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# UNITED STATES
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 FOR THE QUARTERLY PERIOD ENDED July 3, 2005
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------

| | o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------

| | Commission file number   1-2451
| | -------------------------------

NATIONAL PRESTO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

|WISCONSIN                                            |  | 39-0494170          | 
|---------------------------------------------------- |  | ------------------- | 
|(State or other jurisdiction of                      |  | (I.R.S. Employer    | 
|incorporation or organization)                       |  | Identification No.) | 
|3925 NORTH HASTINGS WAY                              | 
|EAU CLAIRE, WISCONSIN                                |  | 54703-3703          | 
|(Address of principal executive offices)             |  | (Zip Code)          | 
|(Registrants telephone number, including area code) |  | 715-839-2121        | 

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   Yes __X__   No _____

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

There were 6,826,215 shares of the Issuers Common Stock outstanding as
of the close of the period covered by this report.

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NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 3, 2005 and December 31, 2004
(Unaudited)
(Dollars in thousands)

|                                | 2005 |  | 2004
|------------------------------- | ---- |  | ----
|ASSETS                          |      |  |     
|CURRENT ASSETS:                 |      | 
|Cash and cash equivalents       |      |  |     
|                               
|Marketable securities           |      |  |     
|                               
|Accounts receivable, net        |      |  |     
|                               
|Inventories:                    |      | 
|Finished goods                  |      |  | $   
|                               
|Work in process                 |      |  |     
|                               
|Raw materials                   |      |  |     
|                                |      |  |     
|                               
|Other current assets            |      |  |     
|                                |      |  |     
|                               
|Total current assets            |      |  |     
|                               
|PROPERTY,  PLANT AND EQUIPMENT  |      |  |     
|                               
|Less allowance for depreciation |      |  |     
|                                |      |  |     
|                               
|OTHER ASSETS                    |      |  |     
|                               
|                                |      |  |     
|                                |      |  |     
|                                |      |  |     

The accompanying notes are an integral part of the financial statements.

Page 2

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NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 3, 2005 and December 31, 2004
(Unaudited)
(Dollars in thousands)

|                                              | 2005 |  | 2004
|--------------------------------------------- | ---- |  | ----
|LIABILITIES                                   |      |  |     
|CURRENT LIABILITIES:                          |      | 
|Accounts payable                              |      |  |     
|                                             
|Federal and state income taxes                |      |  |     
|                                             
|Accrued liabilities                           |      |  |     
|                                             
|                                              |      |  |     
|Total current liabilities                     |      |  |     
|                                             
|DEFERRED INCOME TAXES                         |      |  |     
|COMMITMENTS AND CONTINGENCIES                 |      |  |     
|                                             
|STOCKHOLDERS EQUITY                         
|                                             
|Common stock, $1 par value:                   |      | 
|Authorized: 12,000,000 shares                
|Issued: 7,440,518 shares                      |      |  | $   
|                                             
|Paid-in capital                               |      |  |     
|                                             
|Retained earnings                             |      |  |     
|                                             
|Accumulated other comprehensive income (loss) |      |  |     
|                                              |      |  |     
|                                             
|                                              |      |  |     
|                                             
|Treasury stock, at cost                       |      |  |     
|                                             
|                                              |      |  |     
|Total stockholders equity                    |      |  |     
|                                             
|                                              |      |  |     
|                                              |      |  |     
|                                              |      |  |     

The accompanying notes are an integral part of the financial statements.

Page 3

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NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months and Six Months Ended July 3, 2005 and July 4, 2004
(Unaudited)
(In thousands except per share data)

|                                                  | Three Months Ended |  | Six Months Ended
|------------------------------------------------- | ------------------ |  | ----------------
|
|Net sales                                         |                    |  | $               
|                                                 
|Cost of sales                                     |                    |  |                 
|                                                 
|                                                  |                    |  |                 
|Gross profit                                      |                    |  |                 
|                                                 
|Selling and general expenses                      |                    |  |                 
|                                                 
|                                                  |                    |  |                 
|Operating profit                                  |                    |  |                 
|                                                 
|Other income, principally interest                |                    |  |                 
|                                                 
|                                                  |                    |  |                 
|Earnings before provision for income taxes        |                    |  |                 
|                                                 
|Income tax provision                              |                    |  |                 
|                                                 
|                                                  |                    |  |                 
|Net earnings                                      |                    |  | $               
|                                                  |                    |  |                 
|                                                 
|Weighted average shares outstanding:              |                    | 
|Basic                                             |                    |  |                 
|                                                  |                    |  |                 
|Diluted                                           |                    |  |                 
|                                                  |                    |  |                 
|                                                 
|Net earnings per share:                          
|Basic                                             |                    |  | $               
|                                                  |                    |  |                 
|Diluted                                           |                    |  | $               
|                                                  |                    |  |                 
|                                                 
|Cash dividends declared and paid per common share |                    |  | $               
|                                                  |                    |  |                 

The accompanying notes are an integral part of the financial statements.

Page 4

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NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended July 3, 2005 and July 4, 2004
(Unaudited)
(Dollars in thousands)

|                                                    | 2005 |  | 2004
|--------------------------------------------------- | ---- |  | ----
|Cash flows from operating activities:               |      |  |     
|Net earnings                                        |      |  | $   
|Adjustments to reconcile net earnings to net        |      |  |     
|cash provided by operating activities:              |      |  |     
|Provision for depreciation                          |      |  |     
|Deferred Taxes                                      |      |  |     
|Other                                               |      |  |     
|Changes in:                                         |      |  |     
|Accounts receivable                                 |      |  |     
|Inventories                                         |      |  |     
|Other current assets                                |      |  |     
|Accounts payable and accrued liabilities            |      |  |     
|Federal and state income taxes                      |      |  |     
|                                                    |      |  |     
|Net cash used in operating activities               |      |  |     
|                                                    |      |  |     
|                                                   
|Cash flows from investing activities:               |      | 
|Marketable securities purchased                     |      |  |     
|Marketable securities - maturities and sales        |      |  |     
|Acquisition of property, plant and equipment        |      |  |     
|Acquisition of business                             |      |  |     
|Sale of property, plant and equipment               |      |  |     
|                                                    |      |  |     
|Net cash provided by (used in) investing activities |      |  |     
|                                                    |      |  |     
|                                                   
|Cash flows from financing activities:               |      |  |     
|Dividends paid                                      |      |  |     
|Purchase of treasury stock                          |      |  |     
|                                                    |      |  |     
|Net cash used in financing activities               |      |  |     
|                                                    |      |  |     
|                                                   
|Net decrease in cash and cash equivalents           |      |  |     
|Cash and cash equivalents at beginning of period    |      |  |     
|                                                    |      |  |     
|Cash and cash equivalents at end of period          |      |  | $   
|                                                    |      |  |     

The accompanying notes are an integral part of the financial statements.

Page 5

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NATIONAL PRESTO INDUSTRIES, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE A  EARNINGS PER SHARE

The Companys basic net earnings per share amounts have been computed by
dividing net earnings by the weighted average number of outstanding common shares. The Companys diluted net earnings per
share is computed by dividing net earnings by the weighted average number of outstanding common shares and common share
equivalents relating to stock options, when dilutive.

NOTE B  BUSINESS SEGMENTS

In the following summary, operating profit (loss) represents earnings (loss)
before other income, principally interest income and income taxes.

The Companys segments operate discretely from each other with no shared
manufacturing facilities. Costs associated with corporate activities (such as cash and marketable securities management) are
included within housewares/small appliances for all periods presented.

|                           | (in thousands)
|-------------------------- | --------------
|
|Quarter ended July 3, 2005 |               
|External net sales         |               
|Gross profit (loss)        |               
|Operating profit (loss)    |               
|Total assets               |               
|Depreciation               |               
|Capital expenditures       |               
|                          
|Quarter ended July 4, 2004 |               
|External net sales         |               
|Gross profit               |               
|Operating profit           |               
|Total assets               |               
|Depreciation               |               
|Capital expenditures       |               

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|                              | (in thousands)
|----------------------------- | --------------
|
|Six Months ended July 3, 2005 |               
|External net sales            |               
|Gross profit (loss)           |               
|Operating profit (loss)       |               
|Total assets                  |               
|Depreciation                  |               
|Capital expenditures          |               
|                             
|Six Months ended July 4, 2004 |               
|External net sales            |               
|Gross profit                  |               
|Operating profit (loss)       |               
|Total assets                  |               
|Depreciation                  |               
|Capital expenditures          |               

NOTE C  PRODUCT WARRANTY

Company housewares/small appliance products are generally warranted to the
original owner to be free from defects in material and workmanship for a period of 1 to 12 years from date of purchase. The
Company allows a 60-day over-the-counter initial return privilege through cooperating dealers. The Company services its products
through independent service providers throughout the United States and a corporate service repair operation. The Companys
service and warranty programs are competitive with those offered by other manufacturers in the industry. The Company determines
its product warranty liability based on historical percentages which have remained relatively consistent over the years.

The following table shows the changes in product warranty liability for the
period:

|                            | (in thousands)
|--------------------------- | --------------
|
|Beginning balance January 1 |               
|Accruals during the period  |               
|Charges / payments made    
|under the warranties        |               
|                            |               
|Balance end of period       |               
|                            |               

NOTE D  PENSION PLAN

During the third quarter of 2003, the Company announced its decision to
terminate its defined benefit pension plan and provide enhancements to its 401(k) plan. As a result, the plan was amended
effective December 31, 2003, to freeze benefit accruals. The amendment eliminated the accrual of future defined benefits for all
employees. A $3,528,000 settlement charge was recorded in the last half of 2004 when final distributions from the plan were made
or annuities purchased in exchange for participants rights to receive benefits under the plan.

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Components of net periodic pension cost for the three and six months ended
July 3, 2005 and July 4, 2004 are as follows:

|                               | (in thousands)
|------------------------------ | --------------
|
|
|Service cost                   |               
|Interest cost                  |               
|Expected return on assets      |               
|Net loss amortization          |               
|                               |               
|                               |               
|                               |               
|                              
|
|
|Discount rate                  |               
|Expected return on plan assets |               

NOTE E  PLANT CLOSING

In November 2001, the Company announced that continued erosion of product
pricing resulted in its decision to cease manufacturing housewares/small appliances in its U.S. plants, close those facilities,
and purchase most products from the Orient. This transition from U.S. plant production to the Orient was completed during late
2002. The Company closed its manufacturing facilities in Alamogordo, New Mexico, during the third quarter of 2002 and donated the
facility to the Otero County Economic Development Council during the fourth quarter of 2004. The Company effectively closed its
Jackson, Mississippi, plant during the fourth quarter of 2002 and has modified this plant to serve as a warehousing and shipping
facility.

The following table summarizes the plant closing accrual activities for the
periods presented:

|                        | (in thousands)
|----------------------- | --------------
|
|Balance January 1, 2005 |               
|Charges in 2005         |               
|                        |               
|Balance July 3, 2005    |               
|                        |               
|                       
|Balance January 1, 2004 |               
|Charges in 2004         |               
|                        |               
|Balance July 4, 2004    |               
|                        |               

The remaining employee termination benefits are for health care costs for
workers who accepted early retirement at the time of the plant closing and will be extinguished over approximately the next three
years.

The total outsourcing of all Company housewares/small appliance product
manufacturing resulted in the creation of a new LIFO inventory category for the outsourced products. During the three and six
months ended July 4, 2004, the Company recognized a $113,000 and $329,000 (or $.02 and $.05 per share), net of tax, respectively,
partial liquidation of the Manufactured LIFO Reserve. The remaining Manufactured LIFO Reserve of $157,000 was liquidated during
the last two quarters of 2004.

Page 8

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NOTE F  COMMITMENTS AND CONTINGENCIES

On July 16, 2002, the Securities and Exchange Commission filed a lawsuit
against National Presto Industries, Inc. alleging the company operated as an unregistered investment company. The case does not
involve fraud, deceptive practices or accounting methods, and the Company plans to vigorously defend itself. If unsuccessful the
Company may have to reallocate invested assets which will result in reduced yields or it might be required to register as an
investment company. In the latter situation, it would be prohibited from engaging in business in interstate commerce until
registration occurred. The obligations upon registration are many and could include: 1) possible imposition of significant
additional reporting requirements (a burden which would not be imposed upon its competitors); 2) potential regard in the market as
a closed end mutual fund which could result in a trading price sharply discounted from net asset value; 3) possible limitations on
the use of capital and earnings which could inhibit or terminate commercial business growth. Management is unable to make a
meaningful estimate of the overall impact on the Companys operations, if any, that would result from an unfavorable final
determination of this matter.

In addition, the Company is involved in other routine litigation incidental
to its business. Management believes the ultimate outcome of this litigation will not have a material affect on the Companys
consolidated financial position, liquidity, or results of operations.

NOTE G  ACCUMULATED OTHER COMPREHENSIVE INCOME

The $79,000 of accumulated comprehensive loss at July 3, 2005, reflects the
unrealized loss, net of tax, of available-for-sale marketable security investments. Total comprehensive income was $1,591,000 and
$1,046,000 for the three month periods ended July 3, 2005 and July 4, 2004, respectively, and $2,678,000 and $2,413,000 for the
six months ended July 3, 2005 and July 4, 2004, respectively.

NOTE H  ADOPTION OF NEW ACCOUNTING STANDARDS

In November 2004, the FASB issued SFAS 151, Inventory Costs. The
provisions of this statement become effective for the Company in fiscal 2006. SFAS 151 amends the existing guidance on the
recognition of inventory costs to clarify the accounting for abnormal amounts of idle expense, freight, handling costs, and wasted
material (spoilage). Existing rules indicate that under some circumstances, items such as idle facility expense, excessive
spoilage, double freight, and rehandling costs may be so abnormal as to require treatment as current period charges. SFAS 151
requires that those items be recognized as current period charges regardless of whether they meet the criterion of so
abnormal. In addition, SFAS 151 requires that allocation of fixed production overheads to the costs of conversion be based
on the normal capacity of the production facilities. The Companys existing policies with regard to inventory accounting are
consistent with the provisions of SFAS 151 and the adoption of this Statement is not expected to have a material impact on the
valuation of inventory or operating results.

In December 2004, the FASB issued SFAS 123R, Share-Based Payment.
This revised standard addresses the accounting for share-based payment transactions in which a company receives employee services
in exchange for either equity instruments of the company or that are based on the fair value of the companys equity
instruments or that may be settled by the issuance of such equity instruments. Under the new standard, companies will no longer be
able to account for share-based compensation transactions using the intrinsic method in accordance with APB 25. Instead, companies
will be required to account for such transactions using a fair-value method and recognize the expense in the consolidated
statement of income. SFAS 123R will be effective for annual periods beginning after June 15, 2005. The Company will adopt this
standard January 1, 2006 and it is not expected to have a material impact on our operating results.

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In December 2004, the FASB issued SFAS 153, Exchanges of Nonmonetary
Assets. This statement addresses the fair value concepts contained in Opinion 29, Accounting for Nonmonetary
Transactions which included certain exceptions to the concept that exchanges of similar productive assets should be recorded
at the carrying value of the asset relinquished. SFAS 153 eliminates that exception and replaces it with a general exception for
exchanges of nonmonetary assets that lack commercial substance. Only nonmonetary exchanges in which an entitys future cash
flows are expected to significantly change as a result of the exchange will be considered to have commercial substance. SFAS 153
must be applied to nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of this
Statement is not expected to have a material impact on our operating results.

NOTE I  INCOME TAXES

On October 22, 2004, Congress passed the American Jobs Creation Act of 2004
(the Act). The Act provides a deduction for income from qualified domestic production activities, which will be phased in from
2005 through 2010, as well as other tax implications. The domestic production deduction will be accounted for as a special
deduction and as such, will have no effect on deferred tax assets and liabilities existing at the date of enactment. It is not
currently possible to predict what impact this act will have on future earnings until final implementation guidance is issued.

NOTE J  RECLASSIFICATIONS

Certain reclassifications have been made to the prior periods financial
statements to conform with the 2005 financial statement presentation. These reclassifications did not affect net earnings or
stockholders equity as previously reported.

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The foregoing information for the periods ended July 3, 2005, and July 4,
2004, is unaudited; however, in the opinion of management of the Registrant, it reflects all the adjustments, which were of a
normal recurring nature, necessary for a fair statement of the results for the interim periods. The condensed consolidated balance
sheet as of December 31, 2004, is summarized from audited consolidated financial statements, but does not include all the
disclosures contained therein and should be read in conjunction with the 2004 Annual Report. Interim results for the period are
not indicative of those for the year.

Page 10

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ITEM 2.    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Forward-looking statements in
this Managements Discussion and Analysis of Financial Condition and Results of Operations, elsewhere in this Form 10-Q, in
the Companys 2004 Annual Report to Shareholders, in the Proxy Statement for the annual meeting held October 19, 2004, and in
the Companys press releases and oral statements made with the approval of an authorized executive officer are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. There are certain important factors that
could cause results to differ materially from those anticipated by some of the statements made herein. Investors are cautioned
that all forward-looking statements involve risks and uncertainty. In addition to the factors discussed herein and in the notes to
consolidated financial statements, among the other factors that could cause actual results to differ materially are the following:
consumer spending and debt levels; interest rates; continuity of relationships with and purchases by major customers; product mix;
the benefit and risk of business acquisitions; competitive pressure on sales and pricing; increases in material, freight/shipping,
or production cost which cannot be recouped in product pricing; delays or interruptions in shipping; cut backs by the US
government in defense spending, and the efficient start-up and utilization of capital equipment investments. Additional
information concerning those and other factors is contained in the Companys Securities and Exchange Commission filings,
copies of which are available from the Company without charge. The Company does not undertake any obligation to publicly update or
revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Comparison Second Quarter 2005 and 2004

Readers are directed to Note
B, Business Segments for data on the financial results of the Companys three business segments for the Quarters
ended July 3, 2005 and July 4, 2004.

On a consolidated basis,
sales increased by $9,880,000 (40%), gross margins increased by $608,000 (14%), selling and general expense increased by $671,000
(19%), and other income, principally interest, increased by $190,000 (19%). Earnings before the provision for income taxes
increased by $127,000 (7%), as did net earnings by $181,000 (13%). Details concerning these changes can be found in the comments
by segment found below.

Housewares/small appliance
net sales increased $1,211,000 from $15,310,000 to $16,521,000, or 8%, as a result of an increase in units shipped, resulting
primarily from new product introductions. Defense net sales increased by $5,692,000 from $3,271,000 to $8,963,000, or 174%,
primarily reflecting a unit volume increase stemming from partial fulfillment of an augmented backlog. Absorbent products net
sales increased by $2,977,000 from $6,208,000 to $9,185,000, or 48%, primarily reflecting increased sales from unit shipments.

Housewares/small appliance
gross profits for 2005 were relatively flat, increasing $210,000 from $3,268,000 to $3,478,000 (21% of sales). Defense gross
profits increased $1,336,000 from $614,000 (19% of sales) from the prior years quarter to $1,950,000 (22% of sales). The
increase reflected the increased sales referenced above. Absorbent products gross profit dropped $938,000 to a negative $497,000.
The decline stemmed from the combination of two factors which had an approximately comparable impact on margins: increased raw
material costs and cost inefficiencies primarily of a startup/learning curve nature related to the installation of new
state-of-the-art machinery.

Page 11

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The Company accrues for
unexpended selling and advertising costs, primarily for housewares/small appliances, budgeted for the year against each
quarters sales. Selling and advertising charges included in selling expense in each quarter represent that percentage of the
annual sales and advertising budget associated with that quarters shipments. Revisions to this budget result in periodic
changes to the accrued liability for committed selling and advertising expenditures. Housewares/small appliance selling and
general expenses increased $244,000, largely attributable to increases in the aforementioned accrual. Defense segment selling and
general expenses increased by $267,000, reflecting increased compensation and staffing commensurate with the segments
increased sales and earnings levels. Absorbent segment selling and general expenses increased by $160,000, reflecting an increase
in administrative costs related to the expansion of the segment.

The above items were
responsible for the change in operating profit.

Other income increased
$190,000 or 19% as a result of higher interest income of $276,000, resulting from increased yields on reduced dollars invested
(due to the use of funds for expansion of the defense and absorbent products segments). The increase was offset in part primarily
by reduced outside rental income of the Eau Claire facility, which has largely been converted to the production of absorbent
products.

Earnings before provision for
income taxes increased $127,000 from $1,762,000 to $1,889,000. The provision for income taxes decreased from $369,000 to $315,000,
which resulted in an effective income tax rate decrease from 21% to 17% as a result of decreased earnings subject to tax. Net
earnings increased $181,000 from $1,393,000 to $1,574,000, or 13%.

Comparison of First Six Months 2005 and 2004

Readers are directed to Note
B, Business Segments for data on the financial results of the Companys three business segments for the Six
Months ended July 3, 2005 and July 4, 2004.

On a consolidated basis,
sales increased by $19,325,000 (38%), gross margins increased by $1,287,000 (15%), selling and general expense increased by
$1,913,000 (27%), and other income, principally interest, increased by $235,000 (11%). Earnings before the provision for income
taxes decreased by $391,000 (10%), as did net earnings by $38,000 (1%). Details concerning these changes can be found in the
comments by segment found below.

Housewares/small appliance
net sales increased $2,746,000 from $32,610,000 to $35,356,000, or 8%, as a result of an increase in units shipped, resulting
primarily from new product introductions. Defense net sales increased by $11,657,000 from $5,193,000 to $16,850,000, or 225%,
primarily reflecting a unit volume increase stemming from partial fulfillment of an augmented backlog. Absorbent products net
sales increased by $4,922,000 from $12,900,000 to $17,822,000, or 38%, primarily reflecting increased sales from unit shipments.

Page 12

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Housewares/small appliance
gross profits for 2005 were relatively flat, increasing $496,000 from $6,749,000 to $7,245,000 (21% of sales). Defense gross
profits increased $2,996,000 from $922,000 (18% of sales) from the prior years quarter to $3,918,000 (23% of sales). The
increase reflected the increased sales referenced above. Absorbent products gross profit dropped $2,205,000 to a negative
$1,092,000. The decline stemmed from the combination of two factors which had an approximately comparable impact on margins:
increased raw material costs and cost inefficiencies primarily of a startup/learning curve nature related to the installation of
new state-of-the-art machinery.

The accrual for unexpended
advertising costs discussed in the Second Quarter comparison also applies to the first six months. Readers are also directed to
Note E, Plant Closing for a comparison of the first six months. Housewares/small appliance selling and general expenses increased
$833,000, largely attributable to increases in the aforementioned accrual. Defense segment selling and general expenses increased
by $787,000, reflecting increased compensation and staffing commensurate with the segments increased sales and earnings
levels. Absorbent segment selling and general expenses increased by $293,000, reflecting an increase in administrative costs
related to the expansion of the segment.

The above items were
responsible for the change in operating profit.

Other income increased
$235,000 or 11% as a result of higher interest income of $477,000 resulting from increased yields on reduced dollars invested (due
to the use of funds for expansion of the defense and absorbent products segments). The increase was offset in part primarily by
reduced outside rental income of the Eau Claire facility, which has largely been converted to the production of absorbent
products.

Earnings before provision for
income taxes decreased $391,000 from $3,730,000 to $3,339,000. The provision for income taxes decreased from $842,000 to $489,000,
which resulted in an effective income tax rate decrease from 23% to 15% as a result of decreased earnings subject to tax. Net
earnings decreased $38,000 from $2,888,000 to $2,850,000, or 1%.

Liquidity and Capital Resources

Cash used in operating
activities was $7,035,000 during the six months of 2005, as compared to $4,563,000 used during the first six months of 2004. The
principal factors behind the increase in cash used can be found in the changes in the components of working capital within the
Consolidated Statement of Cash Flows.

Net cash flows from Investing
activities during the first six months of 2005 increased by $23,345,000 over the prior period. The increase is attributable to two
factors. First, more instruments matured and were placed in cash equivalents during the review period than in the prior
years period, and second, payments for fixed asset additions were higher during the first six months of 2004 than in the
comparable 2005 period, reflecting the timing of payments for the equipment for the absorbent product expansion and the
modification of the Jackson, Mississippi plant to a warehousing and shipping facility.

Cash flows from financing
activities for the first six months of 2005 and 2004 primarily differed as a result of the $.50 per share increase in the extra
dividend paid during those periods.

Page 13

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Working capital decreased by
$11,711,000 to $197,061,000 at July 3, 2005. The Companys current ratio was 6.0 to 1.0 at July 3, 2005, compared to 5.3 to
1.0 at December 31, 2004.

As of July 3, 2005, there
were approximately $5,600,000 of open equipment purchase commitments to expand the product line in its absorbent products segment.
The Company expects to continue to evaluate acquisition opportunities that align with its business segments and will make further
acquisitions as well as continue to make capital investments in these segments if the appropriate return on investment is
projected.

The Company has substantial
liquidity in the form of cash and short-term maturity marketable securities to meet all of its anticipated capital requirements,
to make dividend payments, and to fund growth through acquisitions and other means. The company intends to continue its investment
strategy of safety and short-term liquidity throughout its investment holdings. The interest rate environment is a function of
national and international monetary policies as well as the growth and inflation rates of the U.S. and foreign economies and is
not controllable by the Company.

The Company may have
additional plant closing costs but is not aware of any such costs. However, plant closing activities of this nature are unique and
infrequent for the Company; therefore, these activities possess inherent risk that errors in the estimation process could occur.
Subject to the foregoing estimation risk, no major plant closing related expenses are expected in 2005.

CRITICAL ACCOUNTING POLICIES
        The preparation of the consolidated financial statements in accordance with
accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that
affect the amount of reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the
consolidated financial statements and revenues and expenses during the periods reported. Actual results may differ from those
estimates. The Company reviewed the development and selection of the critical accounting policies and believes the following are
the most critical accounting policies that could have an effect on the Companys reported results. These critical accounting
policies and estimates have been reviewed with the Audit Committee of the Board of Directors.

Inventories:   New housewares/small appliance product
introductions are an important part of the Companys sales to offset the morbidity rate of other housewares/small appliance
products and/or the effect of lowered acceptance of seasonal products due to weather conditions. New products entail unusual risks
and have occasionally in the past resulted in losses related to obsolete inventory as a result of low or diminishing demand for a
product. The Company did not have any major new product introductions or morbidity issues in the current period and, accordingly,
did not record a reserve for obsolete product. In the future should product demand issues arise, the Company may incur losses
related to the obsolescence of the related inventory.

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Insurance:   The Company is subject to product
liability claims in the normal course of business and is self-insured for health care costs. The Company insures for product
liability claims and retains a self-insured retention insurance accrual in the Companys financial statements. The Company
utilizes historical trends and other analysis to assist in determining the appropriate accrual. An increase in the number or
magnitude of claims could have a material impact on the Companys financial condition.

Environmental:   In May 1986, the Companys Eau
Claire, Wisconsin, site was placed on the United States Environmental Protection Agencys National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 because of hazardous waste deposited on the property.
By December 31, 1998, all remediation projects had been installed, were fully operational, and restoration activities had been
completed and accrued liabilities established for the expected cost of the activity. The Company believes its accrued liability
reserve will be adequate to satisfy ongoing remediation operations and monitoring activities; however, should environmental
agencies require additional studies or remediation projects, it is possible the existing accrual could be inadequate. The
Companys current environmental liability is based upon estimates of the future costs to maintain and operate remediation
projects and monitor their results based upon historical costs incurred for such activities.

NEW ACCOUNTING PRONOUNCEMENTS

Please refer to Note H for information related to the effect of adopting new
accounting pronouncements on the Companys consolidated financial statements.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Companys interest
income on cash equivalents and marketable securities is affected by changes in interest rates in the United States. Cash
equivalents include money market funds and 7-day variable rate demand notes which are highly liquid instruments with interest
rates set every 7 days that can be tendered to the remarketer upon 7 days notice for payment of principal and accrued interest
amounts. The 7 day tender feature of these variable rate demand notes are further supported by an irrevocable letter of credit
from highly rated U.S. banks. To the extent a bond is not remarketed at par plus accrued interest, the difference is drawn from
the banks letter of credit. The Companys investments are held primarily in fixed and variable rate municipal bonds
with an average life of less than one year. Accordingly, changes in interest rates have not had a material effect on the Company,
and the Company does not anticipate that future exposure to interest rate market risk will be material. The Company uses
sensitivity analysis to determine its exposure to changes in interest rates.

The Company has no history
of, and does not anticipate in the future, investing in derivative financial instruments. Most transactions with international
customers are entered into in U.S. dollars, precluding the need for foreign currency cash flow hedges. The Companys
manufacturing contracts with its foreign suppliers contain provisions to share the impact of fluctuations in the exchange rate
between the U.S. dollar and the Hong Kong dollar above and below a fixed range contained in the contracts. All transactions with
the foreign suppliers were within the exchange rate range specified in the contracts during 2005, 2004, and 2003. The impact of
the revaluation of the Chinese yuan is not known at this point in time; however, the revaluation could result in a cost increase
on future product purchases.

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ITEM 4.    CONTROLS AND PROCEDURES

The Companys
management, including the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness
of the design and operation of the Companys disclosure controls and procedures pursuant to Rule 13a-15 under the Securities
Exchange Act of 1934 (the 1934 Act) as of the end of the period covered by this report. Based on that evaluation, the
Companys Chief Executive Officer and Chief Financial Officer concluded that the Companys disclosure controls and
procedures are effective in ensuring that information required to be disclosed by the Company in the reports it files or submits
under the 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SECs rules and
forms.

There have been no changes in
internal controls over financial reporting during the fiscal quarter ended July 3, 2005, that have materially affected, or are
reasonably likely to materially affect, the Companys internal control over financial reporting.

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PART II  OTHER INFORMATION

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

| |  | See Note
E in the Notes to Consolidated Financial Statements set forth under Part I  Item 1
above.
| |  | ---------------------------------------------------------------------------------------------------

|Item 2. |  | Unregistered
Sales of Equity Securities and Use of Proceeds
|------- |  | -----------------------------------------------------------

| |  | There were
no purchases or sales of securities during the quarter ended July 3, 2005.
| |  | -------------------------------------------------------------------------------------

|Item 6. |  | Exhibits
and Reports on Form 8-K
|------- |  | --------------------------------

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

| |  | Exhibit 3 (i)  |  | Restated Articles of Incorporation  incorporated by
reference from Exhibit 3 (i) of the Companys quarterly report on Form 10-Q for the quarter ended July 6, 1997
| |  | --------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (ii)  |  | By-Laws  incorporated by reference from Exhibit 3 (ii) of
the Companys quarterly report on Form 10-Q for the quarter ended October 3, 1999
| |  | ------ |  | --------------------------------------------------------------------------------------------------------------------------------------------

| |  | Exhibit 9  |  | Voting Trust Agreement  incorporated by reference from
Exhibit 9 of the Companys quarterly report on Form 10-Q for the quarter ended July 6, 1997
| |  | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Exhibit 10.1  |  | 1988 Stock Option Plan  incorporated by reference from
Exhibit 10.1 of the Companys quarterly report on Form 10-Q for the quarter ended July 6, 1997
| |  | -------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Exhibit 10.2  |  | Form of Incentive Stock Option Agreement under the 1988 Stock
Option Plan  incorporated by reference from Exhibit 10.2 of the Companys quarterly report on Form 10-Q for the quarter
ended July 6, 1997
| |  | -------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Exhibit 11  |  | Statement regarding computation of per share earnings
| |  | ------------ |  | -----------------------------------------------------

| |  | Exhibit 31.1  |  | Certification of the Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
| |  | -------------- |  | -------------------------------------------------------------------------------------------------------

| |  | Exhibit 31.2  |  | Certification of the Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
| |  | -------------- |  | -------------------------------------------------------------------------------------------------------

| |  | Exhibit 32.1  |  | Certification of the Chief Executive Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
| |  | -------------- |  | -------------------------------------------------------------------------------------------------------

| |  | Exhibit 32.2  |  | Certification of the Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
| |  | -------------- |  | -------------------------------------------------------------------------------------------------------

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.

|                       |                                                                                                    | NATIONAL PRESTO INDUSTRIES, INC. | 
|---------------------- | -------------------------------------------------------------------------------------------------- | -------------------------------- | 
|                      
|Date:   August 9, 2005 |                                                                                                    | /s/   M. J. Cohen               
|                       |                                                                                                   
|                       | M. J. Cohen, Chair of the Board, ChiefExecutive Officer and President(Principal executive officer)
|                      
|Date:   August 9, 2005 |                                                                                                    | /s/   R. F. Lieble              
|                       |                                                                                                   
|                       | R. F. Lieble, Vice President andTreasurer/Chief Financial Officer(Principal accounting officer)   

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National Presto Industries, Inc.
Exhibit Index

| |  | ExhibitNumber |  | Exhibit Description |  | 
| |  | ------------- |  | ------------------- |  | 
| |  |               | 

| |  | 11 |  | Computation of Earnings per Share
| |  | -- |  | ---------------------------------

| |  | 31.1 |  | Chief Executive Officer Certification pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002
| |  | ---- |  | -----------------------------------------------------------------------------------------------

| |  | 31.2 |  | Chief Financial Officer Certification pursuant to Section 302 of
the Sarvanes-Oxley Act of 2002
| |  | ---- |  | -----------------------------------------------------------------------------------------------

| |  | 32.1 |  | Chief Executive Officer Certification pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
| |  | ---- |  | -----------------------------------------------------------------------------------------------

| |  | 32.2 |  | Chief Financial Officer Certification pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
| |  | ---- |  | -----------------------------------------------------------------------------------------------

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