**SECURITIES
AND EXCHANGE COMMISSION**


**WASHINGTON,
D.C. 20549**





**FORM
10-K**


****


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


**OF
THE SECURITIES EXCHANGE ACT OF 1934**


**or**


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


**OF
THE SECURITIES EXCHANGE ACT OF 1934**





For
      fiscal year ended: January 31, 2005
    
    Commission
      file number 001-07763


**MET-PRO
CORPORATION**


(Exact
name of registrant as specified in its charter)


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





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





Securities
registered pursuant to Section 12(b) of the Act:





**Name
      of each exchange on****Title
      of each class**
    
    **which
      registered**Common
      Shares, par value $0.10 per share
    
    New
      York Stock Exchange





Securities
registered pursuant to Section 12(g) of the Act:


Common
      Shares, par value $0.10 per share(Title
      of Class)




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 if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to this
Form 10-K. X





Indicate
by check mark whether the registrant is an accelerated filer (as defined by Rule
12b-2 of the Act).   Yes XNo
___





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
last sold, or the average of the bid and asked price of such common equity, as
of the last business day of the registrant’s most recently completed second
fiscal quarter: $118,047,167





The
number of Registrant’s outstanding Common Shares was 8,388,575 as of April 13, 2005.





**DOCUMENTS
INCORPORATED BY REFERENCE**





**Form
      10-K****Part
      Number**Portions of Registrant’s Definitive Proxy Statement filed pursuant to
      Regulation 14Ain
      connection with Registrant’s Annual Meeting of Shareholders to be held on
      June 8, 2005
    III








**INDEXPagePART IItem 1.
    Business
    1Executive Officers of the
      Registrant
    6Item 2.
    Properties
    7Item 3.
    Legal
    Proceedings
    8Item 4.
    Submission of Matters to a Vote
      of Security Holders
    8

PART
IIItem 5.
    Market for
      the Registrant’s Common Equity, Related Shareholder Matters
      andIssuer Purchases of Equity Securities
    9Item 6.
    Selected Financial Data
    11Item 7.
    Management’s Discussion and Analysis of Financial
      Condition and Results of Operations
    12Forward-Looking Statements; Factors
      That May Affect Future Results
    16Item 7A.
    Quantitative and Qualitative Disclosure About
      Market Risks
    17Item 8.
    Financial Statements and Supplementary
      Data
    18Item 9.
    Changes in and Disagreements with Accountants on
      Accounting and Financial Disclosure
    43Item 9A.
    Controls and
      Procedures
    43

PART
    IIIItem 10.
    Directors
      and Executive Officers of the Registrant
    44Item 11.
    Executive
      Compensation
    44Item 12.
    Security
      Ownership of Certain Beneficial Owners and
      Management
    44Item
      13.
    Certain
      Relationships and Related Transactions
    44Item 14.
    Principal
      Accountant Fees and Services
    44

PART
IVItem
      15.
    Exhibits
      and Financial Statement Schedules
    45SIGNATURES
    
    48**














































Index




**FACTORS THAT MAY AFFECT FUTURE
RESULTS**
      
      Met-Pro’s
      prospects are subject to certain uncertainties and risks. This Annual
      Report on Form 10-K also contains certain forward-looking statements
      within the meaning of the Federal securities laws. Met-Pro’s future
      results may differ materially from its current results and actual results
      could differ materially from those projected in the forward-looking
      statements as a result of certain risk factors. *Readers should pay
      particular attention to the considerations described in the section of
      this report entitled “Management’s Discussion and Analysis of Financial
      Condition and Results of Operations - Forward-Looking Statements; Factors
      That May Affect Future Results.”*Readers should also carefully review
      the risk factors described in the other documents Met-Pro files from time
      to time with the Securities and Exchange
Commission.





****


**PART
I**





**Item 1.*****Business:***





*General:*





Met-Pro Corporation (“Met-Pro” or the
“Company”), incorporated in the State of Delaware on March 30, 1966 and
reincorporated in the State of Pennsylvania on July 31, 2003, manufactures and
sells product recovery and pollution control equipment for purification of air
and liquids, and fluid handling equipment for corrosive, abrasive and high
temperature liquids. The Company, which operates through ten divisions and five
wholly-owned subsidiaries, markets and sells its products through its own
personnel, distributors, representatives and agents based on the division or
subsidiary involved. The Company’s products are sold worldwide primarily in
industrial markets. The Company was taken public on April 6, 1967 and traded on
the American Stock Exchange from July 25, 1978 until June 18, 1998, at which
time the Company’s Common Shares began trading on the New York Stock Exchange,
where it currently trades under the symbol “MPR”.





The Company’s principal executive offices are
located at 160 Cassell Road, Harleysville, Pennsylvania and the telephone number
at that location is (215) 723-6751. Our website address is
*www.met-pro.com**.*





Our Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K filed pursuant to Section
13(a) and 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), are made available free of charge on or through our website at
*www.met-pro.com***as soon as reasonably practicable
after such reports are filed with, or furnished to, the Securities and Exchange
Commission (the “SEC”). Copies of our (i) Corporate Governance Guidelines, (ii)
charters for the Audit Committee, Compensation and Stock Option Committee, and
Corporate Governance and Nominating Committee, and (iii) Code of Business
Conduct and Ethics are available at *www.met-pro.com* under the
“Investor Relations - Corporate Governance” captions. Copies will also be
provided to any shareholder upon written request to the Secretary, Met-Pro
Corporation, 160 Cassell Road, P.O. Box 144, Harleysville, Pennsylvania 19438.





Except where otherwise indicated by the context
used herein, references to the “Company”, “we”, “our” and “us” refer to Met-Pro
Corporation, its divisions and its wholly-owned subsidiaries.








*Products,
Services and Markets:*





The Company operates in two segments, the
Product Recovery/Pollution Control Equipment Segment and the Fluid Handling
Equipment Segment. For financial information concerning the Company’s industry
segments, reference is made to “Consolidated Business Segment Data” contained
within the Company’s Consolidated Financial Statements that form a part of this
Report on Form 10-K. A narrative description of the Company’s operations within
these two segments is as follows:





*Product
Recovery/Pollution Control Equipment Segment*





This
segment is composed of the following seven divisions and/or subsidiaries of the
Company: Flex-Kleen Division, Stiles-Kem Division, Pristine Hydrochemical Inc.,
Sethco Division, Strobic Air Corporation, Duall Division and Systems
Division.





Flex-Kleen
Division, located in Itasca, Illinois, operating with the Company’s wholly-owned
subsidiary, Flex-Kleen Canada Inc., is a leading supplier of product recovery
and dry particulate collectors that are used primarily in the process of
manufacturing industrial and consumer goods, food products and pharmaceuticals.
While some of Flex-Kleen’s products are used for nuisance collection of
particulates to conform to environmental concerns, the larger portion of its
sales activity is for product collection and is process driven. Flex-Kleen’s
products are sold through manufacturer’s representatives located across the
United States and Canada.





Index
 1





Stiles-Kem Division, operating with the Company’s wholly-owned
subsidiary, Pristine Hydrochemical Inc., located in Waukegan, Illinois, is a
leading manufacturer of safe and reliable water treatment compounds which have
been used in the public drinking water industry since 1955. Stiles-Kem’s
AquadeneTM products are designed to eliminate problems created by high iron and
manganese levels in municipal water systems and to reduce scaling and general
corrosion tendencies within water distribution piping systems. Stiles-Kem’s
products have also been used extensively to help municipalities meet soluble
lead and copper limits in drinking water. These food grade products are NSF/ANSI
approved for health considerations in municipal drinking water supplies and are
certified to meet or exceed existing state and federal guidelines. The division
also markets a line of Bio-PurgeTM products for drinking well water
remediation.





Pristine
Hydrochemical’s product line includes PHI coagulant and flocculent polymer
products for both municipal and industrial applications as well as a chlorine
dioxide treatment program for municipal drinking water sterilization, which
improves water clarity, reduces sludge volume and also helps customers reduce
trihalomethane formation as required by the EPA. In addition, Pristine
Hydrochemical sells boiler and water cooling chemicals and services to
industrial and commercial markets allowing customers to maximize their heat
transfer efficiency and save operating revenues through energy conservation.





Both
Stiles-Kem’s and Pristine Hydrochemical’s products are sold directly through
regional sales representatives or agents and through a network of distributors
located in the United States and Canada, and both offer technical and laboratory
customer support from the Waukegan facilities.





Sethco
Division, located on Long Island, New York, designs, manufactures and sells
corrosion resistant pumps, filter chambers and filter systems with flow rates to
about 250 gallons per minute. These products are used extensively in the metal
finishing, electronics, chemical processing and waste water treatment
industries. Sethco’s products are sold directly through regional sales managers
and through a worldwide network of non-exclusive distributors, catalog houses
and original equipment manufacturers.





Strobic
Air Corporation, located in Harleysville, Pennsylvania, designs and manufactures
patented laboratory fume hood exhaust systems and specialty blowers and
industrial fans for industrial applications including university laboratories,
hospitals, semiconductor manufacturers, government laboratories, pharmaceutical,
chemical, petrochemical plants and other testing laboratory facilities. Sales,
engineering and customer service are provided both internally and through a
network of manufacturer’s representatives located in offices
worldwide.





Duall
Division, located in Owosso, Michigan, is a leading manufacturer of industrial
and municipal air and water quality control systems. The Division’s major
products include chemical and biological odor control systems, fume and
emergency gas scrubbers, wet particulate collectors, air strippers and
degasifiers for contaminated groundwater treatment, ducting and exhaust fans.
All equipment is fabricated from corrosion resistant materials. Duall’s support
services include pilot studies, engineering, installation and performance
testing. Duall products are sold both domestically and internationally to the
metal finishing, wastewater treatment, composting, food processing, chemical,
printed circuit, semiconductor, steel pickling, pharmaceutical, battery
manufacturing and groundwater remediation markets. Market specific sales
managers and factory trained manufacturer’s representatives sell Duall’s
engineered systems to industrial and municipal clients.





Systems
Division, located in Kulpsville, Pennsylvania, is a leader in the supply of
custom designed and manufactured air and water pollution control equipment.
Systems Division’s air pollution control capabilities include: carbon adsorption
systems for the concentration and recovery of volatile solvents, thermal and
catalytic oxidation systems, regenerative thermal oxidizers, enclosed flares and
the supply of abatement catalysts. These systems are custom engineered for
clients in the automotive, aerospace and furniture industries. Additional
applications include painting, pharmaceutical, ethanol, chemical, electronics,
food processing and printing industries. Systems Division also offers a full
range of catalyst products for the oxidation of pollutants, which include
catalysts for the oxidation of chlorinated solvents and low temperature
oxidation catalysts. Systems Division products are sold worldwide by a
combination of in-house personnel and manufacturer’s
representatives.





*Fluid
Handling Equipment Segment*





This
segment is composed of the following four divisions and/or subsidiaries of the
Company: Mefiag, Keystone Filter Division, Dean Pump Division and Fybroc
Division.





Mefiag®,
operating with the Company’s wholly-owned subsidiary, Mefiag B.V., located in
Heerenveen, the Netherlands, and the Mefiag Division, located in Harleysville,
Pennsylvania, designs, manufactures and sells filter systems utilizing
horizontal disc technology for superior performance, particularly in high
efficiency and high-flow applications. Mefiag® filters are used in tough,
corrosive applications in the plating, metal finishing and printing industries.
Worldwide sales are accomplished directly through regional sale representatives,
qualified market-based distributors and original equipment manufacturers located
throughout Europe, the United States, Asia and other major markets around the
world.





Keystone
Filter Division, located in Hatfield, Pennsylvania, is an established custom
pleater and filter cartridge manufacturer in the United States.  The
Division provides custom designed and engineered products which are
currently used in a diversity of  applications





Index
 2





such as
the nuclear power industry, components in medical equipment and in indoor air
quality equipment. Keystone Filter also provides standard filters for water
purification and industrial applications. Sales and customer service are
provided directly through regional sales managers and through a non-exclusive
distributor network.





Dean Pump
Division, located in Indianapolis, Indiana, designs and manufactures high
quality pumps that handle a broad range of industrial and commercial
applications. Industrial users include the chemical, petrochemical, refinery,
pharmaceutical, plastics, pulp and paper, and food processing industries.
Commercial users include hospitals, universities and laboratories. Both groups
choose Dean Pump products particularly for their high temperature applications.
The Division’s products are sold worldwide through an extensive network of
distributors.





Fybroc
Division, located in Telford, Pennsylvania, is a world leader in the manufacture
of fiberglass reinforced plastic (“FRP”) centrifugal pumps. These pumps provide
excellent corrosion resistance for tough applications including pumping of
acids, brines, caustics, bleaches, seawater and a wide variety of waste liquids.
Fybroc’s second generation epoxy resin, EY-2, allows the Company to offer the
first corrosion resistant and high temperature FRP thermoset pumps suitable for
solvent applications. The EY-2 material also expands Fybroc’s pumping
capabilities to include certain acid applications such as high concentration
sulfuric acid (75-98%). Fybroc pumps are sold to many markets including the
chemical, petrochemical, pharmaceutical, fertilizer, pesticides, steel, pulp and
paper, electric utility, aquaculture, aquarium, commercial marine/navy,
desalination/water reuse, and industrial and municipal waste treatment
industries. A worldwide distributor network provides sales, engineering and
customer service.








*United
States Sales versus Foreign Sales:*





The
following table sets forth certain data concerning total net sales to customers
by geographic area in the past three years:





****


**Percentage
      of Net Sales****Fiscal
      Year Ended January 31,****2005**
    
    **2004**
    
    **2003**United
      States
    78.6
    %
    82.6
    %
    84.7
    %Foreign
    21.4
    %
    17.4
    %
    15.3
    %Net
      Sales
    100.0
    %
    100.0
    %
    100.0
    %








*Customers:*





During
each of the past three fiscal years, no single customer accounted for 10% or
more of the total net sales of the Company in any year. The Company does not
believe that it would be materially adversely affected by the loss of any single
customer.








*Seasonality:*





The
Company does not consider its business to be seasonal in nature.








*Competition:*





The
Company experiences competition from a variety of sources with respect to
virtually all of its products. The Company knows of no single entity that
competes with it across the full range of its products and systems. The lines of
business in which the Company is engaged are highly competitive. Competition in
the markets served is based on a number of considerations, which may include
price, technology, applications experience, know-how, reputation, product
warranties, service and distribution.





With
respect to the Fluid Handling Equipment segment, specifically the pump
manufacturing operations, several companies, including Ingersoll-Dresser Pumps
Co. (a subsidiary of Flowserve Corporation), Goulds Industrial Pumps, Inc. (a
subsidiary of ITT Industries), and Durco Pumps, Inc. (a subsidiary of Flowserve
Corporation), dominate the industry with several smaller companies, including
Met-Pro, competing in selected product lines and niche markets.





With
respect to the Product Recovery/Pollution Control Equipment segment, there are
numerous competitors of both comparable and larger size which may have greater
resources than the Company, but there are no companies that dominate the
market.





The
Company is unable to state with certainty its relative market position in all
aspects of its businesses.





Index
 3


**


*Research
and Development:*





Due in
part to the diversity of the Company’s products, research and development
activities are typically initiated and conducted on a divisional or subsidiary
basis, and are not centralized in the Company’s corporate offices. Research is
directed towards the development of new products related to current product
lines, and the improvement and enhancement of existing products.





The
principal goals of the Company’s research programs are maintaining the Company’s
technological capabilities in the production of product recovery/pollution
control equipment, and fluid handling equipment; developing new products; and
providing technological support to the manufacturing operations.





Research
and development expenses were $0.8 million, $0.7 million and $0.6 million for
each of the years ended January 31, 2005, 2004 and 2003,
respectively.








*Patents
and Trademarks:*





The
Company has a number of patents and trademarks. The Company considers these
rights important to certain of its businesses, although it considers no
individual right material to its business as a whole.








*Regulatory
Matters:*





The
Company is subject to environmental laws and regulations concerning air
emissions, discharges to water processing facilities, and the generation,
handling, storage and disposal of waste materials in all operations. All of the
Company’s production and manufacturing facilities are controlled under permits
issued by federal, state and local regulatory agencies. The Company believes it
is presently in compliance in all material respects with these laws and
regulations. To date, compliance with federal, state and local provisions
relating to protection of the environment has had no material effect upon
capital expenditures, earnings or the competitive position of the
Company.








*Backlog:*





Generally,
the Company’s customers do not enter into long-term contracts, but rather issue
purchase orders that are accepted by the Company. Certain orders may be placed
subject to customer approvals, such as approval of engineering drawings. The
rate of booking new orders varies from month to month. In addition, the orders
have varying delivery schedules, and the Company’s backlog as of any particular
date may not be representative of actual revenues for any succeeding period.





The
dollar amount of the Company’s backlog of orders, considered to be firm, totaled
$11,663,558 and $7,332,386 as of January 31, 2005 and 2004, respectively. The
Company expects that substantially all of the backlog that existed as of January
31, 2005 will be shipped during the ensuing fiscal year. The backlog amount does
not include an additional $8,219,193 and $5,652,153 of orders in-house as of
January 31, 2005 and 2004, respectively, which, in accordance with our
longstanding policy, are not considered firm, and not included in the backlog
amount, until completed engineering drawings have been approved.








*Raw
Materials:*





The
Company procures its raw materials and supplies from various sources. The
Company believes it could secure substitutes for the raw materials and supplies
should they become unavailable, but there are no assurances that the substitutes
would perform as well or be priced as competitively. The Company has not
experienced any significant difficulty in securing raw materials and supplies,
and does not anticipate any significant difficulty in procurement in the coming
year or foreseeable future.








*Employees:*





As of
January 31, 2005, the Company employed 333 people, of whom 134 were involved in
manufacturing, and 199 were engaged in administration, sales, engineering,
supervision and clerical work. The Company has had no work stoppages during the
past five years and considers its employee relations to be good.





Index
 4





*Foreign
Operations:*





Most of
the Company’s operations and assets are located in the United States. The
Company also owns a manufacturing operation in Heerenveen, The Netherlands
through its wholly-owned subsidiary, Mefiag B.V., and operates a sales office
and warehouse in Barrie, Ontario, Canada through its wholly-owned subsidiary,
Flex-Kleen Canada Inc. Subsequent to January 31, 2005, the Company announced
that it is in the process of establishing a wholly-owned subsidiary in the
People’s Republic of China to produce the Mefiag line of products initially for
sale to China’s domestic plating and metal-finishing industry.





Large
export sales are typically made on the basis of confirmed irrevocable letters of
credit or time drafts to selected customers in U.S. dollars. The Company
believes that currency fluctuation and political and economic instability do not
constitute substantial risks to its business.





For
information concerning foreign net sales on a segment basis, reference is made
to the Consolidated Business Segment Data contained on page 26.
















































































































Index
 5





*Executive Officers of the Registrant:*








The
following table sets forth certain information regarding the Executive Officers
of the Registrant:





Raymond
J. De Hont, age 51, is Chairman of the Board, Chief Executive Officer and
President of the Company. Mr. De Hont was elected Chairman of the Board in
September 2003. He was elected President and Chief Executive Officer in March
2003 and a Director of the Company in February 2003. Mr. De Hont served as the
Chief Operating Officer of the Company from June 2000 to March 2003. From June
1995 to December 2000, Mr. De Hont was Vice President and General Manager of the
Company’s Fybroc Division, during which time, starting in October 1999, he also
served as General Manager for the Company’s Dean Pump Division. Prior to joining
Met-Pro Corporation, Mr. De Hont was employed by Air and Water Technologies,
where among other positions he was Vice President and General Manager of
Flex-Kleen Corporation, the business of which is now owned by Met-Pro
Corporation.





Gary J.
Morgan, CPA, age 50, is Vice President-Finance, Chief Financial Officer,
Secretary, Treasurer and a Director of the Company. He was appointed Vice
President-Finance, Chief Financial Officer, Secretary and Treasurer in October
1997, and became a Director of the Company in February 1998. Mr. Morgan joined
the Company in 1980 and served as the Company’s Corporate Controller immediately
prior to October 1997.





James G.
Board, age 51, is Vice President of the Company and General Manager of Dean Pump
and Fybroc Divisions, to which offices he was appointed in December 2000. For
more than five years prior thereto, Mr. Board was employed by Tuthill Energy
Systems, most recently as Director of Sales.





Thomas V.
Edwards, age 51, is Vice President of the Company and General Manager of the
Systems Division, to which offices he was appointed in December 1998. Mr.
Edwards joined the Company in June 1995 and prior to his present position, held
the position of Assistant to the President. For more than five years prior
thereto, Mr. Edwards was employed by Lockheed Martin as Engineering
Manager.





Hans J.
D. Huizinga, age 54, is the Managing Director of Mefiag B.V., a wholly-owned
subsidiary of the Company, located in Heerenveen, The Netherlands, an office to
which he was appointed in August 1993. He was employed for over five years
before that as Managing Director for the company whose business is now owned by
Mefiag B.V.





Gregory
C. Kimmer, age 50, is Vice President of the Company and General Manager of the
Duall Division, to which offices he was appointed in October 1989. For more than
five years prior thereto, Mr. Kimmer was employed by the company whose business
is now operated as the Duall Division.





Lewis E.
Osterhoudt, age 54, is Vice President of the Company and General Manager of the
Keystone Filter Division, to which offices he was appointed in June 2004. Mr.
Osterhoudt joined the Company in March 2004, initially serving as Assistant to
the President. For more than five years prior thereto, Mr. Osterhoudt was
employed by Hardy Machine and Design Inc. and I.O. Gold Systems Inc., most
recently as Operations Manager and President, respectively.





Robert P.
Replogle, age 64, is Vice President of the Company and General Manager of Mefiag
and Sethco Divisions. Mr. Replogle assumed the duties with respect to Mefiag in
July 1993 and Sethco in August 2003, at which time he relinquished his position
as Director of the International Sales Division.





Paul A.
Tetley, age 46, is Vice President of the Company and General Manager of Strobic
Air Corporation, to which offices he was appointed in December 1999. Mr. Tetley
joined the Company in 1996 in connection with the Company’s acquisition of the
business now conducted by Strobic Air Corporation, where he had worked as the
Engineering/Production Manager. Prior to his present position with the Company,
Mr. Tetley held the position of Director of Operations.





Vincent J. Verdone, age 57, was elected
a Vice President of the Company in February 2005, following his appointment in
January 2005 as General Manager of the Company’s Stiles-Kem Division and
subsidiary Pristine Hydrochemical Inc. For more than five years prior thereto,
Mr. Verdone was employed by Ashland Inc., in which his last position was North
American Corporate Sales Manager.





Dennis M.
Wierzbicki, age 47, is Vice President of the Company, General Manager of the
Flex-Kleen Division and Vice President and General Manager of Flex-Kleen Canada
Inc., to which offices he was appointed in February 2003 when he joined
Flex-Kleen Division. For more than five years prior thereto, Mr. Wierzbicki was
employed by American Air Filter, as Vice President and General Manager of its
Air Quality Equipment Division since October 2000 until he joined Flex-Kleen
Division, and as Vice President of Marketing and Sales of its Global Air
Filtration Division from April 1996 until October 2000.





There are
no family relationships between any of the Directors or Executive Officers of
the Registrant. Each officer serves at the pleasure of the Board of Directors,
subject, however, to agreements we have with certain officers providing for
compensation in the event of termination of employment following a change in
control of the Company. See “Security Ownership of Certain Beneficial Owners and
Management” referenced in Item 12 of this Report.




Index
 6





**Item
2.*****Properties:***





The
following manufacturing and production facilities were owned or leased by the
Company as of the date of filing this report:





**Name**
    **Structure**
    
    **Property/Location**
    **Status**Executive
      Offices,
    73,000
      square feet, cement
    
    17
      acres in Harleysville,
    OwnedInternational
      Division,
    building,
      with finestone facing,
    
    PennsylvaniaMefiag
      Division and
    built
      1976Strobic
      Air CorporationSethco
      Division
    30,000
      square feet, cement
    
    4
      acres in Hauppauge,
    Ownedblock
      with brick facing
    
    Long
      Island, New Yorkbuilt
      1982Fybroc
      Division
    47,500
      square feet, cement
    
    8
      acres in Telford,
    Ownedbuilding
      with brick facing,
    
    Pennsylvaniabuilt
      1991Keystone
      Filter Division
    31,000
      square feet, cement
    
    2.3
      acres in Hatfield,
    Ownedblock,
      built 1978
    
    PennsylvaniaSystems
      Division
    3,375
      square feet,
    
    Kulpsville,
      Pennsylvania
    Leased(1)brick
      buildingDean
      Pump Division
    66,000
      square feet, metal
    
    17.1
      acres in
    OwnedBuilding
    
    Indianapolis,
      IndianaDuall
      Division
    63,000
      square feet, metal
    
    7
      acres in Owosso,
    Ownedand
      masonry building
    
    MichiganStiles-Kem
      Division
    22,000
      square feet, cement
    
    2.55
      acres in
    Ownedblock
      building, built 1996
    
    Waukegan,
      IllinoisPristine
      Hydrochemical Inc.
    600
      square feet
    
    Bismarck,
      North Dakota
    Leased(2)warehouse
      facilityFlex-Kleen
      Division
    13,760
      square feet, brick
    
    Itasca,
      Illinois
    Leased(3)Building37,320
      square feet, metal
    
    Sharpsburg,
      North Carolina
    Leased(4)BuildingMefiag
      B.V.
    17,200
      square feet, metal
    
    1.1
      acres in
    Ownedand
      masonry building
    
    Heerenveen,
      The NetherlandsVacant
      land
    
    3
      acres in
    OwnedHeerenveen,
      The NetherlandsFlex-Kleen
      Canada Inc.
    3,187
      square feet, masonry
    
    Barrie,
      Ontario, Canada
    Leased(5)Building





(1)
    Systems
      Division’s lease for the Sales and Engineering facility in Kulpsville,
      Pennsylvania expires on February 9, 2006. We anticipate no difficulties
      either renewing this lease or in otherwise finding suitable facilities for
      Systems Division.
 (2)
    Pristine
      Hydrochemical Inc.’s lease for the warehouse in Bismarck, North Dakota is
      on a month to month basis.
 (3)
    Flex-Kleen
      Division’s lease for the operation in Itasca, Illinois expires on December
      31, 2007.


(4)
    Flex-Kleen
      Division’s lease for the warehouse in Sharpsburg, North Carolina is on a
      month to month basis.
 (5)
    Flex-Kleen
      Canada Inc.’s lease for the sales and warehouse facility in Barrie,
      Ontario, Canada expires on February 28,
2007.




Index
 7





**Item 3.*****Legal
Proceedings:***





*Certain
of the statements made in this Item 3 (and elsewhere in this Report) are
“forward-looking” statements which are subject to the considerations set forth
in “Forward-Looking Statements; Factors That May Affect Future Results” located
in the Management’s Discussion and Analysis of Financial Condition and Results
of Operations section of this Report, and we refer you to these
considerations.*





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





The
Company is also party to a small number of other legal proceedings arising out
of the ordinary course of business or other proceedings that the Company does
not presently believe will have a material adverse impact upon the Company’s
results of operations, liquidity or financial condition. After the end of the
fiscal year on January 31, 2004, the Company settled a patent litigation case in
which the costs of defending the case were material to the fiscal year ended
January 31, 2004. Neither the legal fees incurred after January 31, 2004 nor the
settlement had a material adverse impact upon the Company’s results of
operations, liquidity or financial condition during the fiscal year ended
January 31, 2005.








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





No
matters were submitted to a vote of security holders during the fourth quarter
of the fiscal year ended January 31, 2005.





Index
 8





**PART II**





**Item 5.*****Market for the
Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities:***





(a)
*Market Information*. The Company’s Common Shares are traded on the New
York Stock Exchange under the symbol “MPR”. The high and low selling prices of
the Common Shares for each quarterly period for the last two fiscal years, as
reported on the New York Stock Exchange, are shown below (adjusted for
four-for-three stock split paid on October 15, 2003).




**Quarter
      ended****Year
      ended January 31, 2005**
    **April**
    
    **July**
    
    **October**
    
    **January****Price
      range of common shares:****High**
    $17.75
    
    $17.37
    
    $15.26
    
    $14.05**Low**
    15.00
    
    14.01
    
    12.65
    
    12.82**Cash
      dividend paid**
    .0725
    
    .0725
    
    .0725
    
    .0775**Year
      ended January 31, 2004**
    **April**
    
    **July**
    
    **October**
    
    **January****Price
      range of common shares:****High**
    $10.58
    
    $11.47
    
    $14.50
    
    $18.00**Low**
    9.53
    
    9.98
    
    11.44
    
    14.06**Cash
      dividend paid**
    .0675
    
    .0675
    
    .0675
    
    .0725


(b) *Holders*. There were 630
registered shareholders at January 31, 2005, and the Company estimates that
there are approximately 2,000 additional shareholders with shares held in street
name.





(c)
*Stock Split*. On September 17, 2003, the Board of Directors declared a
four-for-three stock split which was paid on October 15, 2003 to shareholders of
record on October 1, 2003. All references to per share amounts, number of shares
outstanding, and number of shares covered by stock option and other plans have
been restated to reflect the effect of the stock split.





(d)
*Dividends*. The Board of Directors declared quarterly dividends of
$.0725 per share payable on March 10, 2004, June 9, 2004, and September 9, 2004
to shareholders of record at the close of business on February 27, 2004, May 28,
2004 and August 27, 2004, respectively. The Board of Directors declared
quarterly dividends of $.0775 per share payable on December 9, 2004 and March 8,
2005 to shareholders of record as of November 26, 2004 and February 25, 2005,
respectively.





We expect to continue to pay comparable
dividends during at least the next fiscal year.





(e) *Securities Authorized For
Issuance Under Equity Compensation Plans.*Set forth below is information
aggregated as of January 31, 2005 with respect to two equity compensation plans
previously approved by the Company’s shareholders, being the 1997 Stock Option
Plan and 2001 Equity Incentive Plan. Also shown is information with respect to
the Company’s Year 2000 Employee Stock Purchase Plan.





**Number
      of Securities****Remaining
      Available****Number
      of Securities**
    
    **For
      Future Issuance****to
      be Issued Upon**
    **Weighted-Average**
    **Under
      Equity****Exercise
      of**
    **Exercise
      Price of**
    **Compensation
      Plans****Outstanding
      Options,**
    **Outstanding
      Options,**
    **(Excluding
      Securities****Plan
      Category**
    **Warrants
      and Rights**
    **Warrants
      and Rights**
    **Reflected
      in Column (A))****(A)**
    **(B)**
    **(C)**Equity
      compensation plans approved bySecurity
      holders
    394,851
    $11.60
    522,196Equity
      compensation plans not approvedby
      security holders
    -
    -
    -




Index
 9





(f)
*Recent Sales of Unregistered Securities.*In May 2002, the Company
issued to two individuals an aggregate of 151,300 Common Shares (adjusted for
stock split) valued at $1,600,000 as part of the purchase price for the shares
of Pristine Hydrochemical, Inc. These shares were not registered under the
Securities Act of 1933 and were issued in reliance upon the exemption from
registration afforded by Section 4(2) of the Securities Act. The purchasers of
these shares represented to their investment intent in connection with such
acquisition.





(g) *Stock Repurchases.* During
the fiscal year ended January 31, 2005, the Company repurchased an aggregate of
32,881 shares, at a total cost of $0.5 million, pursuant to a 400,000 (adjusted
for stock split) share stock repurchase program authorized by the Company’s
Board of Directors on December 15, 2000. As of January 31, 2005, an aggregate of
187,401 shares have been repurchased through such repurchase
program.





The
following table summarizes Met-Pro’s purchases of its Common Shares during the
fiscal year ended January 31, 2005:








**Issuer
Purchases of**


**Equity
Securities**


**Period**
    
    **Total**
      **Number
      of Shares**
      **Purchased**
    **(1)**
    **Average**
      **Price
      Paid**
      **Per
      Share**
    
    **Total**
      **Number
      of**
      **Shares**
      **Purchased**
      **As
      Part of**
      **Publicly**
      **Announced**
      **Plans
      or**
      **Programs**
    
    **Maximum**
      **Number
      of**
      **Shares**
      **That
      May**
      **Yet
      Be**
      **Purchased**
      **Under
      the**
      **Plan
      or**
      **Programs**
    ****
      **(2)**February
      1-28, 2004
    
    0
    
    $ -
    
    0
    
    245,480March
      1-31, 2004
    
    28,717
    
    16.77
    
    28,717
    
    216,763April
      1-30, 2004
    
    0
    
    -
    
    0
    
    216,763May
      1-31, 2004
    
    0
    
    -
    
    0
    
    216,763June
      1-30, 2004
    
    0
    
    -
    
    0
    
    216,763July
      1-31, 2004
    
    0
    
    -
    
    0
    
    216,763August
      1-31, 2004
    
    0
    
    -
    
    0
    
    216,763September
      1-30, 2004
    
    0
    
    -
    
    0
    
    216,763October
      1-31, 2004
    
    0
    
    -
    
    0
    
    216,763November
      1-30, 2004
    
    0
    
    -
    
    0
    
    216,763December
      1-31, 2004
    
    0
    
    -
    
    0
    
    216,763January
      1-31, 2005
    
    4,164
    
    13.65
    
    4,164
    
    212,599Total
    
    32,881
    
    $16.37
    
    32,881
    
    212,599





(1)
    These
      amounts consist of shares we purchased from non-employee directors and an
      employee who both elected to pay the exercise price of certain stock
      options upon exercise by delivering to us (and, thus, selling) Met-Pro
      Common Shares in accordance with the terms of our equity incentive plans
      that were previously approved by our shareholders and disclosed in our
      proxy statements. We purchased these shares at their fair market value, as
      determined by reference to the average of the high and low price of our
      Common Shares on the day after the option exercise. The Company expects to
      continue to repurchase shares in this manner, but is not obligated to do
      so.(2)
    On
      December 15, 2000, our Board of Directors authorized a Common Share
      repurchase program that was publicly announced on December 19, 2000, for
      up to 400,000 (adjusted for stock split) shares. The program has no fixed
      expiration date.












Index
 10




**Item
6.*****Selected
Financial Data:***








**Years
      ended January 31,****2005**
    **2004**
    **2003**
    **2002**
    **2001****Selected
      Operating Statement Data**Net
      sales
    $72,116,289
    $75,058,929
    $69,619,382
    $70,088,446
    $81,203,550Income
      from operations
    7,513,049
    11,167,238
    9,154,986
    9,451,925
    12,513,886Net
      income
    4,814,679
    6,346,579
    5,888,379
    6,189,317
    7,773,720Earnings
      per share, basic (a)
    .58
    .76
    .71
    .76
    .95Earnings
      per share, diluted (a)
    .57
    .76
    .71
    .76
    .94**Selected
      Balance Sheet Data**Current
      assets
    $50,270,495
    $48,173,429
    $40,631,745
    $37,411,679
    $37,412,259Current
      liabilities
    13,867,892
    14,229,463
    9,750,309
    10,151,149
    12,957,995Working
      capital
    36,402,603
    33,943,966
    30,881,436
    27,260,530
    24,454,264Current
      ratio
    3.6
    3.4
    4.2
    3.7
    2.9Total
      assets
    82,924,066
    81,135,557
    73,754,671
    68,070,192
    69,151,341Long-term
      obligations
    4,039,068
    5,447,869
    7,111,995
    7,125,195
    8,100,000Total
      shareholders’ equity
    63,165,191
    60,270,734
    56,045,885
    50,279,394
    47,061,366Total
      capitalization
    67,204,259
    65,718,603
    63,157,880
    57,404,589
    55,161,366Return
      on average total assets, %
    5.9
    8.2
    8.3
    9.0
    11.3Return
      on average shareholders’ equity, %
    7.8
    10.9
    11.1
    12.7
    17.0**Other
      Financial Data**Net
      cash flows from operating activities
    $8,545,521
    $8,232,851
    $5,831,186
    $8,301,567
    $10,047,845Capital
      expenditures
    1,193,767
    952,812
    752,125
    1,631,356
    1,023,682Shareholders’
      equity per share (a)
    7.54
    7.24
    6.76
    6.20
    5.80Cash
      dividends paid per share (a)
    .295
    .275
    .259
    .255
    .24Average
      common shares, basic (a)
    8,359,382
    8,297,668
    8,239,491
    8,145,521
    8,203,100Average
      common shares, diluted (a)
    8,463,005
    8,398,256
    8,295,328
    8,191,783
    8,231,249Common
      shares outstanding (a)
    8,368,042
    8,323,277
    8,288,492
    8,110,896
    8,120,207




(a)
    All
      references to per share amounts, average common shares and shares
      outstanding have been restated to reflect the effect of the four-for-three
      stock split effective October 15, 2003.











Index
 11





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





The
following discussion should be read in conjunction with the Company’s
Consolidated Financial Statements and Notes thereto included elsewhere in this
Form 10-K, together with “Forward-Looking Statements; Factors That May Affect
Future Results” located in the Management’s Discussion and Analysis of Financial
Condition and Results of Operations.


**





*Results
of Operations:*





The
following table sets forth for the periods indicated the percentage of total net
sales that such items represent in the Consolidated Statement of
Operations.





**Years ended January 31,****2005**
    
    **2004**
    
    **2003**Net
      sales
    100.0
    %
    100.0
    %
    100.0
    %Cost
      of goods sold
    68.6
    %
    64.5
    %
    65.3
    %Gross
      profit
    31.4
    %
    35.5
    %
    34.7
    %Selling,
      general and administrative expense
    21.0
    %
    20.6
    %
    21.6
    %Income
      from operations
    10.4
    %
    14.9
    %
    13.1
    %Interest
      expense
    (.5
    %)
    (.6
    %)
    (.7
    %)Other
      income/(expense), net
    .2
    %
    (1.5
    %)
    .4
    %Income
      before taxes
    10.1
    %
    12.8
    %
    12.8
    %Provision
      for taxes
    3.4
    %
    4.4
    %
    4.4
    %Net
      income
    6.7
    %
    8.4
    %
    8.4
    %





*FYE
2005 vs FYE 2004:*


Net
sales for the fiscal year ended January 31, 2005 were $72.1 million compared to
$75.1 million for the fiscal year ended January 31, 2004, a decrease of $3.0
million.  Sales
in the Fluid Handling Equipment segment were $29.2 million or 20.3% higher than
the fiscal year ended January 31, 2004.  Sales
in the Product Recovery/Pollution Control Equipment segment were $42.9 million
or 15.5% lower than the fiscal year ended January 31, 2004. The decreased sales
in the Product Recovery/Pollution Control Equipment segment have been adversely
impacted by an overall softness in the higher dollar capital equipment and
systems markets, combined with atypical customer delays in issuing expected
purchase orders for several large dollar projects.





Foreign
sales increased to $15.5 million for the fiscal year ended January 31, 2005,
compared to $13.0 million for the same period last year, an 18.4% increase.
Foreign sales increased 31.4% in the Fluid Handling Equipment segment from the
prior fiscal year, and the Product Recovery/Pollution Control Equipment segment
foreign sales were slightly lower than the prior fiscal year.





Net
income for the fiscal year ended January 31, 2005 was $4.8 million compared to
$6.3 million for the fiscal year ended January 31, 2004, a decrease of $1.5
million. The decrease in net income was primarily attributable to the decreased
sales in the Product Recovery/Pollution Control segment, as discussed above, and
by a decrease in gross margin, as discussed below.





The
gross margin for the fiscal year ended January 31, 2005 was 31.4% compared to
35.5% for the same period in the prior year due to lower gross margins
experienced in both operating segments. The decrease in gross margin is
principally due to product mix, competitive pricing pressures, and higher raw
material and in-bound freight costs, combined with the profit erosion sustained
on a Product Recovery/Pollution Control project which reduced our net income by
approximately $260,000 or 0.6% of the overall reduction in the gross margin for
the fiscal year.

Selling
expense was $7.5 million for the fiscal year ended January 31, 2005, a decrease
of $0.1 million over the prior year. Selling expense as a percentage of net
sales was 10.4% compared to 10.2% for the prior fiscal
year.




Index
 12





General
and administrative expense was $7.6 million for the fiscal year ended January
31, 2005 compared to $7.8 million in the prior fiscal year. General and
administrative expense as a percentage of net sales was 10.6% for the fiscal
year ended January 31, 2005 compared to 10.4% for the prior fiscal year.





Interest
expense was approximately $0.4 million for each of the fiscal years ended
January 31, 2005 and 2004.





Other
income, net, was $0.2 million for the fiscal year ended January 31, 2005
compared to other expense, net, of $1.1 million in the prior year. This change
is principally related to a reduction in legal expenses incurred in defending
against allegations that products sold by one of the Company’s divisions
infringed a competitor’s intellectual property rights. We settled this case in
February 2004. Neither the settlement nor the legal fees incurred after January
31, 2004 were material in the fiscal year ended January 31, 2005.





The
effective tax rate was 34.0% for each of the fiscal years ended January 31, 2005
and 2004.








*FYE
2004 vs FYE 2003:*





Net
sales for the fiscal year ended January 31, 2004 were $75.1 million compared to
$69.6 million for the fiscal year ended January 31, 2003, an increase of $5.5
million. Sales in the Product Recovery/Pollution Control Equipment segment
increased to $50.8 million, 10.1% higher than the prior year due primarily to
increased demand for laboratory fume hood exhaust systems. Sales in the Fluid
Handling Equipment segment were $24.3 million, or 3.3% higher compared to the
fiscal year ended January 31, 2003.





Foreign
sales increased to $13.0 million for the fiscal year ended January 31, 2004,
compared to $10.7 million for the same period last year, a 22.1% increase.
Foreign sales increased 32.2% in the Fluid Handling Equipment segment from the
prior fiscal year, and the Product Recovery/Pollution Control Equipment segment
foreign sales were 9.6% higher than the prior fiscal year due to higher demand
for our laboratory fume hood exhaust systems.





Net
income for the fiscal year ended January 31, 2004 was $6.3 million compared to
$5.9 million for the fiscal year ended January 31, 2003, an increase of $0.4
million. The increase in net income is principally related to higher sales and
gross margin in the Product Recovery/Pollution Control Equipment segment during
the current fiscal year.





The
gross margin for the fiscal year ended January 31, 2004 increased to 35.5%
versus 34.7% for the prior year. This increase can be attributed to higher gross
margins experienced in the Product Recovery/Pollution Control Equipment
segment.





Selling
expense was $7.7 million for the fiscal year ended January 31, 2004, an increase
of $0.5 million over the prior year. Selling expense as a percentage of net
sales was 10.2% compared to 10.3% for the prior fiscal year.





General
and administrative expense was $7.8 million for the fiscal year ended January
31, 2004 compared to $7.9 million in the prior fiscal year. General and
administrative expense as a percentage of net sales was 10.4% for the fiscal
year ended January 31, 2004 compared to 11.3% for the prior fiscal year.





Interest
expense was $0.4 million for the fiscal year ended January 31, 2004 compared to
$0.5 million in the prior fiscal year. This decrease was due primarily to a
reduction of existing long-term debt.





Other
expense, net, increased $1.4 million for the fiscal year ended January 31, 2004
compared to the prior fiscal year. This increase is principally related to an
unusual charge for legal expenses incurred in defending allegations that
products sold by one of the Company’s divisions infringed on a competitor’s
intellectual property rights. We settled this case in February 2004.





The
effective tax rate was 34.0% for each of the fiscal years ended January 31, 2004
and 2003.








*Liquidity:*





The
Company’s cash and cash equivalents were $20.9 million on January 31, 2005
compared to $17.0 million on January 31, 2004, an increase of $3.9 million. This
increase is the net result of the positive cash flows provided by operating
activities of $8.5 million,  the exercise of stock options amounting to
$0.7 million and the effect of exchange rate changes totaling $0.1 million,
offset by payments of the quarterly cash dividends amounting to $2.5 million,
the purchase of treasury shares amounting to $0.5 million, payments on long-term
debt totaling $1.2 million and investment in property and equipment amounting to
$1.2 million. The Company’s cash flows from operating activities are influenced,
in part, by the timing of shipments and negotiated standard payment terms,
including retention associated with major projects.




Index
 13


Accounts
receivable were $13.6 million on January 31, 2005, a decrease of $3.0 million
compared to the prior fiscal year. The timing and size of shipments and
retainage on contracts, especially in the Product Recovery/Pollution Control
Equipment segment, will, among other factors, influence accounts receivable
balances at any point in time.





Inventories
totaled $13.8 million on January 31, 2005, an increase of $1.1 million compared
to the prior fiscal year. Inventory balances will fluctuate, in part, with the
size and timing of orders and market demand, especially when major systems and
contracts are involved.





Current
liabilities amounted to $13.9 million on January 31, 2005 compared to $14.2
million on January 31, 2004, a decrease of $0.3 million. A decrease in accounts
payable and accrued expenses, offset by an increase in customers’ advances,
accounted for this decrease.





The
Company has consistently maintained a high current ratio and has not utilized
either the domestic line of credit or the foreign line of credit totaling $5.0
million which are available for working capital purposes. Cash flows, in
general, have exceeded the current needs of the Company. The Company presently
foresees no change in this situation in the immediate future. As of January 31,
2005 and January 31, 2004, working capital was $36.4 million and $33.9 million,
respectively, and the current ratio was 3.6 and 3.4, respectively.








*Capital
Resources:*





Cash
flows provided by operating activities during the fiscal year ended January 31,
2005 amounted to $8.5 million compared with $8.2 million in the fiscal year
ended January 31, 2004, an increase of $0.3 million. This increase in cash flows
from operating activities was due principally to (i) the decrease in accounts
receivable and (ii) the increase in customers’ advances, which were offset by
(i) the decrease in net income and accounts payable and accrued expenses, and
(ii) the increase in inventory.





Cash
flows used in investing activities during the fiscal year ended January 31, 2005
amounted to $1.2 million compared to $1.0 million during the fiscal year ended
January 31, 2004. The Company’s investing activities principally represent the
acquisition of property, plant and equipment in the two operating segments
during both years. The Company continues to invest in machinery and equipment,
tooling, patterns and molds to improve efficiency and maintain our position as
leaders in the markets that we serve.





Financing
activities during the fiscal year ended January 31, 2005 used $3.5 million of
available resources compared to $3.8 million during the prior fiscal year. The
2005 activity is the result of the payment of quarterly cash dividends amounting
to $2.5 million, reduction of long-term debt totaling $1.2 million, and the
purchase of treasury shares totaling $0.5 million, offset by proceeds received
by the exercise of stock options amounting to $0.7 million.





The
Company paid $1.2 million of scheduled debt during the current fiscal year. The
percentage of long-term debt to equity at January 31, 2005 decreased to 6.4 %
compared to 9.0% at January 31, 2004.





During
the fiscal year ended January 31, 2005, the Company repurchased an aggregate of
32,881 shares at a cost of $0.5 million under the 400,000 (adjusted for stock
split) share stock repurchase program authorized by the Board of Directors on
December 15, 2000.





The
Board of Directors declared quarterly dividends of $.0725 per share payable on
March 10, 2004, June 9, 2004 and September 9, 2004 to shareholders of record at
the close of business on February 27, 2004, May 28, 2004 and August 27, 2004,
respectively, and quarterly dividends of $.0775 per share payable on December 9,
2004 and March 8, 2005 to shareholders of record at the close of business on
November 26, 2004 and February 25, 2005, respectively.





On
September 17, 2003, the Board of Directors declared a four-for-three stock split
which was paid on October 15, 2003 to shareholders of record on October 1, 2003.
All references in the financial statements to per share amounts, number of
shares outstanding, and number of shares covered by stock option and similar
plans have been restated to reflect the effect of the stock split.





The
Company accounts for its defined benefit plans in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 87, “Employers’ Accounting for
Pensions”. SFAS No. 87 requires a liability (“minimum pension liability”) be
recorded when the accumulated benefit obligation exceeds the fair value of plan
assets. On October 31, 2004, the Company’s annual measurement date, the
accumulated benefit obligation related to the Company’s pension plans exceeded
the fair value of the pension plan assets (such excess is referred to as an
unfunded accumulated benefit obligation). This difference is due to the decline
in the market value of assets in the Company’s non-contributory defined benefit
pension plan trust during the fiscal year ended January 31, 2003, combined with
a reduction in the discount rate from 7.00% to 6.25% in the fiscal year ended
January 31, 2004. In connection with this difference, the Company’s minimum
pension liability as of January 31, 2005 was $570,262.




Index
 14




As
part of our commitment to the future, the Company expended $0.8 million and $0.7
million on research and development for the fiscal years ended January 31, 2005
and 2004, respectively.





The
Company will continue to invest in new product development to maintain and
enhance its competitive position in the markets in which we participate. Capital
expenditures will be made to support operations and expand our capacity to meet
market demands. The Company intends to finance capital expenditures in the
coming year through cash flows from operations and will secure third party
financing, when deemed appropriate.








*Off-Balance
Sheet Arrangements:*




We
have no off-balance sheet arrangements that have, or are reasonably likely to
have, a current or future effect on our financial condition, revenues or
expenses, results of operations, liquidity, capital resources or capital
expenditures that is material to investors.








*Contractual
Obligations:*





The
following table summarizes the Company's contractual cash obligations by
required payment periods:






**Payments
      Due By**
      **Period**
    
    **Long-Term**
      **Debt**
    
    **Purchase
      Obligations**
    
    **Operating**
      **Leases**
    
    **Total
      Contractual**
      **Cash
      Obligations**Less
      than 1 Year
    
    $1,500,910
    
    $5,539,401
    
    $206,207
    
    $7,246,5181
      - 3 Years
    
    2,700,000
    
    -
    
    240,857
    
    2,940,8573
      - 5 Years
    
    1,200,000
    
    -
    
    -
    
    1,200,000More
      than 5 Years
    
    -
    
    -
    
    -
    
    -Total
    
    $5,400,910
    
    $5,539,401
    
    $447,064
    
    $11,387,375





Future
expected obligations under the Company's pension plans have not been included in
the contractual cash obligations table above.  The Company's pension plan
policy allows it to fund an amount, which could be in excess of the pension cost
expensed, subject to the limitations imposed by current tax regulations. 
The Company currently projects that it will be required to contribute
approximately $720,000 to its pension and deferred contribution plans during the
fiscal year ended January 31, 2006.








*Recent
Accounting Pronouncements:*





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





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





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”. This
Statement replaces SFAS No. 123 and supersedes Accounting Principles Board
(“APB”) No. 25. SFAS No. 123(R) will require the fair value of all stock option
awards issued to employees to be recorded as an expense over the related vesting
period. The Statement also requires the recognition of compensation expense for
the fair value of any unvested stock option awards outstanding at the date of
adoption. As permitted by SFAS No. 123, the Company currently accounts for
share-based payments to employees using the APB No. 25 intrinsic value method
and, as such, generally recognizes no compensation cost for employee stock
options. Accordingly, the adoption of SFAS No. 123(R)’s fair value method will
have an impact on our results of operations, although it will have no impact on
our overall financial position. Had we adopted SFAS No. 123(R) in prior periods,
the impact of that standard would have approximated the impact of SFAS No. 123
as described in the disclosure of pro forma net income and earnings per share on
page 29.





Index
 15




*Critical
Accounting Policies and Estimates:*





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





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





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





The
determination of our obligation and expense for pension benefits is dependent on
our selection of certain assumptions used by actuaries in calculating such
amounts. Those assumptions are described in Note 10 to the consolidated
financial statements and include, among others, the discount rate, expected
long-term rate of return on plan assets and rates of increase in compensation.
In accordance with generally accepted accounting principles, actual results that
differ from our assumptions are accumulated and amortized over future periods
and therefore, generally affect our recognized expense and recorded obligation
in such future periods. While we believe that our assumptions are appropriate,
significant differences in our actual experience or significant changes in our
assumptions may materially affect our pension obligations and our future
expense.








*Forward-Looking Statements; Factors That May
Affect Future Results:*





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





Our
results may differ materially from its current results and actual results could
differ materially from those suggested in the forward-looking statements as a
result of certain risk factors, including but not limited to those set forth
below, other one time events, other important factors disclosed previously and
from time to time in Met-Pro’s other filings with the Securities and Exchange
Commission.





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





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


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


·
    material
      changes in available technology;


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


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


Index
 16
  ·
    the
      cost of compliance with Sarbanes-Oxley and other applicable legal and
      listing requirements, and the unanticipated possibility that Met-Pro may
      not meet these requirements;


·
    unexpected
      results in our product development
activities;


·
    loss
      of key customers;


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


·
    changes
      in our existing management;


·
    exchange
      rate fluctuations;


·
    changes
      in federal laws, state laws and
regulations;


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


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


·
    the
      effect of acquisitions and other strategic
ventures;


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


·
    the
      cancellation or delay of purchase orders or
shipments;


·
    losses
      related to international sales; and/or


·
    failure
      in execution of acquisition strategy.








**Item
7A.*****Quantitative
and Qualitative Disclosure About Market Risks:***





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












Index
 17





**Item
8.*****Financial
Statements and Supplementary Data:***





Index
to Consolidated Financial Statements and Supplementary Data:




PageConsolidated
      Financial Statements:Management’s Report on Internal Control
      Over Financial Reporting
    19Report of Independent Registered Public Accounting
      Firm
    20Report of Independent Registered Public Accounting
      Firm
    21Consolidated Statement of
      Operations
    22Consolidated Balance Sheet
    23Consolidated Statement of Cash Flows
    24Consolidated Statement of Shareholders’
      Equity
    25Consolidated Business Segment
      Data
    26Notes to Consolidated Financial Statements
    27Supplementary
      Data:Quarterly Financial Data
    43















Index
 18





**MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING**
  
 The
management of Met-Pro Corporation (the “Company”) is responsible for
establishing and maintaining adequate internal control over financial reporting.
The Company’s internal control over financial reporting is a process designed
under the supervision of the Chief Executive and Chief Financial Officers to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of the Company’s financial statements for external reporting
purposes in accordance with accounting principles generally accepted in the
United States.
 
 As
of January 31, 2005, management conducted an assessment of the
effectiveness of the Company’s internal control over financial reporting based
on the framework established in *Internal
Control-Integrated Framework* issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on this assessment, management has determined that the Company’s internal
control over financial reporting as of January  31, 2005 is effective to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of the Company’s financial statements for external reporting
purposes in accordance with accounting principles generally accepted in the
United States.
 
 Our
internal control over financial reporting includes policies and procedures that
pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect transactions and dispositions of assets; provide reasonable
assurances that transactions are recorded as necessary to permit preparation of
financial statements in accordance with accounting principles generally accepted
in the United States, and that receipts and expenditures are being made only in
accordance with authorizations of management; and provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on our
financial statements.
 
 Management’s
assessment of the effectiveness of the Company’s internal control over financial
reporting as of January 31, 2005, has been audited by Margolis &
Company P.C., an independent registered public accounting firm, as stated in
their report appearing herein, which expresses unqualified opinions on
management’s assessment and on the effectiveness of the Company’s internal
control over financial reporting as of January 31, 2005.
 
 The
Company’s management, including the Chief Executive Officer and Chief Financial
Officer, does not expect that our internal control over financial reporting will
prevent or detect all errors and all frauds. A control system, no matter how
well designed and operated, can provide only reasonable, not absolute, assurance
that the control system’s objectives will be met. The design of a control system
must reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Further, because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not
occur or that all control issues and instances of fraud, if any, within the
Company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake. Controls can also be circumvented by the
individual acts of some persons, by collusion of two or more people, or by
management override of the controls. The design of any system of controls is
based, in part, on certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving its
stated goals under all potential future conditions. Projections of any
evaluation of controls effectiveness to future periods are subject to risks.
Over time, controls may become inadequate because of changes in conditions or
deterioration in the degree of compliance with policies or
procedures.
 
 
 /s/
Raymond J. De Hont
 Raymond
J. De Hont
 President
and Chief Executive Officer
 
 
 /s/
Gary J. Morgan
 Gary
J. Morgan
 Chief
Financial Officer
 
 Harleysville,
Pennsylvania
 February
25, 2005


Index
 19




**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM**








To
the Board of Directors and Shareholders


Met-Pro
Corporation


Harleysville,
Pennsylvania





We
have audited the accompanying consolidated balance sheet of Met-Pro Corporation
and its wholly-owned subsidiaries as of January 31, 2005 and 2004, and the
related consolidated statements of operations, shareholders’ equity and cash
flows for each of the three years in the period ended January 31, 2005. These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.





In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Met-Pro Corporation
and its wholly-owned subsidiaries as of January 31, 2005 and 2004, and the
results of their operations and their cash flows for each of the three years in
the period ended January 31, 2005, in conformity with accounting principles
generally accepted in the United States of America.





We
also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of Met-Pro
Corporation’s internal control over financial reporting as of January 31, 2005,
based on criteria established in *Internal
Control—Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO), and our report dated February 25, 2005 expressed an unqualified opinion
on management’s assessment of internal control over financial reporting and an
unqualified opinion on the effectiveness of internal control over financial
reporting.








/s/
Margolis & Company P.C.





Bala
Cynwyd, Pennsylvania


February
25, 2005




Index
 20




**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM**








To
the Board of Directors and Shareholders


Met-Pro
Corporation


Harleysville,
Pennsylvania





We
have audited management’s assessment, included in the accompanying *Management’s
Report on Internal Control Over Financial Reporting* ,
that Met-Pro Corporation and its wholly-owned subsidiaries (the “Company”)
maintained effective internal control over financial reporting as of January 31,
2005, based on criteria established in *Internal
Control-Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Company’s management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting. Our responsibility
is to express an opinion on management’s assessment and an opinion on the
effectiveness of the Company’s internal control over financial reporting based
on our audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of internal control over
financial reporting, evaluating management’s assessment, testing and evaluating
the design and operating effectiveness of internal control, and performing such
other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.





A
company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over
financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial
statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





In
our opinion, management’s assessment that the Company maintained effective
internal control over financial reporting as of January 31, 2005 is fairly
stated, in all material respects, based on criteria established in *Internal
Control-Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Also, in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of January 31, 2005,
based on criteria established in *Internal
Control-Integrated Framework* issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).





We
also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the accompanying consolidated
balance sheets of the Company as of January 31, 2005 and 2004 and the related
statements of operations, shareholders’ equity and cash flows for each of the
three years in the period ended January 31, 2005, and our report dated February
25, 2005 expressed an unqualified opinion.








/s/
Margolis & Company P.C.





Bala
Cynwyd, Pennsylvania


February
25, 2005







Index
 21
 **MET-PRO
CORPORATION**


**CONSOLIDATED STATEMENT OF
OPERATIONS**








**Years ended January 31,****2005**
    
    **2004**
    
    **2003****Net
      sales**
    $72,116,289
    
    $75,058,929
    
    $69,619,382Cost
      of goods sold
    49,441,456
    
    48,406,090
    
    45,439,557Gross
      profit
    22,674,833
    
    26,652,839
    
    24,179,825**Operating
      expenses**Selling
    7,537,508
    
    7,662,594
    
    7,139,082General
      and administrative
    7,624,276
    
    7,823,007
    
    7,885,75715,161,784
    
    15,485,601
    
    15,024,839Income
      from operations
    7,513,049
    
    11,167,238
    
    9,154,986Interest
      expense
    (371,345
    )
    (441,704
    )
    (505,394
    )Other
      income/(expense), net
    153,266
    
    (1,109,506
    )
    278,126Income
      before taxes
    7,294,970
    
    9,616,028
    
    8,927,718Provision
      for taxes
    2,480,291
    
    3,269,449
    
    3,039,339**Net
      income**
    $4,814,679
    
    $6,346,579
    
    $5,888,379**Earnings
      per share**Basic
      (adjusted for stock split)
    $.58
    
    $.76
    
    $
      .71Diluted
      (adjusted for stock split)
    $.57
    
    $.76
    
    $
      .71**Average
      number of common and****common
      equivalent shares outstanding**Basic
      (adjusted for stock split)
    8,359,382
    
    8,297,668
    
    8,239,491Diluted
      (adjusted for stock split)
    8,463,005
    
    8,398,256
    
    8,295,328The notes to
      consolidated financial statements are an integral part of the above
      statement.











Index
 22
 **MET-PRO
CORPORATION**




**CONSOLIDATED BALANCE SHEET**







**January 31,****ASSETS**
    **2005**
    
    **2004**Current
      assetsCash
      and cash equivalents
    $20,889,476
    
    $16,996,253Accounts
      receivable, net of allowance fordoubtful
      accounts of approximately$213,000
      and $208,000, respectively
    13,637,599
    
    16,608,344Inventories
    13,843,171
    
    12,755,011Prepaid
      expenses, deposits and other current assets
    1,250,098
    
    1,209,395Deferred
      income taxes
    650,151
    
    604,426Total
      current assets
    50,270,495
    
    48,173,429Property,
      plant and equipment, net
    11,287,253
    
    11,514,199Costs
      in excess of net assets of businesses acquired, net
    20,798,913
    
    20,798,913Other
      assets
    567,405
    
    649,016**Total
      assets**
    $82,924,066
    
    $81,135,557





****


**LIABILITIES
      AND SHAREHOLDERS’ EQUITY**Current
      liabilitiesCurrent
      portion of long-term debt
    $1,500,910
    
    $1,533,866Accounts
      payable
    5,028,074
    
    5,073,554Accrued
      salaries, wages and expenses
    5,397,195
    
    6,542,306Dividend
      payable
    648,381
    
    602,755Customers’
      advances
    1,293,332
    
    476,982Total
      current liabilities
    13,867,892
    
    14,229,463Long-term
      debt
    4,039,068
    
    5,447,869Other
      non-current liabilities
    41,015
    
    38,818Deferred
      income taxes
    1,810,900
    
    1,148,673Total
      liabilities
    19,758,875
    
    20,864,823CommitmentsShareholders’
      equityCommon
      shares, $.10 par value; 18,000,000 sharesauthorized,
      9,634,956 shares issued,of
      which 1,266,914 and 1,311,679 shares were reacquiredand
      held in treasury at the respective dates
    963,496
    
    963,496Additional
      paid-in capital
    7,930,646
    
    7,955,459Retained
      earnings
    66,032,446
    
    63,727,425Accumulated
      other comprehensive income/(loss)
    100,635
    
    (328,616
    )Treasury
      shares, at cost
    (11,862,032
    )
    (12,047,030
    )Total
      shareholders’ equity
    63,165,191
    
    60,270,734**Total
      liabilities and shareholders’ equity**
    $82,924,066
    
    $81,135,557The
      notes to consolidated financial statements are an integral part of the
      above statement.




Index
 23
 **MET-PRO
CORPORATION**




**CONSOLIDATED STATEMENT OF CASH FLOWS**


****


**Years
      ended January 31,****2005**
    
    **2004**
    
    **2003**





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





**Cash
      flows from operating activities**Net
      income
    $4,814,679
    
    $6,346,579
    
    $5,888,379Adjustments
      to reconcile net income to netcash
      provided by operating activities:Depreciation
      and amortization
    1,491,894
    
    1,571,482
    
    1,559,357Deferred
      income taxes
    511,225
    
    471,652
    
    379,874(Gain)
      loss on sales of property and equipment, net
    (6,358
    )
    24,906
    
    (5,247
    )Allowance
      for doubtful accounts
    4,823
    
    (55,077
    )
    34,188(Increase)
      decrease in operating assets,net
      of acquisition of business:Accounts
      receivable
    3,080,432
    
    (4,156,402
    )
    (1,420,024
    )Inventories
    (1,008,533
    )
    766,704
    
    591,932Prepaid
      expenses, deposits and other current assets
    (31,363
    )
    (214,988
    )
    (52,207
    )Other
      assets
    48,833
    
    (336,490
    )
    (8,408
    )Increase
      (decrease) in operating liabilities,net
      of acquisition of business:Accounts
      payable and accrued expenses
    (1,176,126
    )
    3,352,279
    
    (406,094
    )Customers’
      advances
    813,818
    
    460,009
    
    (732,761
    )Other
      non-current liabilities
    2,197
    
    2,197
    
    2,197**Net
      cash provided by operating activities**
    8,545,521
    
    8,232,851
    
    5,831,186**Cash
      flows from investing activities**Proceeds
      from sale of property and equipment
    18,965
    
    -
    
    19,347Acquisitions
      of property and equipment
    (1,193,767
    )
    (952,812
    )
    (752,125
    )Payment
      for acquisition of business
    -
    
    -
    
    (465,673
    )**Net
      cash (used in) investing activities**
    (1,174,802
    )
    (952,812
    )
    (1,198,451
    )**Cash
      flows from financing activities**Proceeds
      from new borrowing
    -
    
    -
    
    16,373Reduction
      of debt
    (1,233,866
    )
    (1,536,927
    )
    (1,235,974
    )Exercise
      of stock options
    698,685
    
    884,339
    
    353,229Payment
      of dividends
    (2,464,033
    )
    (2,280,833
    )
    (2,029,579
    )Purchase
      of treasury shares
    (538,499
    )
    (893,570
    )
    (289,218
    )Payment
      of cash in lieu of fractional shares
    -
    
    (1,421
    )
    -**Net
      cash (used in) financing activities**
    (3,537,713
    )
    (3,828,412
    )
    (3,185,169
    )Effect
      of exchange rate changes on cash
    60,217
    
    115,259
    
    149,541**Net
      increase in cash and cash equivalents**
    3,893,223
    
    3,566,886
    
    1,597,107Cash
      and cash equivalents at beginning of year
    16,996,253
    
    13,429,367
    
    11,832,260**Cash
      and cash equivalents at end of year**
    $20,889,476
    
    $16,996,253
    
    $13,429,367The
      notes to consolidated financial statements are an integral part of the
      above statement.






Index
 24
 **MET-PRO
CORPORATION**




**CONSOLIDATED STATEMENT OF SHAREHOLDERS’
EQUITY**





**Accumulated****Additional**
    
    
    **Other****Common**
    **Paid-in**
    **Retained**
    
    **Comprehensive**
    **Treasury****Shares**
    **Capital**
    **Earnings**
    
    **Income/(Loss)**
    **Shares**
    
    **Total**
Balances,
      January 31, 2002
    $721,916
    $7,879,368
    
    $55,990,079
    
    ($827,737
    )
    ($13,484,232
    )
    $50,279,394Comprehensive
      income:Net
      income
    -
    -
    
    5,888,379
    
    -
    
    -Cumulative
      translation adjustment
    -
    -
    
    -
    
    617,563
    
    -Interest
      rate swap, net of tax of $109,056
    -
    -
    
    -
    
    (202,802
    )
    -Minimum
      pension liability adjustment,net
      of tax of $70,991
    -
    -
    
    -
    
    (128,983
    )
    -Total
      comprehensive income
    
    
    
    
    
    
    
    
    
    6,174,157Issuance
      of treasury shares for acquisitionof
      business
    -
    250,782
    
    -
    
    -
    
    1,349,218
    
    1,600,000Dividends
      paid, $.1913 per share
    -
    -
    
    (1,614,024
    )
    -
    
    -
    
    (1,614,024
    )Dividend
      declared, $.0675 per share
    -
    -
    
    (559,167
    )
    -
    
    -
    
    (559,167
    )Proceeds
      from issuance of commonshares
      under dividend reinvestmentplan
      (9,517 shares)
    714
    100,801
    
    -
    
    -
    
    -
    
    101,515Stock
      option transactions
    -
    (34,169
    )
    -
    
    -
    
    387,397
    
    353,228Purchase
      of 26,588 treasury shares
    -
    -
    
    -
    
    -
    
    (289,218
    )
    (289,218
    )Balances,
      January 31, 2003
    722,630
    8,196,782
    
    59,705,267
    
    (541,959
    )
    (12,036,835
    )
    56,045,885Comprehensive
      income:Net
      income
    -
    -
    
    6,346,579
    
    -
    
    -Cumulative
      translation adjustment
    -
    -
    
    -
    
    449,074
    
    -Interest
      rate swap, net of tax of
      ($51,447)
    -
    -
    
    -
    
    78,812
    
    -Minimum
      pension liability adjustment,net
      of tax of $157,492
    -
    -
    
    -
    
    (314,543
    )
    -Total
      comprehensive income
    
    
    
    
    
    
    
    
    
    6,559,922Stock
      split four-for-three
    240,866
    (240,866
    )
    -
    
    -
    
    -
    
    -Cash
      in lieu of fractional shares
    -
    (1,421
    )
    -
    
    -
    
    -
    
    (1,421
    )Dividends
      paid, $.2025 per share
    -
    -
    
    (1,721,666
    )
    -
    
    -
    
    (1,721,666
    )Dividend
      declared, $.0725 per share
    -
    -
    
    (602,755
    )
    -
    
    -
    
    (602,755
    )Stock
      option transactions
    -
    964
    
    -
    
    -
    
    883,375
    
    884,339Purchase
      of 62,480 treasury shares
    -
    -
    
    -
    
    -
    
    (893,570
    )
    (893,570
    )Balances,
      January 31, 2004
    963,496
    7,955,459
    
    63,727,425
    
    (328,616
    )
    (12,047,030
    )
    60,270,734Comprehensive
      income:Net
      income
    -
    -
    
    4,814,679
    
    -
    
    -Cumulative
      translation adjustment
    -
    -
    
    -
    
    224,890
    
    -Interest
      rate swap, net of tax of
      ($70,683)
    -
    -
    
    -
    
    137,208
    
    -Minimum
      pension liability adjustment,net
      of tax of ($34,594)
    -
    -
    
    -
    
    67,153
    
    -Total
      comprehensive income
    
    
    
    
    
    
    
    
    
    5,243,930Dividends
      paid, $.2175 per share
    -
    -
    
    (1,861,277
    )
    -
    
    -
    
    (1,861,277
    )Dividend
      declared, $.0775 per share
    -
    -
    
    (648,381
    )
    -
    
    -
    
    (648,381
    )Stock
      option transactions
    -
    (24,813
    )
    -
    
    -
    
    723,498
    
    698,685Purchase
      of 32,881 treasury shares
    -
    -
    
    -
    
    -
    
    (538,500
    )
    (538,500
    )**Balances,
      January 31, 2005**
    $963,496
    $7,930,646
    
    $66,032,446
    
    $100,635
    
    ($11,862,032
    )
    $63,165,191The
      notes to consolidated financial statements are an integral part of the
      above statement.


Index
 25
 **MET-PRO
CORPORATION**


**CONSOLIDATED BUSINESS SEGMENT
DATA**






**Years
      ended January 31,****2005**
    **2004**
    **2003****Net
      sales to unaffiliated customers**Product
      recovery/pollution control equipment
    $42,861,110
    $50,746,995
    $46,094,834Fluid
      handling equipment
    29,255,179
    24,311,934
    23,524,548$72,116,289
    $75,058,929
    $69,619,382**Includes
      foreign sales of:**Product
      recovery/pollution control equipment
    $5,187,629
    $5,234,164
    $4,777,495Fluid
      handling equipment
    10,264,500
    7,811,469
    5,907,012$15,452,129
    $13,045,633
    $10,684,507**Income
      from operations**Product
      recovery/pollution control equipment
    $3,761,248
    $7,977,169
    $6,039,173Fluid
      handling equipment
    3,751,801
    3,190,069
    3,115,813$7,513,049
    $11,167,238
    $9,154,986**Depreciation
      and amortization expense**Product
      recovery/pollution control equipment
    $841,619
    $887,979
    $859,590Fluid
      handling equipment
    650,275
    683,503
    699,767$1,491,894
    $1,571,482
    $1,559,357**Capital
      expenditures**Product
      recovery/pollution control equipment
    $495,575
    $443,884
    $301,437Fluid
      handling equipment
    565,204
    308,833
    315,4091,060,779
    752,717
    616,846Corporate
    132,988
    200,095
    135,279$1,193,767
    $952,812
    $752,125**Identifiable
      assets at January 31**Product
      recovery/pollution control equipment
    $41,554,730
    $44,613,967
    $41,396,626Fluid
      handling equipment
    19,784,083
    19,313,159
    18,417,18761,338,813
    63,927,126
    59,813,813Corporate
    21,585,253
    17,208,431
    13,940,858$82,942,066
    $81,135,557
    $73,754,671The
      Company follows the practice of allocating general corporate
      expenses,including
      depreciation and amortization expense, between the
    segments.





****








Index
 26
 **MET-PRO
CORPORATION**






**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








****NOTE 1:**
    ****NATURE
      OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
      POLICIES****** ****





*Nature
of operations:*





The
Company manufactures and sells product recovery/pollution control equipment for
purification of air and liquids, and fluid handling equipment for corrosive,
abrasive and high temperature liquids.





*Basis
of presentation:*





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





*Use
of estimates:*





The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.





*Foreign
currency translation:*





Assets
and liabilities of the Company’s foreign subsidiaries are translated at current
exchange rates, while income and expenses are translated at average rates for
the period. Translation gains and losses are reported as a component of other
comprehensive income in the Statement of Shareholders’ Equity.





*Inventories:*





Inventories
are stated at the lower of cost (principally first-in, first-out) or market
except for the inventory at the Dean Pump Division which is determined on the
last-in, first-out basis (see Note 4).





*Property,
plant and equipment:*





Property,
plant and equipment are stated at cost. Depreciation is computed principally by
the straight-line method over estimated useful lives. Expenditures for
maintenance and repairs are charged to expense as incurred. Renewals and
betterments are capitalized (see Note 5).





*Costs
in excess of net assets of businesses acquired:*





In
June 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 141, “Business Combinations”, and
SFAS No. 142, “Goodwill and Other Intangible Assets”. SFAS No. 141, which was
effective for business combinations completed after June 30, 2001, requires,
among other things, that (1) the purchase method of accounting be used for all
business combinations, (2) specific criteria be established for the recognition
of intangible assets separately from goodwill and (3) additional information
about acquired intangible assets be provided. SFAS No. 142, which became
effective for the Company as of February 1, 2002, primarily addresses the
accounting for goodwill and intangible assets subsequent to their acquisition.
Among other things it requires that goodwill not be amortized for financial
statement purposes; instead, management is required to test goodwill for
impairment at least annually. The Company performed its annual impairment test
in the fourth quarter of the fiscal year ended January 31, 2005 using a fair
value approach. No impairment was present upon performing this test. At January
31, 2005, costs in excess of net assets of businesses acquired associated with
the Company’s reportable business segments totaled $20,798,913. The Company
cannot predict the occurrence of certain events that might adversely affect the
reportable value of costs in excess of net assets of businesses
acquired. ****





Index
 27
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








The
changes in the carrying amount of costs in excess of net assets of businesses
acquired by business segment for the fiscal year ended January 31, 2005 are as
follows:




**Product
      Recovery/****Pollution
      Control**
    **Fluid
      Handling****Equipment**
    **Equipment**
    **Total**
 Balance
      as of February 1, 2004
    $19,066,431
    $1,732,482
    $20,798,913Goodwill
      acquired during the period
    -
    -
    -Balance
      as of January 31, 2005
    $19,066,431
    $1,732,482
    $20,798,913


*Revenue
recognition:*





Revenues
are generally recognized when products are shipped.





*Advertising* :





Advertising
costs are charged to operations in the year incurred and were $1,307,722,
$1,340,929 and $1,299,908 for the years ended January 31, 2005, 2004 and 2003,
respectively.





*Research
and development:*





Research
and development costs are charged to operations in the year incurred and were
$755,778, $700,622 and $624,098 for the years ended January 31, 2005, 2004 and
2003, respectively.





*Earnings
per share:*





Basic
earnings per share are computed based on the weighted average number of common
shares outstanding during each year.





Diluted
earnings per share are computed based on the weighted average number of shares
outstanding plus all potential dilutive common shares outstanding (stock
options) during each year.





Basic
and diluted earnings per share have been restated to reflect the effect of the
four-for-three stock split, which was effective October 15, 2003.





*Dividends* :





On
December 14, 2004, the Board of Directors declared a $.0775 per share quarterly
cash dividend payable on March 8, 2005 to shareholders of record on February 25,
2005, amounting to an aggregate of $648,381.





*Stock
splits* :





On
September 17, 2003, the Board of Directors declared a four-for-three stock
split, effected in the form of a stock distribution, payable on October 15, 2003
to shareholders of record on October 1, 2003. The Company retained the current
par value of $.10 per share for all common shares. All references in the
financial statements and notes to the number of shares outstanding, per share
amounts, and stock option data of the Company’s common shares have been restated
to reflect the effect of the stock split for all periods presented.





Shareholders’
equity reflects the stock split by reclassifying from “Additional Paid-in
Capital” to “Common Shares” an amount equal to the par value of the additional
shares arising from the split.





Index
 28
 **MET-PRO
CORPORATION**





**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








*Stock
options:*





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





Pro
forma information regarding net income and earnings per share is required by
SFAS No. 123, which requires that the information be determined as if we had
accounted for our stock options under the fair-value method. The fair value for
these options was estimated at the date of grant using the Black-Scholes pricing
model with the following assumptions: risk-free interest rates ranging from 2.9%
to 3.4%, dividend yield ranging from 1.8% to 3.9%, expected volatility of the
market price of the Company’s Common Shares ranging from 28% to 32%, and an
expected option life of five years.





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





The
pro forma information compared to reported information for the three years ended
January 31 is presented in the following table:





**2005**
    **2004**
    **2003**Net
      income:As
      reported
    $4,814,679
    $6,346,579
    $5,888,379Pro forma
    4,404,760
    6,182,008
    5,788,478Basic
      earnings per share:As reported
    $.58
    $.76
    $.71Pro forma
    .53
    .75
    .70Diluted
      earnings per share:As reported
    $.57
    $.76
    $.71Pro forma
    .52
    .74
    .70Adjusted
      for four-for-three stock split.










During
the fiscal year ended January 31, 2005, the Company accelerated the vesting of
options covering 65,182 shares as to which the $17.15 per share exercise price
was in excess of the then-trading price of the Company’s shares (“out of the
money options”). This action caused the increase in pro forma compensation
expense noted above under SFAS No. 123 for the fiscal year ended January 31,
2005 and was taken primarily to avoid the recognition of an expense in
connection with the vesting of these options that would be required by the
revision to SFAS No. 123, which will be effective for the Company on July 1,
2005. By vesting options which were out of the money, the expense under SFAS No.
123 is reflected only in the footnote disclosure above, and therefore, the
future expense to be recorded once the revised SFAS No. 123 is effective is
reduced.





The
pro forma effects of applying SFAS No. 123 to fiscal 2005, 2004 and 2003 may not
be representative of the pro forma effects in future years. Based on the vesting
schedule of the Company’s stock option grants, the pro forma effects on earnings
are most pronounced in the early years following each grant. The timing and
magnitude of any future grants is at the discretion of the Company’s Board of
Directors and cannot be assured.





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




Index
 29
 **MET-PRO
CORPORATION**


****


**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








*Concentrations
of credit risk:*





Financial
instruments which potentially subject the Company to concentrations of credit
risk consist of cash and cash equivalents (see Note 2), and trade accounts
receivable. The Company believes concentrations of accounts receivable credit
risk are limited due to the number of customers, and dispersion among the
business segments and geographic areas. It is the policy of management to review
the outstanding accounts receivable at the end of each reporting period, as well
as the bad debt write-offs experienced in the past, and establish an allowance
for doubtful accounts for uncollectable amounts.





*Supplemental
cash flow information:*


**2005**
    **2004**
    **2003**Cash
      paid during the year for:Interest
    $327,776
    $395,494
    $465,728Income
      taxes
    1,982,222
    2,634,096
    2,732,862





*Recent
accounting pronouncements:*





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





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





In
December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”. This
Statement replaces SFAS No. 123 and supersedes APB No. 25. SFAS No. 123(R) will
require the fair value of all stock option awards issued to employees to be
recorded as an expense over the related vesting period. The Statement also
requires the recognition of compensation expense for the fair value of any
unvested stock option awards outstanding at the date of adoption. As permitted
by SFAS No. 123, the Company currently accounts for share-based payments to
employees using the APB No. 25 intrinsic value method and, as such, generally
recognizes no compensation cost for employee stock options. Accordingly, the
adoption of SFAS No. 123(R)’s fair value method will have an impact on our
results of operations, although it will have no impact on our overall financial
position. Had we adopted SFAS No. 123(R) in prior periods, the impact of that
standard would have approximated the impact of SFAS No. 123 as described in the
disclosure of pro forma net income and earnings per share on page 29.















Index
 30
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








****NOTE 2:**
    ****FAIR
      VALUE OF FINANCIAL
INSTRUMENTS******





*Cash
and cash equivalents:*





Short-term
investments at January 31, 2005 and 2004 were valued at cost (approximating
market) and amounted to $20,878,623 and $13,891,531, respectively. Short-term
investments consist principally of certificate of deposits with an original
maturity of six months or less, and money market funds, both of which are
considered to be cash equivalents. The Company evaluates the creditworthiness of
the financial institutions and financial instruments in which it
invests.





*Debt:*





The
fair value and carrying amount of long-term debt was as follows: ****


**January
      31,****2005**
    **2004**Fair value
    $5,545,754
    $7,011,068Carrying amount
    5,539,978
    6,981,735





Valuations
for long-term debt are determined based on borrowing rates currently available
to the Company for loans with similar terms and maturities.





The
Company uses an interest rate swap (see Note 6) to minimize its exposure to
fluctuations in interest rates. The interest rate differential to be paid or
received under this agreement is recognized over the term of the loan and is
included in interest expense.





The
Company’s financial instruments are not held for trading purposes.








****NOTE 3:**
    ****ACQUISITION OF
      BUSINESS******





Effective
May 22, 2002, the Company, pursuant to an Agreement and Plan of Merger, acquired
100% of the Common Shares of Pristine Hydrochemical Inc. (“Pristine”) for a
purchase price of approximately $3,200,000. The results of Pristine’s operations
have been included in the consolidated financial statements since that date. The
acquisition was accounted for as a purchase transaction. Pristine sells water
treatment chemicals and services to municipal water utilities, and boiler and
water cooling chemicals and services to industrial and commercial markets. It is
expected that Pristine will complement the operations of the Company’s
Stiles-Kem Division.





The
acquisition was completed by issuing Common Shares from the treasury valued at
$1,600,000 (151,300 shares, adjusted for stock split), a cash payment of
$400,000, promissory notes payable for $1,200,000, plus acquisition costs. The
notes are payable over a four-year period in installments of $300,000 annually,
plus interest at a fixed rate of 4.75% (see Note 6). Goodwill totaling
approximately $3,018,000 was acquired.

















Index
 31
 **MET-PRO
CORPORATION**






**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**





****NOTE 4:**
    ****INVENTORIES**********





Inventories
consisted of the following:





**January
      31,****2005**
    **2004**Raw
      materials
    $7,965,553
    $7,069,349Work
      in process
    1,682,391
    1,186,898Finished
      goods
    4,195,227
    4,498,764$13,843,171
    $12,755,011








At
January 31, 2005 and 2004, inventories valued at the last-in, first-out method
(“LIFO”) were $2,028,623 and $2,172,540, respectively. The LIFO value of
inventories was lower than replacement cost by $988,992 and $926,888 at January
31, 2005 and 2004, respectively.





The
book basis of LIFO inventories exceeded the tax basis by approximately $983,000
and $1,026,000 at January 31, 2005 and 2004, respectively, as a result of
applying the provisions of Accounting Principles Board Opinion No. 16, “Business
Combinations”, to an acquisition completed in a prior year.




****NOTE
      5:**
    ****PROPERTY,
      PLANT AND
EQUIPMENT******





Property,
plant and equipment consisted of the following:




**January
      31,****2005**
    **2004**Land
    $2,155,104
    $2,131,045Buildings
      and improvements
    11,396,731
    11,266,376Machinery
      and equipment
    11,999,576
    11,596,206Furniture
      and fixtures
    4,707,416
    4,716,192Automotive
      equipment
    1,289,731
    1,093,741Construction
      in progress
    179,804
    73,38831,728,362
    30,876,948Less
      accumulated depreciation
    20,441,109
    19,362,749$11,287,253
    $11,514,199







Depreciation
of property, plant and equipment charged to operations amounted to $1,459,116,
$1,510,417 and $1,486,083 for the fiscal years ended in 2005, 2004 and 2003,
respectively.



















Index
 32
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**





****


**NOTE
      6:**
    ****DEBT****





*Short-term
debt:*





The
Company has available both domestic and foreign unsecured lines of credit
totaling $5,000,000 which can be used for working capital. The lines of credit
were not used during either year.





*Long-term
debt:*





Long-term
debt consisted of the following:


**January
      31,****2005**
    **2004**Note
      payable, bank, payable inquarterly
      installments of $300,000,plus
      interest at a fixed rate swap of5.98%,
      maturing October, 2008
    $4,800,000
    $5,700,000Notes
      payable, payable in annualinstallments
      of $300,000, plusinterest
      at a fixed rate of 4.75%,maturing
      May, 2006
    600,000
    900,000Equipment
      note, payable in monthlyinstallments
      ranging from $455 to$1,074,
      maturing November 2004through
      March, 2005, no interest
    910
    34,7765,400,910
    6,634,776Less
      current portion
    1,500,910
    1,533,8663,900,000
    5,100,910Fair
      market value of interest rateswap
      liability
    139,068
    346,959Long-term
      portion
    $4,039,068
    $5,447,869





The
note payable, bank is subject to certain covenants, including maintenance of
prescribed amounts of leverage and fixed charge coverage ratios.





Maturities
of long-term debt are as follows:







**Year
      Ending****January
      31,**2006
    $1,500,9102007
    1,500,0002008
    1,200,0002009
    1,200,000$5,400,910




Interest
expense was $371,345, $441,704 and $505,394 for the years ended in 2005, 2004
and 2003, respectively.





Index
 33
 **MET-PRO
CORPORATION**







**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**




****NOTE
      7:**
    ****SHAREHOLDERS'
      EQUITY******





On
December 15, 2000, the Company announced a 400,000 (adjusted for stock split)
share stock repurchase program, which began after the Company’s February 21,
2000 stock repurchase program was completed. During the fiscal year ended
January 31, 2005, the Company repurchased 32,881 Common Shares at a cost of $0.5
million. At January 31, 2005, the Company had the authority to repurchase an
additional 212,599 shares under the December 15, 2000 stock repurchase
program.





The
Company has a Shareholders’ Rights Plan, under which the Company’s Board of
Directors declared a dividend of one Right for each Common Share owned. The Plan
provides, under certain conditions involving acquisition of the Company’s Common
Shares, that holders of Rights, except for the acquiring entity, would be
entitled to purchase Common Shares of the Company, or acquiring company, having
a value of twice the Rights’ exercise price. The Rights under the Plan expire in
2010.





****


**NOTE
      8:**
    ****INCOME
      TAXES****





The
provision for income taxes was comprised of the following:





****


**2005**
    **2004**
    **2003**CurrentFederal
    $1,396,111
    $2,331,231
    $2,291,842State
    240,048
    242,078
    275,729Foreign
    227,630
    224,488
    91,8941,863,789
    2,797,797
    2,659,465Deferred
    616,502
    471,652
    379,874$2,480,291
    $3,269,449
    $3,039,339


****






















































Index
 34
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








Deferred
income taxes reflect the net tax effect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. Significant components of the net
deferred tax assets (liabilities) were as follows:





**2005**
    
    **2004**Deferred
      tax assetsInventory
      cost capitalization
    $130,509
    
    $137,143Pension
      cost
    888,398
    
    955,321Non-compete
      agreements
    283,707
    
    334,896Other
    243,859
    
    242,983Total
      deferred tax assets
    1,546,473
    
    1,670,343Deferred
      tax liabilitiesAccelerated
      depreciation
    652,942
    
    612,907Inventory
      - Dean Pump Division
    334,241
    
    348,913Prepaid
      Expenses
    189,547
    
    -Goodwill
    1,530,492
    
    1,235,474Other
    -
    
    17,296Total
      deferred tax liabilities
    2,707,222
    
    2,214,590Net
      deferred tax assets/(liabilities)
    ($1,160,749
    )
    ($544,247
    )








A
reconciliation of the federal statutory rate and the Company’s effective tax
rate is presented as follows: ****




**2005**
    
    **2004**
    
    **2003**Computed
      expectedtax
      expense (federal)
    $2,480,291
    
    34.0
    %
    $3,269,449
    
    34.0
    %
    $3,035,424
    
    34.0
    %State
      income taxes,net
      of federalincome
      tax benefit
    158,432
    
    2.2
    
    177,415
    
    1.8
    
    188,981
    
    2.1Other
    (158,432
    )
    (2.2
    )
    (177,415
    )
    (1.8
    )
    (185,066
    )
    (2.1
    )Effective
      income taxes
    $2,480,291
    
    34.0
    %
    $3,269,449
    
    34.0
    %
    $3,039,339
    
    34.0
    %


****


**NOTE 9:**
    **LEASES AND OTHER
      COMMITMENTS**





The
Company has various real estate operating leases for warehouse space and office
space for sales, general and administrative purposes. Future minimum lease
payments under these non-cancelable operating leases at January 31, 2005 were as
follows:




2006
    $206,2072007
    132,1242008
    108,733
 
  Rental
expense for the above operating leases during the fiscal years ended in 2005,
2004 and 2003 was $266,884, $397,291 and $466,911, respectively.




Index
 35
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**






**NOTE
      10:**
    ****EMPLOYEE
      BENEFIT PLANS****


*Pension
Plans:*





The
Company has several defined benefit pension plans covering eligible employees in
the United States. The Company contributes amounts to the plans equal to the
amounts that are tax deductible.





On
October 31, 2004, the Company’s annual measurement date, the accumulated benefit
obligation related to the Company’s pension plans exceeded the fair value of the
pension plan assets (such excess is referred to as an unfunded accumulated
benefit obligation). This difference is due to the decline in the market value
of investments during the fiscal year ended January 31, 2003 combined with a
reduction in the discount rate from 7.00% to 6.25% in the fiscal year ended
January 31, 2004.





A
minimum pension liability adjustment was recorded in the fourth quarter of the
fiscal year ended January 31, 2005 as a decrease to the minimum pension
liability with a corresponding increase to shareholders’ equity and a decrease
in intangible assets. During the fiscal year ended January 31, 2005, the Company
recorded an after-tax increase to shareholders’ equity of $67,153 and a decrease
to intangible assets of $71,838.





Net
periodic pension cost (income) included the following components:





**2005**
    
    **2004**
    
    **2003**Service
      cost - benefits earnedduring
      the period
    $629,673
    
    $549,886
    
    $574,129Interest
      cost on projectedbenefit
      obligation
    1,002,086
    
    916,844
    
    881,278Expected
      return on assets
    (996,546
    )
    (946,473
    )
    (1,064,136
    )Amortization
    86,147
    
    91,995
    
    31,332$721,360
    
    $612,252
    
    $422,603








Index
 36
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








The
following table sets forth the plans’ change in benefit obligations, change in
plan assets and amounts recognized on the Company’s balance sheet at January 31,
2005 and 2004:





**2005**
    
    **2004**Change
      in benefit obligation:Benefit
      obligation at beginning of year
    $16,378,077
    
    $13,407,299Service
      cost
    629,673
    
    549,886Interest
      cost
    1,002,086
    
    916,844Actuarial
      (gain) loss
    (350,580
    )
    2,398,019Benefits
      paid
    (854,573
    )
    (893,971
    )Benefit
      obligation at end of year
    $16,804,683
    
    $16,378,077Change
      in plan assets:Fair
      value of plan assets at beginning of year
    $11,676,238
    
    $10,837,628Actual
      gain on plan assets
    904,456
    
    1,642,973Employer
      contribution
    326,458
    
    89,608Benefits
      paid
    (854,573
    )
    (893,971
    )Fair
      value of plan assets at end of year
    $12,052,579
    
    $11,676,238Funded
      status
    ($4,752,104
    )
    ($4,701,839
    )Unrecognized
      actuarial loss
    1,570,711
    
    1,829,201Unrecognized
      transition (asset)
    (91,890
    )
    (102,405
    )Unrecognized
      prior service costs
    740,623
    
    837,285Contribution
      after measurement date
    514,854
    
    24,869Net
      amount recognized
    ($2,017,806
    )
    ($2,112,889
    )Amounts
      recognized in the balance sheet consist of:Accrued
      benefit liability
    ($3,358,837
    )
    ($3,137,520
    )Intangible
      assets
    255,915
    
    327,753Accumulated
      other comprehensive loss
    570,262
    
    672,009Contributions
      after measurement date
    514,854
    
    24,869Net
      amount recognized
    ($2,017,806
    )
    ($2,112,889
    )





The
accumulated benefit obligation, projected benefit obligation, and fair value of
plan assets for plans with accumulated benefit obligations in excess of assets
were $15,306,308, $16,804,683 and $12,052,579, respectively as of October 31,
2004 and $14,813,758, $16,378,077 and $11,676,238, respectively as of October
31, 2003.





The
Company contributed $816,446 to the pension plans during the fiscal year ended
January 31, 2005 and expects an additional contribution of $519,978 during the
fiscal year ended January 31, 2006.





Weighted
average assumptions used in accounting for benefit obligations for the fiscal
year ended January 31:






**2005**
    **2004**
    **2003**Discount
      rate
    6.25%
    6.25%
    7.00%Expected
      long-term rate ofreturn
      on assets
    9.00%
    9.00%
    9.00%Rate
      of increase incompensation
      levels
    3%
      for Two Years
    3%
      for Three Years
    3%
      for Four Years(where
      applicable)
    Then
      4.50% Thereafter
    Then
      4.50% Thereafter
    Then
      4.50% Thereafter





Index
 37
 **MET-PRO
CORPORATION**





**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








Weighted
average assumptions used in accounting for net projected pension cost for the
fiscal year ended January 31:


**2005**
    **2004**
    **2003**Discount
      rate
    6.25%
    7.00%
    7.00%Expected
      long-term rate ofreturn
      on assets
    9.00%
    9.00%
    9.00%Rate
      of increase incompensation
      levels
    3%
      for Three Years
    3%
      for Four Years
    3%
      for Five Years(where
      applicable)
    Then
      4.50% Thereafter
    Then
      4.50% Thereafter
    Then
      4.50% Thereafter


In
selecting the expected long-term rate of return on asset assumption, the Company
considered the average rate of earnings on the funds invested or to be invested
to provide for the benefits of these plans. This included considering the
trust’s asset allocation and the expected returns likely to be earned over the
life of the plans.





The
table below sets forth the target allocations and asset allocations for the plan
as follows:





**2004**
    
    **2003**Target
      allocation:Equity
      securities
    40-80%
    
    40-80%Debt
      securities
    20-60%
    
    20-60%Asset
      allocation as of October 31:Equity
      securities
    78%
    
    79%Debt
      securities
    22%
    
    21%Total
    100%
    
    100%





The
assets of the funds will be invested in a manner consistent with the safeguards
and diversity to which a prudent investor would adhere to and undertake on the
behalf of the plans’ participants. The main objective is to obtain the highest
possible return commensurate with the level of assumed risk and with an
investment horizon sufficient to permit market cycles to be reasonably
reflected.





*Directors’
Benefit Plan:*





The
Company also provides a non-qualified pension plan for Directors which is
presently unfunded. The plan is designed to provide pension benefits based on
the category of the Director and length of service. The aggregate benefit
obligation payable in the future under the terms of the plan was $733,674 and
$781,630 at January 31, 2005 and 2004, respectively. The amounts applicable are
included in the tables above. This plan was discontinued in December 1999 as to
non-vested Directors.





*Defined
Contribution Plan:*





The
Company has a 401(k) profit sharing plan in which all employees of the Company
in the United States are eligible to participate following completion of one
year of service and attaining age 21. Pursuant to this plan, employees can
contribute up to 25% of their compensation to the Plan. The Company will match,
in the form of Met-Pro Common Shares, up to 50% of the employee’s contribution
up to 4% of compensation. The Company provided for cash contributions to the
401(k) profit sharing plan of $202,963, $203,103 and $206,257, for the fiscal
years ended January 31, 2005, 2004 and 2003, respectively.




Index
 38
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








*Employees’
Stock Ownership Trust:*





The
Company sponsors an employee stock ownership plan under which it may make
discretionary contributions to the trust either in cash or in shares of the
Company for salaried employees in the United States eligible to participate in
the plan. There were no contributions to the Employees’ Stock Ownership Trust
for the fiscal years ended in 2005, 2004 and 2003. All shares are considered to
be allocated to participants or to be released for allocation to participants,
and are included in the earnings per share computations.





*Stock
Option Plans:*





In
1997, the Board of Directors of the Company approved a stock option plan
covering 350,000 shares (increased to 466,667 shares after giving effect to a
stock split) that was approved by the Company’s shareholders at the 1997 meeting
of shareholders (the “1997 Plan”). In 2001, the Board of Directors of the
Company approved an equity incentive plan covering 350,000 shares (increased to
466,667 shares after giving effect to a stock split) that was approved by the
Company’s shareholders at the 2001 meeting of shareholders (the “2001 Plan”).
These plans contain anti-dilution provisions that apply to stock splits and
stock dividends declared by the Company.















Index
 39
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**








The
status of the plans was as follows (adjusted for stock splits):





**1997
      Plan**
    **2005**
    
    **2004**
    
    **2003**Options
      outstanding, beginning
    256,873
    
    347,408
    
    271,167Grants
    8,930
    
    12,000
    
    124,675Exercises
    70,536
    
    92,935
    
    43,367Cancellations
    -
    
    9,600
    
    5,067Options
      outstanding, ending
    195,267
    
    256,873
    
    347,408Options
      price range at January 31
    $7.3125
    
    $7.3125
    
    $7.3125to
    
    to
    
    to$17.1450
    
    $9.8625
    
    $11.6250Options
      exercisable at January 31
    182,835
    
    252,871
    
    307,708Options
      available for grant at January 31
    0
    
    8,930
    
    12,558
















**2001
      Plan**
    ****2005****
    
    ****2004****
    
    ****2003****Options
      outstanding, beginning
    99,958
    
    -
    
    -Grants
    108,070
    
    108,402
    
    -Exercises
    7,110
    
    4,444
    
    -Cancellations
    1,334
    
    4,000
    
    -Options
      outstanding, ending
    199,584
    
    99,958
    
    -Options
      price range at January 31
    $9.8100
    
    $9.8100
    
    -to
    
    to$17.1450
    
    $9.8663Options
      exercisable at January 31
    96,536
    
    65,150
    
    -Options
      available for grant at January 31
    255,529
    
    362,265
    
    466,667








The
weighted average exercise prices of the Company’s stock option plans were as
follows:





****2005****
    
    ****2004****
    
    ****2003****Options
      outstanding, beginning
    $9.2080
    
    $8.9775
    
    $8.4450Grants
    $17.1450
    
    $9.8119
    
    $9.8625Exercises
    $8.9983
    
    $9.0814
    
    $8.1450Cancellations
    $9.8100
    
    $9.6154
    
    $9.6525Options
      outstanding, ending
    $11.5991
    
    $9.2080
    
    $8.9775


**** **** ****




















Index
 40
 **MET-PRO
CORPORATION**




**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**


****


****NOTE
      11:**
    ****OTHER
      INCOME/(EXPENSE),
NET******





Other
income/(expense), net was comprised of the following:





**2005**
    
    **2004**
    
    **2003**Gain/(loss)
      on sale of property andequipment
    $6,358
    
    ($24,906
    )
    $5,248Other,
      primarily interest income
    282,200
    
    207,642
    
    272,878Unusual
      charge - patent litigation
    (135,292
    )
    (1,292,242
    )
    -$153,266
    
    ($1,109,506
    )
    $278,126




****NOTE
      12:**
    ****BUSINESS
      SEGMENT
DATA******





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





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





Financial
information by business segment is shown on page 26.








****NOTE
      13:**
    ****GEOGRAPHIC
      INFORMATION******


Transfers
between geographic areas are accounted for at cost and consistent with rules and
regulations of governing tax authorities. Such transfers are eliminated in the
consolidated financial statements. Income from operations by geographic segment
includes an allocation of general corporate expenses. Identifiable assets are
those that can be directly associated with the geographic area. Geographic
information for the three years ended January 31 is presented in the following
table:





**2005**
    
    **2004**
    
    **2003**Net
      sales:United
      States
    $56,664,160
    
    $62,013,296
    
    $58,934,875Foreign
    15,452,129
    
    13,045,633
    
    10,684,507$72,116,289
    
    $75,058,929
    
    $69,619,382Income
      from operations:United
      States
    $5,860,184
    
    $9,217,442
    
    $8,093,077Foreign
    1,652,865
    
    1,949,796
    
    1,061,909$7,513,049
    
    $11,167,238
    
    $9,154,986Total
      assets:United
      States
    $75,391,281
    
    $74,940,833
    
    $69,012,399Foreign
    7,532,785
    
    6,194,724
    
    4,742,272$82,924,066
    
    $81,135,557
    
    $73,754,671










Index
 41
 **MET-PRO
CORPORATION**





**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**  **(Continued)**


**FOR
THE YEARS ENDED JANUARY 31, 2005, 2004 AND 2003**




****NOTE
      14:**
    ****CONTINGENCIES******





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





The
Company is also party to a small number of other legal proceedings arising out
of the ordinary course of business or other proceedings that the Company does
not presently believe will have a material adverse impact upon the Company’s
results of operations, liquidity or financial condition. After the end of the
fiscal year on January 31, 2004, the Company settled a patent litigation case in
which the costs of defending the case were material to the fiscal year ended
January 31, 2004. Neither the legal fees incurred after January 31, 2004 nor the
settlement had a material adverse impact upon the Company’s results of
operations, liquidity or financial condition during the fiscal year ended
January 31, 2005.



































Index
 42
 ****




**QUARTERLY FINANCIAL DATA
(Unaudited)**





**Earnings**
    **Earnings****Per
      Share,**
    **Per
      Share,****2004**
    **Net
      Sales**
    
    **Gross
      Profit**
    
    **Net
      Income**
    
    **Basic**
    **Diluted**First
      Quarter
    $17,002,269
    
    $6,234,967
    
    $1,350,088
    
    $.16
    
    $.16Second
      Quarter
    18,626,209
    
    6,648,468
    
    1,568,039
    
    .19
    
    .19Third
      Quarter
    19,811,544
    
    6,949,807
    
    1,655,529
    
    .20
    
    .20Fourth
      Quarter
    19,618,907
    
    6,819,597
    
    1,772,923
    
    .21
    
    .21**Earnings**
    **Earnings****Per
      Share,**
    **Per
      Share,****2005**
    ****Net
      Sales****
    
    **Gross
      Profit**
    
    **Net
      Income**
    
    **Basic**
    **Diluted**First
      Quarter
    $15,634,646
    
    $5,062,432
    
    $814,249
    
    $.10
    
    $.10Second
      Quarter
    20,350,024
    
    6,401,163
    
    1,610,417
    
    .19
    
    .19Third
      Quarter
    17,406,160
    
    5,340,793
    
    979,671
    
    .12
    
    .12Fourth
      Quarter
    18,725,459
    
    5,870,445
    
    1,410,342
    
    .17
    
    .17


************


Adjusted
for four-for-three stock split.








**Item
9.*****Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure:***





None.








**Item
9A.*****Controls and Procedures:***





As
required by Exchange Act Rule 13a-15(b), our management, including our Chief
Executive Officer and our Chief Financial Officer, conducted an evaluation of
the effectiveness of our disclosure controls and procedures, as such term is
defined under Exchange Act Rule 13a-15(e). Based on this evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were effective as of the end of the period covered by
this Annual Report.





As
required by Exchange Act Rule 13a-15(d), our management, including our Chief
Executive Officer and our Chief Financial Officer, also conducted an evaluation
of our internal control over financial reporting, as such term is defined in
Exchange Act Rule 13a-15(f), in order to determine whether any changes occurred
in the fourth fiscal quarter that have materially affected, or are reasonable
likely to materially affect, our internal control over financial reporting.
Based on this evaluation, there has been no such change during the fourth fiscal
quarter.























Index
 43





**PART III**








Pursuant
to Paragraph G (3) of the General Instructions to Form 10-K, portions of the
information required in Part III of Form 10-K are incorporated by reference from
Met-Pro’s proxy statement to be filed with the SEC in connection with our 2005
Annual Meeting of Shareholders.








**Item
10.*****Directors
and Executive Officers of the Registrant*****:**





We
have a code of ethics that applies to all Directors, officers and employees,
including our Chief Executive Officer and our Chief Financial Officer (who is
also our principal accounting officer). You can find our code of ethics on our
website by going to the following address: ** *www.met-pro.com* ,
and clicking on the link for our code of ethics under the “Investor Relations -
Corporate Governance” captions. We will post any amendments to the code of
ethics, as well as, any waivers that are required to be disclosed by the rules
of either the Securities and Exchange Commission or the New York Stock Exchange,
on our website.





Our
Board of Directors has adopted charters for the three standing committees of the
Board, being the Audit, Compensation and Stock Option, and Corporate Governance
and Nominating Committees. You can find these documents on our website by going
to the following address: *www.met-pro.com* *,* and
clicking on the link “charters” under the “Investor Relations - Corporate
Governance” captions.





You
may obtain a printed copy of any of the foregoing materials by writing to:
Corporate Secretary, Met-Pro Corporation, 160 Cassell Road, Harleysville, PA
19438.





The
information required by this Item (except for the information set forth on page
6 of this Report with respect to Executive Officers of Registrant) is hereby
incorporated by reference to the applicable information set forth in our proxy
statement for our 2005 Annual Meeting of Shareholders, including the information
set forth under the caption “Election of Directors” and “Security Ownership of
Certain Beneficial Owners and Management”.








**Item
11.*****Executive
Compensation*****:**





The
information required by this Item is hereby incorporated by reference to the
applicable information set forth in our proxy statement for our 2005 Annual
Meeting of Shareholders, including the information set forth under the caption
“Executive Compensation and Other Information”.








**Item
12.*********Security
Ownership of Certain Beneficial Owners and
Management:***





The
information required by this Item is hereby incorporated by reference to the
applicable information set forth in our proxy statement for our 2005 Annual
Meeting of Shareholders, including the information set forth under the caption
“Security Ownership of Certain Beneficial Owners and Management”.








**Item
13.*****Certain
Relationships and Related Transactions:***





The
information required by this Item is hereby incorporated by reference to the
applicable information set forth in our proxy statement for our 2005 Annual
Meeting of Shareholders, including the information set forth under the captions
“Election of Directors” and “Certain Business Relationships”.








**Item
14.*********Principal
Accountant Fees and Services:***





The
information required by this Item is hereby incorporated by reference to the
applicable information set forth in our proxy statement for our 2005 Annual
Meeting of Shareholders, including the information set forth under the caption
“Our Relationship with Our Independent Auditor”.




Index
 44


****


**PART IV**





**Item
15.*Exhibits
and Financial Statement Schedules:***
 
 *(a)
Exhibits and Financial Statements and Schedules:*
  **
  (1)  
Financial Statements and Schedules:
 
 Financial
statements filed as part of this report are listed in the Index to Consolidated
Financial Statements and Supplementary Data that appears on page 18 of this
report.
 
 (2) 
 Exhibits, including those incorporated by reference:
 
 Exhibit
No.Description
 
 (2)
    (c)
    Agreement
      and Plan of Merger dated July 31, 2003 by and between Met-Pro Corporation,
      a Delaware Corporation, and Met-Pro Pennsylvania, Inc., a Pennsylvania
      corporation. Incorporated by reference to the Company’s Current Report on
      Form 8-K filed on August 6, 2003.(3)
    (f)
    Articles
      of Incorporation of Met-Pro Corporation, a Pennsylvania corporation
      formerly known as Met-Pro Pennsylvania, Inc. Incorporated by reference to
      the Company’s Current Report of Form 8-K filed on August 6,
      2003.(3)
    (g)
    By-Laws
      of Met-Pro Corporation, a Pennsylvania corporation formerly known as
      Met-Pro Pennsylvania, Inc. Incorporated by reference to the Company’s
      Current Report on Form 8-K filed on August 6, 2003.(4)
    
    Shareholders’
      Rights Plan, incorporated by reference to Company’s Current Report on Form
      8-K filed on January 6, 2000.(10)
    (b)
    The
      1997 Stock Option Plan, incorporated by reference to Company’s
      Registration Statement on Form S-8 filed January 16,
  1998.*(10)
    (d)
    Amendment
      No. 1 to the 1997 Stock Option Plan, incorporated by reference to
      Company’s Annual Report on Form 10-K filed on May 4,
  2001.*(10)
    (f)
    Key
      Employee Severance Agreement between Met-Pro Corporation and Gary J.
      Morgan, incorporated by reference to Company’s Annual Report on Form 10-K
      filed on May 4, 2001.*(10)
    (g)
    Key
      Employee Severance Agreement between Met-Pro Corporation and Raymond J. De
      Hont, incorporated by reference to Company’s Annual Report on Form 10-K
      filed on May 4, 2001.*(10)
    (i)
    Amendment
      to Key Employee Severance Agreement between Met-Pro Corporation and Gary
      J. Morgan, incorporated by reference to Company’s Annual Report on Form
      10-K filed on May 4, 2001.*(10)
    (j)
    The
      Company’s Director’s Retirement Plan, incorporated by reference to
      Company’s Annual Report on Form 10-K filed on May 4,
  2001.*(10)
    (k)
    Amendment
      No. 1 to the Company’s Director’s Retirement Plan, incorporated by
      reference to Company’s Annual Report on Form 10-K filed on May 4,
      2001.*(10)
    (l)
    Amendment
      No. 2 to the Company’s Director’s Retirement Plan, incorporated by
      reference to Company’s Annual Report on Form 10-K filed on May 4,
      2001.*(10)
    (m)
    Restoration
      Plan, effective February 1, 2000, incorporated by reference to Company’s
      Annual Report on Form 10-K filed on May 4, 2001.*(10)
    (n)
    Amendment
      No. 1 to the Company’s Restoration Plan, incorporated by reference to
      Company’s Annual Report on Form 10-K filed on May 4,
  2001.*
 
 Index
 45
 **Exhibit
No.Description**
 (10)
    (o)
    Additional
      1% Supplemental Executive Retirement Plan, effective February 1, 2000,
      incorporated by reference to Company’s Annual Report on Form 10-K filed on
      May 4, 2001.*(10)
    (p)
    The
      2001 Equity Incentive Plan, incorporated by reference to Company’s
      Registration Statement on Form S-8 filed August 22,
  2001.*(10)
    (q)
    Year
      2000 Employee Stock Purchase Plan, incorporated by reference to the
      Company’s Registration Statement on Form S-8 filed on June 13, 2000.*(10)
    (r)
    Salaried
      Pension Plan Amended and Restated effective September 1,
      2000.*(10)
    (s)
    First
      Amendment to the Company’s Salaried Pension Plan dated August 15,
      2002.*(10)
    (t)
    Second
      Amendment to the Company’s Salaried Pension Plan dated October 23,
      2002.*(10)
    (u)
    Amendment
      No. 3 to the Company’s Directors’ Retirement Plan dated as of February 24,
      2003.*(10)
    (v)
    Amendment
      No. 1 to the Company’s Additional 1 % Supplemental Executive Plan dated as
      of March 21, 2003.*(10)
    (w)
    Directors
      Retirement Plan Trust dated as of February 11, 2000.*(10)
    (x)
    Amendment
      No. 1 to the Company’s Directors’ Retirement Plan Trust dated as of
      February 24, 2003.*(10)
    (y)
    Amendment
      No. 2 to the Company’s Directors’ Retirement Plan Trust dated as of
      February 24, 2003.*(10)
    (z)
    Restoration
      and Supplemental Executive Retirement Plan Trust Agreement dated as of
      February 11, 2000.*(10)
    (aa)
    Amendment
      No. 1 to the Company’s Restoration and Supplemental Executive Retirement
      Plan Trust Agreement dated as of February 24, 2003.*(11)
    
    Statement
      Re-computation of Per Share Earnings. See page 22 of Item
    8.(21)
    
    List
      of Subsidiaries of Registrant as of January 31,
2005:
 
 Corporate
    Jurisdiction
      of
    Name
      under which BusinessName
    Incorporation
    is
      ConductedMefiag
      B.V.
    The
      Netherlands
    Mefiag
      B.V., a wholly-owned
      subsidiary ofMet-Pro
      CorporationFlex-Kleen
      Canada Inc.
    Ontario,
      Canada
    Flex-Kleen
      Canada Inc.,a
      wholly-owned subsidiary ofMet-Pro
      CorporationStrobic
      Air Corporation
    Delaware
    Strobic
      Air Corporation,a
      wholly-owned subsidiary ofMet-Pro
      CorporationMPC
      Inc.
    Delaware
    MPC
      Inc.,a
      wholly-owned subsidiary ofMet-Pro
      CorporationPristine
      Hydrochemical Inc.
    Delaware
    Pristine
      Hydrochemical Inc.,a
      wholly-owned subsidiary ofMet-Pro
      Corporation
 Index
 46
 
 Exhibit
No.Description
 (23)
    Consent
      of Independent Auditor.**(31.1)
    Certification
      of Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of
      2002.**(31.2)
    Certification
      of Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of
      2002.**(32.1)
    Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section
      1350.**(32.2)
    Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section
      1350.**
 
  The
following exhibits required under Item 601 of Regulation S-K promulgated by the
Securities & Exchange Commission have been omitted because they are either
posted on our website, inapplicable or non-existent:
 
 (9)
    Voting
      trust agreements.(12)
    Statements
      re computation of ratios.(13)
    Annual
      report to security holders.(14)
    Code
      of ethics.(16)
    Letter
      re change in certifying accountant.(18)
    Letter
      re change in accounting principles.(22)
    Published
      report regarding matters submitted to vote of security
      holders.(24)
    Power
      of attorney.*  Indicates
      management contract or compensatory plan or arrangement.**Filed
      herewith.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Index
 47
  **SIGNATURES**
 
 
 Pursuant
to the requirements of Section 13 or 15(d) 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.
 
  ME
    T-PRO
      CORPORATIONApril 13,
      2005
    By:
    /s/
      Raymond J. De
      HontDate
    
    Raymond
      J. De HontChairman,
       Chief ExecutiveOfficer
      and President
   Pursuant
to the requirement of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.
 
  Signature
    Title
    Date/s/
      Raymond J. De Hont
    Chairman,
    April
      13, 2005Raymond
      J. De Hont
    Chief
      Executive Officerand
      President/s/
      Gary J. Morgan
    Vice
      President-Finance,
    April
      13, 2005Gary
      J. Morgan
    Secretary,
      Treasurer,Chief
      Financial Officer,Chief
      Accounting Officerand
      Director/s/
      Nicholas DeBenedictis
    Director
    April
      13, 2005Nicholas
      DeBenedictis/s/
      George H. Glatfelter II
    Director
    April
      13, 2005George
      H. Glatfelter II/s/
      William L. Kacin
    Director
    April
      13, 2005William
      L. Kacin/s/
      Alan Lawley
    Director
    April
      13, 2005Alan
      Lawley/s/
      Michael J. Morris
    Director
    April
      13, 2005Michael
      J. Morris/s/
      Constantine N. Papadakis
    Director
    April
      13, 2005Constantine
      N. Papadakis
 Index
 48