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 twenty-six weeks ended June 28, 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                           6,232,043
             (Title of Class)                       (No. of Shares Outstanding
                                                          at August 7, 1997)
  
                    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
            June 28, 1997 and December 28, 1996.................................3
  
            Consolidated Statements of Operations
            Thirteen weeks and Twenty-six weeks
            ended June 28, 1997 and June 29, 1996 ..............................4
  
            Consolidated Condensed Statements of Cash Flows
            Twenty-six Weeks Ended June 28, 1997 and June 29, 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
  
                                       2 of 10
  
  <PAGE>
  
  PART I.   FINANCIAL INFORMATION
  Item 1.   Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                     (unaudited)
  <TABLE>
  <CAPTION>
                                                          June 28, 1997      December 28, 1996
  <S>                                                      <C>                 <C>         
  Current assets:
       Cash                                                $    175,654        $    233,366
       Accounts and notes receivable, net of
         allowance for doubtful accounts                     18,272,877          16,962,591
       Inventories:
         Raw materials                                        1,845,302           1,626,877
         Work in progress                                       596,218             563,381
         Finished goods                                         724,613             665,254
                                                           ------------        ------------
                                                              3,166,133           2,855,512
       Deferred income taxes, prepayments and other           3,596,572           2,726,014
                                                           ------------        ------------
         Total current assets                                25,211,236          22,777,483
                                                           ------------        ------------
  Property, plant and equipment:                            145,096,720         139,349,055
       Less accumulated depreciation                        101,917,868          98,375,648
                                                           ------------        ------------
                                                             43,178,852          40,973,407
                                                           ------------        ------------
  Long-term receivables                                      11,949,889          10,288,159
                                                           ------------        ------------
  Deferred income taxes                                      10,235,656          10,235,656
                                                           ------------        ------------
  Spare parts inventory and miscellaneous assets              2,937,007           3,153,659
                                                           ------------        ------------
  Total assets                                             $ 93,512,640        $ 87,428,364
                                                           ============        ============
  Current liabilities:
       Current portion of long-term debt                   $     27,104        $     58,340
       Current obligations under capital leases                 657,692             587,336
       Notes payable, banks                                   1,850,000                  --
       Accounts payable                                       4,745,228           3,963,610
       Accrued liabilities                                    6,674,657           6,533,612
       Accrued income taxes                                     491,517           1,474,887
                                                           ------------        ------------
          Total current liabilities                          14,446,198          12,617,785
                                                           ------------        ------------
  Long-term debt, less current portion                        6,289,125           5,302,416
                                                           ------------        ------------
  Long-term obligations under capital leases,
       less current portion                                     768,276           1,131,118
                                                           ------------        ------------
  Accrued pensions and other liabilities                     11,955,377          11,203,178
                                                           ------------        ------------
  Postretirement benefits other than pensions                18,928,596          18,267,013
                                                           ------------        ------------
  Shareholders' equity:
       Common stock                                           3,646,594           3,644,544
       Capital in excess of par value of stock               29,901,952          29,742,513
       Retained earnings                                     24,249,118          22,265,220
                                                           ------------        ------------
                                                             57,797,664          55,652,277
       Less:
       Treasury stock, at cost                               16,266,198          16,329,055
       Management Stock Purchase Plan
         receivables and deferrals                              406,398             416,368
                                                           ------------        ------------
                                                             41,125,068          38,906,854
                                                           ------------        ------------
  Total liabilities and shareholders' equity               $ 93,512,640        $ 87,428,364
                                                           ============        ============
  </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>
                                              For the Thirteen Weeks Ended               For the Twenty-six Weeks Ended
                                           June 28, 1997         June 29, 1996         June 28, 1997         June 29, 1996
  <S>                                      <C>                   <C>                   <C>                   <C>          
  Gross Sales                              $  57,652,342         $  54,781,233         $ 113,285,582         $ 106,134,918
  
  
  Less discounts and allowances              (18,678,237)          (17,031,966)          (36,856,731)          (32,442,042)
                                           -------------         -------------         -------------         -------------
  
  Net Sales                                   38,974,105            37,749,267            76,428,851            73,692,876
                                           -------------         -------------         -------------         -------------
  
  Costs and expenses:
       Cost of sales                          23,610,742            23,334,633            46,782,850            46,151,965
  
       Depreciation                            1,860,066             1,813,701             3,555,493             3,652,499
  
       Selling, general and
          administrative                      10,327,675             9,963,743            20,559,255            19,595,314
  
  
       Interest expense                          158,045                99,048               285,635               227,574
  
       Other income, net                        (415,287)             (455,740)             (811,714)             (909,312)
                                           -------------         -------------         -------------         -------------
  
                                              35,541,241            34,755,385            70,371,519            68,718,040
                                           -------------         -------------         -------------         -------------
  
  Income before provision for
       income taxes                            3,432,864             2,993,882             6,057,332             4,974,836
  
  Provision for income taxes                   1,326,230             1,157,108             2,336,905             1,918,713
                                           -------------         -------------         -------------         -------------
  
  Net income                               $   2,106,634         $   1,836,774         $   3,720,427         $   3,056,123
                                           =============         =============         =============         =============
  
  
  Average common shares outstanding            6,278,579             6,174,261             6,252,500             6,173,985
  
  
  Per share of common stock:
  
       Net income                          $         .34         $         .30         $         .60         $         .50
                                           =============         =============         =============         =============
  
       Cash dividend                       $         .14         $         .14         $         .28         $         .28
                                           =============         =============         =============         =============
  </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>
                                                              For the Twenty-six Weeks Ended
                                                            June 28, 1997       June 29, 1996
  <S>                                                        <C>                 <C>        
  Cash flows from (used for) operating activities
       Net income                                            $ 3,720,427         $ 3,056,123
       Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                        3,555,493           3,652,499
           Amortization                                           63,707              35,158
           Other                                               1,620,436             369,873
       Changes in assets and liabilities
        affecting operations                                  (2,552,172)         (1,471,943)
                                                             -----------         -----------
  
       Net cash from operating activities                      6,407,891           5,641,710
                                                             -----------         -----------
  
  Cash flows from (used for) investing activities
       Purchase of property, plant and equipment              (5,788,833)         (2,470,609)
       Proceeds from owner/operators' loan repayments          1,838,209           2,604,830
       Loans to owner/operators                               (3,505,018)         (1,910,613)
       Other                                                      32,400              46,104
                                                             -----------         -----------
  
       Net cash used for investing activities                 (7,423,242)         (1,730,288)
                                                             -----------         -----------
  
  Cash flows from (used for) financing activities
       Additional long-term debt                               2,000,000           3,000,000
       Proceeds from sale of common stock                        181,181                  --
       Dividends paid                                         (1,736,529)         (1,731,915)
       Payment of long-term debt                              (1,337,013)         (4,531,278)
       Net increase (decrease) in short-term debt              1,850,000            (700,000)
                                                             -----------         -----------
  
       Net cash from (used for) financing activities             957,639          (3,963,193)
                                                             -----------         -----------
  
       Net decrease in cash                                      (57,712)            (51,771)
  
       Cash, beginning of year                                   233,366              85,104
                                                             -----------         -----------
  
       Cash, end of period                                   $   175,654         $    33,333
                                                             ===========         ===========
  
  
       Supplemental Cash Flow Information:
       Cash paid during the period for:
           Interest                                          $   228,036         $   233,946
                                                             ===========         ===========
           Income taxes                                      $ 3,470,240         $ 1,718,612
                                                             ===========         ===========
  </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.   Manufacturing Facility
       On July 1, 1996,  the company,  through a  wholly-owned  subsidiary,  Tasty
       Baking  Oxford,  Inc.,  completed the purchase for  $4,000,000 of a 160,000
       square foot manufacturing facility in Oxford, Chester County, Pennsylvania.
       This  facility  will enable the company to  manufacture  products  that are
       currently made for it by other suppliers,  improve its operating margins on
       those products and expand new product offerings.  The company completed the
       installation  of the first  manufacturing  line at the facility which began
       making  products in January,  1997.  The company is currently  running test
       trials on a second  manufacturing line and expects to be producing products
       during the third quarter.
  
  
  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 June 28, 1997 and  December  28, 1996 and the
       results of its operations for the thirteen and twenty-six  weeks ended June
       28,  1997 and June 29, 1996 and cash flows for the  twenty-six  weeks ended
       June 28, 1997 and June 29, 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
       twenty-six weeks ended June 28, 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 twenty-six weeks ended June 28, 1997
       and June 29, 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.
  
                                       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 second quarter of 1997, the company realized net income of $2,106,634 or
  $.34 per share  versus  $1,836,774  or $.30 per share for the second  quarter of
  1996. These results represent increases of 14.7% and 13.3%, respectively.
  
  For the twenty-six weeks ended June 28, 1997, the company realized net income of
  $3,720,427  or $.60  per  share  versus  $3,056,123  or $.50 per  share  for the
  comparable period in 1996, an increase of 21.7% and 20%, respectively.
  
  For the second quarter,  gross sales increased 5.2% to $57,652,342,  compared to
  $54,781,233 last year. Gross sales, less discounts and allowances  resulted in a
  net sales increase of 3.2% to $38,974,105  compared to $37,749,267 reported last
  year.  The  increase  in gross  sales for the second  quarter  of 1997  resulted
  primarily from price increases instituted by the company. The difference between
  the  increases of 5.2% in gross sales and 3.2% in net sales  resulted  primarily
  from higher promotion costs and increased discounts.
  
  Cost of sales, as a percentage of net sales,  was 60.6% and 61.8% for the second
  quarters of 1997 and 1996,  respectively.  This decrease in the current  quarter
  was due to  moderating  commodity  costs as well as  favorable  packaging  costs
  throughout the quarter.
  
  Selling,  general and  administrative  expenses  for the second  quarter of 1997
  increased by $363,932 or 3.7% over the comparable  period in 1996. This increase
  resulted  primarily from an increase in advertising  costs and selling expenses.
  Advertising  costs  were  higher  due to a new  television  campaign  which  was
  instituted in the first quarter of 1997 and continued  into the second  quarter.
  The increase in selling expenses resulted from the re-alignment of the company's
  sales regions and expenses associated with higher sales levels.
  
  Interest  expense  increased  for the second  quarter of 1997  versus the second
  quarter of 1996 as a result of increased average borrowing levels.  The decrease
  in other income, net for the second quarter of 1997 was the result of a decrease
  in rental income.
  
  The effective tax rate for each of the quarters ended June 28, 1997 and June 29,
  1996 was 38.6%, which compares to a federal statutory rate of 34%. The principle
  reason for the difference  between the effective rates and the statutory rate in
  the second 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 during the
  years 1990 through 1994 the company's independent owner/operators were employees
  and not independent contractors. The company has filed a formal Protest with the
  IRS and has held  conferences  with an appeals  officer of the IRS.  The company
  believes that it has good grounds for the defenses which it has asserted and has
  a reasonable  chance for favorable  resolution  on all issues.  At this time the
  company is unable to estimate the possible loss, if any, that may be incurred as
  a result of this  proposed  assessment.  The ultimate  outcome of this  proposed
  assessment  may or may not have a  material  impact on the  company's  financial
  position or results of operations.
  
                                       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 twenty-six weeks ended June 28, 1997, net cash from operating activities
  increased by $766,181 to $6,407,891 from $5,641,710 for the same period in 1996.
  The increase in net cash from  operating  activities was  principally  due to an
  increase in net income and a reduction in pension contributions versus the prior
  year.  These  favorable   changes  were  partially  offset  by  an  increase  in
  receivables due to higher sales.
  
  Net cash used for investing  activities for the twenty-six  weeks ended June 29,
  1997 increased by $5,692,954 relative to the same period in 1996 principally due
  to an increase in expenditures on equipment for the new Oxford facility, as well
  as an  increase  in the funds  needed to  finance  the net  owner/operator  loan
  activity.
  
  Net cash from financing  activities for the twenty-six weeks ended June 28, 1997
  increased  by  $4,920,832  relative to the same  twenty-six  weeks in 1996.  The
  increase is primarily the result of a net increase in short and  long-term  debt
  relative to the prior year.
  
  For  the  remainder  of  1997  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
  
       (a)  The Company's  annual  meeting of shareholders  was held on April 25,
            1997.
  
       (b)  The directors elected at the meeting were:
  
                                              For        Against        Withheld
  
                   James L. Everett,III     4,808,071      ---          343,313
                   Nelson G. Harris         4,807,738      ---          343,646
                   Carl S. Watts            4,812,533      ---          338,851
  
            Other directors whose terms of office  continued after the meeting are
            as follows:  Philip J. Baur,  Jr.,  Judith M. Von  Seldeneck,  Fred C.
            Aldridge, Jr., G. Fred DiBona, Jr., and John M. Pettine.
  
       (c)  Other matters voted upon at the meeting and the results of those votes
            were as follows:
  
                                                        For     Against  Abstain
  
            Approval of the Amendments 
            to the Tasty Baking Company 
            Management Stock Purchase Plan           3,229,672  701,387  114,413
  
  
  
                                                        For     Against  Abstain
  
            Approval of Coopers & Lybrand L.L.P., 
            as independent certified public 
            accountants                              5,107,938   20,608   22,838
  
  
  
  The foregoing  matters are described in detail in the Company's  proxy statement
  dated March 20, 1997.
  
  
  
  
  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 twenty-six
            weeks ended June 28, 1997.
  
                                    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)
  
  
               August 7, 1997                      /S/ John M. Pettine
                   (Date)                             JOHN M. PETTINE
                                                     VICE PRESIDENT AND
                                                  CHIEF FINANCIAL OFFICER
                                      (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
  
  
                                      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 twenty-six weeks ended June 28, 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                           6,232,043
             (Title of Class)                       (No. of Shares Outstanding
                                                          at August 7, 1997)
  
                    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
            June 28, 1997 and December 28, 1996.................................3
  
            Consolidated Statements of Operations
            Thirteen weeks and Twenty-six weeks
            ended June 28, 1997 and June 29, 1996 ..............................4
  
            Consolidated Condensed Statements of Cash Flows
            Twenty-six Weeks Ended June 28, 1997 and June 29, 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
  
                                       2 of 10
  PART I.   FINANCIAL INFORMATION
  Item 1.   Financial Statements
  
                        TASTY BAKING COMPANY AND SUBSIDIARIES
                        CONSOLIDATED CONDENSED BALANCE SHEETS
                                     (unaudited)
  June 28, 1997      December 28, 1996
  Current assets:
       Cash                                                $    175,654        $    233,366
       Accounts and notes receivable, net of
         allowance for doubtful accounts                     18,272,877          16,962,591
       Inventories:
         Raw materials                                        1,845,302           1,626,877
         Work in progress                                       596,218             563,381
         Finished goods                                         724,613             665,254
                                                           ------------        ------------
                                                              3,166,133           2,855,512
       Deferred income taxes, prepayments and other           3,596,572           2,726,014
                                                           ------------        ------------
         Total current assets                                25,211,236          22,777,483
                                                           ------------        ------------
  Property, plant and equipment:                            145,096,720         139,349,055
       Less accumulated depreciation                        101,917,868          98,375,648
                                                           ------------        ------------
                                                             43,178,852          40,973,407
                                                           ------------        ------------
  Long-term receivables                                      11,949,889          10,288,159
                                                           ------------        ------------
  Deferred income taxes                                      10,235,656          10,235,656
                                                           ------------        ------------
  Spare parts inventory and miscellaneous assets              2,937,007           3,153,659
                                                           ------------        ------------
  Total assets                                             $ 93,512,640        $ 87,428,364
                                                           ============        ============
  Current liabilities:
       Current portion of long-term debt                   $     27,104        $     58,340
       Current obligations under capital leases                 657,692             587,336
       Notes payable, banks                                   1,850,000                  --
       Accounts payable                                       4,745,228           3,963,610
       Accrued liabilities                                    6,674,657           6,533,612
       Accrued income taxes                                     491,517           1,474,887
                                                           ------------        ------------
          Total current liabilities                          14,446,198          12,617,785
                                                           ------------        ------------
  Long-term debt, less current portion                        6,289,125           5,302,416
                                                           ------------        ------------
  Long-term obligations under capital leases,
       less current portion                                     768,276           1,131,118
                                                           ------------        ------------
  Accrued pensions and other liabilities                     11,955,377          11,203,178
                                                           ------------        ------------
  Postretirement benefits other than pensions                18,928,596          18,267,013
                                                           ------------        ------------
  Shareholders' equity:
       Common stock                                           3,646,594           3,644,544
       Capital in excess of par value of stock               29,901,952          29,742,513
       Retained earnings                                     24,249,118          22,265,220
                                                           ------------        ------------
                                                             57,797,664          55,652,277
       Less:
       Treasury stock, at cost                               16,266,198          16,329,055
       Management Stock Purchase Plan
         receivables and deferrals                              406,398             416,368
                                                           ------------        ------------
                                                             41,125,068          38,906,854
                                                           ------------        ------------
  Total liabilities and shareholders' equity               $ 93,512,640        $ 87,428,364
                                                           ============        ============
  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               For the Twenty-six Weeks Ended
                                           June 28, 1997         June 29, 1996         June 28, 1997         June 29, 1996
  Gross Sales                              $  57,652,342         $  54,781,233         $ 113,285,582         $ 106,134,918
  
  Less discounts and allowances              (18,678,237)          (17,031,966)          (36,856,731)          (32,442,042)
                                           -------------         -------------         -------------         -------------
  
  Net Sales                                   38,974,105            37,749,267            76,428,851            73,692,876
                                           -------------         -------------         -------------         -------------
  
  Costs and expenses:
       Cost of sales                          23,610,742            23,334,633            46,782,850            46,151,965
  
       Depreciation                            1,860,066             1,813,701             3,555,493             3,652,499
  
       Selling, general and
          administrative                      10,327,675             9,963,743            20,559,255            19,595,314
  
       Interest expense                          158,045                99,048               285,635               227,574
  
       Other income, net                        (415,287)             (455,740)             (811,714)             (909,312)
                                           -------------         -------------         -------------         -------------
  
                                              35,541,241            34,755,385            70,371,519            68,718,040
                                           -------------         -------------         -------------         -------------
  
  Income before provision for
       income taxes                            3,432,864             2,993,882             6,057,332             4,974,836
  
  Provision for income taxes                   1,326,230             1,157,108             2,336,905             1,918,713
                                           -------------         -------------         -------------         -------------
  
  Net income                               $   2,106,634         $   1,836,774         $   3,720,427         $   3,056,123
                                           =============         =============         =============         =============
  
  Average common shares outstanding            6,278,579             6,174,261             6,252,500             6,173,985
  
  Per share of common stock:
  
       Net income                          $         .34         $         .30         $         .60         $         .50
                                           =============         =============         =============         =============
  
       Cash dividend                       $         .14         $         .14         $         .28         $         .28
                                           =============         =============         =============         =============
  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 Twenty-six Weeks Ended
                                                            June 28, 1997       June 29, 1996
  Cash flows from (used for) operating activities
       Net income                                            $ 3,720,427         $ 3,056,123
       Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                        3,555,493           3,652,499
           Amortization                                           63,707              35,158
           Other                                               1,620,436             369,873
       Changes in assets and liabilities
        affecting operations                                  (2,552,172)         (1,471,943)
                                                             -----------         -----------
  
       Net cash from operating activities                      6,407,891           5,641,710
                                                             -----------         -----------
  
  Cash flows from (used for) investing activities
       Purchase of property, plant and equipment              (5,788,833)         (2,470,609)
       Proceeds from owner/operators' loan repayments          1,838,209           2,604,830
       Loans to owner/operators                               (3,505,018)         (1,910,613)
       Other                                                      32,400              46,104
                                                             -----------         -----------
  
       Net cash used for investing activities                 (7,423,242)         (1,730,288)
                                                             -----------         -----------
  
  Cash flows from (used for) financing activities
       Additional long-term debt                               2,000,000           3,000,000
       Proceeds from sale of common stock                        181,181                  --
       Dividends paid                                         (1,736,529)         (1,731,915)
       Payment of long-term debt                              (1,337,013)         (4,531,278)
       Net increase (decrease) in short-term debt              1,850,000            (700,000)
                                                             -----------         -----------
  
       Net cash from (used for) financing activities             957,639          (3,963,193)
                                                             -----------         -----------
  
       Net decrease in cash                                      (57,712)            (51,771)
  
       Cash, beginning of year                                   233,366              85,104
                                                             -----------         -----------
  
       Cash, end of period                                   $   175,654         $    33,333
                                                             ===========         ===========
  
       Supplemental Cash Flow Information:
       Cash paid during the period for:
           Interest                                          $   228,036         $   233,946
                                                             ===========         ===========
           Income taxes                                      $ 3,470,240         $ 1,718,612
                                                             ===========         ===========
  See accompanying notes to consolidated
                          condensed financial statements.
  
                                       5 of 10
  TASTY BAKING COMPANY AND SUBSIDIARIES
                NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
  
  1.   Manufacturing Facility
       On July 1, 1996,  the company,  through a  wholly-owned  subsidiary,  Tasty
       Baking  Oxford,  Inc.,  completed the purchase for  $4,000,000 of a 160,000
       square foot manufacturing facility in Oxford, Chester County, Pennsylvania.
       This  facility  will enable the company to  manufacture  products  that are
       currently made for it by other suppliers,  improve its operating margins on
       those products and expand new product offerings.  The company completed the
       installation  of the first  manufacturing  line at the facility which began
       making  products in January,  1997.  The company is currently  running test
       trials on a second  manufacturing line and expects to be producing products
       during the third quarter.
  
  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 June 28, 1997 and  December  28, 1996 and the
       results of its operations for the thirteen and twenty-six  weeks ended June
       28,  1997 and June 29, 1996 and cash flows for the  twenty-six  weeks ended
       June 28, 1997 and June 29, 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
       twenty-six weeks ended June 28, 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 twenty-six weeks ended June 28, 1997
       and June 29, 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.
  
                                       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 second quarter of 1997, the company realized net income of $2,106,634 or
  $.34 per share  versus  $1,836,774  or $.30 per share for the second  quarter of
  1996. These results represent increases of 14.7% and 13.3%, respectively.
  
  For the twenty-six weeks ended June 28, 1997, the company realized net income of
  $3,720,427  or $.60  per  share  versus  $3,056,123  or $.50 per  share  for the
  comparable period in 1996, an increase of 21.7% and 20%, respectively.
  
  For the second quarter,  gross sales increased 5.2% to $57,652,342,  compared to
  $54,781,233 last year. Gross sales, less discounts and allowances  resulted in a
  net sales increase of 3.2% to $38,974,105  compared to $37,749,267 reported last
  year.  The  increase  in gross  sales for the second  quarter  of 1997  resulted
  primarily from price increases instituted by the company. The difference between
  the  increases of 5.2% in gross sales and 3.2% in net sales  resulted  primarily
  from higher promotion costs and increased discounts.
  
  Cost of sales, as a percentage of net sales,  was 60.6% and 61.8% for the second
  quarters of 1997 and 1996,  respectively.  This decrease in the current  quarter
  was due to  moderating  commodity  costs as well as  favorable  packaging  costs
  throughout the quarter.
  
  Selling,  general and  administrative  expenses  for the second  quarter of 1997
  increased by $363,932 or 3.7% over the comparable  period in 1996. This increase
  resulted  primarily from an increase in advertising  costs and selling expenses.
  Advertising  costs  were  higher  due to a new  television  campaign  which  was
  instituted in the first quarter of 1997 and continued  into the second  quarter.
  The increase in selling expenses resulted from the re-alignment of the company's
  sales regions and expenses associated with higher sales levels.
  
  Interest  expense  increased  for the second  quarter of 1997  versus the second
  quarter of 1996 as a result of increased average borrowing levels.  The decrease
  in other income, net for the second quarter of 1997 was the result of a decrease
  in rental income.
  
  The effective tax rate for each of the quarters ended June 28, 1997 and June 29,
  1996 was 38.6%, which compares to a federal statutory rate of 34%. The principle
  reason for the difference  between the effective rates and the statutory rate in
  the second 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 during the
  years 1990 through 1994 the company's independent owner/operators were employees
  and not independent contractors. The company has filed a formal Protest with the
  IRS and has held  conferences  with an appeals  officer of the IRS.  The company
  believes that it has good grounds for the defenses which it has asserted and has
  a reasonable  chance for favorable  resolution  on all issues.  At this time the
  company is unable to estimate the possible loss, if any, that may be incurred as
  a result of this  proposed  assessment.  The ultimate  outcome of this  proposed
  assessment  may or may not have a  material  impact on the  company's  financial
  position or results of operations.
  
                                       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 twenty-six weeks ended June 28, 1997, net cash from operating activities
  increased by $766,181 to $6,407,891 from $5,641,710 for the same period in 1996.
  The increase in net cash from  operating  activities was  principally  due to an
  increase in net income and a reduction in pension contributions versus the prior
  year.  These  favorable   changes  were  partially  offset  by  an  increase  in
  receivables due to higher sales.
  
  Net cash used for investing  activities for the twenty-six  weeks ended June 29,
  1997 increased by $5,692,954 relative to the same period in 1996 principally due
  to an increase in expenditures on equipment for the new Oxford facility, as well
  as an  increase  in the funds  needed to  finance  the net  owner/operator  loan
  activity.
  
  Net cash from financing  activities for the twenty-six weeks ended June 28, 1997
  increased  by  $4,920,832  relative to the same  twenty-six  weeks in 1996.  The
  increase is primarily the result of a net increase in short and  long-term  debt
  relative to the prior year.
  
  For  the  remainder  of  1997  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
  
       (a)  The Company's  annual  meeting of shareholders  was held on April 25,
            1997.
  
       (b)  The directors elected at the meeting were:
  
                                              For        Against        Withheld
  
                   James L. Everett,III     4,808,071      ---          343,313
                   Nelson G. Harris         4,807,738      ---          343,646
                   Carl S. Watts            4,812,533      ---          338,851
  
            Other directors whose terms of office  continued after the meeting are
            as follows:  Philip J. Baur,  Jr.,  Judith M. Von  Seldeneck,  Fred C.
            Aldridge, Jr., G. Fred DiBona, Jr., and John M. Pettine.
  
       (c)  Other matters voted upon at the meeting and the results of those votes
            were as follows:
  
                                                        For     Against  Abstain
  
            Approval of the Amendments 
            to the Tasty Baking Company 
            Management Stock Purchase Plan           3,229,672  701,387  114,413
  
                                                        For     Against  Abstain
  
            Approval of Coopers & Lybrand L.L.P., 
            as independent certified public 
            accountants                              5,107,938   20,608   22,838
  
  The foregoing  matters are described in detail in the Company's  proxy statement
  dated March 20, 1997.
  
  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 twenty-six
            weeks ended June 28, 1997.
  
                                    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)
  
               August 7, 1997                      /S/ John M. Pettine
                   (Date)                             JOHN M. PETTINE
                                                     VICE PRESIDENT AND
                                                  CHIEF FINANCIAL OFFICER
                                      (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)
  
                                      10 of 10