Owosso Corporation Announces Amendment to Credit Agreement and Notice From Nasdaq Regarding Continued Listing

WATERTOWN, N.Y., May 12, 2003 -- Owosso Corporation today announced today that it reached an agreement in April with its bank group to modify certain financial covenants, under which the company had previously been in technical default, and to forbear from exercising their rights under the company's credit facility. George B. Lemmon Jr., President and Chief Executive Officer of the company, remarked, "As noted in our first quarter report, we began pre-emptive negotiations with our bank group and are happy to have successfully concluded these negotiations." In addition, the company announced it successfully completed the sale of a facility utilized by a former operation of the company in Avon, CT. Mr. Lemmon went on to say, "We are now turning our full attention to securing a long-term credit facility for the company prior to December 2003, at which time the present facility is set to mature. Based on the company's reduced debt levels and our singular focus on AC, DC and Universal electric geared motors and motor parts sets at Stature Electric, Inc., we believe we are well positioned to obtain the needed financing. Of course, we cannot precisely predict the outcome of our financing efforts."

The company announced that in connection with its Annual Meeting of Shareholders on April 3, 2003, it had reduced the size of its board from seven to five directors in recognition of the reduced size and scope of company's operations. Mr. Lemmon remarked, "I am pleased that our shareholders have re- elected Harry E. Hill, Lowell P. Huntsinger and Eugene P. Lynch to the Board of Directors. I also wish to welcome Mr. Holiday, our former Chief Operating Officer, as the newest member of the Board. I believe Mr. Holiday's knowledge of the business and our operations puts him a position to make immediate contributions as a director." The company also announced that Mr. Lemmon had been named Chairman of the Board of Directors, succeeding John R. Reese, who had chaired the Board since 1997. Mr. Lemmon stated that, "John Reese, as well as former directors Ellen Harvey and James Ounsworth, will be missed. Each has decided to pursue other interests, and the company thanks them for their years of service on the Board."

The company also disclosed that it had received a letter from the Nasdaq Stock Market, Inc. in which the company was notified that it was no longer in compliance with Marketplace Rule 4310(c)(7) regarding the market value of publicly held shares. The company has until June 19, 2003, to regain compliance with the rule. If the company is unable to regain compliance, and is subsequently delisted from the Nasdaq SmallCap Market, the company's common stock may be eligible for trading on the OTC Bulletin Board or on other over- the-counter markets, although there can be no assurance that the company's common stock will be eligible for trading on any alternative exchanges or markets. Among other consequences, delisting from the Nasdaq SmallCap Market may cause a decline in the stock price, reduced liquidity in the trading market for the stock, and difficulty in obtaining future financing.

This press release contains forward-looking statements, including an expectation as to the company's ability to refinance its credit facility that involve a number of risks and uncertainties. The company cannot assure you that it will be successful in securing a new credit facility, or that, if its securities are delisted from the Nasdaq SmallCap Market, its stock price will not decline or that such delisting will not jeopardize its financing efforts. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, adverse developments in economic factors influencing the real estate market, manufacturing sector of the economy or the additional factors discussed in the Company's Annual Report on Form 10-K for the year ended October 27, 2002 and Quarterly Report on Form 10-Q for the quarter January 26, 2003, in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations."