<PAGE>

                       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 quarterly period ended: April 27, 1997   Commission file number: 0-25066



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


         Pennsylvania                                    23-2756709
(State or other jurisdiction of                (IRS employer identification no.)
 incorporation or organization)



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


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



Indicate by check 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 
                                       ---    ---

As of June 6, 1997 there were 5,808,676 shares of Common Stock, $.01 par value,
were outstanding.

<PAGE>

                               OWOSSO CORPORATION





PART I - Financial Information:                                         Page No.

         Item 1.  Consolidated Financial Statements

                       Consolidated Balance Sheets                             3
                       April 27, 1997 (unaudited) and
                       October 27, 1996

                       Consolidated Statements of Operations                   4
                       Three and Six Months Ended April 27, 1997 and
                       April 28, 1996 (unaudited)

                       Consolidated Statements of Cash Flows                   5
                       Six Months Ended April 27, 1997 and
                       April 28, 1996 (unaudited)

                       Notes to Consolidated Financial Statements              6
                       (unaudited)

         Item 2.       Management's Discussion and Analysis of                 9
                       Financial Condition and Results of Operation


Part II - Other Information:


         Item 4.       Submission of Matters to a Vote of Security Holders    16

         Item 6.       Exhibits and Reports on Form 8-K                       16


                                      -2-

<PAGE>
OWOSSO CORPORATION

CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                              April 27,          October 27,
                                                                                                 1997                1996
                                                                                             (Unaudited)
ASSETS

<S>                                                                                         <C>                 <C>          
CURRENT ASSETS:
  Cash and cash equivalents                                                                 $     573,338       $     839,889
  Receivables, net                                                                             20,065,866          18,415,245
  Inventories, net                                                                             22,160,956          19,123,122
  Advances and interest receivable from affiliate                                                  43,840              36,766
  Prepaid expenses and other                                                                    2,958,417           2,640,169
                                                                                            -------------       -------------

           Total current assets                                                                45,802,417          41,055,191

PROPERTY, PLANT AND EQUIPMENT, NET                                                             26,780,443          26,308,809

INTANGIBLES, NET                                                                               38,251,477          39,277,112

OTHER ASSETS                                                                                    1,293,517           1,254,233
                                                                                            -------------       -------------

TOTAL ASSETS                                                                                $ 112,127,854       $ 107,895,345
                                                                                            =============       =============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Payables - trade                                                                          $   8,888,969       $   6,597,061
  Accrued compensation and benefits                                                             3,000,890           3,005,658
  Accrued expenses                                                                              3,907,972           2,321,457
  Related party debt                                                                            3,750,000           5,975,000
  Current portion of long-term debt                                                             2,725,021           2,770,934
                                                                                            -------------       -------------

            Total current liabilities                                                          22,272,852          20,670,110

LONG-TERM DEBT, LESS CURRENT PORTION                                                           48,247,570          45,068,116

POSTRETIREMENT BENEFITS                                                                         1,701,225           1,593,950

DEFERRED TAXES                                                                                  3,543,000           3,543,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Convertible preferred stock Class A, 5% cumulative, $.01 par value; 10,000,000
    shares authorized; 1,071,428 shares issued and outstanding (aggregate
    liquidation value at April 27, 1997 and October 27, 1996 - $15,000,000)                    13,813,252          13,667,814
  Common stock, $.01 par value; 15,000,000 authorized; 5,865,000 shares issued
    and outstanding                                                                                58,650              58,650
  Additional paid-in capital                                                                   21,611,701          21,611,701
  Retained earnings                                                                             1,328,888           2,131,288
                                                                                            -------------       -------------

            Total                                                                              36,812,491          37,469,453
   Less treasury stock, at cost (56,324 shares at April 27, 1997 and October 27, 1996)           (449,284)           (449,284)
                                                                                            -------------       -------------

            Total stockholders' equity                                                         36,363,207          37,020,169
                                                                                            -------------       -------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                  $ 112,127,854       $ 107,895,345
                                                                                            =============       =============
</TABLE>


See notes to consolidated financial statements.


                                      -3-
                                       
<PAGE>
OWOSSO CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS  (UNAUDITED)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                 Three Months Ended                    Six Months Ended
                                                          --------------------------------------------------------------------------
                                                            April 27,          April 28,          April 27,         April 28,
                                                              1997               1996               1997              1996

<S>                                                       <C>                <C>                <C>                <C>         
Net Sales                                                 $ 37,567,098       $ 33,442,895       $ 67,729,171       $ 61,362,296

Cost of products sold                                       28,707,320         25,475,827         51,860,577         46,364,544
                                                          ------------       ------------       ------------       ------------

Gross Profit                                                 8,859,778          7,967,068         15,868,594         14,997,752

Expenses:
  Selling, general and administrative                        5,147,508          4,819,379         10,056,893          9,362,904
  Corporate                                                  1,289,047          1,082,231          2,552,714          2,051,477
                                                          ------------       ------------       ------------       ------------

Income from operations                                       2,423,223          2,065,458          3,258,987          3,583,371

Interest expense                                               992,225          1,099,572          1,975,377          2,062,348

Other income                                                    40,470              2,425             91,865             54,394
                                                          ------------       ------------       ------------       ------------

Income before income tax provision                           1,471,468            968,311          1,375,475          1,575,417
                                                              

Income tax provision                                           652,707            429,131            611,875            668,938
                                                           ------------       ------------       ------------      ------------
Net income                                                     818,761            539,180            763,600            906,479

Dividends and accretion on preferred stock                    (260,903)          (255,582)          (520,438)          (509,896)
                                                          ------------       ------------       ------------       ------------


Net income available for common stockholders              $    557,858       $    283,598       $    243,162       $    396,583
                                                          ============       ============       ============       ============

Net income per common share                               $       0.10       $       0.05       $       0.04       $       0.07
                                                          ============       ============       ============       ============


Weighted average number of common shares outstanding         5,828,000          5,865,000          5,828,000          5,865,000
                                                          ============       ============       ============       ============
</TABLE>

See notes to consolidated financial statements.

                                      -4-


<PAGE>
OWOSSO CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                    Six Months Ended
                                                                            ------------------------------
                                                                               April 27,        April 28,
                                                                                 1997             1996

<S>                                                                          <C>               <C>        
OPERATING ACTIVITIES:
  Net income                                                                 $   763,600       $   906,479
  Adjustments to reconcile net income to net cash provided by operating
    activities:
    Loss on sale of assets                                                        83,643            92,060
    Depreciation                                                               1,986,416         1,931,830
    Amortization                                                               1,026,666         1,223,711
    Changes in assets and liabilities which provided (used) cash:
       Accounts receivable                                                    (1,650,621)       (1,548,852)
       Inventories                                                            (3,037,834)         (128,290)
       Prepaid expenses and other                                               (324,722)         (271,265)
       Accounts payable                                                        2,291,908          (196,943)
       Accrued expenses                                                        1,688,999            96,577
                                                                             -----------       -----------

           Net cash provided by operating activities                           2,828,055         2,105,307
                                                                             -----------       -----------

INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                                  (2,541,916)       (1,878,594)
  Increase in other assets                                                       (40,669)         (338,719)
                                                                             -----------       -----------

           Net cash used in investing activities                              (2,582,585)       (2,217,313)
                                                                             -----------       -----------

FINANCING ACTIVITIES:
  Proceeds from long-term debt                                                   350,000           150,000
  Borrowings from line of credit                                               3,650,000         5,900,000
  Payments on long-term debt                                                    (866,459)         (842,071)
  Payments on related party debt                                              (2,225,000)       (5,100,000)
  Dividends paid                                                              (1,420,562)       (1,243,200)
                                                                             -----------       -----------

           Net cash used in financing activities                                (512,021)       (1,135,271)
                                                                             -----------       -----------

NET DECREASE  IN CASH AND CASH EQUIVALENTS                                      (266,551)       (1,247,277)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                   839,889         1,750,236
                                                                             -----------       -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                     $   573,338       $   502,959
                                                                             ===========       ===========


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
  Cash paid during the period for interest                                   $ 1,782,992       $ 2,020,880
                                                                             ===========       ===========

  Cash paid during the period for taxes                                      $        --       $   300,000
                                                                             ===========       ===========

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITY -
  Accrual of preferred stock dividends                                       $   187,500       $   187,500
                                                                             ===========       ===========
</TABLE>

See notes to consolidated financial statements.


                                      -5-
<PAGE>

OWOSSO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------
1.    THE COMPANY

      Business - The consolidated financial statements represent the
      consolidated financial position, results of operations and cash flows of
      Owosso Corporation and subsidiaries (the "Company"). The subsidiaries
      include Motor Products - Owosso Corporation (Motor Products), Motor
      Products-Ohio Corporation (MP - Ohio), Sooner Trailer Manufacturing Co.
      (Sooner), Cramer Company (Cramer), DewEze Manufacturing, Inc., including
      Parker Industries, Inc.(DewEze), Snowmax Incorporated (Snowmax), The
      Landover Company (Dura-Bond), Great Bend Manufacturing, Inc. (Great Bend),
      Stature Electric, Inc. (Stature Electric) and Owosso Motor Group, Inc.
      (Motor Group). The Company is a diversified manufacturer of products in
      narrowly defined niche markets and currently operates in two business
      segments, Engineered Component Products and Specialized Equipment. In the
      Engineered Component Products segment, the Company's products are sold
      primarily to original equipment manufacturers or service providers who use
      them in their end product or service. These products are primarily motors,
      cam shaft bearings and heat transfer "fin and tube" coils. The products 
      sold in the Specialized Equipment segment are almost exclusively final 
      products sold through dealers to their users. These products are primarily
      all-aluminum horse trailers and agricultural and turf maintenance 
      equipment. The majority of the Company's customers are located in North 
      America.

      Seasonality - Sales of certain of the Company's specialized equipment
      tend to be seasonal with lowest sales during the first fiscal quarter and
      higher sales during the fourth fiscal quarter, corresponding with the fall
      harvest season for farmers. Sales of the Company's engineered component
      products experience less seasonality but generally have higher sales
      during the second fiscal quarter while sales of these products are lowest
      during the first fiscal quarter.

      Cyclicality - The Company's Engineered Component Products segment is
      subject to changes in the overall level of domestic economic activity. The
      Specialized Equipment segment is subject to changes in certain sectors of
      the agricultural economy, which may be influenced by climate changes and
      governmental policy. The segment's horse trailer sales, which have not
      tended to be affected by changes in the agricultural economy, have had a
      moderating effect on the results of the entire Specialized Equipment
      segment, but may be subject to the overall domestic business cycle.

      Pursuant to the rules and regulations of the Securities and Exchange
      Commission, the financial statements do not include all of the information
      and notes normally included with financial statements prepared in
      accordance with generally accepted accounting principles. In the opinion
      of management, all adjustments (consisting of a normal recurring nature)
      considered necessary for a fair presentation of results for interim
      periods have been made. These financial statements should be read in
      conjunction with the consolidated financial statements and notes thereto
      included in the Company's Annual Report on Form 10-K for the year ended
      October 27, 1996.


                                      -6-
<PAGE>

2.    INVENTORIES

      Inventories are summarized as follows:


                                             April 27,      October 27,
                                               1997            1996
     

      Raw materials and purchased parts    $ 9,718,446     $ 8,468,218
      Work in process                        5,160,505       4,316,588
      Finished goods                         7,282,005       6,338,316
                                           -----------     -----------

      Total                                $22,160,956     $19,123,122
                                           ===========     ===========




3.    LONG-TERM DEBT

      Long-term debt consists of the following:

                                             April 27,      October 27,
                                               1997            1996


      Banks                                $35,103,777     $31,507,643
      Industrial revenue bonds               9,106,364       9,173,642
      Former and current stockholders        6,291,665       6,842,692
      Related party debt                     3,750,000       5,975,000
      Other                                    470,785         315,073
                                           -----------     -----------

      Total long-term debt                  54,722,591      53,814,050
      Less portion due within one year       6,475,021       8,745,934
                                           -----------     -----------

      Total                                $48,247,570     $45,068,116
                                           ===========     ===========




      The Company has a $55,000,000 unsecured revolving credit agreement with
      two banks, which expires on March 31, 2000. Interest is payable, at the
      Company's option, at either the bank's prime rate (8.50% at April 27,
      1997) or a variable spread (2.00% at April 27, 1997) over the London
      Interbank Offered Rate. The agreement includes financial and other
      covenants, including, fixed charge, cash flow and net worth ratios,
      restrictions on certain asset sales, mergers and other significant
      transactions, and a negative pledge on fixed assets. Repayment of the
      Industrial Revenue Bonds of certain of the subsidiaries has been
      guaranteed by the Company.

      The Company entered into two interest rate swap agreements, each with a
      $7.5 million notional amount. Beginning in the third quarter of fiscal
      1997, the Company will receive floating interest rate payments at the
      three month London Interbank Offered Rate in exchange for quarterly fixed
      interest rate payments of 7.0675% and 7.09% over the life of the
      agreements. The Company enters into these interest rate swap agreements to
      change the fixed/variable interest rate mix of the debt portfolio to
      reduce the Company's aggregate risk to movements in interest rates. These
      agreements are accounted for using settlement accounting.


                                      -7-
<PAGE>

4.    CONTINGENCIES

      The Company is subject to federal, state and local environmental
      regulation with respect to their operations. The Company believes that it
      is operating in substantial compliance with applicable environmental
      regulations.

      The lessor of Cramer's facility is engaged in negotiations with the State
      of Connecticut regarding investigative or remedial measures at this
      facility. Cramer may be required to bear a portion of the costs of any
      such investigative or remedial measures, the amount of which cannot
      currently be reasonably estimated. Cramer is also engaged in the closure
      of waste handling facilities at this location in accordance with State
      regulations. Closure is expected to be completed in 1997 at a cost which
      is not expected to be significant.

      The Company is named as a potentially responsible party with respect to
      two hazardous substance disposal sites being cleaned up by the U.S.
      Environmental Protection Agency under its "Superfund" program. With
      respect to both sites, based on the minimal amount of waste alleged to
      have been contributed to the site by the Company, the Company expects to
      resolve the matter through the payment of a de minimis amount.

      Current historic manufacturing and other operations at the Company's
      various facilities may result, and may have resulted, in the discharge and
      release of hazardous substances and waste from time to time. The Company
      routinely responds to such incidents as deemed appropriate pursuant to
      applicable federal, state and local environmental regulations.

      Sooner and DewEze have arrangements with a number of financial
      institutions to provide floor plan financing for their dealers, which
      require them to repurchase repossessed products from the financial
      institutions in the event of a default by the financed dealer. Their
      obligation is typically to repurchase the equipment at 90% of the purchase
      price for the first 180 days, 80% for the next 90 days and 70% for the
      next 90 days, after which the obligation expires. In the event of a
      default by all of the financed dealers, the Company would be required to
      repurchase approximately $3.0 million of product as of April 27, 1997. The
      Company does not believe that its obligation under these repurchase
      agreements will have a material adverse effect on the financial results of
      the Company. Neither subsidiary has taken possession on any equipment
      pursuant to the repurchase obligations in these contracts.

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




                                      -8-
<PAGE>


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

Three months ended April 27, 1997 compared to three months ended April 28, 1996

Net sales. Net sales for the Company's second quarter of fiscal 1997 were $37.6
million, an increase of 12.3% over net sales of $33.4 million in the second
quarter of fiscal 1996. Net sales increased at each of the Company's business
units during the quarter, with the largest increases coming from the Company's
motor businesses and its agricultural equipment businesses.

In the Company's Engineered Component Products segment, net sales increased
13.1% to $21.2 million in the second quarter of fiscal 1997 from $18.7 million
in the fiscal 1996 period. The favorable economic conditions in domestic
manufacturing, combined with new customers for the Company's Ohio motor
manufacturing operation led to a 15% increase in sales from the Company's motor
businesses. At Dura-Bond, an expanded distribution network, sales derived from
its newly-acquired valve seat and shim product line and comparison to a slow
second quarter in fiscal 1996 led to a 25% increase in net sales.

Net sales in the Specialized Equipment segment were $16.4 million in the second
quarter of fiscal 1997, an 11.3% increase over net sales of $14.7 million in the
comparable 1996 period. Demand for the Company's agricultural equipment
continued to be strong, particularly at Great Bend, where sales of front-end
loaders were 48% ahead of last year's second quarter, and at Parker, where
fiscal second quarter sales of grain handling equipment were up 25% over the
prior year period. Sales of aluminum trailers were 4% higher in the second
quarter as compared to the second quarter of fiscal 1996.

Overall, backlogs and customer demand were strong at the end of the second
quarter of fiscal 1997, and sales are expected to continue to be ahead of prior
year sales levels in the second half of the fiscal year.

Gross profit. The Company's gross profit in the second quarter of fiscal 1997
was $8.9 million, or 23.6% of net sales, 11% greater than gross profit of $8.0
million, or 23.8% of net sales, in the second quarter of fiscal 1996.

Gross profit in the Engineered Component Products segment was $5.3 million, or
25.0% of net sales in the second quarter of fiscal 1997, up 12% as compared to
$4.7 million, or 25.3% of net sales in the prior fiscal year's second quarter.
The increase in gross profit in this segment was due to the increase in sales.
The slight decline in gross profit margin was due to lower gross profit margins
at Dura-Bond, partially offset by higher gross profit margins at Snowmax. Gross
profit margins in the motor businesses in the second quarter of fiscal 1997 were
level with the prior year period.

Gross profit in the Specialized Equipment segment was $3.6 million, or 21.8% of
net sales, in the second quarter of fiscal 1997, an increase of 10.2% over gross
profit of $3.3 million, or 22.0% of net sales, in the second quarter of fiscal
1996. The increase in gross profit is due to increased sales. The slight decline
in gross profit margin is primarily due to lower gross margins at Parker and
Great Bend, partially offset by the effect of a more favorable mix of business
due to the large increase in sales at Great Bend, which has a higher gross
profit margin than the other businesses in this segment. Sooner Trailer's gross
profit margin was slightly below last year's level, although showing an increase
over the first quarter of fiscal 1997, as production efficiency began to improve
in the fiscal second quarter.


                                      -9-
<PAGE>

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $5.1 million, or 13.7% of net sales, in the second
quarter of fiscal 1997 as compared to $4.8 million, or 14.4% of net sales, in
the 1996 fiscal period. In the Company's Engineered Component Products segment,
selling, general and administrative expenses increased to $2.7 million in the
second quarter of fiscal 1997 as compared to $2.6 million in the prior fiscal
year period. In the Specialized Equipment segment, selling, general and
administrative expenses increased to $2.4 million in the second quarter of
fiscal 1997 from $2.2 million in the prior year period. The percentage increase
in each segment was less than the percentage increase in net sales.

Corporate Expenses. Corporate expenses in the second fiscal quarter of 1997 were
$1.3 million, or 3.4% of net sales, as compared to $1.1 million, or 3.2% of net
sales, in the second quarter of fiscal 1996. Corporate expenses increased
primarily due to increases in personnel costs and information services expenses,
including higher depreciation and amortization expenses related to a computer
upgrade.

Income from Operations. Income from operations increased 17.3% to $2.4 million,
or 6.5% of net sales, in the second quarter of fiscal 1997 from $2.1 million, or
6.2% of net sales, in the prior year period, primarily due to increased sales.
The operating margin improved because the slightly lower gross profit margins
and increased corporate expenses were more than offset by the decline in
selling, general and administrative expenses as a percentage of net sales.

Among other measures, the Company evaluates the operating performance of its
business segments and its individual subsidiaries based on business unit income,
which is defined as income from operations before allocation of corporate
expenses. The Company believes this measurement most closely reflects the
subsidiaries' individual contributions. On this basis, business unit income for
the Engineered Component Products segment increased 21.0% to $2.6 million, or
12.3% of net sales, in the fiscal 1997 quarter from $2.2 million, or 11.5% of
net sales in fiscal 1996. Increased business unit income in the motor
businesses, due primarily to increased sales volume, as well as higher margins
at Snowmax more than offset reduced business unit income at Dura-Bond.

Business unit income in the Specialized Equipment segment before corporate
expenses was $1.1 million, or 6.8% of sales, as compared to $1.0 million, or
6.6% of sales in the second quarter of fiscal 1996. The increase was due to the
significantly increased sales at the Company's Great Bend subsidiary and
improved margins at DewEze, which more than offset reduced margins at Sooner and
Parker as compared to the prior year period.

Because of the overall favorable trends in demand for its products, the Company
expects that income from operations for the second half of fiscal 1997 will
continue to show increases over the prior year.

Interest Expense. Interest expense was $1.0 million, or 2.6% of net sales in the
second quarter of fiscal 1997 as compared to $1.1 million, or 3.3% of net sales,
in the second quarter of fiscal 1996. Interest expense was lower in the fiscal
1997 period due to a lower effective interest rate offsetting a small increase
in average debt outstanding.

Net income. In the second quarter of fiscal 1997, the Company reported net
income of $0.8 million, or 2.2% of net sales, as compared to $0.5 million, or
1.6% of net sales in the fiscal 1996 period. The effective tax rate was 44.3% in
both periods.

                                      -10-
<PAGE>


Net income available for common stockholders. The Company reported income
available to common stockholders of $0.6 million or $0.10 per share, as compared
to $0.3 million, or $0.05 per share in the second quarter of fiscal 1996. Income
for common stockholders is calculated by subtracting dividends on preferred
stock of $187,500 and non-cash accretion in value of preferred stock of $73,403
($68,082 in the fiscal 1996 second quarter) from net income.

Six months ended April 27, 1997 compared to six months ended April 28, 1996

Net sales. Net sales for the Company's first six months of fiscal 1997 were
$67.7 million, an increase of 10.4% over net sales of $61.4 million in the first
six months of fiscal 1996. With the exception of flat sales of aluminum trailers
at Sooner, all of the Company's subsidiaries reported increased net sales in the
first half of fiscal 1997 as compared to the fiscal 1996 period.

In the Company's Engineered Component Products segment, net sales increased
11.3% to $38.3 million in the first half of fiscal 1997 from $34.5 million in
the fiscal 1996 period. The largest increases came from increased demand for
motors, including the effect of new customers at the Company's Ohio
manufacturing facility.

In the first six months of fiscal 1997, net sales in the Specialized Equipment
segment were $29.4 million, a 9.2% increase over net sales of $26.9 million in
the first three months of fiscal 1996. An improved economic environment for the
Company's agricultural equipment businesses, including the effects of favorable
weather conditions in the first quarter of fiscal 1997, resulted in an increase
of 19.3% in net sales at those businesses. Net sales of aluminum trailers were
approximately equal to the prior year period.

Gross profit. The Company's gross profit in the first six months of fiscal 1997
was $15.9 million, or 23.4% of net sales, an increase of 5.8% over gross profit
in the comparable 1996 period of $15.0 million, or 24.4% of net sales.

In the first half of fiscal 1997, gross profit in the Engineered Component
Products segment was $9.5 million, or 24.8% of net sales, 10.2% higher than
gross profit of $8.6 million, or 25.1% of net sales in the prior fiscal year
period. The increase in gross profit in this segment was due to the increase in
sales. The small decline in gross profit margin was due to a lower gross margin
at Dura-Bond, which more than offset an increased gross profit margin at
Snowmax, while the gross profit margin in the Company's motor businesses
remained relatively level.

Gross profit in the Specialized Equipment segment was $6.4 million, or 21.6% of
net sales, in the first six months of fiscal 1997, approximately equal to gross
profit of $6.4 million, or 23.6% of net sales, in the first six months of fiscal
1996. A significantly reduced gross profit at Sooner Trailer due to higher labor
costs and production inefficiencies, particularly in 1997's fiscal first
quarter, outweighed overall increased gross profit at the agricultural equipment
businesses in the segment, which increased due to increased sales.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $10.1 million, or 14.8% of net sales, in the first
six months of fiscal 1997 as compared to $9.4 million, or 15.3% of net sales, in
the 1996 fiscal period. In the Company's Engineered Component Products segment,
selling, general and administrative expenses increased to $5.3 million in the
first six months of fiscal 1997 as compared to $5.0 million in the prior fiscal
year period, and represented 13.7% of net sales and 14.4%, respectively. In the
Specialized Equipment segment, selling, general and administrative expenses
increased to $4.8 million in the first half of fiscal 1997 from $4.4 million in
the prior year period, an increase commensurate with the increase in net sales 
in the segment.


                                      -11-

<PAGE>



Corporate Expenses. Corporate expenses in the first half of fiscal 1997 were
$2.6 million, or 3.8% of net sales, as compared to $2.1 million, or 3.3% of net
sales, in the first half of fiscal 1996. Corporate expenses increased primarily
due to increases in personnel costs and information services expenses, including
higher depreciation and amortization expenses related to a computer upgrade.

Income from Operations. Income from operations declined 9.1% to $3.3 million, or
4.8% of net sales, in the first half of fiscal 1997 from $3.6 million, or 5.8%
of net sales, in the prior year period, due to the lower gross profit margins
and increased selling, general and administrative expenses and corporate
expenses as discussed above.

Among other measures, the Company evaluates the operating performance of its
business segments and its individual subsidiaries based on business unit income,
which is defined as income from operations before allocation of corporate
expenses. The Company believes this measurement most closely reflects the
subsidiaries' individual contributions. On this basis, business unit income for
the Engineered Component Products segment increased 15.8% to $4.2 million, or
11.1% of net sales, in the first six months of fiscal 1997 from $3.7 million, or
10.6% of sales in the first six months of fiscal 1996. Increased business unit
income in the motor businesses overall and at Snowmax more than offset reduced
business unit income at Dura-Bond.

Business unit income in the Specialized Equipment segment before corporate
expenses was $1.6 million, or 5.4% of sales, 20.4% below the $2.0 million, or
7.4% of sales, earned in the first half of fiscal 1996. The Company's DewEze and
Great Bend subsidiaries had a significant increase in business unit income as
compared to the prior year period. These increases were outweighed by a
significant reduction in business unit income at Sooner due to the higher labor
costs and production inefficiencies mentioned above, and lower margins at 
Parker, compared to the prior year period.

Because of the overall favorable trends in demand for its products, the Company
expects that income from operations for fiscal 1997 will be higher than in the
prior year.

Interest Expense. Interest expense was $2.0 million, or 2.9% of net sales in the
first half of fiscal 1997 as compared to $2.1 million or 3.4% of net sales in
the first quarter of fiscal 1996. Interest expense was slightly lower in the
fiscal 1997 period due to a lower effective interest rate.

Net income. The Company reported net income of $0.8 million, or 1.1% of net
sales in the first six months of fiscal 1997 as compared to net income of $0.9
million, or 1.5% of net sales, in the first six months of fiscal 1996. The
effective tax rate for the first half of 1997 was 44.5% as compared to 42.5% in
the fiscal 1996 period. The lower results are attributable to the lower income
from operations.

Net income available for common stockholders. In the first half of fiscal 1997,
the Company reported income available to common stockholders of $0.2 million or
$0.04 per share, as compared to net income available to common stockholders of
$0.4 million, or $0.07 per share in the first half of fiscal 1996. Income for
common stockholders is calculated by subtracting dividends on preferred stock of
$375,000 and non-cash accretion in value of preferred stock of $145,438
($134,896 in the fiscal 1996 first half) from net income. Due primarily to the
favorable economic prospects in its markets, the Company expects to report
higher net income available to common stockholders in each of the remaining
quarters of fiscal 1997, both as compared to the comparable fiscal 1996
quarters, and as compared to the first two quarters of fiscal 1997.



                                      -12-
<PAGE>

Liquidity and Capital Resources

Cash and cash equivalents decreased to $0.6 million at April 27, 1997 from $0.8
million at October 27, 1996. In addition to cash and cash equivalents at April
27, 1997, the Company had $0.4 million of cash that was restricted under
industrial revenue financings. Net cash provided by operating activities was
$2.8 million in the first half of fiscal 1997, as compared to $2.1 million in
the first quarter of fiscal 1996. The increase in net cash provided by
operations was primarily a reduction in net cash used to finance working capital
in first half of fiscal 1997. Net non-cash working capital at April 27, 1997 was
6% lower than at the end of the second quarter of fiscal 1996, despite the
increase in sales in the fiscal 1997 second quarter over the prior year period.

The Company's primary cash requirements have been for operating expenses,
including raw materials, labor costs and funding of accounts receivable, as well
as capital expenditures, acquisitions and dividends to shareholders. Primary
sources of cash have been from operations and bank borrowings, with industrial
revenue bonds being used for specific capital projects.

Working capital increased to $23.5 million at January 26, 1997 from $20.4
million at October 27, 1996. The increase was primarily due to repayment of
current maturities of related party debt issued in connection with the purchase
of Stature using proceeds from the Company's long-term revolving credit
agreement, and seasonal increases in inventory and accounts receivable in excess
of seasonal increases in current liabilities.

The Company maintains a $55.0 million revolving credit agreement with two banks
with a termination date of March 31, 2000. At April 27, 1997 borrowings of $33.7
million were outstanding under the revolving credit agreement. Interest is
payable, at the Company's option, at either the agent bank's prime rate or at a
spread over the London Interbank Offered Rate that varies with the Company's
ratio of total debt to EBITDA. The LIBOR spread was 2% at April 27, 1997. The
agreement contains customary financial and other covenants, including, fixed
charge, cash flow and net worth ratios, restrictions on certain asset sales,
mergers and other significant transactions and a negative pledge on assets. The
covenants were amended in the second quarter of fiscal 1997 to reduce the
required levels of net worth and to increase the maximum allowable ratio of
total debt to cash flow. In addition, the definition of the fixed charge
coverage ratio was changed and the leverage covenant was eliminated. The Company
anticipates being in compliance with these covenants for the foreseeable future.

During fiscal 1996, the Company entered into interest rate swap agreements with
its two banks with notional amounts totaling $15.0 million. The agreements call
for the Company to make quarterly fixed payments on the notional amount at rates
of 7.0675% and 7.09% for five years beginning in July 1997 in exchange for
receiving payments at the six month London Interbank Offered Rate.

In the first half of fiscal 1997, the Company has invested $2.5 million in
capital expenditures as compared to $1.9 million in the first half of fiscal
1996. Of the $2.5 million invested in the first six months of fiscal 1997,
approximately $2.0 million was invested in the Engineered Component Products
segment and $0.5 million in the Specialized Equipment segment, with a small
amount at the corporate level. The Company expects that capital expenditures for
fiscal 1997 will be higher than that of fiscal 1996, and that capital
expenditures in the remainder of fiscal 1997 will be at a rate approximately
consistent with that of the first half. The Company intends that capital
expenditures will continue to be concentrated primarily in the Engineered
Component Products segment for the remainder of the fiscal year.

The Company believes that funds from operations and borrowings from its bank
facilities will be sufficient



                                      -13-
<PAGE>

to fund its activities, including capital expenditures, for the foreseeable
future.

Seasonality

Sales of certain of the Company's specialty equipment tend to be seasonal, with
lowest sales during the first fiscal quarter and higher sales during the fourth
fiscal quarter, corresponding with the fall harvest season for farmers. Sales of
the Company's engineered component products experience less seasonality but
generally have higher sales during the second fiscal quarter while sales of
these products are lowest during the first fiscal quarter. Accordingly, the
Company's results have historically been lowest in the fiscal first quarter.

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-Q are "forward-looking
statements" made pursuant to these provisions.

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:

         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 and
         agricultural sectors 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.

         Commodity prices can have a material influence on the Company's
         results. Grain prices and cattle prices can affect demand for certain
         agricultural equipment sold by the businesses in the Company's
         Specialized Equipment segment. Metal prices, particularly aluminum,
         copper and steel, can affect the Company's costs as well as demand for
         the Company's products and the value of inventory held at the end of a
         reporting period. Lack of availability of certain commodities could
         also disrupt the Company's production.

         Weather can affect the success of the grain harvest in the United
         States, which can directly affect demand for the Company's grain
         handling equipment business.

         The Company's Sooner Trailer subsidiary has experienced production
         inefficiencies which have caused increased production costs and lower
         gross margins. Continuation of such inefficiencies could continue to
         adversely affect the Company's results of operations.

         Loss of a substantial customer may affect results of operations. 



                                      -14-
<PAGE>


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

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

         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.

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




                                      -15-
<PAGE>




Part II.  OTHER INFORMATION

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

At the Company's Annual Meeting of Shareholders held on March 12, 1997, the
shareholders elected six directors, the holders of the Class A Convertible
Preferred Stock elected one director and the shareholders ratified the
appointment of independent auditors for the year ended October 26, 1997. In the
election of directors, 5,464,102 shares were voted in favor of the election of
George B. Lemmon, Jr. and 3,963 shares were withheld, 5,464,265 shares were
voted in favor of the election of John B. Reese and 3,800 shares were withheld,
5,464,102 shares were voted in favor of the election of Eugene P. Lynch and
3,963 shares were withheld, 5,463,852 shares were voted in favor of the election
of Ellen D. Harvey and 4,213 shares were withheld, 5,464,102 shares were voted
in favor of the election of Harry E. Hill and 3,963 shares were withheld,
5,464,102 shares were voted in favor of the election of James A. Ounsworth and
3,963 shares were withheld. There were 812,212 shares of the Class A Convertible
Preferred Stock voted in favor of Lowell P. Huntsinger. In the vote for
ratification of the appointment of Deloitte & Touche LLP as independent auditors
for the year ended October 26, 1997, 5,459,920 shares were voted in favor, 3,963
shares voted against and 1,482 shares abstained.

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits.

Exhibit No.       Description

10.64             Seventh Amendment to Credit Agreement by and among Owosso
                  Corporation, its subsidiaries, NBD Bank, PNC Bank, N.A., and
                  NBD Bank, as Agent, dated as of March 3, 1997.

27                Financial Data Schedule


(b)      Form 8-K

                  No reports on Form 8-K were filed during the period ended
                  April 27, 1997.





                                      -16-
<PAGE>




                                   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 hereunto duly authorized.


                               OWOSSO CORPORATION



                                 By:  /s/ George B. Lemmon, Jr.
                                      ----------------------------------
                                      George B. Lemmon, Jr.
                                      Chief Executive Officer




                                 By:  /s/ John H. Wert, Jr.
                                      -----------------------------------
                                      John H. Wert, Jr.,
                                      Senior Vice President - Finance and 
                                      Chief Financial Officer




Date:  June 11, 1997



                                      -17-
<PAGE>

                                Index to Exhibits



Exhibit Number                      Description
--------------                      -----------

10.64                               Seventh Amendment to Credit Agreement
                                    by and among Owosso Corporation,
                                    its subsidiaries, NBD Bank, PNC Bank,
                                    N.A., and NBD Bank, as Agent, dated
                                    as of March 3, 1997.

27                                  Financial Data Schedule