content: SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON D.C. 20549
  
                                      FORM 10-Q
  
  (Mark One)
  
  (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934
  
       For the thirteen weeks ended March 28, 1998
  
  ( )  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
       EXCHANGE ACT OF 1934
  
       For the transition period from __________ to __________
  
                            Commission File Number 1-5084
  
                                TASTY BAKING COMPANY
  
               (Exact name of registrant as specified in its charter)
  
         Pennsylvania                                       23-1145880
   (State of Incorporation)                  (IRS Employer Identification Number)
  
             2801 Hunting Park Avenue, Philadelphia, Pennsylvania 19129
                 (Address of Principal Executive Offices) (Zip Code)
  
  
                                   (215) 221-8500
                (Registrant's Telephone Number, including area code)
  
  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
  
                        APPLICABLE ONLY TO CORPORATE ISSUERS:
  
  Indicate the number of shares  outstanding  of each of the  issuer's  classes of
  common stock, as of the latest practicable date.
  
      Common Stock, par value $.50                             7,793,235
            (Title of Class)                          (No. of Shares Outstanding
                                                          at April 23, 1998)
  
                    INDEX OF EXHIBITS IS LOCATED ON PAGE 9 OF 10.
  
                                      1 of 10
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                        INDEX
  
  
                                                                              Page
  
  
  PART I.       FINANCIAL INFORMATION
  
  Item 1.       Financial Statements
  
                Consolidated Condensed Balance Sheets
                March 28, 1998 and December 27, 1997............................3
  
                Consolidated Statements of Operations
                Thirteen weeks ended March 28, 1998 and March 29, 1997..........4
  
                Consolidated Condensed Statements of Cash Flows
                Thirteen weeks ended March 28, 1998 and March 29, 1997..........5
  
                Notes to Consolidated Condensed Financial Statements............6
  
  Item 2.       Management's Discussion and Analysis of Financial
                Condition and Results of Operations...........................7-8
  
  
  PART II.      OTHER INFORMATION
  
  Item 4.       Submission of Matters to a Vote of Security Holders ............9
  
  Item 6.       Exhibits and Reports on Form 8-K................................9
  
  Signature....................................................................10
  
                                      2 OF 10
  <PAGE>
  PART I.       FINANCIAL INFORMATION
  Item 1.       Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                     (unaudited)
  <TABLE>
  <CAPTION>
  <S>                                                                        <C>                          <C>              
                                                                                March 28, 1998             December 27, 1997
  -------------------------------------------------------------------------------------------------------------------------
  Current assets:
       Cash                                                                  $          145,752           $         748,117
       Accounts and notes receivable, net of
         allowance for doubtful accounts                                             21,381,375                  18,661,411
       Inventories:
         Raw materials                                                                1,874,297                   1,940,423
         Work in progress                                                               592,098                     580,362
         Finished goods                                                                 890,049                     775,417
                                                                         --------------------------------------------------
                                                                                      3,356,444                   3,296,202
       Deferred income taxes, prepayments and other                                   3,309,938                   2,241,587
                                                                         --------------------------------------------------
         Total current assets                                                        28,193,509                  24,947,317
                                                                         --------------------------------------------------
  Property, plant and equipment:                                                    150,669,238                 149,709,346
       Less accumulated depreciation                                                106,313,890                 105,501,230
                                                                         --------------------------------------------------
                                                                                     44,355,348                  44,208,116
                                                                         --------------------------------------------------
  Long-term receivables                                                              11,328,694                  11,233,128
                                                                         --------------------------------------------------
  Deferred income taxes                                                              11,059,696                  11,059,696
                                                                         --------------------------------------------------
  Spare parts inventory and miscellaneous assets                                      3,230,289                   2,871,121
                                                                         --------------------------------------------------
  Total assets                                                               $       98,167,536           $      94,319,378
                                                                         ==================================================
  
  Current liabilities:
       Current portion of long-term debt                                     $           29,354           $          29,354
       Current obligations under capital leases                                         489,440                     543,962
       Notes payable, banks                                                             950,000                     900,000
       Accounts payable                                                               6,099,529                   4,345,944
       Accrued liabilities                                                            7,077,316                   6,817,319
       Accrued income taxes                                                             180,146                   1,826,981
                                                                         --------------------------------------------------
          Total current liabilities                                                  14,825,785                  14,463,560
                                                                         --------------------------------------------------
  Long-term debt, less current portion                                                9,765,933                   7,773,053
                                                                         --------------------------------------------------
  Long-term obligations under capital leases,
       less current portion                                                             499,534                     587,156
                                                                         --------------------------------------------------
  Accrued pensions and other liabilities                                             12,258,405                  11,771,540
                                                                         --------------------------------------------------
  Postretirement benefits other than pensions                                        18,465,607                  18,129,226
                                                                         --------------------------------------------------
  Shareholders' equity:
       Common stock                                                                   4,558,243                   4,558,243
       Capital in excess of par value of stock                                       29,340,203                  29,337,938
       Retained earnings                                                             25,494,487                  24,788,276
                                                                         --------------------------------------------------
                                                                                     59,392,933                  58,684,457
       Less:
       Treasury stock, at cost                                                       16,707,854                  16,738,364
       Management Stock Purchase Plan
         receivables and deferrals                                                      332,807                     351,250
                                                                         --------------------------------------------------
                                                                                     42,352,272                  41,594,843
                                                                         --------------------------------------------------
  
  Total liabilities and shareholders' equity                                 $       98,167,536           $      94,319,378
                                                                         ==================================================
  </TABLE>
       See accompanying notes to consolidated condensed financial statements.
  
                                      3 OF 10
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                     (unaudited)
  <TABLE>
  <CAPTION>
  <S>                                                                        <C>                          <C>              
                                                                                         For the Thirteen Weeks Ended
                                                                                  March 28, 1998              March 29, 1997
  --------------------------------------------------------------------------------------------------------------------------
       Gross Sales                                                           $       57,160,752           $      55,633,240
  
       Less discounts and allowances                                                (18,840,284)                (18,178,494)
                                                                             -----------------------------------------------
  
       Net Sales                                                                     38,320,468                  37,454,746
                                                                             ----------------------------------------------
  
       Costs and expenses:
           Cost of sales                                                             23,824,979                  23,172,108
  
           Depreciation                                                               1,751,378                   1,695,427
  
           Selling, general and administrative                                       10,471,017                  10,231,580
  
           Interest expense                                                             141,243                     127,590
           Other income, net                                                           (351,364)                   (396,427)
                                                                             -----------------------------------------------
  
                                                                                     35,837,253                  34,830,278
                                                                             ----------------------------------------------
  
       Income before provision for income taxes                                       2,483,215                   2,624,468
  
       Provision for income taxes                                                       842,113                   1,010,675
                                                                             ----------------------------------------------
  
       Net income                                                            $        1,641,102           $       1,613,793
                                                                             ==============================================
  
       Average common shares outstanding:              Basic                          7,791,652                   7,743,369
                                                       Diluted                        7,965,199                   7,796,711
  
       Per share of common stock:
  
       Net income - Basic and Diluted                                                      $.21                        $.21
                                                                             ==============================================
       Cash dividend                                                                       $.12                       $.112
                                                                             ==============================================
  </TABLE>
  
       See accompanying notes to consolidated condensed financial statements.
  
                                      4 of 10
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  <TABLE>
  <CAPTION>
  <S>                                                                        <C>                          <C>              
                                                                                     For the Thirteen Weeks Ended
                                                                                 March 28, 1998              March 29, 1997
  -------------------------------------------------------------------------------------------------------------------------
  
  Cash flows from (used for) operating activities
       Net income                                                            $        1,641,102           $       1,613,793
       Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                                               1,751,378                   1,695,427
           Amortization                                                                  43,651                      17,680
           Other                                                                        883,774                     833,997
       Changes in assets and liabilities
        affecting operations                                                         (3,481,810)                 (2,488,534)
                                                                         ---------------------------------------------------
  
       Net cash from operating activities                                               838,095                   1,672,363
                                                                         --------------------------------------------------
  
  Cash flows from (used for) investing activities
       Proceeds from owner/operators' loan repayments                                   875,832                   1,082,652
       Purchase of property, plant and equipment                                     (2,344,325)                 (3,003,813)
       Loans to owner/operators                                                        (970,408)                 (1,686,258)
       Other                                                                               (179)                     17,923
  
       Net cash used for investing activities                                        (2,439,080)                 (3,589,496)
                                                                         ---------------------------------------------------
  
  Cash flows from (used for) financing activities
       Additional long-term debt                                                      3,000,000                   2,000,000
       Proceeds from sale of common stock                                                32,775                     181,181
       Dividends paid                                                                  (934,891)                   (867,109)
       Payment of long-term debt                                                     (1,149,264)                 (1,183,776)
       Net increase in short-term debt                                                   50,000                   2,000,000
                                                                         --------------------------------------------------
  
       Net cash from financing activities                                               998,620                   2,130,296
                                                                         --------------------------------------------------
  
       Net increase (decrease) in cash                                                 (602,365)                    213,163
  
       Cash, beginning of year                                                          748,117                     233,366
                                                                         --------------------------------------------------
  
       Cash, end of period                                                   $          145,752           $         446,529
                                                                         ==================================================
  
       Supplemental Cash Flow Information:
       Cash paid during the period for:
           Interest                                                          $          152,893           $          88,816
                                                                         ==================================================
           Income taxes                                                      $          235,648           $       1,106,307
                                                                         ==================================================
  </TABLE>
  
       See accompanying notes to consolidated condensed financial statements.
  
                                      5 of 10
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
  
  1.     Interim Financial Information
         In the opinion of management,  the  accompanying  unaudited  consolidated
         condensed  financial  statements  contain all adjustments  (consisting of
         only normal recurring accruals) necessary to present fairly the financial
         position of the company as of March 28,  1998 and  December  27, 1997 and
         the results of its operations for the thirteen weeks ended March 28, 1998
         and March 29, 1997 and cash flows for the thirteen  weeks ended March 28,
         1998 and March 29, 1997. These unaudited consolidated condensed financial
         statements should be read in conjunction with the consolidated  financial
         statements  and footnotes  thereto in the company's 1997 Annual Report to
         Shareholders.  In addition,  the results of  operations  for the thirteen
         weeks ended March 28, 1998 are not necessarily  indicative of the results
         to be expected for the full year.
  
         Certain  expense items are charged to  operations  in the year  incurred.
         However,  for interim  reporting  purposes  the  expenses  are charged to
         operations on a pro-rata basis over the company's accounting periods. For
         the  thirteen  weeks  ended  March  28,  1998 and  March  29,  1997,  the
         difference  between the actual expenses incurred and the expenses charged
         to operations was not material.
  
  2.     Net Income Per Common Share
         Net income per common share is calculated  according to the  requirements
         of Statement of Financial  Accounting  Standards  No. 128 - "Earnings Per
         Share" which requires companies to present basic and diluted earnings per
         share. Net income per common share Basic is based on the weighted average
         number of common  shares  outstanding  during  the year.  Net  income per
         common share - Diluted is based on the weighted  average number of common
         shares and dilutive  potential common shares outstanding during the year.
         The company's  dilutive  potential common shares  outstanding  during the
         year result entirely from dilutive stock options.
  
                                      6 of 10
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
  Item 2.       Management's Discussion and Analysis of Financial Condition
                and Results of Operations
  
  Results of Operations
  
  For the first quarter of 1998, the company  realized net income of $1,641,102 or
  $.21 per share  versus  $1,613,793  or $.21 per share for the first  quarter  of
  1997.
  
  For the first quarter,  gross sales increased 2.7% to  $57,160,752,  compared to
  $55,633,240 last year. Gross sales,  less discounts and allowances,  resulted in
  net  sales  of  $38,320,468,   compared  to  $37,454,746   reported  last  year,
  representing  an increase of 2.3% which was related to a sales  volume  increase
  from promotional efforts at the Tastykake division  (Tastykake) and the addition
  of Dutch Mill donuts to Tastykake owner/operator routes.
  
  Cost of sales, as a percentage of gross sales, was 41.7% and 41.7% for the first
  quarters of 1998 and 1997, respectively. Product development costs at the Oxford
  facility  were  offset  by  improved  manufacturing   efficiencies  and  reduced
  ingredient costs.
  
  Selling,  general  and  administrative  expenses  for the first  quarter of 1998
  increased by $239,437 or 2.3% over the  comparable  period in 1997.  Most of the
  increase can be attributed to the additional  expenses from the Oxford facility,
  which was not in operation  during the first quarter of 1997. The balance of the
  increase  resulted  from an increase  in selling  expenses  associated  with the
  expansion into new geographic  regions and an increase in  administration  costs
  related to an upgrade of the computer system.
  
  Interest  expense  increased  for the first  quarter  of 1998  versus  the first
  quarter of 1997 as a result of increased average borrowing levels.  The decrease
  in other income,  net for the first quarter of 1998 was the result of a decrease
  in rental income.
  
  The  effective tax rate was 34.0% for the quarter ended March 28, 1998 and 38.5%
  for the quarter ended March 29, 1997 which compares to a federal  statutory rate
  of 34%.  There was no difference  between the  effective  rate and the statutory
  rate in the first  quarter of 1998  because the effect of state taxes was offset
  principally  due to tax  benefits  arising from passive  income.  The  principal
  reason for the  difference  between the effective rate and the statutory rate in
  the first quarter of 1997 was the effect of state income taxes.
  
                                      7 of 10
  <PAGE>
  Financial Condition
  
  The company has  consistently  demonstrated  the ability to generate  sufficient
  cash  flow from  operations.  Bank  borrowings,  under  various  lines of credit
  arrangements, are used to supplement cash flow from operations during periods of
  cyclical shortages.
  
  For the thirteen weeks ended March 28, 1998, net cash from operating  activities
  decreased by $834,268 to $838,095 from  $1,672,363  for the same period in 1997.
  The decrease in net cash from  operating  activities was  principally  due to an
  increase in prepaid expenses slightly offset by an increase in accrued expenses.
  
  Net cash used for investing  activities  for the thirteen  weeks ended March 28,
  1998 decreased by $1,150,416 relative to the same period in 1997 principally due
  to a decrease  in capital  requirements  at the  Oxford  facility,  as well as a
  decrease in the funds needed to finance the net owner/operator loan activity.
  
  Net cash from  financing  activities for the thirteen weeks ended March 28, 1998
  decreased  by  $1,131,676  relative  to the same  thirteen  weeks  in 1997.  The
  decrease  is  primarily  the  result of a net  decrease  in short and  long-term
  borrowing relative to the prior year.
  
  For  the  remainder  of  1998  the  company  anticipates  that  cash  flow  from
  operations,  along with the continued  availability of bank lines of credit, the
  revolving  credit  agreement  and  other  long-term   financing,   will  provide
  sufficient cash to meet operating and financing requirements.
  
                                      8 of 10
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
  PART II.      OTHER INFORMATION
  
  Item 4.       Submission of Matters to a Vote of Security Holders
  
                No matters were submitted to a vote of security holders during the
                first quarter of the fiscal year covered by this report.
  
  Item 6.       Exhibits and Reports on Form 8-K
  
       (a)      Exhibits:  Exhibit 27 - Financial Data Schedule
  
       (b)      Reports on Form 8-K
  
                The  registrant  did not file a  report  on Form  8-K  during  the
                     thirteen weeks ended March 28, 1998.
  
                                    Exhibit Index
  
                        Exhibit 27 - Financial Data Schedule
  
  
  
                                      9 of 10
  <PAGE>
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                      SIGNATURE
  
  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 thereunto duly authorized.
  
  
  
  
  
                                                 TASTY BAKING COMPANY
                                                     (Registrant)
  
  
  
  
       May 8, 1998                             /S/ John M. Pettine
         (Date)                                    JOHN M. PETTINE
                                                  VICE PRESIDENT AND
                                                CHIEF FINANCIAL OFFICER
                                      (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
  
  
                                      10 of 10
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 27447}]
metadata_filer: {"company-data": {"conformed-name": "TASTY BAKING CO", "cik": "0000096412", "assigned-sic": "2050", "irs-number": "231145880", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-05084", "film-number": "98613833"}, "business-address": {"street1": "2801 HUNTING PARK AVE", "city": "PHILADELPHIA", "state": "PA", "zip": "19129", "phone": "2152218500"}, "mail-address": {"street1": "3413 FOX ST", "city": "PHILADELPHIA", "state": "PA", "zip": "19129"}}
text: SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON D.C. 20549
  
                                      FORM 10-Q
  
  (Mark One)
  
  (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934
  
       For the thirteen weeks ended March 28, 1998
  
  ( )  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
       EXCHANGE ACT OF 1934
  
       For the transition period from __________ to __________
  
                            Commission File Number 1-5084
  
                                TASTY BAKING COMPANY
  
               (Exact name of registrant as specified in its charter)
  
         Pennsylvania                                       23-1145880
   (State of Incorporation)                  (IRS Employer Identification Number)
  
             2801 Hunting Park Avenue, Philadelphia, Pennsylvania 19129
                 (Address of Principal Executive Offices) (Zip Code)
  
                                   (215) 221-8500
                (Registrant's Telephone Number, including area code)
  
  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
  
                        APPLICABLE ONLY TO CORPORATE ISSUERS:
  
  Indicate the number of shares  outstanding  of each of the  issuer's  classes of
  common stock, as of the latest practicable date.
  
      Common Stock, par value $.50                             7,793,235
            (Title of Class)                          (No. of Shares Outstanding
                                                          at April 23, 1998)
  
                    INDEX OF EXHIBITS IS LOCATED ON PAGE 9 OF 10.
  
                                      1 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                        INDEX
  
                                                                              Page
  
  PART I.       FINANCIAL INFORMATION
  
  Item 1.       Financial Statements
  
                Consolidated Condensed Balance Sheets
                March 28, 1998 and December 27, 1997............................3
  
                Consolidated Statements of Operations
                Thirteen weeks ended March 28, 1998 and March 29, 1997..........4
  
                Consolidated Condensed Statements of Cash Flows
                Thirteen weeks ended March 28, 1998 and March 29, 1997..........5
  
                Notes to Consolidated Condensed Financial Statements............6
  
  Item 2.       Management's Discussion and Analysis of Financial
                Condition and Results of Operations...........................7-8
  
  PART II.      OTHER INFORMATION
  
  Item 4.       Submission of Matters to a Vote of Security Holders ............9
  
  Item 6.       Exhibits and Reports on Form 8-K................................9
  
  Signature....................................................................10
  
                                      2 OF 10
  PART I.       FINANCIAL INFORMATION
  Item 1.       Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                     (unaudited)
  March 28, 1998             December 27, 1997
  -------------------------------------------------------------------------------------------------------------------------
  Current assets:
       Cash                                                                  $          145,752           $         748,117
       Accounts and notes receivable, net of
         allowance for doubtful accounts                                             21,381,375                  18,661,411
       Inventories:
         Raw materials                                                                1,874,297                   1,940,423
         Work in progress                                                               592,098                     580,362
         Finished goods                                                                 890,049                     775,417
                                                                         --------------------------------------------------
                                                                                      3,356,444                   3,296,202
       Deferred income taxes, prepayments and other                                   3,309,938                   2,241,587
                                                                         --------------------------------------------------
         Total current assets                                                        28,193,509                  24,947,317
                                                                         --------------------------------------------------
  Property, plant and equipment:                                                    150,669,238                 149,709,346
       Less accumulated depreciation                                                106,313,890                 105,501,230
                                                                         --------------------------------------------------
                                                                                     44,355,348                  44,208,116
                                                                         --------------------------------------------------
  Long-term receivables                                                              11,328,694                  11,233,128
                                                                         --------------------------------------------------
  Deferred income taxes                                                              11,059,696                  11,059,696
                                                                         --------------------------------------------------
  Spare parts inventory and miscellaneous assets                                      3,230,289                   2,871,121
                                                                         --------------------------------------------------
  Total assets                                                               $       98,167,536           $      94,319,378
                                                                         ==================================================
  
  Current liabilities:
       Current portion of long-term debt                                     $           29,354           $          29,354
       Current obligations under capital leases                                         489,440                     543,962
       Notes payable, banks                                                             950,000                     900,000
       Accounts payable                                                               6,099,529                   4,345,944
       Accrued liabilities                                                            7,077,316                   6,817,319
       Accrued income taxes                                                             180,146                   1,826,981
                                                                         --------------------------------------------------
          Total current liabilities                                                  14,825,785                  14,463,560
                                                                         --------------------------------------------------
  Long-term debt, less current portion                                                9,765,933                   7,773,053
                                                                         --------------------------------------------------
  Long-term obligations under capital leases,
       less current portion                                                             499,534                     587,156
                                                                         --------------------------------------------------
  Accrued pensions and other liabilities                                             12,258,405                  11,771,540
                                                                         --------------------------------------------------
  Postretirement benefits other than pensions                                        18,465,607                  18,129,226
                                                                         --------------------------------------------------
  Shareholders' equity:
       Common stock                                                                   4,558,243                   4,558,243
       Capital in excess of par value of stock                                       29,340,203                  29,337,938
       Retained earnings                                                             25,494,487                  24,788,276
                                                                         --------------------------------------------------
                                                                                     59,392,933                  58,684,457
       Less:
       Treasury stock, at cost                                                       16,707,854                  16,738,364
       Management Stock Purchase Plan
         receivables and deferrals                                                      332,807                     351,250
                                                                         --------------------------------------------------
                                                                                     42,352,272                  41,594,843
                                                                         --------------------------------------------------
  
  Total liabilities and shareholders' equity                                 $       98,167,536           $      94,319,378
                                                                         ==================================================
  See accompanying notes to consolidated condensed financial statements.
  
                                      3 OF 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                     (unaudited)
  For the Thirteen Weeks Ended
                                                                                  March 28, 1998              March 29, 1997
  --------------------------------------------------------------------------------------------------------------------------
       Gross Sales                                                           $       57,160,752           $      55,633,240
  
       Less discounts and allowances                                                (18,840,284)                (18,178,494)
                                                                             -----------------------------------------------
  
       Net Sales                                                                     38,320,468                  37,454,746
                                                                             ----------------------------------------------
  
       Costs and expenses:
           Cost of sales                                                             23,824,979                  23,172,108
  
           Depreciation                                                               1,751,378                   1,695,427
  
           Selling, general and administrative                                       10,471,017                  10,231,580
  
           Interest expense                                                             141,243                     127,590
           Other income, net                                                           (351,364)                   (396,427)
                                                                             -----------------------------------------------
  
                                                                                     35,837,253                  34,830,278
                                                                             ----------------------------------------------
  
       Income before provision for income taxes                                       2,483,215                   2,624,468
  
       Provision for income taxes                                                       842,113                   1,010,675
                                                                             ----------------------------------------------
  
       Net income                                                            $        1,641,102           $       1,613,793
                                                                             ==============================================
  
       Average common shares outstanding:              Basic                          7,791,652                   7,743,369
                                                       Diluted                        7,965,199                   7,796,711
  
       Per share of common stock:
  
       Net income - Basic and Diluted                                                      $.21                        $.21
                                                                             ==============================================
       Cash dividend                                                                       $.12                       $.112
                                                                             ==============================================
  See accompanying notes to consolidated condensed financial statements.
  
                                      4 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  For the Thirteen Weeks Ended
                                                                                 March 28, 1998              March 29, 1997
  -------------------------------------------------------------------------------------------------------------------------
  
  Cash flows from (used for) operating activities
       Net income                                                            $        1,641,102           $       1,613,793
       Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                                               1,751,378                   1,695,427
           Amortization                                                                  43,651                      17,680
           Other                                                                        883,774                     833,997
       Changes in assets and liabilities
        affecting operations                                                         (3,481,810)                 (2,488,534)
                                                                         ---------------------------------------------------
  
       Net cash from operating activities                                               838,095                   1,672,363
                                                                         --------------------------------------------------
  
  Cash flows from (used for) investing activities
       Proceeds from owner/operators' loan repayments                                   875,832                   1,082,652
       Purchase of property, plant and equipment                                     (2,344,325)                 (3,003,813)
       Loans to owner/operators                                                        (970,408)                 (1,686,258)
       Other                                                                               (179)                     17,923
  
       Net cash used for investing activities                                        (2,439,080)                 (3,589,496)
                                                                         ---------------------------------------------------
  
  Cash flows from (used for) financing activities
       Additional long-term debt                                                      3,000,000                   2,000,000
       Proceeds from sale of common stock                                                32,775                     181,181
       Dividends paid                                                                  (934,891)                   (867,109)
       Payment of long-term debt                                                     (1,149,264)                 (1,183,776)
       Net increase in short-term debt                                                   50,000                   2,000,000
                                                                         --------------------------------------------------
  
       Net cash from financing activities                                               998,620                   2,130,296
                                                                         --------------------------------------------------
  
       Net increase (decrease) in cash                                                 (602,365)                    213,163
  
       Cash, beginning of year                                                          748,117                     233,366
                                                                         --------------------------------------------------
  
       Cash, end of period                                                   $          145,752           $         446,529
                                                                         ==================================================
  
       Supplemental Cash Flow Information:
       Cash paid during the period for:
           Interest                                                          $          152,893           $          88,816
                                                                         ==================================================
           Income taxes                                                      $          235,648           $       1,106,307
                                                                         ==================================================
  See accompanying notes to consolidated condensed financial statements.
  
                                      5 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
  
  1.     Interim Financial Information
         In the opinion of management,  the  accompanying  unaudited  consolidated
         condensed  financial  statements  contain all adjustments  (consisting of
         only normal recurring accruals) necessary to present fairly the financial
         position of the company as of March 28,  1998 and  December  27, 1997 and
         the results of its operations for the thirteen weeks ended March 28, 1998
         and March 29, 1997 and cash flows for the thirteen  weeks ended March 28,
         1998 and March 29, 1997. These unaudited consolidated condensed financial
         statements should be read in conjunction with the consolidated  financial
         statements  and footnotes  thereto in the company's 1997 Annual Report to
         Shareholders.  In addition,  the results of  operations  for the thirteen
         weeks ended March 28, 1998 are not necessarily  indicative of the results
         to be expected for the full year.
  
         Certain  expense items are charged to  operations  in the year  incurred.
         However,  for interim  reporting  purposes  the  expenses  are charged to
         operations on a pro-rata basis over the company's accounting periods. For
         the  thirteen  weeks  ended  March  28,  1998 and  March  29,  1997,  the
         difference  between the actual expenses incurred and the expenses charged
         to operations was not material.
  
  2.     Net Income Per Common Share
         Net income per common share is calculated  according to the  requirements
         of Statement of Financial  Accounting  Standards  No. 128 - "Earnings Per
         Share" which requires companies to present basic and diluted earnings per
         share. Net income per common share Basic is based on the weighted average
         number of common  shares  outstanding  during  the year.  Net  income per
         common share - Diluted is based on the weighted  average number of common
         shares and dilutive  potential common shares outstanding during the year.
         The company's  dilutive  potential common shares  outstanding  during the
         year result entirely from dilutive stock options.
  
                                      6 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
  Item 2.       Management's Discussion and Analysis of Financial Condition
                and Results of Operations
  
  Results of Operations
  
  For the first quarter of 1998, the company  realized net income of $1,641,102 or
  $.21 per share  versus  $1,613,793  or $.21 per share for the first  quarter  of
  1997.
  
  For the first quarter,  gross sales increased 2.7% to  $57,160,752,  compared to
  $55,633,240 last year. Gross sales,  less discounts and allowances,  resulted in
  net  sales  of  $38,320,468,   compared  to  $37,454,746   reported  last  year,
  representing  an increase of 2.3% which was related to a sales  volume  increase
  from promotional efforts at the Tastykake division  (Tastykake) and the addition
  of Dutch Mill donuts to Tastykake owner/operator routes.
  
  Cost of sales, as a percentage of gross sales, was 41.7% and 41.7% for the first
  quarters of 1998 and 1997, respectively. Product development costs at the Oxford
  facility  were  offset  by  improved  manufacturing   efficiencies  and  reduced
  ingredient costs.
  
  Selling,  general  and  administrative  expenses  for the first  quarter of 1998
  increased by $239,437 or 2.3% over the  comparable  period in 1997.  Most of the
  increase can be attributed to the additional  expenses from the Oxford facility,
  which was not in operation  during the first quarter of 1997. The balance of the
  increase  resulted  from an increase  in selling  expenses  associated  with the
  expansion into new geographic  regions and an increase in  administration  costs
  related to an upgrade of the computer system.
  
  Interest  expense  increased  for the first  quarter  of 1998  versus  the first
  quarter of 1997 as a result of increased average borrowing levels.  The decrease
  in other income,  net for the first quarter of 1998 was the result of a decrease
  in rental income.
  
  The  effective tax rate was 34.0% for the quarter ended March 28, 1998 and 38.5%
  for the quarter ended March 29, 1997 which compares to a federal  statutory rate
  of 34%.  There was no difference  between the  effective  rate and the statutory
  rate in the first  quarter of 1998  because the effect of state taxes was offset
  principally  due to tax  benefits  arising from passive  income.  The  principal
  reason for the  difference  between the effective rate and the statutory rate in
  the first quarter of 1997 was the effect of state income taxes.
  
                                      7 of 10
  Financial Condition
  
  The company has  consistently  demonstrated  the ability to generate  sufficient
  cash  flow from  operations.  Bank  borrowings,  under  various  lines of credit
  arrangements, are used to supplement cash flow from operations during periods of
  cyclical shortages.
  
  For the thirteen weeks ended March 28, 1998, net cash from operating  activities
  decreased by $834,268 to $838,095 from  $1,672,363  for the same period in 1997.
  The decrease in net cash from  operating  activities was  principally  due to an
  increase in prepaid expenses slightly offset by an increase in accrued expenses.
  
  Net cash used for investing  activities  for the thirteen  weeks ended March 28,
  1998 decreased by $1,150,416 relative to the same period in 1997 principally due
  to a decrease  in capital  requirements  at the  Oxford  facility,  as well as a
  decrease in the funds needed to finance the net owner/operator loan activity.
  
  Net cash from  financing  activities for the thirteen weeks ended March 28, 1998
  decreased  by  $1,131,676  relative  to the same  thirteen  weeks  in 1997.  The
  decrease  is  primarily  the  result of a net  decrease  in short and  long-term
  borrowing relative to the prior year.
  
  For  the  remainder  of  1998  the  company  anticipates  that  cash  flow  from
  operations,  along with the continued  availability of bank lines of credit, the
  revolving  credit  agreement  and  other  long-term   financing,   will  provide
  sufficient cash to meet operating and financing requirements.
  
                                      8 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
  PART II.      OTHER INFORMATION
  
  Item 4.       Submission of Matters to a Vote of Security Holders
  
                No matters were submitted to a vote of security holders during the
                first quarter of the fiscal year covered by this report.
  
  Item 6.       Exhibits and Reports on Form 8-K
  
       (a)      Exhibits:  Exhibit 27 - Financial Data Schedule
  
       (b)      Reports on Form 8-K
  
                The  registrant  did not file a  report  on Form  8-K  during  the
                     thirteen weeks ended March 28, 1998.
  
                                    Exhibit Index
  
                        Exhibit 27 - Financial Data Schedule
  
                                      9 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                      SIGNATURE
  
  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 thereunto duly authorized.
  
                                                 TASTY BAKING COMPANY
                                                     (Registrant)
  
       May 8, 1998                             /S/ John M. Pettine
         (Date)                                    JOHN M. PETTINE
                                                  VICE PRESIDENT AND
                                                CHIEF FINANCIAL OFFICER
                                      (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
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