<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the quarterly period ended FEBRUARY 28, 1997
                                                OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period from                         to

Commission file number: 0-1461

                             THE TODD-AO CORPORATION
             (Exact name of registrant as specified in its charter)

         DELAWARE                                        13-1679856
(State or other jurisdiction               (I.R.S. Employer Identification No.)
of incorporation)

            900 N. SEWARD STREET, HOLLYWOOD, CALIFORNIA      90038
                (Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code: (213) 962-5304

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

         Yes    X            No  
              -----             -----

The number of shares of common stock outstanding at April 8, 1997 was: 
8,223,654 Class A Shares and 1,747,178 Class B Shares.

<PAGE>

THE TODD-AO CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FEBRUARY 28, 1997

<TABLE>
<CAPTION>

INDEX
-----------------------------------------------------------------------------------------------
<S>                                                                                        <C>

PART I - FINANCIAL INFORMATION                                                             Page

    Item 1- FINANCIAL STATEMENTS

       The following financial statements are filed herewith:

            Consolidated Balance Sheets, February 28, 1997 and August 31, 1996                3

            Consolidated Statements of Income and Retained Earnings for the
               Six and Three Months Ended February 28, 1997 and 1996                          5

            Consolidated Statements of Cash Flows for the Six Months Ended
               February 28, 1997 and 1996                                                     6

            Notes to Consolidated Financial Statements for the Six Months
               Ended February 28, 1997                                                        8

    Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
             FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                   10


PART II - OTHER INFORMATION

    Item 1 - Legal Proceedings                                                               13

    Item 6 - Exhibits and Reports on Form 8-K                                                13

             Signature                                                                       13

</TABLE>


                                                 2


<PAGE>


                                  THE TODD-AO CORPORATION

                                CONSOLIDATED BALANCE SHEETS
                                   (DOLLARS IN THOUSANDS)


                                         ASSETS

<TABLE>
<CAPTION>

                                                                       AUGUST 31,          FEBRUARY 28, 
                                                                      ------------        --------------
                                                                          1996                 1997     
                                                                      ------------        --------------
<S>                                                                   <C>                 <C>

CURRENT ASSETS
Cash and cash equivalents. . . . . . . . . . . . . . .                $      3,385        $        1,791
Marketable securities. . . . . . . . . . . . . . . . .                       2,616                 7,945
Trade receivables
  (net of allowance for doubtful accounts of $707 at
  February 28, 1997 and $696 at August 31, 1996) . . .                       9,132                13,547
Inventories (first-in first-out basis) . . . . . . . .                         635                   552
Income tax receivable. . . . . . . . . . . . . . . . .                          --                   390
Deferred income taxes. . . . . . . . . . . . . . . . .                       1,152                 1,115
Prepaids and other . . . . . . . . . . . . . . . . . .                         988                 1,073
                                                                      ------------         -------------

Total current assets . . . . . . . . . . . . . . . . .                      17,908                26,413
                                                                      ------------         -------------

INVESTMENTS. . . . . . . . . . . . . . . . . . . . . .                         994                   981
                                                                      ------------         -------------

PROPERTY AND EQUIPMENT - At Cost:
Land . . . . . . . . . . . . . . . . . . . . . . . . .                       4,270                 4,270
Buildings. . . . . . . . . . . . . . . . . . . . . . .                      10,559                10,878
Leasehold improvements . . . . . . . . . . . . . . . .                       6,286                 6,930
Lease acquisition costs. . . . . . . . . . . . . . . .                       2,187                 2,187
Equipment. . . . . . . . . . . . . . . . . . . . . . .                      31,271                38,399
Equipment under capital leases . . . . . . . . . . . .                       3,360                 3,360
Construction in progress . . . . . . . . . . . . . . .                       1,402                   270
                                                                      ------------         -------------

Total. . . . . . . . . . . . . . . . . . . . . . . . .                      59,335                66,294
Accumulated depreciation and amortization. . . . . . .                     (20,858)              (23,800)
                                                                      ------------         -------------

Property and equipment - net . . . . . . . . . . . . .                      38,477                42,494
                                                                      ------------         -------------

GOODWILL
  (net of accumulated amortization of $406 at
  February 28, 1997 and $190 at August 31, 1996) . . .                       5,761                 5,782
                                                                      ------------         -------------

OTHER ASSETS . . . . . . . . . . . . . . . . . . . . .                       1,046                 1,037
                                                                      ------------         -------------

TOTAL. . . . . . . . . . . . . . . . . . . . . . . . .                $     64,186         $      76,707
                                                                      ------------         -------------
                                                                      ------------         -------------

</TABLE>



              See notes to consolidated financial statements.


                                                 3

<PAGE>


                                  THE TODD-AO CORPORATION

                                CONSOLIDATED BALANCE SHEETS
                                   (DOLLARS IN THOUSANDS)
                                         (CONTINUED)


                            LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>

                                                                     AUGUST 31,        FEBRUARY 28, 
                                                                    ------------      --------------
                                                                        1996               1997
                                                                    ------------      --------------
<S>                                                                 <C>               <C>

CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . .              $      2,812      $        3,475
Accrued liabilities:
  Payroll and related taxes. . . . . . . . . . . . . .                     2,023               2,229
  Interest . . . . . . . . . . . . . . . . . . . . . .                       173                  31
  Equipment lease. . . . . . . . . . . . . . . . . . .                       300                 280
  Other. . . . . . . . . . . . . . . . . . . . . . . .                     1,198               1,027
  Income taxes payable . . . . . . . . . . . . . . . .                       368               1,469
Current maturities of long-term debt . . . . . . . . .                       615                 639
Capitalized lease obligations - current. . . . . . . .                       616                 237
Deferred income. . . . . . . . . . . . . . . . . . . .                       634               1,559
                                                                    ------------      --------------
Total current liabilities. . . . . . . . . . . . . . .                     8,739              10,946

LONG-TERM DEBT . . . . . . . . . . . . . . . . . . . .                     9,332               1,421
CAPITALIZED LEASE OBLIGATIONS. . . . . . . . . . . . .                        22                  --
DEFERRED COMPENSATION. . . . . . . . . . . . . . . . .                       273                 233
DEFERRED GAIN ON SALE/LEASEBACK. . . . . . . . . . . .                     4,909               4,173
DEFERRED INCOME TAXES. . . . . . . . . . . . . . . . .                     4,488               4,460
                                                                    ------------      --------------


Total liabilities. . . . . . . . . . . . . . . . . . .                    27,763              21,233
                                                                    ------------      --------------

STOCKHOLDERS' EQUITY:
Common Stock:
  Class A; authorized 30,000,000 shares of $0.01
  par value; issued and outstanding 8,202,570 at
  February 28, 1997 and 6,555,640 at
  August 31, 1996. . . . . . . . . . . . . . . . . . .                        65                  82
Class B; authorized 6,000,000 shares of $0.01 par
  value; issued and outstanding 1,747,178. . . . . . .                        17                  17
Additional capital . . . . . . . . . . . . . . . . . .                    24,291              39,877
Retained earnings. . . . . . . . . . . . . . . . . . .                    12,267              15,288
Unrealized gains on marketable securities and
  long-term investments. . . . . . . . . . . . . . . .                        42                   3
Cumulative foreign currency translation adjustment . .                      (259)                207
                                                                    ------------      --------------

Total stockholders' equity . . . . . . . . . . . . . .                    36,423              55,474
                                                                    ------------      --------------

TOTAL. . . . . . . . . . . . . . . . . . . . . . . . .              $     64,186      $       76,707
                                                                    ------------      --------------
                                                                    ------------      --------------

</TABLE>



              See notes to consolidated financial statements.

                                                 4

<PAGE>


                            THE TODD-AO CORPORATION

            CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
         FOR THE SIX AND THREE MONTHS ENDED FEBRUARY 28, 1997 AND 1996
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<TABLE>
<CAPTION>


                                                                              SIX MONTHS                   THREE MONTHS
                                                                       ------------------------     ------------------------
                                                                         1996           1997          1996           1997     
                                                                       ---------     ----------     ---------     ----------
<S>                                                                    <C>                          <C>                     

REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . . .       $  31,339      $  39,681     $  13,199     $   19,341
                                                                       ---------     ----------     ---------     ----------

COSTS AND EXPENSES:
Operating costs and other expenses . . . . . . . . . . . . . . .          24,279         30,659        11,256         15,102
Depreciation and amortization. . . . . . . . . . . . . . . . . .           2,588          3,187         1,322          1,565
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .             386            327           184            106
Equipment lease expense - net. . . . . . . . . . . . . . . . . .             344            155           132             63
Other expense (income) - net . . . . . . . . . . . . . . . . . .            (258)            99          (511)            60
                                                                       ---------     ----------     ---------     ----------

Total costs and expenses . . . . . . . . . . . . . . . . . . . .          27,339         34,427        12,383         16,896 
                                                                       ---------     ----------     ---------     ----------

INCOME BEFORE PROVISION FOR INCOME TAXES . . . . . . . . . . . .           4,000          5,254           816          2,445
PROVISION FOR INCOME TAXES . . . . . . . . . . . . . . . . . . .           1,510          1,965           309            927
                                                                       ---------     ----------     ---------     ----------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . .           2,490          3,289     $     507     $    1,518
                                                                                                    ---------     ----------
                                                                                                    ---------     ----------
RETAINED EARNINGS BEGINNING OF PERIOD. . . . . . . . . . . . . .           7,904         12,267
LESS:   DIVIDENDS PAID . . . . . . . . . . . . . . . . . . . . .            (241)          (268)
                                                                       ---------     ----------
RETAINED EARNINGS END OF PERIOD. . . . . . . . . . . . . . . . .       $  10,153      $  15,288
                                                                       ---------     ----------
                                                                       ---------     ----------

NET INCOME PER COMMON SHARE AND
  COMMON SHARE EQUIVALENTS . . . . . . . . . . . . . . . . . . .       $    0.28      $    0.34     $    0.06      $     0.14
                                                                       ---------     ----------     ---------      ----------
                                                                       ---------     ----------     ---------      ----------

WEIGHTED AVERAGE SHARES OUTSTANDING. . . . . . . . . . . . . . .       8,748,018      9,770,336     8,746,989      10,523,799
                                                                       ---------     ----------     ---------      ----------
                                                                       ---------     ----------     ---------      ----------
</TABLE>



              See notes to consolidated financial statements.

                                                 5

<PAGE>


                                  THE TODD-AO CORPORATION

                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                      FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 AND 1996
                                  (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>


                                                                                1996              1997
                                                                             ----------        ----------
<S>                                                                          <C>               <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . .           $    2,490        $    3,289
 Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
   Depreciation and amortization. . . . . . . . . . . . . . . . .                 2,588             3,187
   Deferred income taxes. . . . . . . . . . . . . . . . . . . . .                    --                 2
   Deferred compensation. . . . . . . . . . . . . . . . . . . . .                   (98)              (40)
   Amortization of deferred gain on
      sale/leaseback transaction . . . . . . . . . . . . . . . . .                 (736)             (736)
   (Gain) loss on sale of marketable securities
     and investments. . . . . . . . . . . . . . . . . . . . . . .                    41                --
   (Gain) loss on disposition of fixed assets . . . . . . . . . .                    --               (23)
   Changes in assets and liabilities (net of acquisitions):
     Trade receivables . . . . . . . . . . . . . . . . . . . . . .               (2,335)           (4,246)
     Inventories and other current assets. . . . . . . . . . . . .                  (56)               20
     Accounts payable and accrued liabilities. . . . . . . . . . .                  878               380
     Accrued equipment lease . . . . . . . . . . . . . . . . . . .                  (80)              (20)
     Income taxes payable. . . . . . . . . . . . . . . . . . . . .                  607               672
     Deferred income . . . . . . . . . . . . . . . . . . . . . . .                 (298)              876
                                                                             ----------        ----------

Net cash flows provided by operating activities: . . . . . . . . .                3,001             3,361
                                                                             ----------        ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of marketable securities and investments. . . . . . . . .                  57            (5,901)
 Proceeds from sale of marketable securities
  and investments . . . . . . . . . . . . . . . . . . . . . . . . .                 630               527
 Proceeds from disposition of fixed assets. . . . . . . . . . . . .                  --                26
 Capital expenditures . . . . . . . . . . . . . . . . . . . . . . .              (2,511)           (6,511)
 Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .                 130              (118)
                                                                             ----------        ----------

Net cash flows (used in) investing activities: . . . . . . . . . .           $   (1,694)       $  (11,977)
                                                                             ----------        ----------

</TABLE>


                                                 6

<PAGE>


                                    THE TODD-AO CORPORATION

                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 AND 1996
                                    (DOLLARS IN THOUSANDS)
                                        (CONTINUED)


<TABLE>
<CAPTION>


                                                                                    1996                1997
                                                                               --------------      --------------
<S>                                                                            <C>                 <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
 Borrowings of long-term debt . . . . . . . . . . . . . . . . . .              $        1,400      $        6,900
 Payments of long-term debt . . . . . . . . . . . . . . . . . . .                      (3,359)            (14,831)
 Payments on capital lease obligations. . . . . . . . . . . . . .                        (508)               (406)
 Net proceeds from issuance of common stock . . . . . . . . . . .                         238              15,603
 Treasury stock transactions. . . . . . . . . . . . . . . . . . .                        (560)                 --
 Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . .                        (241)               (268)
                                                                               --------------      --------------

Net cash flows provided by (used in) financing activities:  . . .                      (3,030)              6,998
 Effect of exchange rate changes on cash  . . . . . . . . . . . .                          --                  24
                                                                               --------------      --------------

NET (DECREASE) IN CASH AND 
 CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . .                      (1,723)             (1,594)
CASH AND CASH EQUIVALENTS AT 
 BEGINNING OF PERIOD  . . . . . . . . . . . . . . . . . . . . . .                       5,278               3,385
                                                                               --------------      --------------

CASH AND CASH EQUIVALENTS AT 
 END OF PERIOD  . . . . . . . . . . . . . . . . . . . . . . . . .              $        3,555      $        1,791
                                                                               --------------      --------------
                                                                               --------------      --------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .              $          414      $          475
                                                                               --------------      --------------
                                                                               --------------      --------------

Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . .               $          905      $        1,080
                                                                               --------------      --------------
                                                                               --------------      --------------

</TABLE>

                                                 7

<PAGE>


THE TODD-AO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 
-------------------------------------------------------------------------------

If complete notes were to accompany these statements they would be substantially
in the same form as those to the Company's Financial Statements for the Year 
Ended August 31, 1996.  In addition the following notes are applicable:

1.   In the opinion of management for the Company, all adjustments (which
     comprise only normal recurring accruals) necessary for a fair presentation
     of the results of operations have been included.

2.   The consolidated financial statements include the Company and its wholly
     owned subsidiaries Todd-AO Studios, Todd-AO Studios East, Inc. ("Todd-AO
     East"), Todd-AO Productions, Inc., Todd-AO Digital Images, Inc. ("TDI"),
     Todd-AO Video Services, Inc. ("TVS"), Todd-AO Studios West ("TSW"), Todd-AO
     Europe Holding Ltd. ("TAO Europe"), Todd-AO Preservation Services,
     Hollywood Supply Company and Todd-AO's Land of the Future.  All significant
     intercompany balances and transactions have been eliminated.

3.   Net income per common share is computed based on the weighted average
     number of common and common equivalent shares outstanding for each of the
     years presented including common share equivalents arising from the assumed
     conversion of any outstanding dilutive stock options.

4.   On August 15, 1996, the Company purchased substantially all of the assets
     and certain liabilities of Edit Acquisition LLC ("Editworks").  Editworks
     provides video post production services to broadcasters, advertising
     agencies and other businesses.  The Company paid Editworks $3,680 in cash
     and $970 in common stock.

     The acquisition is being accounted for under the purchase method of
     accounting.  The following unaudited pro forma consolidated financial
     information for the six months ended February 29, 1996 is presented as if
     the acquisition had occurred on September 1, 1995.  Pro forma adjustments
     for Editworks are primarily to amortization of goodwill, interest expense
     on borrowings in connection with the acquisition, and income taxes.

                                                                  1996
                                                              ------------

          Revenues . . . . . . . . . . . . . . . . . .        $     33,529
                                                              ------------
                                                              ------------
          Net income . . . . . . . . . . . . . . . . .        $      2,721
                                                              ------------
                                                              ------------
          Net income per common share. . . . . . . . .        $       0.31
                                                              ------------
                                                              ------------

5.   The Company has a stock repurchase program under which 1,300,000 shares may
     be purchased from time to time in the open market or in private
     transactions.  As of February 28, 1997, 795,146 shares had been
     repurchased.  All of these shares have been cancelled and returned to
     authorized but unissued status.

6.   On October 10, 1996, the Company filed a registration statement with the
     Securities and Exchange Commission and on November 20, 1996 the
     registration statement, as amended, was declared effective for a public
     offering of 1,500,000 primary Class A shares at $10.50 per share.  On
     November 26, 1996 the offering was completed and all the shares were sold
     and issued.  In December 1996 an additional 145,000 shares were sold and
     issued in connection with the exercise of a portion of the underwriters'
     over-allotment option.  Proceeds from the offering, net of costs as of
     February 28, 1997 totaled $15,594.


                                                 8

<PAGE>


7.   In January 1997 the Company announced that it was in negotiations to 
     acquire all of the stock of International Video Conversions, Inc. 
     ("IVC"), a California corporation based in Burbank.  IVC is engaged 
     in the business of providing a full range of video tape services 
     specializing in duplication, telecine and conversions including HDTV.  
     This acquisition has not materialized.


     The Company is in the process of organizing a limited liability company
     ("LLC") with United Artists Theatre Circuit, Inc., an operator of motion
     picture theatres ("UATC") for the purpose of exploiting proprietary
     technology to conserve film stock and reduce the length of wide screen film
     release prints.  The technology, known as "Compact Distribution Print" or
     "CDP", has been successfully demonstrated, but its implementation will
     require a broad level of film industry acceptance which has not yet been
     obtained.  Pending such acceptance, further development and marketing
     expenditures will be minimal.  It is anticipated that the Company and UATC
     will each have a 50% interest in any profits of the LLC, which is known as
     "CDP Limited Liability Company".


                                                 9

<PAGE>


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
          (DOLLARS IN THOUSANDS, EXCEPT AMOUNTS PER SHARE)

1.   Material Changes in Financial Condition

     In December 1994, the Company signed agreements with its bank to implement
     the sale/leaseback of certain equipment and a long-term credit facility. An
     aggregate of $11,218 of sound studio equipment was sold and leased back on
     December 30, 1994. The sale/leaseback agreement, which consists of five 1-
     year terms amortizing to approximately 40% with interest at Libor rates
     plus 1.5% which can increase to Libor plus 2% if the leverage ratio (Funded
     Indebtedness/EBITDA) is greater than 2:1, terminates on December 30, 1999.
     Under the credit facility, including amendments in 1995 and 1996, the
     Company may borrow up to $20,000 and L5,000 in revolving loans until
     February 28, 2000. On that date and quarterly thereafter until the
     expiration of the agreement on November 30, 2003, the revolving loan
     commitment will reduce by 5% of the original loan commitment.  The credit
     facility provides for borrowings at the Bank's Reference rates (plus .5%),
     CD rates (plus 1.625%) and Libor rates (plus 1.5%) which can increase to
     plus 1%, 2.125% and 2%, respectively, if the leverage ratio (described
     above) is greater than 2:1.  Leverage ratios may not exceed 3:1.  The
     facility includes commitment fees at .5% per annum on the unused balance.
     Other material restrictions include:  the coverage ratio (cash flow/fixed
     charges) may not be less than 1.75:1 through 1998 and 1.5:1 thereafter; the
     Company is limited to $10,000 per annum for capital expenditures (except
     for fiscal year 1997 which is limited to $12,500); Other Indebtedness or
     Contingent Liabilities (outside the credit and sale/leaseback agreements)
     may not exceed $8,000 and Minimum Net Worth is not to be less than $23,400
     plus net proceeds from issuance of equity plus 50% of future consolidated
     net income.  These credit facilities are available for general corporate
     purposes, capital expenditures and acquisitions. Management believes that
     funds generated from operations, proceeds from the public offering
     described below, proceeds from the  sale/leaseback and the borrowings
     available under the credit facility will be sufficient to meet the needs of
     the Company at least through the end of 1997.

     In February 1995, the Company used $6,878 of the proceeds from the
     sale/leaseback agreement to acquire substantially all of the property,
     equipment and inventory of Skywalker Sound South, renamed Todd-AO Studio
     West. In March 1995, the Company used $7,726 under the credit facility in
     connection with the acquisition of Chrysalis. In August 1996, the Company
     used $4,280 under the credit facility in connection with the acquisition of
     Editworks. As of February 28, 1997, the Company had $775 outstanding under
     the credit facility.

     The Company expects capital expenditures of approximately $11,500 for its
     Los Angeles, New York City, Atlanta and London facilities in fiscal 1997.
     These capital expenditures will be financed by credit facilities and
     internally generated funds.  As of February 28, 1997 the Company has
     incurred $6,511 for fiscal 1997 capital expenditures.

     On October 10, 1996, the Company filed a registration statement with the
     Securities and Exchange Commission and on November 20, 1996 the
     registration statement, as amended, was declared effective for a public
     offering of 1,500,000 primary Class A shares at $10.50 per share.  All of
     the shares plus an additional 145,000, exercised as a portion of the
     underwriters' over-allotment option, were sold and issued.  Proceeds from
     the offering, net of costs as of February 28, 1997 totaled $15,594.  The
     funds received were used to temporarily pay down existing debt in the
     amount of $9,102.  The remaining funds are currently invested in short-term
     federal agency securities.  These funds will be used for possible future
     acquisitions, working capital requirements and other general corporate
     purposes.

     The Company does not believe that it is currently exposed to any material
     foreign exchange rate risk and, at present, does not have a policy for
     managing such risk. 


                                                10

<PAGE>


2.   Material Changes in Results of Operations

     General

     Since fiscal 1995, the Company has pursued a strategy of diversifying its
     operations by acquiring or establishing complementary service companies in
     the production and post production markets.  This diversification is not
     only functional but geographical, as represented by the Company's
     acquisitions in Santa Monica, California, London, UK and Atlanta, Georgia.
     The Company has not yet utilized the funds provided by the public offering
     in November, 1996 for its primary long-term objective of accretive
     acquisitions.  The previously announced acquisition of International Video
     Conversions in Burbank, California has not materialized.

     SIX MONTHS ENDED FEBRUARY 28, 1997 COMPARED TO SIX MONTHS ENDED
     FEBRUARY 29, 1996

     Revenues increased $8,342 or 26.6% from $31,339 to $39,681 primarily due to
     significant increases from the Company's sound services divisions ($4,257)
     as well as its video services divisions which include Todd-AO Editworks
     ("Editworks") acquired in August 1996 and Todd-AO Filmatic ("Filmatic")
     acquired in April 1996 which contributed revenue increases of $2,165 and
     $522, respectively.  There is also a non-recurring settlement of $434
     included in the prior year revenue of Todd-AO UK, Ltd. (formerly
     Chrysalis/Todd-AO Europe, Ltd. before name change on March 1, 1997).

     Operating costs and other expenses increased $6,380 or 26.3% from $24,279
     to $30,659.  Cost increases related to the acquisitions described above
     were higher than usual due to transitional changes at Editworks and the
     relocation of Filmatic.  These acquisitions are now fully integrated into
     operations and should impact favorably on future results.  The remaining
     cost increases are related to the revenue increases described above.

     Depreciation and amortization increased $599 or 23.1% primarily due to the
     acquisitions and current year capital expenditures.

     Net equipment lease expense decreased $189 or 54.9% due to decreases in the
     interest rate and a declining principal balance while the straight line
     amortization of the deferred gain remains the same.

     Other (income) expense, net decreased $357 primarily due to a non-recurring
     provision adjustment of $215 from a favorable settlement of a contested
     claim and other provision adjustments of $202 in the prior year.

     As a result of the above, income before taxes increased $1,254 from $4,000
     to $5,254 and net income increased $799 from $2,490 to $3,289.

     Earnings per share increased 21% from $0.28 to $0.34 in spite of a 12%
     dilution in average shares outstanding primarily due to the November 1996
     public offering when 1,645,000 shares were issued.  If the public offering
     had occurred as of September 1, 1996 and the bank credit facility debt paid
     down, the EPS as of February 28, 1997 would not have changed from $0.34.

     THREE MONTHS ENDED FEBRUARY 28, 1997 COMPARED TO THREE MONTHS ENDED
     FEBRUARY 29, 1996.

     Revenues increased $6,142 or 46.5% from $13,199 to $19,341 primarily due to
     significant increases from the Company's sound services divisions ($3,820)
     as well as its video services divisions which include Editworks and
     Filmatic acquired in August and April 1996 which contributed revenue
     increases of $1,181 and $243, respectively.  There is also a non-recurring
     settlement of $109 included in the prior year revenue of Todd-AO UK, Ltd.


                                                11

<PAGE>


     Operating costs and other expenses increased $3,837 or $34.1% from $11,265
     to $15,102.  Cost increases related to the acquisitions described above
     were higher than usual due to transitional changes at Editworks and the
     relocation of Filmatic.  The remaining cost increases are related to the
     revenue increases described above.

     Depreciation and amortization increased $243 or 18.4% primarily due to the
     acquisitions and current year capital expenditures.

     Net equipment lease expense decreased $69 or 52.3% due to a declining
     principal balance while the straight line amortization of the deferred gain
     remains the same.

     Other (income) expense, net decreased $580 primarily due to a non-recurring
     provision adjustment of $215 from a favorable settlement of a contested
     claim and other provision adjustments of $199 in the prior year.

     As a result of the above, income before taxes increased $1,629 from $816 to
     $2,445 and net income increased $1,011 from $507 to $1,518.

     Earnings per share increased 133% from $0.06 to $0.14 in spite of a 20%
     dilution arising from the November 1996 public offering.

3.   Material Changes in Cash Flows

     For the six months ended February 28, 1997 the Company generated $3,361 in
     cash from operating activities compared to $3,001 in 1996.  In addition to
     net income of $3,289, adjusted for depreciation and net amortization of
     $2,451, increases in accounts payable and other liabilities of $1,928 also
     increased cash provided by operations.  Cash was utilized primarily to fund
     trade receivables.  The revenue increase in the second quarter of the
     fiscal year represented 74% of the total increase for the six month period.
     This, in addition to an overall increase in 1997 revenues, caused a
     significant increase in trade receivables of $4,246 at February 28, 1997.
     This is the opposite of the prior year when revenues in the second quarter
     represented 25% of the total six month increase and caused a less severe
     increase in trade receivables of $2,335.

     Net cash generated from operating activities supplemented by proceeds from
     the sale of certain marketable securities and investments and borrowings
     from the Company's credit facility were used to reinvest in capital assets
     of the Company and to pay down long-term debt.  Cash generated from the net
     proceeds received in connection with the Company's public offering of
     $15,594 were used to pay down long-term debt, to purchase short-term
     federal agency securities and to reinvest in capital assets of the Company.

4.   Other Business Information

     The Editworks division is currently constructing two audio rooms in order
     to provide its clients with additional services.  The rooms are expected to
     begin operations in the fourth quarter of this fiscal year and thereafter
     should contribute to the revenue and earnings of the Company.


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<PAGE>


                                PART II - OTHER INFORMATION


ITEM 5.  LEGAL PROCEEDINGS

     The Company is involved in litigation and similar claims incidental to the
     conduct of its business.  None of the pending actions is considered
     material.

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

          (a). (1)  Fourth amendment dated October 1, 1996 to Credit Agreement
                    dated as of December 2, 1994 between The Todd-AO 
                    Corporation and Bank of America National Trust and Savings
                    Association.

               (2)  Employment agreement dated as of November 8, 1996 between
                    The Todd-AO Corporation and Christopher D. Jenkins.

               (3)  Exhibit 27 Financial Data Schedule.






                                          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.



                                                   THE TODD-AO CORPORATION



   April 10, 1997                                 /s/      Silas R. Cross
 ------------------                            ------------------------------
      Date                                                 Silas R. Cross
                                                     Chief Accounting Officer



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