<PAGE>  1

                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549

                               FORM 10-Q
---
 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
---                  SECURITIES EXCHANGE ACT OF 1934
              For the quarterly period ended September 30, 1997

                                  OR

        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934
            For the transition period from      to
                                          ---------   ----------               

                     Commission file number   1-5356


                PENN ENGINEERING & MANUFACTURING CORP.
-----------------------------------------------------------------------------
       (Exact name of registrant as specified in its charter)

Delaware                                        23-0951065
-------------------------------         --------------------------
(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)             Identification No.)

P.O. Box 1000, Danboro, Pennsylvania                  18916
---------------------------------------------------------------------------
(Address of principal executive offices)           (Zip Code)

                             (215) 766-8853
---------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

                             Not Applicable
---------------------------------------------------------------------------
             (Former name, former address and former fiscal year,
                      if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
documents and 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 the number of shares outstanding of each of the
issuer's classes of common stock, as of the last practicable
date: 1,707,082 shares of Class A common stock, $.01 par value and
6,927,123 shares of common stock, $.01 par value, outstanding on
November 10, 1997.




                       





<PAGE>  2


                     PART I. FINANCIAL INFORMATION
         PENN ENGINEERING & MANUFACTURING CORP. & SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                              ASSETS
                                 (Unaudited)
                              September 30, 1997   December 31, 1996  
CURRENT ASSETS                ------------------   ------------------
<S>                                <C>                    <C>
  Cash and cash equivalents        $6,142,821             $4,208,339
  Short-term investments           11,725,415             10,857,728
  Accounts receivable-trade        25,891,769             29,579,972
  Allowance for doubtful accounts    (900,000)            (1,000,000)
  Refundable income taxes             852,868                245,682
  Inventories (Note 2)             26,057,256             27,533,220
  Prepaid expenses                  2,492,291              2,124,335
  Deferred income taxes               362,205                391,244     
                                   ----------             ----------
    Total current assets           72,624,625             73,940,520
                                   ----------             ----------

PROPERTY
  Property, plant & equipment     117,062,042            101,260,757
  Less accumulated depreciation    43,995,329             39,428,723
                                   ----------             ----------
    Property - net                 73,066,713             61,832,034
                                   ----------             ----------

OTHER ASSETS                        2,805,000              2,765,000
                                   ----------             ----------
      TOTAL                      $148,496,338           $138,537,554
                                 ============            ===========

                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable-trade           $4,985,477             $3,740,603
  Dividends payable                   948,609                      0
  Accrued expenses:
    Pension & profit sharing        2,526,427              2,139,844   
    Income taxes                       95,276                      0           
    Payroll & commissions           4,661,197              2,809,711
    Other                             978,648              1,017,518
                                   ----------             ----------
    Total current liabilities      14,195,634              9,707,676
                                   ----------             ----------

ACCRUED PENSION COST                4,330,429              4,792,857
                                   ----------             ----------  
DEFERRED INCOME TAXES               3,809,196              2,899,870
                                   ----------             ---------- 
STOCKHOLDERS' EQUITY (See Note 3)
  Class A common stock                 17,720                 17,720
  Common stock                         71,766                 71,661
  Additional paid-in capital       35,587,913             35,420,903
  Retained earnings                93,499,487             85,822,011
  Unrealized loss on 
     investments -net of tax          (64,060)               (61,671)
  Cumulative foreign currency
     translation adjustment          (633,592)               818,484
  Treasury stock                   (2,318,155)              (951,957)
                                  -----------            -----------
     Total stockholders' equity   126,161,079            121,137,151
                                  -----------            -----------
      TOTAL                      $148,496,338           $138,537,554
                                 ============           ============

</TABLE> 
See Notes to Condensed Consolidated Financial Statements

<PAGE>  3


          PENN ENGINEERING & MANUFACTURING CORP. & SUBSIDIARIES
 STATEMENTS  OF  CONDENSED  CONSOLIDATED  INCOME AND  RETAINED EARNINGS

<TABLE>
<CAPTION>                                      
                                                THREE MONTHS ENDED                 SIX MONTHS ENDED         
                                         --------------------------------  ------------------------------
                                                    (Unaudited)                      (Unaudited)
                                    September 30, 1997  September 30, 1996 September 30, 1997  September 30, 1996
                                    ------------------  ------------------ ------------------  ------------------
<S>                                      <C>                <C>              <C>                 <C> 
REVENUES:                                                                    
   Net Sales                             $42,531,365        $38,713,584      $123,521,017        $119,224,887
   Other income                              557,472            437,714         1,027,933             668,529
                                         -----------        -----------       -----------         ----------- 
                                          43,088,837         39,151,298       124,548,950         119,893,416
                                         -----------        -----------       -----------         ----------- 
COSTS AND EXPENSES                                                             
   Cost of products sold                  29,414,064         26,454,165        85,657,943          81,970,468
   Selling, general & administrative       7,690,801          6,823,851        22,522,212          21,101,852  
                                         -----------        -----------       -----------         ----------- 
                                          37,104,865         33,278,016       108,180,155         103,072,320
                                         -----------        -----------       -----------         -----------
INOME BEFORE INCOME TAXES                  5,983,972          5,873,282        16,368,795          16,821,096
PROVISION FOR INCOME TAXES                 2,156,000          2,198,500         6,006,000           6,307,000
                                         -----------        -----------       -----------         -----------
NET INCOME                                 3,827,972          3,674,782        10,362,795          10,514,096
RETAINED EARNINGS - BEGINNING             90,620,125         80,538,457        85,822,011          74,851,423 
CASH DIVIDEND                               (948,610)          (867,833)       (2,685,319)         (2,020,113)
                                         -----------        -----------       -----------         -----------
RETAINED EARNINGS - ENDING               $93,499,487        $83,345,406       $93,499,487         $83,345,406
                                         ===========        ===========       ===========         ===========
NET INCOME PER SHARE (See Note 3)              $0.44              $0.43             $1.19               $1.41
                                         ===========        ===========       ===========         ===========
WEIGHTED AVERAGE SHARES
  OUTSTANDING (See Note 3)                 8,685,190          8,638,111         8,705,183           7,435,992

CASH DIVIDEND PER SHARE (see Note 3)            $.11               $.10              $.31                $.27


</TABLE>
         See Notes to Condensed Consolidated Financial Statements




<PAGE> 4                             



         PENN ENGINEERING & MANUFACTURING CORP. & SUBSIDIARIES
            STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS

<TABLE>
<CAPTION>
                                                    NINE MONTHS ENDED
                                             -----------------------------
                                                      (Unaudited)
                                       September 30, 1997 September 30, 1996
                                       ------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                           <C>               <C>
Net income                                    $10,362,795       $10,514,096
Adjustments to reconcile net income to net
 cash provided by operating activities:
    Depreciation                                4,708,515         3,825,472
    Loss (gain) on disposal of property            (6,171)           47,339
    Gain on disposal of investments                (7,662)                0 
    Changes in assets and liabilities:
      (Increase)decrease in receivable          3,588,203        (3,911,468)
      (Increase) in refundable income taxes      (607,186)                0
      (Increase)decrease in inventories         1,475,964        (8,485,594)
      (Increase) in prepaid expenses, etc.       (367,956)           (8,724)  
      (Increase)decrease in deferred               
         income taxes-current                      29,039           (41,533)
      (Increase) in other assets                  (40,000)         (350,000)
      Increase in accounts payable              1,244,874           509,661
      Increase in accrued expenses              2,294,474         1,262,559
      (Decrease)in accrued pension cost          (462,428)         (498,692)
      Increase in deferred income 
          taxes- noncurrent                       909,326           523,022
                                               ----------        ----------
       Net cash provided by operating
          activities                           23,121,787         3,386,138
                                               ----------        ----------
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                      
     Property additions                       (16,161,540)      (18,646,182)
     Additions to held-to-maturity    
         investments                          (23,589,128)     (412,182,675)
     Additions to available-for-sale
         investments                                    0            (4,367) 
     Proceeds from disposal of held-to-
         maturity investments                  22,277,321       399,514,033
     Proceeds from disposal of available-     
         for-sale investments                     447,865           193,636
     Proceeds from disposal of property           164,097            41,225
                                               ----------       -----------
       Net cash used in investing activities  (16,861,385)      (31,084,330)
                                               ----------        ----------
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                                      
     Net short-term borrowings                          0        41,750,000
     Net short-term repayments                          0       (43,250,000) 
     Dividends paid                            (1,736,710)       (1,152,281)
     Issuance of common stock                     167,115        32,755,445
     Acquisition of treasury stock             (1,366,198)                0
                                                ---------        ----------
     Net cash provided by (used in)
         financing activities                  (2,935,793)       30,103,164
                                                ---------        ----------
     Effect of exchange rate and investment  
         reserve changes on cash               (1,390,127)          159,966
                                                ---------         --------- 
     Net increase in cash and cash equivalents  1,934,482         2,564,938
     Cash and cash equivalents at
         beginning of year                      4,208,339         1,459,370
                                                ---------         --------- 
     Cash and cash equivalents at end of year  $6,142,821        $4,024,308
                                               ==========        ==========

SUPPLEMENTAL CASH FLOW DATA:                                                   
     Cash paid during the year for:                                        
        Income taxes                           $5,086,490        $5,521,600
        Interest                                    1,380           217,907
</TABLE>
                                                     
See Notes to Condensed Consolidated Financial Statements                  
                               
<PAGE> 5

          PENN ENGINEERING & MANUFACTURING CORP. & SUBSIDIARIES                 
           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                
                            September 30, 1997                     

                                                       
                                                       
Note 1. Condensed Consolidated Financial Statements (Unaudited)                
---------------------------------------------------------------          
  The accompanying interim financial statements should be read in conjunction
with the annual financial statements and notes thereto included in
Registrant's Annual Report for the year ended December 31, 1996. The
information contained in this report is unaudited and subject to year-end
audit and adjustment. In the opinion of management, all adjustments (which
include only normal recurring adjustments) have been made which are necessary
for a fair presentation of Registrant's consolidated financial position at
September 30, 1997 and December 31, 1996 and the consolidated statements of
income and cash flows for the three and nine-month periods ended September 30,
1997 and 1996, respectively. The results of operations for the three and nine
months ended September 30, 1997 are not necessarily indicative of the results
of operations to be expected for the year ending December 31, 1997.

Note 2. Inventories
-------------------
  Substantially all of the Registrant's domestic fastener inventories are
priced on the lower of last-in, first-out (LIFO) cost or market method. The
remainder of the inventories are priced on the first-in, first-out (FIFO)
method, at the lower of cost or market.         
               
                                                       
       Inventories are as follows:
<TABLE>
<CAPTION>                                    
                                  (Unaudited)                       
                               September 30, 1997       December 31, 1996       
                               ------------------       -----------------
         <S>                        <C>                    <C>
         Raw material               $4,435,396             $4,469,666
         Tooling                     4,082,710              3,882,298
         Work-in-process             7,894,281              7,648,141
         Finished goods              9,644,869             11,533,115
                                    ----------              ---------
            TOTAL                  $26,057,256            $27,533,220
                                    ==========             ==========
</TABLE>
                                                       
If the FIFO method of inventory valuation had been used by Registrant for
all inventories, inventories would have been $8,840,112 and $8,117,442 higher
than reported at September 30, 1997 and December 31, 1996, respectively, and
net income would have been $454,000 and $170,000 higher than reported for the
nine months ended September 30, 1997 and 1996, respectively, and $320,000  
higher than reported for the three months ended September 30, 1997 and $3,000
lower than reported for the three months ended September 30, 1996. Included in
other assets is long-term tooling inventory totaling $2,805,000 and 
$2,765,000 at September 30, 1997 and December 31, 1996, respectively.

  In the fourth quarter of 1996, the Company changed its method of calculating
the index on its domestic fastener LIFO inventory from the unit cost method
to the components of cost method. Management believes that the change in its
LIFO method of application better reflects the effects of inflation and 
results in a more representative LIFO cost index for product mix changes.
Accordingly, the statement of Condensed Consolidated Income and Retained
Earnings for the three months and nine months ended September 30, 1996 has 
been restated to reflect the results of this change.


<PAGE 6>
                 
Note 3. Reclassification & Stock Repurchase
-------------------------------------------
  On May 22, 1996, Registrant effected a reclassification of its existing
common stock whereby each share of existing $1.00 par value voting common 
stock became one share of new $.01 par value Class A voting common stock (the
"Stock Reclassification"). On May 23, 1996, the Registrant effected a 4-for-1
stock split, in the form of a stock dividend, payable in shares of $.01 par
value non-voting common stock to stockholders of record on May 3, 1996
(the "Stock Dividend"). The change in par value of the Class A common stock
as a result of the Stock Reclassification resulted in the transfer of 
$1,754,305 from Class A common stock to additional paid-in capital, and the 
Stock Dividend resulted in the issuance of 5,316,075 new shares of non-voting
common stock and in the transfer of $53,161 from retained earnings to common
stock. In the forgoing consolidated financial statements, all per share
amounts and number of shares have been restated to reflect the Stock
Reclassification and the Stock Dividend.
  On August 12, 1997, Registrant repurchased 65,034 shares of $.01 par value 
non-voting common stock from a director of the Company at a price of $21.00
per share. The amount paid for the repurchase has been included in treasury
stock.

Note 4. Newly Issued Accounting Pronouncement
---------------------------------------------
  In February 1997, the Financial Accounting Standards Board issued 
Statement No. 128, "Earnings per Share" (SFAS No. 128). SFAS No. 128 requires
the presentation of basic EPS, calculated by dividing income available to
common shareholders by the weighted-average number of common shares
outstanding during the period, and diluted EPS, calculated the same as basic
EPS except that the denominator is increased to include the number of
additional common shares that would have been issued if all dilutive
potential common shares had been issued. SFAS No. 128 is effective for 
periods ending after December 15, 1997, and requires the restatement of EPS
for all periods presented. On a pro forma basis, the adoption of SFAS No. 128   
would not have a material effect on the Company's calculation of primary or
fully diluted earnings per share in the accompanying financial statements.      

<PAGE> 7





           PENN ENGINEERING & MANUFACTURING CORP. & SUBSIDIARIES               

                             September 30, 1997                              

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF           
                          RESULTS OF OPERATIONS                       
                         AND FINANCIAL CONDITION                               
          
                                                       

Quarter Ended September 30, 1997 vs. Quarter Ended September 30, 1996
---------------------------------------------------------------------
   Consolidated net sales for the quarter ended September 30, 1997 were $42.5
million, versus $38.7 million for the quarter ended September 30, 1996, a 9.8%
increase. Sales to customers outside the United States for the quarter
ended September 30, 1997 were $10.2 million, versus $10.1 million for the
quarter ended September 30, 1996, a 1.0% increase. Net sales for the fastener
operation for the quarter ended September 30, 1997 were $34.4 million, versus 
$31.7 million for the quarter ended September 30, 1996, an 8.5% increase.
Motor sales were $8.1 million for the quarter ended September 30, 1997, versus
$7.1 million for the quarter ended September 30, 1996, a 14.1% increase.
   The number of fastener units sold to independent customers increased 7.5%
in the third quarter of 1997 compared to the third quarter of 1996. The number
of fastener units sold within North America increased approximately 7.5% in 
the third quarter of 1997 compared to the third quarter of 1996, and 
represented approximately 72.7% of total fasteners sold in the third quarter
of 1997. The number of fastener units sold into Europe increased approximately
24.3% in the third quarter of 1997 compared to the third quarter of 1996 and
represented approximately 22.2% of total fasteners sold in the third quarter
of 1997. Point-of-sale demand remains strong in these two regions and sales 
volume is now increasing after adjustments were made to unusually high
distributor inventory levels in late 1996 and early 1997. The number of 
fastener units sold into the Asia-Pacific region decreased approximately 
32.7% in the third quarter of 1997 compared to the third quarter of 1996. 
This decrease is attributable to the economic uncertainty faced by this region
during the third quarter of 1997 forcing several customers to shift their
production to other regions. The number of motors sold increased 23.0% in the
third quarter of 1997 compared to the third quarter of 1996. Strong demand 
from the semiconductor equipment manufacturing market, the data storage and
retrieval market, and the graphic imaging market all contributed to the
motor sales increase.
  The average selling price for fasteners shipped in the third quarter of 
1997 increased approximately 1.6% from $62.49 per thousand fasteners sold in
the third quarter of 1996 to $63.48 per thousand fasteners sold in the third
quarter of 1997. This increase is mainly due to a price increase which was 
effective in the second quarter of 1997. The average selling price of Pittman
motors decreased approximately 6.7% from the third quarter of 1996 to the
third quarter of 1997 mainly due to a change in product mix towards less
expensive brush motors.
  Consolidated gross profit for the third quarter of 1997 was $13.1 million,
versus $12.3 million for the third quarter of 1996, a 6.5% increase. 
Fastener gross profit increased 4.7% in the third quarter of 1997 compared to
the third quarter of 1996 mainly due to higher sales volume offset by higher
fixed costs due to the large level of capital expenditures during 1996 and
early 1997. Motor gross profit increased 20.7% due to the large sales volume
increase during the quarter.
   Consolidated selling, general, and administrative expenses ("SG&A") for
the third quarter of 1997 were $7.7 million, versus $6.8 million for the
third quarter of 1996, a 13.2% increase. A major reason for the increase is 
that commission expense increased 8.7% from the third quarter of 1996 to the
third quarter of 1997 due to continued strong end customer demand.

<PAGE> 8

           PENN ENGINEERING & MANUFACTURING CORP. & SUBSIDIARIES
                             September 30, 1997

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
                          RESULTS OF OPERATIONS
                         AND FINANCIAL CONDITION


                
Nine Months Ended September 30, 1997 vs. Nine Months Ended September 30, 1996
-----------------------------------------------------------------------------
   Consolidated net sales for the nine months ended September 30, 1997 were
$123.5 million, versus $119.2 million for the nine months ended September 30, 
1996, a 3.6% increase. Sales to customers outside the United States for the 
nine months ended September 30, 1997 were $30.4 million, versus $29.5 million
for the nine months ended September 30, 1996, a 3.1% increase. Net sales for
the fastener operation for the nine months ended September 30, 1997 were
$100.6 million, versus $96.8 million for the nine months ended September 30,
1996, a 3.9% increase. Motor sales were $22.9 million for the nine months
ended September 30, 1997, versus $22.4 million for the nine months ended
September 30, 1996, a 2.2% increase.
   The number of fastener units sold to independent customers decreased
approximately 3.0% in the first nine months of 1997 compared to the first 
nine months of 1996. The number of fastener units sold within North America
decreased approximately 5.9% in the first nine months of 1997 compared to the
first nine months of 1996, and represented approximately 71.4% of total
fasteners shipped in the first nine months of 1997. This decrease is mainly
due to adjustments in distributor inventory levels which were unusually high
during the latter part of 1996 and early 1997. The number of fastener 
units sold into Europe increased approximately 6.3% in the first nine months
of 1997 compared to the first nine months of 1996, and represented
approximately 23.1% of total fasteners shipped in the first nine months of 
1997. The number of fastener units sold to the Asia-Pacific region decreased 
approximately 0.9% in the first nine months of 1997 compared to the first
nine months of 1996. The increase in Europe is due to continued strong point-
of-sale demand throughout all three quarters of 1997 as opposed to 1996 when
point-of-sales demand trended significantly downward in the latter part of the
year. Sales in the Asia-Pacific region have been affected by the relocation 
of manufacturing operations away from the region due to currency fluctuations
and other economic problems being experienced in the area during the third 
quarter. The number of motors sold increased 2.3% from the first nine months
of 1996 to the first nine months of 1997 as demand picked up significantly in
the third quarter of 1997.
   The average selling price of fasteners shipped in the first nine months of
1997 increased approximately 6.3% from $60.35 per thousand fasteners sold in
the first nine months of 1996 to $64.16 per thousand fasteners sold in the 
first nine months of 1997. This increase is mainly due to a change in product
mix toward higher priced fasteners and a 3.98% price increase effective in the
second quarter of 1997. The average selling price of Pittman motors increased
from $40.93 per motor in the first nine months of 1996 to $40.98 per motor in 
the first nine months of 1997.
   Consolidated gross profit increased slightly from $37.3 million in the 
first nine months of 1996 to $37.9 million in the first nine months
of 1997. Fastener gross profit increased 1.9% in the first nine months of 
1997 compared to the first nine months of 1996 as a result of increased sales
offset by higher depreciation expense. Motor gross profit in the first nine
months of 1997 was equal to the comparable period in 1996. 
   Consolidated SG&A for the first nine months of 1997 was $22.5 million,
versus $21.1 million for the first nine months of 1996, a 6.6% increase. This
increase was caused by increased commission expense due to continued strong
end customer demand and increased legal, investor relations, and other
professional fees resulting from the Company's 1996 public offering and
subsequent listing on the New York Stock Exchange.
   Consolidated net income for the first nine months of 1997 was $10.4 
million, versus $10.5 million for the first nine months of 1996. Other income 
increased mainly due to higher investment income and more favorable currency
transactions.

<PAGE> 9


           PENN ENGINEERING & MANUFACTURING CORP. & SUBSIDIARIES
                            September 30, 1997   


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
                          RESULTS OF OPERATIONS
                         AND FINANCIAL CONDITION



Liquidity and Capital Resources
-------------------------------
   Net cash provided by operations totaled $23.1 million for the nine months
ended September 30, 1997. The Company experienced a 12% decrease in receivable
days outstanding from December 31, 1996 to September 30, 1997 as well as a
planned decrease in inventory levels which contributed to the increased cash
from operations. This cash from operations was mainly used to finance $16.1
million in capital expenditures including the construction of a 120,000 square
foot manufacturing facility in Winston-Salem, North Carolina which is now
fully operational. Cash was also used to pay $1.7 million in dividends and
to repurchase shares of non-voting common stock at a cost of $1.4 million
for treasury. Short-term investments increased 7.3% from $10.9 million at
December 31, 1996 to $11.7 million at September 30, 1997. Also, the Company
had approximately $27.5 million available at September 30, 1997 under its
short-term lines of credit. Accordingly, the Company anticipates that its 
existing capital resources and cash flow generated from future operations will
enable it to maintain its current level of operations and its planned growth
for the foreseeable future.

<PAGE> 10
      
                   PART II OTHER INFORMATION

Item 1. Legal Proceedings
-------------------------
Reference is made to Part 1, Item 3 of the Registrant's Form 10-K Annual
Report for the year ended December 31, 1996.

Item 2. Changes in Securities
-----------------------------
Not Applicable

Item 3. Defaults Upon Senior Securities
---------------------------------------
Not Applicable

Item 4. Submission of Matters to a Vote of Security Holders
-----------------------------------------------------------
Not Applicable

Item 5. Other Information
-------------------------
Not Applicable

Item 6. Exhibits and Reports on Form 8-K
----------------------------------------
(a) Exhibits:
    Exhibit No.    Description
    -----------    -----------
      3.1          Restated Certificate of Incorporation. (Incorporated by
                   reference to Exhibit 3.1 of Registrant's Form 10-Q 
                   Quarterly Report for the period ended June 30, 1996.) 
      3.2          Bylaws, as amended. (Incorporated by reference to Exhibit
                   3(ii) of the Registrant's Form 10-K Annual Report for the
                   year ended December 31, 1994.)
      27           Financial Statement Data Schedule. (Filed herewith.)
    
(b) Reports on Form 8-K
    Registrant filed a Form 8-K dated September 26, 1997 to report under
    Item 4 that it would not be retaining Deloitte & Touche LLP as its
    independent auditors and that on September 29, 1997 had retained Ernst &
    Young LLP to serve as its certifying accountant.





<PAGE> 11
   
                                 SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                               PENN ENGINEERING & MANUFACTURING CORP.


Dated: November 13, 1997        By:  /s/ Kenneth A. Swanstrom
                               ----------------------------
                                Kenneth A. Swanstrom
                                Chairman/ CEO/ President



Dated: November 13, 1997        By:  /s/ Mark W. Simon
                               ----------------------------
                                Mark W. Simon
                                Vice-President - Finance