UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

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

FOR THE QUARTERLY PERIOD ENDED September 30, 2005

OR

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

FOR THE TRANSITION PERIOD FROM ________________ to ________________

COMMISSION FILE NUMBER 1-5005

INTRICON CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

PENNSYLVANIA	23-1069060
(State or Other Jurisdiction of	(IRS Employer Identification No.)
Incorporation or Organization)

1260 Red Fox Road,
Arden Hills, Minnesota 55112
(Address of Principal Executive Offices) (651) 636-9770
(Registrant’s Telephone Number,
Including Area Code)

Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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.

x YES       o NO

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

o YES       x NO

Indicate by check mark whether the Registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act)

o YES       x NO

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

COMMON SHARES, $1.00 PAR VALUE	5,149,814 (exclusive of 515,754
CLASS	treasury shares)
	OUTSTANDING AT November 7, 2005

INTRICON CORPORATION

I N D E X

		Page Numbers
PART I:    FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Condensed Balance Sheets as of September 30, 2005 (Unaudited) and December 31, 2004	3, 4
	Consolidated Condensed Statements of Operations (Unaudited) for the Three Months Ended September 30, 2005 and 2004	5
	Consolidated Condensed Statements of Operations (Unaudited) for the Nine Months Ended September 30, 2005 and 2004	6
	Consolidated Condensed Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2005 and 2004	7
	Notes to Consolidated Condensed Financial Statements (Unaudited)	8-14
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15-23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23-24
PART II:    OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Submission of Matters to a Vote of Security Holders	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

2

PART I:   FINANCIAL INFORMATION

ITEM 1.    Financial Statements

INTRICON CORPORATION
Consolidated Condensed Balance Sheets
Assets

	September 30, 2005 (Unaudited)		December 31, 2004 (Restated)
Current assets:
Cash	$	457,737	$	246,430
Restricted cash		59,172		449,613
Accounts receivable (less allowance for doubtful accounts of $200,000
in 2005 and $177,000 in 2004)		7,095,751		4,996,705
Inventories		5,939,624		4,287,643
Refundable income tax		20,361		46,163
Other current assets		408,144		379,318
Assets of discontinued operations		—		6,834,256
Total current assets		13,980,789		17,240,128
Property, plant and equipment:
Land		170,500		170,500
Buildings		1,732,914		1,732,914
Machinery and equipment		26,531,346		25,635,452
		28,434,760		27,538,866
Less: Accumulated depreciation		21,574,807		20,260,792
Net property, plant and equipment		6,859,953		7,278,074
Note receivable from sale of discontinued operations		575,000		—
Goodwill		5,292,564		5,264,585
Other assets, net		1,190,540		1,156,449
	$	27,898,846	$	30,939,236

(See accompanying notes to the consolidated condensed financial statements)

3

INTRICON CORPORATION
Consolidated Condensed Balance Sheets
Liabilities and Shareholders’ Equity

	September 30, 2005 (Unaudited)			December 31, 2004 (Restated)
Current liabilities:
Notes payable	$	608,594		$	3,740,393
Checks written in excess of cash		716,821			665,098
Current maturities of long-term debt		192,338			1,458,470
Accounts payable		2,783,811			2,211,909
Income taxes payable		264,203			—
Customer’s advance payments on contracts		35,433			75,000
Liabilities of discontinued operations		—			4,266,899
Other accrued liabilities		2,623,470			2,638,889
Total current liabilities		7,224,670			15,056,658
Long term debt, less current maturities		4,213,587			—
Other postretirement benefit obligations		2,363,469			2,710,106
Deferred income taxes		29,586			143,902
Accrued pension liabilities		903,581			900,713
Total liabilities		14,734,893			18,811,379
Commitments and contingencies (Notes 12 and 14)
Shareholders’ equity:
Common shares, $1 par; 10,000,000 shares authorized; 5,665,568 shares issued		5,665,568			5,644,968
Additional paid-in capital		12,053,590			12,025,790
Accumulated deficit		(3,028,088	)		(3,680,704	)
Accumulated other comprehensive loss		(262,039	)		(597,119	)
Less: 515,754 common shares held in treasury, at cost		(1,265,078	)		(1,265,078	)
Total shareholders' equity		13,163,953			12,127,857
	$	27,898,846		$	30,939,236

(See accompanying notes to the consolidated condensed financial statements)

4

INTRICON CORPORATION
Consolidated Condensed Statements of Operations
(Unaudited)

	Three Months Ended
	September 30, 2005			September 30, 2004 (Restated)
Sales, net	$	11,896,464		$	8,524,215
Cost of sales		8,989,356			6,849,639
Gross margin		2,907,108			1,674,576
Operating expenses:
Selling expense		826,852			889,371
General and administrative expense		1,291,753			1,245,042
Research and development expense		479,549			424,083
Total operating expenses		2,598,154			2,558,496
Operating income (loss)		308,954			(883,920	)
Interest expense		(65,679	)		(102,863	)
Interest income		16,310			1,715
Other income, net		11,587			17,822
Income (loss) from continuing operations before income taxes		271,172			(967,246	)
Income tax expense		96,993			7,534
Income (loss) from continuing operations		174,179			(974,780	)
Income (loss)from discontinued operations, net of income tax expense		(48,732	)		969,602
Net income (loss)	$	125,447		$	(5,178	)
Income (loss) per share:
Basic:
Continuing operations	$	.03		$	(.19	)
Discontinued operations		(.01	)		.19
	$	.02		$	(.00	)
Diluted:
Continuing operations	$	.03		$	(.19	)
Discontinued operations		(.01	)		.19
	$	.02		$	(.00	)
Average shares outstanding:
Basic		5,132,692			5,129,214
Diluted		5,384,767			5,129,214

(See accompanying notes to the consolidated condensed financial statements)

5

INTRICON CORPORATION
Consolidated Condensed Statements of Operations
(Unaudited)

	Nine months Ended
	September 30, 2005			September 30, 2004 (Restated)
Sales, net	$	33,284,010		$	26,216,712
Cost of sales		24,583,421			20,063,282
Gross margin		8,700,589			6,153,430
Operating expenses:
Selling expense		2,515,066			2,817,667
General and administrative expense		3,828,688			4,140,429
Research and development expense		1,245,303			1,299,866
Total operating expenses		7,589,057			8,257,962
Gain on sale of asset held for sale		—			3,109,627
Operating income		1,111,532			1,005,095
Interest expense		(285,344	)		(350,765	)
Interest income		34,892			1,834
Other income, net		118,341			118,300
Income from continuing operations before income taxes		979,421			774,464
Income tax expense		385,414			1,103,944
Income (loss) from continuing operations		594,007			(329,480	)
Income from discontinued operations, net of income tax expense		58,609			1,499,493
Net income	$	652,616		$	1,170,013
Income (loss) per share:
Basic:
Continuing operations	$	.11		$	(.06	)
Discontinued operations		.01			.29
	$	.12		$	.23
Diluted:
Continuing operations	$	.11		$	(.06	)
Discontinued operations		.01			.29
	$	.12		$	.23
Average shares outstanding:
Basic		5,130,373			5,129,214
Diluted		5,202,814			5,129,214

(See accompanying notes to the consolidated condensed financial statements)

6

INTRICON CORPORATION
Consolidated Condensed Statements of Cash Flows
(Unaudited)

	Nine months Ended
	September 30, 2005			September 30, 2004 (Restated)
Cash flows from operating activities:
Net income	$	652,616		$	1,170,013
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Income (loss) from discontinued operations		(58,609	)		(1,313,367	)
Depreciation and amortization		1,533,079			1,722,943
Provision for deferred income taxes		(112,727	)		890,230
Gain on disposition of property		(1,189	)		(1,684	)
Gain on sale of asset held for sale		—			(3,109,627	)
Changes in operating assets and liabilities:
Accounts receivable		(2,509,165	)		(1,257,150	)
Inventories		(1,709,617	)		1,502,016
Other assets		(770,573	)		690,707
Accounts payable		868,088			(486,004	)
Accrued expenses		431,707			(892,209	)
Customer advances		(39,567	)		(7,314	)
Other liabilities		(359,143	)		44,654
Net cash used by continuing operations		(2,075,100	)		(1,046,792	)
Net cash provided by discontinued operations		3,095,196			660,609
Net cash provided (used) by operating activities		1,020,096			(386,183	)
Cash flows from investing activities:
Proceeds from sale of assets		2,950			3,800
Proceeds from sale of asset held for sale		—			3,649,802
Purchases of property, plant and equipment		(1,071,170	)		(643,852	)
Net cash provided (used) by investing activities		(1,068,220	)		3,009,750
Net cash used by discontinued operations		—			(29,464	)
Net cash provided (used) by investing activities		(1,068,220	)		2,980,286
Cash flows from financing activities:
(Repayment) Proceeds from bank borrowings		92,701			1,257,930
Repayments of short-term bank borrowings		(3,171,447	)		(432,806	)
Proceeds from long term borrowings		4,371,900			800,001
Change in checks written in excess of cash		51,723			—
Change in restricted cash		386,282			—
Repayments of long-term debt		(1,458,470	)		(3,794,110	)
Net cash provided (used) by financing activities		272,689			(2,168,985	)
Effect of exchange rate changes on cash		(13,258	)		(43,887	)
Net increase in cash and cash equivalents		211,307			381,231
Cash and cash equivalents, beginning of period		246,430			624,866
Cash and cash equivalents, end of period	$	457,737		$	1,006,097

(See accompanying notes to the consolidated condensed financial statements)

7

INTRICON CORPORATION

Notes to Consolidated Condensed Financial Statements (Unaudited)

1. General

In the opinion of management, the accompanying consolidated condensed financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly IntriCon Corporation’s consolidated financial position as of September 30, 2005 and December 31, 2004, and the consolidated results of its operations for the three and nine months ended September 30, 2005 and 2004.

2. Restatement of Prior Year Financial Statements

We have restated our consolidated financial statements for the years 2000 through 2004 (the “Restatement”). The determination to restate these financial statements was made after errors were discovered in May, 2005. In addition, certain disclosures in other notes to our consolidated financial statements have been restated to reflect the Restatement adjustments. In the Restatement, we have:

• Corrected the accounting for certain research and development expenditures that were erroneously capitalized on the balance sheet by recording charges to the statement of operations.

• Reversed amortization expense related to the erroneously capitalized research and development expenditures.

• Adjusted income tax reserves as a function of the impact on pre-tax income relating to the correction of accounting for certain research and development expenditures noted above.

Further information regarding the impact of these adjustments is provided in note 2 of the consolidated financial statements in Form 10-K/A for the year ended December 31, 2004.

3. New Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 123R, Share-Based Compensation, which supersedes Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services through share-based payment transactions. SFAS No. 123R requires a public entity to measure the cost of employee services received in exchange for the award of equity investments based on the fair value of the award at the date of grant. The cost will be recognized over the period during which an employee is required to provide services in exchange for the award. On April 14, 2005, the Securities and Exchange Commission issued a release announcing the adoption of a new rule delaying the required implementation of SFAS No. 123R. Under this new rule, SFAS No. 123R is effective as of the beginning of the first annual reporting period that begins after June 15, 2005. The impact on net earnings as a result of the adoption of SFAS No. 123R, from a historical perspective, can be found in Note 9 to the Consolidated Financial Statements in this Quarterly Report and in Note 1 to the Consolidated Financial Statements contained in our 2004 Annual Report. We are currently evaluating the provisions of SFAS No. 123R and will adopt it in the first quarter of 2006, as required.

8

4. Discontinued Operations

Burners and Components Business – In the third quarter of 2004, the Company reacquired Selas Waermetechnik GmbH, which was previously part of Selas SAS. Selas SAS filed insolvency in August of 2003. The Company recorded an extraordinary gain of approximately $684,000 on the reacquisition of Selas Waermetechnik, GmbH. In 2003, the Company initiated its plan to sell the remainder of its Heat Technology segment. This segment, which was sold on March 31, 2005, consisted of the operating assets of Selas Corporation of America, located in Dresher, Pennsylvania, Nippon Selas located in Tokyo, Japan and Selas Waermetechnik located in Ratingen, Germany. This business generated sales of $2.1 million, and $1.6 million and net income of $59,000 and $892,000 for the nine months ended September 30, 2005 and 2004, respectively. The net income for the nine months ended September 30, 2005, included a gain on the sale of the operations of $135,000. The total purchase price was approximately $3.7 million, subject to adjustment, of which approximately $2.8 million was paid in cash on April 1, 2005, and $900,000 was paid in the form of a subordinated promissory note. An adjustment to the purchase price of approximately $352,000 was recorded in the quarter ended June 30, 2005.

The consolidated condensed financial statements reflect the Company’s presentation of discontinued operations. A recap of discontinued operations for the three and nine months ended September 30 is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2005			2004			2005			2004
Income (loss) from operations
Gain (loss) from Sale of Discontinued operations	$	(48,732	)	$	—		$	135,050		$	—
Gain on acquisition of SWT		—			683,630			—			683,630
Small furnace		—			(1,518	)		—			(75,857	)
Burners and components		—			287,490			(76,441	)		891,720
	$	(48,732	)	$	969,602		$	58,609		$	1,499,493

5. Business Segment Information

The Company has made a strategic decision to focus its future on the Precision Miniature Medical and Electronics products business. The Company sold the remaining operations of its Heat Technology business of the Burners and Components business on March 31, 2005. As a result of this decision and other divestures the Company has made over the past three years, the Company now operates in only one segment.

6. Inventories consist of the following at:

	September 30, 2005		December 31, 2004
Raw material	$	2,946,816	$	2,240,194
Work-in-process		1,658,117		1,008,706
Finished products and components		1,334,691		1,038,743
	$	5,939,624	$	4,287,643

9

7. Short and Long Term Debt

Short and long term debt at September 30, 2005 and December 31, 2004 are summarized as follows:

	September 30, 2005			December 31, 2004
Domestic Asset-Based Revolving Credit Facility	$	2,635,541		$	3,171,447
Foreign Overdraft and Letter of Credit Facility		642,619			568,946
Domestic Term Loans (Real Estate Based in 2005)		1,481,000			1,458,470
Domestic Equipment Leases Term Loan		255,359			—
	$	5,014,519		$	5,198,863
Less: Current maturities		(800,932	)		(5,198,863	)
Total Long Term Debt	$	4,213,587		$	—

The Company has a series of loan facilities available to it including a $5,500,000 domestic asset-based revolving credit facility supported by a borrowing base, to mature on August 31, 2008 with annual interest computed at the greater of 5.25%, or 0.5% over prime. The Company also has a $1,500,000 domestic real estate term loan supported by the Company’s Vadnais Heights, MN manufacturing facility, amortized on a 12-year schedule, to mature on August 31, 2008 with annual interest computed at the greater of 5.25%, or 0.75% over prime. The Company also has an unutilized $1,000,000 domestic equipment term loan amortized on a five-year schedule, to mature on August 31, 2008 with annual interest computed at the greater of 5.25%, or 0.75% over prime. The domestic asset-based revolving facility carries a commitment fee of 0.25% per annum, payable on the unborrowed portion of the line. Additionally, the entire package of credit lines carries with it an annual fee of $27,500 due on August 31, 2006, 2007, and 2008.

The $8,000,000 domestic program ($5,500,000 revolver, $1,500,000 real estate, and $1,000,000 equipment line) also provides for one-, three- and six-month London Interbank Offered Rate (LIBOR) interest rate options at the applicable LIBOR rate plus 3.25% for the revolver, or 3.50% for the term loans.

In addition to the Company’s domestic facilities, the Company’s operation in Singapore maintains an overdraft and letter of credit facility which as of September 30, 2005, had outstanding borrowings of $642,619.

At September 30, 2005 the Company was in compliance with all terms of the agreements in all of its credit facilities.

The terms of the domestic loan agreements require monthly interest payments on the revolving line with a balloon payment due at the end of the loan, and monthly interest and principal payments on the real estate and equipment lines consistent with their respective 12-year and five-year amortization periods.

Our ability to pay the principal and interest on our indebtedness as it comes due will depend upon our current and future performance. Our performance is affected by general economic conditions and by financial, competitive, political, business and other factors. Many of these factors are beyond our control.

10

We believe that funds expected to be generated from operations, the available borrowing capacity through our revolving credit loan facilities, and the control of capital spending will be sufficient to meet our anticipated cash requirements for operating needs through September 30, 2006. If, however, we do not generate sufficient cash from operations, or if we incur additional unanticipated liabilities, we may be required to seek additional financing or sell equity on terms which may not be as favorable as we could have otherwise obtained. No assurance can be given that any refinancing, additional borrowing or sale of equity will be possible when needed or that we will be able to negotiate acceptable terms. In addition, our access to capital is affected by prevailing conditions in the financial and equity capital markets, as well as our own financial condition. While management believes that the Company will meet its liquidity needs through September 30, 2006, no assurance can be given that the Company will be able to do so.

8. Income Taxes

Income taxes for the three and nine months ended September 30, 2005 were $97,000 and $385,000, respectively, compared to $8,000 and $1.1 million for the same periods in 2004, respectively. The effective tax rates for the three and nine months ended September 30, 2005 were 35.8% and 39.3%, respectively, compared to (1.5) % and 142.5% for the same periods in 2004, respectively. Taxes for the three months ended September 30, 2004 were primarily due to income taxes on foreign operations. The higher effective rate for the nine months ended September 30, 2004 was primarily due to the elimination of the deferred tax asset of $890,230. The effective rate in 2005 was primarily due to foreign taxes on German and Singapore operations. The Company is in a net operating loss position for Federal income tax purposes and, consequently, no expense from the current period domestic operating income was recognized.

9. Stockholders’ Equity and Stock-based Compensation

The following table presents a reconciliation of the denominators used in the computation of basic and diluted earnings per share related to the Company’s employee stock option plan:

	Three months ended September 30,				Nine months ended September 30,
	2005		2004		2005		2004
Basic – weighted shares outstanding		5,132,692		5,129,214		5,130,373		5,129,214
Weighted shares assumed upon exercise of stock options		252,075		—		72,441		—
Diluted – weighted shares outstanding		5,384,767		5,129,214		5,202,814		5,129,214

The dilutive impact summarized above relates to the periods when the average market price of Company stock exceeded the exercise price of the potentially dilutive option securities granted.

The Company has adopted the disclosure provision of SFAS No. 148, Accounting for Stock-Based Compensation – Transition and Disclosure. SFAS No. 148 amends the disclosure requirements of SFAS No. 123, Accounting for Stock-Based Compensation.

11

The Company applies Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations in accounting for its stock option plans. Therefore no compensation expense has been recognized for the stock option plans. SFAS No. 123 “Accounting for Stock-Based Compensation”, amended by SFAS No. 148 “Accounting for Stock-Based Compensation –Transition and Disclosure”, requires the Company to disclose pro forma net earnings and pro forma net earnings per share amounts as if compensation expense was recognized for all options granted (note 3). The proforma amounts are as follows:

	Three months ended September 30,					Nine months ended September 30,
	2005		2004			2005		2004
Reported net income (loss)	$	125,447	$	(5,178	)	$	652,616	$	1,170,013
Stock-based employee compensation expense, net of related tax effects		46,319		19,721			138,957		59,163
Pro forma net income (loss)		79,128		(24,899	)		513,660		1,110,850
Reported basic and diluted net income per share	$	.02	$	(.00	)	$	.12	$	.23
Pro forma basic and diluted net income per share	$	.01	$	(.00	)	$	.10	$	.22

10. Income (Loss) Per Share

Excluded from the computation of diluted earnings per share at September 30, 2005 were options to purchase approximately 199,000 common shares, with an average exercise price of $8.32, because the effect would have been anti-dilutive. Excluded from the computation of diluted earnings per share at September 30, 2004 were options to purchase approximately 277,000 common shares, with an average exercise price of $7.01, because the effect would have been anti-dilutive.

11. Comprehensive Income

The components of comprehensive income, as required to be reported by SFAS No. 130, Reporting Comprehensive Income, were as follows:

	Three months ended September 30,						Nine months ended September 30,
	2005			2004			2005		2004
Net income (loss)	$	125,447		$	(5,178	)	$	652,616	$	1,170,013
Gain (loss) on foreign currency translation adjustment		(12,616	)		(12,869	)		335,080		(35,511	)
Comprehensive income (loss)	$	112,831		$	(18,047	)	$	987,696	$	1,134,502

Accumulated other comprehensive loss totaled ($262,000) and ($597,000) at September 30, 2005 and December 31, 2004, respectively.

12

12. Legal Proceedings

The Company is a defendant along with a number of other parties in approximately 122 lawsuits as of September 30, 2005 (approximately 123 lawsuits as of December 31, 2004) alleging that plaintiffs have or may have contracted asbestos-related diseases as a result of exposure to asbestos products or equipment containing asbestos sold by one or more named defendants. Due to the noninformative nature of the complaints, the Company does not know whether any of the complaints state valid claims against the Company.  The lead insurance carrier has informed the Company that the primary policy for the period July 1, 1972 – July 1, 1975 has been exhausted and that the lead carrier will no longer provide a defense under that policy.  The Company has requested that the lead carrier substantiate its position.  The Company has contacted representatives of the Company’s excess insurance carrier for some or all of this period.  The Company does not believe that the asserted exhaustion of the primary insurance coverage for this period will have a material adverse effect on the financial condition, liquidity, or results of operations of the Company.  Management believes that the number of insurance carriers involved in the defense of the suits and the significant number of policy years and policy limits to which these insurance carriers are insuring the Company, make the ultimate disposition of these lawsuits not material to the Company’s consolidated financial position or results of operations.

As more fully described in Note 14, the Company’s wholly owned French subsidiary, Selas SAS filed insolvency in France and is being managed by a court appointed judiciary administrator. The Company may be subject to additional litigation or liabilities as a result of the French insolvency.

The Company is also involved in other lawsuits arising in the ordinary course of business. While it is not possible to predict with certainty the outcome of these matters, management is of the opinion that the disposition of these lawsuits and claims will not materially affect the Company’s consolidated financial position, liquidity, or results of operations.

13. Related-Party Transactions

One of the Company’s subsidiaries leases office and factory space from a partnership consisting of three present or former officers of the subsidiary, including Mark Gorder, the President and Chief Executive Officer of the Company. The subsidiary is required to pay all real estate taxes and operating expenses. In the opinion of management, the terms of the lease agreement are comparable to those which could be obtained from unaffiliated third parties. The total rent expense incurred under the lease was approximately $368,000 for 2004, $336,000 for 2003 and $330,000 for 2002. Annual lease commitments approximate $368,000 through October 2011.

14. Subsidiary Insolvency

On August 4, 2003 the Company’s wholly owned French subsidiary, Selas SAS, filed insolvency in the Commercial Court of Nanterre, France and is being managed through a court appointed judiciary administrator. Historical financial information has been restated to include this European operation in discontinued operations. In addition, the Company may be subject to additional litigation or liabilities as a result of the French insolvency.

13

15. Statements of Cash Flows

Supplemental disclosures of cash flow information:

	Nine months Ended
	September 30, 2005		September 30, 2004
Interest received	$	34,875	$	1,932
Interest paid	$	321,406	$	322,171
Income taxes paid	$	32,264	$	5,800

16. Subsequent Events

On October 6, 2005, RTI Electronics acquired the assets of Amecon Inc. Amecon is primarily engaged in the research, development, manufacture, marketing and sale of toroidal power and low voltage instrument transformers, current sense transformers and filter inductors, magnetic amplifiers, AC/DC load sensors. The purchase price for the assets was $1,300,000 (subject to adjustment based on the fair market valuation of the acquired assets and certain sales targets) and required a $10,000 initial deposit and $240,000 payment made at the time of closing. The unpaid balance will be paid in four equal annual installments beginning on October 6, 2006. The unpaid balance will bear interest at an annual rate of 5%, which shall be payable annually with each principal payment. The purchase price allocation will be finalized in the fourth quarter.

The unaudited proforma results of operations for the three and nine months ended September 30, 2005 and 2004 as a result of this acquisition is not material to the historical financial statements.

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ITEM 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

Headquartered in Arden Hills, Minnesota, IntriCon Corporation (formerly Selas Corporation of America) is an international firm that designs, develops, engineers and manufactures micro-miniature medical and electronic products. The Company supplies micro-miniaturized components, systems and molded plastic parts, primarily to the hearing instrument manufacturing industry, as well as the computer, electronics, telecommunications and medical equipment industries. In addition to its Arden Hills headquarters, the Company has facilities in California, Singapore, and Germany. Within discontinued operations, the Company had facilities in Pennsylvania, Japan and Germany. See also notes 4 and 5 to the Condensed Consolidated Financial Statements.

Currently, the Company has one operating segment, its precision miniature medical and electronics products segment. In the past the Company had operated three segments, precision miniature medical and electronics products segment, heat technology segment, and tire holders, lifts and related products segment. In 2001, the Company began focusing on its precision miniature medical and electronics products segment and developing plans to exit the businesses that comprised the heat technology segment, and tire holders, lifts and related products segment. The Company exited the tire holders, lifts and related products business in 2003 and exited the heat technology segment on March 31, 2005. The Company classified its heat technology segment as discontinued operations in 2004.

With the completed sale of the burner and components business, the Company has successfully completed the shift from its traditional business segments to the emerging prospects in its precision miniature medical and electronic products business. To reflect the Company’s redefined focus, it changed its name to IntriCon Corporation.

The Company manufactures micro-miniature components, systems and molded plastic parts for hearing instruments, medical equipment, electronics, telecommunications and computer industry manufacturers. These components consist of volume controls, microphones, trimmer potentiometers and switches. The Company also manufactures hybrid amplifiers and integrated circuit components (“hybrid amplifiers”), along with faceplates for in-the-ear and in-the-canal hearing instruments. Components are offered in a variety of sizes, colors and capacities in order to accommodate a hearing manufacturer’s individualized specifications. Sales to hearing instrument manufacturers represented approximately 52% of net sales for the Company’s precision miniature medical and electronic products business in the first nine months of fiscal 2005.

In the medical market, the Company is focused on sales of microelectronics, micromechanical assemblies and high-precision plastic molded components to medical device manufacturers. Targeted customers include medical product manufacturers of portable and lightweight battery powered devices, large AC-powered units often found in clinics and hospitals, as well as a variety of sensors designed to connect a patient to an electronic device.

The medical industry is faced with pressures to reduce the costs of healthcare. The Company offers medical manufacturers the capabilities to design, develop and manufacture components for medical devices that are easier to use, measure with greater accuracy and provide more functions while reducing the costs to manufacture these devices. Examples of the Company’s products used by medical device manufacturers include components found in intravenous fluid administration pumps that introduce drugs into the bloodstream, and bubble sensors and flow restrictors that monitor and control the flow of fluid in an intravenous infusion system.

15

The Company also manufactures a family of safety needle products for an OEM customer that utilizes the Company’s insert and straight molding capabilities. These products are assembled using full automation including built-in quality checks within the production lines. Other examples include sensors used to detect pathologies in specific organs of the body and monitoring devices to detect cardiac and respiratory functions. The early and accurate detection of pathologies allows for increased likelihood for successful treatment of chronic diseases and cancers. Accurate monitoring of multiple functions of the body, such as heart rate and breathing, aids in generating more accurate diagnosis and treatments for patients.

The Company has also expanded its micro-miniature components business through the manufacture of thermistors and film capacitors. The Company manufactures and sells thermistors and thermistor assemblies, which are solid state devices that produce precise changes in electrical resistance as a function of any change in absolute body temperature. The Company’s Surge-Gard TM product line, an inrush electric current limiting device used primarily in computer power supplies, represented approximately 5% of the Company’s sales in the first nine months of fiscal 2005. The balance of sales represents various industrial, commercial and military sales for thermistor and thermistor assemblies to domestic and international markets.

Forward-Looking and Cautionary Statements

Certain statements included in this Quarterly Report on Form 10-Q or documents the Company files with the Securities and Exchange Commission, which are not historical facts, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995), which are intended to be covered by the safe harbors created thereby. These statements may include, but are not limited to:

• statements in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” such as, new digital products to gain market share, recovery of the telecommunications market, potential growth in the Company’s medical profits, future gross profit margins, future cost savings, net operating loss carryforwards, the impact of future cash flows, the ability to maintain financial covenants, the ability to meet working capital requirements, future level of funding of employee benefit plans, the ability to negotiate extension on purchases, the impact of foreign currencies and litigation; and
• statements in “Notes to the Company’s Condensed Consolidated Financial Statements”.

Forward-looking statements also include, without limitation, statements as to the Company’s:

• expected future results of operations and growth;
• ability to meet working capital requirements;
• business strategy;
• expected benefits from staff reductions;
• expected increases in operating efficiencies;
• anticipated trends in the hearing-health market; and
• estimate of goodwill impairment and amortization expense of the intangible assets.

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In addition, forward-looking statements also include the effects of changes in accounting pronouncements, the effects of litigation and the amount of insurance coverage, and statements as to trends or the Company’s or management’s beliefs, expectations and opinions. Forward-looking statements are subject to risks and uncertainties and may be affected by various factors that may cause actual results to differ materially from those in the forward-looking statements. In addition to the factors discussed in this Quarterly Report on Form 10-Q, certain risks, uncertainties and other factors can cause actual results and developments to be materially different from those expressed or implied by such forward-looking statements, including, without limitation, the following:

• the ability to implement the Company's business strategy;
• risks arising in connection with the insolvency of Selas SAS, and potential liabilities and actions arising in connection therewith;
• the volume and timing of orders received by the Company;
• changes in estimated future cash flows;
• foreign currency movements in markets the Company services;
• changes in the global economy and financial markets;
• changes in the mix of products sold;
• acceptance of the Company's products;
• reliance on two customers in the Company’s medical products business;
• competitive pricing pressures;
• pending and potential future litigation;
• availability of electronic components for the Company’s products;
• ability to create and market products in a timely manner;
• ability to pay debt when it comes due; and
• the risks associated with terrorist attacks, war and threats of attacks.

For a description of these and other risks see “Risk Factors” in Part 1, Item 1: Business in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2004 or in other filings the Company makes from time to time with the Securities and Exchange Commission. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company.

2005 compared with 2004

Sales, net

Consolidated net sales for the three and nine months ended September 30, were as follows (in thousands):

	Restated				Change
	2005		2004		Dollars		Percent
Three months ended September 30	$	11,896	$	8,524	$	3,372		39.6	%
Nine months ended September 30	$	33,284	$	26,217	$	7,067		27.0	%

The Company’s sales for the three months ended September 30, 2005 increased for three of the four product sectors over the same periods in the prior year. For the quarter ended September 30, 2005 sales increased by 65.9% for medical products, 56.7% for hearing health products, and 23.7% for professional audio and military products. The electronic sales decreased slightly, 3.4%, over the same period in the prior year. The Company’s sales for the nine months ended September 30, 2005 increased for all four product sectors over the same periods in the prior year. For the nine months ended September 30, 2005 sales increased by 71.9% for medical products, 30.8% for hearing health products, 15.4% for professional audio and military products, and 2.4% for electronics products. The sales increase for medical products was due to strengthened orders for design and contract manufacturing with several medical OEM customers; for hearing health products the increase was primarily due to new product offerings in the Company’s advance line of amplifier assemblies and systems based on Digital Signal Processing (DSP); for professional audio and military products the increase was primarily due to sales of a new microphone to a specific customer.

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Gross profit

Gross profit margins for the three and nine months ended September 30, were as follows (in thousands):

	2005					Restated 2004					Change
	Dollars		Percent of Sales			Dollars		Percent of Sales			Dollars		Percent
Three months ended June 30	$	2,907		24.4	%	$	1,675		19.7	%	$	1,232		4.7	%
Nine months ended June 30	$	8,701		26.1	%	$	6,153		23.5	%	$	2,548		2.6	%

The gross profit margin as a percentage of sales, improved over the three and nine month periods ended September 30, 2005 from the previous year periods due to higher sales and lower manufacturing costs for some products which are now manufactured in Asia.

Selling, general and administrative expenses (SG&A)

Selling, general and administrative expenses (SG&A) for the three months ended September 30 were as follows (in thousands):

	2005					Restated 2004					Change
	Dollars		Percent of Sales			Dollars		Percent of Sales			Dollars			Percent Increase/ (Decrease)
Selling	$	827		7.0	%	$	889		10.4	%	$	(62	)		(7.0	)%
General and administrative		1,292		10.9	%		1,245		14.6	%		47			3.8	%
Research and development		480		4.0	%		424		5.0	%		56			13.2	%

Selling, general and administrative expenses (SG&A) for the nine months ended September 30 were as follows (in thousands):

	2005					Restated 2004					Change
	Dollars		Percent of Sales			Dollars		Percent of Sales			Dollars			Percent Increase/ (Decrease)
Selling	$	2,515		7.6	%	$	2,818		10.7	%	$	(303	)		(10.8	)%
General and administrative		3,829		11.5	%		4,140		15.8	%		(311	)		(7.5	)%
Research and development		1,245		3.7	%		1,300		5.0	%		(55	)		(4.2	)%

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The lower selling, general and administrative, and research and development expense for nine month period ended September 30, 2005 as compared to the prior year period was the result of a reduction in staffing that occurred in November 2004. The staffing adjustment was a combination of reductions due to the transfer of a portion of manufacturing to our overseas operation and an effort to streamline administrative functions. In order to support the substantial growth in our second and third quarters, various investments were made in selling, general and administrative, and research and development areas during the three month period ending September 30, 2005.

Operating income (loss)

Operating income for the three and nine months ended September 30, 2005 was $309,000 and $1,112,000 respectively, compared to $(884,000) and $1,005,000 for the same periods in 2004, respectively. The nine months ended September 30, 2004 included a gain on sale of our Dresher property of approximately $3.1 million.

Interest expense

Interest expense for the three and nine months ended September 30, 2005 was $66,000 and $285,000 respectively, compared to $103,000 and $351,000 for the same periods in 2004, respectively. The decrease from the prior year’s expense was due to the lower outstanding debt balance, partially offset by higher interest rates.

Interest income

Interest income for the three and nine months ended September 30, 2005 was $16,000 and $35,000, respectively, compared to $2,000 for the same three and nine month periods in 2004. The increase in 2005 interest income was attributable to interest on the note receivable from the buyer of the discontinued operations that were sold on March 31, 2005.

Other income

Other income for the three and nine months ended September 30, 2005 was $12,000 and $118,000 respectively, compared to $18,000 and $118,000 for the same periods in 2004, respectively. The increase in other income in the third quarter of 2005 was attributable to the sale of securities the Company had received in settlement of an outstanding debt with one of its former customers. The majority of the other income in 2004 was attributable to foreign exchange gain on a portion of the Company’s debt that was Euro denominated until its amendment in March 2004.

Income taxes

Income taxes for the three and nine months ended September 30, 2005 were $97,000 and $385,000, respectively, compared to $8,000 and $1.1 million for the same periods in 2004, respectively. The effective tax rates for the three and nine months ended September 30, 2005 were 35.8% and 39.3% respectively, compared to (1.5) % and 142.5% for the same periods in 2004, respectively. Taxes for the three months ended September 30, 2004 were primarily due to income taxes on foreign operations. The higher effective rate for the nine months ended September 30, 2004 was primarily due to the elimination of the deferred tax asset of $890,230. The effective rate in 2005 was primarily due to foreign taxes on German and Singapore operations. The Company is in a net operating loss position for Federal income tax purposes and, consequently, no expense from the current period domestic operating income was recognized.

Income (loss) from continuing operations

For the three and nine months ended September 30, 2005, the net income from continuing operations was $174,000 and $594,000, respectively, compared with a loss from continuing operations of $975,000 and $329,000 for the same periods in 2004, respectively. The nine months ended September 30, 2004 included a gain of $3.1 million on an asset held for sale.

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Discontinued Operations

Discontinued operations generated a net loss of $49,000 for the three months ended September 30, 2005 and net income of $59,000 for the nine months ended September 30, 2005, compared to a net income of $970,000 and $1,499,000 for the three and nine months ended September 30, 2004, respectively. As of this date, no additional purchase price adjustments regarding the sale of the discontinued operations are expected. The income for the nine months ended September 30, 2005 included a gain on the sale of these operations of $135,000. See note 4 of the Consolidated Condensed Financial Statements.

Liquidity and Capital Resources

The Company’s cash flows from operating, investing and financing activities, as reflected in the statement of cash flows, are summarized as follows (in thousands):

	Nine months Ended
	September 30, 2005			Restated September 30, 2004
Cash provided (used) by:
Continuing operations	$	(2,075	)	$	(792	)
Discontinued operations *		3,095			660
Investing activities		(1,068	)		2,726
Financing activities		272			(2,169	)
Effect of exchange rate changes on cash		(13	)		(44	)
Increase in cash and cash equivalents	$	211		$	381

*Includes proceeds from the sale of discontinued operations of $2.8 million.

The Company had the following bank arrangements (in thousands):

	September 30, 2005		December 31, 2004
Total availability under existing facilities	$	10,255	$	7,056
Domestic Asset-Based Revolving Credit Facility		2,636		3,171
Foreign Overdraft and Letter of Credit Facility		643		569
Domestic Term Loans (Real Estate Based in 2005)		1,481		1,458
Domestic Equipment Lease Term Loan		255		—
Total Debt		5,015		5,199
Total availability under existing facilities	$	5,270	$	1,857

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On August 31, 2005, the Company’s wholly-owned subsidiaries Resistance Technology, Inc. and RTI Electronics, Inc. (the “Borrowers”) entered into a senior secured credit agreement with Diversified Business Credit, Inc. (the “Agreement”), and related Term Loan Supplement (Real Estate) and Term Loan Supplement (Equipment). In connection with the Agreement, on August 31, 2005, the Company also entered into a security agreement and a guaranty by corporation with Diversified Business Credit, Inc. whereby the Company guaranteed the full amount that the Borrowers may owe Diversified Business Credit, Inc. Under these agreements, the Company and the Borrowers granted Diversified Business Credit, Inc. a security interest in substantially all of their assets. In addition, Resistance Technology, Inc. granted a mortgage on its Vadnais Heights, Minnesota facility.

The Agreement has a term of three years. The Agreement provides for the following:

• $5.5 million asset-backed revolving credit facility supported by a monthly borrowing base;
• $1.5 million real estate term loan amortized on a 12-year schedule; and
• $1.0 million equipment term loan amortized on a five-year schedule.

The domestic revolving credit facility bears interest at 0.5% over the prime rate or, at the option of the Borrower, subject to certain exceptions, the London InterBank Offered Rate (“LIBOR”) plus 3.25%, provided that in no event will the rate be less than 5.25%. The domestic term loans bear interest at 0.75% over the prime rate or, at the option of the Borrower, subject to certain exceptions, LIBOR plus 3.50%, provided that in no event will the rate be less than 5.25%. Notwithstanding the foregoing, interest paid on advances for each twelve month period may never be less than $100,000. Under the Agreement, an unused line fee at the rate of 0.25% per annum on the daily average unused amount of the revolving credit facility is due and payable monthly in arrears on the first day of the month. In addition, the Borrowers must pay an annual fee equal to the greater of $27,500 or one-half percent of the maximum amount permitted to be borrowed under the revolving credit facility. In addition, if the facility is terminated by the Borrowers prior to the end of the term, the Borrowers will also be required to pay a termination fee equal to 3% (if terminated before the first anniversary of the facility), 2% (if terminated before the second anniversary of the facility) and 1% (if terminated before the third anniversary of the facility), respectively, of the total of the maximum amount available under the revolving credit facility plus the amounts then outstanding under the terms loans.

The real estate term loan requires monthly principal payments of $10,285, with any balance due on August 31, 2008. The equipment term loan requires monthly principal payments based on a assumed amortization period of 60 months, with any balance due on August 31, 2008.

As of August 31, 2005, approximately $1.6 million was outstanding under the revolving credit facility and approximately $1.5 million was outstanding under the real estate term loan.

Under the Agreement, without the prior written consent from Diversified Business Credit, Inc., the Company and the Borrowers are restricted or limited, except as otherwise permitted in the Agreement, from, among other things: becoming or remaining liable in any manner with respect of indebtedness or contractual liability; declaring or paying any cash dividends (except that Borrowers may declare and pay dividends to the Company as described in the Agreement), purchasing or redeeming any of its capital stock or otherwise distributing any property on its capital stock; creating, expending or contracting to expend, in any one calendar year, with respect to the Borrowers collectively, more than $2.0 million in the aggregate, or more than $250,000 in any one transaction, for the lease, purchase or other acquisition of any capital asset, or for the lease of any other asset whether payable currently or in the future; selling, leasing or otherwise disposing of any collateral (as defined in the agreement) or all or any substantial part of its property; consolidating or merging with any other corporation or acquiring stock of any corporation or entering into any other partnership or joint venture; substantially alter the nature of the business in which it is engaged; permitting any breach, default or event of default to occur under any note, loan, agreement or other contractual obligation binding the Borrowers; or amending governing documents.

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In the case of an event of default (as defined in the Agreement), unless waived by Diversified Business Credit, Inc., Diversified Business Credit, Inc., by notice, may terminate the Agreement and declare the Borrowers’ obligations under the Agreement due and payable. Diversified Business Credit, Inc. may also in accordance with the Agreement and the law, exercise and enforce any and all rights and remedies available upon default to a secured party under the Uniform Commercial Code, including, without limitation, the right to take possession of the collateral (as defined in the Agreement). Upon the occurrence of any default, Diversified Business Credit, Inc. can suspend the making of advances until the default has been cured or waived. All obligations will be immediately and automatically due and payable, without further act or condition, if any cause under the United States Bankruptcy Code is commenced voluntarily by any Borrower, guarantor (as defined in the Agreement and includes the Company) or involuntary against any Borrower or guarantor. Events of default include, among other things, the failure to maintain certain financial covenants or insurance coverage, the failure to make payment of any obligation due under the Agreement or the occurrence of a default under any bond, debenture, note or other evidence of material indebtedness of any Borrower or guarantor owed to any person or entity other than Diversified Business Credit, Inc., or under any indenture or other instrument under which any such evidence of indebtedness has been issued or by which it is governed, or under any material lease or other contract, and the expiration of the applicable period of grace, if any, specified in such evidence of indebtedness, indenture, other instrument, lease or contract.

On August 15, 2005, the Company’s wholly-owned subsidiary, RTI Tech, PTE LTD., entered into an international senior secured credit agreement with Oversea-Chinese Banking Corporation Ltd. that provides for a $2.0 million line of credit. Borrowings bear interest at a rate of 6.47%. This facility will be reviewed annually to determine whether it will be renewed.

We believe that funds expected to be generated from operations, the available borrowing capacity through our revolving credit loan facilities, and the control of capital spending will be sufficient to meet our anticipated cash requirements for operating needs through September 30, 2006.

Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 123R, Share-Based Compensation, which supersedes Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and its related implementation guidance. SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services through share-based payment transactions. SFAS No. 123R requires a public entity to measure the cost of employee services received in exchange for the award of equity investments based on the fair value of the award at the date of grant. The cost will be recognized over the period during which an employee is required to provide services in exchange for the award. On April 14, 2005, the Securities and Exchange Commission issued a release announcing the adoption of a new rule delaying the required implementation of SFAS No. 123R. Under this new rule, SFAS No. 123R is effective as of the beginning of the first annual reporting period that begins after June 15, 2005. The impact on net earnings as a result of the adoption of SFAS No. 123R, from a historical perspective, can be found in Note 9 to the Consolidated Financial Statements in this Quarterly Report and in Note 1 to the Consolidated Financial Statements contained in our 2004 Annual Report. We are currently evaluating the provisions of SFAS No. 123R and will adopt it in the first quarter of 2006, as required.

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Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period.

Certain accounting estimates and assumptions are particularly sensitive because their significance to the consolidated condensed financial statements and the possibility that future events affecting them may differ markedly. The accounting policies of the Company with significant estimates and assumptions include the Company’s revenue recognition, accounts receivable reserves, inventory reserves, discontinued operations, goodwill, long-lived assets and deferred taxes policies. These and other significant accounting policies, except for revenue recognition which is described in the paragraphs below, are described in and incorporated by reference from “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Note 1 to the financial statements contained in or incorporated by reference in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2004.

The Company’s continuing operations recognizes revenue when products are shipped and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists and the sales price is fixed or determinable. Under contractual terms shipments are generally FOB shipment point.

Customers have 30 days to notify the Company if the product is damaged or defective. Beyond that, there are no significant obligations that remain after shipping other than warranty obligations. Contracts with customers do not include product return rights, however, the Company may elect in certain circumstances to accept returns for product. The Company records revenue for product sales net of returns. Net sales also include amounts billed to customers for shipping and handling, if applicable. The corresponding shipping and handling costs are included in the cost of sales.

In general, the Company warrants its products to be free from defects in material and workmanship and will fully conform to and perform to specifications for a period of one year. While the Company’s warranty costs have historically been within its expectations, the Company cannot guarantee that it will continue to experience the same warranty return rates or repair costs that it has experienced in the past.

ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk

For information regarding the Company’s exposure to certain market risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2004. There have been no material changes in the Company’s portfolio of financial instruments or market risk exposures which have occurred since December 31, 2004.

ITEM 4.    Controls and Procedures

On May 31, 2005, the Company concluded, after discussions among the Audit Committee of the Board of Directors of the Company and management, that it would restate financial results for the years 2000 through 2004 in order to correct the accounting for certain research and development expenditures that were erroneously capitalized on the balance sheet instead of being recorded as charges on the statement of operations. The methodology for accounting for the Company’s research and development expenses was corrected prior to the end of the quarter covered by this report and the Company initiated the policies and procedures described below:

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• The Company implemented education programs within the Company to ensure that all finance and accounting employees are adequately trained and supervised in the application of US GAAP.
• The Company created stronger communication protocols and relationships between the Company’s management and its finance and accounting personnel to ensure for proper accounting analysis and treatment.
• The Company added internal review controls to insure that capitalized projects appearing on the balance sheet are reviewed and approved by management on a quarterly basis.

The Company also restated its financial statements and corrected its accounting practices as further described in Note 2 of the Notes to Consolidated Condensed Financial Statements.

The Company’s management, with the participation of its chief executive officer and chief financial officer, conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of September 30, 2005 (the “Disclosure Controls Evaluation”). Based upon the Disclosure Controls Evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company’s disclosure controls and procedures were effective to provide a reasonable level of assurance that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the specified time periods in the Securities and Exchange Commission’s rules and forms. Officers of the Company have concluded that disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act are accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure, all in accordance with Exchange Act Rule 13a-15(e).

Other than disclosed above, there were no changes in our internal controls over financial reporting during the quarter ended September 30, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.    Legal Proceedings

The information contained in Notes 12 and 14 to the Consolidated Condensed Financial Statements in part 1 of this quarterly report is incorporated by reference herein.

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

None.

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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ITEM 6.    Exhibits

(a)   Exhibits

10.1(1) Form of Non-employee director option agreement for options pursuant to the Amended and Restated Non-Employee Directors Stock Option Plan

10.2 Credit and Security Agreement dated August 31, 2005 by Resistance Technology, Inc. and RTI Electronics, Inc. and Diversified Business Credit, Inc.

10.3 Security Agreement dated August 31, 2005 between IntriCon Corporation and Diversified Business Credit, Inc.

10.4 Guaranty by Corporation dated August 31, 2005 between IntriCon Corporation and Diversified Business Credit, Inc.

10.5 Term Loan Supplement (Real Estate) to Credit Agreement dated August 31, 2005, by Resistance Technology, Inc. and RTI Electronics, Inc. for the benefit of Diversified Business Credit, Inc.

10.6 Term Loan Supplement (Equipment) to Credit Agreement dated August 31, 2005, by Resistance Technology, Inc. and RTI Electronics, Inc. for the benefit of Diversified Business Credit, Inc.

10.7 Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents by Resistance Technology, Inc. to Diversified Business Credit, Inc.

31.1 Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of principal executive officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of principal financial officer to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporated by reference from an exhibit to the Company’s Form 8-K filed with the SEC on October 3, 2005.

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INTRICON CORPORATION

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.

	INTRICON CORPORATION (Registrant)
Date:   November 14, 2005	By:	/s/   Mark S. Gorder
		Mark S. Gorder President and Chief Executive Officer (principal executive officer)

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EXHIBIT INDEX

10.1(1) Form of Non-employee director option agreement for options pursuant to the Amended and Restated Non-Employee Directors Stock Option Plan

10.2 Credit and Security Agreement dated August 31, 2005 by Resistance Technology, Inc. and RTI Electronics, Inc. and Diversified Business Credit, Inc.

10.3 Security Agreement dated August 31, 2005 between IntriCon Corporation and Diversified Business Credit, Inc.

10.4 Guaranty by Corporation dated August 31, 2005 between IntriCon Corporation and Diversified Business Credit, Inc.

10.5 Term Loan Supplement (Real Estate) to Credit Agreement dated August 31, 2005, by Resistance Technology, Inc. and RTI Electronics, Inc. for the benefit of Diversified Business Credit, Inc.

10.6 Term Loan Supplement (Equipment) to Credit Agreement dated August 31, 2005, by Resistance Technology, Inc. and RTI Electronics, Inc. for the benefit of Diversified Business Credit, Inc.

10.7 Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents by Resistance Technology, Inc. to Diversified Business Credit, Inc.

31.1 Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of principal executive officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of principal financial officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1) Incorporated by reference from an exhibit to the Company’s Form 8-K filed with the SEC on October 3, 2005.

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