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 thirty-nine weeks ended September 27, 1997
  
  ( )  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                          6,234,039
          (Title of Class)                       (No. of Shares Outstanding
                                                      at November 7, 1997)
  
                   INDEX OF EXHIBITS IS LOCATED ON PAGE 10 OF 11.
  
  
                                    PAGE 1 of 10
  
  <PAGE>
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                        INDEX
  
                                                                             Page
  
  PART I.       FINANCIAL INFORMATION
  
  Item 1.       Financial Statements
  
                Consolidated Condensed Balance Sheets
                September 27, 1997 and December 28, 1996.......................3
  
                Consolidated Condensed Statements of Operations
                Thirteen Weeks and Thirty-nine Weeks Ended
                September 27, 1997 and September 28, 1996......................4
  
                Consolidated Condensed Statements of Cash Flows
                Thirty-nine Weeks Ended September 27, 1997 and
                September 28, 1996.............................................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
  
                                    PAGE 2 of 10
  <PAGE>
  
  PART I.       FINANCIAL INFORMATION
  Item 1.       Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                     (unaudited)
  
  <TABLE>
  <CAPTION>
                                                    September 27, 1997  December 28, 1996
  ------------------------------------------------------------------------------------
  <S>                                                       <C>              <C>     
  Current assets:
       Cash                                                 $221,450         $233,366
       Accounts and notes receivable, net of
         allowance for doubtful accounts                  20,392,524       16,962,591
       Inventories:
         Raw materials                                     1,899,991        1,626,877
         Work in progress                                    644,446          563,381
         Finished goods                                      795,581          665,254
                                                         -----------      -----------
                                                           3,340,018        2,855,512
       Deferred income taxes, prepayments and other        3,289,501        2,726,014
                                                         -----------      -----------
         Total current assets                             27,243,493       22,777,483
                                                         -----------      -----------
  Property, plant and equipment:                         146,975,688      139,349,055
       Less accumulated depreciation                     103,688,860       98,375,648
                                                         -----------      -----------
                                                          43,286,828       40,973,407
                                                         -----------      -----------
  Long-term receivables                                   11,484,083       10,288,159
                                                         -----------      -----------
  Deferred income taxes                                   10,235,656       10,235,656
                                                         -----------      -----------
  Miscellaneous assets and deferred charges                2,970,797        3,153,659
                                                         -----------      -----------
  Total assets                                           $95,220,857      $87,428,364
                                                         ===========      ===========
  Current liabilities:
       Current portion of long-term debt                     $27,104          $58,340
       Current obligations under capital leases              692,870          587,336
       Notes payable, banks                                2,750,000               --
       Accounts payable                                    4,469,125        3,963,610
       Accrued liabilities                                 7,507,181        6,533,612
       Accrued income taxes                                  165,772        1,474,887
                                                         -----------      -----------
          Total current liabilities                       15,612,052       12,617,785
                                                         -----------      -----------
  Long-term debt, less current portion                     6,282,283        5,302,416
                                                         -----------      -----------
  Long-term obligations under capital leases,
       less current portion                                  586,020        1,131,118
                                                         -----------      -----------
  Accrued pensions and other liabilities                  12,117,452       11,203,178
                                                         -----------      -----------
  Postretirement benefits other than pensions             19,265,727       18,267,013
                                                         -----------      -----------
  Shareholders' equity:
       Common stock                                        3,646,594        3,644,544
       Capital in excess of par value of stock            30,230,206       29,742,513
       Retained earnings                                  24,573,159       22,265,220
                                                         -----------      -----------
                                                          58,449,959       55,652,277
       Less:
       Treasury stock, at cost                            16,712,320       16,329,055
       Management Stock Purchase Plan
         receivables and deferrals                           380,316          416,368
                                                         -----------      -----------
                                                          41,357,323       38,906,854
                                                         -----------      -----------
  Total liabilities and shareholders' equity             $95,220,857      $87,428,364
                                                         ===========      ===========
  </TABLE>
  
       See accompanying notes to consolidated condensed financial statements.
  
                                    Page 3 to 10
  <PAGE>
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                     (unaudited)
  
  <TABLE>
  <CAPTION>
  
                                            For the Thirteen Weeks Ended       For the Thirty-nine Weeks Ended
                                        Sept. 27, 1997     Sept. 28, 1996     Sept. 27, 1997     Sept. 28, 1996
  --------------------------------------------------------------------------------------------------------------
  <S>                                     <C>                <C>               <C>                <C>         
  Gross Sales                             $53,651,996        $52,755,993       $166,937,578       $158,890,911
  
  Less discounts and allowances           (17,607,128)       (16,734,341)       (54,463,859)       (49,176,383)
                                        -------------      -------------      -------------      -------------
  
  Net Sales                               $36,044,868        $36,021,652       $112,473,719       $109,714,528
                                        -------------      -------------      -------------      -------------
  
  Costs and expenses:
       Cost of sales                       22,478,742         22,332,536         69,261,592         68,484,501
  
       Depreciation                         1,847,134          1,838,336          5,402,627          5,490,835
  
       Selling, general and
          administrative                   10,077,778         10,472,900         30,637,033         30,068,214
  
       Interest expense                       131,732            134,564            417,367            362,138
  
       Other income, net                     (413,500)          (446,541)        (1,225,214)        (1,355,853)
                                        -------------      -------------      -------------      -------------
  
                                           34,121,886         34,331,795        104,493,405        103,049,835
                                        -------------      -------------      -------------      -------------
  
  Income before provision
       for income taxes                     1,922,982          1,689,857          7,980,314          6,664,693
  
  Provision for income taxes                 (726,455)          (637,636)        (3,063,360)        (2,556,349)
                                        -------------      -------------      -------------      -------------
  
  Net income                               $1,196,527         $1,052,221         $4,916,954         $4,108,344
                                        =============      =============      =============      =============
  
  
  Average common shares outstanding         6,340,140          6,185,551          6,260,762          6,177,032
  
  Per share of common stock:
  
       Net income                                $.19               $.17               $.79               $.67
                                        =============      =============      =============      =============
  
       Cash dividend                             $.14               $.14               $.42               $.42
                                        =============      =============      =============      =============
  </TABLE>
  
       See accompanying notes to consolidated condensed financial statements.
  
                                    Page 4 of 10
  <PAGE>
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  <TABLE>
  <CAPTION>
                                                          For the Thirty-nine Weeks Ended
                                                         Sept. 27, 1997     Sept. 28, 1996
  --------------------------------------------------------------------------------------
  <S>                                                       <C>              <C>     
  Cash flows from (used for) operating activities
       Net income                                          $4,916,954       $4,108,344
       Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                     5,402,627        5,490,835
           Amortization                                       107,100           52,431
           Other                                            2,080,853       (1,327,972)
       Changes in assets and liabilities
        affecting operations                               (4,425,824)         836,077
                                                          -----------      -----------
  
       Net cash from operating activities                   8,081,710        9,159,715
                                                          -----------      -----------
  
  Cash flows from (used for) investing activities
       Proceeds from owner/operator's loan repayments       2,526,332        3,203,559
       Purchase of property, plant and equipment           (7,769,331)      (8,271,305)
       Loans to owner/operators                            (3,728,396)      (2,539,257)
       Other                                                   46,536           63,280
                                                          -----------      -----------
  
       Net cash used for investing activities              (8,924,859)      (7,543,723)
                                                          -----------      -----------
  
  Cash flows from (used for) financing activities
       Additional long-term debt                            2,000,000        5,000,000
       Proceeds from sale of common stock                     181,181               --
       Dividends paid                                      (2,609,015)      (2,597,892)
       Payment of long-term debt                           (1,490,933)      (4,692,366)
       Net increase in short-term debt                      2,750,000          700,000
                                                          -----------      -----------
  
       Net cash from (used for) financing activities          831,233       (1,590,258)
                                                          -----------      -----------
  
       Net increase (decrease) in cash                        (11,916)          25,734
  
       Cash, beginning of year                                233,366           85,104
                                                          -----------      -----------
  
       Cash, end of period                                   $221,450         $110,838
                                                          ===========      ===========
  
       Supplemental Cash Flow Information:
       Cash paid during the period for:
           Interest                                          $348,833         $343,217
                                                          ===========      ===========
           Income taxes                                    $4,727,240       $2,221,142
                                                          ===========      ===========
  </TABLE>
  
       See accompanying notes to consolidated condensed financial statements.
  
                                    Page 5 of 10
  <PAGE>
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
  
  
  1.   Stock Split
  On October 24, 1997, the Board of Directors approved a five-for-four stock split
  of the company's  common stock for the  shareholders of record as of November 7,
  1997,  to be  distributed  on  December  1,  1997.  Restatements  of the  shares
  outstanding or per share amounts have not been provided for the current  period.
  Had the transaction  occurred prior to the release of the financial  statements,
  restatements  of net income per common  share  would have been $.15 and $.14 for
  the thirteen weeks ended September 27, 1997 and September 28, 1996 respectively,
  and $.63 and $.53 for the thirty-nine weeks then ended.
  
  2.   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 September  27, 1997,  and December 28, 1996 and the results of its
  operations for the thirteen and  thirty-nine  weeks ended September 27, 1997 and
  September 28, 1996 and cash flows for the thirty-nine  weeks ended September 27,
  1997 and September 28, 1996. These unaudited  consolidated  condensed  financial
  statements  should  be read  in  conjunction  with  the  consolidated  financial
  statements  and  footnotes  thereto  in the  company's  1996  Annual  Report  to
  Shareholders.  In addition,  the results of operations for the thirty-nine weeks
  ended  September  27, 1997 are not  necessarily  indicative of the results to be
  expected for the full year.
  
  Advertising  expenses and certain  other 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  thirty-nine  weeks ended September 27, 1997 and September 28, 1996, the
  difference  between the actual  expenses  incurred and the  expenses  charged to
  operations was not significant.
  
  3.   Net Income Per Share
  Per share amounts are based on the weighted  average number of common shares and
  equivalent shares outstanding during the quarter and year to date.
  
                                    Page 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 third quarter of 1997, the company  realized net income of $1,196,527 or
  $.19 per share  versus  $1,052,221  or $.17 per share for the third  quarter  of
  1996. These results represent increases of 13.7% and 11.8%, respectively.
  
  For the  thirty-nine  weeks ended  September 27, 1997, the company  realized net
  income of $4,916,954  or $.79 per share versus  $4,108,344 or $.67 per share for
  the  comparable  period in 1996,  representing  an  increase of 19.7% and 17.9%,
  respectively.
  
  For the third quarter,  gross sales increased 1.7% to  $53,651,996,  compared to
  $52,755,993 last year. The increase in gross sales for the third quarter of 1997
  resulted primarily from price increases instituted by the company.  Gross sales,
  less  discounts  and  allowances,  resulted  in a net sales  increase  of .1% to
  $36,044,868 compared to $36,021,652 reported last year.
  
  Cost of sales,  as a percentage of net sales,  was 62.4% and 62.0% for the third
  quarters of 1997 and 1996,  respectively.  The  increase in the current  quarter
  resulted from reduced  efficiencies due to continued product  development at the
  Oxford facility.
  
  Selling,  general  and  administrative  expenses  for the third  quarter of 1997
  decreased by $395,122 or 3.8% compared to the  comparable  period in 1996.  This
  change resulted  primarily from certain  consulting  expenses that were incurred
  only in the third quarter of 1996.
  
  Interest  expense  remained  relatively  unchanged for the third quarter of 1997
  versus the third  quarter of 1996.  The  decrease in other  income,  net for the
  third quarter of 1997 was the result of a decrease in rental income.
  
  The effective  tax rates for each of the quarters  ended  September 27, 1997 and
  September  28,  1996 were 37.8% and 37.7%,  respectively,  which  compares  to a
  federal  statutory rate of 34%. The principal reason for the difference  between
  the effective rates and the statutory rate in the third quarter of 1997 and 1996
  was the effect of state income taxes.
  
  In November,  1995, the company received a proposed assessment from the Internal
  Revenue  Service  (IRS) for  employment  taxes  based on an  assertion  that the
  company's  independent   owner/operators  were  employees  and  not  independent
  contractors.  The company  continues  to attempt to resolve its dispute with the
  IRS concerning the treatment of its independent  owner/operators for payroll tax
  purposes.  A "Closing  Agreement" (the Agreement) is currently being  negotiated
  between the company and the IRS. If the  Agreement is accepted by both  parties,
  the company would incur a pre-tax charge of  approximately  $1.5 to $2.0 million
  for tax years 1990-1997  including  related expenses.  In addition,  the company
  would  agree  to  certain   changes  in  the   treatment   of  its   independent
  owner/operators  for payroll tax purposes  effective  January 1, 1998.  However,
  within the Agreement, there are issues that remain in dispute, some of which the
  company  will not agree to and could cause the company to litigate  its position
  if a satisfactory resolution is not achieved.
  
  
                                    Page 7 of 10
  <PAGE>
  
  Financial Condition
  
  The company has  consistently  demonstrated  the ability to generate  sufficient
  cash flows from  operations.  Bank  borrowings,  under  various  lines of credit
  arrangements,  are used to supplement cash flows from operations  during periods
  of cyclical  shortages.
  
  For the  thirty-nine  weeks ended  September 27, 1997,  net cash from  operating
  activities  decreased  by  $1,078,005  to  $8,081,710  from  $9,159,715  for the
  comparable  period in 1996. The decrease in net cash from  operating  activities
  was  principally  due to an increase in income tax  payments  and an increase in
  accounts receivable. These reductions to net cash from operating activities were
  partially  offset by an  increase  in net  income  and a  reduction  in  pension
  contributions compared to 1996.
  
  Net cash used for investing activities for the thirty-nine weeks ended September
  27, 1997 increased by $1,381,136 relative to the same period in 1996 principally
  due to an increase in owner/operator loan activity.
  
  Net cash from financing activities for the thirty-nine weeks ended September 27,
  1997 increased by $2,421,491 relative to the same thirty-nine weeks in 1996. The
  increase is primarily the result of an increase in short-term debt.
  
  For the  remainder  of 1997,  the  company  anticipates  that  cash  flows  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.
  
  
                                    Page 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
           third 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 September 29, 1997.
  
  
                                    Exhibit Index
  
                        Exhibit 27 - Financial Data Schedule
  
  
  
                                    Pgae 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)
  
  
  
   November 7, 1997                              /s/ John M. Pettine
      (Date)                                       JOHN M. PETTINE
                                                  VICE PRESIDENT AND
                                              CHIEF FINANCIAL OFFICER
                                     (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
  
  
  
  
                                    Page 10 of 10
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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 thirty-nine weeks ended September 27, 1997
  
  ( )  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                          6,234,039
          (Title of Class)                       (No. of Shares Outstanding
                                                      at November 7, 1997)
  
                   INDEX OF EXHIBITS IS LOCATED ON PAGE 10 OF 11.
  
                                    PAGE 1 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
  
                                        INDEX
  
                                                                             Page
  
  PART I.       FINANCIAL INFORMATION
  
  Item 1.       Financial Statements
  
                Consolidated Condensed Balance Sheets
                September 27, 1997 and December 28, 1996.......................3
  
                Consolidated Condensed Statements of Operations
                Thirteen Weeks and Thirty-nine Weeks Ended
                September 27, 1997 and September 28, 1996......................4
  
                Consolidated Condensed Statements of Cash Flows
                Thirty-nine Weeks Ended September 27, 1997 and
                September 28, 1996.............................................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
  
                                    PAGE 2 of 10
  PART I.       FINANCIAL INFORMATION
  Item 1.       Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                     (unaudited)
  September 27, 1997  December 28, 1996
  ------------------------------------------------------------------------------------
  Current assets:
       Cash                                                 $221,450         $233,366
       Accounts and notes receivable, net of
         allowance for doubtful accounts                  20,392,524       16,962,591
       Inventories:
         Raw materials                                     1,899,991        1,626,877
         Work in progress                                    644,446          563,381
         Finished goods                                      795,581          665,254
                                                         -----------      -----------
                                                           3,340,018        2,855,512
       Deferred income taxes, prepayments and other        3,289,501        2,726,014
                                                         -----------      -----------
         Total current assets                             27,243,493       22,777,483
                                                         -----------      -----------
  Property, plant and equipment:                         146,975,688      139,349,055
       Less accumulated depreciation                     103,688,860       98,375,648
                                                         -----------      -----------
                                                          43,286,828       40,973,407
                                                         -----------      -----------
  Long-term receivables                                   11,484,083       10,288,159
                                                         -----------      -----------
  Deferred income taxes                                   10,235,656       10,235,656
                                                         -----------      -----------
  Miscellaneous assets and deferred charges                2,970,797        3,153,659
                                                         -----------      -----------
  Total assets                                           $95,220,857      $87,428,364
                                                         ===========      ===========
  Current liabilities:
       Current portion of long-term debt                     $27,104          $58,340
       Current obligations under capital leases              692,870          587,336
       Notes payable, banks                                2,750,000               --
       Accounts payable                                    4,469,125        3,963,610
       Accrued liabilities                                 7,507,181        6,533,612
       Accrued income taxes                                  165,772        1,474,887
                                                         -----------      -----------
          Total current liabilities                       15,612,052       12,617,785
                                                         -----------      -----------
  Long-term debt, less current portion                     6,282,283        5,302,416
                                                         -----------      -----------
  Long-term obligations under capital leases,
       less current portion                                  586,020        1,131,118
                                                         -----------      -----------
  Accrued pensions and other liabilities                  12,117,452       11,203,178
                                                         -----------      -----------
  Postretirement benefits other than pensions             19,265,727       18,267,013
                                                         -----------      -----------
  Shareholders' equity:
       Common stock                                        3,646,594        3,644,544
       Capital in excess of par value of stock            30,230,206       29,742,513
       Retained earnings                                  24,573,159       22,265,220
                                                         -----------      -----------
                                                          58,449,959       55,652,277
       Less:
       Treasury stock, at cost                            16,712,320       16,329,055
       Management Stock Purchase Plan
         receivables and deferrals                           380,316          416,368
                                                         -----------      -----------
                                                          41,357,323       38,906,854
                                                         -----------      -----------
  Total liabilities and shareholders' equity             $95,220,857      $87,428,364
                                                         ===========      ===========
  See accompanying notes to consolidated condensed financial statements.
  
                                    Page 3 to 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                     (unaudited)
  For the Thirteen Weeks Ended       For the Thirty-nine Weeks Ended
                                        Sept. 27, 1997     Sept. 28, 1996     Sept. 27, 1997     Sept. 28, 1996
  --------------------------------------------------------------------------------------------------------------
  Gross Sales                             $53,651,996        $52,755,993       $166,937,578       $158,890,911
  
  Less discounts and allowances           (17,607,128)       (16,734,341)       (54,463,859)       (49,176,383)
                                        -------------      -------------      -------------      -------------
  
  Net Sales                               $36,044,868        $36,021,652       $112,473,719       $109,714,528
                                        -------------      -------------      -------------      -------------
  
  Costs and expenses:
       Cost of sales                       22,478,742         22,332,536         69,261,592         68,484,501
  
       Depreciation                         1,847,134          1,838,336          5,402,627          5,490,835
  
       Selling, general and
          administrative                   10,077,778         10,472,900         30,637,033         30,068,214
  
       Interest expense                       131,732            134,564            417,367            362,138
  
       Other income, net                     (413,500)          (446,541)        (1,225,214)        (1,355,853)
                                        -------------      -------------      -------------      -------------
  
                                           34,121,886         34,331,795        104,493,405        103,049,835
                                        -------------      -------------      -------------      -------------
  
  Income before provision
       for income taxes                     1,922,982          1,689,857          7,980,314          6,664,693
  
  Provision for income taxes                 (726,455)          (637,636)        (3,063,360)        (2,556,349)
                                        -------------      -------------      -------------      -------------
  
  Net income                               $1,196,527         $1,052,221         $4,916,954         $4,108,344
                                        =============      =============      =============      =============
  
  Average common shares outstanding         6,340,140          6,185,551          6,260,762          6,177,032
  
  Per share of common stock:
  
       Net income                                $.19               $.17               $.79               $.67
                                        =============      =============      =============      =============
  
       Cash dividend                             $.14               $.14               $.42               $.42
                                        =============      =============      =============      =============
  See accompanying notes to consolidated condensed financial statements.
  
                                    Page 4 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
                   CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                     (unaudited)
  For the Thirty-nine Weeks Ended
                                                         Sept. 27, 1997     Sept. 28, 1996
  --------------------------------------------------------------------------------------
  Cash flows from (used for) operating activities
       Net income                                          $4,916,954       $4,108,344
       Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                     5,402,627        5,490,835
           Amortization                                       107,100           52,431
           Other                                            2,080,853       (1,327,972)
       Changes in assets and liabilities
        affecting operations                               (4,425,824)         836,077
                                                          -----------      -----------
  
       Net cash from operating activities                   8,081,710        9,159,715
                                                          -----------      -----------
  
  Cash flows from (used for) investing activities
       Proceeds from owner/operator's loan repayments       2,526,332        3,203,559
       Purchase of property, plant and equipment           (7,769,331)      (8,271,305)
       Loans to owner/operators                            (3,728,396)      (2,539,257)
       Other                                                   46,536           63,280
                                                          -----------      -----------
  
       Net cash used for investing activities              (8,924,859)      (7,543,723)
                                                          -----------      -----------
  
  Cash flows from (used for) financing activities
       Additional long-term debt                            2,000,000        5,000,000
       Proceeds from sale of common stock                     181,181               --
       Dividends paid                                      (2,609,015)      (2,597,892)
       Payment of long-term debt                           (1,490,933)      (4,692,366)
       Net increase in short-term debt                      2,750,000          700,000
                                                          -----------      -----------
  
       Net cash from (used for) financing activities          831,233       (1,590,258)
                                                          -----------      -----------
  
       Net increase (decrease) in cash                        (11,916)          25,734
  
       Cash, beginning of year                                233,366           85,104
                                                          -----------      -----------
  
       Cash, end of period                                   $221,450         $110,838
                                                          ===========      ===========
  
       Supplemental Cash Flow Information:
       Cash paid during the period for:
           Interest                                          $348,833         $343,217
                                                          ===========      ===========
           Income taxes                                    $4,727,240       $2,221,142
                                                          ===========      ===========
  See accompanying notes to consolidated condensed financial statements.
  
                                    Page 5 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
  
  1.   Stock Split
  On October 24, 1997, the Board of Directors approved a five-for-four stock split
  of the company's  common stock for the  shareholders of record as of November 7,
  1997,  to be  distributed  on  December  1,  1997.  Restatements  of the  shares
  outstanding or per share amounts have not been provided for the current  period.
  Had the transaction  occurred prior to the release of the financial  statements,
  restatements  of net income per common  share  would have been $.15 and $.14 for
  the thirteen weeks ended September 27, 1997 and September 28, 1996 respectively,
  and $.63 and $.53 for the thirty-nine weeks then ended.
  
  2.   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 September  27, 1997,  and December 28, 1996 and the results of its
  operations for the thirteen and  thirty-nine  weeks ended September 27, 1997 and
  September 28, 1996 and cash flows for the thirty-nine  weeks ended September 27,
  1997 and September 28, 1996. These unaudited  consolidated  condensed  financial
  statements  should  be read  in  conjunction  with  the  consolidated  financial
  statements  and  footnotes  thereto  in the  company's  1996  Annual  Report  to
  Shareholders.  In addition,  the results of operations for the thirty-nine weeks
  ended  September  27, 1997 are not  necessarily  indicative of the results to be
  expected for the full year.
  
  Advertising  expenses and certain  other 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  thirty-nine  weeks ended September 27, 1997 and September 28, 1996, the
  difference  between the actual  expenses  incurred and the  expenses  charged to
  operations was not significant.
  
  3.   Net Income Per Share
  Per share amounts are based on the weighted  average number of common shares and
  equivalent shares outstanding during the quarter and year to date.
  
                                    Page 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 third quarter of 1997, the company  realized net income of $1,196,527 or
  $.19 per share  versus  $1,052,221  or $.17 per share for the third  quarter  of
  1996. These results represent increases of 13.7% and 11.8%, respectively.
  
  For the  thirty-nine  weeks ended  September 27, 1997, the company  realized net
  income of $4,916,954  or $.79 per share versus  $4,108,344 or $.67 per share for
  the  comparable  period in 1996,  representing  an  increase of 19.7% and 17.9%,
  respectively.
  
  For the third quarter,  gross sales increased 1.7% to  $53,651,996,  compared to
  $52,755,993 last year. The increase in gross sales for the third quarter of 1997
  resulted primarily from price increases instituted by the company.  Gross sales,
  less  discounts  and  allowances,  resulted  in a net sales  increase  of .1% to
  $36,044,868 compared to $36,021,652 reported last year.
  
  Cost of sales,  as a percentage of net sales,  was 62.4% and 62.0% for the third
  quarters of 1997 and 1996,  respectively.  The  increase in the current  quarter
  resulted from reduced  efficiencies due to continued product  development at the
  Oxford facility.
  
  Selling,  general  and  administrative  expenses  for the third  quarter of 1997
  decreased by $395,122 or 3.8% compared to the  comparable  period in 1996.  This
  change resulted  primarily from certain  consulting  expenses that were incurred
  only in the third quarter of 1996.
  
  Interest  expense  remained  relatively  unchanged for the third quarter of 1997
  versus the third  quarter of 1996.  The  decrease in other  income,  net for the
  third quarter of 1997 was the result of a decrease in rental income.
  
  The effective  tax rates for each of the quarters  ended  September 27, 1997 and
  September  28,  1996 were 37.8% and 37.7%,  respectively,  which  compares  to a
  federal  statutory rate of 34%. The principal reason for the difference  between
  the effective rates and the statutory rate in the third quarter of 1997 and 1996
  was the effect of state income taxes.
  
  In November,  1995, the company received a proposed assessment from the Internal
  Revenue  Service  (IRS) for  employment  taxes  based on an  assertion  that the
  company's  independent   owner/operators  were  employees  and  not  independent
  contractors.  The company  continues  to attempt to resolve its dispute with the
  IRS concerning the treatment of its independent  owner/operators for payroll tax
  purposes.  A "Closing  Agreement" (the Agreement) is currently being  negotiated
  between the company and the IRS. If the  Agreement is accepted by both  parties,
  the company would incur a pre-tax charge of  approximately  $1.5 to $2.0 million
  for tax years 1990-1997  including  related expenses.  In addition,  the company
  would  agree  to  certain   changes  in  the   treatment   of  its   independent
  owner/operators  for payroll tax purposes  effective  January 1, 1998.  However,
  within the Agreement, there are issues that remain in dispute, some of which the
  company  will not agree to and could cause the company to litigate  its position
  if a satisfactory resolution is not achieved.
  
                                    Page 7 of 10
  Financial Condition
  
  The company has  consistently  demonstrated  the ability to generate  sufficient
  cash flows from  operations.  Bank  borrowings,  under  various  lines of credit
  arrangements,  are used to supplement cash flows from operations  during periods
  of cyclical  shortages.
  
  For the  thirty-nine  weeks ended  September 27, 1997,  net cash from  operating
  activities  decreased  by  $1,078,005  to  $8,081,710  from  $9,159,715  for the
  comparable  period in 1996. The decrease in net cash from  operating  activities
  was  principally  due to an increase in income tax  payments  and an increase in
  accounts receivable. These reductions to net cash from operating activities were
  partially  offset by an  increase  in net  income  and a  reduction  in  pension
  contributions compared to 1996.
  
  Net cash used for investing activities for the thirty-nine weeks ended September
  27, 1997 increased by $1,381,136 relative to the same period in 1996 principally
  due to an increase in owner/operator loan activity.
  
  Net cash from financing activities for the thirty-nine weeks ended September 27,
  1997 increased by $2,421,491 relative to the same thirty-nine weeks in 1996. The
  increase is primarily the result of an increase in short-term debt.
  
  For the  remainder  of 1997,  the  company  anticipates  that  cash  flows  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.
  
                                    Page 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
           third 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 September 29, 1997.
  
                                    Exhibit Index
  
                        Exhibit 27 - Financial Data Schedule
  
                                    Pgae 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)
  
   November 7, 1997                              /s/ John M. Pettine
      (Date)                                       JOHN M. PETTINE
                                                  VICE PRESIDENT AND
                                              CHIEF FINANCIAL OFFICER
                                     (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
                                    Page 10 of 10