<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                             ---------------------


                                    FORM 10-Q


(Mark One)

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

For the quarterly period ended       APRIL 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 0-18198
                       -------

                              DEVLIEG-BULLARD, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

            Delaware                  0-18198                    62-1270573
-------------------------------     ------------             -------------------
(State or other jurisdiction of     (Commission               (I.R.S. Employer
incorporation or organization)      File Number)             Identification No.)


         One Gorham Island, Westport, CT                             06880
    ----------------------------------------                      ----------
    (Address of principal executive offices)                      (Zip Code)

                                  203-221-8201
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

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
                                       ---   ---

The number of shares of common stock outstanding as of May 31, 1996 was
12,275,400.
<PAGE>   2
                              DeVlieg-Bullard, Inc.

                                      INDEX


<TABLE>
<CAPTION>
PART I -          FINANCIAL INFORMATION                                      Page
                  ---------------------                                      ----
<S>      <C>                                                                  <C>
         Item 1.   Financial Statements:
                     Balance Sheets--
                       April 30, 1997 and July 31, 1996                        2

                     Statements of Operations--
                       Three and Nine Months Ended April 30, 1997
                       and April 30, 1996                                      3

                     Statements of Cash Flows--
                       Nine Months Ended April 30, 1997
                       and April 30, 1996                                      4

                     Notes to Financial Statements                             6

         Item 2.   Management's Discussion and Analysis of
                       Financial Condition and Results of
                       Operations                                              9


PART II -       OTHER INFORMATION                                             14
                -----------------

         Item 1.   Legal Proceedings

         Item 6.   Exhibits and Reports on Form 8-K


SIGNATURES                                                                    15

EXHIBIT 11         Computation of Earnings Per Share                          16
</TABLE>
<PAGE>   3
                         PART I - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                              DeVlieg-Bullard, Inc.
                                 Balance Sheets
                        (in thousands, except share data)


<TABLE>
<CAPTION>
                                                      April 30, 1997          July 31, 1996
                                                      --------------          -------------
                                                        (unaudited)
<S>                                                      <C>                    <C>
                                          ASSETS
                                          ------
Current assets:
     Cash and cash equivalents                           $   1,441              $     768
     Accounts receivable, net                               25,318                 17,505
     Inventories, net                                       39,313                 42,071
     Other current assets                                    1,751                  1,165
                                                         ---------              ---------
       Total current assets                                 67,823                 61,509

Property, plant and equipment, net                          12,407                 13,306
Engineering Drawings                                        18,935                 18,366
Goodwill                                                    11,159                 11,472
Other assets                                                15,138                 15,150
                                                         ---------              ---------
       Total assets                                      $ 125,462              $ 119,803
                                                         =========              =========

                           LIABILITIES AND STOCKHOLDERS' EQUITY
                           ------------------------------------
Current liabilities:
     Accounts payable                                    $  10,302              $   9,854
     Accrued expenses and other current liabilities         15,821                 16,534
     Revolving credit agreement                             22,355                 19,195
     Current portion of long-term debt                       4,355                  2,932
                                                         ---------              ---------
       Total current liabilities                            52,833                 48,515

Long-term debt (related party 1997 and 1996 - $4,084)       14,555                 15,175
Postretirement benefit obligation                           22,438                 22,830
Other noncurrent liabilities                                11,314                 11,699
                                                         ---------              ---------
       Total liabilities                                   101,140                 98,219

Stockholders' equity:
     Common stock, $0.01 par value; authorized
       30,000 shares; issued and outstanding
       12,250                                                  123                    123
     Additional paid-in capital                             34,096                 34,049
     Excess purchase price over net assets from the
       Services Group acquisition                          (16,358)               (16,358)
     Retained earnings                                       6,599                  3,946
     Cumulative translation adjustment                        (138)                  (176)
                                                         ---------              ---------
       Total stockholders' equity                           24,322                 21,584
                                                         ---------              ---------
       Total liabilities and stockholders' equity        $ 125,462              $ 119,803
                                                         =========              =========
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                        2
<PAGE>   4
                              DeVlieg-Bullard, Inc.
                            Statements of Operations
                (unaudited - in thousands, except per share data)




<TABLE>
<CAPTION>
                                    Three Months Ended      Nine Months Ended
                                         April 30,              April 30,
                                      1997      1996        1997        1996
                                      ----      ----        ----        ----
<S>                                 <C>       <C>         <C>         <C>     
Net sales                           $33,771   $ 30,262    $ 97,268    $ 84,890
Cost of sales                        24,241     21,717      71,495      62,635
                                    -------   --------    --------    --------
     Gross profit                     9,530      8,545      25,773      22,255
                                    -------   --------    --------    --------

Operating expenses:
     Engineering                        491        447       1,277       1,178
     Selling                          2,799      2,951       8,148       7,944
     General and administrative       2,962      2,772       8,048       7,941
                                    -------   --------    --------    --------
       Total ESG&A Expense            6,252      6,170      17,473      17,063
Litigation expense                       --         --          --       4,600
Other (income) expense, net              --        (71)        (23)        (73)
                                    -------   --------    --------    --------
     Total Operating Expenses         6,252      6,099      17,450      21,590
                                    -------   --------    --------    --------
Operating income                      3,278      2,446       8,323         665

Interest expense (related party:
     three months 1997 - $171;
     1996 - $167; nine months
     1997 - $512; 1996 - $357)        1,305      1,257       3,796       3,194
                                    -------   --------    --------    --------

Income (loss) before income taxes     1,973      1,189       4,527      (2,529)
Provision for income taxes              803        500       1,874      (1,022)
                                    -------   --------    --------    --------

Net income (loss)                   $ 1,170   $    689    $  2,653    $ (1,507)
                                    =======   ========    ========    ========

Income (loss) per common share      $  0.08   $   0.05    $   0.18    $  (0.12)
                                    =======   ========    ========    ========

Average common shares and
     equivalents outstanding         15,246     14,965      15,126      12,250
                                    =======   ========    ========    ========
</TABLE>




The accompanying notes are an integral part of these financial statements.




                                        3
<PAGE>   5
                              DeVlieg-Bullard, Inc.
                            Statements of Cash Flows
                           (unaudited - in thousands)

<TABLE>
<CAPTION>
                                                           Nine Months Ended
                                                                April 30,
                                                            1997        1996
                                                            ----        ----
<S>                                                       <C>        <C>      
Cash flows from operating activities:
Net income (loss)                                         $ 2,653    $ (1,507)
Adjustments to reconcile net income to net cash
  provided by operating activities:
      Depreciation and amortization                         3,606       3,339
      Provision for losses on accounts receivable              14         169
Change in assets and liabilities, net of effects from
  acquisitions
      (Increase)/decrease in accounts receivable           (6,227)      1,219
      Decrease/(increase) in inventories                    4,592      (2,461)
      Decrease/(increase) in other current assets           1,974        (400)
      Increase in accounts payable                            448       1,232
      (Decrease)/increase in accrued expenses and other
         current liabilities                                 (713)      5,060
      Other, net                                             (937)     (1,375)
                                                          -------    --------
      Net cash provided by operating activities             5,410       5,276
                                                          -------    --------

Cash flows from investing activities:
  Capital expenditures                                     (1,023)       (736)
  Purchase of business                                       (912)    (10,549)
                                                          -------    --------
      Net cash used for investing activities               (1,935)    (11,285)
                                                          -------    --------

Cash flows from financing activities:
  Increase in revolving credit agreement                    3,160       4,358
  Proceeds from issuance of long-term debt                     --       8,000
  Payments on long-term debt                               (5,831)     (4,668)
  Proceeds from issuance of stock options                      47          --
  Debt issuance costs                                        (216)     (1,061)
                                                          -------    --------
      Net cash provided by financing activities            (2,840)      6,629
                                                          -------    --------

Effect of exchange rate changes on cash                        38         (35)
                                                          -------    --------

Net increase/(decrease) in cash and cash equivalents          673         585
Cash and cash equivalents at beginning of period              768         415
                                                          -------    --------
Cash and cash equivalents at end of period                $ 1,441    $  1,000
                                                          =======    ========
</TABLE>




The accompanying notes are an integral part of these financial statements.


                                        4
<PAGE>   6
                              DeVlieg-Bullard, Inc.
                      Statements of Cash Flows (continued)
                           (unaudited - in thousands)


<TABLE>
<CAPTION>
                                                          Nine Months Ended
                                                              April 30,

                                                           1997       1996
                                                           ----       ----
<S>                                                       <C>        <C>      
Supplemental disclosure of cash flow information:
Cash paid during the period for:
     Interest                                             $3,073     $2,900
     Income taxes, net of refunds                            148       (101)
</TABLE>

During the nine months ended April 30, 1997, the Company issued debt consisting
of a $2,600 Seller's note and an increase in term debt of $3,500 in connection
with acquisitions (See Note 2). The Company also entered into a Capital Lease
for equipment for $192.

During the nine months ended April 30, 1996, the Company assumed liabilities in
the amount of $42,658 in connection with the acquisition of The National Acme
Company (See Note 2).

In connection with obtaining the consent of the holders of the $12,000 principal
amount of subordinated debentures to the acquisition of National Acme and to the
refinancing of the Company's senior credit facility and to the refinancing of
$4,000 principal amount of such subordinated debentures, the Company issued
stock purchase warrants valued at $1,750. Such amount was credited to Additional
paid-in capital and charged as a discount to subordinated debentures, reducing
the carrying value of the debentures.






                                        5
<PAGE>   7
                              DeVlieg-Bullard, Inc.

                          NOTES TO FINANCIAL STATEMENTS


NOTE 1: BASIS OF PRESENTATION

Pursuant to the rules and regulations of the Securities and Exchange Commission
for Form 10-Q, the financial statements, footnote disclosures and other
information normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed. The financial
statements contained in this report are unaudited but in the opinion of
DeVlieg-Bullard, Inc. (the "Company"), reflect all adjustments, consisting of
only normal recurring adjustments, necessary to fairly present the financial
position as of April 30, 1997 and the results of operations and cash flows for
the interim periods of the fiscal year ending July 31, 1997 ("fiscal 1997") and
the fiscal year ended July 31, 1996 ("fiscal 1996") presented herein. The
results of operations for any interim period are not necessarily indicative of
results for the full year. These financial statements, footnote disclosures and
other information should be read in conjunction with the financial statements
and the notes thereto included in the Company's annual report on Form 10-K for
the year ended July 31, 1996.

The financial statements include all accounts of the Company after elimination
of all significant interdivision transactions and balances. Certain amounts in
the fiscal 1996 financial statements have been reclassified to conform with the
fiscal 1997 presentation. Amounts in these notes, except per share data, are
expressed in thousands.

INCOME (LOSS) PER SHARE
Income per share is computed by dividing net income by the weighted average
number of common shares and equivalents outstanding during the period.
Outstanding stock options, which are common stock equivalents, are included in
the calculation if they are dilutive. Stock purchase warrants, which are common
stock equivalents, are included in the calculation of income per share from the
date of issuance. Loss per share is computed by dividing net loss by the
weighted average number of common shares outstanding during the period. Stock
options and stock purchase warrants are not considered in this calculation as
they would be anti-dilutive.

NOTE 2: ACQUISITION

On January 17, 1997, the Company acquired substantially all of the assets of
Mattison Technologies, Inc., a Rockford, Illinois-based Machine Tool Company
("Mattison"), including intellectual property, parts inventory, accounts
receivable and customer lists. The purchase price was $6,810, plus legal and
closing costs, and was financed with additional term debt of $3,500 and a $2,600
Seller's note, $1,600 of which is secured by Mattison's accounts receivable, as
well as with funds from the revolving credit facility. As the Mattison accounts
receivable are collected, the Company is required to pay down the principal on
the note; the balance on the note is $1,460 at April 30, 1997. The remaining
balance on the note is due January 7, 1998. The Mattison operations will be
consolidated with the Machine Tool Group.


                                        6
<PAGE>   8
NOTE 3: INVENTORIES

Inventories consisted of:

<TABLE>
<CAPTION>
                                      April 30,             July 31,
                                         1997                 1996
                                         ----                 ----
                                     (unaudited)
<S>                                    <C>                  <C>    
Raw materials                          $ 1,404              $ 1,451
Work-in-process                         11,604               13,650
Finished goods                          26,305               26,970
                                       -------              -------
                                       $39,313              $42,071
                                       =======              =======
</TABLE>

Valuation reserves for obsolete, excess and slow-moving inventory aggregated
$10,870 and $10,922 at April 30, 1997, and July 31, 1996, respectively.
Inventories valued using LIFO were $13,074 and $15,970 at April 30, 1997, and
July 31, 1996, respectively. There was no LIFO reserve against those
inventories. The financial accounting basis for the inventories of acquired
companies exceeds the tax basis by $12,224 at April 30, 1997 and July 31, 1996.

NOTE 4: REFINANCING OF DEBT

In connection with the acquisition of Mattison (see Note 2), the Company amended
its senior credit facility to increase it to $40,000 from the current $32,000.
This facility now consists of a $30,000 revolving credit agreement and $10,000
in term loans. Borrowings from the increase in term debt were used to finance
the acquisition. The funding occurred on January 17, 1997, contemporaneously
with the Company's completion of the acquisition of Mattison's assets.

The senior credit facility is secured by all of the Company's assets. Under the
terms of the facility, the Company is required to comply with various
operational and financial covenants, as defined, including (i) minimum net
worth, (ii) interest coverage ratio, (iii) liabilities to net worth ratio, (iv)
current ratio, (v) fixed charge coverage ratio and (vi) minimum earnings levels,
as defined. In addition, the facility places limitations on the Company's
ability to make capital expenditures and to pay dividends. The Company is in
compliance with these debt covenants at April 30, 1997.

The maturity date for the senior credit facility has been extended to October
31, 2000. Amounts available under the revolving credit agreement are based upon
a formula related to the Company's eligible accounts receivable and inventories.
Interest on outstanding balances is payable monthly in arrears. Interest rates
are based on the prime rate or alternative rates based on LIBOR.

In connection with the acquisition, two new term loans were provided to finance
the acquisition and the maturity on the existing loans was extended. The $5,000
term loan is now payable in 58 equal installments of $86 with the balance due
August 31, 2000. The $3,000 term loan is now payable in 36 equal installments of
$83 through May 31, 1999. The third term loan of $2,000 is due and payable with
the proceeds from the sale of Mattison equipment (this equipment was sold during
February 1997). The fourth term loan of $1,500 is payable in 45 equal
installments of $33 commencing January 31, 1997 through October 31, 2000.


                                        7
<PAGE>   9
NOTE 5: LITIGATION SETTLEMENT

During the first quarter of fiscal 1996, the Company accrued $2,200 related to a
jury verdict rendered against the Company, including interest expense and legal
costs. The Company had appealed the verdict on the basis that it was against the
weight of evidence. During the second quarter of fiscal 1997, the Company
settled this case for $1,500.

The Company does not believe the outcome of this legal proceeding will have any
future material adverse impact on the results of operations, liquidity or
financial condition of the Company.






                                        8
<PAGE>   10
                              DEVLIEG-BULLARD, INC.

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

RESULTS OF OPERATIONS
Summarized below is a discussion of the results of operations of the Company.
Amounts, except per share data, are expressed in thousands.

ACQUISITION
On January 17, 1997, the Company acquired substantially all of the assets of
Mattison Technologies, Inc. for $6,810, financed in part by a $2,600 Seller's
note and $3,500 increase in term debt. The results of Mattison are included with
the Company since acquisition (see Note 2 of Notes to Financial Statements).
Mattison will be reported with the Machine Tool Group and added $1,663 in sales
and $852 in operating income to the nine month results discussed below.

RESTRUCTURING
On March 18, 1997, the Company announced a restructuring plan which will result
in the reorganization of the Company's existing National Acme and Services
Groups into the Machine Tool Group, which will include the design, manufacture
and marketing of new, remanufactured and used machines and aftermarket parts
and service. As part of the reorganization, the Company plans to close two 
facilities, integrating their operations with other Company operations and
eliminating 38 jobs. The Company expects to spend approximately $1,000 to
implement the plan, but does not expect to take any charges associated with the
restructuring; the plan will be funded through utilization of certain reserves
recorded by the Company for integrating the operations of National Acme with
those of the Company at the time of acquisition. The plan is expected to yield
approximately $2,000 in annual savings beginning in fiscal 1998. The Business
Segment discussion below reflects the new organizational structure and prior
year's results have been restated.

THREE MONTHS ENDED APRIL 30, 1997 COMPARED TO THREE MONTHS ENDED APRIL 30, 1996.

CONSOLIDATED RESULTS:
Net sales for the third quarter of fiscal 1997 were $33,771 compared to $30,262
for the third quarter of fiscal 1996, an increase of $3,509, or 11.6%; $1,304 of
this increase was contributed by the Mattison acquisition. Gross profit for
the third quarter of fiscal 1997 was $9,530 compared to $8,545 for the third
quarter of fiscal 1996, an increase of $985, or 11.5%, reflecting the increased
sales volume. Gross profit as a percentage of net sales was 28.2% in the third
quarter of fiscal 1997 and fiscal 1996.

ESG&A expenses were $6,252, or 18.5% of net sales in the third quarter of fiscal
1997, compared to $6,170, or 20.4% of net sales in the third quarter of fiscal
1996. The decrease in operating expenses as a percentage of net sales is
attributable to cost reduction programs implemented by the Company and leverage
from the higher sales volume.

Interest expense was $1,305 in the third quarter of fiscal 1997 compared to
$1,257 in the third quarter of fiscal 1996, an increase of $48.


                                        9
<PAGE>   11
Income tax expense of $803 was recorded for the third quarter of fiscal 1997,
compared to $500 for the same period last year.

OPERATING RESULTS BY BUSINESS SEGMENTS:
The Machine Tool Group sales for the third quarter of fiscal 1997 were $22,239
compared with $18,575 in the third quarter of the prior year, an increase of
19.7%. Operating income was $3,317, compared to $2,438 in the third quarter a
year ago. This is an increase of 36.1% over the prior year, reflecting the
leverage from the higher sales on fixed costs, as well as the acquisition of
Mattison. Fiscal 1997 results include $1,304 in sales and $596 in operating
income contributed by acquisitions.

The Tooling Systems Group's sales for the third quarter of fiscal 1997 were
$5,207 compared with $5,279 in the prior year's third quarter. Operating income
was $368 in fiscal 1997 compared with $189 in the prior year, a 94.7% increase,
reflecting productivity improvements as well as the cost reduction plan put into
place late in fiscal 1996.

The Industrial Group had sales of $6,325 during the third quarter of fiscal 1997
compared to $6,408 in the third quarter of the prior year. Operating income was
$453, compared with $446 in the prior year.

NINE MONTHS ENDED APRIL 30, 1997 COMPARED TO NINE MONTHS ENDED APRIL 30, 1996.

CONSOLIDATED RESULTS:
Net sales for the first nine months of fiscal 1997 were $97,268 compared to
$84,890 for the first nine months of fiscal 1996, an increase of $12,378, or
14.6%. National Acme acquisition in fiscal 1996 and Mattison acquisition in
fiscal 1997 account for $11,194 and $1,663 of the increase, respectively. Gross
profit for the nine months ended April 30, 1997 was $25,773 compared to the
$22,225 for the same period in the prior year, an increase of $3,518, or 15.8%.
Gross profit as a percent of net sales was 26.5% for the first nine months of
fiscal 1997 compared to 26.2% for the first nine months of fiscal 1996.

ESG&A expenses were $17,473, or 18.0% of net sales, and $17,063, or 20.1% of net
sales, for the first nine months of fiscal 1997 and 1996, respectively.

There were no litigation expenses during the first nine months of fiscal 1997.
The Company is not aware of any outstanding legal proceedings the outcome of
which, in management's opinion, would have a material adverse effect on the
Company's results of operations or financial condition. Litigation expenses of
$4,600 were recorded during the first nine months of fiscal 1996. Of these
expenses, $2,200 ($1,320 after taxes) related to an adverse judgement rendered
in a breach of contract suit (allocated to the Machine Tool Group). Although the
Company accrued for the full jury verdict, plus interest and legal costs, it
filed a Notice of Appeal against the verdict on the grounds that the jury's
verdict was against the weight of the evidence. The Suit was settled for $1,500
during the second quarter of fiscal 1997. The balance of $2,400 ($1,440 after
taxes) was for settlement and legal costs incurred in connection with the class
action suit filed in 1992. This suit was settled in the second quarter of fiscal
1996 and such settlement was approved by the Court in July 1996.

Interest expense was $3,796 for the nine months ended April 30, 1997 compared to
$3,194 for the


                                       10
<PAGE>   12
same period in the prior year. The $602 increase in interest expense is
attributable to higher outstanding debt balance, primarily due to the 
acquisitions, cost of litigation settlements, and higher effective interest 
rates.

Income tax expense of $1,874 was recorded for the first nine months of fiscal
1997 compared to an income tax benefit of $1,022 for the same period last year,
reflecting net income in fiscal 1997 compared to a net loss in fiscal 1996.

OPERATING RESULTS BY BUSINESS SEGMENTS:
Sales for the Machine Tool Group for the first nine months of fiscal 1997 were
$63,416, compared with $50,342 in the same period a year ago, an increase of
$13,074. National Acme, acquired in October 1995, contributed $11,194 of this
increase, while Mattison, acquired in January 1997, contributed $1,663.
Operating income for the period was $8,669 compared with $3,001 in the prior
year period. The fiscal 1996 results include nonrecurring litigation costs of
$2,200 related to a breach of contract lawsuit (see "Item 1 - Legal
Proceedings"). Without this nonrecurring charge, the Machine Tool Group would
have had operating income of $5,201 in fiscal 1996, which would yield a fiscal
1997 increase of 66.7% over the prior year. This improvement reflects the
leverage from the higher sales on fixed costs, as well as the acquisition of
Mattison in January 1997 (which contributed $852) and National Acme in October
1995 (which contributed $1,535).

Tooling Systems sales for the first nine months of fiscal 1997 were $15,504 as
compared with $16,285 during the same period in the prior year. Operating income
was $762 compared to $996 for the same periods. The decline in sales and
operating income can be attributed to lower than anticipated sales for the
Cushman product line.

Sales for the first nine months of fiscal 1997 for the Industrial Group were
$18,348 compared to $18,263 in the year-ago period. Operating income was $900
compared with $897 for the same periods.

LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operations was $5,410 for the nine months ended April 30,
1997 compared to $5,276 for the nine months ended April 30, 1996.

Capital expenditures were $1,023 in the first nine months of fiscal 1997
compared to $736 for the same period in the prior year. As of April 30, 1997,
the Company had no material commitments for specific capital expenditures.

Cash of $912 was used for the acquisition Mattison Technologies in fiscal 1997,
compared to $10,549 used for the acquisition of The National Acme Company in
fiscal 1996. These cash acquisition costs were financed by borrowings from the
revolving credit agreement.

The balance outstanding under the Company's revolving credit agreement was
$22,355 at April 30, 1997 compared to $19,195 at July 31, 1996. Long-term debt,
including current maturities, was $18,910 and $18,107 at April 30, 1997 and July
31, 1996, respectively. The Company's total indebtedness was $41,265 and $37,302
at April 30, 1997 and July 31, 1996, respectively, an increase


                                       11
<PAGE>   13
of $3,963. As outlined in Note 4 of Notes to Financial Statements, the Company
amended its senior debt facility in January 1997 to increase the amount
available for borrowings thereunder to $40,000 from $32,000. New term loans in
the amount of $3,500, as well as a $2,600 Seller's note, were obtained to
finance the Mattison acquisition (see Notes 2 and 4 of Notes to Financial
Statements).

The new senior debt facility aggregating approximately $40,000 at April 30,
1997, is comprised of up to $10,000 in term loans and a revolving credit
agreement which provides for borrowings up to $30,000. The existing term loan
requires monthly principal payments of $86 beginning November 30, 1995, and the
second term loan requires monthly principal payments of $83 beginning June 30,
1996. A third term loan of $2,000 is repayable with proceeds from the sale of
Mattison's excess machinery and equipment (this was completed in February 1997
and the loan was repaid in March 1997), while the fourth $1,500 term loan
requires monthly payments of $33 beginning January 31, 1997. Interest on the
term loans is payable monthly at 1.25% above prime rate or, at the Company's
option, at alternative rates based on LIBOR. The effective rate based on LIBOR
was 8.84% at April 30, 1997. The maturity date of the Company's revolving
credit agreement was extended to October 31, 2000, subject to renewal, and to
collateral maintenance requirements. Interest on outstanding borrowings under
the revolving credit agreement is payable monthly in arrears at 1% above the
prime rate or, at the Company's option, at alternative rates based on LIBOR.
The effective rate based on LIBOR was 8.59% at April 30, 1997. The amount the
Company may borrow under the revolving credit agreement is based upon a formula
related to the Company's eligible accounts receivable and inventories, reduced
by outstanding letters of credit. Unused borrowings available at April 30, 1997
were $5,163.

Pursuant to the subordinated debt facility, the Company issued subordinated
debentures in May 1994 in the principal amount of $12,000. Of this amount,
$4,000 was replaced by junior subordinated debt in October 1995. The
subordinated debentures provide for the repayment of principal of $2,000 in
fiscal 1999 and fiscal 2000 and $4,000 in fiscal 2001. Interest payments on the
subordinated debentures of 11.5% per annum are payable quarterly in arrears
commencing July 1, 1994. The junior subordinated debt provides for the repayment
of principal of $4,000 in June 2001 or thirty days after the payment of the
subordinated debentures. Interest accrues at 14.5% on the junior subordinated
debt, and the cash interest of 11% per annum is payable quarterly in arrears
commencing January 1, 1996. In connection with the issuance of the subordinated
debentures in May 1994, the Company issued the holders warrants to purchase one
million shares of the Company's common stock at $0.01 per share and an estimated
289 warrants for additional shares at $0.01 per share, which became available in
May 1997 based upon the settlement of certain legal proceedings. In addition, in
connection with the issuance of the junior subordinated debt and refinancing of
the senior credit facility, the Company issued 500 additional Class A and 750
Class C stock purchase warrants.

The Company expects to continue to provide liquidity and finance its ongoing
operational needs primarily through internally generated funds. The Company 
actively seeks to expand by acquisition, as well as through the internal growth
of its present businesses. A significant acquisition would require additional
borrowings. The Company does not anticipate any difficulty in obtaining
additional borrowings, however, there can be no assurance that the Company
would be able to obtain such financing on acceptable terms.

NEW ACCOUNTING PRONOUNCEMENTS

In February 1997, Statement of Financial Accounting Standards No. 128, Earnings
Per Share ("SFAS 128") was issued. Management will adopt SFAS 128 for the second
quarter ended January 31, 1998 and expects that the diluted earnings per share
calculation under SFAS will not be


                                       12
<PAGE>   14
materially different from the earnings per share results the Company currently
reports.

OUTLOOK: ISSUES AND UNCERTAINTIES
A number of factors may affect future results, liquidity and capital resources;
actual results may differ materially from those reflected by forward-looking
statements made by the Company. These factors are discussed in the Company's
Annual Report on Form 10-K for the year ended July 31, 1996.






                                       13
<PAGE>   15
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On November 3, 1995, a jury rendered a verdict against the Company in the net
amount of approximately $1.3 million, plus interest, relating to a civil suit
filed against the Company in the Supreme Court for the State of New York, County
of Erie, styled Watson Bowman Acme Corp. v. DeVlieg-Bullard, Inc. The plaintiff
had alleged losses resulting from a breach of contract by the Company, as
successor to DeVlieg-Lyons Integrated Systems, Inc., in connection with the
delivery to the plaintiff of a CNC Milling Machine. The suit was originally
filed on November 21, 1991. The Company had countersued for the remaining
balance due under the contract of approximately $280 thousand.

The Company made an accrual in the first quarter of fiscal 1996 in the amount
$2.2 million for the jury's verdict, plus interest and other costs. This suit
was settled for $1.5 million during the second quarter of fiscal 1997.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      10.1        Registration Rights Agreement dated February 27, 1997, among
                  DeVlieg-Bullard, Inc., Charles E. Bradley, Stanwich Oil and
                  Gas, Inc. and Corestates Bank.

      10.2        Third Amendment to Investment Agreement dated January 17,
                  1997, among DeVlieg-Bullard, Inc., Banc One Capital Partners
                  Corporation, PNC Capital Corp., Charles E. Bradley and John G.
                  Poole.

      11          Computation of Earnings per Share

      27          Financial Data Schedule (for SEC use only)

(b)   Reports on Form 8-K

      During the quarter ended April 30, 1997, the Company filed a Form 8-K
      dated February 3, 1997 (Item 5) to report the acquisition of Mattison
      Technologies, Inc., the increase in debt related to the acquisition and
      the settlement of the breach of contract law suit.


                                       14
<PAGE>   16
                                   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.

                                            DeVlieg-Bullard, Inc.
                                            (Registrant)



Date:    June 16, 1997                  By: /s/ Lawrence M. Murray
         -------------                      ------------------------------------
                                            Vice President and Chief
                                            Financial Officer




                                       15