SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-Q

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

                  For The Quarterly Period Ended April 4, 1997

                         Commission File Number 1-14182

                             TB WOOD'S CORPORATION
             (Exact Name of registrant as specified in its charter)

             DELAWARE                           25-1771145
   (State or other Jurisdiction of       (IRS Employer Identification Number)
    Incorporation of Organization)

        440 North Fifth Avenue, Chambersburg, PA             17201
        (Address of principal executive offices)           (Zip Code)


                                 (717) 264-7161
              (Registrant's telephone number, including area code)


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

                                Yes _X___ No ____

Number of shares outstanding of the issuer's Common Stock:

               Class                         Outstanding at April 4, 1997

     Common Stock, $.01 par value                        5,834,147


<PAGE>


                                Table of Contents


Part I. - Financial Information                                         Page No.
-------------------------------                                         --------


Unaudited Condensed Consolidated Balance Sheets -
         April 4, 1997 and January 3, 1997 ....................................3

Unaudited Condensed Consolidated Statements of Operations -
         For the Three Months Ended April 4, 1997 and March 29, 1996 ..........4

Unaudited Condensed Consolidated Statements of Cash Flows -
         For the Three Months Ended April 4, 1997 and March 29, 1996 ..........5

Notes to Unaudited Condensed Consolidated Financial Statements ................6

Management's Discussion and Analysis of
         Financial Condition and Results of Operations ........................7


Part II. - Other information ..................................................9
----------------------------





<PAGE>


Part I.-Financial Information
Item 1. Financial Statements


                     TB Wood's Corporation And Subsidiaries
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>

                                                                                                       Audited
                                                                                      April 4,       January 3,
(in thousands, except per share and share amounts)                                       1997             1997
------------------------------------------------------------------------------- -------------- ----------------
ASSETS
Current Assets:
<S>                                                                                      <C>              <C>
Cash and cash equivalents .......................................................        $507             $306
Accounts receivable, less allowances for doubtful accounts, discounts, and
claims of $467 at April 4, 1997 and $437 at January 3, 1997 .....................      17,998           15,518
                                                                                      -------          -------
Inventories (Note 4) : ..........................................................      23,757           23,985
                                                                                      -------          -------
Other current assets ............................................................       1,150            1,053
                                                                                      -------          -------
     Total current assets .......................................................      43,412           40,862
                                                                                      -------          -------
Property, plant, and equipment: .................................................      42,210           41,652
Less accumulated depreciation ...................................................      21,909           21,154
                                                                                      -------          -------
    Net property, plant and equipment ...........................................      20,301           20,498
                                                                                      -------          -------
Other Assets:
Deferred income taxes ...........................................................       5,273            5,249
Goodwill, net of accumulated amortization of  $999 at
      April 4, 1997 and $958 at January 3, 1997 .................................       4,653            4,603

Other ...........................................................................       2,122            2,183
                                                                                      -------          -------
     Total other assets .........................................................      12,048           12,035
                                                                                      -------          -------

                                                                                      $75,761          $73,395
                                                                                      =======          =======


LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities:
Current maturities of long-term debt ............................................        $452             $520
Accounts payable ................................................................       4,514            5,210
Checks outstanding ..............................................................       1,278            1,532
Accrued expenses ................................................................       9,419            8,384
Deferred income taxes ...........................................................         537              539
                                                                                      -------          -------
     Total current liabilities ..................................................      16,200           16,185
                                                                                      -------          -------
Long-term debt, less current maturities .........................................      22,083           21,707
                                                                                      -------          -------
Postretirement benefit obligation, less current portion .........................      18,450           18,628
                                                                                      -------          -------

Shareholders' Equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized,
     no shares issued or outstanding ............................................          --               --
Common stock, $.01 par value; 40,000,000 shares authorized, 5,834,147 and
5,827,397 shares issued and outstanding at April 4, 1997 and January 3, 1997,
respectively ....................................................................          58               58
Additional paid-in capital ......................................................      28,201           28,158
Accumulated deficit .............................................................     (9,169)         (11,306)
Foreign currency translation adjustment .........................................        (62)             (35)
     Total shareholders' equity .................................................      19,028           16,875
                                                                                      -------          -------
 ................................................................................     $75,761          $73,395
                                                                                      =======          =======

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

</TABLE>

                                       3


<PAGE>


                     TB Wood's Corporation And Subsidiaries
                                  Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                                          April 4,     March 29,
 (in thousands, except per share amounts)                                    1997          1996
-------------------------------------------------------------------- ------------- -------------
<S>                                                                       <C>           <C>
Net sales ...........................................................     $30,489       $23,813
Cost of sales .......................................................      19,538        14,921
                                                                          -------       -------
     Gross profit ...................................................      10,951         8,892
Selling, general, and administrative expenses .......................       6,714         6,073
                                                                          -------       -------
     Operating income ...............................................       4,237         2,819
                                                                          -------       -------
Other (expense) income:
     Interest expense and other finance charges .....................       (487)         (800)
     Other, net .....................................................       (188)         (506)
                                                                          -------       -------
          Other expense, net ........................................       (675)       (1,306)
                                                                          -------       -------
Income before provision for income taxes and extraordinary item
 ....................................................................       3,562         1,513
Provision for income taxes ..........................................       1,425           580
                                                                          -------       -------
Income before extraordinary item ....................................       2,137           933
Extraordinary item, early extinguishment of debt
     (less related income tax benefit of $870) ......................         - -       (1,305)
                                                                          -------       -------
Net income ..........................................................      $2,137        ($372)
                                                                          =======       =======
Per share of common stock:
     Income before extraordinary item ...............................       $0.36          $.19
     Extraordinary item .............................................         - -        (0.27)
                                                                          -------       -------
Net income per common share .........................................       $0.36       ($0.08)
                                                                          =======       =======

Weighted average shares of common stock
     and equivalents outstanding ....................................       5,908         4,832
                                                                          =======       =======


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

</TABLE>
                                       4

<PAGE>


                     TB Wood's Corporation And Subsidiaries
                                  Consolidated Statements Of Cash Flows




<TABLE>
<CAPTION>

                                                                                     April 4,      March 29,
(in thousands)                                                                          1997           1996
-------------------------------------------------------------------               -------------- --------------
Cash Flows from Operating Activities:
<S>                                                                                   <C>             <C>
Net income                                                                            $2,137          $(372)
                                                                                      -------        -------
Adjustments   to  reconcile  net  income  to  net  cash  provided  by  operating
activities:
     Depreciation and amortization                                                     1,017            911
     Deferral of interest and management fees payable to
     affiliates                                                                            0            288
     Change in deferred income taxes, net                                                (26)          (440)
     Stock option compensation expense                                                    26             35
     Write off of non-compete agreement                                                   --            563
     Extraordinary loss on early extinguishment of debt, net                              --          1,305
     Other, net                                                                           --           (100)
  Changes in working capital, net of effects of acquisitions:
          Accounts receivable, net                                                    (2,080)           487
          Inventories, net                                                               228         (1,230)
          Prepaid expenses and other current assets                                     (249)          (290)
          Accounts payable                                                              (230)           244
          Accrued and other liabilities                                                  857         (1,112)
                                                                                      -------        -------
               Total adjustments                                                        (457)           661
                                                                                      -------        -------
               Net cash provided by operating activities                               1,680            289
                                                                                      -------        -------
Cash Flows from Investing Activities:
Acquisitions, net of cash acquired                                                        --           (458)
Capital expenditures                                                                    (554)          (447)
Purchase of minority interest in subsidiary                                               --         (1,626)
Other, net                                                                              (500)           (19)
                                                                                      -------        -------
     Net cash used in investing activities                                            (1,054)        (2,550)
                                                                                      -------        -------
Cash Flows from Financing Activities:
Change in checks outstanding                                                            (254)          (672)
Repayments of long-term debt, net                                                        (95)       (14,319)
Proceeds from original revolving credit facility                                          --         31,021
Repayments of original revolving credit facility                                          --        (33,882)
Proceeds from new revolving credit facility                                           10,100             --
Repayments of new revolving credit facility                                           (9,700)            --
Proceeds from public sale of common stock                                                 --         20,099
Payment of dividends                                                                    (466)            --
Proceeds from issuance of stock upon option exercise                                      17             --
                                                                                      -------        -------
     Net cash used in financing activities                                              (398)         2,247
                                                                                      -------        -------
Effect of changes in foreign exchange rates                                              (27)             7
                                                                                      -------        -------
Net (decrease) increase in cash and cash equivalents                                     201             (7)
Cash and cash equivalents at beginning of year                                           306            417
                                                                                      =======        =======
Cash and cash equivalents at end of period                                              $507           $410
                                                                                      =======        =======


The accompanying notes are an integral part of these consolidated statements.

</TABLE>
                                       5


<PAGE>


                     TB Wood's Corporation And Subsidiaries
                   Notes To Consolidated Financial Statements
                    (in thousands, except per share amounts)

1.   In the  opinion of  management,  the  accompanying  unaudited  consolidated
     financial  statements  contain all adjustments  necessary to present fairly
     the  financial  position of TB Wood's  Corporation  and  Subsidiaries  (the
     "Company")  as of April 4, 1997 and  January  3, 1997,  and the  results of
     operations  and cash flows for the three month  periods ended April 4, 1997
     and March 29, 1996. Operating results for the interim periods presented are
     not  necessarily  indicative  of the results  that may be expected  for the
     fiscal year ending January 2, 1998.

2.   Certain  reclassifications may have been made to the consolidated financial
     statements of prior periods to conform to the current period presentation.

3.   In 1997, the Company changed the remaining amortization period for the Post
     Retirement Benefits, unrecognized prior service cost from 14.4 years to 5.4
     years.  The change in the  amortization  rate will  provide  an  additional
     benefit of  approximately  $700 before taxes annually through 2001 and $300
     in 2002.

4.   The major  classes  of  inventories  at April 4, 1997 and  January  3, 1997
     consisted of the following:
                                                                        audited
                                                     April 4,         January 3,
                                                        1997               1997
     Raw material and supplies                       $ 3,058            $ 3,755
     Work in process                                   7,822              7,994
     Finished goods                                   17,034             16,293
                                                      ------             ------
          Total at FIFO cost                          27,914             28,042
     Excess of FIFO cost over LIFO cost               (4,157)            (4,057)
                                                     -------             ------
          Total at LIFO cost                         $23,757            $23,985
                                                     =======            =======



5.   In March 1997, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards No. 128 ("SFAS 128"),  "Earnings Per Share,"
     which the Company is required to adopt for periods  ending  after  December
     15, 1997. While SFAS 128 prohibits early adoption,  pro forma  presentation
     is permitted. The pro forma Earnings per Share ("EPS") is as follows:

                               April 4, 1997                   March 29, 1996
                               -------------                   --------------
                            APB 15      SFAS 128           APB 15      SFAS 128
     Net Income             $2,137      $2,137             ($372)       ($372)
     Primary EPS            $0.36                          $0.08)
     Primary Shares         5,908
                                                            4,832
     Basic EPS                           $0.37                          ($0.08)
     Basic Shares                        5,828                           4,727
     Diluted EPS                         $0.36                          ($0.08)
     Diluted Shares                      5,908                           4,832

6.   On April 10, 1997 the Board of Directors declared a quarterly cash dividend
     of $0.08 per share payable on April 30, 1997 to  shareholders  of record on
     April 18, 1997.

                                       6
<PAGE>


7.      On April 9, 1997, the Company issued Variable Rate Demand Revenue Bonds,
        Series 1997,  totaling  approximately  $2,550 under the authority of The
        Industrial  Revenue  Board of the City of  Chattanooga.  Interest is due
        monthly and the bonds mature on April 1, 2022.  The bonds are tax exempt
        and bear  interest at the  prevailing 7 day floating  rate.  The initial
        weekly interest rate (including  letter of credit and remarketing  fees)
        was approximately 4.4%.

8.      On May 8, 1997,  the Company  purchased  the stock of Graseby  Controls,
        Inc.("GCI"),  for cash of  approximately  $5,000.  GCI  manufactures and
        sells  industrial  AC  Drives,  including  the  Volkmann  brand  of high
        frequency, AC drives, electronic brakes, and SoftStarts.

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

RESULTS OF OPERATIONS (in thousands, except per share amounts)

         TB Wood's Corporation and Subsidiaries (the "Company") posted net sales
for the first quarter 1997 of $30,489, compared to $23,813 for the first quarter
1996, an increase of 28.0%. The increase was primarily due to increased sales of
AC Drives, electronic systems, sales from recent acquisitions, and strong demand
for mechanical products.

         Cost of sales ("COS") in the first quarter 1997 was $19,538 compared to
$14,921 for the same period last year, an increase of 30.9%. COS as a percent of
sales in the  first  quarter  1997 was  64.1%  compared  to 62.7%  for the first
quarter  1996.  The  increase  was  primarily  due to shifts in product mix, and
higher COS as the recent coupling acquisition is integrated into the business.

         Selling,  general and  administrative  ("SG&A")  expenses for the first
quarter  1997 were $6,714,  compared to $6,073 for the first  quarter  1996,  an
increase of $641 or 10.6%.  SG&A as a percent of sales decreased to 22.0% in the
first quarter 1997 from 25.5% in the first quarter 1996.

         Operating  profit was $4,237 for the first  quarter  1997  compared  to
$2,819 for the first  quarter  1996,  an increase of $1,418 or 50.3%.  Operating
profits as a percent of sales  increased to 13.9% in the first quarter 1997 from
11.8% in the first quarter 1996.

         Other expense for the first quarter 1997 was $188, compared to $506 for
the same period last year. The 1997 expense included one time charges related to
1996  acquisitions,  while  the  1996  expense  related  to  a  write  off  of a
non-compete agreement.

         Net income for the first  quarter  1997 was $2,137,  compared to ($372)
for the same period in the prior year.  First quarter 1996 net income was $1,282
before one time charges of $1,654  associated with the early  extinguishment  of
debt and a write-off of a non-compete agreement.

           Earnings per share  ("EPS") for the first  quarter 1997 were $0.36 on
5,908 weighted average shares outstanding  compared to first quarter 1996 EPS of
$0.27 before one time charges, on 4,832 weighted average shares outstanding. EPS
on net income for the first quarter 1996 was ($0.08).

                                       7
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES (in thousands, except per share amounts)

         Cash flows from  operations  provide  the  principal  source of current
liquidity.  Net cash flows provided by operating activities were $1,680 and $289
for the first  quarters  ended April 4, 1997 and March 29,  1996,  respectively.
Working  capital  increased  $2,535 to $27,212 at April 4, 1997 from  $24,677 at
January 3, 1997. The increase was caused by additional  accounts  receivable due
to record sales in the first quarter 1997.

         The Company used $1,054 for investment  purposes during the first three
months of 1997,  a  decrease  of $1,496  over the same  period in 1996.  Capital
expenditures  were constant at  approximately  $500 for both years. In the first
quarter 1996,  the Company  purchased the minority  interests of TB Woods Canada
LTD for approximately $1,600.

         The Company used $398 from  financing  activities  in the first quarter
1997  compared to cash  provided by financing  activities of $2,247 in the first
quarter 1996. The Company  received net proceeds of  approximately  $20,099 from
the initial public offering on February 8, 1996, and used the funds primarily to
repay debt.

         On April 10,  1997,  the Board of Directors  declared a quarterly  cash
dividend of $0.08 per share payable on April 30, 1997, to shareholders of record
on April 18, 1997.


SAFE HARBOR STATEMENT

          This quarterly report contains various forward-looking  statements and
includes  assumptions  concerning the Company's  operations,  future results and
prospects.  These  forward-looking  statements are based on current expectations
and are subject to risk and uncertainties.  In connection with the "safe harbor"
provisions of the Private Securities  Litigation Reform Act of 1995, the Company
provides the following  cautionary  statement  identifying  important  economic,
political and  technology  factors which,  among others,  could cause the actual
results or events to differ materially from those set forth in or implied by the
forward-looking statements and related assumptions.

          Such  factors  include the  following:  (i) changes in the current and
future business  environment,  including interest rates and capital and consumer
spending;  (ii)  competitive  factors and competitor  responses to the Company's
initiatives;   (iii)   successful   development  and  market   introductions  of
anticipated  new  products;  (iv) changes in  government  laws and  regulations,
including taxes; and (v) favorable  environment to make  acquisitions,  domestic
and foreign, including regulatory requirements and market value of candidates.


                                       8
<PAGE>

Part II - OTHER INFORMATION

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

         No matters were submitted to a vote of security holders.

Item 5.  Other Information (in thousands)

         On April 9, 1997,  the Company  issued  Variable  Rate  Demand  Revenue
Bonds,  Series 1997,  totaling  approximately  $2,550 under the authority of The
Industrial Revenue Board of the City of Chattanooga. Interest is due monthly and
the bonds mature on April 1, 2022. The bonds are tax exempt and bear interest at
the prevailing 7 day floating rate. The initial weekly  interest rate (including
letter of credit and remarketing fees) was approximately 4.4%. The proceeds will
be used to purchase and renovate a new  production  facility for the  electronic
systems business.

     On May 8, 1997, the Company purchased the stock of Graseby  Controls,  Inc.
("GCI"), for cash of approximately $5,000. GCI manufactures and sells industrial
AC Drives, including the Volkmann brand of high frequency, AC drives, electronic
brakes, and SoftStarts

Item 6.  Exhibits and Reports on Form 8-K

a)
                                              EXHIBIT INDEX
Exhibit

   11    Computation of Per Share Earning

   27    Financial Data Schedule

   b)    Reports  on Form 8-K - There  were no reports on Form 8-K filed for the
         three months ended April 4, 1997.



                                       9
<PAGE>


Pursuant to the  requirements of Section 13 or 15(d) 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,   in  the  City  of
Chambersburg and Commonwealth of Pennsylvania, on May 15, 1997.

                           TB WOOD'S CORPORATION



                           By:     \s\DAVID H. HALLEEN
                                   -------------------
                                   David H. Halleen
                                   Vice President of Finance, Treasurer
                                   and Chief Financial Officer
                                   (Principal Financial Officer and
                                   Principal Accounting Officer)



<PAGE>


EXHIBIT 11

                     TB Wood's Corporation And Subsidiaries
                       Computation Of Earnings Per Share

<TABLE>
<CAPTION>

                                                                         April 4,     March 29,
(in thousands, except per share amounts)                                    1997          1996
------------------------------------------------------------------- ------------- -------------

<S>                                                                        <C>           <C>
Weighted average number of common shares outstanding                       5,828         4,727
Shares issued upon assumed exercise of outstanding stock options              80           105
                                                                           -----         -----
Weighted average number of common and common equivalent shares
outstanding                                                                5,908         4,832
                                                                           -----         -----
Income before extraordinary item                                          $2,137          $933
Extraordinary item                                                            --       (1,305)
Net  income                                                                2,137         (372)
                                                                           =====         ====

Net (loss) Income per common share:
Before extraordinary item                                                  $0.36         $0.19
Extraordinary item                                                            --        (0.27)
Net Income                                                                  0.36        (0.08)



                                                                           =====         ====

</TABLE>