<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                 ---------------

                                    FORM 10-Q


(Mark One)

 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---      EXCHANGE ACT OF 1934.

         For the quarterly period ended  January 26, 1997

                                       OR

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

         For the transition period from ___________ to ___________.

                         Commission file number 0-25066

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

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


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
                                                   --------------

---------------------------------------------------------------------------
Former name, address and former fiscal year, if changed since last report

                  Indicate by check whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days.

                                 Yes X       No
                                    ----       ----

<PAGE>


                               OWOSSO CORPORATION
                               ------------------

                                      INDEX
                                      -----

                                                                      PAGE NO.
                                                                      --------


PART I - Financial Information:


   Item 1.                Consolidated Financial Statements

                          Consolidated Balance Sheets                      3
                          January 26, 1997 (unaudited) and
                          October 27, 1996

                          Consolidated Statements of Operations            4
                          Three Months Ended January 26, 1997 and
                          January 28, 1996 (unaudited)

                          Consolidated Statements of Cash Flows            5
                          Three Months Ended January 26, 1997 and
                          January 28, 1996 (unaudited)

                          Notes to Consolidated Financial Statements       6
                          (unaudited)

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


Part II - Other Information:


   Item 6.                Exhibits and Reports on Form 8-K                15


                                      
<PAGE>

OWOSSO CORPORATION
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------------------------------------------------

                                                                                          January 26,    October 27,
                                                                                              1997           1996
                                                                                          (Unaudited) 
<S>                                                         
ASSETS                                                                                                     
<S>                                                                                        <C>             <C>          
CURRENT ASSETS:
  Cash and cash equivalents                                                              $      684,348  $      839,889
  Receivables, net                                                                           18,062,239      18,415,245
  Inventories, net                                                                           20,053,108      19,123,122
  Prepaid expenses and other                                                                  1,943,552       1,608,169
  Advances and interest receivable from affiliate                                                38,042          36,766
  Deferred taxes                                                                              1,032,000       1,032,000
                                                                                          -------------    ------------
           Total current assets                                                              41,813,289      41,055,191

PROPERTY, PLANT AND EQUIPMENT, NET                                                           26,375,664      26,308,809

INTANGIBLES, NET                                                                             38,669,821      39,277,112

OTHER ASSETS                                                                                  1,341,985       1,254,233
                                                                                          -------------    ------------

TOTAL ASSETS                                                                             $  108,200,759  $  107,895,345
                                                                                         ==============  ==============
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Payables - trade                                                                       $    6,573,790  $    6,597,061
  Accrued compensation and benefits                                                           3,011,141       3,005,658
  Accrued expenses                                                                            1,886,833       1,901,892
  Accrued interest                                                                              519,089         419,565
  Current portion of related party debt                                                       3,750,000       5,975,000
  Current portion of long-term debt                                                           2,740,257       2,770,934
                                                                                          -------------    ------------

            Total current liabilities                                                        18,481,110      20,670,110

LONG-TERM DEBT, LESS CURRENT PORTION                                                         48,279,834      45,068,116

POSTRETIREMENT BENEFITS                                                                       1,642,088       1,593,950

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

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
  Convertible preferred stock Class A, 5% cumulative, $.01 par value; 10,000,000
    shares  authorized;  1,071,428  shares  issued  and  outstanding  (aggregate
    liquidation value at January 26, 1997 and October 27, 1996 - $15,000,000)                13,739,849      13,667,814
  Common stock, $.01 par value; 15,000,000 authorized; 5,865,000 shares issued                   
    and outstanding                                                                              58,650          58,650
    Additional paid-in capital                                                               21,611,701      21,611,701
    Retained earnings                                                                         1,293,811       2,131,288             
                                                                                           -------------    -----------

            Total                                                                            36,704,011      37,469,453
   Less treasury stock, at cost (56,324 shares at January 26, 1997 and October 27, 1996)       (449,284)       (449,284)
                                                                                          -------------    ------------

            Total stockholders' equity                                                       36,254,727      37,020,169
                                                                                          -------------    ------------
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                               $  108,200,759  $  107,895,345
                                                                                         ==============  ==============
</TABLE>

See notes to consolidated financial statements 

<PAGE>


OWOSSO CORPORATION
<TABLE>
<CAPTION>


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

                                                                           Three Months Ended
                                                                     --------------------------------
                                                                          January 26,     January 28,
                                                                              1997            1996

<S>                                                                   <C>              <C>           
Net Sales                                                             $    30,162,073  $   27,919,402

Cost of products sold                                                      23,153,257      20,888,716
                                                                      ---------------   -------------
Gross Profit                                                                7,008,816       7,030,686

Expenses:
  Selling, general and administrative                                       4,909,384       4,543,523
  Corporate                                                                 1,263,668         969,246
                                                                      ---------------   -------------
Income from operations                                                        835,764       1,517,917

Interest expense                                                              983,152         962,777

Other income                                                                   51,395          51,967
                                                                      ---------------   -------------
(Loss) income before income tax (benefit) provision                           (95,993)        607,107

Income tax (benefit) provision                                                (40,832)        239,807
                                                                      ---------------   -------------
Net (loss) income                                                             (55,161)        367,300

Dividends and accretion on preferred stock                                   (259,535)       (254,314)
                                                                      ---------------   -------------

Net (loss) income available for common stockholders                  $       (314,696)  $     112,986
                                                                     ================   =============
Net (loss) income per common share                                   $          (0.05)           0.02
                                                                     ================   =============

Weighted average number of common shares outstanding                        5,809,000       5,865,000
                                                                     ================   =============
</TABLE>

See notes to consolidated financial statements 

<PAGE>

OWOSSO CORPORATION
<TABLE>
<CAPTION>


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

                                                                                            Three Months Ended
                                                                                     ----------------------------------
                                                                                       January 26,      January 28,
                                                                                           1997             1996

<S>                                                                                 <C>              <C>
OPERATING ACTIVITIES:
  Net (loss) income                                                                  $      (55,161)    $    367,300
  Adjustments to reconcile net income to net cash provided by operating
    activities:
    Loss on sale of assets                                                                   22,802           16,528
    Depreciation                                                                            983,339          970,630
    Amortization                                                                            620,734          609,664
    Changes in assets and liabilities which provided (used) cash:
       Accounts receivable                                                                  353,006          510,182
       Inventories                                                                         (929,986)      (1,284,000)
       Prepaid expenses and other                                                          (336,659)        (913,502)
       Accounts payable                                                                     (23,271)        (353,183)
       Accrued expenses                                                                     (49,414)        (656,486)
                                                                                       -------------     ------------

           Net cash provided by (used in) operating activities                              585,390         (732,867)
                                                                                       -------------     ------------

INVESTING ACTIVITIES:
  Purchases of property, plant and equipment                                             (1,072,996)        (819,354)
  Increase in other assets                                                                 (101,195)         (82,225)
                                                                                       -------------     ------------

           Net cash used in investing activities                                         (1,174,191)        (901,579)
                                                                                       -------------     ------------

FINANCING ACTIVITIES:
  Proceeds from long-term debt                                                              350,000
  Borrowings from line of credit                                                          3,200,000        6,450,000
  Payments on long-term debt                                                               (368,959)        (373,256)
  Payments on related party debt                                                         (2,225,000)      (3,175,000)
  Dividends paid                                                                           (522,781)        (527,850)
                                                                                       -------------     ------------

           Net cash provided by financing activities                                        433,260        2,373,894
                                                                                       -------------     ------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                                       (155,541)         739,448

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

CASH AND CASH EQUIVALENTS, END OF PERIOD                                             $      684,348     $  2,489,684
                                                                                       =============   ==============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION -
  Cash paid during the period for interest                                           $      883,628     $    804,467
                                                                                       ============    ==============

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


See notes to consolidated financial statements.
<PAGE>


OWOSSO CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
------------------------------------------------------

1.    THE COMPANY

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

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

      Cyclicality - The Company's Engineered Component Products segment is
      subject to changes in the overall level of domestic economic activity. The
      Specialized Equipment segment is subject to changes in certain sectors of
      the agricultural economy, which may be influenced by climate changes and
      governmental policy. The segment's horse trailer sales which have not
      tended to be affected by changes in the agricultural economy, have had a
      moderating effect on the results of the entire Specialized Equipment
      segment, but may be subject to the overall domestic business cycle.
      
      Pursuant to the rules and regulations of the Securities and Exchange
      Commission, the financial statements do not include all of the information
      and notes normally included with financial statements prepared in
      accordance with generally accepted accounting principles. In the opinion
      of management, all adjustments (consisting of a normal recurring nature)
      considered necessary for a fair presentation of results for interim
      periods have been made. These financial statements should be read in
      conjunction with the consolidated financial statements and notes thereto
      included in the Company's Annual Report on Form 10-K for the year ended
      October 27, 1996.

2.    INVENTORIES

      Inventories are summarized as follows:

                                              January 26,        October 27,
                                                 1997                1996

     Raw materials and purchased parts     $    8,518,586     $    8,468,218
     Work in process                            4,587,979          4,316,588
     Finished goods                             6,946,543          6,338,316
                                            --------------     --------------

     Total                                 $   20,053,108     $   19,123,122
                                            ==============     ==============

<PAGE>


3.    LONG-TERM DEBT

      Long-term debt consists of the following:


                                                  1997               1996


     Banks                                  $  34,669,731      $  31,507,643
     Industrial revenue bonds                   9,140,003          9,173,642
     Former and current stockholders            6,591,492          6,842,692
     Related party debt                         3,750,000          5,975,000
     Other                                        618,865            315,073
                                            -------------      -------------

     Total long-term debt                      54,770,091         53,814,050
     Less portion due within one year           6,490,257          8,745,934
                                            -------------      -------------

     Total                                  $  48,279,834      $  45,068,116
                                            =============      =============


      The Company has a $55,000,000 unsecured revolving credit agreement with
      two banks, which expires on March 31, 2000. Interest is payable, at the
      Company's option, at either the bank's prime rate (8.25% at January 26,
      1997) or a variable spread (1.75% at January 26, 1997) over the London
      Interbank Offered Rate. The agreement includes financial and other
      covenants, including leverage, fixed charge, cash flow and net worth
      ratios, restrictions on certain asset sales, mergers and other significant
      transactions, and a negative pledge on fixed assets. Repayment of the
      Industrial Revenue Bonds of certain of the subsidiaries has been
      guaranteed by the Company.

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

4.    TAXES ON INCOME

      The Company accounts for income taxes under the provisions of Statement of
      Financial Accounting Standards No. 109. The effective income tax rate
      differs from the federal statutory tax rate due to adjustments for
      amortization of goodwill, officers' life insurance premiums, state income
      taxes, and meals and entertainment.

5.    CONTINGENCIES

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

<PAGE>

      In December 1990, Dura-Bond was issued a nonbinding request for certain
      investigative and remediation measures by the California Regional Water
      Quality Control Board relating to a facility it formerly operated. Since
      the issuance of the request, the State has taken no further action against
      Dura-Bond. In the event the State were to seek further remediation,
      Dura-Bond may face claims from the State or claims for contribution to its
      former lessor. Dura-Bond believes that it has substantial defenses to any
      such claim.

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

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

      A portion of Sooner's manufacturing facility was used in the past to store
      containers of waste oil and solvents, and an aboveground diesel fuel
      storage tank is currently located at the facility. The Company intends to
      establish a well at the facility for the purpose of monitoring the ground
      water for any contamination, and the Company estimates such monitoring
      will cost approximately $12,500 per year.

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

      Sooner and DewEze have arrangements with a number of financial
      institutions to provide floor plan financing for their dealers, which
      require them to repurchase repossessed products from the financial
      institutions in the event of a default by the financed dealer. Their
      obligation is typically to repurchase the equipment at 90% of the purchase
      price for the first 180 days, 80% for the next 90 days and 70% for the
      next 90 days, after which the obligation expires. Neither subsidiary has
      taken possession on any equipment pursuant to the repurchase obligations
      in these contracts.

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



<PAGE>

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


Three months ended January 26, 1997 compared to three months ended January 28, 
1996
--------------------------------------------------------------------------------

Net sales. Net sales for the Company's fiscal first quarter of fiscal 1997 were
$30.2 million, an increase of 8.0% over net sales of $27.9 million in the first
quarter of fiscal 1996. Increases in net sales in the Company's motor and
agricultural equipment businesses offset declines in net sales of replacement
camshaft bearings and aluminum trailers.

In the Company's Engineered Component Products segment, net sales increased 9.2%
to $17.2 million in the first quarter of fiscal 1997 from $15.8 million in the
fiscal 1996 period. A 16.5% increase in sales at the Company's motor businesses,
primarily due to increased demand by these businesses' existing customers, and a
modest increase in net sales of heat transfer coils, more than offset a decline
of 14.5% at Dura-Bond. The sales decline at Dura-Bond was due to a significant
reduction in sales to that subsidiary's former largest customer, Federal-Mogul
Corporation, which had served as Dura-Bond's largest distribution network.
Federal-Mogul began to manufacture its own replacement camshaft bearings in the
first quarter of fiscal 1996, and sales to Federal-Mogul began to decrease
significantly beginning in the second quarter. Due to strong backlogs at the
subsidiaries in the Engineered Component Products segment at the end of the
first quarter, net sales in this segment are expected to be above prior year
levels in the second quarter of fiscal 1997.

Net sales in the Specialized Equipment segment were $13.0 million in the first
three months of fiscal 1997, a 6.5% increase over net sales of $12.2 million in
the first three months of fiscal 1996. An improved environment for the Company's
agricultural equipment businesses, including favorable weather conditions,
resulted in an increase of 18.9% in net sales at those businesses. Net sales of
aluminum trailers were 4.8% below the prior year's quarter due to reduced demand
by the Company's dealers.

Gross profit. In the first quarter of fiscal 1997 the Company's gross profit was
$7.0 million, or 23.2% of net sales, approximately equal to first quarter fiscal
1996 gross profit of $7.0 million, or 25.2% of net sales.

Gross profit in the Engineered Component Products segment was $4.2 million, or
24.6% of net sales in the first quarter of fiscal 1997, up 8.2% as compared to
$3.9 million, or 24.8% of net sales in the prior fiscal year's first quarter.
The increase in gross profit in this segment was due to the increase in sales.
Gross profit margins remained relatively level for the motor businesses and the
segment as a whole. An increased gross profit margin at Snowmax offset a decline
in gross profit margin at Dura-Bond.

Gross profit in the Specialized Equipment segment was $2.8 million, or 21.4% of
net sales, in the first three months of fiscal 1997, down 11.0% from gross
profit of $3.1 million, or 25.6% of net sales, in the first three months of
fiscal 1996. A significantly reduced gross profit at Sooner Trailer due to its
decline in sales, higher labor costs and production inefficiencies outweighed
increased gross profit at the agricultural equipment businesses in the segment,
the gross profit of which increased due to increased sales.









<PAGE>

Selling, General and Administrative Expenses. Selling, general and
administrative expenses were $4.9 million, or 16.3% of net sales, in the first
three months of fiscal 1997 as compared to $4.5 million, or 16.3% of net sales,
in the 1996 fiscal period. In the Company's Engineered Component Products
segment, selling, general and administrative expenses increased to $2.6 million
in the first three months of fiscal 1997 as compared to $2.4 million in the
prior fiscal year period. In the Specialized Equipment segment, selling, general
and administrative expenses increased to $2.3 million in the first quarter of
fiscal 1997 from $2.1 million in the prior year period. The increase in both
segments was commensurate with the increase in sales.

Corporate Expenses. Corporate expenses in the first fiscal quarter of 1997 were
$1.3 million, or 4.2% of net sales, as compared to $1.0 million, or 3.5% of net
sales, in the first quarter of fiscal 1996. Corporate expenses increased
primarily due to increases in travel expense, personnel costs, and information
services expenses, including higher depreciation and amortization expenses
related to a computer upgrade.

Income from Operations. Income from operations declined 44.9% to $0.8 million,
or 2.8% of net sales, in the first quarter of fiscal 1997 from $1.5 million, or
5.4% of net sales, in the prior year period, due to the lower gross profit
margins and increased selling, general and administrative expenses and corporate
expenses as discussed above.

Among other measures, the Company evaluates the operating performance of its
business segments and its individual subsidiaries based on business unit income,
which is defined as income from operations before allocation of corporate
expenses. The Company believes this measurement most closely reflects the
subsidiaries' individual contributions. On this basis, business unit income for
the Engineered Component Products segment increased 8.4% to $1.6 million, or
9.5% of net sales, in the fiscal 1997 quarter from $1.5 million, or 9.6% of
sales in fiscal 1996. Increased business unit income in the motor businesses and
Snowmax more than offset reduced business unit income at Dura-Bond.

Business unit income in the Specialized Equipment segment before corporate
expenses was $0.5 million, or 3.6% of sales, as compared to $1.0 million, or
8.2% of sales in the first quarter of fiscal 1996. The Company's DewEze and
Great Bend subsidiaries had a significant increase in business unit income as
compared to the prior year period. These increases were more than offset by a
small business unit loss at Sooner due to the factors mentioned above, compared
to positive business unit income at Sooner in the prior year period.

Interest Expense. Interest expense was $1.0 million, or 3.3% of net sales in the
first quarter of fiscal 1997 and $1.0 million or 3.4% of net sales in the first
quarter of fiscal 1996. Interest expense was slightly higher in the fiscal 1997
period due to a small increase in average debt outstanding.

Net (loss) income. The Company reported a net loss of $0.1 million (0.2% of net
sales) in the first quarter of fiscal 1997 as compared to net income of $0.4
million (1.3% of net sales) in the first quarter of fiscal 1996. The effective
tax rate in the first quarter of 1997 period was 42.5% as compared to 39.5% in
the fiscal 1996 period. The lower results are attributable to the lower income
from operations. The Company expects to report positive net income for the
remainder of fiscal 1997.

Net (loss) income available for common stockholders. In the first quarter of
fiscal 1997, the Company reported a net loss available to common stockholders of
$0.3 million or $0.05 per share, as compared to net income available to common
stockholders of $0.1 million, or $0.02 per share in the first quarter of fiscal
1996. The income or loss for common stockholders is calculated by subtracting
dividends on preferred stock of $187,500 and non-cash accretion in value of
preferred stock of $72,035 ($66,814 in the fiscal 1996 first quarter) from net
income.

<PAGE>

Liquidity and Capital Resources

Cash and cash equivalents decreased to $0.7 million at January 26, 1997 from
$0.8 million at October 27, 1996. In addition to cash and cash equivalents at
January 26, 1997, the Company had $0.4 million of cash that was restricted under
industrial revenue financings. Net cash provided by operating activities was
$0.6 million in the first quarter of fiscal 1997, as compared to net cash used
in operating activities of $0.7 million in the first quarter of fiscal 1996. The
Company historically has seen a seasonal increase in its working capital needs,
particularly in building inventory, in its fiscal first quarter. In the 1997
fiscal first quarter, cash used for working capital needs was $1.0 million as
compared to $2.7 million in the fiscal 1996 period. This lower use of cash for
working capital, combined with the Company's substantial non-cash expenses which
are added back to its net income or loss when calculating net cash from
operations, resulted in the Company generating cash from operations in the 1997
quarter in spite of its net loss.

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

Working capital increased to $23.3 million at January 26, 1997 from $20.4
million at October 27, 1996. The increase was primarily due to repayment of
current maturities related party debt issued in connection with the purchase of
Stature using proceeds from the Company's long-term revolving credit agreement,
and a seasonal increase in inventory.

The Company maintains a $55.0 million revolving credit agreement with two banks
with a termination date of March 31, 2000. At January 26, 1997 borrowings of
$33.2 million were outstanding under the revolving credit agreement. Interest is
payable, at the Company's option, at either the agent bank's prime rate or at a
spread over the London Interbank Offered Rate that varies with the Company's
ratio of total debt to EBITDA. The LIBOR spread was 1.75% at January 26, 1997.
The agreement contains customary financial and other covenants, including
leverage, fixed charge, cash flow and net worth ratios, restrictions on certain
asset sales, mergers and other significant transactions and a negative pledge on
assets. During fiscal 1996, the Company entered into interest rate swap
agreements with its two banks with notional amounts totaling $15.0 million. The
agreements call for the Company to make quarterly fixed payments on the notional
amount at rates of 7.0675% and 7.09% for five years beginning in July 1997 in
exchange for receiving payments at the three month London Interbank Offered
Rate.

In the first quarter of fiscal 1997, the Company invested $1.1 million in
capital expenditures as compared to $0.8 million in the first quarter of fiscal
1996. Of the $1.1 million invested in the first three months of fiscal 1997,
$0.8 million were invested in the Engineered Component Products segment and $0.2
million in the Specialized Equipment segment, with the remainder at the
corporate level. The Company expects that capital expenditures for fiscal 1997
should remain at a level consistent with or somewhat higher than that of fiscal
1996, and that capital expenditures will continue to be concentrated primarily
in the Engineered Component Products segment in fiscal 1997.

The Company believes that funds from operations and borrowings from its bank
facilities will be sufficient to fund its activities, including capital
expenditures, for the foreseeable future.






<PAGE>

Seasonality

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


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

The following information is provided pursuant to the "Safe Harbor" provisions
of the Private Securities Litigation Reform Act of 1995. Certain statements in
Management's Discussion and Analysis of this Form 10-Q are "forward-looking
statements" made pursuant to these provisions.

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

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

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

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

         The start-up of the Company's Ohio plant has affected results of
         operations. As sales at that plant increase, manufacturing difficulties
         could lead to low gross margins or continuing losses from that
         operation.

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

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



<PAGE>

         Loss of a substantial customer may affect results of operations. For
         example, the Company's replacement camshaft bearing business sells a
         substantially reduced volume of its products through Federal-Mogul
         Corporation, which had been that business unit's largest customer.

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

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

         The Company's results are dependent on the hiring and retention of
         qualified executive and local management. There can be no assurance
         that the Company will be able to find qualified candidates in the
         future.

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

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

         The Company is subject to various Federal and state environmental laws
         which could be costly to adhere to if changed materially.






<PAGE>

Part II.  OTHER INFORMATION

       Item 6.             Exhibits and Reports on Form 8-K

                           (a)      Exhibits.

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

 10.63                              Sixth Amendment to Credit Agreement by
                                    and among Owosso Corporation, its
                                    subsidiaries, NBD Bank, PNC Bank, N.A., and
                                    NBD Bank, as Agent, dated as of December 4,
                                    1996.

 27                                 Financial Data Schedule

                           (b)      Form 8-K.
                                    ---------
           
                                        (1)  The Company filed a Current Report
                           on Form 8-K on November 14, 1996 announcing 
                           expected earnings for the fiscal year ended October 
                           27, 1996.

                                        (2) The Company filed a Current Report
                           on Form 8-K/A (the "Form 8-K/A") on January 13, 1997
                           amending the Company's original Form 8-K dated
                           October 31, 1995, as previously amended by a Form
                           8-K/A filed on November 24, 1995 relating to the
                           acquisition of Stature Electric, Inc. The audited
                           financial statements of Stature as at February 28,
                           1994 and 1995 and for the fiscal years then ended,
                           and the unaudited financial statements of Stature as
                           at August 31, 1994 and 1995 and for the six month
                           periods then ended, were filed with the Form 8-K/A.
                           In addition, the unaudited pro forma balance sheet of
                           Owosso as at July 30, 1995 and unaudited pro forma
                           financial statements of earnings data of Owosso for
                           the fiscal year ended October 30, 1994 and the nine
                           months ended July 30, 1995 were filed with the Form
                           8-K/A.
 

<PAGE>





                                   SIGNATURES

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


                                          OWOSSO CORPORATION


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



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


Date:  March 12, 1997









<PAGE>



                                Index to Exhibits
                                -----------------




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

    10.63                           Sixth Amendment to Credit Agreement
                                    by and among Owosso Corporation,
                                    its subsidiaries, NBD Bank, PNC Bank,
                                    N.A., and NBD Bank, as Agent, dated
                                    as of December 4, 1996.

    27                              Financial Data Schedule