<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:                  Commission file number: 0-25066
       January 31, 1999


                               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 March 10, 1999, 5,815,842 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                       3
                       for the Fourteen Weeks Ended January 31, 1999 and
                       the Thirteen Weeks Ended January 25, 1998 (unaudited)

                       Condensed Consolidated Balance Sheets at                              4
                       January 31, 1999 (unaudited) and October 25, 1998

                       Condensed Consolidated Statements of Cash Flows                       5
                       for the Fourteen Weeks Ended January 31, 1999 and
                       the Thirteen Weeks Ended January 25, 1998 (unaudited)

                       Notes to Condensed Consolidated Financial Statements                  6
                       (unaudited)

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

     Item 3.           Quantitative and Qualitative Disclosures about Market Risks          17


PART II - OTHER INFORMATION:


     Item 6.           Exhibits and Reports on Form 8-K                                     18
</TABLE>










                                       2




<PAGE>

OWOSSO CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                     Three Months Ended
                                                              ----------------------------------
                                                               January 31,           January 25,
                                                                  1999                  1998
<S>                                                                <C>                    <C>
Net sales                                                     $ 38,835,000          $ 34,054,000

Cost of products sold                                           31,607,000            26,558,000
                                                              ------------          ------------
Gross profit                                                     7,228,000             7,496,000

Expenses:
     Selling, general and administrative                         4,687,000             5,006,000
     Corporate                                                   1,561,000             1,400,000
                                                              ------------          ------------
Income from operations                                             980,000             1,090,000

Interest expense                                                 1,296,000             1,124,000

Other income                                                        73,000                45,000
                                                              ------------          ------------

Income (loss) before income taxes                                 (243,000)               11,000

Income tax expense (benefit)                                      (111,000)                5,000
                                                              ------------          ------------

Net income (loss)                                                 (132,000)                6,000

Dividends and accretion on preferred stock                        (271,000)             (265,000)
                                                              ------------          ------------

Net income (loss) available for common stockholders           $   (403,000)         $   (259,000)
                                                              ============          ============

Basic and diluted earnings (loss) per common share            $      (0.07)         $      (0.04)
                                                              ============          ============
Weighted average number of common shares outstanding             5,816,000             5,809,000
                                                              ============          ============
</TABLE>






            See notes to condensed consolidated financial statements.


                                       3
<PAGE>

OWOSSO CORPORATION                                      
CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                 January 31,          October 25,
                                                                    1999                 1998
ASSETS                                                           (Unaudited)          (See Note)
<S>                                                                   <C>                <C>
CURRENT ASSETS:
       Cash and cash equivalents                                $    195,000          $   191,000
       Receivables, net                                           16,392,000           17,919,000
       Inventories, net                                           21,591,000           21,262,000
       Prepaid expenses and other                                  2,045,000            1,283,000
       Deferred taxes                                                733,000              733,000
                                                                ------------         ------------

            Total current assets                                  40,956,000           41,388,000

PROPERTY, PLANT AND EQUIPMENT, NET                                36,935,000           35,915,000

GOODWILL, NET                                                     28,006,000           28,155,000

OTHER INTANGIBLE ASSETS, NET                                       8,486,000            8,690,000

NET ASSETS HELD FOR SALE                                           7,296,000            7,619,000

RESTRICTED CASH                                                    1,923,000            1,906,000

OTHER ASSETS                                                       1,549,000            1,533,000
                                                                ------------         ------------

TOTAL ASSETS                                                    $125,151,000         $125,206,000
                                                                ============         ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
       Accounts payable - trade                                 $  9,206,000         $  9,762,000
       Accrued expenses                                            5,607,000            7,197,000
       Current portion of related party debt                       1,815,000            2,843,000
       Current portion of long-term debt                           1,757,000            1,935,000
                                                                ------------         ------------

            Total current liabilities                             18,385,000           21,737,000

LONG-TERM DEBT, LESS CURRENT PORTION                              67,856,000           63,746,000

POSTRETIRMENT BENEFITS                                             2,742,000            2,713,000

DEFERRED TAXES                                                     2,367,000            2,367,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY                                              33,801,000           34,643,000
                                                                ------------         ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $125,151,000         $125,206,000
                                                                ============         ============

</TABLE>

Note: the balance sheet at October 25, 1998 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>

                                                                                Three Months Ended
                                                                           ---------------------------------
                                                                           January 31,           January 25,
                                                                              1999                  1998
<S>                                                                              <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
       Net income (loss)                                                  $  (132,000)          $     6,000
       Adjustments to reconcile net income (loss) to cash
            provided by (used in) operating activities:
            Depreciation                                                    1,292,000             1,085,000
            Amortization                                                      570,000               573,000
            Other                                                                   -                 8,000
            Changes in operating assets and liabilities                    (1,384,000)           (1,731,000)
                                                                          -----------           -----------

       Net cash provided by (used in) operating activities                    346,000               (59,000)
                                                                          -----------           -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of property, plant and equipment                          (2,313,000)           (2,362,000)
       Contingent consideration on acquisition                               (223,000)                    -
       Other                                                                    1,000               (99,000)
                                                                          -----------           -----------

       Net cash used in investing activities                               (2,535,000)           (2,461,000)
                                                                          -----------           -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Net borrowings under revolving credit agreement                      4,400,000             4,150,000
       Payments on long-term debt                                            (468,000)           (1,135,000)
       Payments on related party debt                                      (1,028,000)                    -
       Dividends paid                                                        (711,000)             (710,000)
                                                                          -----------           -----------

       Net cash provided by financing activities                            2,193,000             2,305,000
                                                                          -----------           -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                            4,000              (215,000)

CASH AND CASH EQUIVALENTS, BEGINNING                                          191,000               840,000
                                                                          -----------           -----------

CASH AND CASH EQUIVALENTS, ENDING                                         $   195,000           $   625,000
                                                                          ===========           ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
       Interest paid                                                      $ 1,495,000           $ 1,023,000
                                                                          ===========           ===========
       Taxes paid                                                         $    84,000           $   202,000
                                                                          ===========           ===========


</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 consolidated financial statements represent the
         consolidated financial position, results of operations and cash flows
         of Owosso Corporation and subsidiaries (the "Company").  The Company's
         operating subsidiaries include:

         o  The "Motor Companies":
            o  Motor Products - Owosso Corporation ("Motor Products")
            o  Motor Products - Ohio Corporation ("MP-Ohio")
            o  Stature Electric, Inc. ("Stature")
            o  Owosso Motor Group, Inc. ("Motor Group")
            o  M.H. Rhodes, Inc. ("Rhodes") - acquired June 30, 1998
         o  Snowmax, Inc. ("Snowmax")
         o  Astro Air Acquisition, Inc. ("Astro Air") - acquired April 26, 1998
         o  The Landover Company ("Dura-Bond")
         o  Sooner Trailer Manufacturing Co. ("Sooner")
         o  Parker Industries ("Parker") - sold March 5, 1999

         The Company is a diversified manufacturer of products in narrowly
         defined niche markets and currently operates in two business segments,
         Engineered Component Products (the Motor Companies, Snowmax, Dura-Bond,
         and Astro Air), and Specialized Equipment (Sooner and Parker). In 1998,
         the Specialized Equipment segment also included Great Bend
         Manufacturing Company, Inc. ("Great Bend") which was sold in April 1998
         and DewEze Manufacturing, Inc. ("DewEze") which was sold in July 1998.
         The condensed consolidated financial statements include the results of
         Parker, which was sold March 5, 1999 (see Note 7). In the Engineered
         Component Products segment, the Company's products, primarily motors,
         heat transfer "fin and tube" coils and replacement cam shaft bearings,
         are sold primarily to original equipment manufacturers or service
         providers who use them in their end products or services. The products
         sold in the Specialized Equipment segment, primarily all-aluminum horse
         trailers and agricultural equipment, are almost exclusively final
         products sold through dealers to their users. Nearly all of the 
         Company's customers are located in North America.

         Financial Statements - The condensed consolidated balance sheet as of
         January 31, 1999 and the condensed consolidated statements of
         operations and cash flows for the three months ended January 31, 1999
         and January 25, 1998 have been prepared by the Company, without audit.
         In the opinion of management, all adjustments (which include only
         normal recurring adjustments) considered necessary to present fairly
         the financial position, results of operations and cash flows as of
         January 31, 1999 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 25, 1998
         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 will consist of 53
         weeks. The first fiscal quarter of 1999 ended January 31, 1999 included
         14 weeks, whereas the first quarter of 1998 included 13 weeks.











                                       6
<PAGE>



         Seasonality - Sales of certain of the Company's specialized equipment
         tend to be seasonal with lowest sales during the first 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 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 government 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 are subject to the overall domestic business
         cycle.

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

         Comprehensive income - Effective for the first quarter of 1999, the
         Company adopted Statement of Financial Accounting Standards ("SFAS")
         No. 130, Reporting Comprehensive Income. SFAS No. 130 requires the
         presentation of comprehensive income and its components in a full set
         of general purpose financial statements. The Company's comprehensive
         income for the first quarter of 1999 and 1998 consisted solely of net
         earnings.

         New Accounting Pronouncements - In June 1997, the Financial Accounting
         Standards Board ("FASB") issued SFAS No. 131, Disclosures about
         Segments of an Enterprise and Related Information. This statement,
         which establishes standards for reporting information about operating
         segments and requires the reporting of selected information about
         operating segments in interim financial statements, is effective for
         fiscal years beginning after December 15, 1997, although earlier
         application is permitted. Reclassification of segment information for
         earlier periods presented for comparative purposes is required under
         SFAS No. 131. As this statement only requires additional disclosures in
         the Company's consolidated financial statements, its adoption will not
         have any impact on the Company's consolidated financial position or
         results of operations. The Company expects to adopt SFAS No. 131
         effective October 31, 1999.

         In March 1998, the FASB issued SFAS No. 132, Employers' Disclosure
         About Pensions and Other Postretirement Benefits. This statement, which
         revises the required disclosures for employee benefit plans, is
         effective for fiscal years beginning after December 15, 1997, although
         earlier adoption is permitted. Restatement of disclosures for earlier
         periods, presented for comparative purposes, is required under SFAS No.
         132. As this statement only revises disclosures in the Company's
         consolidated financial statements, its adoption will not have any
         impact on the Company's consolidated financial position or results of
         operations. The Company expects to adopt SFAS No. 132 effective October
         31, 1999.

         In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
         Instruments and Hedging Activities. This statement, which establishes
         accounting and reporting standards for derivative instruments and
         hedging activities, is effective for fiscal years beginning after June
         15, 1999, although earlier adoption is permitted. The Company has not
         yet completed its analysis of the effects of adopting this statement on
         its consolidated financial position or results of operations. The
         Company expects to adopt SFAS No. 133 in fiscal 2000.


















                                       7
<PAGE>


2.       ACQUISITION

         In connection with the acquisition of Astro Air in April 1998, the
         Company entered into a five-year consulting agreement with Dacus
         Properties, Inc. ("DPI"), the former owner of Astro Air, under which
         DPI receives 3.4% of net revenues generated by certain specified
         customers. For the three months ended January 31, 1999, the Company
         recorded $223,000 of contingent consideration under the agreement with
         DPI as goodwill based upon related first quarter 1999 revenues.


3.       INVENTORIES


                                                 January 31,         October 25,
                                                    1999                1998

Raw materials and purchased parts               $  9,843,000        $ 10,039,000
Work in process                                    3,963,000           4,161,000
Finished goods                                     7,785,000           7,062,000
                                                ------------        ------------

Total                                           $ 21,591,000        $ 21,262,000
                                                ------------        ------------







4.       ACCRUED RESTRUCTURING CHARGE

         In connection with the merger, in June 1998, of the Company's former
         subsidiary, Cramer Company ("Cramer"), into Rhodes, and the
         consolidation of Cramer's manufacturing into Rhodes' manufacturing
         facility, the Company recorded a restructuring charge of $909,000, of
         which $827,000 has been paid through January 31, 1999. Approximately
         $82,000 of restructuring costs is included in accrued expenses at
         January 31, 1999. The Company anticipates that the remaining
         restructuring costs will be paid by the end of the third fiscal quarter
         of 1999.


5.       LONG-TERM DEBT

         On January 22, 1999, the Company entered into a new $55,000,000
         revolving credit facility with the Company's two primary banks,
         expiring in December 2002. The new agreement is secured by the non-real
         estate assets of the Company. Interest is payable, at the Company's
         option, at either the bank's prime rate or a variable spread (2.5% at
         the inception of the agreement) over the London Interbank Offered Rate.
         The agreement includes financial and other covenants, including fixed
         charge, cash flow and net worth ratios and restrictions on certain
         asset sales, mergers and other significant transactions. The Company
         was in compliance with such covenants at January 31, 1999, and expects
         to be in compliance with such covenants for the foreseeable future.


6.       COMMITMENTS AND CONTINGENCIES

         The Company is subject to federal, state and local environmental
         regulation 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







                                       8
<PAGE>




         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. The Company is also in negotiations with the former operator
         of the site concerning the reimbursement by the former operator of any
         costs the Company has incurred or may incur in the future in connection
         with this matter. 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 two hazardous substance disposal sites currently under
         remediation by the U.S. Environmental Protection Agency (the "EPA")
         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 matters through the
         payment of de minimis amounts.

         Rhodes has been named as a potentially responsible party with respect
         to a hazardous disposal site currently under remediation by the EPA
         under its "Superfund" program. Based on the minimal amount of waste
         alleged to have been contributed to the site by Rhodes, the Company
         expects to resolve the matter through the payment of a de minimis
         amount. Rhodes is also involved in environmental remediation at its
         manufacturing site, which is not subject to any Superfund law
         proceeding. Based upon the amounts recorded as liabilities, the Company
         does not believe that the resolution of this matter will have a
         material adverse effect on the consolidated financial results of the
         Company.

         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 $11,550,000 of product as of January 31, 1999. 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.


7.       SUBSEQUENT EVENT - SALE OF PARKER

         On March 5, 1999, the Company completed the sale of the business and
         substantially all of the assets of Parker to Top Air Manufacturing,
         Inc., of Cedar Falls, Iowa. In connection with the sale, the Company
         received cash of $3.3 million, a non-interest bearing note of $3.6
         million, and the assumption of liabilities of $550,000, all subject to
         adjustment to reflect the change in book value of the assets between
         the valuation date and the date of the closing of the transaction. In













                                       9
<PAGE>

         addition, the local development authority in Iowa has agreed to acquire
         certain Parker fixed assets for $750,000, and lease those assets to Top
         Air. Based upon the proposed terms of the sale, the Company recorded,
         in the fourth quarter of fiscal 1998, a pre-tax charge of $1,635,000 to
         adjust the carrying value of Parker's assets to their estimated fair
         market value. The carrying value of the net assets of Parker, which is
         a component of the Company's Specialized Equipment segment, are
         included in the consolidated balance sheet as "Net assets held for
         sale." Sales attributable to Parker were $602,000 and $2,100,000 for
         the first quarters of 1999 and 1998, respectively. Loss from
         operations, before the allocation of corporate expenses, from Parker
         was $268,000 for the first quarter of 1999, as compared to income from
         operations of $16,000 for the first quarter of 1998.






















                                       10
<PAGE>


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

The following discussion addresses the financial condition of the Company as of
January 31, 1999 and the results of operations for the three months ended
January 31, 1999 and January 25, 1998. The 1999 period included 14 weeks,
whereas the 1998 period 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.

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 are lowest during the first fiscal quarter.

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.


                                                         Three Months Ended
                                                       ------------------------
                                                       January 31,  January 25,
                                                          1999         1998

Net sales                                                100.0%       100.0%
Cost of products sold                                     81.4%        78.0%
                                                         ------        ------
Gross profit                                              18.6%        22.0%
Expenses:
  Selling, general and administrative                     12.1%        14.7%
  Corporate                                                4.0%         4.1%
                                                          -----        ------
Income from operations                                     2.5%         3.2%
Interest expense                                           3.3%         3.3%
Other income                                               0.2%         0.1%
                                                          -----        -----
Income (loss) before income taxes                         -0.6%         0.0%
Income tax expense (benefit)                              -0.3%         0.0%
                                                          -----        -----
Net income (loss)                                         -0.3%         0.0%
Dividends and accretion on preferred stock                 0.7%         0.8%
                                                          =====        =====
Net income (loss) available for common stockholders       -1.0%        -0.8%
                                                          =====        =====


Three months ended January 31, 1998 compared to three months ended January 25,
1998

Net sales. For the first quarter of 1999, net sales increased 14.0%, to $38.8
million, as compared to net sales of $34.1 million in the first quarter of 1998.
These results include the effects of disposing of Great Bend, which was sold in
April 1998, and DewEze, which was sold in July 1998, and the acquisition, in
April 1998, of Astro Air. Sales attributable to Great Bend and DewEze were $3.7
million and $2.7 million, respectively, in 1998. Sales attributable to Astro Air
included in 1999 results were $6.8 million. Exclusive of the effects of the
acquisition of Astro Air and the dispositions of Great Bend and DewEze, net
sales increased 15.4% over the prior year quarter.

In the Company's Engineered Component Products segment, net sales increased
$12.2 million, to $30.9 million in 1999 from $18.7 million in 1998. This
increase reflects $6.8 million in sales from Astro Air.














                                       11
<PAGE>




These results also reflect a $4.2 million, or 30.4%, increase in sales at the
Motor Companies as a result of increased sales to existing customers and the 
addition of new customers, and a $1.0 million, or 31.3%, increase in sales of 
heat transfer coils at Snowmax, attributable to increased volume with a
significant customer.

Net sales in the Specialized Equipment segment were $7.9 million in 1999, as
compared to $15.4 million in 1998. This decrease reflects the sale in 1998 of
Great Bend and DewEze and significantly lower sales at Parker as a result of a
weak agricultural market and the effects of its pending sale, which was
subsequently completed on March 5, 1999.

Gross profit. For the first quarter of 1999, gross profit was $7.2 million, or
18.6% of net sales, as compared to $7.5 million, or 22.0% of net sales in the
prior year quarter. The decrease in gross profit reflects principally the
dispositions of Great Bend and DewEze. Exclusive of these dispositions and the
acquisition of Astro Air, gross profit would have been $6.4 million, or 20.0% of
net sales, in 1999, as compared to $5.6 million, or 20.0% of net sales, in 1998.

Gross profit in the Engineered Component Products segment increased 31.8%, to
$5.8 million, or 18.9% of net sales, as compared to $4.4 million, or 22.0% of
net sales in the first quarter of 1998. The increase in gross profit was
principally a result of the inclusion of Astro Air and increased sales at the
Motor Companies. The decrease in gross margin percentage was primarily a result
of the inclusion of Astro Air, which has lower gross profit margins than other
companies in this segment, and a decreased margin percentage at the Motor
Companies as a result of changes in product mix.

In the Specialized Equipment segment, gross profit was $1.4 million, or 17.5% of
net sales, as compared to $3.1 million, or 19.9% of net sales, in the prior year
quarter. This decrease reflects the sales of Great Bend and DewEze and reduced
sales at Parker. Gross profit at Sooner Trailer, the only remaining business
unit in this segment, increased to $1.3 million, or 18.3% of net sales, in 1999,
from $729,000, or 10.5% of net sales, in 1998, primarily as a result of the
discontinuation of certain low-margin livestock trailers and the institution of
price increases on certain other models in the second quarter of 1998.

Selling, general and administrative expenses. As a percentage of net sales,
selling, general and administrative expenses decreased to 12.1%, or $4.7
million, in the first quarter of 1999, as compared to 14.7%, or $5.0 million, in
the prior year quarter.

Selling, general and administrative expenses in the Engineered Component
Products segment were $3.2 million in 1999, as compared to $2.4 million in 1998.
This increase reflects the inclusion of Astro Air and increased costs at the
Motor Companies, primarily as a result of the inclusion of Rhodes, acquired in
July 1998. As a percentage of net sales, selling, general and administrative
expenses decreased to 10.3%, from 12.8%, in 1998. This decrease was primarily a
result of the inclusion of Astro Air, which has lower selling, general and
administrative expenses as a percentage of net sales than other companies in
this segment.

Selling, general and administrative expenses in the Specialized Equipment
segment decreased $1.1 million, to $1.5 million in 1999 as a result of the
dispositions of Great Bend and DewEze. As a percentage of net sales, selling
general and administrative expenses in this segment increased to 19.1% in 1999,
as compared to 17.0% in the prior year quarter, primarily as a result of weak
sales at Parker.

Corporate expenses. In the first quarter of 1999, corporate expenses were $1.6
million, or 4.0% of net sales, as compared to $1.4 million, or 4.1% of net sales
in 1998. The increase in corporate expenses primarily reflects the 14-week
accounting period in 1999, as compared to the 13-week period in 1998.












                                       12
<PAGE>




Income from operations. For the first quarter of 1999, income from operations
was $980,000, or 2.5% of net sales, as compared to $1.1 million, or 3.2% of net
sales, in 1998.

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 to $2.7 million in the first
quarter of 1999, as compared to $2.0 million in the prior year quarter. This
increase was primarily a result of Astro Air, which contributed $508,000 of
business unit income in 1999. Business unit income of the Motor Companies was
essentially flat and was adversely effected by the inclusion of Rhodes, which
has had low gross margins since its acquisition and high selling, general and
administrative expenses, in comparison to other companies in this segment. As a
percentage of net sales, business unit income for this segment was 8.6%, as
compared to 10.9% in the prior quarter. The decrease in business unit income as
a percentage of net sales was primarily a result of the inclusion of Rhodes, for
the reasons described above, and the inclusion of Astro Air, which has lower
gross margins than other companies in this segment. The results of operations of
Rhodes continue to be adversely affected by inefficiencies as a result of the
continuing process of integrating its systems and operations with the Company's
former Cramer subsidiary.

The Specialized Equipment segment experienced a loss at the business unit level
of $127,000 in 1999, as compared to business unit income of $460,000 in the
first quarter of 1998. These results reflect the dispositions of Great Bend and
DewEze and poor operating results at Parker, as a result of the weak
agricultural market and the effects of its pending sale. Business unit income at
Sooner increased from a loss of $367,000 in 1998 to income of $141,000 in 1999,
primarily as a result of increased gross margins.

Interest expense. For the first quarter of 1999, interest expense was $1.3
million, as compared to $1.1 million in 1998. This increase was primarily the
result of increased borrowings under the Company's revolving credit agreement.

Income tax expense (benefit). The Company's effective income tax rate was 45.7%
for 1999, while the benefit recorded in the prior year quarter was at an
effective rate of 45.5%.

Net income (loss) available for common stockholders. Net loss available for
common stockholders was $403,000, or $.07 per share, in the first quarter of
1999, as compared to a net loss of $259,000, or $.04 per share, in the prior
year quarter. Income (loss) available for common stockholders is calculated by
subtracting dividends on preferred stock of $188,000 for both 1999 and 1998 and
by deducting the non-cash accretion in book value of preferred stock of $83,000
and $77,000 for 1999 and 1998, respectively.

Liquidity and Capital Resources

Cash and cash equivalents were $195,000 at January 31, 1999, exclusive of $1.9
million of cash that was restricted under an industrial revenue financing.
Working capital increased to $22.6 million at January 31, 1999 from $19.7
million at October 25, 1998. This increase was primarily a result of a reduction
in the current portion of long-term debt and the payment of accrued expenses.
Net cash provided by operating activities was $346,000, as compared to net cash
used in operating activities of $59,000 in the prior year quarter. The increase
in cash from operations was principally the result of increased cash collections
on accounts receivable in comparison to the prior year, partially offset by the
payment of accounts payable and accrued expenses due to timing.

Net cash used in investing activities included $2.3 million for capital
expenditures for equipment, invested primarily in the Engineered Component
Products segment and $233,000 of contingent














                                       13
<PAGE>


consideration paid to the former owner of Astro Air and recorded as goodwill. 
The Company currently plans to invest approximately $4.0 million during the 
remainder of fiscal 1999, primarily for added capacity and production 
efficiencies in the Engineered Component Products segment. Management
anticipates funding capital expenditures with cash from operations and proceeds
from the Company's revolving credit facility.

The Company is currently negotiating a joint venture agreement with a subsidiary
of its largest customer, Bergstrom, Inc. The joint venture, which is anticipated
to be owned 90% by the Company, will manufacture and supply heat transfer coils
primarily to Bergstrom's facility in Birmingham, England, and will be located on
property adjacent to Bergstrom's current facility in Birmingham.

Net cash provided by financing activities included net borrowings of $4.4
million under the Company's $55.0 million revolving credit agreement, debt
repayments of $1.5 million, including the repayment of $1.0 million of related
party debt, and the payment of dividends of $711,000.

On January 22, 1999, the Company entered into a new $55.0 million revolving
credit agreement with the Company's two primary banks, expiring in December
2002. At January 31, 1999, $52.6 million was outstanding and $2.4 million was
available for additional borrowing under the agreement. Interest is payable, at
the Company's option, at either the agent bank's prime rate or at a spread over
the London Interbank Offered Rate that varies with the Company's ratio of total
debt to EBITDA. The LIBOR spread was 2.5% at January 31, 1999. The agreement
contains customary financial and other covenants, including fixed charges, cash
flow and net worth ratios, restrictions on certain asset sales, mergers and
other significant transactions. The Company was in compliance with such
covenants at January 31, 1999, and anticipates that it will remain in compliance
with these covenants for the foreseeable future.

The Company has interest rate swap agreements with its two banks with notional
amounts totaling $15.0 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
agreements require the Company to make quarterly fixed payments on the notional
amount at rates of 7.0675% and 7.09% through July 2002 in exchange for receiving
payments at the three-month London Interbank Offered Rate.

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.

Other

On March 5, 1999, the Company completed the sale of the business and
substantially all of the assets of Parker to Top Air Manufacturing, Inc., of
Cedar Falls, Iowa. In connection with the sale, the Company received cash of
$3.3 million, a non-interest bearing note of $3.6 million, and the assumption of
liabilities of $550,000, all subject to adjustment to reflect the change in book
value of the assets between the valuation date and the date of the closing of
the transaction. In addition, the local development authority in Iowa has agreed
to acquire certain Parker fixed assets for $750,000, and lease those assets to
Top Air. Based upon the proposed terms of the sale, the Company recorded, in the
fourth quarter of fiscal 1998, a pre-tax charge of $1,635,000 to adjust the
carrying value of Parker's assets to their estimated fair market value. The
carrying value of the net assets of Parker, which is a component of the
Company's Specialized Equipment segment, are included in the consolidated
balance sheet as "Net assets held for sale." Sales attributable to Parker were
$602,000 and $2,100,000 for the first quarters of 1999 and 1998, respectively.
Loss from operations, before the allocation of corporate expenses, from Parker
was $268,000 for the first quarter of 1999, as compared to income from
operations of $16,000 for the first quarter of 1998.















                                       14
<PAGE>


"Year 2000" Costs

The Company's primary centralized manufacturing and accounting information
system is currently Year 2000 compliant (meaning that it can properly process
dates in the year 2000 and beyond). The Company is currently evaluating any
possible exposures related to other date-sensitive equipment and anticipates
being fully Year 2000 compliant by the end of July 1999. The cost to the Company
of bringing such equipment into Year 2000 compliance is expected to be
approximately $200,000. Historical costs related to Year 2000 issues have not
been material. In addition, the Company has initiated formal communications with
its significant suppliers and large customers to determine the extent to which
the Company is vulnerable to those third parties' failure to remediate their own
Year 2000 compliance issues. There can be no assurance that the systems of other
companies on which the Company's systems rely will be timely converted, or that
a failure to convert by another company, or a conversion that is incompatible
with the Company's systems, would not have a material adverse effect on the
Company. Management believes that the Company has taken measures to minimize the
exposure to a Year 2000 disruption. The Company does not yet have a contingency
plan but anticipates developing, by July 1999, a plan that would focus on
various types of possible business interruptions that could occur.

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       No definitive agreement exists with regard to the Company's
              proposed joint venture in the United Kingdom. If the Company
              enters into the joint venture, it may be subjected to various
              risks which may include currency risk, risk associated with
              compliance with foreign regulations, and political and economic
              risks.

      o       Anticipated cost savings in connection with the merger of Cramer
              and Rhodes have not yet fully materialized as a result of the
              continuing process of integrating their systems and operations.
              Improvement in the operating results of Rhodes is not expected
              until such integration is completed.

      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
              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.










                                       15
<PAGE>


      o       Commodity prices can have a material influence on the Company's
              results. 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 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       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       Acquisitions are an important part of the Company's growth
              strategy. Acquisitions may have a dilutive effect on the Company's
              earnings and could effect 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 loss on the disposition that
              could reduce the Company's results. In addition, acquisitions or
              dispositions could effect the Company's relative mix of operating
              results from engineered component products and specialized
              equipment, thereby effecting the seasonality and cyclicality of
              such operating results.

      o       Although the Company believes that it has taken measures to
              minimize the exposure of a Year 2000 disruption, there can be no
              assurance that, if a disruption occurs, it would not have a
              material adverse effect on the Company's operating results.








                                       16
<PAGE>


Item 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company uses a revolving credit facility, industrial revenue bonds and term
loans to finance a significant portion of its operations. These on-balance sheet
financial instruments, to the extent they provide for variable rates of
interest, expose the Company to interest rate risk resulting from changes in
London Interbank Offered Rate or the prime rate. The Company uses 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 January 31,
1999 did not differ materially from the information disclosed in the Company's
Form 10-K for the fiscal year ended October 25, 1998. 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.








                                       17
<PAGE>


Part II.          OTHER INFORMATION

Item 6.           Exhibits and Reports on Form 8-K

(a)      Exhibits

Exhibit No.       Description

10.1              Amended and Restated Credit Agreement by and among Owosso
                  Corporation, its subsidiaries, NBD Bank, PNC Bank, N.A., and
                  NBD Bank, as Agent, dated as of January 22, 1999.

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 25, 1998.

(b)      Form 8-K

                  No reports on Form 8-K were filed during the quarter ended
                  January 31, 1999.
----------------------------
*        Incorporated by reference.
















                                       18
<PAGE>



                                   SIGNATURES
                                   ----------


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



                                            OWOSSO CORPORATION



         Date:    March 10, 1999            By: /s/ George B. Lemmon, Jr.
                                                -------------------------
                                                George B. Lemmon, Jr.
                                                President, Chief Executive
                                                Officer, and Director



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



                                       19