UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 10-Q
                Quarterly report pursuant to section 13 or 15 (d)
                     of the Securities Exchange Act of 1934

For the quarter ended September 30, 1997        Commission file number 0-13875


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


                Texas                                            74-1591073
   (State or other jurisdiction of                             (IRS employer
   incorporation or organization)                          identification no.)

 235 West Turbo, San Antonio, Texas                                78216
(Address of principal executive offices)                         (Zip Code)

       Registrant's telephone number, including area code: (210) 344-3071

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 14(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 issuers of classes of
common stock, as of the latest practicable date.

          Title                                      Shares outstanding as of
                                                           November 10, 1997

Common stock, par value $.01 per share                          8,900,384



<PAGE>


Part I - Financial Information

Item 1 - Financial Statements
<TABLE>
<CAPTION>

                       LANCER CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                      ASSETS


                                                                September 30,                  December 31,
                                                                    1997                           1996
                                                             --------------------           --------------------
                                                                 (Unaudited)

Current assets:
<S>                                                        <C>                            <C>                  
  Cash                                                     $           1,095,366          $           1,016,425
                                                             --------------------           --------------------
  Receivables:
    Trade accounts and notes                                          26,773,405                     19,686,318
    Refundable income taxes                                                1,572                        396,495
    Other                                                              1,504,005                        690,034
                                                             --------------------           --------------------
                                                                      28,278,982                     20,772,847
    Less allowance for doubtful accounts                                (185,000)                      (185,000)
                                                             --------------------           --------------------
      Net receivables                                                 28,093,982                     20,587,847
                                                             --------------------           --------------------

  Inventories                                                         43,120,699                     28,238,923
  Prepaid expenses                                                       184,456                        243,937
  Deferred tax asset                                                     102,346                         64,513
                                                             --------------------           --------------------

      Total current assets                                            72,596,849                     50,151,645
                                                             --------------------           --------------------

Property, plant and equipment, at cost:
  Land                                                                 1,307,663                      1,307,663
  Buildings                                                            9,986,421                      9,681,466
  Machinery and equipment                                             17,245,116                     14,925,713
  Tools and dies                                                       8,635,096                      8,448,506
  Leaseholds, office equipment and vehicles                            6,834,951                      5,945,069
  Construction in progress                                             9,359,293                      5,162,508
                                                             --------------------           --------------------
                                                                      53,368,540                     45,470,925
  Less accumulated depreciation and amortization                     (21,488,976)                   (19,676,377)
                                                             --------------------           --------------------
    Net property, plant and equipment                                 31,879,564                     25,794,548
                                                             --------------------           --------------------

Long-term receivables                                                    447,795                        404,007
Investment in affiliates                                               5,867,304                      2,975,000
Intangibles and other assets,
 at cost, less accumulated amortization                                3,373,551                      2,684,073
                                                             --------------------           --------------------

                                                           $         114,165,063          $          82,009,273
                                                             ====================           ====================
<CAPTION>

                               See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                       LANCER CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED BALANCE SHEETS (continued)

                      LIABILITIES AND SHAREHOLDERS' EQUITY


                                                                       September 30,                  December 31,
                                                                            1997                          1996
                                                                     -------------------           --------------------
                                                                        (Unaudited)
Current liabilities:
<S>                                                            <C>                           <C>                  
  Accounts Payable                                             $         16,176,313          $           6,302,345
  Current installments of long-term debt                                  3,472,200                      1,852,500
  Line of credit with bank                                               19,000,000                     11,700,000
  Deferred licensing and maintenance fees                                   962,844                      1,339,868
  Accrued expenses and other liabilities                                  5,753,900                      4,288,130
  Income taxes payable                                                      (22,387)                         -
                                                                     -------------------           --------------------

    Total current liabilities                                            45,342,870                     25,482,843

Deferred tax liability                                                    1,179,036                      1,038,655
Other long-term liabilities                                                 820,000                        820,000
Long-term debt, excluding current installments                           21,958,550                     15,459,375
Long-term deferred licensing and maintenance fees                         2,173,149                      2,172,137
                                                                     -------------------           --------------------

     Total liabilities                                                   71,473,605                     44,973,010
                                                                     -------------------           --------------------

Shareholders' equity:
  Common stock, $.01 par value:
   50,000,000 shares authorized; 8,900,436 and 5,820,976
   issued and outstanding in 1997 and 1996, respectively                     89,004                         58,209

  Additional paid-in capital                                             11,594,526                      9,888,244

  Cumulative translation adjustment                                        (514,040)                       183,803

  Retained earnings                                                      31,521,968                     26,906,007
                                                                     -------------------           --------------------

    Total shareholders' equity                                           42,691,458                     37,036,263
                                                                     -------------------           --------------------

                                                                   $    114,165,063              $      82,009,273
                                                                     ===================           ====================

<CAPTION>

                           See  accompanying  notes  to  consolidated  financial statements.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                       LANCER CORPORATION AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)



                                                Three Months Ended                          Nine Months Ended
                                       September 30,        September 30,          September 30,        September 30,
                                           1997                 1996                    1997                 1996
                                      ----------------     ----------------       -----------------    -----------------

<S>                                 <C>                  <C>                    <C>                  <C>               
Net sales                           $      29,844,076    $      27,895,453      $       92,536,791   $       77,133,939
Cost of sales                              22,214,108           21,409,375              69,300,881           58,866,795
                                      ----------------     ----------------       -----------------    -----------------
    Gross profit                            7,629,968            6,486,078              23,235,910           18,267,144

Selling, general and
   administrative expenses                  5,377,909            4,085,332              14,435,253           10,670,224
                                      ----------------     ----------------       -----------------    -----------------

    Operating income                        2,252,059            2,400,746               8,800,657            7,596,920
                                      ----------------     ----------------       -----------------    -----------------

Other income (expense):
  Interest expense                           (638,029)            (306,971)             (2,012,136)          (1,114,336)
  Other income, net                           122,660              230,973                 586,845              452,250
                                      ----------------     ----------------       -----------------    -----------------
                                             (515,369)             (75,998)             (1,425,291)            (662,086)
                                      ----------------     ----------------       -----------------    -----------------

    Income before income taxes              1,736,690            2,324,748               7,375,366            6,934,834
                                      ----------------     ----------------       -----------------    -----------------

Income tax expense (benefit):
  Current                                     642,587              708,353               2,619,024            2,522,704
  Deferred                                     69,468              107,643                 140,381               37,131
                                      ----------------     ----------------       -----------------    -----------------
                                              712,055              815,996               2,759,405            2,559,835
                                      ----------------     ----------------       -----------------    -----------------

    Net earnings                    $       1,024,635   $        1,508,752      $        4,615,961   $        4,374,999
                                      ================     ================       =================    =================

Weighted average shares                     9,402,980            9,120,756               9,384,624            9,091,337
                                      ================     ================       =================    =================

Net earnings per share              $            0.11    $            0.17      $             0.49   $             0.48
                                      ================     ================       =================    =================

<CAPTION>

                               See  accompanying  notes  to  consolidated  financial statements.
</TABLE>



<PAGE>


<TABLE>
<CAPTION>

                       LANCER CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                                                                Nine Months Ended
                                                                                        September 30,             September 30,
                                                                                            1997                      1996
                                                                                  -----------------------   -----------------------

Cash flow from operating activities:
<S>                                                                             <C>                       <C>                    
     Net earnings                                                               $              4,615,961  $             4,374,999
     Adjustments  to  reconcile  net  earnings  to net  cash  used by  
       operating activities (net of effects from purchase of subsidiaries:)
        Depreciation and amortization                                                          2,011,512                1,844,980
        Loss on sale and disposal of assets                                                           -                   (15,485)
        Cumulative effect of the translation adjustment                                         (697,843)                 218,896
        Gain on investments in affiliates                                                        (87,826)                       -
        Changes in assets and liabilities:
            Receivables                                                                       (6,654,003)              (5,183,764)
            Refundable income taxes                                                              394,923                        -
            Prepaid expenses                                                                      76,903                 (183,771)
            Deferred tax liability                                                               (37,833)                       -
            Inventories                                                                      (10,698,760)              (7,023,797)
            Other assets                                                                         152,769                  (71,524)
            Accounts payable                                                                   9,291,848                1,982,935
            Accrued expenses and other liabilities                                             1,303,441                1,279,103
            Income taxes payable                                                                 (22,387)                (330,577)
            Deferred license fees and other revenue                                             (376,012)                 659,693
            Other long-term liabilities                                                          140,381                   90,000
                                                                                  -----------------------   -----------------------
     Net cash used by operating activities                                                      (586,926)              (2,358,312)
                                                                                  -----------------------   -----------------------
Cash flow from investing activities:
        Proceeds from sale of assets                                                                   -                   43,625
        Acquisition of property, plant and equipment                                          (6,929,838)              (5,838,456)
        Acquisition of subsidiary companies                                                   (3,768,375)                        -
        Additional investments in affiliates                                                    (250,000)                        -
                                                                                  -----------------------   -----------------------
     Net cash used in investing activities                                                   (10,948,213)              (5,794,831)
                                                                                  -----------------------   -----------------------

Cash flow from financing activities:
        Net borrowings under line of credit agreements                                         7,300,000                7,900,000
        Proceeds from long-term debt                                                           5,850,000                8,301,883
        Retirement of long-term debt                                                          (1,717,125)              (6,447,550)
        Proceeds from exercise of stock options                                                  181,205                   23,204
                                                                                  -----------------------   -----------------------
Net cash provided by financing activities                                                     11,614,080                9,777,537
                                                                                  -----------------------   -----------------------
Net increase in cash                                                                              78,941                1,624,394
Cash at beginning of year                                                                      1,016,425                  754,352
                                                                                  -----------------------   -----------------------
Cash at end of period                                                           $              1,095,366   $            2,378,746
                                                                                  =======================   =======================
<CAPTION>
       Lancer issued debt of $3,986,000 and stock of  $1,555,872 to the sellers of the subsidiaries acquired in 1997.
                   The non-cash portion of these transactions is excluded from the above statement.
                           See accompanying notes to consolidated financial statements.
</TABLE>


<PAGE>



                       LANCER CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)



1.       Basis of Presentation

All  adjustments  (consisting of normal  recurring  adjustments)  have been made
which are necessary for a fair presentation of financial position and results of
operations.  All intercompany  balances and transactions have been eliminated in
consolidation.  It is suggested that the  consolidated  financial  statements be
read in conjunction with the consolidated financial statements and notes thereto
included in the December 31, 1996 Annual Report on Form 10-K.

Net earnings per share are based on the  weighted  average  number of common and
common equivalent (dilutive stock options) shares outstanding each period. Fully
diluted net  earnings  per share would not be  different  than net  earnings per
share.  On July 8, 1997,  the  Company  effected  a  three-for-two  stock  split
accounted for as a dividend.  Prior year weighted average shares outstanding and
prior year per share amounts have been restated accordingly.

Certain amounts in the  consolidated  financial  statements for prior years have
been reclassified to conform with the current year's presentation.


2.       Inventory Components

The  Company  uses the  gross  profit  method  to  determine  cost of sales  and
inventory for interim  periods.  Inventory  components  are  estimated  based on
historical relationships as follows:


<TABLE>
<CAPTION>

                                             September 30,                December 31,
                                                 1997                         1996
                                          --------------------         --------------------
<S>                                     <C>                          <C>
Finished Goods                          $          11,845,866        $           8,543,784
Work in process                                    25,290,777                   18,425,735
Raw material and supplies                           5,984,056                    1,269,404
                                          ====================         ====================
                                        $          43,120,699        $          28,238,923
                                          ====================         ====================
</TABLE>


3.       Earnings Per Share

In February  1997,  the  Financial  Accounting  Standards  Board  (FASB)  issued
Statement  of  Financial  Accounting  Standards  No.  128,  Earnings  Per  Share
(Statement  128).  Statement 128 specifies the  computation,  presentation,  and
disclosure  requirements for earnings per share (EPS) for entities with publicly
held  common  stock or  potential  common  stock.  Statement  128 was  issued to
simplify the  computation of EPS and to make the U.S.  standard more  compatible
with  the EPS  standards  of  other  countries  and  that  of the  International
Accounting  Standards  Committee (IASC). It replaces the presentation of primary
EPS with a presentation of basic EPS and fully diluted EPS with diluted EPS.


<PAGE>


If the Company had adopted the  Statement  as of September  30, 1997,  EPS would
have been as follows:
<TABLE>
<CAPTION>


                           Three Months Ended                                Nine Months Ended
                  September 30,         September 30,               September 30,         September 30,
                       1997                  1996                        1997                  1996
                 -----------------     -----------------           -----------------     -----------------
<S>              <C>                   <C>                         <C>                   <C>             
Basic EPS        $           0.12      $           0.17            $           0.52      $           0.48
Diluted EPS                  0.11                  0.17                        0.49                  0.48
</TABLE>


Item 2 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations

This  document  contains  certain  "forward-looking"  statements as such term is
defined in the Private Securities  Litigation Reform Act of 1995 and information
relating to the Company  and its  subsidiaries  that are based on the beliefs of
the  Company's  management.  When used in this report,  the words  "anticipate,"
"believe,"  "estimate,"  "expect," "forecast," "plan," and "intend" and words or
phrases of similar import,  as they relate to the Company or its subsidiaries or
Company management,  are intended to identify forward-looking  statements.  Such
statements reflect the current risks,  uncertainties and assumptions which exist
or must be made as a result of certain factors  including,  without  limitation,
competitive   factors,   general  economic   conditions,   customer   relations,
relationships  with  vendors,   the  interest  rate  environment,   governmental
regulation  and  supervision,   seasonality,   distribution  networks,   product
introductions and acceptance, one-time events and other factors described herein
and in other  filings  made by the  Company  with the  Securities  and  Exchange
Commission.  Based  upon  changing  conditions,  should any one or more of these
risks or uncertainties  materialize,  or should any underlying assumptions prove
incorrect,  actual results may vary materially  from those  described  herein as
anticipated,  believed, estimated,  expected, forecast, planned or intended. The
Company does not intend to update these forward-looking statements.

Results of Operations

Comparison of the Three-Month Periods Ended September 30, 1997 and 1996

Net sales for the quarter ended  September 30, 1997  were $29.8  million, a 7.1%
increase  over  sales in the  third  quarter  of 1996.  The  increase  primarily
reflects the inclusion of sales from the Company's newly-acquired  operations in
Brazil  and  New  Zealand.  Sales  in  parts  of  Asia  and  Europe  were  below
expectations.  Overall,  sales to customers outside the United States were 43.3%
of sales in the third  quarter of 1997,  compared to 37.0% of sales in the third
quarter of 1996.

Gross margin in the third  quarter of 1997 was 25.6%,  up from 23.3% in the same
period last year.  The  improvement  was the result of continued cost savings in
the manufacturing process and changes in product mix.

Selling,  general and  administrative  expenses  were $5.4  million in the third
quarter of 1996,  an increase of $1.3  million,  or 33.0% from the third quarter
last year. Expenses from Lancer's new operations in Brazil and New Zealand, plus
costs  associated  with the Company's new marketing  initiative in Europe caused
most of the increase.

Interest expense for the three months ended September 30, 1997 was $0.6 million,
up $0.3 million,  or 107.8% from the same period last year. The higher  interest
expense is the  result of larger  borrowings  that  financed  capital  spending,
acquisitions,  and  increases in current  assets.  Lancer's  effective  tax rate
increased  in the third  quarter  of 1997  because  of the  nondeductibility  of
foreign losses against income earned in the United States.  Net earnings for the
1997 quarter were $1.0 million,  down 32.1% from the $1.5 million  earned in the
third quarter of 1996.

There  were  several  factors  that  negatively   impacted  Lancer's   financial
performance in the third quarter of 1997.  First, the Company's  subsidiaries in
Brazil and New Zealand were  unprofitable.  Sales in those markets suffered from
overall  weakness  in  demand  for  dispensing  equipment.   Results  from  both
subsidiaries  may  remain  pressured  in the  near  term,  but are  expected  to
strengthen in 1998. Second, Lancer recently formed a new subsidiary in Brussels,
Belgium.  Operations  consist of a warehouse and sales office.  The new European
operation will improve  service to customers.  The short term impact has been to
increase costs in a weak European market.  Third,  sales to Asian customers were
below  expectations,  as falling  currency  values in Southeast Asia  negatively
impacted shipments to the region.  Currently,  demand for the Company's products
varies greatly by individual  market within Asia. The uncertainty about currency
values could continue to impact the Company's sales in Asia.


Comparison of the Nine-Month Periods ended September 30, 1997 and 1996

Net sales for the nine months ended September 30, 1997 were $92.5 million, a 20%
increase  from  sales in the same  period of 1996.  The  increase  reflects  the
results  of the  Company's  recently  acquired  subsidiaries  in Brazil  and New
Zealand,  higher  export sales from the United  States,  and higher sales in the
domestic market.  Sales to customers outside the United States were 48.0% of net
sales in the first three quarters of 1997,  compared to 39.7% in the same period
of 1996.

Gross  margin  in the  first  nine  months  of  1997  was  25.1%, up from  23.7%
in the  1996  period.  Improved  manufacturing  efficiencies  caused most of the
increase.

Selling,  general and  administrative  expenses  were $14.4 million in the first
three quarters of 1997, up 35.3% from the same period of 1996.  Operating  costs
from the new  subsidiaries  in Brazil and New  Zealand,  increased  spending  in
Europe,  and a general  increase  in  spending  to  support  growth  caused  the
increase.

Interest  expense rose to $2.0 million in 1997 from $1.1 million in 1996 because
of higher average borrowings.  Net earnings were $4.6 million in the first three
quarters of 1997, up 5.5% from the $4.4 million earned in the 1996 period.


Liquidity and Capital Resources

The Company's  principal sources of liquidity are cash flows from operations and
amounts available under the Company's  existing lines of credit. The Company has
met, and currently  expects that it will continue to meet,  substantially all of
its working  capital and capital  expenditure  requirements  as well as its debt
service  requirements with funds provided by operations and borrowings under its
credit facilities.

Net cash used by operating activities improved to $0.6 million in the first nine
months of 1997,  compared to $2.4  million in the same period last year.  Lancer
invested  $6.9  million in  property,  plant and  equipment  in the first  three
quarters of 1997. Additionally,  the Company paid approximately $6.0 million for
its  Brazilian  operations,  and $3.3  million for the assets of the New Zealand
company  acquired in the second  quarter.  The Company  financed  the  Brazilian
transaction  with a $4.0  million  note issued to the seller and $2.0 million in
cash.  Consideration for the New Zealand acquisition consisted of 122,832 shares
of Lancer  Corporation  common  stock  valued  at  approximately  $1.6  million,
adjusted  for the  three-for-two  stock split  effected  July 8, 1997,  and $1.7
million in cash.  Lancer financed the cash portion of its  acquisitions  and its
capital spending with bank debt.

Effective  May 12, 1997,  the Company  increased  its  revolving  facility  from
$17.5 million to  $25.0  million.  All  other  material  terms  of the revolving
facility are unchanged.


Part II - Other Information

Item 1 - Legal Proceedings

The Company is a party to various  lawsuits and claims  generally  incidental to
its business.  In the opinion of management and independent  legal counsel,  the
ultimate  disposition  of these  matters is not  expected to have a  significant
adverse effect on the Company's financial position or results of operations.


Item 6 - Exhibits and Reports on Form 8-K

         (a)      Exhibits:

                  None

         (b)      Reports on Form 8-K

                  None





SIGNATURES

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

LANCER CORPORATION
(Registrant)



November 12, 1997                    By:  /s/ George F. Schroeder
                                          George F. Schroeder
                                          President and CEO



November 12, 1997                    By:  /s/ John P. Herbots
                                          John P. Herbots
                                          Chief Financial Officer