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  August 30, 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 office)                           (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 October 8, 1997
---------------------------------          -------------------------------------

     Common stock, $.20 par value                       5,682,903
<PAGE>

                      FAB INDUSTRIES INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS

PART 1 - FINANCIAL INFORMATION                                              PAGE

   Table of Contents                                                           2

   Consolidated Statements of Income
   13 Weeks ended August 30, 1997 and August 31, 1996                          3

   Consolidated Statements of Income
   39 Weeks ended August 30, 1997 and August 31, 1996                          4

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

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

   Consolidated Statements of Stockholders' Equity
   39 Weeks ended August 30, 1997                                              7

   Consolidated Statements of Cash Flows
   39 Weeks ended August 30, 1997 and August 31, 1996                          8

   Notes to Consolidated Financial Statements                                  9

PART II - OTHER INFORMATION

            Item 6. Exhibits and Reports on Form 8-K                          12

Management's Discussion and Analysis of Financial Condition
and Results of Operations                                                     13

SIGNATURES                                                                    16


                                       2
<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                                     FOR THE 13 WKS ENDED
                                             -----------------------------------
                                             August 30, 1997     August 31, 1996
                                              ----------------------------------
                                             (Unaudited)            (Unaudited)

Net sales                                     $41,775,000           $40,016,000
Cost of goods sold                             35,009,000            33,704,000
                                             ------------          ------------
Gross profit                                    6,766,000             6,312,000
                                                                
Selling, general and administrative expenses    4,002,000             3,825,000
                                             ------------          ------------
Operating income                                2,764,000             2,487,000
                                             ------------          ------------
Other income (expense):                                         
  Interest and dividend income                    939,000               900,000
  Interest expense                                (17,000)              (19,000)
  Net gain on investment securities               197,000               171,000
                                             ------------          ------------
Total other income                              1,119,000             1,052,000
                                             ------------          ------------
Income before taxes                             3,883,000             3,539,000
                                                                
Taxes on Income                                 1,243,000             1,119,000
                                             ------------          ------------
Net Income                                     $2,640,000            $2,420,000
                                                                
                                                                
Earnings per share of common stock and              $0.46                 $0.42
 common stock equivalents                                       
                                                                
Weighted average number of shares of common                     
 stock and common stock equivalents             5,679,998             5,758,847
                                                                
See notes to consolidated financial statements.


                                       3
<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

                                                    FOR THE 39 WKS ENDED
                                            ------------------------------------
                                            August 30, 1997      August 31, 1996
                                            ------------------------------------
                                            (Unaudited)          (Unaudited)

Net sales                                    $120,190,000         $116,372,000
Cost of goods sold                            103,037,000           99,497,000
                                            -------------        -------------
Gross profit                                   17,153,000           16,875,000
                                                                 
Selling, general and administrative expenses   11,180,000           10,911,000
                                            -------------        -------------
Operating income                                5,973,000            5,964,000
                                            -------------        -------------
Other income (expense):                                          
Interest and dividend income                    2,844,000            2,671,000
Interest expense                                  (49,000)            (107,000)
Net gain on investment securities               1,060,000              492,000
                                                                 
                                            -------------        -------------
Total other income                              3,855,000            3,056,000
                                            -------------        -------------
Income before taxes                             9,828,000            9,020,000
                                                                 
Taxes on Income                                 3,143,000            2,850,000
                                                                 
                                            -------------        -------------
Net Income                                     $6,685,000           $6,170,000
                                                                 
                                                                 
                                                                 
                                                                 
Earnings per share of common stock and              $1.17                $1.06
 common stock equivalents                                        
                                                                 
Weighted average number of shares of common                      
 stock and common stock equivalents             5,713,517            5,809,042
                                                         
See notes to consolidated financial statements.


                                       4
<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                   A S S E T S
                                   - - - - - -

<TABLE>
<CAPTION>
                                                                   AS OF
                                                     -----------------------------------
                                                     August 30, 1997   November 30, 1996
                                                     --------------    -----------------
                                                     (Unaudited)
<S>                              <C>                 <C>               <C>         
Current Assets:

 Cash and cash equivalents (Note 2)                  $  9,093,000      $  7,518,000
 Investment securities available-for-sale (Note 3)     60,182,000        60,880,000
 Accounts receivable-net of allowance of                            
   $800,000 and $600,000 for doubtful accounts         27,204,000        28,797,000
 Inventories (Note 4)                                  29,421,000        28,947,000
 Other current assets                                   1,710,000         1,944,000
                                                     ------------      ------------
                                                                    
     Total current assets                             127,610,000       128,086,000
                                                     ------------      ------------
                                                                    
Property, plant and equipment - at cost               112,454,000       108,324,000
Less: Accumulated depreciation                         81,983,000        78,121,000
                                                     ------------      ------------
                                                       30,471,000        30,203,000
                                                                    
Other assets                                            3,595,000         2,691,000
                                                     ------------      ------------
                                                     $161,676,000      $160,980,000
                                                     ============      ============
</TABLE>

See notes to consolidated financial statements.


                                       5
<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

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

                                                           AS OF
                                              ----------------------------------
                                              August 30, 1997  November 30, 1996
                                              ---------------  -----------------
                                               (Unaudited)

Current liabilities:

 Accounts payable                             $ 10,067,000     $ 12,076,000
 Corporate income and other taxes                2,377,000        1,667,000
 Accrued payroll and related expenses            2,742,000        3,403,000
 Dividends payable                                 994,000        1,007,000
 Other current liabilities                         606,000          532,000
 Deferred income taxes                             776,000          761,000
                                              ------------     ------------
Total current liabilities                       17,562,000       19,446,000
                                              ------------     ------------

Obligations under capital leases - net of
   current maturities                              572,000          620,000

Other noncurrent liabilities                     2,707,000        2,364,000

Deferred income taxes                            4,860,000        4,662,000
                                              ------------     ------------

   Total liabilities                            25,701,000       27,092,000
                                              ------------     ------------

Stockholders' equity                           135,975,000      133,888,000
                                              ------------     ------------

                                              $161,676,000     $160,980,000
                                              ============     ============

See notes to consolidated financial statements.


                                       6
<PAGE>

                      FAB INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     FOR THE 39 WEEKS ENDED AUGUST 30, 1997

<TABLE>
<CAPTION>
                                                      Common Stock *                                             
                                                      ==============                  Additional                 
                                                      Number of                       Paid-in         Retained  
                                        Total         Shares         Amount           Capital         Earnings  
                                   ------------------------------------------------------------------------------
<S>                                <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

Net income                             6,685,000                                                        6,685,000

Cash dividends                        (2,994,000)                                                      (2,994,000)

Exercise of
  stock options                           85,000            4,800           1,000          84,000

Purchase of
  treasury stock                      (2,385,000)

Compensation under
  restricted stock plan                   27,000

Payment of loan
from ESOP                                790,000

Change in net
unrealized holding
gain (loss) on  investment
securities available-for-
sale, net of taxes                      (121,000)
                                   ------------------------------------------------------------------------------
Balance at
August  30, 1997                   $ 135,975,000        6,568,994   $   1,314,000   $   6,494,000   $ 160,914,000
(Unaudited)                        ==============================================================================

<CAPTION>

                                                    Net             Unearned              Treasury Stock
                                  Loan to           Unrealized      Restricted         ====================
                                  Employee Stock    Holding Gain    Stock              Number of
                                  Ownership Plan    (Loss)          Compensation       Shares         Cost 
                                  ----------------------------------------------------------------------------------
<S>                                <C>              <C>             <C>                <C>            <C>           
Balance at                                                                                            
November 30, 1996                  ($  7,907,000)   $     607,000   ($     58,000)     (806,439)      ($ 23,700,000)
                                                                                                      
Net income                                                                                            
                                                                                                      
Cash dividends                                                                                        
                                                                                                      
Exercise of                                                                                           
  stock options                                                                                       
                                                                                                      
Purchase of                                                                                           
  treasury stock                                                                        (83,200)      (   2,385,000)
                                                                                                      
Compensation under                                                                                    
  restricted stock plan                                                    27,000                     
                                                                                                      
Payment of loan                                                                                       
from ESOP                                790,000                                                      
                                                                                                      
Change in net                                                                                         
unrealized holding                                                                                    
gain (loss) on  investment                                                                            
securities available-for-                                                                             
sale, net of taxes                                       (121,000)                    
                                  ----------------------------------------------------------------------------------
Balance at                                                                                            
August  30, 1997                   ($  7,117,000)   $     486,000   ($     31,000)     (889,639)      ($ 26,085,000)
(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.


                                       7
<PAGE>

FAB INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                              FOR THE 39 WKS ENDED
                                                      ----------------------------------
                                                      August 30, 1997    August 31, 1996
                                                      ----------------------------------
                                                      (Unaudited)        (Unaudited)
<S>                                                   <C>                <C>         
OPERATING ACTIVITIES:
Net Income                                            $  6,685,000       $  6,170,000
Adjustments to reconcile net income                                     
to  net cash provided by operating activities:                          
   Provision for doubtful accounts                         300,000            300,000
   Depreciation and amortization                         3,862,000          4,320,000
   Deferred income taxes                                   293,000            (43,000)
   Net gain on investment securities                    (1,060,000)          (492,000)
   Compensation under restricted stock plan                 27,000            159,000
Decrease (increase) in:                                                 
   Accounts receivable                                   1,293,000         10,067,000
   Inventories                                            (474,000)           964,000
   Other  current assets                                   234,000             56,000
   Other assets                                           (904,000)           (66,000)
(Decrease) increase in:                                                 
   Accounts payable                                     (2,009,000)        (4,980,000)
   Accruals and other liabilities                          403,000         (1,242,000)
                                                      ------------       ------------
   Net cash provided by                                                 
   operating activities                                  8,650,000         15,213,000
                                                      ------------       ------------
                                                                        
CASH FLOWS FROM INVESTING ACTIVITIES:                                   
   Purchases of property, plant and equipment           (4,130,000)        (3,383,000)
   Proceeds from sales of investment securities          3,184,000          7,659,000
   Acquisition of investment securities                 (1,625,000)       (13,806,000)
                                                      ------------       ------------
   Net cash used in                                                     
   investing activities                                 (2,571,000)        (9,530,000)
                                                      ------------       ------------
                                                                        
CASH FLOWS FROM FINANCING ACTIVITIES:                                   
   Purchase of  treasury  stock                         (2,385,000)        (5,269,000)
   Payment of  loan  from  ESOP                            790,000            790,000
   Dividends                                            (2,994,000)        (3,039,000)
   Exercise of stock options                                85,000            228,000
                                                      ------------       ------------
                                                                        
   Net cash used in financing activities                (4,504,000)        (7,290,000)
                                                      ------------       ------------
                                                                        
   Increase (decrease) in cash and cash equivalents      1,575,000         (1,607,000)
   Cash and cash equivalents, beginning of period        7,518,000          7,883,000
                                                      ------------       ------------
   Cash and cash equivalents, end of period           $  9,093,000       $  6,276,000
                                                      ============       ============
</TABLE>

   See notes to consolidated financial statements.


                                       8
<PAGE>

                   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 39 weeks ended August 30, 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):

                                             August 30, 1997   November 30, 1996
                                             ---------------   -----------------
                                               (Unaudited)

Cash                                             $1,964             $1,700
                                                                 
Tax-free short-term debt instruments              7,129              5,818
                                                 ------             ------
                                                 $9,093             $7,518
                                                 ======             ======


                                       9
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

3.  Investment Securities:

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

<TABLE>
<CAPTION>
                                              Gross          Gross
                                              Unrealized     Unrealized
                                              Holding        Holding        Fair
August 30, 1997 (Unaudited)     Cost          Gain           Loss           Value
---------------------------     --------      --------       --------       --------
<S>                             <C>           <C>            <C>            <C>     
Equities                        $  8,478      $    365       ($   113)      $  8,730

U.S. Government securities            28                                          28

Corporate bonds                    5,298           190                         5,488

Tax-exempt obligations            45,567           369                        45,936
                                --------      --------       --------       --------
                                $ 59,371      $    924       ($   113)      $ 60,182
                                ========      ========       ========       ========

<CAPTION>

                                              Gross          Gross
                                              Unrealized     Unrealized
                                              Holding        Holding        Fair
November 30, 1996               Cost          Gain           Loss           Value
-----------------               --------      --------       --------       --------
<S>                             <C>           <C>            <C>            <C>     
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
                                ========      ========       ========       ========
</TABLE>


                                       10
<PAGE>

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.

                                          August 30, 1997     November 30, 1996
                                          ---------------     -----------------
                                            (Unaudited)

Raw materials                               $ 9,899,000          $10,504,000
Work in process                              10,380,000           10,087,000
Finished goods                                9,142,000            8,356,000
                                            -----------          -----------
         Total                              $29,421,000          $28,947,000
                                            ===========          ===========

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

Excess of FIFO valuation
 over LIFO valuation                        $ 6,561,000          $ 7,161,000
                                            ===========          ===========

5. Stockholders' Equity:

     Employee Stock Ownership Plan:

     The sixth of 15 equal  annual  installments  of $790,000  plus  interest at
prime was paid by the ESOP to the Company on August 1, 1997.  The balance on the
ESOP  indebtedness  of  $7,117,000  is reflected as a reduction of the Company's
Stockholders' Equity in the consolidated balance sheet.


                                       11
<PAGE>

                           PART II. OTHER INFORMATION


Item 6. Exhibits and Reports on Form 8-K

a)   Exhibits:  No exhibits are filed herewith  except for Exhibit 27 which
     is 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 August 30, 1997.


                                       12
<PAGE>

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

Results of Operations
Third Quarter
Fiscal 1997 Compared to Fiscal 1996

           Net sales for the third fiscal  quarter of 1997 were  $41,775,000  as
compared to $40,016,000 in the similar 1996 period, an increase of 4.4%. For the
nine months ended August 30, 1997, net sales were  $120,190,000,  an increase of
$3,818,000 or 3.3% from 1996.  Overall Company shipments and bookings during the
quarter were on a comparable level with last year and divisional product mix was
favorable. Certain of the Company's products enjoyed stronger customer demand.

           Overall  Company  gross  profit  margins for the quarter  improved to
16.2% from 15.8% last year.  An  improved  product  mix and the  Company's  cost
control programs more than offset lower plant utilization rates. The comparative
effect of changes in LIFO inventory reserves for the quarter was negligible. For
the nine months ended August 30, 1997, gross profits margins were 14.3% compared
to 14.5% in 1996.

           Selling,  general and administrative  expenses in the current quarter
increased by $177,000,  or 4.6%, and as a percentage of sales remained  constant
at 9.6%.  For the nine  months  ended  August 30,  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 third quarter.


                                       13
<PAGE>

The Company  continued  its expense  containment  program  which began in fiscal
1995.

           Interest and dividend income increased by $39,000 in the quarter,  or
4.3%. The Company has realized  gains from the sale of investment  securities of
$197,000 compared to gains of $171,000 in the third quarter 1996.

           As a result of these  factors,  quarterly  net  income  increased  to
$2,640,000,  or 6.3% of sales,  from  $2,420,000 or 6.0% of sales in last year's
third quarter.

         Earnings per share, which are based upon the weighted average number of
shares outstanding (5,679,998 vs 5,758,847), were $0.46 compared to $0.42. 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 provided by operating activities for the 39
weeks ended August 30, 1997 amounted to  $8,650,000,  as compared to $15,213,000
in  the  comparable  1996  period.  Of  this  decrease,  $8,774,000  relates  to
comparative  declines in accounts  receivable  and  $1,438,000  in  inventories,
offset by $4,616,000 in accounts payable and other liabilities.

           Capital  expenditures  for the nine  months were  $4,130,000  against
$3,383,000 in the comparable 1996 period.  The Company has purchased  additional
knitting machines for two of its knitting mills.


                                       14
<PAGE>

           In August 1997, a wholly owned  subsidiary of Fab  Industries,  Inc.,
"Gem  Urethane   Corporation",   formed  a  new  corporation  known  as  "Sandel
International,  Inc." which has acquired patents, licenses, trademarks and other
intellectual property worldwide.  The new corporation was formed for the purpose
of creating fire and flame retardant industrial fabrics made from glass filament
yarns.

           During the first nine months of fiscal 1997, the Company  repurchased
83,200 shares of its Common Stock at a cost of  $2,385,000  (an average price of
$28.67).  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 October 20, 1997, to stockholders of record as of August 29, 1997.

           Stockholders'  equity was  $135,975,000  ($23.94 per share) at August
30,1997,  as compared to $133,888,000  ($23.25 per share) at the previous fiscal
year-end November 30, 1996, and  $131,805,000,  ($22.87 per share) at the end of
the comparative 1996 third 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.


                                       15
<PAGE>

                                   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: October 8, 1997                  FAB INDUSTRIES, INC.


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


                                       16