<PAGE>   1
                                   FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

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

For the quarterly period ended June 30, 1997

                                       OR

   [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

Commission file number 1-7399

                             TCC INDUSTRIES, INC.
            -----------------------------------------------------
            (Exact name of registrant as specified in its charter)

              Texas                                             74-1366626     
-------------------------------                            --------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                              Identification No.)

               816 Congress Avenue, Suite 1250, Austin, TX 78701  
            -----------------------------------------------------
             (Address of principal executive offices)    (Zip code)

                                (512) 320-0976                    
            -----------------------------------------------------
              (Registrant's telephone number, including area code)

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

         Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes  X    No 
    ---      ---

               APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDING DURING THE PRECEDING FIVE YEARS

         Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.

Yes       No 
    ---      ---

                     APPLICABLE ONLY TO CORPORATE ISSUERS:

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date: 2,762,115 shares as 
of August 11, 1997.
<PAGE>   2
Part I.   Contents of Consolidated Financial Information:


<TABLE>
<CAPTION>
                                                          Page Number(s)  
                                                          --------------
<S>                                                           <C>
    Consolidated Balance Sheet                                1 - 2

    Consolidated Statement of Operations                      3 - 4 

    Consolidated Statement of Shareholders' Equity              5     

    Condensed Consolidated Statement of Cash Flows              6
                                                                    
    Notes to Consolidated Financial Statements                7 - 8  
                                                                    
    Management's Discussion and Analysis                      9 - 11
                                                                    
Part II.  Other Information                                  12 - 13   

    Signatures                                                  14
</TABLE>

<PAGE>   3

                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEET
                                  (Unaudited)
                                 (In Thousands)

<TABLE>
<CAPTION>
                                     June 30,        December 31,
  ASSETS                               1997              1996
Current assets:                  ---------------   ---------------
<S>                              <C>               <C>
  Cash and cash equivalents              $ 1,810           $ 2,723 

  Receivables:
    Trade receivables, net
      of allowance of
      $177 and $104, respectively          4,359             2,518
    Other, including
      interest                                91                48
                                 ---------------   ---------------
                                           4,450             2,566
                                 ---------------   ---------------
  Inventories:
    Raw materials                            914               877
    Work in progress                         277                90
    Finished goods, net of 
      valuation allowance of
      $571 and $182, 
      respectively                         5,129             5,664
                                 ---------------   ---------------
                                           6,320             6,631
                                 ---------------   ---------------
  Other                                      542               185
                                 ---------------   ---------------
      Total current assets                13,122            12,105
                                 ---------------   ---------------
Property, plant and
equipment                                  9,987             9,879
  Accumulated depreciation                (5,879)           (5,652)
                                 ---------------   --------------- 
                                           4,108             4,227
                                 ---------------   ---------------

Intangible assets:
  Goodwill                                 1,174             1,181
  Patents and trademarks                      79                57
                                 ---------------   ---------------
                                           1,253             1,238
  Accumulated amortization                  (469)             (443)
                                 ---------------   --------------- 
                                             784               795
                                 ---------------   ---------------
Other assets                                 741               602
                                 ---------------   ---------------
      Total assets                       $18,755           $17,729
                                 ===============   ===============
</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.




                                     -1-
<PAGE>   4

                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEET - continued
                                  (Unaudited)
                      (In Thousands, except share amounts)

<TABLE>
<CAPTION>
    LIABILITIES AND                  June 30,        December 31,
    SHAREHOLDERS' EQUITY               1997              1996     
                                 ---------------   ---------------
<S>                              <C>               <C>
Current liabilities:
  Notes payable                          $ 3,807           $ 2,033
  Current maturities of
    long-term debt                           208               225
  Accounts payable                         1,029               565
  Accrued expenses                         1,087               971
  Customer deposits                          395               432
                                 ---------------   ---------------
    Total current
      liabilities                          6,526             4,226
Long-term debt, less
  current maturities                       1,635             1,755
Deferred liabilities                         212               224
                                 ---------------   ---------------
      Total liabilities                    8,373             6,205
                                 ---------------   ---------------
Commitments and contingencies

Shareholders' equity:
  Preferred stock, authorized
    2,000,000 shares, no par
    value, no shares issued                  --                --
  Common stock, authorized
    10,000,000 shares, par
    value $1 per share,
    2,841,601 shares issued                2,842             2,842
  Additional paid-in capital               8,744             8,746
  Cumulative foreign currency
    translation adjustment                    32                54
  Retained earnings (accumulated
    deficit)                                (977)              144
                                 ---------------   ---------------
                                          10,641            11,786
  Less treasury stock,
    79,486 and 80,486 shares, 
    respectively, at cost                   (259)             (262)
                                 ---------------   --------------- 
    Total shareholders'
      equity                              10,382            11,524
                                 ---------------   ---------------
      Total liabilities
        and shareholders'
        equity                           $18,755           $17,729
                                 ===============   ===============
</TABLE>

              The accompanying notes are an integral part of the
                      consolidated financial statements.




                                     -2-
<PAGE>   5

                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF OPERATIONS
                                  (Unaudited)
                    (In Thousands, except per share amounts)



<TABLE>
<CAPTION>
                                               For the Three Months Ended
                                                         June 30,
                                                   1997            1996      
                                            ---------------   ---------------
<S>                                         <C>               <C>
Revenue                                             $ 5,472           $ 5,845
Cost of goods sold                                    3,894             4,040  
                                            ---------------   ---------------
      Gross profit                                    1,578             1,805
                                         
Selling, general and administrative      
   expenses                                           1,908             1,857  
                                            ---------------   ---------------
                                         
      Operating loss                                   (330)              (52)
                                            ---------------   ---------------
Other income (expense):                                               
   Interest income                                       25                24
   Interest expense                                    (171)             (142)
   Other, net                                          (393)               11  
                                            ---------------   ---------------
                                                       (539)             (107)  
                                            ---------------   ---------------
Loss before provision  
   for income taxes                                    (869)             (159)
                                         
Provision for state income taxes                         19                --
                                            ---------------   ---------------
                                         
Net loss                                              $(888)            $(159)  
                                            ===============   ===============
Weighted average number of common and    
   common equivalent shares outstanding               2,762             2,759  
                                            ===============   ===============
Loss per common and common    
   equivalent share:                                 $(0.32)           $(0.06)  
                                            ===============   ===============
</TABLE>

              The accompanying notes are an integral part of the
                      consolidated financial statements.




                                     -3-

<PAGE>   6

                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF OPERATIONS
                                  (Unaudited)
                    (In Thousands, except per share amounts)



<TABLE>
<CAPTION>
                                                 For the Six Months Ended
                                                         June 30,
                                                   1997            1996      
                                            ---------------   ---------------
<S>                                         <C>               <C>
Revenue                                             $10,009           $11,157
Cost of goods sold                                    6,801             7,719  
                                            ---------------   ---------------
      Gross profit                                    3,208             3,438
                                         
Selling, general and administrative      
   expenses                                           3,588             3,628  
                                            ---------------   ---------------
                                         
      Operating loss                                   (380)             (190)
                                            ---------------   ---------------
Other income (expense):                                               
   Interest income                                       45                53
   Interest expense                                    (326)             (273)
   Other, net                                          (434)               56  
                                            ---------------   ---------------
                                                       (715)             (164)  
                                            ---------------   ---------------
Loss before provision (benefit) 
   for income taxes                                  (1,095)             (354)
                                         
Provision (benefit) for state income taxes               26                (2)
                                            ---------------   ---------------
                                         
Net loss                                            $(1,121)            $(352)
                                            ===============   ===============
Weighted average number of common and    
   common equivalent shares outstanding               2,762             2,759  
                                            ===============   ===============
Loss per common and common    
   equivalent share:                                 ($0.41)           $(0.13) 
                                            ===============   ===============
</TABLE>

              The accompanying notes are an integral part of the
                      consolidated financial statements.




                                     -4-

<PAGE>   7





                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (Unaudited)
                                 (In Thousands)


<TABLE>
<CAPTION>
                                                       For the Six Months Ended
                                                               June 30,
                                                         1997             1996       
                                                   ---------------   ---------------

<S>                                                <C>               <C>
Net cash used by operating activities                     $(2,236)          $(1,825)
                                                   --------------    --------------
Cash flows of investing activities:
   Additions to property, plant and equipment                (159)             (114)
   Proceeds from sale of assets                                10               111
   Increase in notes receivable                              (140)               --
   Other, net                                                 (22)                2 
                                                   --------------    --------------
   Net cash used by investing activities                     (311)               (1)
                                                   --------------    --------------
Cash flows of financing activities:
   Net borrowings of notes payable debt                     1,774             2,008
   Long-term debt paid                                       (125)             (301) 
   Other, net                                                   1                11
                                                   --------------    --------------
   Net cash provided by financing activities                1,650             1,718
                                                   --------------    --------------

Effect of foreign exchange rate changes on cash               (16)               --

Net decrease in cash and cash equivalents                    (913)             (108)
Cash and cash equivalents at beginning
   of period                                                2,723             2,224  
                                                   --------------    --------------
Cash and cash equivalents at end
   of period                                               $1,810            $2,116  
                                                   ==============    ==============

</TABLE>




              The accompanying notes are an integral part of the
                      consolidated financial statements.




                                     -6-

<PAGE>   8


                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                                  (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                                    
                                                                                          
                                                                                           
                                                                         Cumulative                   
                                                                          Foreign       Retained      
                                             Par Value      Addt'l        Currency      Earnings      
                              Number of      of Common      Paid-in     Translation   (Accumulated    Treasury
                               Shares         Shares        Capital      Adjustment     Deficit)       Stock         Total
                              ---------     ----------      -------     -----------   ------------   ----------     --------
 <S>                          <C>          <C>             <C>         <C>             <C>          <C>            <C>          
 Balances,                               
 January 1, 1997               2,842       $ 2,842         $ 8,746     $      54       $    144     $     (262)    $ 11,524

 Net loss                                                                                (1,121)                     (1,121)
                                         
 Exercise of stock 
 option                                                         (2)                                          3            1

 Foreign currency                        
 translation                             
 adjustment                                                                  (22)                                       (22)
                               -----       -------         -------     ---------       --------     ----------     --------

 Balances,                               
 June 30, 1997                 2,842       $ 2,842         $ 8,744     $      32       $   (977)    $     (259)    $ 10,382
                               =====       =======         =======     =========       ========     ==========     ========
</TABLE>





              The accompanying notes are an integral part of the
                      consolidated financial statements.




                                     -5-
<PAGE>   9





                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (Unaudited)
                                 (In Thousands)


<TABLE>
<CAPTION>
                                                       For the Six Months Ended
                                                               June 30,
                                                         1997             1996       
                                                   ---------------   ---------------

<S>                                                <C>               <C>
Net cash used by operating activities                     $(2,236)          $(1,825)
                                                   --------------    --------------
Cash flows of investing activities:
   Additions to property, plant and equipment                (159)             (114)
   Proceeds from sale of assets                                10               111
   Increase in notes receivable                              (140)               --
   Other, net                                                 (22)                2 
                                                   --------------    --------------
   Net cash used by investing activities                     (311)               (1)
                                                   --------------    --------------
Cash flows of financing activities:
   Net borrowings of notes payable debt                     1,774             2,008
   Long-term debt paid                                       (125)             (301) 
   Other, net                                                   1                11
                                                   --------------    --------------
   Net cash provided by financing activities                1,650             1,718
                                                   --------------    --------------

Effect of foreign exchange rate changes on cash               (16)               --

Net decrease in cash and cash equivalents                    (913)             (108)
Cash and cash equivalents at beginning
   of period                                                2,723             2,224  
                                                   --------------    --------------
Cash and cash equivalents at end
   of period                                               $1,810            $2,116  
                                                   ==============    ==============

</TABLE>




              The accompanying notes are an integral part of the
                      consolidated financial statements.




                                     -6-

<PAGE>   10
                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)



Note 1   Summary of Significant Accounting Policies

         The consolidated financial statements include the accounts of TCC 
Industries, Inc. and Subsidiaries ("the Company"), and have been presented in
accordance with the reporting requirements for interim financial statements.
Such requirements do not include all of the disclosures normally required by
generally accepted accounting principles or those normally made in an Annual
Report on Form 10-K. Certain amounts have been reclassified for consistency in
presentation.  In connection therewith readers are referred to the Company's
most recent Annual Report on Form 10-K filed for the year ended December 31,
1996.  The information furnished herein reflects all adjustments which, in the
opinion of management, are of a normal recurring nature and necessary for a
fair statement of the results of interim periods.  Such results for interim
periods are not necessarily indicative of the results to be expected for a full
year, principally due to seasonal fluctuations in wholesale distribution
revenue.

         Income Taxes

         The Company and its wholly owned domestic subsidiaries join in filing
a consolidated federal income tax return.  The provision (benefit) for income
taxes for interim financial reporting is determined utilizing the estimated
annual effective tax rate method of allocation.  Separate state and foreign
income tax returns are filed by subsidiaries where required.

         Statement of Cash Flows

         For purposes of the condensed consolidated statement of cash flows, 
the Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.

         Foreign Currency Translation

         The consolidated financial statements of Meyer Europe, Ltd. are 
translated into U.S. dollars in accordance with SFAS 52, "Foreign Currency
Translation". SFAS 52 requires the foreign operations to be translated using
current exchange rates for balance sheet items, historical rates for capital
accounts, and average exchange rates for income statement items. The resulting
translation adjustments are recorded directly into a separate component of
shareholders' equity.

Note 2   Restrictions on Net Assets:  

         Certain of the Company's subsidiaries have bank loan agreements which
contain provisions that can limit or restrict the transfer of funds to the
parent company in the form of cash dividends, loans or advances. Such
restrictions are based on each subsidiaries' income and other formulas
contained in the respective loan agreements. Substantially all of the Company's
net assets are restricted by the loan agreements, except as to the
aforementioned transfers of funds allowed under the loan agreements.
                      




                                     -7-
<PAGE>   11
                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
                                  (UNAUDITED)




Note 3   Commitments and Contingencies

                 There are sundry claims pending against certain of the
Company's subsidiaries, all of which are incidental to the ordinary course of
business and, in the opinion of Company management, should not result in any
significant liability.


Note 4   Shareholders' Equity

         The loss per share for the three and six months ended June 30, 1997 is 
calculated using the weighted average number of common shares outstanding for
the three and six months ended June 30, 1997.  Common share equivalents would
have diluted the loss per share and were therefore excluded from the
computation.

Note 5   Pending Matters

         On February 26, 1997, the Board of Directors of the Company decided to
expand the scope of the engagement of Rauscher Pierce Refsnes, the Company's
investment banking firm, for the purpose of evaluating all strategic
alternatives for enhancing shareholder value, including having the firm assist
with such alternatives as a material acquisition of or merger with another
company, the sale of all or part of the Company, or a leveraged buyout by
management and/or new investors.

Note 6   Inventories

         During the three month period ended June 30, 1997, the Company
recorded a $429,000 provision at the wholesale distribution segment related to
the decision to more rapidly reduce inventory levels and the estimated
inventive discounts that are expected to be incurred to reduce the levels of
certain items.

Note 7   Other Expenses

         During the six month period ended June 30, 1997, the Company incurred
the following unusual and nonrecurring charges, both of which were reported as
"Other income (expense) - other, net", on the Consolidated Statement of
Operations:

         o  $235,000 charge for the cost of the proxy election contest that was
            concluded in May, 1997 (of such expense, $80,000 was incurred in the
            three month period ending March 31, 1997).

         o  $282,000 charge for the cost of the severance provisions pursuant
            to the employment agreement with the Company's former Chief 
            Executive Officer.

Note 8   Recent Accounting Pronouncements

         In June 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting 
Comprehensive Income," which establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. SFAS No. 130 is effective for fiscal years beginning
after December 15, 1997.

         Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," which establishes standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
SFAS No. 131 is effective for financial statements for periods beginning after
December 15, 1997.

         Management believes that the Company currently substantially complies
with the requirements of these new standards and that the implementation of the
standards will not have a material impact on the Company's financial results.



                                     -8-
<PAGE>   12
                    TCC INDUSTRIES, INC. AND SUBSIDIARIES
                     MANAGEMENT'S DISCUSSION AND ANALYSIS

        The following is management's discussion and analysis of the results of
operations and financial condition of TCC Industries, Inc. and subsidiaries
("the Company") during the periods included in the accompanying consolidated
financial statements. The discussion below relates to material changes in the
results of operations for the three and six months ended June 30, 1997 as
compared to the same periods ended June 30, 1996 and to material changes in the
financial condition of the Company occurring since the prior year end of
December 31, 1996. The reader is invited to review Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 for
further details regarding the significant factors affecting the results of
operations and financial condition of the company.

            COMPARISONS OF THE RESULTS OF OPERATIONS FOR THE THREE
                  MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996

        The Company reported a net loss for the three months ended June 30,
1997 of $888,000 on revenue of $5.5 million as compared to a loss of $159,000
on revenue of $5.8 million for the same period in 1996.

        During the three month period ended June 30, 1997, the Company recorded
the following unusual and nonrecurring charges to expense:

    o   $429,000 provision at the wholesale distribution segment related to the
        decision to more rapidly reduce inventory levels and the estimated 
        incentive discounts that are expected to be incurred to reduce the 
        levels of certain items.
        
    o   $155,000 charge for the cost of the proxy election contest that was
        concluded in May, 1997.
        
    o   $282,000 charge for the cost of the severance provisions pursuant to
        the employment agreement with the Company's former Chief Executive
        Officer.

        Excluding the above mentioned charges, the Company realized a loss
before taxes of $3,000 for the second quarter of 1997 as compared to a loss
before taxes of $159,000 for the second quarter of 1996.

REVENUE

        Consolidated revenue decreased $373,000 (6.4%) to $5.5 million for the
second quarter of 1997 as compared to revenue of $5.8 million for the second
quarter of 1996. The decreased revenue is primarily the result of a decline in
revenue at the wholesale distribution segment.

        Wholesale distribution revenue decreased 11.8% during the second
quarter of 1997 to $2.5 million when compared to revenue of $2.9 million for
the same quarter in 1996. The decline in revenue is a reflection of the earlier
noted declines in bookings which have resulted in a 33% decline in backlog at
June 30, 1997 as compared to June 30, 1996.

GROSS PROFIT

        Consolidated gross profit decreased $227,000 to $1,578,000 in the
second quarter of 1997 when compared to $1,805,000 for the same period in 1996.
The decline in gross profit is the result of a decline in gross profit at the
wholesale distribution segment, partially offset by an increase at the 
manufacturing segment.

    o   At the wholesale distribution segment, gross profit declined $471,000 to
        $477,000 (18.9% of sales) for the second quarter in 1997 when compared
        to $948,000 (33.0% of sales) for the same quarter of 1996, primarily due
        to (1) a $429,000 provision associated with the segment's decision to
        rapidly reduce inventory levels and the estimated incentive discounts
        that are expected to be incurred to reduce the levels of certain items
        and (2) the decline in revenue, discussed above. The impact of the two
        above mentioned items was partially offset by improved gross profit 
        margins. Excluding the $429,000 provision mentioned above, gross profit
        margins improved to 35.8% in the second quarter of 1997 as compared to
        33.0% in the second quarter of 1996 due to an improved sales mix
        towards a lower percentage of sales qualifying for quantity discounts.

    o   Gross profit at the manufacturing segment increased $243,000 during the
        second quarter of 1997 to $1,086,000 (37.1% of sales) when compared to
        $843,000 (28.5% of sales) for the same period in 1996. The improved
        gross profit margins primarily resulted from a 5.3 percentage point
        reduction in direct and indirect materials, as a percentage of sales, in
        the second quarter of 1997 when compared to the same period in 1996. The
        lower material costs, as a percentage of sales, primarily resulted 
        from an improved product sales mix (the second quarter of 1996
        contained a higher percentage of customized equipment which are more
        difficult to estimate than more standard equipment) and steps taken 
        during the second half of 1996 to reduce the costs of certain 
        components used in the manufacture of products.
 
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

        Consolidated selling, general and administrative expenses increased
$51,000 during the second quarter of 1997 when compared to the second quarter
of 1996. The increase in selling, general and administrative expense is
primarily the result of a $71,000 decrease at the parent company level,
primarily due a $29,000 reduction in salary expense due to lower staffing
levels, a $32,000 decrease in insurance expense due to lower premiums and
better experience in the group health insurance program, and the absence of
$33,000 of expense related to assets held for sale. The effect of these 
decreases was partially offset by an $18,000 increase in costs associated with
the engagement of Rauscher Pierce Refsnes, the Company's investment banking
firm. The lower selling, general and administrative expenses at the parent
level were more than offset by a $93,000 increase at the manufacturing segment
and a $29,000 increase at the wholesale distribution segment. The increase at
the manufacturing segment primarily resulted from a $76,000 provision for
allowance for doubtful accounts.

OTHER INCOME (EXPENSE)

        Other expense, net of other income, increased $432,000 to $539,000
during the second quarter of 1997 when compared to the same period in 1996,
primarily due to (1) $155,000 attributable to the cost of the proxy election
contest and (2) a $282,000 charge for funding the severance provisions pursuant
to the employment agreement with the company's former Chief Executive Officer.

                                     -9-
<PAGE>   13
                    TCC INDUSTRIES, INC. AND SUBSIDIARIES
              MANAGEMENT'S DISCUSSION AND ANALYSIS -- (Continued)


              COMPARISONS OF THE RESULTS OF OPERATIONS FOR THE SIX
                  MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996


        The Company reported a net loss for the six month period ended June 30,
1997 of $1,121,000 on revenue of $10.0 million as compared to a loss of
$352,000 on revenue of $11.2 million for the same period in 1996.

        During the six month period ended June 30, 1997, the company recorded
the following unusual and nonrecurring charges to expense:

        o   $429,000 provision at the wholesale distribution segment related to
            the decision to more rapidly reduce inventory levels and the
            estimated incentive discounts that are expected to be incurred to
            reduce the levels of certain items.
 
        o   $235,000 charge for the cost of the proxy election contest that was
            concluded in May, 1997.     

        o   $282,000 charge for the cost of funding severance provisions
            pursuant to the employment agreement with the Company's former Chief
            Executive Officer.

        Excluding the above mentioned charges, the Company realized a loss
before taxes of $149,000 for the six month period ended June 30, 1997 as
compared to a loss before taxes of $354,000 for the same period of 1996.

REVENUE

        Consolidated revenue decreased $1,148,000 (10.3%) to $10.0 million for
the six month period ended June 30, 1997 as compared to revenue of $11.2
million for the same period in 1996. 

        Manufacturing revenue decreased 2.9% to $5.3 million for the six month
period ended June 30, 1997 down from $5.5 million for the same period in 1996.
This decrease resulted from a $416,000 (9.3%) increase at Meyer Machine and a
$575,000 (55.8%) decrease at Meyer Vi-Tech. The increase at Meyer Machine is
primarily the result of a 15.6% increase in sales of equipment partially offset
by a 1.2% decrease in parts and service sales. The increase in equipment sales
primarily resulted from its higher backlog at December 31, 1996 compared to
December 31, 1995. The decrease at Meyer Vi-Tech is primarily the result of its
lower backlog at December 31, 1996, when compared to December 31, 1995.

        Wholesale distribution segment revenue decreased 17.6% to $4.6 million
during the six month period ended June 30, 1997 when compared to $5.6 million
for the same period in 1996. The decline in revenue is primarily a reflection
of the earlier noted declines in bookings which have resulted in a 33% decline
in backlog at June 30, 1997 as compared to June 30, 1996.

GROSS PROFIT

        Consolidated gross profit decreased $230,000 to $3.2 million for the
six month period ended June 30, 1997 when compared to $3.4 million for the
same period in 1996. The decline in gross profit is primarily the result of the
following factors:

        o   At the wholesale distribution segment, gross profit declined
            $610,000 to $1,232,000 (26.6% of sales) for the first six months of
            1997 when compared to $1,843,000 (32.8% of sales) for the same
            period in 1996, primarily due to (1) a $429,000 provision associated
            with the segment's decision to rapidly reduce inventory levels and
            the estimated incentive discounts that are expected to be incurred
            to reduce the levels of certain items and (2) the decline in
            revenue, discussed above. The impact of the two above mentioned
            items was partially offset by improved gross profit margins. 
            Excluding the $429,000 provision mentioned above, gross profit 
            margins improved to 35.9% during the first six months of 1997 as 
            compared to 32.8% during the same period of 1996.

        o   Gross profit at the manufacturing segment increased $379,000
            during the six month period ended June 30, 1997 to $1,947,000 (36.4%
            of sales) when compared to $1,568,000 (28.5% of sales) for the same
            period in 1996. The improved gross profit margins primarily resulted
            from a 5.6 percentage point reduction in direct and indirect
            materials, as a percentage of sales, in the first six months of 1997
            when compared to the same period in 1996. The lower material cost,
            as a percentage of sales, primarily resulted from an improved
            product sales mix (the first half of 1996 contained a higher
            percentage of customized equipment which are more difficult to
            estimate than more standard equipment) and steps taken during the
            second half of 1996 to reduce the costs of certain components used
            in the manufacture of products.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

        Consolidated selling, general and administrative expenses decreased
$40,000 (1.1%) during the six month period ended June 30, 1997 when compared to
the same period in 1996. Selling and administrative expenses at the
manufacturing segment increased $166,000 during the first six months of 1997
when compared to the same period in 1996 due primarily to a $67,000 increase in
labor and labor related expenses from a general increase in the pay levels,
increased use of outside labor and a provision for possible incentive
compensation; and a $76,000 provision for allowance for doubtful accounts.
Selling and administrative expenses at the wholesale distribution segment
decreased $75,000 during the first six months of 1997 when compared to the same
period in 1996, primarily due to a $43,000 reduction in labor and labor related
expenses resulting from changes in certain management positions and the
reduction of staff positions during the last half of 1996. General and
administrative expenses at the parent company level decreased $131,000 during
the first six months of 1997 when compared to the same period in 1996, primarily
due to a $65,000 reduction in salary expense due to lower staffing levels, and a
$59,000 reduction in insurance expense due to lower premiums and better
experience in the group medical plan. 

OTHER INCOME (EXPENSE)

        Other expense, net of other income, increased $551,000 to $715,000 for
the six month period ended June 30, 1997 when compared to the same period in
1996, primarily due to (1) $235,000 attributable to the cost of the proxy
election contest and (2) a $282,000 charge for funding the severance provisions
pursuant to the employment agreement with the Company's former Chief Executive
Officer. 



                                     -10-
<PAGE>   14
                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
              MANAGEMENT'S DISCUSSION AND ANALYSIS -- (Continued)

                        LIQUIDITY AND CAPITAL RESOURCES

        At June 30, 1997, the Company had working capital of $6.6 million and a
current ratio of 2.0 to 1. This compares to working capital of $7.9 million and
a current ratio of 2.9 to 1 at December 31, 1996. The decrease in the current
ratio is a result of a greater percentage increase in current liabilities
versus current assets. Current liabilities increased primarily as a result of
an increase in the line of credit balance at the wholesale distribution segment
to support the increase in accounts receivable which was the primary cause for
the increase in current assets at the end of the second quarter of 1997 when
compared to December 31, 1996. The increase in accounts receivable and the line
of credit can be attributed to the seasonality of the wholesale distribution
segment of the Company as shipments are increased to customers in preparation
of the summer selling season. Cash for the six months ended June 30, 1997
decreased a net $913,000. In addition to the effect on cash from the changes in
current assets and liabilities discussed above, the Company made scheduled
payments on long term debt of $125,000 and had capital expenditures of $159,000.

        At June 30, 1997, Meyer Machine maintained a $1,200,000 bank line of
credit, of which all was available to be borrowed. Meyer Machine has a
commitment from its  primary bank lender to provide a line of credit for up to
$500,000, if needed, for equipment purchases. This commitment expires in June
1998.

        At June 30, 1997, Allen-Lewis maintained a line of credit with a bank 
that provided maximum borrowing capabilities of $4.0 million, subject to a 
borrowing base calculation, for working capital purposes and letters of credit.
At June 30, 1997, Allen-Lewis had approximately $1,000 available for borrowing
under this line of credit. On July 30, 1997, this line of credit was converted
to a demand note subject to the borrowing base calculation.

        TCC Industries has an $85,000 and a $500,000 line of credit, neither of
which had outstanding balances at June 30, 1997. These lines of credit are
used to supplement the short-term cash needs of the parent company.

        Each of the subsidiaries bank lines of credit agreements contain
provisions that limit or restrict the transfer of funds to the parent company in
the form of cash dividends, loans, or advances. Management does not believe the
restrictions will have a significant effect on the parent company's ability to
meet ordinary cash obligations.

        For information on the impact of future changes in accounting
principles see Note 8 to the Consolidated Financial Statements appearing
elsewhere herein.

                               PENDING MATTERS

        On February 26, 1997, the Board of Directors of the Company decided to
expand the scope of the engagement of Rauscher Pierce Refsnes, the Company's
investment banking firm, for the purpose of evaluating all strategic
alternatives for enhancing shareholder value, including having the firm assist
with such alternatives as a material acquisition of or merger with another
company, the sale of all or part of the Company, or a leveraged buyout by
management and/or new investors.

                                     -11-
<PAGE>   15
                     TCC INDUSTRIES, INC. AND SUBSIDIARIES
               FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1997




                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

                 See Note 3 to the financial statements included elsewhere
                 herein for a discussion of legal proceedings.

Item 2.  Changes in Securities

                 None.

Item 3.  Defaults upon Senior Securities

                 None.

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

                 The Annual Meeting of Shareholders of TCC Industries, Inc. was
                 held on May 7, 1997, for the purpose of electing two directors
                 to the board of Directors and approving the appointment by the
                 Board of Directors of Coopers & Lybrand L.L.P. as the firm of
                 independent accountants to audit the accounts of the Company
                 for the fiscal year ended December 31, 1997. Proxies for the
                 meeting were solicited by the Company pursuant to Section
                 14(a) of the Securities Exchange Act of 1934. A solicitation
                 in opposition to management's solicitation was made and the
                 opposition's nominees for director, as listed in their proxy 
                 statement, were elected.     
                 
        
                 The vote on the election of the nominees for director was:

                                 William E. Callahan          Ed R. L. Wroe, Jr.
                 For                 828,870                      828,720
                 Withheld              9,063                        9,013


                                  Walter A. DeRoeck            Robert Thomajan
                 For                1,024,190                    1,025,275
                 Withheld               6,242                        4,957

                 The following directors, who were not up for election,
                 continued in office: W. Grogan Lord, Frank W. Denius, J.
                 Patrick Kaine and Lawrence W. Schumann. On July 2, 1997 Mr.
                 Schumann resigned his position with the Company. See Part II,
                 Item 6(b).

                 The vote on approving the appointment of Coopers & Lybrand
                 L.L.P. as the firm of independent accountants to audit the 
                 accounts of the Company for the fiscal year ended December 31,
                 1997 was:

                 For               1,453,089
                 Against              15,544
                 Abstain             399,533





                                      12
<PAGE>   16
                     TCC INDUSTRIES, INC. AND SUBSIDIARIES 

                 FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1997


                    PART II - OTHER INFORMATION (CONTINUED)

Item 5.  Other Information

                 None.

Item 6.  Exhibits and Reports on Form 8-K

6(a)     Exhibits:

                 10.23    Service agreement by and among Meyer Vi-Tech Limited
                          and John Basketfield dated May 21, 1997.

                 11       The computation of fully diluted earnings per share
                          would be the same as primary earnings per share,
                          which is easily discernable on the face of the
                          statements of operations included elsewhere herein.

                 27       Financial Data Schedules:

                          (i)     For the quarterly period ended June 30, 1997.

6(b)     Reports on Form 8-K:

                 The following is the date and description of the events
                 reported on Form 8-K filed during the second quarter of 1997
                 and the Forms 8-K filed subsequently:

                 Date of Earliest Event
                 Reported on Form 8-K              Description

                 May 23, 1997                Announcement of Election of two 
                                             new members to Board of Directors
                                             (see Part II, Item 4)

                 July 7, 1997                Walter A. DeRoeck was elected
                                             Chairman and Interim Chief
                                             Executive Officer of the Company,
                                             replacing Lawrence W. Schumann who
                                             resigned those positions. Mr.
                                             Schumann also agreed to resign as
                                             President and director of the
                                             Company. In addition, Robert
                                             Thomajan was elected to replace
                                             Frank Denius who resigned his
                                             position as Secretary of the
                                             Company. The Board also approved a
                                             resolution to expand the size of
                                             the Board by two seats and to add
                                             an advisory director to the Board.
                                             Mr. Schumann also agreed to sell
                                             the shares of the Company's common
                                             stock that he beneficially owns to
                                             Mr. DeRoeck and Mr. Thomajan for a
                                             price equal to the average closing
                                             price for the Company's shares for
                                             the past fifteen trading day
                                             period. The Board agreed to waive
                                             the provisions of the Company's
                                             Shareholders' Rights Plan to allow
                                             for Mr. DeRoeck and Mr. Thomajan to
                                             acquire up to twenty percent of the
                                             Company's outstanding shares in
                                             view of their agreement to acquire
                                             Mr. Schumann's shares.

                 July 11, 1997               Three new directors elected to the
                                             Board of Directors: Lawrence E.
                                             Tilton, Richard B. Curran and Alan
                                             M. Sager. Additionally, Robert D.
                                             Starnes was named as an advisory
                                             director.




                                     -13-
<PAGE>   17
                                   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.


                                                  TCC INDUSTRIES,INC.   
                                        ----------------------------------------
                                        (Registrant)


                                        /s/ WALTER A. DeROECK
                                        ----------------------------------------
                                        WALTER A. DeROECK
                                        Chairman of the Board of Directors, 
                                        Chief Executive Officer and 
                                        Principal Financial Officer



Date:  August 13, 1997




                                      -14-
<PAGE>   18
                                 EXHIBIT INDEX



EXHIBIT
  NO.  
-------

10.23    Service Agreement by and among Meyer Vi-Tech Limited and John
         Basketfield dated May 21, 1997. 

11       The computation of fully diluted earnings per shares would be the same
         as primary earnings per share, which is easily discernable on the face
         of the statements of operations included elsewhere herein.

27       Financial Data Schedules:

         (i)     For the quarterly period ended June 30, 1997.