OF THE SECURITIES EXCHANGE ACT OF 1934

A Virginia Corporation IRS Identification #54-0320170

80 29th Street

Newport News, Virginia 23607

Telephone: (757) 928-9000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days.

[X] Yes [ ] No

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). [ ]

Outstanding common stock, $10.00 par value at May 6, 2005: 3,384,718 shares.

This report contains 20 pages.

NOLAND COMPANY AND SUBSIDIARIES

Cash and cash equivalents $ 3,436,847 $ 2,500,927

Trade accounts receivable, net 62,124,694 58,664,159

Other accounts receivable 5,341,296 9,676,258

Other current assets 3,202,599 1,988,708

Total Current Assets 153,809,791 148,856,345

Property and Equipment, at cost:

Land 19,560,950 19,707,508

Buildings 108,430,616 113,139,895

Equipment and fixtures 73,550,967 71,824,918

Property in excess of current needs 5,121,283 4,758,725

Total 206,663,816 209,431,046

Less accumulated depreciation 90,838,735 91,437,439

Property and Equipment, net 115,825,081 117,993,607

Assets Held for Resale 4,019,466 2,076,583

Prepaid Pension 27,375,939 27,383,439

Other Assets 606,802 628,901

$301,637,079 $296,938,875

Current Liabilities:

Notes payable - short term borrowings $ 8,562,347 $ 11,369 037

Current maturity of long-term debt 2,007,640 2,010,415

Bank overdrafts 3,561,017 4,320,631

Accounts payable 34,592,713 32,827,912

Other accruals and liabilities 13,976,614 18,746,050

Federal and state income taxes 2,238,104 2,273,717

Total Current Liabilities 64,938,435 71,547,762

Long-term Debt 33,459,016 25,511,283

Deferred Income Taxes 20,988,635 20,872,756

Accrued Postretirement Benefits 2,564,879 2,509,662

Total Liabilities 121,950,965 120,441,463

Stockholders' Equity:

Capital common stock, par value $10;

authorized, 6,000,000 shares; issued,

3,384,718 and 3,384,386 shares 33,847,180 33,843,860

Additional paid in capital 762,635 762,635

Retained earnings 145,906,953 142,991,843

Accumulated other comprehensive loss,

net of tax (286,196) (474,541)

Unearned compensation, stock plans (544,458) (626,385)

Total Stockholders' Equity 179,686,114 176,497,412

$301,637,079 $296,938,875

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

Merchandise sales, net $138,899,986 $122,765,791

Cost of goods sold:

Purchases and freight-in 111,135,178 100,725,045

Inventory, beginning 76,026,293 67,690,838

Inventory, ending (79,704,355) (72,798,001)

Cost of goods sold 107,457,116 95,617,882

Gross profit on sales 31,442,870 27,147,909

Operating expenses 26,825,796 23,996,967

Rental income 309,413 331,898

Gains from sale of property 306,856 10,586

Operating profit 5,233,343 3,493,426

Other income 402,789 357,631

Interest expense 411,471 379,070

Income before income taxes 5,224,661 3,471,987

Income taxes 2,038,800 1,365,900

Net income $ 3,185,861 $ 2,106,087

Earnings per share:

Basic $ .95 $ .63

Diluted $ .94 $ .63

Average shares outstanding:

Basic 3,342,440 3,333,360

Diluted 3,373,003 3,360,230

Cash dividends per share $ .08 $ .08

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

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

Noland Company is an independent wholesale distributor of mechanical equipment and supplies, primarily to the construction trades but also to various other industries. The Company operates in a 13 state territory that ranges from Pennsylvania to Florida, providing plumbing, air conditioning, water systems, electrical and industrial products to a customer base that includes plumbing, heating/cooling, and electrical contractors, mechanical contractors, home builders, well drillers, maintenance/repair organizations, utilities, government agencies, and manufacturing plants. The Company operates in only one segment of business.

The wholesale distribution of mechanical equipment and supplies is highly competitive. Competition results primarily from price, service and the availability of goods. The business may be affected to the extent the residential and commercial construction industries are affected by interest rate changes and the weather.

Management's discussion and analysis and other sections of this quarterly report contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate", "project", "anticipate", "intend", "believe", and similar expressions are intended to identify forward-looking statements. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated in the statements. Such risks and uncertainties include, but are not limited to, general business conditions, climatic conditions, competitive pricing pressures, and product availability.

The Company makes estimates and assumptions when preparing financial statements. These estimates and assumptions affect various matters, including:

• reported amounts of assets and liabilities in the Company's Consolidated Balance Sheets at the dates of the financial statements;
• disclosure of contingent assets and liabilities at the dates of the financial statements; and
• reported amounts of revenues and expenses in the Company's Consolidated Statements of Income during the reporting periods. These estimates involve judgments with respect to, among other things, future economic factors which are difficult to predict and are beyond management's control. Senior management has discussed the development, selection and disclosure of these estimates with the Audit Committee of the Board of Directors. Actual amounts could differ from these estimates.

The critical accounting policies considered most important to the Company's financial condition and results of operations that require management's most difficult, subjective, or complex judgments that have not changed in the first three months of 2005 are as follows:

• Allowance for Doubtful Accounts
• Consideration Received from Vendors
• Self Insurance Reserves

For interim reporting purposes there is an additional critical accounting policy that is not applicable for full year reporting. The Company uses estimated gross profit rates to determine cost of goods sold during interim periods. This process includes estimates for inventory shrink and the LIFO reserve adjustment. For the interim LIFO reserve adjustment the Company estimates the final year-end FIFO inventory and the rate of inflation/deflation. The rate of inflation/deflation for an interim period is not necessarily consistent with the full year rate of inflation/deflation. If the final FIFO inventory and the final rate of inflation/deflation differs from those estimated at the end of an interim period, the actual LIFO reserve adjustment could affect fourth quarter and full year results. The inflation/deflation rate tends to have a greater impact on the LIFO reserve than the amount of the inventory dollars. High inflation generally increases the LIFO reserve and reduces gross profit. Low inflation an d/or deflation decreases the LIFO reserve and increases gross profit. Year-end inventory adjustments to reflect actual inventory levels are made in the fourth quarter.

The following table highlights changes in the results of operations for the quarters ended March 31, 2005 and 2004:

First-quarter 2005 sales totaled $138,899,896 or 13.1% greater than 2004's $122,765,791 first-quarter total. The higher sales reflected a continuation of 2004's strong construction activity and rising prices, and our success in capturing our share of those opportunities. Air conditioning sales rose 18.8% due to an increase in equipment provided to HVAC contractors in Florida who benefited from a healthy construction market and unusually warm winter weather. The Company's newest branch, an air conditioning supply operation that opened in Charlotte, N.C., in late February, also contributed to the higher sales. Plumbing sales, which represent more than half of Noland's total revenues, were 14.0% higher than the year-earlier period, while electrical/industrial sales declined 2.4%. Plumbing sales benefited from rising prices and a 56.5% increase in sales of water well drilling rigs and accessories.

Gross profit margins increased from 22.1% for the first quarter of 2004 to 22.6% for the first quarter of 2005 as a result of rising prices. The higher margins led to a $4,294,961, or 15.8 %, rise in gross profit for the first quarter of 2005 compared to the same period a year ago.

Operating expenses of $26,825,796 were $2,828,829, or 11.8%, higher than the year earlier total of $23,996,967. Higher personnel-related expenses accounted for $1,667,029 of the increase. Pension and postretirement expense totaled $137,500 in the first quarter of 2005 compared to net pension and postretirement income of $53,500 in the first quarter of 2004. One piece of property held for resale was sold in the first quarter of 2005 for a gain $306,856 compared to a gain of $10,586 for the same period last year. Gains from the sale of property are calculated based on the difference between the cash consideration received, net of expenses of sale, and the basis of the property.

If the weather cooperates our recent sales momentum should continue in the second quarter.

The Company's primary capital requirements for the first quarter of 2005 were for property and equipment expenditures and working capital. The Company's capital needs are met primarily through: (1) cash flow from operations; (2) short-term financings; (3) bank line of credit borrowings, when needed; and (4) additional long-term debt, when needed.

At March 31, 2005 the Company's current ratio was 2.37:1 and working capital totaled $88,871,356. Cash needed for the first quarter of 2005 was provided primarily from an additional $8,000,000 borrowed on the Company's term revolver loan. Sources of cash in the future will continue to come from operations, unused short-term lines of credit and additional long-term debt if needed. Bank overdrafts, as shown on the Consolidated Balance Sheets, are the result of the reclassification of negative balances maintained in the Company's disbursement checking account. Checks paid on the disbursement account are not covered until they are presented to the bank for payment. This cash management technique allows the Company to reduce its short-term borrowings and related interest cost.

The Company's market risk exposure comes from changes in interest rates and inflationary pressures. Reported results, for the most part, reflect the impact of inflation/deflation because of the Company's use of the LIFO (last in, first out) inventory method. During inflationary periods the LIFO method of inventory valuation better matches the most recently incurred costs with current revenues by charging cost of goods sold with the costs of goods most recently acquired. The objective in managing the Company's exposure to interest rate changes is to limit the impact of rate changes on earnings, cash flow, and to lower overall borrowing cost. The Company is a party to three separate interest rate swaps to manage its exposure to interest rate changes on its borrowings. The swaps are with financial institutions that have investment grade credit ratings, minimizing the risk of credit loss. All swaps are non-trading. At March 31, 2005, the Company had three swap agreements with an aggregate notional amount of $22.1 million to manage interest rate changes related to the Company's industrial revenue bonds, a portion of its revolving credit agreement and its term loan. The swaps effectively convert the variable rate borrowings (LIBOR and BMA Municipal Swap Index) into fixed rate borrowings with fixed rates of 5.36%, 4.22% and 5.27%, respectively.

SFAS No. 133 "Accounting for Certain Derivative Instruments and Certain Hedging Activities," as amended by SFAS No. 138, requires all derivatives to be recorded as assets or liabilities on the balance sheet at fair value. For a derivative designated as a cash flow hedge, the effective portion of the change in the fair value of the derivative is recorded in OCI and recognized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. OCI increased $188,345, net of tax expense of $115,879 for the quarter ended March 31, 2005 and decreased $97,226, net of a tax benefit of $59,339, for the quarter ended March 31, 2004.

In addition, the Company's pension plan is over-funded, resulting in a prepaid pension asset. The prepaid pension asset is subject to change based on the performance of the plan investments and the discount rate. Changes in the investment performance and discount rate may cause the amount of pension income to increase or decrease from year to year.

As reported previously, Noland Company is a defendant in personal injury claims based on alleged past exposure to asbestos-containing products or materials produced by others and allegedly distributed by the Company years ago. Since the early 1990s, the Company has been sued many times, along with a large number of other companies, by one law firm in cases that allege asbestos-related injuries to persons in the maritime industry. In none of these suits has a link to the Company been substantiated, and most of them already have been dismissed.

The Company also has been named as one of the defendants in various other asbestos-related suits within its operating footprint in which a connection to the Company was alleged. Some of these suits have been dismissed with prejudice, others have been settled through the Company's insurance carrier and others are still pending. Management does not consider the foregoing suits, individually or in the aggregate, to be material to the Company.

The Company has also been named as one of the defendants in approximately nineteen hundred asbestos-related suits filed by one law firm in the Circuit Court for Newport News, Virginia or in the Circuit Court for Portsmouth, Virginia. At this time it is still not possible to fully evaluate the merits of these new suits. The Company is not aware of any relationship between the Company and any of the plaintiffs; nor does it have any information as to the extent of any injury that may have been suffered by any of them. All of these cases will be defended vigorously.

The Company accrues for losses associated with liabilities when such losses are probable and can reasonably estimated. The Company has not recognized or accrued any losses related to the above named suits. All losses to date have been paid by available insurance coverage. Management's assumptions include that they do not believe there is a reasonable possibility that any future losses related to the above named suits will exceed available insurance coverage.

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

May 6, 2004 Arthur P. Henderson, Jr.

Arthur P. Henderson, Jr.

Vice President-Finance