<PAGE>


================================================================================

                       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: January 26, 2003

                                       OR

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

For the quarterly period from _________________ to _________________.

Commission file number: 0-25066

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


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

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

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

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

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

As of March 8, 2003, 5,874,345 shares of the Registrant's Common Stock, $.01 par
value, were outstanding.


================================================================================


<PAGE>

<TABLE>
<CAPTION>
OWOSSO CORPORATION
TABLE OF CONTENTS
-------------------------------------------------------------------------------------------------------


                                                                                               Page
<S>                        <C>                                                                 <C>
PART I - FINANCIAL INFORMATION:


         Item 1.           Financial Statements

                           Condensed Consolidated Statements of Operations                       3
                           for the three months ended January 26, 2003 and
                           January 27, 2002 (unaudited)

                           Condensed Consolidated Balance Sheets at                              4
                           January 26, 2003 and October 27, 2002 (unaudited)

                           Condensed Consolidated Statements of Cash Flows                       5
                           for the three months ended January 26, 2003 and
                           January 27, 2002 (unaudited)

                           Notes to Condensed Consolidated Financial Statements                  6
                           (unaudited)

         Item 2.           Management's Discussion and Analysis of                               11
                           Financial Condition and Results of Operations

         Item 3.           Quantitative and Qualitative Disclosures about Market Risk            16

         Item 4.           Controls and Procedures                                               16

PART II - OTHER INFORMATION:

         Item 2.           Changes in Securities and Use of Proceeds                             17

         Item 3.           Defaults Upon Senior Securities                                       17

         Item 6.           Exhibits and Reports on Form 8-K                                      17
</TABLE>








                                        2
<PAGE>
<TABLE>
<CAPTION>
OWOSSO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
----------------------------------------------------------------------------------------------------------
                                                                                 Three-Months Ended
                                                                           -------------------------------
                                                                           January 26,         January 27,
                                                                              2003                 2002
<S>                                                                        <C>                 <C>
Net sales                                                                  $4,601,000          $ 8,993,000
Costs of products sold                                                      3,755,000            7,938,000
                                                                           ----------          -----------

Gross profit                                                                  846,000            1,055,000

Selling, general and administrative expenses                                  928,000            2,110,000
                                                                           ----------          -----------

Loss from operations                                                          (82,000)          (1,055,000)

Interest expense                                                              214,000              500,000
                                                                           ----------          -----------

Loss before income taxes                                                     (296,000)          (1,555,000)

Income tax benefit                                                            (62,000)                   0
                                                                           ----------          -----------

Net loss                                                                     (234,000)          (1,555,000)

Dividends on preferred stock                                                  341,000              335,000
                                                                           ----------          -----------

Net loss available for common shareholders                                 $ (575,000)         $(1,890,000)
                                                                           ==========          ===========


Net loss per share                                                         $    (0.10)         $     (0.32)
                                                                           ==========          ===========

Basic and diluted weighted average number of common
   shares outstanding                                                       5,874,000            5,874,000
                                                                           ==========          ===========
</TABLE>
See notes to condensed consolidated financial statements.











                                        3
<PAGE>


<TABLE>
<CAPTION>
OWOSSO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
----------------------------------------------------------------------------------------------------------------------------
                                                                                              January 26,        October 27,
                                                                                                  2003              2002
<S>                                                                                           <C>                <C>
ASSETS
CURRENT ASSETS:
       Cash and cash equivalents                                                              $    94,000        $   524,000
       Receivables, net                                                                         2,430,000          3,111,000
       Inventories, net                                                                         1,812,000          1,906,000
       Net assets held for sale                                                                   800,000            800,000
       Prepaid expenses and other                                                                 735,000            690,000
       Tax refund receivable                                                                      919,000            919,000
       Deferred taxes                                                                             295,000            295,000
                                                                                              -----------        -----------
           Total current assets                                                                 7,085,000          8,245,000

PROPERTY, PLANT AND EQUIPMENT, NET                                                              5,367,000          5,616,000
GOODWILL, NET                                                                                   8,405,000          8,405,000
OTHER INTANGIBLE ASSETS, NET                                                                    5,119,000          5,218,000
NET ASSETS OF DISCONTINUED OPERATIONS HELD FOR SALE                                               350,000            350,000
OTHER ASSETS                                                                                      130,000            136,000
                                                                                              -----------        -----------
      TOTAL ASSETS                                                                            $26,456,000        $27,970,000
                                                                                              ===========        ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
       Accounts payable - trade                                                               $ 1,676,000        $ 2,025,000
       Accrued compensation and benefits                                                          522,000            537,000
       Accrued expenses                                                                         1,712,000          2,085,000
       Current portion of long-term debt                                                        8,498,000          8,951,000
                                                                                              -----------        -----------
           Total current liabilities                                                           12,408,000         13,598,000

LONG-TERM DEBT, LESS CURRENT PORTION                                                            4,531,000          4,594,000
COMMON STOCK PUT OPTION                                                                           600,000            600,000
POSTRETIREMENT BENEFITS AND OTHER LIABILITIES                                                     335,000            362,000
DEFERRED TAXES                                                                                  1,900,000          1,900,000
ACCRUED PREFERRED STOCK DIVIDENDS                                                               3,005,000          2,664,000
COMMITMENTS AND CONTINGENCIES (Note 14)

SHAREHOLDERS' EQUITY                                                                            3,677,000          4,252,000
                                                                                              -----------        -----------
      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                              $26,456,000        $27,970,000
                                                                                              ===========        ===========
</TABLE>

      See notes to condensed consolidated financial statements.




                                        4
<PAGE>

<TABLE>
<CAPTION>
OWOSSO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
---------------------------------------------------------------------------------------------------
                                                                             Three Months Ended
                                                                        ---------------------------
                                                                        January 26,     January 27,
                                                                           2003              2002
<S>                                                                     <C>             <C>
OPERATING ACTIVITIES:
  Net loss                                                               $(234,000)     $(1,555,000)

  Adjustments to reconcile net loss to
     net cash provided by operating activities:
           Depreciation                                                    269,000          662,000
           Amortization                                                    100,000          267,000
           Other                                                                 0         (107,000)
           Changes in operating assets and liabilities which
                 provided cash                                              12,000          900,000
                                                                         ---------      -----------
           Net cash provided by operating activities                       147,000          167,000
                                                                         ---------      -----------

INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                               (21,000)        (101,000)
  Decrease in other assets                                                   6,000          835,000
                                                                         ---------      -----------
           Net cash (used in) provided by investing activities             (15,000)         734,000
                                                                         ---------      -----------
FINANCING ACTIVITIES:
  Net payments on line of credit                                          (500,000)        (350,000)
  Payments on long-term debt                                               (62,000)         (66,000)
  Payments on related party debt                                                 0         (400,000)
                                                                         ---------      -----------
           Net cash used in financing activities                          (562,000)        (816,000)
                                                                         ---------      -----------

NET (DECREASE) INCREASE IN
          CASH AND CASH EQUIVALENTS                                       (430,000)          85,000

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                             524,000          200,000
                                                                         ---------      -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                 $  94,000      $   285,000
                                                                         =========      ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Interest paid                                                        $ 197,000      $   799,000
                                                                         =========      ===========
    Taxes refundable                                                     $       0      $(1,553,000)
                                                                         =========      ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
     Dividends payable                                                   $ 341,000      $   335,000
                                                                         =========      ===========
</TABLE>

See notes to condensed consolidated financial statements.



                                        5
<PAGE>

OWOSSO CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
--------------------------------------------------------------------------------

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

     Financial Statements - The condensed consolidated balance sheet as of
     January 26, 2003 and the condensed consolidated statements of operations
     and cash flows for the three months ended January 26, 2003 and January 27,
     2002 have been prepared by the Company, without audit. In the opinion of
     management, all adjustments (which include only normal recurring
     adjustments) considered necessary to present fairly the financial position,
     results of operations and cash flows as of January 26, 2003 and for all
     periods presented have been made. Certain information and footnote
     disclosures normally included in financial statements prepared in
     accordance with generally accepted accounting principles have been
     condensed or omitted. These financial statements should be read in
     conjunction with the consolidated financial statements and notes thereto
     included in the Company's October 27, 2002 Annual Report on Form 10-K.

     Loss per share - Basic loss per common share is computed by dividing net
     loss (the numerator) by the weighted average number of common shares
     outstanding during each period (the denominator). The computation of
     diluted loss per common share is similar to that of basic earnings per
     common share, except that the denominator is increased by the dilutive
     effect of stock options outstanding, computed using the treasury stock
     method, the dilutive effect of convertible preferred stock computed using
     the "if converted" method, and by the dilutive effect of the put option on
     common stock, computed using the reverse-treasury stock method.

     Comprehensive loss - The Company presents accumulated other comprehensive
     loss as a component of shareholders' equity. For the first quarter of 2002
     and 2003, total comprehensive loss consisted solely of net loss.







                                        6
<PAGE>

     New Accounting Pronouncements - In July 2001, the Financial Accounting
     Standards Board issued SFAS No. 141 "Business Combinations" ("SFAS No.
     141") and SFAS No. 142 "Goodwill and Other Intangible Assets" ("SFAS No.
     142"). SFAS No. 141 requires business combinations initiated after June 30,
     2001 to be accounted for using the purchase method of accounting, and
     broadens the criteria for recording intangible assets separate from
     goodwill. Recorded goodwill and intangibles will be evaluated against this
     new criteria and may result in certain intangibles being subsumed into
     goodwill, or alternatively, amounts initially recorded as goodwill may be
     separately identified and recognized apart from goodwill. SFAS No. 142
     requires the use of a nonamortization approach to account for purchased
     goodwill and certain intangibles. Under a nonamortization approach,
     goodwill and certain intangibles will not be amortized into results of
     operations but, instead, would be reviewed for impairment and written down
     and charged to results of operations only in the periods in which the
     recorded value of goodwill and certain intangibles is more than its fair
     value. The provisions of each statement which apply to goodwill and
     intangible assets acquired prior to June 30, 2001 are required to be
     adopted for fiscal years beginning after December 15, 2001. The Company
     adopted SFAS No. 142 on October 28, 2002. The impact in the first quarter
     of 2003 of discontinuing goodwill amortization was approximately $162,000.
     In accordance with SFAS No. 142, the Company has not yet completed its
     transitional goodwill impairment test. The Company expects to complete this
     test prior to the end of its second quarter. The impact of the adoption of
     SFAS No. 142 is summarized as follows:
<TABLE>
<CAPTION>
                                                               Three-Months Ended
                                                          ----------------------------
                                                         January 26,       January 27,
                                                             2003             2002
     <S>                                                  <C>              <C>

     Reported Net Income                                  $(575,000)       $(1,890,000)
     Add back: Goodwill amortization                           -               162,000
                                                          ---------        -----------
     Adjusted Net Income                                  $(575,000)       $(1,728,000)
                                                          =========        ===========

     Basic loss per share:
     Reported Net Income                                  $   (0.10)       $     (0.32)
     Add back: Goodwill amortization                            -                 0.03
                                                          ---------        -----------
     Adjusted Net Income                                  $   (0.10)       $     (0.29)
                                                          =========        ===========
</TABLE>

     In August 2001, the Financial Accounting Standards Board issued SFAS No.
     144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
     ("SFAS No. 144"). SFAS No. 144, which addresses financial accounting and
     reporting for the impairment of long-lived assets and for long-lived assets
     to be disposed of, supercedes SFAS No. 121 and is effective for fiscal
     years beginning after December 15, 2001. The Company adopted SFAS No. 144
     on October 28, 2002. As a result, management of the Company has concluded
     that there was no material effect on the Company's financial position,
     results of operations or cash flows from the adoption of SFAS No. 144.


2.   LIQUIDITY AND FINANCING

     The Company has experienced a significant downturn in its operating results
     over the past three years and at the end of fiscal 2000, was out of
     compliance with covenants under its bank credit facility. In February 2001,
     the Company entered into an amendment to its bank credit facility
     agreement, wherein the lenders agreed to forbear from exercising their
     rights and remedies under the facility in connection with such
     non-compliance until February 15, 2002, at which time the facility was to
     mature. In addition, as further disclosed under Note 6 "Long-term Debt,"
     this amendment to the bank credit facility required reductions in the
     outstanding balance under the facility during calendar 2001 and modified
     the interest rates charged. The amendment also required additional
     collateral, effectively all of the assets of the Company, and additional
     reporting requirements as well as the addition of a covenant requiring
     minimum operating profits. The amendment also required the suspension of
     principal and interest payments on subordinated debt, with an aggregate
     outstanding balance of $2.1 million as of October 28, 2001. Furthermore,
     the amendment to the facility prohibits the payment of preferred or common
     stock dividends and prohibits the Company from purchasing its stock.
     Beginning in August 2001, the Company was out of compliance with its
     minimum operating profit covenant. In February 2002, the Company entered
     into a further amendment to the facility, which extended the maturity date
     to December 31, 2002, required further reductions in the outstanding
     balance under the facility, based on expected future asset sales, increased
     the interest rate charged and replaced the minimum operating profit
     covenant with a minimum EBITDA covenant. In December 2002, the Company
     entered into a further amendment to the facility, which extends the
     maturity date to December 31, 2003. This amendment requires further
     reductions in the outstanding balance under the facility, based on expected
     future asset sales and cash flow generated from operations, and extended
     and adjusted the minimum EBITDA covenant for 2003. Borrowings under the
     facility are charged interest at the Prime Rate plus 2.75% (7.0% at January
     26, 2003).






                                        7
<PAGE>

     Management intends to dispose of or liquidate additional non-operating
     assets during fiscal 2003, including real estate at the Company's former
     Cramer and Snowmax subsidiaries and various notes receivable that arose
     from previous asset divestitures. Proceeds from these sales and
     collections, which are expected to be between $1.5 and $2.5 million net of
     taxes, and an anticipated tax refund of approximately $1.2 million will be
     utilized to further reduce amounts outstanding under the Company's bank
     credit facility. Management believes that along with the sale of assets,
     the tax refund, available cash and cash equivalents, cash flows from
     operations and available borrowings under the Company's bank credit
     facility will be sufficient to fund the Company's operating activities,
     investing activities and debt maturities for fiscal 2003.

     Management further believes that the Company will be unable to remain in
     compliance with its bank covenant requirements throughout fiscal 2003. As a
     result, management has entered into negotiations with the Company's lenders
     to further modify the minimum EBITDA covenant. It is management's intent to
     refinance the Company's bank credit facility prior to its maturity in
     December 2003. However, there can be no assurance that management's plans
     will be successfully executed.

     The accompanying condensed consolidated financial statements have been
     prepared on a going concern basis of accounting and do not reflect any
     adjustments that might result if the Company is unable to continue as a
     going concern. The Company's recurring losses from operations, working
     capital deficiency, potential default under the terms of its bank credit
     facility and inability to comply with debt and other bank covenants raise
     substantial doubt about the Company's ability to continue as a going
     concern.

3.   NET ASSETS OF DISCONTINUED OPERATIONS HELD FOR SALE

     The Company completed the sale of Astro Air Coils, Inc. ("Astro Air"), and
     Snowmax Incorporated ("Snowmax") on October 26, 2001. For financial
     reporting purposes, the assets and liabilities attributable to the Coils
     segment have been classified in the condensed consolidated balance sheets
     as net assets of discontinued operations held for sale. At both January 26,
     2003 and October 27, 2002, net assets of discontinued operations held for
     sale were $350,000 and represent the estimated fair value of the Snowmax
     building, the only remaining Coils segment asset.

4.   NET ASSETS HELD FOR SALE

     The Company's former Other segment consisted of Cramer Company ("Cramer").
     The Company completed the sale of the assets associated with the timer and
     switch line of Cramer on December 4, 2000. The Company disposed of
     substantially all of the remaining Cramer assets (excluding real property)
     in a separate transaction completed on September 23, 2001. The Company
     intends to dispose of the remaining Cramer asset by the end of the third
     quarter of 2003. For financial reporting purposes, the assets and
     liabilities attributable the real estate asset has been classified in the
     condensed consolidated balance sheets as net assets held for sale. At both
     January 26, 2003 and October 27, 2002, net assets held for sale were
     $800,000 and represent the estimated fair value of the Cramer building, the
     only remaining Cramer asset.








                                        8
<PAGE>



5.   INVENTORY


                                                  January 26,     October 27,
                                                     2003            2002

     Raw materials and purchased parts            $  944,000      $1,001,000
     Work in process                                 878,000         908,000
     Finished goods                                  246,000         231,000
                                                  ----------      ----------
        Total Inventory                            2,068,000       2,140,000
        Inventory Provision                          256,000         234,000
                                                  ----------      ----------
        Net Inventory                             $1,812,000      $1,906,000
                                                  ==========      ==========

6.   LONG-TERM DEBT

     On January 22, 1999, the Company entered into a new bank credit facility
     with the Company's two primary banks, originally expiring in December 2002.
     The agreement included financial and other covenants, including fixed
     charge, cash flow and net worth ratios and restrictions on certain asset
     sales, mergers and other significant transactions. The Company was out of
     compliance with such covenants at October 29, 2000. In February 2001, the
     Company entered into an amendment to its bank credit facility agreement,
     wherein the lenders agreed to forbear from exercising their rights and
     remedies under the facility in connection with such non-compliance until
     February 15, 2002, at which time the facility was to mature. This amendment
     to the bank credit facility required reductions in the outstanding balance
     under the facility during calendar 2001 and modified the interest rates
     charged. The amendment required additional collateral, effectively all of
     the assets of the Company, and additional reporting requirements as well as
     the addition of a covenant requiring minimum operating profits. The
     amendment also required the suspension of principal and interest payments
     on subordinated debt, with an aggregate outstanding balance of $2.1 million
     as of October 28, 2001. Furthermore, the amendment to the facility
     prohibits the payment of preferred or common stock dividends and prohibits
     the Company from purchasing its stock. Beginning in August 2001, the
     Company was out of compliance with its minimum operating profit covenant.
     In February 2002, the Company entered into a further amendment to the
     facility, which extended the maturity date to December 31, 2002, required
     reductions in the outstanding balance under the facility, based on expected
     future asset sales, increased the interest rate charged and replaced the
     minimum operating profit covenant with a minimum EBITDA covenant. In
     December 2002, the Company entered into a further amendment to the
     facility, which extends the maturity date to December 31, 2003. This
     amendment requires further reductions in the outstanding balance under the
     facility based on expected future asset sales and cash flow generated from
     operations and extended and adjusted the minimum EBITDA covenant for 2003.
     Borrowings under the facility are charged interest at the Prime Rate plus
     2.75% (7.0% at January 26, 2003).

     At January 26, 2003, $6,400,000 was outstanding under the Company's bank
     credit facility and $1,474,000 was available for additional borrowing.

     Derivative Interest Rate Contracts - The Company has an interest rate swap
     agreement with one of its banks with a notional amount of $4,850,000. The
     agreement requires the Company to make quarterly fixed payments on the
     notional amount at 4.22% through October 2003 in exchange for receiving
     payments at the BMA Municipal Swap Index (1.03% at January 26, 2003). The
     Company entered into the interest rate swap agreement to change the
     fixed/variable interest rate mix of its debt portfolio to reduce the
     Company's aggregate risk to movements in interest rates. Such swap
     agreements do not meet the stringent requirements for hedge accounting
     under SFAS No. 133. Accordingly, changes in the fair value of such
     agreements are recorded in the condensed consolidated statements of
     operations as a component of interest expense. The fair market value of the
     swap agreement liability was $93,000 at January 26, 2003, resulting in a
     credit to interest income of $17,000 for the quarter ended January 26,
     2003. The fair market value of the swap agreement liability was $497,000 at
     January 27, 2002, resulting in a credit to interest income of $202,000 for
     the quarter ended January 27, 2002.








                                        9
<PAGE>

7.   COMMITMENTS AND CONTINGENCIES

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

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

     A subsidiary of the Company is a party to a consent decree with the State
     of Connecticut pursuant to which it has agreed to complete its
     environmental investigation of the site and conduct any remedial measures
     which may be required. Based upon the amounts recorded as liabilities, the
     Company believes that the ultimate resolution of this matter will not have
     a material adverse effect on the consolidated financial results of the
     Company.

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






















                                       10
<PAGE>



     ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                  CONDITION AND RESULTS OF OPERATIONS

     The following discussion addresses the financial condition of the Company
     as of January 26, 2003 and the results of operations for the three months
     ended January 26, 2003 and January 27, 2002. This discussion should be read
     in conjunction with the financial statements included elsewhere herein and
     the Management's Discussion and Analysis and Financial Statement sections
     of the Company's Annual Report on Form 10-K to which the reader is directed
     for additional information.

     General

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

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

     Throughout fiscal 2001 the Company remained out of compliance with
     financial covenants under its bank credit facility. As a result, the
     Company and its lenders entered into a series of amendments to the facility
     during fiscal 2001 and 2002, and in each case the Company's lenders agreed
     to forbear from exercising their rights and remedies under the facility. In
     order to meet the lenders' requirements for reduced outstanding balances
     under the facility and to secure the lenders' agreement to forbear, the
     Company engaged in a series of divestitures of its operating subsidiaries,
     concluding with the sale of its Motor Products subsidiaries, Motor Products
     Owosso Corporation and Motor Products Ohio Corporation in July 2002. The
     amendments to the bank credit facility modified the interest rates charged,
     called for reductions in the outstanding balance during calendar 2001 and
     2002, added additional reporting requirements, suspended payments of
     principal and interest on subordinated debt, prohibited the payment of
     preferred or common dividends, prohibited the purchase of the Company's
     stock and added a covenant requiring the maintenance of minimum operating
     profit. In December 2002, the Company entered into a further amendment to
     the facility that extended the maturity date to December 31, 2003, required
     further reductions in the outstanding balance under the facility, based on
     expected future asset sales and cash flow generated from operations, and
     adjusted the minimum EBITDA covenant.

     Management intends to dispose of or liquidate additional non-operating
     assets during fiscal 2003, including real estate at the Company's former
     Cramer Company ("Cramer") and Snowmax Corporation subsidiaries and various
     notes receivable that arose from previous asset divestitures. Proceeds from
     these sales and collections, which are expected to be between $1.5 and $2.5
     million net of taxes, and an anticipated tax refund of approximately $1.2
     million will be utilized to further reduce amounts outstanding under the
     Company's bank credit facility. Management believes that along with the
     sale of assets, the tax refund, available cash and cash equivalents, cash
     flows from operations and available borrowings under the Company's bank
     credit facility will be sufficient to fund the Company's operating
     activities, investing activities and debt maturities for fiscal 2003.









                                       11
<PAGE>

     Management further believes that the Company will be unable to remain in
     compliance with its bank covenant requirements throughout fiscal 2003. As a
     result, management has entered into negotiations with the Company's lenders
     to further modify the minimum EBITDA covenant. It is management's intent to
     refinance the Company's bank credit facility prior to its maturity in
     December 2003. However, there can be no assurance that management's plans
     will be successfully executed.

     Three months ended January 26, 2003 compared to three months ended January
     27, 2002

     Net sales. Net sales for the first quarter of 2003 decreased 48.9%, or $4.4
     million, to $4.6 million, as compared to net sales of $9.0 million in the
     prior year quarter, primarily as a result of the sale of Motor Products.
     Sales for the prior year quarter excluding Motor Products were $4.7
     million.

     Loss from operations. For the first quarter of 2003, the Company reported a
     loss from operations of $82,000 as compared to a loss from operations of
     $1.1 million in the prior year first quarter. These results reflect the
     sale of Motor Products, a reduction in corporate expenses from the closing
     of the corporate office, discontinued amortization of goodwill and a
     reduction in depreciation expense. Loss from operations for the prior year
     quarter excluding Motor Products was $689,000. The closing of the corporate
     office resulted in a decrease in selling, general and administrative costs
     from $807,000 in the first quarter of 2002, to $338,000 in the first
     quarter of 2003.

     Interest expense. Interest expense was $214,000 in 2003, as compared to
     $500,000 in 2002. The current year quarter includes interest income of
     $17,000 resulting from a decrease in the fair market value of the Company's
     interest rate swap liability. The prior year quarter includes interest
     income of $202,000, resulting from a decrease in the fair market value of
     the Company's interest rate swap liability. These amounts were recorded in
     accordance with SFAS 133. Exclusive of the effects of interest rate swap
     agreements, interest expense would have been $231,000 for the first quarter
     of 2003, as compared to $702,000 in the prior year quarter. Interest
     expense decreased primarily as a result of lower interest rates and debt
     levels.

     Income tax expense (benefit). The Company recorded an income tax benefit of
     $62,000 in 2003 as a result of net operating loss carry forwards and the
     valuation allowance placed on such carry forwards. No income tax benefit
     was recorded in 2002 because none was available.

     Net loss available for common shareholders. Net loss available for common
     shareholders was $575,000, or $.10 per share, in the first quarter of 2003,
     as compared to a net loss of $1.9 million, or $.32 per share, in the prior
     year quarter. Loss available for common shareholders is calculated by
     subtracting dividends on preferred stock of $341,000 and $335,000 for 2003
     and 2002, respectively. Net loss available for common shareholder excluding
     Motor Products for the prior year quarter was $1.3 million or $.23 per
     share.

     Liquidity and Capital Resources

     Cash and cash equivalents were $94,000 at January 26, 2003. The Company had
     negative working capital of $5.3 million at January 26, 2003, as compared
     to negative working capital of $5.4 million at October 27, 2002. Net cash
     provided by operating activities of continuing operations was $147,000, as
     compared to net cash provided by operating activities from continuing
     operations of $167,000 in the prior year quarter.







                                       12
<PAGE>

     Cash flows provided by investing activities from continuing operations
     included $21,000 for capital expenditures for equipment. The Company
     currently plans to invest approximately $230,000 during the remainder of
     fiscal 2003. Management anticipates funding capital expenditures with cash
     from operations and borrowings under the Company's revolving credit
     facility.

     Net cash used in financing activities from continuing operations included
     net repayments of $500,000 under the Company's revolving credit agreement,
     and debt repayments of $62,000.

     At January 26, 2003, $6.4 million was outstanding under the Company's
     revolving credit facility. The Company has experienced a significant
     downturn in its operating results over the past three years and at the end
     of fiscal 2000, was out of compliance with covenants under its bank credit
     facility. In February 2001, the Company entered into an amendment to its
     bank credit facility agreement, wherein the lenders agreed to forbear from
     exercising their rights and remedies under the facility in connection with
     such non-compliance until February 15, 2002, at which time the facility was
     to mature. This amendment to the bank credit facility required reductions
     in the outstanding balance under the facility during calendar 2001 and
     modified the interest rates charged. The amendment required additional
     collateral, effectively all of the assets of the Company, and additional
     reporting requirements, as well as the addition of a covenant requiring
     minimum operating profits. The amendment also required the suspension of
     principal and interest payments on subordinated debt, with an aggregate
     outstanding balance of $2.1 million as of October 28, 2001. Furthermore,
     the amendment to the facility prohibits the payment of preferred or common
     stock dividends and prohibits the Company from purchasing its stock.
     Beginning in August 2001, the Company was out of compliance with its
     minimum operating profit covenant. In February 2002, the Company entered
     into a further amendment to the facility, which extended the maturity date
     to December 31, 2002, required further reductions in the outstanding
     balance under the facility, based on expected future asset sales, increased
     the interest rate charged and replaced the minimum operating profit
     covenant with a minimum EBITDA covenant. In December 2002, the Company
     entered into a further amendment to the facility, which extends the
     maturity date to December 31, 2003. This amendment requires further
     reductions in outstanding balance under the facility based on expected
     future asset sales and cash flow generated from operations and extended and
     adjusted the minimum EBITDA covenant for 2003. Borrowings under the
     facility are charged interest at the Prime Rate plus 2.75% (7.0% at January
     26, 2003).

     The Company has an interest rate swap agreement with one of its banks with
     a notional amount of $4,850,000. The Company entered into the interest rate
     swap agreement to change the fixed/variable interest rate mix of its debt
     portfolio to reduce the Company's aggregate risk to movements in interest
     rates. Such swap agreements do not meet the stringent requirements for
     hedge accounting under SFAS No. 133.

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

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








                                       13
<PAGE>

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

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

     o   The Company's common stock is currently traded on the Nasdaq SmallCap
         Market. For continued listing, the Nasdaq SmallCap Market requires,
         among other things, that listed securities maintain a minimum bid price
         of not less than $1.00 per share. On or before February 10, 2003, the
         Company was required to have evidenced a closing bid price of at least
         $1.00 per share, and, immediately thereafter, a closing bid price of at
         least $1.00 per share of a minimum of ten consecutive trading days, but
         was unable to provide such evidence. On February 21, 2003, The Nasdaq
         Stock Market, Inc. informed the Company that the Nasdaq Listing
         Qualifications Panel had determined not to delist the Company's common
         stock from the Nasdaq SmallCap Market for failure to meet the
         requirement of at least a $1.00 bid price until at least May 22, 2003
         pending modification of Nasdaq's bid price rules. The Panel's
         determination is subject to further extension, termination or
         modification based on further developments in the Nasdaq rule-making
         process. If delisted from the Nasdaq SmallCap Market, the Company's
         common stock may be eligible for trading on the OTC Bulletin Board or
         on other over-the-counter markets, although there can be no assurance
         that the Company's common stock will be eligible for trading on any
         alternative exchanges or markets. Among other consequences, moving from
         the Nasdaq SmallCap Market, or delisting from the Nasdaq SmallCap
         Market may cause a decline in the stock price, reduced liquidity in the
         trading market for the common stock, and difficulty in obtaining future
         financing.

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

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

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

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

     o   The influence of foreign competition from low-cost areas of the world
         may affect results of operations.







                                       14
<PAGE>

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

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

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

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

     o   In that the Company's outstanding derivative instruments do not meet
         the stringent requirements for hedge accounting under SFAS 133, future
         earnings could reflect greater volatility.

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













                                       15
<PAGE>



     ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                  MARKET RISK

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

     To the extent that the Company's financial instruments expose the Company
     to interest rate risk and market risk, they are presented in the table
     below. The table presents principal cash flows and related interest rates
     by year of maturity for the Company's bank credit facility, industrial
     revenue bonds and term loans in effect at January 26, 2003. For interest
     rate swaps, the table presents notional amounts and the related reference
     interest rates by year of maturity. Fair values included herein have been
     determined based upon (1) rates currently available to the Company for debt
     with similar terms and remaining maturates, and (2) estimates obtained from
     dealers to settle interest rate swap agreements. Note 6 to the condensed
     consolidated financial statements should be read in conjunction with the
     table below (dollar amounts in thousands).
<TABLE>
<CAPTION>

                                                        Year of Maturity                                   Fair Value
                                   ----------------------------------------------------------    Total Due         at
                                    2003       2004      2005      2006      2007  Thereafter  at Maturity  1/26/2003
                                    ----       ----      ----      ----      ----  ----------  -----------  ---------
     <S>                            <C>        <C>       <C>       <C>       <C>   <C>         <C>          <C>
     Debt:
         Fixed rate                $1,498     $ 255      $ 175     $  94      $ 57    $  -       $ 2,079     $ 2,079
         Average interest rate       8.9%      7.3%       6.1%      5.0%      5.0%
         Variable rate             $7,000     $ 600      $ 600     $ 900     $ 900    $ 950      $10,950     $10,950
         Average interest rate       7.1%      2.8%       2.8%      2.8%      2.8%     2.8%

     Interest rate swap agreements:
         Variable to fixed swaps   $4,550     $  -       $ -       $ -       $ -      $  -       $ 4,550     $   (93)
         Average pay rate             4.2
         Average receive rate         1.0
</TABLE>

     ITEM 4.      CONTROLS AND PROCEDURES

     The Company carried out an evaluation, under the supervision and with the
     participation of our management, including our Chief Executive Officer (the
     principal executive officer, principal financial officer and principal
     accounting officer), of the effectiveness of the design and operation of
     our disclosure controls and procedures (as defined in Rules 13a-14(c) and
     15d-14(c) under the Securities Exchange Act of 1934, as amended (the
     "Exchange Act")) as of a date within 90 days prior to the date of filing
     this Quarterly Report on Form 10-Q (the "Evaluation Date"). Based on that
     evaluation, our Chief Executive Officer concluded that, as of the
     Evaluation Date, our disclosure controls and procedures are effective to
     ensure that information required to be disclosed by us in our Exchange Act
     reports was recorded, processed, summarized and reported within the
     applicable time periods. Since the Evaluation Date, there have been no
     significant changes in internal controls or, to the Company's knowledge, in
     any other factors that could significantly affect these controls including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.















                                       16
<PAGE>



Part II.          OTHER INFORMATION

Item 2.           Changes in Securities and Use of Proceeds

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

Item 3.           Defaults Upon Senior Securities

(b) Since February 2001, the Company has been prohibited from making dividend
payments on its Class A Convertible Preferred Stock in connection with
modifications to its revolving credit facility. As of the date of the filing of
this report, accrued dividends on the Class A Convertible Preferred Stock total
$3,006,000.

Item 6.           Exhibits and Reports on Form 8-K

(a)      Exhibits

Exhibit No.       Description

11                Computation of Per Share Earnings

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

(b)      Form 8-K

No reports on Form 8-K were filed during the quarter ended January 26, 2003.










                                       17
<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



         Date:    March 11, 2003                By: /s/ George B. Lemmon, Jr.
                                                    -------------------------
                                                     George B. Lemmon, Jr.
                                                     President, Chief Executive
                                                     Officer, and Director


                                 CERTIFICATIONS

                  I, George B. Lemmon, Jr., certify that:

                  1. I have reviewed this quarterly report on Form 10-Q of
Owosso Corporation;

                  2. Based on my knowledge, this annual report does not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period covered by
this annual report;

                  3. Based on my knowledge, the financial statements, and other
financial information included in this annual report, fairly present in all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this quarterly
report;

                  4. I am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-4 and
15d-4) for the registrant and have:

                           a) Designed such disclosure controls and procedures
         to ensure that material information relating to the registrant,
         including its consolidated subsidiaries, is made known to me by others
         within those entities, particularly during the period in which this
         annual report is being prepared;

                           b) Evaluated the effectiveness of the registrant's
         disclosure controls and procedures as of a date within 90 days prior to
         the filing of this annual report (the "Evaluation Date"); and

                           c) Presented in this annual report my conclusions
         about the effectiveness of the disclosure controls and procedures based
         on our evaluation as of the Evaluation Date;

                  5. I have disclosed, based on my most recent evaluation, to
the registrant's auditors and audit committee of registrant's board of directors
(or other persons performing the equivalent functions):








                                       18
<PAGE>

                           a) All significant deficiencies in the design or
         operation of internal controls which could adversely affect the
         registrant's ability to record, process, summarize and report financial
         data and have identified for the registrant's auditors any material
         weakness in internal controls; and

                           b) Any fraud, whether or not material, that involves
         management or other employees who have a significant role in the
         registrant's internal controls; and

                  6. I have indicated in this annual report whether there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: March 11, 2003


                                  /s/ George B. Lemmon, Jr.
                                      ----------------------
                                        George B. Lemmon, Jr.
                                         President and Chief Executive Officer
                                         (principal executive officer and
                                              principal financial officer)
















                                       19