<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                  FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO
          SECTIONS 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

For the fiscal year ended: October 26, 2003

                                       OR

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

For the transition period from ____________ to ___________.

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)

            22543 Fisher Road, PO Box 6660, Watertown, New York 13601
               (Address of principal executive offices)(Zip Code)

       Registrant's telephone number, including area code: (315) 782-5910

           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)


<PAGE>

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. [X]

Indicate by a check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).  YES [ ] NO [X].

The aggregate market value of the voting common stock held by non-affiliates of
the registrant was approximately $744,000 as of April 27, 2003, which is based
upon the closing price on such date. As of July 9, 2003 the registrant's common
stock has traded on the OTC Bulletin Board.

As of January 20, 2004, 5,824,306 shares of the registrant's Common Stock, $.01
par value, were outstanding.

                       Documents Incorporated By Reference

Portions of the registrant's Proxy Statement intended to be filed with the
Commission in connection with the 2004 Annual Meeting of Shareholders are
incorporated by reference into Part III of this Form 10-K. To the extent the
Proxy Statement is not filed within the prescribed time period, the registrant
will amend Part III of this Form 10-K as required by instruction G(3) to this
Form 10-K.

                                      -2-
<PAGE>

                                     PART I

Item 1.  Business.

Owosso Corporation (the "Company") was incorporated in Pennsylvania and
organized as a holding company in 1994. The holding company structure separated
the administrative and financing activities of the Company from the activities
of its operating subsidiaries.

As of July 30, 2002, the Company had one operating subsidiary, Stature Electric,
Inc. ("Stature"), representing the Company's historical "Motors segment."
Stature is a custom designer and manufacturer of motors and gear motors,
including AC, DC, and Universal. Established in 1974 in Watertown, New York,
Stature is a progressive company, which emphasizes a partnership approach in all
aspects of its business. Significant markets for Stature include commercial
products and equipment, healthcare, recreation and non-automotive
transportation. Stature's component products are sold throughout North America
and in Europe, primarily to original equipment manufacturers who use them in
their end products.

On February 10, 2004, the Company reached a definitive agreement with Allied
Motion Control Technologies, Inc. ("Allied") for the acquisition by Allied of
all the shares of the Company on the following terms: .068 shares of common
stock of Allied for each share of common stock of the Company, and a combination
of .127 shares of Allied common stock, a warrant to purchase 0.28 shares of
Allied common stock and cash of $0.9333 for each share outstanding of the
Company's Class A convertible preferred stock. Based on the Company's 5,824,306
common shares and 1,071,428 preferred shares issued, the aggregate amount to
common shareholders will be approximately $1.75 million, and the aggregate
amount to preferred shareholders will be approximately $1.6 million. In
addition, Allied has agreed to repay and assume up to $10.6 million of the
Company's outstanding debt, and the Company's preferred shareholders may be
entitled to Allied subordinated promissory notes with an aggregate principal
amount of up to $500,000 based on the 2004 gross revenue of Stature.
Accordingly, the transaction has an aggregate value of approximately $14.0
million, exclusive of any value attributable to the warrants and Allied notes.
The board of directors of each Company has approved the transaction. The
consummation of the transaction is subject to the approval of the Company's
shareholders and other customary conditions. The transaction is expected to be
completed prior to July 1, 2004.

In 1998, the Company formulated a long-term plan to concentrate on value-added
components for industry. In connection with its implementation of that plan, the
Company began a series of divestitures beginning with the sale of the four
businesses comprising its historical Agricultural Equipment segment. The sale of
the last of those businesses was completed in January 2001 with the divestiture
of Sooner Trailer Manufacturing Company ("Sooner Trailer"). During that time,
however, the Company experienced a significant downturn in its operating results
and at the end of fiscal 2000 was out of compliance with covenants under its
bank credit facility.

Throughout fiscal 2001, the Company remained out of compliance with financial
covenants, including maintenance of minimum operating profit, under its bank
credit facility. As a result, the Company and its lenders entered into a series
of amendments to the facility during fiscal 2001, 2002 and 2003, and in each
case the Company's lenders agreed to forebear from exercising their rights and
remedies under the facility. In order to meet the lenders' requirements for
reduced outstanding balances and to secure the lenders' agreement to forebear,
the Company engaged in a series of divestitures of its operating subsidiaries,
concluding with the sale of its Motor Products subsidiaries, Motor Products
Owosso Corporation and Motor Products Ohio Corporation in July of 2002. As
disclosed under Note 9 "Long-term Debt," the amendments to the bank credit
facility modified the interest rates charged, called for reductions in the
outstanding balance during calendar 2001, 2002 and 2003, added additional
reporting requirements, suspended payments of principal and interest on
subordinated debt, prohibited the payment of preferred or common dividends,
prohibited the purchase of the Company's stock and added a covenant requiring
the maintenance of minimum operating profit. In December 2003 (fiscal 2004), the
Company entered into a further amendment to the facility which extended the
maturity date to March 31, 2004.


<PAGE>

During fiscal 2004, the Company intends to dispose of real estate at the
Company's former Snowmax Corporation subsidiary. An entity controlled by Mr.
Lemmon, the Company's President, CEO and Chairman, has expressed interest in
purchasing such real estate, however no binding agreement has been entered into
and any such sale will be subject to the approval of the Company's audit
committee. Based on current negotiations, the Company estimates proceeds of
approximately $312,000 if successful in completing the sale.

Management believes that, along with the sale of this real estate, available
cash and cash equivalents, cash flows from operations and available borrowings
under the Company's bank credit facility will be sufficient to fund the
Company's operating activities, investing activities and debt maturities through
March 2004. It is management's intent to refinance the Company's bank credit
facility prior to its maturity in March 2004. However, there can be no assurance
that management's plans will be successfully executed.

On July 30, 2002, the Company completed the sale of all of the outstanding stock
of its Motor Products subsidiaries, manufacturers of fractional and integral
horsepower motors. The purchase price paid by Allied (F.K.A. Hathaway Motion
Control Corporation) (the "Buyer") for the outstanding stock of Motor Products
consisted of $11.5 million in cash and a promissory note in the principal amount
of $300,000, paid six months after closing. Net cash proceeds of $10.7 million
from the sale, after payment of certain transaction costs, were utilized to
reduce outstanding bank debt. The principal amount of the note was also utilized
to reduce outstanding bank debt. As a result of this transaction, the Company
presently has only one operating subsidiary, Stature.

The Company's historical Other segment included Dura-Bond Bearing Company
("Dura-Bond") and Cramer Company ("Cramer"). Dura-Bond manufactured replacement
camshaft bearings, valve seats and shims for the automotive after-market. In
November 2000, the Company completed the sale of the stock of Dura-Bond to a
joint venture formed by Melling Tool Company of Jackson, Michigan and Engine
Power Components, Inc. of Grand Haven, Michigan (the "Joint Venture"). The Joint
Venture acquired the stock of Dura-Bond for approximately $4.6 million, plus the
assumption of approximately $5.0 million of debt. Based upon the terms of the
sale, the Company recorded, in the fourth quarter of fiscal 2000, a pretax
charge of $1.2 million to adjust the carrying value of Dura-Bond's assets to
their estimated fair value.

Cramer manufactured timers and subfractional horsepower motors for use in
commercial applications. On December 4, 2000, the Company completed the sale of
the assets associated with the timer and switch line of Cramer to Capewell
Components, LLC of South Windsor, Connecticut for cash of approximately $2.0
million, plus the assumption of approximately $400,000 in liabilities. In
connection with the sale of the timer and switch line and the anticipated sale
of the remainder of the operating assets (excluding the real estate) of Cramer,
the Company recorded, in the fourth quarter of fiscal 2000, a pretax charge of
$1.6 million to adjust the carrying value for the Cramer assets to their
estimated fair value, based upon an estimated sales price of the assets. Such
charge represented a reduction in goodwill of $400,000 and the write-down of
other non-current assets of $1.2 million. In September 2001, the Company sold
substantially all of the remaining operating assets (excluding the real estate)
of Cramer to the Chestnut Group of Wayne, Pennsylvania for cash proceeds of
$565,000, plus the assumption of $317,000 in liabilities. In connection with
that sale, the Company recorded a further adjustment to the carrying value of
the Cramer assets resulting in a pre-tax charge of $1.1 million, recorded in the
third fiscal quarter of 2001. The Company recorded a pretax charge of $270,000
in the fourth quarter of 2002 to adjust the carrying value for the Cramer real
estate to the estimated fair value, based upon an estimated sales price of the
assets and was included in "Write-down of net assets held for sale" in the
consolidated statements of operations for fiscal 2002.

                                      -2-
<PAGE>

The Company's historical Coils segment manufactured heat exchange coils and
included Astro Air Coils, Inc. ("Astro Air"), Snowmax, Inc. ("Snowmax"), and
Astro Air UK, Limited ("Astro UK"). Astro UK was a joint venture with the
Company's largest customer, Bergstrom, Inc. In May 2001, the sale of
substantially all of the assets of Astro UK to ACR Heat Transfer Limited of
Norfolk, England for cash of (pound)450,000 (approximately $643,000) was
completed. Based upon the terms of the sale, the Company recorded, in the second
quarter of 2001, a pretax charge of $700,000 to adjust the carrying value of
Astro UK's assets to their estimated realizable value. No additional gain or
loss was recorded upon completion of the sale. Proceeds from the sale were
utilized to reduce the Company's bank credit facility.

In October 2001, the Company completed the sale of the assets of the remaining
businesses in its Coils segment, Astro Air and Snowmax (together, the "Coils
Subsidiaries"). The sale of the Coils Subsidiaries was effectuated pursuant to
an Asset Purchase Agreement, dated as of October 26, 2001, by and among the
Coils Subsidiaries, Astro Air, Inc. (the "Buyer"), and Rex Dacus, the manager of
the Coils segment and the person from whom the Company acquired the assets and
operations of Astro Air Coils, Inc. in 1998. Proceeds from the sale of $5.6
million were utilized to reduce the Company's bank credit facility. The Buyer
also assumed approximately $3.7 million of liabilities. The Company recorded a
pretax charge of approximately $9.3 million related to this sale in the fourth
quarter of 2001. The Company recorded a charge of $520,000 net of taxes in the
fourth quarter of 2002 to adjust the carrying value for the real estate assets
to the estimated fair value, based upon an estimated sales price of the assets.
The Company has reported the results of the Coils segment as discontinued
operations for all periods presented in the consolidated statements of
operations.

In January 2001, the Company completed the sale of stock of Sooner Trailer to
the McCasland Investment Group and certain members of Sooner Trailer's
management for cash of $11.5 million, subject to certain post-closing
adjustments based on changes in working capital, plus the assumption of debt of
approximately $670,000. In May 2001, the Company received approximately $2.0
million related to such post-closing adjustments. In connection with the
anticipated sale, the Company recognized a loss of $8.6 million in the fourth
quarter of 2000 to adjust the carrying value of Sooner Trailer's assets to their
estimated fair value based on an expected sales price. No additional gain or
loss was recorded upon completion of the sale. Sooner Trailer had been included
in the Company's historical Agricultural Equipment segment (formerly known as
the Trailers and Agricultural Equipment segment). Accordingly, the Company has
reported the results of Sooner Trailer as discontinued operations for all
periods presented in the consolidated statements of operations.

Owosso Corporation (the "Company") was incorporated in Pennsylvania and
organized as a holding company in 1994. The holding company structure separated
the administrative and financing activities of the Company from the activities
of its operating subsidiaries.

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 is seasonal, nor was any
historical segment's seasonal.



                                      -3-
<PAGE>

A significant portion of the Company's sales are concentrated among a small
number of customers. Sales to the two largest customers represented
approximately 26%, 14% and 15% of total sales from continuing operations for
2003, 2002 and 2001, respectively. Subsequent to October 26, 2003, the Company
is no longer selling to the second largest customer that accounted for 9% of its
sales in 2003.

The Company's backlog of unfilled orders for the historical Motors segment was
$6.4 million as of December 12, 2003, as compared to $5.5 million as of December
12, 2002.

The Company's business is 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 170 employees and 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 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 applicable 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 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.

Executive officer(s) of the registrant

The sole executive officer of the Company is:

Name                          Age        Positions
----                          ---        ---------
George B. Lemmon, Jr.          42        President, Chief Executive
                                         Officer, and Chairman of the Board


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 its inception in March 1994. Mr. Lemmon has been
acting as the Company's principle accounting officer and principle financial
officer since February 2002. In April 2003, Mr. Lemmon was elected Chairman of
the Board. As an officer of the Company Mr. Lemmon serves until his successor is
elected and qualifies. Prior to joining the Company, Mr. Lemmon was the CFO of
Brynavon Group, a private equity firm that contributed part of its investment
portfolio to the Company in exchange for shares during the initial public
offering of the Company in October of 1994.

                                      -4-
<PAGE>

Item 2.  Properties.

The Company's principal executive offices and manufacturing, warehousing and
distribution facility are located at 22543 Fisher Road, Watertown, New York.
This facility consists of approximately 112,000 square feet, of which 107,800
square feet are dedicated to manufacturing, warehousing and distribution, with
the remaining portion dedicated to office space. This facility is utilized by
Stature, the Company's sole remaining business, and is subject to a mortgage
securing a $4.6 million industrial revenue bond financing.

The Company's former principal executive offices, located at 2200 Renaissance
Boulevard, King of Prussia, Pennsylvania, were under lease to expire in
September 2006 with a base rent of approximately $305,000 per year. The Company
successfully negotiated a lease surrender agreement in December 2003 at a cost
of $280,000 and vacated the office space in January 2004. The Company paid
$89,000 covering rent through March 2004. The landlord also has the right to
negotiate an existing letter of credit held by the landlord as security under
the lease and retain the proceeds therefrom in the amount of $191,000 on the
termination date.

The Company continues to own a 90,000 square foot manufacturing facility located
in Kilgore, Texas, which housed the Company's former Snowmax subsidiary. During
fiscal 2004, the Company intends to dispose of this facility. An entity
controlled by Mr. Lemmon, the Company's President, CEO and Chairman, has
expressed interest in purchasing such real estate, however no binding agreement
has been entered into and any such sale will be subject to the approval of the
Company's audit committee. Based on current negotiations, the Company estimates
proceeds of approximately $312,000 if successful in completing the sale.

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 are 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 and Issuer Purchases of Equity Securities.

In July 2003, the Company's common stock was de-listed from the NASDAQ SmallCap
Market. At that time, the Company's common stock began trading on the NASD's
electronic over-the-counter quotation system, the Over-the-Counter Bulletin
Board (the "OTCBB").

The following table sets forth, for all fiscal quarters in fiscal 2002 and for
the first through third fiscal quarters of fiscal 2003, the high and low sales
prices per share for the Company's common stock on the NASDAQ SmallCap Market,
and for the fourth quarter of fiscal 2003 sets forth the high and low bid prices
per share for the Company's common stock on the OTCBB.

 Fiscal year ended October 28, 2003:            High                  Low
                                               ------                -----
          First Quarter                        $0.660                $0.230

          Second Quarter                       $0.410                $0.200

          Third Quarter                        $0.580                $0.040

          Fourth Quarter                       $0.200                $0.050

 Fiscal year ended October 27, 2002:            High                  Low
                                               ------                -----
          First Quarter                        $0.550                $0.100

          Second Quarter                       $0.780                $0.210

          Third Quarter                        $0.850                $0.290

          Fourth Quarter                       $0.805                $0.450

As of January 20, 2004, there were 114 holders of record of the Company's common
stock and an estimated 450 beneficial owners of the common stock.

Effective for the second quarter of 2000 the Company modified certain covenants
included in its bank credit facility. In connection with such modifications, the
Company was, and continues to be, prohibited from making common stock dividend
payments subsequent to August 28, 2000. Further modifications to the Company's
bank credit facility in February 2001 resulted in the Company also being
prohibited from making future preferred stock dividend payments and from
purchasing the Company's stock.


                                      -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, has been restated to reflect
the Coils segment and Agricultural Equipment as discontinued operations and
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>

                                                                    Fiscal Year Ended
                                                 -------------------------------------------------------------
                                                  Oct. 26,     Oct. 27,    Oct. 28,      Oct. 29,    Oct. 31,
                                                    2003       2002(2)       2001         2000        1999(1)
                                                 ----------  -----------   ---------     ---------  ----------
                                                             (in thousands, except share amounts)
<S>                                                <C>         <C>          <C>          <C>          <C>
STATEMENT OF OPERATIONS DATA:
Net sales                                          $17,715     $36,901      $54,326      $75,204      $84,214
Cost of products sold                               14,374      31,242       43,897       59,429       65,009
                                                  --------    --------     --------     --------     --------
Gross profit                                         3,341       5,659       10,429       15,775       19,205
Selling, general and administrative
         expenses                                    3,881       8,224       11,183       13,240       16,305
Goodwill impairment expense                          5,331          --           --           --           --
Write-down of net assets held for sale                  --         381        1,100        2,800           --
                                                  --------    --------     --------     --------     --------
Income (loss) from operations                       (5,871)     (2,946)      (1,854)        (265)       2,900
Interest expense                                       708       1,588        4,335        5,069        4,947
Gain on sale of business                                --      (6,055)          --           --           --
Other (income) expense                                (122)         --         (110)         530         (444)
                                                  --------    --------     --------     --------     --------

Income (loss) from continuing
operations        before income taxes               (6,457)      1,521       (6,079)      (5,864)      (1,603)
Income tax benefit                                    (604)     (4,197)      (1,968)      (1,082)        (658)
                                                  --------    --------     --------     --------     --------
Income (loss) from continuing operations            (5,853)      5,718       (4,111)      (4,782)        (945)

Discontinued operations:
     Income (loss) from
        discontinued
        operations                                      --        (520)      (2,073)        (290)       2,722


     Loss on disposal of discontinued
          operations                                    --          --      (10,040)      (8,600)          --
Cumulative effect of accounting change                  --          --          (67)          --           --
                                                  --------    --------     --------     --------     --------
Net income (loss)                                   (5,853)      5,198      (16,291)     (13,672)       1,777
Dividends and accretion on preferred stock          (1,370)     (1,349)      (1,316)      (1,121)      (1,095)
                                                  --------    --------     --------     --------     --------

Net income (loss) available to common
          Shareholders                             $(7,223)     $3,849     $(17,607)    $(14,793)        $682
                                                  ========      ======    =========    =========         ====

Basic and diluted income (loss) available
        for common shareholders from
        continuing operations per  share             (1.24)      $0.75       $(0.93)      $(1.01)      $(0.35)

Weighted average number of common
            shares outstanding (basic)               5,824       5,824        5,866        5,844        5,826

</TABLE>


                                      -7-
<PAGE>

<TABLE>
<CAPTION>
                                                                   Fiscal Year Ended
                                             ------------------------------------------------------------
                                                Oct. 26,   Oct.27,      Oct. 28,     Oct. 29,    Oct. 31,
                                                 2003     2002(2)         2001         2000      1999(1)
                                                 ----     -------         ----         -----     -------
                                                                    (in thousands)
<S>                                              <C>        <C>           <C>        <C>          <C>
OTHER DATA:
Capital expenditures                             $171       $ 132         $757       $1,195       $3,789
Depreciation and amortization                   1,432       3,840        3,867        5,025        4,984

</TABLE>

<TABLE>
<CAPTION>

                                                                  Fiscal Year Ended
                                             ------------------------------------------------------------
                                               Oct. 26,   Oct. 27,     Oct. 28,     Oct. 29,     Oct. 31,
                                                 2003     2002(2)        2001         2000       1999(1)
                                                 ----     -------         ----         ----      -------
<S>                                              <C>        <C>           <C>        <C>          <C>
BALANCE SHEET DATA:
Total assets                                  $18,380     $27,970      $46,394      $81,163     $105,345
Total short-term and long-term obligations     11,096      13,545       29,604       49,968       54,222
Stockholders' (deficit) equity                 (2,971)      4,252          403       18,432       33,984

</TABLE>


--------------------------------------------------------------------------------

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

(2)      The results include Motor Products which was sold July, 30, 2002. See
         "Item 1. Business." of this Form 10-K for further information on the
         sale of Motor Products.



                                      -8-
<PAGE>

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

General

Owosso Corporation (the "Company") was incorporated in Pennsylvania and
organized as a holding company in 1994. The holding company structure separated
the administrative and financing activities of the Company from the activities
of its operating subsidiaries.

As of July 30, 2002, the Company had one operating subsidiary, Stature Electric,
Inc. ("Stature"), representing the Company's historical "Motors segment."
Stature's component products are sold throughout North America and in Europe,
primarily to original equipment manufacturers who use them in their end
products.

On February 10, 2004, the Company reached a definitive agreement with Allied
Motion Control Technologies, Inc. ("Allied") for the acquisition by Allied of
all the shares of the Company on the following terms: .068 shares of common
stock of Allied for each share of common stock of the Company, and a combination
of .127 shares of Allied common stock, a warrant to purchase 0.28 shares of
Allied common stock and cash of $0.9333 for each share outstanding of the
Company's Class A convertible preferred stock. Based on the Company's 5,824,306
common shares and 1,071,428 preferred shares issued, the aggregate amount to
common shareholders will be approximately $1.75 million, and the aggregate
amount to preferred shareholders will be approximately $1.6 million. In
addition, Allied has agreed to repay and assume up to $10.6 million of the
Company's outstanding debt, and the Company's preferred shareholders may be
entitled to Allied subordinated promissory notes with an aggregate principal
amount of up to $500,000 based on the 2004 gross revenue of Stature.
Accordingly, the transaction has an aggregate value of approximately $14
million, exclusive of any value attributable to the warrants and Allied notes.
The board of directors of each Company has approved the transaction. The
consummation of the transaction is subject to the approval of the Company's
shareholders and other customary conditions. The transaction is expected to be
completed prior to July 1, 2004.

In 1998, the Company formulated a long-term plan to concentrate on value-added
components for industry. In connection with its implementation of that plan, the
Company began a series of divestitures beginning with the sale of the four
businesses comprising its former Agricultural Equipment segment. The sale of the
last of those businesses was completed in January 2001 with the divestiture of
Sooner Trailer. During that time, however, the Company experienced a significant
downturn in its operating results and at the end of fiscal 2000 was out of
compliance with covenants under its bank credit facility.

Throughout fiscal 2001, the Company remained out of compliance with financial
covenants, including maintenance of minimum operating profit, under its bank
credit facility. As a result, the Company and its lenders entered into a series
of amendments to the facility during fiscal 2001, 2002 and 2003, and in each
case the Company's lenders agreed to forebear from exercising their rights and
remedies under the facility. In order to meet the lenders' requirements for
reduced outstanding balances and to secure the lenders' agreement to forebear,
the Company engaged in a series of divestitures of its operating subsidiaries,
concluding with the sale of its Motor Products subsidiaries, Motor Products
Owosso Corporation and Motor Products Ohio Corporation in July of 2002. As
disclosed under Note 9 "Long-term Debt," the amendments to the bank credit
facility modified the interest rates charged, called for reductions in the
outstanding balance during calendar 2001, 2002, and 2003, added additional
reporting requirements, suspended payments of principal and interest on
subordinated debt, prohibited the payment of preferred or common dividends,
prohibited the purchase of the Company's stock and added a covenant requiring
the maintenance of minimum operating profit. In December 2003 (fiscal 2004), the
Company entered into a further amendment to the facility, which extended the
maturity date to March 31, 2004.

                                      -9-
<PAGE>

During fiscal 2004, the Company intends to dispose of the real estate at the
Company's former Snowmax Corporation subsidiary. An entity controlled by Mr.
Lemmon, the Company's President and CEO, has expressed interest in purchasing
such real estate, however no binding agreement has been entered into and any
such sale will be subject to the approval of the Company's audit committee.
Based on current negotiations, the Company estimates proceeds of approximately
$312,000 if successful in completing the sale.

Management believes that, along with the sale of the real estate, available cash
and cash equivalents, cash flows from operations and available borrowings under
the Company's bank credit facility will be sufficient to fund the Company's
operating activities, investing activities and debt maturities through March
2004. It is management's intent to refinance the Company's bank credit facility
prior to its maturity in March 2004. However, there can be no assurance that
management's plans will be successfully executed.

In July 2002, the Company completed the sale of all of the outstanding stock of
its Motor Products subsidiaries, manufacturers of fractional and integral
horsepower motors. The purchase price paid by Allied Motion Technologies, Inc.
F.K.A. Hathaway Motion Control Corporation (the "Buyer") for the outstanding
stock of Motor Products consisted of $11.5 million in cash and a promissory note
in the principal amount of $300,000, paid six months after closing. Net cash
proceeds of $10.7 million from the sale, after payment of certain transaction
costs, were utilized to reduce outstanding bank debt. The principal amount of
the note was also utilized to reduce outstanding bank debt. As a result of this
transaction, the Company presently has only one operating subsidiary, Stature.

The Company's historical Other segment included Cramer. Cramer manufactured
timers and subfractional horsepower motors for use in commercial applications.
On December 4, 2000, the Company completed the sale of the assets associated
with the timer and switch line of Cramer to Capewell Components, LLC of South
Windsor, Connecticut for cash of approximately $2.0 million, plus the assumption
of approximately $400,000 in liabilities. In connection with the sale of the
timer and switch line and the anticipated sale of the remainder of the operating
assets (excluding the real estate) of Cramer, the Company recorded, in the
fourth quarter of fiscal 2000, a pretax charge of $1.6 million to adjust the
carrying value for the Cramer assets to their estimated fair value, based upon
an estimated sales price of the assets. Such charge represented a reduction in
goodwill of $400,000 and the write-down of other non-current assets of $1.2
million and was included in "Write-down of net assets held for sale" in the
consolidated statements of operations for fiscal 2000. In September 2001, the
Company sold substantially all of the remaining operating assets (excluding the
real estate) of Cramer to the Chestnut Group of Wayne, Pennsylvania for cash
proceeds of $565,000, plus the assumption of $317,000 in liabilities. In
connection with that sale, the Company recorded a further adjustment to the
carrying value of the Cramer assets resulting in a pre-tax charge of $1.1
million, recorded in the third fiscal quarter of 2001. The Company recorded a
pretax charge of $270,000 in the fourth quarter of 2002 to adjust the carrying
value for the Cramer real estate to the estimated fair value, based upon an
estimated sales price of the assets and was included in "Write-down of net
assets held for sale" in the consolidated statements of operations for fiscal
2002.

The Company's historical Coils segment manufactured heat exchange coils and
included Astro Air Coils, Snowmax and Astro Air UK. Astro UK was a joint venture
with the Company's largest customer, Bergstrom, Inc. In May 2001, the sale of
substantially all of the assets of Astro UK to ACR Heat Transfer Limited of
Norfolk, England for cash of (pound)450,000 (approximately $643,000) was
completed. Based upon the terms of the sale, the Company recorded, in the second
quarter of 2001, a pretax charge of $700,000 to adjust the carrying value of
Astro UK's assets to their estimated realizable value. No additional gain or
loss was recorded upon completion of the sale. Proceeds from the sale were
utilized to reduce the Company's bank credit facility.

                                      -10-
<PAGE>

In October 2001, the Company completed the sale of the assets of the remaining
Coils Subsidiaries. The sale of the Coils Subsidiaries was effectuated pursuant
to an Asset Purchase Agreement, dated as of October 26, 2001, by and among the
Coils Subsidiaries, Astro Air, Inc. (the "Buyer"), and Rex Dacus, the manager of
the Coils segment and the person from whom the Company acquired the assets and
operations of Astro Air Coils, Inc. in 1998. Proceeds from the sale of $5.6
million were utilized to reduce the Company's bank credit facility. The Buyer
also assumed approximately $3.7 million of liabilities. The Company recorded a
pretax charge of $9.3 million related to this sale in the fourth quarter of
2001. The Company recorded a charge of $520,000 net of taxes in the fourth
quarter of 2002 to adjust the carrying value for the real estate assets to the
estimated fair value, based upon an estimated sales price of the assets.

Critical Accounting Policies

         The Securities and Exchange Commission ("SEC") recently issued
disclosure guidance for critical accounting policies. The SEC defines critical
accounting policies as those that require application of management's most
difficult, subjective or complex judgments, often as a result of the need to
make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods.

         The Company's significant accounting policies are described in Note 3
to the Consolidated Financial Statements. Not all of these significant
accounting policies require management to make difficult, subjective or complex
judgments or estimates. However, the following accounting policies could be
deemed to be critical by the SEC.

         Use of estimates. In preparing the consolidated financial statements we
use estimates in determining the economic useful lives of our assets, asset
impairments, obligations under our employee benefit plans, provisions for
doubtful accounts, tax valuation allowances and various other recorded or
disclosed amounts. Estimates require us to use our judgment. While we believe
that our estimates for these matters are reasonable, if the actual amount is
significantly different than the estimated amount, our assets, liabilities or
results of operations may be overstated or understated.

         Contingencies. We account for contingencies in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 5, "Accounting for
Contingencies." SFAS No. 5 requires that we record estimated loss from a loss
contingency when information available prior to issuance of the consolidated
financial statements indicates that it is probable that an asset has been
impaired or liability has been incurred at the date of the consolidated
financial statements and the amount of the loss can be reasonable estimated.
Accounting for contingencies such as environmental, legal and income tax matters
requires us to use our judgment. While we believe that our accruals for these
matters are adequate, if the actual loss from a loss contingency is
significantly different from the estimated loss, our results of operations may
be overstated or understated.

         Impairments of Long-Lived Assets. We record impairment losses on
long-lived assets used in operations, exclusive of goodwill, when events and
circumstances indicate that the assets might be impaired and the undiscounted
future cash flows estimated to be generated by those assets are less than the
carrying amount of those assets. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of the asset to future net cash
flows expected to be generated by the asset. If the asset is considered to be
impaired, the impairment to be recognized is measured by the amount by which the
carrying amount of the asset exceeds the fair value of the asset. Assets to be
disposed are reported at the lower of the carrying amount or fair value, less
cost to sell. If the actual value is significantly less than the estimated
value, our assets may be overstated.



                                      -11-
<PAGE>

         Inventories. We record the value of inventory at the lower of cost or
market, and periodically review the book value of products and product lines to
determine if they are properly valued. We also periodically review the
composition of our inventories and seek to identify slow-moving inventories. In
connection with those reviews, we seek to identify products that may not be
properly valued and assess the ability to dispose of them at a price greater
than cost. If it is determined that the cost is less than market value, then
cost is used for inventory valuation. If a write down to current market value is
necessary, the market value cannot be greater than the net realizable value,
sometimes called the ceiling (defined as selling price less cost to complete and
dispose), and cannot be lower than net realizable value less a normal profit
margin, sometimes called the floor. If the actual value is significantly less
than the recorded value, our assets may be overstated.

         Goodwill. On an annual basis, we test goodwill for impairment unless an
event occurs or circumstances change that would require us to test goodwill for
impairment between our annual tests. An impairment expense is recognized
immediately if such testing indicates that goodwill is impaired.

Results of Operations

The Company's fiscal year includes 52 or 53 weeks, ending on the last Sunday in
October. Fiscal years 2003, 2002 and 2001 consisted of 52 weeks.

Year ended October 26, 2003 compared to year ended October 27, 2002

Net sales. Net sales for 2003 were $17.7 million, as compared to net sales of
$36.9 million in 2001, a decrease of 52.0%. These results include the effects of
the disposition of Motor Products in July 2002, the loss of the Company's second
biggest customer, the effects of the general economic slowdown on the Company's
primary markets, particularly the recreational vehicle markets, as well as the
effects of increased Pacific Rim competition in the healthcare market.

Loss from operations. For 2003, the Company recorded a loss from operations of
$5.9 million, as compared to a loss from operations of $2.9 million in 2002.
These results include a $5.3 million goodwill impairment expense for 2003.

Interest expense. Interest expense decreased to $708,000 for 2003 from $1.6
million in the prior year, primarily as a result of lower debt levels. The
current period includes a credit of $110,000 resulting from a decrease in the
fair market value of the Company's interest rate swap agreement that expired
October 1, 2003.

Other (income) expense. For 2003, the Company recorded other income of $122,000.
This was primarily the result of the Company negotiating a settlement with all
of the Cramer retirees covered by a post retirement benefit. As a result of the
settlement, Owosso paid out $76,000 and recognized a gain of $165,000.

Income tax expense (benefit). The Company recorded an income tax benefit of
$604,000 for 2003. The Company recorded an income tax benefit at an effective
rate of 9.4% for 2003.

Income (loss) from discontinued operations. For 2002, the Company recorded a
loss from discontinued operations, representing the remaining real estate asset
of the Coils segment, of $520,000 (net of income tax expense of $268,000). There
were no discontinued operations in 2003.

                                      -12-
<PAGE>

Net income (loss) available for common shareholders. Net loss available for
common shareholders was $7.2 million, or $1.24 per share, in 2003, as compared
to net income of $3.8 million, or $0.66 per share, in 2002. Income (loss)
available for common shareholders is calculated by subtracting dividends of
preferred stock of $1.4 million for 2003 and 1.3 million for 2002.

Year ended October 27, 2002 compared to year ended October 28, 2001

Net sales. Net sales for 2002 were $36.9 million, as compared to net sales of
$54.3 million in 2001, a decrease of 32.0%. Net sales from Motors, the Company's
only remaining segment decreased to $36.9 million in 2002, as compared to $51.4
million in 2001, a decrease of 28.2%. These results include the effects of the
disposition of Motor Products in July 2002, the effects of the general economic
slowdown on the Company's primary markets, particularly the heavy truck and
recreational vehicle markets, as well as the effects of increased Pacific Rim
competition in the healthcare market. These results also include the effect of
disposing of Cramer's operating assets (excluding the real estate) in 2001.
Sales attributed to Cramer were $2.9 million in 2001.

Loss from operations. For 2002, the Company recorded a loss from operations of
$2.9 million, as compared to a loss from operations of $1.9 million in 2001.
These results reflect decreased sales volumes and decreased margins caused by
price pressures and changes in product mix, as well as the under absorption of
overhead costs, partially offset by a reduction in selling, general and
administrative expenses.

The 2002 fiscal year loss includes a charge of $381,000, as compared to $1.1
million in 2001 for the write-down of net assets held for sale, related to the
Cramer real estate asset.

Interest expense. Interest expense decreased to $1.6 million for 2002 from $4.3
million in the prior year, primarily as a result of lower debt levels. The 2002
fiscal year includes a credit of $589,000 resulting from a decrease in the fair
market value of the Company's interest rate swap agreements as a result of
decreases in interest rates.

Other (income) expense. For 2001, other (income) expense primarily represents
the partial recovery of a note received in connection with the sale of certain
Cramer assets in 1999 (the "Cramer Note Receivable").

Income tax expense (benefit). The Company recorded an income tax benefit of $4.5
million for 2002 of which $4.3 million was as a result of recent changes in
federal tax laws, which allow the carryback of net operating losses for five
years. The Company recorded an income tax expense at an effective rate of 6.4%
for 2002, excluding the $4.3 million tax benefit, as compared to an effective
tax rate of 32.4% in the prior year.

Income (loss) from discontinued operations. For 2002, the Company recorded a
loss from discontinued operations, representing the remaining real estate asset
of the Coils segment, of $520,000 (net of income tax expense of $268,000). For
2001, the Company recorded a loss from discontinued operations, representing the
operations of the Coils segment, of $12.1 million (net of income tax expense of
$514,000) on revenues of $35.6 million. The fiscal 2001 year results reflect a
pre-tax loss on the sale of the Coils segment of $10.0 million.

Net income (loss) available for common shareholders. Net income available for
common shareholders was $3.8 million, or $.66 per share, in 2002, as compared to
a net loss of $17.6 million, or $3.00 per share, in 2001. Net income (loss)
available for common shareholders is calculated by subtracting dividends of
preferred stock of $1.3 million for both 2002 and 2001.

                                      -13-
<PAGE>

Liquidity and Capital Resources

The following discussion does not consider the definitive agreement with Allied
Motion Control Technologies, Inc. for the acquisition of the Company. Refer to
Note 19 of the consolidated financial statements.

At October 26, 2003, cash and cash equivalents were $309,000. The Company had
negative working capital at October 26, 2003 of $9.5 million, as compared to
negative working capital of $5.4 million at October 27, 2002. Net cash provided
by operating activities was $2.0 million for 2003, as compared to $5.7 million
in the prior year. Cash from operations in the prior year includes operations of
the Motor Products subsidiaries, some of which were sold in the prior year.

The Company currently plans to invest approximately $280,000 in capital
expenditures during fiscal 2004. Management anticipates funding such capital
expenditures with cash from operations and proceeds from the Company's bank
credit facility.

Net cash used in financing activities included net repayments of $2.4 million
under the Company's revolving credit agreement, and debt repayments of $49,000.

At October 26, 2003, $4.5 million was outstanding under the Company's bank
credit facility. On January 22, 1999, the Company entered into a new bank credit
facility with the Company's two primary banks, originally expiring in December
2002. The agreement included 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 not in compliance
with such covenants at October 29, 2000. In February 2001, the Company entered
into an amendment to its bank credit facility agreement, wherein the lenders
agreed to forbear from exercising their rights and remedies under the facility
in connection with such non-compliance until February 15, 2002, at which time
the facility was to mature. The amendment to the bank credit facility, which was
further amended in February 2001, called for reductions in the outstanding
balance during calendar 2001 and modified the interest rates charged. The
amendment required additional collateral, effectively all the assets of the
Company, and reporting requirements, as well as the addition of a covenant
requiring minimum operating profits. The amendment also required the suspension
of principal and interest payments on subordinated debt, with an aggregate
outstanding balance of $2.1 million as of October 28, 2001. Furthermore, the
amendment to the facility prohibits the payment of preferred or common stock
dividends and prohibited the purchase of the Company's stock. Beginning in
August 2001, the Company was out of compliance with its minimum operating profit
covenant. In February 2002, the Company entered into a further amendment to the
facility, which extended the maturity date to December 31, 2002. That amendment
called for further reductions in the outstanding balance based on expected
future asset sales, increases the interest rate charged and requires minimum
EBITDA. For further information see "Item 7. General." of this Form 10-K. In
December 2002, the Company entered into a further amendment to the facility,
which extends the maturity date to December 31, 2003. This amendment calls for
further reductions in outstanding balance based on expected future asset sales
and cash flow generated from operations and requires minimum EBITDA. In April
2003, the Company entered into a further amendment to the facility, which
amended the financial covenant. In September 2003, the Company entered into a
further amendment to the facility, which waived a mandatory paydown. In December
2003, the Company entered into a further amendment to the facility, which
extended the maturity date to March 31, 2004. Borrowings under the facility are
charged interest at the Prime Rate plus 2.75% (6.75% at October 26, 2003).



                                      -14-
<PAGE>

Contractual Obligations

The following table summarizes the Company's future obligations, based on
original maturities, under contracts as of October 26, 2003:

<TABLE>
<CAPTION>

Contractual Obligations                   2004        2005        2006       2007        2008      Thereafter     Total
-----------------------                   ----        ----        ----       ----        ----      ----------     -----
<S>                                         <C>        <C>         <C>        <C>         <C>          <C>       <C>
Revolving Credit Agreement              $ 4,500,000   $      -   $       -   $      -   $       -    $       -   $ 4,500,000
Term Loans                                  288,000     88,000      93,000     81,000           -            -       550,000
Industrial Revenue Bonds                    600,000    600,000     600,000    900,000     900,000      950,000     4,550,000
Subordinated Promissory Notes             1,368,000    128,000           -          -           -            -     1,496,000
                                     ----------------------------------------------------------------------------------------
                               Total    $ 6,756,000   $816,000   $ 693,000   $981,000   $ 900,000    $ 950,000  $ 11,096,000
                                     ========================================================================================
</TABLE>


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 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.

In connection with the Company's divestitures of its operating businesses over
the past four years, it has agreed to indemnify buyers from and against certain
known and unknown environmental liabilities. In addition, the Company may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, in, under or discharged from it's current or previously owned real property
under applicable federal, state and local environmental laws, ordinances and
regulations.

A subsidiary of 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 Old Saybrook facility was previously
located and 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.

Recently Issued Financial Accounting Standards

In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No.145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections". There was no effect on the Company's financial statements from the
adaptation of SFAS No. 145 in fiscal 2003.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Others" ("FIN 45"). FIN 45 requires that a liability be recorded on the
guarantor's balance sheet upon issuance of a guarantee. In addition, FIN 45
requires disclosures about the guarantees that an entity has issued. The
Company's adoption of FIN 45 did not have an effect on its consolidated
financial statements in fiscal 2003.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46"). FIN 46
requires certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for the
Company for the interim period ended April 30, 2004, or earlier in certain
instances. Such instances did not have a material effect on the Company's
consolidated financial statements in fiscal 2003.

                                      -15-
<PAGE>

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement No. 133 on
Derivative Instruments and Hedging Activities." SFAS No. 149 amends and
clarifies financial accounting and reporting for derivative instruments and for
hedging activities under SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities." This Statement clarifies under what circumstances a
contract with an initial net investment meets the characteristic of a derivative
discussed in SFAS No. 133, clarifies when a derivative contains a financing
component, amends the definition of an underlying to conform it to language used
in FIN 45 and amends certain other existing pronouncements. These changes are
intended to result in more consistent reporting of contracts as either
derivatives or hybrid instruments. The Statement is generally effective for
contracts entered into or modified after, and for hedging relationships
designated after, June 30, 2003. The Company's adoption of SFAS No. 149 did not
have a material effect on its consolidated financial statements in fiscal 2003.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
improves the accounting for certain financial instruments that, under previous
guidance, issuers could account for as equity. The new Statement requires that
those instruments be classified as liabilities in the balance sheet. This
Statement is effective for mandatory redeemable instruments entered into or
modified after May 31, 2003 and for all other instruments for interim periods
beginning after June 15, 2003. The Company's adoption of SFAS No. 150 did not
have a material effect on its consolidated financial statements in fiscal 2003.

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
the "Safe Harbor" 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 continued liquidity is dependent upon its ability to
          achieve levels of revenue necessary to support the Company's cost
          structure, its ability to maintain adequate financing, its ability to
          maintain compliance with debt covenants, and its ability to generate
          sufficient cash flows to meets its obligations on a timely basis.

     o    In July 2003, the Company's common stock was delisted from the NASDAQ
          SmallCap Market and began trading on the NASD's Over-the-Counter
          Bulletin Board ("OTCBB"). As a result, the price of the Company's
          common stock may be subject to greater volatility and reduced
          liquidity. In addition, among other challenges, the Company may have
          difficulties in obtaining future financing.

     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.

                                      -16-
<PAGE>

     o    Metal prices, particularly of 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 influence of foreign competition from low-cost areas of the world
          may affect results of operations.

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

     o    The Company's results can be affected by changes in manufacturing
          processes and techniques.

     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 has divested all but one of its operating businesses over
          the past four years. The Company remains responsible for certain third
          party liabilities in connection with these transactions, including
          product liabilities, environmental liabilities and taxes, and has
          obligations to indemnify the buyers against certain matters arising
          out of the transactions. Although the Company maintains general
          liability insurance coverage, including coverage for errors and
          omissions, there can be no assurance that such coverage will continue
          to be available on reasonable terms or will be available in sufficient
          amounts to cover one or more large claims, or that the insurer(s) will
          not disclaim coverage as to any future claim. The successful assertion
          of one or more large claims against the Company that are uninsured,
          exceed available insurance coverage or result in changes to the
          Company's insurance policies, including premium increases or the
          imposition of a large deductible or co-insurance requirements, could
          adversely affect the Company's business, results of operations and
          financial condition.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

The Company uses a bank 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 the
prime rate.

                                      -17-
<PAGE>

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
original maturity for the Company's bank credit facility, industrial revenue
bonds and term loans in effect at October 26, 2003. Fair values included herein
have been determined based upon rates currently available to the Company for
debt with similar terms and the original maturities. Note 9 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
                                 2004      2005      2006      2007      2008  Thereafter  at Maturity  10/26/2003
                                 ----      ----      ----      ----      ----  ----------  -----------  ----------
<S>                           <C>         <C>         <C>       <C>       <C>         <C>      <C>         <C>
Debt:
    Fixed rate                $ 1,656     $ 216       $ 93      $ 81      $ -         $ -      $ 2,046     $ 2,046
    Average interest rate        8.9%      6.4%       5.0%      5.0%
    Variable rate              $5,100     $ 600       $600      $900      $900        $950     $ 9,050     $ 9,050
    Average interest rate        6.1%      1.1%       1.1%      1.1%      1.1%        1.1%

</TABLE>



Item 8.    Financial Statements and Supplementary Data.

The Company's consolidated financial statements and financial statement schedule
appear at pages F-1 through F-23, as set forth in Item 15.

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

None.

Item 9A.  Controls and Procedures.

The Company carried out an evaluation under the supervision and with the
participation of its internal review committee and its management, including its
Chief Executive Officer (the principal executive officer, principal financial
officer and principal accounting officer), of the effectiveness of the design
and operation of its disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered
by this Annual Report on Form 10-K (the "Evaluation Date"). Based on that
evaluation, the Chief Executive Officer (the principal executive officer,
principal financial officer and principal accounting officer), concluded that,
as of the Evaluation Date, the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
its Exchange Act reports was recorded, processed, summarized and reported within
the applicable time periods. There have been no significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of such evaluation.



                                      -18-
<PAGE>

                                    PART III

Item 10.   Directors and Executive Officers of the Registrant.

Information concerning (i) directors, appearing under the caption "Election of
Directors" in the Company's Proxy Statement (the "Proxy Statement") intended to
be filed with the Securities and Exchange Commission in connection with the 2004
Annual Meeting of Shareholders, (ii) information concerning executive officers,
appearing under the caption "Item 1. Business - Executive Officer(s) of the
Company" in Part I of this Form 10-K, and (iii) 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. To the extent
the Proxy Statement is not filed within the required time period, the Company
will amend this Item 10 as required by general instruction G(3) to this Form
10-K.

The Board of Directors has adopted a Code of Business Conduct and Ethics, which
has been filed as an exhibit to this Form 10-K.

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. To the extent the Proxy Statement is not filed within the required time
period, the Company will amend this Item 11 as required by general instruction
G(3) to this Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

The following table summarizes information about the Company's equity
compensation plans as of October 26, 2003. All outstanding awards relate to the
Company's common stock. For additional information about the Company's equity
compensation plans, see note 17 of Notes to Consolidated Financial Statements
under Item 8.
<TABLE>
<CAPTION>
                                                                                              Number of securities
                                                                                             remaining available for
                                        Number of securities                                  future issuance under
                                          to be issued upon         Weighted-average           equity compensation
                                             exercise of            exercise price of           plans (excluding
                                        outstanding options,      outstanding options,       securities reflected in
Plan category                            warrants and rights       warrants and rights             column (a))
---------------                        ----------------------    ----------------------    --------------------------
                                                 (a)                       (b)                         (c)
<S>                                            <C>                        <C>                        <C>
Equity  Compensation plans approved            229,000                    $5.38                      771,000
by security holders.................

Equity   compensation   plans   not
approved by security holders........              0                         0                           0
                                               -------                    -----                      -------
         Total .....................           229,000                    $5.38                      771,000
                                               =======                    =====                      =======
</TABLE>

The other information required under this Item is contained in the section
titled "Security Ownership of Certain Beneficial Owners and Management" in the
Proxy Statement and is incorporated herein by reference in response to this Item
12. To the extent the Proxy Statement is not filed within the required time
period, the Company will amend this Item 12 as required by general instruction
G(3) to this Form 10-K.

                                      -19-
<PAGE>

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. To the extent the Proxy Statement is not filed within the required time
period, the Company will amend this Item 13 as required by general instruction
G(3) to this Form 10-K.

Item 14.  Principal Accountant Fees and Services.

The information contained in the section titled "Audit Fees" of the Proxy
Statement is incorporated herein by reference in response to this Item 14. To
the extent the Proxy Statement is not filed within the required time period, the
Company will amend this Item 14 as required by general instruction G(3) to this
Form 10-K.



                                      -20-
<PAGE>


                                     PART IV

Item 15.  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)      Reports on Form 8-K

         No reports on Form 8-K were filed during the last quarter of the
Company's fiscal year.

(c)      Exhibits
<TABLE>
<CAPTION>

Exhibit No.                                 Description
-----------------------------------------------------------------------
<S>                   <C>
* 2.1                 Stock Purchase Agreement among Hathaway Motion Control Corporation, Motor Products -- Owosso
                      Corporation, Motor Products -- Ohio Corporation, and Owosso Corporation, dated July 8, 2002.
                      (Exhibit 2.1 to the Company's Current Report on Form 8-K dated July 30, 2002).

*2.2                  Asset Purchase Agreement among Rex Dacus, Dacus Properties, Inc., Astro Air Coils, Inc. and
                      Snowmax Incorporated, dated October 26, 2001 (Exhibit 2.1 to the Company's Current Report on Form
                      8-K, dated October 26, 2001).

*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                 Employment Agreement between Michael Koepke and Owosso Motor Group, Inc., dated September 30, 1996
                      (Exhibit 10.2 to the Company's Annual Report for the year ended October 27 2002).
*10.3                 Lease, dated March 21, 1995, between Motor Products - Ohio Corporation and William Berhard Realty Company
                      (Exhibit 10.44 to the 1995 Form 10-K).

</TABLE>


                                      -21-
<PAGE>

<TABLE>
<CAPTION>

Exhibit No.                                 Description
-----------------------------------------------------------------------
<S>                   <C>
 *10.4                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).

 *10.5                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).

 *10.6                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).

 *10.7                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).

 *10.8                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).

 *10.9                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).

 *10.10               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).

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

#*10.12               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).

 *10.13               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).

 *10.14               First Amendment to Amended and Restated Credit Agreement (Exhibit 10.1 to the Company's Quarterly
                      Report on Form 10-Q for the quarter ended July 30, 2000).

 *10.15               Stock Purchase and Redemption Agreement among Owosso Corporation, MEPC, L.L.C., the Landover
                      Company (d/b/a "Dura-Bond Bearing Company"), Engine Power Components, Inc., and Melling Tool Co.,
                      effective as of October 29, 2000. (Exhibit 10.2 to the Company's Current Report on Form 8-K, dated
                      January 24, 2001).

 *10.16               Asset Purchase Agreement by and between M.H. Rhodes, Inc. and Capewell Component Company, L.L.C.,
                      dated December 1, 2000 (Exhibit 10.35 to the Company's Annual Report on Form 10-K for the year
                      ended October 29, 2000).

 *10.17               Stock Purchase Agreement between Sooner Investment Manufacturing Company (purchaser) and Owosso
                      Corporation (seller), dated January 19, 2001 (Exhibit 10.1 to the Company's Current Report on Form
                      8-K, dated January 24, 2001).

 *10.18               Amendment Agreement by and among Owosso Corporation, its subsidiaries, Bank One and PNC Bank,
                      N.A., dated February 12, 2001 (Exhibit 10.37 to the Company's Annual Report on Form 10-K for the
                      year ended October 29, 2000).

 *10.19               Executive Salary Continuation Agreement between Owosso Corporation and John M. Morrash, dated
                      August 27, 2001 (Exhibit 10.19 to the Company's Annual Report for the year ended October 27 2002).

 *10.20               Seventh Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective May 9, 2001 (Exhibit 10.1 to the Company's
                      Quarterly Report on Form 10-Q for the quarter ended July 29, 2001).

 *10.21               Tenth Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective February 8, 2002 (Exhibit 10.21 to the
                      Company's Annual Report on Form 10-K for the year ended October 28, 2001).

</TABLE>


                                      -22-
<PAGE>

<TABLE>
<CAPTION>

Exhibit No.                                 Description
-----------------------------------------------------------------------
<S>                   <C>
*10.22                Eleventh Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective May 16, 2002 (Exhibit 10.22 to the Company's
                      Quarterly Report on Form 10-Q for the quarter ended April 28, 2002).

*10.23                Twelfth Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective July 8, 2002 (Exhibit 10.23 to the Company's
                      Quarterly Report on Form 10-Q for the quarter ended July 28, 2002).

*10.24                Thirteenth Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective July 30, 2002 (Exhibit 10.24 to the Company's
                      Quarterly Report on Form 10-Q for the quarter ended July 28, 2002).

*10.25                Fourteenth Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective September 30, 2002 (Exhibit 10.25 to the
                      Company's Annual Report for the year ended October 27 2002).

*10.26                Fifteenth Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective October 27, 2002 (Exhibit 10.26 to the
                      Company's Annual Report for the year ended October 27 2002).

*10.27                Sixteenth Amendment to Amended and Restated Credit Agreement by and among Owosso Corporation, its
                      subsidiaries, Bank One and PNC Bank, N.A., effective December 13, 2002 (Exhibit 10.27 to the
                      Company's Annual Report for the year ended October 27 2002).

*10.28                Executive Salary Continuation Agreement between Owosso Corporation and George B. Lemmon, Jr.,
                      dated October 1, 2001 (Exhibit 10.28 to the Company's Annual Report for the year ended October 27
                      2002).

*10.29                Executive Salary Continuation Agreement between Owosso Corporation and Kirk E. Moore, dated August
                      27, 2001 (Exhibit 10.29 to the Company's Annual Report for the year ended October 27 2002).

*10.30                Executive Salary Continuation Agreement between Owosso Corporation and Harry Holiday III, dated
                      August 24, 2001 (Exhibit 10.30 to the Company's Annual Report for the year ended October 27 2002).

*10.31                Seventeenth Amendment to the Amended and Restated Credit Agreement by and among Owosso
                      Corporation, its subsidiaries, Bank One and PNC Bank, N.A., effective March 31, 2003 (Exhibit
                      10.31 to the Company's Quarterly Report on Form 10-Q for the quarter ended April 27, 2003).

*10.32                Eighteenth Amendment to the Amended and Restated Credit Agreement by and among Owosso Corporation,
                      its subsidiaries, Bank One and PNC Bank, N.A., effective September 10, 2003 (Exhibit 10.32 to the
                      Company's Quarterly Report on Form 10-Q for the quarter ended July 27, 2003).

10.33                 Nineteenth Amendment to the Amended and Restated Credit Agreement by and among Owosso Corporation,
                      its subsidiaries, Bank One and PNC Bank, N.A., effective December 19, 2003.

10.34                 Lease Surrender Agreement by and between Owosso Corporation and Triad Realty Associates L.L.C.
                      dated December 31, 2003.

11                    Computation of per share earnings

14                    Code of Ethics

21                    Subsidiaries of the registrant.

23                    Consent of Deloitte & Touche LLP

31                    Certification of Chief Executive Officer (principal executive officer, principal financial officer
                      and principal accounting officer) pursuant to section 302 of the Sarbanes Oxley act of 2002.

32                    Certification of Chief Executive Officer (principal executive officer, principal financial officer
                      and principal accounting officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                      Section 906 of the Sarbanes Oxley Act of 2002.

</TABLE>
----------
*   Incorporated by reference.
#   Management contract or compensatory plan or arrangement.



                                      -23-
<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:    February 10, 2004      By: /s/ George B. Lemmon, Jr.
                                    --------------------------------------------
                                George B. Lemmon, Jr., President, Chief
                                Executive Officer ( principal executive officer,
                                principal financial officer and principal
                                accounting officer) and Chairman




Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed by the following persons on February 10, 2004, in the capacities
indicated:
<TABLE>
<CAPTION>

         Signature                                            Title
         ---------                                            -----

<S>                                                    <C>
/s/ George B. Lemmon, Jr.                            George B. Lemmon, Jr., President, Chief Executive Officer
----------------------------------                   (principal executive officer, principal financial officer
George B. Lemmon, Jr.                                and principal accounting officer) and Chairman


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

/s/ Harry Holiday, III                               Director
----------------------------------
Harry Holiday III


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

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

</TABLE>


                                      -24-




<PAGE>

OWOSSO CORPoration

TABLE OF CONTENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>


                                                                                                                 Page

<S>                                                                                                               <C>
INDEPENDENT AUDITORS' REPORT                                                                                      F-1

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED OCTOBER 26, 2003,
       OCTOBER 27, 2002, AND OCTOBER 28, 2001:

   Statements of Operations                                                                                       F-2

   Balance Sheets                                                                                                 F-3

   Statements of Changes in Stockholders' (Deficit) Equity                                                        F-4

   Statements of Cash Flows                                                                                       F-5

   Notes to Consolidated Financial Statements                                                                 F-6 - F-23

FINANCIAL STATEMENT SCHEDULE II                                                                                  F-24

</TABLE>


<PAGE>

INDEPENDENT AUDITORS' REPORT


Board of Directors and Stockholders of
   Owosso Corporation
Watertown, New York

We have audited the accompanying consolidated balance sheets of Owosso
Corporation and subsidiaries as of October 26, 2003 and October 27, 2002, and
the related consolidated statements of operations, changes in stockholders'
(deficit) equity, and cash flows for each of the three fiscal years in the
period ended October 26, 2003. Our audits also included the financial statement
schedule listed in the index at Item 15(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 auditing standards generally accepted
in the United States of America. 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 26, 2003 and October 27, 2002, and the results of their operations
and their cash flows for each of the three fiscal years in the period ended
October 26, 2003 in conformity with accounting principles generally accepted in
the United States of America. 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.

As described in Note 3 to the consolidated financial statements, in 2003 the
Company changed its method of accounting for goodwill to conform with Statement
of Financial Standards No. 142, Goodwill and Other Intangible Assets.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company's recurring losses from
operations, working capital and stockholders' equity deficiencies, and the
Company's inability to comply with the covenants of its credit agreement raise
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are also described in Note 2. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

/s/ Deloitte & Touche
--------------------------------
Deloitte & Touche LLP

Rochester, New York
December 5, 2003 (February 10, 2004 as to Note 19)



                                      F-1
<PAGE>

OWOSSO CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                            Year Ended
                                                                        ---------------------------------------------------
                                                                         October 26,        October 27,        October 28,
                                                                             2003               2002              2001

<S>                                                                      <C>                <C>               <C>
Net sales                                                                $ 17,715,000       $ 36,901,000      $ 54,326,000
Costs of products sold                                                     14,374,000         31,242,000        43,897,000
                                                                         ------------       ------------      ------------
Gross profit                                                                3,341,000          5,659,000        10,429,000
Selling, general and administrative expenses                                3,881,000          8,224,000        11,183,000
Goodwill impairment expense                                                 5,331,000                 --                --
Write-down of net assets held for sale                                             --            381,000         1,100,000
                                                                         ------------       ------------      ------------
Loss from operations                                                       (5,871,000)        (2,946,000)       (1,854,000)
Interest expense                                                              708,000          1,588,000         4,335,000
Gain on sale of business                                                           --         (6,055,000)               --
Other income                                                                 (122,000)                --          (110,000)
                                                                         ------------       ------------      ------------
Income (loss) from continuing operations before income taxes               (6,457,000)         1,521,000        (6,079,000)
Income tax benefit                                                           (604,000)        (4,197,000)       (1,968,000)
                                                                         ------------       ------------      ------------
Income (loss) from continuing operations                                   (5,853,000)         5,718,000        (4,111,000)

Discontinued operations:
     Loss from discontinued operations, net of income tax
         benefit of $0, $268,000 and $514,000                                      --           (520,000)       (2,073,000)
     Loss on disposal of discontinued operations                                   --                 --       (10,040,000)
                                                                         ------------       ------------      ------------
Income (loss) before cumulative effect of accounting change                (5,853,000)         5,198,000       (16,224,000)

Cumulative effect of accounting change (net of tax of $34,000)                     --                 --           (67,000)
                                                                         ------------       ------------      ------------
Net income (loss)                                                          (5,853,000)         5,198,000       (16,291,000)

Dividends and accretion on preferred stock                                 (1,370,000)        (1,349,000)       (1,316,000)
                                                                         ------------       ------------      ------------
Net income (loss) available for common stockholders                      $ (7,223,000)       $ 3,849,000     $ (17,607,000)
                                                                         ============       ============     =============
Basic and diluted income (loss) per common share:
   Income (loss) available for common stockholders
     from continuing operations                                          $      (1.24)       $      0.75     $       (0.93)
   Loss from discontinued operations                                               --              (0.09)            (2.06)
   Cumulative effect of accounting change, net                                     --                 --             (0.01)
                                                                         ------------       ------------      ------------
Net income (loss) available for common stockholders per share            $      (1.24)       $      0.66     $       (3.00)
                                                                         ============       ============     =============
Weighted average number of common shares outstanding:
    Basic                                                                   5,824,000          5,824,000         5,866,000
                                                                         ============       ============     =============
    Diluted                                                                 5,824,000          5,824,000         5,866,000
                                                                         ============       ============     =============

</TABLE>

See notes to consolidated financial statements.



                                      F-2
<PAGE>
OWOSSO CORPORATION
CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                             October 26,        October 27,
                                                                                                 2003               2002
<S>                                                                                             <C>                <C>
ASSETS
CURRENT ASSETS:
       Cash and cash equivalents                                                                $ 309,000          $ 524,000
       Restricted cash                                                                            400,000                 --
       Receivables, net                                                                         2,323,000          3,111,000
       Inventories, net                                                                         1,745,000          1,906,000
       Net assets held for sale                                                                   350,000            800,000
       Prepaid expenses and other                                                                 251,000            690,000
       Tax refund receivable                                                                           --            919,000
       Deferred taxes                                                                             240,000            295,000
                                                                                             ------------        -----------
           Total current assets                                                                 5,618,000          8,245,000

PROPERTY, PLANT AND EQUIPMENT, NET                                                              4,755,000          5,616,000
GOODWILL                                                                                        3,074,000          8,405,000
CUSTOMER LIST, NET                                                                              4,800,000          5,200,000
OTHER ASSETS                                                                                      133,000            504,000
                                                                                             ------------        -----------
      TOTAL ASSETS                                                                           $ 18,380,000       $ 27,970,000
                                                                                             ============       ============
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
CURRENT LIABILITIES:
       Accounts payable - trade                                                               $ 1,918,000        $ 2,025,000
       Accrued compensation and benefits                                                          504,000            537,000
       Accrued expenses                                                                         1,753,000          2,085,000
       Current portion of long-term debt                                                       10,968,000          8,951,000
                                                                                             ------------        -----------
           Total current liabilities                                                           15,143,000         13,598,000

LONG-TERM DEBT, LESS CURRENT PORTION                                                              128,000          4,594,000
COMMON STOCK PUT OPTION                                                                           600,000            600,000
POSTRETIREMENT BENEFITS AND OTHER LIABILITIES                                                          --            362,000
DEFERRED TAXES                                                                                  1,446,000          1,900,000
ACCRUED PREFERRED STOCK DIVIDENDS                                                               4,034,000          2,664,000
COMMITMENTS AND CONTINGENCIES (Note 12)

STOCKHOLDERS' (DEFICIT) EQUITY
      Convertible preferred stock Class A, 8% in 2003 and 7% in 2002 cumulative,
          $.01 par value: 10,000,000 shares authorized; 1,071,428 shares issued
          and outstanding
          (aggregate liquidation value 2003 - $17,250,000 and 2002 - $16,500,000)              15,000,000         15,000,000
      Common stock, $.01 par value; authorized 15,000,000 shares; issued
          5,874,345 shares in 2003 and 2002                                                        59,000             59,000
      Additional paid-in capital                                                               21,179,000         21,179,000
      Accumulated deficit                                                                     (38,810,000)       (31,587,000)
                                                                                             ------------        -----------
                                                                                               (2,572,000)         4,651,000
      Less treasury stock, at cost, 50,039 shares in 2003 and 2002                               (399,000)          (399,000)
                                                                                             ------------        -----------
          Total stockholders' (deficit) equity                                                 (2,971,000)         4,252,000
                                                                                             ------------        -----------
      TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY                                   $ 18,380,000       $ 27,970,000
                                                                                             ============       ============

      See notes to consolidated financial statements.

</TABLE>

                                      F-3
<PAGE>
OWOSSO CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' (DEFICIT) EQUITY
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                Accumulated
                                                                    Additional     Other
                                             Preferred     Common    Paid-in   Comprehensive  Accumulated    Treasury
                                               Stock       Stock     Capital       Income       Deficit       Stock       Total


<S>                                            <C>           <C>      <C>           <C>         <C>            <C>        <C>
BALANCE, OCTOBER 29, 2000                  $ 15,000,000  $59,000  $21,743,000  $(142,000)   $(17,829,000)  $(399,000) $18,432,000

Net loss                                                                                      (16,291,000)             (16,291,000)
Other comprehensive income:
     Cumulative translation adjustment                                            142,000                                  142,000
                                                                                                                        ----------
     Total comprehensive income (loss)                                                                                 (16,149,000)
Dividends                                                                                      (1,316,000)              (1,316,000)
Exercise common stock put option                                      (600,000)                                           (600,000)
Issuance of common stock                                                36,000                                              36,000
                                            -----------    ------   ----------    -------    ------------   ---------   ----------
BALANCE, OCTOBER 28, 2001                    15,000,000    59,000   21,179,000         --     (35,436,000)   (399,000)     403,000

Net income                                                                                      5,198,000                5,198,000
Dividends                                                                                      (1,349,000)              (1,349,000)
                                            -----------    ------   ----------    -------    ------------   ---------   ----------
BALANCE, OCTOBER 27, 2002                    15,000,000    59,000   21,179,000         --     (31,587,000)   (399,000)   4,252,000

Net loss                                                                                       (5,853,000)              (5,853,000)
Dividends                                                                                      (1,370,000)              (1,370,000)
                                            -----------    ------   ----------    -------    ------------   ---------   ----------
BALANCE, OCTOBER 26, 2003                   $15,000,000   $59,000  $21,179,000    $    --    $(38,810,000)  $(399,000) $(2,971,000)
                                            ===========   =======   ==========    =======    ============   =========   ==========
</TABLE>

See notes to consolidated financial statements.







                                      F-4
<PAGE>



OWOSSO CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                              Year Ended
                                                            ----------------------------------------------
                                                              October 26,     October 27,     October 28,
                                                                  2003           2002            2001
<S>                                                           <C>             <C>          <C>
OPERATING ACTIVITIES:
  Net income (loss)                                           $(5,853,000)    $ 5,198,000  $ (16,291,000)
  Loss from discontinued operations                                    --         520,000     12,113,000
  Adjustments to reconcile net income (loss) to
     net cash provided by (used in) operating activities:
            Provision for deferred taxes                         (399,000)      1,426,000       (238,000)
            Write-down of net assets held for sale                     --         381,000      1,100,000
            Change in net assets held for sale                         --              --       (543,000)
            Interest rate swap contracts - market
              value adjustment                                   (110,000)       (589,000)       699,000
            Goodwill impairment expense                         5,331,000              --             --
            Gain on the sale of business                               --      (6,055,000)            --
            Loss on sale of assets                                     --             --           4,000
            Depreciation                                        1,032,000       2,454,000      2,798,000
            Amortization                                          400,000       1,386,000      1,069,000
    Changes in assets and liabilities which provided
             (used) cash:
            Accounts receivable                                   788,000           2,000      1,851,000
            Inventories                                           161,000         907,000        715,000
            Prepaid expenses and other                            439,000       1,382,000        116,000
            Tax refund receivable                                 919,000              --             --
            Accounts payable                                     (107,000)        287,000     (1,212,000)
            Accrued expenses                                     (617,000)     (1,566,000)      (672,000)
                                                              -----------     -----------   ------------
            Net cash provided by continuing operations          1,984,000       5,733,000      1,509,000
            Net cash used in discontinued operations                   --              --     (5,678,000)
                                                              -----------     -----------   ------------
            Net cash provided by (used in) operating
             activities                                         1,984,000       5,733,000     (4,169,000)
                                                              -----------     -----------   ------------

INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                     (171,000)       (132,000)      (757,000)
  Proceeds from the sale of businesses and assets                 450,000      10,782,000      6,575,000
  Decrease in other assets                                        371,000              --        729,000
                                                              -----------     -----------   ------------
           Net cash provided by continuing operations             650,000      10,650,000      6,547,000
           Net cash provided by discontinued operations                --              --     18,038,000
                                                              -----------     -----------   ------------
           Net cash provided by investing activities              650,000      10,650,000     24,585,000
                                                              -----------     -----------   ------------

FINANCING ACTIVITIES:
  Payments on line of credit                                   (2,400,000)    (15,100,000)   (19,100,000)
  Restricted cash payment                                        (400,000)             --              --
  Payments on long-term debt                                      (49,000)       (559,000)      (664,000)
  Payments on related party debt                                       --        (400,000)      (600,000)
  Dividends paid                                                       --              --       (142,000)
  Other                                                                --              --         38,000
                                                              -----------     -----------   ------------
           Net cash used in continuing operations              (2,849,000)    (16,059,000)   (20,468,000)
           Net cash used in discontinued operations                    --              --       (239,000)
                                                              -----------     -----------   ------------
           Net cash used in financing activities               (2,849,000)    (16,059,000)   (20,707,000)
                                                              -----------     -----------   ------------

NET INCREASE (DECREASE) IN
          CASH AND CASH EQUIVALENTS                              (215,000)        324,000       (291,000)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                    524,000         200,000        491,000
                                                              -----------     -----------   ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                      $   309,000     $   524,000   $    200,000
                                                              ===========     ===========   ============
</TABLE>


See notes to consolidated financial statements.


                                      F-5

<PAGE>

OWOSSO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FISCAL YEARS ENDED OCTOBER 26, 2003, OCTOBER 27, 2002, AND OCTOBER 28, 2001
--------------------------------------------------------------------------------


1. NATURE OF BUSINESS

      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 has one operating subsidiary, Stature Electric, Inc.
      ("Stature"), representing the Company's historical Motors segment. Stature
      is a custom designer and manufacturer of motors and gear motors both AC
      and DC, established in 1974 in Watertown, New York. Significant markets
      for Stature, or the Motors segment, include commercial products and
      equipment, healthcare, recreation and non-automotive transportation. The
      products are sold throughout North America and in Europe, primarily to
      original equipment manufacturers who use them in their end products.

      The Company completed the sale of all of the outstanding stock of Motor
      Products - Owosso Corporation and Motor Products - Ohio Corporation
      (together, "Motor Products"), manufacturers of fractional and integral
      horsepower motors, on July 30, 2002. Prior to that time, these entities
      were included in the results of the Motors segment.

      The Company's Other segment included Cramer Company (formerly known as
      M.H. Rhodes, Inc., and hereinafter referred to as "Cramer"). Cramer
      manufactured timers and subfractional horsepower motors for use in
      commercial applications. The Company completed the sale of the assets
      associated with the timer and switch line of Cramer on December 4, 2000.
      The Company disposed of substantially all of the remaining Cramer assets
      (excluding real property) in a separate transaction completed on September
      23, 2001.

2. BASIS OF PRESENTATION

      The accompanying consolidated financial statements have been prepared
      assuming that the Company will continue as a going concern, which
      contemplates the realization of assets and the satisfaction of liabilities
      in the normal course of business. The Company has incurred losses from
      operations in each of the past four fiscal years and, as shown in the
      consolidated financial statements, the Company incurred a net loss of
      $5,853,000 for the year ended October 26, 2003. In addition, at October
      26, 2003 and October 27, 2002, the Company had a working capital
      deficiency since current liabilities exceeded its current assets by
      $9,525,000 and $5,353,000, respectively, and the Company had a
      stockholders' deficit of $2,971,000 at October 26, 2003. The Company is
      also out of compliance with covenants under its bank credit facility. The
      amount outstanding under the bank credit facility totaled $4,500,000 at
      October 26, 2003 which becomes due on March 31, 2004 (see note 9). These
      factors, among others, may indicate that the Company will be unable to
      continue as a going concern for a reasonable period of time. The
      consolidated financial statements do not include any adjustments that
      might result from the outcome of this uncertainty.

      As disclosed in note 19, the Company has entered into a definitive
      purchase agreement to sell the Company. If the sale does not occur, then
      the Company intends to refinance the Company's bank credit facility prior
      to its maturity in March 2004. However, there can be no assurance that the
      Company's plans will be successfully executed.



                                      F-6
<PAGE>


3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      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.

      Reclassifications - Certain reclassifications have been made to the 2002
      financial statements to conform to the classifications used in 2003.

      Fiscal Year - The Company's fiscal year includes 52 or 53 weeks ending on
      the last Sunday in October. Fiscal years 2003, 2002 and 2001 consisted of
      52-week years.

      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.

      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, determined on a first-in, first-out (FIFO) basis.

      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

      Customer list - The customer list is amortized on a straight-line basis
      over 20 years, its estimated useful life. Accumulated amortization totaled
      $3,200,000 and $2,800,000 as of October 26, 2003 and October 27, 2002,
      respectively. Amortization expense totaled $400,000 in each of 2003, 2002
      and 2001. The Company expects to record amortization expense of $400,000
      in each of the next five fiscal years.

      Asset Impairment for long-lived assets - The Company evaluates the
      carrying value of long-lived assets and other intangible assets, excluding
      goodwill, 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 and title of ownership has passed. An allowance for doubtful
      accounts of $35,000 and $49,000 has been recorded as of October 26, 2003
      and October 27, 2002, respectively.



                                      F-7
<PAGE>

      Income Taxes - Deferred income taxes are determined based on the
      difference between the financial reporting and tax bases of assets and
      liabilities. Deferred income tax expense (benefit) represents the change
      during the reporting period in the deferred tax assets and deferred tax
      liabilities, net of the effect of acquisitions and dispositions. Deferred
      tax assets include tax loss and credit carry forwards and are reduced by a
      valuation allowance if, based on available evidence, it is more likely
      than not that some portion or all of the deferred tax asset will not be
      realized.

      Stock-Based Compensation - In December 2002, the Financial Accounting
      Standards Board issued Statement of Financial Accounting Standards
      ("SFAS") No. 148, "Accounting for Stock-Based Compensation --Transition
      and Disclosure, an amendment of SFAS No. 123 Accounting for Stock-Based
      Compensation, to provide alternative methods of transition for an entity
      that voluntarily changes to the fair value based method of accounting for
      stock-based employee compensation. It also amends the disclosure
      provisions of that Statement to require prominent disclosure about the
      effects on reported net income of an entity's accounting policy decisions
      with respect to stock-based employee compensation. As permitted in those
      standards, the Company has elected to continue to follow recognition
      provisions of Accounting Principles Board Opinion No. 25, Accounting for
      Stock Issued to Employees, and related interpretations in accounting for
      employee stock-based compensation. No employee stock-based compensation
      expense was recorded for the years ended October 26, 2003, October 27,
      2002 and October 28, 2001.

      Proforma information regarding the Company's net income (loss) available
      for common stockholders and related per share amounts as required by SFAS
      No. 123 and SFAS No. 148 are as follows:

<TABLE>
<CAPTION>


                                                                          2003            2002            2001
<S>                                                                   <C>             <C>             <C>
Net Income (loss) available for common stockholders:
As reported                                                           $ (7,223,000)   $ 3,849,000     $ (17,607,000)
Proforma                                                              $ (7,263,000)   $ 3,790,000     $ (17,745,000)

Net Income (loss) per share available for common stockholders:
As reported                                                                $ (1.24)        $ 0.66           $ (3.00)
Proforma                                                                   $ (1.25)        $ 0.65           $ (3.02)
</TABLE>

      The weighted average fair value of options granted in 2003 and 2001 is
      estimated as $2,200 and $48,000, respectively. The Company did not grant
      options in 2002. The fair value of options granted were estimated on the
      date of grant using the Binomial option pricing model with the following
      assumptions:



                                                   2003               2001
Expected Life                                    5 years            5 years
Volatility                                          45%                59%
Risk-free interest rate                            4.0%              4.51%
Dividend yield                                       0%                 0%




      Earnings (loss) per Share - 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 diluted effect of convertible preferred stock
      computed using the "if converted" method, and by the dilutive effect of
      the put option on common stock, computed using the reverse-treasury stock
      method.

                                      F-8
<PAGE>

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

<TABLE>
<CAPTION>


                                                                 2003              2002              2001
<S>                                                              <C>               <C>               <C>
Potential common shares resulting from:
          Stock options and put option on common stock           304,000           399,000           835,000
          Convertible preferred stock                          1,071,000         1,071,000         1,071,000
                                                              ----------         ---------         ---------
                                                               1,375,000         1,470,000         1,906,000
                                                              ==========         =========         =========
</TABLE>



      Comprehensive Income - The Company presents comprehensive income (loss) as
      a component of stockholders' equity. The components of comprehensive
      income are as follows:


<TABLE>
<CAPTION>

                                                                2003              2002              2001
<S>                                                         <C>                <C>             <C>
Net income (loss)                                           $ (5,853,000)     $  5,198,000     $ (16,291,000)
Foreign currency translation                                       0                 0               142,000
                                                            ------------      ------------     -------------

Total comprehensive income (loss)                           $ (5,853,000)     $  5,198,000     $ (16,149,000)
                                                            =============     ============     =============

</TABLE>

      Derivatives - In June 1998, the Financial Accounting Standards Board
      ("FASB") issued SFAS No. 133, "Accounting for Derivative Instruments and
      Hedging Activities" ("SFAS No. 133"). SFAS No. 133 was amended in June
      2000 by SFAS No. 138, "Accounting for Certain Derivative Instruments and
      Certain Hedging Activities", which addressed a limited number of issues
      causing implementation difficulties. SFAS No. 133, as amended, establishes
      accounting and reporting standards for derivative instruments and for
      hedging activities. It requires that an entity recognize all derivative
      instruments as either assets or liabilities and measure them at fair
      value. The accounting for changes in fair value depends upon the purpose
      of the derivative instrument and whether it is designated and qualifies
      for hedge accounting. To the extent derivative instruments qualify and are
      designated as hedges of the variability in cash flows associated with
      forecasted transactions, the effective portion of the gain or loss on such
      derivative instruments will generally be reported in other comprehensive
      income and the ineffective portion, if any, will be reported in net
      income. Such amounts recorded in accumulated other comprehensive income
      will be reclassified into net income when the forecasted transaction
      affects earnings. To the extent derivative instruments qualify and are
      designated as hedges of changes in the fair value of an existing asset,
      liability or firm commitment, the gain or loss on the hedging instrument
      will be recognized currently in earnings along with changes in the fair
      value of the hedged asset, liability or firm commitment attributable to
      the hedged risk.

      The Company was required to adopt the provisions of SFAS No. 133 effective
      October 30, 2000. The Company's derivative instruments outstanding,
      variable-to-fixed interest rate swaps, do not qualify for hedge accounting
      under SFAS No. 133. The adoption of SFAS No. 133 required the Company to
      mark its interest rate swaps to market. The result was to record a net
      liability of $101,000 with an offsetting charge to cumulative effect of
      accounting change. This amount, net of tax of $34,000, is reflected in the
      2001 accompanying consolidated statement of operations as a "Cumulative
      effect of accounting change."



                                      F-9
<PAGE>

      Goodwill - In July 2001, the Financial Accounting Standards Board issued
      SFAS No. 142 "Goodwill and Other Intangible Assets" ("SFAS No. 142"). SFAS
      No. 142 requires the use of a nonamortization approach to account for
      purchased goodwill and certain intangibles. Under a nonamortization
      approach, goodwill and certain intangibles will not be amortized into
      results of operations but, instead, would be reviewed for impairment and
      written down and charged to results of operations only in the periods in
      which the recorded value of goodwill and certain intangibles is more than
      its fair value. The Company adopted SFAS No. 142 on October 28, 2002 and,
      based on its transitional goodwill impairment test, the Company was not
      required to record a goodwill impairment charge as of October 28, 2002.

      Actual net income (loss) available for common stockholders and the related
      per share amounts for the years ended October 26, 2003, October 27, 2002
      and October 28, 2001 and as adjusted net income (loss) and the related per
      share amounts for 2002 and 2001 had the nonamortization provisions of SFAS
      No. 142 been applied in those periods are as follows:

<TABLE>
<CAPTION>

                                                                       2003            2002             2001
<S>                                                                  <C>             <C>             <C>
Net Income (loss) available for common stockholders:
As reported                                                          $ (7,223,000)   $  3,849,000    $ (17,607,000)
Goodwill amortization                                                          --         990,000          665,000
                                                                     ------------    ------------    -------------
As adjusted                                                          $ (7,223,000)   $  4,839,000    $ (16,942,000)
                                                                     ============    ============    =============
Net income (loss) per share available for common stockholders:
As Reported                                                               $ (1.24)         $ 0.66          $ (3.00)
As Adjusted                                                               $ (1.24)         $ 0.83          $ (2.89)

</TABLE>


      The Company's annual assessment of goodwill impairment is conducted in the
      first quarter of its fiscal year. The Company completed its annual
      goodwill impairment test in the first quarter of fiscal 2004 and concluded
      that its goodwill was partially impaired. Accordingly, in the fourth
      quarter of fiscal 2003, the Company recorded an expense for goodwill
      impairment totaling $5,331,000 in the accompanying 2003 consolidated
      statement of operations. As disclosed in note 19, the Company has entered
      into a definitive purchase agreement to sell the Company. The fair value
      of the Company was estimated based on the terms of the definitive purchase
      agreement.

      New Accounting Pronouncements - In April 2002, the FASB issued SFAS
      No.145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
      FASB Statement No. 13, and Technical Corrections." There was no effect on
      the Company's financial statements from the adoption of SFAS No. 145 in
      fiscal 2003.

      In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
      Accounting and Disclosure Requirements for Guarantees, Including Indirect
      Guarantees of Others" ("FIN 45"). FIN 45 requires that a liability be
      recorded on the guarantor's balance sheet upon issuance of a guarantee. In
      addition, FIN 45 requires disclosures about the guarantees that an entity
      has issued. The Company's adoption of FIN 45 did not have an effect on its
      consolidated financial statements in fiscal 2003.



                                      F-10
<PAGE>

      In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
      Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46").
      FIN 46 requires certain variable interest entities to be consolidated by
      the primary beneficiary of the entity if the equity investors in the
      entity do not have the characteristics of a controlling financial interest
      or do not have sufficient equity at risk for the entity to finance its
      activities without additional subordinated financial support from other
      parties. FIN 46 is effective for the Company for the interim period ended
      April 30, 2004, or earlier in certain instances. Such instances did not
      have a material effect on the Company's consolidated financial statements
      in fiscal 2003.

      In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement No.
      133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends
      and clarifies financial accounting and reporting for derivative
      instruments and for hedging activities under SFAS No. 133, "Accounting for
      Derivative Instruments and Hedging Activities." This Statement clarifies
      under what circumstances a contract with an initial net investment meets
      the characteristic of a derivative discussed in SFAS No. 133, clarifies
      when a derivative contains a financing component, amends the definition of
      an underlying to conform it to language used in FIN 45 and amends certain
      other existing pronouncements. These changes are intended to result in
      more consistent reporting of contracts as either derivatives or hybrid
      instruments. The Statement is generally effective for contracts entered
      into or modified after, and for hedging relationships designated after,
      June 30, 2003. The Company's adoption of SFAS No. 149 did not have a
      material effect on its consolidated financial statements in fiscal 2003.

      In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
      Financial Instruments with Characteristics of both Liabilities and
      Equity." SFAS No. 150 improves the accounting for certain financial
      instruments that, under previous guidance, issuers could account for as
      equity. The new Statement requires that those instruments be classified as
      liabilities in the balance sheet. This Statement is effective for
      mandatory redeemable instruments entered into or modified after May 31,
      2003 and for all other instruments for interim periods beginning after
      June 15, 2003. The Company's adoption of SFAS No. 150 did not have a
      material effect on its consolidated financial statements in fiscal.

4. SUPPLEMENTAL CASH FLOW INFORMATION

      Cash payments for interest in 2003, 2002 and 2001 were $674,000,
      $2,530,000 and $3,594,000, respectively. Cash paid (or received) for
      income taxes was $(1,215,000), $(4,481,000) and $226,000 for 2003, 2002
      and 2001, respectively. Dividends recorded and not paid in 2003, 2002 and
      2001 totaled $1,370,000, $1,349,000 and $1,316,000, respectively.

5. DISPOSITIONS OF BUSINESSES

      Cramer - On December 4, 2000, the Company completed the sale of the assets
      associated with the timer and switch line of Cramer to Capewell
      Components, LLC of South Windsor, Connecticut for cash of approximately
      $2,000,000, plus the assumption of approximately $400,000 in liabilities.
      In connection with the sale, the name of the Company was changed from M.H.
      Rhodes, Inc. to Cramer Company. On September 23, 2001, the Company sold
      substantially all of the remaining assets of Cramer to the Chestnut Group
      of Wayne, Pennsylvania for cash proceeds of $565,000, plus the assumption
      of $317,000 in liabilities. In connection with such sale, the Company
      recorded an adjustment to the carrying value of the Cramer assets
      resulting in a pre-tax charge of $1,100,000, recorded in the third fiscal
      quarter of 2001.

      Motor Products - On July 30, 2002, Owosso Corporation, (the "Company")
      completed the sale of all of the outstanding stock of Motor Products -
      Owosso Corporation, and Motor Products - Ohio Corporation, (together,
      "Motor Products"), manufacturers of fractional and integral horsepower
      motors. The purchase price paid by Allied (F.K.A. Hathaway Motion Control
      Corporation) (the "Buyer") for the outstanding stock of Motor Products
      consisted of $11.5 million in cash and a promissory note in the principal
      amount of $300,000, paid six months after closing. Net cash proceeds of
      $10.7 million from the sale, after payment of certain transaction costs,
      were utilized to reduce outstanding bank debt. The Company has reported a
      gain of $6,055,000 on the sale of this business in the accompanying
      consolidated statement of operations for the year ended October 27, 2002.

                                      F-11
<PAGE>

6. DISCONTINUED OPERATIONS

      Coils Segment - On May 9, 2001, the Company completed the sale of
      substantially all of the assets of Astro Air UK to ACR Heat Transfer,
      Ltd., of Norfolk, England for cash of (pound)450,000 (approximately
      $643,000). Based upon the terms of the sale, the Company recorded, in the
      second quarter of 2001, a pretax charge of $700,000 to adjust the carrying
      value of Astro UK's assets to their estimated realizable value. No
      additional gain or loss was recorded upon completion of the sale.

      On October 26, 2001, the Company completed the sale of the assets of its
      Coils segment, which included Astro Air and Snowmax (together, the "Coils
      Subsidiaries"). The sale of the Coils Subsidiaries was effectuated
      pursuant to an Asset Purchase Agreement, dated as of October 26, 2001, by
      and among the Coils Subsidiaries, Astro Air, Inc. (the "Buyer"), and Rex
      Dacus, the manager of the Coils segment and the person from whom the
      Company acquired the assets and operations of Astro Air Coils, Inc. in
      1998. Proceeds from the sale were $5,600,000 of cash and the assumption of
      approximately $3,700,000 of liabilities. The Company recorded a pretax
      charge of $9,340,000 related to this sale in the fourth quarter of 2001.

      Revenues from discontinued operations were $35,608,000 for 2001.



7.       INVENTORIES

<TABLE>
<CAPTION>


                                                                                    2003               2002

<S>                                                                             <C>                 <C>
Raw materials and purchased parts                                               $   744,000         $   810,000
Work in process                                                                     844,000             909,000
Finished goods                                                                      157,000             187,000
                                                                                -----------         -----------
 Total                                                                          $ 1,745,000         $ 1,906,000
                                                                                ===========         ===========

</TABLE>




8. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>


                                                                                     2003               2002

<S>                                                                                <C>                <C>
Land and improvements                                                              $ 112,000          $ 112,000
Buildings and improvements                                                         3,350,000          3,350,000
Machinery and equipment                                                           12,202,000         12,115,000
Construction in progress                                                             120,000             53,000
                                                                                ------------        -----------

Total                                                                             15,784,000         15,630,000
Accumulated depreciation                                                          11,029,000         10,014,000
                                                                                ------------        -----------

Property, plant and equipment, net                                              $  4,755,000        $ 5,616,000
                                                                                ============        ===========

</TABLE>



                                      F-12
<PAGE>



9. LONG-TERM DEBT

<TABLE>
<CAPTION>


                                                                                    2003              2002

<S>                                                                             <C>               <C>
Revolving credit agreement                                                      $ 4,500,000       $ 6,900,000

Term loans, payable in monthly installments through 2007 at
    5%, collateralized by certain real property                                     550,000           599,000

Industrial revenue bonds, payable in varying installments through 2018 at
    a variable rate (1.1% at October 28, 2003), collateralized by certain
    real property, building and equipment                                         4,550,000         4,550,000

Subordinated promissory notes, payable in varying installments
    through 2005 at rates from 7.6% to 11%                                        1,496,000         1,496,000
                                                                                -----------       -----------

           Total long-term debt                                                  11,096,000        13,545,000

Less current portion                                                             10,968,000         8,951,000
                                                                                -----------       -----------

Long-term debt, net of current portion                                          $   128,000       $ 4,594,000
                                                                                ===========       ===========

</TABLE>


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


Year ending October:
  2004                               $ 10,968,000
  2005                                    128,000
                                     ------------

Total                                $ 11,096,000
                                     ============




      On January 22, 1999, the Company entered into a new bank credit facility
      with the Company's two primary banks, originally expiring in December
      2002. The agreement included 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
      not in compliance with such covenants at October 29, 2000. In February
      2001, the Company entered into an amendment to its bank credit facility
      agreement, wherein the lenders agreed to forbear from exercising their
      rights and remedies under the facility in connection with such
      non-compliance until February 15, 2002, at which time the facility was to
      mature. This amendment to the bank credit facility called for reductions
      in the outstanding balance during calendar 2001 and modified the interest
      rates charged. The amendment required additional collateral, effectively
      all of the assets of the Company, and reporting requirements, as well as
      the addition of a covenant requiring minimum operating profits. The
      amendment also required the suspension of principal and interest payments
      on subordinated debt, with an aggregate outstanding balance of $2.1
      million as of October 28, 2001. Furthermore, the amendment to the facility
      prohibits the payment of preferred or common stock dividends and prohibits
      the Company from purchasing its stock. Beginning in August 2001, the
      Company was out of compliance with its minimum operating profit covenant.
      In February 2002, the Company entered into a further amendment to the
      facility, which extended the maturity date to December 31, 2002. That
      amendment calls for further reductions in the outstanding balance based on
      expected future asset sales, increased the interest rate charged and
      requires minimum EBITDA. In December 2002, the Company entered into a
      further amendment to the facility, which extends the maturity date to
      December 31, 2003. This amendment calls for further reductions in
      outstanding balance based on expected future asset sales and cash flow
      generated from operations and requires minimum EBITDA. In April 2003, the
      Company entered into a further amendment to the facility which amended the
      financial covenant. In September 2003, the Company entered into a further
      amendment to the facility which waived a mandatory paydown. In December
      2003 , the Company entered into a further amendment to the facility which
      extended the maturity date to March 31, 2004. Borrowings under the
      facility are charged interest at the Prime Rate plus 2.75% (6.75% at
      October 26, 2003). The Company's lender required the Company to place
      $400,000 in a restricted cash account to be used to service the debt.

                                      F-13
<PAGE>

      At October 26, 2003, $4,500,000 was outstanding under the Company's bank
      credit facility and $611,000 was available for additional borrowing. The
      average amount outstanding in 2003 was $5,528,000 and the weighted average
      interest rate was 7.0%.

      Repayment of the Industrial Revenue Bonds of Stature Electric has been
      guaranteed by the Company and its subsidiaries.

      The Company has classified primarily all of its long-term debt as a
      current liability in the accompanying consolidated balance sheet at
      October 26, 2003 as a result of not complying with the covenants in the
      revolving credit agreement.

      Derivative Interest Rate Contracts - The Company had previously had an
      interest rate swap agreement with one of its banks with a notional amount
      of $4,850,000 which expired in fiscal 2003. The agreement required 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. The Company entered into the interest rate swap
      agreement to change the fixed/variable interest rate mix of its debt
      portfolio to reduce the Company's aggregate risk to movements in interest
      rates. Such swap agreements do not meet the stringent requirements for
      hedge accounting under SFAS No. 133. Accordingly, changes in the fair
      value of such agreements are recorded in the accompanying consolidated
      statements of operations as a component of interest expense. The fair
      market value of the swap agreement liability was $0 and $110,000 at
      October 26, 2003, and October 27, 2002 respectively. The credit to
      interest expense related to this agreement in 2003 and 2002 totaled
      $110,000 and $589,000 respectively.


10. 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.

11. BENEFIT PLAN

      Benefit Plan - The Company sponsors a defined contribution 401(k) plan
      covering substantially all of its employees. 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 this plan was $213,000, $333,000 and $895,000 for 2003, 2002
      and 2001 respectively.

                                      F-14
<PAGE>

12. COMMITMENTS AND CONTINGENCIES

      The Company leased office space production facilities and equipment under
      operating leases. Operating lease expense was approximately $285,000,
      $285,000 and $623,000 for 2003, 2002 and 2001, respectively, net of
      sublease rentals and reimbursements of utilities of $119,000, $119,000 and
      $119,000 for 2003, 2002 and 2001, respectively. The lease on the former
      corporate headquarters office space was to expire in September 2006 with a
      base rent of approximately $305,000. The Company successfully negotiated a
      lease surrender agreement in December 2003 at a cost of $280,000 and
      vacated the office space in January 2004. The Company paid $89,000
      covering rent through March 2004. The landlord also has the right to
      negotiate an existing letter of credit held by the landlord as security
      under the lease and retain the proceeds therefrom in the amount of
      $191,000 on the termination date.

      At October 26, 2003, outstanding letters of credit totaled approximately
      $5,184,000 which primarily guarantees 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
      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.

      In connection with the Company's divestitures of its operating businesses
      over the past four years, it has agreed to indemnify buyers from and
      against certain known and unknown environmental liabilities. In addition,
      the Company may be liable for the costs of removal or remuneration of
      hazardous or toxic substances on, in, under or discharged from it's
      current or previously owned real property under applicable federal, state
      and local environmental laws, ordinances and regulations.

      A subsidiary of 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 Old Saybrook facility
      was previously located and 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.

      In addition to the matters reported herein, the Company is involved in
      litigation dealing with certain 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.

13. MAJOR CUSTOMERS

      A significant portion of the Company's sales are concentrated among a
      small number of customers. Sales to the two largest customers represented
      approximately 26%, 14%, and 15%, of total sales from continuing operations
      for 2003, 2002 and 2001, respectively. Subsequent to October 26, 2003, the
      Company is no longer selling to the second largest customer that accounted
      for 9% of its sales in 2003.

                                      F-15
<PAGE>

14. INCOME TAX EXPENSE

      The income tax provision for continuing operations consists of the
following:

<TABLE>
<CAPTION>

                                                                  2003                 2002                2001

<S>                                                            <C>               <C>                  <C>
Current:
     Federal                                                   $ (237,000)       $ (5,767,000)        $ (1,861,000)
     State                                                         32,000              44,000              131,000
Deferred - Federal                                               (372,000)          1,598,000             (257,000)
Deferred - State                                                  (27,000)            (72,000)              19,000
                                                               ----------        ------------         ------------

Income tax benefit                                             $ (604,000)       $ (4,197,000)        $ (1,968,000)
                                                               ==========        ============         ============
</TABLE>



      A reconciliation of the income tax provision as presented in the
      consolidated statements of operations is as follows:


<TABLE>
<CAPTION>



                                                                               2003             2002             2001

<S>                                                                         <C>             <C>              <C>
Income tax benefit from continuing operations                               $ (604,000)     $ (4,197,000)    $ (1,968,000)
Income tax expense (benefit) from discontinued operations                            0          (268,000)        (514,000)
Income tax benefit associated with cumulative effect of accounting change            0                 0          (34,000)
                                                                            ----------      ------------     ------------
Total income tax benefit                                                    $ (604,000)     $ (4,465,000)    $ (2,516,000)
                                                                            ==========      ============     ============

</TABLE>

      The reconciliation of the statutory federal income tax rate and the
      effective rate, for continuing operations, is as follows:
<TABLE>
<CAPTION>

                                                                          2003          2002           2001

<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                      (0.3)        (1.2)          (1.7)
Goodwill impairment charge                                                (28.1)         0.0            0.0
Amortization of goodwill                                                    0.0         22.1           (6.1)
Effect of disposition of businesses                                         0.0          0.0            0.6
Meal and Entertainment Expense                                             (0.1)         0.0            0.0
Change in valuation allowance                                               0.3       (331.6)           0.0
Other                                                                       3.6          0.5            5.6
                                                                         ------       ------          -----

Effective tax rate, continuing operations                                   9.4%      (276.2)%         32.4%
                                                                         ======       ======          =====

</TABLE>

      The difference between the statutory federal rate and the reported amount
      of income tax expense attributable to continuing operations is primarily
      due to non-deductible goodwill and change in the valuation allowance
      resulting from the utilization of the capital loss carryforward and the
      five year carryback of net operating losses related to the changes in tax
      laws.



                                      F-16
<PAGE>

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


                                                                                    2003              2002
<S>                                                                              <C>               <C>
Deferred tax asset:
  Accruals and reserves                                                          $    683,000      $  1,633,000
  Tax credits and loss carryforwards                                                7,031,000         6,690,000
  Other                                                                                 9,000            11,000
                                                                                 ------------      ------------

           Total gross deferred tax assets                                          7,723,000         8,334,000

  Valuation allowance                                                              (6,866,000)       (6,645,000)
                                                                                 ------------      ------------

           Net deferred tax assets                                               $    857,000      $  1,689,000
                                                                                 ============      ============
Deferred tax liability:
  Intangibles                                                                    $  1,759,000      $  1,976,000
  Property, plant and equipment                                                       304,000         1,318,000
                                                                                 ------------      ------------

           Total gross deferred tax liabilities                                  $  2,063,000      $  3,294,000
                                                                                 ------------      ------------

Net deferred tax liability                                                       $ (1,206,000)     $ (1,605,000)
                                                                                 ============      ============
</TABLE>


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


<TABLE>
<CAPTION>



                                                                                     2003               2002

<S>                                                                              <C>               <C>
Current deferred tax assets                                                      $    240,000      $    295,000
Non-current deferred tax liabilities                                               (1,446,000)       (1,900,000)
                                                                                 ------------      ------------

Net deferred tax liability                                                       $ (1,206,000)     $ (1,605,000)
                                                                                 ============      ============
</TABLE>


      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.

      The Company has approximately $3,081,000 of net operating loss carry
      forwards as of October 26, 2003 for federal income tax reporting purposes
      and which expire between 2006 and 2023. Approximately $2,498,000 of these
      net operating losses are subject to annual utilization limitations under
      Section 382 of the Internal Revenue Code. The Company also has
      approximately $11,051,000 of capital loss carry forwards as of October 26,
      2003 for federal income tax reporting purposes and which expire in 2006.

15. COMMON STOCK PUT OPTION

      During 2001 the Company received notice from a former employee and
      shareholder requesting payment of $8.00 per share for 75,000 shares of
      common stock of the Company owned by him under a conditional put right
      that a subsidiary of the Company had granted to such shareholder. The
      shareholder in question renewed his request in late 2002. Neither the
      Company nor the subsidiary of the Company that had granted the conditional
      put right believes that the shareholder has a contractual right to require
      the purchase of his shares at this time, principally due to a negative
      covenant in the Company's bank credit facility precluding the Company and
      its subsidiaries from making any payments or other distributions with
      respect to the Company's common stock. While the Company believes that it
      has complied with all terms associated with the put right, including those
      excusing performance when payment is precluded by financing documents, it
      has recorded a liability totaling $600,000 as of October 26, 2003 and
      October 27, 2002 related to this matter.



                                      F-17
<PAGE>

16. 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 was 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 had the right, but was not obligated, to redeem the
      preferred stock for cash at its stated value of $14.00 per share. Neither
      the option to convert the preferred stock into the Company's common stock,
      nor the Company's right to redeem the preferred stock, has been exercised.
      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 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. Since the
      preferred stock was not converted by October 2000, the increasing rate
      dividend is 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 accrued but not
      paid on the preferred stock were $4,034,000 and $2,664,000 for October 26,
      2003 and October 27, 2002, respectively.

      The Company may not pay any common stock dividends unless all preferred
      dividend requirements have been met. The convertible preferred
      shareholders 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 shareholders. In connection with the
      amendment to the Company's bank credit facility in February 2001, the
      Company is prohibited from making future preferred stock dividend
      payments.

17. STOCK OPTION 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 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-18
<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 26, 2003            October 27, 2002            October 28, 2001
                                                   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              324,000         $ 6.33       760,000        $ 5.16         880,000        $ 5.84
  Granted                            10,000           0.22             0                        75,000          1.03
  Cancelled                        (105,000)          8.81      (436,000)         4.30        (195,000)         6.64
                                   --------                     --------                      --------

Outstanding, end of year            229,000         $ 5.38       324,000        $ 6.33         760,000        $ 5.16
                                   ========                     ========                      ========

Exercisable, end of year            162,400         $ 6.94       229,000        $ 7.74         398,000        $ 7.13
                                   ========                     ========                      ========


</TABLE>

                                      F-19
<PAGE>

      The following table summarizes information about stock options outstanding
at October 26 2003:

<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

<C>                                         <C>            <C>           <C>             <C>               <C>
$0.22                                       10,000         9.44          $ 0.22               --         $   --

$1.00 - $1.13                               25,000         7.54          $ 1.05               --         $   --

$1.44                                       30,000         6.98          $ 1.44           12,000         $ 1.44

$3.16                                       14,000         6.14          $ 3.16            8,400         $ 3.16

$4.16 - $5.75                               40,000         5.15          $ 4.16           32,000         $ 4.16

$5.88 - $8.00                               67,000         4.14          $ 7.78           67,000         $ 7.78

$8.88 - $11.38                              31,000         2.09          $ 9.20           31,000         $ 9.20

$12.00                                      12,000         0.99         $ 12.00           12,000         $12.00
                                          --------                                       -------

                                           229,000         5.00          $ 5.38          162,400         $ 6.94
                                          ========                                       =======

</TABLE>

18. SEGMENT INFORMATION

      The Company is organized  based upon the products and services it offers.
      Under this organizational structure, the Company has  two business
      segments: Motors and Other.

      The Motors segment, the Company's only remaining business segment, is
      comprised of Stature Electric, Inc., established in 1974 in Watertown, New
      York. Stature is a custom designer and manufacturer of motors and gear
      motors, including AC, DC and Universal. Significant markets for Stature,
      or the Motors segment, include commercial products and equipment,
      healthcare, recreation and non-automotive transportation. Stature's
      component products are sold throughout North America and in Europe,
      primarily to original equipment manufacturers who use them in their end
      products. Prior to July 30, 2002, the Motors segment also included the
      operations of Motor Products - Owosso Corporation and Motor Products -
      Ohio Corporation.

      The Company's Other segment includes Cramer, a business that manufactured
      timers and subfractional horsepower motors for use in commercial
      applications. The Company completed the sale of the assets associated with
      the timer and switch line of Cramer on December 4, 2000 and, in connection
      with the sale, changed the name of the company from M.H. Rhodes, Inc. to
      Cramer Company. The Company disposed of substantially all of the remaining
      Cramer assets (excluding real property) in a separate transaction
      completed on September 23, 2001.

      The Company derives substantially all of its revenues from within the
      United States. 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-20
<PAGE>

      The following table reflects, from continuing operations, net sales,
      income (loss) from operations, capital additions, and depreciation and
      amortization expense for the fiscal years ended October 2003, 2002 and
      2001 and identifiable assets as of October 2003, 2002 and 2001 for each
      segment:
<TABLE>
<CAPTION>

                                                               2003                2002               2001
<S>                                                        <C>                <C>                 <C>
Identifiable assets:
Motors                                                     $ 17,912,000       $ 25,376,000        $ 38,506,000
Other                                                            12,000            845,000           1,181,000
Net assets held for sale                                        350,000            350,000           1,078,000
Corporate                                                       106,000          1,399,000           5,629,000
                                                           ------------       ------------        ------------

           Total identifiable assets                       $ 18,380,000       $ 27,970,000        $ 46,394,000
                                                           ============       ============        ============

Net sales:
Motors                                                     $ 17,715,000       $ 36,901,000        $ 51,356,000
Other                                                                --                 --           2,970,000
                                                           ------------       ------------        ------------

           Total net sales                                 $ 17,715,000       $ 36,901,000        $ 54,326,000
                                                           ============       ============        ============

Income (loss) from operations:
Motors (1)                                                 $ (4,315,000)      $    716,000        $  4,669,000
Other (2)                                                       122,000           (381,000)         (1,417,000)
Corporate (3)                                                (1,678,000)        (3,281,000)         (5,106,000)
                                                           ------------       ------------        -----------

           Total income (loss) from operations             $ (5,871,000)      $ (2,946,000)       $ (1,854,000)
                                                           ============       ============        ============

Capital Additions:
Motors                                                     $    171,000       $    132,000        $    695,000
Corporate                                                            --                 --              62,000
                                                           ------------       ------------        ------------

           Total capital additions                         $    171,000       $    132,000        $    757,000
                                                           ============       ============        ============

Depreciation and amortization expense:
Motors                                                     $  1,421,000       $  3,694,000        $  3,711,000
Corporate                                                        11,000            146,000             156,000
                                                           ------------       ------------        ------------

           Total depreciation and amortization expense     $  1,432,000       $  3,840,000        $  3,867,000
                                                           ============       ============        ============

</TABLE>

(1)   Includes an expense of $5,331,000 for goodwill impairment in 2003.

(2)   Includes write-down of net assets held for sale of $0 in 2003, $381,000 in
      2002 and $1,100,000 in 2001.

(3)   Includes unallocated corporate expenses, primarily salaries and benefits,
      information technology, and other administrative expenses.




                                      F-21
<PAGE>

19.   SUBSEQUENT EVENT

      On February 10, 2004, the Company reached a definitive agreement with
      Allied Motion Control Technologies, Inc. ("Allied") for the acquisition by
      Allied of all the shares of the Company on the following terms: .068
      shares of common stock of Allied for each share of common stock of the
      Company, and a combination of .127 shares of Allied common stock, a
      warrant to purchase 0.28 shares of Allied common stock and cash of $0.9333
      for each share outstanding of the Company's Class A convertible preferred
      stock. Based on the Company's 5,824,306 common shares and 1,071,428
      preferred shares issued, the aggregate amount to common shareholders will
      be approximately $1.75 million, and the aggregate amount to preferred
      shareholders will be approximately $1.6 million. In addition, Allied has
      agreed to repay and assume up to $10.6 million of the Company's
      outstanding debt, and the Company's preferred shareholders may be entitled
      to Allied subordinated promissory notes with an aggregate principal amount
      of up to $500,000 based on the 2004 gross revenue of Stature. Accordingly,
      the transaction has an aggregate value of approximately $14.0 million,
      exclusive of any value attributable to the warrants and Allied notes. The
      board of directors of each Company has approved the transaction. The
      consummation of the transaction is subject to the approval of the
      Company's shareholders and other customary conditions. The transaction is
      expected to be completed prior to July 1, 2004.









                                      F-22
<PAGE>


20. QUARTERLY INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>


                                                             First              Second              Third              Fourth
                                                            Quarter             Quarter            Quarter             Quarter
Year Ended October 26, 2003                                --------            --------           ---------           ---------
--------------------------------------------------
<S>                                                       <C>                 <C>                <C>                 <C>
Net sales                                                 $ 4,601,000         $ 4,423,000        $ 4,399,000         $ 4,292,000

Gross profit                                                  846,000             855,000            814,000             826,000

Net loss                                                     (234,000)           (165,000)          (115,000)         (5,339,000)

Net loss available for common shareholders                   (575,000)           (507,000)          (458,000)         (5,683,000)

Basic and diluted loss
  per common share                                              (0.10)              (0.09)             (0.08)              (0.96)


Year Ended October 27, 2002
--------------------------------------------------
Net sales                                                 $ 8,993,000        $ 11,107,000       $ 11,415,000         $ 5,386,000

Gross profit                                                1,055,000           1,875,000          1,672,000           1,057,000

Income (loss) from continuing operations                   (1,555,000)          4,451,000         (1,119,000)          3,941,000

Loss from discontinued operations                                  --                  --                 --            (520,000)

Net income (loss)                                          (1,555,000)          4,451,000         (1,119,000)          3,421,000

Net income (loss) available for common shareholders        (1,890,000)          4,115,000         (1,457,000)          3,081,000

Basic and diluted earnings (loss) per common share:
     Continuing operations                                      (0.32)               0.70              (0.25)               0.62
     Discontinued operations                                       --                  --                 --               (0.09)

</TABLE>

Loss from continuing operations for the fourth quarter of 2003 included an
expense of $5,331,000 for goodwill impairment.

Loss from continuing operations for the fourth quarter of 2002 included
$381,000 for the writedown of assets held for sale.

Income (loss) from discontinued operations for the fourth quarter of 2002
included $520,000 for the write-down of assets held for sale.



                                      F-23
<PAGE>

                                                                     Schedule II

                               Owosso Corporation
                 Valuation and Qualifying Accounts and Reserves
                   For the three years ended October 26, 2003
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                        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 26, 2003
          Allowances on:
          Accounts receivable                           $ 49,000      $ (14,000)                                    $ 35,000
          Inventory                                      235,000                                       (31,000)      204,000

For  the year ended October 27, 2002
          Allowances on:
          Accounts receivable                          $ 388,000      $ (56,000)      $ (21,000)    $ (262,000)     $ 49,000
          Inventory                                      926,000                       (384,000)      (307,000)      235,000

For  the year ended October 28, 2001
          Allowances on:
          Accounts receivable                          $ 233,000      $ 155,000            $ --           $ --     $ 388,000
          Inventory                                    1,162,000         62,000              --       (298,000)      926,000


</TABLE>

---------------
(a)   Reflects reclassification to Net Assets Held for Sale

(b)   As to accounts receivable and inventory, primarily represents amounts
      written off against related assets.



                                      F-24