U.S. Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
November 30, 2004
May 31, 2005
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from N/A to N/A

Commission file no. 1–-7755

Summa Industries

(Name of registrant as specified in its charter)

Delaware		95–-1240978
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)
(State or other jurisdiction of		(I.R.S. employer identification number)
21250 Hawthorne Boulevard, Suite 500, Torrance, California 90503
incorporation or organization)
(Address of principle executive offices, including zip code)
Registrant’s telephone number: (310) 792–7024

21250 Hawthorne Boulevard, Suite 500, Torrance, California 90503

(Address of principle executive offices, including zip code)

Registrant’s telephone number: (310) 792-7024

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ý No o

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

Yes o No ý

The number of shares of common stock outstanding as of ~~December~~July 315, 2005 ~~2004~~ was 43,~~002~~955,~~527~~542.

Summa Industries

INDEX

PART I – FINANCIAL INFORMATION
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements:	~~Financial Statements:~~
		Condensed Consolidated Balance Sheets – November 30, 2003 (unaudited), August 31, 2004 and November 30, 2004 (unaudited)
	Condensed Consolidated Balance Sheets (unaudited) - May 31, 2004, August 31, 2004 and May 31, 2005
		Condensed Consolidated Income Statements (unaudited) – three months ended November 30, 2003 and 2004
	Condensed Consolidated Income Statements (unaudited) - three months and nine months ended May 31, 2004 and May 31, 2005
		Condensed Consolidated Statements of Cash Flows (unaudited) – three months ended November 30, 2003 and 2004
	Condensed Consolidated Statements of Cash Flows (unaudited) - nine months ended May 31, 2004 and May 31, 2005
	Notes to Condensed Consolidated Financial Statements (unaudited)	~~Notes to Condensed Consolidated Financial Statements (unaudited)~~
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	~~Quantitative and Qualitative Disclosure about Market Risk.~~
Item 4.	Controls and Procedures	~~Controls and Procedures.~~
PART II – OTHER INFORMATION
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits
Signature Page

Summa Industries

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

	November 30, 2003			August 31, 2004			November 30, 2004
	May 31, 2004			August 31, 2004			May 31, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	~~297~~680,000		$	1,248,000		$	~~832~~1,027,000
Accounts receivable	1519,~~681~~895,000			18,227,000			1618,~~371~~761,000
Inventories	13,~~198~~306,000			14,749,000			15,~~118~~638,000
Prepaid expenses and other	3,~~060~~098,000			3,782,000			43,~~512~~895,000
Total current assets	3236,~~236~~979,000			38,006,000			3639,~~833~~321,000
Property, plant and equipment	5660,~~261~~859,000			63,842,000			67,~~152~~450,000
Less accumulated depreciation	(3032,~~637~~385,000		)	(32,789,000		)	(3435,~~066~~223,000		)
Net property, plant and equipment	2528,~~624~~474,000			31,053,000			3332,~~086~~227,000
Other assets	2,~~518~~497,000			1,804,000			1,~~840~~844,000
Goodwill and other intangibles, net	9,~~361~~321,000			9,254,000			9,~~186~~050,000
Total assets	$	6977,~~739~~271,000		$	80,117,000		$	8082,~~945~~442,000
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	67,~~149~~365,000		$	9,088,000		$	69,~~543~~909,000
Accrued liabilities	45,~~504~~769,000			7,429,000			65,~~744~~429,000
Current maturities of long–term debt	3,448,000			2,195,000			2,702,000
Current maturities of long-term debt	1,957,000			2,195,000			4,178,000
Total current liabilities	1415,~~101~~091,000			18,712,000			1519,~~989~~516,000
Long–term debt, net of current maturities	16,247,000			28,663,000			31,591,000
Long-term debt, net of current maturities	30,337,000			28,663,000			29,157,000
Other long–term liabilities	2,594,000			2,508,000			2,500,000
Other long-term liabilities	2,577,000			2,508,000			2,448,000
Total long–term liabilities	18,841,000			31,171,000			34,091,000
Total long-term liabilities	32,914,000			31,171,000			31,605,000
Mandatorily redeemable convertible preferred stock, par value $.001, 5,000 shares authorized, issued and outstanding	6,287,000			—			—
Minority interest in subsidiary	205,000			205,000			155,000
Minority interest in subsidiary	—			205,000			205,000
Stockholders’ equity:
Common stock, par value $.001; 10,000,000 shares authorized; issued and outstanding:
4,317,492 at November 30, 2003, 3,974,187 at August 31, 2004 and 4,002,527 at November 30, 2004	18,061,000			15,305,000			15,566,000
3,934,702 at May 31, 2004, 3,974,187 at August 31, 2004 and 3,970,757 at May 31, 2005	15,035,000			15,305,000			15,288,000
Retained earnings	1214,~~449~~026,000			14,724,000			15,~~094~~878,000
Total stockholders’ equity	3029,~~510~~061,000			30,029,000			3031,~~660~~166,000
Total liabilities, mandatorily redeemable preferred stock and stockholders’ equity	$	69,739,000		$	80,117,000		$	80,945,000
Total liabilities and stockholders’ equity	$	77,271,000		$	80,117,000		$	82,442,000

See accompanying notes to condensed consolidated financial statements.

Summa Industries

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited)

	Three months ended November 30
	Three months ended May 31					Nine months ended May 31
	2003		2004
	2004		2005			2004		2005
Net sales	$	2533,~~926~~160,000	$	2831,~~238~~541,000		$	85,631,000	$	88,976,000
Cost of sales	1925,~~555~~096,000		2124,~~793~~980,000			64,907,000		70,183,000
Gross profit	68,~~371~~064,000		6,~~445~~561,000			20,724,000		18,793,000
Selling, general, administrative and other expenses	45,~~820~~609,000		5,~~118~~316,000			15,467,000		15,363,000
Operating income	12,~~551~~455,000		1,~~327~~245,000			5,257,000		3,430,000
Interest expense	~~305~~321,000		~~367~~476,000			1,210,000		1,314,000
Income before income taxes	1,246,000		960,000
Income before income taxes and minority interest	2,134,000		769,000			4,047,000		2,116,000
Provision for income taxes	~~416~~744,000		~~350~~278,000			1,374,000		772,000
Net income	$	830,000	$	610,000
Income before minority interest	1,390,000		491,000			2,673,000		1,344,000
Preferred stock accretion	$	184,000	$	—
Minority interest in net (loss) of subsidiary	—		(17,000		)	—		(50,000		)
Net income available to common stockholders	$	646,000	$	610,000
Net income	$	1,390,000	$	508,000		$	2,673,000	$	1,394,000
Earnings per common share
Preferred stock accretion	$	81,000	—			$	450,000	—
Basic	$	.15	$	.15
Net income available to common stockholders	$	1,309,000	$	508,000		$	2,223,000	$	1,394,000
Diluted	$	.15	$	.15
Earnings per common share
Weighted average common shares outstanding:
Basic	$	0.31	$	0.13		$	0.52	$	0.35
Basic	4,287,000		3,984,000
Diluted	$	0.30	$	0.13		$	0.51	$	0.34
Diluted	4,355,000		4,064,000
Weighted average common shares outstanding:
Basic	4,234,000		3,984,000			4,297,000		3,990,000
Diluted	4,310,000		4,038,000			4,372,000		4,060,000

See accompanying notes to condensed consolidated financial statements.

Summa Industries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three months ended November 30
	Nine months ended			Nine months ended
	2003			2004
	May 31, 2004			May 31, 2005
Operating activities:
Net income	$	~~830~~2,673,000		$	~~610~~1,394,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	13,~~163~~574,000			13,~~277~~887,000
Amortization	61181,000			68204,000
Net change in assets and liabilities:
(Gain) on disposition of property, plant and equipment	(7,000		)	(33,000		)
Accounts receivable	48,000			1,856,000
Minority interest in net loss of subsidiary	—			(50,000		)
Inventories	(1,553,000		)	(369,000		)
Net changes in assets and liabilities, net of effects of acquisitions:
Prepaid expenses and other assets	(350,000		)	(766,000		)
Accounts receivable	(4,166,000		)	(534,000		)
Accounts payable	847,000			(2,545,000		)
Inventories	(796,000		)	(889,000		)
Accrued liabilities	(173,000		)	(672,000		)
Prepaid expenses and other assets	(323,000		)	(153,000		)
Total adjustments	43,000			(1,151,000		)
Accounts payable	2,063,000			821,000
Net cash provided by (used in) operating activities	873,000			(541,000		)
Accrued liabilities	953,000			(1,799,000		)
Total adjustments	1,479,000			1,454,000
Net cash provided by operating activities	4,152,000			2,848,000
Investing activities:
Purchases of property and equipment	(675,000		)	(3,310,000		)
Acquisition of business	(1,903,000		)	—
Net cash (used in) investing activities	(675,000		)	(3,310,000		)
Purchases of property and equipment	(4,510,000		)	(6,166,000		)
Proceeds from sale of property and equipment	17,000			1,138,000
Net cash (used in) investing activities	(6,396,000		)	(5,028,000		)
Financing activities:
Net proceeds from line of credit	~~877~~9,818,000			1481,~~743,~~000
Proceeds from issuance of long–term debt	—			2,229,000
Proceeds from issuance of long-term debt	5,561,000			6,231,000
Payments on long–term debt	(1,297,000		)	(537,000		)
Payments on long-term debt	(13,386,000		)	(4,235,000		)
Proceeds from the exercise of stock options	~~139~~586,000			—
Net cash provided by (used in) financing activities	(281,000		)	3,435,000
Purchase of common stock	(35,000		)	(278,000		)
Net (decrease) in cash and cash equivalents	(83,000		)	(416,000		)
Payment of cash dividends	—			(240,000		)
Net cash provided by financing activities	2,544,000			1,959,000
Net increase (decrease) in cash and cash equivalents	300,000			(221,000		)
Cash and cash equivalents, beginning of period	380,000			1,248,000
Cash and cash equivalents, end of period	$	~~297~~680,000		$	~~832~~1,027,000

See accompanying notes to condensed consolidated financial statements.

Summa Industries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~November 30, 2004~~(unaudited)

May 31, 2005

1. Basis of presentation

The accompanying ~~unaudited~~ unaudited condensed consolidated financial statements of Summa Industries (the “Company”) have been condensed in certain respects and should, ~~therefor~~therefore, be read in conjunction with the audited consolidated financial statements and notes related thereto contained in the Company’s Annual Report on Form 10–-K for the year ended August 31, 2004. ~~Certain prior year amounts have been reclassified in the accompanying financial statements to conform with current year presentations.~~ In the opinion of the Company, these financial statements contain all adjustments necessary for a fair presentation for the interim period, all of which were normal recurring adjustments. The results of operations for the three months and nine months ended ~~November~~May 3031, 2005 ~~2004~~ are not necessarily indicative of the results to be expected for the full year ending August 31, 2005.

Recent accounting pronouncements

In December 2004, the Financial Accounting Standards Board (“FASB”) ~~issued~~ issued Statement of Financial Accounting Standards No. 123R (“SFAS No. 123R”), “Share–-Based Payments,” which requires companies to recognize in the income statement the grant–-date fair value of stock options and equity–-based compensation issued to employees. The Company reports equity based compensation in accordance with Accounting Principles Board Opinion No. 25 and Financial Interpretation No. 44, and accordingly, no compensation expense is recognized in the financial statements. The pro forma effect of equity–-based compensation under SFAS No. 123, “Accounting for Stock–-Based Compensation,” is disclosed in Note 4 below. The Company ~~standard~~will isadopt ~~effective~~this ~~for~~statement, ~~interim~~effective orwith ~~annual~~its ~~reporting~~fiscal ~~periods~~year beginning ~~after~~ ~~June~~September 151, ~~2005~~ 2006. The Company is currently evaluating the impact of adopting this standard.

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151 (“SFAS No. 151”), “Inventory Costs–-an amendment of ARB 43, Chapter 4.” This statement amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal ~~amount~~ amounts of idle facility expense, freight, handling costs and wasted material. This statement requires that those items be recognized as current period charges. In addition, this statement requires that allocation of fixed production overhead to the costs of conversion be based on the normal capacity of the production facilities. The Company will adopt this statement, effective with its fiscal year beginning September 1, 2005. The Company is currently evaluating the effect of the adoption of this statement on the Company’s results of operations orand financial position.

2. Inventories

Inventories were as follows:

	November 30, 2003		August 31, 2004		November 30, 2004
	May 31, 2004		August 31, 2004		May 31, 2005
Finished goods	$	5,~~202~~613,000	$	6,407,000	$	67,~~771~~600,000
Work in process	~~325~~587,000		296,000		~~292~~207,000
Materials and parts	7,~~671~~106,000		8,046,000		87,~~055~~831,000
	$	13,~~198~~306,000	$	14,749,000	$	15,~~118~~638,000

3. Earnings per share

Basic earnings per share (“EPS”) was computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during each period. The Company had 5,000 shares of redeemable convertible preferred stock outstanding until its repurchase on May 3, 2004, which provided for an accretion in its redemption price. This accretion reduced the net income available to common stockholders used in the EPS calculation prior to that date.

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Diluted EPS was calculated using the “treasury stock” method as if dilutive options had been exercised and the funds were used to purchase common shares at the average market price during the period. Options to purchase ~~616~~518,000 common shares as of May 31, 2004 and 773,000 common shares as of May 31, 2005

~~November 30, 2003 and 590,000 common shares as of November 30, 2004~~ were excluded from the calculation of equivalent shares, as they would have been anti–-dilutive. The 5,000 shares of outstanding preferred stock, convertible into 625,000 shares of common stock, were excluded from the calculation of equivalent shares for the three month ~~period~~and nine month periods ended ~~November~~May 3031, ~~2003~~ 2004, as they would have been anti–-dilutive.

The following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations for “income available to common stockholders” and other disclosures required by FASB Statement of Accounting Standards No. 128, “Earnings per Share”:

	Three months ended November 30
	Three months ended May 31					Nine months ended May 31
	2003			2004
	2004			2005		2004			2005
Numerators:
Net income	$	830,000		$	610,000
Net Income	$	1,390,000		$	508,000	$	2,673,000		$	1,394,000
Preferred stock accretion	(~~184~~81,000		)	—		(450,000		)	—
Income available to common stockholders	$	~~646~~1,309,000		$	~~610~~508,000	$	2,223,000		$	1,394,000
Denominators:
Weighted average shares outstanding – basic	4,~~287~~234,000			3,984,000		4,297,000			3,990,000
Impact of common shares assumed to be issued under stock option plans	6876,000			8054,000		75,000			70,000
Weighted average shares outstanding – diluted	4,~~355~~310,000			4,~~064~~038,000		4,372,000			4,060,000

4. Stock–-based ~~compensation~~ compensation plans

The Company accounts for stock options issued to employees and directors in accordance with the recognition and measurement principles of Accounting Principles Board Opinion No. 25 and Financial Interpretation No. 44. Consequently, no compensation expense was recognized for the Company’s stock option plans. The following table illustrates the effect on net earnings and net earnings per share if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, “Accounting for Stock–-Based Compensation”. The fair value estimate was computed using the Black–-Scholes option pricing model.

	Three months ended November 30
	Three months ended May 31						Nine months ended May 31
	2003			2004
	2004			2005			2004			2005
Income available to common stockholders	$	646,000		$	610,000
Income available to stockholders	$	1,309,000		$	508,000		$	2,223,000		$	1,394,000
Pro forma impact of expensing stock options	(30,000		)	(32,000		)
Share-based compensation included in income available to stockholders	—			—			—			—
Pro forma income available to common stockholders	$	616,000		$	578,000
Pro forma impact of expensing stock options	(57,000		)	(41,000		)	(78,000		)	(35,000		)
Earnings per share:
Pro forma income available to common stockholders	$	1,252,000		$	467,000		$	2,145,000		$	1,359,000
As reported:
Earnings per share:
Basic	$	.15		$	.15
As reported:
Diluted	$	.15		$	.15
Basic	$	0.31		$	0.13		$	0.52		$	0.35
Pro forma:
Diluted	$	0.30		$	0.13		$	0.51		$	0.34
Basic	$	.14		$	.15
Pro forma:
Diluted	$	.14		$	.14
Basic	$	0.30		$	0.12		$	0.50		$	0.34
Diluted	$	0.29		$	0.12		$	0.49		$	0.33

5. Supplemental cash flow information

	Three months ended November 30
	Nine months ended
	2003		2004
	2004		2005
Cash paid during the period:
Interest	$	~~250~~1,254,000	$	~~387~~1,312,000
Income taxes	$	36820,000	$	~~550~~1,559,000
Non–cash financing activity:
Non-cash financing activity:
Common stock issued to 401(k) Plan	$	345,000	$	261,000
Dividend declared, $.06 per share	—		$	(240,000	)
Accretion of redeemable preferred stock	$	450,000	—
Issuance of subordinated debt for repurchase of:
Preferred stock	$	6,553,000	—
Common stock	$	3,633,000	—
Minority interest in subsidiary given as
partial consideration for land and building	$	205,000	—

6. Segment information

The Company has four reportable segments ~~identified~~ identified by differences in products and distribution channels. The accounting policies of the segments are the same as those described in the summary of significant accounting polices described in the Company’s Annual Report on Form 10-K for the year ended August 31, 2004. The Company’s operations are reported in the following business segments:

Optical Components. In its Optical Components segment, Summa designs and manufactures plastic prismatic lenses, reflectors and diffusers and other plastic products, which are used in commercial and industrial lighting fixtures, display, signage, architectural and other applications.

Material Handling Components. In its Material Handling Components segment, Summa designs and manufactures engineered plastic components, which form conveyer belts and chains and other plastic products for use in food processing.

Irrigation Components. In its Irrigation Components segment, Summa designs and manufactures plastic injection–-molded fittings, valves, filters and accessories, extruded tubing and other plastic products for drip irrigation systems used in agriculture, commercial landscape and other applications.

Electrical Components. In its Electrical Components segment, Summa designs and manufactures thermoplastic coil forms or “bobbins” and other plastic products used principally in the manufacture of magnetic devices such as transformers, relays, switches, power supplies and small electric motors.

Financial information by reportable business segment is reported in the following tables:

	Three months ended November 30
	Three months ended May 31						Nine months ended May 31
	2003			2004
	2004			2005			2004			2005
External sales
Optical components	$	1314,~~592~~694,000		$	1413,~~150~~151,000		$	41,000,000		$	41,019,000
Material handling components	57,~~893~~120,000			67,~~409~~259,000			19,524,000			19,874,000
Irrigation components	38,~~580~~005,000			48,~~929~~398,000			16,046,000			20,089,000
Electrical components	23,~~861~~341,000			2,~~750~~733,000			9,061,000			7,994,000
Consolidated	$	25,926,000		$	28,238,000
Other	—			—			—			—
Inter–segment sales
Consolidated	$	33,160,000		$	31,541,000		$	85,631,000		$	88,976,000
Optical components	$	446,000		$	291,000
Inter-segment sales
Material handling components	—			—
Optical components	$	935,000		$	32,000		$	2,059,000		$	341,000
Irrigation components	798,000			—
Material handling components	—			—			—			—
Electrical components	—			—
Irrigation components	26,000			—			673,000			—
Other	(1,244,000		)	(291,000		)
Electrical components	—			—			—			—
Consolidated	$	—		$	—
Other	(961,000		)	(32,000		)	(2,732,000		)	(341,000		)
Total sales
Consolidated	$	—		$	—		$	—		$	—
Optical components	$	14,038,000		$	14,441,000
Total sales
Material handling components	5,893,000			6,409,000
Optical components	$	15,629,000		$	13,183,000		$	43,059,000		$	41,360,000
Irrigation components	4,378,000			4,929,000
Material handling components	7,120,000			7,259,000			19,524,000			19,874,000
Electrical components	2,861,000			2,750,000
Irrigation components	8,031,000			8,398,000			16,719,000			20,089,000
Other	(1,244,000		)	(291,000		)
Electrical components	3,341,000			2,733,000			9,061,000			7,994,000
Consolidated	$	25,926,000		$	28,238,000
Other	(961,000		)	(32,000		)	(2,732,000		)	(341,000		)
Operating income (loss)
Consolidated	$	33,160,000		$	31,541,000		$	85,631,000		$	88,976,000
Optical components	$	1,808,000		$	1,282,000
Operating income (loss)
Material handling components	157,000			710,000
Optical components	$	2,382,000		$	808,000		$	5,652,000		$	3,318,000
Irrigation components	(94,000		)	163,000
Material handling components	398,000			976,000			909,000			2,056,000
Electrical components	140,000			(379,000		)
Irrigation components	394,000			579,000			174,000			997,000
Other	(460,000		)	(449,000		)
Electrical components	(29,000		)	(497,000		)	95,000			(1,384,000		)
Consolidated	$	1,551,000		$	1,327,000
Other	(690,000		)	(621,000		)	(1,573,000		)	(1,557,000		)
Consolidated	$	2,455,000		$	1,245,000		$	5,257,000		$	3,430,000

November 30 2003

August 31 2004

November 30 2004

May 31, 2004

Aug 31, 2004

May 31, 2005

Assets

Optical components

2829,~~737~~472,000

30,183,000

28,~~995~~844,000

Material handling components

1918,~~271~~447,000

20,069,000

2122,~~781~~394,000

Irrigation components

1014,~~194~~040,000

13,622,000

1315,~~709~~473,000

Electrical components

69,~~956~~655,000

10,453,000

109,~~737~~839,000

Other

45,~~581~~657,000

5,790,000

5,~~723~~892,000

Consolidated

6977,~~739~~271,000

80,117,000

8082,~~945~~442,000

In the fourth quarter of fiscal 2004, all of ~~the~~ the assets and operations of the former Miscellaneous Plastic Components ~~segment~~ segment were integrated with the Irrigation Components segment. Prior period segment information has been restated to conform to the consolidation. Segment information as reported prior to the consolidation is as follows for the ~~three~~periods ~~months~~ ended ~~November~~May 3031, 2004:

	2003
	Three months					Nine months
External sales:
Irrigation Components	$	37,~~271~~916,000				$	15,432,000
Miscellaneous Plastic Components	~~309~~89,000					614,000
Total	$	38,~~580~~005,000				$	16,046,000
Inter–segment sales:
Inter-segment sales:
Irrigation Components	$	—				$	—
Miscellaneous Plastic Components	~~798~~233,000					1,482,000
Total	$	~~798~~233,000				$	1,482,000
Total sales:
Irrigation Components	$	37,~~271~~916,000				$	15,432,000
Miscellaneous Plastic Components	1322,~~107,~~000					2,096,000
Total	$	48,~~378~~238,000				$	17,528,000
Operating income (loss):
Irrigation Components	$	56665,000				$	999,000
Miscellaneous Plastic Components	(~~150~~271,000		)		)	(825,000		)
Total	$	~~(94~~394,000	)			$	174,000
Assets:
Assets at May 31, 2004:
Irrigation Components	$	~~7,895,000~~	$	13,995,000
Miscellaneous Plastic Components	~~2,299,000~~		45,000
Total	$	~~10,194,000~~	$	14,040,000

Interest expense and income taxes are not shown in the preceding tables, as they are not fully allocated by segment. “Other” includes inter–-company eliminations and corporate and other expenses not allocated by segment.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statements contained in this Quarterly Report on Form 10–-Q, which are not purely historical, are forward–-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including but not limited to statements regarding Summa’s expectations, hopes, beliefs, intentions or strategies regarding the future, such as those set forth in Part II, Item 1 “Legal Proceedings” below. Actual results could differ materially from those projected in any forward–-looking statements as a result of a number of factors, including those detailed in this “Management’s Discussion and Analysis” section and elsewhere herein and in the Company’s Annual Report on Form 10–-K for the fiscal year ended August 31, 2004. The forward–-looking statements are made as of the date hereof, and the Company assumes no obligation to update the forward–-looking statements, or to update the reasons why actual results could differ materially from those projected in the forward–-looking statements. For a discussion of risks and uncertainties that should be considered and which could materially adversely affect the Company, please see “Risk Factors” in the “Management Discussion and Analysis” section of the Company’s Annual Report on Form 10–-K for the fiscal year ended August 31, 2004.

Summa manufactures plastic products for diverse commercial and industrial markets. Through its four reportable segments, Summa designs and manufactures injection–-molded and formed plastic optical components for OEM customers in the lighting industry; modular plastic conveyor belt and chain for the food processing industry; engineered plastic fittings, valves, filters and tubing for irrigation systems used in agriculture, commercial landscape and other applications; molded plastic coil forms (“bobbins”) for use in transformers, motors, relays and switches; and other molded and extruded plastic components for diverse industries.

Results of Operations

During the ~~quarter~~nine month period ended ~~November~~May 3031, ~~2004~~ 2005, the Company experienced unusually ~~some~~high ~~difficulty~~expenses ~~and~~directly ~~delays~~related to two major relocation initiatives: the consolidation of three plants in ~~passing~~the ~~through~~Material Handling Components segment ~~plastic~~to ~~resin~~a ~~price~~new ~~increases~~facility in Reading, PA, which ~~adversely~~was ~~impacted~~substantially ~~gross~~completed ~~margins~~during ~~and~~the ~~resulted~~second quarter, and an ongoing relocation in ~~some~~the ~~loss~~Electrical ofComponents ~~business~~segment from Bensenville, Illinois to ~~competitors~~Pharr, ~~who~~Texas. The ~~did~~Pharr ~~not~~relocation ~~try~~is expected to ~~increase~~be completed in the fourth quarter ~~prices~~of tofiscal 2005. The relocation costs, which are shown in the ~~full~~following ~~extent~~table, ofare ~~cost~~expected ~~increases~~to decline sharply in the fourth quarter fiscal 2005. The expenses ~~Although~~consisted ~~most~~primarily of ~~the~~duplicate ~~recent~~personnel ~~price~~and ~~increases~~facility ~~have~~costs, ~~now~~costs ~~been~~to ~~implemented~~develop and implement a new manufacturing process and costs to move inventory and equipment. In connection with the relocation in the Electrical Components segment, excess real estate and ~~further~~equipment ~~resin~~was ~~price~~sold ~~increases~~for a net gain of $118,000, and the segment’s remaining facilities in Bensenville have been ~~announced~~listed orfor ~~are~~sale. ~~anticipated~~The ineffects of the ~~near~~relocation ~~future~~expenses and ~~passing~~the ~~these~~pro onforma ~~will~~earnings, ~~represent~~calculated aas ~~continuing~~though ~~challenge.~~the relocation expenses had not been incurred, are as follows:

After the end of the quarter, the Company announced that it plans to sell several parcels of real estate which have or will become excess, primarily as a result of several consolidation and restructuring initiatives. Summa estimates that the sales could result in a book gain of $5 to $9 million and generate cash, net of taxes, of $9 to $14 million. The parcels will be offered for sale separately and the timing of each sale is uncertain.

	Three months ended May 31				Nine months ended May 31
	2004		2005		2004		2005
Operating income	$	2,455,000	$	1,245,000	$	5,257,000	$	3,430,000
Relocation expenses	187,000		497,000		316,000		1,511,000
Gain on sale of real estate and equipment	—		—		—		(118,000		)

Pro forma operating income	$	2,642,000	$	1,742,000	$	5,573,000	$	4,823,000

Net income	$	1,390,000	$	508,000	$	2,673,000	$	1,394,000
Tax-effected relocation expenses	120,000		318,000		202,000		967,000
Tax-effected gain on real estate and equipment	—		—		—		(76,000		)

Pro forma net income	$	1,510,000	$	826,000	$	2,875,000	$	2,285,000

~~The following~~Note ~~table~~that ~~sets~~“pro ~~forth~~forma” ~~certain~~has ~~information,~~no ~~derived~~defined ~~from~~meaning ~~Summa’s~~under ~~unaudited~~Generally ~~condensed~~Accepted Accounting ~~consolidated~~Principles. The ~~statements~~information ofpresented above ~~operations,~~is asfor athe ~~percent~~purpose of ~~sales~~drawing ~~for~~attention ~~the~~to ~~three month~~a ~~periods~~critical ~~ended~~component ~~November 30,~~of current ~~2003~~performance. There ~~and~~are ~~2004~~other components ~~and~~of ~~the~~current ~~Company’s~~performance ~~effective income~~that ~~tax~~are ~~rate~~not ~~during~~highlighted ~~those~~in ~~periods:~~the foregoing presentation.

	Three months ended November 30
	2003		2004
Net sales	100.0	%	100.0	%
Cost of sales	75.4	%	77.2	%
Gross profit	24.6	%	22.8	%
S,G & A and other expenses, net	18.6	%	18.1	%
Operating income	6.0	%	4.7	%
Interest expense, net	1.2	%	1.3	%
Income before tax	4.8	%	3.4	%
Provision for income taxes	1.6	%	1.2	%
Net Income	3.2	%	2.2	%
Effective tax rate	33.4	%	36.5	%

The following table sets forth certain information, derived from Summa’s unaudited condensed consolidated statements of income, as a percent of sales for the three month and nine month periods ended May 31, 2004 and May 31, 2005, and the Company’s effective income tax rate during those periods:

Quarter ended November 30, 2004 compared to the quarter ended November 30, 2003

	Three months ended May 31				Nine months ended May 31
	2004		2005		2004		2005
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	75.7	%	79.2	%	75.8	%	78.9	%
Gross profit	24.3	%	20.8	%	24.2	%	21.1	%
S,G & A and other expenses	16.9	%	16.9	%	18.1	%	17.2	%
Operating income	7.4	%	3.9	%	6.1	%	3.9	%
Interest expense, net	1.0	%	1.5	%	1.4	%	1.5	%
Income before tax and minority interest	6.4	%	2.4	%	4.7	%	2.4	%

Effective tax rate	34.9	%	35.4	%	34.0	%	35.6	%

Sales for the first quarter ended November 30, 2004 increased $2,312,000, or 9%, primarily due to the contribution of sales from recently acquired operations in the Irrigation Components segment and the effects of price increases. Sales increased 4% in the Optical Components segment, primarily due to price increases; increased 9% in the Material Handling Components segment, primarily due to improved efficiencies, sales of new products and price increases; increased 38% in the Irrigation Components segment, primarily due to the inclusion of sales from recently acquired operations, recaptured market share from certain major customers, improved market conditions, the inclusion of the sales of the former Miscellaneous Plastic components segment and price increases; and decreased 4% in the Electrical Components segment, despite price increases, primarily due to reduced customer demand.

Gross profit for the first quarter increased $74,000, or 1%, from the comparable prior year period, primarily due to higher sales, substantially offset by increased material costs and plant consolidation costs. Gross margin decreased from 24.6% to 22.8%, primarily due to difficulties and delays in fully passing through increases in plastic resin prices.

Operating expenses for the first quarter increased $298,000, or 6%, from the comparable prior year period, due to higher variable selling expenses related to higher sales, the inclusion of operating expenses of newly acquired operations and increased costs related to compliance with Sarbanes–Oxley rules and regulations and plant consolidation costs. As a percent of sales, operating expenses decreased from 18.6% to 18.1%.

Operating income for the first quarter was $1,327,000, which was $224,000, or 14%, lower than in the comparable prior year period. By segment, operating income decreased $526,000 in the Optical Components segment, due primarily to difficulty and delays in fully passing through resin price increases and an unfavorable product mix; increased $553,000 in the Material

~~Handling~~Quarter ~~Components~~ended ~~segment~~May 31, ~~primarily~~2005 ~~due~~compared to ~~low sales volume and inefficiencies related to a plant consolidation in~~ the ~~prior year first~~ quarter; ~~increased $257,000~~ended ~~in the Irrigation Components segment~~May 31, primarily due to the effects of higher sales volume; and decreased $519,000 in the Electrical Components segment, primarily due to costs of the business relocation which is underway. Operating margin for the quarter decreased from 6.0% in the first quarter of fiscal 2003 to 4.7% in the first quarter of fiscal 2004~~, due to the factors discussed above.~~

~~Net~~Sales ~~interest expense~~ for the ~~first~~third quarter ended ~~November~~May 3031, ~~2004~~2005 ~~increased~~decreased $621,619,000, or 5%, primarily due to weakness ~~from~~in sales in the ~~prior~~Optical ~~year~~Components ~~first~~segment ~~quarter~~and the transfer of business to China (approximately $500,000) partially offset by the effects of price increases (approximately $1,200,000). Sales decreased 11% in the Optical Components segment, primarily due to softness ~~higher~~in ~~average~~demand ~~debt~~for ~~levels~~high-bay, high intensity lighting products, and transfer of business to China, partially offset by price increases; increased 2% in the Material Handling Components segment, due to price increases; increased 5% in the Irrigation Components segment, primarily due to price increases, and decreased 18% in the Electrical Components segment, despite price increases, ~~lower~~primarily ~~average~~due ~~interest~~to ~~rates~~transfer of business to China and disruptions related to a plant relocation.

~~The~~Gross ~~provision~~profit for ~~income~~ ~~taxes in~~ the ~~first~~third quarter ~~was~~decreased $661,503,000, ~~lower~~or ~~than~~19%, in from the comparable prior year ~~first~~ ~~quarter~~period, ~~despite~~primarily adue ~~significantly~~to ~~higher~~increased ~~effective~~material ~~tax~~costs, increased ~~rate~~business relocation expense and the effects of ~~36.5%~~lower sales volume, ~~versus~~partially ~~33.4%~~offset inby the ~~prior~~effects ~~year~~of higher prices. Gross margin decreased from 24.3% to 20.8%, primarily due to ~~lower~~increased ~~income~~relocation ~~before taxes~~expenses.

~~The~~Operating ~~Company’s backlog~~expenses offor ~~unfilled~~the ~~orders,~~third ~~believed~~quarter todecreased ~~be firm, was~~ $7293,~~699,~~000, ator ~~November 30~~5%, ~~2003,~~from ~~$7,696,000~~the atcomparable ~~August 31,~~prior ~~2004~~year ~~and $7~~period,~~877,000~~ atprimarily ~~November 30, 2004. Because~~due ~~the~~to ~~time~~lower ~~between~~variable ~~entering~~expense anrelated ~~order~~to lower sales volume and ~~shipping~~management ~~the~~cost ~~product~~reduction ~~and~~initiatives, partially ~~recording~~offset aby ~~sale~~increased ischarges ~~typically~~related ~~shorter than~~to ~~one~~plant ~~month~~relocations, ~~backlog~~and increased ~~levels~~costs ~~are~~related ~~not~~to acompliance ~~reliable~~with ~~indicator~~Sarbanes-Oxley ofrules and regulations. As ~~future~~a percent of sales, ~~volume~~operating expenses were unchanged at 16.9%.

~~Liquidity~~Operating income for the third quarter was $1,245,000, which was $1,210,000, or 49%, lower than in the comparable prior year period. By segment, operating income decreased $1,574,000 in the Optical Components segment, due primarily to lower sales volume, difficulty and delays in fully passing through resin price increases ~~Capital~~and ~~Resources~~unfavorable product mix; increased $578,000 in the Material Handling Components segment, due to the benefits of previous plant consolidations; increased $185,000 in the Irrigation Components segment, primarily due to the effects of higher sales volume and the benefits of previous plant consolidations; and the operating loss increased $468,000 in the Electrical Components segment, primarily due to costs and inefficiencies of the business relocation which is underway and the effects of reduced sales volume. Operating margin for the quarter decreased from 7.4% in the third quarter of fiscal 2004 to 3.9% in the third quarter of fiscal 2005, due to the factors discussed above.

~~Working~~Net ~~Capital. The Company’s~~interest ~~working~~expense ~~capital~~for ~~was~~the ~~$18,135,000~~quarter atended ~~November~~May ~~30, 2003; $19,294,000 at August~~ 31, ~~2004~~2005 ~~and $20,844,000 at November 30,~~increased ~~2004. Working capital at November 30, 2004 was~~ $1155,~~550,~~000 ~~greater than~~from ~~at August 31, 2004, primarily due to a decrease in accounts payable due to seasonality,~~ the ~~timing~~prior ofyear ~~payments~~second ~~on capital projects and increased discounting of vendor invoices and increases in prepaid expenses and inventory, partially offset by a decrease in accounts receivable due to lower sequential~~ quarter ~~sales and improved collections. Working capital at November 30~~, ~~2004 was $2,709,000 greater than at November 30, 2003, primarily~~ due to the ~~refinancing~~effects of ~~a term loan which~~higher ~~reduced~~average ~~the current portion of term~~ debt, anlevels ~~increase in inventory in anticipation of increased sales,~~ and ahigher ~~bulk~~average ~~purchase~~interest ofrates ~~inventory~~in asthe ~~part~~most ~~of an asset~~recent ~~acquisition, partially offset by an increase in accrued liabilities~~period.

~~Summary~~The ofprovision for income taxes in the ~~Company’s~~third ~~debt~~quarter atwas ~~November 30~~$278,000, ~~2004:~~$466,000 lower than in the prior year third quarter, due to lower income before taxes.

Description of Debt	Balance		Weighted Average Interest Rate		Additional Availability		Fiscal Year Due
							2005		2006		2007		2008		2009 and thereafter
Revolving line of credit	$	14,086,000	3.7	%	$	5,282,000	$	—	$	—	$	14,086,000	$	—	$	—
Bank term loan	4,310,000		4.7	%	—		699,000		971,000		1,019,000		1,068,000		553,000
Real estate and other loans	12,902,000		4.4	%	3,377,000		1,027,000		4,330,000		3,933,000		891,000		2,721,000
Subordinated debt	2,995,000		7.5	%	—		—		2,000,000		995,000		—		—
Total debt	$	34,293,000	4.4	%	$	8,659,000	$	1,726,000	$	7,301,000	$	20,033,000	$	1,959,000	$	3,274,000

Nine months ended May 31, 2005 compared to the nine months ended May 31, 2004

~~The~~Sales ~~interest~~for ~~rate~~the onnine ~~the~~months ended ~~bank~~May 31, ~~term~~2005 ~~loan~~increased is$3,345,000, or 4%, primarily due to the ~~fixed~~effects ~~for~~of ~~five~~price ~~years. Interest~~increases ~~rates~~(approximately on$3,700,000) and the contribution of sales from recently acquired operations in the ~~bank~~Irrigation ~~line~~Components ofsegment (approximately ~~credit~~$1,900,000), ~~are~~partially ~~subject~~offset by the transfer of business to China ~~market~~(approximately ~~fluctuation~~$1,300,000). ~~and~~Sales ~~are~~were ~~subject~~unchanged toin the Optical ~~reduction~~Components segment, as price increases were offset by lower volume; increased 2% in the ~~Company~~Material ~~achieves~~Handling ~~certain~~Components ~~financial~~segment, ~~milestones. Interest~~primarily ~~rates~~due onto ~~most~~price increases, ofpartially ~~the~~offset ~~real~~by ~~estate~~inefficiencies ~~and~~associated with a plant ~~other~~relocation; ~~loans~~increased ~~are~~$4,043,000, ~~subject~~or 25%, in the Irrigation Components segment, primarily due to the inclusion of sales from recently acquired operations (approximately $1,900,000), the effects of price increases (approximately $1,500,000), recaptured market ~~fluctuation.~~ share from certain major customers and improved market ~~The~~conditions; ~~interest~~and ~~rate~~decreased on12% in the ~~subordinated~~Electrical ~~debt~~Components issegment, ~~scheduled~~primarily due to ~~decrease~~the astransfer of business to China and disruptions related to a plant relocation, partially offset by the ~~outstanding~~effects ~~balance~~of isprice ~~reduced~~increases.

InGross ~~October~~profit for the nine months ended May ~~2004~~31, ~~the~~2005 decreased ~~Company~~$1,931,000, ~~announced~~or a9%, ~~plan~~from tothe ~~repurchase~~comparable upprior year period, primarily due to business relocation expenses of $21,393,000 versus $316,000 ofin ~~its~~the ~~Common~~same ~~Stock~~prior ~~with~~year noperiod ~~time~~and ~~limit~~increased (material costs, partially offset by the ~~“2005~~effects ~~Buy~~of higher ~~Back”)~~sales and higher prices. Gross Nomargin ~~shares~~decreased ~~were~~from ~~purchased~~24.2% ~~during~~to ~~the~~21.1%, ~~quarter~~primarily ~~ended~~due ~~November 30,~~to increased relocation ~~2004~~expenses.

~~Sources~~Operating ~~and~~expenses ~~Uses of Funds. Net cash used in operating activities~~ for the ~~first~~ ~~quarter~~nine ofmonths ~~fiscal~~ended May 31, 2005 decreased ~~was~~ $~~541~~104,000, ~~compared~~or ~~to $873~~1%,~~000~~ ~~provided~~from ~~by operating activities for~~ the ~~first~~comparable ~~quarter~~prior ofperiod, ~~fiscal 2004. The decrease was~~ primarily due to ~~decreases in accounts payable related to the timing of~~ payments for inventory and capital equipment additions, partially offset by decreased accounts receivable due to seasonal reasons and improved collections. Net cash used in investing activities was $3,310,000 in the ~~first~~benefit ~~quarter~~ of ~~fiscal~~ ~~2005,~~ $2186,~~635,~~000 ~~more~~from ~~than~~partial incollection ~~the first quarter~~ of ~~fiscal~~a ~~2004, primarily~~note ~~related~~receivable toand ~~the investment in~~ a ~~new~~gain on ~~facility in~~ the ~~Material~~sale ~~Handling Components~~of ~~segment.~~excess ~~Net~~real ~~cash of $3~~estate,~~435,000~~ ~~was~~partially ~~provided~~offset by ~~financing activities for~~ the ~~first~~inclusion ~~quarter~~of operating expenses of ~~fiscal~~newly ~~2005,~~acquired ~~primarily~~operations byand ~~debt~~increased costs related to ~~the new~~ ~~facility,~~compliance ~~compared~~with toSarbanes-Oxley ~~$281,000~~rules and ~~net~~regulations. As ~~cash~~a ~~used~~percent inof ~~the~~sales, ~~prior~~operating ~~year first quarter~~expenses ~~used~~decreased infrom ~~paying~~18.1% ~~debt~~to 17.2%.

Summa believes that cash flows from operations and existing credit facilities will be sufficient to fund working capital

~~requirements~~Operating income for the nine months ended May 31, ~~planned~~2005 was ~~investments~~$3,430,000, ~~and~~which ~~debt~~was ~~service~~$1,827,000, ~~for~~or 35%, lower than in the ~~next~~comparable ~~twelve~~prior year ~~months~~period. ~~The~~By ~~Company~~segment, ~~has~~operating income adecreased ~~strategy~~$2,334,000 ofin ~~growth~~the ~~by acquisition. In~~Optical ~~the~~Components ~~event~~segment, andue ~~acquisition~~primarily to ~~plan~~difficulty isand ~~adopted~~delays ~~which~~in ~~requires~~fully ~~funds~~passing ~~exceeding~~through resin price increases and unfavorable product mix; increased $1,147,000 in the ~~availability~~Material ~~described~~Handling ~~above~~Components segment, anprimarily ~~alternate~~due ~~source~~to ofinefficiencies ~~funds~~related to ~~accomplish~~a plant consolidation in the ~~acquisition~~prior ~~would~~year ~~have~~period, partially offset by expenses related to bea ~~developed. The~~plant ~~Company~~relocation ~~has~~in 10the period ended May 31,~~000~~ 2005; increased $823,000 in ~~shares~~the ofIrrigation ~~common~~Components ~~stock authorized~~segment, ofprimarily ~~which~~due ~~4,002,527~~to ~~shares~~the ~~were~~effects ~~outstanding~~of higher sales atvolume ~~November 30,~~and ~~2004~~efficiencies gained from facility consolidation; and 5decreased $1,~~000~~479,000 ~~shares~~in ofthe ~~“blank~~Electrical ~~check”~~Components ~~preferred stock authorized~~segment, primarily due to costs of ~~which~~a business ~~none~~relocation ~~was~~incurred ~~outstanding~~in atthe ~~November~~nine months ended May 3031, ~~2004~~2005. ~~The~~Operating ~~Company~~margin ~~could~~decreased ~~issue~~from ~~additional~~6.1% ~~shares~~in ofthe ~~common~~first ornine ~~preferred~~months ~~stock~~of orfiscal ~~enter~~2004 ~~into~~to ~~new~~3.9% orin ~~revised~~the ~~borrowing~~first ~~arrangements~~nine months of fiscal 2005, due to ~~raise~~the ~~funds~~factors discussed above.

~~Off–Balance~~Net ~~Sheet~~interest ~~Arrangements~~expense for the nine months ended May 31, 2005 was $104,000 higher than in the comparable prior year period, due to the effects of higher average debt levels and higher average interest rates in the most recent period partially offset by term loan break-up fees and the write-off of unamortized bank fees of $266,000 in the prior year period.

The ~~Company’s~~provision ~~material~~for ~~off–balance~~income ~~sheet~~taxes in the nine months ended May 31, ~~arrangements~~2005 ~~are~~was as$602,000 ~~follows:~~lower than in the comparable prior year period, due to lower income before taxes.

~~Future Lease Payments.~~ The Company’s ~~leases~~backlog ~~offices~~of ~~and~~unfilled ~~manufacturing facilities~~orders, ~~and~~believed ~~certain~~to ~~equipment~~be ~~under~~firm, ~~non–cancelable~~was $8,039,000 ~~operating~~at ~~leases. Future~~May 31, ~~payments~~2004, ~~under~~$7,696,000 ~~these~~at ~~leases~~August 31, 2004 and $8,041,000 at ~~November~~May 3031, 2005. Because ~~2004~~the time between entering an order and shipping the product and recording a sale is typically shorter than one month, backlog levels are ~~approximately~~not asa ~~follows:~~reliable indicator of future sales volume.

Fiscal Year	Amount
2005	$	699,000
2006	$	971,000
2007	$	1,019,000
2008	$	1,068,000
2009	$	553,000
2010 and thereafter	$	—

Liquidity and Capital Resources

InWorking ~~recent years the Company has consolidated and/or abandoned several facilities in an effort to improve efficiencies and operating results, and plans further consolidations~~Capital. InThe ~~the~~Company’s ~~event~~working ~~the~~capital ~~Company~~ was to$21,888,000 ~~abandon~~at ~~a facility prior to its being leased to a new tenant~~May 31, ~~the Company could become~~2004; ~~obligated~~$19,294,000 ~~for~~at ~~accelerated~~August 31, ~~lease~~2004 ~~payments~~and or$19,805,000 ~~other~~at ~~expenses~~May 31, 2005.

~~Critical~~Summary ~~Accounting~~of ~~Policies~~the ~~and~~Company’s ~~Estimates~~debt at May 31, 2005:

The foregoing discussion and analysis of the Company’s financial condition and results of operations are based upon the consolidated financial statements of the Company, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of such financial statements requires management to make estimates and assumptions in applying certain critical accounting policies. Certain accounting estimates are particularly sensitive because of their significance to the Company’s consolidated financial statements and because of the possibility that future events affecting the estimates could differ markedly from current expectations. The Company believes that the following are some of the more critical judgment areas in the application of its accounting policies that affect the Company’s financial statements:

			Weighted
			Average
			Interest		Additional
Description of Debt	Balance		Rate		Availability		Fiscal Year Due
															2009 and
							2005		2006		2007		2008		thereafter
Revolving line of credit	$	12,824,000	4.7	%	$	7,399,000	$	—	$	—	$	12,824,000	$	—	$	—
Bank term loan	3,782,000		4.7	%	—		235,000		971,000		1,019,000		1,068,000		489,000
Real estate and other loans	16,043,000		5.4	%	—		427,000		4,501,000		4,313,000		1,277,000		5,525,000
Subordinated debt	686,000		6.5	%	—		—		500,000		186,000		—		—
Total debt	$	33,335,000	5.1	%	$	7,399,000	$	662,000	$	5,972,000	$	18,342,000	$	2,345,000	$	6,014,000

~~Impairment of Long–Lived Assets and Long–Lived Assets to be Disposed of.~~ The ~~Company~~interest ~~reviews~~rate ~~its~~on ~~long–lived~~the ~~assets~~bank ~~and~~term ~~certain~~loan ~~identifiable~~is ~~intangibles~~fixed for five ~~impairment~~years. Interest ~~whenever~~rates ~~events~~on ~~or changes in circumstances indicate that~~ the ~~carrying~~bank line ~~amount~~ of ancredit ~~asset~~are ~~may~~subject ~~not be recoverable. Recoverability of assets~~ to bemarket ~~held~~fluctuation and ~~used is measured by a comparison of the carrying amount of an asset to the undiscounted future operating cash flows expected to be generated by the asset. If such assets~~ are ~~considered~~subject to bereduction as ~~impaired,~~ the ~~impairment~~Company toachieves becertain ~~recognized~~financial ismilestones. Interest ~~measured~~rates byon ~~the~~most ~~amount by which the carrying amount~~ of the ~~assets~~real ~~exceeds~~estate ~~the~~and other ~~fair~~loans ~~value of the assets. Assets to be disposed of by sale~~ are ~~reported~~subject ~~at the lower of the carrying amount or fair value less costs~~ to ~~sell~~market fluctuation.

~~The Company~~Sources ~~has~~and aUses ~~significant amount~~ of ~~property~~Funds. Net ~~and~~cash ~~equipment~~provided ~~and~~by ~~intangible~~operating ~~assets.~~activities ~~The~~for ~~determination~~the asfirst tonine ~~whether~~months ~~events~~of orfiscal ~~changes~~2005 inwas ~~circumstances indicate~~$2,848,000 ~~that~~compared ~~the~~to $4,152,000 ~~carrying~~provided ~~amount~~by ofoperating anactivities ~~asset~~for ~~may~~the ~~not~~first benine ~~recoverable~~months ~~involves management’s~~of ~~judgment~~fiscal 2004. InThe ~~addition,~~decrease ~~should~~was ~~the~~primarily ~~Company~~due ~~conclude~~to ~~that recoverability~~lower ofnet anincome. Net ~~asset~~cash isused in ~~question~~investing activities was $5,028,000 in the ~~estimate~~first nine months of ~~undiscounted~~fiscal ~~future operating~~2005, ~~cash~~$1,368,000 ~~flows~~less tothan ~~determine~~in ~~whether~~the first annine ~~asset~~months isof ~~recoverable~~fiscal ~~and~~2004, ifprimarily ~~not, the~~due ~~final~~to ~~determination~~an ofacquisition made in the prior ~~fair~~year ~~value~~period, ofpartially offset by the ~~asset~~investment ~~are~~in ~~also~~a ~~based~~new onfacility in the ~~judgment~~Material ofHandling ~~management.~~Components ~~These~~segment ~~judgments~~and ~~can~~investments bein ~~impacted~~equipment byfor a ~~variety of~~new ~~underlying~~manufacturing ~~assumptions,~~plant ~~such~~and asprocess ~~the~~in ~~general~~Pharr, ~~business~~Texas ~~climate,~~for ~~effectiveness~~the ofElectrical Components ~~competition~~segment ~~and~~in ~~supply~~the ~~and~~current ~~cost~~year. Net ofcash ~~resources.~~ of ~~Accordingly~~$1,959,000 ~~actual~~was ~~results~~provided ~~can~~by ~~differ~~financing ~~significantly~~activities ~~from~~for the first nine months of ~~assumptions~~fiscal ~~made~~2005, primarily by ~~management~~debt inrelated ~~making~~to ~~its~~the ~~estimates.~~new ~~Future~~facility ~~changes~~and inequipment ~~management’s~~financing, ~~estimates~~compared ~~could~~to ~~result~~$2,544,000 in ~~indicators~~net ofcash ~~impairment~~provided ~~and~~in ~~future~~the prior year first ~~impairment~~nine ~~charges~~months from a new bank relationship.

~~Valuation~~In ofOctober 2004, ~~Inventory. The~~ the Company ~~values~~announced ~~its~~a ~~inventories~~plan atto ~~the~~repurchase ~~lower~~up ofto ~~cost or market using the first–in~~$2,000,000 ~~first–out (FIFO) method. The Company records adjustments to the value~~ of ~~inventory~~its ~~based~~Common ~~upon~~Stock with ~~obsolescence~~no ~~and~~time ~~changes~~limit ~~in market value as permanent changes in~~ (the ~~carrying~~“2005 ~~amount~~Buy ~~of such inventory until its ultimate sale or other disposition~~Back”). As ~~The Company has evaluated the current level~~ of ~~inventories considering historical sales and other factors and~~May 31, ~~based on this evaluation~~2005, ~~has~~the ~~recorded~~status ~~adjustments to cost~~ of ~~goods~~the ~~sold~~2005 toBuy ~~adjust~~Back ~~inventory~~was toas net realizable value. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer demand or competition differ from expectations.follows:

Accounts Receivable. The Company performs ongoing evaluations of customers and adjusts credit limits based upon each customer’s payment history and credit worthiness, as determined by credit information available at that time. The Company monitors collections and payments from customers and maintains allowances for doubtful accounts for the inability of customers to make required payments. If the financial condition of customers were to deteriorate resulting in an impairment of their ability to make payments, additional allowances may be required.

	Shares repurchased	Average cost per share		Repurchase cost
Prior to March 2005	500	$	9.76	$	5,000
March 2005	600	$	8.81	$	5,000
April 2005	21,937	$	9.07	$	199,000
May 2005	8,728	$	7.87	$	69,000
Total	31,765	$	8.75	$	278,000

~~Goodwill. Goodwill represents~~The ~~the~~cost ~~excess~~per ofshare ~~purchase price over fair value of net assets~~includes ~~acquired. Goodwill~~commissions iswhere ~~tested for impairment annually in the fourth quarter, after completion of an annual planning process, or earlier if events occur which require an impairment analysis to be performed~~applicable. With respect to each reporting unit which has any goodwill, the fair value is determined using traditional valuation methodology, and compared with its carrying value. If the fair value exceeds the unit’s carrying value, goodwill of the reporting unit is considered not to be impaired. If the unit’s carrying value exceeds its fair value, assets of the unit are individually valued to determine the implied fair value of the reporting unit goodwill. Impairment loss is recognized to the extent that the carrying value of the goodwill exceeds its implied fair value. Significant management judgment is involved in determining the fair value of assets. Future changes in management’s estimates could result in additional impairment charges to goodwill.

~~QUANTITATIVE~~Summa believes that cash ~~AND~~flows ~~QUALITATIVE~~from ~~DISCLOSURES~~operations ~~ABOUT~~and ~~MARKET~~existing ~~RISK~~credit facilities will be sufficient to fund working capital requirements, planned investments and debt service for the next twelve months. In addition, funds may be generated from a limited number of sales of certain non-core assets of the Company. The Company has a strategy of growth by acquisition. In the event an acquisition plan is adopted which requires funds exceeding the availability described above, an alternate source of funds to accomplish the acquisition would have to be developed. The Company has 10,000,000 shares of common stock authorized, of which 3,970,757 shares were outstanding at May 31, 2005 and 5,000,000 shares of “blank check” preferred stock authorized, of which none was outstanding at May 31, 2005. The Company could issue additional shares of common or preferred stock or enter into new or revised borrowing arrangements to raise funds.

ExceptOff-Balance forSheet the outstanding debt and related variable interest rates set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” above, there are no material changes to the disclosure set forth in Item 7A of the Company’s Annual Report on Form 10–K for the fiscal year ended August 31, 2004. The Company has no market risk sensitive instruments entered into for trading purposes.Arrangements

~~EFFECTIVENESS~~The Company’s material OFoff-balance ~~DISCLOSURE~~sheet ~~CONTROLS~~arrangements ~~AND~~are ~~PROCEDURES~~as follows:

AsFuture ofLease ~~the end of~~Payments. The ~~the period covered by this report, the~~ Company ~~carried~~leases ~~out~~offices ~~an evaluation, under the supervision~~ and ~~with~~manufacturing ~~the~~facilities ~~participation of the Company’s management, including the Company’s Chief Executive Officer~~ and ~~Chief~~certain ~~Financial~~equipment ~~Officer, of~~under ~~the~~non-cancelable ~~effectiveness~~operating ~~of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a – 14 and 13a–15~~leases. ~~Based upon that evaluation, the Chief~~Future ~~Executive~~payments ~~Officer~~under ~~and~~these ~~Chief~~leases ~~Financial~~at ~~Officer~~May 31, ~~concluded~~2005 ~~that the Company’s disclosure controls and procedures~~ are ~~effective. There~~approximately ~~were~~as ~~no significant changes in the Company’s internal controls that could significantly affect these controls subsequent to the date of their evaluation.~~follows:

PART II – OTHER INFORMATION

Fiscal Year	Amount
2005	$	307,000
2006	$	1,135,000
2007	$	827,000
2008	$	713,000
2009	$	514,000
2010 and thereafter	$	10,000

In recent years the Company has consolidated and/or abandoned several facilities in an effort to improve efficiencies and operating results, and plans further consolidations. In the event the Company was to abandon a facility prior to its being leased to a new tenant, the Company could become obligated for accelerated lease payments or other expenses.

Critical Accounting Policies and Estimates

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of. The Company reviews its long-lived assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future operating cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are reported at the lower of the carrying amount or fair value less costs to sell.

The Company has a significant amount of property and equipment and intangible assets. The determination as to whether events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable involves management’s judgment. In addition, should the Company conclude that recoverability of an asset is in question, the estimate of undiscounted future operating cash flows to determine whether an asset is recoverable and, if not, the final determination of the fair value of the asset are also based on the judgment of management. These judgments can be impacted by a variety of underlying assumptions, such as the general business climate, effectiveness of competition and supply and cost of resources. Accordingly, actual results can differ significantly from the assumptions made by management in making its estimates. Future changes in management’s estimates could result in indicators of impairment and future impairment charges.

Valuation of Inventory. The Company values its inventories at the lower of cost or market using the first-in, first-out (FIFO) method. The Company records adjustments to the value of inventory based upon obsolescence and changes in market value as permanent changes in the carrying amount of such inventory until its ultimate sale or other disposition. The Company has evaluated the current level of inventories considering historical sales and other factors and, based on this evaluation, has recorded adjustments to cost of goods sold to adjust inventory to net realizable value. These adjustments are estimates, which could vary significantly, either favorably or unfavorably, from actual requirements if future economic conditions, customer demand or competition differ from expectations.

Accounts Receivable. The Company performs ongoing evaluations of customers and adjusts credit limits based upon each customer’s payment history and credit worthiness, as determined by credit information available at that time. The Company monitors collections and payments from customers and maintains allowances for doubtful accounts for the inability of customers to make required payments. If the financial condition of customers were to deteriorate resulting in an impairment of their ability to make payments, additional allowances may be required.

Goodwill. Goodwill represents the excess of purchase price over fair value of net assets acquired. Goodwill is tested for impairment annually in the fourth quarter, after completion of an annual planning process, or earlier if events occur which require an impairment analysis to be performed. With respect to each reporting unit which has any goodwill, the fair value is determined using traditional valuation methodology, and compared with its carrying value. If the fair value exceeds the unit’s carrying value, goodwill of the reporting unit is considered not to be impaired. If the unit’s carrying value exceeds its fair value, assets of the unit are individually valued to determine the implied fair value of the reporting unit goodwill. Impairment loss is recognized to the extent that the carrying value of the goodwill exceeds its implied fair value. Significant management judgment is involved in determining the fair value of assets. Future changes in management’s estimates could result in additional impairment charges to goodwill.

Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases. Deferred tax assets are also recognized for credit carryforwards and then assessed (including the anticipation of future income) to determine the likelihood of realization. Deferred tax assets and liabilities are measured using the rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse and the credits are expected to be used. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Accounting for Stock Options. Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (‘SFAS 123”), as amended by SFAS 148, allows entities to continue to apply the provisions of Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock Issued to Employees, and provide pro forma income and pro forma earnings per share disclosures for stock-based awards as if the fair-value based method defined in SFAS 123 had been applied. In accordance with APB Opinion No. 25, and related interpretations, compensation expense would generally be recorded for fixed option grants only if, on the date of the grant, the current price of the underlying stock exceeded the exercise price. The Company has elected to continue to apply the provisions of APB Opinion No. 25 and provide the pro forma disclosure provisions of SFAS 123. Accordingly, no compensation expense has been recognized for the Company’s stock option plans and award of options to non-employee directors.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Except for the outstanding debt and related variable interest rates set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” above, there are no material changes to the disclosure set forth in Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2004. The Company has no market risk sensitive instruments entered into for trading purposes.

EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rules 13a – 14 and 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective. There were no significant changes in the Company’s internal controls that could significantly affect these controls subsequent to the date of their evaluation.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company encounters lawsuits from time to time in the ordinary course of business and, at ~~November~~May 3031, ~~2004~~2005, the Company and/or its affiliates were parties to several civil lawsuits. Summa does not expect that the resolution of these lawsuits will have a material adverse impact on future results of operations or financial position. Certain lawsuits filed against the Company from time to time contain claims not covered by insurance, or seek damages in excess of policy limits, and such claims could be filed in the future. The Company may file patent infringement and/or other types of lawsuits in the future which may result in materially increased costs and other adverse consequences. Any costs and/or losses that Summa may suffer from such lawsuits, and the effect such litigation may have upon the reputation and marketability of Summa’s products, could have a material adverse impact on the future results of operations, financial condition and/or prospects of the Company.

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

In October 2004, the Company announced a plan to repurchase up to $2,000,000 of its Common Stock with no time limit (the “2005 Buy Back”). As of ~~November~~May 3031, ~~2004~~2005, nothe ~~shares~~status ~~had~~of ~~been repurchased under~~ the 2005 Buy Back. was as follows:

	Shares repurchased	Average cost per share		Repurchase cost
Prior to March 2005	500	$	9.76	$	5,000
March 2005	600	$	8.81	$	5,000
April 2005	21,937	$	9.07	$	199,000
May 2005	8,728	$	7.87	$	69,000
Total	31,765	$	8.75	$	278,000

Item 3. Defaults upon Senior Securities

None.

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

None.

Item 5. Other Information

None.

Item 6. Exhibits

	31.1	Section 302 Certification
	32.1	Section 906 Certification

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 on ~~January~~July 58, 2005.

Summa Industries

/s/ James R. Swartwout		/s/ Trygve M. Thoresen
James R. Swartwout		Trygve M. Thoresen
President and Chief Financial Officer		Vice President and Secretary

1517

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