................................................................................
 ................................................................................

                                  UNITED STATES
                       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 AND EXCHANGE ACT OF 1934

              For the Quarterly Period ended September 28, 1996

              OR

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

              For the transition period from ____________ to ____________

              Commission file number    0-4723

                                  FARR COMPANY
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                95-1288401
--------------------------------------------------------------------------------
(State or other jurisdiction of     (I.R.S. Employer Identification Number)
incorporation or organization)

     2221 Park Place, El Segundo, CA                    90245
--------------------------------------------------------------------------------
(Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code      (310) 536-6300

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  ( )

Number of shares of  registrants common  stock  outstanding  as of close  of the
period covered by this report: 3,800,820.

 ................................................................................
 ................................................................................

<PAGE>

                         PART I - FINANCIAL INFORMATION

                          FARR COMPANY AND SUBSIDIARIES

                                    INDEX TO

                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 28, 1996

Part I - Financial Information


INTRODUCTION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         Balance Sheets - September 28, 1996 and December 30, 1995

         Income  Statements  for the three  months ended  September 28, 1996 and
         September 30, 1995 and for the nine months ended September 28, 1996 and
         September 30, 1995

         Statements  of Cash Flows for the nine months ended  September 28, 1996
         and September 30, 1995

         Notes to Condensed Consolidated Financial Statements


MANAGEMENT'S DISCUSSION AND ANALYSIS


Part II - Other Information


EXHIBITS


<PAGE>






                          FARR COMPANY AND SUBSIDIARIES

                                 INTRODUCTION TO

                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 28, 1996


         The Condensed  Consolidated  Financial  Statements included herein have
been prepared by the Company without audit,  and include all  adjustments  which
are, in the opinion of  management,  necessary  for a fair  presentation  of the
financial  position as of September 28, 1996 and the results of  operations  for
the three and nine  months  ended  September  28,  1996 and  September  30, 1995
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted  pursuant to such rules and regulations  although
the Company  believes that the  disclosures are adequate to make the information
presented not misleading. These condensed financial statements should be read in
conjunction  with  the  consolidated  financial  statements  and  notes  thereto
included in the Company's latest annual report on Form 10-K.




<PAGE>
<TABLE>
                         FARR COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                     Assets
<CAPTION>
                                                              (Unaudited)     (Audited)
Assets                                                       Sep. 28, 1996  Dec. 30, 1995
                                                             -------------  -------------
<S>                                                            <C>           <C>
Current Assets:
   Cash and cash equivalents ...............................   $ 1,682,000   $   812,000
   Accounts receivable, less allowance of $298,000 in 1996
       and $214,000 in 1995 ................................    20,483,000    20,077,000
   Inventories
       Raw materials .......................................     5,889,000     6,392,000
       Work in process .....................................     3,534,000     5,119,000
       Finished goods ......................................     3,545,000     3,926,000
                                                               -----------   -----------
                                                                12,968,000    15,437,000
       Prepaid expenses ....................................     1,108,000       622,000
       Deferred tax benefit ................................     1,396,000     1,980,000
                                                               -----------   -----------
           Total current assets ............................    37,637,000    38,928,000
                                                               -----------   -----------

Property, Plant and Equipment at cost
   Land ....................................................     2,095,000     2,094,000
   Buildings and improvements ..............................    15,201,000    15,231,000
   Machinery and equipment .................................    34,249,000    33,829,000
                                                               -----------   -----------
                                                                51,545,000    51,154,000
   Less-accumulated depreciation and amortization ..........    35,988,000    34,748,000
                                                               -----------   -----------
                                                                15,557,000    16,406,000
Other ......................................................       307,000       236,000
                                                               -----------   -----------
                                                              $ 53,501,000  $ 55,570,000
                                                              ============  ============
<FN>
The accompanying notes are an integral part of these balance sheets.
</FN>
</TABLE>
<TABLE>
                         FARR COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                    Liabilities and Stockholders' Investment
<CAPTION>
                                                              (Unaudited)     (Auditded)
                                                             Sep. 28, 1996   Dec. 30,1995
                                                             -------------   ------------
<S>                                                            <C>           <C>
Current Liabilities:
   Notes/overdraft payable to banks ........................   $   666,000   $   432,000
   Current portion of long-term debt .......................        21,000       664,000
   Accounts payable ........................................     8,031,000     8,875,000
   Accrued liabilities .....................................     8,236,000     8,248,000
   Income taxes payable and deferred taxes .................       478,000       526,000
                                                               -----------   -----------
       Total current liabilities ...........................    17,432,000    18,745,000
                                                               -----------   -----------

Long-Term Debt, Net of Current Portion .....................     4,468,000     9,412,000
Deferred Income Taxes ......................................     2,328,000     2,628,000
Other Non-current Liabilites ...............................        99,000             0
Commitments and Contingencies
Stockholders' Investment:
  Common stock, $.10 par value--Authorized 10,000,000 shares
  Outstanding--3,800,820 shares at September 28, 1996 and
      3,793,336 shares at December 30, 1995 ................       363,000       362,000
  Additional paid-in capital ...............................    11,765,000    11,668,000
  Cumulative translation adjustments .......................    (1,605,000)   (1,624,000)
  Retained earnings:
    Balance beginning of year ..............................    14,379,000    11,255,000
    Net income for the period ..............................     4,272,000     3,124,000
                                                               -----------   -----------
    Balance at end of period ...............................    18,651,000    14,379,000
                                                               -----------   -----------
       Total stockholders' investment ......................    29,174,000    24,785,000
                                                               -----------   -----------
                                                              $ 53,501,000  $ 55,570,000
                                                              ============  ============
<FN>
The accompanying notes are an integral part of these balance sheets.
</FN>
</TABLE>
<PAGE>
<TABLE>
                          FARR COMPANY AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED INCOME STATEMENTS
                                   (Unaudited)
<CAPTION>

                                                Three Months Ended            Nine Months Ended
                                           Sep. 28, 1996  Sep. 30, 1995  Sep. 28, 1996  Sep. 30, 1995
                                           -------------  -------------  -------------  -------------



<S>                                          <C>          <C>              <C>          <C>        
Net Sales ................................   $29,951,000  $28,444,000      $92,386,000  $84,379,000
                                             -----------  -----------      -----------  -----------

Costs and Expenses:
  Cost of sales ..........................    22,418,000   21,692,000       69,627,000   64,275,000
  Selling, general and administrative ....     4,781,000    5,142,000       15,140,000   15,286,000
  Interest expense .......................       145,000      426,000          563,000    1,484,000
                                             -----------  -----------      -----------  -----------

Total Costs and Expenses .................    27,344,000   27,260,000       85,330,000   81,045,000
                                             -----------  -----------      -----------  -----------

Income Before Income Taxes ...............     2,607,000    1,184,000        7,056,000    3,334,000

Income Taxes .............................     1,012,000      458,000        2,784,000    1,300,000
                                             -----------  -----------      -----------  -----------

Net Income ...............................   $ 1,595,000  $   726,000      $ 4,272,000  $ 2,034,000
                                             ===========  ===========      ===========  ===========





Earnings per Common Share *                  $      0.43  $      0.20      $      1.16  $      0.55
                                             ===========  ===========      ===========  ===========



<FN>
*      Based  upon  3,691,886  and  3,694,362  average  shares   outstanding  at
       September 28, 1996 and September 29, 1995, respectively.

The accompanying notes are an integral part of these statements.
</FN>
</TABLE>

<PAGE>
<TABLE>

                          FARR COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
<CAPTION>
Cash Provided by ( Used in ) :                                     Nine Months Ended
                                                             Sep. 28, 1996  Sep. 30, 1995
                                                             -------------  -------------
<S>                                                            <C>           <C>
Operating Activities:
   
  Net Income ................................................. $ 4,272,000   $ 2,034,000
    Adjustments to reconcile net income to net cash
      (used in) provided by operating activities:
    Depreciation and amortization ............................   1,784,000     2,248,000
    Benefit retirement trust .................................      99,000             0
    Provision for loss on accounts receivable ................      99,000       114,000
    Change in deferred income taxes ..........................     319,000       711,000
    Net (gain) loss on sale/retirement of P,P & E ............      25,000       (23,000)
    Net (gain) loss from investments .........................           0      (115,000)
    Decrease (increase) in inventories .......................   2,484,000      (981,000)
    Decrease (increase) in receivables and prepaid expenses ..    (976,000)      335,000
    Decrease in accounts payable & accrued expenses ..........    (866,000)      (84,000)
    Net change in current income taxes payable ...............     (86,000)       (9,000)
    Exchange gain ............................................     (12,000)       (5,000)
                                                               -----------   -----------

    Net cash provided by operating activities ................   7,142,000     4,225,000
                                                               -----------   -----------

Investing Activities:

    Purchases of property, plant and equipment ...............    (896,000)     (674,000)
    Proceeds from sale of property, plant and equipment ......           0        23,000
    Proceeds from sale of investments ........................           0       501,000
    Purchase of investments, benefits trust ..................    (126,000)            0
                                                               -----------   -----------

    Net cash used in investing activities ....................  (1,022,000)     (150,000)
                                                               -----------   -----------

Financing Activities:

    Proceeds from revolving line of credit,
      and long-term borrowings ...............................   8,434,000       240,000
    Principal payments on revolving line of credit
      and long-term debt borrowings & overdrafts ............. (13,790,000)   (4,280,000)
    Principal payments received on notes .....................       6,000        61,000
    Proceeds from sale of stock, stock option plans ..........      98,000       167,000
    Long-term note receivable ................................           0      (174,000)
                                                               -----------   -----------

    Net cash used in financing activities ....................  (5,252,000)   (3,986,000)
                                                               -----------   -----------

Effect of Exchange Rate Changes on Cash ......................       1,000        37,000

Increase (Decrease) in Cash and Cash Equivalents .............     870,000       126,000
Cash and Cash Equivalents at Beginning of Period .............     812,000       127,000
                                                               -----------   -----------

    Cash and Cash Equivalents at End of Period ............... $ 1,682,000   $   253,000
                                                               ===========   ===========


<FN>
      The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
<PAGE>

                          FARR COMPANY AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 28, 1996

                                   (Unaudited)

NOTE A.
-------

         Other than Notes  Payable  and  Long-term  Debt,  and  Commitments  and
Contingencies, there have been no significant changes in the Company's policies,
practices  or  position  from that  described  in the notes to the  Consolidated
Financial  Statements  included in the 1995 Annual Report to Stockholders  which
was  incorporated  by reference  in the Annual  Report on Form 10-K for the year
ended December 30, 1995.

NOTE B. - NOTES PAYABLE AND LONG-TERM DEBT
------------------------------------------

         The  Company's  $2,155,000  term  credit  facility  lending  commitment
previously  scheduled  to be funded  in August  1996 to  replace  the  Company's
existing Holly Springs,  Mississippi  Industrial Bonds will not be utilized. The
redemption  of the bonds were funded from  availability  under the Company's $10
million revolving credit facility.

         On  September  24,  1996,  the  Company  amended its  revolving  credit
facility.  Under  terms  of the  amendment,  the  provision  requiring  security
collateral  was  eliminated  and the  credit  line was  reduced  to $10  million
commensurate  with the Company's  borrowing  needs.  In addition,  the financial
covenant  requiring a minimum  consolidated  liabilities  to tangible  new worth
ratio of 1.50 to 1.0 was reduced to 1.25 to 1.0.

         As of September 28, 1996, the Company's  weighted average interest rate
on short term borrowings was 8.0 percent.

NOTE C. - COMMITMENTS AND CONTINGENCIES
---------------------------------------

         During July 1996,  the Company's  Board of Directors  and  Compensation
Committee  approved a $875,000  lump sum payment to the  Company's  Chairman and
Chief Executive  Officer  covering his salary and certain  incentives from April
1994  through  June  1996.  The lump sum  payment  was paid in July 1996 and was
covered by reserves previously established during the periods from April 1994 to
June 1996.  Beginning in July 1996,  the approved  Chairman and Chief  Executive
Officer's  annual base salary of $246,000 will be paid concurrent with the month
it is earned on a prorata basis.


NOTE D. - EMPLOYEE BENEFIT PLANS
--------------------------------

         Effective  January 1, 1996,  the  Company  established  a  supplemental
executive  savings plan ("SESP")  which provides  benefits to certain  employees
whose  benefits under the defined  contribution  plan are reduced as a result of
limitations imposed by the Internal Revenue Code.

         The Company has  established  a Rabbi  trust to fund  benefit  payments
under its SESP.  Trust assets are  irrevocable to the Company but are subject to
creditor claims under certain conditions.


<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS


RESULTS OF OPERATIONS

         Third quarter sales increased to $29,951,000  from  $28,444,000  during
the same period last year,  representing a 5 percent  increase.  The increase in
sales was primarily  attributable to the Company's Heating,  Ventilating and Air
Conditioning, Custom OEM, Railroad and Engine markets.

         Sales for the first nine  months of 1996  advanced to  $92,386,000,  an
improvement of 9 percent,  or $8,007,000  over 1995's first nine months sales of
$84,379,000. The majority of the improvement was attributable to increased sales
in the Company's Custom OEM, Heating  Ventilating and Air  Conditioning,  Filter
House and International Markets.

         Operating profit (income before income taxes and interest  expense) for
the third quarter was $2,752,000 an increase of 71 percent,  or $1,142,000  from
$1,610,000 for the same period a year ago.  Operating  profit for the first nine
months of 1996  increased 58 percent to $7,619,000  from  $4,818,000  during the
same period a year ago. The increased  operating  profit  principally  reflected
strong sales gains and improved operating efficiencies.

         The third quarter  operating  profit as a percent of sales increased to
9.2 percent compared to 5.7 percent during the same period a year ago. The first
nine  months  operating  profit as a percent of sales  increased  to 8.2 percent
compared to 5.7  percent  during the same  period a year ago.  These  percentage
improvements primarily reflect a trend of a lower percentage of selling, general
and  administrative  expenses  relative to the increase in sales volume,  as the
amount of selling general and administrative expenses was kept approximately the
same as last  year's  third  quarter on higher  sales  volume.  In  addition,  a
favorable  sales mix of higher  margin  products  during 1996  helped  lower the
quarter and nine month cost of sales percentages.

         Interest  expense  during  the  third  quarter  decreased  to  $145,000
compared to $426,000 for the third quarter last year.  Interest  expense  during
the first nine months  decreased to $563,000 from $1,484,000 for the same period
a year ago. Both third  quarter and nine month  interest  expense  declined as a
result of lower borrowing interest rates combined with reduced debt levels.

         The  income  tax rate for the  first  nine  months of 1996 and the same
period last year remained at approximately 39 percent.

         Third  quarter  net  income of  $1,595,000  increased  120  percent  or
$869,000 over the $726,000 for the same period last year. The first nine month's
net income increased to $4,272,000 from $2,034,000,  representing an increase of
$2,238,000 or a 110 percent improvement over the same period last year. Both the
third quarter and nine month  results  reflect  improved  sales and sales margin
contribution,  improved manufacturing  efficiencies and reduced interest expense
compared to the same periods a year ago.

<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

         Cash  flows from  operating  activities  during  the first nine  months
totaled $7,142,000  compared to $4,225,000 for the first nine months a year ago.
Cash flows from  operating  activities  increased  from last  year's  first nine
months due to increased income and decreased working capital  requirements.  The
primary  decrease in working capital was related to decreased  inventories  that
was partially  offset by increased  accounts  receivable due to increased  sales
volume.

         Cash flows used in  investing  activities  during the first nine months
was $1,022,000.  Last year cash flows used $150,000 during the first nine months
as the Company  received  $501,000 from the disposition of certain  investments.
First nine months 1996 capital  expenditures of $896,000 increased over the same
period  last year by  $222,000.  Overall,  capital  expenditures  continue to be
maintained at low levels to conserve  capital  resources but are  anticipated to
increase modestly over the last quarter of the year.

         Cash used in financing  activities totaled $5,252,000 in the first nine
months compared to $3,986,000 for the same period a year ago as surplus cash was
used to pay down debt.

         As of September 28, 1996, working capital totaled $20,205,000  compared
to  $20,183,000  at the end of 1995,  representing  a $22,000  increase in total
working  capital  for the first nine  months of 1996.  The  increase  in working
capital was accounted for by decreases in  inventories  ($2,469,000)  and income
taxes payable and deferred taxes ($236,000),  partially offset by a net decrease
in accounts  payables and accrued expenses  ($856,000),  a decrease in the short
term bank debt ($409,000),  and net increases in accounts receivable  ($976,000)
and cash ($870,000).

         Due to  increased  sales  during the first nine  months,  net  accounts
receivable  increased to $20,483,000  from  $20,077,000 as of December 30, 1995.
Inventories  decreased  primarily  as a result of a decrease  in work in process
related to the completion and shipment of several large gas turbine filter house
jobs and improved inventory turnover rates.

         The Company's  current  portion of long term debt  decreased due to the
early  retirement  of its  Jonesboro,  Arkansas and Holly  Springs,  Mississippi
Industrial  Redevelopment  Bonds  and the  restructure  and  payoff of its prior
revolving and term loan credit  facilities under a new revolving credit facility
obtained in February, 1996.

         On  September  24,  1996,  the  Company  amended its  revolving  credit
facility.  Under  terms  of the  amendment,  the  provision  requiring  security
collateral  was  eliminated  and the  credit  line was  reduced  to $10  million
commensurate  with the Company's  borrowing  needs.  In addition,  the financial
covenant  requiring a minimum  consolidated  liabilities  to tangible  new worth
ratio of 1.50 to 1.0 was reduced to 1.25 to 1.0. Surplus borrowing  availability
under the Company's $10 million domestic revolving credit facility at the end of
September, 1996 was approximately $5.5 million.

         The Company's operations continue to generate cash flow levels required
to maintain planned operating levels, to provide for capital replacement, and to
service and liquidate  long-term debt.  Additionally,  the Company has access to
lines of credit sufficient for its current operations.


<PAGE>


                          PART II. - OTHER INFORMATION


Item 6.a.         Exhibits

The following are being filed with this Quarterly Report on Form 10-Q.

- Exhibit 11               Earnings per share calculation. (unaudited)

- Exhibit 27               Financial Data Schedule.






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

Copies of Exhibits are available, on prepayment of 15 cents per page, by writing
to the  Secretary  of the  Company at the address set forth on the cover page of
this Form 10-Q.

<PAGE>


                           PART II - OTHER INFORMATION

                                   (Continued)

                                   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 hereunto duly authorized.



                                                         FARR COMPANY
                                                 -----------------------------
                                                         (Registrant)
  

November 12, 1996                                /s/  Kenneth W. Gerstner
                                                 ----------------------------
                                                      Kenneth W. Gerstner
                                                      Senior Vice President
                                                      Chief Financial Officer





<PAGE>
<TABLE>
                                   Exhibit 11

                          FARR COMPANY AND SUBSIDIARIES
                         EARNINGS PER SHARE CALCULATIONS
                                   (Unaudited)
<CAPTION>

                                                  Three Months Ended                        Nine Months Ended
                                         September 28, 1996  September 30, 1995   September 28, 1996  September 30, 1995
                                         ------------------  ------------------   ------------------  ------------------
EARNINGS:
---------

<S>                                          <C>                 <C>                 <C>                  <C>       
Net Income ................................  $1,595,000          $  726,000          $4,272,000           $2,034,000
                                             ==========          ==========          ==========           ==========

Shares
  Weighted average number of
    common shares outstanding .............   3,627,840           3,685,914            3,627,840           3,685,914
                                             ==========          ==========           ==========          ==========

Net Income Per Common Share ...............  $     0.44          $     0.20           $    $1.18          $     0.55
                                             ==========          ==========           ==========          ==========





EARNINGS ASSUMING FULL DILUTION:
--------------------------------

Net Income ................................  $1,595,000          $  726,000           $4,272,000          $2,034,000
                                             ==========          ==========           ==========          ==========

Shares
  Weighted average number of
    common shares outstanding .............   3,627,840           3,685,914            3,627,840           3,685,914

  Assuming exercise of options reduced
    by the number of shares which could
    have been purchased with the proceeds
    from exercise of such options .........      64,046               8,448               64,046               8,448
                                             ----------          ----------           ----------          ----------

        Total shares ......................   3,691,886           3,694,362            3,691,886           3,694,362
                                             ==========          ==========           ==========          ==========

Net Income Per Common Share
  Assuming Full Dilution ..................  $     0.43          $     0.20           $     1.16          $     0.55
                                             ==========          ==========           ==========          ==========

</TABLE>