<PAGE>

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

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 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 29, 2001   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 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 [ ]


As of June 8, 2001, 5,874,345 shares of the Registrant's Common Stock, $.01 par
value, were outstanding.

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

<PAGE>

OWOSSO CORPORATION
TABLE OF CONTENTS
--------------------------------------------------------------------------------


                                                                           Page
PART I - FINANCIAL INFORMATION:


      Item 1.    Financial Statements

                 Condensed Consolidated Statements of Operations             3
                 for the three and six months ended April 29, 2001 and
                 April 30, 2000 (unaudited)

                 Condensed Consolidated Balance Sheets at                    4
                 April 29, 2001 (unaudited) and October 29, 2000

                 Condensed Consolidated Statements of Cash Flows             5
                 for the six months ended April 29, 2001 and
                 April 30, 2000 (unaudited)

                 Notes to Condensed Consolidated Financial Statements        6
                 (unaudited)

      Item 2.    Management's Discussion and Analysis of                     13
                 Financial Condition and Results of Operations

      Item 3.    Quantitative and Qualitative Disclosures about Market Risks 21


PART II - OTHER INFORMATION:

      Item 2.    Changes in Securities and Use of Proceeds                   22

      Item 4.    Submission of Matters to a Vote of Security Holders         22

      Item 5.    Other Information                                           22

      Item 6.    Exhibits and Reports on Form 8-K                            23










                                        2

<PAGE>
OWOSSO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                        Three Months Ended             Six Months Ended
                                                                  -----------------------------   -----------------------------
                                                                    April 29,        April 30,     April 29,           April 30,
                                                                      2001             2000           2001                2000
<S>                                                                <C>              <C>           <C>                <C>
Net sales                                                         $22,289,000       $32,475,000   $42,905,000       $61,185,000

Cost of products sold                                              18,743,000        27,047,000    36,668,000        50,977,000
                                                                  -----------       -----------   -----------       -----------
Gross profit                                                        3,546,000         5,428,000     6,237,000        10,208,000

Selling, general and administrative expenses                        2,868,000         3,843,000     6,213,000         8,215,000

Write-down of net assets held for sale                                700,000              -          700,000             -
                                                                  -----------       -----------   -----------       -----------
Income (loss) from operations                                         (22,000)        1,585,000      (676,000)        1,993,000

Interest expense                                                      978,000         1,228,000     2,434,000         2,546,000

Other (income) expense                                               (102,000)          (43,000)     (111,000)          (94,000)
                                                                  -----------       -----------   -----------       -----------
Income (loss) from continuing operations
     before income taxes                                             (898,000)          400,000    (2,999,000)         (459,000)

Income tax expense (benefit)                                          (67,000)          149,000      (781,000)         (250,000)
                                                                  -----------       -----------   -----------       -----------
Income (loss) from continuing operations                             (831,000)          251,000    (2,218,000)         (209,000)

Income (loss) from discontinued operations, net of
     income taxes                                                        -              312,000      (434,000)          500,000
                                                                  -----------       -----------   -----------       -----------
Income (loss) before cumulative effect
     of accounting change                                            (831,000)          563,000    (2,652,000)          291,000

Cumulative effect of accounting change
     (net of tax of $34,000)                                             -                 -          (67,000)             -
                                                                  -----------       -----------   -----------       -----------

Net income (loss)                                                    (831,000)          563,000    (2,719,000)          291,000

Dividends and accretion on preferred stock                           (328,000)         (279,000)     (654,000)         (557,000)
                                                                  -----------       -----------   -----------       -----------

Net income (loss) available
     for common stockholders                                      $(1,159,000)      $   284,000   $(3,373,000)      $  (266,000)
                                                                  ===========       ===========   ===========       ===========
Basic and diluted income (loss) per common share:
     Loss from continuing operations                                  $ (0.20)      $     (0.00)  $     (0.49)      $     (0.13)
     Income (loss) from discontinued operations                          -                 0.05         (0.08)             0.08
     Cumulative effect of account change, net                            -                 -            (0.01)              -
                                                                  -----------       -----------   -----------       -----------
Net income (loss) per share                                           $ (0.20)      $      0.05   $     (0.58)      $     (0.05)
                                                                  ===========       ===========   ===========       ===========
Weighted average number of
     common shares outstanding
          Basic                                                     5,866,000         5,846,000     5,858,000         5,838,000
                                                                  ===========       ===========   ===========       ===========

          Diluted                                                   5,866,000         5,855,000     5,858,000         5,838,000
                                                                  ===========       ===========   ===========       ===========
</TABLE>


See notes to condensed consolidated financial statements.


                                        3
<PAGE>

OWOSSO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                        April 29,            October 29,
                                                                          2001                  2000
                                                                       (Unaudited)           (See Note)
<S>                                                                    <C>                   <C>
ASSETS

CURRENT ASSETS:
   Cash and cash equivalents                                           $   541,000        $   491,000
   Receivables, net                                                     11,848,000         11,973,000
   Inventories, net                                                      8,978,000          9,026,000
   Net assets held for sale                                              2,725,000          8,664,000
   Net assets of discontinued operations held for sale                      -               9,449,000
   Prepaid expenses and other                                            4,396,000          1,243,000
   Deferred taxes                                                        1,990,000          1,900,000
                                                                       -----------        -----------
        Total current assets                                            30,478,000         42,746,000

PROPERTY, PLANT AND EQUIPMENT, NET                                      20,234,000         22,058,000

GOODWILL, NET                                                           12,568,000         12,796,000

OTHER INTANGIBLE ASSETS, NET                                             6,560,000          6,982,000

OTHER ASSETS                                                               711,000          1,172,000
                                                                       -----------        -----------
TOTAL ASSETS                                                           $70,551,000        $85,754,000
                                                                       ===========        ===========

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable - trade                                            $ 6,311,000        $ 7,386,000
   Accrued expenses                                                      5,706,000          5,397,000
   Related party debt                                                      850,000          1,000,000
   Current portion of long-term debt                                    31,597,000         26,816,000
                                                                       -----------        -----------

        Total current liabilities                                       44,464,000         40,599,000

LONG-TERM DEBT, LESS CURRENT PORTION                                     6,075,000         22,463,000

POSTRETIREMENT BENEFITS AND OTHER LIABILITIES                            2,979,000          2,323,000

DEFERRED TAXES                                                           2,026,000          1,937,000

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY                                                    15,007,000         18,432,000
                                                                       -----------        -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                             $70,551,000        $85,754,000
                                                                       ===========        ===========
</TABLE>

Note: the balance sheet at October 29, 2000 has been condensed from the audited
      financial statements at that date.

See notes to condensed consolidated financial statements.



                                        4
<PAGE>

OWOSSO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                                             Six Months Ended
                                                                                                     -------------------------------
                                                                                                      April 29,        April 30,
                                                                                                         2001             2000
<S>                                                                                                  <C>              <C>
OPERATING ACTIVITIES:
   Net income (loss)                                                                                 $ (2,719,000)    $   291,000
   (Income) loss from discontinued operations                                                             434,000        (500,000)
   Adjustments to reconcile net income (loss) to cash
        provided by (used in) operating activities:
        Depreciation                                                                                    2,246,000       2,563,000
        Amortization                                                                                      842,000         911,000
        Write-down of net assets held for sale                                                            700,000            -
        Other                                                                                             169,000            -
        Changes in operating assets and liabilities                                                    (1,869,000)      1,638,000
                                                                                                     ------------     -----------
   Net cash provided by (used in) continuing operations                                                  (197,000)      4,903,000
   Net cash used in discontinued operations                                                            (4,507,000)     (1,929,000)
                                                                                                     ------------     -----------
   Net cash provided by (used in) operating activities                                                 (4,704,000)      2,974,000
                                                                                                     ------------     -----------

INVESTING ACTIVITIES:
   Proceeds from the sale of businesses                                                                 5,996,000            -
   Purchases of property, plant and equipment                                                          (1,119,000)     (1,338,000)
   Contingent consideration on acquisition                                                               (186,000)       (431,000)
   Other                                                                                                  547,000         978,000
                                                                                                     ------------     -----------
   Net cash provided by (used in) continuing operations                                                 5,238,000        (791,000)
   Net cash provided by (used in) discontinued operations                                              11,481,000        (644,000)
                                                                                                     ------------     -----------
   Net cash provided by (used in) investing activities                                                 16,719,000      (1,435,000)
                                                                                                     ------------     -----------
FINANCING ACTIVITIES:
   Net borrowings from (payments on) revolving credit agreement                                       (11,100,000)        600,000
   Payments on long-term debt                                                                            (498,000)       (835,000)
   Payments on related party debt                                                                        (150,000)           -
   Dividends paid                                                                                        (142,000)     (1,075,000)
   Other                                                                                                  (60,000)          8,000
                                                                                                     ------------     -----------
   Net cash used in continuing operations                                                             (11,950,000)     (1,302,000)
   Net cash used in discontinued operations                                                               (15,000)        (24,000)
                                                                                                     ------------     -----------
   Net cash used in financing activities                                                              (11,965,000)     (1,326,000)
                                                                                                     ------------     -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                                  50,000         213,000

CASH AND CASH EQUIVALENTS, BEGINNING                                                                      491,000         161,000
                                                                                                     ------------     -----------
CASH AND CASH EQUIVALENTS, ENDING                                                                    $    541,000     $   374,000
                                                                                                     ============     ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Interest paid                                                                                     $  1,899,000     $ 2,271,000
                                                                                                     ============     ===========
   Taxes paid                                                                                        $    203,000       $ 231,000
                                                                                                     ============     ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
   FINANCING ACTIVITIES:
     Dividends payable                                                                               $    654,000     $   493,000
                                                                                                     ============     ===========
</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 - The condensed consolidated financial statements represent
         the consolidated financial position, results of operations and cash
         flows of Owosso Corporation and its subsidiaries (the "Company"). The
         Company currently operates in three business segments: Motors, Coils,
         and Other.

         The Motors segment, which includes Stature Electric, Inc. ("Stature"),
         Motor Products - Owosso Corporation ("Motor Products"), and Motor
         Products Ohio Corporation ("MP-Ohio"), manufactures fractional and
         integral horsepower motors. Significant markets for the Motors segment
         include commercial products and equipment, healthcare, recreation and
         non-automotive transportation. The Company sells its motors primarily
         throughout North America and also in Europe.

         The Coils segment manufactures heat exchange coils, primarily for
         non-automotive transportation, refrigeration and commercial and
         residential HVAC markets. The businesses included in this segment
         include Astro Air Coils, Inc. ("Astro Air"), Snowmax, Inc. ("Snowmax"),
         and Astro Air UK Ltd. ("Astro UK"). The Company sells its coils
         primarily throughout North America and also in Europe. Subsequent to
         the balance sheet date, the Company completed the sale of substantially
         all of the assets of Astro UK. Accordingly, the net assets of Astro UK
         have been included in "Net Assets Held For Sale" in the April 29, 2001
         condensed consolidated balance sheet. See Note 4.

         The Company's Other segment includes Dura-Bond Bearing Company
         ("Dura-Bond") and Cramer Company (formerly known as M.H. Rhodes, Inc.,
         and hereinafter referred to as "Cramer"). Dura-Bond, which manufactures
         replacement camshaft bearings, valve seats and shims for the automotive
         after-market, was sold November 2, 2000. Cramer manufactures timers and
         subfractional horsepower motors for use in commercial applications. The
         Company completed the sale of the assets associated with the timer and
         switch line of Cramer on December 4, 2000, and in connection with the
         sale, changed the name of the company from M.H. Rhodes, Inc. to Cramer
         Company. The Company intends to dispose of the remaining Cramer assets
         by the end of the year. Accordingly, the net assets of Dura-Bond and
         Cramer have been included in "Net Assets Held For Sale" in the
         condensed consolidated balance sheets.

         During the fourth quarter of fiscal 2000, the Company adopted a plan to
         dispose of Sooner Trailer Manufacturing Company ("Sooner Trailer"),
         which manufactures all-aluminum trailers, primarily horse and livestock
         trailers. Sooner Trailer had previously been included in the
         Agricultural Equipment segment (formerly known as the Trailers and
         Agricultural Equipment segment). The Company completed the sale of
         Sooner Trailer on January 24, 2001. Accordingly, for financial
         statement purposes, the assets, liabilities, results of operations and
         cash flows of Sooner Trailer have been segregated from those of
         continuing operations and are presented in the Company's financial
         statements as discontinued operations. The net assets of Sooner Trailer
         have been included in "Net Assets of Discontinued Operations Held for
         Sale" in the October 29, 2000 condensed consolidated balance sheet.


                                        6

<PAGE>

         Financial Statements - The condensed consolidated balance sheet as of
         April 29, 2001 and the condensed consolidated statements of operations
         and cash flows for the three and six months ended April 29, 2001 and
         April 30, 2000 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 April
         29, 2001 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 29, 2000
         Annual Report on Form 10-K.

         Reclassifications - Certain reclassifications were made to the 2000
         condensed consolidated financial statements to conform to the 2001
         classifications.

         Earnings (loss) per share - Basic earnings per common share is computed
         by dividing net earnings (the numerator) by the weighted average number
         of common shares outstanding during each period (the denominator). The
         computation of diluted earnings per common share is similar to that of
         basic earnings per common share, except that the denominator is
         increased by the dilutive effect of stock options outstanding, computed
         using the treasury stock method.

         Comprehensive income - The Company presents comprehensive income (loss)
         as a component of shareholders' equity. The components of comprehensive
         income are as follows:
<TABLE>
<CAPTION>
                                                       Three Months Ended          Six Months Ended
                                                   -----------------------     -------------------------
                                                   April 29,     April 30,      April 29,      April 30,
                                                     2001          2000           2001           2000
<S>                                                <C>           <C>           <C>            <C>
Net income (loss)                                  $(831,000)    $563,000      $(2,719,000)    $291,000

Foreign currency translation                         (38,000)     (56,000)         (51,000)     (54,000)
                                                   ---------     --------      -----------     --------
Total comprehensive income (loss)                  $(869,000)    $507,000      $(2,770,000)    $237,000
                                                   =========     ========      ===========     ========
</TABLE>
         New Accounting Pronouncements - In June 1998, the Financial Accounting
         Standards Board issued SFAS No. 133, "Accounting for Derivative
         Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 was amended
         in June 2000 by SFAS No. 138, "Accounting for Certain Derivative
         Instruments and Certain Hedging Activities" ("SFAS No. 138"), which
         addressed a limited number of issues causing implementation
         difficulties. SFAS 133, as amended, establishes accounting and
         reporting standards for derivative instruments and for hedging
         activities. It requires that an entity recognize all derivative
         instruments as either assets or liabilities and measure them at fair
         value. The accounting for changes in fair value depends upon the
         purpose of the derivative instrument and whether it is designated and
         qualifies for hedge accounting. To the extent derivative instruments
         qualify and are designated as hedges of the variability in cash flows
         associated with forecasted transactions, the effective portion of the
         gain or loss on such derivative instruments will generally be reported
         in other comprehensive income and the ineffective portion, if any, will
         be reported in net income. Such amounts recorded in accumulated other
         comprehensive income will be reclassified into net income when the
         forecasted transaction affects earnings. To the extent derivative
         instruments qualify and are designated as hedges of changes in the fair
         value of an existing asset, liability or firm commitment, the gain or



                                        7

<PAGE>

         loss on the hedging instrument will be recognized currently in earnings
         along with changes in the fair value of the hedged asset, liability or
         firm commitment attributable to the hedged risk.

         The Company was required to adopt the provisions of SFAS 133 effective
         October 30, 2000. The Company's derivative instruments outstanding,
         variable-to-fixed interest rate swaps, do not qualify for hedge
         accounting under SFAS 133. The adoption of SFAS 133 required the
         Company to mark its interest rate swaps to market. The result was to
         record a net liability of $101,000 with an offsetting charge to
         cumulative effect of accounting change. This amount, net of tax of
         $34,000, is reflected in the condensed consolidated statement of
         operations as "Cumulative effect of accounting change".

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


2.       LIQUIDITY AND FINANCING

         The Company's results of operations have declined significantly over
         the past two years, with the Company reporting a net loss for the year
         ended October 29, 2000. In addition, the Company was not in compliance
         with covenants under its revolving credit facility at October 29, 2000.
         In February 2001, the Company entered into an amendment to its
         revolving credit facility, 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 matures. As further disclosed under Note 6 "Long-term Debt",
         the amendment to the revolving credit facility also modified the
         interest rates charged, calls for reductions in the outstanding balance
         during calendar 2001 and requires additional covenants to be met. 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, and its ability to generate
         sufficient cash flows to meet its obligations on a timely basis.
         Management's plans in regard to these matters are described in the
         following paragraph.

         Since the second half of fiscal 2000, management of the Company has
         taken a series of steps intended to stabilize and improve the operating
         results of the Company, including completion of the sale of its
         Dura-Bond and Sooner Trailer subsidiaries and the sale of the timer and
         switch line at its Cramer subsidiary. The Company also completed the
         sale of the assets of its joint venture, Astro Air UK, Ltd. In
         addition, management of the Company's Coils segment was replaced, cost
         reductions at the corporate office were implemented and reductions in
         fixed costs at the operating units were initiated, commensurate with
         reductions in sales volumes. Management believes that available cash
         and cash equivalents together with cash flow from operations, available
         borrowings under the Company's revolving credit facility and other
         sources of liquidity (including asset sales) will be sufficient to fund
         the Company's operating activities, investing activities and debt
         maturities for fiscal 2001. In addition, management believes that the
         Company will be in compliance with its debt covenant requirements
         throughout fiscal 2001. However, a substantial portion of its
         indebtedness, which will mature in February 2002, will require the
         Company to refinance the indebtedness at that time.


3.       DISCONTINUED OPERATIONS

         On January 24, 2001, the Company completed the sale of the stock of
         Sooner Trailer to the McCasland Investment Group and certain members of
         Sooner Trailer's management for cash of $11,500,000, subject to certain

                                        8

<PAGE>

         post-closing adjustments based on changes in working capital, plus the
         assumption of debt of approximately $670,000. In May 2001, subsequent
         to the balance sheet date, the Company received approximately
         $2,000,000 related to such post-closing adjustments. In connection with
         the anticipated sale, the Company recognized a loss of $8,600,000 in
         the fourth quarter of 2000 to adjust the carrying value of Sooner
         Trailer's assets to their estimated fair value based on an expected
         sales price. No additional gain or loss was recorded upon completion of
         the sale.

         The Company has reported the results of Sooner Trailer as "Discontinued
         Operations" for all periods presented in the condensed consolidated
         financial statements. Revenues from Sooner Trailer were $6,118,000 for
         2001 and $12,763,000 and $21,932,000 for the three and six-months ended
         April 30, 2000, respectively.

         For financial reporting purposes, the net assets attributable to Sooner
         have been classified in the October 29, 2000 condensed consolidated
         balance sheet as "Net Assets of Discontinued Operations Held for Sale"
         and consist of the following:

                                                              October 29,
                                                                 2000

Current assets                                                $ 9,812,000
Current liabilities                                            (4,905,000)
                                                              -----------
Net current assets                                              4,907,000
Net fixed assets                                                3,965,000
Other non-current assets                                        1,180,000
Non-current liabilities                                          (603,000)
                                                              -----------

Total net assets held for sale                                $ 9,449,000
                                                              ===========

4.       NET ASSETS HELD FOR SALE

         Dura-Bond - On November 2, 2000, the Company completed the sale of the
         stock of Dura-Bond to a joint venture formed by Melling Tool Company of
         Jackson, Michigan and Engine Power Components, Inc. of Grand Haven,
         Michigan (the "Joint Venture"). The Joint Venture acquired the stock of
         Dura-Bond for approximately $5,000,000, the net assets of which
         included debt of approximately $5,000,000. Based upon the terms of the
         sale, the Company recorded, in the fourth quarter of fiscal 2000, a
         pre-tax charge of $1,200,000 to adjust the carrying value of
         Dura-Bond's assets to their estimated fair value, reflecting a
         reduction in goodwill. No additional gain or loss is expected to be
         recorded on the sale. Net sales attributable to Dura-Bond were
         $4,252,000 and income from operations before the allocation of
         corporate expenses was $781,000 for the first six months of 2000.

         Cramer - On December 4, 2000, the Company completed the sale of the
         assets associated with the timer and switch line of Cramer to Capewell
         Components, LLC of South Windsor, Connecticut for cash of approximately
         $2,000,000, plus the assumption of approximately $400,000 in
         liabilities. In connection with the sale, the name of the company was
         changed from M.H. Rhodes, Inc. to Cramer Company. The Company


                                        9
<PAGE>

         anticipates the disposition of the remaining Cramer assets within the
         next twelve months. In connection with the sale of the timer and switch
         line and the anticipated sale of the remainder of the assets of Cramer,
         the Company recorded, in the fourth quarter of fiscal 2000, a pre-tax
         charge of $1,600,000 to adjust the carrying value of Cramer's assets to
         their estimated fair value, based upon an estimated sales price of the
         assets.

         Astro UK - Effective May 9, 2001, subsequent to the balance sheet date,
         the Company completed the sale of substantially all of the assets of
         Astro UK to ACR Heat Transfer Limited of Norfolk, England for cash of
         450,000 bps (approximately $643,000). Based upon the terms of the
         sale, the Company recorded, in the second quarter of 2001, a pretax
         charge of $700,000 to adjust the carrying value of Astro UK's assets to
         their estimated realizable value. No additional gain or loss is
         expected to be recorded upon completion of the sale. Proceeds from the
         sale were utilized to reduce the Company's revolving credit facility.

         For financial reporting purposes, the assets and liabilities
         attributable to Dura-Bond, Rhodes and Astro UK have been classified in
         the condensed consolidated balance sheets as Net Assets Held for Sale
         and consist of the following:


                                                  April 29,     October 29,
                                                    2001           2000


         Current assets                          $2,502,000     $ 7,571,000
         Current liabilities                       (662,000)     (1,423,000)
                                                 ----------     -----------
         Net current assets                       1,840,000       6,148,000
         Net fixed assets                         1,168,000       5,923,000
         Other noncurrent assets                     43,000       2,449,000
         Non-current liabilities                   (326,000)     (5,856,000)
                                                 ----------     -----------
         Total net assets held for sale          $2,725,000     $ 8,664,000
                                                 ==========     ===========

5.       INVENTORIES

                                                  April 29,     October 29,
                                                    2001           2000

         Raw materials and purchased parts       $3,365,000     $ 3,711,000
         Work in process                          3,323,000       3,773,000
         Finished goods                           2,290,000       1,542,000
                                                 ----------     -----------
         Total                                   $8,978,000     $ 9,026,000
                                                 ==========     ===========

6.       LONG-TERM DEBT

         On January 22, 1999, the Company entered into a new revolving credit
         facility with the Company's two primary banks, originally expiring in
         December 2002. At April 29, 2001, $30,000,000 was outstanding under
         this facility. The revolving credit facility includes financial and
         other covenants, including fixed charge, cash flow and net worth ratios
         and restrictions on certain asset sales, mergers and other significant
         transactions. The Company was not in compliance with such covenants at


                                       10

<PAGE>

         October 29, 2000. In February 2001, the Company entered into an
         amendment to its revolving credit facility, 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 matures. In addition to changing the maturity
         date from December 2002 to February 15, 2002, the amendment reduced the
         total amount available for borrowings to $32.0 million. Borrowings
         under the facility that are In-Formula (as defined) will be charged
         interest at the Prime Rate plus 1.5% (9.0% at April 29, 2001).
         Borrowings under the facility that are Out-of-Formula (as defined) will
         be charged interest at the Prime Rate plus 2.0% (9.5% at April 29,
         2001). Borrowings and letters of credit will be limited to a Borrowing
         Base, to consist of eligible accounts receivable and inventory.
         Borrowings that equal an amount up to and including the Borrowing Base,
         will be defined as In-Formula borrowings. Total borrowings less
         In-Formula borrowings, will be defined as Out-of- Formula borrowings.
         The available commitment will be reduced by $1,000,000 in June 2001.
         The amendment calls for further reductions in the available commitment
         of $2,000,000, of which $1,000,000 is mandatory, at September 30, 2001,
         and $3,000,000 at December 31, 2001. If the Company is unable to reduce
         its outstanding commitment on any of these dates, then for each missed
         reduction the otherwise-applicable interest rates for outstanding loans
         will increase by 1% per annum, but failure to make the reductions will
         not constitute a default. As amended, the facility is secured by
         substantially all of the assets of the Company. The amendment also
         requires additional reporting requirements as well as the addition of a
         covenant requiring minimum operating profits. The amendment also
         requires the suspension of principal and interest payments on
         subordinated debt, with an aggregate outstanding balance of $1,521,000.
         Furthermore, the amendment to the facility prohibits the payment of
         preferred or common stock dividends.

         Derivative Interest Rate Contracts - The Company has two interest rate
         swap agreements, each with a $7,500,000 notional amount, maturing in
         July 2002. The Company receives floating interest rate payments at the
         three month London Interbank Offered Rate (4.8% at April 29, 2001) in
         exchange for the payment of quarterly fixed interest rate payments of
         7.0675% and 7.09% over the life of the agreements. In addition, the
         Company has an interest rate swap agreement with one of its banks with
         a notional amount of $5,150,000. 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 (3.9% at April 29, 2001). The Company entered into these
         interest rate swap agreements 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 133.
         Accordingly, changes in the fair value of such agreements are recorded
         in the Condensed Consolidated Financial Statements as a component of
         interest expense. The fair market value of the swap agreement liability
         increased in the first six months of 2001, resulting in a charge of
         $453,000.

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
         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.

         The Company is a party to a consent decree with the State of
         Connecticut pursuant to which it has agreed to complete its
         environmental investigation of the site on which its Cramer facility


                                       11
<PAGE>

         was previously located and conduct any remedial measures which may be
         required. Based upon the amounts recorded as liabilities, the Company
         does not believe that the ultimate resolution of this matter will have
         a material adverse effect on the consolidated financial results of the
         Company.

         The Company has been named as a potentially responsible party with
         respect to three hazardous substance disposal sites currently under
         remediation by the U.S. Environmental Protection Agency (the "EPA")
         under its "Superfund" program. With respect to all three sites, based
         on the minimal amount of waste alleged to have been contributed to the
         sites by the Company, the Company expects to resolve the matters
         through the payment of de minimis amounts.

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

8.       SEGMENT INFORMATION
<TABLE>
<CAPTION>
                                                             Three Months Ended                   Six Months Ended
                                                         ---------------------------       ---------------------------
                                                          April 29,       April 30,         April 29,       April 30,
                                                            2001            2000              2001            2000
         <S>                                            <C>              <C>               <C>             <C>
         Net sales:
         Motors                                          $13,669,000     $14,704,000       $26,727,000     $28,702,000
         Coils                                             7,850,000      12,733,000        14,344,000      23,212,000
         Other                                               770,000       5,038,000         1,834,000       9,271,000
                                                         -----------     -----------       -----------     -----------
              Total net sales                            $22,289,000     $32,475,000       $42,905,000     $61,185,000
                                                         ===========     ===========       ===========     ===========
         Income (loss) from operations:
         Motors                                          $ 1,572,000     $ 1,058,000       $ 2,675,000     $ 2,193,000
         Coils                                              (681,000)        500,000        (1,134,000)        728,000
         Other                                              (136,000)        759,000          (273,000)      1,153,000
         Corporate (1)                                      (777,000)       (732,000)       (1,944,000)     (2,081,000)
                                                         -----------     -----------       -----------     -----------
              Total income (loss) from operations        $   (22,000)    $ 1,585,000       $  (676,000)    $ 1,993,000
                                                         ===========     ===========       ===========     ===========
</TABLE>

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


         The Company derives substantially all of its revenues from within the
         United States. Identifiable assets of the segments are not materially
         different from amounts disclosed in the Company's 2000 Annual Report on
         Form 10-K. Information about interest expense, other income and income
         taxes is not provided on a segment level. The accounting policies of
         the segments are the same as those described in the summary of
         significant accounting policies and in the Company's 2000 Annual Report
         on Form 10-K.


                                       12
<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 April 29, 2001 and the results of operations for the
         three and six months ended April 29, 2001 and April 30, 2000. 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

         Owosso Corporation designs, manufactures and distributes engineered
         component products, specifically motors and heat exchange coils. The
         Company's results of operations have declined significantly over the
         past two years, with the Company reporting a net loss for the year
         ended October 29, 2000. In addition, the Company was not in compliance
         with covenants under its revolving credit facility at October 29, 2000.
         In February 2001, the Company entered into an amendment to its
         revolving credit facility, 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 matures. As further disclosed under Note 6 "Long-term Debt",
         the amendment to the revolving credit facility also modified the
         interest rates charged, calls for reductions in the outstanding balance
         during calendar 2001 and requires additional covenants to be met. 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, and its ability to generate
         sufficient cash flows to meet its obligations on a timely basis.
         Management's plans in regard to these matters are described in the
         following paragraph.

         Since the second half of fiscal 2000, management of the Company has
         taken a series of steps intended to stabilize and improve the operating
         results of the Company, including the completion of the sales of its
         Dura-Bond and Sooner Trailer subsidiaries and the sale of the timer and
         switch line at its Cramer subsidiary (formerly known as M.H. Rhodes,
         Inc.). The Company also completed the sale of the assets of its joint
         venture, Astro Air UK, Ltd. In addition, management of the Company's
         Coils segment was replaced, cost reductions at the corporate office
         were implemented and reductions in fixed costs at the operating units
         were initiated, commensurate with reductions in sales volumes.
         Management believes that available cash and cash equivalents together
         with cash flows from operations, available borrowings under the
         Company's revolving credit facility and other sources of liquidity
         (including asset sales) will be sufficient to fund the Company's
         operating activities, investing activities and debt maturities for
         fiscal 2001. In addition, management believes that the Company will be
         in compliance with its debt covenant requirements throughout fiscal
         2001. However, a substantial portion of its indebtedness, which will
         mature in February 2002, will require the Company to refinance the
         indebtedness at that time.

         Sale of Businesses

         Dura-Bond - On November 2, 2000, the Company sold the stock of
         Dura-Bond to a joint venture formed by Melling Tool Company of Jackson,
         Michigan and Engine Power Components, Inc. of Grand Haven, Michigan
         (the "Joint Venture"). The Joint Venture acquired the stock of
         Dura-Bond for approximately $5.0 million, the net assets of which
         included debt of approximately $5.0 million. Based upon the terms of
         the sale, the Company recorded, in the fourth quarter of fiscal 2000, a


                                       13

<PAGE>

         pre-tax charge of $1.2 million to adjust the carrying value of
         Dura-Bond's assets to their estimated realizable value. No additional
         gain or loss is expected to be recorded on the sale. Proceeds from the
         sale, net of transaction fees, were used to reduce the Company's
         revolving credit facility.

         Cramer - On December 4, 2000, the Company completed the sale of the
         assets associated with the timer and switch line of Cramer to Capewell
         Components, LLC of South Windsor, Connecticut for cash of $2.0 million,
         plus the assumption of approximately $400,000 in liabilities. In
         connection with the sale of the assets, the name of the company was
         changed from M.H. Rhodes, Inc. to Cramer Company ("Cramer"). Proceeds
         from the sale were used to reduce the Company's revolving credit
         facility and other long-term indebtedness. The Company anticipates the
         disposition of the remaining assets of Cramer within the next twelve
         months. In connection with the sale of the timer and switch line and
         the anticipated sale of the remaining assets of Cramer, the Company
         recorded, in the fourth quarter of fiscal 2000, a pre-tax charge of
         $1.6 million to adjust the carrying value of Cramer's assets to their
         estimated realizable value, based on the estimated sales price of the
         assets.

         Sooner Trailer - On January 24, 2001, the Company completed the sale of
         the stock of Sooner Trailer to the McCasland Investment Group and
         certain members of Sooner Trailer's management for cash of $11.5
         million, subject to certain post-closing adjustments based on changes
         in working capital, plus the assumption of debt of approximately
         $670,000. In May 2001, subsequent to the balance sheet date, the
         Company received approximately $2.0 million related to such
         post-closing adjustments. Based upon the terms of the sale, the Company
         recorded, in the fourth quarter of 2000, a pretax charge of $8.6
         million to adjust the carrying value of Sooner Trailer's assets to
         their estimated fair value, representing the write-down of goodwill. No
         additional gain or loss was recorded upon completion of the sale.
         Proceeds from the sale were utilized to reduce the Company's revolving
         credit facility.

         Astro UK - Effective May 9, 2001, subsequent to the balance sheet date,
         the Company completed the sale of substantially all of the assets of
         Astro UK to ACR Heat Transfer Limited of Norfolk, England for cash of
         450,000 bps (approximately $643,000). Based upon the terms of the
         sale, the Company recorded, in the second quarter of 2001, a pretax
         charge of $700,000 to adjust the carrying value of Astro UK's assets to
         their estimated fair value. No additional gain or loss is expected to
         be recorded upon completion of the sale. Proceeds from the sale were
         utilized to reduce the Company's revolving credit facility.

         Results of Operations

         The following table sets forth for the periods indicated the percentage
         relationship that certain items in the Company's Condensed Consolidated
         Statements of Operations bear to net sales.
<TABLE>
<CAPTION>
                                                                Three Months Ended          Six Months Ended
                                                             -------------------------- --------------------------
                                                              April 29,    April 30,       April 29,    April 30,
                                                                2001         2000           2001          2000
         <S>                                                 <C>         <C>           <C>          <C>
         Net sales                                              100.0%       100.0%         100.0%        100.0%
         Cost of products sold                                   84.1%        83.3%          85.5%         83.3%
                                                             ---------- ------------   ------------ -------------
         Gross profit                                            15.9%        16.7%          14.5%         16.7%
         Selling, general and administrative expenses            12.9%        11.8%          14.5%         13.4%
         Write-down of net assets held for sale                   3.1%         0.0%           1.6%          0.0%
                                                             ---------- ------------   ------------ -------------
         Income (loss) from operations                           -0.1%         4.9%          -1.6%          3.3%
         Interest expense                                         4.4%         3.8%           5.7%          4.2%
         Other (income) expense                                  -0.5%        -0.1%          -0.3%         -0.1%
                                                             ---------- ------------   ------------ -------------
         Income (loss) before income taxes                       -4.0%         1.2%          -7.0%         -0.8%
</TABLE>






                                       14
<PAGE>

         Three months ended April 29, 2001 compared to three months ended April
         30, 2000

         Net sales. Net sales for the second quarter of 2001 were $22.3 million,
         as compared to $32.5 million in the prior year quarter, a decrease of
         $10.2 million, or 31.4%. These results include the effect of disposing
         of Dura-Bond in November 2000. Sales attributable to Dura-Bond were
         $2.2 million in the second quarter of 2000.

         Net sales from Motors decreased 7.0% to $13.7 million in 2001, from
         $14.7 million in 2000, as a result of lower demand from the
         recreational vehicle, healthcare and heavy truck markets.

         Net sales from Coils were $7.9 million in 2001, as compared to $12.7
         million in 2000, a decrease of 38.3%. This decrease reflects the loss
         of a customer that represented 17% of sales to the Coils segment in
         fiscal 2000. However, during the second quarter, the Company began to
         again supply this customer and management expects to regain most of the
         former business of this customer. The decrease in net sales as compared
         to the prior year quarter is also a result of continuing weak demand
         from the heavy truck market, which, according to industry sources, is
         down approximately 40% compared to last year.

         Net sales from the Company's Other segment were $770,000 in 2001, as
         compared to $5.0 million in 2000. Sales attributable to Dura-Bond,
         which was sold November 2, 2000, were $2.2 million in the second
         quarter of 2000. Sales at Cramer, the only remaining business in this
         segment, decreased $2.0 million, reflecting the sale of the timer and
         switch line on December 4, 2000.

         Income (loss) from operations. For the second quarter of 2001, the
         Company recorded a loss from operations was $22,000, as compared to
         income from operations of $1.6 million in the prior year quarter. The
         current quarter loss includes a charge of $700,000 for the write-down
         of net assets held for sale related to the sale of Astro UK and income
         of $400,000 recorded in connection with the settlement of a vendor
         dispute.

         Income from operations for the Motors segment increased to $1.6
         million, or 11.5% of net sales, in the second quarter of 2001, as
         compared to $1.1 million, or 7.2% of net sales, in the prior year
         quarter. Despite the 7.0% decrease in net sales, income from operations
         improved compared to the prior year quarter as a result of improved
         productivity at the Motor Products - Michigan facility, which was
         adversely affected in the prior year by temporary production
         inefficiencies resulting from the introduction of lean manufacturing
         techniques, and a 7.6% decrease in selling, general and administrative
         expenses. In addition, the prior year quarter included a charge of
         $275,000 for warranty costs related to certain motors supplied to the
         recreational vehicle market.

         The Coils segment reported a loss from operations of $681,000 for 2001,
         as compared to income from operations of $500,000, in the prior year
         quarter. The current year includes a charge of $700,000 to adjust the
         carrying value of Astro UK's assets to their estimated fair value. The
         decrease in operating results also reflects lower sales volume and the
         under-absorption of overhead costs, despite an 18.4% decrease in
         selling, general and administrative costs.

         The Company's Other segment reported a loss from operations of $136,000
         in the second quarter of 2001, as compared to income from operations of
         $759,000 in the prior year quarter. These results include the effect of
         the sale of Dura-Bond, which had income from operations of $451,000 in
         the second quarter of 2000. Operating results from Cramer, the only
         remaining business in this segment, decreased as a result of the sale
         of the timer and switch line.





                                       15
<PAGE>

         Unallocated corporate expenses included in selling, general and
         administrative expenses were $777,000 in the second quarter of 2001, as
         compared to $732,000 in the prior year quarter. The current quarter
         results include income of $400,000 recorded in connection with the
         settlement of a vendor dispute. Prior year results included a $260,000
         reduction in the Company's estimated liability for environmental costs
         related to remedial measures required at the site on which its Cramer
         facility was previously located. Without such one-time items,
         unallocated corporate expenses would have been $1.2 million in the
         second quarter of 2001, as compared to $992,000 in the prior year
         quarter. This increase primarily reflects increased incentive
         compensation.

         Interest expense. Interest expense decreased to $978,000 for the second
         quarter of 2001 from $1.2 million in the prior year quarter as a result
         of both lower interest rates and lower debt levels. The current quarter
         includes a charge of $99,000 resulting from a decrease in the fair
         market value of the Company's interest rate swap agreements as a result
         of decreases in interest rates. This charge was recorded in accordance
         with SFAS 133.

         Income tax expense (benefit). The Company recorded an income tax
         benefit at an effective rate of 7.5% for 2001, as compared to an
         effective tax rate of 37.3% in the prior year quarter. The effective
         tax rate for 2001 was adversely effected as a result of a higher
         proportion of non-deductible taxable losses.

         Income (loss) from discontinued operations. Discontinued operations
         represents the operations of Sooner Trailer, which was sold in January
         2001. For the prior year quarter, income from discontinued operations
         was $312,000 (net of tax of $341,000). Revenues from discontinued
         operations were $12.8 million for the second quarter of 2000.

         Net income (loss) available for common shareholders. Net loss available
         for common shareholders was $1.2 million, or $.20 per share, in the
         second quarter of 2001, as compared to net income available for common
         shareholders of $284,000, or $.05 per share, in the prior year quarter.
         Income (loss) available for common shareholders is calculated by
         subtracting dividends on preferred stock of $225,000 and $187,000 for
         2001 and 2000, respectively, and by deducting the non-cash accretion in
         book value of preferred stock of $103,000 and $92,000 for 2001 and
         2000, respectively.

         Six months ended April 29, 2001 compared to six months ended April 30,
         2000

         Net sales. Net sales for the first six months of 2001 were $42.9
         million, as compared to $61.2 million in the prior year period, a
         decrease of $18.3 million, or 29.9%. These results include the effect
         of disposing of Dura-Bond in November 2000. Sales attributable to
         Dura-Bond were $4.3 million in the first six months of 2000.

         Net sales from Motors decreased 6.9% to $26.7 million in 2001, from
         $28.7 million in 2000, as a result of lower demand from the
         recreational vehicle, healthcare and heavy truck markets.

         Net sales from Coils were $14.3 million in 2001, as compared to $23.2
         million in 2000, a decrease of 38.2%. This decrease reflects the loss
         of a customer that represented 17% of sales to the Coils segment in
         fiscal 2000. However, during the second quarter, the Company began to
         again supply this customer and management expects to regain most of the
         former business of this customer. The decrease in net sales as compared
         to the prior year quarter is also a result of continuing weak demand
         from the heavy truck market.





                                       16
<PAGE>

         Net sales from the Company's Other segment were $1.8 million in 2001,
         as compared to $9.3 million in 2000. Sales attributable to Dura-Bond,
         which was sold November 2, 2000, were $4.3 million for the first six
         months of 2000. Sales at Cramer, the only remaining business in this
         segment, decreased $3.2 million, reflecting the sale of the timer and
         switch line.

         Income (loss) from operations. For the first six months of 2001, the
         Company recorded a loss from operations was $676,000, as compared to
         income from operations of $2.0 million in the prior year period. The
         current period loss includes a charge of $700,000 for the write-down of
         net assets held for sale related to the sale of Astro UK and income of
         $400,000 recorded in connection with the settlement of a vendor
         dispute.

         Income from operations for the Motors segment increased to $2.7
         million, or 10.0% of net sales, in 2001, as compared to $2.2 million,
         or 7.6% of net sales, in the prior year period. Despite decreased
         sales, income from operations improved as a result of improved
         productivity and decreased selling, general and administrative
         expenses.

         The Coils segment reported a loss from operations of $1.1 million in
         2001, as compared to income from operations of $728,000 in the prior
         year period. The current year includes a charge of $700,000 to adjust
         the carrying value of Astro UK's assets to their estimated fair value.
         The decrease in operating results also reflects lower sales volume and
         the under-absorption of overhead costs, despite decreased selling,
         general and administrative costs.

         The Company's Other segment reported a loss from operations of $273,000
         in 2001, as compared to income from operations of $1.2 million in the
         prior year period. These results include the effect of the sale of
         Dura-Bond, which had income from operations of $782,000 in 2000.
         Operating results from Cramer, the only remaining business in this
         segment, decreased as a result of the sale of the timer and switch
         line.

         Unallocated corporate expenses included in selling, general and
         administrative expenses were $1.9 million for the first six months of
         2001 as compared to $2.1 million in the prior year period. The current
         year results reflect higher incentive compensation, offset by income
         from a vendor dispute. Prior year results reflect reduced environmental
         costs.

         Interest expense. Interest expense decreased to $2.4 million for the
         first six months of 2001 from $2.5 million in the prior year period as
         a result of both lower interest rates and lower debt levels. The
         current period includes a charge of $453,000 resulting from a decrease
         in the fair market value of the Company's interest rate swap agreements
         as a result of decreases in interest rates. This charge was recorded in
         accordance with SFAS 133.

         Income tax expense (benefit). The Company recorded an income tax
         benefit at an effective rate of 26.0% for 2001, as compared to an
         effective tax rate of 54.5% in the prior year. The effective tax rate
         for 2001 was adversely effected as a result of a higher proportion of
         non-deductible taxable losses.

         Income (loss) from discontinued operations. For 2001, the Company
         recorded a loss from discontinued operations, representing the
         operations of Sooner Trailer, sold in January 2001, of $434,000 (net of
         a tax benefit of $144,000) on revenues of $6.1 million. For the first
         six months of 2000, income from discontinued operations was $500,000
         (net of tax of $504,000) with revenues of $21.9 million.





                                       17
<PAGE>

         Net income (loss) available for common shareholders. Net loss available
         for common shareholders was $3.4 million, or $.58 per share, in 2001,
         as compared to a net loss of $266,000, or $.05 per share, in the prior
         year period. Income (loss) available for common shareholders is
         calculated by subtracting dividends on preferred stock of $450,000 and
         $375,000 for 2001 and 2000, respectively, and by deducting the non-cash
         accretion in book value of preferred stock of $204,000 and $182,000 for
         2001 and 2000, respectively.

         Liquidity and Capital Resources

         Cash and cash equivalents were $541,000 at April 29, 2001. The Company
         had negative working capital of $14.0 million at April 29, 2001, as
         compared to positive working capital of $2.1 million at October 30,
         2000. The decrease in working capital reflects the classification of
         the Company's revolving credit facility, which expires in February
         2002, as current. Net cash used in operating activities was $4.7
         million, as compared to net cash provided by operating activities of
         $3.0 million in prior year period. The decrease in cash from operations
         was principally the result of lower operating results and changes in
         the level of current assets and current liabilities due to timing.

         Cash flows from investing activities included $6.0 million from the
         sales of Dura-Bond and the Cramer timer and switch line. Investing
         activities also included $1.1 million for capital expenditures for
         equipment and $186,000 of contingent consideration paid to the former
         owner of Astro Air and recorded as goodwill. Net cash provided by
         investing activities of discontinued operations includes $11.5 million
         received from the sale of Sooner Trailer. The Company currently plans
         to invest approximately $2.0 million in capital expenditures during the
         remainder of fiscal 2001, primarily for new technologies and production
         efficiencies. Management anticipates funding capital expenditures with
         cash from operations and proceeds from the Company's revolving credit
         facility.

         Net cash used in financing activities included net repayments of $11.1
         million under the Company's revolving credit agreement, debt repayments
         of $648,000, and the payment of dividends of $142,000.

         At April 29, 2001, $30.0 million was outstanding under the Company's
         revolving credit facility. As a result of noncompliance with covenants
         contained in its revolving credit facility at October 29, 2000, the
         Company, in February 2001, entered into an amendment to its revolving
         credit facility, 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
         matures. In addition to changing the maturity date from December 2002
         to February 15, 2002, the amendment reduced the total amount available
         for borrowings to $32.0 million. Borrowings under the facility that are
         In-Formula (as defined) will be charged interest at the Prime Rate plus
         1.5%. Borrowings under the facility that are Out-of-Formula (as
         defined) will be charged interest at the Prime Rate plus 2.0%.
         Borrowings and letters of credit will be limited to a Borrowing Base,
         to consist of eligible accounts receivable and inventory. Borrowings
         that equal an amount up to and including the Borrowing Base, will be
         defined as In-Formula borrowings. Total borrowings less In-Formula
         borrowings, will be defined as Out-of-Formula borrowings. The available
         commitment will be reduced by $1.0 million in June 2001. The amendment
         calls for further reductions in the available commitment of $2.0
         million, of which $1.0 million is mandatory, at September 30, 2001, and
         $3.0 million at December 31, 2001. If the Company is unable to reduce
         its outstanding commitment on any of these dates, then for each missed
         reduction the otherwise-applicable interest rates for outstanding loans
         will increase by 1% per annum, but failure to make the reductions will




                                       18
<PAGE>

         not constitute a default. The facility, as amended, is secured by
         substantially all of the assets of the Company. The amendment requires
         additional reporting requirements as well as the addition of a covenant
         requiring minimum operating profits. The amendment also requires the
         suspension of principal and interest payments on subordinated debt,
         with an aggregate outstanding balance of $1.5 million as of April 29,
         2001. Furthermore, the amendment to the facility prohibits the payment
         of preferred or common stock dividends. See discussion under section
         titled "General".

         The Company has interest rate swap agreements with its two banks with
         notional amounts totaling $20.2 million. The Company entered into these
         agreements to change the fixed/variable interest rate mix of its debt
         portfolio, in order to reduce the Company's aggregate risk from
         movements in interest rates. In that the Company's interest rate swap
         agreements do not meet the stringent requirements for hedge accounting
         under SFAS 133, future earnings could reflect greater volatility.

         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, 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 these
         provisions. Such statements are subject to certain risks and
         uncertainties which could cause actual results to differ materially
         from those projected. Readers are cautioned not to place undue reliance
         on these forward-looking statements which speak only as of the date
         hereof. The Company undertakes no obligation to republish revised
         forward-looking statements to reflect events or circumstances after the
         date hereof or to reflect the occurrence of unanticipated events.

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

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

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

            o     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.





                                       19
<PAGE>

            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 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 may, in the future, divest of product lines or
                  business units. Any such divestiture may involve costs of
                  disposition or loss on the disposition that could adversely
                  affect the Company's operating results or financial condition.





                                       20
<PAGE>



         Item 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Company uses a revolving 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 London Interbank Offered Rate or
         the prime rate. The Company uses interest rate swap agreements to
         partially hedge interest rate exposure associated with on-balance sheet
         financial instruments. 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 revolving credit
         facility, industrial revenue bonds and term loans in effect at April
         29, 2001. 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 maturities, 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
                                          2001        2002       2003     2004    2005    Thereafter  at Maturity   04/29/01
                                          ----        ----       ----     ----    ----    ----------  -----------   --------
         <S>                             <C>         <C>        <C>       <C>     <C>     <C>         <C>        <C>
         Debt:
            Fixed rate                   $ 2,146     $   371    $   308   $257    $162    $  128      $  3,372    $ 3,372
            Average interest rate            8.0%        8.0%       8.0%   8.0%    8.0%      8.0%
            Variable rate                $30,300     $   300    $   300   $600    $600    $3,050      $ 35,150   $ 35,150
            Average interest rate            8.2%        4.4%       4.4%   4.4%    4.4%      4.4%

         Interest rate swap agreements:
            Variable to fixed swaps      $  -        $15,000    $ 5,150   $ -     $ -     $ -         $ 20,150     $ (554)
            Average pay rate                             7.1%       4.2%
            Average receive rate                         4.8%       3.9%
</TABLE>



                                       21
<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 4.           Submission of Matters to a Vote of Security Holders

         At the Company's Annual Meeting of Shareholders held on March 22, 2001,
         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 ending
         October 28, 2001. In the election of directors, 6,037,492 shares were
         voted in favor of the election of George B. Lemmon, Jr., and 691,749
         were withheld; 6,037,542 shares were voted in favor of the election of
         John R. Reese and 691,699 were withheld; 6,037,542 shares were voted in
         favor of the election of Eugene P. Lynch and 691,699 were withheld;
         6,037,342 shares were voted in favor of the election of Ellen D. Harvey
         and 691,899 were withheld; 6,037,792 shares were voted in favor of the
         election of Harry E. Hill and 691,449 were withheld; 6,026,842 shares
         were voted in favor of the election of James A. Ounsworth and 702,399
         were withheld. There were 1,071,428 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 ending October 28, 2001, 6,721,493 shares were
         voted in favor, 7,600 shares were voted against, and 148 shares
         abstained.


         Item 5.           Other Information

         Effective March 8, 2001, trading of the Company's shares moved from the
         Nasdaq National Market to the Nasdaq SmallCap Market. Owosso's common
         stock will continue trading under its current symbol - OWOS. As the
         market value of Owosso's public float (i.e., shares held by
         nonaffiliates) has fallen below $5,000,000, which is the minimum level
         required in order to remain on the Nasdaq National Market, Owosso
         elected to apply for listing of its common stock on the Nasdaq SmallCap
         Market in order to ensure the continuity of its Nasdaq listing and to
         protect the interests of Owosso's shareholders.





                                       22
<PAGE>



         Item 6.           Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  Exhibit No.               Description
                  -----------               -----------

                  11                        Computation of Per Share Earnings

         (b)      Form 8-K

                  The Company filed a report on Form 8-K, dated January 24,
                  2001, to report under Item 2 that it had disposed of its
                  subsidiary, Sooner Trailer Manufacturing Company. This report
                  also included under Item 7 an unaudited pro forma condensed
                  consolidated statement of operations for the year ended
                  October 29, 2000 and an unaudited pro forma condensed
                  consolidated balance sheet as of October 29, 2000.

                  The Company filed a report on Form 8-K, dated February 19,
                  2001, to report under Item 5 that the Company had submitted an
                  application to list its common stock on the Nasdaq SmallCap
                  Market.

                  The Company filed a report on Form 8-K, dated March 7, 2001,
                  to report under Item 5 that trading of its shares would be
                  moved to the Nasdaq SmallCap Market effective March 8, 2001.







                                       23
<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:    June 11, 2001             By: /s/ George B. Lemmon, Jr.
                                                -------------------------
                                                George B. Lemmon, Jr.
                                                President, Chief Executive
                                                Officer, and Director



                                            By: /s/ John M. Morrash
                                                -------------------------
                                                John M. Morrash
                                                Executive Vice President -
                                                Finance, Chief Financial
                                                Officer, and Treasurer and
                                                Secretary


                                       24