
    **3,696,942**
    
    4,039,068Other
      non-current liabilities
    **41,564**
    
    41,015Deferred
      income taxes
    **1,825,603**
    
    1,810,900Total liabilities
    **19,776,150**
    
    19,758,875Shareholders'
      equityCommon shares, $.10 par value; 18,000,000 sharesauthorized, 9,634,956 shares issued,of which 1,246,381 and 1,266,914 shares were reacquiredand held in treasury at the respective dates
    **963,496**
    
    963,496Additional paid-in capital
    **7,922,603**
    
    7,930,646Retained earnings
    **66,700,406**
    
    66,032,446Accumulated other comprehensive income
    **48,037**
    
    100,635Treasury shares, at cost
    **(11,669,843**
    )
    (11,862,032
    )Total shareholders' equity
    **63,964,699**
    
    63,165,191**Total liabilities and shareholders'
equity**
    **$83,740,849**
    
    $82,924,066See
      accompanying notes to consolidated financial statements.




Index
 2
 **MET-PRO
CORPORATION**





**CONSOLIDATED STATEMENT OF
OPERATIONS**


**(unaudited)**


******Three
      Months Ended****April
      30,****2005**
    
    2004**Net
      sales**
    **$17,927,612**
    
    $15,634,646Cost
      of goods sold
    **11,973,337**
    
    10,572,214Gross
      profit
    **5,954,275**
    
    5,062,432**Operating
      expenses**Selling
    **1,954,263**
    
    1,932,368General and administrative
    **2,093,458**
    
    1,802,308**4,047,721**
    
    3,734,676Income
      from operations
    **1,906,554**
    
    1,327,756Interest
      expense
    **(66,052**
    **)**
    (96,847
    )Other
      income, net
    **126,989**
    
    2,804Income
      before taxes
    **1,967,491**
    
    1,233,713Provision
      for taxes
    **649,273**
    
    419,464**Net
      income**
    **$1,318,218**
    
    $814,249**Earnings
      per share, basic****(1)**
    **$.16**
    
    $.10**Earnings
      per share, diluted****(2)**
    **$.16**
    
    $.10**Cash
      dividend per share -
      declared** **(3)**
    **$.0775**
    
    $.0725**Cash
      dividend per share - paid****(3)**
    **$.0775**
    
    $.0725








(1)
    Basic
      earnings per share are based upon the weighted average number of shares
      outstanding of 8,381,731 and 8,342,386 for the three-month periods ended
      April 30, 2005 and 2004, respectively.(2)
    Diluted
      earnings per share are based upon the weighted average number of shares
      outstanding of 8,464,944 and 8,480,996 for the three-month periods ended
      April 30, 2005 and 2004, respectively.(3)
    The
      Board of Directors declared quarterly dividends of $.0775 per share
      payable on March 8, 2005 and June 8, 2005 to shareholders of record as of
      February 25, 2005 and May 27, 2005, respectively. Quarterly dividends of
      $.0725 per share were paid on March 10, 2004 and June 9, 2004 to
      shareholders of record as of February 27, 2004 and May 28, 2004,
      respectively.





See
accompanying notes to consolidated financial statements.





Index
 3
 **MET-PRO
CORPORATION**





**CONSOLIDATED STATEMENT OF SHAREHOLDERS'
EQUITY**


**(unaudited)**





******Accumulated****Additional**
    
    **Other****Common**
    **Paid-in**
    **Retained**
    **Comprehensive**
    **Treasury****Shares**
    **Capital**
    **Earnings**
    **Income/(Loss)**
    **Shares**
    **Total**


**Balances,
      January 31, 2005**
    $963,496
    $7,930,646
    
    $66,032,446
    
    $100,635
    
    ($11,862,032
    )
    $63,165,191Comprehensive
      income:Net income
    -
    -
    
    1,318,218
    
    -
    
    -Cumulative translation adjustment
    -
    -
    
    -
    
    (79,432
    )
    -Interest rate swap,net of tax of****($15,292)
    -
    -
    
    -
    
    26,834
    
    -Total comprehensive income
    
    
    
    
    
    
    
    
    
    1,265,620Dividends
      declared, $.0775 pershare
    -
    -
    
    (650,258
    )
    -
    
    -
    
    (650,258
    )Stock
      option transactions
    -
    (8,043
    )
    -
    
    -
    
    192,189
    
    184,146**Balances,
      April 30, 2005**
    $963,496
    $7,922,603
    
    $66,700,406
    
    $48,037
    
    ($11,669,843
    )
    $63,964,699


**Accumulated****Additional**
    
    **Other****Common**
    **Paid-in**
    **Retained**
    **Comprehensive**
    **Treasury****Shares**
    **Capital**
    **Earnings**
    **Income/(Loss)**
    **Shares**
    **Total**


**Balances,
      January 31, 2004**
    $963,496
    $7,955,459
    
    $63,727,425
    
    ($328,616
    )
    ($12,047,030
    )
    $60,270,734Comprehensive
      income:Net income
    -
    -
    
    814,249
    
    -
    
    -Cumulative translation adjustment
    -
    -
    
    -
    
    (125,961
    )
    -Interest rate swap,net of tax of ($29,031)
    -
    -
    
    -
    
    56,355
    
    -Total comprehensive income
    
    
    
    
    
    
    
    
    
    744,643Dividends
      declared, $.0725 pershare
    -
    -
    
    (606,347
    )
    -
    
    -
    
    (606,347
    )Stock
      option transactions
    -
    (28,462
    )
    -
    
    -
    
    552,651
    
    524,189Purchase
      of 28,717 shares oftreasury stock
    -
    -
    
    -
    
    -
    
    (481,687
    )
    (481,687
    )**Balances,
      April 30, 2004**
    $963,496
    $7,926,997
    
    $63,935,327
    
    ($398,222
    )
    ($11,976,066
    )
    $60,451,532See
      accompanying notes to consolidated financial
statements










Index
 4
 **MET-PRO
CORPORATION**







**CONSOLIDATED STATEMENT OF CASH FLOWS**





**(unaudited)**


**Three
      Months Ended****April
      30,****2005**
    
    2004





**INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS**





**Cash
      flows from operating activities**Net Income
    
    
    **$1,318,218**
    
    $814,249Adjustments to reconcile net income to netcash provided by (used in) operating activities:Depreciation and amortization
    
    
    **374,519**
    
    358,256Deferred income taxes
    
    
    **(589**
    **)**
    (606
    )Loss on sale of property and equipment, net
    
    
    **12,198**
    
    -Allowance for doubtful accounts
    
    
    **23,066**
    
    (19,736
    )(Increase) decrease in operating assets:Accounts receivable
    
    
    **206,313**
    
    4,253,669Inventories
    
    
    **(2,402,889**
    **)**
    (1,384,106
    )Prepaid expenses, deposits and other current assets
    
    
    **57,228**
    
    (39,497
    )Other assets
    
    
    **(1,950**
    **)**
    (1,920
    )Increase (decrease) in operating liabilities:Accounts payable and accrued expenses
    
    
    **(264,409**
    **)**
    (1,121,513
    )Customers’ advances
    
    
    **623,810**
    
    55,869Other non-current liabilities
    
    
    **549**
    
    549Net
      cash provided by (used in) operating activities
    
    
    **(53,936**
    **)**
    2,915,214**Cash
      flows from investing activities**Proceeds from sale of property and equipment
    
    
    **12,330**
    
    -Acquisitions of property and equipment
    
    
    **(261,596**
    **)**
    (284,632
    )Net cash (used in) investing activities
    
    
    **(249,266**
    **)**
    (284,632
    )**Cash
      flows from financing activities**Reduction of debt
    
    
    **(300,910**
    **)**
    (309,232
    )Exercise of stock options
    
    
    **184,146**
    
    524,189Payment of dividends
    
    
    **(648,524**
    **)**
    (603,441
    )Purchase of treasury shares
    
    
    **-**
    
    (481,687
    )Net cash (used in) financing activities
    
    
    **(765,288**
    **)**
    (870,171
    )Effect
      of exchange rate changes on cash
    
    
    **(13,122**
    **)**
    (25,277
    )**Net
      increase (decrease) in cash and cash equivalents**
    
    
    **(1,081,612**
    **)**
    1,735,134Cash
      and cash equivalents at February 1
    
    
    **20,889,476**
    
    16,996,253**Cash
      and cash equivalents at April 30**
    
    
    **$19,807,864**
    
    $18,731,387See
      accompanying notes to consolidated financial
      statements.





Index
 5
 **MET-PRO
CORPORATION**





**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**





****


**NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Stock
Options:**The Company accounts for stock options under the provisions of
Accounting Principles Board Opinion (“APB”) No. 25, “Accounting for Stock Issued
to Employees”, and related interpretations. Accounting for the issuance of stock
options under the provisions of APB No. 25 typically does not result in
compensation expense for the Company since the exercise price of options is
normally established at the market price of the Company’s Common Shares on the
date granted. Statement of Financial Accounting Standards (“SFAS”) No. 123,
“Accounting for Stock-Based Compensation”, provides that the related expense may
be recorded in the basic financial statements or the pro forma effect on
earnings may be disclosed in the financial statements.





Pro forma
information regarding net income and earnings per share is required by SFAS No.
123, which requires that the information be determined as if we had accounted
for our stock options under the fair-value method. The fair value for these
options was established at the date of grant using the Black-Scholes pricing
model with the following assumptions: risk-free interest rates ranging from 3.1%
to 3.9%, dividend yield ranging from 2.3% to 3.7%, expected volatility of the
market price of the Company’s Common Stock of 32%, and an expected option life
of five years.





The
risk-free interest rates are based on the five-year treasury bill rates. For the
purpose of pro forma disclosures, the estimated fair value of the options is
amortized to expense over the options’ vesting periods.





The pro
forma information compared to reported information for the three-month period
ended April 30, 2005 and 2004 is presented in the following table:





Three
      Months EndedApril
      30,2005
    
    2004Net
      income:As reported
    $1,318,218
    
    $814,249Pro forma
    1,276,528
    
    761,645Basic
      earnings per share:As reported
    $.16
    
    $.10Pro forma
    .15
    
    .09Diluted
      earnings per share:As reported
    $.16
    
    $.10Pro forma
    .15
    
    .09





The pro
forma effects of applying SFAS No. 123 to the three-month periods ended April
30, 2005 and 2004 may not be representative of the pro forma effects in future
years. Based on the vesting schedule of the Company’s stock option grants, the
pro forma effects on earnings are most pronounced in the early years following
each grant. The timing and magnitude of any future grants are at the discretion
of the Company’s Board of Directors and cannot be assured.





Non-employee
directors of the Company are eligible to receive stock options for Common
Shares. These stock options are accounted for the same as stock options granted
to employees.





**Recent
Accounting Pronouncements:** In December 2003, the Financial Accounting
Standards Board (“FASB”) issued Finance Interpretation (“FIN”) No. 46(R),
“Consolidation of Variable Interest Entities”. FIN No. 46(R) addresses the
application of Accounting Research Bulletin No. 51, “Consolidated Financial
Statements”, to certain entities in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support. FIN No. 46(R) was effective for the Company on
February 1, 2004 and had no impact on its financial condition or results of
operations.





Index
 6
 **MET-PRO
CORPORATION**





**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**








In
November 2004, the FASB issued SFAS No. 151, "Inventory Costs". The new
Statement amends Accounting Research Bulletin No. 43, Chapter 4, "Inventory
Pricing," to clarify the accounting for abnormal amounts of idle facility
expense, freight, handling costs, and wasted material. This Statement requires
that those items be recognized as current period charges and requires that
allocation of fixed production overheads to the cost of conversion be based on
the normal capacity of the production facilities. This statement is effective
for fiscal years beginning after June 15, 2005. We do not expect adoption of
this Statement to have a material impact on the Company’s financial condition or
results of operations.




In
December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets -
An Amendment of APB Opinion No. 29." SFAS No. 153 eliminates the exception for
nonmonetary exchanges of similar productive assets and replaces it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. SFAS No. 153 specifies that a nonmonetary exchange has
commercial substance if the future cash flows of the entity are expected to
change significantly as a result of the exchange. SFAS No. 153 is effective for
fiscal periods beginning after June 15, 2005. The Company believes this
statement will not have a material impact on its results of operations or
financial position.





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”. This
Statement replaces SFAS No. 123 and supersedes Accounting Principles Board
(“APB”) No. 25. SFAS No. 123(R) will require the fair value of all stock option
awards issued to employees to be recorded as an expense over the related vesting
period. The Statement also requires the recognition of compensation expense for
the fair value of any unvested stock option awards outstanding at the date of
adoption. As permitted by SFAS No. 123, the Company currently accounts for
share-based payments to employees using the APB No. 25 intrinsic value method
and, as such, generally recognizes no compensation cost for employee stock
options. In April 2005, the effective date for this standard was changed to
require adoption of the standard at the beginning of the next fiscal year after
June 15, 2005. Accordingly, the adoption of SFAS No. 123(R)’s fair value method
will have an impact on our results of operations, although it will have no
impact on our overall financial position. Had we adopted SFAS No. 123(R) in
prior periods, the impact of that standard would have approximated the impact of
SFAS No. 123 as described in the disclosure of pro forma net income and earnings
per share on page 6.





**NOTE
2 - PRINCIPLES OF CONSOLIDATION**


The
consolidated financial statements include the accounts of Met-Pro Corporation
(“Met-Pro” or the “Company”) and its wholly-owned subsidiaries, Mefiag B.V.,
Flex-Kleen Canada Inc., Strobic Air Corporation, MPC Inc. and Pristine
Hydrochemical Inc. Significant intercompany accounts and transactions have been
eliminated.





**NOTE
3 - BASIS OF PRESENTATION**


In the
opinion of management, the accompanying unaudited financial statements contain
all adjustments necessary to present fairly the financial position as of April
30, 2005 and the results of operations, changes in shareholders’ equity and cash
flows for the three-month periods ended April 30, 2005 and 2004. The results of
operations for the three-month periods ended April 30, 2005 and 2004 are not
necessarily indicative of the results to be expected for the full year. These
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements and notes thereto contained in the Company’s
Annual Report on Form 10-K for the year ended January 31, 2005.




Index
 7
 **MET-PRO
CORPORATION**


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**





**NOTE
4 - INVENTORIES**





Inventories
consisted of the following:





April
      30,
    
    January
      31,2005
    
    2005Raw
      materials
    $9,335,623
    
    $7,965,553Work
      in progress
    1,971,761
    
    1,682,391Finished
      goods
    4,916,804
    
    4,195,227$16,224,188
    
    $13,843,171








**NOTE
5 - SUPPLEMENTAL CASH FLOW INFORMATION**





Net cash
flows from operating activities reflect cash payments for interest and income
taxes as follows:





Three
      Months EndedApril
      30,2005
    
    2004Cash
      paid during the period for:Interest
    $62,796
    
    $86,306Income
      taxes
    45,812
    
    51,800








**NOTE
6 - OTHER INCOME, NET**





Other
income, net was comprised of the following:








Three
      Months EndedApril
      30,
 2005
    
    2004(Loss)
      on sale of property and equipment
    ($12,198
    )
    $      
       -Other,
      primarily interest income
    139,187
    
    80,465Unusual
      charge - patent litigation
    -
    
    (77,661
    )$126,989
    
    $2,804













Index
 8
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**





**NOTE
7 - BUSINESS SEGMENT DATA**





The
Company’s operations are conducted in two business segments: the manufacture and
sale of product recovery/pollution control equipment, and the manufacture and
sale of fluid handling equipment.





No
significant intercompany revenue is realized by either business segment.
Interest income and expense are not included in the measure of segment profit
reviewed by management. Income taxes are also not included in the measure of
segment operating profit reviewed by management.





Financial
information by business segment is shown below:








Three
      Months EndedApril 30,2005
    
    2004**Net
      sales**Product recovery/pollution control equipment
    $10,244,280
    
    $9,251,532Fluid handling equipment
    7,683,332
    
    6,383,114$17,927,612
    
    $15,634,646**Income
      from operations**Product recovery/pollution control equipment
    $929,992
    
    $587,088Fluid handling equipment
    976,562
    
    740,668$1,906,554
    
    $1,327,756








****


April
      30,
    
    January
      31,2005
    
    2005**Identifiable
      assets**Product recovery/pollution control equipment
    $42,609,496
    
    $41,554,730Fluid handling equipment
    20,216,194
    
    19,784,08362,825,690
    
    61,338,813Corporate
    20,915,159
    
    21,585,253$83,740,849
    
    $82,924,066








**NOTE
8 - ACCOUNTANTS’ 10-Q REVIEW**





Margolis
& Company P.C., the Company’s independent accountants, has performed a
limited review of the financial information included herein. Their report on
such review accompanies this filing.











Index
 9
 **MET-PRO
CORPORATION**




**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM**










To the
Board of Directors


Met-Pro
Corporation


Harleysville,
Pennsylvania





We have
reviewed the accompanying consolidated balance sheet of Met-Pro Corporation and
its wholly-owned subsidiaries as of April 30, 2005, and the related consolidated
statements of operations, shareholders’ equity, and cash flows for the
three-month periods ended April 30, 2005 and 2004. These financial statements
are the responsibility of the Company’s management.





We
conducted our reviews in accordance with the standards of the Public Accounting
Oversight Board (United States). A review of interim financial information
consists principally of applying analytical procedures to financial data and
making inquiries of persons responsible for financial and accounting matters. It
is substantially less in scope than an audit conducted in accordance with the
standards of Public Accounting Oversight Board, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.





Based on
our reviews, we are not aware of any material modifications that should be made
to the accompanying interim consolidated financial statements for them to be in
conformity with U.S. generally accepted accounting principles.





We have
previously audited, in accordance with the standards of the Public Accounting
Oversight Board, the consolidated balance sheet of Met-Pro Corporation and its
wholly-owned subsidiaries as of January 31, 2005, and the related consolidated
statements of operations, shareholders’ equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 25, 2005, we
expressed an unqualified opinion on those financial statements. In our opinion,
the information set forth in the accompanying consolidated balance sheet as of
January 31, 2005, is fairly stated, in all material respects, in relation to the
balance sheet from which it has been derived.














/s/ Margolis & Company
P.C.


Certified Public Accountants














Bala
Cynwyd, Pennsylvania


May 18,
2005
























Index
 10
 **MET-PRO
CORPORATION**








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





******


***Results
of Operations:***







**Three
      Months Ended****April
      30,****2005**
    
    **2004**Net
      sales
    **100.0**
    **%**
    100.0
    %Cost
      of goods sold
    **66.8**
    **%**
    67.6
    %Gross
      profit
    **33.2**
    **%**
    32.4
    %Selling
      expenses
    **10.9**
    **%**
    12.4
    %General
      and administrative expenses
    **11.7**
    **%**
    11.5
    %Income
      from operations
    **10.6**
    **%**
    8.5
    %Interest
      expense
    **(.4**
    **%)**
    (.6
    %)Other
      income, net
    **.8**
    **%**
    -Income
      before taxes
    **11.0**
    **%**
    7.9
    %Provision
      for taxes
    **3.6**
    **%**
    2.7
    %Net
      income
    **7.4**
    **%**
    5.2
    %





***Three
Months Ended April 30, 2005 vs Three Months Ended April 30,
2004***





Net sales
for the three-month period ended April 30, 2005 were $17,927,612 compared to
$15,634,646 for the three-month period ended April 30, 2004, an increase of
$2,292,966 or 14.7%. Sales in the Fluid Handling Equipment segment were
$7,683,332 or 20.4% higher compared to the three-month period ended April 30,
2004. Sales in the Product Recovery/Pollution Control Equipment segment were
$10,244,280 or 10.7% higher than the three-month period ended April 30, 2004.





Backlog
at April 30, 2005 totaled $18,261,846 compared to $11,857,264 at April 30, 2004.
In addition, at April 30, 2005, the Company had orders of $3,977,076 compared to
$4,237,564 at April 30, 2004, which are not included in our backlog due to the
Company’s long-standing policy of not including these orders in backlog until
engineering drawings are approved.





Net
income for the three-month period ended April 30, 2005 was $1,318,218 compared
to $814,249 for the three-month period ended April 30, 2004, an increase of
$503,969 or 61.9%. The increase in net income was primarily related to higher
sales in both operating segments, combined with higher gross margins in the
Product Recovery/Pollution Control Equipment segment.





The gross
margin for the three-month period ended April 30, 2005 was 33.2% compared to
32.4% for the same period last year. The increase in gross margin is due to
higher gross margins in the Product Recovery/Pollution Control Equipment
segment.





Selling
expenses increased $21,895 during the three-month period ended April 30, 2005
compared to the same period last year. As a percentage of net sales, selling
expenses were 10.9% for the three-month period ended April 30, 2005 compared to
12.4% for the same period last year.




Index
 11
 **MET-PRO
CORPORATION**








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


General
and administrative expense was $2,093,458 for the three-month period ended April
30, 2005 compared to $1,802,308 for the three-month period ended April 30, 2004,
an increase of $291,150. General and administrative expense for the three-month
period ended April 30, 2005 was 11.7% of net sales, compared to 11.5% of net
sales for the same period last year. This increase in part is related to higher
health care costs combined with an increase in the accrual for the management
incentive program.





Interest
expense was $66,052 for the three-month period ended April 30, 2005 compared to
$96,847 for the same period in the prior year, a decrease of 31.8%. This
decrease was due principally to a reduction of existing long-term debt.





Other
income, net, was $126,989 for the three-month period ended April 30, 2005
compared to $2,804 in the same period in the prior year. This change is related
to higher interest income earned on the cash on hand, combined with the
reduction in legal expenses incurred in defending against allegations that
products sold by one of the Company’s divisions infringed a competitor’s
intellectual property rights. Neither the settlement nor the legal fees incurred
after January 31, 2004 were material in the fiscal year ended January 31,
2005.





The
effective tax rate for the three-month periods ended April 30, 2005 and April
30, 2004 was 33.0% and 34.0%, respectively.





***Liquidity:***





The
Company’s cash and cash equivalents were $19,807,864 on April 30, 2005 compared
to $20,889,476 on January 31, 2005, a decrease of $1,081,612. This decrease is
the net result of the cash flows used in operating activities totaling $53,936,
payments of the quarterly cash dividends amounting to $648,524, payments on
long-term debt totaling $300,910, exchange rate changes of $13,122 and
investment in property and equipment amounting to $261,596, offset by the
exercise of stock options amounting to $184,146 and the proceeds from the sale
of property and equipment totaling $12,330. The Company’s cash flows from
operating activities are influenced by the timing of shipments and negotiated
standard payment terms, including retention associated with major
projects.





Accounts
receivable (net) amounted to $13,366,843 on April 30, 2005 compared to
$13,637,599 on January 31, 2005, which represents a decrease of $270,756. The
timing and size of shipments and retainage on contracts, especially in the
Product Recovery/Pollution Control Equipment segment, will influence accounts
receivable balances at any point in time.





Inventories
were $16,224,188 on April 30, 2005 compared to $13,843,171 on January 31, 2005,
an increase of $2,381,017. This increase is due to inventory purchased in the
three-month period ended April 30, 2005 for projects which are expected to ship
in the second and third quarters of this fiscal year. Inventory balances
fluctuate depending on market demand and on the timing and size of shipments,
especially when major systems and contracts are involved.





Current
liabilities amounted to $14,212,041 on April 30, 2005 compared to $13,867,892 on
January 31, 2005, an increase of $344,149. An increase in customers’ advances
and accrued expenses accounted for this increase.





The
Company has consistently maintained a high current ratio and has not utilized
either the domestic line of credit or the foreign line of credit together
totaling $5 million, which are available for working capital purposes. Cash
flows, in general, have exceeded the current needs of the Company. The Company
presently foresees no change in this situation in the immediate future. As of
April 30, 2005 and January 31, 2005, working capital was $37,026,347 and
$36,402,603, respectively, and the current ratio was 3.6 on both
dates.





***Capital
Resources and Requirements:***





Cash
flows used in operating activities during the three-month period ended April 30,
2005 amounted to $53,936 compared with cash flows provided by operating
activities amounting to $2,915,214 in the three-month period ended April 30,
2004. This decrease in cash flows from operating activities was due principally
to (i) the increase in inventories, (ii) the decrease in accounts payable, which
were offset by the increase in net income and customers’ advances and (iii) the
decrease in accounts receivable for the three-month period ended April 30,
2004.





Index
 12
 **MET-PRO
CORPORATION**





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


******


Cash
flows used in investing activities during the three-month period ended April 30,
2005 amounted to $249,266 compared with $284,632 for the three-month period
ended April 30, 2004. The Company’s investing activities principally represent
the acquisitions of property, plant and equipment in the two operating segments
during both years.





Consistent
with past practices, the Company intends to continue to invest in new product
development programs and to make capital expenditures to support the ongoing
operations during the coming year. The Company expects to finance all routine
capital expenditure requirements through cash flows generated from
operations.





Financing
activities during the three-month period ended April 30, 2005 utilized $765,288
of available resources compared to $870,171 for the three-month period ended
April 30, 2004. The 2005 activity is the result of the payments of the quarterly
cash dividends amounting to $648,524 and the reduction of long-term debt
totaling $300,910, offset by the exercise of stock options amounting to
$184,146.





The Board
of Directors declared quarterly dividends of $.0775 per share payable on March
8, 2005 and June 8, 2005 to shareholders of record as of February 25, 2005 and
May 27, 2005, respectively.





***Critical
Accounting Policies and Estimates:***





Management’s
discussion and analysis of financial position and results of operations are
based upon the Company’s consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenue and expenses and related disclosure of contingent
assets and liabilities. The significant accounting policies which we believe are
the most critical to aid in fully understanding and evaluating our reported
financial results include the following:





The
Company’s revenues are generally recognized when products are shipped to
unaffiliated customers. The Securities and Exchange Commission’s Staff
Accounting Bulletin (“SAB”) No. 101, “Revenue Recognition”, provides guidance on
the application of generally accepted accounting principles to selected revenue
recognition issues. The Company has concluded that its revenue recognition
policy is appropriate and in accordance with generally accepted accounting
principles and SAB No. 101.





Property,
plant and equipment, intangible and certain other long-lived assets are
depreciated and amortized over their useful lives. Useful lives are based on
management’s estimates of the period that the assets will generate revenue.
Intangible assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. In accordance with SFAS No. 142, “Goodwill and Other Intangible
Assets”, which supersedes Accounting Principles Board (“APB”) No. 17,
“Intangible Assets”, effective February 1, 2002, the Company’s unamortized
goodwill balance is not being amortized over its estimated useful life; rather,
it is being assessed at least annually for impairment.





The
determination of our obligation and expense for pension benefits is dependent on
our selection of certain assumptions used by actuaries in calculating such
amounts. These assumptions include, among others, the discount rate, expected
long-term rate of return on plan assets and rates of increase in compensation.
In accordance with generally accepted accounting principles, actual results that
differ from our assumptions are accumulated and amortized over future periods
and therefore generally affect our recognized expense and recorded obligation in
such future periods. While we believe that our assumptions are appropriate,
significant differences in our actual experience or significant changes in our
assumptions may materially affect our pension obligations and our future
expense.





Index
 13
 **MET-PRO
CORPORATION**





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








***Cautionary
Statement Concerning Forward-Looking Statements:***





Our
prospects are subject to certain uncertainties and risk. This Quarterly Report
on Form 10-Q also contains certain forward-looking statements within the meaning
of the Federal securities laws. These forward-looking statements may be
identified by words describing our belief or expectation, such as where we say
that we “believe”, “expect” or “anticipate”, or where we characterize something
in a manner in which there is an express or implicit reference to the future,
such as “non-recurring” or “unusual,” or where we express that our view is based
upon the “current status” of a given matter, or upon facts as we know them as of
the date of the statement. The content and/or context of other statements that
we make may indicate that the statement is “forward-looking”. We claim the “safe
harbor” provided by The Private Securities Reform Act of 1995 for all
forward-looking statements.





Our
future results of operations and financial condition may differ materially from
those suggested in forward-looking statements which we make in our Securities
and Exchange Commission (“SEC”) filings and other public statements, as a result
of events and occurrences relating to one or more of the factors set forth
below, one time events or occurrences which are not reflected in the factors
indicated below, or relating to factors disclosed previously or disclosed in the
future in Met-Pro’s filings with the Securities and Exchange
Commission.





The
following important factors, along with those discussed elsewhere in this
Quarterly Report on Form 10-Q, could affect our future financial condition and
results of operations, and could cause our future financial condition and
results of operations to differ materially from those expressed in our SEC
filings and in our forward-looking statements:





·
    the
      write-down of costs in excess of net assets of businesses acquired
      (goodwill), as a result of the determination that the acquired business is
      impaired. Our Flex-Kleen Division, which initially performed well after
      being acquired by Met-Pro, thereafter had several years of declining
      performance which we attributed primarily to a general weakness in its
      served markets, followed by improved performance in the fiscal year ended
      January 31, 2005 as compared to the prior year. During the fiscal year
      ended January 31, 2005, we performed an impairment analysis of the $11.1
      million of goodwill that the Company carries for Flex-Kleen and concluded
      that no impairment has occurred. Flex-Kleen’s performance needs to
      continue to improve in order for us not to be required to write-off some
      or all of its goodwill;


·
    materially
      adverse changes in economic conditions in the markets served by us or in
      significant customers of ours;


·
    material
      changes in available
technology;


·
    adverse
      developments in the asbestos cases that have been filed against the
      Company, including without limitation the exhaustion of insurance
      coverage, the imposition of punitive damages or other adverse developments
      in the availability of insurance
coverage;


·
    changes
      in accounting rules promulgated by regulatory agencies, including the SEC,
      which could result in an impact on
earnings;


·
    the
      cost of compliance with Sarbanes-Oxley and other applicable legal and
      listing requirements, and the unanticipated possibility that Met-Pro may
      not meet these requirements;


·
    unexpected
      results in our product development
activities;


·
    loss
      of key customers;


·
    changes
      in product mix and the cost of materials, with effect on
      margins;


·
    changes
      in our existing management;


·
    exchange
      rate fluctuations;


·
    changes
      in federal laws, state laws and
regulations;


·
    lower
      than anticipated return on investments in the Company’s defined benefit
      plans, which could affect the amount of the Company’s pension
      liabilities;


·
    the
      assertion of litigation claims that the Company’s products, including
      products produced by companies acquired by the Company, infringe third
      party patents or have caused injury, loss or
damage;


·
    the
      effect of acquisitions and other strategic
ventures;


·
    failure
      to properly quote and/or execute customer orders, including
      misspecifications, design, engineering or production
    errors;


·
    the
      cancellation or delay of purchase orders or
shipments;


·
    losses
      related to international sales;
and/or


·
    failure
      in execution of acquisition
strategy.






Index
 14
 **MET-PRO
CORPORATION**





**Item 3.*****Qualitative and
Quantitative Disclosures about Market Risk***





We have
no disclosure to make with respect to this Item.





**Item 4.*****Controls and
Procedures***





(a)
Evaluation of Disclosure Controls and Procedures





Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures as of the end of the period covered by this report. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that our disclosure controls and procedures as of the end of the period covered
by this report are functioning effectively to provide reasonable assurance that
the information required to be disclosed by us in reports filed under the
Securities Exchange Act of 1934 is (i) recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms and (ii)
accumulated and communicated to our management, including the Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding disclosure.





(b)
Changes in Internal Control over Financial Reporting





No change
in our internal control over financial reporting occurred during our most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.








**PART II - OTHER INFORMATION**





**Item 1.** ***Legal
Proceedings***





*Certain
of the statements made in this Item 1 (and elsewhere in this Report) are
“forward-looking” statements which are subject to the considerations set forth
in “Cautionary Statement Regarding Forward-Looking Statements” located in the
Management’s Discussion and Analysis of Financial Condition and Results of
Operations section of this Report, and we refer you to these
considerations.*





There
appears to have been a significant increase during the last several years in
asbestos-related litigation claims filed in particular states on both a single
plaintiff and on a mass basis by large numbers of plaintiffs against a large
number of industrial companies including those in the pump and fluid handling
industries, and beginning in 2002 and continuing through the date of this
Report, the Company and/or one of its divisions began to be named as one of many
defendants in a number of such cases, predominantly in Mississippi. The
allegations against the Company and/or this division are vague, general and
speculative, but in general allege that the Company, or the division, along with
the numerous other defendants, sold unidentified asbestos-containing products
and engaged in other related actions which caused injuries and loss to the
plaintiffs. Based upon the current status of these cases, the Company believes
that these cases are without merit and that none of its products were a cause of
any injury or loss to any of the plaintiffs. The Company’s insurers have hired
attorneys who together with the Company are vigorously defending these cases.
The Company and/or the division has resolved and been dismissed from a number of
these cases. Most of these cases have not advanced beyond the early stages of
discovery, although several cases have been scheduled for trial. Given the
current status of these cases, the Company does not presently believe that these
proceedings will have a material adverse impact upon the Company’s results of
operations, liquidity or financial condition.





The
Company is also party to a small number of other legal proceedings arising out
of the ordinary course of business or other proceedings that the Company does
not presently believe will have a material adverse impact upon the Company’s
results of operations, liquidity or financial condition.








Index
 15
 **MET-PRO
CORPORATION**








**Item 2.*****Unregistered Sales of
Equity Securities and Use of Proceeds***





(a)
    During
      the first quarter ended April 30, 2005, the Company did not sell any of
      our equity securities that were not registered under the Securities Act of
      1933.





(b)
    Not
      applicable





(c)
    The
      following table summarizes Met-Pro’s purchases of its Common Shares for
      the quarter ended April 30,
2005:





**Issuer
Purchases of**


**Equity
Securities**


Period
    
    Total
      Number
      of
      Shares
      Purchased
    
    Average
      Price
      Paid
      Per
      Share
    
    Total
      Number
      of
      Shares
      Purchased
      As
      Part of
      Publicly
      Announced
      Plans
      or
      Programs
    
    Maximum
      Number
      of
      Shares
      That
      May
      Yet
      be
      Purchased
      Under
      the
      Plan
      or
      Programs
    (1)February
      1-28, 2005
    
    0
    
    $               
      -
    
    0
    
    212,599March
      1-31, 2005
    
    0
    
    -
    
    0
    
    212,599April
      1-30, 2005
    
    0
    
    -
    
    0
    
    212,599Total
    
    0
    
    $               
      -
    
    0
    
    212,599





(1)
    On
      December 15, 2000, our Board of Directors authorized a Common Share
      repurchase program that was publicly announced on December 19, 2000, for
      up to 400,000 (adjusted for stock split) shares. The program has no fixed
      expiration date.





**Item 3.**  ***Defaults Upon Senior
Securities***





None





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





None





**Item 5.*****Other
Information***





None











Index
 16
 **MET-PRO
CORPORATION**








**Item 6.*****Exhibits***





(a)
    Exhibits
      Required by Item 601 of Regulation S-KExhibit
      No.
    
    Description31.1
    
    Certification of Chief Executive
      Officer,under
      Section 302 of theSarbanes-Oxley
      Act of 2002.*31.2
    
    Certification of Chief Financial
      Officer,under
      Section 302 of theSarbanes-Oxley
      Act of 2002.*32.1
    
    Certification of Chief Executive
      Officer,Pursuant
      18 U.S.C. Section 1350.*32.2
    
    Certification of Chief Financial
      Officer,Pursuant
      18 U.S.C. Section 1350.*





* Filed herewith.

































Index
 17
 **MET-PRO
CORPORATION**





**SIGNATURES**








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


**Met-Pro
      Corporation**(Registrant)
 ****           
****
 
 
 
 June
      1, 2005
    
    /s/
      Raymond J. De Hont**Raymond
      J. De Hont****Chairman,
      President and Chief Executive****Officer**
 
  June
      1, 2005
    
    /s/
      Gary J. Morgan**Gary
      J. Morgan****Vice
      President of Finance,****Secretary
      and Treasurer, Chief****Financial
      Officer, Chief Accounting****Officer
      and Director**
 
   
 
 ****
 ****





Index
 18