<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JULY 31, 1997

                          Commission file number 0-588

                           COMMERCIAL INTERTECH CORP.
             (Exact name of registrant as specified in its charter)

             Ohio                                             34-0159880
-------------------------------                            ----------------
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                           Identification No.)

1775 Logan Avenue, Youngstown, Ohio                           44501-0239
-----------------------------------                           ----------
(Address of principal executive offices)                      (Zip Code)

                                 (330) 746-8011
               --------------------------------------------------
               Registrant's telephone number, including area code

                                 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 of 1934 during
the preceding 12 months (or for such shorter periods 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 practical date.

      Common Stock, $1 Par Value--14,097,246 shares as of September 1, 1997


<PAGE>   2




                                      INDEX

                           COMMERCIAL INTERTECH CORP.

                                                                      PAGE NO.
                                                                      --------

PART I.   FINANCIAL INFORMATION

Item 1.   Financial Statements (Unaudited)

          Consolidated condensed statements of income - nine
          months ended July 31, 1997 and 1996; and three
          months ended July 31, 1997 and 1996.........................  3

          Consolidated condensed balance sheets - July 31,
          1997 and October 31, 1996...................................  4

          Consolidated condensed statements of cash flows -
          nine months ended July 31, 1997 and 1996....................  5

          Notes to consolidated condensed financial statements - 
          July 31, 1997...............................................  6


Item 2.   Management's Discussion and Analysis of Financial Condition 
          and Results of Operations...................................  10


PART II.  OTHER INFORMATION

Item 6.   Exhibits and Reports on Form 8-K ...........................  16

SIGNATURE   ..........................................................  18



                                        2


<PAGE>   3
<TABLE>
<CAPTION>




                                             PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                                       COMMERCIAL INTERTECH CORP. AND SUBSIDIARIES

                                 CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)

                                                              NINE MONTHS ENDED                  THREE MONTHS ENDED
(Thousands of dollars except per share data)                         JULY 31,                         JULY 31,
                                                           ------------------------         ---------------------------
                                                             1997             1996            1997                 1996
                                                           --------          ------         --------              ------

<S>                                                       <C>              <C>               <C>           <C>        
Net sales ............................................    $ 383,659        $ 340,198        $ 137,051        $ 121,009
Less costs and expenses:
   Cost of products sold .............................      285,280          252,086          100,509           88,710
   Selling, administrative and general expense .......       68,050           66,442           22,548           22,362
   Nonrecurring defense costs ........................            0            3,637                0            3,637
                                                          ---------        ---------        ---------        ---------
                                                            353,330          322,165          123,057          114,709
                                                          ---------        ---------        ---------        ---------
Operating income .....................................       30,329           18,033           13,994            6,300

Nonoperating income (expense):
   Interest income ...................................          661              781              298              261
   Interest expense ..................................       (7,948)          (4,232)          (2,738)          (1,526)
   Foreign currency gains (losses) ...................          675              (42)             225             (401)
   Other .............................................        1,862            2,003               43            1,209
                                                          ---------        ---------        ---------        ---------
                                                             (4,750)          (1,490)          (2,172)            (457)
                                                          ---------        ---------        ---------        ---------
Income from continuing operations
   before income taxes ...............................       25,579           16,543           11,822            5,843
Income taxes .........................................        9,186            5,550            4,121            2,644
                                                          ---------        ---------        ---------        ---------
Income from continuing operations ....................       16,393           10,993            7,701            3,199
Income from discontinued operations ..................            0            5,732                0              630
                                                          ---------        ---------        ---------        ---------
Net income ...........................................    $  16,393        $  16,725        $   7,701        $   3,829
                                                          =========        =========        =========        =========

Preferred stock dividend .............................        1,429            1,544              466              513
                                                          ---------        ---------        ---------        ---------
Net income applicable to common stock ................    $  14,964        $  15,181        $   7,235        $   3,316
                                                          =========        =========        =========        =========


Earnings per share of common stock:
     Primary:
       Income from continuing operations .............    $    1.04        $    0.61        $    0.50        $    0.17
       Income from discontinued operations ...........         0.00             0.37             0.00             0.05
       Net income ....................................         1.04             0.98             0.50             0.22
     Fully diluted:
       Income from continuing operations .............    $    0.93        $    0.59        $    0.44        $    0.17
       Income from discontinued operations ...........         0.00             0.34             0.00             0.04
       Net income ....................................         0.93             0.93             0.44             0.21

Dividends per common share ...........................    $   0.405        $   0.405        $   0.135        $   0.135

See notes to consolidated condensed financial statements.
</TABLE>

                                        3


<PAGE>   4
<TABLE>
<CAPTION>






                   COMMERCIAL INTERTECH CORP. AND SUBSIDIARIES

                CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)

(Thousands of dollars)                                                                         JULY 31,      OCTOBER 31,
                                                                                                  1997            1996
                                                                                              -----------     ----------
<S>                                                                                           <C>            <C>        
ASSETS
------
   CURRENT ASSETS:
      Cash and cash equivalents.............................................................  $    21,370    $    27,552
      Accounts receivable, less allowance (1997-$2,124; 1996-$1,724)........................       73,538         70,399
      Inventories ..........................................................................       58,166         58,129
      Deferred income tax benefits  ........................................................       14,215         15,515
      Prepaid expenses and other current assets.............................................        3,014          4,012
      Receivable from discontinued operations ..............................................        1,067         14,796
                                                                                               ----------    -----------
                                                            TOTAL CURRENT ASSETS............      171,370        190,403

   PROPERTY, PLANT AND EQUIPMENT............................................................      210,820        196,909
      Less allowance for depreciation.......................................................      109,350        100,289
                                                                                              -----------    -----------
                                                                                                  101 470         96,620

   NONCURRENT ASSETS:
      Intangible assets.....................................................................       41,515          9,051
      Pension assets........................................................................       38,969         37,371
      Other assets .........................................................................        6,053          3,671
                                                                                              -----------    -----------
                                                     TOTAL NONCURRENT ASSETS................       86,537         50,093
                                                                                              -----------    -----------
                                                                           TOTAL ASSETS.....  $   359,377    $   337,116
                                                                                              ===========    ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
   CURRENT LIABILITIES:
      Bank loans ...........................................................................  $     5,104    $     2,745
      Accounts payable......................................................................       43,266         51,648
      Accrued expenses......................................................................       51,771         54,291
      Accrued income taxes .................................................................        7,634          4,385
      Dividends payable.....................................................................        2,534          2,449
      Current portion of long-term debt  ...................................................        4,612            705
                                                                                              -----------    -----------
                                                      TOTAL CURRENT LIABILITIES.............      114,921        116,223

   NONCURRENT LIABILITIES:
      Long-term debt .......................................................................      115,585         93,415
      Deferred income taxes.................................................................       15,992         15,495
      Postretirement benefits ..............................................................       24,558         24,822
                                                                                              -----------    -----------
                                               TOTAL NONCURRENT LIABILITIES.................      156,135        133,732

   SHAREHOLDERS' EQUITY:
      Preferred stock, no par value:
         Authorized:  10,000,000 shares
         Series A participating preferred shares ...........................................            0              0
         Series B ESOP convertible preferred shares
            Issued:  1997 -   942,552 shares
                     1996 - 1,039,657 shares ...............................................       21,914        24,172
      Common stock, $1 par value:
         Authorized:  30,000,000 shares
            Issued:  1997 - 14,097,246 shares (excluding 1,922,618 in treasury)
                     1996 - 13,559,579 shares (excluding 2,211,868 in treasury).............       14,097        13,560
      Capital surplus ......................................................................        4,202             0
      Retained earnings.....................................................................       77,695        67,808
      Deferred compensation ................................................................      (16,337)      (17,594)
      Translation adjustment ...............................................................      (13,250)         (785)
                                                                                             ------------   -----------
                                                 TOTAL SHAREHOLDERS' EQUITY.................       88,321        87,161
                                                                                             ------------   -----------
                       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY........................... $    359,377   $   337,116
                                                                                             ============   ===========


See notes to consolidated condensed financial statements.
</TABLE>

                                        4


<PAGE>   5


<TABLE>
<CAPTION>




                   COMMERCIAL INTERTECH CORP. AND SUBSIDIARIES

           CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                                                                    NINE MONTHS ENDED
(Thousands of dollars)                                                                                   JULY 31,
                                                                                                  ---------------------
                                                                                                   1997            1996
                                                                                                  -----           -----
<S>                                                                                            <C>            <C>        
OPERATING ACTIVITIES:
   Net income .............................................................................  $    16,393    $    16,725
   Adjustments to reconcile net income to net cash
      provided by operating activities:
         Discontinued operations...........................................................            0         (5,732)
         Provision for depreciation and amortization.......................................       10,940          8,856
         Amortization of deferred credit ..................................................       (1,164)        (3,634)
         Postretirement benefit  ..........................................................          306            665
         Pension plan credits .............................................................       (2,052)        (1,630)
         Change in deferred income taxes...................................................        1,439           (847)
         Change in current assets and liabilities:
            (Increase) decrease in accounts receivable.....................................       (1,153)        11,931
            (Increase) in inventories .....................................................         (164)        (4,103)
            (Increase) in prepaid expenses and other current assets .......................       (1,690)        (2,962)
            Decrease in receivable from discontinued operations............................        9,231              0
            (Decrease) increase in accounts payable and accrued expenses ..................       (3,647)         8,257
            Increase in accrued income taxes ..............................................        4,188          3,328
                                                                                             -----------    -----------
   Net cash provided by continuing operations .............................................       32,627         30,854
   Net cash provided by discontinued operations ...........................................            0         10,417
                                                                                             -----------    -----------
                                      Net cash provided by operating activities............       32,627         41,271

INVESTING ACTIVITIES:
   Proceeds from sale of fixed assets......................................................          772          2,755
   Business acquisition ...................................................................      (39,359)       (10,731)
   Investment in intangibles  .............................................................         (896)             0
   Capital expenditures....................................................................       (7,736)       (13,808)
   Operating subsidies.....................................................................        3,016              0
                                                                                             -----------    -----------
                                      Net cash (used) by investing activities..............      (44,203)       (21,784)

FINANCING ACTIVITIES:
   Proceeds from long-term debt  ..........................................................      137,910        145,052
   Principal payments on long-term debt....................................................     (118,689)       (83,321)
   Net borrowings under bank loan agreements ..............................................         (426)         2,356
   Repurchase of common shares.............................................................            0        (57,008)
   Proceeds from reserve contracts ........................................................          139          1,945
   Purchase of reserve contracts...........................................................       (4,083)        (3,566)
   Conversion of other assets .............................................................       (2,663)          (449)
   Dividends from discontinued operations .................................................        4,612              0
   Dividends paid .........................................................................       (6,988)        (7,848)
                                                                                             -----------    -----------
                                      Net cash provided (used) by financing activities.....        9,812         (2,839)

Effect of exchange rate changes on cash ...................................................       (4,418)          (967)
                                                                                             -----------    ------------
Net (decrease) increase in cash and cash equivalents ......................................       (6,182)        15,681

Cash and cash equivalents at beginning of period...........................................       27,552         32,949
                                                                                             -----------    -----------
Cash and cash equivalents at end of period  ...............................................  $    21,370    $    48,630
                                                                                             ===========    ===========

Supplemental disclosures:
   Cash paid during the period for:
      Interest.............................................................................  $     7,857    $     3,386
      Income taxes ........................................................................        3,559          3,069



 See notes to consolidated condensed financial statements.
</TABLE>

                                        5


<PAGE>   6




                   COMMERCIAL INTERTECH CORP. AND SUBSIDIARIES

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

                                  JULY 31, 1997

Note A - Basis of Presentation
------------------------------

         The accompanying unaudited consolidated condensed financial statements
of Commercial Intertech Corp. and Subsidiaries (the "Company" or "Commercial
Intertech") have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. 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 normal recurring accruals) considered necessary for a
fair presentation have been included. For further information, refer to the
consolidated financial statements and footnotes thereto included in Commercial
Intertech Corp. and Subsidiaries' annual report on Form 10-K for the year ended
October 31, 1996. Operating results for the nine-month and three-month periods
ended July 31, 1997 are not necessarily indicative of the results that may be
expected for the year ended October 31, 1997. Certain prior period balances have
been reclassified to conform with the presentation of the current period.

Note B - Discontinued Operations
--------------------------------

         On July 29, 1996 the Board of Directors of Commercial Intertech Corp.
approved a plan to spin-off the fluid purification business by declaring a
dividend distribution of 100 percent of the common stock of CUNO Incorporated
("CUNO") on a pro-rata basis to the holders of Commercial Intertech common
shares (the "Distribution"). Each holder of record of Commercial Intertech
common shares at the close of business on September 10, 1996, the record date
for the Distribution, received one share of CUNO Common Stock for every one
common share of Commercial Intertech. No fractional shares of CUNO were issued.
The operating results of CUNO are presented in the accompanying consolidated
condensed financial statements as a discontinued operation.

         In connection with the spin-off, the Board of Directors of Commercial
Intertech declared a dividend of approximately $35,675,000 payable from the CUNO
locations to the parent, and immediately prior to the Distribution, CUNO assumed
$30,000,000 of Commercial Intertech's debt in the form of a dividend.

         The Company and CUNO have entered into a Tax Allocation Agreement in
connection with the distribution. In addition, the Company and CUNO have entered
into a Distribution and Interim Services Agreement which provides that certain
services which have historically been provided to CUNO by the Company will
continue to be provided following the Distribution Date, at rates specified in
such agreement, for a period of up to twelve months.

                                        6


<PAGE>   7



Note C - Long-Term Debt
-----------------------

         In November 1996, the Company used approximately $27.0 million of the
senior revolving credit and term loan facilities negotiated at the end of fiscal
1996 to finance the acquisition (including working capital) of Ultra Hydraulics
Limited (see Note G). In addition to the $27.0 million, approximately $22.0
million was financed with loan notes issued to the principal owners of Ultra
Hydraulics at LIBOR less one percentage point. The loan notes are guaranteed
under the senior revolving credit and term loan agreement. In June 1997, the
loan notes were retired using proceeds from the senior revolving credit
facility.

         In July 1997, the Company completed the private placement of $60.0
million in senior unsecured notes with a group of institutional investors. The
7.61 percent notes, with an average life of seven years and a maturity date of
10 years, are callable at any time at the option of the Company, subject to
certain provisions. Net proceeds were used to repay $60.0 million outstanding
under the Company's term loan facility which was negotiated at the end of fiscal
1996.

Note D - Per-Share Data
-----------------------

         Per-share data was computed using the weighted average number of common
shares outstanding during the period. The preferred stock issued in February,
1990 was determined not to be a common stock equivalent for primary earnings per
share. In computing primary earnings per common share, the Series B preferred
dividends and adjustments reduce income available to common shareholders.

         In computing fully diluted earnings per share, dilution is determined
by dividing net earnings by the weighted average number of common shares
outstanding during the period after giving effect to dilutive preferred stock
assumed converted to common stock. The most dilutive calculation assumes
conversion of Series B preferred stock to common shares and the subsequent
adjustment for dividend rates to arrive at income available to common
shareholders.

Note E - Inventories
--------------------

         Inventories consisted of the following:
<TABLE>
<CAPTION>

                                                 JULY 31,     OCTOBER 31,
                                                   1997          1996
                                                ---------     ----------
                                                      (in thousands)

<S>                                             <C>            <C>      
                 Raw materials................  $   21,066     $  21,090
                 Work-in-process..............      27,855        27,353
                 Finished goods...............       9,245         9,686
                                                ----------     ---------
                                                $   58,166     $  58,129
                                                ==========     =========
</TABLE>









                                        7


<PAGE>   8




Note F - Segment Reporting
--------------------------

         The Company is engaged in the design, manufacture and sale of products
in two segments:
<TABLE>
<CAPTION>

                                                     NINE MONTHS ENDED                THREE MONTHS ENDED
                                                          JULY 31,                          JULY 31,
                                                 -------------------------          ------------------------
                                                  1997               1996           1997               1996
                                                 ------             ------          -----              -----
                                                                        (in thousands)
<S>                                            <C>                <C>            <C>                <C>      
HYDRAULIC SYSTEMS
   Net sales                                   $ 260,046          $ 219,577      $  91,735          $  75,562
   Operating income                               18,499             14,533          7,209              5,041


BUILDING SYSTEMS AND METAL PRODUCTS
   Net sales                                   $ 123,613          $ 120,621      $  45,316          $  45,447
   Operating income                               11,830              7,137          6,785              4,896


NONRECURRING DEFENSE COSTS
   Operating Income                            $       0          $  (3,637)     $       0          $  (3,637)


TOTAL COMPANY
   Net sales                                   $ 383,659          $ 340,198      $ 137,051          $ 121,009
   Operating income                               30,329             18,033         13,994              6,300
   Percent to sales                                  7.9%               5.3%          10.2%               5.2%

</TABLE>

Note G - Acquisitions
---------------------

         On November 18, 1996, the Company reported it acquired all of the
outstanding common stock of Ultra Hydraulics Limited through its wholly owned
subsidiary, Commercial Intertech Limited, located in the United Kingdom. Ultra
Hydraulics is headquartered near Gloucester, England and employs more than 300
men and women in the United Kingdom and the United States. The acquisition was
accounted for as a purchase transaction and included in the accompanying
financial statements since the acquisition date.

         The initial purchase price for the stock of Ultra Hydraulics was
approximately $39.4 million. The purchase price was determined by arm's length
negotiation between the parties. The initial purchase price is subject to
adjustments based upon audit.

                                        8


<PAGE>   9




Note H - Newly Issued Accounting Standards
------------------------------------------

         In February 1997, Statement of Financial Accounting Standards ("SFAS")
No. 128, "Earnings per Share" was issued. SFAS No. 128 specifies the computation
and presentation of earnings per share information and is required to be adopted
on December 31, 1997. Under the new requirements for calculating primary
earnings per share, the dilutive effect of unexercised stock options will be
excluded. The impact of adopting SFAS No. 128 is expected to result in an
increase in primary earnings per share of $.03 and $.00 for the quarters ended
July 31, 1997 and 1996, respectively, and $.06 and $.02 for the nine months
ended July 31, 1997 and 1996, respectively. The Company has not yet finalized
the determination of the impact the statement will have on the calculation of
fully diluted earnings per share. Early adoption of the statement is not
permitted.

         In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was
issued. SFAS No. 130 defines comprehensive income and outlines certain reporting
and disclosure requirements related to comprehensive income and is effective for
fiscal year ending October 31, 1998. The Company is currently evaluating the
impact of the new disclosure requirements.

         In June 1997, SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" was issued. SFAS No. 131 requires changes in
the presentation of operating segment information in both interim and annual
financial statements and is effective for fiscal year ending October 31, 1998.
The Company is currently evaluating the impact of the new disclosure
requirements.

                                        9


<PAGE>   10



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

RESULTS OF OPERATIONS
---------------------

             On July 29, 1996, the Company's Board of Directors declared a
dividend to Commercial Intertech common shareholders of 100 percent of the
common stock of CUNO Incorporated, its fluid filtration and purification
subsidiary. The new CUNO shares were distributed on the basis of one common
share of CUNO for each Commercial Intertech common share outstanding, payable to
holders of record as of the close of business on August 9, 1996. On September 9,
1996, the Securities and Exchange Commission and Nasdaq approved the CUNO shares
for trading on the stock exchange. The CUNO financial results have been restated
and reported as income from discontinued operations in the accompanying
consolidated condensed statements of income.

Third Quarter 1997 Compared With Third Quarter 1996
---------------------------------------------------

             Quarterly net sales of $137,051,000 established a new record for
any fiscal quarter in the Company's history. Net sales during the current
quarter were $16,042,000 or 13 percent higher, or 17 percent higher on a
currency adjusted basis, than the third quarter of fiscal 1996. The increase is
primarily due to the favorable impact of business acquisitions and sales growth
reflecting higher demand for most of the Company's products. Income from
continuing operations more than doubled to $7,701,000 which was $4,502,000
higher than the third quarter of fiscal 1996. The third quarter of 1996 included
nonrecurring hostile takeover costs of $3,637,000. The increase in 1997 reflects
the impact of increased sales and the progress made in reducing the Company's
cost structure.

             Net sales recorded by domestic operations totaled $75,456,000
during the current quarter which was $14,004,000 or 23 percent higher than net
sales of the third quarter of the prior fiscal year which reflects increased
demand. The domestic Hydraulics Systems Group recorded net sales for the quarter
of $60,418,000, a 23 percent increase over the third quarter of last year. The
domestic Metal Products Group recorded third quarter sales of $15,038,000 which
represents a 23 percent increase over the same quarter last year.

             Net sales of foreign operations totaled $61,595,000 which was
$2,038,000 or 3 percent higher than the third quarter of last year. Net sales of
foreign operations would have been higher by $4,498,000 if exchange rates
remained unchanged for the period. The foreign Hydraulic Systems Group reported
shipments of $31,317,000, a 19 percent increase over the third quarter of last
year. Sales of the Company's Astron Division located in Europe increased 3
percent in the current quarter adjusted for the effects of exchange rate
differences.

             Consolidated gross profit of $36,542,000 was $4,243,000 or 13
percent higher than the third quarter of fiscal 1996 which primarily reflects
the impact of increased sales during the current quarter. Gross profit margins
for the current period were flat compared with the third quarter of fiscal 1996.

             Selling, general and administrative expenses of $22,548,000 were
$186,000 or 1 percent higher than the same quarter last year. Expenses actually
declined by 4 percent during the current quarter if acquisitions are excluded
from the comparison. Selling, general and administrative expenses declined as a
percent of sales to 16 percent in the current quarter from 18 percent of sales
last year reflecting the impact of the Company's efforts to reduce its cost
structure.

                                       10


<PAGE>   11



             Operating income of $13,994,000 in the current quarter was
$7,694,000 or 122 percent higher than the same quarter last year. Excluding 1996
third quarter nonrecurring hostile takeover defense costs of $3,637,000,
operating income for the third quarter of 1997 was 41 percent above the same
quarter last year. Operating income of the Hydraulic Systems Group of $7,209,000
was 43 percent higher than the same quarter last year as both domestic and
foreign operations reported increased operating income. The Building Systems and
Metal Products Group recorded operating income of $6,785,000 which was 39
percent higher than operating income of the third quarter of last year primarily
due to increased sales, continuing benefits from programs to reduce
manufacturing costs, and increased efficiencies from Astron's new facility in
the Czech Republic.

             During the third quarter of fiscal 1997, nonoperating expenses of
$2,172,000 were $1,715,000 greater than the same quarter last year. Interest
expense of $2,738,000 in the current quarter was $1,212,000 higher than the
prior year primarily due to debt incurred in the fourth quarter of fiscal 1996
to fund the repurchase of 2.0 million shares of the Company's common shares, to
purchase the outstanding loans of the Company's Employee Stock Ownership Plan
and to fund the acquisition of Ultra Hydraulics Limited, located in the United
Kingdom, on November 16, 1996. In addition, nonoperating expenses for the third
quarter of the prior year include nonrecurring gains realized on the disposal of
fixed assets, principally in the United Kingdom.

             The Company's effective income tax rate normalized at 35 percent
during the third quarter of fiscal 1997.

First Nine Months of 1997 Compared With First Nine Months of 1996
-----------------------------------------------------------------

             The Company recorded net sales of $383,659,000 for the nine months
ended July 31, 1997, surpassing sales recorded for the prior year period by 13
percent, or 15 percent higher on a currency adjusted basis. The increase is
primarily due to the favorable impact of business acquisitions and sales growth
reflecting higher demand for most of the Company's products. Income from
continuing operations of $16,393,000 was $1,763,000 or 12 percent higher than
the first nine months of last year excluding nonrecurring hostile takeover costs
of $3,637,000 recorded in the prior year period. The increase reflects the
impact of increased sales and the progress made in reducing the Company's cost
structure.

             Net sales of domestic operations totaled $212,489,000 during the
current period, which is $26,565,000 or 14 percent higher than net sales of the
prior year period. The domestic Hydraulic Systems Group recorded current period
revenues of $168,375,000, a 15 percent increase over the same period of the
prior year. The domestic Metal Products Group reported a 12 percent increase in
revenues over the same period last year.

             Foreign operations recorded revenues of $171,170,000 which were
$16,896,000 or 11 percent higher than the same period last year. The increase
primarily reflects sales growth and the favorable impact of the acquisition of
Ultra Hydraulics Limited which more than offset the negative currency impact on
foreign sales reported in U.S. dollars due to a stronger dollar relative to most
foreign currencies during the current period. Net sales of foreign operations
would have been higher by $9,192,000 if exchange rates remained unchanged for
the period. The foreign Hydraulic Systems Group recorded net sales of
$91,671,000, a 25 percent increase over the same period last year, reflecting
gains in virtually all markets it serves and the acquisition of Ultra Hydraulics
Limited. Sales of the Company's Astron Division located in Europe increased 8
percent in the current period adjusted for the effects of exchange rate
differences.

                                       11


<PAGE>   12



             Consolidated gross profit of $98,379,000 during the current period
was $10,267,000 or 12 percent higher than the same period of fiscal 1996 which
primarily reflects the impact of increased sales during the current period.
Consolidated gross profit margins of the current period were slightly lower than
the same period last year. Domestic profit margins were flat compared with the
prior year period while profit margins for foreign operations were down slightly
due, in part, to temporary operational difficulties for the newly acquired
Hydraulics business in the United Kingdom. Also included in the current period
results for the Hydraulics Systems Group is a $2.0 million credit related to an
extension of operating subsidies negotiated with the German government. The $2.0
million compares to $3.6 million amortization of deferred credit during the same
period last year.

             Selling, general and administrative expenses of $68,050,000 were
$1,608,000 or 2 percent higher than the same period last year. Expenses actually
declined by 2 percent during the current period if acquisitions are excluded
from the comparison. Selling, general and administrative expenses declined as a
percent of sales to 18 percent in the current period from 20 percent of sales in
the prior period reflecting the impact of the Company's efforts to reduce its
cost structure.

             Operating income of $30,329,000 in the current nine month period
was $12,296,000 or 68 percent higher than the same period of the prior fiscal
year which primarily reflects the impact of increased sales as well as the
results of the Company's efforts to reduce its cost structure. Excluding 1996
nonrecurring hostile takeover defense costs of $3,637,000, operating income for
the first nine months of 1997 was 40 percent above the same period last year.
Operating income of the Hydraulic Systems Group was $18,499,000 or 27 percent
higher than the same period last year as both domestic and foreign operations
reported increased operating income. The Building Systems and Metal Products
Group recorded operating income of $11,830,000 or 66 percent higher than
operating income of the same period last year primarily due to increased sales,
efforts to reduce manufacturing costs and increased efficiencies from Astron's
new facility in the Czech Republic.

             During the first nine months of fiscal 1997, nonoperating expenses
of $4,750,000 were $3,260,000 greater than the same period of the prior year.
Interest expense of $7,948,000 in the current period was $3,716,000 higher than
the prior year primarily due to debt incurred in the fourth quarter of fiscal
1996 to fund the repurchase of 2.0 million shares of the Company's common
shares, to purchase the outstanding loans of the Company's Employee Stock
Ownership Plan and to fund the acquisition of Ultra Hydraulics Limited on
November 16, 1996. The Company also recorded a nonrecurring gain during the
current period of $1.0 million realized on transfer of Astron Building Systems
marketing and manufacturing rights to a new Korean licensee. In addition,
nonoperating expenses for the prior year period include nonrecurring gains
realized on the disposal of fixed assets, principally in the United Kingdom.

             The Company's effective income tax rate of 36 percent during the
first nine months of fiscal 1997 is higher than that of the same period of the
prior fiscal year due primarily to reduced utilization of loss carryforwards in
Germany.

                                       12


<PAGE>   13





Newly Issued Accounting Standards
---------------------------------

             In February 1997, Statement of Financial Accounting Standards
("SFAS") No. 128, "Earnings per Share" was issued. SFAS No. 128 specifies the
computation and presentation of earnings per share information and is required
to be adopted on December 31, 1997. Under the new requirements for calculating
primary earnings per share, the dilutive effect of unexercised stock options
will be excluded. The impact of adopting SFAS No. 128 is expected to result in
an increase in primary earnings per share of $.03 and $.00 for the quarters
ended July 31, 1997 and 1996, respectively, and $.06 and $.02 for the nine
months ended July 31, 1997 and 1996, respectively. The Company has not yet
finalized the determination of what impact the statement will have on the
calculation of fully diluted earnings per share. Early adoption of the statement
is not permitted.

             In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was
issued. SFAS No. 130 defines comprehensive income and outlines certain reporting
and disclosure requirements related to comprehensive income and is effective for
fiscal year ending October 31, 1998. The Company is currently evaluating the
impact of the new disclosure requirements.

             In June 1997, SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" was issued. SFAS No. 131 requires changes in
the presentation of operating segment information in both interim and annual
financial statements and is effective for fiscal year ending October 31, 1998.
The Company is currently evaluating the impact of the new disclosure
requirements.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

             The Company expects that sufficient financial resources, generated
from both internal and external sources, will be available to meet operating
needs, to meet scheduled debt repayments and to fund capital expenditure
programs during the upcoming year. Cash and cash equivalents declined by
$6,182,000 during the first nine months of fiscal 1997. Cash provided by
continuing operations during the current period increased to $32,627,000
compared with $30,854,000 in the first nine months of last year.

             Cash used in investing activities was $44,203,000 in the first nine
months of the fiscal 1997 compared with $21,784,000 last year primarily due to
use of cash totaling $39,359,000 to acquire all of the outstanding common stock
of Ultra Hydraulics Limited in November 1996. Investing activities include
proceeds of $3,016,000 which was paid by an agency of the Federal Republic of
Germany pursuant to a negotiated extension of operating subsidies related to the
Company's German operations. Cash used in investing activities for capital
expenditures was $7,736,000 in the current period which is 44 percent lower than
capital expenditures for the same period last year.

                                       13


<PAGE>   14





             Cash provided by financing activities was $9,812,000 compared with
cash used of $2,839,000 last year. Proceeds from issuing long-term debt in the
current period include the completion of a private placement of $60,000,000 in
7.61 percent senior unsecured notes in July 1997 and approximately $49,000,000
of long-term debt issued to finance the acquisition of Ultra Hydraulics Limited
in November 1996. The senior unsecured notes, with an average life of seven
years and a maturity date of 10 years, are callable at any time at the option of
the Company, subject to certain provisions. Net proceeds from the senior
unsecured notes were used to repay $60,000,000 outstanding under the Company's
term loan facility which was negotiated at the end of fiscal 1996. In addition,
approximately $20,000,000 of loan notes issued to finance the Ultra Hydraulics
Limited acquisition were retired in June 1997 using proceeds from the Company's
senior revolving credit facility. The remaining principal payments on long-term
debt primarily represents net pay-downs of amounts drawn under the Company's
senior revolving credit facility.

BUSINESS OUTLOOK
----------------

             Incoming customer orders received of $425,146,000 during the first
nine months of fiscal 1997 is an all-time Company record. Current period orders
are 25 percent higher than orders received twelve months ago, parity adjusted.
Current fiscal year orders received by the Hydraulic Systems Group are at an
all-time high on the strength of three consecutive record quarters reported by
its domestic units. Current period orders received in the United States were 25
percent higher than last year and bookings received overseas were 27 percent
higher than fiscal 1996, adjusted for parity differences. While domestic Metal
Products Group orders were 18 percent higher than last year, orders received by
the Astron Division in Europe during the first nine months of fiscal 1997 are at
an all-time high, 24 percent higher than last year, adjusted for fluctuations in
foreign currencies.

             The worldwide backlog of unshipped orders amount to $185,215,000 at
July 31, 1997. The amount of unshipped orders is 40 percent higher than the
balance at the end of fiscal 1996 and 24 percent higher than the ending order
backlog twelve months ago, both adjusted for foreign currency exchange rate
differences.

             The Company expects to achieve double-digit growth in revenues and
income from continuing operations along with significant operating margin
improvement in fiscal 1997. Incoming orders for the most recently completed
quarter and year-to-date period reflect favorable business conditions and strong
customer demand for almost all of the Company's major product lines. In
addition, the Company continues to realize substantial benefits from its
overhead cost containment programs implemented at the beginning of fiscal 1997
and the return from capital investment actions to improve manufacturing
efficiencies. As the Company enters the final quarter of 1997, capacity
constraints are appearing at some facilities but the Company remains confident
that it will have a strong fourth quarter to complete an excellent fiscal 1997.

                                       14


<PAGE>   15




FORWARD-LOOKING INFORMATION
---------------------------

             Forward-looking statements contained in this Form 10-Q government
filing are made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. The Company cautions that a number of important
factors could cause the Company's actual results for 1997 and beyond to differ
materially from those expressed in any forward-looking statements made by or on
behalf of the Company. These important factors include, without limitation,
demand for the Company's products; the Company's ability to manufacture
commercial quantities of its products on an efficient and cost effective basis;
competition by rival developers of hydraulic systems and building systems and
metal products; changes in technology; customer preferences; growth in the
hydraulic systems and building systems and metal products industries and general
economic and business conditions. These important factors and other factors
which could affect the Company's results are detailed in the Company's filings
with the Securities and Exchange Commission and are included herein by
reference. The Company assumes no obligation to update the information in this
filing.

                                       15


<PAGE>   16



                           PART II. OTHER INFORMATION

Item 6.      Exhibits and Reports on Form 8-K

             (a)  Exhibits:

Exhibit 11 - computation of per share earnings (unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                          NINE MONTHS ENDED              THREE MONTHS ENDED
                                                                                JULY 31,                       JULY 31,
                                                                        ----------------------         -----------------------
                                                                         1997            1996           1997              1996
                                                                        ------          ------         ------            -----
<S>                                                                  <C>             <C>               <C>            <C>   
PRIMARY
-------
  Average shares outstanding ......................................      13,996          15,369            14,095        15,176
  Net effect of dilutive stock options - based on the
      treasury stock method using average market price.............         414             188               442           232
                                                                     ----------     -----------       -----------     ---------
          Total....................................................      14,410          15,557            14,537        15,408
                                                                     ==========     ===========       ===========     =========

  Income from continuing operations ...............................  $   16,393     $    10,993       $     7,701     $   3,199
  Preferred stock dividends and adjustments .......................      (1,429)         (1,544)             (466)         (513)
                                                                     ----------     -----------       -----------     ---------
  Income applicable to common stock ...............................  $   14,964     $     9,449       $     7,235     $   2,686
                                                                     ==========     ===========       ===========     =========
  Per share amount ................................................  $     1.04     $      0.61       $      0.50     $    0.17
                                                                     ==========     ===========       ===========     =========

  Income from discontinued operations..............................  $        0     $     5,732       $         0     $     630
                                                                     ==========     ===========       ===========     =========
  Per share amount.................................................  $     0.00     $      0.37       $      0.00     $    0.05
                                                                     ==========     ===========       ===========     =========

  Net income ......................................................  $   16,393     $    16,725       $     7,701     $   3,829
  Preferred stock dividends and adjustments........................      (1,429)         (1,544)             (466)         (513)
                                                                     ----------     -----------       -----------     ---------
  Income applicable to common stock ...............................  $   14,964     $    15,181       $     7,235     $   3,316
                                                                     ==========     ===========       ===========     =========
  Per share amount ................................................  $     1.04     $      0.98       $      0.50     $    0.22
                                                                     ==========     ===========       ===========     =========

FULLY DILUTED
-------------
  Average shares outstanding.......................................      13,996          15,369            14,095        15,176
  Net effect of dilutive stock options - based on the
      treasury stock method using the period end price
      if higher than average market price..........................         534             303               515           285
  Common share equivalents:
      Series B Preferred ..........................................       2,915           1,288             2,849         1,284
                                                                     ----------     -----------       -----------     ---------
          Total ...................................................      17,445          16,960            17,459        16,745
                                                                     ==========     ===========       ===========     =========

  Income from continuing operations................................  $   16,393     $    10,993       $     7,701     $   3,199
  Preferred stock (Series B) dividends rate adjustment.............        (249)         (1,023)              (81)         (343)
                                                                     ----------     -----------       -----------     ---------
  Income applicable to common stock ...............................  $   16,144     $     9,970       $     7,620     $   2,856
                                                                     ==========     ===========       ===========     =========
  Per share amount.................................................  $     0.93     $      0.59       $      0.44     $    0.17
                                                                     ==========     ===========       ===========     =========

  Income from discontinued operations..............................  $        0     $     5,732       $         0     $     630
                                                                     ==========     ===========       ===========     =========
  Per share amount ................................................  $     0.00     $      0.34       $      0.00     $    0.04
                                                                     ==========     ===========       ===========     =========

  Net income ......................................................  $   16,393     $    16,725       $     7,701     $   3,829
  Preferred stock (Series B) dividends rate adjustment ............        (249)         (1,023)              (81)         (343)
                                                                     ----------     -----------       -----------     ---------
  Income applicable to common stock ...............................  $   16,144     $    15,702       $     7,620     $   3,486
                                                                     ==========     ===========       ===========     =========
  Per share amount ................................................  $     0.93     $      0.93       $      0.44     $    0.21
                                                                     ==========     ===========       ===========     =========
</TABLE>



                                       16


<PAGE>   17



Exhibit 27 -   Financial Data Schedule

(b)      Reports On Form 8-K

         No reports were filed on Form 8-K during the quarter for which this
report is filed.





                                       17


<PAGE>   18



                                    SIGNATURE

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.

                                             COMMERCIAL INTERTECH CORP.

Date   September  11, 1997                   By    /s/ Steven J. Hewitt
    --------------------------                 ------------------------
                                             Steven J. Hewitt
                                             Senior Vice President and
                                             Principal Financial Officer




                                       18