10-Q/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

Amendment No. 1

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: October 31, 2006

or

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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. Employer
incorporation 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

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 o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of  “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer x Non-accelerated filer o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes o No x

As of October 31, 2006 the Registrant had 11,215,244 Common Shares, par value of $.10 per share, issued and outstanding.

MET-PRO CORPORATION

EXPLANATORY NOTE

On January 22, 2008, the Audit Committee of the Board of Directors of Met-Pro Corporation (the “Company”), after discussion with management and the Company’s independent registered public accountants, Margolis & Company P.C., concluded that the Company’s previously issued audited financial statements as of and for the fiscal year ended January 31, 2007 inclusive of the fourth fiscal quarter ended January 31, 2007, and interim period unaudited financial statements as of and for the periods ended April 30, 2007, July 31, 2007 and October 31, 2007, should no longer be relied upon because of errors in such financial statements that would require restatement of the financial statements for all indicated periods.  Subsequent investigation has indicated that, for similar reasons, restatement of the unaudited financial statements as of and for the fiscal quarter ended October 31, 2006 is also required.

The financial statements for the affected periods prematurely recognized net sales and net income that should have been recognized in subsequent fiscal periods, or which are expected to be able to be recognized in future fiscal periods. These revenue recognition errors resulted in or contributed to adjustments in earnings per share, accounts receivable, inventories, accrued expenses, retained earnings amd backlog. The financial statement errors were the result of unauthorized actions by one non-officer level sales employee, in violation of the Company’s policies including its revenue recognition policy.  Additional information with respect to the action by the employee, who fabricated documents and involved vendors who made false statements to the Company, is disclosed in the Company's Current Report on Form 8-K filed February 12, 2008.

The purpose of this Amendment No. 1 (this “Amendment”) on Form 10-Q/A to the Quarterly Report on Form 10-Q of Met-Pro Corporation (the “Company”) for the fiscal quarter ended October 31, 2006 is to correct the net sales, net income, earnings per share, accounts receivable, inventories, accrued expenses, retained earnings and backlog amounts that were improperly stated as a result of these actions.  The errors affect the Company’s Consolidated Balance Sheet, Consolidated Statement of Operations, Consolidated Statement of Shareholders’ Equity, Consolidated Statement of Cash Flows and the Notes to Consolidated Financial Statements. In addition to these changes to the Consolidated Financial Statements, this Amendment makes corresponding changes in the Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The only changes in this Amendment on Form 10-Q/A to the original Form 10-Q filed on December 11, 2006 are those affected by the restatement.  This Form 10-Q/A continues to speak as of the date of our original Form 10-Q and we have not updated the disclosures to speak as of a later date or to reflect subsequent results, events or developments. Information in the original Form 10-Q not affected by the foregoing is unchanged and reflects the disclosures made at the time of the filing of the original Form 10-Q.  Accordingly, this Form 10-Q/A should be read in conjunction with our SEC filings made subsequent to the December 11, 2006 filing of the original Form 10-Q, including any amendments to those filings. The following items have been amended as a result of the restatement and are included in this Form 10-Q/A:

· Part I – Item 1 – Financial Statements

· Part I – Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

· Part I – Item 4 – Controls and Procedures

· Part II – Item 6 – Exhibits

Pursuant to the applicable rules, Item 6 of Part II has been amended to contain the currently dated certifications from our principal executive officer and principal financial officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. The certifications of our principal executive officer and principal financial officer are attached to this Form 10-Q/A as Exhibits 31.1, 31.2, 32.1 and 32.2, respectively.

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MET-PRO CORPORATION

INDEX

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements
	Consolidated Balance Sheet (Restated) as of October 31, 2006 and January 31, 2006	3
	Consolidated Statement of Operations (Restated) for the nine-month and three-month periods ended October 31, 2006 and 2005	4
	Consolidated Statement of Shareholders’ Equity (Restated) for the nine-month periods ended October 31, 2006 and 2005	5
	Consolidated Statement of Cash Flows (Restated) for the nine-month periods ended October 31, 2006 and 2005	6
	Notes to Consolidated Financial Statements	7
	Report of Independent Registered Public Accounting Firm	19
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated)	20
Item 3.	Qualitative and Quantitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures (Restated)	28
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Submission of Matters to a Vote of Security Holders	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
SIGNATURES		32

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MET-PRO CORPORATION

CONSOLIDATED BALANCE SHEET (RESTATED)

(unaudited)

PART I – FINANCIAL INFORMATION
Item 1.  Financial Statements
	October 31,			January 31,
ASSETS	2006			2006
Current assets	(Restated)
Cash and cash equivalents	$	18,537,674		$	17,683,305
Marketable securities		20,294			-
Accounts receivable, net of allowance for doubtful accounts of		19,611,594			17,909,727
approximately $180,000 and $247,000, respectively
Inventories		19,096,835			16,438,481
Prepaid expenses, deposits and other current assets		1,363,890			1,381,900
Deferred income taxes		620,667			591,534
Total current assets		59,250,954			54,004,947
Property, plant and equipment, net		16,977,419			13,838,221
Costs in excess of net assets of businesses acquired, net		20,798,913			20,798,913
Other assets		1,001,642			1,020,844
Total assets	$	98,028,928		$	89,662,925
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt	$	1,943,898		$	1,689,413
Accounts payable		6,783,453			5,900,281
Accrued salaries, wages and expenses		8,410,240			7,150,142
Dividend payable		757,029			699,819
Customers' advances		1,081,913			1,703,092
Total current liabilities		18,976,533			17,142,747
Long-term debt		5,745,214			2,723,586
Other non-current liabilities		44,859			43,211
Deferred income taxes		2,208,638			2,215,143
Total liabilities		26,975,244			22,124,687
Shareholders' equity
Common shares, $.10 par value; 18,000,000 shares authorized, 12,846,608 shares issued, of which 1,631,364 and 1,649,498 shares were reacquired and held in treasury at the respective dates		1,284,661			1,284,661
Additional paid-in capital		7,828,910			7,564,180
Retained earnings		73,570,713			70,645,717
Accumulated other comprehensive loss		(123,946	)		(321,821	)
Treasury shares, at cost		(11,506,654	)		(11,634,499	)
Total shareholders' equity		71,053,684			67,538,238
Total liabilities and shareholders' equity	$	98,028,928		$	89,662,925
See accompanying notes to consolidated financial statements.

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MET-PRO CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS (RESTATED)

(unaudited)

	Nine Months Ended						Three Months Ended
	October 31,						October 31,
	2006			2005			2006			2005
	(Restated)						(Restated)
Net sales	$	68,566,778		$	62,492,924		$	25,008,855		$	21,918,792
Cost of goods sold		47,817,655			42,762,662			16,849,581			15,205,528
Gross profit		20,749,123			19,730,262			8,159,274			6,713,264
Operating expenses
Selling		6,269,844			5,899,709			2,297,478			1,972,308
General and administrative		7,162,325			6,617,271			2,622,394			2,256,715
Loss on curtailment of pension benefits		234,180			-			234,180			-
		13,666,349			12,516,980			5,154,052			4,229,023
Income from operations		7,082,774			7,213,282			3,005,222			2,484,241
Interest expense		(256,519	)		(196,868	)		(109,205	)		(60,954	)
Other income, net		759,712			457,195			254,461			162,610
Income before taxes		7,585,967			7,473,609			3,150,478			2,585,897
Provision for taxes		2,503,368			2,316,820			1,084,012			703,875
Net income	$	5,082,599		$	5,156,789		$	2,066,466		$	1,882,022
Earnings per share, basic (1)	$	.45		$	.46		$	.18		$	.17
Earnings per share, diluted (2)	$	.45		$	.46		$	.18		$	.17
Cash dividend per share – declared (3)	$	.1925		$	.1788		$	.0675		$	.0625
Cash dividend per share – paid (3)	$	.1875		$	.1744		$	.0625		$	.0581

(1) Basic earnings per share are based upon the weighted average number of shares outstanding of 11,204,760 and 11,185,838 for the nine-month periods ended October 31, 2006 and 2005, respectively, and 11,203,551 and 11,184,295 for the three-month periods ended October 31, 2006 and 2005, respectively.

(2) Diluted earnings per share are based upon the weighted average number of shares outstanding of 11,384,801 and 11,320,875 for the nine-month periods ended October 31, 2006 and 2005, respectively, and 11,382,247 and 11,317,027 for the three-month periods ended October 31, 2006 and 2005, respectively.

(3) The Board of Directors declared quarterly dividends of $.0625 per share payable on March 9, 2006, June 7, 2006, and September 6, 2006 to shareholders of record as of February 24, 2006, May 26, 2006, and August 24, 2006, respectively, and a quarterly dividend of $.0675 per share payable on December 14, 2006 to shareholders of record as of November 30, 2006.  Quarterly dividends of $.0581 per share were paid on March 8, 2005, June 8, 2005, and September 8, 2005 to shareholders of record as of February 25, 2005, May 27, 2005, and August 28, 2005, respectively, and a quarterly dividend of $.0625 per share payable on December 8, 2005 to shareholders of record as of November 25, 2005.

See accompanying notes to consolidated financial statements.

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MET-PRO CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (RESTATED)

 (unaudited)

								Accumulated
			Additional					Other
	Common		Paid-in		Retained			Comprehensive			Treasury
	Shares		Capital		Earnings			Income/(Loss)			Shares			Total
Balances, January 31, 2006	$	1,284,661	$	7,564,180	$	70,645,717		$	(321,821	)	$	(11,634,499	)	$	67,538,238
Comprehensive income:
Net income (Restated)		-		-		5,082,599			-			-
Cumulative translation adjustment		-		-		-			209,890			-
Interest rate swap,		-		-		-			(10,993	)		-
net of tax of ($4,846)
Securities available for sale,		-		-		-			(1,022	)		-
net of tax of ($504)
Total comprehensive income															5,280,474
Dividends paid, $.125 per share		-		-		(1,400,574	)		-			-			(1,400,574	)
Dividends declared, $.0675 per share		-		-		(757,029	)		-			-			(757,029	)
Stock-based compensation		-		245,402		-			-			-			245,402
Stock option transactions		-		19,328		-			-			127,845			147,173
Balances, October 31, 2006 (Restated)	$	1,284,661	$	7,828,910	$	73,570,713		$	(123,946	)	$	(11,506,654	)	$	71,053,684

									Accumulated
			Additional						Other
	Common		Paid-in			Retained			Comprehensive			Treasury
	Shares		Capital			Earnings			Income/(Loss)			Shares			Total
Balances, January 31, 2005	$	963,496	$	7,930,646		$	66,032,446		$	100,635		$	(11,862,032	)	$	63,165,191
Comprehensive income:
Net income		-		-			5,156,789			-			-
Cumulative translation adjustment		-		-			-			(264,444	)		-
Interest rate swap,		-		-			-			71,186			-
net of tax of ($38,028)
Total comprehensive income																4,963,531
Dividends paid, $.1163 per share		-		-			(1,300,374	)		-			-			(1,300,374	)
Dividends declared, $.0625 per share		-		-			(699,539	)		-			-			(699,539	)
Stock option transactions		-		(43,387	)		-			-			367,668			324,281
Purchase of 12,548 treasury shares		-		-			-			-			(140,135	)		(140,135	)
Balances, October 31, 2005	$	963,496	$	7,887,259		$	69,189,322		$	(92,623	)	$	(11,634,499	)	$	66,312,955
See accompanying notes to consolidated financial statements.

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MET-PRO CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS (RESTATED)

(unaudited)

	Nine Months Ended
	October 31,
	2006			2005
	(Restated)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Cash flows from operating activities
Net income	$	5,082,599		$	5,156,789
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,183,326			1,109,925
Deferred income taxes		( 1,659	)		(1,659	)
Loss on sale of property and equipment, net		11,754			8,348
Stock-based compensation		245,402			-
Allowance for doubtful accounts		( 67, 424	)		96,682
(Increase) decrease in operating assets:
Accounts receivable		(1, 517,623	)		(2,172,567	)
Inventories		( 2,570,442	)		(2,638,644	)
Prepaid expenses, deposits and other current assets		202			18,158
Other assets		25,421			(6,744	)
Increase (decrease) in operating liabilities:
Accounts payable and accrued expenses		2,003,045			1,560,944
Customers’ advances		( 621,249	)		380,037
Other non-current liabilities		1,648			1,648
Net cash provided by operating activities		3,775,000			3,512,917
Cash flows from investing activities
Proceeds from sale of property and equipment		14,310			31,696
Acquisitions of property and equipment		( 4,192,649	)		(2,093,201	)
Securities available for sale		(21,820	)		-
Net cash (used in) investing activities		( 4,200,159	)		(2,061,505	)
Cash flows from financing activities
Proceeds from new borrowings		4,306,406			-
Reduction of debt		( 1,103,380	)		(1,500,910	)
Exercise of stock options		147,173			324,281
Payment of dividends		( 2,100,393	)		(1,948,755	)
Purchase of treasury shares		-			(140,135	)
Net cash provided by (used in) financing activities		1,249,806			(3,265,519	)
Effect of exchange rate changes on cash		29,722			(59,026	)
Net increase (decrease) in cash and cash equivalents		854,369			(1,873,133	)
Cash and cash equivalents at February 1		17,683,305			20,889,476
Cash and cash equivalents at October 31	$	18,537,674		$	19,016,343
See accompanying notes to consolidated financial statements.

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MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (RESTATED)

Restatement:

As noted in the Explanatory Note at the outset of this Amendment, the filing of this amended Form 10-Q/A arises out of unauthorized actions by one non-officer level sales employee, in violation of the Company’s policies including its revenue recognition policy.  The financial statements for the affected periods prematurely recognized net sales and net income that should have been recognized in subsequent fiscal periods, or which are expected to be able to be recognized in future fiscal periods. These revenue recognition errors resulted in or contributed to adjustments in earnings per share, accounts receivable, inventories, accrued expenses, retained earnings and backlog.  The financial statement errors were the result of unauthorized actions by one non-officer level sales employee, in violation of the Company’s policies including its revenue recognition policy.  Additional information with respect to the action by the employee, who fabricated documents and involved vendors who made false statements to the Company, is disclosed in the Company's Current Report on Form 8-K filed February 12, 2008.

This restatement affects the Company’s Consolidated Balance Sheet, Consolidated Statement of Operations, Consolidated Statement of Shareholders’ Equity, Consolidated Statement of Cash Flows and the Notes to Consolidated Financial Statements. Accordingly, the Company changed its previously reported net sales, net income, earnings per share, accounts receivable, inventories, accrued expenses, retained earnings and backlog.

The impact of these actions on reported results are as follows:

	Nine Months Ended October 31, 2006				Three Months Ended October 31, 2006
	As Restated		As Previously Reported		As Restated		As Previously Reported
Consolidated Statement of Operations:
Net sales	$	68,566,778	$	68,881,850	$	25,008,855	$	25,323,927
Net income		5,082,599		5,188,951		2,066,466		2,172,818
Earnings per share, basic	$	.45	$	.46	$	.18	$	.19
Earnings per share, diluted	$	.45	$	.46	$	.18	$	.19

	As of October 31, 2006
	As Restated		As Previously Reported
Consolidated Balance Sheet:
Accounts receivable	$	19,611,594	$	19,936,228
Inventory		19,096,835		18,940,498
Accounts payable		6,783,453		6,793,015
Accrued salaries, wages and expenses		8,410,240		8,462,623
Retained earnings		73,570,713		73,677,065

Recent Accounting Pronouncements:  In November 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“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.  SFAS No. 151 has not had a material impact on our financial condition or results of operations.

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment”. This Statement revises SFAS No. 123 and supersedes Accounting Principles Board Opinion (“APB”) No. 25.  SFAS No. 123(R) requires the fair

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MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.  Prior to the adoption of SFAS No. 123(R) on February 1, 2006, the Company, as permitted by SFAS No. 123, provided pro forma disclosure of its compensation costs associated with the fair value of stock options that had been granted, and accordingly, no compensation costs were recognized in its consolidated financial statements. The Company adopted SFAS No. 123(R) using the modified prospective method, and accordingly, the financial statement amounts for the prior periods presented in this Quarterly Report on Form 10-Q have not been restated to reflect the fair value method of expensing share-based compensation.  During the nine-month period ended October 31, 2006, the adoption of SFAS No. 123(R) lowered net income by $164,419 and increased general and administrative expense by $245,402. The after-tax impact of adopting SFAS No. 123(R) is expected to approximate $219,000 during the fiscal year ending January 31, 2007. The adoption of this standard had no material impact on the Company's overall financial position and no impact on cash flow.  See Note 4 for further information and the required disclosures under SFAS No. 123(R).

In December 2004, the FASB issued SFAS No. 153, “Exchanges of Non-monetary Assets,” which addresses the measurement of exchanges of non-monetary assets. SFAS No. 153 eliminates the exception from fair value measurement for non-monetary exchanges of similar productive assets, which was previously provided by APB No. 29, “Accounting for Non-monetary Transactions,” and replaces it with an exception for exchanges that do not have commercial substance. SFAS No. 153 specifies that a non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005.  SFAS No. 153 has not had a material impact on our financial condition or results of operations.

In March 2005, the FASB issued FASB Interpretation (“FIN”) No. 47, “Accounting for Conditional Asset Retirement Obligations”.  FIN No. 47 requires an entity to recognize a liability for a conditional asset retirement obligation when incurred if the liability can be reasonably estimated.   The Interpretation also clarifies that the term Conditional Asset Retirement Obligation refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity.  FIN No. 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation.  FIN No. 47 was effective for the Company with its fiscal year ended January 31, 2006.  FIN No. 47 has not had a material impact on our financial condition or results of operations.

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections”, which replaces APB  No. 20, “Accounting Changes,” and SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements”. SFAS No. 154 changes the requirements for accounting and reporting a change in accounting principle, and applies to all voluntary changes in accounting principles, as well as changes required by an accounting pronouncement in the unusual instance it does not include specific transition provisions.  Specifically, SFAS No. 154 requires retrospective application to prior periods’ financial statements, unless it is impracticable to determine the period specific effects or the cumulative effect of the change.  When it is impracticable to determine the effects of the change, the new accounting principle must be applied to the balances of assets and liabilities as of the beginning of the earliest period for which retrospective application is practicable and a corresponding adjustment must be made to the opening balance of retained earnings for that period rather than being reported in an income statement.  When it is impracticable to determine the cumulative effect of the change, the new principle must be applied as if it were adopted prospectively from the earliest date practicable.  SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005.  SFAS No. 154 does not change the transition provisions of any existing pronouncements.  SFAS No. 154 has not had a material impact on our financial condition or results of operations.

In June 2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes - An Interpretation of SFAS No. 109”, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN No. 48 is effective and will be adopted by the Company on February 1, 2007.  FIN No. 48 is not expected to have a material impact on our financial condition or results of operations.

8

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R)”. SFAS No. 158 requires an entity to recognize in its consolidated balance sheet an asset for a defined benefit postretirement plan’s overfunded status or a liability for a plan’s underfunded status, measure a defined benefit postretirement plan’s assets and obligations that determine its funded status as of the end of the employer’s fiscal year, and recognize changes in the funded status of a defined benefit postretirement plan in comprehensive income in the year in which the changes occur. We are in the process of evaluating the impact of this pronouncement on our consolidated financial position, operations and cash flows.

Reclassifications:  In connection with a comment letter process with the Securities and Exchange Commission (“SEC”), during the fiscal quarter ended October 31, 2006, management undertook a review of operating segment aggregation in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about Segments of an Enterprise and Related Information” and determined that, based on the current business environment in which the Company operates, the economic characteristics of its operating segments, and management’s view of the business, a revision of the aggregation of its operating segments was appropriate.

The Company has identified six operating segments and has aggregated those segments into two reportable segments and one other segment as follows: Product Recovery/Pollution Control Equipment, Fluid Handling Equipment and Filtration and Purification (“all other”).  The Filtration and Purification segment is comprised of four operating segments that do not meet the criteria for aggregation outlined in SFAS No. 131, but which can be combined due to certain quantitative thresholds listed in SFAS No. 131.  The disclosures in the Business Segment Data in Note 12 have been restated to reflect two reportable segments and one other segment. The restatement has no effect upon the Company’s consolidated statement of operations, consolidated balance sheet, consolidated statement of shareholders’ equity or consolidated statement of cash flows for any of the affected periods.  Accordingly, the Company’s historical net sales, net income, earnings per share, total assets, liabilities and shareholders’ equity are unchanged by the restatement of business segment data.

Additionally, the Company has reclassified gains/(losses) on the sale of property and equipment from other income, net to general and administrative expense, in the consolidated statement of operations and the income from operations in the Business Segment Data in Note 12, for the nine-month and three-month periods ended October 31, 2005, and the six-month period ended July 31, 2006.

Stock Split:  On October 10, 2005, the Company’s Board of Directors declared a four-for-three stock split, effective in the form of a stock distribution, payable on November 15, 2005 to shareholders of record on November 1, 2005.  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.

Marketable Securities: All of our marketable securities are classified as available-for-sale.  Available-for-sale securities are carried at fair value, with the unrealized gains and losses, net of any related tax effect, reported in accumulated other comprehensive income/(loss) in shareholders’ equity in the accompanying consolidated financial statements.  Realized gains and losses and declines in value judged to be other-than-temporary on available-for-sale securities are included in other income, net.

NOTE 2 – PRINCIPLES OF CONSOLIDATION

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., Pristine Water Solutions Inc., Mefiag (Guangzhou) Filter Systems Ltd. and Met-Pro (Hong Kong) Limited Company. Significant intercompany accounts and transactions have been eliminated.

9

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – BASIS OF PRESENTATION

In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the financial position of the Company as of October 31, 2006 and the results of operations for the nine-month and three-month periods ended October 31, 2006 and 2005, and changes in shareholders’ equity and cash flows for the nine-month periods then ended.  The results of operations for the nine-month and three-month periods ended October 31, 2006 and 2005 are not necessarily indicative of the results to be expected for the full year.  These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K/A for the year ended January 31, 2006.

NOTE 4 – STOCK-BASED COMPENSATION

Stock Options:  Effective February 1, 2006, the Company adopted SFAS No. 123(R), "Share-Based Payment," which revised SFAS No. 123, "Accounting for Stock-Based Compensation," and superseded APB No. 25, "Accounting for Stock Issued to Employees".  Prior to February 1, 2006, the Company accounted for stock-based compensation under the provisions of APB No. 25 and related interpretations. Accordingly, no compensation expense related to granting of stock options had been recognized in the financial statements prior to adoption of SFAS No. 123(R) for stock options that were granted, as the grant price equaled the market price on the date of grant.

The Company has adopted SFAS No. 123(R) using the modified prospective method, and accordingly the financial statement amounts for the prior periods presented in this Quarterly Report on Form 10-Q/A have not been restated to reflect the fair value method of expensing share-based compensation. Under this transition method, compensation cost recognized in the nine-month and three-month periods ended October 31, 2006 includes compensation cost for all share-based payments granted prior to, but not vested as of February 1, 2006 and shared-based payments granted after February 1, 2006.

For the nine-month and three-month periods ended October 31, 2006, the impact of the adoption of SFAS No. 123(R) as compared to if the Company had continued to account for share-based compensation under APB Opinion No. 25 is as follows: an increase in general and administrative expense by $245,402 and $81,801, respectively; a reduction in net income by $164,419 and $54,807, respectively; and had a de minimis effect on basic and diluted earnings per share. SFAS No. 123(R) requires the Company to estimate forfeitures in calculating the compensation expense instead of recognizing these forfeitures and the resulting reduction in compensation expense as they occur. As of February 1, 2006, the cumulative after-tax effect of this change in accounting for forfeitures reduced stock-based compensation by $12,814.  The estimate of forfeitures will be adjusted over the vesting period to the extent that actual forfeitures differ, or are expected to differ, from such estimates. The adoption of this standard had no impact on net cash flows and results in the reclassification on the consolidated cash flows statement of related tax benefits from cash flows from operating activities to cash flows from financing activities to the extent these tax benefits exceeded the associated compensation cost recognized in the income statement.

At this time, the Company’s practice is to grant options with one-third exercisable as of the date of grant and the remaining two-thirds vesting over a two year period; provided, however, in the event of a “change of control”, any unvested portion of the option shall become immediately exercisable.  The Company’s present practice is that the duration of options is for up to ten years from the date of grant, subject to earlier termination under various conditions.  The fair value of each option is amortized into compensation expense on a straight-line basis over their respective vesting period, net of estimated forfeitures. The fair value of options was estimated at the grant date using the Black-Scholes option valuation model. The per share weighted-average fair value at the date of grant for stock options granted during the fiscal year ended January 31, 2006 was $2.76 per option.  For the nine months ended October 31, 2006, there have been no additional stock options granted.  The application of this valuation model relies on the following assumptions that are judgmental and sensitive in the determination of the compensation expense:

10

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Nine Months Ended
	October 31,
	2006	2005
Expected term (years)	5.0	5.0
Risk-free interest rate	3.63% - 4.58%	3.11% - 4.58%
Expected volatility	30% - 32%	30% - 32%
Dividend yield	2.26% - 3.39%	2.26% - 3.73%

Historical information was the principal basis for the selection of the expected term and dividend yield. The expected volatility is based on a weighted-average combination of historical and implied volatilities over a time period that approximates the expected term of the option. The risk-free interest rate was selected based upon the U.S. Treasury Bill rates in effect at the time of grant for the expected term of the option.

The following table summarizes stock option transactions for the nine-month period ended October 31, 2006:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (years)		Aggregate Intrinsic Value
Options:
Outstanding at February 1, 2006		810,742	$	9.8071		7.68
Granted		-		-
Forfeited		6,667		11.18
Expired		-		-
Exercised		18,134		8.12
Outstanding at October 31, 2006		785,941	$	9.8344		7.18	$	2,896,664
Exercisable at October 31, 2006		619,487	$	9.4274		7.18	$	2,535,312

The aggregate intrinsic value of options exercised during the nine-month periods ended October 31, 2006 and 2005 was $92,085 and $227,797, respectively.  The intrinsic value of stock options is the amount by which the market price of the stock on a given date, such as at the end of the period or on the day of exercise, exceeded the market price of stock on the date of grant.

The following table summarizes information about the options outstanding and options exercisable as of October 31, 2006:

	Options Outstanding						Options Exercisable
	Shares		Weighted Average Remaining Life (years)		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Range of prices:
$5.48 – 5.99		32,980		3.21	$	5.5533		32,980	$	5.5533
$6.00 – 6.99		64,716		4.39		6.8063		64,716		6.8063
$7.00 – 8.99		205,231		5.23		7.3740		205,231		7.3740
$9.00 – 11.99		161,340		7.96		9.8813		107,558		9.8813
$12.00 – 12.99		321,674		8.44		12.4288		209,002		12.6331
		785,941		7.18	$	9.8344		619,487	$	9.4274

11

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of October 31, 2006, there was $373,038 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plans. The cost is expected to be recognized over a weighted-average period of 1.8 years.

The following table provides the pro forma net income and earnings per share for the nine-month and three-month periods ended October 31, 2005 as if compensation cost for stock-based employee compensation was determined as of the grant date under the fair value method of SFAS No. 123, "Accounting for Stock-Based Compensation," as amended by SFAS No. 148.

	Nine Months Ended October 31, 2005			Three Months Ended October 31, 2005
Net income, as reported	$	5,156,789		$	1,882,022
Add: Stock-based employee compensation expense included in reported net income, net of tax		-			-
Less: Pro forma expense related to stock options granted, net of tax effects		(125,070	)		(41,690	)
Pro forma	$	5,031,719		$	1,840,332
Earnings per share, basic:
As reported	$	.46		$	.17
Pro forma		.45			.16
Earnings per share, diluted:
As reported	$	.46		$	.17
Pro forma		.44			.16

For the purposes of this pro forma disclosure, the fair value of the options at the date of grant was estimated using the Black-Scholes option-pricing model.

NOTE 5 – MARKETABLE SECURITIES

At October 31, 2006 the Company's marketable securities had a fair market value of $20,294, which is net of a gross unrealized loss of $1,526.  The marketable securities are composed of 547 shares of Armstrong World Industries, Inc. (“AWI”) distributed to Met-Pro as part of Chapter 11 reorganization settlement in October of 2006.

NOTE 6 – INVENTORIES (RESTATED)

Inventories consisted of the following:

	October 31,		January 31,
	2006		2006
Raw materials	$	14,139,255	$	9,116,168
Work in progress		2,932,796		2,334,589
Finished goods		2,024,784		4,987,724
	$	19,096,835	$	16,438,481

12

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – SUPPLEMENTAL CASH FLOW INFORMATION

Net cash flows from operating activities reflect cash payments for interest and income taxes as follows:

	Nine Months Ended
	October 31,
	2006		2005
Cash paid during the period for:
Interest	$	247,049	$	210,071
Income taxes		2,834,775		1,290,171

13

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 – DEBT

Short-term debt:

The Company and its subsidiaries have domestic and foreign unsecured lines of credit totaling $5,000,000 which can be used for working capital.  As of October 31, 2006, the Company’s Mefiag B.V. subsidiary borrowed $382,890 (300,000 Euro) from its available line of credit.

Long-term debt:

Long-term debt consisted of the following:

	October 31,		January 31,
	2006		2006
Note payable, bank, payable in quarterly installments of $300,000, plus interest at a rate of 75 basis points over the ninety day LIBOR rate (effective interest rate of 6.42% at October 31, 2006), maturing October, 2008.	$	2,700,000	$	3,600,000
Note payable, bank, payable in quarterly installments of $31,908 (25,000 Euro), plus interest at a fixed rate of 3.82%, maturing January, 2016.		1,180,624		379,387
Line of credit, $382,890 (300,000 Euro), payable upon demand, plus interest at a rate of 70 basis points over the thirty day EURIBOR rate (effective interest rate of 4.05% at October 31, 2006).		382,890		364,559
Bond payable, bank, payable in quarterly installments of $58,333, plus interest at a rate of 16 basis points below the ninety day LIBOR rate (effective interest rate of 5.51% at October 31, 2006), maturing April, 2021.		3,390,706		50,000
		7,654,220		4,393,946
Less current portion		1,943,898		1,689,413
		5,710,322		2,704,533
Fair market value of interest rate swap liability		34,892		19,053
Long-term portion	$	5,745,214	$	2,723,586

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

14

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company has two separate interest rate swap agreements to hedge against the potential impact on earnings from increases in market interest rates.  Effective October 29, 1998, the Company entered into a ten-year interest rate swap agreement for a notional amount equal to the balance on the note payable maturing October 2008.  The Company swapped the ninety day LIBOR for a fixed rate of 5.23%.  As a result, the effective fixed interest rate is 5.98%.  Effective April 3, 2006, the Company entered into a fifteen-year interest rate swap agreement for a notional amount equal to the balance on the bond payable maturing April 2021.  The Company swapped the ninety day LIBOR for a fixed rate of 4.87%. As a result, the effective fixed interest rate is 4.71%.  These interest rate swap agreements are accounted for as fair value hedges that qualify for treatment under the short-cut method of measuring effectiveness in accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” as amended by SFAS 138, “Accounting for Certain Derivative Instruments and Hedging Activities – an Amendment to FASB Statement No. 133”.   There was no hedge ineffectiveness as of October 31, 2006.  The fair value of the interest rate swap agreements resulted in a decrease in equity of $23,378 (net of tax) for the nine-months ended October 31, 2006 and a decrease in equity of $12,385 (net of tax) for the fiscal year ended January 31, 2006.  These results are recorded in the accumulated other comprehensive loss section of shareholders’ equity.

Maturities of long-term debt are as follows:

Year Ending
January 31,
2007	$	1,943,898
2008		1,561,472
2009		1,561,472
2010		361,472
2011		361,472
Thereafter		1,864,434
	$	7,654,220

NOTE 9 – ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive income/(loss) consisted of the following:

	October 31,			January 31,
	2006			2006
Interest rate swap, net of tax	$	(23,378	)	$	(12,385	)
Unrealized loss on securities available-for sale, net of tax		(1,022	)		-
Cumulative translation of adjustment		610,321			400,431
Minimum pension liability adjustment, net of tax		(709,867	)		(709,867	)
	$	(123,946	)	$	(321,821	)

NOTE 10 – OTHER INCOME, NET

Other income, net was comprised of the following:

	Nine Months Ended				Three Months Ended
	October 31,				October 31,
	2006		2005		2006		2005
Interest income	$	736,050	$	426,009	$	242,066	$	168,268
Other miscellaneous income/(expense)		23,662		31,186		12,395		(5,658	)
	$	759,712	$	457,195	$	254,461	$	162,610

15

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 – EMPLOYEE BENEFIT PLANS

Pension Plans:  The Company has several defined benefit pension plans covering eligible employees in the United States.  In the third quarter ended October 31, 2006, the Company amended its defined benefit pension plans to freeze the accrual of future benefits for all its salaried and non-union hourly employees, effective on December 31, 2006, which resulted in the Company recognizing a curtailment loss of $234,180.  The net periodic pension cost is based on estimated values provided by independent actuaries. The following table provides the components of net periodic pension costs:

	Net Periodic Pension Cost
	Nine Months Ended						Three Months Ended
	October 31,						October 31,
	2006			2005			2006			2005
Service cost	$	523,584		$	465,048		$	169,460		$	155,016
Interest cost		764,040			772,488			228,226			257,496
Expected return on plan assets		(877,394	)		(770,700	)		(292,464	)		(256,900	)
Amortization of transition asset		(24,986	)		(7,887	)		(16,928	)		(2,629	)
Amortization of prior service cost		62,416			75,888			13,010			25,296
Recognized net actuarial loss		63,726			20,727			12,048			6,909
Curtailment loss		234,180			-			234,180			-
Net periodic pension cost	$	745,566		$	555,564		$	347,532		$	185,188

The Company contributed $110,243 to the pension plans during the nine-month period ended October 31, 2006 and expects an additional minimum contribution of $24,870 during the three-month period ending January 31, 2007.

16

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – BUSINESS SEGMENT DATA (RESTATED)

During the fiscal quarter ended October 31, 2006, management reviewed operating segment aggregation in accordance with SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information,” and based upon changes beginning in February 2006 in the manner in which management manages the Company, as well as the current economic characteristics of its operating segments, management has determined that a revision of the aggregation of operating segments is appropriate.  Therefore, the segment discussion outlined below represents the modified segment structure as determined by management in accordance with SFAS No. 131.  All prior year amounts related to these reporting segments have been restated to conform to the new reporting segment structure.

The Company has identified six operating segments and has aggregated those segments into two reportable segments as follows: Product Recovery/Pollution Control Equipment and Fluid Handling Equipment and one other segment (Filtration and Purification). The Filtration and Purification segment is comprised of four operating segments that do not presently meet the criteria for aggregation outlined in SFAS No. 131. However, the Company’s analysis is that SFAS No. 131 permits the aggregation of operating segments if, individually, each operating segment does not meet any of the following quantitative thresholds: (i) reported revenue is 10 percent or more of combined revenue of all reported operating segments, (ii) the absolute amount of reported profit or loss is 10 percent or more of the greater, in absolute amounts, of either the combined reported profit of all operating segments that did not report a loss or the combined reported loss of all operating segments that did report a loss, and (iii) its assets are 10 percent or more of the combined assets of all operating segments.  Since none of the operating segments included in the Filtration and Purification segment meets these criteria, and at least 75 percent of total consolidated revenue is included in the Product Recovery/Pollution Control Equipment and Fluid Handling Equipment reporting segments, the Company has determined the aggregation of these operating segments into this other segment is appropriate under SFAS No. 131. The disclosures in the Business Segment Data have been restated to reflect two reportable segments and one other segment.

The following is a description of each segment:

Product Recovery/Pollution Control Equipment: This reportable segment consists of one operating segment that manufactures products for the purification of air or liquids.  Many of these products are custom designed and engineered to solve a customer’s product recovery or pollution control issues.  The products are sold worldwide through Company sales personnel and a network of manufacturer’s representatives.  This reporting segment is comprised of the Duall, Systems, Flex-Kleen and Strobic Air business units.

Fluid Handling Equipment: This reportable segment consists of one operating segment that manufactures high quality centrifugal pumps that are applied on difficult applications including pumping of acids, brines, caustics, bleaches, seawater, high temperature liquids and a wide variety of waste liquids.  A variety of pump configurations make these products adaptable to almost any pumping application.  These products are sold worldwide through an extensive network of distributors.  This reporting segment is comprised of the Dean Pump, Fybroc and Sethco business units.

Filtration and Purification: This other segment consists of four operating segments that produce the following products:  proprietary chemicals for the treatment of municipal drinking water systems and boiler and cooling tower systems; cartridges and filter housings; filtration products for difficult industrial air and liquid applications; and filter systems using horizontal disc technology.  This other segment is comprised of the Keystone Filter, Pristine Water Solutions, Mefiag and Mefiag B.V. operating segments.

The accounting policies of the reporting segments are the same as those described in the summary of significant accounting policies. The Company evaluates the performance of these segments based on many factors including sales, sales trends, margins and operating performance.

No significant inter-company revenue is realized in these reporting segments. 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.

17

MET-PRO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial information for two reporting segments and one other segment is shown below:

	Nine Months Ended				Three Months Ended
	October 31,				October 31,
	2006		2005		2006		2005
Net sales	(Restated)				(Restated)
Product recovery/pollution control equipment	$	34,768,126	$	30,483,973	$	12,676,874	$	11,319,446
Fluid handling equipment		19,440,477		17,279,997		7,416,844		5,733,900
Filtration and purification		14,358,175		14,728,954		4,915,137		4,865,446
	$	68,566,778	$	62,492,924	$	25,008,855	$	21,918,792
Income from operations
Product recovery/pollution control equipment	$	2,981,498	$	2,651,828	$	1,575,426	$	1,008,424
Fluid handling equipment		3,054,544		2,751,401		1,320,796		897,015
Filtration and purification		1,046,732		1,810,053		109,000		578,802
	$	7,082,774	$	7,213,282	$	3,005,222	$	2,484,241

	October 31,		January 31,
	2006		2006
Identifiable assets	(Restated)
Product recovery/pollution control equipment	$	34,977,614	$	34,173,031
Fluid handling equipment		22,189,737		17,008,765
Filtration and purification		20,218,663		17,653,316
		77,386,014		68,835,112
Corporate		20,642,914		20,827,813
	$	98,028,928	$	89,662,925

NOTE 13 – ACCOUNTANTS’ 10-Q/A REVIEW

Margolis & Company P.C., the Company’s independent registered public accountants, has performed a limited review of the financial information included herein. Their report on such review accompanies this filing.

18

MET-PRO CORPORATION

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Met-Pro Corporation

Harleysville, Pennsylvania

We have reviewed the accompanying consolidated balance sheet of Met-Pro Corporation and its wholly-owned subsidiaries as of October 31, 2006, and the related consolidated statements of operations for the nine-month and three-month periods ended October 31, 2006 and 2005 and shareholders’ equity and cash flows for the nine-month periods ended October 31, 2006 and 2005.  These financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim consolidated financial statements in order for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board, the consolidated balance sheet of Met-Pro Corporation and its wholly-owned subsidiaries as of January 31, 2006, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 24, 2006, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of January 31, 2006 is fairly stated, in all material respects, in relation to the balance sheet from which it has been derived.

/s/ Margolis & Company P.C.

Certified Public Accountants

Bala Cynwyd, Pennsylvania

November 20, 2006, except for Notes 1, 6 and 12 as to

which the date is February 4, 2008

19

MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated)

The following discussion should be read in conjunction with, and is qualified in its entirety by, the Unaudited Consolidated Financial Statements and Notes thereto included elsewhere in this Quarterly Report on Form 10-Q/A. This item contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those indicated in such forward-looking statements. Factors that may cause such a difference include, but are not limited to, those discussed in “Item 1A: Risk Factors” of our Annual Report on Form 10-K/A for the year ended January 31, 2006.

On January 22, 2008, the Audit Committee of the Board of Directors of Met-Pro Corporation (the “Company”), after discussion with management and the Company’s independent registered public accountants, Margolis & Company P.C., concluded that the Company’s previously issued audited financial statements as of and for the fiscal year ended January 31, 2007 inclusive of the fourth fiscal quarter ended January 31, 2007, and interim period unaudited financial statements as of and for the periods ended April 30, 2007, July 31, 2007 and October 31, 2007, should no longer be relied upon because of errors in such financial statements that would require restatement of the financial statements for all indicated periods.  Subsequent investigation has indicated that, for similar reasons, restatement of the unaudited financial statements as of and for the fiscal quarter ended October 31, 2006 is also required.

The financial statements for the affected periods prematurely recognized net sales and net income that should have been recognized in subsequent fiscal periods or which are expected to be recognized in future fiscal periods. These revenue recognition errors resulted in or contributed to adjustments in accounts receivable, inventories, accrued expenses, retained earnings and backlog. The financial statement errors were the result of unauthorized actions by one non-officer level sales employee, in violation of the Company’s policies including its revenue recognition policy.  Additional information with respect to the action by the employee, who fabricated documents and involved vendors who made false statements to the Company, is disclosed in the Company's Current Report on Form 8-K filed February 12, 2008.

In total, the errors require adjustments in net sales, net income, earnings per share, accounts receivable, inventories, accrued expenses, retained earnings and backlog.  The errors affect the Company’s Consolidated Balance Sheet, Consolidated Statement of Operations, Consolidated Statement of Shareholders’ Equity, Consolidated Statement of Cash Flows and the Notes to Consolidated Financial Statements.

The impact of these actions on reported results are as follows:

	Nine Months Ended October 31, 2006				Three Months Ended October 31, 2006
	As Restated		As Previously Reported		As Restated		As Previously Reported
Consolidated Statement of Operations:
Net sales	$	68,566,778	$	68,881,850	$	25,008,855	$	25,323,927
Net income		5,082,599		5,188,951		2,066,466		2,172,818
Earnings per share, basic	$	.45	$	.46	$	.18	$	.19
Earnings per share, diluted	$	.45	$	.46	$	.18	$	.19

	As of October 31, 2006
	As Restated		As Previously Reported
Consolidated Balance Sheet:
Accounts receivable	$	19,611,594	$	19,936,228
Inventory		19,096,835		18,940,498
Accounts payable		6,783,453		6,793,015
Accrued salaries, wages and expenses		8,410,240		8,462,623
Retained earnings		73,570,713		73,677,065

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatement as it pertains to the fiscal period covered by this Report.

20

MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated) continued…

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations gives effect to the restatement as it pertains to the fiscal period covered by this Report.

Results of Operations (Restated):

The following table sets forth, for the nine-month and three-month periods indicated, certain financial information derived from the Company’s consolidated statement of operations expressed as a percentage of net sales.

	Nine Months Ended						Three Months Ended
	October 31,						October 31,
	2006			2005			2006			2005
	(Restated)						(Restated)
Net Sales		100.0	%		100.0	%		100.0	%		100.0	%
Cost of goods sold		69.7	%		68.4	%		67.4	%		69.4	%
Gross profit		30.3	%		31.6	%		32.6	%		30.6	%
Selling expenses		9.2	%		9.4	%		9.2	%		9.0	%
General and administrative expenses		10.5	%		10.6	%		10.5	%		10.3	%
Loss on the curtailment of pension benefits		.3	%		-			.9	%		-
Income from operations		10.3	%		11.6	%		12.0	%		11.3	%
Interest expense		(.4	% )		(.3	%)		(.4	%)		(.3	%)
Other income, net		1.1	%		.7	%		1.0	%		.7	%
Income before taxes		11.0	%		12.0	%		12.6	%		11.7	%
Provision for taxes		3.6	%		3.7	%		4.3	%		3.2	%
Net income		7.4	%		8.3	%		8.3	%		8.5	%

Nine Months Ended October 31, 2006 vs. Nine Months Ended October 31, 2005 (Restated)

Net sales for the nine-month period ended October 31, 2006 were $68,566,778 compared with $62,492,924 for the nine-month period ended October 31, 2005, an increase of $6,073,854 or 9.7%.  Sales in the Product Recovery/Pollution Control Equipment reporting segment were $34,768,126, or $4,284,153 higher than the $30,483,973 of sales for the nine-month period ended October 31, 2005, an increase of 14.1%.  The sales increase in the Product Recovery/Pollution Control Equipment reporting segment was due primarily to increased demand for our particulate collection equipment, fume and odor control equipment, and thermal oxidizer equipment.  Sales in the Fluid Handling Equipment reporting segment totaled $19,440,477, or $2,160,480 higher than the $17,279,997 of sales for the nine-month period ended October 31, 2005, an increase of 12.5%.  The sales increase in the Fluid Handling Equipment reporting segment was due primarily to increased demand for our centrifugal pumps that handle corrosive, abrasive and high temperature liquids.  Sales in the Filtration and Purification segment were $14,358,175, or $370,779 lower than the $14,728,954 of sales for the nine-month period ended October 31, 2005, a decrease of 2.5%.  This decrease was due primarily to lower demand for our horizontal disc filter systems which are utilized in the metal finishing and plating industry.

The Company’s backlog of orders totaled $24,998,967 and $16,464,777 as of October 31, 2006 and 2005, respectively.  The increase is due primarily to increased demand for products in the Product Recovery/Pollution Control Equipment and Fluid Handling Equipment reporting segments.  Backlog for the Product Recovery/Pollution Control Equipment reporting segment was $18,249,916 or 50.6% higher than the $12,115,463 backlog for the nine-month period ended October 31, 2005.   Backlog for the Fluid Handling Equipment reporting segment was $5,095,316 or 79.7% higher than the $2,835,323 backlog for the nine-month period ended October 31, 2005.  The Company expects that substantially all of the backlog existing as of October 31, 2006 will be shipped during the next three-to-six-month period.

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MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated) continued…

Income from operations for the nine-month period ended October 31, 2006 was $7,082,774 compared with $7,213,282 for the nine-month period ended October 31, 2005, a decrease of $130,508 or 1.8%.

Income from operations in the Product Recovery/Pollution Control Equipment reporting segment was $2,981,498, or $329,670 higher than the $2,651,828 for the nine-month period ended October 31, 2005, an increase of 12.4%.  The increase in income from operations in the Product Recovery/Pollution Control Equipment reporting segment was principally related to (i) higher net sales and (ii) higher gross margins earned during the three-month period ended October 31, 2006, partially offset by (i) a loss on one large Product Recovery/Pollution Control Equipment reporting segment project in the second quarter which reduced the Company’s income from operations by approximately $388,000, (ii) lower gross margins due to product mix and higher material cost during the six-month period ended July 31, 2006, (iii) the allocation of a non-cash charge for stock options, and (iv) the allocation of a one time loss on the curtailment of pension benefits in the third quarter.

Income from operations in the Fluid Handling Equipment reporting segment totaled $3,054,544, or $303,143 higher than the $2,751,401 for the nine-month period ended October 31, 2005, an increase of 11.0%.  The increase in income from operations in the Fluid Handling Equipment reporting segment was principally related to higher net sales, partially offset by (i) lower gross margins due to product mix and higher material costs, (ii) non-recurring and non-capitalized expenses incurred in the first quarter resulting from the relocation of the Company’s Sethco business unit and the expansion of the Company’s Telford, Pennsylvania facility, which reduced income from operations by approximately $267,000, (iii) the allocation of a non-cash charge for stock options, and (iv) the allocation of a one time loss on the curtailment of pension benefits in the third quarter.

Income from operations in the Filtration and Purification segment was $1,046,732, or $763,321 lower than the $1,810,053 for the nine-month period ended October 31, 2005, a decrease of 42.2%.  This decrease was principally related to (i) lower net sales, (ii) reduced gross margins due to product mix in the three-month period ended October 31, 2006, (iii) non-recurring and non-capitalized expenses incurred in the first quarter from the relocation of the Company’s Mefiag business unit and the expansion of the Company’s Netherlands facility, which reduced income from operations by approximately $90,000, (iv) the allocation of a non-cash charge for stock options, and (v) the allocation of a one time loss on the curtailment of pension benefits in the third quarter.

Net income for the nine-month period ended October 31, 2006 was $5,082,599 compared with $5,156,789 for the nine-month period ended October 31, 2005, a decrease of $74,190 or 1.4%.  This decrease in net income was principally related to higher sales volumes in the Product Recovery/Pollution Control Equipment and Fluid Handling Equipment reporting segments and higher gross margins in the Product Recovery/Pollution Control Equipment reporting segment during the three-month period ended October 31, 2006, offset by the impact of (i) product mix and higher material costs in the Product Recovery/Pollution Control Equipment and Fluid Handling Equipment reporting segments for the six-month period ended July 31, 2006, (ii) a loss on one large Product Recovery/Pollution Control Equipment reporting segment project in the second quarter which reduced Company net income by approximately $264,000, (iii) non-recurring and non-capitalized expenses incurred in the first quarter resulting from the relocation of the Company’s Sethco and Mefiag business units and the expansion of the Company’s Netherlands and Telford, Pennsylvania facilities, which reduced net income in the Fluid Handling Equipment reporting segment, and Filtration and Purification segment by approximately $179,000 and $60,000, respectively, (iv) a one time loss on the curtailment of pension benefits in the third quarter which reduced net income by approximately $157,000, (v) a non-cash charge for stock options which reduced Company net income by approximately $164,000 in the nine-month period ended October 31, 2006, and (vi) an increase in the effective tax rate relating primarily to a reduction in expense for exercising stock options and a reduction in the tax benefit provided by the Extraterritorial Income Exclusion (“EIE”).

The gross margin for the nine-month period ended October 31, 2006 was 30.3% versus 31.6% for the same period in the prior year.  This decrease in gross margin was due to (i) product mix and higher material costs in the Product Recovery/Pollution Control Equipment and Fluid Handling Equipment reporting segments for the six-month period ended July 31, 2006 and (ii) a loss on one large Product Recovery/Pollution Control Equipment reporting segment project previously mentioned, offset by higher gross margins in the Product Recovery/Pollution Control Equipment reporting segment during the three-month period ended October 31, 2006.  Procedures have been implemented to mitigate profit erosion on all larger projects.  To offset higher material costs, the Company has taken certain strategic measures to increase gross margins including selected sales price increases and improved purchasing practices.  The relocation of the Company’s Sethco and Mefiag business units and the expansion of the Company’s Netherlands and Telford, Pennsylvania facilities are complete and are expected to promote improved operational results.

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MET-PRO CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated) continued…

Selling expense increased $370,135 during the nine-month period ended October 31, 2006 compared with the same period last year.  Selling expense as a percentage of net sales was 9.2% for the nine-month period ended October 31, 2006 compared with 9.4% for the same period last year.  The increase in absolute dollars was due primarily to the hiring of additional personnel and related costs.

General and administrative expense was $7,162,325 for the nine-month period ended October 31, 2006 compared with $6,617,271 for the same period last year, an increase of $545,054.  This increase was in part related to non-recurring and non-capitalized expenses resulting from the relocation of our Company’s Sethco and Mefiag business units and the expansion of the Company's Netherlands and Telford, Pennsylvania facilities which occurred during the fiscal quarter ended April 30, 2006, combined with the impact of expensing stock options, and higher legal and personnel acquisition expenses.  General and administrative expense as a percentage of net sales was 10.5% for the nine-month period ended October 31, 2006, compared with 10.6% for the same period last year.

In the nine-month period ended October 31, 2006, the Company incurred a one time loss on the curtailment of pension benefits totaling $234,180.  This expense was related to freezing the Company’s defined-benefit plans for all salaried and non-union hourly employees effective December 31, 2006.  The plans will be replaced with an enhanced defined-contribution plan.  The Company expects to reduce subsequent fiscal years’ pension expense, net of the increase in the defined contribution expense, by approximately $500,000 ($335,000 after tax) on an annual basis, if there were no changes in any of the numerous variables affecting pension expense.

Interest expense was $256,519 for the nine-month period ended October 31, 2006, compared with $196,868 for the same period in the prior year, an increase of $59,651.  This increase was due principally to an increase in long-term debt related to previously mentioned plant expansions.

Other income, net, was $759,712 for the nine-month period ended October 31, 2006 compared with $457,195 for the same period in the prior year, an increase of $302,517.  This increase is related to higher interest income earned on cash on hand during the nine-month period ended October 31, 2006.

The effective tax rates for the nine-month periods ended October 31, 2006 and 2005 were 33.0% and 31.0%, respectively.  The increase in the effective tax rate to 33.0% was due primarily to a reduction in expense for exercising stock options and a reduction in the tax benefit provided by the Extraterritorial Income Exclusion (“EIE”) during the third quarter.

Three Months Ended October 31, 2006 vs. Three Months Ended October 31, 2005 (Restated)

Net sales for the three-month period ended October 31, 2006 were $25,008,855 compared with $21,918,792 for the three-month period ended October 31, 2005, an increase of $3,090,063 or 14.1%.  Sales in the Product Recovery/Pollution Control Equipment reporting segment were $12,676,874, or $1,357,428 higher than the $11,319,446 of sales for the three-month period ended October 31, 2005, an increase of 12.0%.  The sales increase in the Product Recovery/Pollution Control Equipment reporting segment was due primarily to increased demand for our particulate collection equipment, fume and odor control equipment, and thermal oxidizer equipment.  Sales in the Fluid Handling Equipment reporting segment totaled $7,416,844, or $1,682,944 higher than the $5,733,900 of sales for the three-month period ended October 31, 2005, an increase of 29.4%.  The sales increase in the Fluid Handling Equipment reporting segment was due primarily to increased demand for our centrifugal pumps that handle corrosive, abrasive and high temperature liquids.   Sales in the Filtration and Purification segment were $4,915,137, or $49,691 higher than the $4,865,446 of sales for the three-month period ended October 31, 2005, an increase of 1.0%.  This slight increase was due to higher third quarter demand for our horizontal disc filter systems, which are utilized in the metal finishing and plating industry.

Income from operations for the three-month period ended October 31, 2006 was $3,005,222 compared with $2,484,241 for the three-month period ended October 31, 2005, an increase of $520,981 or 21.0%.

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MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated) continued…

Income from operations in the Product Recovery/Pollution Control Equipment reporting segment was $1,575,426, or $567,002 higher than the $1,008,424 for the three-month period ended October 31, 2005, an increase of 56.2%.  The increase in income from operations in the Product Recovery/Pollution Control Equipment reporting segment was principally related to (i) higher net sales and (ii) higher gross margins earned from certain strategic measures adopted in the six-month period ended July 31, 2006, including selected sales price increases and improved purchasing practices, partially offset by (i) the allocation of a non-cash charge for stock options and (ii) the allocation of a one time loss on the curtailment of pension benefits.

Income from operations in the Fluid Handling Equipment reporting segment totaled $1,320,796, or $423,781 higher than the $897,015 for the three-month period ended October 31, 2005, an increase of 47.2%.  The increase in income from operations in the Fluid Handling Equipment reporting segment was principally related to higher net sales, partially offset by (i) the allocation of a non-cash charge for stock options and (ii) the allocation of a one time loss on the curtailment of pension benefits.

Income from operations in the Filtration and Purification segment was $109,000, or $469,802 lower than the $578,802 for the three-month period ended October 31, 2005, a decrease of 81.2%.  This decrease was principally related to (i) reduced gross margins due to product mix, (ii) the hiring of additional sales personnel and related costs, (iii) the allocation of a non-cash charge for stock options, and (iv) the allocation of a one time loss on the curtailment of pension benefits.

Net income for the three-month period ended October 31, 2006 was $2,066,466 compared with $1,882,022 for the three-month period ended October 31, 2005, an increase of $184,444 or 9.8%.  The increase in net income was principally related to higher sales volume in the two reporting segments and one other segment, and higher gross margins in the Product Recovery/Pollution Control Equipment reporting segment, partially offset by a one time loss on the curtailment of pension benefits which reduced net income by approximately $157,000, a non-cash charge for stock options which reduced net income by approximately $53,000, and a higher effective tax rate.

The gross margin for the three-month period ended October 31, 2006 was 32.6% compared with 30.6% for the same period in the prior year.  This increase in gross margin was due primarily to increased gross margins in the Product Recovery/Pollution Control Equipment reporting segment as a result of strategic measures taken in the six-month period ended July 31, 2006, which included selected sales price increases, procedures implemented to manage large projects and improved purchasing practices.

Selling expenses increased $325,170 during the three-month period ended October 31, 2006 compared with the same period last year.  As a percentage of net sales, selling expenses were 9.2% for the three-month period ended October 31, 2006, compared with 9.0% of net sales for the same period last year.  This increase in absolute dollars was due primarily to the hiring of additional sales personnel and related costs.

General and administrative expense was $2,622,394 for the three-month period ended October 31, 2006 compared with $2,256,715 for the three-month period ended October 31, 2005, an increase of $365,679.  The increase was in part related to higher legal and personnel expenses, and the impact of expensing stock options.  General and administrative expense as a percentage of net sales was 10.5% for the three-month period ended October 31, 2006, compared with 10.3% of net sales for the same period last year.

In the three-month period ended October 31, 2006, the Company incurred a one time loss on the curtailment of pension benefits totaling $234,180.  This expense was related to freezing the Company’s defined-benefit plans for all salaried and non-union hourly employees effective December 31, 2006.  These plans will be replaced with an enhanced defined-contribution plan.  The Company expects to reduce subsequent fiscal years pension expense, net of the increase in the defined contribution expense, by approximately $500,000 ($335,000 after tax) on an annual basis, if there were no changes in any of the variables affecting pension expense.

Interest expense was $109,205 for the three-month period ended October 31, 2006 compared with $60,954 for the same period in the prior year, an increase of $48,251.  This increase was due principally to an increase in long-term debt related to previously mentioned plant expansions.

Other income, net, was $254,461 for the three-month period ended October 31, 2006 compared with $162,610 for the same period in the prior year, an increase of $91,851.  This increase is related to higher interest income earned on cash on hand during the three-month period ended October 31, 2006.

24

MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated) continued…

The effective tax rates for the three-month periods ended October 31, 2006 and 2005 were 34.4% and 27.2%, respectively.  As previously disclosed, during the third quarter of the current fiscal year, we identified increased taxes due primarily to a reduction in expense for exercising stock options and a reduction in the tax benefit provided by the Extraterritorial Income Exclusion (“EIE”), and as a result we anticipate a 33.0% effective tax rate for the full fiscal year.  The tax rates in the three-month period reflect an adjustment to account for the 32.0% tax rate which had been utilized in the six-month period ended July 31, 2006.

Liquidity (Restated):

The Company’s cash and cash equivalents were $18,537,674 on October 31, 2006 compared with $17,683,305 on January 31, 2006, an increase of $854,369.  This increase is the net result of the positive cash flows provided by operating activities of $3,775,000, the proceeds from new borrowings (as discussed in the Capital Resources and Requirements section below) amounting to $4,306,406, the exercise of stock options amounting to $147,173 and proceeds from the sale of equipment amounting to $14,310, offset by payment of the quarterly cash dividends amounting to $2,100,393, payments on long-term debt totaling $1,103,380, investment in property and equipment amounting to $4,192,649 and the increase in securities available for sale totaling $21,820.  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, as well as other factors including changes in inventories and accounts receivable balances.

Accounts receivable (net) totaled to $19,611,594 on October 31, 2006 compared with $17,909,727 on January 31, 2006, which represents an increase of $1,701,867.  In addition to changes in sales volume, the timing and size of shipments and retainage on contracts, especially in the Product Recovery/Pollution Control Equipment reporting segment, will, among other factors, influence accounts receivable balances at any given point in time.

Inventories were $19,096,835 on October 31, 2006 compared with $16,438,481 on January 31, 2006, an increase of $2,658,354.   This increase is primarily attributable to inventory purchased in the nine-month period ended October 31, 2006 for projects which are expected to ship in the next six-month period.  Inventory balances fluctuate depending on market demand and the timing and size of shipments, especially when major systems and contracts are involved.

Current liabilities amounted to $18,976,533 on October 31, 2006, compared with $17,142,747 on January 31, 2006, an increase of $1,833,786.  This increase is due to an increase in the current portion of long-term debt, accounts payable, and accrued salaries, wages and expenses, partially offset by a decrease in customer advance payments.

The Company has consistently maintained a high current ratio and it and its subsidiaries maintain domestic and foreign lines of credit totaling $5.0 million, all of which are available for working capital purposes, except for $382,890 outstanding as of October 31, 2006 borrowed by the Company’s Mefiag B.V. subsidiary to partially finance an expansion and renovation of its facility located in The Netherlands.  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 October 31, 2006 and January 31, 2006, working capital was $40,274,421 and $36,862,200, respectively, and the current ratio was 3.1 and 3.2, respectively.

Capital Resources and Requirements:

Cash flows provided by operating activities during the nine-month period ended October 31, 2006 amounted to $3,775,000 compared with $3,512,917 in the nine-month period ended October 31, 2005, an increase of $262,083.  This increase in cash flows from operating activities was due principally to a reduction in the increase of accounts receivable and inventory, as well as an increase in accrued salaries, wages and expenses, offset by decreases in customer advances.

Cash flows used in investing activities during the nine-month period ended October 31, 2006 amounted to $4,200,159 compared with $2,061,505 for the nine-month period ended October 31, 2005, an increase of $2,138,654.  The increase in investing activities is partially due to capital expenses incurred in connection with the expansion of the Company’s Telford, Pennsylvania facility, for which the Company incurred costs of $1,799,813 for the nine-month period ended October 31, 2006.  This expansion was required to accommodate the relocation of the Sethco business unit from Hauppauge, New York to the Telford, Pennsylvania facility.  In addition, the increase in investing activities was partially due to an expansion and renovation of our Mefiag B.V. facility in the Netherlands, for which the Company has incurred costs of $1,048,060 in the nine-month period ended October 31, 2006.  This expansion was required in order to accommodate the projected growth of Mefiag B.V.

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MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations(Restated) continued…

The balance of the increase was due to the Company’s capital expenditures in the two reporting segments and one other segment, and in its corporate headquarters.

During the second quarter, the Company listed for sale, its 30,000 square foot building located on four acres in Hauppauge, Long Island, New York, previously occupied by the Sethco business unit at an asking price of $4,950,000.  The net book value of the land and building amounted to $812,756 as of October 31, 2006, and is included in the property, plant and equipment, net, section of the consolidated balance sheet.

Consistent with past practices, the Company intends to continue to invest in new product development programs and to make capital expenditures required to support the ongoing operations during the coming fiscal year.  The Company expects to finance all routine capital expenditure requirements through cash flows generated from operations.

Financing activities during the nine-month period ended October 31, 2006 provided $1,249,806 of available resources, compared with $3,265,519 utilized during the nine-month period ended October 31, 2005.  The 2006 activity is the result of the proceeds from new borrowings of $4,306,406 and the exercise of stock options totaling $147,173, offset by the reduction of debt totaling $1,103,380, and the payment of dividends amounting to $2,100,393.  During the nine-month period ended October 31, 2006, the Company borrowed $3,450,000 in an industrial revenue bond financing for a total of $3,500,000 for a term of fifteen years, at a fixed interest rate swap of 4.71% in order to finance the expansion of the Telford, Pennsylvania facility.  In addition, during the nine-month period ended October 31, 2006, the Company’s Mefiag B.V. business unit borrowed $856,406 (687,799 Euro) from a bank for a term of ten years, at a fixed interest rate of 3.82% for the expansion of its facility in the Netherlands.

The Board of Directors declared quarterly dividends of $.0625 payable on March 9, 2006, June 7, 2006, and September 6, 2006, to shareholders of record as of February 24, 2006, May 26, 2006, and August 24, 2006, respectively.  On October 18, 2006 a quarterly dividend of $.0675 per share was declared, payable on December 14, 2006 to shareholders of record as of November 30, 2006.

Critical Accounting Policies and Estimates:

Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.  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 recognizes revenues from product sales or services provided when the following revenue recognition criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.  The Securities and Exchange Commission’s Staff Accounting Bulletin (“SAB”) No. 104, “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. 104.

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 Accounting Principles Board (“APB”) 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.  These assumptions include, among others, the discount rate, expected long-term rate

26

MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations (Restated) continued…

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.

Cautionary Statement Concerning Forward-Looking Statements:

Our prospects are subject to certain uncertainties and risk.  This Quarterly Report on Form 10-Q/A 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.

Results may differ materially from our 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 Quarterly Report on Form 10-Q/A, 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 business unit, 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 years ended January 31, 2006 and 2005. During the fiscal year ended January 31, 2006, we performed an impairment analysis of the $11.1 million of goodwill that the Company carries for Flex-Kleen and concluded that no impairment had occurred. For the nine-month period ended October 31, 2006, the actual net sales and operating profits for our Flex-Kleen business unit have exceeded the projections used in our annual impairment model, and in addition the backlog as of October 31, 2006 for the Flex-Kleen business unit totaled $6.4 million or an increase of 218% over the same period of last year. 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 (Restated);

· 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 insolvency of our insurance carriers, 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;

· 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;

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MET-PRO CORPORATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations(Restated) continued…

· 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 3.  Qualitative and Quantitative Disclosures about Market Risk

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

Item 4.   Controls and Procedures (Restated)

(a) Evaluation of Disclosure Controls and Procedures

In connection with the original filing of our Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2006, our principal executive officer and principal financial officer, with the participation of our management, conducted an evaluation of the effectiveness of our “disclosure controls and procedures” as of October 31, 2006, as such term is defined in Rule 13a−15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective.

As a result of the errors in the financial statements and the related restatement discussed in several places in this amended Form 10-Q/A including in Note 1 to the Consolidated Financial Statements, our principal executive officer and principal financial officer, with the participation of our management, has re-evaluated the effectiveness of our disclosure controls and procedures for the fiscal quarter ended October 31, 2006 in connection with the filing this amended Quarterly Report on Form 10-Q/A.

Based upon that re-evaluation, our principal executive officer and principal financial officer have again concluded that as of October 31, 2006, our disclosure controls and procedures were effective and adequate. Our principal executive officer and principal financial officer reached this conclusion notwithstanding the material weakness in internal control over financial reporting that is discussed below in “Material Weakness in Internal Control Over Financial Reporting; Remediation Plan”. The Company notes that the interrelationship between disclosure controls and internal control over financial reporting is not yet fully defined by law, rule, or interpretation. If an internal control over financial reporting were determined by appropriate authority to be part of disclosure controls and procedures, then our chief executive officer and principal financial officer might conclude that our disclosure controls and procedures were not effective for the same reasons described below under “Material Weakness in Internal Control Over Financial Reporting; Remediation Plan.” Our principal executive officer and principal financial officer believe that the material weakness that is described below is confined to revenue recognition as described below and that our current disclosure controls and procedures are otherwise adequate to ensure that information required to be disclosed in the reports we file under the Exchange Act is recorded, processed, summarized and reported on a timely basis.

(b) Material Weakness In Internal Control Over Financial Reporting; Remediation Plan

As noted in the Company’s Current Report on Form 8-K filed with respect to an event dated January 22, 2008, management has identified a material weakness as defined in standards established by the Public Company Accounting Oversight Board in its internal control over financial reporting that existed as of October 31, 2006, as follows:  we did not maintain effective policies and procedures with respect to revenue recognition. Specifically, the combination of the lack of effective policies and procedures surrounding the review of terms and conditions of customer purchase orders and the status of the completion of those orders contributed (together with false statements by vendors, documents fabricated by an employee, and other unauthorized actions by the employee explicitly intended to circumvent our revenue recognition policies and procedures, as well as other policies and procedures) to the reporting of incorrect net sales and net income, as well as related errors, in our financial statements for our fiscal quarter ended October 31, 2006. These deficiencies resulted in more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected.

Based upon our assessment of our internal control over financial reporting as of October 31, 2006, management has committed to the following remediation plan:

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MET-PRO CORPORATION

Item 4.   Controls and Procedures (Restated) continued…

1. We shall continue to enhance our contract review process including the implementation of various additional controls and procedures intended to better assure us that the terms and conditions of customer purchase orders are accurately entered and that orders are on terms acceptable to management and otherwise consistent with our policies.

2. We shall continue to enhance our production processes including the implementation of various additional controls and procedures intended to better assure us that the information with respect to the status of projects and orders is accurate and that projects and orders are deemed complete in accordance with our revenue recognition policies.

(c) Changes in Internal Control over Financial Reporting

Except with respect to the changes in our policies and procedures surrounding our revenue recognition policy as described in (b) above, there were no changes in our internal control over financial reporting (as defined in Rules 13a−15(f) and 15d−15(f) under the Exchange Act) during the period covered by this Quarterly Report on Form 10−Q/A that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.   Legal Proceedings

Certain of the statements made in this Item 1 (and elsewhere in this Report) are “forward-looking” statements which are subject to the considerations set forth in “Cautionary Statement Regarding Forward-Looking Statements” 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.

Beginning in 2002, the Company and/or one of its divisions began to be named as one of many defendants in asbestos-related lawsuits filed predominantly in Mississippi on a mass basis by large numbers of plaintiffs against a large number of industrial companies including in particular those in the pump and fluid handling industries. More recently, the Company and/or this division have been named as one of many pump and fluid handling defendants in asbestos-related lawsuits filed in New York and Maryland by individual plaintiffs, sometimes husband and wife.  To a lesser extent, the Company and/or this division have also been named together with many other pump and fluid handling defendants in these type of cases in other states as well.  The complaints filed against the Company and/or this division have been vague, general and speculative, alleging that the Company, and/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 it and/or the division have meritorious defenses to the cases which have been filed and that none of its and/or the division’s 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 have been dismissed from or settled a number of these cases. The sum total of payments through October 31, 2006 to settle these cases is $305,000, all of which has been paid by the Company’s insurers, with an average cost per settled claim of approximately $28,000. As of October 31, 2006, there were a total of 40 cases pending against the Company, as compared to 151 cases that were pending as of October 31, 2005. During the fiscal quarter ended October 31, 2006, four new cases were filed against the Company, and the Company was dismissed from or settled six cases. Most of the pending cases have not advanced beyond the early stages of discovery, although several cases are on schedules leading to trial.  The Company presently believes that none of the pending cases 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 in the ordinary course of business.Although the ultimate outcome of any legal matter cannot be predicted with certainty, based upon the present information including the Company’s assessment of the facts of each particular claim as well as accruals, the Company believes that no pending proceeding will have a material adverse impact upon the Company’s results of operations, liquidity, or financial condition.

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MET-PRO CORPORATION

Item 1A.  Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K/A for the year ended January 31, 2006 as filed with the Securities and Exchange Commission on April 13, 2006, which could materially affect our business, financial condition, financial results or future performance.  Additionally, we refer you to “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Cautionary Statement Concerning Forward-Looking Statements” of this report which we incorporate herein by reference.

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

(a) During the third quarter ended October 31, 2006, we did not sell any of our equity securities that were not registered under the Securities Act of 1933.

(b) Not applicable

(c)  The following table summarizes Met-Pro’s purchases of its Common Shares for the quarter ended October 31, 2006:

Issuer Purchases of

Equity Securities

					Total		Maximum
					Number of		Number of
					Shares		Shares
					Purchased		That May
					As Part of		Yet be
	Total				Publicly		Purchased
	Number of		Average		Announced		Under the
	Shares		Price Paid		Plans or		Plan or
Period	Purchased		Per Share		Programs		Programs		(1)
August 1-31, 2006		0	$	-		0		270,918
September 1-30, 2006		0		-		0		270,918
October 1-31, 2006		0		-		0		270,918
Total		0	$	-		0		270,918

(1) 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 533,333 (adjusted for stock split) shares. The program has no fixed expiration date.

Item 3.   Defaults Upon Senior Securities

None

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

None.

Item 5.   Other Information

None

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MET-PRO CORPORATION

Item 6.   Exhibits

(a)	Exhibits Required by Item 601 of Regulation S-K
	Exhibit No.	Description
	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 18 U.S.C. Section 1350.*
	32.2	Certification of Chief Financial Officer, Pursuant 18 U.S.C. Section 1350.*

* Filed herewith.

31

MET-PRO CORPORATION

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.

	Met-Pro Corporation
	(Registrant)
February 12, 2008	/s/ Raymond J. De Hont
	Raymond J. De Hont
	Chairman, President and Chief Executive Officer
February 12, 2008	/s/ Gary J. Morgan
	Gary J. Morgan
	Senior Vice President of Finance, Secretary and Treasurer, Chief Financial Officer, Chief Accounting Officer and Director

32 

EX-31.1

MET-PRO CORPORATION

Exhibit (31.1)

CERTIFICATION UNDER SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Raymond J. De Hont, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of Met-Pro Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  February 12, 2008	/s/ Raymond J. De Hont
	Raymond J. De Hont
	Chief Executive Officer

EX-31.2

MET-PRO CORPORATION

Exhibit (31.2)

CERTIFICATION UNDER SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Gary J. Morgan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of Met-Pro Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  February 12, 2008	/s/ Gary J. Morgan
	Gary J. Morgan
	Chief Financial Officer

EX-32.1

MET-PRO CORPORATION

Exhibit (32.1)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q/A for the period ended October 31, 2006 of Met-Pro Corporation (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Raymond J. De Hont, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or Section 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  February 12, 2008	/s/ Raymond J. De Hont
	Raymond J. De Hont
	Chief Executive Officer

EX-32.2

MET-PRO CORPORATION

Exhibit (32.2)

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q/A for the period ended October 31, 2006 of Met-Pro Corporation (the "Company") as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Gary J. Morgan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. Section 78m(a) or Section 78o(d)); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  February 12, 2008	/s/ Gary J. Morgan
	Gary J. Morgan
	Chief Financial Officer