<PAGE>

                                     FORM 10-QSB

                          SECURITIES AND EXCHANGE COMMISSION
                               Washington, D. C.  20549


                      QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934


              For Quarter Ended 10-31-96  Commission File Number 0-2865


                                  UNIVERSAL MFG. CO.
                                  ------------------
                (Exact name of Registrant as specified in its Charter)


             NEBRASKA                                     42 0733240
             --------                                     ----------
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                   Identification No.)


     405 Diagonal St., P. O. Box 190, Algona, Iowa           50511
     --- -------- ---- -- -- --- ---- ------- ----           -----
       (Address of principal executive offices)            (Zip Code)


          Registrant's telephone number, including area code (515)-295-3557


                                    NOT APPLICABLE

--------------------------------------------------------------------------------
Former name, former address and former fiscal year if changed since last report.


"Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act 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 _____


"Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of the latest practicable
date"


    Number of shares outstanding as of 10-31-1996      816,000
                                                       -------
                                                       Common

     Transitional Small Business Disclosed Format (Check One):

                       YES  _____    NO  __X__


                                          1



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                                  UNIVERSAL MFG. CO.

                                     FORM 10-QSB

                                        INDEX



Part I   Financial Information                                        Pages


         Item 1.  Financial Statements:


         Balance Sheets - October 31, 1996
              (unaudited) and July 31, 1996                               3

         Statements of Income and Retained
            Earnings - Three Months Ended October 31, 1996
            and 1995 (unaudited)                                          4

         Statements of Cash Flows -
            Three Months Ended October 31, 1996 and
         1995 (unaudited)                                                 5


         Notes to Financial Statements                                    6-7


         Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of Operations           8


Part II  Other Information

         Item 1.  Legal Proceedings                                       8

         Item 2.  Changes in Securities                                   8

         Item 3.  Defaults Upon Senior Securities                         8

         Item 4.  Submission of Matters to a Vote of Security
                  Holders                                                 8

         Item 5.  Other Information                                       9

         Item 6.  Exhibits and Reports on Form 8-K                        9


Signatures                                                                9



                                          2

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                            ITEM 1.  FINANCIAL STATEMENTS

UNIVERSAL MFG. CO. 
BALANCE SHEETS
                                                   October 31,
                                                     1996            July 31,
                                                   (Unaudited)        1996
                                                --------------   -------------
ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                         $1,556,815        $934,072
  Accounts receivable                                1,616,858       1,654,992
  Inventories                                        2,259,133       2,479,713
  Prepaid expenses                                     127,705          50,282
                                                --------------   -------------
  Total current assets                               5,560,511       5,119,059
                                                --------------   -------------
Deferred Income Taxes                                   42,329          42,329
                                                --------------   -------------
Lease Receivable                                        23,245          26,073
                                                --------------   -------------
PROPERTY - At cost
  Land                                                 120,499         120,499
  Buildings                                          1,100,427       1,099,594
  Machinery and equipment                              913,218         899,997
  Furniture and fixtures                               206,520         209,947
  Trucks and automobiles                               720,632         699,240
                                                --------------   -------------
  Total property                                     3,061,296       3,029,277
  Less accumulated depreciation                    (2,030,137)     (1,985,412)
                                                --------------   -------------
  Property - net                                     1,031,159       1,043,865
                                                --------------   -------------
                                                    $6,657,244      $6,231,326
                                                --------------   -------------
                                                --------------   -------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Accounts payable                                  $1,372,986      $1,507,944
  Dividends payable                                    204,000         204,000
  Payroll taxes                                         19,662          10,539
  Income taxes payable                                 307,464          56,790
  Accrued compensation                                  99,635          90,046
  Accrued local taxes                                   10,660          13,984
                                                --------------   -------------
  Total current liabilities                          2,014,407       1,883,303
                                                --------------   -------------
STOCKHOLDERS' EQUITY
  Common stock, $1 par value,
    authorized,  2,000,000 shares,
    issued and outstanding,  816,000 shares            816,000         816,000
  Additional paid-in capital                            17,862          17,862
  Retained earnings                                  3,808,975       3,514,161
                                                --------------   -------------
  Total stockholders' equity                         4,642,837       4,348,023
                                                --------------   -------------
                                                    $6,657,244      $6,231,326
                                                --------------   -------------
                                                --------------   -------------





                                          3

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UNIVERSAL MFG. CO. 
STATEMENTS OF INCOME AND RETAINED EARNINGS
(UNAUDITED)

                                                       Three Months Ended
                                                ------------------------------
                                                   October 31,     October 31,
                                                      1996            1995    
                                                --------------   -------------
NET SALES                                           $4,854,133      $4,428,765

COST OF GOODS SOLD                                   3,559,425       3,419,194
                                                --------------   -------------
GROSS PROFIT                                         1,294,708       1,009,571

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES                              495,813         480,745
                                                --------------   -------------

INCOME FROM OPERATIONS                                 798,895         528,826
                                                --------------   -------------

OTHER INCOME:
  Interest                                              15,087           9,413
  Other                                                  3,745           2,964
                                                --------------   -------------
  Total other income                                    18,832          12,377
                                                --------------   -------------

INCOME BEFORE INCOME TAXES                             817,727         541,203

INCOME TAXES                                           318,913         211,069

                                                --------------   -------------
NET INCOME                                             498,814         330,134

RETAINED EARNINGS, BEGINNING OF PERIOD               3,514,161       3,073,307

LESS CASH DIVIDENDS                                   (204,000)       (163,200)
                                                --------------   -------------
RETAINED EARNINGS, END OF PERIOD                    $3,808,975      $3,240,241
                                                --------------   -------------
                                                --------------   -------------

EARNINGS PER COMMON SHARE                                $0.61           $0.40
                                                --------------   -------------
                                                --------------   -------------


                                          4

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UNIVERSAL MFG. CO. 
STATEMENTS OF CASH FLOWS
(UNAUDITED)

                                                       Three Months Ended
                                                 -----------------------------
                                                    October 31,    October 31,
                                                       1996           1995    
                                                 --------------  -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                             $498,814       $330,134
Adjustments to reconcile net income to
 net cash from operating activities:
  Depreciation                                           48,152         48,120
  (Gain)/loss on sale of property                          (700)            81
Changes in operating assets and liabilities:
  Accounts receivable                                    40,962          3,976
  Inventories                                           220,580        119,825
  Prepaid expenses                                      (77,423)        (2,664)
  Income taxes recoverable                                    -        109,646
  Accounts payable                                     (134,958)        97,055
  Payroll taxes                                           9,123           (773)
  Accrued compensation                                    9,589          7,102
  Accrued local taxes                                    (3,324)        (7,276)
  Income taxes payable                                  250,674        101,424
                                                 --------------  -------------
Net cash flows from operating activities                861,489        806,650
                                                 --------------  -------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property                              700            269
Purchases of property                                   (35,446)       (41,067)
Proceeds from maturities of investments                       -         67,597
                                                 --------------  -------------
Net cash flows from investing activities                (34,746)        26,799
                                                 --------------  -------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of dividends                                   (204,000)      (163,200)
                                                 --------------  -------------
Net cash flows from financing activities               (204,000)      (163,200)
                                                 --------------  -------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                 622,743        670,249

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD        934,072        210,467
                                                 --------------  -------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $1,556,815       $880,716
                                                 --------------  -------------
                                                 --------------  -------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during period for:
  Income taxes                                          $68,240             $0
                                                 --------------  -------------
                                                 --------------  -------------



                                          5

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                                  UNIVERSAL MFG. CO.
                            NOTES TO FINANCIAL STATEMENTS
                            AS OF AND FOR THE THREE MONTHS
                                ENDED OCTOBER 31, 1996
                                     (UNAUDITED)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF OPERATIONS - The Company is engaged in the business of
     remanufacturing and selling on a wholesale basis remanufactured
     engines and other remanufactured automobile parts for Ford,
     Lincoln and Mercury automobiles and trucks.  The Company is a
     franchised remanufacturer for Ford Motor Company with a defined
     sales territory.  The Company purchases the majority of its new
     raw materials from Ford Motor Company.  Remanufactured engines
     for non-Ford vehicles are also marketed on a limited basis.
     The principal markets for the Company's products are automotive
     dealers and jobber supply houses.  The Company has no separate
     segments, major customers, foreign operations or export sales.

     USE OF ESTIMATES - In preparing financial statements in
     conformity with generally accepted accounting principles,
     management is required to make estimates and assumptions that
     affect the reported amounts of assets and liabilities and the
     disclosure of contingent assets and liabilities at the date of
     the financial statements and the reported amounts of revenues and
     expenses during the reporting period.  Actual results could differ
     from those estimates.

     INVENTORIES - Inventories are stated at the lower of cost (last-
     in first-out method) or market.

     INVESTMENTS - Short-term investments are considered as either
     trading securities or available for sale securities and,
     accordingly, are carried at fair value in the Company's financial
     statements.

     DEPRECIATION, MAINTENANCE, AND REPAIRS - Property is depreciated
     generally as follows:

    ASSETS               DEPRECIATION METHOD                 LIVES
    ------               ------------ ------                 -----

    Buildings            Straight-line and
                         declining balance             10 - 20 years

    Machinery and
    equipment            Declining-balance             7 - 10 years

    Furniture and
    fixtures             Declining-balance             5 - 7 years

    Trucks and
    automobiles          Declining-balance             3 - 5 years

     Maintenance and repairs are charged to operations as incurred.
     Renewals and betterments are capitalized and depreciated over
     their estimated useful service lives.  The applicable property
     accounts are relieved of the cost and related accumulated
     depreciation upon disposition.  Gains or losses are recognized
     at the time of disposal.

     REVENUE RECOGNITION - Sales and related cost of sales are
     recognized primarily upon shipment of products.

     CASH EQUIVALENTS - For the purposes of the Statements of Cash
     Flows, the Company considers all highly liquid instruments
     purchased with a maturity of three months or less to be cash
     equivalents.



                                          6

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                      NOTES TO FINANCIAL STATEMENTS - CONTINUED
                                     (UNAUDITED)




     FINANCIAL INSTRUMENTS - Cash and cash equivalents, accounts
     receivable and accounts payable are short term in nature and the
     values at which they are recorded are considered to be reasonable
     estimates of their fair values.

     EARNINGS PER SHARE - Earning per share have been computed on the
     weighted average number of shares outstanding (816,000 shares).

     COMPANY REPRESENTATION - In the opinion of the Company, the
     accompanying unaudited financial statements contain all
     adjustments (consisting of only normal recurring accruals)
     necessary to present fairly the financial position as of October
     31, 1996, and the results of operations and cash flows for the
     three month periods ended October 31, 1996 and 1995.  The results
     of operations for the periods ended October 31, 1996 and 1995 are
     not necessarily indicative of the results to be expected for the
     full year.

     Certain information and footnote disclosures normally included in
     financial statements prepared in accordance with generally
     accepted accounting principles have been omitted.  The Company
     suggests that these condensed financial statements be read in
     conjunction with the financial statements and notes included in
     the Company's Form 10-KSB for the fiscal year ended July 31, 1996.

2.   CHANGES IN ACCOUNTING PRINCIPLES

     INVESTMENTS - During the year ended July 31, 1995 the Company
     adopted the provisions of Statement of Financial Accounting
     Standards (SFAS) No. 115, Accounting for Certain Investments in
     Debt and Equity Securities.  The adoption of SFAS No. 115 had no
     effect on the 1995 financial statements.

3.   LEASE RECEIVABLE

     On May 26, 1993, the Company entered into a lease agreement with
     another manufacturer to lease equipment at 8% interest for a
     sixty-month period.  The total minimum lease payments are $47,903
     and the unearned income is $24,658 at October 31, 1996.  These
     amounts are shown on a net basis for financial statement purposes.

4.   EPA PROJECT COSTS

     In February, 1991, the Company was served with a complaint from
     the United States Environmental Protection Agency (EPA) which
     contained eight counts of alleged violations of the Resource
     Conservation and Recovery Act of 1976 and the Hazardous Solid
     Waste Amendments of 1984.  The complaint alleges, among other
     things, that the Company has failed to adequately test and
     properly transport certain residue of hazardous wastes which it
     was treating at its facility.  The Company entered into a Consent
     Agreement and Consent Order with the EPA, dated May 6, 1994, which
     provides for settlement of this complaint.

     This settlement calls for payment of a civil penalty of $32,955,
     and for the completion of certain remedial projects, estimated to
     cost approximately $149,725.  Total costs paid as of October 31,
     1996 are $90,113.  The remaining amount of $59,612 has been
     recorded in the accompanying financial statements.



                                          7

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                       AND RESULTS OF OPERATIONS

         Sales for the first quarter, 1997 were 10% higher than for the
         first quarter a year ago.  The sales increase was led by
         engine assembly sales increase of $265,579.  Other product
         lines with significant sales increases were electric fuel
         pumps and torque converters.

         Earnings from operations increased 51% due to increased sales
         and improved gross margin.  Manufacturing costs as well as
         sales expense, general expense, an administrative expenses
         were held relatively constant while sales increased.

         The higher cash balance for October 31, 1996, compared to July
         31, 1996, is because first quarter, 1997 estimated income
         taxes are due November 15, 1996.  Fourth quarter 1996 taxes
         were paid before quarter end.

PART II

Item 1.  LEGAL PROCEEDINGS:

         With respect to the Supplemental Environmental Project
         (the "SEP") being performed by the Company pursuant to the
         May 6, 1994 Consent Agreement with the United States
         Environmental Protection Agency ("EPA"), the Company has
         paid total costs of $90,113 for work performed.  No further
         direction has been received from the EPA regarding any testing
         or clean-up that may be required for contamination found in
         the large pit after the sludge was removed.  No estimate of
         these costs can be made at this time.  If the EPA determines
         that no further work is required under the SEP, the Company
         will owe a deferred penalty of approximately $32,955 under the
         terms of the Consent Agreement with the EPA.

         Please refer to the Part I, Item 3 of the Form 10-KSB report
         for the Company's fiscal year ended July 31, 1996 for further
         discussion of this matter.

Item 2.  CHANGES IN SECURITIES:                 NONE.

Item 3.  DEFAULTS UPON SENIOR SECURITIES:       NONE.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:

         At the Company's Annual Meeting of Shareholders on October 31,
         1996, the following individuals were elected to serve a two
         year term; Donald D. Heupel, Harry W. Meginnis, T. Warren
         Thompson.  The number of votes cast for, against or withheld,
         as well as the number of abstentions and broker-nonvotes to
         each person elected as director at the annual meeting is set
         forth below:

                                                            Abstentions
                                  Votes     Votes Against   and Broker
                                  For       or Withheld     Non-Votes

         Donald D. Heupel        809,247          200          -
         Harry W. Meginnis       658,643          200          -
         T. Warren Thompson      806,757          200          -

         Directors whose term of office continues after the 1996
         meeting until the 1997 Annual Meeting of Shareholders include
         Anthony H. Kelly, Richard E. McFayden, John R. McHugh, Richard W.
         Agee.


                                          8

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

PART II  CONTINUED



Item 5.  OTHER INFORMATION:

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K:

         (a) Exhibits:      NONE

         (b) Reports on Form 8-K:
             The Company did not file any reports on Form 8-K during
             the quarter for which this report is filed.











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.


                               UNIVERSAL MFG. CO




Date 11/20/96   /s/ Gary L. Christiansen
    ----------  ----------------------------------------------------------------
                Gary L. Christiansen, Vice President/Treasurer



Date 11/20/96   /s/ Donald D. Heupel
    ----------  ----------------------------------------------------------------
                Donald D. Heupel, President and Chief Financial Officer


                                          9