<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
   
                                   FORM 10-Q/A
    
[ X ]            QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
                 THE SECURITIES EXCHANGE ACT OF 1934

                 For the Quarterly Period Ended March 31, 1997

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

                 For the Transition Period From __________ To __________

                           DOMINION BRIDGE CORPORATION
           (Exact name of registrant as specified in its charter)

         DELAWARE                1-10372                      23-2577796
(State of Incorporation) (Commission File No.) (IRS Employer Identification No.)
                            500 Notre Dame Street
                                 3rd Floor              
                        Lachine, Quebec  CANADA H8S 2B2
                    (Address of principal executive office)

       Registrant's telephone number, including area code: (514) 634-3550

NOT APPLICABLE
(Former name, if changed since last report)

Check whether the Registrant: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 
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 days.

                       (1)   Yes   X       No _____
                       (2)   Yes   X       No _____

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS

Check whether the registrant has filed all documents and reports required to be
filed by Section 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   X       No _____  

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares outstanding of the Registrant's sole class of common stock,
as of May 12, 1997, is 29,003,648.
<PAGE>   2
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              -----
<S>         <C>         <C>                                                                   <C>
PART I      FINANCIAL INFORMATION
            Item 1.     Consolidated Balance Sheets at March 31, 1997 (Unaudited) and
                        September 30, 1996                                                        3
                        Consolidated Statements of Operations for the Three and Six Months
                        ended March 31, 1997 and 1996 (Unaudited)                                 4
                        Consolidated Statements of Cash Flows for the Six Months ended March
                        31, 1997 and 1996 (Unaudited)                                             5
                        Consolidated Statements of Stockholders' Equity for the Six Months
                        ended March 31, 1997 and 1996 (Unaudited)                                 6
                        Notes to consolidated Financial Statements                                7
            Item 2.     Management's Discussion and Analysis of Financial Condition and
                        Results of Operation                                                     11
PART II     OTHER INFORMATION
            Item 1.     Legal Proceedings                                                        19
            Item 2.     Changes in Securities                                                    20
            Item 3.     Defaults Upon Senior Securities                                          20
            Item 4.     Submission of Matters to a Vote of Security Holders                      20
            Item 5.     Other Information                                                        20
            Item 6.     Exhibits and Reports on Form 8-K                                         21
</TABLE>
 
                                        2
<PAGE>   3
 
                          DOMINION BRIDGE CORPORATION
 
                          CONSOLIDATED BALANCE SHEETS
 
                  as at March 31, 1997 and September 30, 1996
    
<TABLE>
<CAPTION>
                                                                    MARCH 31, 1997     SEPTEMBER 30, 1996
                                                                    --------------     ------------------
                                                                      Unaudited
                                                                       (in thousands of U.S. dollars,
                                                                            except share amounts)
<S>                                                                 <C>                <C>
ASSETS
CURRENT ASSETS
Cash (Note 3)...................................................          7,153               26,231
Short Term deposits.............................................          6,255
Accounts receivable.............................................        101,367              126,911
Inventories.....................................................         56,988               43,762
Prepaid expenses and other current assets.......................          9,093                5,417
                                                                        -------              -------
TOTAL CURRENT ASSETS............................................        180,856              202,321
Property, plant and equipment, net..............................         41,504               38,289
Assets of business transferred under contractual arrangements
  (preferred shares)............................................          3,847                3,847
Goodwill........................................................         11,810               11,958
Pension assets..................................................          1,308                1,187
Advances to and investments in unincorporated joint ventures....          1,244                2,398
Other assets....................................................          8,557                5,247
                                                                        -------              -------
TOTAL ASSETS....................................................        249,126              265,247
                                                                        =======              =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank indebtedness(Note 4).......................................          1,473                5,624
Term loan (Note 4)..............................................         20,000               30,000
Accounts payable and accrued expenses...........................        102,740              119,839
Customer advances...............................................         23,187               16,166
Current portion of obligations under capital leases.............          2,425                2,979
                                                                        -------              -------
TOTAL CURRENT LIABILITIES.......................................        149,825              174,608
Deferred income taxes...........................................          7,246                5,147
Accrued post-retirement benefits other than pensions............          1,604                  514
Obligations under capital leases................................          3,330                2,274
Minority interest...............................................         17,542               18,783
Negative goodwill...............................................         10,390               12,945
Other long-term liabilities.....................................          3,715                2,976
                                                                        -------              -------
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value; 25,000,000 shares authorized,
  none issued
Common stock, $0.001 par value; 50,000,000 shares authorized;
  issued and outstanding: 29,003,648 shares in 1997 and
  15,697,582 shares in 1996.....................................             29                   25
Additional paid-in capital (Restated, see note 10)..............         69,795               60,624
Deficit (Restated, see note 10).................................        (11,642)             (10,191)
Cumulative translation adjustment...............................           (884)                (634)
                                                                        -------              -------
                                                                         57,298               49,824
Subscription receivable.........................................         (1,824)              (1,824)
                                                                        -------              -------
Total Stockholders' Equity......................................         55,474               48,000
                                                                        -------              -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......................        249,126              265,247
                                                                        =======              =======
</TABLE>
     
Commitments and contingencies (Note 8)
 
                             See accompanying notes
 
                                        3
<PAGE>   4
' 
                          DOMINION BRIDGE CORPORATION
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
               Three and Six months ended March 31, 1997 and 1996
    
<TABLE>
<CAPTION>
                                              THREE MONTHS ENDED           SIX MONTHS ENDED
                                            -----------------------     -----------------------
                                            MARCH 31,     MARCH 31,     MARCH 31,     MARCH 31,
                                              1997          1996          1997          1996
                                              (in thousands of U.S. dollars, except per share
                                                                   data)
                                                                 Unaudited
<S>                                         <C>           <C>           <C>           <C>
SALES...................................      132,732        53,517       257,536       104,958
                                            -----------   -----------   -----------   -----------
Cost of sales...........................      120,199        45,813       232,080        89,525
Selling, general and administrative
  expenses..............................       14,949         4,317        27,268         9,350
                                            -----------   -----------   -----------   -----------
                                              135,148        50,130       259,348        98,875
Income from operations of joint
  ventures..............................          268           244           483           732
                                            -----------   -----------   -----------   -----------
Income (loss) from operations...........       (2,148)        3,631        (1,329)        6,815
Interest (expense)......................       (1,530)           (3)       (2,919)           43
Gain on disposal of subsidiary shares
  (Note 6)..............................        3,000            --         3,000            --
Other income............................          967            61         1,319           234
                                            -----------   -----------   -----------   -----------
Income (loss) before income taxes and
  minority interest.....................          289         3,689            71         7,092
                                            -----------   -----------   -----------   -----------
Income taxes (Note 5)...................         (529)       (1,406)       (1,149)       (2,717)
Income (loss) before minority
  interest..............................         (240)        2,283        (1,078)        4,375
Minority interest -- dividends on
  preferred shares......................           --          (131)           --          (205)
Minority interest -- common stock.......          (96)           28          (373)          (11)
                                            -----------   -----------   -----------   -----------
NET (LOSS) INCOME.......................         (336)        2,180        (1,451)        4,159
                                            -----------   -----------   -----------   -----------
Net income (loss) per common share and
  common share equivalents
  Primary...............................        (0.01)         0.13         (0.05)         0.25
  Fully diluted.........................           --          0.13            --          0.24
                                            -----------   -----------   -----------   -----------
Weighted average number of common shares
  and common share equivalents
  outstanding
  Primary...............................    28,963,204    16,329,589    28,138,171    16,320,488
  Fully diluted.........................    28,963,204    17,357,811    28,893,818    17,334,599
                                            ===========   ===========   ===========   ===========
</TABLE>
     
                             See accompanying notes
 
                                        4
<PAGE>   5
 
                          DOMINION BRIDGE CORPORATION
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                           Six months ended March 31
    
<TABLE>
<CAPTION>
                                                                            1997        1996
                                                                           -------     -------
                                                                            (in thousands of
                                                                              U.S. dollars)
                                                                                Unaudited
<S>                                                                        <C>         <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income......................................................     (1,451)      4,159
Adjustments to reconcile net income to the cash provided by (used for)
  operating activities
  Minority interest in net income......................................        373          11
  Gain on disposal of subsidiary common shares.........................     (3,000)
  Depreciation and amortization........................................      5,360       1,476
  Common stock issued for services.....................................        553          --
  Amortization of negative goodwill....................................     (2,513)         --
  Deferred income taxes................................................        995         343
  Deferred pension cost................................................       (121)         --
  Income from operations of joint ventures.............................       (483)       (732)
  Cash distributions from joint ventures...............................      1,637         292
  Decrease (Increase) in accounts receivable...........................     25,544      (1,636)
  (Increase) Decrease in prepaid expenses and other assets.............     (3,676)      1,030
  Decrease (increase) in inventories...................................    (13,226)     (2,113)
  (Decrease) increase in accounts payable..............................    (17,099)     (6,840)
  Increase in customer advances........................................      7,021        (129)
  Other -- net.........................................................        345          --
                                                                           --------    --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES....................        259      (4,139)
                                                                           --------    --------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds on disposal of subsidiary common shares.......................     10,436          --
Decrease (Increase) in short term deposits.............................     (6,255)      1,320
Cash consideration paid for acquired businesses........................         --     (23,505)
Cash of acquired businesses............................................         --      35,301
Cash redemption of minority interest...................................         --      (6,163)
Repayment by (advance to) a shareholder................................         --         460
Cash payment for purchase of equipment.................................     (8,427)         30
(Increase) in other assets.............................................     (3,310)     (2,041)
                                                                           --------    --------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES....................     (7,556)      5,402
                                                                           --------    --------
CASH FLOW FROM FINANCING ACTIVITIES
Issuance (Repayment) of term loan......................................    (10,000)     14,385
Proceeds from issuance of common stock.................................         --       4,008
Issue of preferred shares of subsidiary to minority interest...........         --      22,374
Bank indebtedness......................................................     (4,151)     (5,635)
Other long-term liabilities............................................      1,728          (8)
(Payment) Issue of capital lease obligations...........................        502          --
                                                                           --------    --------
Net cash provided by financing activities..............................    (11,921)     35,124
                                                                           --------    --------
Effect of foreign exchange rate fluctuations on cash...................        140        (685)
                                                                           --------    --------
Net change in cash.....................................................    (19,078)     35,702
Cash, at beginning of period...........................................     26,231       4,765
                                                                           --------    --------
Cash, at end of period (Note 3)........................................      7,153      40,467
                                                                           ========    ========
NON-CASH INVESTING AND FINANCING ACTIVITIES
Issuance of common stock on conversion of minority interest preferred
  shares (note 7)......................................................      8,537          --
Purchase of minority interest preferred stock of subsidiaries..........     (8,537)         --
                                                                           --------    --------
</TABLE>
     
                             See accompanying notes
 
                                        5
<PAGE>   6
 
                          DOMINION BRIDGE CORPORATION
 
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
 
                     Six Month Period Ended March 31, 1997
    
<TABLE>
<CAPTION>
                                                COMMON   ADDITIONAL             CUMULATIVE
                                                STOCK     PAID-IN               TRANSLATION  SUBSCRIPTION
                                     SHARES     AMOUNT    CAPITAL     DEFICIT   ADJUSTMENT    RECEIVABLE
                                    ---------   ------   ----------   -------   ----------   ------------
                                                (dollar amounts in thousands of U.S. dollars)
                                                                 (unaudited)
<S>                                 <C>         <C>      <C>          <C>       <C>          <C>
Balance at September 30, 1996 as
  originally filed................  24,722,188    25       57,601      (5,931)     (634)        (1,824)
Deemed dividend (Note 10).........         --     --        3,023      (4,260)       --             --
                                                  --
                                    ---------            ----------   -------   ----------   ------------
Restated balance at September 30,
  1996............................  24,722,188    25       60,624     (10,191)     (634)        (1,824)
Issuance of common stock upon
  conversion of Dominion Bridge,
  Inc. Class A preferred shares...     50,334     --          104          --        --
Issuance of common stock upon
  conversion of Cedar Group (TCI)
  LLC preferred shares............  3,971,126      4        8,533          --        --             --
Share issue costs.................         --     --          (18)         --        --             --
Translation adjustments, net of
  income taxes of nil.............         --     --           --          --      (250)            --
Issuance of common stock for
  services........................    260,000     --          552          --        --             --
Net loss for the period...........         --     --           --      (1,451)       --             --
                                                  --
                                    ---------            ----------   -------   ----------   ------------
Balance at March 31, 1997.........  29,003,648    29       69,795     (11,642)     (884)        (1,824)
                                    =========   ======    =======     =======   ========     =========
</TABLE>
     
                                        6
<PAGE>   7
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

   
     (All dollar figures are in thousands of US dollars unless otherwise
     indicated.)
    
 
1.   NATURE OF OPERATIONS
 
     Dominion Bridge Corporation, a Delaware corporation with executive offices
     in Montreal, Canada, specializes in international engineering,
     infrastructure development and project management and ship building and
     repair.
 
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    
     The accompanying consolidated financial statements have been prepared by
     the Company pursuant to the rules and regulations of the Securities and
     Exchange Commission ("SEC"). This Report on Form 10-Q should be read in
     conjunction with the Company's Annual Report on Form 10-K for the year
     ended September 30, 1996, as amended. The information reflects all normal
     and recurring adjustments which, in the opinion of management, are
     necessary for a fair presentation of the financial position of the Company
     and its results of operations for the interim periods set forth herein.
     The results for the six months ended March 31, 1997 are not necessarily
     indicative of the results to be expected for the full year.
    
     These consolidated financial statements have been prepared by management in
     accordance with accounting principles generally accepted in the United
     States, the most significant of which are outlined below. These principles
     require the use of estimates to measure the financial effects of past
     transactions or events and the present status of assets and liabilities.
 
     Principles of consolidation
 
     The financial statements include the accounts of the Company and its
     subsidiaries. All significant intercompany accounts and transactions have
     been eliminated upon consolidation.
 
     During the previous fiscal year, the Company (1) acquired the remaining
     minority interests in Dominion Bridge Inc. and Steen Contractors Limited,
     (2) acquired approximately 77.4% of the outstanding shares of McConnell
     Dowell Corporation Limited ("MDC") and (3) acquired 100% of the outstanding
     share capital of Davie Industries Inc. (formerly Groupe MIL Inc.)
     ("Davie"). Effective March 21, 1997, the Company sold 6,000,000 ordinary
     shares of MDC, reducing its ownership to approximately 65% of MDC's
     outstanding shares.
 
     These transactions result in the financial results of the three and six
     months ended March 31, 1997, including the results of the acquired
     subsidiaries while the comparative period for the three and six months
     ended March 31, 1996 exclude the results of the MDC and Davie subsidiaries.
 
     Each of the above acquisitions was accounted for under the purchase method
     of accounting. Under the purchase method of accounting, the assets of the
     acquired entity are reflected on the balance sheet at their fair market
     value on the date of purchase, with the balance of the purchase price
     attributed to goodwill. In the case of Davie, since the purchase price was
     nominal, the difference between the fair market value of the assets and the
     purchase price is treated as negative goodwill. Goodwill is amortized on a
     straight-line basis over periods not exceeding forty years. Negative
     goodwill is amortized on a straight-line basis over a period of three
     years.
 
     Cash
 
     Cash includes short-term deposits with terms less than 90 days. Short-term
     deposits with terms longer than 90 days are stated at cost which
     approximates fair market value.
 
     Construction contracts
 
     Income on construction contracts is recognized on the
     percentage-of-completion basis. Provisions for anticipated losses on
     uncompleted contracts are made in the period in which losses are first
     determinable.
 
     Inventories
 
     Work in process related to construction contracts is stated at accumulated
     costs less amounts charged to income based on the percentage of completion
     of individual contracts. Raw materials are stated at the lower of cost
     (first in, first out) or replacement cost. Finished goods comprise steel
     and steel hardware products held for sale and are stated at the lower of
     cost (first in, first out) or net realizable value.
 
     Investment in and advances to unincorporated joint ventures
 
     The Company's investment in and advances to unincorporated joint ventures
     is accounted for by the equity method whereby the investment is initially
     recorded at cost and the carrying value is adjusted thereafter to include
     the Company's pro rata share of earnings less drawings received.
 
                                        7
<PAGE>   8
 
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
     Property, plant and equipment
 
     Property, plant and equipment, including assets that were acquired under
     capital leases, are stated at cost. Maintenance and repairs are charged to
     expenses as incurred. When assets are sold or otherwise disposed of, the
     cost and related accumulated depreciation are removed from their respective
     accounts and the resulting gain or loss is reflected in current operations.
     Depreciation is computed on the straight-line method over the estimated
     useful lives of the assets, generally five to seven years for machinery and
     equipment and forty years for buildings.
 
     Pension costs
 
     The Company maintains defined benefit pension plans which cover certain of
     its Canadian employees. Pension plan obligations are valued using the
     projected benefit actuarial method and best estimate assumptions. Pension
     plan assets are valued at market-related values. The Company also
     participates in defined contribution plans for its Australian and certain
     of its Canadian employees.
 
     Post-retirement benefits other than pensions
 
     The Company accrues for benefits such as health care, life insurance
     coverage and long service leave to which retired employees are entitled.
     The obligation is adjusted on an annual basis to reflect the expected cost
     of providing post-retirement benefits during the years an employee renders
     service.
 
     Translation of foreign currencies and foreign exchange contracts
 
     All assets and liabilities of the Company's subsidiaries operating outside
     the United States are translated into U.S. dollars using current exchange
     rates and income statement items are translated using weighted average
     exchange rates for the year. The resulting translation adjustment is
     included as a component of stockholders' equity. Other foreign currency
     transaction gains and losses are included in determining net income.
 
     Income taxes
 
     The Company accounts for income taxes under the liability method. Deferred
     taxes reflect the tax consequences in future years of differences between
     the tax bases of assets and liabilities and their financial reporting
     amounts.
 
     Net income per share
 
     Primary net income per common share is computed by dividing the income
     applicable to common shares by the weighted average number of shares of
     common stock outstanding and common stock equivalents including the
     dilutive effect of options and warrants from the date of grant.
 
     Net income per common share on a fully diluted basis assumes that all
     convertible instruments were converted to common stock at the earlier of
     the beginning of each year or the date of issuance.
 
3.   CASH
 
     The Consolidated cash and short term deposits at March 31, 1997 amounted to
     $13,408. Included in this amount is cash and short term deposits in the
     amount of $5,850 which are for the sole benefit of Davie for its day to day
     operations and business development.
 
4.   FINANCING AGREEMENT
 
     On April 29, 1996, the Company entered into an agreement with BT Commercial
     Corporation ("BTCC") for a term loan in the amount of $30,000. The term
     loan was reduced to $20,000 on March 21, 1997 following the sale by the
     Company of shares of MDC. This loan bears interest at i) the greater of
     1.5% per annum above the prime rate announced from time to time by Bankers
     Trust Company or  1/2% above the federal funds rate established from time
     to time by the Federal Reserve Bank of New York; or ii) at a rate
 
                                        8
<PAGE>   9
 
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
4.   FINANCING AGREEMENT -- (CONTINUED)
     equal to 2  1/2% above the London Interbank Offered Rate ("LIBOR") for a
     period of up to six months at the election of the borrower. The Loan is
     collateralized by all the assets of DBI and Steen and the pledge of the
     shares of MDC owned by the Company. The weighted average interest rate on
     the term loan was 9.75% for the six month period ended March 31, 1997.
     Subsequent to the balance sheet date of March 31, 1997, the Company repaid
     US $5 million of the term loan, bringing the balance to US $15 million and
     the Company and BTCC entered into an agreement to extend the maturity date
     to January 31, 1998. A subsidiary of the Company has entered into operating
     credit facilities totaling $6,200 bearing interest at variable rates. At
     March 31, 1997, $1,261 was outstanding under these facilities. Certain
     facilities have restrictions on their usage and are limited for use on
     specific projects.
 
5.   INCOME TAXES
 
     The difference between the Company's effective income tax rate and the
     statutory rate on income from operations for the six months ended March 31
     of each year is reconciled below:
 
<TABLE>
<CAPTION>
                                                                               1997      1986
                                                                               -----     -----
                                                                                 $         $
    <S>                                                                        <C>       <C>
    Income tax expense (recovery) at U.S. statutory rate (35%).............       25     2,482
    State tax (recovery), net of federal tax benefits (6%).................        4       426
    Foreign income taxes at more (less) than statutory rate................      356      (396)
    Operating losses without tax benefit...................................      764       205
                                                                               -----     -----
                                                                               1,149     2,717
                                                                               =====     =====
</TABLE>
   
6.   GAIN ON SALE OF SUBSIDIARY SHARES

     Effective March 21, 1997 the Company received net proceeds of $10.6 million
     from the sale of 6,000,000 ordinary shares of MDC, which amount represents 
     13% of the equity of MDC.
     
7.   STOCKHOLDERS' EQUITY
 
     During the three months ended December 31, 1996, the Company issued
     3,971,126 shares of its common stock at its fair value of $8,533 upon the
     conversion of the final 858,826 of Cedar Group (TCI) Inc. LLC. preferred
     shares in accordance with the terms of the preferred share agreement. The
     fair value of shares issued was determined as the actual trading price of
     the shares during the five days prior to the date of each conversion. The
     deemed dividend embedded in the Cedar Group (TCI) Inc. LLC. preferred
     shares was accrued for as a restatement of September 30, 1996 deficit. (See
     Note 9.)
 
     The Company also issued 50,334 shares of its common stock for cash proceeds
     of $104.
 
     During the three months ended March 31, 1997, the Company issued 260,000
     shares for services valued at $552.
 
8.   COMMITMENTS AND CONTINGENCIES
 
     In December 1996, the Company was notified that a purported class action
     shareholder complaint had been filed against it and certain executive
     officers of the Company. The complaint alleges that the defendants misled
     the investing public as to the quality and status of a number of contracts
     obtained by the Company as well as failed to disclose various inaccurate
     and misleading accounting practices. Management intends to vigorously
     defend this claim and believes the claim is without merit. As the outcome
     of this claim is indeterminable, no provision has been recorded in the
     consolidated financial statements.
 
     During 1995, the Company submitted a Claim Notification Letter to a
     customer and issued invoices to another customer against which a cash
     advance of $2,100 was applied. These amounts were originated with a view to
     recovering substantial cost increases pertaining to the design, manufacture
     and delivery of major infrastructure assets. The Company believes that the
     costs and expenses claimed are justified and has obtained a third party
     analysis as to the reasonability of its claim to the first customer. It has
     also received acknowledgment of the invoices issued to the second customer.
     During 1995, the value of these claims has been recognized in sales in the
     amount of $3,672. While management believes that the favorable outcome of
     these claims is probable, their resolution will involve further negotiation
     with the clients, or arbitration, and the ultimate realization may vary
     from the current estimates.
 
                                        9
<PAGE>   10
 
     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
 
8.   COMMITMENTS AND CONTINGENCIES -- (CONTINUED)
     A number of claims and lawsuits seeking unspecified damages and other
     relief are pending against the Company. It is impossible at this time for
     the Company to predict with any certainty the outcome of such litigation.
     However, management is of the opinion, based upon information presently
     available, that it is unlikely that any liability, to the extent not
     provided for through insurance or otherwise, would be material in relation
     to the Company's consolidated financial position.
 
     Certain subsidiaries have given various warranties on asset sales and in
     respect of taxation to purchasers of certain of the Company's former
     subsidiaries and equity investments. A warranty claim from one purchaser of
     a former equity investment is being defended and remains unresolved.
     Management is of the opinion that it is unlikely that any liability would
     be material to the Company's consolidated financial position.
 
     Certain subsidiaries of the Company are contingently liable for letters of
     credit, commitments and performance guarantees arising in the ordinary
     course of business.
 
     The Purchase offer agreement entered into by the Company and Societe
     General de Financement du Quebec ("SGF") dated April 24, 1996 to acquire
     the shares of Davie requires, amongst other things, that the Company,
     together with strategic investors and SGF, will invest up to Cdn $60,000
     over the five years following the acquisition of Davie. This investment can
     be raised by Davie through public offerings, private placements or debt
     financings. Furthermore, this investment is subject to market conditions
     and capital improvement requirements included in the business plan to
     restructure the business of Davie.
 
     During the period ended December 31, 1996, the Company entered into a joint
     venture agreement which was initially committed to fund up to an aggregate
     of US $2.5 million into up to 17 projects related to energy and power. The
     Company had the discretion to select the projects with the highest rate of
     return and the highest probability of success. After the joint venture
     completed its preliminary due diligence, it was decided to pursue only four
     of the original projects and, therefore, the required investment would be
     substantially reduced.
 
     The Company and its subsidiaries are engaged in manufacturing activities
     subject to numerous environmental laws, regulations and guidelines adopted
     by various governmental authorities in the jurisdictions in which the
     Company operates. The Company's policy is to accrue for environmental costs
     in the accounting period in which a loss is known or considered probable
     and the amount can be estimated.
    
9.   COMPARATIVE FIGURES
 
     Certain comparatives figures have been reclassified to conform with the
     presentation adopted in 1997.
 
10.  RESTATEMENT OF SEPTEMBER 30, 1996
     
     Net loss to common shareholders and deficit for the year ended September
     30, 1996 has been increased by $4,260 ($0.23 per share) from amounts
     previously reported to reflect a deemed dividend on the Company's TCI
     subsidiary convertible preferred shares in accordance with recently
     published views of the staff of the Securities and Exchange Commission.
     Regarding Accounting for preferred stock which is convertible at a discount
     to the market. The Company has charged net income and deficit as at
     September 30, 1996 for the full $4,260 of the deemed dividend embedded in
     the convertible instruments and recorded offsetting increases of $3,023 in
     the Company's paid in capital and $1,233 to its minority interest
     obligations at that date. The deemed dividend is determined as the discount
     to which the Company's TCI subsidiary preferred shares were convertible
     into the Company's common stock. As at September 30, 1996, 1,981,383 of the
     2,840,209 originally issued TCI preferred shares had been converted into
     7,994,605 common shares of the Company leaving 858,826 still unconverted.
     The Company has reflected the realized increase to paid in capital for
     those shares converted by year end and the unrealized portion remains in
     minority interest representing the discount to be borne on the remaining
     conversion. The balance of the TCI preferred shares are converted in the
     first quarter of fiscal 1997 into common stock, retiring the fully accrued
     fair value of the minority interest with no further charges to net income
     for 1997.
 
                                       10
<PAGE>   11
 
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
     Except for historical information, the material contained in Management's
Discussion and Analysis of Financial Condition and Results of Operations is
forward-looking. For the purposes of the safe harbor provisions for
forward-looking statements of the Private Securities Litigation Reform Act of
1995, readers are urged to review the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1996 for a list of certain important factors
that may cause actual results to differ materially from those described below.
 
BACKGROUND
 
     Dominion Bridge Corporation (the "Company"), through its principal
     operating companies, participates in four market segments throughout the
     world: construction, fabrication, pipeline and shipbuilding. The
     construction, fabrication and pipeline businesses were acquired by the
     Company in March 1994 through the purchase of Dominion Bridge Inc. ("DBI"),
     and were expanded in 1995 with the acquisition of Steen Contractors Limited
     ("Steen") and in March 1996 with the acquisition of a majority interest in
     McConnell Dowell Corporation Limited ("MDC"). The shipbuilding segment
     consists of Davie Industries Inc. ("Davie"), which was also acquired in
     March 1996. In addition, the Company has a majority-owned specialty
     fastener unit in the United States, Unimetric Corporation ("Unimetric"),
     which accounted for less than 1% of the Company's consolidated revenue
     during the quarter and six months ended March 31, 1997.
 
     Since the acquisitions of MDC and Davie occurred at the end of March 1996,
     comparisons of the results for the current periods with the comparable
     periods in the prior year are not meaningful. Accordingly, the discussion
     which follows is focused upon the results of each of the operating
     businesses for the periods discussed, including any period prior to the
     acquisition by the Company (the "proforma" information). The proforma
     results for 1996 include the results of operations of the Company's
     acquisitions that were made in March 1996 as if they had been included from
     October 1, 1995. The proforma results are not necessarily indicative of the
     results that would have occurred if the acquisitions had occurred at the
     beginning of the periods presented.
 
RESULTS OF OPERATIONS
 
     GENERAL
 
     The following table provides selected financial information from the
     Company's Consolidated Statements of Operations stated as a percentage of
     sales for the three months and six months ended March 31, 1997 (the
     "Current Quarter" and "Current Six Months," respectively) and the three and
     six months ended March 31,1996 (the "Comparable Quarter" and "Comparable
     Six Months," respectively). It will be referred to in the discussions that
     follow the table.
 
<TABLE>
<CAPTION>
                                                                FISCAL 1997         FISCAL 1996
                                                              ---------------     ---------------
                                                                          6                   6
                                                               Q2       MOS.       Q2       MOS.
                                                              -----     -----     -----     -----
    <S>                                                       <C>       <C>       <C>       <C>
    Sales.................................................    100.0%    100.0%    100.0%    100.0%
    Cost of Sales.........................................     90.6%     90.1%     85.6%     85.3%
    Gross Profit..........................................      9.4%      9.9%     14.4%     14.7%
    S, G & A..............................................     11.3%     10.6%      8.1%      8.9%
    Other Income..........................................      3.0%      1.7%      0.1%      0.2%
    EBIT..................................................      1.4%      1.2%      6.9%      6.8%
    EBT & Minority Interest...............................      0.3%      0.0%      6.9%      6.8%
    Net Income for Common Stock...........................     -0.3%     -0.6%      4.1%      4.0%
    EBITDA................................................      1.9%      2.2%      9.7%      9.9%
</TABLE>
 
     All companies do not calculate EBITDA in the same fashion and the measure
     as presented in this table may not be comparable to similarly-titled
     measures reported by other companies. Within Dominion Bridge Corporation
     however, all subsidiaries calculate EBITDA on a consistent basis.
 
                                       11
<PAGE>   12
 
THREE MONTHS ENDED MARCH 31, 1997
 
     Sales for the Current Quarter increased 148% to $132.7 million as compared
     to $53.6 million in the Comparable Quarter. The sales increase of $79.2
     million in the Current Quarter over the Comparable Quarter is mainly
     attributable to the acquisitions of MDC and Davie. Of the sales increase of
     $79.2 million, $68.4 million (or 86% of the Current Quarter increase) is
     from the acquisition of MDC on March 29, 1996 and $10.9 million (or 14%) is
     from the acquisition of Davie on March 31, 1996. The Comparable Quarter
     does not contain any operations of Davie or MDC. On a proforma Comparable
     Quarter basis, sales remained relatively flat, increasing slightly from
     $131.4 million to $132.7 million. This overall increase in sales was
     achieved despite an $8.0 million decline in DBI sales to $28.7 million due
     to low demand in its Quebec fabrication division.
 
     During the Current Quarter, the Company's sales in North America
     (consisting of DBI, Steen and Davie) increased slightly on a proforma basis
     but were flat on a reported basis. Sales increased in the Current Quarter
     over the proforma Comparable Quarter in North America sales by $3.1 million
     or 5%. The major component of the increase is the pipeline project
     undertaken by Steen in the Current Quarter. Steen's sales in the Current
     Quarter increased 53% to $23.9 million. Davie sales, on a proforma basis,
     increased 42% to $10.9 million. In Asia Pacific, MDC sales for the Current
     Quarter declined on a proforma basis 2.5% to $68.4 million. At MDC, the
     decline was attributable to the delay in obtaining regulatory approval to
     commence its $125 million Queensland pipeline contract that subsequently
     began in April of 1997.
    
     In addition, the Company received net proceeds of $10.6 million from the
     sale of 6,000,000 ordinary shares of MDC, representing 13% of the equity of
     MDC. After giving effect to the sale, the Company continues to own
     approximately 65% of the outstanding ordinary shares of MDC, which
     percentage being approximately equal to the MDC holdings the Company
     originally intended to acquire. The Company recorded a book gain from the
     sale of the shares of $3.0 million, which is included in Other Income.
     Income taxes of $0.75 million have been provided for in the Company's
     quarterly provision. Twenty (20) institutional investors in Australia, New
     Zealand, Singapore and Hong Kong acquired the block. The broader
     distribution of MDC shares is expected to enhance interest and liquidity in
     MDC stock. The Company currently does not have an intention to dispose of
     any further common shares of MDC and, accordingly, it is unlikely that a
     similar transaction will occur in future periods.
     
     Based on new business booked and the contract timing of the Company's
backlog, the Company projects accelerating sales growth beginning in the earlier
portion of the third quarter of fiscal 1997. The Company booked new business in
the Current Quarter of $100.4 million, of which $60.6 was in North America and
$39.8 million in Asia Pacific. Subsequent to the end of the Second Quarter, the
Company announced an additional $26 million pipeline contract in the Republic of
Georgia. Significant new business booked in the second quarter included i) a
Canadian Coast Guard contract to manufacture a number of 47 foot motorized
lifeboats, and ii) an initial $12 million pipeline contract. As of March 31,
1997, the Company's backlog, representing the uncompleted portions of
construction and engineering contracts, was $283.5 million, of which $102.1
million was in North America and $181.4 million in Asia Pacific. This compares
to a total Company backlog of $321 million at December 31, 1996 and $205.4
million at the end of fiscal 1996. The dollar amount of backlog is not
necessarily indicative of the future earnings of the Company related to the
performance of such work. Neither does the backlog include services contracts of
a recurring nature.
 
     In addition to backlog, the Company has been successful in generating
recurring sales for recurring annual projects and services from existing
clients. The Company considers this to be a significant target market and has
been successful in increasing the amount of recurring revenue contracts over the
past two years. During the Current Quarter, contracts representing recurring
work were signed with two major Canadian oil refineries.
 
     Due to a number of factors, including a change in its mix of business to a
substantially greater percentage of construction and engineering, the Company's
Current Quarter gross profit margin moved to 9.4% from 14.4% in the Comparable
Quarter, a margin level which is closer to the average for the construction and
engineering sector. In Asia Pacific, which represented approximately 50% of the
Company's Current Quarter sales, the Company achieved a lower rate of gross
profit margin when compared to the Company's overall Current Quarter rate of
9.4%, and also lower than the rate in MDC's prior quarter. A principal factor in
the lower gross profit margin in Asia Pacific was the decision to recognize a
lower rate of profit on a major project
 
                                       12
<PAGE>   13
 
which is scheduled for completion in the Third Quarter of 1997 and should result
in MDC's gross margin returning to historic levels. Additionally, there was a
delay in commencement of its Queensland pipeline contract, which has
subsequently commenced in April as well as a number of contracts too early in
their stage of completion to recognize profits. The Company's policy is to not
record any profit on contracts until they have reached a 25% completion stage.
Steen in the Current Quarter improved its gross profit margins over the prior
year due to its mix of business, which included material progress on the
pipeline project in North America.
 
     Also, the inclusion of Davie, which represented less than 10% of the
Company sales in the Current Quarter, had a negative impact on overall gross
profit margins. For the Current Quarter, Davie had a gross profit margin lower
than the corporate average and which was substantially lower than its gross
profit margin in the First Quarter. The rate of profit that the Company accrues
each quarter can vary substantially and is based on many factors. Management is
taking steps that, together with the expected short-term duration of the lower
gross profit margin in Asia Pacific and Davie, should lead to an improvement in
the Company's overall gross profit margin in the Third Quarter of 1997.
 
     Selling, general and administrative costs increased from $4.3 million in
the Comparable Quarter to $14.9 million in the Current Quarter, which represents
an increase of 3.2% of period sales to 11.3%. Of the $10.6 million increase in
total selling, general and administrative expenses in the Current Quarter over
the Comparable Quarter, $5.8 million (55%) and $2.0 million (19%), respectively,
were from the inclusion of MDC and Davie. The remaining $2.8 million (26%)
increase is from increases in the costs and scope of corporate overhead. At its
other North American subsidiaries in the Current Quarter as compared to the
Comparable Quarter, there was a net decrease in selling, general and
administrative costs. DBI reduced its selling, general and administrative
expenses by $0.8 million to $2.8 million while Steen's selling, general and
administrative expenses, reflecting the start of the North American pipeline
contract, increased by $0.4 million to $1.4 million.
 
     The net increase of selling, general and administrative costs at corporate
in the Current Quarter over the Comparable Quarter was $2.5 million, and
reflected primarily the scope and size of corporate operations including legal,
accounting and administrative expenses associated with increasing globalization
of the Company's operations. Also, executive bonuses relating to two years were
paid in a lump sum in the Current Quarter. In the Current Quarter at DBI, Steen
and Davie there were increased marketing costs to increase sales in the Canadian
and North American markets. These expenditures have begun to provide returns,
with the Company having contract proposals outstanding in North America at the
end of the Second Quarter in excess of $700 million, which for Davie includes
expansion or construction of three major offshore semi-submersible oil
platforms.
 
     Other Income increased significantly in the Current Quarter to $4.0
million. Primarily, the increase was from the sale by the Company in March of
6,000,000 shares of the ordinary shares of MDC at Au $2.25 to Asia Pacific
investors for which it had a $3.0 million pre tax gain. With this sale of MDC
shares, the Company reduced its ownership of MDC to its original target of 26
million shares or 65% of the ordinary stock outstanding. A tax provision of
$0.75 million on the gain from the sale is included in the Company's tax
provision for the Current Quarter.
 
     Income from the operations of joint ventures primarily represents the
Company's interest, through Steen, in the joint venture that is providing
project construction management service and procurement to the offshore drilling
platform in the Hibernia oil field off the coast of Newfoundland. The decrease
in the Company's earnings from the joint venture for the Current Quarter as
compared to the Comparable Quarter reflects that the project should be completed
by the end of calendar 1997, the Company's first quarter of fiscal 1998. The
termination of the joint venture at the conclusion of the contract is not
expected to result in any expenses to the Company. Management continues to seek
additional offshore drilling projects being planned to replace this stream of
income.
 
     During the Second Quarter, each of the Company's operating subsidiaries and
divisions operated profitably except Davie and DBI. Davie and DBI continue to be
negatively impacted with losses in their Quebec fabrication operations. While
the Quebec construction services division is profitable, the economy in Quebec
remains weak, and steps have been taken to restore DBI to profitability. Davie
is on track with its
 
                                       13
<PAGE>   14
 
restructuring plan that was implemented at the time of the acquisition.
Management, as previously noted, has initiated sales and marketing programs
while concurrently reducing certain expenses in Quebec to achieve a lower
break-even level. The steps to restore profitability include integrating DBI and
Steen construction operations, which should result in i) increased operational
and marketing efficiencies, ii) reduced total and relative selling, general and
administrative expenses, and iii) substantial enhanced financial control,
financial planning and cash management. The Company's U.S. commodity fastener
business, which lost money in fiscal 1996, was discontinued during the First
Quarter. Its remaining operation, Unimetric that specializes in fastener high
value-added manufacturing, was profitable in the Current Quarter.
 
     The Company's interest expense of $1.5 million in the Current Quarter is
due to the interest cost and amortization of financing fees incurred in
connection with the $30 million credit facility from BTCC, which was used to
partially finance the acquisition of 77.4% of MDC. Both the cash interest cost
and amortization of deferred debt issue costs are expected to be reduced
substantially for the Company's third quarter ended June 30, 1997 through the
repayment of $15 million of the outstanding loan facility and the completion of
the issue costs amortization at April 30, 1997. This facility did not exist
during the Comparable Quarter.
 
     The Company's provision for income taxes primarily reflects the incurrence
of taxable income and losses in different international tax jurisdictions. This
precluded obtaining the tax benefits of the Company's losses to offset the tax
burden of its profitable subsidiaries as well as for the taxable gain on the
sale of the MDC shares. The Company did not recognize all of the income tax
benefits from the losses incurred in the Current Quarter.
 
     During the first three months of fiscal 1997, the remaining $8.5 million of
TCI preferred shares were converted by the holders into Company common stock
according to a specified formula. As a result no further preferred dividends
were paid in the Current Quarter. The minority interests attributable to common
stock of $0.1 million, and the increase of $0.1 million in the Current Quarter
is attributable to the 22.6% of MDC not owned by the Company, and which
increased to 35% in March 1997 when the Company sold a portion of its holdings
in MDC. The minority interest attributable to common stock in the Comparable
Quarter was attributable to the 25% of Steen owned by minority shareholders
before their interest was purchased effective March 31, 1996.
 
     Exchange rates used in this discussion for the translation of financial
results for the Current Quarter and the Comparable Quarter from Canadian to U.S.
dollars were Cdn $1.00 equals US $0.74 and US $0.73, respectively. For the
Current Quarter, the Australian dollar was converted to US dollars at the
exchange rate of A $1.00 equals US $0.789. For the Current Quarter, the Company
incurred an additional cumulative currency translation loss of $0.23 million,
and now has a Cumulative Currency Translation Loss of $0.9 million, which has
been deferred as part of shareholders' equity.
 
SIX MONTHS ENDED MARCH 31, 1997
 
     Sales for the Current Six Months increased 145% to $257.5 million as
compared to $105.0 million in the Comparable Six Months. The $152.6 million
total increase in sales growth in the Current Six Months over the Comparable Six
Months is wholly attributable to the acquisitions of MDC and Davie. Of this
sales increase of $152.6 million, $130.7 million (86%of the Current Six Months
increase) is from the acquisition of MDC on March 29, 1996 and $22.9 million (or
14%) is from the acquisition of Davie on March 31, 1996. During the Current Six
Months, the Company's sales from its continuing operations in North America
remained constant.
 
     In comparison to the proforma Comparable Six Months, Company sales in the
Current Six Months period declined $12.3 million. While sales in North America
in the Current Six Months increased $4.6 million or 3.8% to $126.9 million,
revenues in Asia Pacific declined $16.8 million to $130.7 million due primarily
to the delay of a major pipeline project. In North America, DBI sales of $64.2
million for the Current Six Months were $11.1 lower than the Comparable Six
Months while Steen and Davie had increases of $10.1 million and $5.5 million,
respectively. Primarily, DBI continues to suffer in its Quebec fabrication
division from the region's weak economy.
 
                                       14
<PAGE>   15
 
     Due to a significant shift in its mix of business to construction and
engineering, the Company's Current Six Months gross profit margin moved closer
towards the industry average of that sector, namely to 9.9% from 14.7%. For the
Company's Current Six Months, MDC represented 50% of the Company's sales and its
gross profit margin was slightly higher than the overall corporate average.
Management has initiated steps, including an integration of construction
operations at DBI and Steen, which should lead to improvement in its gross
profit margins beginning in the third quarter of fiscal 1997. The inclusion of
MDC as opposed to Davie for the Current Six Months was positive as MDC had gross
profit margins higher than the corporate average in the Current Six Months.
    
     In addition, the Company received net proceeds of $10.6 million from the
sale of 6,000,000 ordinary shares of MDC, representing 13% of the equity of MDC.
After giving effect to the sale, the Company continues to own approximately 65%
of the outstanding ordinary shares of MDC. The Company recorded a book gain from
the sale of the shares of $3.0 million, which is included in Other Income.
Income taxes of $0.75 million have been provided for in the Company's six months
tax provision. The Company currently does not have an intention to dispose of
any further common shares of MDC and, accordingly, it is unlikely that a similar
transaction will occur in future periods.
    
     Selling, general and administrative costs increased from $9.4 million in
the Comparable Six Months to $27.3 million in the Current Six Months, which
represents an increase of 1.7% of sales to 10.6%. Of the $17.9 million increase
in total selling, general and administrative expenses in the Current Six Months,
$10.7 million and $1.2 million, respectively, were from the inclusion of MDC and
Davie. For the Current Six Months, DBI reduced its selling, general and
administrative expenses by $1.0 million to $5.5 while Steen's increased $0.2
million to $2.3 million. The increase at Steen is primarily attributable to the
commencement of its pipeline contract in North America. The remaining $7.2
million increase in selling, general and administrative expenses for the Current
Six Months period reflected primarily the scope and size of corporate operations
including legal, accounting and administrative expenses associated with
increasing globalization of the Company's operations.
 
     Additionally, there were increases in marketing costs expended in the
Current Six Months by DBI, Steen and Davie to expand their sales in their North
American markets. These expenditures have begun to provide returns, with the
December 1996 announcement of the Canadian pipeline contract and over $700
million of contract proposals outstanding on March 31, 1997.
 
     Income from the operations of joint ventures primarily represents the
Company's interest, through Steen, in the joint venture that is providing
project construction management service and procurement services to the offshore
drilling platform in the Hibernia oil field off the coast of Newfoundland. The
decrease in the Company's earnings from the joint venture for the Current Six
Months as compared to the Comparable Six Months reflects that the project should
be completed by the end of calendar 1997, the Company's first quarter of fiscal
1998. Although there can be no assurance of success, management continues to
address additional offshore drilling projects being planned to replace this
stream of income.
 
     Each of the Company's operating subsidiaries and divisions operated
profitably in the Current Six Months period except Davie and DBI. Although its
Construction Services division in Quebec is profitable, DBI continues to be
negatively impacted by its Quebec fabrication operations. Davie is on track with
its restructuring plan that was implemented at the time of the acquisition. The
economy in Quebec remains weak, and steps have been taken to restore DBI to
profitability. Management, as previously noted, has initiated sales and
marketing programs while concurrently reducing expenses in Quebec to achieve a
lower break even sales level. The steps to restore profitability include
integrating DBI and Steen operations, which should result in i) increased
operational and marketing efficiencies, ii) reduced total and relative selling,
general and administrative expenses, and iii) substantial enhanced financial
control, financial planning and cash management The Company's fastener
operations lost $1.5 million in fiscal 1996. The U.S. commodity fastener
business was discontinued during the first three months of fiscal 1997. Its
remaining operation, Unimetric which specializes in high value added
manufacturing, was profitable in the Current Six Months period.
 
     The Company's interest expense of $2.9 million in the Current Six Months is
due to the interest cost and amortization of financing fees incurred in
connection with the $30 million credit facility from BTCC, which was used to
partially finance the acquisition of MDC. Both the cash interest cost and
amortization of deferred debt issue costs are expected to be reduced
substantially for the Company's third quarter ended June 30, 1997
 
                                       15
<PAGE>   16
 
through the repayment of $15 million of the outstanding loan facility and the
completion of the issue costs amortization at April 30, 1997. This facility did
not exist during the Comparable Six Months.
 
     The Company did not recognize all of the income tax benefits from the
losses incurred in the Current Six Months. This was due to the incurrence of
taxable income and losses in different international tax jurisdictions. This
precluded obtaining the tax benefits of the Company's losses to offset the tax
burden of its profitable subsidiaries as well as the taxable gain on the sale of
the 6,000,000 MDC ordinary shares.
 
     The minority interests attributable to common stock of $0.373 million, and
the increase of $0.362 in the Current Six Months is attributable to the 22.6% of
MDC not owned by the Company, and increased during the latter part of the
Current Six Months to 35%. The minority interest attributable to common stock in
the Comparable Six Months was attributable to the 25% of Steen owned by minority
shareholders before their interest was purchased effective March 31, 1996.
 
     Exchange rates used in this discussion for the translation of financial
results for the Current Six Months and the Comparable Six Months from Canadian
to U.S. dollars were Cdn $1.00 equals US $0.74 and US $0.73, respectively. For
the Current Six Months, the Australian dollar was converted to US dollars at the
exchange rate of A $1.00 equals US $0.78. For the Current Six Months, the
Company incurred an additional cumulative currency translation loss of $0.25
million, which has been deferred as part of shareholders' equity.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company's principal sources of liquidity have been proceeds from seller
financing provided in connection with the Company's acquisitions and the private
placement of equity securities, bank financing and cash from operations.
 
     During the fiscal year ended September 30, 1996 ("Fiscal 1996"), the
Company issued $24.2 million of preferred shares of its subsidiary, Cedar Group
(TCI) Inc., LLC, ("TCI"), through an offshore private placement, and obtained a
$30 million credit facility from BT Commercial Corporation, an affiliate of
Bankers Trust Company ("BTCC"). The proceeds, net of issuance costs of
approximately $4.0 million, were used to fund the $40.2 million acquisition of
MDC, approximately $4.7 million to partially retire the outstanding minority
interest preferred shares in DBI, and $5.0 million to repay a prior bridge loan
from BTCC which partially funded the Steen acquisition. The balance of
approximately $0.3 million was added to working capital. The TCI preferred
shares paid cash dividends at the rate of 6% per annum. The TCI Preferred Shares
became convertible into the Company's common stock, beginning May 31, 1996, at a
conversion price equal to 12% less than the market price of the common stock
during the five trading days prior to conversion if converted prior to June 30,
1996, or 15% less than the market price of the common stock during the five
trading days prior to conversion, if converted thereafter. There was no minimum
conversion price. All TCI preferred shares outstanding on the maturity date of
October 31, 1998 were to automatically convert into shares of common stock of
the Company at a price equal to 15% less than the weighted average price of the
Company's shares traded on NASDAQ during the 20 previous trading days. As of the
end of Fiscal 1996, $7.3 million of the preferred shares remained outstanding
and $16.9 million had converted into 7,994,606 shares of the Company's common
stock. During the first three months of Fiscal 1997, the remaining outstanding
balance of the TCI preferred shares were converted into 3,971,126 shares of the
Company's common stock.
 
     The Company's credit facility with BTCC (the "Facility") had an outstanding
balance of $20 million as of March 31, 1997. Amounts outstanding under the
Facility bear interest at (i) the greater of 1.5% per annum above the prime rate
announced from time to time by Banker's Trust Company or 0.5% above the federal
funds rate established from time to time by the Federal Reserve Bank of New
York; or (ii) at a rate equal to 2.5% above the London Interbank Offered Rate
for a period of up to six months, at the election of the Borrower. The original
maturity date for the loan was April 30, 1997; however, on April 29, 1997 the
Company and BTCC entered into an agreement to extend the maturity date of $15
million to January 31, 1998. The Facility is secured by the pledge of the shares
in the operating subsidiary companies and under its agreement of April 29, BTCC
released its lien on the North American capital and operating assets. Both the
extension and lien release by BTCC were predicated upon the Company reducing its
borrowings to $15 million on or before May 7, 1997, which condition was timely
met. The Facility agreements provide for an acceleration of
 
                                       16
<PAGE>   17
 
the maturity date in the event of an "Event of Default" (as such term is defined
in the Facility agreements). An Event of Default includes failure to pay when
due any installment of interest on or principal of the Facility and any failure
to observe the covenants provided in the Facility agreements, including certain
financial covenants.
 
     During the Current Quarter, the Company sold 6,000,000 ordinary shares of
MDC for net proceeds of $10.6 million, of which $10 million was paid to BTCC to
reduce the principal balance of the facility.
 
     MDC has a revolving credit facility of $28 million which management
believes is adequate for its current level of operations. The Company's other
subsidiaries in North America rely upon cash on hand, trade payables and
customer advances for working capital. Due to restrictions under the BTCC
Facility, these subsidiaries were precluded from drawing on their normal
operating lines of credit. A key priority for the Company in refinancing or
amending the BTCC Facility was to obtain an adequate working capital facility
for the Company's North American operating subsidiaries. In addition, MDC will
require additional working capital facilities in the near future to meet its
expanded business. The Company is exploring a range of financing options, which
could include public or private debt, or equity financing. There can be no
assurance that such financing will be available, or if available, will be
available on terms attractive to the Company.
 
     During the Current Six Months, the Company's operations generated cash in
the amounts of $0.2 million and during the Comparable Six Months used $4.1
million. For the Current Six Months, the uses of cash in operations were
primarily for the increase in the Company's inventories and a decrease in its
accounts payable. These operating uses of cash were offset by the generation of
cash from a reduction in the Company's accounts receivable, an increase of
customer advances, non-cash expenses including depreciation and amortization,
and cash distributions from its joint ventures. The $10.4 million gain from the
sale of 6,000,000 shares of MDC was the primary source of cash from investing
activities.
 
     Until the Company successfully completes a credit arrangement for an
operating line of credit, the Company will rely on its working capital to
finance operations. The level of working capital may adversely impact the
Company's competitive position in bidding for new work. Management is in
preliminary negotiation with several potential sources of replacement financing
and believes it will be able to conclude its refinancing in the Third Quarter,
although there can be assurance to this effect.
 
     In its normal course of business, the Company may be investing in
inventories and have amounts due from its customers that it cannot finance
through a combination of customer advances and accounts payable. The working
capital financing previously discussed will be used by the Company to augment
its own internal resources to finance these working capital requirements. DBI,
Steen and MDC were each committed to various infrastructure projects that were
net users of cash at the previous year-end. Several of these major projects have
commenced to reverse the net cash investment and the Company is scheduled to
produce net positive cash flows from changes in working capital accounts over
the remainder of fiscal 1997. Additionally, certain types of projects may
require a short period of cash investment which depending on the amount of cash
investment, the Company may make specific financing arrangements.
 
     In addition to efforts to improve the efficiency of the management of its
working capital accounts to reduce cash requirements for its growth, the Company
has instituted several significant business initiatives to improve the operating
cash flow. The Company has shut down during the first quarter its commodity
fastener business and made Unimetric profitable to eliminate the $1.5 million
operating loss incurred in Fiscal 1996. The Company has liquidated a majority of
its commodity fastener inventory and has written down its balance of inventory
to its estimated realizable amount and has eliminated its remaining commodity
fastener real estate obligations. The Company has also initiated plant and
administrative staff reductions in its DBI operations to achieve operating cost
savings and benefit from rationalization of operations with those of Steen. The
Company has initiated its business plan at Davie to focus on running the
operation profitability.
 
     During the Current Six Months, the Company invested $8.5 million in capital
expenditures, of which $5.3 million was made in the Current Quarter. The
substantial majority of these expenditures was made in Asia Pacific and reflects
necessary equipment for the commencement of new contracts.
 
     At year end, the Company had approximately $68 million of claims which it
expects to settle in the normal course of business. This potential gain is not
reflected in the Company's balance sheet and although in
 
                                       17
<PAGE>   18
 
the past, the Company has been successful in settling most claims positively,
these is no assurance that any of these claims may be realized in the future.
 
     In connection with the Company's acquisition of Davie, the Company received
$18.5 million in cash from Societe Generale de Financement ("SGF"), the
industrial finance arm of the Government of Quebec, which it committed to an
investment program at Davie in accordance with the expansion plan proposed by
the Company for Davie at the time of acquisition. As of March 31, 1997, the
Company had invested $9 million of this requirement. The Company also agreed to
use its best efforts to obtain up to $45 million in additional financing for
Davie, which SGF has agreed to match on the basis of $1 for each $3 in
additional investment. There are no penalties if the Company is unable to meet
this requirement.
 
     The Company is subject to a risk of claims for construction and product
liability. If a liability claim exceeding the Company's insurance coverage or
its own available resources was to be successfully asserted against the Company,
it could have a material adverse effect on the Company's financial condition.
The Company has general liability insurance of approximately $5 million per
occurrence, with a maximum of $5 million of claims payable during any policy
year. There is no assurance that such coverage will be sufficient to fully
insure against claims brought against the Company and its subsidiaries, or that
the Company will be able to maintain such insurance at affordable rates or
obtain additional insurance covering the products. At the current time, the
Company has no product liability claim outstanding.
 
     The Company's sureties limit the annual amount of new bid and performance
bonds available to the Company. Each year this limit has increased commensurate
with the increase in the growth of the Company's sales. While the limitation did
not restrict the Company's ability to secure new work in the Current Quarter,
and the Company had substantial unused capacity at the end of the Current
Quarter, there could be circumstances where the limitation might influence the
selection of prospective projects.
 
                                       18
<PAGE>   19
 
                          PART II -- OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
     From time to time, disagreements with individual employees and
     disagreements as to the interpretation, effect or nature of individual
     agreements arise in the ordinary course of business and may result in legal
     proceedings being commenced against the Company.
 
     Other than as set forth below, the Company is not currently involved in any
     litigation or proceeding which is material, either individually or in the
     aggregate, and, to the Company's knowledge, no other legal proceeding of a
     material nature involving the Company is currently contemplated by any
     individuals, entities or governmental authorities.
 
     1.   By complaint dated November 7, 1995, certain shareholders of the
     Company (the "Plaintiffs") brought a shareholders derivative suit in the
     Chancery Court of the State of Delaware against the Company and Michel L.
     Marengere, Micheline Prud'homme, and Rene Amyot, individually. The
     complaint alleged certain interested and self-dealing transactions by Mr.
     Marengere. The parties have settled the suit pursuant to a stipulation of
     settlement, which provides for (i) the repayment to the Company, prior to
     March 31, 1997, of certain loans to affiliates of Mr. Marengere; (ii) the
     guarantee by a company controlled by Mr. Marengere of certain payments owed
     to the Company by the purchasers of Edinov, a former subsidiary of the
     Company; (iii) an agreement that no further interest free loans may be made
     to Mr. Marengere; (iv) an agreement that all future transactions not in the
     ordinary course of business between the Company and Mr. Marengere be
     subject to independent director approval; and (v) payment of attorney's
     fees in the amount of $140,000. The loans referred to above were repaid in
     fiscal 1996. The settlement was approved by the Chancery Court on January
     24, 1997.
 
     2.   By letter dated July 24, 1996, United Dominion Industries Limited
     ("UDI"), the former owner of DBI, has indicated that it intends to seek
     indemnification from the Company and from DBI, with regard to legal
     proceedings instituted against UDI by Loblaws Inc. in the Supreme Court of
     Newfoundland. The proceedings are based on the collapse of the roof of a
     building owned by Loblaws Inc.
 
     The complaint seeks unspecified damages. DBI has informed UDI that neither
     itself nor the Company are liable towards UDI in this matter. The Company
     has not yet been served with court papers as of the date of this Quarterly
     Report.
 
     3.   IPCO International has commenced legal action in Thailand seeking
     damages against the Thai company Si Chang Thong (as first defendant) and
     MDC's Thailand subsidiary (as second defendant) in connection with alleged
     infringements of intellectual property rights of IPCO International
     relating to the construction of the Si Chang Thong Island Deep Sea Terminal
     and Tank Farm in Thailand. MDC believes these allegations are baseless and
     are being vigorously defended.
 
     4.   On or about November 18, 1996 (but not served on the Company until
     December 9, 1996), James B. Smith commenced a purported class action
     securities lawsuit in the United States District Court for the Eastern
     District of Pennsylvania against the Company and Messrs. Marengere and
     Matossian individually. The complaint seeks unspecified damages for the
     persons who traded in the Company's common stock during the period
     commencing on April 20, 1995 and ending on May 18, 1996. The action alleges
     that during the class period the Company issued misleading press releases
     and reports to the Securities and Exchange Commission in that the Company
     failed to disclose allegations made by a former disgruntled employee
     regarding DBI's accounting practices, bonding capability and contracts in
     connection with his action against the Company for constructive dismissal.
     On December 12, 1996 the Company filed an answer denying the allegations,
     and strongly affirms that the allegations, both by Smith and the former
     employee, are entirely without merit.
 
     5.   By complaint dated July 18, 1995, Paul Kandola, a former employee of
     DBI, commenced an action in Quebec Superior Court against UDI, seeking
     Cdn$352,933 in severance payments under his employment agreement. On
     September 11, 1995, UDI filed an action in warranty against DBI seeking
     indemnification for any payments which may be required in this matter.
 
     By complaint dated August 4, 1995, Kandola filed an action in Quebec
     Superior Court against DBI for constructive dismissal seeking damages in
     the amount of Cdn$490,901.92.
 
                                       19
<PAGE>   20
 
     The Company has answered these complaints denying liability and intends to
     vigorously defend the actions.
 
     6.   By complaint dated February 24, 1997, the Company commenced an action
     in Quebec Superior Court against Steinar Knai, a former executive of the
     Company, DBI and Steen, for misappropriation of corporate property. On
     March 14, 1997, Knai answered the complaint and made a cross demand against
     the Company in the amount of Cdn$1.5 million for defamation. The Company
     intends to vigorously pursue it's action and defend itself against Knai's
     cross demand, the whole subject to arbitration.
 
     7.   On March 13, 1997, Privateinvest Bank AG (Privatinvest), an investor
     in this private placement of the TCI Preferred Shares, filed a Statement of
     Claim in the Superior Court for the District of Montreal against the
     Company's subsidiary, TCI seeking recission of its investment in the
     preferred shares of TCI on the basis of the Company's alleged failure to
     deliver the correct number of shares of common stock of the Company upon
     conversion of the TCI preferred shares. Alternatively, Privatinvest seeks
     $445,849 plus interest reflecting the value of shares not received in time
     as alleged by Privatinvest. The Company believes it honored the terms of
     the TCI preferred shares and intends to vigorously defend this action. The
     Company is not required to file immediately a defence since that the
     defendants were ordered to deposit a sum of money in order to guarantee the
     payment of court costs in the event that the complaint is dismissed.
 
     8.   By complaint dated January 31, 1997 and filed with the courts of
     Newfoundland. International Offshore Services Group Inc. and Ocean
     Management And Trading Company Ltd, both former consultants to the Company,
     are claiming Cdn $973,000 for purported unpaid retainer fees, success fees
     and finders fees. The Company intends to vigourously defend this action,
     since no agreement or understanding has ever taken place with respect to
     the payment of such fees.
 
ITEM 2.   CHANGES IN SECURITIES
 
     None
 
     During the Quarter, the Company issued common stock in exchange for
     services to non U.S. citizens. These shares were exempt from registration
     under the Securities Act by virtule of Regulation S and Regulation D under
     the Securities Act of 1993.
 
ITEM 3.   DEFAULTS UPON SENIOR SECURITIES
 
     None.
 
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     The Company held its Annual Meeting of Stockholders on February 28, 1997.
 
     The following actions were taken:
 
     1)  The following directors were elected to serve on the Board of Directors
        until the expiration of their term at the 2000 Annual Meeting and until
        their respective successors shall be elected and qualified. Tabulated
        voting results were as follows:
 
        Michel L. Marengere (For- 23,934,635; Withheld- 819,222) Louis
        Berlinguet (For- 23,947,435; Withheld- 806,422)
 
     2)  Approval of Deloitte & Touche as the independent auditing firm for the
        Company for the fiscal year ending September 30, 1997.
 
        Votes For- 24,627,996; Votes Against- 73,552 Votes Abstained- 52,309
 
     At a Board of Directors meeting following the Annual Meeting of
     Shareholders, Mr. Marengere was reelected Chairman and Chief Executive
     Officer.
 
     At a subsequent Board of Directors meeting, Messrs. Ladislas Rice and
     Andrew Choa and Dr. Nicholas Matossian were elected to the Board of
     Directors.
 
ITEM 5.   OTHER INFORMATION
 
     None.
 
                                       20
<PAGE>   21
    
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
     (a)  Exhibits
 
<TABLE>
<CAPTION>
    EXHIBIT NO.                               DESCRIPTION
    -----------     ----------------------------------------------------------------
    <S>             <C>                                                                 <C>
     4(a)           Amendment and Extension Agreement Among the Company, Certain of
                    its Subsidiaries, and BT Commercial Corporation. (previously filed)
    11              Statement Re: Computation of Per Share Earnings (previously filed)
    27              Financial Data Schedule.
</TABLE>
 
     (b)  Reports on Form 8-K
 
     None.
 
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 10-Q/A to be signed on its behalf by the
undersigned, thereunto duly authorized.
 
DOMINION BRIDGE CORPORATION
 
<TABLE>
<S>                                            <C>                      <C>
By: /s/ MICHEL L. MARENGERE                                             Dated: December 3, 1997
    Michel L. Marengere
    Chairman of the Board
    Chief Executive Officer
    (Principal Executive Officer)
By: /s/ ROBERT CHARTIER                                                 Dated: December 3, 1997
    Robert Chartier
    Vice President and Interim Chief
    Financial Officer
    (Principal Financial
    and Accounting Officer)
</TABLE>
 
                                   EXHIBIT INDEX
 
<TABLE>
<CAPTION>
    EXHIBIT NO.                               DESCRIPTION
    -----------     ----------------------------------------------------------------
    <S>             <C>                                                                 <C>
    27              Financial Data Schedule.
</TABLE>
     
                                       21