<PAGE>
 
                     SECURITIES AND  EXCHANGE  COMMISSION

                            Washington, D.C.  20549
                            -----------------------
                                        
                                   FORM 10-Q
 (Mark One)
[   ]  Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
       Exchange Act of 1934
                   For Quarterly Period Ended June 30, 1997

                                      OR
[   ]  Transition Report Pursuant to Section 13 or 15(d) of The Securities
       Exchange Act of 1934
                   For the transition period from ___ to ___

                       Commission file Number:  33-84262

                           _________________________


             MVE HOLDINGS, INC.                               MVE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN           (EXACT NAME OF REGISTRANT AS
               ITS CHARTER)                           SPECIFIED IN ITS CHARTER)
 
 
   DELAWARE           41-1641718           DELAWARE            41-1396485
  (State or         (IRS Employer         (State or          (IRS Employer
     other          Identification          other            Identification
jurisdiction of         Number)        jurisdiction of           Number)   
incorporation or                       incorporation or
 organization)                          organization)
 
                        TWO APPLETREE SQUARE, SUITE 100
                            8011 34TH AVENUE, SOUTH
                            BLOOMINGTON, MN  55425
                   (Address of principal executive offices)

                          TELEPHONE:  (612) 853-9600
             (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 and Exchange Act
of 1934 during 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 ninety (90) days.

                               Yes       No    
                                   ---      ---

                     Applicable Only To Corporate Issuers:
     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.


                                                                 OUTSTANDING AT
                                      CLASS                      JUNE 30, 1997
MVE Holdings, Inc.              -----------------                --------------
MVE, Inc.                         Common Stock                   149,068 Shares
MVE Holdings, Inc.                Common Stock                    1,000 Shares
MVE Holdings, Inc.              Preferred A Stock                 4,700 Shares
                                Preferred B Stock                  797 Shares
 
 
 
<PAGE>
 
NOTE: The duty of each of MVE Holdings, Inc., a Delaware corporation
("Holdings") and MVE, Inc. also a Delaware corporation ("MVE"), to file reports
under Section 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), has been suspended. Holdings and MVE are voluntarily filing
this quarterly report under cover of Form 10-Q. Please be advised that this
report does not include all the information required to be included in a
quarterly report on Form 10-Q filed pursuant to Section 13 or 15(d) of the
Exchange Act.


                        PART 1.  FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS
         --------------------

                                       2
<PAGE>
 
                      MVE HOLDINGS, INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets
                                (In Thousands)

<TABLE>
<CAPTION>
 
                                              June 30,          December 31, 
                                                1997                1996
                                             ----------         ------------  
                                             (Unaudited)
<S>                                          <C>                <C>
                ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                  $   4,848           $  10,505
  Accounts receivable, net of allowance 
   for doubtful accounts                        32,352              26,958
  Inventories                                   28,615              28,091
  Prepaid expenses                               1,617               1,227
  Income tax refund receivable                   3,032               3,102
  Deferred income taxes                          6,740               6,740
                                             ---------           ---------
          Total current assets                  77,204              76,623
 
PROPERTY, PLANT AND EQUIPMENT                   47,011              42,388
  Less-Accumulated depreciation and     
   amortization                                (17,030)            (15,376)
                                             ---------           ---------
          Net property, plant and               29,981              27,012
           equipment
 
GOODWILL, net                                   25,029              26,001
 
OTHER ASSETS, net                               11,966              12,540
                                             ---------           ---------
          Total assets                       $ 144,180           $ 142,176
                                             =========           ========= 

  LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
  Current maturities of long-term debt       $   3,311           $   3,633
  Accounts payable                              19,165              18,090
  Accrued expenses and other liabilities        21,294              24,988
                                             ---------           ---------
          Total current liabilities             43,770              46,711
 
LONG-TERM DEBT, net of current  
 maturities                                    151,359             143,009
DEFERRED INCOME TAXES                            1,887               1,887
OTHER NONCURRENT LIABILITIES                     7,749               4,159
                                             ---------           ---------
          Total liabilities                    204,765             195,766
 
MINORITY INTEREST                                  324                 320
SERIES A CONVERTIBLE REDEEMABLE 
 PREFERRED STOCK                                47,000              47,000
SERIES B CONVERTIBLE PREFERRED STOCK             7,971               8,331
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS' DEFICIT:
  Notes receivable from shareholders            (2,000)             (2,000)
  Common stock                                       2                   2
  Additional paid-in deficit                      (449)               (449)
  Common stock warrants                            165                 168
  Accumulated deficit                         (113,598)           (106,962)
                                             ---------           ---------
          Total stockholders' deficit         (115,880)           (109,241)
                                             ---------           ---------
          Total liabilities and 
           stockholders' deficit             $ 144,180           $ 142,176
                                             =========           ========= 
</TABLE>


  The accompanying notes are an integral part of these condensed consolidated
                                balance sheets.

                                       3
<PAGE>
 
                           MVE, INC. AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets
                                 (In Thousands)
<TABLE>
<CAPTION>
 
                                              June 30,          December 31, 
                                                1997               1996
                                             ----------         ------------
                                             (Unaudited)
<S>                                          <C>                <C>
            ASSETS
Current Assets:
  Cash and cash equivalents                   $  1,824            $  3,054
  Accounts receivable, net allowance    
   for doubtful accounts                        32,212              26,958
  Inventories                                   28,615              28,091
  Prepaid expenses                               1,617               1,227
  Income tax refund receivable                   3,032               3,102
  Deferred income taxes                          6,740               6,740
                                              --------            -------- 
          Total current assets                  74,040              69,172
 
Property, Plant and Equipment                   47,011              42,388
  Less-Accumulated depreciation and     
   amortization                                (17,030)            (15,376)
                                              --------            -------- 
     Net property, plant and equipment          29,981              27,012
 
DUE FROM MVE HOLDINGS, INC.                     31,040              31,015
 
GOODWILL, net                                   25,029              26,001
 
OTHER ASSETS, net                               11,966              12,540
                                              --------            -------- 
          Total assets                        $172,056            $165,740
                                              ========            ======== 
 
 LIABILITIES AND STOCKHOLDERS' DEFICIT
 
CURRENT LIABILITIES:
  Current maturities of long-term debt        $  3,311            $  3,633
  Accounts payable                              19,165              18,071
  Accrued expenses and other liabilities        21,294              24,982
                                              --------            -------- 
          Total current liabilities             43,770              46,686
 
LONG-TERM DEBT, net of current                 151,359             143,009
 maturities
 
DEFERRED INCOME TAXES                            1,887               1,887
 
OTHER NONCURRENT LIABILITIES                     2,010               1,041
                                              --------            -------- 
          Total liabilities                    199,026             192,623
 
MINORITY INTEREST                                  324                 320
 
COMMITMENTS AND CONTINGENCIES
 
STOCKHOLDERS' DEFICIT:
 Common stock                                        1                   1
 Additional paid-in deficit                     10,411              10,411
 Accumulated deficit                           (37,706)            (37,615)
                                              --------            -------- 
     Total stockholders' deficit               (27,294)            (27,203)
                                              --------            -------- 
     Total liabilities and 
      stockholders' deficit                   $172,056            $165,740
                                              ========            ========
</TABLE>


  The accompanying notes are an integral part of these condensed consolidated
                                balance sheets.

                                       4
<PAGE>
 
                      MVE HOLDINGS, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements Of Operations
                                (In Thousands)

<TABLE>
<CAPTION>
 
 
                                    (Unaudited)                     (Unaudited)
                             --------------------------       ------------------------
                             Three Months Ended June 30       Six Months Ended June 30
                             --------------------------       ------------------------
                                1997             1996           1997            1996
                             ---------         --------       --------        --------    
<S>                          <C>           <C>               <C>             <C>
NET SALES                      $50,501          $48,097        $98,945         $97,144
COST OF SALES                   35,954           34,143         69,516          68,664
                               -------          -------        -------         -------
          Gross profit          14,547           13,954         29,429          28,480
                                                                             
OPERATING EXPENSES:                                                          
  Selling and marketing          3,522            2,572          6,582           5,230
  General and                    
   administrative                4,951            3,544          8,847           5,064                                            
  Research and development       1,514              735          3,130           1,493
  Amortization                   1,032            1,340          2,045           2,711
                               -------          -------        -------         -------
     Total operating expenses   11,019            8,191         20,604          14,498                                             
                               -------          -------        -------         -------
     Operating income            3,528            5,763          8,825          13,982
                                                                             
INTEREST INCOME                   (109)                           (269)       
INTEREST EXPENSE                 4,459            4,131          8,824           8,294
                               -------          -------        -------         -------
     Income (loss) before 
      income tax provision                                                         
      (benefit) and minority                                                          
      interest                    (822)           1,632            270           5,688                                           
                                                                             
INCOME TAX PROVISION (BENEFIT)    (370)           1,000            102           2,642                                             
                               -------          -------        -------         -------
     Income (loss) before 
      minority interest           (452)             632            168           3,046
                                                                             
MINORITY INTEREST IN NET      
 INCOME (LOSS)                                       19              4            (109)
                               -------          -------        -------         -------
     Net income (loss)            (452)             613            164           3,155
                                                                             
PREFERRED STOCK DIVIDENDS        1,750                           3,488        
                               -------          -------        -------         -------
                                                                             
NET INCOME (LOSS) AVAILABLE 
 TO COMMON STOCKHOLDERS        $(2,202)         $   613        $(3,324)        $ 3,155
                               =======          =======        =======         =======
</TABLE>



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

                                       5
<PAGE>
 
                          MVE, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements Of Operations
                                (In Thousands)

<TABLE>
<CAPTION>
 
 
                                           (Unaudited)                       (Unaudited)
                                   --------------------------        --------------------------
                                   Three Months Ended June 30         Six Months Ended June 30
                                   --------------------------        --------------------------
                                      1997             1996             1997             1996
                                   ---------        ---------        ---------         --------
<S>                                <C>              <C>               <C>              <C>
NET SALES                           $50,501          $48,097          $98,945          $97,144
COST OF SALES                        35,954           34,143           69,516           68,664
                                    --------         --------         --------         --------
     Gross profit                    14,547           13,954           29,429           28,480
                                                                      
OPERATING EXPENSES:                                                   
  Selling and marketing               3,522            2,572            6,582            5,230
  General and administrative          4,951            3,544            8,847            5,064
  Research and development            1,514              735            3,130            1,493
  Amortization                        1,032            1,340            2,045            2,711
                                    --------         --------         --------         --------
     Total operating expenses        11,019            8,191           20,604           14,498
                                    --------         --------         --------         --------
     Operating income                 3,528            5,763            8,825           13,982
                                                                      
INTEREST EXPENSE                      4,459            4,131            8,824            8,294
                                    --------         --------         --------         --------
     Income (loss) before                                             
      income tax provision                                            
      (benefit) and minority                                          
      interest                         (931)           1,632                1            5,688
                                                                      
INCOME TAX PROVISION (BENEFIT)         (370)           1,000              102            2,642
                                    --------         --------         --------         --------
     Income (loss) before                                             
      minority interest                (561)             632             (101)           3,046
                                                                      
MINORITY INTEREST IN NET INCOME                                       
 (LOSS)                                                   19                4             (109)
                                    --------         --------         --------         --------
     Net income (loss)              $  (561)         $   613          $  (105)         $ 3,155
                                    ========         ========         ========         ========
</TABLE>



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

                                       6
<PAGE>
 
                      MVE HOLDINGS, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements Of Cash Flows
                                (In Thousands)

<TABLE>
<CAPTION>
 
                                               (Unaudited)
                                            Six Months Ended
                                                 June 30,
                                          --------------------
                                            1997        1996
                                          --------   --------- 
<S>                                       <C>        <C>

OPERATING ACTIVITIES:
  Net income before preferred stock     
   dividends                              $    164   $   3,155
  Adjustments to reconcile net income
   to net cash used in operating 
   activities:
    Depreciation and amortization            3,635       4,462
    Minority interest                            4        (109)
    Interest on exchangeable debt              165         163
    Deferred income tax benefit                           (478)
    Loss (gain) on disposition of assets        66        (208)
    Change in operating assets and     
     liabilities:                      
      Accounts receivable                   (5,500)     (1,498)
      Inventories                             (332)     (2,175)
      Prepaid expenses                        (388)         11
      Accounts payable                         915       4,531
      Accrued expenses and other 
       liabilities                          (3,707)       (477)
    Changes in other non-current        
     liabilities                               551          98
                                          --------   --------- 
                                      
        Net cash provided by (used in) 
         operating activities               (4,427)      7,475
 
INVESTING ACTIVITIES:
  Proceeds from sale of assets                 219           1
  Purchase of property, plant, and      
   equipment                                (4,458)     (5,001)
  Purchase of other assets                    (380)     (2,752)
                                          --------   --------- 
 
        Net cash used in investing 
         activities                         (4,619)     (7,752)
 
FINANCING ACTIVITIES:
  Borrowings under working capital      
   agreement                               103,976     105,346
  Repayments under working capital      
   agreement                               (95,347)   (106,951)
  Proceeds from issuance of long-term   
   debt                                                  3,023
  Repayment of long-term debt               (1,525)     (1,324)
  Purchase of common stock warrants            (13)
  Purchase of treasury stock                (3,183)
  Purchase of preferred stock                 (493)
  Changes in other non-current assets   
   and liabilities                             (26)       (117)
                                          --------   --------- 
 
        Net cash provided by (used in) 
         financing activities                3,389         (23) 
                                          --------   --------- 
 
        Net decrease in cash and cash 
         equivalents                        (5,657)       (300) 
 
CASH AND CASH EQUIVALENTS, BEGINNING OF 
 PERIOD                                     10,505       1,053
                                          --------   --------- 

CASH AND CASH EQUIVALENTS, END OF PERIOD  $  4,848   $     753
                                          ========   =========
Supplemental Disclosure of Cash Flow
 Information:
        Cash paid for interest            $  8,057   $   7,831
        Cash paid for taxes               $    166   $     813

</TABLE>


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

                                       7
<PAGE>
 
                          MVE, INC. AND SUBSIDIARIES
                Condensed Consolidated Statements Of Cash Flows
                            (Dollars in thousands)

<TABLE>
<CAPTION>
                                               (Unaudited)
                                            Six Months Ended
                                                June 30,
                                          --------------------
                                             1997       1996
                                          ---------  ---------
<S>                                       <C>        <C>
OPERATING ACTIVITIES:
  Net income (loss)                       $    (105) $   3,155
  Adjustments to reconcile net income                
   to net cash used in operating                     
   activities:                                       
     Depreciation and amortization            3,635      4,462
     Minority interest                            4       (109)
     Interest on exchangeable debt              165        163
     Deferred income tax benefit                          (478)
     Loss (gain) on disposition of                   
      assets                                     66       (208)
     Change in operating assets and                  
      liabilities:                                   
       Accounts receivable                   (5,385)    (1,498)
       Inventories                             (332)    (2,175)
       Prepaid expenses                        (388)        11
       Accounts payable                         934      4,531
       Accrued expenses and other                    
        liabilities                          (3,701)      (477)
     Changes in other non-current                    
      liabilities                               470         98
                                          ---------  ---------

         Net cash provided by (used in) 
          operating activities               (4,637)     7,475             
                                                   
Investing activities:                              
  Proceeds from sale of assets                  219          1
  Purchases of property, plant, and    
   equipment                                 (4,458)    (5,001)             
  Purchase of other assets                     (380)    (2,752)
                                          ---------  ---------
                                                   
         Net cash used in investing 
          activities                         (4,619)    (7,752)             
                                                   
Financing activities:                              
  Borrowings under working capital     
   agreement                                103,976    105,346 
  Repayments under working capital                             
   agreement                                (95,347)  (106,951)             
  Proceeds from issuance of long-term  
   debt                                                  3,023             
  Repayment of long-term debt                (1,525)    (1,324)
  Changes in other non-current assets  
   and liabilities                              922       (117)             
                                          ---------  ---------
                                                   
         Net cash provided by (used in) 
          financing activities                8,026        (23)             
                                          ---------  ---------
                                                   
         Net decrease in cash and cash 
          equivalents                        (1,230)      (300)              
                                                   
Cash and cash equivalents, beginning of  
 period                                       3,054      1,053           
                                          ---------  ---------
                                                   
Cash and cash equivalents, end of period   $  1,824  $     753
                                          =========  =========
Supplemental disclosure of cash flow               
 information:                                      
     Cash paid for interest                $  8,138  $   7,831
     Cash paid for taxes                   $    166  $     813
</TABLE>


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

                                       8
<PAGE>
 
              MVE HOLDINGS,  INC. AND MVE, INC. AND SUBSIDIARIES
                          NOTES TO INTERIM UNAUDITED
                  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 JUNE 30, 1997

1.   Description of Business and General Information

     In the opinion of MVE Holdings, Inc. (Holdings) and MVE, Inc. (the
     Company), the accompanying condensed consolidated financial statements
     include all adjustments necessary, all of which were of a normal recurring
     nature, to present fairly the financial position of Holdings and the
     Company as of June 30, 1997 and the results of its operations and its cash
     flows for the six month periods ended June 30, 1997 and 1996. These results
     are not necessarily indicative of the results to be expected for the full
     year.

     The consolidated financial statements included herein have been prepared by
     Holdings and the Company, without audit, pursuant to the rules and
     regulations of the Securities and Exchange Commission (SEC). The
     consolidated financial statements include the accounts of Holdings and the
     Company and their subsidiaries. All significant intercompany accounts and
     transactions have been eliminated.

     In accordance with the rules and regulations of the SEC, the accompanying
     interim financial statements have been prepared under the presumption that
     users of the interim financial information have either read or have access
     to the audited financial statements for the latest fiscal year ended
     December 31, 1996. Accordingly, footnote disclosures which would
     substantially duplicate the disclosures contained in the December 31, 1996
     audited financial statements have been omitted from these interim financial
     statements. While management of Holdings and the Company believes the
     procedures followed in preparing these financial statements are reasonable
     under the circumstances and that all adjustments necessary for a fair
     statement of the results of operations have been made, it is suggested that
     these interim financial statements be read in conjunction with the
     financial statements and the notes thereto included in Holdings' and the
     Company's latest annual report under cover of Form 10-K.

2.   Pursuant to an agreement entered into in June, 1997, between Holdings and
     certain shareholders, Holdings redeemed 25,373 shares of Common Stock for
     $125.456 per share and issued 13.31 shares of the 10% Class B Preferred
     stock in exchange for 1,061 shares of Common Stock.

     In addition, Holdings redeemed 49.33 shares of the 10% Class B Preferred
     Stock, each share having a liquidation preference of $10,000.

3.   In March, 1997, Holdings purchased 430 of its outstanding Warrants for
     $30.10944 per Warrant.

                                       9
<PAGE>
 
     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS

                                        
SUMMARY
-------

The Company develops, manufactures, markets and sells products which are grouped
according to three business segments: Industrial, Distributed and Medical.
Industrial products include cryogenic storage tanks and transportation equipment
sold to producers, distributors and end users of industrial gases.  Distributed
products include bulk CO\\2\\ containers used for beverage carbonization,
biological storage systems used to store and transport temperature-sensitive
biological matter and insulated storage of liquid natural gas.  Medical products
include a  range of respiratory products such as liquid oxygen systems,
ambulatory oxygen systems, oxygen concentrators and nebulizers.

RESULTS OF OPERATIONS
---------------------

Three Months Ended June 30, 1997 and 1996

Net Sales
---------

Net sales for the quarter ended June 30, 1997 increased 5.0% to $50.5 million
from $48.1 million in the comparable period in 1996.

Industrial Products:  Net sales for the quarter ended June 30, 1997 increased
6.6% to $32.4 million from $30.4 million in the comparable period in 1996.  The
increase is primarily attributable to the Company's acquisition, in November
1996, of a subsidiary located near Sydney, Australia.  This subsidiary had sales
of approximately $3.3 million during the quarter ended June 30, 1997.  These
sales primarily consisted of very large cryogenic tanks and tanker trailers sold
to customers in Australia and southeast Asia.  Sales of small pressure vessels
increased $2.2 million and the new Orca product line was introduced in 1997.
This increase was offset by a decrease in bulk tank sales.

Distributed Products:  Net sales for the quarter ended June 30, 1997 decreased
1.8% to $10.7 million from $10.9 million in the comparable period in 1996.  The
decrease is primarily attributable to decreases in the sales of AURA panels.
There were no sales of AURA panels for the quarter ended June 30, 1997 compared
to $400,000 for the quarter ended June 30, 1996.  The sales of AURA panels have
been discontinued.

Medical Products:  Net sales for the quarter ended June 30, 1997 increased 8.8%
to $7.4 million from $6.8 million in the comparable period in 1996. Sales of
concentrators increased $1.4 million between the two periods due to the
introduction of a new concentrator product in late 1996.  This increase was
offset by decreasing sales of liquid oxygen resulting from continued uncertainty
in oxygen reimbursement caused by governmental review of Medicare/Medicaid
expenditures.

Gross Margin
------------

Gross margin (expressed as a percent of net sales) decreased to 28.8% for the
quarter ended June 30, 1997 from 29.0% in the comparable period in 1996.

Industrial Products:  Gross margin increased to 25.5% for the quarter ended June
30, 1997 from 23.9% in the comparable period in 1996.  The increase is primarily
attributable to improved product mix and reduced manufacturing costs.

Distributed Products:  Gross margin increased to 43.0% for the quarter ended
June 30, 1997 from 40.8% in the comparable period in 1996. This increase is
primarily due to lower margin sales of AURA panels in the second quarter of
1996.  Sales of AURA panels were discontinued in the first quarter of 1997.

Medical Products:  Gross margin decreased to 22.6% for the quarter ended June
30, 1997 from 33.0% in the comparable period in 1996.  The decrease is primarily
attributable to lower prices resulting from increased competition and
governmental regulation, as well as a change in the mix of medical products
sales, with lower margin concentrator sales replacing higher margin liquid
sales.

                                       10
<PAGE>
 
Operating Expenses
------------------

Operating expenses for the quarter ended June 30, 1997 were $11.0 million or
21.8% of net sales compared to $8.2 million or 17.0% of net sales for the same
period one year ago.  The increase in operating expense is primarily
attributable to additional expenses of $1.0 million associated with the
expansion of  the Company's business into the Pacific Rim and other net spending
increases of approximately $1.8 million.

Operating Income
----------------

Operating income decreased 38.8% to $3.5 million or 7.0% of net sales for the
quarter ended June 30, 1997 from $5.8 million or 12.0% of net sales in the
comparable period in 1996.  The decrease is primarily due to the factors noted
in the Operating Expenses discussion above.

Interest Expense
----------------

Interest expense was $4.5 million for the quarter ended June 30, 1997 and $4.1
million in the comparable period in 1996.

Income Taxes
------------

The effective income tax rate was 45.0% for the quarter ended June 30, 1997
compared to 61.3% in the comparable period in 1996.

Net Income
----------

As a result of the above, net loss (before preferred stock dividends) for the
quarter ended June 30, 1997 was $452,000 compared to a net income of $613,000 in
the comparable period in 1996.

EBITDA
------

EBITDA (earnings before interest, income taxes, depreciation, amortization)
decreased 32.5% to $5.4 million or 10.7% of sales for the quarter ended June 30,
1997 from $8.0 million or 16.6% of sales in the comparable period of 1996.  The
decrease in EBITDA is attributable to the factors noted in "Operating Income"
above.


Six Months Ended June 30, 1997 and 1996

Net Sales
---------

Net sales for the six months ended June 30, 1997 increased 1.9% to 98.9 million
from 97.1 million in the comparable period in 1996.

Industrial Products:  Net sales for the six months ended June 30, 1997 increased
7.7% to $64.0 million from $59.4 million in the comparable period in 1996.  The
increase is primarily attributable to the Company's acquisition, in November
1996, of a subsidiary located near Sydney, Australia.  This subsidiary had sales
of approximately $5.9 million during the six months ended June 30, 1997.  These
sales primarily consisted of very large cryogenic tanks and tanker trailers sold
to customers in Australia and southeast Asia.  Sales of small pressure vessels
increased $3.8 million and the new Orca product line was introduced in 1997.
This increase was offset by a decrease in bulk tank sales.

Distributed Products:  Net sales for the six months ended June 30, 1997
decreased 9.4% to $21.3 million from $23.3 million in the comparable period in
1996.  The decrease is primarily attributable to decreases in the sales of AURA
panels. Sales of AURA panels were $135,000 for the six months ended June 30,
1997 compared to $1.9 million for the six months ended June 30, 1996.  The sales
of AURA panels have been discontinued.

Medical Products:  Net sales for the six months ended June 30, 1997 decreased
5.6% to $13.6 million from $14.4 million in the comparable period in 1996.
Sales of concentrators increased $1.7 million between the two periods due to the
introduction of a new concentrator product in late 1996.  This increase was
offset by a $2.5 million decrease in liquid oxygen sales resulting from
continued uncertainty in oxygen reimbursement caused by governmental review of
Medicare/Medicaid expenditures.

                                       11
<PAGE>
 
Gross Margin
------------

Gross margin (expressed as a percent of net sales) increased to 29.7% for the
six months ended June 30, 1997 from 29.3% in the comparable period in 1996.

Industrial Products:  Gross margin increased to 26.5% for the six months ended
June 30, 1997 from 23.7% in the comparable period in 1996.  The increase is
attributable to changes in the mix of products and decreased manufacturing
costs.

Distributed Products:  Gross margin decreased to 43.0% for the six months ended
June 30, 1997 from 44.5% in the comparable period in 1996.  The decrease is
primarily attributable to favorable adjustments made in February 1996 which were
partially offset by improved manufacturing efficiencies.

Medical Products:  Gross margin decreased to 25.6% for the six months ended June
30, 1997 from 29.2% in the comparable period in 1996. The decrease is primarily
attributable to lower pricing as a result of increased competition and
governmental regulation and due to a change in the mix of medical products
sales, with lower margin concentrator sales replacing higher margin liquid
sales.

Operating Expenses
------------------

Operating expenses for the six months ended June 30, 1997 were $20.6 million or
20.8% of net sales compared to $14.5 million or 14.9% of net sales for the same
period one year ago.  The increase in operating expense is primarily
attributable to favorable, non-recurring adjustments of $1.8 million made in
January and February 1996, additional expenses of $1.6 million associated with
the expansion of the Company's business into the Pacific Rim and other net
spending increases of approximately $2.7 million.

Operating Income
----------------

Operating income decreased 36.9% to $8.8 million or 8.9% of net sales for the
six months ended June 30, 1997 from $14.0 million or 14.4% of net sales in the
comparable period in 1996.  The decrease is primarily due to the factors noted
in the Operating Expense discussion above.

Interest Expense
----------------

Interest expense was $8.8 million for the six months ended June 30, 1997 and
$8.3 million in the comparable period in 1996.

  Income Taxes
 -------------

The effective income tax rate was 37.8% for the six months ended June 30, 1997
compared to 46.4% in the comparable period in 1996.

Net Income
----------

As a result of the above, net income (before preferred stock dividends) for the
six months ended June 30, 1997 was $164,000 compared to a net income of $3.2
million in the comparable period in 1996.

EBITDA
------

EBITDA (earnings before interest, income taxes, depreciation, amortization)
decreased 31.7% to $12.5 million or 12.6% of sales for the six months ended June
30, 1997 from $18.4 million or 18.9% of sales in the comparable period of 1996.
The decrease in EBITDA is attributable to the factors noted in "Operating
Income" above.

LIQUIDITY AND CAPITAL RESERVES
------------------------------

Cash flow used by operating activities was $4.4 million for the six months ended
June 30, 1997 compared to cash provided of $7.5 million in the same period one
year ago.  This resulted primarily from the Company's decrease in net income,
increase in accounts receivable and decrease in liabilities.

Working capital was $33.4 million and $29.9 million at June 30, 1997 and
December 31, 1996,  respectively.

The Company invested $4.6 million in the six months ended June 30, 1997 compared
to $7.8 million in the same period one year ago.  Lower investment in 1997
resulted primarily from loans advanced in 1996 to a major supplier.

                                       12
<PAGE>
 
Cash provided by financing activities was $3.4 million for the six months ended
June 30, 1997 compared to  $23,000 used in the same period one year ago.  This
resulted from higher borrowings under the working capital agreement less the
cash used to redeem common and preferred stock by MVE Holdings, Inc.  The
Company is not in default under any lending agreement nor in violation of any
related covenants for which there have not been waivers obtained.  The Company's
agreement governing its revolving line of credit expires in February 1998. The
Company is currently in negotiation with and has obtained a commitment from a
commercial lender to replace its current $40 million revolving facility.

                                       13
<PAGE>
 
                          PART II.  OTHER INFORMATION



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

(a)     Exhibits

        None.

(b)     Reports on Form 8-K.

        None.



                                  SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.


                                        MVE HOLDINGS,  INC.


DATE: August 14, 1997                   /s/ William Priesmeyer
                                        ----------------------------------------
                                        William Priesmeyer
                                        Chief Financial Officer


                                        MVE,  INC.


DATE: August 14, 1997                   /s/ William Priesmeyer
                                        ----------------------------------------
                                        William Priesmeyer
                                        Chief Financial Officer

                                       14