<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

  For the fiscal year ended: October 31, 1999 Commission file number: 0-25066

                               OWOSSO CORPORATION

             (Exact name of registrant as specified in its charter)

              Pennsylvania                                23-2756709
     (State or other jurisdiction of          (IRS Employer Identification No.)
     incorporation or organization)

           The Triad Building, 2200 Renaissance Boulevard, Suite 150,
                            King of Prussia, PA 19406
               (Address of principal executive offices)(Zip Code)

       Registrant's telephone number, including area code: (610) 275-4500

           Securities registered pursuant to Section 12(b) of the Act:

                                      None

           Securities registered pursuant to Section 12(g) of the Act:

                     Common Stock, par value $.01 per share

                                (Title of Class)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein and will not be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

On January 21, 2000, the aggregate market value of the Registrant's Common
Stock, $.01 par value, held by nonaffiliates of the Registrant was approximately
$7,900,000.

On January 21, 2000, 5,829,642 shares of the Registrant's Common Stock, $.01 par
value, were outstanding.

                       Documents Incorporated By Reference

Portions of the Registrant's Proxy Statement to be filed with the Commission in
connection with the Annual Meeting of Shareholders scheduled to be held on March
15, 2000 are incorporated by reference into Part III of this Form 10-K.



<PAGE>


                                     Part I

Item 1.  Business

         Owosso Corporation (the "Company"), incorporated in Pennsylvania in
March 1994, designs, manufactures and distributes engineered component products,
primarily motors and heat exchange coils. The Company has four operating
segments: Motors, Coils, Trailers and Agricultural Equipment, and Other. The
Motors segment manufactures fractional and integral horsepower motors and
include Stature Electric, Inc. ("Stature"), Motor Products - Owosso Corporation
("Motor Products"), and Motor Products - Ohio ("MP-Ohio"). Significant markets
for the Company's motors include commercial products and equipment, healthcare
and recreation. The products are sold throughout North America and in Europe,
primarily to original equipment manufacturers who use them in their end
products.

         The Coils segment manufactures heat exchange coils and consists of
Astro Air Coils, Inc. ("Astro Air"), acquired in April 1998, Snowmax, Inc.
("Snowmax"), and Astro Air UK, Ltd. ("Astro UK"). Astro UK, which began
production of heat exchange coils at a new facility located in Birmingham,
England in March 1999, is a joint venture with the Company's largest customer,
Bergstrom, Inc. The joint venture, which is owned 90% by the Company, supplies
heat exchange coils primarily to Bergstrom's facility in Birmingham. Significant
markets for the Company's coils include non-automotive transportation,
refrigeration and commercial and residential HVAC. The products are sold
throughout North America and in Europe, primarily to original equipment
manufacturers who use them in their end products.

         The Company also manufactures all-aluminum trailers, primarily horse
and livestock trailers, through its Sooner Trailer Manufacturing Company
("Sooner Trailer"). Sooner Trailer sells its products through a dealer network
located throughout the United States and Canada and is included in the Company's
Trailers and Agricultural Equipment segment. Also included in this segment,
through the dates of their sales, are the agricultural equipment companies,
Great Bend Manufacturing Company ("Great Bend"), DewEze Manufacturing, Inc.
("DewEze"), and Parker Industries ("Parker"). During 1998, the Company initiated
the disposition of its agricultural equipment businesses in order to focus its
resources on expanding the Company's motor and coil companies. The sales of
Great Bend and DewEze were completed in 1998, while the sale of Parker was
completed in March 1999.

         The Company's Other segment includes Dura-Bond Bearing Company
("Dura-Bond"), and M.H. Rhodes, Inc. ("Rhodes"). Dura-Bond manufactures
replacement camshaft bearings, valve seats and shims for the automotive
after-market, selling its products to engine rebuilders, primarily through
distributors. Rhodes, which was acquired in June 1998, manufactures timers and
subfractional horsepower motors for use in commercial applications. The Company
consolidated the operations of its former Cramer subsidiary, previously located
in Old Saybrook, Connecticut, into the Rhodes manufacturing facility. Rhodes
sells its products primarily to original equipment manufacturers who use them in
their end products.

         The Company obtains raw materials, component parts and supplies from a
variety of sources, generally from more than one supplier. In certain cases,
where it has an impact on improving quality control or cost control, the Company
obtains raw materials and component parts from sole source suppliers. The
Company anticipates it will have no significant problems with respect to sources
or availability of the raw materials or component parts essential to the conduct
of its business.

         No material portion of the Company's business in any segment is
seasonal.




                                       2


<PAGE>


         The Company's Motors, Trailers and Agricultural Equipment, and Other
segments are not dependent upon a single customer. Sales from the Coils segment
are concentrated among a small number of customers. In 1999, sales to the three
largest customers represented approximately 55% of total Coils sales.

         The Company's backlog of unfilled orders as of December 26, 1999 and
December 22, 1998 was as follows:

                                                 December 26,      December 22,
                                                    1999              1998
                                                 ------------     -------------
                                                       (In thousands)
         Motors                                 $ 21,165           $ 22,399
         Coils                                     8,708              8,607
         Trailers and Agricultural Equipment       2,856              4,024
         Other                                     3,380              3,561
                                                --------           --------
         Total                                  $ 36,109           $ 38,591
                                                --------           --------


         The Company expects to fill substantially all of the December 26, 1999
backlog by the end of fiscal 2000.

         The Company's businesses are highly competitive. Competition is based
primarily on design and application engineering capabilities and product
reliability and quality, as well as price.

         The Company has approximately 1,750 employees, of which approximately
125 employees at its Owosso, Michigan facility are represented by a labor union,
the International Union, United Automobile, Aerospace and Agricultural Implement
Workers of America, Local 743, under a four-year collective bargaining agreement
which expires in 2001. In addition, approximately 90 employees at the Company's
Avon, Connecticut facility are represented by a labor union, the International
Association of Machinists, under a two-year collective bargaining agreement
which expires in September 2001. The Company believes that its relationship with
its employees is good.

         The Company is subject to federal, state and local environmental
regulations with respect to its operations. The Company believes that it is
operating in substantial compliance with applicable environmental regulations.
Manufacturing and other operations at the Company's various facilities may
result and may have resulted in the discharge and release of hazardous
substances and wastes from time to time. The Company routinely responds to such
incidents as deemed appropriate pursuant to applicable federal, state and local
environmental regulations.

         The Company's manufacturing operations involve the storage, use,
handling and disposal of various hazardous substances and wastes. Under various
federal, state and local environmental laws, ordinances and regulations, a
current or previous owner of real property may be liable for the costs of
removal or remediation of certain hazardous or toxic substances on, in, under or
discharged from such property. The operation and subsequent removal of
underground storage tanks, which are or were located on several of the Company's
properties, are also regulated by federal, state and local environmental laws,
ordinances and regulations. The Company is also subject to the federal
Occupational Safety and Health Act and similar state statutes. See Item 7 -
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Environmental Matters."

         The Company currently maintains product liability insurance coverage of
$1.0 million per occurrence and $2.0 million in aggregate annual coverage, and
an umbrella policy for an additional $20.0 million of blanket liability
protection per occurrence. There can be no assurance that such insurance will be
sufficient to cover potential product liability claims or that the Company will
be able to maintain such insurance or obtain product liability insurance in the
future at a reasonable cost.

                                       3


<PAGE>


Executive Officers of the Company

The executive officers of the Company are:

         Name                        Age            Position

George B. Lemmon, Jr.................38             President, Chief Executive
                                                    Officer, and Director

Harry Holiday, III...................43             Executive Vice President
                                                    and Chief Operating Officer

John M. Morrash......................45             Executive Vice President -
                                                    Finance, Chief
                                                    Financial Officer,
                                                    Treasurer and Secretary

Brian D. Tidwell.....................38             Vice President of Operations

Steve R. Shubert.....................37             Chief Information Officer


         George B. Lemmon, Jr. became President of the Company in May 1996, and
has served as Chief Executive Officer of the Company since August 1995 and as a
director of the Company since March 1994.

         Harry Holiday, III joined the Company as its Executive Vice President
and Chief Operating Officer in November 1996. Prior to joining the Company, Mr.
Holiday served as Vice President of Operations at two subsidiaries of Emerson
Electric Co. where he had worked since 1992.

         John M. Morrash joined the Company as its Executive Vice President -
Finance, Chief Financial Officer, Treasurer and Secretary in June 1999. Prior to
joining the Company, Mr. Morrash served as Vice President, Treasurer and
Assistant Secretary of SPS Technologies, Inc., a position he held since July
1995.

         Brian D. Tidwell became President of the Company's Coils segment in
November 1999. He continues to serve as the Company's Vice President of
Operations, a position he has held since June 1996. Mr. Tidwell has worked for
the Company since 1987 in various managerial and technical capacities.

         Steve R. Shubert joined the Company as its Chief Information Officer in
December 1998. Prior to joining the Company, Mr. Shubert served as the Chief
Information Officer of American Sunroof Company, where he had worked since 1996.
From 1994 until 1996, he served as the Director of Information Systems at the
E.L. Weigand division of Emerson Electric Co.



                                       4
<PAGE>


Item 2. Properties

         The following table sets forth information relating to the Company's
manufacturing facilities. Unless otherwise indicated, the Company owns these
manufacturing facilities.
<TABLE>
<CAPTION>
                                                                                  Total Square     Manufacturing
Business Segment                                   Location                          Footage       Square Footage
------------------------------------- ------------------------------------------- ---------------- -------------------
<S>                                  <C>                                          <C>              <C>
Motors:                               Watertown, New York (1)                       112,000          107,800
                                      Owosso, Michigan                               86,900           67,400
                                      Barberton, Ohio (2)                            29,700           27,400

Coils:                                Jacksonville, Texas (3)                       133,000          123,000
                                      Kilgore, Texas (4)                             90,000           86,600
                                      Birmingham, England (5)                        15,000           14,500

Trailers and Agricultural
   Equipment:                         Duncan, Oklahoma (6)                          122,000          112,300

Other:                                Avon, Connecticut                              92,000           82,000
                                      Carson City, Nevada (7)                        75,100           59,600
</TABLE>
-------------
(1) This facility is subject to a mortgage securing a $5.5 million industrial
    revenue bond financing.

(2) The lease for this facility expires in 2000 and provides for annual rental
    payments of approximately $83,000.

(3) The lease for this facility expires in 2001 and provides for annual rental
    payments of approximately $250,000.

(4) This facility is subject to a $323,000 mortgage.

(5) The lease for this facility expires in 2002 and provides for annual rental
    payments of approximately $110,000.

(6) This facility is subject to a $719,000 mortgage.

(7) This facility is subject to a mortgage securing a $5.0 million industrial
    revenue bond financing.

         The Company leases its principal offices, located in King of Prussia,
Pennsylvania, which consist of approximately 12,700 square feet of office space.
The lease, which expires in September 2006, requires annual rental payments of
approximately $305,000 plus taxes and certain other charges. The Company
believes that its machinery, plants and offices are in satisfactory operating
condition and are adequate for the Company's current needs.

Item 3.  Legal Proceedings

         As discussed in Item 7 under "Environmental Matters," the Company is a
party to various legal proceedings concerning environmental regulations. In
addition, the Company is a party to various lawsuits arising in the ordinary
course of business, none of which is expected to be material with respect to the
business assets or continuing operations of the Company.

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

         Not applicable.



                                       5


<PAGE>




                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         The Company's common stock is listed on the Nasdaq National Market
under the symbol "OWOS". The following table sets forth, for the fiscal quarters
indicated, the high and low sales prices per share for the Company's common
stock, as reported on the Nasdaq National Market.

                                                      High              Low
                                                      ----              ---
         Fiscal year ended October 31, 1999:
                 First Quarter                        $ 5 5/8           $ 4
                 Second Quarter                       $ 5 5/8           $ 3 9/16
                 Third Quarter                        $ 6               $ 4 5/8
                 Fourth Quarter                       $ 6               $ 3 5/8

         Fiscal year ended October 25, 1998:

                 First Quarter                        $ 7 15/16         $ 7 1/2
                 Second Quarter                       $ 8 3/16          $ 7 1/4
                 Third Quarter                        $ 7 9/16          $ 5 3/4
                 Fourth Quarter                       $ 6 15/16         $ 4 7/8

         As of January 10, 1999, there were approximately 120 holders of record
of the Company's common stock and an estimated number of beneficial owners of
the common stock of approximately 700.

         In June 1999, the Company changed its quarterly dividend rate to $0.06
per share, from the $0.09 per share amount previously paid. The Company expects
to pay its quarterly dividend at the new rate for the foreseeable future.
However, there can be no assurances that future dividends will be paid. The
payment and rate of future dividends are subject to the discretion of the Board
of Directors and will depend upon the Company's earnings, financial condition,
capital requirements, and other factors.



                                       6
<PAGE>



Item 6.  Selected Financial Data

         The information set forth below, which has been derived from the
audited consolidated financial statements of the Company, should be read in
conjunction with the Consolidated Financial Statements and notes thereto and
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations."
<TABLE>
<CAPTION>
                                                                        Year Ended
                                              ---------------------------------------------------------------
                                                Oct. 31,      Oct. 25,     Oct. 26,     Oct. 27,  Oct. 29,
                                                1999(1)        1998(2)       1997         1996     1995(3)
                                              ----------      --------     ---------    --------  --------
                                                         (in thousands, except per share amounts)
<S>                                           <C>             <C>          <C>          <C>        <C>
STATEMENT OF OPERATIONS DATA:

Net sales                                       $170,121      $159,968     $143,061     $128,216    $108,001
Cost of products sold                            138,131       125,419      109,867       98,948      77,629
                                                 -------       -------      -------       ------      ------
Gross profit                                      31,990        34,549       33,194       29,268      30,372
Selling, general and administrative expenses      24,436        26,464       24,599       23,266      17,603
Restructuring charge                                  --           909           --           --          --
                                                ---------      -------      -------     --------    --------
Income from operations                             7,554         7,176        8,595        6,002      12,769
Interest expense                                   5,060         4,912        4,143        4,081       2,876
Gain on sale of business                              --         2,775           --           --          --
Write-down of net assets held for sale                --       (1,635)           --           --          --
Other income                                         493            98          199          202         390
                                                     ---            --          ---          ---         ---
Income before income taxes                         2,987         3,502        4,651        2,123      10,283
Income tax expense                                 1,210         2,800        2,100        1,275       3,900
                                                   -----         -----        -----        -----       -----
Net income                                         1,777           702        2,551          848       6,383

Dividends and accretion on preferred stock       (1,095)       (1,070)      (1,047)      (1,025)          --
                                                 -------       -------      -------      -------      ------
Net income (loss) available to common
    stockholders                                   $682         ($368)      $1,504        ($177)      $6,383
                                                   ====         ======      ======       ======       ======
Basic and diluted income (loss) per
    common share                                  $0.12        ($0.06)       $0.26       ($0.03)      $ 1.09

Weighted average number of common
    shares outstanding (basic)                    5,826         5,813        5,809        5,839        5,865
</TABLE>

                                       7


<PAGE>
<TABLE>
<CAPTION>
                                                                       Year Ended
                                              ------------------------------------------------------------
                                              Oct. 31,     Oct. 25,     Oct. 26,    Oct. 27,    Oct. 29,
                                               1999(1)       1998(2)      1997        1996       1995(3)
                                              --------    ----------    ---------   --------  ----------
                                                                      (in thousands)
<S>                                           <C>         <C>           <C>          <C>      <C>
OTHER DATA:

Capital expenditures                           $5,677       $9,573       $5,335      $4,346      $4,437
Depreciation and amortization                   7,766        7,115        6,200       6,298       4,213
EBITDA (4)                                     15,320       14,291       14,795      12,300      16,982

                                               Oct. 31,     Oct. 25,    Oct. 26,    Oct. 27,    Oct. 29,
                                                 1999         1998        1997        1996        1995
                                               --------     --------    --------    --------    --------
BALANCE SHEET DATA:

Working capital                                $16,911       $19,651     $24,611     $20,385     $20,564
Total assets                                   116,690       125,206     111,681     107,895     108,719
Total short-term and long-term obligations      55,480        68,524      54,848      53,814      52,799
Stockholders' equity                            33,984        34,643      36,730      37,020      39,570
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes the results of operations of Parker through its disposition on
    March 5, 1999. Fiscal 1999 included 53 weeks, while the other years
    presented included 52 weeks.

(2) Includes the results of operations of Great Bend and DewEze through
    their dates of disposition, April 26, 1998 and July 24, 1998,
    respectively. Also includes the results of operations of Astro Air and
    M.H. Rhodes from their dates of acquisition, April 26, 1998 and June
    30, 1998, respectively.

(3) Includes the results of operations of Great Bend from May 1, 1995, the
    date of its acquisition. Excludes the results of operations of Stature,
    which was acquired as of October 29, 1995.

(4) EBITDA represents income before income taxes, interest expense, other
    income and expense and depreciation and amortization expenses. EBITDA
    has been presented because the Company believes it is commonly used in
    this or a similar format by investors to analyze and compare operating
    performance and to determine a company's ability to service and/or
    incur debt. However, EBITDA should not be considered in isolation or as
    a substitute for net income, cash flow from operations or any other
    measure of income or cash flow that is prepared in accordance with
    generally accepted accounting principles, or as a measure of a
    company's profitability or liquidity. EBITDA, as presented, may not be
    comparable to other similarly titled measures of other companies. See
    "Management's Discussion and Analysis of Financial Condition and
    Results of Operations" and the Consolidated Financial Statements,
    including the Consolidated Statements of Cash Flows, and the related
    notes thereto included elsewhere herein.

                                       8

<PAGE>


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

General

Owosso Corporation (the "Company") designs, manufactures and distributes
engineered component products, primarily motors and heat exchange coils. The
Company has four operating segments: Motors, Coils, Trailers and Agricultural
Equipment, and Other. The Motors segment manufactures fractional and integral
horsepower motors and includes Stature Electric, Inc. ("Stature"), Motor
Products - Owosso Corporation ("Motor Products"), and Motor Products - Ohio
("MP-Ohio"). Significant markets for the Company's motors include commercial
products and equipment, healthcare and recreation. Products of the Motors
segment are sold throughout North America and in Europe, primarily to original
equipment manufacturers which use them in their end products.

The Coils segment manufactures heat exchange coils and includes Astro Air Coils,
Inc. ("Astro Air"), which was acquired in April 1998, Snowmax, Inc. ("Snowmax"),
and Astro Air UK, Limited ("Astro UK"). Astro UK, which began production of heat
exchange coils at a new 15,000 square foot facility located in Birmingham,
England in March 1999, is a joint venture with the Company's largest customer,
Bergstrom, Inc. The joint venture, which is owned 90% by the Company, supplies
heat exchange coils primarily to Bergstrom's facility in Birmingham. Significant
markets for the Company's coils include non-automotive transportation,
refrigeration and commercial and residential HVAC. The products are sold
throughout North America and in Europe, primarily to original equipment
manufacturers who use them in their end products.

The Company also manufactures all-aluminum trailers, primarily horse and
livestock trailers, through its Sooner Trailer Manufacturing Company ("Sooner
Trailer"). Sooner Trailer sells its products through a dealer network located
throughout the United States and Canada and is included in the Company's
Trailers and Agricultural Equipment segment. Also included in this segment,
through the dates of their sales, are Great Bend Manufacturing Company ("Great
Bend"), DewEze Manufacturing, Inc. ("DewEze") and Parker Industries ("Parker")
(collectively the "Agricultural Equipment Companies").

The Company's Other segment includes Dura-Bond Bearing Company ("Dura-Bond") and
M.H. Rhodes, Inc. ("Rhodes"). Dura-Bond manufactures replacement camshaft
bearings, valve seats and shims for the automotive after-market. Rhodes, which
was acquired in June 1998, manufactures timers and subfractional horsepower
motors for use in commercial applications. The Company consolidated the
operations of its former Cramer subsidiary, previously located in Old Saybrook,
Connecticut, into the Rhodes manufacturing facility. In connection with the
consolidation, the Company recorded, in fiscal 1998, a $909,000 restructuring
charge, consisting principally of lease termination costs and employee severance
and termination benefits, and incurred an additional $929,000 in other
merger-related expenses.

During 1998, the Company initiated the disposition of its Agricultural Equipment
Companies including Great Bend, DewEze and Parker in order to focus its
resources on expanding the Company's motor and coil companies. The Company
completed the sale of Great Bend to Allied Products Corporation, effective April
26, 1998. The Company completed the sale of DewEze to Harper Industries, Inc., a
company formed by the president of the subsidiary, on July 24, 1998.

                                       9

<PAGE>

The Company completed the sale of its remaining agricultural equipment company,
Parker, on March 5, 1999 to Top Air Manufacturing, Inc., of Cedar Falls, Iowa.
Proceeds from the sale included cash of $3.7 million, a non-interest bearing
note of $3.3 million, and the assumption of liabilities of $476,000. In
addition, the local development authority in Iowa acquired certain Parker fixed
assets for $750,000. In connection with the terms of the sale, the Company
recorded, in the fourth quarter of 1998, a pre-tax charge of $1.6 million to
adjust the carrying value of Parker's assets to their fair market value. No
additional pre-tax gain or loss was recorded upon completion of the sale.
However, the sale did result in a tax benefit of approximately $535,000,
recorded in 1999.

Results of Operations

The Company's fiscal year includes 52 or 53 weeks, ending on the last Sunday in
October. Fiscal year 1999 consisted of 53 weeks, while fiscal years 1998 and
1997 consisted of 52 weeks. The following table sets forth for the periods
indicated the percentage relationship that certain items in the Company's
Consolidated Statements of Operations bear to net sales.

<TABLE>
<CAPTION>
                                                                1999             1998             1997
<S>                                                        <C>             <C>               <C>
Net sales:                                                     100.0%           100.0%            100.0%
Cost of products sold                                           81.2%            78.4%             76.8%
                                                               -----            -----             -----
Gross profit                                                    18.8%            21.6%             23.2%
Expenses:
  Selling, general and administrative                           14.4%            16.5%             17.2%
  Restructuring charge                                           0.0%             0.6%              0.0%
                                                               -----            -----             -----
Income from operations                                           4.4%             4.5%              6.0%
Interest expense                                                 3.0%             3.1%              2.9%
Gain on sale of business                                         0.0%             1.7%              0.0%
Write-down of net assets held for sale                           0.0%            -1.0%              0.0%
Other income                                                     0.3%             0.1%              0.2%
                                                               -----            -----             -----
Income before income taxes                                       1.7%             2.2%              3.3%
Income tax expense                                               0.7%             1.8%              1.5%
                                                               -----            -----             -----
Net income                                                       1.0%             0.4%              1.8%
Dividends and accretion on preferred stock                       0.6%             0.6%              0.7%
                                                               -----            -----             -----
Net income (loss) available for common stockholders              0.4%            -0.2%              1.1%
                                                               =====            =====             =====

</TABLE>

Selected financial results for the Company by business unit and by segment are
set forth below:

           Segment and Business Unit Operating Results (in thousands)
<TABLE>
<CAPTION>
                                                                         1999             1998             1997
<S>                                                                    <C>             <C>               <C>
Net Sales:
 Motors                                                                $ 63,941        $ 54,188          $ 46,865
 Coils (1)                                                               46,634          30,555            15,515
 Trailers and Agricultural Equipment (2)                                 40,277          58,958            64,111
 Other (3)                                                               19,269          16,267            16,570
                                                                       --------        --------          --------
Total Net Sales                                                        $170,121        $159,968          $143,061
                                                                       ========        ========          ========

Income (loss) from operations:
  Motors                                                               $  8,353        $  7,384          $  6,187
  Coils (1)                                                               3,114           3,571             1,558
  Trailers and Agricultural Equipment (2)                                 1,289           3,071             4,505
  Other (3)                                                               1,410             (58)            1,180
  Corporate Expenses (4)                                                 (6,612)         (6,792)           (4,835)
                                                                       --------        --------          --------
Total Income from Operations                                           $  7,554        $  7,176          $  8,595
                                                                       ========        ========          ========
</TABLE>

(1)  Includes the results of Astro Air since its acquisition in April 1998.
(2)  Includes, through the dates of sale, the results of Great Bend (sold April
     1998), DewEze (sold July 1998), and Parker (sold March 1999).
(3)  Includes the results of Rhodes from its acquisition in June 1998.
(4)  Includes unallocated corporate expenses, primarily executive, information
     technology, and other administrative expenses; also reflects a
     restructuring charge of $909,000 in 1998.

                                       10
<PAGE>

Year ended October 31, 1999 compared to year ended October 25, 1998

Net sales. Net sales for 1999 increased 6.3%, to $170.1 million, as compared to
net sales of $160.0 million in 1998. These results include the effects of
disposing of the Agricultural Equipment Companies, and the acquisition of Astro
Air. Sales attributable to the Agricultural Equipment Companies were $1.0
million in 1999, as compared to $24.8 million in 1998. Sales attributable to
Astro Air included in 1999 results were $28.9 million as compared to $13.4
million in 1998. Exclusive of the effects of the acquisition of Astro Air and
the disposition of the Agricultural Equipment Companies, net sales increased
15.1% over the prior year.

Net sales from Motors increased 18.0% to $63.9 million in 1999, from $54.2
million in 1998, as a result of increased sales to existing customers and the
addition of new customers, particularly in the healthcare and recreation
markets.

Net sales from Coils increased $16.1 million, to $46.6 million in 1999 from
$30.6 million in 1998. This increase reflects a $15.5 million increase in sales
attributable to Astro Air.

Net sales from the Trailers and Agricultural Equipment segment were $40.3
million in 1999, as compared to $59.0 million in 1998. This decrease reflects
the sale of the Agricultural Equipment Companies. Sales at Sooner Trailer, the
only remaining business in this segment, increased 15.0%, or $5.1 million, to
$39.3 million as a result of higher unit volume.

Net sales from the Company's Other segment were $19.3 million in 1999, as
compared to $16.3 million in 1998. This increase was a result of the acquisition
of Rhodes in June 1998.

Gross profit. For 1999, gross profit was $32.0 million, or 18.8% of net sales,
as compared to $34.5 million, or 21.6% of net sales in the prior year. The
decrease in gross profit reflects the disposition of the Agricultural Equipment
Companies, partially offset by the inclusion of Astro Air for a full year.

Gross profit from Motors increased 10.0%, to $14.6 million, or 22.8% of net
sales, as compared to $13.2 million, or 24.4% of net sales in 1998. Although
gross profit increased over the prior year as a result of increased sales
volume, margins declined as a result of price pressures and changes in product
mix.

Gross profit from Coils was $5.5 million in 1999, or 11.8% of net sales, as
compared to $5.2 million, or 17.0% of net sales in 1998. The increase in gross
profit was attributable to the inclusion of Astro Air for a full year, partially
offset by decreased gross profit at Snowmax as a result of operating
inefficiencies and increased warranty costs. Gross profit at the Coils segment
was also adversely effected by the start-up of Astro UK in March 1999.

In the Trailers and Agricultural Equipment segment, gross profit was $6.8
million, or 16.8% of net sales, as compared to $12.1 million, or 20.6% of net
sales, in the prior year. This decrease reflects the sale of the Agricultural
Equipment Companies. Gross profit at Sooner Trailer increased to $6.7 million,
or 17.2% of net sales in 1999, from $6.1 million, or 17.8% of net sales in 1998,
as a result of increased sales volume and changes in product mix.

Gross profit from the Company's Other segment was $5.2 million in 1999, as
compared to $4.0 million in 1998. This increase was a result of the acquisition
of Rhodes in June 1998.

                                       11
<PAGE>



Selling, general and administrative expenses. Selling, general and
administrative expenses decreased to $24.4 million, or 14.4% of net sales, as
compared to $26.5 million, or 16.5% of net sales in 1998. This decrease reflects
the disposition of the Agricultural Equipment Companies, partially offset by the
inclusion of Astro Air for a full year.

Selling, general and administrative expenses for Motors were $6.2 million, or
9.7% of net sales, as compared to $5.8 million, or 10.8% of net sales in 1998.
The increase in expense was primarily a result of increased sales and marketing
expenses.

Selling, general and administrative expenses for Coils were $2.4 million, or
5.1% of net sales, as compared to $1.6 million, or 5.4% of net sales in 1998.
The increase in expense was primarily attributable to the inclusion of Astro Air
for a full year.

In the Trailers and Agricultural Equipment segment, selling, general and
administrative expenses were $5.5 million, or 13.6% of net sales, as compared to
$9.1 million, or 15.4% of net sales, in the prior year. This decrease reflects
the sale of the Agricultural Equipment Companies.

Selling, general and administrative expenses at the Company's Other segment were
$3.7 million in 1999, as compared to $4.0 million in 1998. In the prior year,
selling, general and administrative expenses included $602,000 of expenses
related to the merger of the Company's former Cramer subsidiary into Rhodes.

Unallocated corporate expenses included in selling, general and administrative
expenses were $6.6 million, as compared to $5.9 million in 1998. This increase
includes higher medical and workers' compensation costs of approximately
$400,000, as well as, $200,000 recorded in connection with the Company's
environmental investigation of the site on which its Cramer facility was
previously located and the conduct thereon of any remedial measures that may be
required.

Income from operations. For 1999, income from operations was $7.6 million, or
4.4% of net sales, as compared to $7.2 million, or 4.5% of net sales, in 1998.
Income from operations in the prior year included a restructuring charge of
$909,000 and other merger-related expenses of $929,000, incurred in connection
with the merger of the Company's former Cramer subsidiary into Rhodes.

Income from operations for the Motors segment increased to $8.4 million, or
13.1% of net sales, in 1999, from $7.4 million, or 13.6% of net sales, in the
prior year. These results reflect increased sales volume partially offset by
decreased margins caused by price pressures and changes in product mix.

Income from operations for the Coils segment was $3.1 million, or 6.7% of net
sales, in 1999, as compared to $3.6 million, or 11.7% of net sales, in the prior
year. These results reflect the inclusion of Astro Air for a full year, offset
by decreased gross profit at Snowmax as a result of operating inefficiencies and
increased warranty costs. Income from operations at the Coils segment was also
adversely effected by the start-up of Astro UK, which generated a loss from
operations of $417,000.

The Trailers and Agricultural Equipment segment had income from operations of
$1.3 million in 1999, as compared to $3.1 million in 1998. This decrease
reflects the dispositions of the Agricultural Equipment Companies. Income from
operations for Sooner Trailer increased to $1.9 million, or 4.8% of net sales,
in 1999, from $1.4 million, or 4.1% of net sales, in 1998, primarily as a result
of increased sales volume.

                                       12
<PAGE>


Income from operations for the Company's Other segment was $1.4 million in 1999,
as compared to a loss of $58,000 in 1998. The prior year results included
$929,000 of merger-related costs from Cramer.

Interest expense. For 1999, interest expense was $5.1 million, as compared to
$4.9 million in 1998. This increase was primarily the result of increased
borrowings under the Company's revolving credit agreement partially offset by
decreased average interest rates.

Income tax expense. The Company's effective income tax rate was 40.5% for 1999,
as compared to an effective rate of 80.0% in the prior year period. The
effective tax rate for 1999 was favorably impacted by a deferred tax benefit
realized upon the sale of Parker. The 1998 effective tax rate was unusually high
as a result of differences between the book and tax basis of the assets of Great
Bend at the time of their sale and by a higher proportion of non-deductible
expenses, primarily non-cash amortization expenses related to acquisitions, as
compared to pretax income.

Net income (loss) available for common stockholders. Net income available for
common stockholders was $682,000, or $.12 per share, for 1999, as compared to a
net loss for common stockholders of $368,000, or $.06 per share, in the prior
year. Income available for common stockholders is calculated by subtracting
dividends on preferred stock of $750,000 for both 1999 and 1998, and by
deducting the non-cash accretion in book value of preferred stock of $345,000
and $320,000 for 1999 and 1998, respectively.

Year ended October 25, 1998 compared to year ended October 26, 1997

Net sales. Net sales for 1998 increased 11.8%, to $160.0 million, as compared to
net sales of $143.1 million in 1997. These results include both the effects of
disposing of Great Bend and DewEze, and acquiring Astro Air. Sales attributable
to Great Bend were $7.3 million in 1998 and $13.7 million in 1997. Sales
attributable to DewEze were $5.8 million in 1998 and $7.4 million in 1997. Sales
attributable to Astro Air included in 1998 results were $13.4 million. Exclusive
of the effects of Great Bend, DewEze, and Astro Air, sales increased 9.5% as
compared to the prior year.

Net sales from Motors increased 15.6% to $54.2 million, from $46.9 million in
1997, as a result of increased sales volume to existing customers and the
addition of new customers.

Net sales from Coils increased $15.0 million, to $30.6 million in 1998 from
$15.5 million in 1997. This increase reflects $13.4 million in sales
attributable to Astro Air, which was acquired at the end of the second quarter
of 1998.

Net sales from the Trailers and Agricultural Equipment segment were $59.0
million in 1998, as compared to $64.1 million in 1997. This decrease reflects
the sale of Great Bend in April 1998 and DewEze in July 1998. Sales at Sooner
Trailer, the only remaining business in this segment, increased 12.7%, or $3.8
million, to $34.1 million as a result of increased volume.

Net sales from the Company's Other segment were $16.3 million in 1998, as
compared to $16.6 million in 1997.

Gross profit. For 1998, gross profit increased 4.1%, to $34.5 million, or 21.6%
of net sales, as compared to $33.2 million, or 23.2% of net sales, in 1997.

Gross profit from Motors increased 16.8%, to $13.2 million, or 24.4% of net
sales, as compared to $11.3 million, or 24.2% of net sales in 1997. The increase
in gross profit was primarily a result of increased sales volume.

                                       13
<PAGE>


Gross profit from Coils was $5.2 million in 1998, or 17.0% of net sales, as
compared to $2.8 million, or 18.1% of net sales in the prior year. The increase
in gross profit was primarily attributable to the inclusion of Astro Air, as
well as increased gross profit at Snowmax as a result of increased sales,
favorable changes in product mix and lower raw material costs.

In the Trailers and Agricultural Equipment segment, gross profit was $12.1
million, or 20.6% of net sales, as compared to $14.4 million, or 22.5% of net
sales, in the prior year. This decrease reflects the sale of Great Bend and
DewEze and lower gross profit at Parker as a result of decreased sales. Gross
profit at Sooner Trailer increased to $6.1 million, or 17.8% of net sales in
1998, from $5.3 million, or 17.3% of net sales in 1997, primarily as a result of
favorable changes in product mix.

Gross profit from the Company's Other segment was $4.0 million in 1998, as
compared to $4.6 million in 1997. This decrease was primarily a result of
merger-related costs at Cramer.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased to $26.5 million, or 16.5% of net sales, in
1998, as compared to $24.6 million, or 17.2% of net sales, in the prior year.

Selling, general and administrative expenses for Motors were $5.8 million, or
10.8% of net sales, as compared to $5.1 million, or 11.0% of net sales in 1997.
The increase was primarily a result of increased sales and administrative costs
and increased engineering costs in response to increased sales.

Selling, general and administrative expenses for Coils were $1.6 million, or
5.4% of net sales, as compared to $1.3 million, or 8.1% of net sales in 1997.
The increase was primarily attributable to the inclusion of Astro Air.

In the Trailers and Agricultural Equipment segment, selling, general and
administrative expenses were $9.1 million, or 15.4% of net sales, as compared to
$9.9 million, or 15.5% of net sales, in the prior year. This decrease reflects
the sale of Great Bend and DewEze, partially offset by an increase in sales
personnel and increased advertising and promotional costs at Sooner Trailer.

Selling, general and administrative expenses at the Company's Other segment were
$4.0 million in 1998, as compared to $3.4 million in 1997. In 1998, selling,
general and administrative expenses included $602,000 of expenses related to the
merger of Cramer and consisted primarily of training costs, consulting costs for
enhancements to management information systems, temporary help, and the cost of
moving Cramer's facility.

For 1998, unallocated corporate expenses included in selling, general and
administrative expenses were $5.9 million, or 3.7% of net sales, as compared to
$4.8 million, or 3.4% of net sales in 1997. Corporate expenses increased
primarily as a result of higher personnel and related costs and increased
consulting and legal and professional expenses.

Restructuring charge. In connection with the merger of the Company's Cramer
subsidiary into Rhodes and the consolidation of Cramer's manufacturing into
Rhodes' manufacturing facility, the Company recorded a restructuring charge of
$909,000 in the third quarter of 1998. The restructuring charge included
$583,000 for the termination of the lease on Cramer's Old Saybrook, Connecticut
manufacturing facility, $102,000 for the write-off of inventory for discontinued
product lines, $174,000 for employee severance and termination benefits for 74
predominantly manufacturing employees, and $50,000 for the write-off of
manufacturing equipment. The amount of actual termination benefits subsequently
paid and charged against the liability and the actual number of employees
terminated did not differ significantly from the original estimates. At October
25, 1998, approximately $125,000 of accrued restructuring costs was included in
accrued expenses and accrued compensation and benefits. Such remaining
restructuring costs were paid by the end of fiscal 1999.

                                       14
<PAGE>


Income from operations. For the year ended October 25, 1998, income from
operations was $7.2 million, as compared to $8.6 million, in 1997. This decrease
reflects a $909,000 restructuring charge and $929,000 of merger-related expenses
incurred in connection with the Cramer merger into Rhodes, as discussed above.

Income from operations for the Motors segment increased to $7.4 million, or
13.6% of sales, in 1998, from $6.2 million, or 13.2% of net sales, in the prior
year. These results primarily reflect increased sales volume.

Income from operations for the Coils segment was $3.6 million, or 11.7% of net
sales, in 1998, as compared to $1.6 million, or 10.0% of net sales, in the prior
year. These results reflect the inclusion of Astro Air and increased sales and
improved margins at Snowmax.

The Trailers and Agricultural Equipment segment had income from operations of
$3.1 million in 1998, as compared to $4.5 million in 1997. This decrease
reflects the dispositions of Great Bend and DewEze, and reduced income at Parker
as a result of decreased sales. This decrease was partially offset by increased
income from operations at Sooner Trailer as a result of changes in product mix.

The Company's Other segment reported a loss from operations of $58,000 in 1998,
as compared to income of $1.2 million in 1997. This decrease was attributable to
the Company's Cramer facility, which experienced weak sales, reduced margins and
merger-related expenses.

Interest expense. For 1998, interest expense increased to $4.9 million, as
compared to $4.1 million in 1997, primarily as a result of increased borrowings
under the Company's revolving credit agreement.

Income tax expense. The Company's effective income tax rate was 80.0% for 1998,
as compared to 45.2% in the prior year. The effective tax rate for 1998 was
unusually high as a result of differences between the book and tax basis of the
assets of Great Bend at the time of sale and by a higher proportion of
non-deductible expenses, primarily non-cash amortization expenses related to
acquisitions, as compared to pretax income.

Net income (loss) available for common stockholders. Net loss available for
common stockholders was $368,000, or $.06 per share in 1998, as compared to net
income available for common stockholders of $1.5 million, or $.26 per share, in
the prior year. Income (loss) available for common stockholders is calculated by
subtracting dividends on preferred stock of $750,000 for both 1998 and 1997 and
by deducting the non-cash accretion in book value of preferred stock of $320,000
and $297,000 for 1998 and 1997, respectively. The 1998 results include the gain
on the sale of Great Bend and a restructuring charge and other merger-related
costs incurred in connection with the merger of Cramer into Rhodes.

Liquidity and Capital Resources

At October 31, 1999, cash and cash equivalents were $161,000. Working capital
decreased to $16.9 million at October 31, 1999 from $19.7 million at October 25,
1998. This decrease was principally a result of increased accounts payable and
accrued expenses. Net cash provided by operating activities was $13.4 million,
as compared to net cash used in operating activities of $807,000 in the prior
year. The increase in cash from operations was principally the result of changes
in inventory levels, accounts receivable, accounts payable and accrued expenses
and improved operating results.

                                       15
<PAGE>


Cash from investing activities included cash proceeds from the sale of Parker of
$4.4 million. Cash flows from investing activities also reflect $5.7 million for
capital expenditures for equipment, primarily in the Motors and Coils segments.
The Company currently plans to invest approximately $4.9 million in capital
expenditures during fiscal 2000. Management anticipates funding such capital
expenditures with cash from operations and proceeds from the Company's revolving
credit facility.

In connection with the acquisition of Astro Air in April 1998, the Company
entered into a five-year consulting agreement with Dacus Properties, Inc.
("DPI"), the former owner of Astro Air, under which DPI receives 3.4% of net
revenues generated by certain specified customers. For 1999, the Company
recorded $878,000 of contingent consideration under the agreement with DPI as
goodwill based upon related 1999 revenues.

As part of the sale of Parker, the Company obtained a non-interest bearing note
of $3.3 million. The note, which was discounted to $3.0 million, is payable in
monthly installments as to the extent the accounts receivable, acquired by Top
Air pursuant to the sale agreement, are collected. Payments received on the note
and applied to principal were approximately $1.9 million in fiscal 1999, and are
included in cash flows from investing activities.

Net cash used in financing activities included net repayments of $10.1 million
under the Company's $55.0 million revolving credit agreement, debt repayments of
$3.0 million, including the repayment of $1.0 million of related party debt, and
the payment of dividends of $2.0 million.

On January 22, 1999, the Company entered into a new $55.0 million revolving
credit agreement with the Company's two primary banks, expiring in December
2002. At October 31, 1999, $38.2 million was outstanding and $16.8 million was
available for additional borrowing under the agreement. Interest is payable, at
the Company's option, at either the agent bank's prime rate or a spread over the
London Interbank Offered Rate that varies with the Company's ratio of total debt
to EBITDA. The LIBOR spread was 2.5% at October 31, 1999.

The Company has interest rate swap agreements with its two banks with notional
amounts totaling $20.8 million. The Company entered into these agreements to
change the fixed/variable interest rate mix of its debt portfolio, in order to
reduce the Company's aggregate risk from movements in interest rates.

In June 1999, the Company changed its quarterly dividend rate to $0.06 per
share, from the $0.09 per share amount previously paid. The Company expects to
pay its quarterly dividend at the new rate for the foreseeable future.

Also in June 1999, the Company announced that its Board of Directors had
authorized the purchase of up to $1.0 million of the Company's stock in open
market purchases or through private transactions. Such authorization is
effective through June 2000, subject to review by the Board of Directors at its
regular meetings. Management anticipates funding such stock purchases with cash
from operations and proceeds from the Company's revolving credit facility. No
amounts were purchased in 1999.

The Company believes anticipated funds to be generated from future operations
and available credit facilities will be sufficient to meet anticipated operating
and capital needs.

                                       16
<PAGE>



Environmental Matters

The Company is subject to federal, state and local environmental regulations
with respect to its operations. The Company believes that it is operating in
substantial compliance with applicable environmental regulations. Manufacturing
and other operations at the Company's various facilities may result, and may
have resulted, in the discharge and release of hazardous substances and waste
from time to time. The Company routinely responds to such incidents as deemed
appropriate pursuant to applicable federal, state and local environmental
regulations.

The Company is a party to a consent decree with the State of Connecticut
pursuant to which it has agreed to complete its environmental investigation of
the site on which its Cramer facility was previously located and conduct any
remedial measures which may be required. The Company has entered into a
settlement agreement with the former operators of the site. In accordance with
the terms of the agreement, the Company received $600,000 from the former
operators, in return for a release from future obligations with respect to
environmental matters related to the site. The $600,000 received, which is
included in accrued expenses as of October 31, 1999, will be used to complete
the environmental investigation of the site and to conduct any remedial measures
which may be required. Based upon the amounts recorded as liabilities, the
Company believes that the ultimate resolution of this matter will not have a
material adverse effect on the financial results of the Company.

The Company has been named as a potentially responsible party with respect to
three hazardous substance disposal sites currently under remediation by the U.S.
Environmental Protection Agency (the "EPA") under its "Superfund" program. With
respect to all three sites, based on the minimal amount of waste alleged to have
been contributed to the sites by the Company, the Company expects to resolve the
matter through the payment of de minimis amounts.

"Year 2000" Costs

The Company did not experience any business interruptions or any other
significant issues related to the "Year 2000." The costs associated with
bringing the Company's centralized manufacturing and accounting information
system and other date-sensitive equipment into "Year 2000" compliance was not
material. In addition, the Company is not aware of any "Year 2000" disruptions
at any of its significant suppliers or large customers.

Recently Issued Financial Accounting Standards

In June 1998, the Financial Accounting Standards Board (the "FASB") issued SFAS
No. 133, Accounting for Derivative Instruments and Hedging Activities. This
statement establishes accounting and reporting standards for derivative
instruments and hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. This statement, as amended
by SFAS No. 137, Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133, is effective for all
fiscal quarters of fiscal years beginning after June 15, 2000. The Company is in
the process of analyzing the impact that SFAS No. 133 will have on its
consolidated financial position and results of operations when such statement is
adopted.

                                       17
<PAGE>


Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

The following information is provided pursuant to the "Safe Harbor" provisions
of the Private Securities Litigation Reform Act of 1995. Certain statements in
Management's Discussion and Analysis of this Form 10-K, including those which
express "belief," "anticipation" or "expectation" as well as other statements
which are not historical fact, are "forward-looking statements" made pursuant to
these provisions. Such statements are subject to certain risks and uncertainties
which could cause actual results to differ materially from those projected.
Readers are cautioned not to place undue reliance on these forward-looking
statements which speak only as of the date hereof. The Company undertakes no
obligation to republish revised forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

The Company cautions readers that the following important factors, among others,
have in the past affected and could in the future affect the Company's actual
results of operations and cause the Company's actual results to differ
materially from the results expressed in any forward-looking statements made by
or on behalf of the Company:

   o The Company's results have been and can be expected to continue to be
     affected by the general economic conditions in the United States and
     specific economic factors influencing the manufacturing sector of the
     economy. Lower demand for the Company's products can lower revenues as well
     as cause underutilization of the Company's plants, leading to reduced gross
     margins.

   o Metal prices, particularly of aluminum, copper and steel, can affect the
     Company's costs as well as demand for the Company's products and the value
     of inventory held at the end of a reporting period. Lack of availability of
     certain commodities could also disrupt the Company's production.

   o Changes in demand that change product mix may reduce operating margins by
     shifting demand toward less profitable products.

   o Loss of a substantial customer or customers may affect results of
     operations.

   o The Company's results can be affected by engineering difficulties in
     designing new products or applications for existing products to meet the
     requirements of its customers.

   o Obsolescence or quality problems leading to returned goods in need of
     repair can affect the value of the Company's inventories and its
     profitability.

   o The Company has a substantial amount of floating rate debt. Increases in
     short-term interest rates could be expected to increase the Company's
     interest expense.

   o The Company's facility in the United Kingdom subjects the Company to
     various risks, which may include currency risk, risk associated with
     compliance with foreign regulations, and political and economic risks.

                                       18
<PAGE>



   o Acquisitions are an important part of the Company's growth strategy.
     Acquisitions may have a dilutive effect on the Company's earnings and could
     affect the Company's available credit and interest costs. Conversely, the
     Company may from time to time divest of product lines or business units.
     Any such divestiture may involve costs of disposition or loss on the
     disposition that could reduce the Company's results.

   o Although the Company is not aware of any "Year 2000" disruptions at any
     significant supplier or customer, there can be no assurance that if a
     disruption did occur, it would not have a material adverse effect on the
     Company's operating results or financial condition.


                                       19
<PAGE>


Item 7A.          Quantitative and Qualitative Disclosures About Market Risk

                  The Company uses its revolving credit facility, industrial
                  revenue bonds and term loans to finance a significant portion
                  of its operations. These on-balance sheet financial
                  instruments, to the extent they provide for variable rates of
                  interest, expose the Company to interest rate risk resulting
                  from changes in London Interbank Offered Rate or the prime
                  rate. The Company uses off-balance sheet interest rate swap
                  agreements to partially hedge interest rate exposure
                  associated with on-balance sheet financial instruments. All of
                  the Company's derivative financial instrument transactions are
                  entered into for non-trading purposes.

                  To the extent that the Company's financial instruments expose
                  the Company to interest rate risk and market risk, they are
                  presented in the table below. The table presents principal
                  cash flows and related interest rates by year of maturity for
                  the Company's revolving credit facility, industrial revenue
                  bonds and term loans in effect at October 31, 1999. For
                  interest rate swaps, the table presents notional amounts and
                  the related reference interest rates by year of maturity. Fair
                  values included herein have been determined based upon (1)
                  rates currently available to the Company for debt with similar
                  terms and remaining maturities, and (2) estimates obtained
                  from dealers to settle interest rate swap agreements. Note 8
                  to the consolidated financial statements should be read in
                  conjunction with the table below (dollar amounts in
                  thousands).

<TABLE>
<CAPTION>
                                                     Year of Maturity                                            Fair Value
                               ------------------------------------------------------------        Total Due             at
                                2000      2001     2002     2003      2004       Thereafter      at Maturity     10/31/1999
                                ----      ----     ----     ----      ----       ----------      -----------     ----------
<S>                            <C>       <C>       <C>    <C>        <C>           <C>             <C>             <C>
Debt:
  Fixed rate                   $3,576    $2,171    $949   $   858    $  593        $3,730          $11,877         $11,877
  Average interest rate           6.0%      6.0%    6.0%      6.0%      6.0%          6.0%
  Variable rate                $  303    $  300    $300   $38,450    $  600        $3,650          $43,603         $43,603
  Average interest rate           7.6%      7.6%    7.6%      7.6%      3.5%          3.5%

Interest rate swap agreements:
  Variable to fixed swaps      $    -    $    -    $  -   $15,000    $5,750        $    -          $20,750         $  (285)
  Average pay rate                                            7.1%      4.2%
  Average receive rate                                        5.2%      3.3%
</TABLE>


Item 8.           Financial Statements and Supplementary Data

                  The Company's consolidated financial statements and
                  supplemental schedules appear at pages F-1 through F-24, as
                  set forth in Item 14.

Item 9.           Changes in and Disagreements with Accountants on Accounting
                  and Financial Disclosure

                  None.


                                       20

<PAGE>


                                    PART III

Item 10. Directors and Executive Officers of the Registrant

         Information concerning directors, appearing under the caption "Election
of Directors" in the Company's Proxy Statement (the "Proxy Statement") to be
filed with the Securities and Exchange Commission in connection with the Annual
Meeting of Shareholders scheduled to be held on March 22, 2000, information
concerning executive officers, appearing under the caption "Item 1. Business -
Executive Officers of the Company" in Part I of this Form 10-K, and information
under the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in
the Proxy Statement are incorporated herein by reference in response to this
Item 10.

Item 11. Executive Compensation

         The information contained in the section titled "Executive
Compensation" in the Proxy Statement, with respect to executive compensation,
and the information contained in the section entitled "Director Compensation"
with respect to director compensation, are incorporated herein by reference in
response to this Item 11.

Item 12. Security Ownership of Certain Beneficial Owners and Management

         The information contained in the section titled "Security Ownership of
Certain Beneficial Owners and Management" in the Proxy Statement, with respect
to security ownership of certain beneficial owners and management, is
incorporated herein by reference in response to this Item 12.

Item 13. Certain Relationships and Related Transactions

         The information contained in the section titled "Certain Relationships
and Transactions" of the Proxy Statement, with respect to certain relationships
and related transactions, is incorporated herein by reference in response to
this Item 13.


                                       21
<PAGE>

                                     PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)(1)   Financial Statements

         The financial statements listed in the accompanying Table of Contents
         to Consolidated Financial Statements are filed as part of this Form
         10-K, commencing on page F-1.

(a)(2)   Schedules

         The following consolidated financial statement schedule of the Company
is filed as part of this Form 10-K:

         Schedule II - Valuation and Qualifying Accounts

(a)(3)   Exhibits

         The exhibits are listed in the index to Exhibits appearing below.

(b)      No reports were filed on Form 8-K during the last quarter of fiscal
         1999.

(c)      Exhibits

Exhibit No.      Description
-----------      -----------

* 3.1            Articles of Incorporation of the Company (Exhibit 3.1 to
                 the Company's Form S-1 Registration Statement, No. 33-76964
                 (the "1994 Registration Statement")).

* 3.2            By-Laws of the Company, as amended June 5, 1997 (Exhibit
                 3.2 to the Company's Quarterly Report on Form 10-Q for the
                 quarter ended July 27, 1997).

* 3.3            Designations of the Class A Convertible Preferred Stock of
                 Owosso Corporation (Exhibit 4.1 to the Company's Current Report
                 on Form 8-K dated October 31, 1995 (the "October 31, 1995 Form
                 8-K")).

*10.1            1994 Stock Option Plan (Exhibit 10.1 to the Company's Annual
                 Report on Form 10-K for the year ended October 30, 1994 (the
                 "1994 Form 10-K ")).#

*10.2            MIS Agreement dated October 31, 1994 by and between Owosso
                 Corporation and The Owosso Company (Exhibit 10.2 to the 1994
                 Form 10-K).

*10.3            Loan Agreement between Director of the State of Nevada
                 Department of Commerce as Issuer and The Landover Company D/B/A
                 Dura-Bond Bearing Company, dated August 1, 1988 regarding the
                 issuance of Series 1988-A Industrial Development Revenue Bonds
                 (Exhibit 10.5 to the 1994 Registration Statement).

*10.4            Offering Statement regarding the Gregg County Development
                 Corporation, Inc. Revenue Bonds, issued to Greer & Snow Coil
                 Manufacturers, Inc., dated May 17, 1984 (Exhibit 10-8 to the
                 1994 Registration Statement).

*10.5            Management Services Agreement, by and between Snowmax,
                 Incorporated, and The Owosso Company, dated July 31, 1989
                 (Exhibit 10.33 to the 1994 Registration Statement).

*10.6            Extension agreement among Owosso Corporation, Richard R. Carr
                 and I. Wistar Morris, III, dated September 27, 1994 (Exhibit
                 2.7 to the 1994 Registration Statement).


                                       22
<PAGE>

*10.7            Promissory Note of Snowmax, Incorporated, dated April 7, 1992,
                 issued to Longview Bank and Trust Company, in the amount of
                 $1,000,000 (Exhibit 10.39 to the 1994 Registration Statement).

*10.8            Deed of Trust, dated April 7, 1992, on property of Snowmax,
                 Incorporated located in Upshur County, Texas (Exhibit 10.40 to
                 the 1994 Registration Statement).

*10.9            Deed of Trust, dated April 7, 1992, on property of Snowmax,
                 Incorporated located in Gregg County, Texas (Exhibit 10.41 to
                 the 1994 Registration Statement).

*10.10           Lender's Subordination Agreement, dated April 7, 1992, among
                 Longview Bank and Trust Company, Snowcoil, Inc. and Snowmax,
                 Incorporated (Exhibit 10.42 to the 1994 Registration
                 Statement).

*10.11           Lease, dated March 21, 1995, between Motor Products - Ohio
                 Corporation and William Berhard Realty Company (Exhibit 10.44
                 to the 1995 Form 10-K).

*10.12           Confidentiality and Non-Solicitation Agreement between the
                 Company and Eugene P. Lynch, dated October 31, 1994 (Exhibit
                 10.45 to the 1994 Form 10-K).

*10.13           Confidentiality and Non-Solicitation Agreement between the
                 Company and Ellen D. Harvey, dated October 31, 1994 (Exhibit
                 10.46 to the 1994 Form 10-K).

*10.14           Confidentiality and Non-Solicitation Agreement between the
                 Company and George B. Lemmon, Sr., dated October 31, 1994
                 (Exhibit 10.47 to the 1994 Form 10-K).

*10.15           Confidentiality and Non-Solicitation Agreement between the
                 Company and George B. Lemmon, Jr., dated October 31, 1994
                 (Exhibit 10.48 to the 1994 Form 10-K).

*10.16           Confidentiality and Non-Solicitation Agreement between the
                 Company and John R. Reese, dated October 31, 1994 (Exhibit
                 10.51 to the 1994 Form 10-K).

*10.17           Stock Purchase Agreement among Owosso Corporation, Richard R.
                 Carr and I. Wistar Morris, III, dated March 24, 1994 (Exhibit
                 2.2 to the 1994 Form 10-K).

*10.18           The Owosso Group, Plan of Reorganization dated March 25, 1994
                 (Exhibit 2.1 to the 1994 Registration Statement).

*10.19           Amendment No. 1 to The Owosso Group Plan of Reorganization
                 dated September 26, 1994 (Exhibit 2.8 to the 1994 Registration
                 Statement).

*10.20           Stock Purchase Agreement dated September 9, 1994 by and among
                 Owosso Corporation, Sooner Trailer Manufacturing Co., Michael
                 S. Bernhardt, Billy J. Bernhardt, Viola M. Bernhardt, Michael
                 S. and Cynthia L. Bernhardt Charitable Remainder Unitrust U/T/A
                 8/15/94, Billy J. and Viola M. Bernhardt Charitable Remainder
                 Unitrust U/T/A 8/15/94, Steven J. Bernhardt Trust U/T/A 8/15/94
                 and Cynthia L. Bernhardt Trust U/T/A 8/15/94 (Exhibit 2.9 to
                 the 1994 Registration Statement).

*10.21           Letter Agreement by and among Owosso Corporation, The Owosso
                 Company and Sooner Trailer Manufacturing Co. dated October 25,
                 1994 (Exhibit 2.10 to the 1994 Form 10-K).

*10.22           Agreement and Plan of Merger dated October 25, 1995 by and
                 among Owosso Corporation, Stature Electric, Inc. and the
                 stockholders of Stature Electric, Inc. (Exhibit 2.1 to the
                 October 31, 1995 Form 8-K).

*10.23           Consulting Agreement dated October 31, 1995 by and between
                 Owosso Corporation and Lowell Huntsinger (Exhibit 10.1 to the
                 October 31, 1995 Form 8-K).#


                                       23
<PAGE>

 *10.24          Registration Rights Agreement dated October 31, 1995 by and
                 among Owosso Corporation, Lowell Huntsinger, Randall James and
                 Morris Felt (Exhibit 10.2 to the October 31, 1995 Form 8-K).

 *10.25          Loan Agreement dated September 18, 1993 between Sooner Trailer
                 Manufacturing Co. and American National Bank, Duncan, Oklahoma,
                 and Amendment No. 1 to Loan Agreement dated December 13, 1994
                 between the same parties (Exhibit 10.54 to the Company's
                 Quarterly Report on Form 10-Q for the quarter ended January 29,
                 1995).

 *10.26          Separation and Confidentiality Agreement between Thomas L.
                 French and Owosso Corporation, dated as of June 14, 1996
                 (Exhibit 10.73 to the July 1996 Form 10-Q).#

 *10.27          Lease Agreement by and between Owosso Corporation and
                 Philadelphia Freedom Partners, L.P. dated September 6, 1996
                 (Exhibit 10.62 to the Company's Annual Report on Form 10-K for
                 the year ended October 27, 1996).

 *10.28          Owosso Corporation 401(K) Savings Plan (Exhibit 10.2 to the
                 January 25, 1998 Form 10-Q).

 *10.29          Ninth Amendment to Credit Agreement by and among Owosso
                 Corporation, its subsidiaries, NBD Bank, PNC Bank, N.A., and
                 NBD Bank, as Agent, dated as of March 27, 1998. (Exhibit 10.1
                 to the Company's Quarterly Report on Form 10-Q for the quarter
                 ended April 26, 1998).

#*10.30          1998 Long-Term Incentive Plan (Exhibit 4.1 to the Company's
                 Registration Statement on Form S-8 filed June 2, 1998,
                 Registration No. 333-55835).

 *10.31          Asset Purchase Agreement, dated March 27, 1998, by and among
                 Allied Products Corporation, Great Bend Manufacturing Company,
                 and Owosso Corporation (Exhibit 2.1 to the Company's Current
                 Report on Form 8-K dated April 26, 1998).

 *10.32          Asset Purchase Agreement among Owosso Corporation, Astro Air
                 Acquisition Corp., Astro Air, Inc., Rex Dacus and Dacus
                 Properties, Inc., dated April 2, 1998 (Exhibit 2.2 to the
                 Company's Current Report on Form 8-K dated April 26, 1998).

 *10.33          Agreement and Plan of Merger among Owosso Corporation, Cramer
                 Company and M.H. Rhodes, Inc., dated April 3, 1998 (Exhibit
                 10.1 to the Company's Quarterly Report on Form 10-Q for the
                 quarter ended July 26, 1998).

 *10.34          Asset Sale and Purchase Agreement dated June 22, 1998, by and
                 between Harper Industries, Inc., and DewEze Manufacturing, Inc.
                 (Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q
                 for the quarter ended July 26, 1998).

 *10.35          Amended and Restated Credit Agreement by and among Owosso
                 Corporation, its subsidiaries, NBD Bank, PNC Bank, N.A., and
                 NBD Bank, as Agent, dated as of January 22, 1999. (Exhibit 10.1
                 to the Company's Quarterly Report on Form 10-Q for the quarter
                 ended January 31, 1999).

 *10.36          Asset Purchase Agreement by and among Top Air Manufacturing,
                 Inc. and Parker Acquisition Sub, Inc., as buyers, and Owosso
                 Corporation and DWZM, Inc., as sellers, dated March 3, 1999
                 (Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
                 for the quarter ended May 2, 1999).

#*10.37          Severance Agreement between the Company and John H. Wert, Jr.
                 dated May 12, 1999, (Exhibit 10.2 to the Company's Quarterly
                 Report on Form 10-Q for the quarter ended August 1, 1999).

11               Computation of per share earnings.

21               Subsidiaries of the registrant.

23               Consent of Deloitte & Touche LLP

27               Financial Data Schedule

--------------
*  Incorporated by reference.
#  Management contract or compensatory plan or arrangement.


                                       24
<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                     OWOSSO CORPORATION

Date: January 25, 2000           By: /s/ George B. Lemmon, Jr.
                                    --------------------------------------------
                                     George B. Lemmon, Jr., President, Chief
                                     Executive Officer, and Director

                                 By: /s/ John M. Morrash
                                    --------------------------------------------
                                     John M. Morrash, Executive Vice President -
                                     Finance, Chief Financial Officer and
                                     Treasurer and Secretary

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed by the following persons on January 25, 2000, in the
capacities indicated:

Signature                                            Title

/s/  John R. Reese
-----------------------------
John R. Reese                                Chairman of the Board and Director

/s/ George B. Lemmon, Jr.
-----------------------------
George B. Lemmon, Jr.                        President, Chief Executive Officer,
                                             and a Director

/s/ John M. Morrash
-----------------------------
John M. Morrash                              Executive Vice President - Finance,
                                             Chief Financial Officer and
                                             Treasurer and Secretary

/s/ Ellen D. Harvey
-----------------------------
Ellen D. Harvey                              Director

/s/ Harry E. Hill
-----------------------------
Harry E. Hill                                Director

/s/ Lowell P. Huntsinger
-----------------------------
Lowell P. Huntsinger                         Director

/s/ Eugene P. Lynch
-----------------------------
Eugene P. Lynch                              Director

/s/ James A. Ounsworth
-----------------------------
James A. Ounsworth                           Director


                                       25
<PAGE>

OWOSSO CORPORATION

TABLE OF CONTENTS
--------------------------------------------------------------------------------


                                                                       Page

INDEPENDENT AUDITORS' REPORT                                            F-1

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
   OCTOBER 31, 1999, OCTOBER 25, 1998, AND OCTOBER 26, 1997:

   Statements of Operations                                             F-2

   Balance Sheets                                                       F-3

   Statements of Stockholders' Equity                                   F-4

   Statements of Cash Flows                                             F-5

   Notes to Consolidated Financial Statements                       F-6 - F-24

FINANCIAL STATEMENT SCHEDULE II                                        F-25


<PAGE>

INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholders of
   Owosso Corporation
King of Prussia, Pennsylvania

We have audited the accompanying consolidated balance sheets of Owosso
Corporation and subsidiaries as of October 31, 1999 and October 25, 1998, and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three fiscal years in the period ended October 31,
1999. Our audits also included the financial statement schedule listed in the
index at Item 14(a)(2). These financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and financial statement
schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Owosso Corporation and subsidiaries
as of October 31, 1999 and October 25, 1998, and the results of their operations
and their cash flows for each of the three fiscal years in the period ended
October 31, 1999 in conformity with generally accepted accounting principles.
Also, in our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.

/s/ Deloitte & Touche LLP

Philadelphia, Pennsylvania
December 9, 1999




                                      F-1
<PAGE>

OWOSSO CORPORATION

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------------------------------------------------
                                                                                  Year Ended
                                                                 -----------------------------------------------
                                                                   October 31,     October 25,      October 26,
                                                                      1999            1998             1997

<S>                                                               <C>              <C>              <C>
Net sales                                                         $170,121,000     $159,968,000     $143,061,000
Costs of products sold                                             138,131,000      125,419,000      109,867,000
                                                                  ------------     ------------     ------------
Gross profit                                                        31,990,000       34,549,000       33,194,000

Expenses:
  Selling, general and administrative                               24,436,000       26,464,000       24,599,000
  Restructuring charge                                                     --          909,000               --
                                                                  ------------     ------------     ------------
Income from operations                                               7,554,000        7,176,000        8,595,000
Interest expense                                                     5,060,000        4,912,000        4,143,000
Gain on sale of business                                                    --        2,775,000               --
Write-down of net assets held for sale                                      --       (1,635,000)              --
Other income                                                           493,000           98,000          199,000
                                                                  ------------     ------------     ------------
Income before income tax expense                                     2,987,000        3,502,000        4,651,000
Income tax expense                                                   1,210,000        2,800,000        2,100,000
                                                                  ------------     ------------     ------------
Net income                                                           1,777,000          702,000        2,551,000
Dividends and accretion on preferred stock                          (1,095,000)      (1,070,000)      (1,047,000)
                                                                  ------------     ------------     ------------
Net income (loss) available for common stockholders               $    682,000     $   (368,000)    $  1,504,000
                                                                  ============     ============     ============
Basic and diluted income (loss) per common share                  $       0.12     $      (0.06)    $       0.26
                                                                  ============     ============     ============
Weighted average number of common shares outstanding:
     Basic                                                           5,826,000        5,813,000        5,809,000
                                                                  ============     ============     ============
     Diluted                                                         5,852,000        5,813,000        5,827,000
                                                                  ============     ============     ============
</TABLE>

See notes to consolidated financial statements.

                                      F-2
<PAGE>

OWOSSO CORPORATION

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------------------------------------------------------
                                                                                             October 31,          October 25,
                                                                                                1999                 1998
<S>                                                                                        <C>                      <C>
ASSETS
CURRENT ASSETS:
       Cash and cash equivalents                                                           $     161,000            $ 191,000
       Receivables, net                                                                       19,999,000           17,919,000
       Inventories, net                                                                       20,173,000           21,262,000
       Prepaid expenses and other                                                              1,101,000            1,283,000
       Deferred taxes                                                                          1,220,000              733,000
                                                                                           -------------        -------------
            Total current assets                                                              42,654,000           41,388,000

PROPERTY, PLANT AND EQUIPMENT, NET                                                            35,900,000           35,915,000
GOODWILL, NET                                                                                 27,057,000           28,155,000
OTHER INTANGIBLE ASSETS, NET                                                                   7,893,000            8,690,000
NET ASSETS HELD FOR SALE                                                                              --            7,619,000
RESTRICTED CASH                                                                                       --            1,906,000
OTHER ASSETS                                                                                   3,186,000            1,533,000
                                                                                           -------------        -------------
      TOTAL ASSETS                                                                         $ 116,690,000        $ 125,206,000
                                                                                           =============        =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
       Accounts payable - trade                                                            $  13,169,000        $   9,762,000
       Accrued compensation and benefits                                                       3,532,000            3,149,000
       Accrued expenses                                                                        5,163,000            4,048,000
       Related party debt                                                                      1,815,000            2,843,000
       Current portion of long-term debt                                                       2,064,000            1,935,000
                                                                                           -------------        -------------
            Total current liabilities                                                         25,743,000           21,737,000

LONG-TERM DEBT, LESS CURRENT PORTION                                                          51,601,000           63,746,000
POSTRETIREMENT BENEFITS                                                                        2,923,000            2,713,000
DEFERRED TAXES                                                                                 2,439,000            2,367,000
COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS' EQUITY
      Convertible preferred stock Class A, 5% cumulative, $.01 par value;
          10,000,000 shares authorized; 1,071,428 shares issued and outstanding
          (aggregate liquidation value 1999 and 1998  - $15,000,000)                          14,630,000           14,285,000
      Common stock, $.01 par value; authorized 15,000,000 shares; issued
          5,866,000 shares                                                                        59,000               59,000
      Additional paid-in capital                                                              21,618,000           21,618,000
      Accumulated other comprehensive income                                                      (3,000)                  --
      Accumulated deficit                                                                     (2,034,000)            (918,000)
                                                                                           -------------        -------------
                                                                                              34,270,000           35,044,000
      Less treasury stock, at cost, 35,863 shares in 1999 and 50,208 shares in 1998             (286,000)            (401,000)
                                                                                           -------------        -------------
           Total stockholders' equity                                                         33,984,000           34,643,000
                                                                                           -------------        -------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                           $ 116,690,000        $ 125,206,000
                                                                                           =============        =============
</TABLE>

See notes to consolidated financial statements.

                                      F-3
<PAGE>

OWOSSO CORPORATION
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------

                                                                  Additional    Accumulated     Retained
                                         Preferred     Common       Paid-in        Other        Earnings    Treasury
                                           Stock       Stock        Capital    Comprehensive  (Accumulated    Stock        Total
                                                                                   Income        Deficit)

<S>                                   <C>            <C>         <C>            <C>         <C>            <C>         <C>
BALANCE, OCTOBER 27, 1996              $ 13,668,000   $ 59,000    $ 21,612,000              $ 2,131,000    $(450,000)  $ 37,020,000
  Net income                                                                                  2,551,000                   2,551,000
  Dividends                                                                                  (2,841,000)                 (2,841,000)
  Accretion on convertible
   preferred stock                          297,000                                            (297,000)
                                       ------------   --------    ------------              -----------    ---------   ------------
BALANCE, OCTOBER 26, 1997                13,965,000     59,000      21,612,000                1,544,000     (450,000)    36,730,000
  Net income                                                                                    702,000                     702,000
  Dividends                                                                                  (2,843,000)                 (2,843,000)
  Accretion on  convertible
   preferred stock                          320,000                                            (320,000)
  Issuance of treasury shares                                                                    (1,000)      49,000         48,000
  Exercise of stock options                                              6,000                                                6,000
                                       ------------   --------    ------------              -----------    ---------   ------------
BALANCE, OCTOBER 25, 1998                14,285,000     59,000      21,618,000                 (918,000)    (401,000)    34,643,000

Net Income                                                                                    1,777,000                   1,777,000
Dividends                                                                                    (2,498,000)                 (2,498,000)
Accretion on  convertible
 preferred stock                            345,000                                            (345,000)                         --
Issuance of treasury shares                                                                     (50,000)     115,000         65,000
Cumulative translation adjustment                                                  (3,000)                                   (3,000)
                                       ------------   --------    ------------    -------   -----------    ---------   ------------
BALANCE, OCTOBER 31, 1999              $ 14,630,000   $ 59,000    $ 21,618,000    $(3,000)  $(2,034,000)   $(286,000)  $ 33,984,000
                                       ============   ========    ============    =======   ===========    =========   ============
</TABLE>

See notes to consolidated financial statements.


                                      F-4

<PAGE>

OWOSSO CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                            Year Ended
                                                                        ----------------------------------------------
                                                                           October 31,     October 25,    October 26,
                                                                              1999           1998            1997
<S>                                                                      <C>               <C>            <C>
OPERATING ACTIVITIES:
  Net income                                                             $  1,777,000    $    702,000    $ 2,551,000
  Adjustments to reconcile net income to
     net cash provided by (used in) operating activities:
            Allowance for doubtful accounts                                   106,000          89,000        249,000
            Provision for deferred taxes                                      (33,000)       (561,000)      (403,000)
            Gain on sale of business                                               --      (2,775,000)            --
            Write-down of net assets held for sale                                 --       1,635,000             --
            (Gain) loss on sale of assets                                      (7,000)         87,000         31,000
            Depreciation                                                    5,504,000       4,704,000      4,027,000
            Amortization                                                    2,262,000       2,411,000      2,173,000
    Changes in assets and liabilities which provided (used) cash:

            Accounts receivable                                              (767,000)     (3,286,000)    (1,702,000)
            Inventories                                                       179,000      (2,419,000)    (3,961,000)
            Prepaid expenses and other                                        156,000        (138,000)       492,000
            Accounts payable                                                3,306,000        (127,000)     2,224,000
            Accrued expenses                                                  922,000      (1,129,000)       996,000
                                                                         ------------    ------------    -----------
            Net cash provided by (used in) operating activities            13,405,000        (807,000)     6,677,000
                                                                         ------------    ------------    -----------

INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                               (5,677,000)     (9,573,000)    (5,335,000)
  Contingent consideration on acquisition                                    (878,000)       (425,000)            --
  Acquisition of businesses, net of cash acquired                                  --     (10,485,000)            --
  Proceeds from the sale of businesses and assets                           4,628,000      14,075,000             --
  (Increase) decrease in other assets                                       3,476,000      (1,303,000)       465,000
                                                                         ------------    ------------    -----------
           Net cash provided by (used in) investing activities              1,549,000      (7,711,000)    (4,870,000)
                                                                         ------------    ------------    -----------

FINANCING ACTIVITIES:
  Borrowings from (payments on)  line of credit                           (10,050,000)     13,550,000      4,650,000
  Proceeds from long-term debt                                                     --       6,050,000        350,000
  Payments on long-term debt                                               (1,967,000)     (8,035,000)    (1,741,000)
  Payments on related party debt                                           (1,028,000)       (907,000)    (2,225,000)
  Dividends paid                                                           (2,006,000)     (2,843,000)    (2,841,000)
  Other                                                                        67,000          54,000             --
                                                                         ------------    ------------    -----------
           Net cash (used in) provided by financing activities            (14,984,000)      7,869,000     (1,807,000)
                                                                         ------------    ------------    -----------

NET DECREASE IN

          CASH AND CASH EQUIVALENTS                                           (30,000)       (649,000)            --

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                191,000         840,000        840,000
                                                                         ------------    ------------    -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                 $    161,000    $    191,000   $    840,000
                                                                         ============    ============    ===========
</TABLE>

See notes to consolidated financial statements.



                                       F-5



<PAGE>



OWOSSO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEARS ENDED OCTOBER 31, 1999, OCTOBER 25, 1998, AND OCTOBER 26, 1997
--------------------------------------------------------------------------------


1.    NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The Company - The consolidated financial statements represent the
      consolidated financial position, results of operations and cash flows of
      Owosso Corporation and its subsidiaries (the "Company"). The Company
      currently operates in four business segments: Motors, Coils, Trailers and
      Agricultural Equipment, and Other.

      The Motors segment, which includes Stature Electric, Inc. ("Stature"),
      Motor Products - Owosso Corporation ("Motor Products"), and Motor Products
      Ohio Corporation ("MP-Ohio"), manufactures fractional and integral
      horsepower motors. Significant markets for the Company's motors include
      commercial products and equipment, healthcare and recreation. The Company
      sells its motors primarily throughout North America and also in Europe.

      The Coils segment manufactures heat exchange coils primarily for
      non-automotive transportation, refrigeration and commercial and
      residential HVAC markets. The businesses included in this segment include
      Astro Air Coils, Inc. ("Astro Air"), which was acquired in April 1988,
      Snowmax, Inc. ("Snowmax"), and Astro Air UK Ltd. ("Astro UK"), which began
      operations in March 1999. The Company sells its coils primarily throughout
      North America and also in Europe.

      The Trailers and Agricultural Equipment segment includes Sooner Trailer
      Manufacturing Co. ("Sooner Trailer"), which manufactures all-aluminum
      trailers, primarily horse and livestock trailers. Sooner Trailer sells its
      trailers through a dealer network located throughout the United States and
      Canada. Also included in this segment, through the dates of their sales,
      are Great Bend Manufacturing Co. ("Great Bend"), sold in April 1998,
      DewEze Manufacturing, Inc. ("DewEze"), sold in July 1998, and Parker
      Industries ("Parker"), sold in March 1999 (collectively the "Agricultural
      Equipment Companies").

      The Company's Other segment includes Dura-Bond Bearing Company
      ("Dura-Bond"), and M.H. Rhodes, Inc. ("Rhodes"). Dura-Bond manufactures
      replacement camshaft bearings, valve seats and shims for the automotive
      after-market. Rhodes, which was acquired in June 1998, manufactures timers
      and subfractional horsepower motors for use in commercial applications.

      Consolidation - The consolidated financial statements of the Company
      include the accounts of Owosso Corporation and its majority owned
      subsidiaries. All intercompany balances and transactions have been
      eliminated in consolidation.

      Fiscal Year - The Company's fiscal year includes 52 or 53 weeks ending on
      the last Sunday in October. Fiscal year 1999 consisted of 53 weeks, while
      fiscal years 1998 and 1997 consisted of 52-week years.

      Cash and Cash Equivalents - Cash and cash equivalents consist of cash and
      highly-liquid investments with an original maturity of three months or
      less.

      Inventories - Inventories of the Company are recorded at cost, which is
      not in excess of market. At October 31, 1999 and October 25, 1998, cost
      for 6% and 10%, respectively, of the inventories was determined on the
      last-in, first-out (LIFO) basis, and the remainder on the first-in,
      first-out (FIFO) basis.



                                      F-6


<PAGE>


      Information related to the FIFO method may be useful in comparing
      operating results to those of companies not on LIFO. If the FIFO method of
      inventory, which approximates replacement cost, had been used by the
      Company for all inventories, inventory would have been approximately
      $803,000 and $820,000 higher than reported at October 31, 1999 and October
      25, 1998, respectively. Additionally, net income would have decreased by
      approximately $17,000 in 1999, increased by approximately $18,000 for
      1998, and decreased approximately $98,000 for 1997. These amounts reflect
      the combined effects, in each year, of changes in inventory quantities and
      unit costs.

      Property, Plant and Equipment - Items of property, plant and equipment are
      stated at cost and are depreciated principally on the straight-line method
      over their estimated useful lives as follows:

         Land improvements                                       10 - 20 years
         Buildings                                               30 years
         Machinery and equipment                                 3 - 10 years

      Interest is capitalized in connection with the construction of major
      capital additions. The capitalized interest is recorded as part of the
      asset to which it relates and is amortized over the asset's estimated
      useful life. In 1998, $90,000 of interest cost was capitalized. No
      interest was capitalized in 1999 or 1997.

      Use of Estimates - The preparation of financial statements in conformity
      with generally accepted accounting principles requires management to make
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenues and
      expenses during the reporting period. Actual results may differ from those
      estimates and assumptions.

      Intangible Assets - Intangibles are amortized on a straight-line basis
      over their estimated useful lives as follows:

             Noncompetition agreements                           3-6 years
             Customer lists                                      20 years
             Goodwill                                            20-25 years
             Other                                               5-20 years

      Asset Impairment - The Company evaluates the carrying value of long-term
      assets, including goodwill and other intangible assets, based upon current
      and anticipated undiscounted cash flows, and recognizes an impairment when
      such estimated cash flows will be less than the carrying value of the
      asset. Measurement of the amount of impairment, if any, is based upon the
      difference between carrying value and fair value.

      Revenue Recognition - Revenue is recognized at the time the product is
      shipped. An allowance for doubtful accounts of $318,000 and $341,000 has
      been recorded as of October 31, 1999 and October 25, 1998, respectively.

      Stock Option Plan - SFAS No. 123, Accounting for Stock-Based Compensation,
      encourages, but does not require, companies to record compensation cost
      for stock-based employee compensation plans at fair value. The Company has
      chosen to continue to account for stock-based compensation in accordance
      with Accounting Principles Board Opinion No. 25, Accounting for Stock
      Issued to Employees, under which no compensation cost has been recognized.



                                      F-7


<PAGE>


      Reclassifications - Certain reclassifications were made to the 1998 and
      1997 consolidated financial statements to conform to 1999 classifications.

      Earnings per Share - Effective for the first quarter of fiscal 1998, the
      Company adopted SFAS No. 128, Earnings Per Share. In accordance with the
      provisions of this statement, all prior periods presented have been
      restated. Basic earnings per common share is computed by dividing net
      earnings (the numerator) by the weighted average number of common shares
      outstanding during each period (the denominator). The computation of
      diluted earnings per common share is similar to that of basic earnings per
      common share, except that the denominator is increased by the dilutive
      effect of stock options outstanding, computed using the treasury stock
      method.

      The basic weighted average shares reconciles to diluted weighted average
shares as follows:

                                                  1999       1998         1997
       Basic weighted average

            common shares outstanding          5,826,000   5,813,000   5,809,000
       Dilutive effect of stock options           26,000          --      18,000
                                               ---------   ---------   ---------
       Diluted weighted average

            common shares outstanding          5,852,000   5,813,000   5,827,000
                                               =========   =========   =========

      The following table summarizes those securities that could potentially
      dilute income (loss) for common stockholders per common share in the
      future that were not included in determining net income (loss) available
      for common stockholders per common share as the effect was antidilutive:

                                                  1999       1998         1997
       Potential common shares resulting from:

           Stock options                         786,000     587,000     259,000
            Convertible preferred stock        1,071,000   1,071,000   1,071,000
                                               ---------   ---------   ---------
                                               1,857,000   1,658,000   1,330,000
                                               =========   =========   =========

      Comprehensive Income - Effective for the first quarter of fiscal 1999, the
      Company adopted Statement of Financial Accounting Standards ("SFAS") No.
      130, Reporting Comprehensive Income. This statement establishes standards
      for reporting and disclosure of comprehensive income and its components
      (revenues, expenses, gains and losses). The Company presents comprehensive
      income as a component of stockholders' equity. For 1999, total
      comprehensive income was $679,000 and consisted of net earnings of
      $682,000, offset by a $3,000 loss on foreign currency translation. The
      Company's comprehensive income for 1998 and 1997 consisted solely of net
      earnings.

      New Accounting Pronouncements - In June 1998, the Financial Accounting
      Standards Board (the "FASB") issued SFAS No. 133, Accounting for
      Derivative Instruments and Hedging Activities. This statement establishes
      accounting and reporting standards for derivative instruments and hedging
      activities. It requires that an entity recognize all derivatives as either
      assets or liabilities in the consolidated balance sheet and measure those
      instruments at fair value. This statement, as amended by SFAS No. 137,
      Accounting for Derivative Instruments and Hedging Activities - Deferral of
      the Effective Date of FASB Statement No. 133, is effective for all fiscal
      quarters of fiscal years beginning after June 15, 2000. The Company is in
      the process of analyzing the impact that SFAS No. 133 will have on its
      consolidated financial position and results of operations when such
      statement is adopted.




                                      F-8


<PAGE>


2.    SUPPLEMENTAL CASH FLOW INFORMATION

      Cash payments for interest in 1999, 1998, and 1997 were $5,311,000,
      $4,693,000, and $4,307,000, respectively. Cash paid for income taxes was
      $1,503,000, $4,077,000 and $1,717,000 for 1999, 1998 and 1997,
      respectively. Dividends payable at October 31, 1999 were $492,000.

3.    ACQUISITIONS AND DISPOSITIONS OF BUSINESSES

      Disposition of Parker - On March 5, 1999, the Company completed the sale
      of the business and substantially all of the assets of Parker to Top Air
      Manufacturing, Inc. of Cedar Falls, Iowa. In connection with the sale, the
      Company received cash of $3,700,000, a non-interest bearing note of $3.3
      million, and the assumption of liabilities of $476,000. In addition, the
      local development authority in Iowa acquired certain Parker fixed assets
      for $750,000. Based upon the proposed terms of the sale, the Company
      recorded, in the fourth quarter of fiscal 1998, a pre-tax charge of
      $1,635,000 to adjust the carrying value of Parker's assets to their
      estimated fair market value. No additional pre-tax gain or loss was
      recorded upon completion of the sale. However, the sale did result in a
      tax benefit of approximately $535,000 recorded in 1999.

      The non-interest bearing note has been discounted to $3,000,000 and is
      payable in monthly installments as to the extent the accounts receivable,
      acquired by Top Air pursuant to the sale agreement, are collected. The
      note is secured by such accounts receivable. The terms of the note provide
      further that, irrespective of the amounts collected on such accounts
      receivable, Top Air is required to pay no less than 60% of the principal
      amount of the note by November 15, 1999, 85% of the principal of the note
      by November 15, 2000, with the final payment of all outstanding principal
      due on February 15, 2001. At October 31, 1999, $1,047,000 was outstanding
      on the note and is included in other assets on the consolidated balance
      sheet.

      The carrying value of the net assets of Parker, which was a component of
      the Company's Trailers and Agricultural Equipment segment, were included
      in the consolidated balance sheet at October 25, 1998 as "Net assets held
      for sale". Sales attributable to Parker were $1,004,000, $11,715,000 and
      $12,697,000 for 1999, 1998 and 1997, respectively. Income (loss) from
      operations, before the allocation of corporate expenses, from Parker was
      ($607,000), $741,000 and $1,044,000 for 1999, 1998 and 1997, respectively.

      Sale of DewEze - Effective July 24, 1998, the Company sold substantially
      all of the assets of DewEze to Harper Industries, Inc., a company formed
      by the president of the subsidiary, for cash proceeds of approximately
      $4,200,000 and a note for $700,000, plus the assumption of approximately
      $600,000 in liabilities. Quarterly principal payments are due on the note
      beginning January 2001 through October 2005. Interest on the note is due
      quarterly at 9% per annum beginning January 1999 through October 2001, at
      which time the rate increases to 12% per annum, and further increases 1%
      per year thereafter through maturity of the note and is being recorded
      using the effective interest method. The Company has no further
      commitments or contingencies related to the sale of DewEze. Net sales
      attributable to DewEze were $5,844,000 and $7,417,000 for 1998 and 1997,
      respectively. Income from operations, before allocation of corporate
      expenses, from DewEze was $272,000 and $752,000 for 1998 and 1997,
      respectively.

      Acquisition of Rhodes - Effective June 30, 1998, the Company acquired all
      of the outstanding stock of M.H. Rhodes, Inc. ("Rhodes"), a publicly held
      manufacturer of mechanical timers and photoelectric controls, located in
      Avon, Connecticut, for $2,900,000 in cash, plus the assumption or
      repayment of approximately $1,200,000 of debt. The acquisition has been
      accounted for by the purchase method of accounting. The purchase price has
      been allocated to the net assets acquired based on estimated fair values
      at the date of acquisition. This resulted in excess of purchase price over
      assets acquired of approximately $475,000, which is being amortized on a
      straight-line basis over 20 years. The Company has consolidated the
      operations of its Cramer subsidiary, previously located in Old Saybrook,
      Connecticut, into Rhodes' manufacturing facility. See Note 12 -
      Restructuring Charge.

      Sale of Great Bend - Effective April 26, 1998, the Company sold
      substantially all of the assets of Great Bend to Allied Products
      Corporation of Chicago, Illinois, for cash proceeds of approximately
      $9,900,000, plus the assumption of approximately $2,100,000 in
      liabilities. The Company recorded a pre-tax gain on the sale of Great Bend
      of $2,775,000 ($924,000 net of tax). Net sales attributable to Great Bend
      were $7,251,000 and $13,689,000 for 1998 and 1997, respectively. Income
      from operations, before allocation of corporate expenses, from Great Bend
      was $670,000 and $1,466,000 for 1998 and 1997, respectively.

                                       F-9

<PAGE>


      Acquisition of Astro Air - Effective April 26, 1998, the Company acquired
      substantially all of the assets of Astro Air, Inc. ("Astro Air"), a
      Jacksonville, Texas manufacturer of "fin and tube" heat transfer coils,
      for $8,000,000 in cash, plus the repayment, shortly after closing, of
      approximately $2,700,000 in debt. The acquisition has been accounted for
      by the purchase method of accounting. The purchase price has been
      allocated to the net assets acquired based on estimated fair values at the
      date of acquisition. This resulted in excess of purchase price over assets
      acquired of approximately $1,425,000, which is being amortized on a
      straight-line basis over 20 years. In connection with the acquisition, the
      Company has entered into a five-year consulting agreement with Dacus
      Properties, Inc. ("DPI"), the former owner of Astro Air, under which DPI
      will receive 3.4% of net revenues generated by certain specified
      customers. During 1999 and 1998, the Company recorded $878,000 and
      $425,000, respectively, of contingent consideration under the agreement
      with DPI as goodwill based upon related revenue.

      The following unaudited pro forma financial information presents the
      consolidated results of operations of the Company as if the acquisitions
      of Rhodes and Astro Air and the dispositions of DewEze and Great Bend had
      occurred at the beginning of fiscal year 1997 after giving effect to
      certain adjustments, including depreciation expense related to the fair
      market write-up of machinery and equipment, amortization of intangible
      assets, including goodwill, the elimination of the gain on the disposition
      of Great Bend and elimination of the restructuring charge and other
      merger-related costs incurred in connection with the merger of Cramer into
      Rhodes, including the termination of the lease on the Cramer facility. The
      disposition of Parker is not reflected in the pro forma financial
      information presented below because the effect on the financial statements
      is not considered to be significant. The unaudited pro forma information
      is presented for comparative purposes only and does not purport to be
      indicative of the results of operations of the Company had these
      transactions been made at the beginning of fiscal year 1997.

<TABLE>
<CAPTION>

                                                                                  1998                 1997
      <S>                                                                   <C>                  <C>
      Net sales                                                             $ 165,457,000        $ 150,630,000
      Income from operations                                                    9,126,000            8,087,000
      Net income                                                                  729,000            2,241,000
      Net (loss) income available for common stockholders                        (341,000)           1,194,000

      Basic (loss) earnings per common share                                      $ (0.06)              $ 0.21
</TABLE>

4.    INVENTORIES

                                                      1999             1998

        Raw materials and purchased parts         $ 9,619,000        $10,039,000
        Work in process                             4,076,000          4,161,000
        Finished goods                              6,478,000          7,062,000
                                                   ----------       ------------

        Total                                     $20,173,000        $21,262,000
                                                  ===========        ===========



                                      F-10
<PAGE>

5. PROPERTY, PLANT AND EQUIPMENT

                                                   1999                  1998

   Land and improvements                       $ 1,385,000           $ 1,443,000
   Buildings and improvements                   17,390,000            14,928,000
   Machinery and equipment                      49,297,000            45,379,000
   Construction in progress                      1,374,000             2,525,000
                                               -----------           -----------

   Total                                        69,446,000            64,275,000
   Accumulated depreciation                     33,546,000            28,360,000
                                               -----------           -----------

   Property, plant and equipment, net          $35,900,000           $35,915,000
                                               ===========           ===========



   Depreciation expense was approximately $5,504,000, $4,704,000 and $4,027,000
   for 1999, 1998 and 1997, respectively.

6. GOODWILL AND OTHER INTANGIBLE ASSETS


                                                  1999                  1998

   Goodwill:
   Goodwill                                    $33,336,000           $33,003,000
   Accumulated amortization                      6,279,000             4,848,000
                                               -----------           -----------

   Goodwill, net                               $27,057,000           $28,155,000
                                               ===========           ===========

   Other Intangible Assets:
   Noncompetition agreements                   $ 3,020,000           $ 3,520,000
   Customer lists                                8,000,000             8,000,000
   Other                                           566,000               541,000
                                               -----------           -----------

   Total                                        11,586,000            12,061,000
   Accumulated amortization                      3,693,000             3,371,000
                                               -----------           -----------

   Other intangible assets, net                $ 7,893,000           $ 8,690,000
                                               ===========           ===========

                                      F-11

<PAGE>

   Amortization expense related to goodwill and other intangible assets was
   approximately $2,262,000 for 1999, $2,411,000 for 1998 and $2,173,000 for
   1997.

7. RELATED PARTY DEBT

   Related party debt consists of promissory notes to preferred stockholders,
   payable on demand, but no later than October 2005, aggregating $1,815,000 and
   $2,843,000 as of October 31, 1999 and October 25, 1998, respectively.
   Interest on the notes is paid quarterly at 8%.

8.    LONG-TERM DEBT
<TABLE>
<CAPTION>
                                                                                  1999              1998

<S>                                                                                <C>              <C>
Revolving credit agreements                                                    $38,150,000      $48,200,000

Termloans, payable in monthly installments through 2009
   at variable rates from 5% to 8.5%, collateralized by
   certain real property                                                         1,675,000        2,079,000

Industrial revenue bonds, payable in varying installments
   through 2018 at rates from 4.25% to 7.5%, collaterized
   by certain real property, building and equipment                             10,679,000       11,069,000

Subordinated promissory notes, payable in varying installments
   through 2005 at rates from 7.6% to 9%                                         2,848,000        3,923,000

Other long-term debt                                                               313,000          410,000
                                                                               -----------      -----------

           Total long-term debt                                                 53,665,000       65,681,000

   Less current portion                                                          2,064,000        1,935,000
                                                                               -----------      -----------

   Long-term debt, net of current portion                                      $51,601,000      $63,746,000
                                                                               ===========      ===========
</TABLE>

   On January 22, 1999, the Company entered into a new $55,000,000 revolving
   credit facility with the Company's two primary banks, expiring in December
   2002. At October 31, 1999, $38,150,000 was outstanding and $16,850,000 was
   available for additional borrowing under the facility. The facility is
   secured by the non-real estate assets of the Company. Interest is payable at
   the Company's option, at either the bank's prime rate or a variable spread
   (2.5% at October 31, 1999) over the London Interbank Offered Rate. The
   average amount outstanding under the Company's revolving credit facilities in
   1999 was $46,932,000 and the weighted average interest rate was 8.1%. The
   agreement includes financial and other covenants, including fixed charge,
   cash flow and net worth ratios and restrictions on certain asset sales,
   mergers and other significant transactions. The Company was in compliance
   with such covenants at October 31, 1999, and expects to be in compliance with
   such covenants for the foreseeable future.

   Repayment of the Industrial Revenue Bonds of certain of the subsidiaries has
   been guaranteed by the Company.

   Derivative Interest Rate Contracts - The Company has two interest rate swap
   agreements, each with a $7,500,000 notional amount, maturing in July 2002.
   The Company receives floating interest rate payments at the three month
   London Interbank Offered Rate (6.19% at October 31, 1999) in exchange for the
   payment of quarterly fixed interest rate payments of 7.0675% and 7.09% over
   the life of the agreements. In March 1999, the Company entered into an
   interest rate swap agreement with one of its banks with an initial notional
   amount of $5,750,000. The agreement requires the Company to make quarterly
   fixed payments on the notional amount at 4.22% through October 2003 in
   exchange for receiving payments at the BMA Municipal Swap Index (3.6% at
   October 31, 1999). The Company entered into these interest rate swap
   agreements to change the fixed/variable interest rate mix of its debt
   portfolio to reduce the Company's aggregate risk to movements in interest
   rates. These agreements are accounted for using settlement accounting.

                                      F-12

<PAGE>

   The aggregate amount of required payments on long-term debt is as follows:

   Year ending October:
   2000                                                              $ 2,064,000
   2001                                                                2,471,000
   2002                                                                1,249,000
   2003                                                               39,308,000
   2004                                                                1,193,000
   Thereafter                                                          7,380,000
                                                                     -----------

   Total                                                             $53,665,000
                                                                     ===========


9. FAIR VALUE OF FINANCIAL INSTRUMENTS

   The following disclosures of the estimated fair value of financial
   instruments were made in accordance with the requirements of SFAS No. 107,
   Disclosures about Fair Value of Financial Instruments. The estimated fair
   value amounts have been determined by the Company using available market
   information and appropriate valuation methodologies.

      Cash and Cash Equivalents, Accounts Receivable, and Accounts Payable - The
      carrying amount of these items are a reasonable estimate of their fair
      value.

      Short-term Debt and Long-term Debt - Rates currently available to the
      Company for debt with similar terms and remaining maturities are used to
      estimate the fair value for debt issues. Accordingly, the carrying amount
      of debt is a reasonable estimate of its fair value.

      Derivatives - The Company's interest rate swap agreements have an
      aggregate notional amount of $20,750,000 and were in a liability position
      of $285,000 at October 31, 1999.

10. PENSION AND POSTRETIREMENT PLANS

   Pension Plans - The Company sponsors a defined contribution 401(k) plan
   covering substantially all of its employees, except for Motor Products'
   hourly employees, who are covered under the defined benefit pension plan
   described below. Eligible employees may contribute up to 15% of their
   compensation to this plan and their contributions are matched by the Company
   at a rate of 50% on the first 4% of the employees' contribution. The plan
   also provides for a fixed contribution of 3% of eligible employees'
   compensation. Pension expense related to these plans was $1,233,000,
   $1,017,000 and $891,000 for 1999, 1998 and 1997, respectively.

   Motor Products has a defined benefit pension plan covering substantially all
   of its hourly employees. The benefits are based on years of service, the
   employee's compensation during the last three years of employment, and
   accumulated employee contributions.

                                      F-13

<PAGE>

   Effective October 31, 1999, the Company adopted SFAS No. 132, Employers
   Disclosures About Pensions and Other Post-Retirement Benefits. In accordance
   with SFAS No. 132, the following tables provide a reconciliation of the
   change in benefit obligation, the change in plan assets and the net amount
   recognized in the consolidated balance sheets.
<TABLE>
<CAPTION>

                                                                       1999         1998
<S>                                                                <C>           <C>
   Change in projected pension benefit obligation:
   Projected pension benefit obligation at beginning of year       $3,415,000    $3,074,000
   Service cost                                                       106,000        83,000
   Interest cost                                                      204,000       200,000
   Actuarial (gain) loss                                             (485,000)      182,000
   Benefits paid                                                     (149,000)     (124,000)
                                                                   ----------    ----------

   Projected pension benefit obligation at end of year             $3,091,000    $3,415,000
                                                                   ==========    ==========

                                                                       1999          1998
   Change in plan assets:
   Fair value of plan assets at beginning of year                  $3,604,000    $3,455,000
   Actual return on plan assets                                       644,000       281,000
   Employee contributions                                              15,000        17,000
   Benefits and expenses paid                                        (182,000)     (149,000)
                                                                   ----------    ----------

   Fair value of plan assets at end of year                        $4,081,000    $3,604,000
                                                                   ==========    ==========


                                                                       1999          1998

   Excess of fair value of plan assets over benefit obligation        990,000       190,000
   Unrecognized initial net credit                                   (247,000)     (289,000)
   Unrecognized prior service cost                                    228,000       247,000
   Unrecognized net (gain) loss                                      (565,000)      264,000
                                                                   ----------    ----------

   Prepaid pension asset                                            $ 406,000     $ 412,000
                                                                   ==========    ==========
</TABLE>

   The accumulated benefit obligation was $2,660,000 as of October 31, 1999 and
   $2,896,000 as of October 25, 1998.

   Components of net pension expense (credit) included in the consolidated
   statements of operations for 1999, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
                                                        1999          1998           1997
<S>                                                  <C>            <C>           <C>
   Service cost                                      $ 106,000      $ 83,000      $  69,000
   Interest cost on projected benefit obligation       204,000       200,000        194,000
   Expected return on assets                          (283,000)     (272,000)      (243,000)
   Amortization of unrecognized net credit             (41,000)      (41,000)       (41,000)
   Amortization of prior service cost                   19,000        19,000         13,000
                                                     ---------     ---------      ---------

   Net pension expense (credit)                      $   5,000     $ (11,000)     $  (8,000)
                                                     ---------     ---------      ---------
</TABLE>

                                      F-14

<PAGE>

   Additional disclosures and assumptions:

                                                         1999              1998

   Discount rate                                         7.25%             6.25%
   Expected long-term rate of return                      8.0               8.0
   Salary increases                                       5.0               5.0


   Postretirement Plan - Motor Products - Motor Products provides postretirement
   medical benefits and life insurance benefits to current and former employees
   who retire from Motor Products. No contributions from retirees are required
   and the plan is funded on a pay-as-you-go basis. The Company recognizes the
   expected cost of providing such post-retirement benefits during employees'
   active service periods.

   The following tables provide a reconciliation of the change in the
   accumulated postretirement benefit obligation and the net amount recognized
   in the consolidated balance sheets at October 31, 1999 and October 25, 1998:
<TABLE>
<CAPTION>
                                                                                    1999              1998
<S>                                                                                  <C>              <C>
   Change in accumulated postretirement benefit obligation:

   Accumulated postretirement benefit obligation, beginning of year               $2,009,000       $2,126,000
   Service cost                                                                      128,000          114,000
   Interest cost                                                                     118,000          113,000
   Actuarial gain                                                                   (335,000)        (296,000)
   Benefits paid                                                                     (47,000)         (48,000)
                                                                                  ----------       ----------

   Accumulated postretirement benefit obligation, end of year                     $1,873,000       $2,009,000
                                                                                  ==========       ==========

                                                                                      1999             1998

   Accumulated postretirement benefit obligation                                  $1,873,000       $2,009,000
   Unrecognized net loss from past experience different
     from that assumed and from changes in assumptions                               (29,000)        (368,000)
   Prior service cost not yet recognized in net periodic
     postretirement benefit cost                                                     315,000          333,000
                                                                                  ----------       ----------

   Accrued postretirement benefit cost                                            $2,159,000       $1,974,000
                                                                                  ==========       ==========
</TABLE>

                                      F-15
<PAGE>

    Net periodic postretirement benefit cost included the following components
    for 1999, 1998 and 1997:

                                            1999           1998            1997

    Service cost                          $128,000       $114,000       $119,000
    Interest cost                          118,000        113,000        132,000
    Amortization of prior service cost     (14,000)       (17,000)        16,000
                                          --------       --------       --------
    Total                                 $232,000       $210,000       $267,000
                                          ========       ========       ========


    For measurement purposes, an 8.5% annual rate of increase in the per capita
    cost of covered health care benefits was assumed. The rate was assumed to
    decrease gradually to 5.2% for 2012, and remain at that level thereafter.
    The healthcare cost trend rate assumption has a significant effect on the
    amounts reported. To illustrate, increasing the assumed healthcare cost
    trend rates by one percentage point in each year would increase the
    accumulated postretirement benefit obligation as of October 31, 1999 by
    $426,000 and the aggregate of the service cost and interest cost components
    of the net periodic postretirement benefit cost for the year then ended by
    $68,000. Decreasing the assumed healthcare postretirement benefit obligation
    as of October 31, 1999 by 1% decreases the accumulated postretirement
    benefit obligation by $318,000 and the aggregate of the service cost and
    interest cost components of the net periodic postretirement benefit cost for
    the year then ended by $49,000. The weighted average discount rate used in
    determining the accumulated postretirement benefit obligation was 7.25% as
    of October 31, 1999 and 6.25% as of October 25, 1998.

    Postretirement Plan - Rhodes - Rhodes provides postretirement income,
    medical benefits and life insurance benefits to certain current and former
    employees who retire from Rhodes. No contributions from retirees are
    required and the plan is funded on a pay-as-you-go basis. The Company
    recognizes the expected cost of providing such postretirement benefits
    during employees' active service periods.

    The following tables provide a reconciliation of the change in the
    accumulated postretirement benefit obligation and the net amount recognized
    in the consolidated balance sheets at October 31, 1999 and October 25, 1998:

<TABLE>
<CAPTION>
                                                                           1999           1998
    <S>                                                                     <C>            <C>
    Change in accumulated postretirement benefit obligation:

    Accumulated postretirement benefit obligation, beginning of year     $784,000       $752,000
    Interest cost                                                          49,000         44,000
    Actuarial gain                                                        (41,000)            --
    Benefits paid                                                         (41,000)       (12,000)
                                                                         --------       --------
    Accumulated postretirement benefit obligation, end of year           $751,000       $784,000
                                                                         ========       ========
</TABLE>

    Net periodic post retirement benefit cost consists of interest cost of
    $49,000 for 1999 and $44,000 for 1998. The effects of assumed changes in the
    healthcare cost trend by 1% are not material.


                                      F-16
<PAGE>

<TABLE>
<CAPTION>
                                                                           1999           1998
    <S>                                                                     <C>            <C>
    Accumulated postretirement benefit obligation                        $751,000       $784,000

    Unrecognized net gain (loss) from past experience different
     from that assumed and from changes in assumptions                      7,000        (45,000)
                                                                         --------       --------
    Accrued postretirement benefit cost                                  $758,000       $739,000
                                                                         ========       ========
</TABLE>




    The weighted average discount rate used in determining the accumulated
    postretirement benefit obligation was 7.25% and 6.25% for 1999 and 1998,
    respectively, and the medical inflation rate was 5.5% and 4.5% for 1999 and
    1998, respectively.

11. COMMITMENTS AND CONTINGENCIES

    The Company leases office space and certain production facilities and
    equipment under operating leases. Operating lease expense was approximately
    $1,202,000, $1,489,000 and $1,107,000 for 1999, 1998 and 1997, respectively,
    net of sublease rentals and reimbursements of utilities of $63,000 and
    $44,000 for 1998 and 1997, respectively. The lease on the corporate
    headquarters office space expires in September 2006 with a base rent of
    approximately $305,000. Future minimum rental payments under non-cancelable
    operating leases are as follows:

                        2000                   $1,066,000
                        2001                      849,000
                        2002                      445,000
                        2003                      336,000
                        2004                      322,000
                        Thereafter                585,000
                                               ----------
                                               $3,603,000
                                               ==========

    At October 31, 1999, outstanding letters of credit totaled approximately
    $12,317,000 and primarily guarantee industrial revenue bonds.

    The Company is subject to federal, state and local environmental regulations
    with respect to its operations. The Company believes that it is operating in
    substantial compliance with applicable environmental regulations.
    Manufacturing and other operations at the Company's various facilities may
    result, and may have resulted, in the discharge and release of hazardous
    substances and waste from time to time. The Company routinely responds to
    such incidents as deemed appropriate pursuant to applicable federal, state
    and local environmental regulations.

    The Company is a party to a consent decree with the State of Connecticut
    pursuant to which it has agreed to complete its environmental investigation
    of the site on which its Cramer facility was previously located and conduct
    any remedial measures which may be required. The Company has entered into a
    settlement agreement with the former operators of the site. In accordance
    with the terms of the agreement, the Company received $600,000 from the
    former operators, in return for a release from future obligations with
    respect to environmental matters related to the site. The $600,000 received,
    which is included in accrued expenses at October 31, 1999, will be used to
    complete the environmental investigation of the site and to conduct any
    remedial measures which may be required. Based upon the amounts recorded as
    liabilities, the Company believes that the ultimate resolution of this
    matter will not have a material adverse effect on the consolidated financial
    results of the Company.


                                      F-17
<PAGE>

    The Company has been named as a potentially responsible party with respect
    to three hazardous substance disposal sites currently under remediation by
    the U.S. Environmental Protection Agency (the "EPA") under its "Superfund"
    program. With respect to all three sites, based on the minimal amount of
    waste alleged to have been contributed to the sites by the Company, the
    Company expects to resolve the matters through the payment of de minimis
    amounts.

    Sooner Trailer has arrangements with a number of financial institutions to
    provide floor plan financing for its dealers, which requires it to
    repurchase repossessed products from the financial institutions in the event
    of a default by the financed dealer. Its obligation is typically to
    repurchase the equipment at 90% of the purchase price for the first 180
    days, 80% for the next 90 days and 70% for the next 90 days, after which the
    obligation expires. In the event of a default by all of the financed
    dealers, the Company would be required to repurchase approximately
    $11,300,000 of product as of October 31, 1999. The Company does not believe
    that its obligation under these repurchase agreements will have a material
    adverse effect on the financial results of the Company. Sooner Trailer has
    not taken possession of any significant amount of equipment pursuant to the
    repurchase obligations in these contracts.

    In addition to the matters reported herein, the Company is involved in
    litigation dealing with numerous aspects of its business operations. The
    Company believes that settlement of such litigation will not have a material
    adverse effect on its consolidated financial position or results of
    operations.

12. RESTRUCTURING CHARGE

    In connection with the merger in 1998 of the Company's Cramer subsidiary
    into Rhodes, and the consolidation of Cramer's manufacturing into Rhodes'
    manufacturing facility, the Company recorded, in the third quarter of 1998,
    a restructuring charge of $909,000. The restructuring charge included
    $583,000 for the termination of the lease on Cramer's Old Saybrook,
    Connecticut manufacturing facility, $102,000 for the write-off of inventory
    for discontinued product lines, $174,000 for employee severance and
    termination benefits for 74 predominantly manufacturing employees, and
    $50,000 for the write-off of manufacturing equipment. The amount of actual
    termination benefits subsequently paid and charged against the liability and
    the actual number of employees terminated did not differ significantly from
    the original estimates. At October 25, 1998, approximately $125,000 of
    accrued restructuring costs was included in accrued expenses and accrued
    compensation and benefits. The remaining restructuring costs were paid in
    fiscal 1999.

13. INCOME TAX EXPENSE

    The income tax provision consists of the following:

                                       1999            1998              1997
    Current:
       Federal                      $ 986,000       $2,967,000       $2,400,000
       State                          257,000          394,000          103,000
    Deferred - Federal                (33,000)        (561,000)        (403,000)
                                   ----------       ----------       ----------
    Income tax expense             $1,210,000       $2,800,000       $2,100,000
                                   ==========       ==========       ==========


                                      F-18
<PAGE>

    The reconciliation to the statutory federal income tax rate is as follows:

<TABLE>
<CAPTION>
                                                                       1999       1998       1997
<S>                                                                    <C>        <C>        <C>
    Federal income tax provision at statutory rate                     34.0%      34.0%      34.0%
    State income taxes, net of federal income tax benefit               5.5        7.2        1.4
    Amortization of excess cost of net assets acquired                 15.8       13.9       10.8
    Effect of disposition of businesses                               (17.9)      18.4         --
    Other                                                               3.1        6.5       (1.0)
                                                                      -----      -----      -----
    Provision for income taxes                                         40.5%      80.0%      45.2%
                                                                      =====      =====      =====
</TABLE>

    The components of the Company's net deferred tax assets and liabilities are
    as follows:

                                                        1999             1998
    Deferred tax asset:
     Accruals and reserves                         $ 3,128,000      $ 3,347,000
     Tax credits and loss carryforwards              2,166,000          900,000
     Intangibles                                            --          971,000
     Other                                             135,000          126,000
                                                   -----------      -----------
                                                     5,429,000        5,344,000

     Valuation allowance                            (2,060,000)      (2,724,000)
                                                   -----------      -----------
          Total                                    $ 3,369,000      $ 2,620,000
                                                   ===========      ===========
    Deferred tax liability:
     Intangibles                                   $ 2,008,000      $ 2,584,000
     Pension                                           140,000          140,000
     Property, plant and equipment                   2,275,000        1,502,000
     Other                                             165,000           28,000
                                                   -----------      -----------
          Total                                    $ 4,588,000      $ 4,254,000
                                                   -----------      -----------
    Net deferred tax liability                     $(1,219,000)     $(1,634,000)
                                                   ===========      ===========

    These amounts are included in the accompanying consolidated financial
    statements as follows:

                                                       1999             1998

    Current assets                                 $ 1,220,000      $   733,000
    Long-term liabilities                           (2,439,000)      (2,367,000)
                                                   -----------      -----------
    Net deferred tax liability                     $(1,219,000)     $(1,634,000)
                                                   ===========      ===========


    The Company has recorded valuation allowances which management has
    determined are sufficient to reduce its deferred tax assets to an amount
    which is more likely than not to be realized. The Company's valuation
    allowances relate primarily to intangible assets, federal and state net
    operating loss carry-forwards, and other state deferred tax assets.


                                      F-19
<PAGE>

    As a result of the acquisition of Rhodes, the Company has approximately
    $1,400,000 of net operating loss carry forwards as of October 31, 1999
    available to reduce the taxable income of Rhodes for federal income tax
    reporting purposes and which expire between 2003 and 2011. The utilization
    of these net operating losses are subject to annual limitations under
    Section 382 of the Internal Revenue Code.

14. CONVERTIBLE PREFERRED STOCK

    In connection with the acquisition of Stature in October 1995, the Company
    issued 1,071,428 of its 10,000,000 authorized preferred shares of Class A
    convertible preferred stock with a stated value of $14.00 per share. Such
    preferred stock is convertible into the Company's common stock on a
    one-for-one basis, at the holders' option, through October 2000, at which
    time, the Company has the right, but is not obligated, to redeem, the
    preferred stock for cash at its stated value of $14.00 per share. The
    Company's option to redeem the preferred stock continues after October 2000,
    with the redemption price increasing annually until it reaches $21.00 in
    2009 for a maximum liquidation amount of $22,500,000. The Company is
    accreting the value of its preferred stock to its stated value of $14.00 per
    share over the period ending in October 2000, when the conversion feature of
    the stock expires, using the effective interest method at a rate of 7.6%.

    The preferred stock earns quarterly cash dividends as a percentage of the
    stated value of $15,000,000 at a rate of 5% per annum through October 2000.
    Thereafter, the dividend percentage rate increases 1% each year to its
    maximum rate of 10% in November 2004 and thereafter. To the extent that the
    preferred stock has not been converted by October 2000, the increasing rate
    dividend will be accounted for by the accrual of amounts in excess of the
    cash dividend through the consolidated statements of operations using the
    effective interest method, at a rate of 8.7%. Dividends paid on the
    preferred stock were $750,000 for 1999, 1998 and 1997.

    The Company may not pay any common stock dividends unless all preferred
    dividend requirements have been met. At October 31, 1999, there are no
    accrued preferred dividends. The convertible preferred stockholders are
    entitled to vote as a class to elect one member of the Board of Directors of
    the Company, provided at least 40% of the originally issued Class A
    preferred stock is outstanding. The convertible preferred stock has
    liquidation priority over common stock. In certain circumstances, the
    issuance of other classes of securities require the approval of the Class A
    preferred stockholders.

15. STOCK-BASED COMPENSATION PLANS

    In 1998, the Company adopted a long-term incentive plan (the "Incentive
    Plan") which permits the granting of Stock Options, Stock Appreciation
    Rights, Restricted Stock, Long-Term Performance Awards, Performance Shares
    and Performance Units. Officers, other employees and directors of the
    Company and consultants to the Company are eligible to receive awards under
    the Incentive Plan. The maximum number of shares of Common Stock of the
    Company that may be made the subject of awards granted under the Incentive
    Plan is 500,000. Stock options granted under the Incentive Plan generally
    vest over five years and are exercisable for periods up to ten years from
    the date of grant at a price which equals fair value at the date of grant.

    The Company also maintains a stock option plan (the "1994 Plan"), designed
    to serve as an incentive for retaining valuable employees and directors. All
    employees and directors of the Company are eligible to participate in the
    1994 Plan. The 1994 Plan provides for the granting of options to purchase an
    aggregate of up to 500,000 shares of common stock of the Company. Options
    granted generally vest over five years and are exercisable for periods up to
    ten years from the date of grant at a price which equals fair market value
    at the date of grant.


                                      F-20
<PAGE>

    The 1994 Plan provides for the automatic acceleration of the exercisability
    of all outstanding options upon the occurrence of a change in control (as
    defined) and for the cancellation of options and cash payment to the holders
    of such canceled options upon the occurrence of certain events constituting
    a change in control. The 1994 Plan may be amended, altered or discontinued
    at any time, but no amendment, alteration or discontinuation will be made
    which would impair the rights of an optionee with respect to an outstanding
    stock option without the consent of the optionee.

    The following schedule summarizes stock option activity and status:

<TABLE>
<CAPTION>
                                                                    Year Ended
                                 --------------------------------------------------------------------------------
                                    October 31, 1999            October 25, 1998             October 26, 1997
                                               Weighted                    Weighted                      Weighted
                                               Average                      Average                       Average
                                               Exercise                    Exercise                      Exercise
                                 Options        Price         Options        Price         Options         Price
<S>                                <C>            <C>           <C>           <C>            <C>            <C>
Outstanding,
  beginning of year              587,000        $8.57         371,000       $ 9.31         334,000        $10.14
 Granted                         204,000         4.70         296,000         7.82          81,000          6.65
 Exercised                            --           --          (1,000)        6.13              --            --
 Cancelled                        (6,000)        6.13         (79,000)        9.26         (44,000)        10.70
                                 -------                      -------                      -------
Outstanding, end of year         785,000        $7.58         587,000       $ 8.57         371,000        $ 9.31
                                 =======                      =======                      =======
Exercisable, end of year         270,000        $9.50         155,000       $10.15         135,000        $10.69
                                 =======                      =======                      =======
</TABLE>

    The following table summarizes information about stock options outstanding
    at October 31, 1999:

<TABLE>
<CAPTION>
                                                   Options Outstanding                     Options Exercisable
                                           -------------------------------------          ----------------------
                                                         Weighted
                                                          Average
                                                         Remaining      Weighted                        Weighted
                                                        Contractual      Average                        Average
                                                           Life         Exercise                        Exercise
Range of Exercise Prices                   Options       in Years         Price           Options        Price
<S>                                         <C>            <C>             <C>               <C>          <C>
$4.16 - $5.75                              204,000         9.33          $ 4.70                --        $   --

$5.88 - $8.00                              381,000         7.96          $ 7.43           108,000        $ 7.09

$8.88 - $11.38                              85,000         6.07          $ 9.17            53,000        $ 9.26

$12.00                                     115,000         5.15          $12.00           109,000        $12.00
                                           -------                                        -------

                                           785,000         7.70          $ 7.58           270,000        $ 9.53
                                           =======                                        =======
</TABLE>

    The Company accounts for the 1994 Plan and stock options granted under the
    Incentive Plan in accordance with APB Opinion No. 25, under which no
    compensation cost has been recognized. Had compensation cost for the 1994
    Plan and the Incentive Plan been determined consistent with SFAS No. 123,
    Accounting for Stock-Based Compensation, the Company's net income and
    earnings per share would have been reduced by $219,000 and $0.04 per share,
    respectively for 1999, $84,000 and $0.01 per share, for 1998, $129,000 and
    $0.02 per share, for 1997. Because the SFAS No. 123 method of accounting has
    not been applied to options granted prior to October 30, 1995, the resulting
    pro forma compensation cost may not be representative of that to be expected
    in future years.


                                      F-21
<PAGE>

      The weighted average fair value of options granted during 1999, 1998 and
      1997 was $277,000, $575,000 and $252,000, respectively. The fair value of
      the options granted were estimated on the date of grant using the Binomial
      option-pricing model with the following assumptions for grants in 1999,
      1998 and 1997: risk-free interest rate of 6.3%, 4.7%, and 6.2%,
      respectively, expected volatility of 35%, 31% and 63%, respectively,
      dividend yield of 5.1%, 4.6% and 5.4%, respectively, and an expected life
      of six years in 1998, 1997 and 1996.

16. SEGMENT INFORMATION

    As of October 31, 1999, the Company adopted Statement of Financial
    Accounting Standards ("SFAS") No. 131, Disclosure About Segments of an
    Enterprise and Related Information. SFAS No. 131 requires companies to
    define and report financial and descriptive information about its operating
    segments. The Company is organized based upon the products and services it
    offers. Under this organizational structure, the Company operates in four
    business segments: Motors, Coils, Trailers and Agricultural Equipment, and
    Other.

    The Motors segment manufactures fractional and integral horsepower motors.
    Significant markets for the Company's motors include commercial products and
    equipment, healthcare and recreation.

    The Coils segment manufactures heat exchange coils primarily for
    non-automotive transportation, refrigeration and commercial and residential
    HVAC markets. This segment includes the results of Astro Air, which was
    acquired in April 1998.

    The Trailers and Agricultural Equipment segment includes the Company's
    Sooner Trailer subsidiary, which manufactures all-aluminum trailers,
    primarily horse and livestock trailers. Sooner Trailer sells its trailers
    through a dealer network located throughout the United States and Canada.
    Also included in this segment, through the dates of their sales, are the
    agricultural equipment companies, Great Bend (sold in April 1998), DewEze
    (sold in July 1998), and Parker (sold in March 1999).

    The Company's Other segment includes Dura-Bond Bearing Company
    ("Dura-Bond"), and M.H. Rhodes, Inc. ("Rhodes"). Dura-Bond manufactures
    replacement camshaft bearings, valve seats and shims for the automotive
    after-market. Rhodes manufactures timers and subfractional horsepower motors
    for use in commercial applications.

    The Company derives substantially all of its revenues from within the United
    States. Company assets located outside of the United States are not
    considered material. Information about interest expense, other income and
    income taxes is not provided on a segment level. The accounting policies of
    the segments are the same as those described in the summary of significant
    accounting policies.


                                      F-22
<PAGE>

    The following table includes net sales, income (loss) from operations,
    capital additions, and depreciation and amortization expense for the fiscal
    years ended October 1999, 1998 and 1997 and identifiable assets as of
    October 1999, 1998 and 1997 for each segment:

<TABLE>
<CAPTION>
                                                                  1999               1998               1997
   <S>                                                             <C>                <C>                <C>
   Identifiable assets:
    Motors                                                   $ 49,115,000       $ 50,988,000       $ 44,262,000
    Coils                                                      22,969,000         21,292,000          6,594,000
    Trailers and Agricultural Equipment                        22,882,000         31,190,000         42,778,000
    Other                                                      20,369,000         20,964,000         16,239,000
    Corporate                                                   1,355,000            772,000          1,808,000
                                                             ------------       ------------       ------------
          Total identifiable assets                          $116,690,000       $125,206,000       $111,681,000
                                                             ============       ============       ============
    Net sales:
    Motors                                                   $ 63,941,000       $ 54,188,000       $ 46,865,000
    Coils                                                      46,634,000         30,555,000         15,515,000
    Trailers and Agricultural Equipment                        40,277,000         58,958,000         64,111,000
    Other                                                      19,269,000         16,267,000         16,570,000
                                                             ------------       ------------       ------------
          Total net sales                                    $170,121,000       $159,968,000       $143,061,000
                                                             ============       ============       ============
    Income (loss) from operations:
    Motors                                                   $  8,353,000       $  7,384,000       $  6,187,000
    Coils                                                       3,114,000          3,571,000          1,558,000
    Trailers and Agricultural Equipment                         1,289,000          3,071,000          4,505,000
    Other                                                       1,410,000            (58,000)         1,180,000
    Corporate (1)                                              (6,612,000)        (6,792,000)        (4,835,000)
                                                             ------------       ------------       ------------
          Total income from operations                       $  7,554,000       $  7,176,000       $  8,595,000
                                                             ============       ============       ============
    Capital Additions:
    Motors                                                   $  3,232,000       $  5,680,000       $  2,463,000
    Coils                                                       1,563,000          1,133,000            326,000
    Trailers and Agricultural Equipment                           325,000          1,106,000          1,555,000
    Other                                                         477,000            982,000            807,000
    Corporate                                                      80,000            672,000            184,000
                                                             ------------       ------------       ------------
          Total capital additions                            $  5,677,000       $  9,573,000       $  5,335,000
                                                             ============       ============       ============
    Depreciation and amortization expense:
    Motors                                                   $  3,420,000       $  2,890,000       $  2,672,000
    Coils                                                       2,009,000          1,134,000            493,000
    Trailers and Agricultural Equipment                           774,000          1,642,000          1,791,000
    Other                                                       1,131,000          1,005,000            985,000
    Corporate                                                     432,000            444,000            259,000
                                                             ------------       ------------       ------------
          Total depreciation and amortization expense        $  7,766,000       $  7,115,000       $  6,200,000
                                                             ============       ============       ============
</TABLE>

    (1) Includes unallocated corporate expenses, primarily executive,
    information technology, and other administrative expenses; also reflects a
    restructuring charge of $909,000 in 1998.

                                      F-23
<PAGE>

17. QUARTERLY INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
                                                    First              Second              Third              Fourth
                                                   Quarter            Quarter             Quarter             Quarter
                                                   -------            -------             -------             -------
    <S>                                             <C>                <C>                 <C>                 <C>
    Year Ended October 31, 1999:
    -----------------------------------------
    Net sales                                       $ 38,835,000       $ 45,742,000        $ 43,910,000        $ 41,634,000

    Gross profit                                       7,228,000          9,296,000           8,796,000           6,670,000

    Income (loss) before taxes                          (243,000)         1,587,000           2,147,000            (504,000)

    Net income (loss)                                   (132,000)         1,299,000           1,054,000            (444,000)

    Net income (loss) available
      for common stockholders                           (403,000)         1,026,000             779,000            (720,000)

    Basic and diluted earnings (loss)
      per common share                                     (0.07)              0.18                0.13               (0.12)

    Year Ended October 25, 1998:
    -----------------------------------------
    Net sales                                       $ 34,054,000       $ 41,868,000        $ 42,998,000        $ 41,048,000

    Gross profit                                       7,496,000         10,224,000           8,495,000           8,334,000

    Income (loss) before taxes                            11,000          4,630,000            (362,000)           (777,000)

    Net income (loss)                                      6,000          1,937,000            (338,000)           (903,000)

    Net income (loss) available
      for common stockholders                           (259,000)         1,670,000            (606,000)         (1,173,000)

    Basic and diluted earnings (loss)
      per common share                                     (0.04)              0.29               (0.10)              (0.20)
 </TABLE>

    The fourth quarter of 1999 included $500,000 of increased warranty costs
    associated with specific product identified during the period, a $500,000
    inventory adjustment recognized at year-end when a physical inventory was
    completed, and a $500,000 adjustment to the Company's workers' compensation
    accrual, representing an increase in the estimated costs to resolve open
    claims related to previous years.

    The second quarter of 1998 includes a pre-tax gain of $2,775,000 on the sale
    of Great Bend.

    The third quarter of 1998 includes a restructuring charge of $909,000
    recorded in connection with the merger of the Company's Cramer and Rhodes
    subsidiaries. The third quarter of 1998 also includes a write-off of
    approximately $327,000 of inventory in connection with the merger recorded
    in cost of products sold and approximately $380,000 of expenses related to
    the merger recorded in selling, general and administrative expenses.

    The fourth quarter of 1998 includes a pre-tax charge of $1,635,000 to adjust
    the carrying value of the assets of the Company's Parker subsidiary to their
    estimated fair market value in connection with its sale.

                                   * * * * * *

                                      F-24

<PAGE>
                                                                     Schedule II
<TABLE>
<CAPTION>

                                                       Owosso Corporation
                                        Valuation and Qualifying Accounts and Reserves
                                          For the three years ended October 31, 1999
-----------------------------------------------------------------------------------------------------------------------

                                          Balance at       Charged to          Charged                         Balance at
                                           Beginning        Costs and         to Other         Deductions        End of
                                           of Period         Expenses       Accounts (a)           (b)           Period
                                        -------------      -----------      ------------       ----------      ----------
<S>                                           <C>               <C>                <C>              <C>              <C>
For  the year ended October 31, 1999
     Allowances on:
          Accounts receivable            $  341,000        $  106,000               --       $  (129,000)      $  318,000
          Inventory                       1,353,000           853,000               --          (777,000)       1,429,000
     Accrued restructuring costs            125,000                --               --          (125,000)              --

For  the year ended October 25, 1998
     Allowances on:
          Accounts receivable            $  300,000        $   89,000         $ 82,000       $  (130,000)      $  341,000
          Inventory                         616,000         1,382,000          423,000        (1,068,000)       1,353,000
     Accrued restructuring costs                 --           909,000               --          (784,000)         125,000

For  the year ended October 26, 1997
     Allowances on:
          Accounts receivable            $  509,000        $  249,000         $     --       $  (458,000)      $  300,000
          Inventory                         565,000         1,010,000               --          (959,000)         616,000

--------------------------------------------------------
</TABLE>
(a)  Primarily relates to the effects of acquisitions.
(b)  As to accounts receivable and inventory, primarily represents amounts
     written off against related assets; as to accrued restructuring costs,
     represents amounts paid.

                                      F-25