8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 1, 2005

OTTER TAIL CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota
(State or other jurisdiction
of incorporation) 0-00368
(Commission
File Number) 41-0462685
(I.R.S. Employer
Identification No.)

215 South Cascade Street, P.O. Box 496, Fergus Falls, MN
(Address of principal executive offices) 56538-0496
(Zip Code)

Registrant’s telephone number, including area code: (866) 410-8780

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Press Release

Item 2.02 Results of Operations and Financial Condition

     On August 1, 2005 Otter Tail Corporation issued a press release concerning consolidated financial results for the second quarter of 2005, a copy of which is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statement and Exhibits

     (c) Exhibits

          99.1 Press Release issued August 1, 2005

Signature

     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.

	OTTER TAIL CORPORATION
Date: August 1, 2005
	By:	/s/ Kevin G. Moug
		Kevin G. Moug
		Chief Financial Officer and Treasurer

2

EXHIBIT INDEX

Exhibit	Description of Exhibit
99.1	Press release, dated August 1, 2005

3

EX-99.1

Exhibit 99.1

NEWS RELEASE

Media contact:	Amy Richardson, Director of Communications, (701) 451-3580 or (866) 410-8780
Investor contact:	Loren Hanson, Director of Shareholder Services, (218) 739-8481 or (800) 664-1259
Dateline:	Fergus Falls, Minnesota
For release:	August 1, 2005	Financial Media

Otter Tail Corporation Reports Record Second Quarter Earnings;
Board of Directors Declares Dividend

Otter Tail Corporation (NASDAQ: OTTR) announced financial results for the quarter ended June 30, 2005 with the following highlights:

• Consolidated net income from continuing operations increased to $11.0 million for the second quarter of 2005 compared with $7.8 million for the second quarter of 2004.

• The corporation recorded an $11.9 million after-tax gain ($0.41 per diluted share) on the sale of Midwest Information Systems, Inc. (MIS) to Arvig Enterprises, Inc. in the second quarter of 2005.

• Total consolidated net income, which includes the results of discontinued operations, increased to $22.3 million for the second quarter of 2005 compared with $8.0 million for the second quarter of 2004.

• Diluted earnings per share from continuing operations increased to $0.37 for the second quarter of 2005 compared with $0.29 for the second quarter of 2004.

• Total diluted earnings per share, which includes the results of discontinued operations, increased to $0.76 for the second quarter of 2005 compared with $0.30 for the second quarter of 2004.

Announcements:

• On June 30, 2005 Otter Tail Power Company jointly announced an agreement along with six other utilities to build a new 600-megawatt coal-based electric generating plant at the existing Big Stone Plant site near Milbank, South Dakota. The project is contingent on approval of all necessary permits and financial conditions. The new plant is expected to commence operations in mid-2011.

• On August 1, 2005 the Board of Directors declared a quarterly common stock dividend of $0.28 per share.

• The corporation is reaffirming its 2005 diluted earnings per share guidance from continuing operations to be in the range of $1.50 to $1.70 and reaffirming its total diluted earnings per share guidance to be in the range of $1.80 to $2.00.

1

For the six months ended June 30, 2005 net income from continuing operations was $22.0 million compared with $16.1 million for the six months ended June 30, 2004. Total consolidated net income, which includes the results of discontinued operations, increased to $32.3 million for the six months ended June 30, 2005 compared with $16.3 million for the six months ended June 30, 2004. Diluted earnings per share from continuing operations were $0.74 for the six months ended June 30, 2005 compared with $0.60 for the six months ended June 30, 2004. Total diluted earnings per share, which include the results of discontinued operations, were $1.09 for the six months ended June 30, 2005 compared with $0.61 for the six months ended June 30, 2004.

“We are pleased with our strong second quarter results, which reflect increased earnings across our electric and nonelectric businesses as compared to the same period in 2004,” said John Erickson, president and chief executive officer of Otter Tail Corporation. “Electric segment earnings were up nearly $1 million with better than anticipated results in wholesale power markets. The combined net earnings from continuing operations in our nonelectric segments were $5.3 million, which is up over 70% from the second-quarter results from a year ago.” Erickson credits the substantial increase in nonelectric operations to improvements in the manufacturing and health services segments, along with continuing strong performance from the plastics segment. “We are also pleased with the significant positive impact on the corporation’s total earnings from the sale of Midwest Information Systems, which was completed during this quarter,” he said. In reaffirming earnings guidance for the year, Erickson said he anticipates the solid performance will continue for the remainder of 2005.

Quarterly Performance Summary

Electric

Net income in the electric segment for the quarter ended June 30, 2005 was $5.6 million compared with $4.7 million for the quarter ended June 30, 2004. Retail revenues were $59.5 million for the quarter ended June 30, 2005 compared with $49.3 million for the quarter ended June 30, 2004. Wholesale electric sales from company-owned generation increased to $4.3 million from $3.8 million for the same period last year despite a 27.1% decrease in megawatt hour (mwh) sales. Net revenue from the resale of purchased power, including net gains on forward energy contracts, increased to $6.1 million in the second quarter of 2005 from $3.0 million in the second quarter 2004, reflecting favorable results in wholesale power markets. A $13.7 million increase in total electric segment revenue between the quarters was primarily offset by a $12.6 million increase in operating expenses, mostly as a result of increased costs for purchased power for retail customers. Other items contributing to the increase in operating expenses between the quarters were wage and benefit cost increases and higher costs related to an increase in work performed for other utilities. The quarter was also impacted by $737,000 in costs

2

incurred during a scheduled seven-week maintenance shutdown at Big Stone Plant in the second quarter of 2005 and $600,000 in costs incurred to repair damage caused by storms in the second quarter of 2005.

Plastics

Net income for the plastics segment was $2.4 million for the quarter ended June 30, 2005 compared with $2.3 million for the quarter ended June 30, 2004. Plastics revenues increased $3.4 million despite a 9.8% decrease in the pounds of polyvinyl chloride (PVC) pipe sold between the quarters. The increase in revenue reflects a 21.4% increase in the average sales price per pound of PVC pipe sold. Operating expenses increased $3.2 million due to increases in raw material costs. The average cost per pound of PVC pipe sold increased 22.9% between the quarters.

Manufacturing

The manufacturing segment’s revenues and net income were $67.9 million and $4.5 million, respectively, for the quarter ended June 30, 2005 compared to $50.4 million and $2.2 million for the same quarter in 2004. DMI Industries, Inc., the corporation’s manufacturer of wind towers and structural steel products, increased revenues by $10.2 million and net earnings by $1.4 million due to increased production and sales activity, in part related to the production tax credits for wind-generated electricity being in place for 2005 as well as continued improvements in productivity and capacity utilization. BTD Manufacturing, Inc., the corporation’s metal fabrication business, increased revenues $4.6 million and net earnings $0.1 million compared to the same quarter in 2004. The increase in BTD revenues mainly reflects recovery of higher raw material costs and additional sales related to the 2005 acquisition of Performance Tool & Die, Inc. ShoreMaster, Inc., the corporation’s manufacturer of waterfront equipment, reported a $1.7 million increase in revenue and a $0.3 million increase in net earnings in the second quarter of 2005 compared to the second quarter of 2004. T.O. Plastics, Inc., the corporation’s manufacturer of thermoformed plastics and horticultural products, increased revenues by $1.0 million and net earnings by $0.5 million due in part to a higher margin product mix.

Health Services

Net income in the health services segment was $1.2 million for the quarter ended June 30, 2005 compared with net income of $0.2 million for the quarter ended June 30, 2004. Scanning and other related service revenues increased $4.1 million while revenues from equipment sales and service increased $0.6 million between the periods. Growing scan counts, improved operating efficiencies in the imaging business and service cost reductions contributed to improved results in the health services segment over the second quarter of 2004.

Food Ingredient Processing

Second quarter 2005 results for the corporation’s food ingredient processing segment, established with the acquisition of Idaho Pacific Holdings, Inc. in August 2004, included operating revenues of $8.2 million and net

3

income of $0.2 million. Net income has been impacted by lower than expected sales volumes, high energy costs, the increasing value of the Canadian dollar relative to the U.S. dollar and excess capacity in the flake market.

Other Business Operations

Other business operations had a net loss of $2.9 million for the quarter ended June 30, 2005 compared with a net loss of $1.6 million for the quarter ended June 30, 2004. This $1.3 million increase in net losses is mainly due to increases in the corporation’s health insurance costs, other employee benefit costs that are not allocated to the other operating segments and independent auditor fees related to Sarbanes-Oxley requirements.

Discontinued Operations

Discontinued operations includes the operating results of MIS, the corporation’s telecommunications company located in Parkers Prairie, Minnesota, St. George Steel Fabrication, Inc. (SGS), the corporation’s structural steel fabricator located in St. George, Utah, and Chassis Liner Corporation of Alexandria, Minnesota, the corporation’s manufacturer of auto and truck frame-straightening equipment and accessories. The sales of MIS and SGS were completed in the second quarter of 2005. The pending sale of Chassis Liner was in the process of negotiation as of June 30, 2005. Discontinued operations consists of two components: net income (loss) from discontinued operations, which was a loss of $0.1 million for the second quarter of 2005 compared with income of $0.2 million for the second quarter of 2004 and a net after-tax gain on the disposition of discontinued operations of $11.5 million in the second quarter of 2005. The net after-tax gain on sale of discontinued operations includes an $11.9 million gain on the sale of MIS, net of an after-tax loss on the sale of SGS and an estimated loss on the sale of Chassis Liner. The after-tax loss on the sale of SGS was increased by $0.2 million in the second quarter of 2005 from a projected loss of $1.6 million recorded in the first quarter of 2005. The corporation recorded an estimated after-tax loss on the pending sale of Chassis Liner of $0.2 million in the second quarter of 2005.

2005 Outlook

The corporation reaffirms its 2005 earnings guidance in the range of $1.50 to $1.70 of diluted earnings per share from continuing operations. Total earnings, which include expected earnings, gains and losses from discontinued operations, are expected to be in the range of $1.80 to $2.00 of diluted earnings per share.

Contributing to the earnings guidance for 2005 are the following items:

• The corporation expects solid performance in the electric segment in 2005 although net income is anticipated to be lower than 2004 levels. This is primarily because of uncertainty in the wholesale electric markets due to the implementation of the Midwest Independent Transmission System Operator (MISO) electric markets on April 1, 2005 and anticipated lower margins on retail sales. Regulated returns in 2005 for the electric segment are expected to be consistent with authorized levels.

4

• The corporation expects the plastics segment will perform well in 2005 due to continuing strong demand in the southwestern region of the country and sustained high PVC resin prices. 2005 net earnings for this segment are expected to be similar to 2004 net earnings.

• The improving economy, continued enhancements in productivity and capacity utilization, and the extension of the production tax credit are expected to result in increased net income in the corporation’s manufacturing segment.

• The health services segment is expected to grow net income in 2005 as the corporation continues to realize earnings improvement from its imaging business.

• The corporation expects its food ingredient processing business to generate net income in the range of $2.1 million to $3.8 million for the year ending December 31, 2005. The revision in the low end of the range is due to lower than expected sales volumes, high energy costs, the increasing value of the Canadian dollar relative to the U.S. dollar and excess capacity in the flake market.

• The other business operations segment is expected to show results similar to 2004. While the improving economy is having a positive impact on the transportation business and the extension of the production tax credit is expected to have a positive impact on the corporation’s electrical contracting business, earnings growth in these businesses are expected to be offset by weaker performance in the corporation’s other construction business, increased health and casualty insurance costs, and other employee benefit costs.

Risk Factors and Forward Looking Statements that Could Affect Future Results

The information in this release includes certain forward-looking information, including the 2005 outlook, made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Although the corporation believes its expectations are based on reasonable assumptions, actual results may differ materially from those expectations. The following factors, among others, could cause actual results for the corporation to differ materially from those discussed in the forward-looking statements:

• The corporation is subject to government regulations and actions that may have a negative impact on its business and results of operations.

• Weather conditions can adversely affect the corporation’s operations and revenues.

• Federal and state environmental regulation could cause the corporation to incur substantial capital expenditures which could result in increased operating costs.

• The corporation’s plans to grow and diversify through acquisitions may not be successful and could result in poor financial performance.

• Competition is a factor in all of the corporation’s businesses.

• Economic uncertainty could have a negative impact on the corporation’s future revenues and earnings.

5

• Volatile financial markets could restrict the corporation’s ability to access capital and could increase borrowing costs and pension plan expenses.

• The corporation’s food ingredient processing segment operates in a highly competitive market and is dependent on adequate sources of raw materials for processing. Should the supply of these raw materials be affected by poor growing conditions, this could negatively impact the results of operations for this segment. This segment could also be impacted by foreign currency changes between Canadian and United States currency and prices of natural gas.

• The corporation’s plastics segment is highly dependent on a limited number of vendors for PVC resin. The loss of a key vendor or an interruption or delay in the supply of PVC resin could result in reduced sales or increased costs for this business.

• The corporation’s health services businesses may not be able to retain or comply with the dealership arrangement and other agreements with Philips Medical.

For a further discussion of other risk factors and cautionary statements, refer to reports the corporation files with the Securities and Exchange Commission.

About The Corporation

Otter Tail Corporation has interests in diversified operations that include an electric utility, plastics, manufacturing, health services, food ingredient processing and other businesses. Otter Tail Corporation stock trades on NASDAQ under the symbol OTTR. The latest investor and corporate information is available at www.ottertail.com. Corporate offices are located in Fergus Falls, Minnesota, and Fargo, North Dakota.

See Otter Tail Corporation’s results of operations for the three months and six months ended June 30, 2005 and 2004 in the attached financial statements.

Consolidated Statements of Income, Consolidated Balance Sheets — Assets, Consolidated Balance Sheets — Liabilities and Equity

6

Otter Tail Corporation

Consolidated Statements of Income
For the three and six months ended June 30, 2005 and 2004
In thousands, except share and per share amounts

	Quarter Ended June 30,						Year to date - June 30,
	2005			2004			2005			2004
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Operating revenues by segment:
Electric	$	74,150		$	60,449		$	147,633		$	133,304
Plastics		36,004			32,636			68,159			59,072
Manufacturing		67,858			50,399			123,387			92,213
Health services		31,324			26,597			59,122			52,273
Food ingredient processing		8,234			—			17,489			—
Other business operations		39,707			33,906			74,604			67,421
Intersegment eliminations		(899	)		(530	)		(1,883	)		(1,243	)
Total operating revenues		256,378			203,457			488,511			403,040
Operating expenses:
Fuel and purchase power		30,453			21,096			57,168			46,615
Nonelectric cost of goods sold (excludes depreciation; included below)		140,042			110,941			263,676			213,958
Electric operating and maintenance expense		27,742			24,561			54,333			48,327
Nonelectric operating and maintenance expense		25,720			21,259			48,461			41,831
Depreciation and amortization		11,553			10,529			22,938			21,036
Total operating expenses		235,510			188,386			446,576			371,767
Operating income (loss) by segment:
Electric		9,852			8,777			23,929			26,411
Plastics		4,252			4,032			8,890			5,321
Manufacturing		8,662			4,206			11,205			5,254
Health services		2,247			532			3,773			956
Food ingredient processing		456			—			1,658			—
Other business operations		(4,601	)		(2,476	)		(7,520	)		(6,669	)
Total operating income — continuing operations		20,868			15,071			41,935			31,273
Interest charges		4,841			4,324			9,407			8,709
Other income		215			755			409			766
Income taxes — continuing operations		5,275			3,694			10,920			7,264
Net income (loss) by segment — continuing operations:
Electric		5,622			4,728			13,375			14,714
Plastics		2,362			2,290			4,999			2,929
Manufacturing		4,507			2,199			5,511			2,496
Health services		1,190			172			1,972			273
Food ingredient processing		210			—			951			—
Other business operations		(2,924	)		(1,581	)		(4,791	)		(4,346	)
Total net income — continuing operations		10,967			7,808			22,017			16,066
Discontinued operations
Income from discontinued operations net of taxes of ($96); $149; $237 and $153 for the respective periods		(149	)		224			348			225
Net gain on disposition of discontinued operations — net of taxes of $6,820 and $5,769 for the three and six months ended June 30, 2005		11,486			—			9,910			—
Net income from discontinued operations		11,337			224			10,258			225
Total net income		22,304			8,032			32,275			16,291
Preferred stock dividend		183			184			367			368
Balance for common:	$	22,121		$	7,848		$	31,908		$	15,923
Average number of common shares outstanding—basic		29,158,140			25,891,440			29,142,118			25,842,241
Average number of common shares outstanding—diluted		29,263,643			26,013,519			29,244,698			25,969,648
Basic earnings per common share:
Continuing operations (net of preferred dividend requirement)	$	0.37		$	0.29		$	0.74		$	0.61
Discontinued operations	$	0.39		$	0.01		$	0.35		$	0.01
	$	0.76		$	0.30		$	1.09		$	0.62
Diluted earnings per common share:
Continuing operations (net of preferred dividend requirement)	$	0.37		$	0.29		$	0.74		$	0.60
Discontinued operations	$	0.39		$	0.01		$	0.35		$	0.01
	$	0.76		$	0.30		$	1.09		$	0.61

Otter Tail Corporation

Consolidated Balance Sheets
Assets
In thousands
(unaudited)

	June 30,		December 31,
	2005		2004
Current assets
Cash and cash equivalents	$	16,179	$	—
Accounts receivable:
Trade—net		120,232		116,141
Other		9,634		9,872
Inventories		95,808		72,504
Deferred income taxes		4,875		4,852
Accrued utility revenues		19,699		15,344
Costs and estimated earnings in excess of billings		25,120		18,145
Other		16,545		7,800
Assets held for sale from discontinued operations		9,938		30,937
Total current assets		318,030		275,595
Investments and other assets		45,985		42,650
Goodwill—net		97,970		92,196
Other intangibles—net		21,549		19,600
Deferred debits:
Unamortized debt expense and reacquisition premiums		6,828		7,291
Regulatory assets and other deferred debits		17,046		16,692
Total deferred debits		23,874		23,983
Plant
Electric plant in service		894,398		890,200
Nonelectric operations		216,045		208,311
Total		1,110,443		1,098,511
Less accumulated depreciation and amortization		449,240		436,856
Plant—net of accumulated depreciation and amortization		661,203		661,655
Construction work in progress		22,920		18,469
Net plant		684,123		680,124
Total	$	1,191,531	$	1,134,148

Otter Tail Corporation

Consolidated Balance Sheets
Liabilities and Equity
In thousands
(unaudited)

	June 30,			December 31,
	2005			2004
Current liabilities
Short-term debt	$	78,000		$	39,950
Current maturities of long-term debt		4,834			6,016
Accounts payable		75,294			84,433
Accrued salaries and wages		15,524			17,330
Accrued federal and state income taxes		19,311			3,700
Other accrued taxes		9,535			11,391
Other accrued liabilities		12,335			10,417
Liabilities from discontinued operations		1,835			8,585
Total current liabilities		216,668			181,822
Pensions benefit liability		18,652			16,703
Other postretirement benefits liability		25,957			25,053
Other noncurrent liabilities		13,719			11,874
Deferred credits
Deferred income taxes		119,084			121,301
Deferred investment tax credit		9,901			10,477
Regulatory liabilities		58,020			56,909
Other		4,587			1,662
Total deferred credits		191,592			190,349
Capitalization
Long-term debt, net of current maturities		259,615			261,805
Class B stock options of subsidiary		1,271			1,832
Class B stock of subsidiary		728			—
Cumulative preferred shares		15,500			15,500
Cumulative preference shares — authorized 1,000,000 shares without par value; outstanding — none		—			—
Common shares, par value $5 per share		145,854			144,885
Premium on common shares		91,233			87,865
Unearned compensation		(2,351	)		(2,577	)
Retained earnings		215,011			199,427
Accumulated other comprehensive loss		(1,918	)		(390	)
Total common equity		447,829			429,210
Total capitalization		724,943			708,347
Total	$	1,191,531		$	1,134,148