# 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 October 3, 2004
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------

| | [   ] |  | 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 6,822,392 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
October 3, 2004 and December 31, 2003
(Unaudited)
(Dollars in thousands)

|                                | 2004 |  | 2003
|------------------------------- | ---- |  | ----
|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.



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NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
October 3, 2004 and December 31, 2003
(Unaudited)
(Dollars in thousands)

|                                              | 2004 |  | 2003
|--------------------------------------------- | ---- |  | ----
|LIABILITIES                                   |      |  |     
|CURRENT LIABILITIES:                          |      | 
|Accounts payable                              |      |  |     
|                                             
|Federal and state income taxes                |      |  |     
|                                             
|Accrued liabilities                           |      |  |     
|                                              |      |  |     
|                                             
|Total current liabilities                     |      |  |     
|                                             
|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.



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NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months and Nine Months ended October 3, 2004 and September 28, 2003
(Unaudited)
(In thousands except per share data)

|                                                  | Three Months Ended |  | Nine Months Ended
|------------------------------------------------- | ------------------ |  | -----------------
|
|                                                  |                    |  |                  
|Net sales                                         |                    |  | $                
|                                                 
|Cost of sales                                     |                    |  |                  
|                                                 
|                                                  |                    |  |                  
|Gross profit                                      |                    |  |                  
|                                                 
|Selling and general expenses                      |                    |  |                  
|                                                 
|Pension plan termination expense                  |                    |  |                  
|                                                 
|                                                  |                    |  |                  
|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.



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NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months ended October 3, 2004 and September 28, 2003
(Unaudited)
(Dollars in thousands)

|                                                     | 2004 |  | 2003
|---------------------------------------------------- | ---- |  | ----
|                                                     |     
|Cash flows from operating activities:                |      |  |     
|Net earnings                                         |      |  | $   
|Adjustments to reconcile net earnings to net         |      | 
|cash provided by operating activities:               |      | 
|Provision for depreciation                           |      |  |     
|Deferred Taxes                                       |      |  |     
|Pension charges                                      |      |  |     
|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 increase (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.



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NATIONAL PRESTO INDUSTRIES, INC., AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 October 3, 2004    |               
|External net sales               |               
|Gross profit                     |               
|Operating profit                 |               
|Total assets                     |               
|Depreciation                     |               
|Capital expenditures             |               
|Quarter ended September 28, 2003 |               
|External net sales               |               
|Gross profit (loss)              |               
|Operating profit (loss)          |               
|Total assets                     |               
|Depreciation                     |               
|Capital expenditures             |               



---

|                                     | (in thousands)
|------------------------------------ | --------------
|
|Nine Months ended October 3, 2004    |               
|External net sales                   |               
|Gross profit                         |               
|Operating profit                     |               
|Total assets                         |               
|Depreciation                         |               
|Capital expenditures                 |               
|Nine Months ended September 28, 2003 |               
|External net sales                   |               
|Gross profit                         |               
|Operating profit                     |               
|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 2 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.

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

|                            | 2004 |  | 2003
|--------------------------- | ---- |  | ----
|Beginning balance January 1 |      |  | $   
|Accruals during the period  |      |  |     
|Charges / payments made     |      | 
|under the warranties        |      |  |     
|                            |      |  |     
|Balance end of period       |      |  | $   
|                            |      |  |     



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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 resulting in a curtailment charge of $1,200,000, which was recorded in 2003. An additional $3,509,000 settlement charge
was recorded in the third quarter of 2004 when final distributions from the plan were made or annuities purchased in exchange for
participants rights to receive benefits under the plan.

Components of net periodic pension cost for the three and nine months ended
October 3, 2004 and September 28, 2003 are as follows:

|                                | Three Months |  | Nine Months
|------------------------------- | ------------ |  | -----------
|
|Service cost                    |              |  | $          
|Interest cost                   |              |  |            
|Expected return on assets       |              |  |            
|Prior service cost amortization |              |  |            
|Net loss amortization           |              |  |            
|                                |              |  |            
|                                |              |  | $          
|                                |              |  |            
|                               
|                               
|
|
|Discount rate                   |              |  |            
|Expected return on plan assets  |              |  |            
|Rate of compensation increase   |              |  |            

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 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 is continuing its
efforts to sell the facility. The Company closed its Jackson, Mississippi, plant during the fourth quarter of 2002 and has decided
to modify this plant to serve as a warehousing and shipping facility. Modification to the Jackson plant should be completed during
2004.



---

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

|                               | EmployeeTerminationBenefits |  | OtherExitCosts |            | Total
|------------------------------ | --------------------------- |  | -------------- | ---------- | -----
|Balance January 1, 2004        |                             |  | $              | 836,000    |      
|Charges in 2004                |                             |  |                | (360,000   | )    
|                               |                             |  |                |            |      
|                              
|Balance October 3, 2004        |                             |  | $              | 476,000    |      
|                               |                             |  |                |            |      
|Balance January 1, 2003        |                             |  | $              | 2,148,000  |      
|Additions (reductions) in 2003 |                             |  |                | (390,000   | )    
|Charges in 2003                |                             |  |                | (1,088,000 | )    
|                               |                             |  |                |            |      
|Balance September 28, 2003     |                             |  | $              | 670,000    |      
|                               |                             |  |                |            |      

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 nine
months ended October 3, 2004, the Company recognized a $111,000 and $642,000 (or $.01 and $.06 per share, net of tax),
respectively, partial liquidation of the Manufactured LIFO Reserve. This compares with the three and nine months ended September
28, 2003 liquidation of $924,000 and $3,239,000 (or $.08 and $.29 per share, net of tax), respectively. At October 3, 2004,
$45,000 of Manufacturing LIFO Reserve remains which is expected to be recognized in 2004 as the remaining manufactured inventory
is sold.

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 $217,000 of accumulated comprehensive income at October 3, 2004, reflects
the fair value gain, net of tax, of available-for-sale marketable security investments. Total comprehensive income was $4,120,000
and $2,092,000 for the three month periods ended October 3, 2004 and September 28, 2003, respectively, and $6,533,000 and
$5,932,000 for the nine months ended October 3, 2004 and September 28, 2003, respectively.

NOTE H  BUSINESS ACQUISITION

In October, 2003, the Company acquired the assets and operations of an
absorbent products manufacturer. During the three and nine months ended October 3, 2004, this operation had net sales of
$5,506,000 and $14,397,000.

NOTE I  ADOPTION OF NEW ACCOUNTING STANDARDS

In December 2003, the FASB revised and reissued Statement 132,
Employers Disclosures about Pensions and Other Postretirement Benefits (SFAS 132 (R)). This statement retains
all of the disclosures that are required by the original FASB Statement 132, Employers Disclosures about Pensions and
Other Postretirement Benefits, and includes several additional disclosures. It also requires certain disclosures about
pension and other postretirement benefit plans in interim financial statements. The annual disclosures in SFAS 132 (R) were
adopted in fiscal year ended December 31, 2003. The interim disclosure provisions of SFAS 132 (R) have been adopted in the first
quarter of fiscal 2004.

---

The foregoing information for the periods ended October 3, 2004, and
September 28, 2003, 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, 2003, is summarized from audited consolidated financial statements, but does not
include all the disclosures contained therein and should be read in conjunction with the 2003 Annual Report. Interim results for
the period are not indicative of those for the year.



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# ITEM 2.   MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIALCONDITION AN 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 2003 Annual Report to Shareholders, 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, and the impact of foreign sourcing of houseware products. Additional information
concerning those and other factors is contained in the Companys Securities and Exchange Commission filings, including but
not limited to the Form 10-K, copies of which are available from the Company without charge.

Comparison Third Quarter 2004 and 2003
        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 October 3, 2004 and September 28, 2003.

Housewares/small appliance
net sales increased $4,054,000 from $23,468,000 to $27,522,000, or 17%, primarily reflecting increased unit volume partially
offset by decreased pricing. Defense net sales increased by $4,572,000 from $1,796,000 to $6,368,000, or 255% reflecting a unit
volume increase and a change in the mix of products shipped. Absorbent products net sales increased by $5,730,000 from $1,585,000
to $7,315,000, or 362%, primarily reflecting the addition of revenues stemming from the October 2003 acquisition of the assets of
NCN Hygienic Products, Inc.

Housewares/small appliance
gross profit for 2004 increased $1,581,000 from $8,552,000 to $10,133,000, or 37% versus 36% as a percentage of sales. The gross
margin profit percentage increase is attributed to a combination of a reduction in the cost of product, offset in part by reduced
prices and the comparatively smaller benefit received in 2004 from the partial reversal of Manufactured Product LIFO reserve (see
Note E). Defense gross profit increased $1,444,000 from $570,000 to $2,014,000 as a result of increased unit volume and was 32% in
both periods. Absorbent products gross profit increased $385,000 from a loss of $252,000 to a profit of $133,000 primarily due to
the acquisition noted in the previous paragraph.



---

The Company accrues for
unexpended advertising cost, primarily for housewares/small appliances, budgeted for the year against each quarters sales.
Major advertising commitments are incurred in advance of the expenditures, and the timing of sales through dealers and
distributors to the ultimate customer does not permit specific identification of the customers purchase to the actual time
an advertisement appears. Advertising charges included in selling expense in each quarter represent that percentage of the annual
advertising budget associated with that quarters shipments. Revisions to this budget result in periodic changes to the
accrued liability for committed advertising expenditures. Housewares/small appliance selling and general expenses increased
$1,069,000, largely attributable to increases in the aforementioned accrual.

In the third quarter of 2003,
the Company announced its decision to terminate its defined benefit pension plan (see Note D). As a result, the Company recorded a
charge of $3,509,000 in the third quarter of 2004 when the defined benefit pension plan termination was completed.

Earnings before provision for
income taxes decreased $85,000 from $2,862,000 to $2,777,000. The provision for income taxes increased from $784,000 to $788,000,
which resulted in an effective income tax rate increase from 27% to 28% as a result of increased earnings subject to tax. Net
earnings decreased $89,000 from $2,078,000 to $1,989,000, or 4%.

Comparison First Nine Months 2004 and 2003
        Readers are directed to Note B, Business Segments for data on the
financial results of the Companys three business segments for the Nine Months ended October 3, 2004 and September 28, 2003.

Housewares/small appliance
net sales increased $4,158,000 from $57,561,000 to $61,719,000, or 7%, reflecting increased unit volume partially offset by
decreased pricing. Defense net sales increased by $6,043,000 from $5,518,000 to $11,561,000, or 110% reflecting a volume increase
and a change in the mix of products shipped. Absorbent products net sales increased by $12,939,000 from $7,276,000 to $20,215,000,
or 178%, primarily reflecting the addition of revenues stemming from the October 2003 acquisition of the assets of NCN Hygienic
Products, Inc.

Housewares/small appliance
gross profit for 2004 increased $49,000 from $18,420,000 to $18,469,000, or 30% versus 32% as a percentage of sales. This gross
profit percentage decrease is largely due to comparatively smaller liquidation of the Manufactured Product LIFO reserve stemming
from the sourcing of products overseas (see Note E). Defense gross profit increased $1,366,000 from $1,570,000 to $2,936,000, or
25% versus 28% as a percentage of sales primarily due to the mix of products shipped. Absorbent products gross profit increased
$836,000 from $410,000 to $1,246,000 primarily due to the acquisition noted in the previous paragraph.

The accrual for unexpended
advertising costs discussed in the Third Quarter comparison also applies to the first nine months.

Readers are also directed to
Note E, Plant Closing, for a comparison of the first nine months.

Other income, principally
interest, decreased $250,000 from $3,242,000 to $2,992,000 largely as a result of a lower rate of return on a lower level of
invested funds.



---

Earnings before provision for
income taxes decreased $1,650,000 from $8,157,000 to $6,507,000. The provision for income taxes decreased from $2,108,000 to
$1,630,000, which resulted in an effective income tax rate decrease from 26% to 25% as a result of decreased earnings subject to
tax. Net earnings decreased $1,172,000 from $6,049,000 to $4,877,000, or 19%.

Liquidity and Capital Resources
        For year-to-date 2004, $20,556,000 of cash and cash equivalents were used in
operating activities versus the $389,000 used in the comparable 2003 period. A summary of the sources of operating cash can be
found in the changes in the components of working capital in the statement of cash flows. Of note is the significant change in the
inventory line item reflecting relative increases in defense segment and housewares/small appliance segment inventories since the
beginning of the year. The defense segment increase is in response to a larger contract backlog during 2004, while the
housewares/small appliance increase reflects the relatively lean inventory levels as of January 1, 2004 in comparison to the
relatively high levels as of January 1, 2003. The higher levels on January 1, 2003 resulted from the Companys transition to
off shore product sourcing.

Cash used in investing
activities increased $38.8 million, with the majority of the increase stemming from the expansion in the absorbent product
segment, and the modification of the Companys Jackson, Mississippi manufacturing plant to serve as a warehousing and
shipping facility.

Working capital decreased by
$15,004,000 to $197,732,000 at October 3, 2004. The Companys current ratio was 5.7 to 1.0 at October 3, 2004, compared to
4.9 to 1.0 at December 31, 2003.

In January 2004, the Company
entered into an agreement to purchase approximately $12,000,000 in equipment to expand the product line in its absorbent products
segment. Also, in the second and third quarters of 2004, the Company entered into agreements to purchase approximately $19,000,000
of additional equipment to further expand the absorbent products segment. To date, the Company has deposited approximately
$14,000,000 towards the purchase of this equipment leaving approximately $17,000,000 of capital commitment outstanding as of
October 3, 2004. The Company expects to continue to evaluate acquisition opportunities that align with its business segments and
will make further acquisitions or capital investments in these segments if the appropriate return on investment is projected.

The Company has substantial
liquidity in the form of cash and marketable securities to meet all of its anticipated capital requirements, to make dividend
payments, and to fund growth through acquisitions and other means. The interest rate declines over the past several years coupled
with the extremely low interest rate environment currently has resulted in reduced levels of interest income for the Company.
There can be no assurance when interest rates will begin to move towards more historically normal levels. 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.

In connection with the
Companys plant closing activity during 2004, the Company could incur additional losses upon the disposition of property
associated with the operations being closed. In addition, the Company may have additional plant closing costs. The Company 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 2004.



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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.

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 health care costs, 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.



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Plant Closing Costs:   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 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 is continuing its efforts to sell the facility. The Company closed its Jackson, Mississippi, plant during the
fourth quarter of 2002 and has been modifying this plant to serve as a warehousing and shipping facility. Modification to the
Jackson plant should be completed during 2004. (See Note E for a description of plant closing activity.) The estimated accruals
for plant closing costs may be subject to adjustment in the future. Potential cost items include the Companys success and
the length of time required to sell the Alamogordo building, larger than expected health care claims for separated employees, and
changes in other estimated costs to complete the plant closings.

NEW ACCOUNTING PRONOUNCEMENTS

Please refer to Note I 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.
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 marketable securities are primarily fixed rate municipal bonds with an average
life of less than one year. Accordingly, changes in interest rates have not had a material short term affect 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. Any transactions that are
currently entered into for settlement in foreign currency are not deemed material to the financial statements.



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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 October 3, 2004, 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 F 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 October 3, 2004.
| | ----------------------------------------------------------------------------------------

|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.                                                                                                   | 
|(b)     Reports on Form 8-K:                                                                                                                            | 
|On May 4, 2004, the registrant filed a current report under item 12 to furnish its earnings                     press release issued on April 30, 2004.

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:   November 9, 2004 |  | /s/   M.J. Cohen                                                                                     | 
|                         |  |                                                                                                     
|                         |  | M. J. Cohen, Chair of the Board, Chief
Executive Officer and President
(Principal executive officer) | 
|                        
|Date:   November 9, 2004 |  | /s/   R. F. Lieble                                                                                   | 
|                         |  |                                                                                                     
|                         |  | R. F. Lieble, Vice President and
Treasurer/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
| |  | ---- |  | -----------------------------------------------------------------------------------------------

---