10-Q 1 ten-q.txt FORM 10-Q =============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q |X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: July 27, 2003 ------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period from _________________ to _________________. Commission file number: 0-25066 OWOSSO CORPORATION ---------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 23-2756709 ------------------------------- -------------------------------- (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 22543 Fisher Road, PO Box 6660, Watertown, NY 13601 ----------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (315) 782-5910 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate by a check mark whether registrant is an accelerated filer (as defined in rule 12b-2 of the Exchange Act). YES [ ] NO [X] As of September 8, 2003, 5,874,345 shares of the Registrant's Common Stock, $.01 par value, were outstanding. ================================================================================ OWOSSO CORPORATION TABLE OF CONTENTS -------------------------------------------------------------------------------- Page PART I - FINANCIAL INFORMATION: Item 1. Unaudited Financial Statements Condensed Consolidated Statements of Operations 3 for the three and nine months ended July 27, 2003 and July 28, 2002 Condensed Consolidated Balance Sheets at 4 July 27, 2003 and October 27, 2002 Condensed Consolidated Statements of Cash Flows 5 for the nine months ended July 27, 2003 and July 28, 2002 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Consolidated 11 Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures about Market Risk 17 Item 4. Controls and Procedures 17 PART II - OTHER INFORMATION: Item 2. Changes in Securities and Use of Proceeds 18 Item 3. Defaults Upon Senior Securities 18 Item 6. Exhibits and Reports on Form 8-K 18 2 OWOSSO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

~~Page~~Three-Months Ended Nine-Months Ended ------------------------------------ ~~PART~~----------------------------------- IJuly -27, ~~FINANCIAL~~July ~~INFORMATION:~~28, ~~Item~~July 1.27, ~~Unaudited~~July ~~Financial~~28, ~~Statements~~2003 ~~Condensed~~2002 ~~Consolidated~~2003 ~~Statements~~2002 Net sales $ 4,399,000 $ 11,415,000 $ 13,423,000 $ 31,515,000 Costs of ~~Operations~~products sold 3,585,000 ~~for~~9,743,000 ~~the~~10,908,000 ~~three~~26,913,000 ~~and~~----------- ~~six~~------------ ~~months~~------------ ~~ended~~------------ ~~April~~Gross 27profit 814,000 ~~2003~~1,672,000 2,515,000 4,602,000 Selling, general and ~~April~~administrative 28expenses 779,000 ~~2002~~2,826,000 ~~Condensed~~2,635,000 ~~Consolidated~~6,633,000 ~~Balance~~----------- ~~Sheets~~------------ at------------ 4------------ ~~April~~Income 27(loss) from operations 35,000 ~~2003~~(1,154,000) ~~and~~(120,000) ~~October~~(2,031,000) 27Interest expense 163,000 ~~2002~~389,000 ~~Condensed~~553,000 ~~Consolidated~~1,374,000 ~~Statements~~----------- of------------ ~~Cash~~------------ ~~Flows~~------------ 5Loss ~~for~~before ~~the~~income ~~six~~taxes ~~months~~(128,000) ~~ended~~(1,543,000) ~~April~~(673,000) 27(3,405,000) ~~2003~~Income ~~and~~tax ~~April~~benefit 2813,000 ~~2002~~424,000 ~~Notes~~159,000 to5,182,000 ~~Condensed~~----------- ~~Consolidated~~------------ ~~Financial~~------------ ~~Statements~~------------ 6Net ~~Item~~(loss) 2.income ~~Management's~~(115,000) ~~Discussion~~(1,119,000) ~~and~~(514,000) ~~Analysis~~1,777,000 ofDividends ~~Consolidated~~on 11preferred ~~Financial~~stock ~~Condition~~343,000 ~~and~~338,000 ~~Results~~1,026,000 of1,009,000 ~~Operations~~----------- ~~Item~~------------ 3.------------ ~~Quantitative~~------------ ~~and~~Net ~~Qualitative~~(loss) ~~Disclosures~~income ~~about~~available ~~Market~~for ~~Risk~~common 17shareholders ~~Item~~$ 4.(458,000) ~~Controls~~$ ~~and~~(1,457,000) ~~Procedures~~$ 17(1,540,000) ~~PART~~$ II768,000 -=========== ~~OTHER~~============ ~~INFORMATION:~~============ ~~Item~~========== 2.Net ~~Changes~~(loss) inincome ~~Securities~~per ~~and~~share ~~Use~~$ of(0.08) ~~Proceeds~~$ 18(0.25) ~~Item~~$ 3(0.26) ~~Defaults~~$ ~~Upon~~0.13 ~~Senior~~=========== ~~Securities~~============ 18============ ~~Item~~========== 6.Basic ~~Exhibits~~ and ~~Reports~~diluted onweighted ~~Form~~average ~~8-K~~number 18of common shares outstanding 5,874,000 5,874,000 5,874,000 5,874,000 =========== ============ ============ ==========

See notes to condensed consolidated financial statements. 3 OWOSSO CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS --------------------------------------------------------------------------------

~~Three-Months~~July ~~Ended~~27, ~~Six-Months~~October ~~Ended ------------------------------------ ----------------------------------- April~~ 27, ~~April~~2003 ~~28,~~2002 ~~April~~(Unaudited) ~~27,~~(See ~~April~~Note) ~~28,~~ASSETS ~~2003~~CURRENT ~~2002~~ASSETS: ~~2003~~Cash ~~2002~~and ~~Net~~cash ~~sales~~equivalents $ 4541,~~423,~~000 $ 11524,~~107,~~000 $Receivables, 9net 2,~~024~~187,000 $3,111,000 20Inventories,~~100~~ net 1,690,000 ~~Costs~~1,906,000 ofNet ~~products~~assets ~~sold~~held 3for sale - 800,~~568~~000 Prepaid expenses and other 175,000 9690,~~276~~000 Tax refund receivable - 919,000 7Deferred taxes 295,~~323,~~000 17295,~~214,~~000 ------------ ------------ ~~-----------~~Total ~~------------~~current ~~Gross~~assets ~~profit~~4,888,000 ~~855~~8,245,000 1PROPERTY,~~831~~ PLANT AND EQUIPMENT, NET 4,961,000 15,~~701~~616,000 2GOODWILL,~~886~~ NET 8,405,000 ~~Selling~~8,405,000 ~~general~~OTHER ~~and~~INTANGIBLE ~~administrative~~ASSETS, ~~expenses~~NET ~~928~~4,920,000 15,~~653~~218,000 1NET ASSETS OF DISCONTINUED OPERATIONS HELD FOR SALE 350,~~856~~000 350,000 3OTHER ASSETS 119,~~763~~000 136,000 ----------- -~~-----------~~ ----------- -~~-----------~~ ~~(Loss)~~TOTAL ~~income~~ASSETS ~~from~~$ ~~operations (73~~23,643,000) ~~178~~$ 27,970,000 ~~(155~~============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable - trade $ 1,569,000) ~~(877~~$ 2,025,000) ~~Interest~~Accrued ~~expense~~expenses ~~176~~2,125,000 ~~485~~2,622,000 ~~390~~Current portion of long-term debt 6,643,000 ~~985~~8,951,000 ------------ ------------ ~~-----------~~Total current liabilities 10,337,000 13,598,000 LONG-~~-----------~~TERM ~~Loss~~DEBT, ~~before~~LESS ~~income~~CURRENT ~~taxes~~PORTION ~~(249~~4,403,000) ~~(307~~4,594,000) ~~(545~~COMMON STOCK PUT OPTION 600,000) (1600,~~862,~~000) ~~Income~~POSTRETIREMENT ~~tax~~BENEFITS ~~benefit~~AND 84OTHER LIABILITIES - 362,000 4DEFERRED TAXES 1,~~758~~900,000 ~~146~~1,900,000 4ACCRUED PREFERRED STOCK DIVIDENDS 3,~~758~~691,000 ~~-----------~~2,664,000 ------------ ----------- -~~-----------~~ ~~Net~~COMMITMENTS ~~(loss)~~AND ~~income~~CONTINGENCIES ~~(165,000)~~TOTAL 4LIABILITIES 20,~~451~~931,000 ~~(399~~23,~~000) 2~~718,~~896,~~000 ~~Dividends~~SHAREHOLDERS' onEQUITY ~~preferred stock 342~~2,~~000 336~~712,000 ~~683~~4,~~000 671~~252,000 ----------- -~~-----------~~ ----------- -~~-----------~~ ~~Net~~TOTAL ~~(loss)~~LIABILITIES ~~income~~AND ~~available~~SHAREHOLDERS' ~~for~~EQUITY ~~common shareholders~~ $ ~~(507~~23,~~000) $ 4~~643,~~115,~~000 $~~(1,082,000)~~ ~~$ 2~~27,~~225~~970,000 =========== =~~===========~~ =========== ============ Net (loss) income per share $ (0.09) $ 0.70 $ (0.18) $ 0.38 =========== ============ =========== ============ Basic and diluted weighted average number of common shares outstanding 5,874,000 5,874,000 5,874,000 5,874,000 =========== ============ =========== ============

Note: the balance sheet at October 27, 2002 has been condensed from the audited financial statements at that date. See notes to condensed consolidated financial statements. 4 OWOSSO CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

~~April~~--------------------------------------------------------------------------------------------------- Nine Months Ended ----------------------------- July 27, ~~October~~July 2728, 2003 2002 ~~(Unaudited)~~OPERATING ~~(See Note) ASSETS CURRENT ASSETS~~ACTIVITIES: ~~Cash~~Net ~~and~~Loss ~~cash~~(income) ~~equivalents~~ $ ~~103~~(514,000) $ ~~524~~1,777,000 ~~Receivables,~~Adjustments ~~net~~to ~~2,487,000~~reconcile ~~3,111,000~~net ~~Inventories,~~loss to net ~~1,771,000~~cash ~~1,906,000~~provided ~~Net~~by operating activities: Gain from sale of net assets held for sale ~~800~~(77,000) ~~800~~0 Depreciation 787,000 ~~Prepaid~~1,967,000 ~~expenses~~Amortization ~~and~~300,000 ~~other 263~~802,000 ~~690~~Other 0 313,000 ~~Tax~~Changes ~~refund~~in ~~receivable~~operating -assets ~~919,000~~and ~~Deferred~~liabilities ~~taxes~~which ~~295~~provided cash 1,401,000 ~~295~~130,000 ----------- ----------- Net cash provided by operating activities 1,897,000 4,989,000 ----------- ----------- ~~Total~~INVESTING ~~current~~ACTIVITIES: ~~assets~~Purchases ~~5,719,000~~of 8property,~~245,000~~ ~~PROPERTY,~~plant ~~PLANT~~and ~~AND~~equipment ~~EQUIPMENT~~(134, ~~NET 5,169,~~000) 5(293,~~616,~~000) ~~GOODWILL,~~Proceeds ~~NET~~from ~~8,405,000~~net ~~8,405,000~~assets ~~OTHER~~held ~~INTANGIBLE~~for ~~ASSETS,~~sale ~~NET 5~~877,~~019,~~000 ~~5,218,000~~0 ~~NET~~Increase ~~ASSETS~~(decrease) OFin ~~DISCONTINUED~~other ~~OPERATIONS~~assets ~~HELD FOR SALE 350~~17,000 ~~350~~(369,000) ~~OTHER ASSETS 124,000 136,000~~ -----------~~------~~ -----------~~-----~~ ~~TOTAL~~Net ~~ASSETS~~cash $provided ~~24,786,000~~by $(used ~~27,970,000~~in) ~~=================~~investing ~~================~~activities ~~LIABILITIES~~760,000 ~~AND~~(662,000) ~~SHAREHOLDERS'~~----------- ~~EQUITY~~----------- ~~CURRENT~~FINANCING ~~LIABILITIES~~ACTIVITIES: ~~Accounts~~Net ~~payable~~payments -on ~~trade~~line $of 1credit (2,~~499~~450,000) ~~$ 2~~(4,~~025~~400,000) ~~Accrued~~Payments ~~expenses~~on 2long-term debt (190,~~208,~~000) 2(242,~~622,~~000) ~~Current~~Payments ~~portion~~on ofrelated ~~long-term~~party debt ~~7,594,000~~0 8(400,~~951,~~000) -----------~~------~~ -----------~~-----~~ ~~Total~~Net ~~current~~cash ~~liabilities~~used ~~11,301,000~~in ~~13,598,000~~continuing ~~LONG-TERM~~operations ~~DEBT~~(2, ~~LESS CURRENT PORTION 4~~640,~~467,~~000) 4(5,~~594~~042,000) ~~COMMON~~Net ~~STOCK~~cash ~~PUT~~used ~~OPTION~~in ~~600,000~~discontinued ~~600~~operations 763,000 ~~POSTRETIREMENT~~----------- ~~BENEFITS AND OTHER LIABILITIES~~ ----------- ~~362,000~~Net ~~DEFERRED~~cash ~~TAXES~~used ~~1,900,000~~in ~~1,900,000~~financing ~~ACCRUED~~activities ~~PREFERRED STOCK DIVIDENDS 3~~(2,~~348~~640,000) 2(4,~~664~~279,000) ~~COMMITMENTS AND CONTINGENCIES~~ -----------~~------~~ -----------~~-----~~ ~~TOTAL~~NET ~~LIABILITIES~~INCREASE 21IN CASH AND CASH EQUIVALENTS 17,~~616,~~000 2348,~~718,~~000 ~~SHAREHOLDERS'~~CASH ~~EQUITY~~AND 3CASH EQUIVALENTS,~~170~~ BEGINNING OF PERIOD 524,000 4200,~~252,~~000 -----------~~------~~ -----------~~-----~~ ~~TOTAL~~CASH ~~LIABILITIES~~ AND ~~SHAREHOLDERS'~~CASH ~~EQUITY~~EQUIVALENTS, END OF PERIOD $ 24541,~~786~~000 $ 248,000 =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 27524,~~970~~000 $ 2,299,000 =========== =========== Taxes refunded $ 1,155,000 $ 6,392,000 =========== =========== SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Preferred Dividends payable $ 1,026,000 $ 1,009,000 =========== ===========

See notes to condensed consolidated financial statements. 5 OWOSSO CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -------------------------------------------------------------------------------- 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company - Owosso Corporation (the "Company") historically operated in four business segments: Motors, Coils, Agricultural Equipment and Other. The Company presently has one operating subsidiary, Stature Electric, Inc. ("Stature"), representing the Company's historical Motors segment. Stature is a custom designer and manufacturer of motors and gear motors, including AC, DC and Universal, established in 1974 in Watertown, New York. Significant markets for Stature, or the Motors segment, include commercial products and equipment, healthcare, recreation and non-automotive transportation. The products are sold throughout North America and in Europe, primarily to original equipment manufacturers who use them in their end products. The Company completed the sale of all of the outstanding stock of Motor Products - Owosso Corporation and Motor Products - Ohio Corporation (together, "Motor Products"), manufacturers of fractional and integral horsepower motors, on July 30, 2002. Prior to that time, these entities were included in the results of the Motors segment Financial Statements - The condensed consolidated balance sheet as of July 27, 2003, the condensed consolidated statements of operations for the three and nine months ended July 27, 2003 and July 28, 2002 and the statement of cash flows for the nine months ended July 27, 2003 and July 28, 2002 have been prepared by the Company, without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flows as of July 27, 2003 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's October 27, 2002 Annual Report on Form 10-K. Income (loss) per share - Basic income (loss) per common share is computed by dividing net income (loss) (the numerator) by the weighted average number of common shares outstanding during each period (the denominator). The computation of diluted income (loss) per common share is similar to that of basic earnings per common share, except that the denominator is increased by the dilutive effect of stock options outstanding, computed using the treasury stock method, the dilutive effect of convertible preferred stock computed using the "if converted" method, and by the dilutive effect of the put option on common stock, computed using the reverse-treasury stock method. Recently Adopted Accounting Pronouncements - In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 142 "Goodwill and Other Intangible Assets". SFAS No. 142 requires the use of a nonamortization approach to account for purchased goodwill and certain intangibles. Under a nonamortization approach, goodwill and certain intangibles will not be amortized into results of operations but, instead, would be reviewed for impairment and written down and charged to results of operations only in the periods in which the recorded value of goodwill and certain intangibles is more than its fair value. The provisions of the statement which apply to goodwill and intangible assets acquired prior to June 30, 2001 are required to be adopted for fiscal years beginning after December 15, 2001. The Company adopted SFAS No. 142 on October 28, 2002. The impact in the first nine months of 2003 of discontinuing goodwill amortization was approximately $486,000. In accordance with SFAS No. 142, the Company has completed its transitional goodwill impairment test. Based on its assessment, the Company was not required to record a goodwill impairment charge as of October 28, 2002. The impact of the adoption of SFAS No. 142 is summarized as follows: 6

~~Six~~Three-Months Ended Nine-Months Ended ---------------------------- ----------------------------------- ~~April~~July 27, ~~April~~July 28, ~~2003~~July ~~2002~~27, ~~OPERATING~~July ~~ACTIVITIES: Net Loss (income) $ (399~~28,~~000)~~ $2003 ~~2,896,000~~2002 ~~Adjustments~~2003 to2002 ~~reconcile~~Reported ~~net~~Net (loss) toincome ~~net~~available ~~cash~~for ~~provided~~common byshareholders ~~operating~~$ ~~activities: Depreciation 533~~(458,000) $ (1,~~324~~457,000) ~~Amortization~~$ ~~200~~(1,~~000 534~~540,000) ~~Other~~$ ~~0 203~~768,000 ~~Changes~~Add inback: ~~operating~~Goodwill ~~assets~~amortization ~~and~~- ~~liabilities which provided cash 896~~162,000 ~~(729~~- 486,000) ---------- ------------ ~~Net cash provided by operating activities 1,230,000 4,228,000~~ ------------ ----------- ~~INVESTING~~Adjusted ~~ACTIVITIES:~~Net ~~Purchases~~(loss) ofincome ~~property,~~$ ~~plant and equipment~~ (87458,000) $ (~~197~~1,295,000) ~~Decrease~~$ ~~in other assets 12~~(1,~~000 848~~540,000 ~~---------- ----------- Net cash (used in~~) ~~provided~~$ ~~by investing activities (75~~1,~~000) 651~~254,000 ~~----------~~========== ~~-----------~~============ ~~FINANCING~~============ ~~ACTIVITIES:~~=========== ~~Net~~Basic ~~payments~~(Loss) onincome ~~line~~per ofshare: ~~credit~~Reported ~~(1,450,000)~~Net (~~4,300,000~~loss) ~~Payments~~income onavailable ~~long-term~~for ~~debt~~common ~~(126,000)~~shareholders $ (~~129,000~~0.08) ~~Payments~~$ ~~on related party debt~~ (0.25) $ (~~400,000~~0.26) ~~----------~~$ ~~-----------~~0.13 ~~Net~~Add ~~cash~~back: ~~used~~Goodwill inamortization ~~financing~~- ~~activities~~0.03 ~~(1,576,000)~~- ~~(4,829,000)~~0.08 ---------- ------------ ~~NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (421,000) 50,000 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 524,000 200,000~~ ------------ ----------- ~~CASH~~Adjusted ~~AND~~Net ~~CASH~~(loss) ~~EQUIVALENTS,~~income ~~END OF PERIOD~~ $ ~~103,000~~(0.08) $ ~~250,000~~(0.22) ~~========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid~~ $ ~~364,000~~(0.26) $ ~~1,733,000~~0.21 ========== =========== ~~Taxes refunded $1,155,000 $ 6,198,000~~ =~~=========~~ =========== ~~SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Dividends payable $ 683,000 $ 671,000~~ =~~=========~~ ===========

In August 2001, the Financial Accounting Standards Board issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS No. 144"). SFAS No. 144, which addresses financial accounting and reporting for the impairment of long-lived assets and for long-lived assets to be disposed of, supercedes SFAS No. 121 and is effective for fiscal years beginning after December 15, 2001. The Company adopted SFAS No. 144 on October 28, 2002. As a result, management of the Company has concluded that there was no material effect on the Company's financial position, results of operations or cash flows from the adoption of SFAS No. 144. 2. LIQUIDITY AND FINANCING The Company has experienced a significant downturn in its operating results over the past several years and has been required to modify its bank credit facility, as further disclosed under Note 6 "Long-term Debt". Management intends to dispose of its remaining non-operating asset, the real estate at the Company's former Snowmax subsidiary. Management believes that available cash and cash equivalents, cash flows from operations and available borrowings under the Company's bank credit facility will be sufficient to fund the Company's operating activities, investing activities and debt maturities for fiscal 2003. In anticipation of management's belief that the Company would be unable to remain in compliance with certain of its bank covenant requirements throughout fiscal 2003, management entered into and has successfully negotiated with the Company's lenders a waiver of the minimum EBITDA covenant through the end of fiscal 2003. It is management's intent to refinance the Company's bank credit facility prior to its maturity in December 2003. There can be no assurance, however, that management's plans for refinancing will be successfully executed. The accompanying condensed consolidated financial statements have been prepared on a going concern basis of accounting and do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company's recurring losses from operations, working capital deficiency, potential default under the terms of its bank credit facility and inability to comply with debt and other bank covenants raise substantial doubt about the Company's ability to continue as a going concern. 7 3. NET ASSETS OF DISCONTINUED OPERATIONS HELD FOR SALE The Company completed the sale of Astro Air Coils, Inc. ("Astro Air"), and Snowmax Incorporated ("Snowmax") on October 26, 2001. For financial reporting purposes, the assets and liabilities attributable to the Coils segment have been classified in the condensed consolidated balance sheets as net assets of discontinued operations held for sale. At both July 27, 2003 and October 27, 2002, net assets of discontinued operations held for sale were $350,000 and represent the estimated fair value of the Snowmax building, the only remaining Coils segment asset. 4. NET ASSETS HELD FOR SALE The Company's former Other segment consisted of Cramer Company ("Cramer"). The Company completed the sale of the assets associated with the timer and switch line of Cramer on December 4, 2000. The Company disposed of substantially all of the remaining Cramer assets (excluding real property) in a separate transaction completed on September 23, 2001. The Company disposed of the remaining Cramer real property on May 9, 2003 and the net amount received at closing was $877,000, resulting in a gain of $77,000. For financial reporting purposes, the assets and liabilities attributable to the real property had been classified in the condensed consolidated balance sheets as net assets held for sale. 5. INVENTORIES July 27, October 27, 2003 2002 Raw materials and purchased parts $1,030,000 $1,001,000 Work in process 725,000 908,000 Finished goods 224,000 231,000 ---------- ---------- Total Inventories 1,979,000 2,140,000 Inventory Provision 289,000 234,000 ---------- ---------- Net Inventories $1,690,000 $1,906,000 ========== ========== 6. LONG-TERM DEBT On January 22, 1999, the Company entered into a new bank credit facility with the Company's two primary banks, originally expiring in December 2002. The agreement included financial and other covenants, including fixed charge, cash flow and net worth ratios and restrictions on certain asset sales, mergers and other significant transactions. The Company was out of compliance with such covenants at October 29, 2000. In February 2001, the Company entered into an amendment to its bank credit facility agreement, wherein the lenders agreed to forbear from exercising their rights and remedies under the facility in connection with such non-compliance until February 15, 2002, at which time the facility was to mature. This amendment to the bank credit facility required reductions in the outstanding balance under the facility during calendar 2001 and modified the interest rates charged. The amendment required additional collateral, effectively all of the assets of the Company, and additional reporting requirements as well as the addition of a covenant requiring minimum operating profits. The amendment also required the suspension of principal and interest payments on subordinated debt, with an aggregate outstanding balance of $2.1 million as of October 28, 2001. Furthermore, the amendment to the facility prohibits the payment of preferred or common stock dividends and prohibits the Company from purchasing its stock. Beginning in August 2001, the Company was out of compliance with its minimum operating profit covenant. In February 2002, the Company entered into 8 a further amendment to the facility, which extended the maturity date to December 31, 2002, required reductions in the outstanding balance under the facility, based on expected future asset sales, increased the interest rate charged and replaced the minimum operating profit covenant with a minimum EBITDA covenant. In December 2002, the Company entered into a further amendment to the facility, which extends the maturity date to December 31, 2003. This amendment requires further reductions in the outstanding balance under the facility, based on expected future asset sales and cash flow generated from operations, and extended and adjusted the minimum EBITDA covenant for 2003. At the beginning of the second quarter of 2003, management realized that the EBITDA covenant would be violated in the future and entered into negotiations with the Company's lenders to further modify the minimum EBITDA covenant. In April 2003, the Company entered into a further amendment to the facility, which adjusted the minimum EBITDA required under the covenant. Borrowings under the facility are charged interest at the Prime Rate plus 2.75% (6.75% at July 27, 2003). In anticipation of management's belief that the Company would be unable to remain in compliance with certain of its bank covenant requirements throughout fiscal 2003, management entered into and has successfully negotiated with the Company's lenders to a waiver of the minimum EBITDA covenant through the end of fiscal 2003. It is management's intent to refinance the Company's bank credit facility prior to its maturity in December 2003. There can be no assurance, however, that management's plans for refinancing will be successfully executed. At July 27, 2003, $4,450,000 was outstanding under the Company's bank credit facility and $601,000 was available for additional borrowing in addition to the $541,000 cash on hand. Derivative Interest Rate Contracts - The Company has an interest rate swap agreement with one of its banks with a notional amount of $4,550,000. The agreement requires the Company to make quarterly fixed payments on the notional amount at 4.22% through October 1, 2003 in exchange for receiving payments at the BMA Municipal Swap Index (.80% at July 27, 2003). The Company entered into the interest rate swap agreement to change the fixed/variable interest rate mix of its debt portfolio to reduce the Company's aggregate risk to movements in interest rates. Such swap agreements do not meet the stringent requirements for hedge accounting under SFAS No. 133. Accordingly, changes in the fair value of such agreements are recorded in the condensed consolidated statements of operations as a component of interest expense. The fair market value of the swap agreement liability decreased to $25,000 at July 27, 2003, resulting in a credit to interest income of $85,000 for the nine months ended July 27, 2003. The fair market value of the swap agreement was $143,000 at July 28, 2002, resulting in a credit to interest income of $556,000 for the nine months ended July 28, 2002. 7. COMMITMENTS AND CONTINGENCIES The Company is subject to federal, state and local environmental regulations with respect to its operations. The Company believes that it is operating in substantial compliance with applicable environmental regulations. Manufacturing and other operations at the Company's facilities may result, and may have resulted, in the discharge and release of hazardous substances and waste from time to time. The Company routinely responds to such incidents as deemed appropriate pursuant to applicable federal, state and local environmental regulations. 9 In connection with the Company's divestitures of its operating businesses over the past four years, it has agreed to indemnify buyers from and against certain known and unknown environmental liabilities. In addition, the Company may be liable for the costs of removal or remediation of hazardous or toxic substances on, in, under or discharged from its current or previously owned real property under applicable federal, state and local environmental laws, ordinances and regulations. A subsidiary of the Company is a party to a consent decree with the State of Connecticut pursuant to which it has agreed to complete its environmental investigation of the site and conduct any remedial measures which may be required. Based upon the amounts recorded as liabilities, the Company believes that the ultimate resolution of this matter will not have a material adverse effect on the consolidated financial results of the Company. In addition to the matters reported herein, the Company is involved in litigation dealing with certain aspects of its business operations. The Company believes that settlement of such litigation will not have a material adverse effect on its consolidated financial position or results of operations. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion addresses the financial condition of the Company as of July 27, 2003 and the results of operations for the three and nine months ended July 27, 2003 and July 28, 2002. This discussion should be read in conjunction with the financial statements included elsewhere herein and the Management's Discussion and Analysis and Financial Statement sections of the Company's Annual Report on Form 10-K to which the reader is directed for additional information. General As of July 30, 2002, Owosso Corporation (the "Company") has one operating subsidiary, Stature Electric, Inc. ("Stature"), representing the Company's historical Motors segment. Stature is a custom designer and manufacturer of motors and gear motors, including AC, DC and Universal. Established in 1974 in Watertown, New York, Stature is a progressive company, which emphasizes a partnership approach in all aspects of its business. Significant markets for Stature include commercial products and equipment, healthcare, recreation and non-automotive transportation. Stature's component products are sold throughout North America and in Europe, primarily to original equipment manufacturers who use them in their end products. In 1998, the Company formulated a long-term plan to concentrate on value-added components for industry. In connection with its implementation of that plan, the Company began a series of divestitures beginning with the sale of the four businesses comprising its former Agricultural Equipment segment. The sale of the last of those businesses was completed in January 2001 with the divestiture of Sooner Trailer Manufacturing Company ("Sooner Trailer"). During that time, however, the Company experienced a significant downturn in its operating results and at the end of fiscal 2000 was out of compliance with covenants under its bank credit facility. Three months ended July 27, 2003 compared to three months ended July 28, 2002 Net sales. Net sales for the third quarter of 2003 decreased 61.4%, or $7.0 million, to $4.4 million, as compared to net sales of $11.4 million in the prior year quarter, primarily as a result of the sale of Motor Products. In addition, Pacific Rim competition has also continued to affect the Company's sales along with the reduction of business from the Company's major customers for the quarter. Sales for the prior year quarter excluding Motor Products were $5.5 million. Income from operations. For the third quarter of 2003, the Company reported income from operations of $35,000 as compared to a loss from operations of $1,154,000 in the prior year quarter. Loss from operations for the prior year quarter excluding Motor Products was $1,198,000. These results reflect a lower gross profit due to the decrease in sales, the sale of Motor Products, offset by a reduction in depreciation expense. This was offset by reduced selling general and administrative costs mainly due to decreased corporate expenses and discontinued amortization of goodwill. Corporate expenses included in selling, general and administrative costs were $329,000 in the third quarter of 2003, as compared to $1,540,000 in the prior year quarter. This decrease reflects no change in the expense estimate of outstanding workman's compensation claims in the third quarter of 2003 compared to an increase in the expense estimate in the prior year quarter. Also, professional fees and other miscellaneous expenses have decreased from the prior year quarter. 11 Interest expense. Interest expense was $163,000 for the third quarter of fiscal 2003, as compared to $389,000 in the prior year quarter. The current year quarter includes interest income of $34,000 resulting from a decrease in the fair market value of the Company's interest rate swap liability. The prior year quarter includes interest income of $151,000, resulting from a decrease in the fair market value of the Company's interest rate swap liability. These amounts were recorded in accordance with SFAS 133. Exclusive of the effects of interest rate swap agreements, interest expense would have been $197,000 for the third quarter of 2003, as compared to $540,000 in the prior year quarter. Interest expense decreased primarily as a result of lower interest rates and debt levels. Income tax expense (benefit). The Company recorded an income tax benefit of $13,000 in the third quarter of 2003 as compared to a $424,000 benefit in the prior year quarter. The prior year quarter's benefit was as a result of changes in Federal tax laws, which allow the carryback of net operating losses for five years. Net loss available for common shareholders. Net loss available for common shareholders was $458,000, or $.08 per share, in the third quarter of 2003, as compared to net loss of $1.5 million, or $.25 per share, in the prior year quarter. Net loss available for common shareholders is calculated by subtracting dividends on preferred stock of $343,000 and $338,000 for 2003 and 2002, respectively. Net loss available for common shareholder excluding Motor Products for the prior year quarter was $1.3 million or $.22 per share. Nine months ended July 27, 2003 compared to Nine months ended July 28, 2002 Net sales. Net sales for first nine months of 2003 decreased 57.5%, or $18.1 million, to $13.4 million, as compared to net sales of $31.5 million in the prior year, primarily as a result of the sale of Motor Products. In addition, Pacific Rim competition has continued to affect the Company's sales along with the reduction of business from the Company's major customers for the year. Sales for the prior year excluding Motor Products were $15.6 million. Loss from operations. For the first nine months of 2003, the Company reported a loss from operations of $120,000 as compared to a loss from operations of $2,031,000 in the prior year. Loss from operations for the prior year excluding Motor Products was $2,053,000. These results reflect a lower gross profit due to the decrease in sales, the sale of Motor Products, offset by a reduction in depreciation expense. This was offset by reduced selling general and administrative costs mainly due to decreased corporate expenses and discontinued amortization of goodwill. Corporate expenses included in selling, general and administrative costs were $1.1 million in the first nine months of 2003, as compared to $2.7 million in the prior year period. This decrease primarily reflects the closing of the corporate office. This decrease also reflects a reduced change in the expense estimate of outstanding workman's compensation claims in the first nine months of 2003 compared to an increase in the expense estimate in the prior year. Also, professional fees and other miscellaneous expenses have decreased from the prior year quarter. During the second quarter of 2003, the Company negotiated a settlement with all the Cramer retirees covered by a post retirement benefit. As a result of the settlement, Owosso paid out $76,000 and recognized a gain of $153,000. Interest expense. Interest expense was $553,000 for the first nine months of fiscal 2003, as compared to $1,374,000 in the prior year. The current year includes interest income of $85,000 resulting from a decrease in the fair market value of the Company's interest rate swap liability. The prior year includes interest income of $556,000, resulting from a decrease in the fair market value of the Company's interest rate swap liability. These amounts were recorded in accordance with SFAS 133. Exclusive of the effects of interest rate swap agreements, interest expense would have been $638,000 for the first nine months of 2003, as compared to $1,930,000 in the prior year. Interest expense decreased primarily as a result of lower interest rates and debt levels. 12 Income tax expense (benefit). The Company recorded an income tax benefit of $159,000 in the first nine months of 2003 as compared to a $5.2 million benefit in the prior year. The prior year's benefit was as a result of changes in Federal tax laws, which allow the carryback of net operating losses for five years. Net income (loss) available for common shareholders. Net loss available for common shareholders was $1.5 million, or $.26 per share, in the first nine months of 2003, as compared to net income of $768,000, or $.13 per share, in the prior year. Net income (loss) available for common shareholders is calculated by subtracting dividends on preferred stock of $1026,000 and $1009,000 for 2003 and 2002, respectively. Net income available for common shareholder excluding Motor Products for the prior year was $514,000 or $.09 per share. Liquidity and Capital Resources Cash and cash equivalents were $541,000 at July 27, 2003. The Company had negative working capital of $5.4 million at July 27, 2003, as compared to negative working capital of $5.4 million at October 27, 2002. Net cash provided by operating activities of continuing operations was $1.9 million for the nine months ended July 27, 2003, as compared to net cash provided by operating activities from continuing operations of $5.0 million in the comparable period. Cash flows provided by investing activities from continuing operations included $134,000 for capital expenditures for equipment. The Company currently plans to invest approximately $40,000 during the remainder of fiscal 2003. Management anticipates funding capital expenditures with cash from operations and borrowings under the Company's revolving credit facility. Net cash used in financing activities from continuing operations included net repayments of $2,450,000 under the Company's revolving credit agreement, and debt repayments of $190,000. At July 27, 2003, $4.5 million was outstanding under the Company's revolving credit facility. The Company has experienced a significant downturn in its operating results over the past four years and starting at the end of fiscal 2000, was out of compliance with covenants under its bank credit facility. In February 2001, the Company entered into an amendment to its bank credit facility agreement, wherein the lenders agreed to forbear from exercising their rights and remedies under the facility in connection with such non-compliance until February 15, 2002, at which time the facility was to mature. This amendment to the bank credit facility required reductions in the outstanding balance under the facility during calendar 2001 and modified the interest rates charged. The amendment required additional collateral, effectively all of the assets of the Company, and additional reporting requirements, as well as the addition of a covenant requiring minimum operating profits. The amendment also required the suspension of principal and interest payments on subordinated debt, with an aggregate outstanding balance of $2.1 million as of October 28, 2001. Furthermore, the amendment to the facility prohibits the payment of preferred or common stock dividends and prohibits the Company from purchasing its stock. Beginning in August 2001, the Company was out of compliance with its minimum operating profit covenant. In February 2002, the Company entered into a further amendment to the facility, which extended the maturity date to December 31, 2002, required further reductions in the outstanding balance under the facility, based on expected future asset sales, increased the interest rate charged and replaced the minimum operating profit covenant with a minimum EBITDA covenant. In December 2002, the Company entered into a further amendment to the facility, which extends the maturity date to December 31, 2003. This amendment requires 13 further reductions in the outstanding balance under the facility, based on expected future asset sales and cash flow generated from operations, and extended and adjusted the minimum EBITDA covenant for 2003. At the beginning of the second quarter of 2003, management realized that the EBITDA covenant would be violated in the future and entered into negotiations with the Company's lenders to further modify the minimum EBITDA covenant. In April 2003, the Company entered into a further amendment to the facility, which adjusted the minimum EBITDA required under the covenant. Borrowings under the facility are charged interest at the Prime Rate plus 2.75% (6.75% at July 27, 2003). Management intends to dispose of or liquidate its remaining non-operating asset, the real estate at the Company's former Snowmax subsidiary. Management believes that available cash and cash equivalents, cash flows from operations and available borrowings under the Company's bank credit facility will be sufficient to fund the Company's operating activities, investing activities and debt maturates for fiscal 2003. In anticipation of management's belief that the Company would be unable to remain in compliance with certain of its bank covenant requirements throughout fiscal 2003, management entered into and has successfully negotiated with the Company's lenders a waiver of the minimum EBITDA covenant through the end of fiscal 2003. It is management's intent to refinance the Company's bank credit facility prior to its maturity in December 2003. There can be no assurance, however, that management's plans for refinancing will be successfully executed. The Company has an interest rate swap agreement with one of its banks with a notional amount of $4,550,000. The Company entered into the interest rate swap agreement to change the fixed/variable interest rate mix of its debt portfolio to reduce the Company's aggregate risk to movements in interest rates. Such swap agreements do not meet the stringent requirements for hedge accounting under SFAS No. 133. Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 The following information is provided pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Certain statements in Management's Discussion and Analysis of this Form 10-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 the "Safe Harbor" provisions. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to republish revised forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The Company cautions readers that the following important factors, among others, have in the past affected and could in the future affect the Company's actual results of operations and cause the Company's actual results to differ materially from the results expressed in any forward-looking statements made by or on behalf of the Company: o The Company's continued liquidity is dependent upon its ability to achieve levels of revenue necessary to support the Company's cost structure, its ability to maintain adequate financing, its ability to maintain compliance with debt covenants, and its ability to generate sufficient cash flows to meets its obligations on a timely basis. 14 o The Company's common stock was delisted from the Nasdaq SmallCap Market effective with the close of business July 8, 2003 as a result of the market value of the Company's publicly held shares falling below $1,000,000. The Company's common stock is currently trading on the OTC Bulletin Board ("OTCBB"). Among other consequences, the delisting from the Nasdaq SmallCap Market, and trading on the OTCBB, may cause a decline in the stock price, reduced liquidity in the trading market for the common stock and difficulty in obtaining future financing. o The Company's results have been and can be expected to continue to be affected by the general economic conditions in the United States and specific economic factors influencing the manufacturing sector of the economy as well as the influence of terrorism, war and political unrest on these conditions. Lower demand for the Company's products can lower revenues as well as cause underutilization of the Company's plant, leading to reduced gross margins. o Metal prices, particularly of copper and steel, can affect the Company's costs as well as demand for the Company's products and the value of inventory held at the end of a reporting period. Lack of availability of certain commodities could also disrupt the Company's production. o Changes in demand that change product mix may reduce operating margins by shifting demand toward less profitable products. o Loss of a substantial customer or customers may affect results of operations. o The influence of foreign competition from low-cost areas of the world may affect results of operations. o The Company's results have been and can be affected by engineering difficulties in designing new products or applications for existing products to meet the requirements of its customers. o The Company's results can be affected by changes in manufacturing processes and techniques. o Obsolescence or quality problems leading to returned goods in need of repair can affect the value of the Company's inventories and its profitability. o The Company has a substantial amount of floating rate debt. Increases in short-term interest rates could be expected to increase the Company's interest expense. o In that the Company's outstanding derivative instruments do not meet the stringent requirements for hedge accounting under SFAS 133, future earnings could reflect greater volatility. 15 o The Company has divested all but one of its operating businesses over the past four years. The Company remains responsible for certain third party liabilities in connection with these transactions, including product liabilities, environmental liabilities and taxes, and has obligations to indemnify the buyers against certain matters arising out of the transactions. Although the Company maintains general liability insurance coverage, including coverage for errors and omissions, there can be no assurance that such coverage will continue to be available on reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer(s) will not disclaim coverage as to any future claim. The successful assertion of one or more large claims against the Company that are uninsured, exceed available insurance coverage or result in changes to the Company's insurance policies, including premium increases or the imposition of a large deductible or co-insurance requirements, could adversely affect the Company's business, results of operations and financial condition. 16 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company uses a bank credit facility, industrial revenue bonds and term loans to finance a significant portion of its operations. These on-balance sheet financial instruments, to the extent they provide for variable rates of interest, expose the Company to interest rate risk resulting from changes in the prime rate. The Company uses interest rate swap agreements to partially change interest rate exposure associated with the Company's variable rate debt. All of the Company's derivative financial instrument transactions are entered into for non-trading purposes. To the extent that the Company's financial instruments expose the Company to interest rate risk and market risk, they are presented in the table below. The table presents principal cash flows and related interest rates by year of maturity for the Company's bank credit facility, industrial revenue bonds and term loans in effect at July 27, 2003. For interest rate swaps, the table presents notional amounts and the related reference interest rates by year of maturity. Fair values included herein have been determined based upon (1) rates currently available to the Company for debt with similar terms and remaining maturaties, and (2) estimates obtained from dealers to settle interest rate swap agreements. Note 6 to the condensed consolidated financial statements should be read in conjunction with the table below (dollar amounts in thousands).

~~Three-Months~~Year ~~Ended~~of ~~Six-Months~~Maturity ~~Ended~~Fair Value ---------------------------------- ------------------------~~-------------~~ ~~April~~Total ~~27,~~Due ~~April~~at ~~28, April 27, April 28,~~ 2003 ~~2002~~2004 ~~2003~~2005 ~~2002~~2006 ~~Reported~~2007 ~~Net~~Thereafter ~~(loss)~~at ~~income~~Maturity ~~available~~7/27/2003 ~~for common shareholders $ (507,000) $ 4,115,000 $ (1,082,000) $ 2,225,000 Add back: Goodwill amortization~~ - ~~162,000~~ - ~~324,000~~ ---- ----- ---- ---- ---- ---------- -----------~~----~~ ----------~~--------~~ ~~Adjusted~~Debt: ~~Net~~Fixed ~~(loss)~~rate ~~income~~$1,592 $ ~~(507,000)~~258 $ ~~4,277,000~~92 $ ~~(1,082,000)~~96 $ 8 $ - $2,~~549~~046 $2,~~000~~046 ~~================~~Average ~~==============~~interest ~~===============~~rate ~~==================~~8.9% ~~Basic~~6.6% ~~(Loss)~~5.0% ~~income~~5.0% ~~per~~5.0% ~~share:~~Variable ~~Reported~~rate ~~Net~~$5,050 ~~(loss)~~$ ~~income~~600 ~~available~~$600 ~~for~~$900 ~~common~~$900 ~~shareholders~~$950 $9,000 ~~(0.09)~~ $9,000 0Average interest rate 6.709% $2.8% (02.~~18)~~8% $2.8% 02.388% ~~Add~~2.8% ~~back:~~Interest ~~Goodwill~~rate ~~amortization~~swap -agreements: ~~0.03~~Variable -to ~~0.06~~fixed ~~----------------~~swaps ~~--------------~~$4,550 ~~---------------~~$ -~~-----------------~~ ~~Adjusted~~$ ~~Net~~- ~~(loss)~~$ ~~income~~- $ ~~(0.09)~~- $ ~~0.73~~- $4,550 $ (~~0.18~~25) $Average 0pay rate 4.432 ~~================~~Average ~~==============~~receive ~~===============~~rate ~~==================~~0.8

ITEM 4. CONTROLS AND PROCEDURES The Company's Chief Executive Officer (the principal executive officer, principal financial officer and principal accounting officer), after evaluating the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report, has concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in rules and forms of the Securities and Exchange Commission. 17 Part II. OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds Effective for the second quarter of 2000, the Company modified certain covenants included in its revolving credit facility. In accordance with such modifications, the Company was, and continues to be, prohibited from making common stock dividend payments. Further modifications to the Company's revolving credit facility in February 2001 resulted in the Company also being prohibited from making future preferred stock dividend payments. Item 3. Defaults Upon Senior Securities (b) Since February 2001, the Company has been prohibited from making dividend payments on its Class A Convertible Preferred Stock in connection with modifications to its revolving credit facility. As of the date of the filing of this report, accrued dividends on the Class A Convertible Preferred Stock total $3,691,000. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. Description 10.32 Eighteenth Amendment to the Amended and Restated Credit Agreement by and among Owosso Corporation, its subsidiaries, Bank One and PNC Bank, N.A., effective September 10, 2003. 11 Computation of Per Share Earnings 31.1 Certification of Chief Executive Officer (the principal executive officer, principal financial officer and principal accounting officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002. 32.1 Certification of Chief Executive Officer (the principal executive officer, principal financial officer and principal accounting officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002. (b) Form 8-K The Company filed a report on 8-K dated July 8, 2003, disclosing that The Nasdaq Stock Market, Inc. had informed Owosso Corporation that its common stock would be delisted from the Nasdaq SmallCap Market effective with the close of business on Tuesday, July 8, 2003. The delisting was a result of the market value of Owosso's publicly held shares falling below $1,000,000. 18 SIGNATURES ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. OWOSSO CORPORATION Date: September 9, 2003 By: /s/ George B. Lemmon, Jr. ------------------------- George B. Lemmon, Jr. President, Chief Executive Officer, and chairman

Year of Maturity Fair Value --------------------------------------------------------- Total Due at 2003 2004 2005 2006 2007 Thereafter at Maturity 4/27/2003 ---- ---- ---- ---- ---- ---------- ----------- --------- Debt: Fixed rate $1,544 $ 256 $ 133 $ 95 $ 33 $ - $ 2,061 $ 2,061 Average interest rate 8.9% 7.3% 6.1% 5.0% 5.0% Variable rate $6,050 $ 600 $ 600 $ 900 $ 900 $ 950 $ 10,000 $ 10,000 Average interest rate 7.1% 2.8% 2.8% 2.8% 2.8% 2.8% Interest rate swap agreements: Variable to fixed swaps $4,550 $ - $ - $ - $ - $ - $ 4,550 $ (93) Average pay rate 4.2 Average receive rate 1.2

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