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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended   September 30, 2004

Commission File Number   0-23539

        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.

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

        Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

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PART I – FINANCIAL INFORMATION

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LADISH CO., INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)

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LADISH CO., INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share Data)

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LADISH CO., INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)

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LADISH CO., INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands, Except Share Data)

In the opinion of the Company, the accompanying unaudited consolidated condensed financial statements contain all adjustments necessary to present fairly its financial position at September 30, 2004 and December 31, 2003 and its results of operations and cash flows for the nine months ended September 30, 2004 and September 30, 2003. All adjustments are of a normal recurring nature.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with Article 10 of Regulation S-X and therefore do not include all information and footnotes necessary for a fair presentation of the financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. The Company has filed a report on Form 10-K which contains audited consolidated financial statements that include all information and footnotes necessary for a fair presentation of its financial position at December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years ended December 31, 2003, 2002 and 2001.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results will likely differ from those estimates, but management believes such differences will not be material.

The results of operations for any interim period are not necessarily indicative of the results to be expected for a full year.

Inventories consisted of:

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Cash in excess of daily requirements is invested in marketable securities consisting of commercial paper and repurchase agreements which mature in three months or less. Such investments are deemed to be cash equivalents.

Sales revenue is recognized when the title and risk of loss have passed to the customer, there is pervasive evidence of an arrangement, delivery has occurred or the services provided, the sales price is determinable and collectibility is reasonably assured. This generally occurs at the time of shipment. Net sales include freight out as well as reductions for returns and allowances, and sales discounts. Progress payments on contracts are generally recognized as reductions of the related inventory costs. Progress payments in excess of inventory costs are reflected as a liability.

Included in the first nine months of 2003 as a reduction of selling, general and administrative expenses is $1,250 received from the Internal Revenue Service for the refund of certain pension excise taxes expensed and paid in prior years. Due to the nature of this item, it has been treated as a significant infrequently occurring item in determining the provision for income taxes. The provision for income taxes for the nine months ended September 30, 2003 includes $424 related to this item.

The tax provision of $1,502 for the first nine months of 2004 reflects an annualized effective tax rate of 36.9% versus the statutory rate of 35% . The 49.1% tax rate for the third quarter is due to a change in estimate of the 2004 Extra-Territorial Income Exclusion on foreign sales.

The components of net periodic benefit costs recognized for the nine-month periods ending September 30, 2004 and 2003 are reflected in the table below.

Contributions:
The Company previously disclosed in its financial statements for the year ended December 31, 2003, that it expected to contribute $4,837 to its pension plans in 2004. As of September 30, 2004, the Company has made $2,030 of cash contributions to the pension plans versus $532 during the same period in 2003. In addition, on July 14, 2004, the Company contributed 525,000 shares of common stock which were previously held in treasury with a fair market value of $4,725 to the pension plans. See Part II, Item 5. The Company now estimates its total contribution to its pension plans in 2004 will be $6,766.

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The incremental difference between basic weighted average shares outstanding and diluted weighted average shares outstanding is due to the dilutive impact of outstanding options and warrants.

The Company has a Long-Term Incentive Plan (the “Plan”) that covers certain employees. Under the Plan, incentive stock options for up to 983,333 shares may be granted to employees of the Company of which 955,333 options have been granted. These options expire ten years from the grant date. Options granted vest over two years. There were no options granted in the nine-month periods ended September 30, 2004 and 2003. During 2003 fiscal year, 17,500 options were forfeited. As of September 30, 2004, 692,834 options granted under the Plan remain outstanding and exercisable. During 2003, 496,188 stock options expired under a previous stock option plan. During the third quarter of 2004, 5,000 stock options were exercised.

The Company accounts for its option grants using the intrinsic value based method pursuant to APB Opinion No. 25 and Statement of Financial Accounting Standards No. 123 (“SFAS 123”) under which no compensation expense was recognized in the three and nine-month periods ending September 30, 2004 and September 30, 2003. Had compensation cost for these options been determined pursuant to the fair value method under SFAS 123, the Company’s pro forma net income and diluted earnings per share would have been as follows:

Because the SFAS 123 method of accounting has not been applied to options granted prior to January 1, 1995, and additional awards in future years are anticipated, the effect of applying SFAS 123 in the above pro forma disclosure is not necessarily indicative of future results.

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MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(Dollars in Thousands)

RESULTS OF OPERATIONS

Third Quarter 2004 Compared to Third Quarter 2003

Net sales for the three months ended September 30, 2004 were $51,076 compared to $42,222 for the same period in 2003. The 21% increase in sales for the third quarter of 2004 was due to the overall improvement in the aerospace industry along with a significantly stronger demand for industrial forgings. Gross profit for the third quarter of 2004 increased to 8.3% of sales in contrast to 7.5% of sales in the third quarter of 2003 primarily as a result of better absorption of fixed costs combined with the Company’s ongoing cost reduction efforts partially offset by competitive pricing pressures in 2004. Cost reductions in the third quarter of 2004 included lower unit cost of natural gas, reduced manpower and lower benefit costs.

Selling, general and administrative expenses, as a percentage of sales, were 4.3% for the third quarter of 2004 compared to 5.1% for the same period in 2003. The variation in SG&A expenses between the periods was partially attributable to the better absorption of costs through increased sales.

Interest expense for the three-month period in 2004 was $476 in contrast to $564 in 2003. The reduction in interest expense is due to the reduction of debt by the retirement of $6,000 of senior notes. During the third quarter of 2004, the Company’s revolving credit facility had an interest rate equal to the LIBOR rate plus 1.50% per annum and the senior notes bore interest at the rate of 7.19% per annum. The Company had no borrowings under the revolving credit facility in the third quarter of 2004.

The third quarter tax provision of $786 reflects an annualized effective tax rate of 49.1% versus the statutory rate of 35%. The difference is primarily due to a change in estimate in the third quarter of the 2004 Extraterritorial Income Exclusion along with an adjustment to reflect the actual Extraterritorial Income Exclusion used in the 2003 federal tax return. The Company has significant net operating loss (“NOL”) carryforwards which largely offset most calculated tax liabilities of the Company. For financial statement purposes, the Company has recorded as a deferred tax asset the tax benefits attributable to the NOL carryforwards. Therefore, the Company uses an effective tax rate which reflects federal and state taxes without a reduction for actual NOL usage. See Note 6 to the consolidated financial statements and “Liquidity and Capital Resources.”

The Company’s net income for the third quarter of 2004 was $816, a 358% increase from the same period in 2003. The increase in profitability was directly due to the above described increase in sales along with the accompanying improved absorption of fixed costs. The Company’s contract backlog at September 30, 2004 was $269,933 in comparison to $210,795 at September 30, 2003, as the Company received $82,087 of new orders in the third quarter of 2004.

First Nine Months 2004 Compared to First Nine Months 2003

Net sales for the first nine months of 2004 were $155,071, an increase of 11.9% from the $138,584 of sales in the first nine months of 2003. The growth in sales in 2004 is due to an improved commercial aerospace market and a pick-up in industrial markets related to large earthmoving equipment. The increase in sales along with better absorption of fixed costs combined with the Company’s ongoing cost reduction programs resulted in a gross income of $12,327, or 7.9% of sales, in the first nine months of 2004. In the first nine months of 2003 gross profit was $9,430 or 6.8% of sales.

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The Company incurred $6,677 of selling, general and administrative expenses, or 4.3% of sales, in the first nine months of 2004. In the same period of 2003, SG&A expenses were $6,554, or 4.7% of sales. SG&A expenses in the first nine months of 2003 reflect a credit of $1,250 for an excise tax refund as well as a charge of $1,000 associated with unusual expenses for the 2003 annual meeting. Adjusting 2003 SG&A to eliminate both of those unusual events would have resulted in the first nine months of 2003 SG&A expenses of $6,804, or 4.9% of sales. The reduction in SG&A in 2004 is largely attributable to reduced expenses associated with foreign sales.

The first nine months of 2004 reflect interest expense of $1,680 in contrast to $1,658 in the same period in 2003. The increase in interest expense does not indicate higher borrowings in 2004, rather, it is the result of higher capitalization of interest expense in 2003 associated with capital projects at the Company.

The tax provision of $1,502 for the first nine months of 2004 reflects an annualized effective rate of 36.9% versus the statutory rate of 35%. The Company has significant net operating loss (“NOL”) carryforwards which largely offset most calculated tax liabilities of the Company. For financial statement purposes, the Company has recorded as a deferred tax asset the tax benefits attributable to the NOL carryforwards. Therefore, the Company uses an effective tax rate which reflects federal and state taxes without a reduction for actual NOL usage. See Note 6 to the consolidated financial statements and “Liquidity and Capital Resources.”

The $2,569 of net income through September 30, 2004, a $1,744 improvement over 2003, is due to the improvements in the markets served by the Company along with Company-wide cost containment efforts. The Company obtained $207,796 of new orders in the first nine months of 2004 in comparison to $155,962 of new orders for the same period in 2003.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash position as of September 30, 2004 is $4,884 less than its position at December 31, 2003. The year-to-date decline in cash is a result of $4,016 of capital expenditures and $6,000 of debt repayment, partially offset by cash flow from operating activities which includes $2,214 of interest paid. Cash flow from operating activities in 2004 was reduced by pension contributions of $2,030 versus $532 in 2003.

On July 20, 2001, the Company sold $30,000 of Notes in a private placement to certain institutional investors. The Notes bear interest at a rate of 7.19% per annum with the interest being paid semiannually. The Notes have a seven-year duration with the principal amortizing equally over the remaining duration after the third year. The Company used the proceeds from the Notes to repay outstanding borrowings and for working capital purposes. The Notes began annual amortization in the third quarter of 2004, therefore $6,000 of the Notes have been classified as a current liability and there was a reduction of $6,000 in the Senior Notes.

In conjunction with the private placement of the Notes, the Company and a syndicate of lenders entered into a credit facility on July 17, 2001 (the “Facility”). The Facility consisted of a $50,000 revolving line of credit which bore interest at a rate of LIBOR plus 0.80%. On April 12, 2002, the Facility was modified to reduce the revolving line of credit to $45,000. On December 31, 2002, the Facility was further modified to reduce the revolving line of credit to $25,000. The interest rate on the Facility was LIBOR plus 1.50% as of September 30, 2004. At September 30, 2004, $21,630 was available pursuant to the terms of the Facility. There were no borrowings under the Facility as of September 30, 2004.

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The Company has NOL carryforwards that were generated prior to its 1993 reorganization, as well as NOL carryforwards that were generated in subsequent years. The total remaining NOL carryforwards were $37,443 as of December 31, 2003. The NOL carryforwards expire gradually in the years 2008 through 2022.

The Company’s initial public offering in March 1998 created an ownership change as defined by the IRS. This ownership change generated an IRS imposed limitation on the utilization of NOL carryforwards on future tax returns. The annual use of the NOL carryforwards is limited to the lesser of the Company’s taxable income or the amount of the IRS imposed limitation. The NOL carryforwards available for use annually is $11,865. Of the $11,865 annual limitation, $2,142 relates to a previous restriction on NOL carryforwards generated prior to the 1993 reorganization.

Realization of the net deferred tax assets, including those attributable to the NOL carryforwards, over time is dependent upon the Company generating sufficient taxable income in future periods. In determining that realization of the net deferred tax assets was more likely than not, the Company has given consideration to a number of factors including its recent earnings history, expectations for earnings in the future, the timing of reversal of temporary differences, tax planning strategies available to the Company and the expiration dates associated with NOL carryforwards. If, in the future, the Company determines that it is no longer more likely than not that the net deferred tax assets will be realized, a valuation allowance will be established against all or part of the net deferred tax assets with an offsetting charge to the income tax provision.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

The Company believes that its exposure to market risk related to changes in foreign currency exchange rates and trade accounts receivable is immaterial as all of the Company’s sales are made in U.S. dollars. The Company does not consider itself subject to the market risks addressed by Item 305 of Regulation S-K.

_____________________

Any statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995, and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performance, estimates, projections, goals and forecasts. Potential factors which could cause the Company’s actual results of operations to differ materially from those in the forward-looking statements include:

Any forward-looking statement speaks only as of the date on which such statement is made. The Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

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Item 4.    Controls and Procedures

The registrant’s certifying officers have evaluated the effectiveness of the design and operation of the Company’s internal controls and disclosure controls and procedures as of the end of the period covered by this quarterly report. Based upon that review, the certifying officers have concluded that the internal controls and disclosure controls and procedures are effectively operating to ensure that material information relating to the Company and its consolidated subsidiaries is made known to such officers by others within those entities, particularly during the period in which this quarterly report was being prepared. The review of internal controls and disclosure controls and procedures did not reveal any significant deficiencies in the design or operation which could adversely affect the Company’s ability to record, process, summarize and report financial data. The Company did not discover any material weaknesses in these controls or procedures, nor did the Company discover any fraud of any kind involving management or other employees who have a significant role in the Company’s internal controls. There were no significant changes in the internal controls or in other factors that could significantly affect internal controls subsequent to the date of evaluation, including any corrective actions taken with regard to significant deficiencies or material weaknesses, and there are no corrective actions contemplated as of the date of this report. The Company did not identify any significant changes that need to be made to ensure the effectiveness of the internal controls or the disclosure controls and procedures, nor did the Company identify any other factors that could materially affect the internal controls occurring after the date of our certification.

During the period covered by this report, the Company continued its progress toward documenting its financial controls and testing the same in preparation for the year-end audit of its financial controls under Section 404 of the Sarbanes-Oxley Act (“SOX”) by the Company’s outside auditors at KPMG LLP. As of September 30, 2004, the Company has not identified any significant deficiencies in its internal controls. In the course of documenting its financial controls and working with its advisors at Grant Thornton LLP, the Company is addressing deficiencies surrounding segregation of duties regarding certain functions in the financial and purchasing departments and the information technologies area. The Company believes these segregation of duties issues are common among businesses of similar size and complexity and can be addressed through alternative controls. Through September 30, 2004, the Company has incurred approximately $90 in outside expenses in implementing Section 404 of SOX. The Company anticipates significant additional expenses will be incurred in this effort through the end of 2004.

PART II – OTHER INFORMATION

Item 1.    Legal Proceedings

On August 11, 2004, the United States District Court for the Eastern District of Wisconsin dismissed the putative class action against the Company in Dean, et. al. v. Ladish, et. al., Case No. 03-C-0165. The plaintiffs failed to appeal this Order of Dismissal and the time period for appeal has expired.

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

On July 14, 2004, the Company contributed 525,000 shares of common stock of the Company to the trust for three of the defined benefit plans of the Company. The 525,000 shares came from the Treasury Stock of the Company and reduced the number of shares held in Treasury Stock from 1,545,122 to 1,020,122. The shares transferred had a cost basis of $7.32 per share and a fair market value of $9.00 per share based upon quoted prices at the market close on July 14, 2004. The pension liability was reduced by the fair value of the shares of $4,725, treasury stock was reduced by $3,843 and the difference of $882 was credited as an addition to paid-in capital. The shares were issued pursuant to Section 4(2) of the Securities Act of 1933.

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

No matters came before the stockholders for a vote during the period covered by this report.

Item 6.    Exhibits

SIGNATURES

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