<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: July 30, 2000    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 September 8, 2000, 5,849,789 shares of the Registrant's Common Stock, $.01
par value, were outstanding.

================================================================================
<PAGE>


OWOSSO CORPORATION
TABLE OF CONTENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                                               Page
<S>                       <C>                                                                 <C>
PART I - FINANCIAL INFORMATION:


         Item 1.           Financial Statements

                           Condensed Consolidated Statements of Operations for                    3
                           the three and nine months ended July 30, 2000 and
                           August 1, 1999 (unaudited)

                           Condensed Consolidated Balance Sheets at                               4
                           July 30, 2000 (unaudited) and October 31, 1999

                           Condensed Consolidated Statements of Cash Flows                        5
                           for the nine months ended July 30, 2000 and August 1, 1999
                           (unaudited)

                           Notes to Condensed Consolidated Financial Statements                   6
                           (unaudited)

         Item 2.           Management's Discussion and Analysis of                               10
                           Financial Condition and Results of Operations

         Item 3.           Quantitative and Qualitative Disclosures about Market Risks           15


PART II - OTHER INFORMATION:

         Item 2.           Changes in Securities and Use of Proceeds                             16

         Item 6.           Exhibits and Reports on Form 8-K                                      16
</TABLE>

                                       2
<PAGE>

OWOSSO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                               Three Months Ended                         Nine Months Ended
                                                         ------------------------------------------------------------------------
                                                           July 30,          August 1,              July 30,           August 1,
                                                             2000              1999                   2000               1999
<S>                                                     <C>                <C>                   <C>                <C>
Net sales                                                $41,824,000        $43,910,000           $124,941,000       $128,487,000

Cost of products sold                                     34,940,000         35,114,000            103,822,000        103,167,000
                                                         -----------        -----------           ------------       ------------
Gross profit                                               6,884,000          8,796,000             21,119,000         25,320,000

Selling, general and administrative expenses               5,183,000          5,646,000             16,392,000         18,444,000
                                                         -----------        -----------           ------------       ------------
Income from operations                                     1,701,000          3,150,000              4,727,000          6,876,000

Interest expense                                           1,286,000          1,272,000              3,854,000          3,787,000

Other income                                                  19,000            269,000                106,000            402,000
                                                         -----------        -----------           ------------       ------------
Income before income taxes                                   434,000          2,147,000                979,000          3,491,000

Income tax expense                                           237,000          1,093,000                491,000          1,270,000
                                                         -----------        -----------           ------------       ------------
Net income                                                   197,000          1,054,000                488,000          2,221,000

Dividends and accretion on preferred stock                  (282,000)          (275,000)              (839,000)          (819,000)
                                                         -----------        -----------           ------------       ------------
Net income (loss) available
     for common stockholders                             $   (85,000)       $   779,000           $   (351,000)      $  1,402,000
                                                         ===========        ===========           ============       ============
Earnings (loss) per common share:
          Basic                                          $     (0.01)       $      0.13           $      (0.06)      $       0.24
                                                         ===========        ===========           ============       ============
          Diluted                                        $     (0.01)       $      0.13           $      (0.06)      $       0.24
                                                         ===========        ===========           ============       ============
Weighted average number of
     common shares outstanding
          Basic                                            5,850,000          5,830,000              5,842,000          5,824,000
                                                         ===========        ===========           ============       ============
          Diluted                                          5,850,000          5,868,000              5,842,000          5,853,000
                                                         ===========        ===========           ============       ============
</TABLE>

         See notes to condensed consolidated financial statements.

                                       3
<PAGE>

OWOSSO CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                   July 30,             October 31,
                                                                     2000                  1999
                                                                  (Unaudited)           (See Note)
<S>                                                                   <C>                   <C>
ASSETS

CURRENT ASSETS:
    Cash and cash equivalents                                  $     450,000         $     161,000
    Receivables, net                                              20,084,000            19,999,000
    Inventories, net                                              19,914,000            20,173,000
    Prepaid expenses and other                                     1,986,000             1,101,000
    Deferred taxes                                                 1,220,000             1,220,000
                                                               -------------         -------------
         Total current assets                                     43,654,000            42,654,000

PROPERTY, PLANT AND EQUIPMENT, NET                                34,108,000            35,900,000

GOODWILL, NET                                                     26,572,000            27,057,000

OTHER INTANGIBLE ASSETS, NET                                       7,268,000             7,893,000

OTHER ASSETS                                                       2,061,000             3,186,000
                                                               -------------         -------------
TOTAL ASSETS                                                   $ 113,663,000         $ 116,690,000
                                                               =============         =============
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable - trade                                   $  13,385,000         $  13,169,000
    Accrued expenses                                               7,082,000             8,695,000
    Current portion of related party debt                          1,000,000             1,815,000
    Current portion of long-term debt                              1,651,000             2,064,000
                                                               -------------         -------------
         Total current liabilities                                23,118,000            25,743,000

LONG-TERM DEBT, LESS CURRENT PORTION                              52,140,000            51,601,000

POSTRETIREMENT BENEFITS AND OTHER LIABILITIES                      3,037,000             2,923,000

DEFERRED TAXES                                                     2,521,000             2,439,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY                                              32,847,000            33,984,000
                                                               -------------         -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                     $ 113,663,000         $ 116,690,000
                                                               =============         =============
</TABLE>

Note: the balance sheet at October 31, 1999 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>
                                                                       Nine Months Ended
                                                                       -----------------
                                                                  July 30,          August 1,
                                                                    2000              1999
<S>                                                                 <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                   $   488,000        $ 2,221,000
  Adjustments to reconcile net income to cash
      provided by (used in) operating activities:
      Depreciation                                               4,092,000          4,039,000
      Amortization                                               1,727,000          1,710,000
      Other                                                             --              6,000
      Changes in operating assets and liabilities               (1,986,000)          (374,000)
                                                               -----------        -----------
  Net cash provided by operating activities                      4,321,000          7,602,000
                                                               -----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sale of business                                        --          4,442,000
  Purchases of property, plant and equipment                    (2,436,000)        (4,846,000)
  Contingent consideration on acquisition                         (628,000)          (660,000)
  Other                                                          1,344,000          1,839,000
                                                               -----------        -----------
  Net cash provided by (used in) investing activities           (1,720,000)           775,000
                                                               -----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings (payments) under revolving credit agreement     1,450,000         (4,350,000)
  Payments on long-term debt                                    (1,324,000)        (1,260,000)
  Payments on related party debt                                  (815,000)        (1,028,000)
  Dividends paid                                                (1,613,000)        (1,423,000)
  Other                                                            (10,000)                --
                                                               -----------        -----------
  Net cash used in financing activities                         (2,312,000)        (8,061,000)
                                                               -----------        -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS                          289,000            316,000

CASH AND CASH EQUIVALENTS, BEGINNING                               161,000            191,000
                                                               -----------        -----------
CASH AND CASH EQUIVALENTS, ENDING                              $   450,000        $   507,000
                                                               ===========        ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Interest paid                                                $ 3,286,000        $ 4,085,000
                                                               ===========        ===========
  Taxes paid                                                   $ 1,951,000        $ 1,468,000
                                                               ===========        ===========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING ACTIVITIES:
  Dividends payable                                            $   493,000        $   537,000
                                                               ===========        ===========
</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 two core business segments: Motors and Coils; and two
   business segments considered to be non-core: Trailers and Agricultural
   Equipment, 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 Company's motors include commercial
   products and equipment, healthcare and recreation. 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"), which began operations in March 1999. The Company sells its
   coils primarily throughout North America and also in Europe.

   The Trailers and Agricultural Equipment segment includes Sooner Trailer
   Manufacturing Co. ("Sooner Trailer"), which manufactures all-aluminum
   trailers, primarily horse and livestock trailers. Sooner Trailer sells its
   trailers through a dealer network located throughout the United States and
   Canada. Also included in this segment through March 1999, the date of its
   sale, is Parker Industries ("Parker").

   The Company's Other segment includes Dura-Bond Bearing Company ("Dura-Bond"),
   and M.H. Rhodes, Inc. ("Rhodes"). Dura-Bond manufactures replacement camshaft
   bearings, valve seats and shims for the automotive after-market. Rhodes
   manufactures timers and subfractional horsepower motors for use in commercial
   applications.

   Financial Statements - The condensed consolidated balance sheet as of July
   30, 2000 and the condensed consolidated statements of operations and cash
   flows for the three- and nine-month periods ended July 30, 2000 and August 1,
   1999 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 July 30, 2000 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 31,
   1999 Annual Report on Form 10-K.

   Fiscal Year - The Company's fiscal year includes 52 or 53 weeks ending on the
   last Sunday in October. Fiscal year 1999 consisted of 53 weeks. The first
   nine months of 2000 included 39 weeks, whereas the first nine months of 1999
   included 40 weeks. Both the third quarter of 2000 and 1999 included 13 weeks.


                                       6
<PAGE>

   Earnings 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's comprehensive income consists of net
   earnings and foreign currency translation adjustments as follows:

<TABLE>
<CAPTION>
                                                     Three Months Ended               Nine Months Ended
                                                  July 30,      August 1,         July 30,        August 1,
                                                    2000           1999             2000             1999
<S>                                                  <C>            <C>             <C>              <C>
Net income (loss) available for
     common stockholders                       $  (85,000)      $ 779,000       $ (351,000)      $ 1,402,000
Foreign currency translation loss                 (17,000)        (54,000)         (70,000)          (54,000)
                                               ----------       ---------       ----------       -----------
Total comprehensive income (loss)              $ (102,000)      $ 725,000       $ (421,000)      $ 1,348,000
                                               ==========       =========       ==========       ===========
</TABLE>

   New Accounting Pronouncements - In June 1998, the Financial Accounting
   Standards Board (the "FASB") issued SFAS No. 133, Accounting for Derivative
   Instruments and Hedging Activities. This statement establishes accounting and
   reporting standards for derivative instruments and hedging activities. It
   requires that an entity recognize all derivatives as either assets or
   liabilities in the consolidated balance sheet and measure those instruments
   at fair value. This statement, as amended by SFAS No. 137, Accounting for
   Derivative Instruments and Hedging Activities - Deferral of the Effective
   Date of FASB Statement No. 133, is effective for all fiscal quarters of
   fiscal years beginning after June 15, 2000. The Company is in the process of
   analyzing the impact that SFAS No. 133 will have on its consolidated
   financial position and results of operations when such statement is adopted.


2. INVENTORIES

                                                      July 30,       October 31,
                                                        2000             1999

   Raw materials and purchased parts               $  8,912,000     $  9,619,000
   Work in process                                    6,174,000        4,076,000
   Finished goods                                     4,828,000        6,478,000
                                                   ------------     ------------
   Total                                           $ 19,914,000     $ 20,173,000
                                                   ============     ============


                                       7
<PAGE>

3. 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 was previously located and conduct
   any remedial measures which may be required. In the second quarter of 2000,
   the Company revised its estimate of the cost to complete the remedial
   measures required at the site. The revision to the estimate resulted in a
   reduction in the liability of $260,000. 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.

   Sooner has arrangements with a number of financial institutions to provide
   floor plan financing for its dealers, which requires it to repurchase
   repossessed products from the financial institutions in the event of a
   default by the financed dealer. Its obligation is typically to repurchase the
   equipment at 90% of the purchase price for the first 180 days, 80% for the
   next 90 days and 70% for the next 90 days, after which the obligation
   expires. In the event of a default by all of the financed dealers, the
   Company would be required to repurchase approximately $12,000,000 of product
   as of July 30, 2000. The Company does not believe that its obligation under
   these repurchase agreements will have a material adverse effect on the
   financial results of the Company. Sooner has not taken possession of any
   significant amount of equipment pursuant to the repurchase obligations in
   these contracts.

   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
<PAGE>

4. SEGMENT INFORMATION

<TABLE>
<CAPTION>
                                                          Three Months Ended                     Nine Months Ended
                                                     July 30,          August 1,            July 30,            August 1,
                                                       2000               1999                2000                1999
<S>                                                    <C>                <C>                  <C>                <C>
Net sales:
Motors                                            $ 14,821,000       $ 16,242,000       $  43,523,000       $  47,864,000
Coils                                               10,473,000         12,007,000          33,685,000          35,800,000
Trailers and Agricultural Equipment                 12,216,000         10,846,000          34,148,000          30,274,000
Other                                                4,314,000          4,815,000          13,585,000          14,549,000
                                                  ------------       ------------       -------------       -------------

       Total net sales                            $ 41,824,000       $ 43,910,000       $ 124,941,000       $ 128,487,000
                                                  ============       ============       =============       =============

Income (loss) from operations:
Motors                                            $  1,907,000       $  2,554,000       $   4,373,000       $   6,728,000
Coils                                                  (65,000)           893,000             841,000           3,261,000
Trailers and Agricultural Equipment                    253,000            771,000           1,285,000           1,015,000
Other                                                  712,000            474,000           1,865,000             796,000
Corporate (1)                                       (1,106,000)        (1,542,000)         (3,637,000)         (4,924,000)
                                                  ------------       ------------       -------------       -------------

       Total income from operations               $  1,701,000        $ 3,150,000       $   4,727,000       $   6,876,000
                                                  ============       ============       =============       =============
</TABLE>

(1) Includes unallocated corporate expenses, primarily executive compensation,
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 1999 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
1999 Annual Report on Form 10-K.


                                       9
<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
July 30, 2000 and the results of operations for the three and nine months ended
July 30, 2000 and August 1, 1999. The nine- month 2000 period included 39 weeks,
whereas the nine-month 1999 period included 40 weeks. Both of the three-month
periods included 13 weeks. 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.

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      Nine Months Ended
                                                        --------------------    ---------------------
                                                        July 30,   August 1,    July 30,    August 1,
                                                          2000        1999        2000        1999
<S>                                                      <C>         <C>         <C>         <C>
Net sales                                                100.0%      100.0%      100.0%      100.0%
Cost of products sold                                     83.5%       80.0%       83.1%       80.3%
                                                         ------      ------      ------      ------
Gross profit                                              16.5%       20.0%       16.9%       19.7%
Selling, general and administrative expenses              12.4%       12.8%       13.1%       14.3%
                                                         ------      ------      ------      ------
Income from operations                                     4.1%        7.2%        3.8%        5.4%
Interest expense                                           3.1%        2.9%        3.1%        2.9%
Other income                                               0.0%        0.6%        0.1%        0.2%
                                                         ------      ------      ------      ------
Income before income taxes                                 1.0%        4.9%        0.8%        2.7%
Income tax expense                                         0.6%        2.5%        0.4%        1.0%
                                                         ------      ------      ------      ------
Net income                                                 0.4%        2.4%        0.4%        1.7%
Dividends and accretion on preferred stock                 0.6%        0.6%        0.7%        0.6%
                                                         ------      ------      ------      ------
Net income (loss) available for common stockholders       -0.2%        1.8%       -0.3%        1.1%
                                                         ======      ======      ======      ======
</TABLE>

Three months ended July 30, 2000 compared to three months ended August 1, 1999

Net sales. Net sales for the third quarter of 2000 decreased 4.8%, or $2.1
million, to $41.8 million, as compared to net sales of $43.9 million in the
prior year quarter.

Net sales from Motors decreased 8.7% to $14.8 million in 2000, from $16.2
million in 1999, primarily as a result of decreased sales to the recreational
vehicle market and a softening of the healthcare market. Sales to the
recreational vehicle market were adversely affected by design issues associated
with a new motor developed for this market.

Net sales from Coils decreased 12.8% to $10.5 million, compared to $12.0 million
in the prior year quarter, primarily as a result of a softening in the truck
market. The Company expects demand from the heavy truck market to continue to
decline in the fourth quarter.

Net sales from Sooner Trailer, the only remaining business in the Trailers and
Agricultural Equipment segment, were $12.2 million in 2000, as compared to $10.8
million in 1999. This increase is a result of higher unit volume, primarily from
the newly introduced Revolution product line.


                                       10
<PAGE>

Net sales from the Company's Other segment were $4.3 million in 2000, as
compared to $4.8 million in 1999. This decrease was primarily a result of
decreased sales to the timer and switch markets.

Income from operations. For the third quarter of 2000, income from operations
was $1.7 million, or 4.1% of net sales, as compared to $3.2 million, or 7.2% of
net sales, in 1999.

Income from operations for the Motors segment was $1.9 million, or 12.9% of net
sales, in the third quarter of 2000, as compared to $2.6 million, or 15.7% of
net sales, in the prior year quarter. These results reflect decreased sales
volume to the recreational vehicle market and a softening of the healthcare
market. As noted above, sales to the recreational vehicle market have been
adversely affected by design issues associated with a new motor developed for
this market. The design issues were resolved during the third quarter and the
Company expects sales to this market to improve during the fourth quarter.
Income from operations for the Motors segment also continued to be unfavorably
impacted by temporary production inefficiencies resulting from a complete
overhaul of Motor Products' facility from batch processing to demand flow
technology during the second quarter of 2000.

The Coils segment reported a loss from operations of $65,000, or 0.6% of net
sales, as compared to income from operations of $893,000, or 7.4% of net sales,
in the prior year quarter. These results reflect a decrease in gross profit of
$731,000 primarily from reduced net sales, as well as manufacturing
inefficiencies related, in part, to the transition to a new manufacturing
system. In addition, selling, general and administrative costs increased
$227,000, or 41.9%, over the prior year quarter primarily as a result of higher
personnel costs associated with additional management personnel, including
approximately $80,000 related to recruiting and relocation costs.

The Trailers and Agricultural Equipment segment had income from operations of
$253,000, or 2.1% of net sales, in 2000, as compared to $771,000, or 7.1% of net
sales, in the prior year quarter. During the second quarter of 2000, Sooner
Trailer initiated efforts to redefine its manufacturing process by adopting more
modern and efficient techniques. The temporary disruption this caused to the
business has unfavorably affected income from operations during the second and
third quarters of 2000. The Company expects profitability at Sooner Trailer to
improve during the fourth quarter of 2000.

Income from operations for the Company's Other segment was $712,000 in 2000, as
compared to $474,000 in the prior year quarter, primarily reflecting improved
profitability at Rhodes.

Unallocated corporate expenses included in income from operations were $1.1
million, or 2.6% of net sales, as compared to $1.5 million, or 3.5% of net sales
in 1999. This reflects reduced personnel, legal and consulting costs, as
compared to the prior year.

Interest expense. Interest expense was $1.3 million for the third quarters of
both 2000 and 1999.

Income tax expense (benefit). The Company's effective income tax rate was 54.6%
for 2000, as compared to 50.9% in the prior year quarter. The increase in the
effective tax rate is a result of a higher proportion of non-deductible
expenses, primarily non-cash amortization expenses related to acquisitions, as
compared to pre-tax income.

Net income (loss) available for common stockholders. Net loss available for
common stockholders was ($85,000), or ($.01) per share, in the third quarter of
2000, as compared to income of $779,000, or $.13 per share, in the prior year
quarter. Income (loss) available for common stockholders is calculated by
subtracting dividends on preferred stock of $187,000 for both 2000 and 1999 and
by deducting the non-cash accretion in book value of preferred stock of $94,000
and $88,000 for 2000 and 1999, respectively.


                                       11
<PAGE>

Nine months ended July 30, 2000 compared to nine months ended August 1, 1999

Net sales. Net sales for the nine-month period of 2000 decreased 2.8%, or $3.5
million, to $124.9 million, as compared to net sales of $128.5 million in the
prior year period. These results include the effect of disposing of Parker in
March 1999. Sales attributable to Parker were $1.0 million in 1999.

Net sales from Motors decreased 9.1% to $43.5 million in 2000, from $47.9
million in 1999, primarily as a result of decreased sales to the recreational
vehicle market due to design issues associated with a new motor developed for
this market and a softening of the healthcare market.

Net sales from Coils decreased 5.9% to $33.7 million in 2000 from $35.8 million
in 1999. This decrease is a result of a weakness in demand experienced in the
heavy truck and beverage refrigeration markets.

Net sales from the Trailers and Agricultural Equipment segment were $34.1
million in 2000, as compared to $30.3 million in 1999. Sales attributable to
Parker were $1.0 million in 1999. Sales at Sooner Trailer, the only remaining
business in this segment, increased 16.7%, or $4.9 million as a result of higher
unit volume, particularly from the newly-introduced Revolution product line.

Net sales from the Company's Other segment were $13.6 million in 2000, as
compared to $14.5 million in 1999. This decrease was primarily a result of lower
demand at Rhodes and softness in the automotive after-market.

Income from operations. For the nine-month period of 2000, income from
operations was $4.7 million, or 3.8% of net sales, as compared to $6.9 million,
or 5.4% of net sales, in 1999.

Income from operations for the Motors segment was $4.4 million, or 10.0% of net
sales, as compared to $6.7 million, or 14.1% of net sales, in the prior year
period. These results reflect decreased sales volume to the recreational vehicle
market and a softening of the healthcare market. As mentioned above, sales to
the recreational vehicle market were adversely affected in the second and third
quarters of 2000 by design issues associated with a new motor developed for this
market. The design issues have been resolved and the Company recorded a charge
of $275,000 for the replacement of such motors. Income from operations for
Motors was also impacted by production inefficiencies related to the adoption of
demand flow technology at Motor Products at the beginning of the second quarter
of 2000.

Income from operations for the Coils segment was $841,000, or 2.5% of net sales,
as compared to $3.3 million, or 9.1% of net sales, in the prior year period.
These results reflect decreased sales volume primarily to the heavy truck and
beverage refrigeration markets and lower margins caused primarily by
manufacturing inefficiencies related, in part, to the transition to a new
manufacturing system.

The Trailers and Agricultural Equipment segment had income from operations of
$1.3 million in 2000, as compared to $1.0 million in the prior year period. This
increase reflects the disposition of Parker which reported a net loss from
operations of $607,000 in the prior year. Exclusive of the effects of Parker,
income from operations for this segment decreased $335,000 as a result of the
disruption to Sooner Trailer's manufacturing process, as discussed above.

Income from operations for the Company's Other segment was $1.9 million in 2000,
as compared to $796,000 in the prior year period, reflecting improved
profitability at Rhodes.

Unallocated corporate expenses included in income from operations were $3.6
million, or 2.9% of net sales, as compared to $4.9 million, or 3.8% of net
sales, in 1999. This decrease primarily reflects reduced environmental costs, as
well as reduced personnel and related costs.


                                       12
<PAGE>

Interest expense. Interest expense increased to $3.9 million for 2000 as
compared to $3.8 million in the prior year period, primarily as a result of
increased rates.

Income tax expense (benefit). The Company's effective income tax rate was 50.2%
for 2000, as compared to 36.4% in the prior year period. The effective tax rate
for 1999 was favorably impacted by a deferred tax benefit realized upon the sale
of Parker.

Net income (loss) available for common stockholders. Net loss available for
common stockholders was ($351,000), or ($.06) per share, in 2000, as compared to
net income available for common stockholders of $1.4 million, or $.24 per share,
in the prior year period. Income (loss) available for common stockholders is
calculated by subtracting dividends on preferred stock of $562,000 for both 2000
and 1999 and by deducting the non-cash accretion in book value of preferred
stock of $276,000 and $257,000 for 2000 and 1999, respectively.

Liquidity and Capital Resources

Cash and cash equivalents were $450,000 at July 30, 2000. Working capital
increased to $20.5 million at July 30, 2000 from $16.9 million at October 31,
1999. Net cash provided by operating activities was $4.3 million, as compared to
$7.6 million in the prior year period. The decrease in cash from operations was
principally the result of decreased operating income.

Net cash used in investing activities included $2.4 million for capital
expenditures for equipment, invested primarily in Motors, Coils and Trailers,
and $628,000 of contingent consideration paid to the former owner of Astro Air
and recorded as goodwill. The Company currently plans to invest approximately
$1.4 million during the remainder of fiscal 2000, primarily for added capacity
and production efficiencies. Management anticipates funding capital expenditures
with cash from operations and proceeds from the Company's revolving credit
facility. Cash flows from investing activities also included approximately $1.1
million received on notes obtained in connection with the sale of subsidiaries.

Net cash used in financing activities included net borrowings of $1.5 million
under the Company's revolving credit agreement, debt repayments of $2.1 million,
including $815,000 of related- party debt, and the payment of dividends of $1.6
million.

Effective for the second quarter of 2000, the Company modified certain covenants
included in its revolving credit facility. In connection with such
modifications, the Company is restricted from making common stock dividend
payments subsequent to August 28, 2000. The Company is in compliance with such
modified covenants and expects to continue to be in compliance for the
foreseeable future.

The Company has interest rate swap agreements with its two banks with notional
amounts totaling $20.4 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.

The Company intends to sell its non-core businesses subject to terms and
conditions that are considered to be in the best interest of the Company and its
shareholders. If the Company is successful in these efforts, total proceeds,
including the assumption of debt by acquirers, would be expected to be in the
range of $30 million to $40 million. To the extent that the proceeds are
received in cash, such cash would be used to reduce the outstanding debt of the
Company. Although the Company is currently in preliminary negotiations
concerning a number of these dispositions, no definitive agreements have been
entered into and there can be no assurance that these transactions will
ultimately be consummated.


                                       13
<PAGE>

The Company believes anticipated funds to be generated from future operations
and available credit facilities will be sufficient to meet anticipated operating
and capital needs.

"Year 2000" Costs

The Company did not experience any business interruptions or any other
significant issues related to the "Year 2000". The costs associated with
bringing the Company's centralized manufacturing and accounting information
system and other date-sensitive equipment into "Year 2000" compliance was not
material. In addition, the Company is not aware of any "Year 2000" disruptions
at any of its significant suppliers or large customers.

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 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.

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 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.


                                       14
<PAGE>

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  The Company's facility in the United Kingdom subjects the Company to various
   risks, which may include currency risk, risk associated with compliance with
   foreign regulations, and political and economic risks.

o  The Company intends to sell its non-core businesses subject to terms and
   conditions that are considered to be in the best interest of the Company and
   its shareholders. Any such divestiture may involve costs of disposition or
   loss on the disposition that could adversely effect the Company's operating
   results or financial condition.

o  Although the Company is not aware of any "Year 2000" disruptions at any
   significant supplier or customer, there can be no assurance that if a
   disruption did occur, it would not have a material adverse effect on the
   Company's operating results or financial condition.



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 off-balance
sheet 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.

The quantitative and qualitative disclosures about market risk as of July 30,
2000 did not differ materially from the information disclosed in the Company's
Form 10-K for the fiscal year ended October 31, 1999. The information set forth
in the Form 10-K under Part I, Item 7A - Quantitative and Qualitative
Disclosures About Market Risk is incorporated herein by reference in response to
this Item 3.


                                       15
<PAGE>

Part II. OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

Effective for the second quarter of 2000, the Company's revolving credit
facility was amended. In accordance with such amendment, the Company is
restricted from making common stock dividend payments subsequent to August 28,
2000.


Item 6.        Exhibits and Reports on Form 8-K

(a) Exhibits

Exhibit No.    Description

10.1           First Amendment to Amended and Restated Credit Agreement

11             Computation of Per Share Earnings

27             Financial Data Schedule

*99.1          Part I, Item 7A - Quantitative and Qualitative Disclosures About
               Market Risk of the Company's Annual Report on Form 10-K for the
               year ended October 31, 1999.

(b)            Form 8-K

               No reports on Form 8-K were filed during the quarter ended
July 30, 2000.

----------------------------
* Incorporated by reference.


                                       16
<PAGE>

                                   SIGNATURES

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



                                         OWOSSO CORPORATION



Date: September 8, 2000                  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


                                       17