Form 10-Q Quarterly Report
                           --------------------------

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q


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

For the quarterly period ended               May 31, 1997
                               -------------------------------------------------
                                                   OR

[ ]  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                       1-5901
                      ----------------------------------------------------------

                              Fab Industries, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         Delaware                                            13-2581181
--------------------------------------------------------------------------------
(State or other jurisdiction of                          (I. R. S. Employer)
incorporation or organization)                           Identification No.)


   200 Madison Avenue, New York, N.Y.                            10016
--------------------------------------------------------------------------------
(Address of principal executive offices)                      (Zip Code)


                                 (212) 592-2700
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


                                       N/A
--------------------------------------------------------------------------------
              (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. Yes [X] No [ ]

              CLASS                   Shares Outstanding at July 7, 1997
--------------------------------------------------------------------------------
   Common stock, $.20 par value                       5,679,962


<PAGE>

                      FAB INDUSTRIES INC. AND SUBSIDIARIES


                                TABLE OF CONTENTS


 PART I - FINANCIAL INFORMATION                                             PAGE


    Table of Contents                                                          2

    Consolidated Statements of Income
    13 Weeks ended May 31, 1997 and June 1, 1996                               3

    Consolidated Statements of Income
    26 Weeks ended May 31, 1997 and June 1, 1996                               4

    Consolidated Balance Sheets (Asset Section)
    May 31, 1997 and November 30, 1996                                         5

    Consolidated Balance Sheets (Liability and Stockholders'
    Equity Section) May 31, 1997 and November 30, 1996                         6

    Consolidated Statements of Stockholders' Equity
    26 Weeks ended May 31, 1997                                                7

    Consolidated Statements of Cash Flows
    26 Weeks ended May 31, 1997 and June 1, 1996                               8

    Notes to Consolidated Financial Statements                                 9

PART II - OTHER INFORMATION

    Item 4. Submission of Matters to a Vote of Security Holders               12
                                                                             
    Item 6. Exhibits and Reports on Form 8-K                                  13
                                                                     
Management's Discussion and Analysis of Financial Condition
and Results of Operations                                                     14


SIGNATURES                                                                    17


<PAGE>


                                        3

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                                   FOR THE 13 WKS ENDED
                                              ----------------------------
                                               May 31, 1997     June 1, 1996
                                              ----------------------------
                                               (Unaudited)       (Unaudited)

Net sales                                      $ 42,940,000    $ 40,768,000
Cost of goods sold                               36,601,000      34,753,000
                                               ------------    ------------
Gross profit                                      6,339,000       6,015,000

Selling, general and administrative expenses      4,140,000       3,837,000
                                               ------------    ------------
Operating income                                  2,199,000       2,178,000
                                               ------------    ------------
Other income (expense):
  Interest and dividend income                      959,000         914,000
  Interest expense                                  (16,000)        (70,000)
  Net gain on investment securities                 378,000         129,000
                                               ------------    ------------
Total other income                                1,321,000         973,000
                                               ------------    ------------
Income before taxes                               3,520,000       3,151,000

Taxes on Income                                   1,125,000         995,000
                                               ------------    ------------
Net Income                                     $  2,395,000    $  2,156,000
                                               ============     ===========

Earnings per share of common stock and         $       0.42    $       0.37
 common stock equivalents

Weighted average number of shares of common
 stock and common stock equivalents               5,708,115       5,767,621

See notes to consolidated financial statements

<PAGE>

                                        4

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                                                      FOR THE 26 WKS ENDED
                                                 ------------------------------
                                                 May 31, 1997    June 1, 1996
                                                 ------------------------------
                                                 (Unaudited)     (Unaudited)

Net sales                                      $ 78,415,000    $ 76,356,000
Cost of goods sold                               68,028,000      65,793,000
                                               ------------    ------------
Gross profit                                     10,387,000      10,563,000

Selling, general and administrative expenses      7,178,000       7,086,000
                                               ------------    ------------
Operating income                                  3,209,000       3,477,000
                                               ------------    ------------
Other income (expense):
  Interest and dividend income                    1,905,000       1,771,000
  Interest expense                                  (32,000)        (88,000)
  Net gain on investment securities                 863,000         321,000
                                               ------------    ------------
Total other income                                2,736,000       2,004,000
                                               ------------    ------------
Income before taxes                               5,945,000       5,481,000

Taxes on Income                                   1,900,000       1,731,000
                                               ------------    ------------
Net Income                                     $  4,045,000    $  3,750,000
                                               ============     ===========

Earnings per share of common stock and         $       0.71    $       0.64
 common stock equivalents

Weighted average number of shares of common
 stock and common stock equivalents               5,730,277       5,834,139

See notes to consolidated financial statements


<PAGE>

                                        5

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

          A S S E T S
          -   -  -  - 
<TABLE>
<CAPTION>

                                                                  AS OF
                                                     --------------------------------
                                                     May 31, 1997   November 30, 1996
                                                     --------------------------------
                                                     (Unaudited)

Current Assets:

<S>                                                  <C>            <C>         
 Cash and cash equivalents (Note 2)                  $  2,829,000   $  7,518,000
 Investment securities available-for-sale (Note 3)     58,883,000     60,880,000
 Accounts receivable-net of allowance of
   $800,000 and $600,000 for doubtful accounts         29,564,000     28,797,000
 Inventories (Note 4)                                  31,218,000     28,947,000
 Other current assets                                   1,950,000      1,944,000
                                                     ------------   ------------
   Total current assets                               124,444,000    128,086,000
                                                     ------------   ------------

Property, plant and equipment - at cost               111,070,000    108,324,000
Less: Accumulated depreciation                         80,691,000     78,121,000
                                                     ------------   ------------
                                                       30,379,000     30,203,000

Other assets                                            3,142,000      2,691,000
                                                     ------------   ------------
                                                     $157,965,000   $160,980,000
                                                     ============   ============
</TABLE>

See notes to consolidated financial statements.


<PAGE>

                                        6

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                            L I A B I L I T I E S and
                            --------------------------
                      S T O C K H O L D E R S' E Q U I T Y
                      ------------------------------------

                                                       AS OF
                                          ----------------------------------
                                          May 31, 1997    November 30, 1996
                                          ----------------------------------
                                          (Unaudited)

Current liabilities:

 Accounts payable                           $ 10,225,000   $ 12,076,000
 Corporate income and other taxes              1,861,000      1,667,000
 Accrued payroll and related expenses          2,549,000      3,403,000
 Dividends payable                               994,000      1,007,000
 Other current liabilities                       556,000        532,000
 Deferred income taxes                           654,000        761,000
                                            ------------   ------------
   Total current liabilities                  16,839,000     19,446,000
                                            ------------   ------------
Obligations under capital leases - net of
   current maturities                            588,000        620,000

Other noncurrent liabilities                   2,512,000      2,364,000

Deferred income taxes                          4,582,000      4,662,000
                                            ------------   ------------

   Total liabilities                          24,521,000     27,092,000
                                            ------------   ------------

Stockholders' equity                         133,444,000    133,888,000
                                            ------------   ------------
                                            $157,965,000   $160,980,000
                                            ============   ============

See notes to consolidated financial statements.

<PAGE>

                                        7

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                       FOR THE 26 WEEKS ENDED MAY 31,1997
<TABLE>
<CAPTION>
                                            Common Stock*                                                             Net         
                                            ============            Additional                     Loan to            Unrealized  
                                            Number of               Paid-in        Retained        Employee Stock     Holding Gain
                              Total         Shares      Amount      Capital        Earnings        Ownership Plan     (Loss)      
----------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>            <C>        <C>         <C>            <C>              <C>               <C>      
Balance at                                                                                                         
November 30, 1996            $133,888,000   6,564,194  $1,313,000  $6,410,000     $157,223,000     ($7,907,000)      $607,000 
                                                                                                                   
Net income                      4,045,000                                            4,045,000                              
                                                                                                                   
Cash dividends                 (2,000,000)                                          (2,000,000)                             

Exercise of                                                                                                        
stock options                      14,000         800                  14,000     
                                                                                                                   
Purchase of                                                                                                        
treasury stock                 (2,211,000)                                                                                  
                                                                                                                   
Compensation under                                                                                                 
restricted stock plan              18,000                                                                                   
                                                                                                                   
Change in net                                                                                                      
unrealized holding                                                                                                 
gain (loss) on investment                                                                                          
securities available-for-                                                                                          
sale, net of taxes               (310,000)                                                                           (310,000)
                             -----------------------------------------------------------------------------------------------------
                                                                                                                   
Balance at May 31, 1997      $133,444,000   6,564,994  $1,313,000  $6,424,000     $159,268,000     ($7,907,000)      $297,000 
(Unaudited)                  ==================================================================================================---


                            Unearned         Treasury Stock        
                            Restricted       ===========---        
                            Stock            Number of         
                            Compensation     Shares         Cost    
--------------------------------------------------------------------
<S>                         <C>            <C>        <C>           
Balance at                                                          
November 30, 1996           ($58,000)      (806,439)  ($23,700,000) 
                                                                    
                                                                    
Net income                                                          
                                                                    
Cash dividends                                                      
                                                                    
Exercise of                                                         
stock options                                                       
                                                                    
Purchase of                                                         
treasury stock                              (77,719)  (2,211,000)   
                                                                    
Compensation under                                                  
restricted stock plan         18,000                                
                                                                    
Change in net                                                       
unrealized holding                                                  
gain (loss) on investment                                           
securities available-for-                                           
sale, net of taxes                                                  
                          ------------------------------------------
                                                                    
Balance at May 31, 1997     ($40,000)      (884,158)  ($25,911,000) 
(Unaudited)               ==========================================
</TABLE>

                           
*  Common  stock $0.20 par value -  15,000,000  shares  authorized.  Preferred
   stock $1.00 par value - 2,000,000 shares authorized, none issued.

See notes to consolidated financial statements


<PAGE>

                                        8

FAB INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                          FOR THE 26 WKS ENDED
                                                   ---------------------------------
                                                      May  31, 1997    June 1, 1996
                                                   ---------------------------------
CASH FLOWS FROM                                     (Unaudited)        (Unaudited)
OPERATING ACTIVITIES:
<S>                                                    <C>             <C>        
Net Income                                             $ 4,045,000     $ 3,750,000
 Adjustments to reconcile net income
 to net cash provided (used in) by operating
 activities:
   Provision for doubtful accounts                         200,000         200,000
   Depreciation and amortization                         2,570,000       2,845,000
   Deferred income taxes                                    20,000        (167,000)
   Net gain on investment securities                      (863,000)       (321,000)
   Compensation under restricted stock plan                 18,000         112,000
 Decrease (increase) in:
   Accounts receivable                                    (967,000)      7,050,000
   Inventories                                          (2,271,000)     (2,860,000)
   Other current assets                                     (6,000)       (175,000)
   Other assets                                           (451,000)       (126,000)
 Decrease in:
   Accounts payable                                     (1,851,000)     (2,899,000)
   Accruals and other liabilities                         (532,000)     (1,468,000)
                                                       -----------     -----------
   Net cash provided by (used in)                          (88,000)      5,941,000
   operating activities                                -----------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment           (2,746,000)       (897,000)
   Proceeds from sales of investment securities          3,294,000       6,616,000
   Acquisition of investment securities                   (952,000)     (5,601,000)
                                                       -----------     -----------
   Net cash provided by (used in)
   investing activities                                   (404,000)        118,000
                                                       -----------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Purchase of treasury stock                           (2,211,000)     (5,155,000)
   Dividends                                            (2,000,000)     (2,040,000)
   Exercise of stock options                                14,000          91,000
                                                       -----------     -----------

   Net cash used in financing activities                (4,197,000)     (7,104,000)
                                                       -----------     -----------

   Increase (decrease) in cash and cash equivalents     (4,689,000)      1,045,000)
   Cash and cash equivalents, beginning of period        7,518,000       7,883,000
                                                       -----------     -----------
   Cash and cash equivalents, end of period            $ 2,829,000     $ 6,838,000
                                                       ===========     ===========
</TABLE>

   See notes to consolidated financial statements.


<PAGE>

                                        9

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of presentation:

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally  accepted  accounting  principles for
interim  financial  information and the instructions to Form 10-Q and Rule 10-01
of Regulation S-X of the Securities and Exchange Commission.  Accordingly,  they
do not include  all of the  information  and  footnotes  required  by  generally
accepted accounting principles for complete financial statements. In the opinion
of management,  all adjustments  (consisting of only normal recurring  accruals)
considered  necessary  for a fair  presentation  have been  included.  Operating
results for the 26 weeks ended May 31, 1997 are not  necessarily  indicative  of
the results that may be expected for the entire fiscal year ending  November 29,
1997.  The balance  sheet at November 30, 1996 has been derived from the audited
balance sheet at that date. For further  information,  refer to the consolidated
financial  statements  and footnotes  thereto  included in the Company's  Annual
Report on Form 10-K for the fiscal year ended November 30, 1996.


2.  Cash and cash equivalents consist of the following (in thousands):



                                         May 31, 1997    November 30, 1996
                                         ------------    -----------------
                                          (Unaudited)

Cash                                        $1,404             $1,700
                                                       
Tax-free short-term debt instruments         1,425              5,818
                                            ------             ------
                                            $2,829             $7,518
                                            ======             ======
                                                   


<PAGE>


                                       10


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.  Investment Securities:

At May 31, 1997 and November 30, 1996, investment securities  available-for-sale
consist of the following (in thousands):



                                                  Gross      Gross
                                                  Unrealized Unrealized
                                                  Holding    Holding      Fair
May 31, 1997 (Unaudited)                Cost      Gain       Loss         Value
-----------------------------           -----     --------   ----------   ------
                                      
Equities                               $ 8,268    $ 366     ($   160)    $ 8,474

U.S. Government securities                  30                                30

Corporate bonds                          5,342      160           (2)      5,500

Tax-exempt obligations                  44,748      195          (64)     44,879
                                       -------    -----     --------     -------
                                       $58,388    $ 721     ($   226)    $58,883
                                       =======    =====     =========    =======

                                                  Gross      Gross             
                                                  Unrealized Unrealized        
                                                  Holding    Holding      Fair 
November 30, 1996                       Cost      Gain       Loss         Value
----------------------------            -----     --------   ----------   -----
                             
Equities                               $ 7,251    $ 624     ($   218)    $ 7,657

U.S. Government securities                  37                                37

Corporate bonds                          5,689      155          (37)      5,807

Tax-exempt obligations                  46,891      513          (25)     47,379
                                       -------    -----     --------     -------
                                       $59,868    $1,292    ($   280)    $60,880
                                       =======    ======    ========     =======


<PAGE>

                                       11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.  Inventories:

    The Company's inventories are valued at the lower of cost or market. Cost is
determined  principally  by  the  last-in,  first-out  (LIFO)  method  with  the
remainder being determined by the first-in, first-out (FIFO) method. Because the
inventory valuation under the LIFO method is based upon an annual  determination
of  inventory  levels  and costs as of the fiscal  year-end,  the  interim  LIFO
calculations are based on management's  estimates of expected year-end inventory
levels and costs.


                                       May 31, 1997        November 30, 1996
                                       ----------------    -----------------
                                        (Unaudited)

Raw materials                           $11,962,000         $10,504,000
Work in process                           9,706,000          10,087,000
Finished goods                            9,550,000           8,356,000
                                        -----------         -----------
Total                                   $31,218,000         $28,947,000
                                        ===========         ===========

Approximate percentage of
inventories valued
under LIFO valuation                             60%                 65%
                                        ===========         ===========

Excess of FIFO valuation
over LIFO valuation                     $ 6,861,000         $ 7,161,000
                                        ===========         ===========


<PAGE>

                                       12

                           PART II - OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     The Company held its Annual  Meeting of  Stockholders  on May 1, 1997.  The
matters submitted to a vote of the Company's  stockholders were (I) the election
of two directors to Class III of the  Company's  Board of Directors and (ii) the
approval of the Company's 1997 Stock Incentive Plan.

     The Company's  stockholders elected Messrs.  Samson Bitensky and Sherman S.
Lawrence to Class III of the Company's Board of Directors,  to hold office until
the 2000 Annual Meeting of Stockholders  and until their  respective  successors
are duly elected and qualified. The results of the voting were as follows:



           Mr. Samson Bitensky
           -------------------

           Voted for                                        5,399,386
           Authority withheld                                  38,790
           Abstained                                                0
           Broker non-votes                                         0

           Mr. Sherman S. Lawrence
           -----------------------

           Voted for                                        5,294,286
           Authority withheld                                 143,890
           Abstained                                                0
           Broker non-votes                                         0


     The Company's stockholders also approved the Company's 1997 Stock Incentive
Plan by a vote of 4,594,601 in favor, 174,245 against, with 669,330 abstaining.


<PAGE>

                                       13

                           PART II. OTHER INFORMATION
                  ---------------------------------------------


 Item 6. Exhibits and Reports on Form 8-K
 --------------------------------------------------

 a) Exhibits: 
              
               10.1 Fab Industries, Inc. 1997 Stock Incentive Plan (incorporated
                    by reference to Exhibit A of the Company's  Definitive Proxy
                    Statement on Schedule 14A, dated March 31, 1997)

               27   Financial Data Schedule pursuant to Article 5 of Regulation
                    S-X, filed with EDGAR filing only

 b) Reports on Form 8-K: The Registrant did not file any Current Reports on
    Form 8-K during the quarter ending May 31, 1997.


<PAGE>

                                       14

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



Results of Operations
Second Quarter
Fiscal 1997 compared to Fiscal 1996

     Net sales  for the  second  quarter  of fiscal  1997  were  $42,940,000  as
compared to  $40,768,000  in 1996, an increase of 5.3%. For the six months ended
May 31, 1997, net sales were $78,415,000, an increase of $2,059,000 or 2.7% from
1996.  Certain of the Company's products enjoyed stronger customer demand during
the current quarter and divisional product mix was more favorable.

     Comparative  gross profit  margins for the second quarter  remained  fairly
constant as a percentage  of sales.  An improved  product mix and the  Company's
cost control  programs more than offset lower plant  utilization  rates.  In the
current quarter,  no adjustments to LIFO inventory  reserves were required.  For
the six months ended May 31, 1997,  gross profit  margins were 13.2% compared to
13.8% in 1996.

     Selling,  general  and  administrative  expenses  in  the  current  quarter
increased by $303,000,  or 7.9%, and as a percentage of sales increased slightly
from 9.4% to 9.6%. For the six months ended May 31, 1997,  selling,  general and
administrative  expenses remained  relatively constant as a percentage of sales.
Selling,  general and administrative costs increased  principally as a result of
the Wiener Laces  operations in the second  quarter.  The Company  continued its
expense containment program which began in fiscal 1995.


<PAGE>

                                       15

     Interest and dividend income increased by $45,000 in the quarter,  or 4.9%.
The  Company  has  realized  gains  from the sale of  investment  securities  of
$378,000 compared to gains of $129,000 in the second quarter 1996.

     As a result of these factors, quarterly net income increased to $2,395,000,
or 5.6% of  sales,  from  $2,156,000  or 5.3% of  sales  in last  year's  second
quarter.

     Earnings  per share,  which are based upon the weighted  average  number of
shares  outstanding  (5,708,115  vs.  5,767,621),  were $0.42 compared to $0.37.
There  was no stock  option  related  dilution  in either  comparative  quarter.
Liquidity and Capital Resources

     The Company's principal source of funds continues to be cash flow generated
from  operations.  Net cash used in operating  activities for the 26 weeks ended
May 31, 1997  amounted to $88,000  compared  to net cash  provided by  operating
activities  of  $5,941,000  in the  comparable  1996 period.  Of this  decrease,
$8,017,000  relates to comparative  declines in accounts  receivable,  offset by
$1,984,000 in accounts payable, accruals and other liabilities.

     Capital expenditures for the six months were $2,746,000 against $897,000 in
the  comparable  1996  period.  In the current  quarter,  the Company  purchased
additional knitting machines for its knitting plant.


<PAGE>

                                       16

     In March 1997, the Company acquired the copyrights,  trade name and certain
assets of Wiener Laces, Inc., manufacturer of raschel and leavers lace goods for
a total purchase price of approximately $1.0 million.

     During the first six months of fiscal 1997, the Company  repurchased 77,719
shares of its common stock at a cost of $2,211,000 (an average price of $28.45).
The Company intends to continue to purchase its shares of common stock from time
to time as market conditions warrant and price criteria are met.

     The Company declared a quarterly dividend of $0.175 per share, payable July
21,1997 to stockholders of record as of June 2, 1997.

     Stockholders' equity was $133,444,000,  ($23.49 per share) at May 31, 1997,
compared to  $133,888,000,  ($23.25 per share) at the previous  fiscal  year-end
November  30,  1996,  and  $129,559,000,  ($22.50  per  share) at the end of the
comparative 1996 second quarter.

     Management  believes that the current financial  position of the Company is
more than  adequate to  internally  fund any future  expenditures  to  maintain,
modernize  and expand  its  manufacturing  facilities,  pay  dividends  and make
acquisitions of textile related businesses if criteria relating to indebtedness,
market expansion and existing management are met.


<PAGE>

                                       17






                                   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.





Dated: July 7, 1997                 FAB INDUSTRIES, INC.


                                    By: /s/ David A. Miller
                                        -------------------
                                            David A. Miller
                                    Vice President-Finance and Treasurer
                                    (Principal Financial and Accounting
                                             Officer)